Majority
p. 317Frederick H. Smith, Jr., Resp’t, v. The Isle of Wight Company and others, App’lts. (Supreme Court, General Term, Second Department, Filed December 10, 1888.)
Headnote
Corporations—Action to foreclose a mortgage against—Defense of- „ usury—Judgment by default—Laws 1850, Chap. 173, § 1..Where in an action brought against a corporation and the guarantors of the mortgage and purchasers of the land, to foreclose a mortgage executed by the corporation, the defendants set up usury, and. extension of time discharging the guarantors and after the cause had been noticed for trial, the defendants amended their answer, by striking out the second defense, Held, that, under the provisions of Laws 1850, chapter 173, § 1,, ''no corporation shall hereafter interpose the defense of usury in any action.” The amended answer set up no defense and judgment was properly awarded ondefault.
Appeal from an order of the special term denying a motion to open a judgment of foreclosure, taken by default at a special term and circuit of Queens county.
The plaintiff brought an action to. foreclose a certain mortgage for $30,000 given by the defendant, the Isle of Wight Company, to the plaintiff. The defendants, Rufus W. Leavitt, Sidney De Kay, Van Dewater Smith and Philip Kobbe, were guarantors of that mortgage.
Subsequent to the giving of this mortgage the Isle of Wight Company gave a second mortgage to the plaintiff. This second mortgage was foreclosed and a sale of the property had thereunder, and on such sale one Robert W. Jaggard purchased the property, and the same was duly-deeded to him by the referee. Jaggard subsequently sold the entire property in question to Eliza M. Leavitt, subject to the mortgage in suit, specifying it distinctly by its date- and to whom given.
Eliza M. Leavitt subsequently transferred a part of the-premises to the defendant, Morris F. Leavitt, subject to the-mortgage in suit. Subsequently she transferred all the re
p. 318
mainder to the Lawrence Beach Company, specifically subject to the mortgage in suit. That company deeded the property so transferred to it by Eliza M. Leavitt to the (Knickerbocker Trust Company, by a deed of trust to secure its bonds, and made such trust deed specifically subject to the mortgage in suit.
In March, 1888, the plaintiff commenced the foreclosure <of the $30,0C0 mortgage (the one in question here), making the Isle of Wight Company a defendant and asking a judgment of deficiency against that company and the defendants, who were guarantors of the mortgage.
On the 7th of May, 1888, the defendants, the Isle of Wight Company, the Lawrence Beach Company, Eliza M. Leavitt, Rufus W. Leavitt, Morris F. Leavitt and Sidney De Kay, answered, setting up as one defense that the mortgage was usurioús, and as a second defense thát by reason of the plaintiff’s having contracted, for a valuable consideration, with the defendant, Eliza M. Leavitt, to extend the time of payment of said mortgage, the other defendants were discharged. All of the other defendants defaulted in answering.
On the fifteenth of May the plaintiff’s attorney noticed the case for trial for the term commencing June 11, 1888.
On the twenty-eighth of May the defendants last above named served amended answers, which consisted in dropping out the second defense originally set up, leaving only the defense of usury.
At the opening of the circuit in June defendants presented an order transferring the case to the circuit court of the United States. Mr. Justice Cullen held the order invalid and plaintiff moved for judgment, and an inquest was taken and judgment entered accordingly, the plaintiff stipulating not to take judgment against Sidney De Kay for any deficiency.
Subsequently defendants who had answered, as above, moved to open the judgment, and that they be allowed to defend the action on the ground that the case was never properly noticed.
Mr. Justice Dykman denied the motion on the plaintiff’s giving a stipulation not to take judgment for any deficiency in this action against the Isle of Wight Company or Rufus W. Leavitt.
Plaintiff gave the stipulation required, which was received and retained by the defendants.
Defendants now appeal from said order of the special term.
T. V. Canton (Frederic Eder, of counsel), for appl’ts; Herman Kobbe (J. A. Dennison, of counsel) for respt’.
The amended answers constitute no defense. Laws of 1850, chap. 172, par. 1; 15 N. Y., 86 . They could, have been stricken out as frivolous. If a defendant wishes, to insist upon the questions raised by such an answer, he must be ready when the cause is reached. The court was right in giving judgment.
The affidavits do not show any ground for relief as a matter of favor; rather the contrary. It appears that the plaintiff is willing to sacrifice a large part of the debt to get his money.
That is an abundant answer to the opinions expressed in the papers as to the great value of the property. The impression produced upon the court is that the property is worth less than the debt.
Order affirmed, with costs.
Barnard, P. J., concurs; Dykman, J., not sitting.