Levey v. Union Print Works — 34 N.Y. St. Rep. 900

Majority

p. 900

Augustus A. Levey, Trustee, and Isaac Levey, App’lts, v. The Union Print Works, Resp’t.

(Supreme Court, General Term, Second Department,

Filed December 8, 1890.)

Headnote

Mortgage—Demand op interest.

Defendant issued bonds and executed a mortgage to Augustus Levey as trustee to secure them, which provided that if default in payment of interest continued for six months after." payment shall have been duly demanded,” the whole should at the option of the trustee become due. The trustee’s father took the whole issue of. bonds. The trustee demanded payment of the interest at a branch office of the defendant in New York city of his brother, who was treasurer, and who shortly after resigned, and no notice of the demand was given to the other officers of the company. Held, that no such demand as the mortgage called for was made.

Appeal from, judgment dismissing the complaint

Action to foreclose a mortgage or trust deed made by the defendant, a domestic manufacturing corporation, on certain real estate and personal property located in the city of Brooklyn,

George W. Wingate and Augustus A. Levey, for app’lts ] J. II. V. Arnold, for resp’t

On the 1st of January, 1889, the defendant-executed a deed of trust or mortgage to secure the payment of $25,000, made up of twenty-five bonds of $1,000 each. Isaac Levy took the entire issue. On the 1st of July, 1889, the interest was not paid on the bonds. The bonds and the trust deed, provide that a default in the payment of the interest, if such default continues six months after “ payment shall have been duly demanded,” shall, at the option of the trustee, render the whole payment due and payable. Edgar J. Levey was the treasurer of the company. The trustee and the treasurer were both sons of the holder of the bonds. The principal office of the company was in Brooldyn.

The company had also a branch office in New York. It was-at this office the demand was made, and of the treasurer, Edgar J. Levey. No notice was given either to the president or vice-president by the treasurer, who resigned his office as treasurer during the month of July, 1889. On the 1st of July, 1890, the company tendered the back interest for July 1, 1889, and that which became due January 1,1890. The trustee made the demand for his father upon his brother, and did not inform the officer of the company, but waited until the expiration of the six months, and then claimed to foreclose for the principal and interest. The court properly found under tnis state of facts that no demand, such as was called for by the mortgage, was made. The interest was payable at the company’s office, in the city of Brooklyn. It can be reasonably inferred from the resignation of the treasurer soon thereafter that there was some dissension between the company and the treasurer, in which his father and brother sympathized with him. The demand, so-called, was simply a device by which a form would be substituted for the substance of a demand, and thus an advantage be obtained by the holder of the bonds over the company. The discussion of the question, whether the provi

p. 901

sion as to default is a penalty or condition, and whether the holder of the bonds must signify his option to claim absolute default, is not called for where no demand was ever made.

The judgment should, therefore, be affirmed, with costs.

Dykman and Pratt, JJ., concur.