Schlitz v. Koch

Jenks, J.: This appeal is from a judgment for foreclosure of a mortgage upon real estate. The defendants are the widow and infant children [536] of the mortgagor, and this appeal is taken by the said infants. The infants’answers allege that.the bond and mortgage was-'executed by. their father to his wife* the present widow, without consideration, that she.then executed the assignment thereof to the plaintiff’s intestate without consideration;- that plaintiffs -intestate had full knowledge of the facts in reference to the execution, and that the assignment was made to secure the said, assignee for ■ his execution of certain indemnity bonds an which bonds no-liability was ever had, The learned Special Term found .that the mortgagor executed and delivered the bond and the mortgage to the mortgagee, • and that the mortgagee assigned the'mortgage to plaintiff’s intestate for a good and valuable consideration^ that there, was default, and' that the face of the mortgage was due. The defendants' "inquired of the said widow^ mortgagee .and assignor of the plaintiff’s intestate, whether-she paid any money at the time pf.the delivery of the' bond and-mortgage to her, and whether she paid at that time or at any time any money to the mortgagor, blit was silenced by the objections that, the questions were immaterial, irrelevant and incompetent, tending to vary'the term's of the written instrument, and as not binding on the plaintiff. I think the exceptions to these rulings, and exceptions to similar rulings' during the examination of the defendants’ witness Mansland, were well .taken. There was no proof that any consideration had-ever passed between the mortgagor and mortgagee beyond the presumption arising from ' the sealing of the instruments. We cannot say that if the court had ■permitted proof to the contrary it would not have been-satisfied that the presumption thereby was overthrown. The assignee took the mortgage subject to the-legal and equitable defenses available to the mortgagor at the time of the assignment. (Hill v. Hoole, 116 N. Y. 299; Baird v. Baird, 145 id. 659, 661; Briggs v. Langford, 1 Silv. 553; S. C., 107 N. Y. 680; Rapps v. Gottlieb, 142 id. 164; Thomas Mort. [2d ed.] § 324; Jones Mort. § 842.) Hence, want of consideration might be a defense to the motion of the assignee for foreclosure. In Hill v. Hoole (supra) the court, per Bkadlby, J., considering the element of good faith and valuable consideration in'the assignment, .say (p. 3Q4): “But it is by no- means clear that such fact, if it had been found,'would have -been of. any avail against the defense. As held in Westfall v. Jones (23 Barb. 9); it [537] would not. There it was determined that a defense, under like circumstances, came within the rule that a mortgage is taken by an assignee subject to all the defenses existing as between the original parties to it. So far as observed, that case does not appear to have been questioned by any later adjudicated case. And for the purposes of the present one, it is unnecessary to give the question any further consideration.” It may be urged that inasmuch as the questions related to a money consideration only, -the answers would not necessarily have shown lack of any consideration. But the fact remains that the defendants were halted in their attempts to prove that a usual consideration did not exist, by a ruling pf the court, upon an objection, that was sufficient to indicate that any effort to go farther would be vain. The widow was not disqualified by section 829 of the Code. (Holcomb v. Campbell, 118 N. Y. 46.) The judgment is reversed and a new trial is granted, costs to abide the final award of costs. Hirsohberg, P. J., Boer, High and Carr, JJ., concurred. Judgment reversed and new trial granted, costs to abide the final' award of costs.