Garlasco v. Smith

O’Malley, J. Upon the facts clearly and fully established by the plaintiff (not excepted to as found in the decision save in one instance) the relief granted was fully justified under the principles enunciated in our decision in Kossoff v. Wald (241 App. Div. 483). It is urged, however, that a judgment of foreclosure and sale, entered before the commencement of this action, to which the plaintiff herein was a party defendant, is res adjudicóla as to plaintiff’s alleged cause of action. The facts upon which this action is predicated it is asserted might have been pleaded as a defense in the foreclosure action and the issue litigated therein. In our view, however, the facts upon which this action is predicated could not have been interposed as a defense in the action to foreclose. Many of the overt acts of the conspiracy occurred subsequent to the commencement of the foreclosure action and even subsequent to the judgment of foreclosure and sale. Their discovery was impossible prior thereto. At the time the plaintiff would have been [536] required to interpose answer and plead defenses to the foreclosure action, the fact that the mortgagees had agreed to sell to Paltrowitz and the latter’s intention to convey to Manbras Realties, Inc., were unknown to plaintiff, and could not have been discovered in the exercise of reasonable diligence. The provisions of section 1085 of the Civil Practice Act and the authorities relied upon by the appellants have no application. (See Byrnes v. Owen, 243 N. Y. 211, 218.) There was sufficient evidence to justify a money judgment against the defendant Paltrowitz. From statements issued by the defendant Wertshore Realty Corporation the annual rents were estimated at $48,000 per annum, or $4,000 monthly. During the five months in question, therefore, there is an admission that some $20,000 was received as rentals. This the defendants did not controvert. The amount was not shown to have been used in any way in the maintenance of the building or for the discharge of any of the obligations of the corporation. The defendants, including Paltrowitz, were evasive and non-informing when queried as to the books of the company and other records. It was incumbent upon them, including Paltrowitz, to explain, if possible, what had become of the rents during the five-month period. Not having done so, Paltrowitz may not now complain that a personal money judgment has been entered against him. Appellants’ counsel appear to have reserved a full discussion of the merits of the appeal for their reply brief. This practice has heretofore been condemned and disapproved by this court. (Ardolino v. Reinhardt, 128 App. Div. 339.) The judgment should be affirmed, with costs. Martin, P. J., Dore and Cohn, JJ., concur; McAvoy, J., dissents and votes for reversal.