First Citizens Bank & Trust Co. v. Speaker

Judgment modified on the law by striking out provisions for return of security and as modified affirmed, without costs. Memorandum: We find in the proof of the transaction between the parties to this action, the Savings Bank of Utica and the Home Owners’ Loan Corporation sufficient to establish that the plaintiff agreed to accept a renewal note of $830, secured by bond and mortgage, in full settlement of the former note 825 and mortgage of the defendants. In reaching this conclusion we take into consideration the surrender of the original note to the Home Owners’ Loan Corporation, the form, of the new bond and mortgage, and the absence of disclosure by the plaintiff of the taking of the additional note on which this action is brought. We do not put weight on the statement of the plaintiff in the satisfactions of mortgages that the mortgage debts were paid. Such being our view of the arrangement, we are of the opinion that the taking of the note on which this suit is based is against public policy, and that the note itself is void. (Compare Adams v. Outhouse, 45 N. Y. 318; Hanover Nat. Bank v. Blake, 142 id. 404.) We find no warrant, however, for that part of the judgment which directs the return of certain securities by the plaintiff to the defendant Mabel W. Speaker. The plaintiff came lawfully into possession of these securities and may hold them at least until demand. The counterclaim fails to state facts sufficient to constitute a cause of action in replevin. Further, it seems that the plaintiff can hold these securities as collateral for the $830 note, which was a partial renewal of the note for which securities had previously been pledged as collateral security. That these securities were to be held as collateral to the $830 note is also recognized by the language included in the note of defendant Mabel W. Speaker, on which this action was brought. All concur. (The judgment dismisses plaintiff’s complaint and directs plaintiff to return to defendant shares of stock pledged as collateral security on a promissory note.) Present — Sears, P. J., Thompson, Crosby, Lewis and Cunningham, JJ. [159 Misc. 427.]