Summary
In New York Water Service Corp. v. Newstrand Realty Corp., 280 A.D. 322, 113 N.Y.S.2d 769 (1952), a mortgage provided that "the mortgagor or any subsequent owner may prepay this mortgage in whole or in part at any time on ten (10) days' written notice to the mortgagee".
Summary of this case from Aardwoolf Corp. v. Nelson Capital Corp.Opinion
280 A.D. 322 113 N.Y.S.2d 769 NEW YORK WATER SERVICE CORPORATION, Appellant-Respondent, v. NEWSTRAND REALTY CORP., Respondent-Appellant. Supreme Court of New York, First Department. June 17, 1952
APPEAL by defendant from an order of the Supreme Court at Special Term (SCHREIBER, J.), entered May 22, 1951, in New York County, which granted a motion by plaintiff for leave to reopen and permit plaintiff to serve affidavits in opposition to the request of defendant for summary judgment. CROSS APPEALS from an order of said court, entered June 21, 1951, which (1) denied a motion by plaintiff for summary judgment under rule 113 of the Rules of Civil Practice, and (2) failed to grant a motion by defendant for summary judgment dismissing the complaint. The action was brought to recover interest on a mortgage from August 12, 1949, to November 14, 1949. A modification and spreader agreement and supplemental mortgage was executed on March 23, 1949, maturing on November 14, 1949. Clause 10 thereof provided 'Except as herein modified, all of the other terms, covenants and conditions of said bond and mortgage and of the said supplemental mortgage and spreader agreement are hereby adopted herein, made part hereof and shall remain in full force and effect. When the covenants, terms and conditions of the said bond and mortgage and of the said supplemental mortgage and spreader agreement in any way conflict with the covenants, terms and conditions of this agreement, the covenants, terms and conditions of this agreement shall prevail'. The original mortgage contained a provision that 'the mortgagor or any subsequent owner may prepay this mortgage in whole or in part at any time on ten (10) days' written notice to the mortgagee'. On August 12, 1949, plaintiff delivered to defendant its satisfaction of mortgages upon payment of the remaining principal balance due, with interest to that date, without prejudice to its claim for interest to November 14, 1949.
COUNSEL
Louis Boehm of counsel (Herbert J. Lipp with him on the brief; Louis Boehm, attorney), for appellant-respondent.
Sylvan D. Freeman of counsel (Dreyer and Traub, attorneys), for respondent-appellant.
Per Curiam.
The learned Special Term correctly decided in its original decision of April 16, 1951, that defendant's (mortgagor's) right of prepayment survived and plaintiff's (mortgagee's) objection to the proposed prepayment of the mortgage in the summer of 1949 was not based on the absence of a proper notice. That latter objection was only belatedly urged after plaintiff's motion for summary judgment had been denied.
In any event we hold that under the terms of the reservation clause 10 in the modification agreement, the mortgagor's right of prepayment clearly survived and we also hold that the notice given was sufficient.
Plaintiff's motion to reargue should have been denied as it concededly was based, not on the facts originally submitted, but on additional facts admittedly known to plaintiff's attorneys but, for plaintiff's then contemplated benefit, deliberately omitted from plaintiff's original moving papers.
The order entered herein on May 22, 1951, should be reversed, with $10 costs and disbursements to defendant-appellant and plaintiff's motion should be denied. The order entered herein on June 21, 1951, should be modified on the appeal of defendant-appellant by granting summary judgment in favor of defendant dismissing the complaint, with costs to defendant and as so modified, the said order should be affirmed, with $10 costs and disbursements to defendant-appellant. VAN VOORHIS, J. (concurring).
Regardless of the survival of the prepayment clause, full payment of the principal obligation was accepted by plaintiff on August 12, 1949. The reservation that the principal was accepted 'without prejudice' could not cause interest to run on an indebtedness that had been satisfied. The money was not placed in escrow, nor was it held by the debtor to keep good a tender that had been refused. The creditor received the money as its own, to be spent for any purpose that it might select, in extinguishment of the principal obligation. Interest cannot accrue on a debt that has been paid. The creditor was not obliged to accept payment, but if it did so then no form of words could keep the interest running. Plaintiff took the payment 'without prejudice' to an obligation which ipso facto ceased to exist. No interest could accrue subsequent to that date under any circumstances.
The order entered herein on the 22d day of May, 1951, should accordingly be reversed.
PECK, P. J., DORE, COHN and HEFFERNAN, JJ., concur in Per Curiam opinion; VAN VOORHIS, J., concurs in reversal of the order entered May 22, 1951, in opinion.
Order entered May 22, 1951, reversed, with $10 costs and disbursements to defendant-appellant and plaintiff's motion denied. Order entered June 21, 1951, unanimously modified on the appeal of defendant-appellant by granting summary judgment in favor of defendant dismissing the complaint, with costs to defendant and, as so modified, affirmed, with $10 costs and disbursements to defendant-appellant. Settle orders on notice.