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New York Bus. Dev. Corp. v. Gilbert's Hotel

Appellate Division of the Supreme Court of New York, Third Department
May 15, 1967
28 A.D.2d 597 (N.Y. App. Div. 1967)

Opinion

May 15, 1967


Appeals (1) from an order of the Supreme Court which denied the renewed application of defendants-appellants to open their default in a mortgage foreclosure action (see memorandum decision on prior appeal, 26 A.D.2d 791); and (2) from an order of said court which denied said defendants' motion for reargument. The proposed amended answer would interpose a counterclaim seeking rescission of an agreement whereby the liens of appellants' mortgages were subordinated to that of the mortgage which was proposed to be, and was, executed to plaintiff, on the ground that the subordination agreement was induced by the fraudulent misrepresentations of certain attorneys. The only connection alleged between the plaintiff mortgagee and the attorneys named, at the time of the alleged fraud in the procurement of the subordination agreement, is the allegation, upon information and belief, that they "played some part in the representation of the plaintiff in said transaction." Appellants' affidavit of merits, essential to the consideration of the application, adds no evidentiary support to this equivocal allegation; the affiant stating that "I am also of the belief" (without disclosing the grounds thereof) that these attorneys "also played some part in the representation of the plaintiff in said mortgage transaction." On the other hand, the answering affidavits of a number of lawyers and other responsible affiants present massive proof completely negating appellants' tenuous assertions respecting plaintiff's representation by the attorneys named in the counterclaim. Appellants urge, further, that a cause of action for rescission merely, differing from a claim for damages for fraud and deceit, can be established without proof that the person guilty of the fraud was the agent of the party against whom the right of rescission to restore the status quo is asserted; but it is obvious that upon rescission here the innocent beneficiary of the subordination agreement would not be, and could not be, restored to the status of a merely prospective lender, as that status existed prior to plaintiff's advancement of moneys upon the strength of the subordination agreement. Orders affirmed, with one bill of costs. Gibson, P.J., Herlihy, Reynolds, Aulisi and Staley, Jr., JJ., concur in memorandum by Gibson, P.J.


Summaries of

New York Bus. Dev. Corp. v. Gilbert's Hotel

Appellate Division of the Supreme Court of New York, Third Department
May 15, 1967
28 A.D.2d 597 (N.Y. App. Div. 1967)
Case details for

New York Bus. Dev. Corp. v. Gilbert's Hotel

Case Details

Full title:NEW YORK BUSINESS DEVELOPMENT CORPORATION, Respondent, v. GILBERT'S HOTEL…

Court:Appellate Division of the Supreme Court of New York, Third Department

Date published: May 15, 1967

Citations

28 A.D.2d 597 (N.Y. App. Div. 1967)

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