Opinion
06-27-1926
REDDAVIDE et ux. v. LASKOWITZ et al.
Samuel Wollnmn, of Newark, for complainants. Benjamin M. Weinberg, of Newark, for defendant Laskowitz. William K. Flanagan, of Newark, for defendants Chirelstein and Bell.
Suit in the nature of interpleader by Gennaro Reddavide and another against Joseph Laskowitz, Ida Chirelstein, and Bessie Bell. Decree for defendants Chirelstein and Bell.
Samuel Wollnmn, of Newark, for complainants.
Benjamin M. Weinberg, of Newark, for defendant Laskowitz.
William K. Flanagan, of Newark, for defendants Chirelstein and Bell.
CHURCH, V. C. This is a bill in the nature of an interpeader. The complainants sought a mortgage on their property through one Kleinman. The defendants Chirelstein and Bell, and also defendant Laskowitz, all of whom had made loans through Kleinman before, examined the property and agreed to make the loan. On October 14, 1924, complainants and the defendants Chirelstein and Bell met in Kleinman's office. Complainants executed a mortgage and at least one bond. Chirelstein and Bell thereupon gave complainants checks for the agreed upon consideration, about $1,700. Complainants supposed, as did Chirelstein and Bell, that the mortgage ran to Chirelstein and Bell, Kleinman so reading the instruments aloud to them. Neither complainants nor defendants can read or write English. The bond and mortgage were in fact payable to Kleinman, were acknowledged before one Stafford an attorney at law, and recorded the following day. Kleinman gave defendants a bond stating it ran to them and that he would send them the mortgage after it was recorded. The husband denies that he signed this bond. As to this I think he is mistaken, as a careful reading of the testimony convinces me that he did in fact sign it. On October 15, Kleinman executed an assignment of the mortgage to defendant Laskowitz, receiving therefor $1,700 from one Lubetkin, Laskowitz's son-in-law and attorney. This was recorded on October 20th. A month or so afterwards Chirelstein and Bell had the bond they held read to them and found it ran to Kleinman and not to themselves. They demanded an explanation, and Kleinman executed an assignment to them dated November 17, 1924, and recorded January 19, 1925. The mortgage is now in the possession of Laskowitz. It does not appear how he got it. Kleinman has absconded.
Laskowitz contends that he is entitled to the money paid into court because his assignment was first recorded; and that he is not chargeable with notice of the other assignment. That might be if complainants had executed a mortgage to Kleinman, and Kleinman had paid them $1,700, and then assigned for value to Laskowitz, and the latter had recorded it, and it later appeared that Chirelstein and Bell theretofore, relying upon some authority in Kleinman, had taken an assignment from Kleinman but had not recorded it. The situation here is different. The defendants relied on the representations of the complainants. Complainants say they thought they were executing and meant to execute a bond and mortgage to Chirelstein and Bell, and it is undisputed that Chirelstein and Bell then and there gave them checks for approximately $1,700. The witness Stalford says he read the contents of the papers to complainants before they signed, and informed them that the obligee was Kleinman. He says he read the papers verbatim and told them the due date. The papers have no due date. I think he is mistaken in saying he made the complainants understand the mortgage ran to Kleinman. They are illiterate and ignorant people, and the reading of long legal documents verbatim would mean little to them. I am convinced they thought they were giving the mortgage to Chirelstein and Bell, and that Chirelstein and Bell were equally sure that they were paying $1,700 for a mortgage to themselves.
The equity here is one existing against the mortgage in the hands of the original obligor, and Laskowitz is bound thereby.
"The purchaser for value of a chose in action is bound by the equities existing against it in the hands of the original obligor." Putnum v. Clark, 29 N. J. Eq. 412, affirmed, 33 N. J. Eq. 338.
Moreover, I believe that Laskowitz' had sufficient notice of the transaction between complainants and defendants Chirelstein and Bell to make it obligatory on him to investigate. Had he done so, Kleinman's intendedfraud would have been frustrated. He was in Kleinman's office while this transaction was going on. A simple question would have disclosed the fact that it was not the intention of the parties to make Kleinman the mortgagee. Five days intervened between the date of the assignment to him and its record. He knew the mortgagors and had visited them at the property in question.
"It is always easy for an assignee, before purchasing, to inquire of the mortgagor, or of those who have succeeded to his rights, whether or not its validity will be disputed. * * * If he chose to refrain from doing so, * * * relying entirely upon the representations of his assignor, I think he has no right to ask the complainant [in this case the codefendants] to bear the consequences of his own folly." Vredenburgh v. Burnet. 31 N. J. Eq. 229, affirmed 34 N. J. Eq. 252.
I will advise a decree that the money in court be paid to Chirelstein and Bell.