K. S. S. Realty Co., Inc. v. Ostroff

• Decision Date: 21 January 1927
• Citation: 135 A. 869
• Parties: K. S. S. REALTY CO., Inc. v. OSTROFF et al.
• Court: New Jersey Court of Chancery

135 A. 869

K. S. S. REALTY CO., Inc.

v. OSTROFF et al.

Court of Chancery of New Jersey.

Jan. 21, 1927.

(Syllabus by the Court.)

Suit by K. S. S. Realty Company, Incorporated, against Albert Ostroff and others to foreclose a mortgage. Decree for complainants.

Louis G. Morten, of Jersey City, for complainant.

Aaron A. Melniker, of Bayonne, for defendants Ostroff and Cohen.

James D. Carpenter, of Jersey City, for defendant Frank's Center Garage, Inc.

FIELDER, Vice Chancellor. The bill was filed July 3, 1926, to foreclose a mortgage on premises in Jersey City. The due date of the mortgage is August 18, 1929, but the mortgage contains a provision "that the whole of the principal sum herein expressed shall, at the option of the holder of this mortgage, become due after default in the payment * * * of any tax, water rate or assessment for 30 days." The bill alleges that on June 1, 1926, there became due to Jersey City a tax levied on the mortgaged premises for the period of January 1, 1926, to July 1, 1926, and on July 1, 1926, although the taxes were then a lien on said premises from June 1, 1926, the same were unpaid; that on May 25, 1926, there became due to said city a sum for metered water consumed" on said premises to May 25, 1926, and that the same remained unpaid and in arrear for more than 30 days; that said tax and water rent remained unpaid up to the filing of the bill, and that complainant has elected that the whole principal sum, with interest, shall be now due. The answer filed by defendants Ostroff and Cohen (record owners when the bill was filed) admits said allegations. After the bill was filed the mortgaged premises were conveyed to Frank's Center Garage, Inc., which new owner, being admitted as a defendant, filed an answer denying that the tax and water rent were due and payable as alleged in the bill. The tax and water charge were paid after the bill was filed, and besides the defense that they were not due and payable as alleged by complainant, the further defense is that one Kanengeiser, a director and vice president of complainant, advised defendants Ostroff and Cohen not to pay said tax and to appeal therefrom and to pay the tax and water bills together after the determination of the appeal.

By statute (P. L. 1918, c. 226, § 6), the default clause in this mortgage is construed to mean that should any tax or water charge imposed or required against the mortgaged premises become due and payable and remain unpaid and in arrear for 30 days, then the principal and interest should, at the option of the complainant, become due and payable immediately.

The proofs show that the tax in question is the one-half part of the tax imposed or required against the mortgaged premises for the year 1926. Said one-half part of said tax became payable April 1, 1926, and, remaining unpaid, became delinquent June 1, 1926 (P. L. 1920, c. 224). The only proof concerning the water charge is that Jersey City entered such charge on its books May 25, 1926, and that the charge was not paid until after the bill of complaint was filed.

Sections 8, 11, 12 and 30, art. 32, c. 152, P. L. 1917, empower the city to pass ordinances for fixing and collecting water rents and make the owner of the building and land to which water is supplied liable for such charge. If the charge remains in arrear six months, a statement thereof is to be filed with the collector of tax arrears, and from the time of such filing the charge is a lien on the land'...