New Order Bldg. & Loan Ass'n v. Landau

• Decision Date: 24 September 1931
• Citation: 156 A. 276
• Parties: NEW ORDER BUILDING & LOAN ASS'N v. LANDAU et al.
• Court: New Jersey Court of Chancery

156 A. 276

NEW ORDER BUILDING & LOAN ASS'N

v. LANDAU et al.

Court of Chancery of New Jersey.

Sept. 24, 1931.

Bill by the New Order Building & Loan Association, a corporation, against Louis Landau and others. On motion to strike out the answer and counterclaim.

Answer and counterclaim stricken out.

Cohen & Klein, of Newark, for complainant.

Abraham Gurney, of Newark, for defendants Louis and Ida Landau.

BACKES, Vice Chancellor.

The bill is to foreclose an $80,000 building and loan mortgage, because of default in monthly installments of principal and interest and the nonpayment of taxes. The default in principal and interest is denied, but the proofs show the answer to be untrue. The charge of default in taxes, the defendants plead they have no knowledge. They are the owners; they know that they did or did not pay their taxes. Their answer is untruthful. The answer will be stricken out.

By the counterclaim, which must be accepted as true on this motion, the defense set up is that Morris Metsky, the president of the complainant, who represented himself as having full power and authority to do so, agreed that the complainant would credit them with all arrearages of installments of principal and interest and insurance premiums advanced, and arrearages of taxes, and pay all future taxes to September, 1931, and charge the same against the sum of installments of principal which had been paid, and alleged to be $11,000, and that in September, 1931, the complainant would recast the mortgage "on basis commonly known as a split or combination mortgage." It is not alleged that the complainant made the agreement. The allegations that Metsky, the president of the complainant, represented that he had the power and authority to bind the complainant and that he agreed to charge the defaults to credits, is not a charge that the complainant agreed to the credits and to forgive the defaults and to recast the mortgage. If the defense has validity, the charge should be that the complainant made the agreement, or, if to specify, that the complainant through its duly authorized agent, Metsky, the president of the complainant, made the contract. That goes to the form of pleading.

The president of the complainant had not, as such, the authority to give the credit, nor to contract to recast the mortgage. What is meant by a "split or combination mortgage," I am not informed, and it is not known in law. Further, the contract to credit and recast was without...