Simon v. Landau

• Court: New York Supreme Court
• Writing for the Court: CHARLES MARGETT
• Citation: Simon v. Landau, 27 Misc.2d 269, 208 N.Y.S.2d 120 (N.Y. Sup. Ct. 1960)
• Decision Date: 27 September 1960
• Parties: Moritz SIMON v. Saul LANDAU and Mary Landau, 'John Doe' and 'Mary Doe' the last two names being fictitious, the persons intended being tenants or persons otherwise having an interest in and to the mortgaged premises.

Page 120

208 N.Y.S.2d 120

27 Misc.2d 269

Moritz SIMON

v.

Saul LANDAU and Mary Landau, 'John Doe' and 'Mary Doe' the last two names being fictitious, the persons intended being tenants or persons otherwise having an interest in and to the mortgaged premises.

Supreme Court, Special Term, Queens County, Part I.

Sept. 27, 1960.

Silbowitz & Feiden, St. Albans, for plaintiff; Albert E. Silbowitz, St. Albans, of counsel.

Finkel & Nadler, New York City, for defendants.

CHARLES MARGETT, Justice.

Plaintiff moves for summary judgment in an action to foreclose a second and third mortgage (Exhs. 10 and 10-A), appoint a referee to compute and to amend the title of the action.

No issue is raised as to the defaults pleaded in the complaint. The brief opposing affidavit of the defendant Saul Landau is confined to the defense of usury pleaded in the answer. The burden of that defense is that the defendants Saul and Mary Landau, the owners of the property being foreclosed, were primary obligors of the loan transactions involved for which bonds, mortgages and other documents were executed and delivered to plaintiff, bearing interest at the rate of one and one quarter per cent per month or fifteen per cent a year.

The affidavits submitted in support of the motion are fully buttressed by documentary proof. They establish that the loan of $15,000 made by plaintiff on May 1, 1959, and $2,500 made by him on April 11, 1960, were corporate loans to Apex Chair Mfg. Corp., a domestic corporation engaged in the manufacture of upholstered furniture. Organized in December, 1956, as Landau Bros., Inc., 25 of its 100 shares of capital stock were issued to the defendant Saul Landau, its president, 25 shares to the defendant Mary Landau, his wife and the secretary-treasurer of the corporation and 50 shares to Herbert Landau, Saul's brother and the vice-president of the corporation. Plaintiff's checks for said loans (Exhs. 3 and 12) were drawn to the order of Apex, which endorsed and deposited them in its own bank accounts. According to the certified public accountant retained by the assignee for the benefit of Apex' creditors, its books and records characterized the indebtedness here involved as corporate loans from the plaintiff, the proceeds of which were deposited in the corporate bank account and disbursed in the ordinary course of business.

Each of said loans was evidenced by the bond or note of Apex (Exhs. 4 and 13), bearing interest at the rate of one and one-quarter per cent per month, and the repayment of each loan was expressly guaranteed by the defendants in each of such instruments, which also contained the following provision:

'It is further understood that a mortgage covering premises known as 186-04 Grand Central Parkway, which property is owned by Saul Landau and Mary Landau, is given as further security for the repayment of this bond. The obligee, Moritz Simon shall not be limited to recovery solely against the obligor or guarantors but may, in addition to any of his other remedies, foreclose the said mortgage, and the terms of the said mortgage are hereby made a part of the bond, which mortgage is being executed simultaneously with this bond.'

Each of said loans was authorized by Apex' Board of Directors and its stockholders (Exhs. 7, 8, 15 and 16) and was reflected in the corporate minutes (Exhs. 9 and 17). All disbursements incurred in connection with these loans were billed to and paid by Apex (Exhs. 11 and 18) and form 1099 filed with the Bureau of Internal Revenue for 1959 shows that Apex paid the interest to the plaintiff (Exh. 19). The formal guaranty of payment agreements (Exhs. 5 and 14) recited that they were executed by the stockholders of Apex, including the defendants herein, 'In order to induce Moritz Simon * * * to enter into contract or contracts with, make loan to Apex Chair Mfg. Corp., * * *.' The stockholders also agreed that without in any manner affecting their liability under their guaranty of payment, the plaintiff could '* * * extend in whole or in part (by renewal or otherwise), modify, premature, change or release any indebtedness, liability or obligation of debtor or of any other person * * * sell, release, surrender, modify, impair, exchange, substitute or * * * extend the duration or the time for the performance or payment of any and all property * * * [and] settle, adjust, or compromise any claim * * * against debtors or any other person.' They...