Terranova v. Emil

• Decision Date: 02 November 1967
• Citation: 20 N.Y.2d 493,231 N.E.2d 753,285 N.Y.S.2d 51
• Court: New York Court of Appeals Court of Appeals
• Parties: , 231 N.E.2d 753 Vincent TERRANOVA, Appellant, v. Allan D. EMIL et al., Respondents et al., Defendant.

Page 51

285 N.Y.S.2d 51

20 N.Y.2d 493, 231 N.E.2d 753

Vincent TERRANOVA, Appellant, v. Allan D. EMIL et al., Respondents et al., Defendant.

Court of Appeals of New York.

Nov. 2, 1967.

Harry Salvan, New York City, for appellant.

Robert Conrad, New York City, for respondents.

VAN VOORHIS, Judge.

Plaintiff purchased real property from the three defendants, in which each had a one-third undivided interest, and gave the defendants a purchase-money mortgage as part of the consideration. In this action plaintiff sought cancellation of the mortgage alleging that defendant Riker, as the agent and partner of the owner two defendants, has accepted $37,500 in satisfaction of the mortgage and the defendants had refused to deliver a satisfaction of mortgage although he had made various demands therefor. It appears that Riker did give plaintiff a satisfaction of his one-third interest. Defendants Emil and Slifka counterclaimed for foreclosure of the mortgage alleging defaults in making payments.

Special Term held that the plaintiff was bound by a covenant in the mortgage note and a letter of even date signed by all the defendants directing him to make all payments to defendant Emil until otherwise notified. The Appellate Division, 27 A.D.2d 712, 276 N.Y.S.2d 944, affirming, held that plaintiff made the alleged payments to defendant Riker at his own peril, the defendants-respondents not having directly or indirectly induced the alleged payments to Riker.

Justice Steuer dissented being of the opinion that an issue of fact was presented as to whether Riker acted as agent for the defendants-respondents.

The plaintiff argues that there are questions of fact as to whether there was a partnership between the defendants or whether Riker was the agent of the defendants Emil and Slifka; that he should have been allowed to examine the defendants- respondents before trial and that the defendants' motion for summary judgment should have been denied.

Briefly stated, except for the written direction in the letter signed by defendants for the making of payments on account of the mortgage to Allan D. Emil, there would be little doubt that Riker or his corporation acted for the other two defendants in receiving payment of this $37,500 in satisfaction of the mortgage. Riker & Co., Inc. had been agents for the owners since 1961, Riker individually was the owner of an undivided one-third interest in the subject property, Riker or his corporation managed the property for the other two defendants making leases and collecting rents, neither of the other defendants ever met the plaintiff or transacted any of the business connected with his purchase of the property or otherwise, and everything connected with its sale and management was entrusted by them to Riker and his corporation to transact in their behalf. Riker & Co., Inc. by Riker as president even executed an indemnity letter to plaintiff at the time of the closing of title acting on behalf of all three of the sellers of the premises, who became the owners in common of this purchase-money mortgage.

The dissenting opinion at the Appellate Division states: 'None of the above facts, at least for the purposes of this motion, is in dispute. On them plaintiff contends that Riker, in negotiating the transaction for discount of the mortgage and receiving the consideration therefor, was the agent of his associates. In support thereof he submits Riker's sworn testimony that he was acting for them as well as himself. In addition there is the undisputed fact that in all prior negotiations, and the sale resulting therefrom, he did act for them and was so authorized. It is quite true that Riker's sworn statement is largely conclusory in...