Clifton v. Fox ( 1941 )

Action to recover on a guaranty of payment of certain bonds secured by a mortgage on real property. The trial court decided the mortgage was merged in the title of the bondholders’ committee, relieving the guarantor from liability. Judgment reversed on the law and a new trial granted, with costs to appellants to abide the event. The facts do not disclose there was such a merger. On the new trial the defenses pleaded will also be disposed of. Lazansky, P. J., Hagarty and Carswell, JJ., concur; Adel and Close, JJ., dissent and vote to affirm, with the following memorandum: There is ample evidence in the record to support the finding by the trial court that there is union of title of the mortgagor and mortgagee in the mortgage. The fact that the record title is in the name of Heathcote Plaza Corporation does not affect that conclusion. The attorney for the bondholders’ protective committee, who organized the corporation, testified that the property is now held by it for the bondholders. It is apparent that the corporation was organised for that purpose as a subterfuge to deprive the defendant of the benefits of the mortgage moratorium statutes.