Levey v. Union Print Works , 34 N.Y. St. Rep. 900 ( 1890 )

Barnard, P. J.

On the 1st of January, 1889, the defendant executed a. deed of trust or mortgage to secure the payment of $25,000 made up of bonds of $1,000 each. Isaac Levey took the entire issue. On the 1st of July, 1889, the interest was not paid on the bohds. .The bonds and the trust-deed provide that a default in the payment of the interest, if such default continues six months after “payment shall have been duly demanded,” shall, at the-option of the trustee, render the whole payment due and payable. Edgar J. Levey was the treasurer of the company. The trustee and the treasurer were-both sons of the holder of the bonds. The principal office of the company was. in Brooklyn. The company had also a branch office in New York. It was at this office the demand was made, and of the treasurer Edgar J. Levey. No-notice was given either to the president or vice-president by the treasurer, who-resigned his office as treasurer during the month of July, 1889. On the 1st. of July, 1890, the company tendered the back interest from July 1, 1889, and that which became due January 1, 1890. The trustee made the demand for his father upon his brother, and did not inform the officer of the company, but. waited until the expiration of the six months, and then claimed to foreclose-for the principal and interest. The court properly found under this state of facts that no demand such as was called for by the mortgage was made. The-interest was payable at the company’s office in the city of Brooklyn. It can be reasonably inferred, from the resignation of the treasurer soon thereafter, that there was some dissension between the company and the treasurer, in which his father and brother sympathized with him. The “demand” so-called was simply a device by which a form would be substituted for the substance of a demand, and thus an advantage be obtained by the holder of the bonds over the company. The discussion of the question whether the provision as to default is a penalty or condition, and whether the holder of the bonds must signify his option to claim absolute default, is not called for, where no demand was even made. The judgment should therefore be affirmed, with costs.