Citation Numbers: 32 A.D.2d 1034
Filed Date: 7/21/1969
Status: Precedential
Modified Date: 1/12/2022
Two orders of the Supreme Court, Nassau County, one in the first above-entitled action dated March 2, 1968, and the other in the second above-entitled action dated March 21, 1968, affirmed, without costs. No opinion. Rabin, Acting P. J., Martuscello and Kleinfeld, JJ., concur; Benjamin and Munder, JJ., dissent and vote to reverse the orders and deny plaintiff’s motions, with the following memorandum: The subject orders granted summary judgment to plaintiff in two mortgage foreclosure actions. In his moving affidavits plaintiff stated that he loaned $25,000 to a corporation, the Hudson River Warehouse and Trucking Corp.; that the corporation executed a note therefor; that defendants Seymour Kaplan and Leonard Kaplan guaranteed payment of that note; that their mother, Frances Goldstein (who has since died), executed a mortgage on three buildings to secure the loan; and that there has been a default in payment of interest and principal due on the loan. In opposition to the motions for summary judgment, defendant Seymour Kaplan stated the following: Prior to the transaction herein involved, he, his brother and his mother were the principals in a long-established trucking company known as Grey Fleet Trucking Co., Inc. Needing a new warehouse, he discussed a possible location with defendant Ralph Miller, an attorney and friend. After investigating the matter, Miller told him he would need substantial moneys for the deal, and that he (Miller) would arrange the financing if he became a partner. Miller and defendant Murray Rayburn, acting as attorneys, then organized Hudson River Warehouse and Trucking Corp., arranged the financing and became principals in the new business. Stock in that corporation was not issued and Seymour Kaplan never saw the minute books which were supposed to name him and his brother as officers, but he did not complain because he was grateful to Miller. In December, 1962, when the new corporation needed additional capital, Miller and Rayburn said plaintiff was willing to invest in the business and, to protect his option to make such investment, he would lend the money to the corporation; and at the will of either party the loan could later be converted into an investment. In February, 1963, a note was prepared and executed by the corporation. Thereafter, Miller and Rayburn suggested that to have plaintiff become an investor they should all show their faith in the corporation by giving him mortgages on their homes — defendant Goldstein on the three houses in which she and her sons lived, and Miller and Rayburn on their homes. The arrangement was that Miller and Rayburn would hold the mortgages until plaintiff became an investor in the corporation, and would not deliver them without the consent of the Kaplans and their mother. The mortgage covering the subject premises was delivered to Miller and Rayburn on February 23, 1963, but it was not acknowledged by defendant Goldstein until June 18, 1963