Bush v. Murray

209 A.D. 563, 205 N.Y.S. 21, 1924 N.Y. App. Div. LEXIS 8681
CourtAppellate Division of the Supreme Court of the State of New York
DecidedJune 6, 1924
StatusPublished
Cited by7 cases

This text of 209 A.D. 563 (Bush v. Murray) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bush v. Murray, 209 A.D. 563, 205 N.Y.S. 21, 1924 N.Y. App. Div. LEXIS 8681 (N.Y. Ct. App. 1924).

Opinion

McAvoy, J.:

There are two appeals, both taken by the plaintiffs. One is from a judgment dismissing the complaint as to the defendant Fried, and from the orders upon which the judgment was entered. The other is from an order dismissing the plaintiffs’ motion for a bill of particulars of the allegations contained in the answer of defendant Murray.

Plaintiffs sue their attorney, Murray, for defrauding them of their property consisting of two parcels of realty. The other defendants are joined because they joined with him in the fraud and because all have acquired the property or some interest therein. Murray and Fried now own the properties which they acquired, one while attorney for the owners thereof, the other while attorney for the receiver in a foreclosure of them. The motion was made on these grounds:

1. That there was a misjoinder of causes of action;

2. That there was a misjoinder of parties plaintiff;

3. That there was a defect of parties defendant; and

4. That as to part of the complaint, no cause of action was stated.

While we do not pass upon the facts, since they have not yet been proven, yet for the purposes of this appeal we must assume the allegations of the complaint to be true.

The complaint sets out the cause, in effect, as follows:

In 1912 plaintiff Rochford owned two parcels of real property, 357 Fulton street, Brooklyn, and Nautilus Hotel, Arverne, L. I.

These parcels, with others, were mortgaged to one Manheimer to secure a loan of $45,000. To foreclose this mortgage an action was pending, in which a receiver had been appointed. The defendant Fried was attorney both for the receiver and for the plaintiff in that action, Manheimer. The receiver had failed to account from 1915 to 1919, although demand had been made upon him repeatedly. In August, 1919, however, he filed an accounting which required objections and exceptions to be made on behalf of the owners of the equity of redemption. Further, there were a number of liens on the property in addition to the mortgage, consisting chiefly of judgments. In December, 1915, Rochford had made a deed' of the two parcels to plaintiff, Peppard Realty Co., Inc. This transfer was merely nominal, for Rochford received neither shares of stock nor other consideration, nor any promise that any would be given.

In this situation the plaintiffs came to defendant Murray, an attorney. The rights of the plaintiffs between themselves were not clearly fixed, the individuals being entitled co ownership either in [566]*566the real property itself or in the shares of stock in the corporation, or to an accounting by the corporation. It is charged, then, in the complaint that all three plaintiffs “ made an agreement with defendant Murray whereby plaintiffs engaged the defendant Murray as their attorney and counsellor at law and he agreed to protect and safeguard the rights and interests of the plaintiffs * * ■* in and to the real properties hereinbefore described, the rights and equities of the plaintiffs among themselves, and the defendant Murray further agreed to represent the plaintiffs in the foreclosure actions brought by said Manheimer and to oppose, and procure the correction of, the accounting filed by the receiver in the said foreclosure actions, and to purchase for and on behalf of the plaintiffs certain judgments and alleged hens then existing against said properties, upon terms as favorable to the plaintiffs as could be obtained, and to take such steps with respect to the existence, organization and status of the plaintiff Peppard Realty Co., Inc., as were necessary to carry out the said purposes, and the defendant Murray then and there agreed to prevent loss or impairment of the rights, interests and remedies of the plaintiffs aforesaid, and to furnish such sums of money as might be required to effect the purposes above referred to, among others, for the purchase of the various judgments and hens as aforesaid, and the payment, replacement and renewal or extension of the mortgage then being foreclosed, and the plaintiffs agreed to cause the said defendant Murray to be paid for ah of the foregoing.”

The compensation of Murray under this agreement was to be $9,000.

As required by this agreement, Murray appeared in the foreclosure action, negotiated with defendant Fried, attorney for the mortgagee and for the receiver, with defendant Tomlin, attorney for an alleged claimant and lienor, and purchased at about twenty-five cents on the dollar a number of judgments which were hens. Finally he made an agreement with the various parties, among other things, for an extension of the mortgage after a reduction of the principal by using the funds in the hands of the receiver, for a withdrawal of the objections to the receiver’s accounts and a discontinuance of the foreclosure action, for a fee to receiver’s attorneys of $8,000 upon condition that the action be discontinued and the mortgage extended, and for a settlement and discharge of the other hens.

On the representation to the plaintiffs that it was necessary to carry out this arrangement, Murray procured the execution of a mortgage by the plaintiffs jointly to himself and his nominee, one Linoki. The amount of the mortgage was fixed by him at $22,000. It was said that this mortgage was to secure the $9,000 fee to Murray, [567]*567$5,000 to one Morrison as a settlement of his alleged claim, $2,500 in satisfaction of an inchoate right of dower, $3,000 alleged commissions to a broker, and the balance, $2,500, also for Murray for prospective disbursements.

Further, on Murray’s representation that this was necessary, plaintiffs allowed him to elect himself and his nominees directors of the corporation which nominally owned the properties, all the stock of which he issued to one of his nominees, Morris. The complaint alleges that these things were to have been done supposedly for the benefit of the plaintiffs; but it is alleged they were done in fact to place Murray in control of the corporation.

In this situation Murray and the other defendants, it is alleged, conspired to obtain for themselves the properties which Murray had undertaken to save for the plaintiffs. Murray was their own attorney. Fried was attorney for the receiver in the foreclosure. Tomlin represented an alleged claimant. Both Fried and' Tomlin knew of the retainer of Murray by the plaintiffs. What the defendants did thereafter was alleged to have been conclusively prearranged between them, and was for the sole purpose of acquiring the properties for themselves. Instead of discontinuing the foreclosure, they pressed it to judgment and sale, after they had procured the withdrawal of the objections to the receiver’s account and the allowance of $8,000 to Fried’s firm, although that, it is alleged, was intended only as an inducement to a discontinuance. They permitted Tomlin to obtain for his client a judgment for $7,500 in place of $5,000 participation in the $22,000 mortgage. It is then asserted that Murray recorded and asserted the.validity of the $22,000. mortgage made by his clients, although he refused to carry out the settlement to effect which it was executed. The complaint proceeds to charge that all the defendants purchased for themselves the properties at the sale. Murray and Tomlin’s client together took over 357 Fulton street. Fried took the Nautilus Hotel.

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Cite This Page — Counsel Stack

Bluebook (online)
209 A.D. 563, 205 N.Y.S. 21, 1924 N.Y. App. Div. LEXIS 8681, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bush-v-murray-nyappdiv-1924.