Century Federal Savings & Loan Ass'n v. Sullivan

281 A.D. 830, 118 N.Y.S.2d 479, 1953 N.Y. App. Div. LEXIS 3465

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: February 2, 1953
• Status: Published

Opinion

In an action to foreclose several mortgages, the appellant’s answer sets forth defenses to the effect that the parties entered into a joint venture for the improvement of vacant land, and that the mortgages were not intended to create any indebtedness between the parties. Respondent is a banking institution. On respondent’s motion, under rule 109 of the Rules of Civil Practice, the defenses were struck as insufficient on grounds that the agreement is ultra vires the respondent institution and void as contrary to public policy. Order modified on the law by adding a provision that the defendant may set up such counterclaim as he may be advised for the alleged breach of the alleged contract for a joint venture, and as so modified, the order is affirmed, with $10 costs and disbursements, payable to respondent. Such counterclaim may be served within ten days from the entry of an order hereon. The agreement, that the mortgages were not intended to create any indebtedness between the parties, is void as contrary to public policy, and insufficient to constitute defenses to the demand for foreclosure and sale. (Rothschild v. Manufacturers Trust Co., 279 N. Y. 355; Mount Vernon Trust Co. v. Bergoff, 272 N. Y. 192.) Ás a matter of pleading, it does not appear that the agreement to improve the land as a joint venture, is ultra vires respondent. Adel, Acting P. J., Wenzel, MacCrate, Schmidt and Beldock, JJ., concur.