International Madison Bank & Trust Co. v. Jonas Construction Co.

247 A.D. 806

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: March 15, 1936
• Status: Published

Opinion

Order granting plaintiff’s motion for summary judgment reversed on the law, with ten dollars costs and disbursements, and motion denied, with ten dollars costs. The existence of the agreement concerning the assignment of rents and the statements in the opposing affidavits as to the amounts of rents collected, and that such amounts, if applied as required by the agreement, were sufficient to prevent any default, were not denied by the plaintiff. Assuming the truth of these statements, we are of opinion that they constitute a defense in appellant’s favor. It is asserted that the agreement in question was made for the benefit of the appellant as well as for the benefit of all subsequent lienors of the property. This is an equitable action and the rights of the parties are governed by equitable principles. It would be unjust and inequitable to permit the plaintiff, with funds in its possession sufficient to pay the interest on the mortgage, and required so to do by its agreement with the mortgagor, to withhold such payments, to declare a default in the payment of such interest, and to maintain an action to foreclose the mortgage and wipe out all subsequent liens and interests. Lazansky, P. J., Young, Hagarty, Carswell and Davis, JJ., concur.