Gross v. Ben Franklin Building & Loan Ass'n

Ubneb, J., delivered the opinion of the Court. A decree in personam for a deficiency of $13,539.76, in the-amount realized from a sale of mortgaged property for application to the mortgage debt, was rendered against seven. ⁴⁰³ parties charged with liability for its payment. Two' of the parties, Jacob A. Gross and William Cohen, have appealed from the decree. The grounds of defense upon which they respectively rely are separate and distinct.

Mr. Gross is one of the mortgagors and Mr. Oohen is the purchaser of an interest in the equity of redemption. The defense of Mr. Gross is based on the theory that his liability under the mortgage was discharged by indulgences extended without his consent to the grantees of the mortgaged lands. Mr. Oohen contends that he is not amenable to a decree m personam under the terms of the statute by which that remedy is provided. * The mortgage was executed on May 29th, 1925, by the five owners of the property which it described. In the following August Mr. Gross sold his interest in the property to Mr. Oohen, and subsequently the remaining interests in the equity of redemption were acquired by Mr. Cohen and Raymond Levin.

There was a provision in the mortgage that upon the transfer of the mortgaged lands the debt secured thereby should immediately become due and payable. When Mr. Gross sold his interest in the property, he mentioned that provision to Mr. Cohen, the purchaser, in order that its enforcement might be obviated by arrangement with the mortgagee. This was accomplished by the payment of a transfer fee of approximately $300, to which both purchasers of interests in the equity of redemption contributed. On May 2nd, 1927, an agreement was signed by Mr. Cohen and Mr. Levin, as owners of the mortgaged premises, and by two of the original mortgagors, not including Mr. Gross, the appellant, which, after referring to the execution of the mortgage and the lots of ground described therein, recited that indulgences in the payments required by the mortgage had been granted from time to time by the mortgagee to the owners of the equity of redemption, and that they were again unable to make payments in accordance with the terms of the mortgage; and the agreement then provided that for the ensuing period of six months the mortgagee would accept one-half of the weekly payments of principal ⁴⁰⁴ stipulated in the mortgage, but that the subsequent payments should be strictly in accordance with its terms, which were declared to be a part of the agreement.

Among the covenants which it contained were the following: “2. In the event the said parties of the first part shall fail or neglect to make the payments herein agreed to be made, in. strict accordance with the terms hereof, for a period of four weeks, then the modification of payment herein made shall be cancelled, and the said mortgage shall thereupon be and continue in default. “3. The parties of the first part hereby jointly and severally agree for themselves, their heirs or personal representatives, that they shall be primarily liable upon all the covenants contained in the said mortgage, and for the payment of the mortgage debt.” Appended to the agreement was a written assent to all of its terms, signed by the mortgagors, including Mr. Gross,, the appellant, who had not joined in its execution. By that assent Mr. Gross clearly precluded himself from basing his-present defense upon any indulgence which the agreement granted.

The evidence in the record does not show any prior-modification of the terms of payment which the mortgage prescribed. The waiver by the mortgagee of the provision relating to transfers of the equity of redemption is not a-fact from which Mr. Gross is entitled to derive any support for his defense, since the transfer was his own act and was made with a design that such a waiver should be negotiated. It was proved that the mortgagee, prior to the agreement of’ May, 1921, repeatedly accepted payments which were less than the amounts currently due under the