
    Charles C. Jacobs, Respondent, v. Peter Ciancimino, Appellant.
    Second Department,
    December 8, 1911.
    Mortgage — assignment.— action to recover expenses of foreclosure had , , at instance of mortgagor — new trial.
    Plaintiff purchased a third mortgage on lands belonging to the defendant, hut, not recorded in his name. From the amount of the mortgage he deducted the cost of a search and a sum which he advanced to pay interest on a second mortgage on which the defendant was obligated, giving the defendant a check for the difference. The defendant.-gave the plaintiff a promissory note as collateral security for the third mortgage assigned to the plaintiff, who subsequently at the defendant’s request foreclosed the mortgage, bought in the property, entered a deficiency judgment in .his own name in which suit he incurred expenses. He . recovered these expenses by a directed verdict in an action at law, there' being no accounting between the parties, no tender of the lands, or the judgment for "the deficiency, or account for the rents received by the plaintiff. . •
    
      Held, that a new trial should he granted.
    Btjrr, J., and Jehiís, P. J., dissented, with opinion.
    Appeal by the defendant, Peter Ciancimino, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Kings on the 10th day of December, 1910, upon the verdict of a jury rendered by direction of' the court, and also from an order entered in. said clerk’s office on the 12th day of December, 1910, denying the defendant’s motion for a new trial made upon the minutes.
    
      Martin S. Lynch, for the appellant.
    
      Ralph K. Jacobs, for the respondent.
   Hirschberg, J.:

The evidence in this case compels the conclusion that the initial transaction which has occasioned the controversy between the parties was a purchase by the plaintiff of a third mortgage on certain real estate in the borough of Manhattan which apparently belonged to the defendant but which was not recorded in his name. The mortgage amounted to the sum of $287.50. The plaintiff deducted from the amount $30, the cost of a search, and $60, being interest which he intended to advance in payment of a second mortgage for which the defendant was obligated, and gave to the defendant a check for the difference, that is, the sum of $197.50. At the same time the plaintiff took from the defendant the latter’s promissory note for the sum of $287.50, the note reciting that it was given as collateral security for the third bond and mortgage then purchased by and duly assigned to the plaintiff. Subsequently the plaintiff, at the defendant’s request; foreclosed the bond and mortgage, bought in and took a deed of the property on the sale and entered a deficiency judgment in his own name for the sum of $654.32. ' He incurred some expense in the transaction, for which expense he claims the defendant promised to reimburse him.

The action is brought at law to recover the amount of the plaintiff’s advancements and disbursements, and at the close of the evidence the court directed a verdict in the plaintiff’s favor for the amount with interest. There was no accounting rendered by the plaintiff, nor did he transfer, or offer to transfer, the title to the property or to the judgment for the deficiency, or to account for the rents received by him, if any, the court stating to the plaintiff at the close of the trial, as follows: “Ton have got to tender him [the. defendant] back and be ready to give him back a deed of the property and assignment for the deficiency judgment against Parks, or whoever you have, also all the collateral which you hold which belongs to him, must be given back to him; not now, when you enter the judgment, but when you get your judgment; because ydur judgment is recovered upon the ground that that was simply loaned, and it makes no difference what .you have taken in the way of value. He gets the property back. Then of course you will have to account, if he ever calls you to account, for the rents received, or which you should have received, or the income from the property. That can be taken up, in another branch of this court. You can come in before me,, and I will take proof in regard to it.”

The judgment entered was a simple final money judgment, no provision being contained in it for an accounting; and I know of no authority by which an accounting can be had informally and effectively in another branch of the court before the individual who Was the trial justice in the case at bar.

That the. plaintiff actually purchased the mortgage in question would appear from the evidence given on the trial by him and by his counsel. The plaintiff’s Counsel, Ralph K. Jacobs, testified on the subject as follows: “I came into my office, and Mr. Ciancimino- was talking to Mr. Jacobs [the plaintiff] and they both came into the private office, and Mr. Jacobs told me that he had made an arrangement to let Mr. Ciancimino have $60, and he was going to take over the third mortgage of $287.50, which Mr. Ciancimino had just taken in exchanging the property in New York.” .The plaintiff himself testified in reference to the transaction as follows: Q. Do you remember in January, 1910, having had a transaction with him relative to a third mortgage and lending money ? A. Yes, sir; he came in, I should say, about January 15, and asked me if I would discount a third mortgage. He came in about January 15, and asked me .if I would take over a> third mortgage, and he would pay $60 interest that was due on the prior mortgage, and he would pay the cost of searching. So I told him I would if. everything was satisfactory. The Court: You heard Ralph Jacobs testify. Do you want to go over all that ? Mr. Lynch [defendant’s counsel]: Not at all. The statement that the witness just told is absolutely true; there is no dispute about that.” '

There being no dispute between the parties on the trial that the mortgage in question was purchased by the plaintiff, and the note sued on being expressly given, as stated on its face, as collateral security, the facts did not justify the court in directing a verdict in favor of the plaintiff on the theory that the transaction was merely a loan,. If a dispute appears, in any view which may be taken of the evidence, certainly the question of fact should have been submitted to the jury. The cases cited by the learned counsel for the respondent do not support his claim to the contrary. In Matter of Gilbert (104 N. Y. 200) the mortgage in question was assigned by the mortgagee as collateral for his own debt. In the case at bar, however, the mortgage was acquired by the plaintiff in his own name by assignment from some one other than the defendant, and, assuming that it may be disputed that it was acquired as his own property, it was certainly acquired under circumstances which would justify a jury in concluding that it was so acquired. The defendant’s note was unquestionably taken as collateral security. In De Cordova v. Barnum (130 N. Y. 615) it was held, it is true, that one who takes collateral security for a debt may maintain an action to recover on the debt without first resorting to the collateral or returning it to the debtor. This, however, is no authority for the proposition that one who. has advanced money and acquired property at the instance of another may retain the property and maintain an action for the purchase money, in the absence of an agreement to that effect and without accounting for what he has received which the law would credit upon the obligation.

The case should be retried in order that the entire controversy may be determined and the dealings between the parties finally adjusted and settled.

Woodward, J., concurred; Rich, J., concurred in result; Burr, J., read for affirmance, with whom Jenks, P. J., concurred.

Burr, J. (dissenting):

I dissent. I think that the evidence clearly establishes a loan made by the plaintiff to the defendant and expenses incurred by him in connection with the foreclosure of a mortgage, which expenses were incurred at defendant’s request and upon his promise to repay the same. It is for a debt thus incurred that this action is brought. The note referred to in the evidence, and the assignment of the mortgage, were made as collateral security for the payment of this debt. Under such circumstances plaintiff may recover on the original indebtedness without regard to the collateral. It is probably true that upon payment of the debt defendant would be entitled to an accounting as to the collateral and the return thereof, but in his answer in this case defendant seeks no affirmative relief by way of prayer for an accounting, and that issue was not before the court for determination. The suggestion by the learned trial justice before whom this case was tried, that the parties might come in before him to take and state the account, was manifestly a voluntary offer upon his part to assist them in the final settlement of all matters in controversy between them. I do not think that he intended to intimate that as matter of right an accounting can be had informally and effectively in another branch of the court before the individual who was the trial justice 'in the case at bar.”

Jenks,. P. J., concurred.

Judgment and order reversed and! new trial granted, costs to abide the event.  