Orchard Street Associates v. McElone

Order, Supreme Court, New York County (Beatrice Shainswit, J.), entered on or about December 20, 1994, which, in an action to recover the unpaid balance on a mortgage, denied plaintiff’s motion for summary judgment, and granted defendant’s cross-motion for summary judgment dismissing the complaint and on its counterclaims declaring the mortgage to be null and void and seeking return of the payments already made thereon, unanimously affirmed, without costs.

The mortgage consolidation and extension agreement in issue was correctly held to be null and void on the ground that, by its terms, it requires the intended mortgagor, defendant, to own the subject premises, which defendant never did. The record shows that the parties intended that defendant would purchase the premises from the owner, a nonparty who was then in default on his mortgages with plaintiff, and that plaintiff would consolidate and extend the original mortgages to defendant. The parties imprudently executed the consolidation agreement before the sale from the nonparty to defendant was finalized or its intent was memorialized in contract and, when negotiations for the sale ultimately failed, defendant rightly refused to make the mortgage payments.

We have considered plaintiff’s other contentions and find them to be without merit. Concur—Rosenberger, J. P., Wallach, Rubin and Mazzarelli, JJ.