Edwards V. Voorhis

It is important to note that the defendants Amscon and Reliance did not raise in this litigation any claim that they owned these notes and mortgages. Rather, the claim of ownership in Amscon and Reliance was raised at the trial by the defendant mortgagors, Paul and Murle Edwards. Although the defendants Amscon and Reliance were duly served, they did not file an answer or make any appearance in this action. In fact, their defaults were duly entered, judgment was taken against them, and that judgment had become final prior to trial. One of the provisions of this default judgment against Amscon and Reliance specifically held that plaintiffs were the owners and holders of these notes and mortgages. In accordance with the notice of lis pendens recorded by plaintiffs at the commencement of the foreclosure action, the judgment further barred all persons claiming through Amscon and Reliance from and after the date of the recording of the lis pendens from claiming any right, title or interest in the mortgaged property adverse to the plaintiffs. The notice of lis pendens was recorded on February 16, 1965, the date the complaint was filed. Some six months thereafter, on September 9, 1965, the defendant mortgagors purported to purchase the subject notes and mortgages from the defendants Amscon and Reliance. The purchase price for these notes and mortgages was the issuance by the defendant mortgagors of a new note in the principal amount of $11,025.00*fn1 secured by a new mortgage on the subject premises. However, provision was made in this new note and mortgage that no payment would ever become due unless the defendant mortgagors were successful in defending against plaintiffs in this action. Thus, the inference is raised that the motives of the defendant mortgagors in questioning plaintiffs' title was not to protect themselves from the possibility of double liability, but rather was an attempt to create a situation where they might be able to settle their obligations at less than fifty (50%) per cent of the balance owing thereon.