Feller v. Architects Display Buildings, Inc.

Architects Display Buildings, Inc. (Architects) and its president, Charles S. Cohen (defendants), entered into two mortgage-loan agreements with Sturm, an individual, to secure financing for the construction of a building. At the time of the first mortgage, Architects had completed approximately 70 percent of the building’s construction. The first mortgage was issued in January 1957 for $250,000. This mortgage was subject to advanced interest of $11,460 and a service charge of $28,540. All funds granted pursuant to this loan were to be repaid by December 30, 1957. The mortgage was secured by Architects’ president, Cohen, with the consent of its shareholders. The parties then agreed to allow Sturm to assign their interests to Feller (plaintiff). In April 1957, Architects entered into a second mortgage agreement with Feller for an additional loan of $50,000. The second mortgage agreement was secured by 11 promissory notes, which were endorsed by Cohen as an individual. The second mortgage was subject to advanced interest of $8,500. Under the second mortgage agreement, Architects was obligated to make monthly payments commencing on July 1, 1957, and concluding on April 24, 1958. Both the first and second mortgages called for an interest rate of one twenty-third of 1 percent per day from the date of default until the satisfaction of payment. Architects defaulted on its December payments, and Feller declared the loans immediately due and payable. Feller filed suit, and the trial court granted summary judgment to Feller foreclosing the two mortgages. Architects appealed the trial court’s determination.