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178 A.D. 12

Diehl v. Becker

Appellate Division of the Supreme Court of the State of New York · decided 1917-05-04

Appeal by the plaintiff, George H. Diehl, Jr., from an order of the Supreme Court, made at the Hew York Special Term and entered in the office of the clerk of the county of Hew York on the 3d day of October, 1916, granting respondent’s motion for judgment on the pleadings consisting of a complaint and answer, and also from the judgment entered in said clerk’s office on the 19th day of October, 1916, pursuant to said order.

Decided 1917-05-04

Smith, J.

¶1(dissenting):

¶2As I read the contract the prevailing opinion ignores the right of the lender to foreclose the lien given to him upon the

¶3*16patents as security for the amounts payable. This right is emphasized by that provision of the contract which retains in the borrower the sole right for five years to sell or grant licenses under the patents. Without this provision, except for the illegality of the contract, the lender might after a reasonable time have foreclosed his lien and sold the patents thereunder. This he may now do, as the five years have expired. I do not agree, therefore, with the prevailing opinion that it was optional with the borrower whether he would sell and pay the bonus. There breathes through the whole contract the manifest intention that the lender was to have the right to have returned the principal and interest, and in addition the bonus of $1,250 or $2,500, dependent upon the date of sale. That sale could within five years have been made by the borrower, or after that time by the lender through a foreclosure of his lien. If this be the true interpretation of the contract the ■ lender cannot purge it of its illegality by bringing an action only for the principal and legal interest.

¶4I recommend affirmance.

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