182 A.D. 331 | N.Y. App. Div. | 1918
Lead Opinion
The question involved upon this appeal is whether a grantee under a full covenant deed can interpose as a counterclaim in an action brought by the grantor to foreclose a purchase-money mortgage the damages sustained by a breach of covenant when there is already pending an action by the grantee against the grantor to recover damages for such breach.
The facts are not in dispute. In August, 1914, the plaintiffs conveyed to the defendants Fear, by full covenant deed, three parcels of land situated in the city of Rensselaer, N. Y„
The defendants interposed an answer in which they alleged, first, as a defense, the facts as above set forth; second, as a counterclaim, said facts, except that they did not therein allege the pendency of the prior action, and asked to recoup against the amount unpaid upon the bond the damages sustained by the defendants by reason of the failure of title; and third, as a defense, that at the time of the commencement of this action there was an action pending in this court between defendant Nellis as such trustee as plaintiff, and the plaintiffs herein as defendants, to recover damages for the breach of the covenants of said" deed by reason of such failure of title, the defendants alleging that the plaintiffs herein ought not to be permitted to prosecute this foreclosure action during the pendency of said prior action, and asked that this action be dismissed, with costs. The plaintiffs served a reply •to said counterclaim admitting giving said deed but denying every other allegation thereof, and pleaded adverse possession. Said prior action is still pending, undetermined. Upon the issues in this action coming on for trial at the Albany Special Term in October, 1917, the court, over the objection of the
While it was held in Meserole v. Williams (153 App. Div. 306) that defendants cannot plead as a defense in an action to foreclose a purchase-money mortgage alleged defects of title, it was held in Simon v. Neef (160 App. Div. 46), in which a deficiency judgment was demanded, that the court should not disregard a counterclaim for damages based upon the ground that the title to the property at the time of the conveyance by the plaintiff to the defendant was defective.
The defendants, however, in the case at bar, having alleged as a defense the pendency of a prior action brought by them to recover the -damages claimed to have been sustained by them by reason of a breach of the covenants contained in the deed to them, in which action the defendants had the right to insist upon a trial by jury, and which action was still pending and undetermined, and which the defendants neither asked nor offered to discontinue, and not being entitled to two trials of that issue, must be held to have elected to pursue their remedy in the prior action and to have waived their counterclaim, and the Special Term was right in granting plaintiffs’ motion for judgment on the pleadings.
The order appealed from should be affirmed, with costs.
All concurred, except John M. Kellogg, P. J., dissenting in opinion.
Dissenting Opinion
The covenant of seizin was broken when the deed was delivered, and a cause of action arose thereon at that time. (Mygatt v. Coe, 124 N. Y. 212.)
The action was brought by the plaintiffs to recover the moneys agreed to be paid by the bond given for the purchase price; the mortgage was an incident to the bond and the indebtedness created thereby, and was given solely as collateral security for its payment. The object of the foreclosure action was to sell the mortgaged premises and apply the proceeds
Some of the cases indicate that in an action to foreclose a mortgage against the mortgagee in possession, he cannot set up as a counterclaim or recoupment a breach of covenant in the deed for which the mortgage was given. They evidently proceed upon the theory that no action lies for such breach until there is an eviction, and overlook entirely the fact that in case of a breach of covenant of seizin the cause of action arises the moment the deed is made, if there is a defect in title. We have sustained a counterclaim as a recoupment under facts very similar to those in this case. (Peuser v. Marsh, 167 App. Div. 604.)
A defendant may allege as many defenses as he has, even though they are not consistent with each other. It cannot be that the allegation in the answer that a former action is pending for a breach of the covenant waives the defendants’ counterclaim and compels two actions where justice requires that the controversy be settled in one. I, therefore, dissent.
Order affirmed, with ten dollars costs and disbursements.
