98 N.J. Eq. 323 | N.J. | 1925
This is a foreclosure suit. The defendant, Clara R. Bailey, on the 19th of November, 1921, executed a note to the complainant, secured by a mortgage, in the sum of $2,600, payable within two years from date. The complainant admits in his bill payments on account of the principal of this note totaling $1,300, and the suit is brought to enforce the payment of the balance still remaining due. The defendant set up in her answer that the mortgage had been obtained from her by fraudulent representations made to her by the complainant, and that there was, in fact, nothing due thereon from her to him. She also set up by way of counter-claim that, prior to the making of the mortgage, the complainant had been employed by her to make certain alterations and additions to the dwelling-house upon the mortgaged premises; that she had paid him considerable sums for the work to be done and the materials to be furnished by him on the building, and then asserts that he never fully performed his contract, but left the work uncompleted, by reason of which default she had been caused a considerable financial loss, and prayed a decree fixing the damages so sustained by her and directing their deduction from the mortgage debt, if it should be considered that it was a valid obligation against her. Vice-Chancellor Ingersoll, before whom the cause was heard, concluded that the mortgage debt was a valid obligation against the defendant, and advised a decree of foreclosure for the unpaid principal thereof. He also held that the counter-claim should be disallowed, for the reason that it could not be set up as a defense in a foreclosure proceeding. From the decree entered in accordance with these views the defendant has appealed.
The first ground upon which a reversal of the decree under review is sought is that the proofs support the appellant's *325 claim that the mortgage was obtained by fraud, and is, for that reason, null and void. It is sufficient, in disposing of this ground of appeal, to state that our examination of the proofs in the cause satisfies us that this claim is not justified by the facts, and that, consequently, the respondent was entitled to a decree establishing his right to the unpaid balance of the mortgage debt.
It is further argued before us that the court of chancery committed legal error in refusing to entertain the appellant's claim for damages, and to permit them, when ascertained, to be credited on account of the mortgage debt. This contention, also, we think, is without merit. In the absence of a statutory provision to the contrary, the defendant in a foreclosure suit cannot set up in that suit, by way of satisfaction of the mortgage in whole or in part, a debt owing to him from the complainant, or a claim for unliquidated damages which he has against the latter, unless there be an agreement between the parties that such debt or claim shall be received and credited as payment. Parker v. Hartt,
For the reasons indicated we conclude that the decree under review should be affirmed.
For affirmance — THE CHIEF-JUSTICE, TRENCHARD, PARKER, MINTURN, KALISCH, BLACK, KATZENBACH, LLOYD, WHITE, VAN BUSKIRK, CLARK, McGLENNON, KAYS, JJ. 13.
For reversal — None.