Irving v. De Kay

10 Paige Ch. 319 | New York Court of Chancery | 1843

The Chancellor.

If the cross bill in this case showed a case of equitable set-off, which it was impossible for the defendants to avail themselves of by a proper answer in the original suit, they were not entitled to an order to stay the proceedings without showing some excuse for their neglect to file their cross bill before this suit was at issue. Here the defendants were served with the bill in the spring of 1842, and there is no pretence that any new fact has been discovered since that time rendering a cross bill necessary. And yet they have waited more than a year, and until the original suit was in readiness for hearing and had actually been reached in its regular order upon the calendar, before their crossbill is filed. The proper time for filing a cross bill, where such a bill is necessary, is at the time of putting in. the answer, to the original bill and before the issue is joined by the filing of the replication. And as the matters of defence upon which a cross bill is founded must be stated in the answer to the original suit, as well as in the cross bill, it can seldom be necessary to delay the filing of the cross bill till after the original cause is at issue.

Again ; there appears to be no necessity for a cross bill in this case. For if the defendants had a legal right of set-off against the mortgage debt, all that was necessary for them to do, was to state such set-off in their answer to the original bill. Under the provisions of the revised statutes, in suits for the recovery or payment of money, set-offs are to be allowed in this court, in the same manner and with the like effect as in actions at law. (2 R. S. 174, § 40.) If the defendants, therefore, had any such legal set-off in this case as is contemplated by the provisions of the revised slatutes relative to set-offs in courts of law, all that was necessary for them was to state the nature and particulars thereof in their answer to the original bill, in analogy to a plea of set-off in an action at law, and to produce proof upon the hearing in support of such answer. (Chapman v. Robinson, 6 Paige’s Rep. 627.) But no such set-off can be allowed in a foreclosure suit, under the provisions of the revised statutes, which could not be allowed, as a proper subject of set-off, in an analogous case in a suit at law for the recovery of the mortgage debt. And where the defendant has not such a legal right of set-off, his cross bill must not only show the existence of a debt due from the complainants in the foreclosure suit, but also that they are insolvent; so that injustice would be done if such set-off was not allowed and the defendant was left to his remedy against them by a distinct and independent suit. Or the defendant must state some other ground of equity in his cross bill, which would have been sufficient to sustain an original bill in this court for a set-off.

Neither of the claims mentioned in the cross bill appears to be a proper offset against this mortgage debt, under the provisions of the revised statutes. The claim of Mrs. De Kay against the executors, for the rents and profits alleged to have been received by Mr. Eckford in his lifetime, is a debt due from the estate, and not from the executors personally, in their character as executors. It is not, therefore, a legal offset against a debt in their favor created since the death of the testator; according to the decision of the supreme court in the case of Fry v. Evans, (8 Wend. Rep. 530.) And that decision is in accordance with the settled rule of law in England upon this subject.

The answer sets up an agreement, by the complainants in the foreclosure suit, to account for the rents of the Love Lane property received by them, at the rate of $900 a year, if the conveyance of August, 1826, should be declared to be an absolute deed of the premises. But the answer is not sworn to, and no proof has been produced to support that allegation. Nor do I find any such charge made in the cross bill, which is put in upon oath. The cross bill, therefore, contains nothing to show that the executors were authorized by De Kay and wife to receive the rents and profits of the property ; and from aught that appears, whoever received such rents and profits received them without the consent of De Kay and wife. The remedy of the defendants, therefore, is by an action against the individual who received the money ; and neither party has the right to have them offset against this mortgage debt; as has already been decided in this suit, upon the application to dissolve the injunction, in relation to other rents which were in the same situation.

The individual claim of De Kay against the estate of Eckford, for the $2500 placed in his hands in 1834, is also a claim against the estate of Eckford which could not be offset against this mortgage, even if the mortgage debt was due from De Kay individually, for the reasons before stated. And as he has failed in establishing that claim against the executors, in the suit at law brought for the recovery thereof, the claim cannot be urged as a subject of either legal "or equitable set-off.

The only remaining claim of offset relates to what the complainants in the cross bill suppose Mrs. De Kay may be entitled to as her distributive share of the estate of her grandfather, under the will. This of course could not be the subject of a legal offset until her share of the estate should have been ascertained and decreed to be paid, either by this court or by the surrogate having jurisdiction to decree an account and distribution of the property. Such an account cannot be taken in this suit, to which the other parties entitled to distributive shares under the will are not parties. It is impossible, therefore, that such a claim, either as a legal or equitable offset, should be allowed in this court. Upon the merits of the case, then, if the delay in filing the cross bill was satisfactorily accounted for, or the same had been filed and this application made before the filing of the replication to the answer, the order to stay the proceedings until this cross bill was answered, would have been erroneous.

The order appealed from must therefore be reversed with costs, including the costs of the complainant in opposing the application before the vice chancellor ; which costs are to be costs in the cause and to be taxed as a part of the general costs of this suit, if the complainants succeed in obtaining a decree for the foreclosure and sale of the mortgaged premises.