139 N.Y.S. 169 | N.Y. App. Div. | 1913
This is an action on a promissory note made by the defendant Shonts to the order of the defendant Wanser which, it is alleged, was duly indorsed by the payee and for value delivered to the defendant Thorn before maturity, and by him duly indorsed and delivered for value to the plaintiffs before maturity, and was duly protested for non-payment. The defendant Shonts admits that she received what purported to be a notice of protest, but, upon information and belief, she dénies that she executed the note and delivered it, or that it was for value, or that the presentation and protest thereof were due presentation and protest, or that notice of protest was duly given, or that any sum of money is due and owing from her to the plaintiffs; and she denies that she has any knowledge or information sufficient to form a belief with ■ respect to any of the other allegations of the complaint. The answer further contains two separate defenses pleaded as complete defenses, and one pleaded as a partial defense, and three counterclaims.
The first counterclaim alleges, by reference, all of the allegations pleaded as a first separate defense. The material facts alleged in that defense are, in substance, that on or about the day the note bears date the defendant Wanser presented to the defendant Shonts a proposed contract for the purchase by her from the executors or trustees of one Hoe the premises in the
The only question presented is whether an equitable counterclaim is pleaded which should be first tried at Special Term. It is quite clear that the first counterclaim is for the conversion of the stock, and, therefore, a legal counterclaim and the order cannot be sustained on the facts pleaded therein.
The second counterclaim merely alleges, by reference, the allegations contained in the first separate defense, the substance of which has already been stated, and it contains no additional allegations. The third counterclaim merely alleges, by reference, the allegations of the second separate defense. The only material allegations of that defense are that the note was procured by the payee by fraud and subterfuge, and that it was never executed or delivered to him, and that he was not the owner and had no right or power to transfer any title thereto. The defendant by the prayer for relief demands judgment for the dismissal of the complaint and for the return of the certificate of stock and the cancellation of the note and the power of attorney and the delivery thereof to the defendant Shonts, and for the value of the stock in the event that its return cannot be compelled, and for costs, and for the usual other and further relief, and for the stay of the prosecution of the plaintiffs’ cause of action pending the determination of the defenses and counterclaims, and that pending the action the plaintiffs be restrained from transferring the note, power of
The learned counsel for the appellants. contends that the facts thus pleaded in the second and third counterclaims are available to the defendant Shonts as a defense to the action and they undoubtedly are. (Hutkoff v. Moje, 20 Misc. Rep. 632, 634, and cases cited.) Counsel for appellants further contends that they should not be deprived of their right to a jury trial on the issues which arise under the complaint and the defenses thereto which are made the basis of these counterclaims to which the plaintiffs have replied, putting in issue the material allegations.
I am of opinion that the facts of this case are exceptional, and that it does not fall within the rule that in an action at law an equitable counterclaim should be first tried. (See Brody, Adler & Koch Co. v. Hochstadter, No. 1, 150 App. Div. 527.) I know of no authoritative decision in this jurisdiction and none is cited holding that the plaintiff can be deprived of his right to a jury trial in an action at law on a promissory note by the interposition of a plea of an equitable counterclaim for the cancellation and return of the note or be delayed in procuring judgment by the presentation of an issue between the defendants" as to which of them is primarily liable, or for the determination by a court of equity as to whether execution should first issue "against the indorsers of the note. It may be said that the order does not necessarily deprive the plaintiffs of the right to a jury trial and that they would still be' at liberty to apply to the court to have the issues raised on the counterclaims settled and tried by a jury; but that would rest in the" discretion of the court arid they would not be entitled as- á matter of right to the settlement of these issues and their trial by a jury. Accepting: the allegations of the counterclaims the plaintiffs merely claim to hold the certificate of stock as collateral'
It follows, therefore, that the order should be reversed, with
Ingraham, P. J., Clarke, Scott and Miller, JJ., concurred.
Order reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs. ■