Wade v. Strever — 42 A.D. 330

Majority

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Mary J. Wade, as Executrix, etc., of Sally E. Brockway, Deceased, Appellant, v. Martin Strever and Others, Defendants; Jane E. Miller, Respondent.

Headnote

Mortgage foreclosure — counterclaim asserting the priority of another mortgage on the same premises, and asking for its foreclosure — a reply is necessary—final judgment against the plaintiff and in favor of such answering defendant.

The complaint in an action for the foreclosure of a mortgage alleged that, simultaneously with the execution of the plaintiff’s mortgage, two other mortgages rvere executed upon- the same premises, with the understanding that neither of'the three mortgages “should have precedence over the others, or either of them.” It demanded judgment that the defendants, among whom were the holders of the other two mortgages, he foreclosed; that the premises he sold, and that the proceeds he brought into court, and that the plaintiff he paid therefrom.

The holder of one of the two mortgages referred to, “for an answer and counterclaim,” set forth her mortgage, and made the averments appropriate to a-complaint for its foreclosure, and then alleged that such mortgage was a.

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prior lien to the other two mortgages, and that the mortgagor and mortgagees so agreed at the time the three mortgages were executed and delivered. It denied the allegation of the complaint that the original understanding was that “neither of the mortgages so executed should have precedence over the: others, or either of them,” and also denied knowledge or information sufficient to form a belief as to whether the other mortgages were given upon a consideration, or whether anything was due upon them, and demanded judgment that the priority of the defendant’s mortgage be decreed, and that a foreclosure and, sale be adjudged accordingly. .

Held, that the answer stated a counterclaim, to which it was incumbent upon the plaintiff to reply in order to prevent the defendant interposing the answer from obtaining judgment for the relief demanded therein;

That the judgment in favor of the answering defendant entered against the plaintiff, upon the latter’s failure to serve a reply, was final as to the issue raised ■ between the plaintiff and the answering defendant, concerning the priority of their respective mortgages.

Appeal by the plaintiff, Mary J. Wade, as executrix, etc., of Sally E. Brockway, deceased, from a judgment of the Supreme: Court in favor of the defendant Jane E. Miller, entered in the office of the clerk of the county of Rensselaer on the 28th day of January, 1899, upon the decision of the court rendered after a trial before the court without a jury at the Rensselaer Trial Term.

The plaintiff’s complaint is for the foreclosure of one of three-mortgages upon certain premises, alleged to have been executed by the defendants Martin Strever and Dorcas A. Strever, April 30,187CL The complaint contains the necessary allegations for the foreclosure of the plaintiff’s mortgage, and then alleges “ that simultaneously with the execution of said mortgage were executed two other mortgages, with the understanding that neither of the mortgages so executed at that time should have precedence over the others or either of them.” The complaint further alleges that one of said other mortgages-is held by the defendant Miller, and the other by the defendants. Smith, and prays judgment that the defendants be foreclosed, etc., the premises sold and the proceeds be brought into court, and the: plaintiff be paid therefrom, or for other or further relief.

The defendants Smith answered, setting forth their mortgage, and alleging that it is an equal lien with the plaintiff’s mortgage, and prayed foreclosure and concurrent relief.

The defendant Miller, “for an answer and counterclaim,” set forth her mortgage and made allegations appropriate to a complaint for

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the foreclosure thereof, and then alleged that it was prior in lien to the other two mortgages, and that the respective mortgagors and mortgagees so agreed at the time the three mortgages were executed and •delivered, and denied the allegation of the complaint that'the original understanding was that “ neither of the mortgages so executed should have precedence over the others or either of them; ” and also denied knowledge or intormation sufficient to form. a belief as to whether the other mortgages were given upon consideration, or whether anything was due upon them, and demanded judgment that the priority of the lien of her mortgage be decreed and a foreclosure and sale be adjudged accordingly. The defendant Miller also served his answer upon the defendants Smith.

The learned trial court held that this answer was a counterclaim, and rendered judgment of foreclosure thereon in favor of the defendant Miller, and against the'' plaintiff, because the latter 'had served no reply thereto, but directing that no sale be had “ until all issues between all the parties hereto are found and determined by the court.”

Henry H. Merchant, for the appellant.

William J. Hoche, for the respondent. Miller.

G. B. Willington, for the defendants Smith.

In Metropolitan Trust Co. v. Tonawanda, etc., R. R. Co. ( 43 Hun, 521 ) the question was whether, when the junior mortgagee brought his action of foreclosure, making the senior mortgagee a party, and praying judgment that the mortgaged premises be sold subject to. the lien of the senior mortgage, or that the same be paid from the. proceeds of the sale, and the senior mortgagee ¿answered setting up. all the facts necessary to foreclose his mortgage, and prayed judgment for foreclosure and sale in the usual form, it was competent for the court to render the judgment prayed dor by the senior mortgagee. The court held that such judgment could be rendered, and based its opinion upon its conclusion that the answer of the senior "mortgagee was. a counterclaim. This judgment was affirmed ( 106 N. Y. 673 ) on the opinion of the General Term. In the case as reported it loes not appear whether any reply was

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served. Probably there was none because the complaint alleged the priority of the defendant’s lien. Here the complaint alleges the equality in lien of three mortgages. The defendant Miller denies that equality, and had to allege priority in order to state a counterclaim. The allegation of priority is the essential part of the counterclaim within the case cited..

Following the authority cited we .affirm the judgment.

■ Objection is made to the judgment by the appellant in that it is not final, and cannot be made so until the rights of the defendants Smith are adjudged. By her appeal the plaintiff recognizes its finality. The defendants Smith are not prejudiced by it as the issue between them and Miller is reserved. The judgment is not final as to all the issues and all the parties, but is final as to one issue between two of the parties. Practically the case stands as if Miller were plaintiff and the plaintiff Wade and the others defendants, and as if Wade had raised a separate issue against the plaintiff which the court has separately tried and determined. When all the issues-have been tried final judgment can be rendered between all the parties. (Code Civ. Proc. §§ 1204, 1221.)

The judgment should be affirmed, with costs in favor of the respondent Miller against the appellant.

All concurred.

Judgment affirmed, with costs in favor of respondent Miller against the appellant.