City Real Estate Co. v. Foster — 44 A.D. 114

Majority

p. 114

City Real Estate Company, Appellant, v. James P. Foster and Others, Respondents.

Headnote

•Counterclaim in an action to foreclose a mortgage—the defendants are not entitled, to a compulsory reference where the counterclaim arose against the plaintiff’s ' asdgnor.

Under section 974 of the Code of Civil Procedure, providing that where a ‘•■defendant interposes a counterclaim and thereupon demands an affirmative "judgment against the plaintiff, the mode of trial of an issue of fact arising . thereupon is the same, as, if, it arose, .in an action, brought by the defendant • against the plaintiff for the .cause, of’ action stated in the counterclaim, and demanding the same judgment,” the defendants, in an action to foreclose a mortgage; who interpose a counterclaim alleging, that the plaintiff’s assignor is the real party in interest, and set up a cause of action against such assignor -.arising, out of the breach of a policy of title insurance, are not entitled to a compulsory reference of the issues arising on the counterclaim and the reply, which consists of a general denial, as they could not maintain an action against the plaintiff upon the cause .of action alleged in the counterclaim, nor obtain any affirmative judgment against it thereon.

p. 115

Appeal by the plaintiff, the City Real Estate Company, from an order of the Supreme Court, made at the Hew York Special Term and entered in the office of the clerk of the county of Hew York on the 6th day of October, 1899, directing that the issues raised by a counterclaim and reply be tried before a jury.

William H. Stockwell, for the appellant.

Edward Schenck, for the respondents.

This action was brought to foreclose two mortgages upon certain premises in the city of Hew York. The defendants, in their answer, set up a counterclaim alleging that the real party in interest was the Title Guarantee and Trust Company of the City .of-Hew York, which was the assignor of the plaintiff, and that they had a cause of action against said company because of a breach of a policy of insurance of title. The plaintiff served a reply consisting of a general denial. A motion was made to have the issues raised by this counterclaim and reply tried before a jury, which motion was granted, and the court settled certain issues to be tried by the jury.

The right to such trial is asserted by the defendant as matter of right, and the motion was granted by the court upon that ground. This right is claimed under section 974 of the Code of Civil Procedure. The language of that section is as follows: “ Where the defendant interposes a counterclaim and thereupon demands an affirmative judgment against the plaintiff, the mode of trial of an issue of fact arising thereupon is the same as if it arose in an action brought by the defendant against the plaintiff for the cause of action stated in the counterclaim, and demanding the same judgment.”

It is perfectly apparent that the defendant could obtain no affirmative judgment upon his counterclaim as against the plaintiff in this- foreclosure action. At most, if he established a cause of action, it would be oiily an offset as against the plaintiff’s claim and he could obtain no affirmative .judgment against-ihe--plaintiff. It is manifest from a reading of the section that it is only in those cases where an affirmative judgment may be obtained by the defendant against the plaintiff for the cause of action set up in the counterclaim that the section applies.' The language is “ and thereupon demands an affirmative judgment against the plaintiff, the mode of

p. 116

trial of an issue of fact arising thereupon is the same as if it arose in an action brought by the defendant against the plaintiff.” Now, as has already been observed, the defendant could not bring an .action against the plaintiff for the cause of action - attempted to be alleged in the counterclaim, and he could not obtain any affirmative judgment against, the plaintiff. Hence the conditions required by the section are entirely absent from the case at bar.

The order should be reversed, with ten dollars costs and disbursements, and the inotiqn-.denied, with ten dollars costs.

Barrett, Patterson, O’Brien and Ingraham, JJ., concurred.

Order reversed, with ten dollars costs and disbursements, and riuotion denied, with ten dollars costs.