Thomas v. Bronx Realty Co. — 60 A.D. 365

Majority

p. 365

Rowland W. Thomas, Respondent, v. The Bronx Realty Company, Appellant.

Headnote

Set-off— what allegations constitute an equitable counterclaim—when the trial of the issues at the Trial Term will not be stayed until the issue raised by an equitable counterclaim can be tried at Special Term.

The answer interposed in an action to recover damages for the breach of a contract for the sale of real property alleged that it was agreed between the parties that, if the title to the property was objectionable to the plaintiff, the money paid upon the contract at the time of its execution should be refunded and that thereupon such contract should become null and void; that such agreement, although made, was not incorporated in the written contract, and judgment was demanded that the contract be reformed so as to include the terms of the agreement omitted from the written instrument, and that, after such reformation, the agreement be delivered to the defendant for cancellation.

p. 366

Held, that the answer set up an equitable counterclaim, and that, under the provisions of section 974 of the Code of Civil Procedure, the defendant was entitled to have the issue raised by such counterclaim tried at the Special Term;

That, as it appeared that the defendant, in the exercise of ordinary diligence, could have the issues presented by the counterclaim tried at the Special Term before the issues presented by the complaint could be reached for trial, the defendant was not entitled to a stay of the plaintiff’s proceedings at the Trial Term until the determination of the issues presented by the counterclaim.

. Appeal by the defendant, the Bronx Realty Company, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 27th day of December, 1900, denying the defendant’s motion for a stay of thé plaintiff’s proceedings at the Trial Term pending the determination of the issues raised by the equitable counterclaim set up in the answer and reply thereto.

Mortimer Kennedy Flagg, for the appellant.

Charles P. Hallock, for the respondent.

This action is brought to recover damages for breach of contract in the sale of real property. The complaint avers the making of the contract, its breach, and demands damages in a specified sum. The amended answer of the defendant admits the making of the contract, and that at the. time fixed therein for the delivery of the deed delivery of the same was not tendered. It then avers that at that time it was ready to return to the plaintiff the amount which had been paid upon the contract. Eor a separate defense and as an equitable counterclaim to the action, it is averred, inter alia, that, prior to the execution of the agreement set forth in the complaint, the defendant agreed, upon certain terms, to sell the premises mentioned therein, and that as the • execution of such contract was dependent upon the fulfillment of another contract between other parties and the defendant, it was agreed that if the title to the property was objectionable to the plaintiff the money paid upon the contract set forth in the complaint at the time of its execution should thereupon be refunded, and thereupon such contract should become null and void; that such agreement, although made, was not incorporated in the written contract, as it properly should have been, and' such answer demanded judgment that the contract sued upon be

p. 367

reformed so as to include the terms of the agreement omitted from the written instrument, and that after such reformation the agreement be delivered to the defendant for cancellation. The defendant claims that this answer sets up an equitable counterclaim which he is entitled to have first tried, as otherwise he may not avail himself of it as a defense to the action. We are of opinion that the pleading constitutes an equitable counterclaim under the provisions of section 974 of the Code of Civil Procedure, and under its provisions the defendant is entitled to the trial of such issue at the Special Term. Noth-, ing which appears in Bennett v. Edison Electric Ill. Co. ( 164 N. Y. 131 ) conflicts with this view. The counterclaim averred in that action asked for the reformation of the contract sued upon, on the ground that defendant had been induced to execute the same through fraud practiced upon it, and this, if found as a fact, was available to defendant as a defense. It needed no reformation of the contract, because, if the allegations of the answer were true, all basis for the action would fail as there would exist no valid contract between the parties. In the present case, however, as the contract sued upon is complete upon its face, the plaintiff shows himself entitled to recover. The bffect, therefore, of the averments in the counterclaim is to show the omission of matter which constitutes a part of the agreement between the parties, and which, if true, will furnish a complete answer to the plaintiff’s claim for damages for the breach. Without, this reformation, defendant may not avail himself of such matter as a defense. It is, therefore, evident that he is entitled to a trial of this issue at Special Term.

It does not, however, follow that his motion for a stay for the trial of the action should be granted. On the contrary, we think it was properly denied, for the defendant, in the exercise of ordinary diligence, may have the issue presented by the counterclaim tried at Special Term before the issues presented by the complaint can be reached for trial. Consequently there is no basis for granting a stay of proceedings. The order appealed from should be affirmed, with ten dollars costs and disbursements.

Van Brijnt, P. J., Rtjmsey, O’Brien and Ingraham, JJ., concurred.

Order affirmed, with ten dollars costs and disbursements.

Cases cited

Bennett v. Edison Electric Illuminating Co. 164 N. Y. 131 N.Y. 1900-10-02 p. 367