Quinn v. McDonald — 32 N.Y. St. Rep. 722

Majority

p. 722

Ellen M. Quinn, App’lt, v. Margaret McDonald, Resp’t.

(Supreme Court, General Term, Second Department

Filed July 18, 1890.)

Headnote

I. Reference — Long account.

Where the - only account involved is between persons not parties to the action or to the mortgage in question, which is claimed to have been given for the indebtedness between such persons, for the pur-pose of determining the amount due on the mortgage as against the surety, it is not an account between the parties and does not make the action referable.

3. Same — Foreclosure—Fraud.

Where the answer in an action of foreclosure denies the execution of' the bond and mortgage; alleges that they were given to secure a loan which was not made; that plaintiff is a fraudulent vendee thereof, and that his brother fraudulently inserted an assumption clause in the deed to defendant, the plaintiff has a right to a trial of these issues in the usual way and the action is not referable.

Appeal from order granting a reference.

Action to foreclose a mortgage alleged to have been given by Hugh McDonald to John Lynch to secure moneys due to Michael J. Murphy and Jonas 0. Quinn from Edward McDonald.

p. 723

Under proof that the trials of the action will necessarily involve an examination of long copartnership accounts between Quinn, Murphy and McDonald, covering several years and involving many thousands of dollars and an immense number of items, documents, books, etc., the defendants moved to refer-the action and all of the issues therein, which motion was granted.

Pascal T. Southern, for app’lt; Benner & Benner (Henry C. Willcox, of counsel), for resp’t

The action is not one in which a reference can be compulsorily ordered. The complaint sets out the execution of a bond and mortgage to one John Lynch, by Hugh McDonald, to secure moneys due to Michael J. Murphy and Jonas C. Quinn, from Edward McDonald, under a contract he had with the United States government. The premises are now owned by the defendant, Margaret McDonald. The only account involved is one between Murphy and Quinn on one side and Edward McDonald on the other, to determine the amount due on the bond and mortgage, as against the surety. This is not an account in the ordinary acceptation of the term between the parties, and is not referable. Camp v. Ingersoll, 86 N. Y., 433 ; Untermyer v. Beinhauer, 105 N. Y., 521 ; 8 N. Y. State Rep., 1.

Assuming the action to be referable by motion as only involving the examination of a long account, it should not be referred under the issue made by the pleadings. As has been stated, the complaint avers the execution of a bond and mortgage to secure moneys due from Edward McDonald to Jonas 0. Quinn and Michael J. Murphy. The answer denies the execution of a bond and mortgage and alleges that the same was given to secure a loan which was never made, and that the plaintiff is a fraudulent vendee of the mortgage. The answer further avers that in the deed of the premises from Hugh McDonald to Margaret McDonald, a brother of the plaintiff fraudulently inserted an assumption of this mortgage, and the answer Maims to cancel the mortgage and strike out this clause. The only real issue, therefore, is of the execution of the bond and mortgage. The charges in respect thereto involve questions of fraud and breach of faith.

The circumstances surrounding the transaction, as stated in the complaint, are not without need of explanation of the bond and mortgage as stated therein. The bond and mortgage was given to one John Lynch. It was given for $5,000, payable in the usual form. It contains no reference to the same being give„n to secure a debt of Edward McDonald; why it was not given direct to the creditor, and why it was assigned to them rather than the plaintiff, are questions to be answered by the plaintiff upon the trial. The plaintiff has a right to have these issues tried in the usual way. Did the plaintiff, or those acting for her, insert an averment in Margaret McDonald’s deed? Was this done by an attorney of this court ? The plaintiff is to be compelled to answer these questions under the pleadings, and should have a trial in the special term of this court, or by issue to be framed for a jury.

p. 724

The order should, therefore, be reversed and the motion for a reference denied ; costs of motion and of appeal to abide event of: the action.

Pratt, J., concurs.