Case Name: John Burns vs. Susan A. Nevins
Court: New York Supreme Court
Jurisdiction: New York
Decision Date: 1858-06-07
Citations: 27 Barb. 493
Docket Number: 
Parties: John Burns vs. Susan A. Nevins.
Judges: 
Reporter: Barbour's Supreme Court Reports
Volume: 27
Pages: 493–503

Head Matter:
John Burns vs. Susan A. Nevins.
A complaint alleged that on the 11th of Sept. 1851, the plaintiff became the owner in fee, by virtue of a sheriff’s deed, of certain premises; and the plaintiff claimed that, as such owner, he was entitled to pay off and have assigned to him to protect his title, a prior mortgage on the same premises, held by the defendant, which the complaint stated the plaintiff had offered to pay off, and of which he had demanded an assignment. That the defendant was proceeding to foreclose such mortgage, and refused to assign it; ' and the plaintiff prayed for an injunction to restrain the sale of the mort- = gaged premises, and that the defendant might be compelled to assign the mortgage to the plaintiff; on being paid the amount due thereon. The answer of the defendant, by way of counter-claim, asserted that the defendant’s husband, S. M. N., on the 29th of August, 1851, procured the sheriff’s certificate, under which the plaintiff acquired his title, to be assigned to the plaintiff for his, (S. M. N.’s,) benefit, and furnished the money to the plaintiff to redeem the premises from a prior sale thereof by another judgment creditor. The answer also set out an agreement, signed by the plaintiff, of the same date with such redemption, reciting that the plaintiff had that day redeemed the said premises and held a judgment against S. M. N. for about $500, and covenanting that on the payment of that sum he, the plaintiff, would reconvey the said premises to the defendant, at any time within five years, on the payment of the sum paid on such redemption, with interest; the defendant to pay off the prior mortgage, and indemnify the plaintiff against the same. That the defendant had repeatedly offered to pay off the plaintiff’s debt, and requested him to render a just account thereof; that the plaintiff had rendered an account, which the defendant deemed unjust, and she had offered to refer the same to arbitrators, which the plaintiff refused to do. The defendant prayed that such account might be settled, and that she might be permitted to pay the same to the plaintiff, and have the premises conveyed to her; and for affirmative equitable relief. Held, on demurrer, that the defendant’s cause of action did not arise out of the contract, or transaction, set forth in the complaint as the foundation of the plaintiff’s claim, and was not connected with the subject of the action; and was therefore not admissible as a counter-claim. Smith J., dissented.
APPEAL from a judgment entered at a special term, overruling -a demurrer to the defendant’s answer. On the second day of May, 1846, Samuel M. Kevins executed a mortgage of certain premises described therein, to Evan Evans, to secure the payment of §600. This mortgage was afterwards assigned to the defendant, who, on the 5th of May, 1856, proceeded to foreclose the same by advertisement. The plaintiff acquired title to said premises by virtue of a sale, upon an exe* cution issued on a judgment against ISTevins, the mortgagor, on the 11th of December, 1851. The plaintiff’s title was subject to said mortgage. After the commencement of such foreclosure, the plaintiff tendered to the defendant the amount due upon the mortgage, with the costs of the foreclosure, and requested her to receive the same in payment thereof, which she refused to do, hut continued, after such tender, the proceedings to foreclose said mortgage. The plaintiff thereupon commenced this suit, and in his complaint stated the above facts, and prayed judgment that the defendant he restrained from selling the premises ; that the mortgage might he assigned to him, and for general relief. The defendant, by her answer, admitted the foregoing facts, and stated that the mortgaged premises had been sold upon execution, prior to the 29th of August, 1851; that the mortgagor, wishing to redeem the premises from such sale, agreed with the plaintiff, he being a judgment creditor, to redeem the same, and convey the same to the defendant, on payment by her of the money paid on the redemption and the money due from the mortgagor, to him, at any time within five years. By this agreement, it was made a condition that the defendant should indemnify the plaintiff against the mortgage in question. The defendant further stated that she had offered to pay the plaintiff all such sums as should he found due to him, and had called upon him to make out a statement of his claim; that the plaintiff had made out a statement which she (the defendant) believed to he incorrect; that she had offered to refer the same to arbb trators, which the defendant refused; and is now willing to have it referred for adjustment, and demanded judgment that the plaintiff he required to convey the premises to her, upon payment of his claim. The plaintiff demurred to this answer as not stating facts sufficient to constitute a defense. Judgment was given for the defendant at the special term, from which the plaintiff appealed.
Wm. F. Cogswell, for the appellant.
Benedict & Martindale, for the defendant.

Opinion:
Johnson J.
The substantial question, presented by the demurrer, is whether any counter-claim to the plaintiff's cause of action is set up in the answer. Unless the facts there alleged constitute a counter-claim, the answer presents no defense whatever, and the plaintiff is entitled to judgment upon the pleadings.
This is not an action arising on contract, but is strictly one of equitable cognizance. The counter-claim, therefore, which the defendant is authorized to interpose, must be a cause of action arising out of the contract, or transaction, set forth in the complaint as the foundation of the plaintiff's claim, or connected with the subject of the action. (Code, § 150, sub. 1.) The legal relation of the parties, as presented by the complaint, is that of owner and incumbrancer of the premises covered by the mortgage, and nothing else. The contract, or transaction, set forth in the complaint as the foundation of the plaintiff's claim, is the mortgage upon the premises, and the attempt of the defendant to foreclose the mortgage, by proceedings under the statute, and thus divest the plaintiff of his title through the mortgage. The contract, which the defendant seeks to interpose, is one by which the plaintiff has agreed to sell the premises to the defendant and convey on certain conditions. This presents the parties in an entirely new relation, that of vendor and purchaser. And it is entirely clear that neither the contract, nor the cause of action arising upon it, if the defendant has any, arises in any respect out of the mortgage, or out of the proceedings of the defendant to foreclose such mortgage. It is an entirely separate and distinct transaction, and neither of the two causes of action has any dependence upon, or in any manner, that I can perceive, arises out of the other. The code, in allowing counter-claims in actions of this character, has adopted substantially, and almost literally, the rule in regard to filing cross bills, under the former chancery practice. The cross bill could only relate to matter touching the matters in the original bill. (2 Barb. Ch. Pr. 127.) It could not embrace new and distinct matter, not embraced in the original bill; and if it did, no decree could be founded upon such new matter. (Galatian v. Erwin, Hopkins, 48; S. C. 8 Cowen, 361.) The entire subject of the plaintiff's action is this incumbrance, which, as the complaint alleges, the defendant is attempting to foreclose, and which the plaintiff seeks to cancel and remove. And how a cause of action for the specific performance of a contract to sell and convey the premises, is connected with the subject of the plaintiff's action, it is impossible for me to see. It is true that this mortgage is mentioned in this contract. One of the conditions of the plaintiff's obligation to convey the premises to the defendant is, that the defendant shall pay and indemnify the plaintiff against the principal and interest on the mortgage. This obligation to sell and convey is not a mutual undertaking between the parties. The plaintiff only is bound. The defendant is under no obligation to pay the moneys mentioned in the undertaking, or to indemnify against the mortgage, which the plaintiff can enforce. It is wholly at her election within a stipulated time. • It does not appear from the answer that the defendant has ever offered, or proposed, to indemnify the plaintiff against this mortgage; nor does she now propose - to do so, by her answer. The defendant haying become the assignee of the mortgage, was at liberty to offer to perform, according to the conditions of the plaintiff's undertaking, and in case the plaintiff refused to accept such offer, and to perform on his part, bring her action to enforce a specific performance of the plaintiff's obligation; or she might elect to abandon the contract on the plaintiff's refusing to perform, and resort to her rights under the mortgage, and obtain title to the premises by means of a foreclosure. But it must be perfectly obvious that the defendant cannot do both. It is impossible for a party to occupy such a position in one action ¿ on one hand resisting the plaintiff's claim, as owner of the fee, to remove the incumbrance, and insisting upon the right to foreclose, and thus cut off and destroy the plaintiff's title altogether; and on the other, insisting that the plaintiff shall be decreed to perform his obligation and convey the premises. If, under any circumstances, this contract might have been regarded as a counter-claim to the plaintiff's action to remove or extinguish the incumbrance of the mortgage, the defendant's proceeding to foreclose is so hostile to the contract that the court would be constrained to hold that the contract was rescinded by the defendant, and the plaintiff's obligations under it at an end. The proceeding to foreclose is only consistent with a relinquishment or rescission of the contract to ponvey on the part of the defendant.
The answer does not deny that the defendant is proceeding to foreclose the mortgage upon the premises, and that allegation in the complaint, therefore, stands admitted. The reason for that proceeding, it is to be inferred from the answer, is, that the plaintiff refused, on being requested, to perform the agreement to sell and convey on his part. The demurrer admits the answer to be true, and the fact is consequently established, for all the purposes of the issue of law now before us, that the defendant offered to perform on her part, at least so far as payment is concerned, and the plaintiff refused to perform on his part. This gave her a right of action for a specific performance, which she might have enforced; instead of which, however, she has resorted to her mortgage to obtain title. We cannot fail to see that her agreement to purchase, in which she was to indemnify the plaintiff against this mortgage, was in substance and effect, an agreement on her part to take a title from the plaintiff subject to the mortgage, and that this proceeding to foreclose is utterly subversive of that agreement, and a decisive step in abandonment of it. Having availed herself of the plaintiff's refusal to perform, as a reason or occasion for foreclosing the mortgage,.and thus compelled him to come into court by action to protect his title against it as a hostile claim, I do not see how she can now insist that the agreement to sell and convey is still obligatory upon him, so that it can be enforced specifically. In this aspect the contract is neither a legal claim nor a counter-claim against the plaintiff, now subsisting. To my mind this is very clear. But it is unnecessary to go this length in this case, and I prefer placing the decision upon the distinct ground that the defendant's cause of action, offered as a counter-claim, did not arise out of the contract, or transaction, set forth in the complaint, as the foundation of the plaintiff's claim, and is not connected with the subject of the action. The substantial ends of justice can never, in my judgment, be promoted by the attempt to try one cause of action in favor of the plaintiff, and another in favor of the defendant, in a single action, where such causes of action have no natural or legal connection with, or relation to, each other. On the contrary I should be led to apprehend a confusion of principles, and serious detriment to the just rights of both. The experiment of cheapening and speeding the administration of justice, by such means, will be likely to end only in confounding rights, and subverting justice • and courts ought never to encourage it, unless constrained to do so, by some explicit requirement of the statute.
The judgment of the special term must therefore be reversed, and judgment ordered for the plaintiff as demanded in the complaint, with leave to the defendant to amend the answer on payment of costs.
Strong J., concurred.