Case Name: Pandia C. Ralli, Appellant, v. Paul S. Pearsall, Respondent
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1902
Citations: 69 A.D. 254
Docket Number: 
Parties: Pandia C. Ralli, Appellant, v. Paul S. Pearsall, Respondent.
Judges: 
Reporter: Appellate Division Reports
Volume: 69
Pages: 254–258

Head Matter:
Pandia C. Ralli, Appellant, v. Paul S. Pearsall, Respondent.
Notes, given to secure usurious interest on a prior note, are unenforeible —pendency of cm action to recover more than $3,000 in the City Court of New Torh—it bars an action for the same cause in the Supreme Court — the demand, for more than $3,000 does not deprive the City Court of jurisdiction.
Where the maker of a promissory note, in order to secure* an extension of the time of payment thereof, executes to the holder two other promissory notes for an amount in excess of the legal interest on the original note during the extended period, such notes are not enforcible.
Where the holder of a note for $4,317.60 brings an action to recover thereon in the Oity Court of New York, and after he becomes entitled to enter judgment therein, but before he has actually entered said judgment, becomes aware of the provision of section 316 of the Code of Civil Procedure'which limits a judgment entered in an action brought in the City Court of New York to §2,000, and thereupon tears up the summons and complaint in the City Court action and commences an action in the Supreme Court, the pendency of the action in the City Court of New York is a bar to the maintenance of the action in the Supreme Court.
Section 316 of the Code of Civil Procedure does not operate to deprive the City Court of New York of jurisdiction of an action brought to recover a'greater sum of money than §2,000, but simply limits the amount of the judgment which can be rendered in such an action to §2,000.
Appeal by the plaintiff, Pandia O. Ralli, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of Hew York on the 8d day of September, 1901, upon the report of a referee dismissing the complaint.
& P. Oaliill, for the appellant.
Jacob Halstead, for the respondent.

Opinion:
Ingraham, J.:
The action' was commenced to recover the amount of three promissory notes; the first, dated July 12, 1900, whereby ninety days after date the defendant promised to pay to his own order $4,217.60 ; the second, dated October 10, 1900, for $150, and the third, which was also dated October 10, 1900, for $100. The answer admits the making of the notes, alleges that the two notes, dated October 10, 1900, were without consideration and given in pursuance of a usurious agreement by which the amounts represented by the notes were to be paid for an extension of the time of payment of the note dated July 12, 1900, for ninety days; and alleges as a separate defense that there was another action pending between the plaintiff and the defendant to recover the amount agreed to be paid by the note dated July 12, 1900. The case was referred to a referee and on the trial the defendant proved that on the tenth of October, when the two notes of October tenth were given, he went to the plaintiff to procure a renewal of the note of July 12,1900; that the plaintiff told the defendant to sign the other notes; that they were necessary to give to other parties in order to renew the note of July twelfth ; that an action was commenced in the City Court on the 1-Oth of October, 1900, whereby the plaintiff in this action sought to recover from the defendant the .amount of the note of July 12, 1900.- There was a stipulation in that action, dated.October 10,1900, signed by the parties, as follows: " This action having been commenced by the service on the defendant this day of the summons and complaint.
" It is hereby stipulated on the part of the plaintiff that he will not enter judgment until after ninety days from date, and on the part of the defendant that he will not interpose any defense to this action."
The plaintiff in rebuttal proved that by a mistake the name of the City Court was inserted in the title of that action; that at the expiration of the ninety days, at which- time plaintiff was entitled under the stipulation to enter judgment, the plaintiff's attorney discovered the mistake; that he then tore up the summons and complaint in the City Court action as useless and commenced this action in the Supreme Court. The referee held that there was no consideration for the giving of the two notes dated October 10,1900) and that they were obtained from the defendant on a usurious agreement for an extension of the first note ; and that the defense of the pendency of the former action as to the note of July. 12, 1900, was good, and dismissed the complaint.
We think the referee correctly disposed Of the question submitted to him. It is not disputed that the two notes of October tenth were given as a consideration for the extension of the payment of the nóte of July twelfth, and by which the plaintiff exacted interest in excess of that allowed by law; and as there was no other consideration for the notes they could not be enforced. We also think that the action in the City Court for the -recovery of the amount of the note of July twelfth was a good defense to the cause of action-based on that note. In the action in the City Court the defendant had stipulated that, he would not interpose a defense, but would allow the plaintiff to take judgment unless the note was paid within ninety days. Upon the expiration of that time the plaintiff was entitled to enter a judgment. The jurisdiction-of the City Court is fixed by section 315 of the Code, which provides that " the jurisdiction of the City Court of the city of New York extends to the following cases: 1. An action against a natural person * . wherein the complaint demands judgment for a sum of money." This was such an action. Section 316, providing that the judgment entered in such an action shall not exceed $2,000, does not affect the jurisdiction of the court in an action to recover a greater sum. It has jurisdiction of the action, but the judgment cannot exceed the amount specified. There is a plain distinction between the provision of the Code affecting the City Court of Hew York, and the provisions of the Constitution (Art. 6, § 14) limiting the jurisdiction of the County Courts to an action in which the complaint demands judgment for a sum not exceeding $2,000. As to such courts the jurisdiction of the court depends upon the amount demanded in the complaint; but as to the City Court, jurisdiction depends upon the nature of the demand of the complaint, and the limitation is as to the amount of the judgment that the court can award. (Heffron v. Jennings, 66 App. Div. 443.) If he had entered such a judgment in the City Court for $2,000 it is clear that it would have been a bar to this action. The fact that the jurisdiction of the City Court was so limited that he could enter judgment for a part of his claim only would not have changed the effect of a judgment in the City Court action' as a defense to an action subsequently brought to Tecover the balance due on the note. The fact that plaintiff destroyed the complaint in that action was not a discontinuance. The action was still pending and undetermined, and there is no reason why he would not now be entitled to enter the judgment provided for by the stipulation. The question presented in this case was decided by the Supreme Court in Bendernagle v. Cocks (19 Wend. 207). There the court, after examining the authorities, says: " The plea of a former judgment in an action for a part of such entire demand, being valid as a plea in bar to the whole, it follows that a plea of the pendency of such an action is good in abatement for the whole. Both stand upon the same principle, the only difference lies in the form of the pleas and the effect of the judgments respectively." I do not find that this case has ever been questioned. In the Encyclopaedia of Pleading and Practice (Vol. 1, p. 762) the rule is stated that " the identity of the matters involved must be such that a judgment in the first could be pleaded in bar as a former adjudication." As a judgment entered by the plaintiff in the City Court action would have been a bar to this action upon the same note, the pendency of the City Court action is good as a plea in.abatement of this action.
It follows that the judgment appealed from should be affirmed* with costs.
Van Brunt, P. J., O'Brien and Hatch, JJ., concurred.
Judgment affirmed, with costs.