Case Name: Sadie K. Earle, Respondent, v. Martin Rafalovitz, etc., Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1911-06-02
Citations: 145 A.D. 537
Docket Number: 
Parties: Sadie K. Earle, Respondent, v. Martin Rafalovitz, etc., Appellant.
Judges: ■ Jenks, P. J., Carr and Rich, JJ., concurred; Thomas, J., dissented.
Reporter: Appellate Division Reports
Volume: 145
Pages: 537–540

Head Matter:
Sadie K. Earle, Respondent, v. Martin Rafalovitz, etc., Appellant.
Second Department,
June 2, 1911.
Court — Municipal Court, New York city — equitable jurisdiction — action on bond — defense — satisfaction of mortgage — mutual mistake.
The Municipal Court of the city of New York has no equity jurisdiction except under certain circumstances stated in the Municipal Court Act.
Where in an action in such court to recover on a bond the defendant as a separate defense sets up a satisfaction by the plaintiff of the bond and mortgage accompanying it and on the trial, after introducing the satisfaction piece in evidence, shows that the transaction was fully consummated by the delivery of the bond and mortgage to him, it is error to permit the plaintiff to introduce evidence to-show that in executing the satisfaction piece and in returning the bond and mortage she and the defendant were acting under a mutual mistake of fact as to the amount due.
In the absence of a decree of the Supreme Court setting aside the settlement between the parties the plaintiff had no cause of action.
In such action the Municipal Court has no jurisdiction to permit the plaintiff to rescind the contract,- pursuant to which the satisfaction piece was given, and to recover as though it had never been executed. Thomas; J., dissented.
. Appeal by the defendant, Martin Rafalovitz, etc., from a judgment of the Municipal Court of the city of New York in favor of the plaintiff, rendered on the 17th day of November, 1910.
Abraham A. Sarasohn, for the appellant.
James Moffett [¡Robert E. Moffett with him on the brief], for the respondent. • . ■

Opinion:
Woodward, J.:
The complaint alleges that on of about the 12th day of June, 1905, the defendant covenanted with the plaintiff that the defendant would pay to the plaintiff the stun of $1,500, to be paid in installments of $150 semi-annually, with interest at five per cent; that no part thereof has been paid, excepting the sum of $1,350, and that there is now owing-to the plaintiff the sum of $150, with interest. The answer denies the allegation of non-payment of; the sum' of $150, and sets up two affirmative defenses, one that the plaintiff accepted $300 in full payment of the plaintiff's cause of action; the second that prior to the commencement of this action; and on or about the 3d day of May, 1909, and after the defendant had paid to the plaintiff the sum of $1,050 upon the said cause of action, and while the sum of $450 on the said' cause of action was unpaid, though not yet due, the plaintiff agreed with defendant to accept the sum of $300 in full payment of the balance of the amount remaining unpaid, and the defendant, in pursuance of said agreement with the plaintiff, paid and delivered to the plaintiff, and the plaintiff received and accepted from the defendant, the sum of $300 in full satisfaction and settlement of the said claim, which is the same claim and cause of action in the complaint alleged, and the plaintiff then and there delivered to the defendant a certain instrument known as a "satisfaction piece " of the said bond and the mortgage accompanying the same. Upon the trial it was not questioned that the plaintiff held purchase-money mortgage made and executed by the' defendant, with the usual bond accompanying the same, and that these instruments were duly surrendered to the defendant upon the payment of $300, but the plaintiff was permitted, over the objection and exception of the defendant, to put in evi-* dence tending to show that the plaintiff, in accepting the $300 and delivering the satisfaction piece, together with the bond ' and mortgage, had made a mistake; that .she had supposed there was only $300 soon to become due, and that the defend ant had represented to her that this was the sum remaining unpaid, and had asked for a concession on the interest. With this evidence in the case the learned Municipal Court found in favor of the plaintiff for the sum of $150, the amount claimed by the plaintiff as remaining unpaid. The defendant appeals to this court.
The net result of the litigation is that the plaintiff, asserting an action at law, has been permitted to rescind a contract and to recover as though there had been no executed contract between the parties, and we are of the opinion that the court was without jurisdiction to give this relief. Section 2 of the Municipal Court Act (Laws of 1902, chap. 580) provides in subdivision 2 that " said court shall not have any equity jurisdiction," except under certain circumstances not involved in this action, and surely, if the court was without equitable jurisdiction, it had no power to grant the plaintiff relief under the circumstances disclosed by the evidence which was admitted in spite of the defendant's effort to exclude, it. There can be no. question that the plaintiff had accepted the defendant's check " in full satisfaction of mortgage on property 1631 43d street, borough of Brooklyn, city of New York," and had procured the same to be cashed with this indorsement upon the back thereof, and that she had executed and delivered a satisfaction piece, and had also delivered to the defendant the original bond and mortgage, so that the transaction was fully consummated, and without a decree of the court setting aside this settlement between the parties there was no cause'of action in favor of the plaintiff.' Setting aside an executed contract is clearly not within the province of a court. of law, and yet the Municipal Court, without any jurisdiction of an equitable nature, has in a simple action at law given judgment which could only come properly through an equitable action. Plaintiff's counsel attempts to justify the judgment on the authority of certain cases which hold that a defendant may interpose an equitable defense for the purpose of defeating an action in the Municipal Court, where no affirmative relief is asked, but how this can give the plaintiff any rights it is difficult to understand. In the first place, the plaintiff specially disclaimed upon the trial that there was any fraud claimed; all that was claimed was a mutual mistake, and the plaintiff has asked to .he relieved from that alleged mutual mistake, which is. a matter exclusively of equitable jurisdiction and to recover- a substantial amount of money. 'She has had affirmative relief in a court which is denied all power to give other than legal remedies, and there are no authorities which justify the judgment.
The judgment appealed from should be reversed, with costs.
Jenks, P. J., Carr and Rich, JJ., concurred; Thomas, J., dissented.
Judgment of the Municipal Court reversed and new trial ordered, costs to abide the event.