Case Name: Dimon against Dunn et al.
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1857
Citations: 15 N.Y. 498
Docket Number: 
Parties: Dimon against Dunn et al.
Judges: 
Reporter: New York Reports
Volume: 15
Pages: 498–502

Head Matter:
Dimon against Dunn et al.
When the complaint sets forth the condition of a bond, and avers the execution of a mortgage as collateral security for the same debt, “ with the same condition as the said bondan answer repeating the words of the condition, as stated in the complaint, and averring that it is not contained in the mortgage, is not a denial that such was, in substance, the condition of the mortgage, To raise that issue, the defendant should either deny the deeds or set out the condition verbatimfov the judgment of the court.
Appeal from, a judgment of the Supreme Court. The action was commenced June 34, 1852, and was brought to foreclose a mortgage executed by the defendant Dunn to the plaintiff. The complaint stated the execution of a bond by Dunn to the plaintiff, dated July 8, 1845, in the penalty of $500, upon condition that the same should be void if the defendant should pay to the plaintiff $250, on the 8th day of July, 1855, with interest at 7 per cent, payable semiannually, and that “ it was thereby further agreed that if any default should be made in the payment of said interest or any part thereof, on any day whenever the same was made payable as above expressed, and should the same remain unpaid and in arrear for ten days, then, after the lapse of the said ten days, the aforesaid principal sum, with all arrearages of interest, should, at the option of the plaintiff, become and be due and be immediately payable thereafter.” The complaint proceeds to state that, as collateral security for the payment of said indebtedness, the defendant Dunn, on the .same day, executed to the plaintiff a mortgage on certain premises which are described, •“ with the same condition as the said bond,” and that the mortgage was duly recorded July 16, 1845. It then states a default in the payment of half-a-year’s interest on the mortgage debt, which fell due January 8th, 1852, and claims that the whole debt and inte rest has, in consequence thereof, become payable. Bridges and wife are made defendants as parties having some interest subsequent to the mortgage.
Bridges answered, setting forth a conveyance with warranty, by Dunn to himself, of the mortgaged premises, dated 24th of September, 1850, “ subject to a certain mortgage encumbering the same,” executed by Dunn to the plaintiff bearing date July 8, 1845, and recorded, &c., stating the time and place of record, with the book and page. He avers that this is the only mortgage upon the premises, and that it is conditioned for the payment of $250, lawful money, on the 8th day of July, 1855, and the interest thereon at 7 per cent, to be paid semi-annually, “ and does not contain any condition, agreement or clause that in case the interest or any part thereof, on any day whenever the same was made payable, should remain unpaid, and in arrear for ten days, the principal sum with all arrearages of interest should, at the option of the plaintiff, become and be due and payable immediately thereafter;” that the defendant caused said deed to be recorded. The defendant avers the tender of the half-year’s interest alleged to be in arrear, after ten days had elapsed and before the commencement of the action, which, it is stated, he brings into court. He denies that he had any notice or knowledge that the bond contained any such agreement as is set forth in the complaint, prior to the time when he made such tender. The answer concludes by a denial that the plaintiff has a right to claim that the whole debt had become payable.
The plaintiff demurred to the answer; but the Supreme Court held that it set forth a defence to the action, and gave judgment for the defendant, with leave to the plaintiff to reply j and ultimately, the plaintiff not availing himself of the liberty thus given, final judgment was perfected in favor of the defendant, which was affirmed at a general term, and the plaintiff appealed.
J. H. Reynolds, for the appellant.
W. H. Elting, for the respondent.

Opinion:
Denio, C. J.
The correct method for the defendant to have brought the question which he wishes to raise, before the court, was to set out the mortgage verlatim, and then to have stated the matter of avoidance, which, upon his construction of the mortgage would have barred the action; or he might have denied the execution of the alleged mortgage. Either of these methods would have raised the question of law arising upon the instrument; but an averment that a certain clause is not contained in the mortgage, without giving its actual language, does not afford sufficient data for determining its legal effect. Such an answer would have been insufficient under the former rules of pleading. But as those rules are abolished, we are perhaps obliged to pronounce upon these securities in the light of such averments respecting them as the parties have furnished us with.
The complaint sets out the bond, and as a portion of it, the clause by which the payment of the principal of the debt was to be accelerated by a default in the interest; and it then states the execution of the mortgage on the same day " as collateral security for the payment of such indebtedness," and that it contained the same condition as the one in the bond. As the plaintiff was only bound to state the legal effect of his securities, leaving it to the defendant, if he questions the accuracy of the statement, to set them out or to deny the deeds, his pleading is not to be understood as averring that the mortgage contained a condition in the same language with that embraced in the bond. The complaint would be proved in substance if it should appear that the mortgage contained a reference to the bond in the usual form, " according to the condition of a certain bond, bearing even date with the mortgage." Such a reference would be sufficient to make the mortgage payable upon the same conditions, in all respects, with the bond; and it might, then, properly be said that the mortgage was upon the same condition as the bond. A mortgage is always collateral to the debt attempted to be secured, and when it refers to the instru rnent which is the principal security, the two instruments are to be taken together, and form but one security. Now to say, as this answer does, that the mortgage does not contain any condition, agreement or clause, in the terms stated in the averment in the complaint where it sets out the condition of the bond, does not meet the substance of the allegation that the mortgage has the same condition as the bond. It simply pleads the existence of certain language, without denying the substance of the contract as set out in the complaint, and without setting out the contract itself, so that the court may see what it is. It may well be that nothing is said, in terms, in the mortgage, as to the effect of the non-payment of interest; and yet it may refer to the bond in such a manner as to adopt its provisions. It is not stated, either in the complaint or the answer, that there was any covenant in the mortgage for the payment of the debt. Assuming that there is no such covenant, the bond is the only personal obligation. The object of the mortgage is to reinforce that obligation; and a reference in the mortgage to the paper containing such obligation, makes the bond a part of the mortgage for all essential purposes. The answer, to present a bar to a foreclosure should, at least, have shown that there was nothing on the face of the mortgage to connect it with the bond.
I conceive that the recording laws have nothing to do with the case. The defendant purchased with full knowledge of the plaintiff's mortgage, and subject to it. The existence or effect of constructive notice, arising out of the record, is immaterial to the case. The defendant, by his purchase, undertook to pay off the mortgage, according to its terms. If the mortgage referred to the bond, and the answer does not deny that it did, he had notice of that instrument and was bound to make himself acquainted with its provisions. I am of opinion that the answer is insufficient.
The judgment of the Supreme Court should therefore be reversed and judgment should be' given for the plaintiff.
Comstock and Brown, Js., did not hear the argument and took no part in the decision. The other judges concurring,
Judgment reversed without costs and judgment rendered for plaintiff, with leave to defendant to answer without payment of costs. *