Hunt v. . Chapman

Gray, C. This action, although denominated an action for the foreclosure of a mortgage, is in law and in fact an action for the recovery of the amount unpaid on Chapman’s bond; first by an order for the sale of the premises mortgaged by him as collateral security for its payment, and the application of the avails of the sale to that purpose, and then for a judgment against him for the deficiency. It is not only an action against Chapman upon his contract to pay the amount specified in his bond, to which an offset might have been pleaded before the Code (2 R. S., 354, § 18, sub. 1), but one in which, under the Code, a several judgment might be (and in this case was in fact) had, as between the plaintiff and the defendant, Chapman, and, hence, was subject to a counterclaim of any other cause of action arising also on contract which Chapman had against the plaintiff at the time of the commencement of this action. (Code, § 150, sub. 2; and see National Fire Ins. Co. v. McKay, 21 N. Y., 191, 196.) It follows that the referee erred in rejecting Chapman’s offer to prove the defence set up in his answer, and that the judgment of the General and Special Term should be reversed and new trial granted, costs to abide event. All concur; Lott, Ch. C., not sitting. Judgment reversed.