Caraccia v. Schoenberg

Per Curiam. Plaintiff, after rescission for alleged fraudulent representations in the purchase of a second mortgage, brought this action at law to recover $8,000 paid to defendants for a mortgage in that amount on real property in the city of New York owned by defendant Lena Schoenberg. Defendants’ amended answer contained a counterclaim alleging that the mortgage was void as a usurious loan, and praying that the mortgage and the accompanying bond be declared void for usury, be delivered up by plaintiff to the defendant Lena Schoenberg, and discharged of record. Defendants’ pleading, however, contained no tender to plaintiff of the moneys defendants had received. Plaintiff did not serve a reply and defendants moved for judgment on the counterclaim because of plaintiff’s failure to reply thereto. The Special Term denied the motion on the ground that the so-called counterclaim was, in substance and legal effect, merely [218] a defense, the allegations of which were deemed to be denied. We think the court erred and that the order must be reversed. The affirmative relief asked in the pleading is on behalf of the t£ borrower,” the instrument sought to be avoided is a cloud upon title to the land, and we must, therefore, deem the pleading to be, in fact as well as in form, a counterclaim. (General Business Law, §§ 373 and 377; Loew v. Mclnerney, 159 App. Div. 513; Allerton v. Belden, 49 N. Y. 373, 378; Vilas v. Jones, 1 id. 274, 278; Wheelock v. Lee, 64 id. 242, 247; Williams v. Fitzhugh, 37 id. 444.) We would not be justified, however, in granting final judgment without affording plaintiff an opportunity to move to open what appears to be an excusable default. The order appealed from is accordingly reversed, with twenty dollars costs and disbursements, and motion granted, unless within ten days from service of order to be entered hereon with notice of entry thereof, plaintiff pays said costs and serves a reply to the counterclaim, in which event, the order is affirmed, without costs. Present — Martin, P. J., Townley, Glennon, Untermyer and Dore, JJ. Order reversed, with twenty dollars costs and disbursements, and motion granted, unless within ten days after service of order plaintiff pays said costs and serves a reply to the counterclaim, in which event, the order is affirmed, without costs.