Barnard v. Lawyers' Title Insurance

Freedman, P. J. The complaint states a cause of action for special damages against the defendant founded upon a breach of contract committed by the defendant in the performance of its duty under a certain contract made with the plaintiff for the examination and insurance of the title [578] to certain premises. The breach of contract set forth consists in negligently and inexcusably returning two tax sales as affecting the premises when in point of fact they did not. Defendant’s answer contains two parts. The' first of these consists of a series of denials and the second sets up “ further and separate defense.” The plaintiff demurred to this further and separate defense upon the ground that the same is insufficient in law upon the face thereof. The demurrer was overruled and from the judgment entered upon such decision the plaintiff appealed. In the consideration of this appeal we are asked to.consider certain facts embodied by the parties in a stipulation for the purposes of any trial in the action. The stipulation does not show whether the facts therein admitted are to be taken as part of the further and separate defense demurred to, or as part of the complaint, and at the end thereof it is expressly stated “ This statement of fact is not a complete or exclusive statement.” Moreover on the argument of the appeal the counsel for the respective parties widely differed as to the extent and effect of the admissions and especially as to whether or not they amounted to a waiver of the denials in the answer. In view of this unsatisfactory state of the record the stipulation should not be considered and the questions presented by the appeal should he determined strictly according to the rules of pleading. According to these rules the denials contained in the first part of the answer, not having been reiterated or referred to in the further and separate defense, the said defense must stand or fall independently of them. Encyc. Pl. & Pr. 853 and cases there cited; Douglass v. Phenix Ins. Co., 13S N. Y. 209; Gray Lithograph Co. v. American Watchman’s Time Detector Co., 44 Misc. Rep. 206. On the other hand the demurrer admits the truth of all the material allegations of the defense and for the purpose of determining their sufficiency as a defense the material allegations of the complaint must be taken as admitted. To be sufficient, therefore, the defense in such a case must not only confess, but also avoid or bar. If it does not fully avoid or bar the mere allegation of the answer of a contract of other terms or of a different character has no [579] function or effect. Marx v. Gross, 2 Misc. Rep. 511; affd. 142 N. Y. 678; Fleischmann v. Stern, 90 id. 110; Smith v. Coe, 170 id. 167. Judged by these rules the defense under consideration sets forth a contract of other terms and of a different character from the contract alleged in the complaint without avoiding or barring the latter, and the allegation of due performance relates to the former and not to the latter. The decision in Staten Island Midland R. R. Co. v. Hinchliffe, 170 N. Y. 473, has, therefore, no application. For the foregoing reasons it was error for the court below to give judgment for the defendant overruling the demurrer on the theory that in the determination of the sufficiency of the further and separate defense the defendant was entitled to the benefit of the denials contained in the first part of the answer. The judgment should be reversed, with costs, and judgment ordered for the plaintiff, with costs, with leave to defendant to amend the answer upon payment of such costs. Bischoff and Gildersleeve, JJ., concur. Judgment reversed, with costs, and judgment ordered for plaintiff, with costs, with leave to defendant to answer upon payment of costs.