Quinn v. Case

By the Court, Hilton, J. The defendants appeal from an order, made at special term, denying their motion for leave to serve an answer. It appears that before the time for answering the complaint expired, the defendants, upon a proper affidavit, obtained, from one of the judges of this court, an order extending the time to answer twenty days. This order was served on March 21, 1859, the day of its date, upon the plaintiff’s attorney, but the service was not accompanied with the affidavit on which it was granted. It was for this reason disregarded, (Code, § 405), and notice of taxation was given of the plaintiff’s costs, evidently preparatory to entering the judgment. Three days after the order was thus served, the defendants served a copy of the affidavit, but subsequently, fearing the plaintiff would disregard the order and enter judgment, they applied for leave to serve an answer, thus treating the case as one where the time to answer had expired, but no judgment entered. The affidavits presented upon the motion show that the plaintiff, as assignee of one McGuire, sues to recover from the defendants, who are brokers, the balance due upon the sale by McGuire to them of certain improvement certificates of the city of Hobo-ken, which were issued by the city to McGuire under a mistake, and were received by him with a full knowledge that he was in no way entitled to them. Or, to state the facts with more distinctness : McGuire had done certain work for the city, for which he had been paid on account, from time to time, as it progressed. When it was finished, he presented a statement of the whole work [470] done, and on which he was paid, by the officers of the city, the full contract price, they omitting, by mistake, to deduct the sums thus previously paid on account. Some months after, on discovering the mistake, they applied to McGuire to return the certificates which he had thus improperly received. He then made no claim that he was entitled to them, and promised to arrange the matter. This he neglected to do; on the contrary, he thereafter transferred to the plaintiff the balance remaining due from the sale of the certificates to the defendants. The city of Hoboken has given actual notice to the defendants that they would not pay the certificates thus obtained, and a no: tice has been published in the newspapers, to the effect, that as the certificates were issued through mistake and without consideration, they would not be paid, and cautioning the public against • negotiating or purchasing them. And it is alleged that the plaintiff, at the time he accepted the assignment of the claim for which this action is brought, had a full knowledge of all these facts. Upon these circumstances, which, if proved at the trial, would seem sufficient to constitute a valid defence to this action, being shown by affidavits, I think the judge at special term erred in refusing the defendants leave to answer, thus, in effect, determining the action, and preventing a judgment from which an appeal might be taken. Code, § 349, sub. 4. This was not a case where a party was asking to have a judgment vacated, and that ■he be let in to defend upon the merits, the determination of which application might rest, in some degree, in the discretion of the judge, and therefore might not be reviewable upon appeal, without a certificate, under the rule of March 22, 1851; but it was the ordinary case of a party committing an irregularity in a service of a paper, and against which he was entitled to be relieved, upon such terms, however, as would be proper under the circumstances. Quick v. Merrill, 3 Caine's, 133; Bander v. Covill, 4 Cowen, 60. It has long been the settled practice of the courts to set aside a default, on the defendant swearing to merits and paying costs; [471] (Davenport v. Ferris, 6 John. 181; Tallmadge v. Stockton, 14 John. 342); and in Hanford v. McNair (2 Wend. 286,) the court went so far as to hold, that, upon a motion to open a default, the ordinary affidavit of merits could not be contradicted. Here, there is not only the usual affidavit of merits presented, but, in addition, circumstances are shown which, if uncontradicted, clearly make out a substantial defence. Daly, First Judge. I did not fully understand this case when the motion was made for leave to put in an answer. Upon reading the affidavit now, I find that there is sufficient in the conduct of McGruire to support the allegation that he obtained the certificates fraudulently. The great excess over the amount due him, which was $3,519, for which he received certificates for $8,909, or $5,390 more than he was entitled to; his haste to get the signature of the mayor, his subsequent recognition ot the fact that he had been overpaid, and his promises to go over to- Hoboken and arrange the matter, which he never kept; are circumstances from which it may be inferred that he disposed of the certificates to the defendants with a knowledge that he was not entitled to $5,390 of the amount they represented. That, in the sale of them to the defendants, he dishonestly concealed the facts which, if disclosed, would have enabled the defendants to know that what they were purchasing was improperly obtained by McGruire from the corporation of Hoboken. There may be some difficulty in the defendants’ setting up a defence, unless the Hoboken corporation are made parties; but I quite agree with Judge Hilton that the defendants’ rights should not be summarily disposed of upon a motion like this. That there is quite enough in the affidavit to show a dishonest attempt on the part of McGruire and his assignee, who is alleged to have knowledge of the fact, to obtain, either from the defendants or the corporation of Hoboken, a large sum of money to which they know they have no claim. Order appealed from reversed, and defendants permitted to answer upon payment of $10 costs of the motion at special term.