Herb v. Metropolitan Hospital & Dispensary

LAUGHLIN, J. The allegations of the answer sufficiently show a breach of the plaintiff’s covenant against incumbrances,. and we do not understand that this is- questioned by the respondent, whose contention is that the appellant cannot recover more than nominal damages for the breach without showing expenditure of money on account of the alleged incumbrance. His contention is not tenable. There was an immediate breach of the covenant, and the appellant was entitled to recover the difference between the value of the premises with and without the encroachment. Huych v. Andrews, 113 N. Y. 81, 20 N. E. 581, 3 L. R. A. 789, 10 Am. St. Rep. 432. The further questions to be determined on this appeal are: First. Was the appellant entitled as matter of right to a jury trial of the issues • raised on its counterclaim ? Second. Could such issues be — 555 — noticed for trial at Trial Term without application to the court for this settlement? Third. Was the defendant entitled to have the issues settled, and was it essential to the preservation of such right, if it existed, that a motion should be made for the settlement of the issues within ten days after the joinder of issue? Fourth. Is the order denying appellant’s motion reviewable on appeal from the judgment? Fifth. Could the right be preserved by renewal of the application on the trial? Sixth. Was the application timely made on the trial? These questions will be considered in the' order stated. First. There can be no question but that appellant might have maintained a separate action to recover these damages, and that it then would have been entitled to a jury trial under the Constitution. It is therefore inaccurate to say that the right of a trial of the issues by a jury is not guarantied by the Constitution. But here the counterclaim is interposed in a suit in equity, and it was doubtless competent for the Legislature, in permitting the interposition of a legal counterclaim in such a suit, to regulate the procedure by which a jury trial might be had. In a suit in equity a counterclaim of this nature is clearly authorized by the Code. Code Civ. Proc. §§ 5°°, 501, 507. Section 968 of the Code provides that an issue of fact in “an action in which the complaint demands judgment for a sum of money only,” or in “an action of ejectment; for a nuisance; or to recover a chattel,” "must be tried by a jury, unless a jury trial is waived, or a reference is directed.” Section 974 of the Code provides that “where the defendant interposes a counterclaim, and thereupon demands an affirmative judgment against the plaintiff, the mode of trial of an issue of fact, arising thereupon, is the same, as if it arose in an action, brought by the defendant, against the plaintiff, for the cause of action stated in the counterclaim and demanding the same judgment.” These statutory provisions are so plain and clear that they would not seem to require judicial construction; but they have been given full force by a construction that the counterclaim therein referred to is one upon which a separate cause of action for an affirmative judgment could be maintained against the plaintiff. Cook v. Jenkins, 79 N. Y. 575; City Real Estate Co. v. Foster, 44 App. Div. 114, 60 N. Y. Supp. 577. It seems clear, therefore, that the appellant was entitled to a jury trial of these issues as matter of right, even though they arise on a legal counterclaim in a -suit in equity; and this proposition is sustained by the authorities. Deeves v. Metropolitan, etc., Co., 6 Misc. Rep. 91, 26 N. Y. Supp. 23, affirmed on opinion below 141 N. Y. 587, 36 N. E. 739; McAleer v. Sinnott, 30 App. Div. 318, 51 N. Y. Supp. 956; Hoffman House v. Hoffman House Café, 36 App. Div. 176, 55 N. Y. Supp. 763; Wheelock v. Lee, 74 N. Y. 495; VanDeventer v. VanDeventer, 32 App. Div. 578, 53 N. Y. Supp. 236; Baylis v. Bullock Electric Mfg. Co., 59 App. Div. 576, 69 N. Y. Supp. 693. Second. In such an action it is proper, and perhaps necessary, that the issues arising on the counterclaim and triable by a jury should be settled where there are issues of fact arising on the complaint as well; but here it will be observed that the only issues are those arising on the counterclaim and the reply thereto. I see no — 556 — reason, therefore, why these issues may not be noticed for trial at the Trial Term without their being settled. There being no other issue to try, no confusion can arise from such practice. Upon the verdict of the jury and the pleadings a motion could then be made for judgment iinder section 1225 of the Code. The question has generally arisen where material allegations of the complaint were put in issue, and this precise question seems to be without precedent. In the case of Mackellar v. Rogers, 109 N. Y. 468, 17 N. E. 350, the facts were quite similar to those presented by this record. The complaint in equity was admitted, and the issues arose on a legal -counterclaim. Defendant noticed the issues for trial at Special Term, and it was held that he thereby waived his right to a jury trial. In the opinion it is stated, however, that in such case the defendant, in order to preserve his right to a jury trial, must move for a settlement of the issues in advance of the trial. This was clearly obiter dictum, but it has been recently quoted by the same court with apparent approval. Bennett v. Edison E. I. Co., 164 N. Y. 131, 132, 58 N. E. 7. This was not necessary to the decision. However, the precise point now under consideration does not appear to have been presented or considered in either of those'cases. Third. If the appellant were not entitled to notice the issues for trial at the Trial Term without having them settled, he was entitled, as matter of right, under section 970 of the Code, to have his motion for their settlement granted. Code Civ. Proc. § 970; Deeves v. Metropolitan, etc., Co., supra; McAleer v. Sinnott, supra; Hoffman House v. Hoffman House Café, supra. Although in this case the motion was made within the time limited by rule 31 of the general rules of practice, yet this is such a substantial right that it has been held that the rule does not limit the operation of this section of the Code in cases where a trial by jury is a matter of right, and that the motion may be made at any time before trial. Conderman v. Conderman, 44 Hun, 181; Ulbricht v. Ulbricht, 89 Hun, 479, 35 N. Y. Supp. 324; and VanDeventer v. VanDeventér, supra. It has been since held, however, by this court, without considering these authorities, that where a motion to settle the issues is necessary under section 970 of the Code, it must be made within the time prescribed -by rule 31. Arnot v. Nevins, 44 App. Div. 61, 60 N. Y. Supp. 401. Fourth. I am of opinion that the order denying the motion for the settlement of the issues is reviewable on the appeal from the judgment. Section 1316 of the Code provides that an appeal taken from a final judgment “brings up for review, an interlocutory judgment, or an intermediate order, which is specified in the notice of appeal, and necessarily affects the final judgment; and which has not already been reviewed on a separate appeal therefrom, by the court or the term of court to which the appeal ’from the final judgment is taken. The right to review an interlocutory judgment dr an intermediate order, as prescribed in this section, is not affected by the expiration of the time, within which a separate appeal therefrom might have been taken.” This section clearly contemplates- the review, or an appeal from a final judgment, of an intermediate order that might have been reviewed on a separate appeal, provided it “necessarily — 557 — affects the final judgment.” It is difficult to escape the conclusion that an order denying a motion for the settlement of issues and for a jury trial, where the party is entitled to such order as matter of right, does affect the final judgment, where that judgment is subsequently entered as the result of a trial before the court instead of before the jury. The- provisions of the Code seem plain, but the decisions are quite conflicting. In Stokes v. Stokes, 87 Hun, 152, 33 N. Y. Supp. 1024, where an order of reference was granted against objection, it was clearly and forcibly stated; but not necessarily held, that the order might be reviewed on an appeal from the final judgment, and that the party thus objecting did not waive his right by proceeding with the trial before the referee. In Roslyn Heights Land Co. v. Burrowes, 22 App. Div. 540, 48 N. Y. Supp. 15, it was held in the Second Department, without considering Stokes v. Stokes, supra, to which attention was not called in the points, that an order of reference was not an order affecting the final judgment, and therefore was not reviewable on an appeal from the final judgment, and McCall v. Moschowitz, 14 Daly, 16, was cited as authority for the proposition. The McCall Case, however, was an appeal from an interlocutory judgment, not from a final judgment; and the court in that case, after stating this fact, which was decisive of the proposition, discusses the question whether such orders are reviewable on appeal from final judgment, and cites cases arising under the Code of Procedure, which did not contain a provision similar to that quoted from section 1316 of the Code of Civil Procedure, holding in the negative. The Case of Roslyn Heights Land Co., supra, was a suit in equity in which a legal counterclaim was interposed. A motion 'was made to settle the issues arising on the. counterclaim and for a jury trial. The motion was denied; but the order was reversed on appeal (76 Hun, 62, 27 N. Y. Supp. 622), without prejudice to a motion for a reference, on the ground that these issues involved the examination of a long account. Such a motion was made and granted, and the defendant participated in the trial, attempting to preserve his rights by objection. This court held in Raff v. Koster, Bial & Co., 38 App. Div. 336, 56 N. Y. Supp. 997, that an order granting a bill of particulars did not necessarily affect the final judgment, and stated the rule to be that the intermediate orders reviewable under section 1316, on appeal from the final judgment, are “orders which, if reversed, would take away the foundation of the judgment, or make the trial or the judgment entered invalid or without support.” The Court of Appeals in Taylor v. Smith, 164 N. Y. 399, 58 N. E. 524, held that an order denying a motion for a new trial on the minutes of the court was an intermediate order, necessarily affecting the final judgment, and, within the meaning of section 1316, reviewable on appeal therefrom. The right of the Court of Appeals to review intermediate" orders on an appeal from a final judgment only, rests on this section of the Code, and is the same and no higher than the authority of this court. If the appellant in the case at bar had appealed from the order denying its motion to settle the issues, and this court had affirmed the order, the Court of Appeals, on appeal from such an order of affirmance, would have had no jurisdic — 558 — tian to review the order without leave granted by this court. Code Civ. Proc. §§ 190, 1324; Hammond v. National Life Assn., 168 N. Y. 262, 61 N. E. 244. If, however, the order is not reviewable by the Court of Appeals on appeal from a final judgment, there is no absolute right of review in that court at all, although the question involves one of the most important rights intended to be guarantied by the Constitution. We think it was not intended to deprive a party of the right to have such a question reviewed at some stage of the proceedings by the Court of Appeals. It would seem, therefore, that section 1316 should be so construed as to give a party who is entitled to a jury trial as a matter of right, and who has done nothing to forfeit or waive such right, a remedy to review the order depriving him of this constitutional or statutory right upon an appeal from the final judgment entered in the case. See Fox v. Matthiessen, 155 N. Y. 177, 49 N. E. 673. This reasoning is especially applicable to this case, where the appellant’s time to appeal from the order had not expired when judgment was taken against it in the court of equity. In these circumstances the respondent was not prejudiced by the appellant’s failure to appeal from the order. Fifth. There is much confusion in the decisions on the question as to whether in a case of this kind a motion should be made for the settlement of the issues in advance of the trial. As has been seen, there is a dictum in Mackellar v. Rogers, supra, concurred in by all of the members of that court except one, to the effect that such motion is necessary. In Smith v. Fleischman, 23 App. Div. 355, 48 N. Y. Supp. 234, a suit in equity, where there was a legal counterclaim and issues of fact arising upon both the complaint and counterclaim, it was held by this court, following the dictum in Mackellar v. Rogers, supra, that.the defendant, in order to preserve his right to a jury trial, was obliged to move under section 970 of the Code for the settlement of the issues. In Arnot v. Nevins, 44 App. Div. 61, 60 N. Y. Supp. 401, where there were issues of fact arising on a complaint in equity and issues of fact arising upon a legal counterclaim, this court again followed the dictum in the Mackellar Case, supra, and held that the defendant’s right to a jury trial was lost because he did not apply under section 970 of the Code, and within the time prescribed by rule 31 of the general rules of practice, for an order settling the issues. This case is in conflict with VanDeventer v. VanDeventer, supra, which apparently was not cited, where one cause of action for equitable relief and another for legal relief were alleged in the complaint, upon each of which issues of fact arose, and it was held that the defendant’s right to have the legal issues tried by a jury might be asserted at any time before the production of evidence upon the trial. To the same effect is Wheelock v. Lee, 74 N. Y. 495. In the VanDeventer and Wheelock Cases the party sued was demanding his constitutional right to a jury trial of the issues of fact arising on that count of the pleading which alleged a cause of action at law against him; while in the Arnot Case the defendant, who unnecessarily interposed a legal counterclaim in an equity suit, was demanding a right to a jury trial on his own counterclaim — but that, as has been seen, is expressly authorized by the — 559 — Code. In Baylis v. Bullock Electric Mfg. Co., supra, it was held by this court that where issue was joined on a complaint demanding equitable relief, and the defendant noticed the case for trial at Special Term, he did not thereby waive his right to a jury trial, where the allegations of the complaint would only entitle the plaintiff to recover a money judgment, and that he did not lose this right by first moving for a dismissal of the complaint, but that his application was timely if made before the production of any evidence. It will be observed that section 970 of the Code contains no limitation as to the time within which the motion for the settlement, when necessary, of issues must be made, and consequently it permits the making of the motion any time before trial. Where there is an absolute right to have the issues settled, I think it quite clear that rule 31 of the general rules of practice has no application, and if it did it would be inoperative so far as in conflict with the Code. It is expressly limited to cases “where the trial of issues of fact is unprovided for by the Code.” The trial of these issues of fact is provided for by section 974 of the Code; and so they were in Árnot v. Nevins, supra, wherein I think this court, influenced by the flimsiness of the issue apparently raised for the sole purpose of delaying judgment, laid down an erroneous rule, which is in conflict with Ulbricht v. Ulbricht, 89 Hun, 479, 35 N. Y. Supp. 324, and Conderman v. Corrderman, 44 Hun, 181, not cited or considered in the opinion., Under the decisions in Wheelock v. Lee and Van Deventer v. Van Deventer, supra, the plaintiff would have been entitled to a jury trial of the issues if she had demanded it for the first time upon the trial, and without any previous motion or application. Section 970 of the Code, under which it is claimed that the right to a jury trial by the appellant conferred by section 974 of the Code has been lost, contains no provisions forfeiting the riglit for a failure to make the motion. It provides that where the case is not embraced in section 968 of the Code, which relates only to jury issues, and the absolute right to a jury trial of an issue exists, a motion to settle the issues “may” be made, and that the motion “must” be granted. It thus appears that by the express terms of the statute the making of the motion is permissive, and the granting thereof if made is mandatory; and this, I think, is the proper construction. As has been seen, the plaintiff’s right to- a jury trial of these issues was not waived by failure to move for their settlement. The statute makes no distinction between the parties as to which shall make the motion; nor does it contemplate that neglect to do so shall affect them differently. Sixth. The remaining question is whether the defendant’s application for a jury trial was made before the production of evidence upon the trial, which is the test by which it is to be determined whether his right to a jury trial was waived. Code Civ. Proc. § 1009. The record does not show the reception of any evidence prior to the defendant demanding this right. It contains merely a statement of counsel for the respondent, to which no reply was made by counsel for the appellant until he arose, interrupting counsel for respondent, and asserted the right of his client to a jury trial. It was not necessary for the plaintiff to introduce any evidence. The defendant had the — 560 — affirmative, and was entitled to open the case. In these circumstances the statement made by plaintiff’s counsel should not be deemed “the production of evidence,” within the contemplation of section 1009 of the Code, and consequently the appellant did not waive its right to a jury trial. See Baylis v. Bullock Mfg. Co., supra. As was said in People v. Albany & Susquehanna R. R. Co., 57 N. Y. 176: “A party cannot be deprived of this his constitutional privilege by a mere technicality.” See, also, Wheelock v. Lee, supra. It follows that the judgment should be reversed, and a new trial ordered, with costs to appellant to abide event, and that the order denying defendant’s motion for an order settling the issues arising on the counterclaim and reply, and directing a jury trial thereof, should be reversed, and motion granted, with $10 costs. O’BRIEN, J., concurs. PATTERSON, J., concurs in fourth and sixth subdivisions of this opinion, and in result. Footnotes [¶] 1. See Covenants, vol. 14, Cent. Dig. §§ 111, 239.