Stratton v. Graham

BENEDICT, J. [1] As this motion is made by the plaintiff, it is necessary to consider only the sufficiency of the answer. The amended complaint states a simple cause of action for money paid by plaintiff to defendant’s use. The answer does not effectually deny any material allegation of the amended complaint, but sets up as a counterclaim a cause of action in replevin for certain diamonds, alleged to have been deposited by defendant with plaintiff as security for the sums stated in the amended complaint to have been advanced for defendant’s use by the plaintiff; it being further alleged that defendant tendered the amount of plaintiff’s claim, with interest and costs, to one of plaintiff’s attorneys, demanding at the same time a return of the security, and that he rejected the tender and refused to surrender the security. Under all the authorities, this counterclaim is good, even though the amount tendered was not paid into court, if the tender was sufficient. Cass v. Higenbotam, 100 N. Y. 248, 3 N. E. 189; Reusens v. Arkenburgh, 135 App. Div. 75, 78, 119 N. Y. Supp. 821; Osterman v. Goldstein, 32 Misc. Rep. 676, 677, 66 N. Y. Supp. 506. Such a tender [870] should not be confused with a tender to discharge the debt, either at common law or under Code of Civil Procedure, § 731 et seq., which must be kept good by payment of the amount tendered into court. Such a tender as is here pleaded has only the effect of discharging the plaintiff’s lien upon the security, but does not in any way affect his right to recover upon his caiise of action, except in so far as it enables the defendant to plead a good counterclaim. In the case last cited it is said (32 Misc, Rep. 678, 66 N. Y. Supp. 507): “There is a wide distinction * * * between a tender which operates to discharge a lien upon security given as collateral to the debt, and one which operates to discharge the indebtedness so as to prevent judgment upon it.” The effect of the fender and refusal in, discharging the lien on the security gives the debtor, under the authorities above cited, a cause of action in trover to recover the value of the property pledged, and it would necessarily follow that he might recover the property itself if he chose. [2] The vital question here is, therefore, whether the tender to the plaintiff’s attorney was sufficient to discharge the lien. Had it been made to the plaintiff personally, no question could arise. Section 731 of- the Civil Code not being applicable, the permission there given to make the tender to the plaintiff’s attorney will not avail the defendant. It appears inferentially in paragraph 3 (c) of the answer that the tender was made after suit brought. It would seem that' prior to the bringing of suit such a tender could be made only to the creditor, or to some agent having authority to receive payment of the debt and surrender the security, and who has the security in his possession for that purpose, and that these facts must be alleged as part of the cause of action. But after suit brought payment of the debt could not,safely be made to the plaintiff directly because of the attorney’s lien. Therefore I think that an attorney, who has brought suit on a secured demand, must be deemed to have implied authority to receive payment of the demand, with interest and costs of suit, and to surrender the security. The counterclaim is therefore good in law. [3] Although the plaintiff’s cause of action is not denied, yet, as defendant has interposed a counterclaim for an amount exceeding plaintiff’s claim, plaintiff is not entitled to have judgment for his demand until the issues arising upon the counterclaim have been adjudicated.. Crompton v. Seaich, 142 App. Div. 431, 126 N. Y. Supp. 817; Id., 143 App. Div. 284, 128 N. Y. Supp. 586; Walter v. Carroll, 140 N. Y. Supp. 868. Motion denied, with costs.