Opinion
04-28-1926
MIRKIN et al. v. BOWKER et al.
Perlman & Lerner, of Trenton, for the motion. George Gildea, of Trenton, opposed.
Bill to foreclose mortgages by Milton Mirkin and others against Charles D. Bowker and another, in which defendant Charles D. Bowker filed a counterclaim. On motion to strike out answer and counterclaim. Decree in accordance with opinion.
Perlman & Lerner, of Trenton, for the motion.
George Gildea, of Trenton, opposed.
BUCHANAN, V. C. Complainants' bill is to foreclose two mortgages, made by defendants Bowker and wife, dated July 24, 1925,given to secure respectively two 6 per cent. promissory notes made by Bowker, of even date with the mortgages, one for $575, due in one month from date, the other for $2,500, due in three months from date. The bill alleges the conveyance of the mortgaged premises by complainants to defendant Bowker, by deed of general warranty, on July 24, 1925, the making of the notes and mortgages, as part of the purchase price, and describes the mortgaged premises. It alleges that the defendant Bowker failed to record his deed until November 2, 1925; that complainants after notice to Bowker, in order to compel him to record it, made and recorded a deed of conveyance for the same premises to one Jacob Teich, and, after Bowker recorded his deed, procured and recorded a reconveyance to themselves from Teich. It alleges the falling due of the notes, their due presentment, and nonpayment, and that the full amount of principal and interest is due and unpaid. Defendant Bowker filed an answer and a counterclaim, both of which complainants now move to strike out on the ground that they are sham and frivolous.
The execution and delivery of the notes and mortgages, and the consideration, are admitted by the answer. The affidavits filed with this motion show that the notes duly fell due, were duly presented, were not paid, and have not since been paid. These affidavits remain uncontradicted; no answering affidavits were filed. It is evident therefore that the denial, in paragraph 9 of the answer, of these allegations made in paragraph 9 of the bill, is sham, and should be struck out.
The answer, however, by paragraphs 10 and 12 denies the allegation of the bill that defendant Bowker has always been in possession of the mortgaged premises, and alleges that complainants have for some months been in possession thereof. Complainants' affidavits admit that this is so, and say they are ready to credit rentals against the principal and interest due on the notes. It is obvious that this much of the answer therefore, is neither sham nor frivolous; hence the whole answer cannot be stricken out.
The answer (paragraphs 13 and 14) further sets up as a defense the making and recording of the deed to Teich, hereinbefore mentioned, alleging that this was done "In fraud of defendant's rights" and before any payment was due on either of the notes, and charging that this "placed a cloud on defendant's title" and "made it impossible for him to sell the same without litigation to determine the state of the title." It is charged that, by reason thereof, complainants come into court with unclean hands, and "that there is nothing now due on the notes or mortgages."
Complainants' affidavits show that the conveyance to Teich was not made until a month after the first note had become due and was not paid. They also show the reconveyance to complainants from Teich on December 15, 1925, six weeks after defendant had finally recorded his deed (which was on November 2d, a week after the second note had fallen due). There being no contradiction of these affidavits, it is evident that so much of the answer as denies or fails to admit these facts is sham, and should be stricken out.
It seems also evident that the remainder of this defense, as thus modified, is frivolous, and should be stricken out. The conveyance by complainants to Teich was done, as appears, for the purpose of compelling defendant to record his own deed, because his failure and refusal to record it (for which he gives no explanation whatever) was preventing complainants from selling the notes and mortgages. It may have been an ill-advised act by complainants, but clearly it was neither fraudulent nor unconscionable.
Clearly, also, it had nothing to do with the creation of the cause of action sued on by complainants. The defense of tmclean hands is very strictly limited. It is "applicable only to cases where the particular claim is tied up to inequitable conduct as an element of its creation." Neubeck v. Neubeck, 119 A. 26, 28, 94 N. J. Eq. 167, 171 (27 A. L. R. 172). The conduct of complainants in the present case had nothing to do with the creation of defendant's indebtedness to complainants, or with the giving of the notes or the mortgages; neither did it in any wise hinder or prevent or interfere with defendant's ability to pay his debt.
It is perhaps unnecessary to say that, of course, the conveyance to Teich did not of itself deprive defendant of title or cut it down. Defendant had legal title by his unrecorded deed, as against complainants and every one else except those specified in the recording act, and there is no allegation that there are any such.
Perhaps if defendant showed that by reason of acts for which complainants were equitably responsible, the defendant's title to the mortgaged premises had been so impaired or subjected to superior equities that he could not safely redeem, and that except therefor he was and had been ready and willing to redeem, and tendered himself ready to pay the mortgage debt if and when the impairment of his title should be remedied, the situation might be different. But the defendant does not make or attempt to make any such showing.
All that defendant shows or attempts to show is that complainants have cast a cloud on his title, and that the result has been an impairment of its market ability, which may perhaps be deemed to include by necessary inference an allegation that the value of the property has been impaired. On the facts alleged defendant might have ground for a separate suit or counterclaim against complainantseither in equity to remove the alleged cloud on title, or perhaps for damages at law, and a showing of the timely commencement and diligent prosecution of a bona fide suit or counterclaim might be ground for application for stay of the foreclosure suit or a stay of execution in such suit, but there is nothing to constitute a defense to the foreclosure suit.
Turning now to the counterclaim actually filed in this suit, it sets up only these things: First, the allegation as to the conveyance by complainants to Teich; and, secondly, that complainants, on October 1, 1925, agreed with some stranger to sell to him and actually put him in possession; that by reason of these things defendant has been deprived of possession of the premises and his title has been clouded, to his damage $5,000. He asks decree for this sum, or in the alternative, decree for the cancellation of the notes and mortgages and for payment of the difference between the notes and the $5,000, and that complainants be decreed to deliver defendant a deed of conveyance for the mortgaged premises "in which their respective wives shall join." There is also a prayer for general relief.
It is difficult to understand precisely what the pleader intended by this unusual bit of pleading. It is not clear, for instance, how this court would or could, in his expectation, enforce against the complainants a decree that they give a deed in which their wives shall join; the wives not even being parties to this litigation. However, it seems sufficiently clear that it cannot be deemed a suit to remove the alleged cloud on title; that it is essentially a suit for unliquidated damages because of alleged wrongful dispossession of defendant by complainants and because of alleged injury to his title. This court has no jurisdiction to entertain such a suit, and the counterclaim must be stricken out.
Paragraphs 6, 9, 13, and 14 of the answer will be stricken out, for the reasons hereinbefore stated. The only issue raised by the answer, as thus modified, is as to the credits due defendant on account of rents after complainants entered into possession. This issue is not one which will preclude a reference to a master under rule 192.