Opinion
03-05-1909
REDROW v. SPARKS et al.
Joseph J. Summerili, for the motion. G. Dore Cogswell, opposed.
Bill by Annie A. Redrow against J. Katharine Sparks and others. Defendant having filed a cross-bill, she moves to strike part of the answer thereto. Order denying motion advised.
The bill is filed to foreclose a purchase-money mortgage made by defendants to complainant. Defendants have filed a cross-bill, in which they state that the premises in question were conveyed to them by complainant, and that the purchase-money mortgage was executed by them to complainant as stated in the bill, but aver that complainant was at the date of the conveyance without a marketable title to the land so conveyed, and also that a mortgage existed against the land at the date of the conveyance to defendants, and that complainant, well knowing the existence of the mortgage and defective title, fraudulently represented to defendants that her title was perfect and marketable and unincumbered with a purpose to induce defendants to take title without an examination of the records, and that by reason of such fraudulent representations defendants accepted the conveyance and executed the purchase-money mortgage in question and the bond which the mortgage secures, and paid to complainant the balance of the purchase price by conveying to complainant a certain other tract of land. The cross-bill prays that the bond and mortgage so executed to secure the payment of a part of the purchase price may be canceled, and that the tract of land which was conveyed to complainant, in payment of the remaining part of the purchase price may be re-conveyed to defendants, and that defendants may be permitted to reconvey the mortgaged premises to complainant. Complainant's answer to the cross-bill denies the misrepresentations and fraud set forth in the cross-bill, and denies any knowledge of the prior mortgage or defects in title. The answer to the cross-bill also contains a paragraph asserting that all matters in the cross-bill mentioned and complained of are matters which may be tried and determined at law and with respect to which the cross-complainant is not entitled to any relief in this court, and prays the benefit of that defense to the same extent as though the cross-bill had been demurred to.
Crosscomplainant now moves to strike out that paragraph of the answer to the cross-bill which prays the benefit of a demurrer.
Joseph J. Summerili, for the motion. G. Dore Cogswell, opposed.
LEAMING, V. C. (after stating the facts as above). If the paragraph of the answer praying for the benefit of a demurrer, against which the present motion is directed, cannot be regarded as material to the case under any possible circumstance or contingency, it will be deemed impertinent and may be stricken out. atory's Eq. Pl. § 863. It is mauirest that the paragraph in question cannot be treated as a demurrer which is filed to test the sufficiency of the cross-bill, for it fails to comply with the provisions of our statute touching demurrers. P. L. 1902, p. 518. § 22. There are, however, instances inwhich advantages have been extended to or denied defendants by reason of the existence or nonexistence of a paragraph in the answer praying for the benefit of a demurrer; and such examination of the authorities as I have been able to make leads me to the conclusion that such a paragraph may or may not be regarded as material by reason of special circumstances which may or may not enter into individual cases. When a bill is insufficient on its face to support equitable jurisdiction or relief, it should be demurred to. Defendant may in such case answer, but if, on final hearing, the bill is found insufficient, costs "may be denied to defendant by reason of his failure to demur, and in that manner avoid the necessity of a hearing. Daniell's Ch. Pr. & Pl. 542. Cases may arise, however, in which the jurisdiction of a court of equity can only be accurately measured by the ascertainment of matters which may be appropriately contained in an answer. Thus a court of equity has jurisdiction to enforce a legal right, the existence of which is clear and not in substantial dispute; but the jurisdiction fails when it is made to appear that the legal right is not clear, either by reason of substantial dispute touching the facts on which it is based or uncertainty touching the legal rules on which the right is claimed. In cases of that class an answer and final hearing may be necessary to accurately determine the question of jurisdiction. The propriety of a prayer in an answer, in a case of that nature, for the benefit of a demurrer for want of equitable jurisdiction, is manifest, and has been recognized by our Court of Errors and Appeals in Todd v. Staats, 60 N. J. Eq. 507, 513, 46 Atl. 645, and in Outcalt v. Helme Co., 42 N. J. Eq. 665, 667, 4 Atl. 669, 9 Atl. 683. In the former case the bill was retained while legal title could be established at law because no denial of jurisdiction was asserted by the answer. In the latter case the bill was not retained because defendant had asserted, by his answer, the want of jurisdiction. In Daniell's Ch. PI. & Pr. 715, the following statement is made: "Where the same benefit has been claimed by answer, that the defendant would have been entitled to if he had demurred to the bill, or pleaded the matter, alleged in his answer, in bar, it is only at the hearing of the cause that any such benefit can be insisted upon; and then the defendant will, in general, be entitled to the same advantages of this mode of defense that he would have had if he had adopted the more concise mode of defense, by demurring or pleading."
The special circumstances giving the privilege of this mode of defense in lieu of a plea are referred to by the author above quoted at page 714. No reasons are given in support of the practice in lieu of a demurrer; but Wray v. Hutchinson, 2 My. & K. 235, and Milligan v. Mitchell, 1 My. & C. 433, cited in support of the text above quoted, disclose the special circumstances under which the practice was approved. In the former case the amended bill was demurrable, but contained scandalous matter which defendant desired to answer. Defendant, accordingly, answered and prayed the benefit of a demurrer. On dismissal of the bill, costs to defendant were resisted because defendant had answered and had not regularly demurred. By reason of these peculiar circumstances of the case costs were allowed to defendant. Milligan v. Mitchell was decided on authority of Wray v. Hutchinson. The other cases in this state which have been brought to my attention touching this subject are: Gifford v. Thorn, 7 N. J. Eq. 90, 97; Reed v. Cumberland Ins. Co., 36 N. J. Eq. 146, 152; Bennett v. Bennett, 63 N. J. Eq. 306, 49 Atl. 501; Veghte v. Raritan Water Power Co., 19 N. J. Eq. 143, 145. In the latter case Chancellor Zabriskie, after defining the well-established rule of equity pleading to the effect that a defendant cannot answer and demur to the same part of a bill, and that the answer overrules a demurrer, says: "This rule would be nugatory if the answer could in all cases state the objection, and pray the same advantage as if taken by demurrer. The whole bill, or any part of it, could in this way be demurred to in an answer."
I am convinced that the practice which is challenged by the present motion cannot be properly sustained unless some special circumstances of the case are found to justify it. In the present case the cross-bill is clearly self-sufficient. It seeks the rescission of a contract made by the parties and the restoration to them of their original properties. The ground of the relief sought is that cross-complainant was fraudulently induced to enter into the contract. This court has jurisdiction to entertain such a bill and to administer complete relief if the fraud is established, even though a remedy at law may exist. Hubbard v. International Mercantile Company, 68 N. J. Eq. 434, 59 Atl. 24; Eggers v. Anderson, 63 N. J. Eq. 264, 269, 49 Atl. 578, 55 L. R. A. 570; 1 Story's Eq. Jur. § 208. But the answer to the cross-bill denies the misrepresentations and asserts that no prior incumbrance or defect of title was known to complainant. If cross-complainant should fail at the hearing to establish the fraud alleged, equity jurisdiction would be lost in a case of this nature, because of the remedy at law on the covenants in the deed of conveyance. As the objection to jurisdiction on the ground of an adequate remedy at law is an objection which should be in some form asserted by a defendant (Gifford v. Thorn, supra), I think that the peculiar circumstances of this case referred to fully warrant the practice which the pleader has adopted of inserting in the answer, in connection with thedenial of fraud, the prayer for the benefit of a demurrer by reason of an adequate remedy at law.
I will advise an order denying the motion to strike out.