Opinion
06-02-1900
BRILL v. MARY A. RIDDLE CO.
C. L. Cole, for complainant. Thomas E. French and L. M. Garrison, for defendant.
Suit by John A. Brill against the Mary A. Riddle Company. Complainant moves to strike out part of the answer. Motion refused.
This is a bill to foreclose a mortgage upon lands in Atlantic City, dated July 14, 1899, securing the payment of $11,400, in yearly installments of $1,000 each, for 10 years, and the residue, $1,400, in one year thereafter, with interest payable semiannually. Among other covenants, the mortgage contained an undertaking that the mortgagor should produce to the mortgagee or his assigns, on or before December 1st of each year, receipts for all taxes and municipal liens or charges of the current year assessed upon the mortgaged premises, and that in default thereof the whole principal debt aforesaid should, at the option of the mortgagee or his assigns, become due and payable immediately. The bill alleges, as one of the grounds for the forfeiture of the credit of 11 years, and the bringing of the whole principal sum of the mortgage to be immediately due and payable, that defendant company has not paid the tax assessed upon the mortgaged premises by the city of Atlantic for the year 1899, which has come to be due; that it did not produce to the holder of the mortgage any receipt for the municipal taxes on or before December 1, 1899, nor up to the time of the filing of the bill; by reason of which the complainant insists that the defendant company is in default, and the complainant elects to demand and receive payment of the principal and interest of the mortgage immediately. The defendant company answers the several charges of the bill, and, in response to the above allegation, denies that it has not paid the taxes assessed upon the mortgaged premises by the city of Atlantic for the year 1899. It admits that it did not produce to the mortgage holder receipt for municipal taxes on or before December 1, 1899, but denies that by reason thereof defendant is in default; and avers, in respect thereto, that taxes in Atlantic City are payable on or before December 20th in each year; that the valuation for 1899 assessed upon the mortgaged premises was excessive; that the defendant appealed therefrom to the commissioners of appeal; that the commissioners took the matter into consideration, and held it until about the time of filing the bill in this cause, then noticed the defendant company of a reduction in the valuation, whereupon defendant immediately paid the taxes as adjudged, and produced the receipt therefor to the mortgagee. The answer further denies default with respect to the payment of taxes or the production of the tax receipts. The complainant moves to strike out "so much of the defendant's answer as relates to the failure of the defendant to produce to the complainant a receipt for municipal taxes for the year 1899, for the reason that, admitting tobe true the facts so set forth, they show no legal reason for the failure to produce the tax receipt in accordance with the terms of the bone and mortgage referred to in the complainant's bill, and no legal bar to its right to insist upon the payment of both principal and interest of the said mortgage."
C. L. Cole, for complainant.
Thomas E. French and L. M. Garrison, for defendant.
GREY, V. C. (after stating the facts). This notice to strike out is given under rule 213, which provides that any objections to any pleading, or to any part thereof, may be adjudicated upon a motion without the filing of a demurrer or exceptions, hut the notice of such motion must state the particular ground or grounds of objection. This rule has been interpreted by Vice Chancellor Van Fleet in Leslie v. Leslie, 50 N. J. Eq. 155, 24 Atl. 1029, and by Vice Chancellor Stevens in Doane & Jones Lumber Co. v. Essex Building & Land Co. (N. J. Ch.) 45 Atl. 537. They both hold that, when the challenged pleading is an answer, the application to strike out takes the place of exceptions, and must be decided by the rules which govern in cases of exceptions taken to an answer; that exceptions to an answer may only be taken for scandal, for impertinence, and for insufficiency. There is no claim that the matter objected to in defendant's answer is scandalous, nor that the answer fails to respond to any charge in the bill, and is therefore insufficient.
The complainant claims that the allegation sought to be stricken out is impertinent, and that for this reason it should be removed from the record. The striking out of a defense for this cause will only be ordered where the matter criticised is so clearly impertinent that there can be no doubt about it, for to strike out is to refuse even to hear the matter set up. Story, Eq. PI. § 2637, note 3. The complainant's bill of complaint in the particular in question seeks to forfeit a credit of 11 years, agreed to be given for the payment of the principal money of the mortgage, because the defendant did not on or before December 1st produce a receipt to the mortgage holder showing the payment of a tax in accordance with the condition of the bond. The answer shows that on December 1st the tax assessed on the mortgaged premises was, by due course of law, in dispute, and unadjudged; that it was subsequently determined to have been erroneous, and was by proper judgment reduced, the tax thereupon paid, and the receipt therefor produced to the mortgage holder. The thing agreed to be done by the condition of the bond was to produce a tax receipt upon a named day. If no tax had been assessed, none could have been paid, and no receipt could have been produced. If that were the state of facts, would there have been any default? The expressed terms of the condition presuppose an assessment, and, I think, a lawful assessment Where the defendant with diligence prosecutes his suit to secure a lawful assessment, in order that he may pay the tax and produce the receipt, can it be said that the delay of the tribunal appealed to, in considering the matter and rendering its judgment is to be imputed to the defendant, and that his presentation of the fact of unlawful assessment, his appeal, etc., is so impertinent to the issue (the alleged default and consequent forfeiture of credit) that it should be stricken out without a hearing? If it is, the effect of the condition whereby the mort gagor agrees to present its tax receipt on o. before December 1st must be that he agrees, on or before that day, to pay any assessment made, however oppressive or unlawful it may be. I think the mortgagor is entitled to be heard on this point before such a construction of his contract is imposed upon him. The phrasing of the condition indicates that the payment of the tax and the prevention of a lien prior to the mortgage was the substantial benefit to be secured to the complainant by that element of the contract This has been fully accomplished. The complainant, having the full benefit of the payment, notwithstanding insists on his right to forfeit the credit of 11 years, because the payment was not made, and the proof of it exhibited to him, on or before the day named in the condition. He is clearly using the words of his contract to secure for himself a forfeiture of the credit, and not for the payment of the tax. In my view, such a statement of defense ought not, under the circumstances stated, to be stricken from the record, and thus denied even consideration.
The objection on the point named is, however, in its substance, a demurrer to the answer. This is shown by the frame of the notice to strike out. In the Doane Case, Vice Chancellor Stevens expressly declared that a motion to strike out allegations of an answer, on the ground that the matter set up does not disclose any equitable defense, is a mere demurrer, and that a demurrer to an answer is not. recognized in equity pleading. In the Doane Case, the notice stated that the matter set up in the challenged answer "does not disclose any equitable defense." In this case the notice states that the complainant will move to strike out that part of the answer which relates to the failure to produce tax receipts, for the reason that, admitting it to be true, "the facts set forth show no legal reason" for the failure to produce the tax receipts, etc. The phrasing of the notice in the case now under consideration is, in its legal effect, precisely the same as was that under review in the Doane Case. Both are substantially demurrers to an answer. This is more especially true in the present case, because the challenged matter, if forceful as a defense, goes to defeat the complainant's whole equity, in that it denies his right, for the cause named, to forfeit the defendant's credit of 11 years, and to bring the mortgage debt to be immediately due. Ittherefore disputes his right to file his bill of complaint to collect the mortgage debt. The motion to strike out is, in my view, within the ruling expressed in the first paragraph of the syllabus of the Doane Case, and fully discussed in the opinion of Vice Chancellor Stevens, and should be refused.