
    Caroline C. Piper, Resp’t, v. John L. Hoard, App’lt.
    
      (Supreme Court, General Term, Fourth Department,
    
    
      Filed September, 1888.)
    
    Pleadings—Leave to answer upon terms, after overruling of demurrer, MAT BE GRANTED IN DISCRETION OF COURT—CODE ClV. PRO., §497.
    It is provided by Code Civ. Pro., § 497, that upon tbe decision of a demurrer, either at general or special term, or in the court of appeals, the court may, in its discretion, allow the party in fault to plead anew or amend upon such terms as are just. Feld, that a demurrer having been interposed to a complaint, and successively overruled by the special and general terms and court of appeals, the general term might, by authority of the provision quoted in the exercise of its discretion, reverse an order of the special term denying leave to the defendant to answer and grant such leave upon terms where the demurrer was not frivolous.
    Appeal from an order of the Oneida special term, held November, 1887, denying defendant’s motion for leave to withdraw his demurrer and for leave to answer.
    Defendant demurred to plaintiff’s complaint. The demurrer was overruled, with leave to answer.
    The defendant appealed to the general term, where the order was affirmed on the 13th day of January, 1885, “ with leave to defendant to answer in twenty days, upon payment of costs of demurrer and of appeal.”
    The defendant appealed to the court of appeals, which appeal was decided in October, 1887. See 11 Ñ. Y. State Rep., 373, 375.
    The decision in accordance with opinion of Peokham, J., concurred in by Rapallo, Daneorth and Finch, JJ.; Ruger, Ch. J., and Andrews, J., dissent; Earl, J., not sitting.
    Near the close of the opinion of Judge Peokham he says, viz.: “The defendant asks if his demurrer be overruled in this court, that he be permitted to withdraw it and answer on payment of costs He has twice refused this favor in the supreme court. We suppose that we have the power to grant it now under section 497 of the Code. Formerly in such a case as this it was decided that this court did not have power to grant such leave. Whiting v. Mayor, etc., of N. Y., 37 N. Y., 600. Under the circumstances we do not think it would be well for us to grant the leave desired. Changes may have taken place since the action was commenced which might have weight in deciding the merits of the application, such as the loss of testimony on the part of the plaintiff or other changes of that nature. Justice will be better attained by remitting that question to the supreme court, where both sides may be heard upon an application and all the questions have appropriate consideration. The judgment must, therefore, be affirmed, with costs, with leave to the defendant to apply to the supreme court for leave to withdraw the demurrer and interpose an answer.”
    The motion for leave to answer was made promptly after the rendition of the decision by the court of appeals from which the quotation has been made.
    The moving affidavits show that the motion was made in good faith. That the testimony of Catherine Piper, plaintiff’s mother, has been taken de bene esse, and that the defendant is willing that testimony should be read upon any trial of an issue of fact. She died in 1886. The defendant served with his motion papers a proposed answer. Among other defenses it alleges that the plaintiff, after she became of age, received $500 furnished by the defendant through two trustees, “and she accepted and received it from them in full performance and discharge of said instrument as to her on her part and behalf, and in full satisfaction and discharge of all her claims against the defendant in this action, * * * that every claim or demand that they (Frederick, Catherine and plaintiff), or either of them, had, or might have, are fully satisfied and discharged, including the claim made by plaintiff in this action.” The proposed answer was verified by the defendant.
    In the interlocutory judgment entered upon decision of the demurrer, at special term, in October, 1883, it is adjudged and declared that the debt referred to in the complaint herein, from James Piper and wife to John L. Hoard, the defendant herein, be and hereby is declared and made a deed to the plaintiff herein. And it is further adjudged and decreed that the plaintiff herein, Caroline C. Piper, is the owner in fee of said lands so described in said deed, and is entitled to the possession thereof.”
    In the opinion of Peckham, J., it is said, viz.: “It is only necessary to hold that the issue of the marriage, which was brought about by the falsehood and fraud of the defendant, should be able to call him to account for such, fraud, and bind him to make good the thing in the manner in which he represented it, so that it shall be as he represented it to be.”
    The theory of the opinion of the court of appeals seems to be that the defendant may be regarded as a trustee ex mal officio for the plaintiff, and “held to make good the thing to the person who would have the property if the fact were as he represented it.”
    
      C. D. Adams, for app’lt; A. M. Beardsley, for resp’t.
   Hardin, P. J.

The novel character of this action, the divided vote of the court of appeals, the affidavits of the moving party, are sufficient to indicate that the demurrer was not frivolous, and was not interposed in bad faith. It was reasonable that the defendant should, by his demurrer, challenge the plaintiff’s right of recovery upon the facts stated in the complaint. It was reasonable that he should take the judgment of the general term thereon, and it is apparent that the general term, in sustaining the complaint, considered it was a proper case for the interposition of an answer. Nothing appears in the decision of the court of appeals to indicate that, in its judgment it was not a proper case in which an application should be heard in the supreme court for leave to answer, even after the decision sustaining the complaint in the court of appeals.

Section 497 of the Code of Civil Procedure, as amended in 1877, expressly confers the power to grant leave after the decision of the demurrer “either at a general or special term, or in the court of appeals * * * to plead anew, or amend upon such terms as are just.” The section gives a clear statutory power to grant a party the right to plead anew “in its discretion * * * upon such terms as are just.”

Therefore, the special term had power to grant the motion for leave to serve an answer. The application was addressed to the discretion of the court. When the demurrer was overruled in the special term, the discretion was exercised in favor of the right to serve an answer.

When that order was sustained by this court, at general term, January 1885, the discretion was exercised in the same direction.

We are, therefore, brought to the question of whether the appeal to the court of appeals from our decision, made in January, 1885, and the subsequent occurrences are sufficient to work a change in the court in regard to its discretion. We have already seen that the demurrer was not frivolous; that it was not interposed in bad faith; that the nature of the action was such as to warrant the most astute counsel in challenging the right of the plaintiff to recover. The division in the court of appeals warrants us in saying together with the other features of the litigation, that the appeal to the court of appeals was taken in good faith. If the defendant had succeeded in that appeal, the action would have been ended. He was disappointed and defeated. Ought that defeat to deprive him of the right to a judicial investigation of the facts embraced in the second branch of his proposed answer ? Ought the discretion of this court to be exercised against a defense, and in direct opposition to' the discretion exercised by this court on the 13th of January, 1885, when by its order, leave was granted to the defendant to answer upon payment of costs of demurrer ?

If the plaintiff, after she became of age, deliberately and with knowledge of the facts and circumstances attending the execution of the deed, accepted the sum of $500 “in full satisfaction and discharge of all her claims against the defendant, and of the supposed claims stated and set out in her complaint in this action,”’ she ought not in law or in equity to be permitted to recover. It seems reasonable that the issue of fact presented by that branch of the proposed answer should have the usual judicial investigation. We see nothing in the decision of the court of appeals, or in the authorities quoted upon the argument before us, which make against the reasonableness of the application.

In Miller v. Heath (7 Cowen, 101) the court said: “It is not of course on overruling a frivolous demurrer to allow the party to withdraw it and plead. But it has often been done where the attorney demurred in good faith, and a defense on the merits is sworn to.” In that case the application, although the demurrer was held to be frivolous, was allowed.

In Simson v. Satterlee (64 N.Y., 657), decided in 1876, the court of appeals held “it is within the discretion of the court of original jurisdiction whether, upon overruling a demurrer by the defendant, 'he shall be allowed to answer over.”

In Fisher v. Gould (81 N. Y., 231) it appears that in the opinion the court recognizes that the application for leave to withdraw the demurrer and answer is addressed to the discretion of the court. In this case no attention seems to have been given to the rule laid down in section 497 of the Code of Civil Procedure. That case, however, recognizes Miller v. Heath (supra) as reflecting the general rule relating to such applications. The opinion closes with the remark, viz.: “The court below was right in refusing the order asked for, for it deemed it injudicious to do so, and we may not reverse its decision.” Thus indicating that the •court of appeals in that case was unwilling to reverse or interfere with the discretion that had been exercised in that particular case. It follows therefore that this application, in virtue of section 497, is addressed to the sound discretion of the court, and that the discretion is to be exercised either one way or the other “upon such terms as are just.”

It seems to be a reasonable exercise of discretion in the case now before us, and inasmuch as the demurrer was interposed in good faith in a case involving a novel question of law so intricate and close as to lead to a division in the court of appeals in the decision thereof, so peculiar and exceptional as to have led the general term to have granted the leave to answer that the discretion should be exercised in the same direction even after the decision by the court of appeals, so far as to allow the second defense in the proposed answer to come in and receive a judicial investigation “upon such terms as are just.”

As a condition of allowing the second proposed defense, we think the defendant should be required to pay the costs of the demurrer, the costs accruing in the general term, the costs accruing in the court of appeals, ten dollars costs of opposing at special term, and he should be required to stipulate that the testimony of Catherine Piper, heretofore taken, be read and used upon the trial.

It seems reasonable to reverse the order of the special term and grant leave to the defendant to answer, as above stated, upon the terms stated. Such an order seems to be a proper exercise of this court’s discretion, and to be “upon such terms as are just,” and a proper exercise of the power and the discretion conferred by section 497 of the Code of Civil Procedure.

Order accordingly.

Follett and Martin, JJ., concur.  