
    Nathaniel L. McCready, Respondent, v. Thomas A. Larkin, Appellant, Impleaded with John A. Larkin and Edward L. Larkin, Defendants.
    First Department,
    July 10, 1916.
    Contract—breach, of contract for sale of mortgage — action by vendor to recover difference between purchase price and amount realized upon sale at public auction — pleading — counterclaim.
    In an action by the vendor of a mortgage to recover the difference between the agreed purchase price and the amount actually received at a public sale rendered necessary by defendant’s default, allegations by the defendant that the plaintiff had agreed to assign to him the last $1,000 to be received on the mortgage; that the plaintiff has been paid $7,500 on the mortgage which is all that ever can be paid or received thereon to or by the plaintiff, is sufficient with other proper allegations both as a counterclaim and by way of set-off and recoupment.
    Appeal by the defendant, Thomas A. Larkin, from an interlocutory judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 15th day of July, 1915, sustaining plaintiff’s demurrer to certain defenses and to a counterclaim contained in the second amended answer of the appellant.
    
      John T. Pooling, for the appellant.
    
      Robert Kelly Prentice, for the respondent.
   Dowling, J.:

In so far as the separate defenses are concerned the questions presented are identical with those discussed in the opinion in the case against John A. Larkin (173 App. Div. 847), and for the reasons therein given the demurrers to the fourth and eighth defenses must be overruled. The counterclaim herein, however, is entirely different from the one interposed in that action. The one under examination sets up that on April 7, 1914, plaintiff, then being in possession of the $50,000 mortgage on premises 141-147 Fifth avenue, New York city (referred to in the "opinion in the John A. Larkin appeal), for a good and valuable consideration executed and delivered to defendant Thomas A. Larkin an instrument in writing (a copy whereof is attached to the answer) whereby he agreed to “assign or cause to be assigned to said Larkin the last one thousand dollars to be received on said second mortgage; ” that plaintiff’s interest in said mortgage at that time exceeded $1,000; that under the written instrument plaintiff became bound in law and equity to assign or cause to be assigned to defendant the last $1,000 to be received on the mortgage; that the mortgage was assigned to Charles P. De Casanova under a pretended sale at public auction for $5,500; that thereafter on September 11, 1914, De Casanova reassigned the said mortgage to plaintiff and others; that on October 20, 1914, plaintiff and others assigned and transferred the mortgage for $7,500 to John J. Buckley, thereupon paid by said Buckley; “ and that plaintiff did not, and will not, receive and is not entitled to receive, any further sum from said Buckley or from any other person for or on account of said mortgage.” It is further alleged that since the assignment of the mortgage to Buckley plaintiff has had no interest therein; that all the charges referred to in the written instrument have been paid. The answer continues: “ Sixtieth. That by reason of the facts hereinbefore set forth the plaintiff has received the last One Thousand Dollars ($1,000) which can be received by him for or on account of said Fifty Thousand Dollar ($50,000) mortgage or in any way growing out thereof; and the plaintiff has placed it beyond his power to receive any further sum or sums on account of . said mortgage than the said sum received by him upon the assignment of said mortgage to said Buckley. Sixty-first. That prior to the commencement of this action, this defendant duly performed all the terms and conditions of said instrument, Exhibit I, on his part to be performed. Sixty-second. That the plaintiff 'has not assigned or caused to be assigned to this defendant the last One Thousand Dollars ($1,000) to be received on said second mortgage and that plaintiff has not paid to this defendant and this defendant has not in any way received the last One Thousand Dollars ($1,000) received on said mortgage hereinbefore mentioned; and the plaintiff has not paid to this defendant, nor has this defendant in any manner received any sum of One Thousand Dollars ($1,000) or any sum whatsoever for, on account of, or in any manner growing out of said mortgage; although the said assignment and the payment of said sum of One Thousand Dollars ($1,000) have been duly demanded.” There is a further statement that the cause of action set forth in the counterclaim is connected with the subject of the action in that the mortgage mentioned in the counterclaim and the exhibit is the same as that referred to in the complaint, and that this counterclaim is also a cause of action on contract, existing against plaintiff in favor of defendant before the commencement of the action and also tending to diminish plaintiff’s recovery to the extent of $1,000. The demurrer to this counterclaim in its original form was sustained on the ground that there was no allegation that the last $1,000 on the second mortgage had been received by plaintiff. The. amended counterclaim shows that $7,500 has been paid on the mortgage, which is all that ever can be paid or received thereon to or by plaintiff, as it has been absolutely transferred to Buckley, and plaintiff has no further interest therein, and that plaintiff has received the last $1,000 that ever can be paid thereon. The counterclaim is sufficient in law and is properly pleaded both as a counterclaim and by way of set-off and recoupment. The demurrer thereto should, therefore, be overruled.

The judgment appealed from is, therefore, modified by decreeing that the fourth and eighth defenses and the counterclaim contained in the second amended answer of the defendant Thomas A. Larkin are sufficient in law upon the face thereof and by overruling the demurrers thereto. In all other respects the judgment is affirmed, with costs to appellant. The conclusions of law in. the decision will also be modified accordingly. Leave is given to plaintiff to reply to the counterclaim contained in the second amended answer upon payment of said costs.

Clarke, P. J., McLaughlin, Scott and Davis, JJ., concurred.

Judgment modified as indicated in opinion and as modified affirmed, with costs to appellant, with leave to plaintiff to reply to counterclaim. Order to be settled on notice.  