
    Aron Altman, Respondent, v. The Bungay Company of New York, Appellant, Impleaded with the City of New York and Lillian C. Schwartzman, Defendants.
    First Department,
    April 3, 1914.
    Tax—suit to foreclose tax lien, city of New York—pleading — answer — denial of knowledge of assignment of tax lien — defense of payment — denial of plaintiff’s allegation of non-payment —■ city charter construed — acceleration of due date —requisites of complaint in suit to foreclose lien.
    An answer in a suit to foreclose a tax lien, brought under the provisions of the Greater New York charter, is not frivolous in that it denies that the defendant has any knowledge or information sufficient to form a belief as to the plaintiff’s allegation that the tax lien and moneys due thereunder were assigned to him. This, because such assignment is not necessarily a matter of record.
    Where the plaintiff positively alleges non-payment of the taxes due on the property, as required by the city charter, the defendant may traverse the same by an allegation that he has no knowledge or information sufficient to form a belief as to the truth of the allegation.
    As a general rule payment is an affirmative defense and cannot be raised by a mere denial; but where the non-payment of a sum of money is a fact upon which the plaintiff bases his cause of action for the recovery of a separate and distinct sum of money, so that the burden of pleading non-payment is upon him, the fact of non-payment is put in issue by a denial.
    Sections 1032 and 1035 of the charter of the city of New York, when construed together, provide that the amount of a tax lien shall become due within three years from the date of sale, unless the due date is aecel-erated by default in the payment of interest upon the amount paid for the tax lien for thirty days, or by default for six months after delivery of transfer of tax lien in the payment of any taxes, assessments or water rates, which become a hen on or subsequent to the date mentioned in the advertisement of sale as the date of the tax lien sold.
    Hence, where three years have not elapsed' since the date of the tax sale, a plaintiff seeking to foreclose a lien must allege facts which, under the statute, accelerate the due date. A mere allegation that the defendants have failed to pay the tax which became due, as required by the city charter, is insufficient to show an acceleration of the due date of the hen.
    
      It seems, that properly to allege the acceleration of the due date of the transferred lien the pleader should state: (1) The date specified in the advertisement of sale as the day of the date of the tax transferred to the plaintiff; (2) that on or after that date taxes, assessments or water rates became a hen on the property, and these should be stated specifically; (3) the date of the delivery of the transfer of tax hen sought to be foreclosed with an allegation that subsequent liens have not been paid.
    
      It seems also, that the plaintiff should allege that at the time of the sale there were unpaid taxes, assessments or water rates for' which the city had a lien, which it could sell; that the necessary statutory proceedings were duly had prior to the sale; that the holder of the transfer tax lien has elected to consider the amount thereof due in consequence of a failure to pay subsequent taxes, assessments or water rates, for such failure does not ipso facto accelerate the due date, but merely gives the holder of the transfer of the tax hen an option to consider the amount as presently due.
    Appeal by the defendant, The .Bungay Company of New York, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 2d day of December, 1913, striking out appellant’s answer as frivolous and granting plaintiff’s motion for judgment on the pleadings.
    
      Roy C. Gasser, for the appellant.
    
      Theodore I. Schwartzman, for the respondent.
   Scott, J.:

This is an action to foreclose a tax lien under the provisions of chapter 17, title 5, of the Greater New York charter (Laws of 1901. chap. 466, as amd. by Laws of 1908, chap. 490, and Laws of 1911, chap. 65). By the terms of section 1035 of the charter, as added in 1908 and amended in 1911, such an action is to be “regulated by the provisions of the Code of Civil Procedure and by all other provisions of law and rules of practice applicable to actions to foreclose mortgages on real property, ” except as otherwise especially provided in said title. The exceptions are of minor importance. The general scheme of the title is that when taxes, assessments or water rates, which are by law made a lien upon real property, shall remain unpaid and overdue for a certain period, the city may sell at auction and transfer to the purchaser thereat the lien upon the real estate, for the amount of the unpaid charges, which lien the purchaser may at the time and by the means provided in said title, proceed to foreclose by action.

The complaint in the present case alleges in its 1st and 2d paragraphs that at a public auction 'held on April 21, 1913, one Lillian C. Schwartzman purchased and became the owner of a tax lien affecting certain real estate in the borough of The Bronx, in the city of New York, and that the transfer thereof was duly entered as a public record.

The 3d paragraph alleges that on June 2, 1913, the said Lillian C. Schwartzman duly sold, assigned and transferred the said transfer, of tax lien and all moneys due and to become due thereunder to the plaintiff.

The 4th paragraph reads as follows: “That the defendants have failed to pay the taxes which became due on said property, as required by the provisions of Chapter 17, Title 5, of the Greater New York Charter.”

The 5 th paragraph alleges that there is now due upon the said transfer of tax lien the sum of fifteen dollars and six cents, with interest.

The defendant the Bungay Company “Denies that it has any knowledge or information sufficient to form a belief as to the truth of any of the allegations made and contained ” in paragraphs 1, 2, 3 and 6.

The court at Special Term was of the opinion that this form of denial was insufficient and raised no issue because the matters attempted to be thus denied were of public record. While this criticism may be well founded as to the first and second allegations of the complaint, as to which we express no opinion (See Kirschbaum v. Eschmann, 205 N. Y. 127), it is inapplicable to the 3d paragraph, which sets up the plaintiff’s right and title to sue. That paragraph merely asserts that an assignment was made to plaintiff which is not, however, alleged to be a matter of record. It is improbable that the defendant could have any knowledge of such an assignment, and it was entitled to put plaintiff to his proof in that regard. This denial was, therefore, certainly not frivolous. The positive denials of the allegations of non-payment contained in the 4th and 5th paragraphs of the complaint were deemed to be insufficient because “payment is an affirmative defense, and cannot he raised by a mere denial.” As a general rule, this proposition is unassailable, but where the non-payment of a sum of money is a fact upon which plaintiff bases a cause of action for the recovery of a separate and distinct sum of money, the burden of pleading and proving non-payment of the first-mentioned sum rests on the plaintiff, and the fact of non-payment is put in issue by a denial. This rule was clearly expressed by this court in Gruenstein v. Jablonsky (1 App. Div. 580), in the following words: The plaintiff here seeks to recover the whole amount of her debt and to have a personal judgment against Biersack for it, if the mortgaged property will not upon the sale bring enough to pay it. The fact that the mortgage debt is all due is not established by merely producing the mortgage. The plaintiff must prove in addition that an installment has not been paid, and that she elects to consider it all due. Her allegation that it is so, is not that of a mere conclusion of law, but of a fact. (Allen v. Patterson, 7 N. Y. 476.) This fact is put in issue by the answer. But it is said that part payment is an affirmative defense and cannot be shown under a denial. That is true. (McKyring v. Bull, 16 N. Y. 297.) If the suit were brought simply to foreclose for the failure to pay the installment which fell due September first, and the relief asked were only for that installment, it might be that the defendant to raise that question would be compelled to plead that he had paid it. But that failure is alleged here not merely as a failure to pay, but as one of the facts upon which the plaintiff bases her claim that a condition subsequent has not been performed and that the whole debt has become due. Considered as such a fact, an essential one in the chain, the plaintiff must prove it. When that fact stands in such a relation to the plaintiff’s case the fact of non-payment is put in issue by a denial. (Knapp v. Roche, 94 N. Y. 329.) The answer is, therefore, not frivolous, and the motion for judgment should have been denied.”

To demonstrate the .application of this rule to the present case it will be necessary to read the complaint in the light of the statute, and incidentally to consider the sufficiency of the complaint.

The act provides (§ 1032, as added' supra) as follows:

“ § 1032. The aggregate amount of each tax lien transferred pursuant to this title, shall be due three years from the date of the sale. Until such aggregate amount is fully paid and discharged, the holder of the transfer of tax lien shall be entitled to receive interest on such aggregate amount from the day of sale, semi-annually on the first day of January and July, at the rate which the purchaser shall have bid. At the option of the holder of any transfer of tax lien the aggregate amount thereof shall become due and payable after default in the payment of interest for thirty days or after default for six months after the delivery of transfer of tax lien in the payment of any taxes, assessments or water rents, which become a lien on and after the day of the date mentioned the advertisement of the sale as stated therein, of the tax lien transferred by such transfer of tax lien.”

Section 1035 (as added and amd. supra) provides:

“ § 1035. If the amount of any tax lien which shall have been transferred by a transfer of tax lien shall not be paid when under its terms and the provisions of this title such amount shall be due, the holder of such tax lien may maintain an action in the Supreme Court to foreclose such tax lien.”

These provisions, read together, provide that the amount of a tax lien shall become due three years from the date of sale, unless the due date is accelerated by default in the payment of interest upon the amount paid for the tax lien for thirty days, or by default for six months after delivery of transfer of tax lien in the payment of any taxes, assessments or water rents which become a lien on or subsequent to the date mentioned in the advertisement of sale as the date of the tax lien sold.

The complaint does not state when the transfer of tax lien was delivered to plaintiff’s assignor, but it must have been at some time subsequent to April 21, 1913, alleged to have been the date of sale. Three years had not elapsed since the date of sale when this action was commenced, and it was, therefore, necessary for plaintiff to allege, in order to maintain the action at all, that the due date had been accelerated for one of the reasons provided in the statute and to specify in intelligible language which reason so accelerated it. He has apparently attempted to do so in his fourth allegation that the defendants have failed to pay the taxes which became due on said property, as required by the provisions of Chapter 17, Title 5, of the Greater New York Charter. ” This is clearly an insufficient allegation of such non-payment of taxes as will operate to accelerate the due date of plaintiff’s lien. The statute provides that it may be accelerated if defendants have made default “for six months after the delivery of transfer of tax lien in the payment of any taxes, assessments or water rents, which become a lien on and after the day of the date mentioned in the advertisement of the sale as stated therein, of the tax lien transferred by such transfer of tax lien.”

To properly allege acceleration of the due date of the transferred lien under this provision, the pleader should allege (1) the date specified in the advertisement of sale as the day of the date of the tax lien transferred to and held by plaintiff; (2) that on or after that date taxes, assessments or water rents became a lien on the property, and these should be stated specifically; (3) the date of the delivery of the transfer of tax lien sought to be foreclosed, with an allegation that the subsequent liens have not been paid. Even if properly pleaded it would still be the allegation of the non-payment of a sum of money as the basis of a cause of action to recover a separate and distinct sum of money, and this allegation would be put in issue by a denial, without the necessity of a positive allegation of payment, under the rule quoted from Gruenstein v. Jablonsky (supra).

What has already been said is sufficient to necessitate the reversal of the order appealed from. There are other omissions in the complaint to which attention is called and which are claimed to render it insufficient. While it is alleged that the city on a given date sold a tax lien, there is no allegation that at the time of sale there were any unpaid taxes, assessments or water rents for which the city had a lien which it could sell. It is not alleged that the necessary statutory proceedings were duly had prior to the sale. The only authority of law for a sale and transfer of the city’s lien is the statute above cited, and no valid sale can ¡be 'made under it unless the prescribed preliminary steps are duly taken. Nor is it alleged that the holder of the transfer of tax lien has elected to consider the amount thereof due in consequence of the'failure to pay subsequent taxes, assessments or water rents. Such failure does not ipso facto accelerate the due date, but merely gives the holder of the transfer of tax lien the option to consider the amount as presently due. The exercise of this option is a fact to be pleaded and proved. We do not now pass upon the validity of all of these objections to the complaint, merely calling attention to them to the end that the plaintiff, if he elects to amend, as he must do, to prosecute his action, may be advised of the possible objections he will be called upon to meet.

The order appealed from must be reversed, with ten dollars costs and disbursements, and the motion denied, with ten dollars costs.

Ingraham, P. J., McLaughlin, Laughlbst and Hotchkiss, JJ., concurred.

Order reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs.  