Nat'l Sur. Co. v. Mulligan

• Decision Date: 20 May 1929
• Docket Number: No. 67.,67.
• Citation: 146 A. 372
• Parties: NATIONAL SURETY CO. v. MULLIGAN.
• Court: New Jersey Supreme Court

146 A. 372

NATIONAL SURETY CO.

v. MULLIGAN.

No. 67.

Court of Errors and Appeals of New Jersey.

May 20, 1929.

(Syllabus by the Court.)

Appeal from Supreme Court.

Action by the National Surety Company against Agnes K. Mulligan. Judgment for plaintiff, and defendant appeals. Affirmed.

William F. Burke and John W. Ockford, both of Union City, for appellant.

Eichmann & Seiden, of Jersey City, for respondent.

WALKER, Chancellor. This is an appeal from a judgment of the supreme court entered upon striking out defendant's answer. The plaintiff moved to strike it out, "On the ground that said answer is false, sham and frivolous and interposed solely for the purpose of delay."

A plea cannot be both sham and frivolous. It is either sham or frivolous. A sham plea is one good on its face but false in fact; a frivolous plea is one which on its face sets up no defense, although it may be true in fact. In re Beam, 93 N. J. Eq. 593, 117 A. 613; Fidelity, etc., Co. v. Wilkes-Barre & H. R. Co., 98 N. J. Law, 507, 120 A. 734; Milberg v. Keuthe, 98 N. J. Law, 779, 121 A. 713; Sculthorpe v. Commonwealth Casualty Co., 98 N. J. Law, 845, 847, 121 A. 751.

The order striking out the answer recited that "the defendant's (Agnes K. Mulligan's) answer is sham and frivolous and interposed solely for the purpose of delay and fails to show such facts as entitle her to defend." Now, in Fidelity, etc., Co. v. WilkesBarre & H. R. Co., 98 N. J. Law, 507, at page 510, 120 A. 734, 735, it was held that a plea might be condemned as either false (sham) or frivolous, and could be struck out upon either ground, but was never summarily dealt with upon both grounds. However, the supreme court commissioner's order recites that the answer fails to show such facts as entitle Agnes K. Mulligan to defend, and this is so; and therefore the order will be treated as striking out the answer as frivolous (Wittemann v. Giele, 99 N. J. Law, 478, 123 A. 716), especially as no ground of appeal challenges it for the reason that the answer was struck out as both, when it should have been on one or the other head. Besides, no judgment shall be reversed or new trial granted for error of procedure, unless after examination of the whole case it shall appear that the error injuriously affected the substantial rights of a party. The Practice Act (1912), P. L. p. 377, § 27. The essential thing was striking out the answer, not that it was so done for such and such a reason.

It is true that a supreme court commissioner designated to determine motions preliminary to trial has no power to make an order for summary judgment in that court (Milberg v. Keuthe, 98 N. J. Law, 779, 121 A. 713), but, supreme court rule 84, provides that such judgment may be entered by the court or a judge at chambers. The procedure adopted in this case was regular. Here the commissioner made an order striking out the answer, and then the clerk of the court made an assessment of the damages and the chief justice signed the judgment filed and entered in that tribunal.

Defendant-appellant claims that she is entitled to have the facts set up in her answer tried by a jury. She has no such right. In Eisele & King v. Raphael, 90 N. J. Law, 219, at page 223, 101 A. 200, 202, this court said: "Striking out a sham or frivolous plea is not an infringement of the right of trial by jury." See, also, Wittemann v. Giele, 99 N. J. Law, 478, 123 A. 716.

The plaintiff sought to recover the amount alleged to be due on a decree or judgment obtained by Mary K. Hartman against Agnes K Mulligan, for the sum of $18,997.46 in the surrogate's court in and for the county and state of New York, which decree or judgment was assigned in writing by Mary K. Hartman to the National Surety Company, the party plaintiff in the suit below.

The answer filed by the defendant admitted the recovery of the decree abovementioned by Mary K. Hartman, and also admitted that it was duly assigned to the plaintiff, National Surety Company, but set up these defenses: First, that the moneys alleged to be due under said decree had been paid; second, that the plaintiff became surety on an appeal bond of the defendant, Agnes K. Mulligan, whereby she appealed the abovementioned decree to the appellate division of the supreme court of the state of New York; third, that at the time the appeal bond was executed by the plaintiff as surety for the defendant, the latter entered into an agreement with plaintiff to indemnify it from loss on the appeal bond and deposited with the plaintiff as collateral security for the indemnity agreement, three bonds and mortgages, which were, March 31, 1915, applied by the plaintiff in satisfaction and payment of the amount due on the abovementioned decree against the defendant, Agnes K. Mulligan; fourth, that on March 31, 1915, the plaintiff, National Surety Company, pretended to sell the abovementioned three bonds and mortgages under a pretended auction sale to itself for $3,000.00, but that the pretended sale was held without notice to the defendant herein and while the appeal for which the National Surety Company had become surety was still pending, and before any liability of the plaintiff on its undertaking on appeal had been determined, and that said pretended sale was for the purpose of defrauding said defendant, Agnes K. Mulligan, and, further, that the plaintiff applied the amount of the mortgages in payment and satisfaction of the amount due under the decree.

It was unnecessary to notify defendant of such sale; she was not the owner of the mortgages nor had she pledged them, although she answered that she had. Her affidavit flatly contradicts her answer. She swears that McGuire owned and pledged the mortgages. The liability of defendant had been adjudged in the surrogate's court of New York, and it was unreversed. It cannot be said that the sale was for the purpose of defrauding Mulligan.

The assignment by Catherine A. McGuire to the National Surety Company was for indemnity against loss to the company for having entered into the appeal bond for Agnes K. Mulligan. The bonds were sold at public auction, after advertisement, for $3,000.00, plus $50.00 costs, there being no bidder, which sum ($3,050.00) was applied in reduction of the amount due on the decree. The National Surety Company thus became the absolute owner of the bonds and mortgages, and their subsequent foreclosure of the latter and buying in the property is a matter between the pledgor, Catherine A. McGuire, and the pledgee, National Surety Company. And this suit was for the balance due upon the New York decree, namely, $17,391.50, with interest.

It is not pretended that Agnes K. Mulligan, the defendant in the suit, ever paid the Surety Company anything whatever on account of the decree or judgment, and she still owes the whole and every part thereof. The defendant Mulligan assumes the attitude of being subrogated to the rights of McGuire, with authority to urge defenses which belong alone to the latter, none of which she has put forth in any attack upon the National Surety Company for the more than twelve years which elapsed between the sale of the securities and the commencement of this suit; and it is not perceived how Mulligan is entitled to raise them here.

Defendant-appellant urges that a decree of the surrogate's court is not a definite, final and unconditional judgment capable of enforcement by final process, and is not the kind of foreign judgment that can be the basis of suit in the courts of another state, but says in her brief: "A judicial settlement of an executor's account is not a final determination of anything except the matters embraced within the account." If that be conceded, it is all that is necessary to entitle the person holding the decree to recover the money adjudged by it in the state where the decree was made, or by suit on the decree or judgment in a court of another state. This point has been expressly ruled in New Jersey, and, therefore, the answer of the defendant in. that regard is of no effect. See Bennett v. Bennett, 63 N. J. Eq. 306, at page 308, 49 A. 501, 503...