FIRST DEPARTMENT, MARCH TERM, 1875. in partition according to such rights.* By section 79, † the same power, upon petition or bill filed in that court, was conferred upon the Court of Chancery to decree partition and sales of lands, etc. The Code has repealed the provisions authorizing the proceeding by petition or bill, and substituted proceedings by action, and made all the provisions of the Revised Statutes relating to the partition of lands, applicable to actions for such partition brought under the Code, so far as the same can be so applied to the substance and subject-matter of the action, without regard to form. + The Supreme Court, sitting at Special Term, has therefore all the jurisdiction, both legal and equitable, conferred by the statute on the Court of Chancery and the former Supreme Court, in proceedings for partition, and is to conduct the same, so far as they are applicable, in conformity with the provisions of the Revised Statutes. It does not follow that such an action is a suit in equity because it is on the calendar and moved for hearing at the Special Term. It is before the Supreme Court, which may take such action as the condition of the pleadings and proceedings requires; and if there be issues of fact in the case, upon the result of which depends the title of any of the parties, it becomes the duty, and as I think, it is the right of the court, to send such issues to a trial by a jury either upon a settlement of special issues, or on the pleadings themselves; and, after the determination of that issue, to proceed in the action as provided by section 23 of the Revised Statutes. § The orders should be affirmed with ten dollars costs of each appeal. DANIELS and BRADY, JJ., concurred. Orders affirmed, with ten dollars costs. * 2 R. S., 317, § 1; 318, § 10; 319, § 13; 320, § 19; 321, § Ubi supra. FIRST DEPARTMENT, MARCH TERM, 1875. WILLIAM G. LATHROP, RESPONDENT, v. MARIE ALICE GODFREY AND JOHN A. GODFREY, IMPLEADED, ETC., APPELLANTS. Answer — if not demurred to or stricken out as frivolous, informalities which could be cured by amendment, and variance in proof are not grounds for excluding evidence within its general scope - Foreclosure-set-off - Fraudulent assignment. When the plaintiff does not demur to the answer, nor move to strike it out as sham or frivolous, but suffers it to form an issue of fact which he brings on for trial, evidence, tending to establish a legal or equitable defense, cannot be excluded on account of informalities in the answer, or any defect that can be cured by amendment; or when, the evidence being within the general scope and object of the answer, the pleading can be made to conform to the proof, under section 173 of the Code. Whether the evidence is sufficient to accomplish the purpose of the party, is a question upon which he is entitled to the deliberation of the court or a jury. The defendant in a mortgage foreclosure suit, who is personally liable for the debt, or whose land is bound by the lien of the mortgage, may introduce a setoff to reduce or extinguish the plaintiff's claim, and may show that the plaintiff has received only a colorable and fraudulent assignment of the mortgage, and holds it for the benefit of one against whom such set-off exists. APPEAL from a judgment, entered on a decision of the court at Special Term. B. W. Huntington, for the appellants. "When there is fraud, the party deceived, on discovering the fraud, may rescind the contract; but if he does not do that, the contract on his part remains entire, not broken and not modified, and he is bound to perform it fully according to its terms; he has, however, arising from the fraud a distinct cause of action, the amount of which he may set off against any liability on his part, growing out of the transaction in which the fraud was perpetrated." (Gillespie v. Torrance, 25 N. Y., 306.) There is a distinction in foreclosure suits between defenses by parties against whom personal claims are made, and those against whom such claims are not made. (National Fire Insurance Co. v. McKay, 21 N. Y., 191.) "An assignee of a mortgage takes it subject not only to any latent equities that exist in favor of the mortgagor, but also to the like equities in favor of third FIRST DEPARTMENT, MARCH TERM, 1875. persons." (Schafer v. Reilly, 7 Albany Law J., number dated April 12th, 1873, p. 230.) The fraud in the sale was none the less that of Mrs. Bramhall because committed by her husband, as her agent. (Baum v. Mullen, 47 N. Y., 577.) Striking out evidence, or refusing to receive it because the answer does not state a defense, is severely criticised. (Smith v. Countryman, 30 N. Y., 655.) Fraudulent misrepresentations in sales of real estate are a valid ground of recoupment. (Van Epps v. Harrison, 5 Hill, 63; cited and approved by the Court of Appeals in 1 N. Y., 312; 25 id., 309; 30 id., 669.) S. B. Brownell, for the respondent. A defendant in a foreclosure suit cannot set up a counter-claim arising upon an independent tort; the alleged tort has no connection with the subject of the action. (Code, §§ 149, 150, 153.) The subject of the action is the cause of action, to wit, the foreclosure of the mortgage. The pretended counter-claim is in no wise connected with the mortgage or its foreclosure. (Chamboret v. Cagney, 2 Sweeney, 398; Moffat v. Van Doran, 4 Bosw., 609; Brown v. Buckingham, 21 How., 190; Gotter v. Babcock, 11 Abb., 392; Lawrence v. Bank of Republic, 35 N. Y., 320; reversing S. C., 3 Robt., 142.) The pretended counter-claim is not against the plaintiff, but against other parties, arising a year or more after the assignment to the plaintiff of the mortgage in suit. The answer, so far as it attempts to set up such a counter-claim against the plaintiff, is frivolous. A grantee of mortgaged premises, subject to a mortgage, who assumes the payment as a part of the consideration or purchase-money, cannot set up any defense to the mortgage. (Freeman v. Auld, 45 N. Y., 50; Ricord v. Sanderson, 4 id., 179.) DAVIS, P. J.: This action was brought to foreclose a mortgage, executed by the defendants Bramhall and wife to one William G. Lathrop, Jr., on the 11th of June, 1869, to secure $8,000, and alleged to have been assigned by the mortgagee to plaintiff, on the 19th day of June, 1869. On or about the 10th day of December, 1870, the mortgaged premises were sold and conveyed by the defendants Bramhall and wife to the defendant Marie Alice Godfrey, who, by the terms of the sale and FIRST DEPARTMENT, MARCH TERM, 1875. conveyance, assumed the payment of the mortgage in question as part of the purchase-money. In the answer of the appellants to the complaint, they put in issue the alleged assignment by Wm. G. Lathrop, Jr., to the plaintiff, and alleged that "the plaintiff is collusively the holder of the mortgage for the purpose of hindering the said Marie Alice Godfrey in the recoupment of damages claimed by her," as thereinafter set forth; and charged that the "plaintiff's holding of the mortgage is subject to the equities of the defendant Marie Alice Godfrey, against the said William G. Lathrop, Jr., and the defendant Bramhall," as thereinafter set forth. The defendants, after setting forth other matters, alleged in substance, that Charles A. Bramhall, as agent of Maria A. Bramhall, his wife (who was owner of the premises), and the said William G. Lathrop, Jr., conspired and confederated to deceive and defraud the said Marie Alice Godfrey; and, to induce her to purchase the said premises, falsely and fraudulently represented to her that the house was built in good workmanlike manner; that the cellar was a dry cellar; that the walls were dry walls and uncracked, and that the foundation walls were well and securely built, and the sewers and plumbing in complete order; that said Marie believed such representations to be true, and trusted in them, and was induced by them to purchase the premises; that the contrary of each and every of such false and fraudulent representations was true; and that by reason of the fraud and falsity of such representations, she was greatly injured; and by reason of the fraud and falsity of such representations, and by reason that said house was defective in each of the represented particulars, she was obliged to expend about $3,500 in repairs, to make said house inhabitable with safety to life and health, and lost the use of said house to the value of $2,000 while such repairs were going on; which damages she claimed to have applied on said mortgage, and that judgment should only be given for the balance. On the trial of the case, the plaintiff produced the mortgage and an assignment thereof to him; and, after proving the amount unpaid, with interest, rested. The defendants called a witness," and offered to prove the facts set up in the answer as the defense of the defendants, on the ground of fraud alleged by their answer." The counsel for the plaintiff objected that the answer did not state any defense, and that the defense FIRST DEPARTMENT, MARCH TERM, 1875. stated was entirely inapplicable to the defendants. The court excluded the evidence, saying: "I exclude the evidence as not being a defense and because the answer does not state any defense." The defendants duly excepted. The court directed judgment of foreclosure, and for deficiency, if any, against the defendants Bramhall, and the defendant Marie Alice Godfrey. * The plaintiff did not demur to the answer, nor move to strike it out as sham or frivolous; but suffered it to form an issue of fact which he brought on for trial at the Special Term. This was in accordance with the course indicated by MULLIN, J., in his opinion in Smith v. Countryman, as one competent for the plaintiff to pursue. But where that course is taken, and on objection that the answer sets up no defense, all evidence is excluded, it must be clearly apparent that no evidence which could be properly admitted under the pleadings, would tend to establish any legal or equitable defense to the action. The evidence cannot be excluded on account of informalities in the answer, or any defect of pleading that could be cured by amendment on the trial, nor where the evidence being within the general scope and object of the answer, it would be in the power of the court to conform the pleading to the proofs under section 173, of the Code. When evidence under the answer would tend to establish a legal or equitable defense, it should be received for consideration by the court or jury, because whether its tendency is sufficient to accomplish the purpose of the party, is a question upon which he is entitled to the deliberation of the court or jury with the evidence before them. The question then in this case, is, whether the defendants could properly have been permitted, under the issues, to have proved any facts tending to establish a defense, partial or total, upon which they would be legally entitled to claim the consideration and judgment of the court. Under the pleadings they would have been entitled to show that the mortgage had not been assigned to plaintiff, but still remained legally or equitably the equitably the property of William G. Lathrop, Jr.; that the assignment produced was collusive or colorable, and that plaintiff was holding the mortgage collusively for the purpose of hindering the said Marie Alice Godfrey in the recoupment of her damages. That the said William *30 N. Y., 655, 676. |