By the Court
—The Code (section 177) provides that a defendant may be allowed, on motion, to make a supplemental answer, alleging facts material to the case, occurring after the former answer, or of which he was ignorant when his former answer was made.
This section provides a uniform mode of bringing before the court, not only facts which existed when the answer was put in, but of which the defendant was ignorant when his answer was interposed, but also matters of defence which arose subsequently.
The first question that arises is, must the court grant every [64]*64such, application as a matter of course, if satisfied of the existence of material facts, not known to the defendant when he answered, or which occurred subsequently thereto, without reference to the question whether they present an inequitable defence, or whether the defendant has been guilty of laches in making his motion.
If some applications should be granted and others denied, by what rules of discrimination should the court be influenced or controlled %
Section 469 continues in force, by an express provision, all • pre-pxisting rules and practice of the courts, in civil actions, consistent with the Code itself.
The natural inference is, that when matter of defence to an action at law has arisen since issue joined, any defence which a party could have pleaded at law, puis darrein continuance, as a matter of strict right, he should be allowed to set up by supplemental answer, if he applies within the time within which the right to plead, according to the former practice, was absolute.
If he suffers that time to pass before he applies, leave should be granted or refused, as may be proper according to the practice controlling applications for liberty to put in such a plea, after it had ceased to be a matter of right to plead it.
If the action be one of equitable cognizance, leave should be granted or refused as it would have been under the old system, on a motion for liberty to file a supplemental answer, or a cross bill in the nature of a plea puis darrein continuance at law, setting up matter of defence, which had arisen after the cause had been put at issue.
Courts of law allowed a defendant, who had obtained an insolvent’s discharge, but who had neglected to plead it puis darrein continuance, to plead it nunc pro tunc, on payment of costs of the motion (Shaw v. Wilmerden, 2 Cai., 380; Broome v. Beardsley, 3 Ib., 172). The same rule was applied to any defence which was not deemed inequitable. Continuances were from term to term. If a circuit intervened, and a defence arose after the last continuance, and before the circuit, and a plea was tendered at the circuit, even after the jury was empannelled, the judge was bound to receive it. It was error to refuse (Broome v. Beardsley, supra).
[65]*65If plead in time and verified, it must be received, however irregular, although bad on the face of it (Gra. Pr., 297 ; Morgan v. Dyer, 9 Johns., 255; 10 Ib., 161).
It might be plead in a Court of Common Pleas, upon the case of an appeal from a Justice’s Court (1 Wend., 80).
In some cases, where matter was pleaded puis darrein continuance, although it would be a bar, the court would interfere and set the plea aside, if it was contrary to justice : as where one co-plaintiff, without the consent of the other, fraudulently released the defendant, and that was the only mode of defeating the release (7 Taunt., 421; 4 Barn. c& Ald., 419; 2 Crompt. & Mees., 384; Tuffs v. Gibson, 19 Wend., 639).
In the Court of Chancery, an application made even after the trial of a feigned issue, and at any time before the final decree, would be in time, as the rule is stated by Chancellor Walworth, if made immediately after the discovery of the fact (Smith v. Smith, 4 Paige, 432-438).
Under the .former system, if this suit had been pending in the Court of Chancery, the defendant might, perhaps, have filed a cross bill, on the state of facts now existing. But not having been filed until after the original suit was at issue, the Court of Chancery would not stay proceedings in the original action, without a proper excuse was shown for neglecting to file the cross bill until the original suit was at issue (2 Barb. Ch. Pr., 134).
As permission to put in a supplemental answer, and the put ting in of such an answer, necessarily prevents a decision of the action until after a trial of the matter embraced in such answer, there would seem to be no reason for granting permission to put in such an answer, "when a Court of Chancery, under the same circumstances, would not have granted such liberty; or if a cross bill might have been filed, would not have stayed the proceedings in the original action on the filing of such cross bill.
In this action, the defence now sought to be interposed arose before the answer of Sheldon was put in; but, although it arose before that time, the defendant Sheldon was ignorant of it at the time his answer was put in.
The application in this case should be determined upon the principles governing the decision of motions, to spread upon the record facts existing at the time the moving party put in his [66]*66plea or answer, but of which, without any fault on his part, he was then ignorant.
Such applications, as a general rule, should be granted, unless they have been too long delayed, or the alleged defence is so clearly frivolous, that there is no reasonable ground for believing that any two minds conversant with such matters can differ in their conclusions respecting it; or the defence is so inequitable in its nature, that the permission sought should be refused for that cause.
In deciding upon the question of laches, it should not be forgotten that this application is made by an executor, who is not alleged to have any personal knowdedge of the transactions on which the rights of the parties depend. The title of his testator, which is documentary, and on its face apparently good, is assailed by reason of a want of power on the part of those making the transfer to the State of Michigan, to make a transfer, valid as against the creditors of the Morris Canal & Banking Company. To that transaction Mr. Thompson was neither a party nor privy, so far as the court knows. The counsel of Mr. Sheldon, not being before the referee when the release was produced and the stipulation made, would rather be thrown off his .guard than put upon inquiry, by the terms of the stipulation. That stated that the facts of the release, which had been omitted, in no way related to the subject of this action. Under such circumstances, considering the volume of papers and mass of details which they embrace, and the remote events on which the claim is founded, and making reasonable allowance for the variety of matters which divide the attention of counsel, we do not feel at liberty to decide that the application should have been denied on the mere ground of laches.
Should it have been denied on the ground that it is entirely clear that the release would be no defence at law; or, if a strict legal defence, that it is an inequitable one ?
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By the Court
—The Code (section 177) provides that a defendant may be allowed, on motion, to make a supplemental answer, alleging facts material to the case, occurring after the former answer, or of which he was ignorant when his former answer was made.
This section provides a uniform mode of bringing before the court, not only facts which existed when the answer was put in, but of which the defendant was ignorant when his answer was interposed, but also matters of defence which arose subsequently.
The first question that arises is, must the court grant every [64]*64such, application as a matter of course, if satisfied of the existence of material facts, not known to the defendant when he answered, or which occurred subsequently thereto, without reference to the question whether they present an inequitable defence, or whether the defendant has been guilty of laches in making his motion.
If some applications should be granted and others denied, by what rules of discrimination should the court be influenced or controlled %
Section 469 continues in force, by an express provision, all • pre-pxisting rules and practice of the courts, in civil actions, consistent with the Code itself.
The natural inference is, that when matter of defence to an action at law has arisen since issue joined, any defence which a party could have pleaded at law, puis darrein continuance, as a matter of strict right, he should be allowed to set up by supplemental answer, if he applies within the time within which the right to plead, according to the former practice, was absolute.
If he suffers that time to pass before he applies, leave should be granted or refused, as may be proper according to the practice controlling applications for liberty to put in such a plea, after it had ceased to be a matter of right to plead it.
If the action be one of equitable cognizance, leave should be granted or refused as it would have been under the old system, on a motion for liberty to file a supplemental answer, or a cross bill in the nature of a plea puis darrein continuance at law, setting up matter of defence, which had arisen after the cause had been put at issue.
Courts of law allowed a defendant, who had obtained an insolvent’s discharge, but who had neglected to plead it puis darrein continuance, to plead it nunc pro tunc, on payment of costs of the motion (Shaw v. Wilmerden, 2 Cai., 380; Broome v. Beardsley, 3 Ib., 172). The same rule was applied to any defence which was not deemed inequitable. Continuances were from term to term. If a circuit intervened, and a defence arose after the last continuance, and before the circuit, and a plea was tendered at the circuit, even after the jury was empannelled, the judge was bound to receive it. It was error to refuse (Broome v. Beardsley, supra).
[65]*65If plead in time and verified, it must be received, however irregular, although bad on the face of it (Gra. Pr., 297 ; Morgan v. Dyer, 9 Johns., 255; 10 Ib., 161).
It might be plead in a Court of Common Pleas, upon the case of an appeal from a Justice’s Court (1 Wend., 80).
In some cases, where matter was pleaded puis darrein continuance, although it would be a bar, the court would interfere and set the plea aside, if it was contrary to justice : as where one co-plaintiff, without the consent of the other, fraudulently released the defendant, and that was the only mode of defeating the release (7 Taunt., 421; 4 Barn. c& Ald., 419; 2 Crompt. & Mees., 384; Tuffs v. Gibson, 19 Wend., 639).
In the Court of Chancery, an application made even after the trial of a feigned issue, and at any time before the final decree, would be in time, as the rule is stated by Chancellor Walworth, if made immediately after the discovery of the fact (Smith v. Smith, 4 Paige, 432-438).
Under the .former system, if this suit had been pending in the Court of Chancery, the defendant might, perhaps, have filed a cross bill, on the state of facts now existing. But not having been filed until after the original suit was at issue, the Court of Chancery would not stay proceedings in the original action, without a proper excuse was shown for neglecting to file the cross bill until the original suit was at issue (2 Barb. Ch. Pr., 134).
As permission to put in a supplemental answer, and the put ting in of such an answer, necessarily prevents a decision of the action until after a trial of the matter embraced in such answer, there would seem to be no reason for granting permission to put in such an answer, "when a Court of Chancery, under the same circumstances, would not have granted such liberty; or if a cross bill might have been filed, would not have stayed the proceedings in the original action on the filing of such cross bill.
In this action, the defence now sought to be interposed arose before the answer of Sheldon was put in; but, although it arose before that time, the defendant Sheldon was ignorant of it at the time his answer was put in.
The application in this case should be determined upon the principles governing the decision of motions, to spread upon the record facts existing at the time the moving party put in his [66]*66plea or answer, but of which, without any fault on his part, he was then ignorant.
Such applications, as a general rule, should be granted, unless they have been too long delayed, or the alleged defence is so clearly frivolous, that there is no reasonable ground for believing that any two minds conversant with such matters can differ in their conclusions respecting it; or the defence is so inequitable in its nature, that the permission sought should be refused for that cause.
In deciding upon the question of laches, it should not be forgotten that this application is made by an executor, who is not alleged to have any personal knowdedge of the transactions on which the rights of the parties depend. The title of his testator, which is documentary, and on its face apparently good, is assailed by reason of a want of power on the part of those making the transfer to the State of Michigan, to make a transfer, valid as against the creditors of the Morris Canal & Banking Company. To that transaction Mr. Thompson was neither a party nor privy, so far as the court knows. The counsel of Mr. Sheldon, not being before the referee when the release was produced and the stipulation made, would rather be thrown off his .guard than put upon inquiry, by the terms of the stipulation. That stated that the facts of the release, which had been omitted, in no way related to the subject of this action. Under such circumstances, considering the volume of papers and mass of details which they embrace, and the remote events on which the claim is founded, and making reasonable allowance for the variety of matters which divide the attention of counsel, we do not feel at liberty to decide that the application should have been denied on the mere ground of laches.
Should it have been denied on the ground that it is entirely clear that the release would be no defence at law; or, if a strict legal defence, that it is an inequitable one ?
The courts have refused permission to amend a plea, after the time to plead as a matter of right had expired, by pleading usury, or the statute of limitations, or any matter which would operate as a forfeiture of a just claim.
The sum lent and interest, the court regarded as a meritorious cause of action, and a defence which would forfeit that, without the payment of any part of it, as inequitable. So they [67]*67regarded it as inequitable that a plaintiff should be deprived of an honest debt because he had waited for payment over six years.
In this case, although the plaintiff has succeeded to the rights of Richard & Selden, and stands before the court as the assignee of their equities, yet the papers show that he bought the cause of action, described in the complaint, after a report had been made to the Court of Chancery of Hew-Jersey by the receivers, that this claim and others sold with it were doubtful claims, and that the prosecution of them would lead to expensive and protracted litigation, and that $6000 was more than any other person would give for the whole. If the plaintiff fails to recover in this action, he will not fail to realize all he paid for the claim, principal and interest. If he fails, the speculation will, of course, be less profitable than if he succeeds. He bought the controversy knowing that, if he succeeded, it would be by compelling Mr. Thompson to lose the $20,000 he paid for the debt. Thompson bought, so far as we know, supposing there was nothing doubtful, except the intrinsic value of the debt itself. The State of Michigan, to whom it had been transferred, and of whom he bought, was as meritorious a creditor as Richards & Selden, and on general principles of equity equally entitled to be paid.
The facts of the case, therefore, are somewhat different from those on which permission is sought to prevent a recovery of money actually lent by a plaintiff to a defendant, by pleading usury, or that the debt has been due more than six years.
To deny this application is to prejudge the question as to the legal effect of the release and the equities of the parties.
"We do not think that it would be a proper exercise of discretion to deny the defendant an oppoi’tunity to establish the release, and present the question whether it is in law a bar to the action.
Whether it would violate settled principles of adjudication to allow it to operate as a discharge, can be more accurately decided on the trial of an issue presenting that question, and in the light of all the facts and circumstances of the case.
When it is thus presented and decided, the decision made may be reviewed. If this application is denied, a review of our decision may not be practicable.
If the release, provided it is allowed to operate according to [68]*68the natural import of its terms, would exonerate the estate of Hr. Thompson from all claims of the plaintiff, and if allowing such an operation to it would be inequitable, because contrary to the intent of the parties to it. The court before which the action is tried will dispose of all questions in relation to the release, as it may deem just, and be controlled by the same principles of adjudication as governed the Court of Chancery in deciding the same questions, under the same circumstances. If that decision should be thought wrong, the defeated party will have an opportunity to be heard, on the whole case, on appeal.
We think that liberty to file a supplemental answer should have been granted.
The only question which remains relates to the application to correct the referee’s report.
The affidavit of Mr. Jordan, that he was not present before the referee when the release was produced and the stipulation made, is not contradicted.
As the referee’s report now reads, a stipulation was made before him, by the attorney of Sheldon and the attorneys of the other defendants, and entered in the minutes of the referee as a part of the evidence in the action, which stipulation absolutely and unconditionally asserts that “ all the recitals and premises contained and set forth in the release” . . . “ relate to matters and things having no connection with the subject of the plaintiff’s claim in this action.”
It may not be clear that such a stipulation, if effect be given to it, does not stipulate away all pretence of a defence arising from the release.
The release having since been produced in evidence entire, subject to any objection taken by the plaintiff to its admissibility, the plaintiff cannot be in a worse condition if the whole stipulation should be expunged than he would be if it had never been made, except so far as he may be prejudiced by the delay resulting from the proceedings taken to get rid of it.
The proofs should be so far opened as to direct the report to be returned to the referee, to be corrected by him according to the truth of the case, so as to show on its face that neither the attorney or counsel of Hr. Sheldon was present when the stipulation was made, nor was a party to it, if that is the actual truth of the matter. The parts of the order appealed from must [69]*69be.reversed, and an order entered conforming to the opinion of the court.
If the plaintiff claims nothing from the terms of the stipulation, either as an item of evidence or otherwise, that may be expunged from the referee’s report, by arrangement between the counsel. In that event, the order to be entered will only provide for putting in a supplemental answer. The court requires the appellant to stipulate that the order shall be without prejudice to any proceedings already had, except as otherwise expressed in the order, and that any evidence that may be given upon the issues on such supplemental answer, shall be given before the judge, before whom the trial has been progressing, pending the appeal.
Oakley, O. J., and Bosworth, Hoffman, and Woodruff, JJ,