Jacobson v. Gasko

151 A. 551, 8 N.J. Misc. 785, 1930 N.J. Ch. LEXIS 62

• Court: New Jersey Court of Chancery
• Decided: October 10, 1930
• Status: Published

Opinion

Backes, Y. 0.

The bill is to recover the deficiency of a mortgage debt, after sale of the mortgaged premises in foreclosure. The Kaczer Eealty Company, Incorporated, acquired the title to the mortgaged premises from one Franklach in 1928, and in the deed assumed the payment of the mortgage, as had all intermediate owners in the claim of title from the mortgagor. All were parties, including the mortgagor, to the foreclosure suit and are parties to this suit. The Kaczer Eealty Company, Incorporated, was the last to assume the mortgage debt and held the title at the time of foreclosure. To escape liability on its assumption of the mortgage debt it sets up by way of “separate defenses” that its grantor Franklach fraudulently represented that the mortgaged premises were encumbered by liens not exceeding $16,000; that the debt of the assumed mortgage did not exceed $3,430.35, and that no foreclosure suits were pending.

The motion to strike the answer must prevail. The answering defendant seeks affirmative relief, either to rescind the transaction or to reform the deed for fraud, which can be had only by counter-claim. Green v. Stone, 54 N. J. Eq. 387; Kuehnen v. Parker, 56 N. J. Eq. 286.

Whether the defendant can have rescission after foreclosure, see Green v. Stone, supra.

Whether the defendant can have any relief on counterclaim for the fraud, if it be charged in the manner in which it is set up in the answer, will have to be determined on a motion to plead out of time.