App. Div.] First Department, June, 1908. mortgaged premises, instead of having the mortgage discharged of record and the bond canceled, they fraudulently caused both to be assigned to the plaintiff without consideration, and that he holds the same as their agent and has no personal interest therein. The only new matter set up in the "Fourth" defense is that the plaintiff, without the knowledge or consent of the respondents, extended the time of payment by an agreement with the grantees of the mortgaged premises. No consideration for such agreement is alleged nor is it alleged that the equity of redemption was at that time worth the amount of the indebtedness which would be essential to release the defendants. (Matter of Piza, 5 App. Div. 181.) The new matter, therefore, standing alone would constitute no defense. Inasmuch as the allegations repeated by reference in that defense were not material to the new matter, they could have been stricken out as redundant, and then the sufficiency of that defense might have been tested by demurrer. The only new matter attempted to be presented by the "Fifth" alleged separate defense is that the grantees of the mortgaged premises did not pay the taxes and assessments levied against the same, or the principal or interest on the bond and mortgage, and that thereby the value of the property as security for the indebtedness was greatly decreased and that these acts were wrongful and fraudulent as against the respondents and released them from liability. This new matter likewise is insufficient, for there was no legal obligation on the part of the grantees of the mortgaged premises to pay the taxes and assessments or the principal or interest secured by the bond and mortgage and there was no legal or equitable obligation on the part of the plaintiff on the facts shown to commence the action sooner than he did or to foreclose the mortgage. This action was commenced on the 11th day of October, 1907, or about eighteen months after the indebtedness became due and payable. Doubtless the plaintiff assuming that the indebtedness had not been paid, could have been compelled to foreclose the mortgage and to have applied the proceeds to the payment of the indebtedness before suing on the bond on account of a contract between the grantors and grantees of the mortgaged premises, to which he was not a party, by which the land became primarily liable for the debt, under the well-settled rule that a surety may be discharged on the failure of the creditor to proceed against the principal debtor, to his First Department, June, 1908. [Vol. 126. damages, which rule has been applied to cases of this kind even where the indebtedness is not assumed by the grantee of the mortgaged premises (Remsen v. Beekman, 25 N. Y. 552; Gottschalk v. Jungman, No. 1, 78 App. Div. 171), but he was under no obligation to proceed until the respondents demanded that he bring an action to foreclose the mortgage, and the defense would not be good without showing such demand and damages resulting from the failure to comply therewith. (De Caumont v. Rasines, 38 App. Div. 153; Remsen v. Beekman, supra.) The new matter contained in the "Sixth" alleged defense consists of additional allegations with respect to the non-payment of taxes, assessments, interest and principal and the failure to pay the interest upon a prior mortgage, which, on account of such failure, was foreclosed. Some of the observations already made apply equally to this new matter and render further discussion thereof unnecessary. The several separate defenses to the second cause of action, the sufficiency of which are presented by the demurrer, are to the same effect as those already considered, the only difference being that they relate to the second cause of action, but there is no difference in legal effect. It follows that the interlocutory judgment should be affirmed, with costs. INGRAHAM, MCLAUGHLIN, HOUGHTON and SCOTT, JJ., concurred. Judgment affirmed, with costs, with leave to plaintiff to withdraw demurrer on payment of costs. SAMUEL WIENER, Appellant, v. ISAAC MAYER and HENRY MAYER, Respondents, Impleaded with SOLOMON BOEHM and BERNHARD HEINE, Defendants. First Department, June 5, 1908. Pleading - demurrer - similar defenses sustained. Where the separate defenses of two defendants are of the same nature as those of other defendants which have been sustained upon demurrer, a demurrer thereto will be overruled App. Div.] First Department, June, 1908. APPEAL by the plaintiff, Samuel Wiener, from an interlocutory judgment of the Supreme Court in favor of the defendants Mayer, entered in the office of the clerk of the county of New York on the 26th day of February, 1908, upon the decision of the court, rendered after a trial at the New York Special Term, overruling the plaintiff's demurrer to certain separate defenses contained in the amended answer of the defendants Mayer. Edward W. S. Johnston, for the appellant. Rose & Putzel, for the respondents. PER CURIAM: The separate defenses interposed by the respondents Isaac and Henry Mayer are of the same nature as those interposed by the defendants Boehm and Heine, to which the plaintiff demurred, and which are sustained as sufficient by a decision of this court handed down herewith on an appeal by plaintiff from an interlocutory judgment overruling his demurrer thereto. (Wiener v. Boehm, 126 App. Div. 703.) The only material difference between the defenses considered on the other appeal and the defenses interposed by these respondents is that the latter defenses are more definite, full and complete, and the defense that plaintiff, by an agreement with the grantees of the mortgaged premises, extended the time of payment contains an allegation that the extension was made for a good and valuable consideration. With these exceptions, the discussion in the opinion delivered in deciding the other appeal is applicable to the defenses interposed by the respondents, and further discussion is not required. It follows that the interlocutory judgment should be affirmed, with costs, on the authority of that opinion. Present-INGRAHAM, MCLAUGHLIN, LAUGHLIN, HOUGHTON and SCOTT, JJ. Judgment affirmed, with costs, with leave to the plaintiff to withdraw demurrer on payment of costs. First Department, June, 1908. [Vol. 126. RICKA COHEN, Plaintiff, v. JOSEPH HABERMAN, Defendant. Where, on the dissolution of a partnership, one partner, without an examination of the books, purchased the accounts and bills receivable and other assets, including any rights of indemnity on the bond of the firm bookkeeper, and it was agreed to divide the cash on hand and in the bank, all rights arising on a subsequent discovery that the bookkeeper had defaulted and all claims against his bondsmen and the bank which cashed the forged checks belong to the partner purchasing them and are not to be regarded as part of the cash on hand. As there was no examination of the books at the time of the assignment, there can be no claim of mutual mistake. SCOTT, J., dissented, with opinion. SUBMISSION of a controversy upon an agreed statement of facts, pursuant to section 1279 of the Code of Civil Procedure. Joseph M. Proskauer, for the plaintiff. Benno Lewinson, for the defendant. HOUGHTON, J.: The parties submit their controversy pursuant to section 1279 of the Code of Civil Procedure, and by their stipulated facts show that plaintiff and defendant had been partners for several years when defendant purchased the good will, stock, fixtures, accounts and bills receivable for a stipulated price. The dissolution and transfer agreement provided that cash in bank and on hand, however, should be equally divided. The ordinary business account books had been kept by the firm, but no accounting or trial balance was had on the dissolution and purchase. The cash was divided, the dissolution agreement executed and the consideration paid, and some months thereafter the defendant caused an examination of the account books to be made by an expert accountant, and it was discovered that a bookkeeper employed by the firm had, prior to the dissolution, forged the indorsement of the firm to certain checks sent to it by customers in payment of bills, and converted the money App. Div.] First Department, June, 1908. to his own use. The aggregate of these forgeries was $5,600, which on the books was credited as having been paid to the firm by the various customers whose checks the bookkeeper had thus appropriated. Neither plaintiff nor defendant knew until such examination was made of this larceny of the funds of the firm. The bookkeeper was under bonds to a limited amount, and from his bondsmen and from the bank which cashed the checks the defendant realized the sum of $4,500. The plaintiff demanded one-half of this amount, which the defendant refused to pay, and the parties submit the question of her right to recover. We are of the opinion that the plaintiff cannot recover. The $4,500 which the defendant succeeded in collecting because of the defalcation cannot be considered cash on hand which was to be divided equally. The rights of the firm arising out of the defalcation were choses in action and claims against the forger and his bondsmen and the bank which illegally cashed the forged checks. If the defalcation had not occurred, the firm would have been richer by its amount, and doubtless the defendant would have been obliged to pay a larger sum for the plaintiff's half interest, or there would have been more cash on hand to divide. This circumstance does not give the plaintiff the right to recover, however, for she sold to the defendant all accounts and bills receivable of the firm as well as its other assets for a lump sum and specifically assigned to defendant all right to the indemnity held against defalcations of the dishonest bookkeeper. There was no examination of the account books, and hence there can be no claim of mutual mistake with respect to the various amounts paid by customers on account or which remained due from them. Had there been an examination of the accounts due the firm and the bills receivable and had the parties made a mutual mistake respecting them, the plaintiff very likely would have been entitled to relief upon that ground from the bargain which she made. If, too, there had been a mutual mistake in counting up the money which was to be equally divided, the plaintiff would be entitled to a correction of that mistake and to her rightful share. There was no examination, however, and the stipulated facts do not show that the defendant had superior knowl edge or suppressed any facts or improperly induced an acceptance of the purchase money or an assignment of rights under the indem |