New York County NyArchives Court.....Crasto, Frank Vs. Richard White 1889
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Source: Reports Of Cases - New York
Written: 1889

First Department, May Term, 1889.

FRANK P. CRASTO, Appellant, v. RICHARD WHITE, Respondent.

Defense — when it distinctly refers to a particular cause of action under 
section 507 of the Code of Civil Procedure — complaint for services in procuring 
a loan, when sufficient — distinction between a contract to procure a loan upon, 
and to secure a purchaser of, real property — form of interlocutory judgment — 
Code of Civil Procedure, sec. 3228.

Where a separate defense in an answer contains allegations and denials, which 
can by no possibility refer to any other than a particular cause of action set 
out in the complaint, the defense distinctly refers, within the meaning of 
section 507 of the Code of Civil Procedure, to that cause of action.

A complaint for services rendered, in procuring a loan for defendant upon the 
security of his real estate, which alleges that the plaintiff was employed to 
procure a loan upon defendant's property, that he secured an offer from a 
company to loan the sum required, which offer was accepted, is not sufficient to 
justify a recovery.

There is a distinction between a contract to procure a loan upon, and a contract 
to secure a purchaser of, real property, which exists in the fact that if the 
purchaser, after contract signed, improperly refuses to take the property, he 
can be compelled to complete his contract, whereas there is no way in which a 
party can compel another to make a loan. 

A defendant, who succeeds as to any of the causes of action set forth in the 
complaint, is entitled, under section 3228 of the Code of Civil Procedure, to 
costs, as against the plaintiff, and an interlocutory judgment directing a 
judgment for the defendant on the cause of action as to which he succeeds, so 
that upon the entry of the final judgment in the action he will be entitled to 
recover costs as to that cause of action, is proper.

Appeal by the plaintiff from an interlocutory judgment overruling the 
plaintiff's demurrer interposed to the fourth defense set forth in defendant's 
amended answer, entered in the office of the clerk of the county of New York 
January 26, 1889, and, also, from the order directing the entry of said judgment.

The action was brought to recover for services rendered in procuring a loan upon 
and in perfecting defendant's title to certain real property.

The fourth defense, which was demurred to, was as follows: And for a further and 
fourth defense, defendant says he employed plaintiff and his firm to procure a 
loan for defendant on the lots mentioned in the said complaint, and the houses 
thereon, of $32,000, at interest of five per cent per annum, and plaintiff and 
his firm agreed to procure such loan for defendant. That defendant agreed, when 
such loan was so procured, defendant would pay them the legal brokerage 
therefor ; and he further agreed that he owned said lots in fee simple, and that 
upon procuring such loan he would, to secure the payment thereof and interest, 
give his bond and mortgage the same to the lender of that sum by a fee simple 
mortgage of said lots, free from all incumbrances, executed by himself and wife, 
and that defendant never made any other agreement with plaintiff or his firm, 
and defendant says he performed his part of said agreement and that plaintiff 
and his firm never performed his or their said agreement; that they never 
procured any loan on said lots for defendant whatever; that the United States 
Life Insurance Company of the City of New York refused to make any loan on said 
lots whatever, although the defendant offered to give it his bond to secure the 
repayment of that sum of $32,000 and interest, and his and his wife's mortgage 
in fee simple of said lots, free of all incumbrances, further to secure the 
payment of that sum and interest; and defendant says that when he made said 
agreement, and ever since, he owned and now owns said lots in fee simple; and 
this defendant for a fifth defense, further answering, denies all the 
allegations and statements of the said complaint set forth in the second cause 
of action and containing five sections or paragraphs.

W. E. Benjamin, for the appellant.

Leopold Sandheim, for the respondent.

Van Brunt, P. J.:

The plaintiff, in his complaint, sets up two causes of action: First. For 
services in procuring a loan for defendant upon his real estate; and, second, 
for services in endeavoring to perfect defendant's title to the lots in 
question. The defendant put in an answer by which he denied various allegations 
contained in the complaint as to the first cause of action, and, for a further 
and fourth defense, alleged the employment of the plaintiff and his firm to 
procure a loan for the defendant upon certain premises owned by him, for the 
procurement of which the defendant agreed to pay him the legal brokerage. In 
this defense it is alleged that the defendant performed his part of said 
agreement, and that the plaintiff and his firm never performed their part; that 
they never procured the loan although the defendant offered to give his bond to 
secure the payment of the sum to be loaned, and also a mortgage in fee simple 
upon the premises mentioned, which were free from all incumbrances, and which he 
owned and now owns in fee simple.

The principal ground relied upon to sustain the demurrer to this defense is that 
it is not good as a defense to both causes of action set up in the complaint, 
and that it does not distinctly refer to the first cause of action as required 
by section 507 of the Code of Civil Procedure. That section provides that a 
defendant may set forth in his answer as many defenses or counter-claims, or 
both, as he has, whether they are such as were formerly denominated legal or 
equitable. Each defense or counter-claim must be separately stated and numbered; 
and, unless it is interposed as an answer to the entire complaint, it must 
distinctly refer to the cause of action which it is intended to answer.

It is claimed, because it is not stated to be a defense to the first cause of 
action upon the face of the defense itself, that, therefore, it is bad. We fail 
to find any such provision contained in the section which has been cited. We 
suppose that where a separate defense containing allegations and denials, which 
can under no possibility refer to any but a particular cause of action set out 
in the complaint, they distinctly refer to that cause of action and cannot refer 
to another. This is the condition of the allegations contained in the fourth 
defense. They can only apply to the first cause of action, and none other. They 
are utterly foreign to, and have nothing to do with, the second cause of action; 
and if an allegation or denial can only refer to a particular cause of action in 
the complaint, we see no reason for saying that the Code is not complied with. 
If it can by no possibility refer to but one cause of action, it is difficult to 
see how it could more distinctly refer to the cause of action which it was 
intended to answer where more than one is set out in the complaint. But there 
may be urged another objection to the demurrer, namely, that the plaintiff does 
not state any cause of action in his so-called first cause of action, and this 
is apparent upon the face of the pleadings. The plaintiff alleges that he and 
his firm were employed to procure a loan upon the defendant's property, but he 
nowhere alleges that such loan was ever procured. He alleges that he had secured 
an offer from the United States Life Insurance Company, to loan that sum, which 
offer was accepted, But that is not the contract which he was employed to 
perform. His employment was to procure a loan, and the procurement and 
acceptance of the offer was but one of the steps toward the procuring of the 
loan; and if, without any fault upon the defendant's part, the loan was not 
secured in pursuance of that offer, it is clear that the contract has not been 
complied with. As has been already stated, there is not a single allegation 
contained in the first cause of action that there has been a compliance with the 
contract.

The learned counsel seems to assume that it is well-settled law that where a man 
performs half of his contract he is entitled to recover compensation for the 
whole. "We do not understand this to be the law, as applicable to the right to 
recover upon such a contract. He has been probably led astray by being unable to 
distinguish between a contract to procure a loan and a contract to procure a 
purchaser, where the purchaser does not subsequently take for some reason. When 
a broker is employed to procure a purchaser, when he presents to the other a 
person who is able and willing to contract for the purchase of the property, his 
duties are fulfilled; and if the party refuses to accept, or after contract 
signed the purchaser improperly refuses to take, it does not affect the right of 
the broker to his compensation. There his contract was to procure a purchaser 
able and willing to purchase, and when he presents him his commissions are 
earned. In the case at bar the contract was to procure a loan, not to procure 
somebody who said he was willing to make a loan and then refuses to carry out 
his promise; that was not the contract. The contract was to procure a loan; and 
if, without any fault upon the part of the defendant, the party who had offered 
to make the loan refuses to do so, the contract is not fulfilled. There is no 
way in which a party can compel another to make a loan, the case being entirely 
different from that of a purchaser of real estate who could be compelled to 
complete.

The claim that the interlocutory judgment should be reversed as erroneous in 
directing final judgment for the defendant on the fourth defense is not well 
founded. If the defendant succeeded as to any of the causes of action set forth 
in the complaint, he was, by section 3228 of the Code, entitled to costs as 
against the plaintiff. And, consequently, if the plaintiff did not avail himself 
of the leave to withdraw his demurrer and pay the costs thereof, the defendant 
was, by the provisions of the Code, entitled, upon the entry of the final 
judgment in the action, to costs as to this cause of action, and this is all 
that the interlocutory judgment gives him. This judgment could not probably be 
finally entered until the issues as to the other cause of action were tried, but 
it was entirely correct to give the direction for its entry so that it might be 
entered when the proper time arrived. The express provision of the interlocutory 
judgment is that the defendant have judgment upon the demurrer which simply 
affected the first cause of action, and that was all that was intended to be 
covered by the judgment in question.

The judgment and order appealed from should be affirmed, with costs, and with 
leave to the plaintiff to withdraw the demurrer upon payment of the costs below 
and of this appeal.

Bartlett, J., concurred.

Judgment and order appealed from affirmed, with costs, and with leave to the 
plaintiff to withdraw the demurrer upon payment of the costs below and of this 
appeal.

Additional Comments:
Reports of Cases Heard and Determined in the Supreme Court of the State of New 
York. Marcus T. Hun, Reporter. Volume LIX, 1889, HUN 52. Banks & Company, 
Albany, NY. 1901.

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