The defendant Cuyler who alone appears in this case and sets up the defense of usury, was in possession of the premises covered by the mortgage sought to be foreclosed in this action. A mortgage had been previously foreclosed upon the premises and the same was purchased by the defendant Bingham on the sale who contracted to sell to Cuyler. Bingham executed the bond and mortgage to enable Cuyler to pay him, Bingham. The defendant Wilmerding *Page 514 at Cuyler's request bought the premises of Bingham, took a deed, and with the money received from Wilmerding Cuyler paid the balance due Bingham for the sale of the premises to him and agreed to pay the mortgage executed by Bingham. Cuyler is now in possession under contracts with Wilmerding and the title is now in Wilmerding subject to the mortgage.
The answer of Cuyler contains First, a general denial except as admitted. Second, it commences as follows: "And for a second and further defense," and then proceeds to state as such defense the facts above mentioned, and that he was the equitable owner in possession of the mortgaged premises; that the bond and mortgage was given to secure money loaned for his benefit, and by his negotiation with the plaintiff at a usurious rate of interest, which was agreed upon between the plaintiff and Cuyler; it claims that the bond and mortgage is usurious and void, and demands, that the bond and mortgage be adjudged to be usurious and void and that they be delivered up and canceled.
The claim that the answer sets up a counter-claim, and that the appellant should have judgment upon the ground that there was no reply, is not, we think, well founded. The answer purports, to set up a defense merely and so expressly states, and it is not claimed therein that it was such counter-claim. Had the answer advised the plaintiff that a counter-claim was intended to be set up, a reply would no doubt have been served, or at least the plaintiff would have been informed of the nature of the pleading. We think that no reply was required, for the reason that no counter-claim was actually interposed by the answer. As a distinction exists between a defense and a counter-claim, when the defense is intended as a counter-claim it should be explicitly stated in the answer; so as to advise the opposite party, and in the absence of such an allegation, especially when the party defines and characterizes his answer as a defense, and it is uncertain whether a counter-claim is intended, such party is not in a position to insist that he has actually set up a counter-claim, and the answer should be construed and considered *Page 515 as a defense. The defendant is bound by his own definition of the answer, and cannot at his own volition change the nature of the pleading which he has characterized, and by so doing may have misled the plaintiff. (See Bates v. Rosekrans, 4 Abb. [N.S.], 276; 37 N.Y., 409; Wright v. Delafield, 25 id., 266; Burke v. Thorne, 44 Barb., 363.)
There appears to be some confusion in the reported cases arising from the remarks made in the opinions of judges as to the precise difference between a defense and a counter-claim. InProuty v. Eaton (41 Barb., 412) usury was held to be a substantive defense and not a counter-claim under ordinary circumstances. Certainly such a rule should prevail where the border line between a defense and a counter-claim, is very close, and the answer avers that it is a defense. No single case is cited which holds that usury set up as a defense may be regarded as a counter-claim. In considering the question it should not be overlooked that the defendant upon the trial introduced evidence to establish the usury, and the plaintiff called witnesses to controvert the testimony given. The whole issue was thus tried, and the court found adversely to such a defense. The defendant having treated the answer as a defense, and having had the benefit of a trial, there is no ground for claiming that any injustice has been done.
It may also be observed, that it is by no means clear, that Cuyler who is in the position of a vendee under the contract with Wilmerding, and bound by the contract to pay the mortgage can be regarded under the circumstances as a borrower, who is entitled to interpose the defense of usury. (Bissell v. Kellogg,65 N Y, 432; also Wheelock v. Lee, 64 id., 247, and authorities cited.) The last case holds that the word borrower, means the party who is bound by the original contract to pay the loan.
As the case stands, we are of the opinion that there was no error upon the trial, in any of the rulings, and that judgment should be affirmed, with costs.
All concur.
Judgment affirmed. *Page 516