Imágenes de páginas
PDF
EPUB

Otis v. Shants, 128 N. Y., 45.

poration to perform its contract to deliver a portion of its capital 6 stock to the defendant in consideration of money advanced by the defendant. The fourth answer alleges an indebtedness of the corporation to the defendant in the sum of $2,800 for money loaned. The fifth answer alleges a violation by the company of a contract of employment whereby the defendant sustained damages in the sum of $3,000. The defendant in his answer does not ask any affirmative judgment on his counterclaims, but as to each he asks simply that he be permitted to set off sufficient thereof to satisfy the claims of the plaintiff.

7

It is very clear that neither of the answers alleging counterclaims set up any claim that can be set off against the causes of action in the complaint. The alleged counterclaims are not against the plaintiffs. They are founded upon transactions with the corporation, prior to the appointment of the plaintiffs as trustees. The plaintiffs' claims have no connection therewith, and arose subsequent to the execution of the liquidation agreement, upon contracts not tainted with the alleged fraud in concoction of the agreement. The fact that the defendant was induced to execute the agreement by fraud is no answer to his obligation 8 arising on a purchase from the trustees, nor does it enable him to set off against the debt a claim against the corporation. This would be giving him an inequitable preference.

The plaintiffs demurred to the several answers setting up counterclaims, on the ground "that they were insufficient in law upon the face thereof." Section 494 of the Code of Civil Procedure makes this a ground of demurrer to a counterclaim. But it is claimed that where the defect in an answer alleging a counterclaim is, that the cause of action sought to be counterclaimed did not arise out of the contract or transaction set forth in the complaint, or was not connected with the subject of the action, or that it does not state facts sufficient to constitute a cause of action, these objections must be specifically taken under section 495, and that they are not raised by a demurrer for insufficiency. That the answers were insufficient as answers of counterclaim, we cannot doubt. They set up no cause of action against the plaintiffs. The claims alleged, if they existed, were wholly irrelevant to the claims sued upon. Assuming that

9

Rice v. Grange, 131 N. Y., 149.

10 they were statements of good causes of action, they did not exist against the plaintiffs. It is, however, a decisive answer to the defendant's contention that the demurrer should have been drawn under section 495, that that section only applies where the defendant demands affirmative judgment on his counterclaim and has no application where the defendant seeks to use his counterclaim for the purpose simply of extinguishing the claim of the plaintiffs.

We think the judgment of the General Term was right and 11 should, therefore, be affirmed.

All the judges concurred.
Judgment affirmed.

1

RICE v. GRANGE.

New York Court of Appeals, 1892.

[Reported in 131 N. Y., 149.]

1. A defendant is not entitled to avail himself of an affirmative defence to the action by way of counterclaim, unless he has pleaded it in explicit terms, and not left it to inference.

2. In an action by the assignee for the benefit of creditors of the payee against the maker of a promissory note, defendant alleged as "a defence to the cause of action alleged in the complaint" a failure of consideration as to the note in suit because of default in payment of the note of a third person in exchange for which defendant's note had been given, and offered in the answer to re-exchange the notes,-Held, that the answer could not be considered as interposing an equitable counterclaim.

3. Upon an exchange of notes, each party becomes the holder for a good consideration of the note delivered to him, and failure of consideration is not established in an action upon one note, by proof that the other has become due and remains unpaid.

At Circuit, plaintiff had judgment on a verdict directed by the court.

The General Term of the Supreme Court affirmed the judgment. In delivering the opinion of the court, VAN BRUNT, P. J., said: "We have examined the answer in vain to find any suggestion of a counterclaim or offset. It is clear that no counter

Rice v. Grange, 131 N. Y., 149.

claim could be set up, because no cause of action could be main- 2 tained against the assignee; and, even if an offset might be allowed, there are no allegations in the answer making any such claim whatever."

The Court of Appeals affirmed the judgment.

GRAY, J. This action was upon the promissory note of the defendant, made to the order of Earl B. Chace & Co.; and the plaintiff is the assignee of the payees, under an assignment for the benefit of their creditors, executed at a time subsequent to 3 the maturity of the note. The defence set up in the answer was a failure of consideration. The facts as developed upon the trial of the action were precisely these: That in December, 1889, Chace placed in the hands of a broker a promissory note made by Hawkins & Co. to the order of Chace's firm, and not yet due. This broker called upon the defendant, and offered to give Chace's note in exchange for one of defendant's, and this proposition was accepted. Subsequently the broker took the Hawkins note. with Chace & Co.'s indorsement upon it, to the defendant, and received from him the note in suit, which was for the same 4 amount as the Hawkins note. When the Hawkins note fell due, it was not paid, and was protested. Upon the maturity thereafter of the defendant's note, payment thereof was refused by him. Some three months later, Chace & Co. made their general assignment to plaintiff. The defendant, in support of his appeal from the judgment recovered against him, insists that the defence of failure of consideration was established, and that it was, therefore, error for the trial judge to direct a verdict for the plaintiff. His counsel argues that the defendant's agreement to pay Chace was executory, merely, and was dependent upon the payment of 5 the Hawkins note. In other words, he considers that there was to be implied in this transaction a promise by Chace that the Hawkins note would be paid at maturity, and that this promise formed the consideration for his promise to pay the same sum to Chace in his note. But the defendant has misapprehended the legal effect of the transaction. Upon the exchange of these notes the particular transaction between the parties was fully consummated, and was in no sense executory. Each party

Rice v. Grange, 131 N. Y., 149.

6 became the holder for a good consideration of the note delivered. The consideration for the defendant's note was the transfer and delivery to him of the Hawkins note, and was as good and absolute as it would be in any case of an exchange of property. This was a business transaction; and whether the consideration was in an exchange of notes or was paid in money is quite the same thing. In an exchange of notes, each note is a valid consideration for the other, and is fully available in the hands of its holder. (Cobb v. Titus, 10 N. Y., 198.) The undertaking by Chace & Co., upon their indorsement and transfer of the Hawkins note, was a legal consideration for the defendant's promise; and no agreement is to be implied which is not expressed upon the papers.

7

Nor is the defendant entitled, in this action, to offset a claim upon the Hawkins note. If the defendant had set up an equitable counterclaim to the plaintiff's cause of action, he might then have been in a position to show that no equities or rights of others had intervened, and that the transaction between him and Chace was such as to justify offsetting one note against the other. 8 But such a defence is wholly unavailable to him, for the want of any allegations in his answer making such a counterclaim. His sole defence was a failure of consideration, and there was nothing in the answer which amounted to a plea of an equitable set-off. Under our practice a party having an affirmative defence to the action, by way of a counterclaim, is bound to plead it in explicit terms, and not leave it to inference. Here the defendant pleads a" defence to the cause of action alleged in the complaint," and, after setting it out, avers that it establishes an entire failure of consideration, and makes offer to re-exchange the notes. This did not amount to a counterclaim; and he seems to have recognized the fact, when, at the close of the trial, he moved "to amend the answer by setting up a counterclaim." The denial of the motion was not excepted to, and an exception would have been unavailing here, as it was discretionary with the court to grant or deny such a motion. The judgment appealed from should be affirmed, with costs.

6

All concur, except MAYNARD, J., taking no part.
Judgment affirmed.

Hubbell v. Fowler, 1 Abb. Pr. (N. S.), 1.

HUBBELL v. FOWLER.

New York Supreme Court, Special Term, 1865.

[Reported in 1 Abb. Pr. (N. S.), 1.]

1. An answer interposing the Statute of Limitations, presents a proper case for the court to require, on defendant's motion, that the plaintiff reply.*

2. It is not generally essential that the defendant, in moving to compel such reply, should state that he does not know the ground on which the plaintiff intends to rely to defeat the bar of the statute.

The action was upon a promissory note to which the defend- 1 ant pleaded, first, the Statute of Limitations; secondly, payment. Defendant moved that plaintiff be required to reply to the first defence contained in the answer. The affidavit in support of the motion showed that the summons was in fact served more than six years after the maturity of the note sued upon, and that the defendant was advised by counsel that it was necessary for the proper defence of the suit, that the defendant's counsel should be informed before the trial in what way the plaintiff expected to defeat the operation of the statute. There were also the usual affidavits of merits.

MULLEN, J. In this case the defendant has pleaded the Statute of Limitations, and now asks for an order requiring the plaintiff to reply to the plea, by specifying the grounds which he relies upon to defeat the operation of the statute.

This case is not one in which, by the Code of Procedure, the plaintiff is bound to reply, or the facts stated in the answer will be taken as admitted. But the application is made under Section 153 of the Code [Code Civ. Pro., § 516], which provides that in cases other than where a counterclaim is set up in the answer, if the answer contains new matter constituting a defence by way of avoidance, the court may, in its discretion, on the defendant's motion, require a reply to such new matter.

The case before me is one in which the court has power to require a reply.

To introduce the practice of requiring a reply in all cases

* Compare next case.

« AnteriorContinuar »