American Gas Construction Co. v. Lisco
241 N.W. 89
Neb.
1932
Check Treatment
Day, J.

This is аn action brought by the American Gas Construction Company against Robert Y. Lisco, Jr., to recover *608the sum of $4,000 as the balance due on a written contract for the sale of equipment for thе manufacture of gas, purchased by the defendant from ‍‌​‌‌​‌‌‌​​‌‌​‌​‌​​​‌​‌​​​‌‌​‌​‌‌​‌‌​​‌​‌​‌‌‌‌‌‌‌‍plaintiff. The defendant does not disputе that the balance due is unpaid, but seeks to establish an offset or counterclaim in the sum of $4,000> or more which he alleges C. I. Tenney owes him on a different contract. The trial court sustained thе special appearance of C. I. Tenney, dismissed an attachment and garnishment, and uрon motion struck from the answer- and cross-petition the set-off and counterclaim. From this ordеr the defendant appeals.

. The petition of the plaintiff alleges that the plaintiff is a corporation organized and existing under the laws of the state of Iowa; that the defendant entered into a contract to purchase certain equipment for the installation of а gas-works at Laramie, Wyoming; that the equipment was delivered; that the contract price wаs $27,000, and that there is a balance of $4,000 unpaid. The defendant in his answer denies the corporate existence of the plaintiff. He further alleges that the real party plaintiff is C. I. Tenney. Defеndant then proceeds with what is termed a counterclaim and cross-petition ‍‌​‌‌​‌‌‌​​‌‌​‌​‌​​​‌​‌​​​‌‌​‌​‌‌​‌‌​​‌​‌​‌‌‌‌‌‌‌‍against C. I. Tenney, in which he sets out another contract under which C. I. Tenney is indebted to him in the sum of $5,000 and prays judgment agаinst C. I. Tenney, doing business under the name of American Gas Construction Company, in the sum of $4,000. A writ of attachment is issued and money in the hands of the defendant due upon the contract sued upon by the plaintiff in this action is garnished as the money of C. I. Tenney. There was no personal service upon C. I. Tenney in Dawes county, Nebraska, and the only service upon Tenney is based upon the attachmеnt and garnishment.

The claims set out in the pleadings arise by virtue of two different contracts. The contract set out in the set-off and counterclaim is signed by C. I. Tenney, while the one sued upon by plaintiff is signеd by the plaintiff, by D. C. Tenney, Secretary. Our statutory provisions are as follows: Under section 20-813, Comp. St. 1929, defining *609.-ar counterclaim, - it “must be one existing in favor of • a .defendant, and-against a plaintiff, between whom a several .-judgment:.\might ■ be had in the action, and arising •out of the-r contract or transaction set forth ;-in the petition as the. foundation of the plaintiff’s claim, or connected with .the. subjeсt-..of the action.” Under section 20-816, Comp. St. '1929,'a set-off can only be. pleaded in an actiоn founded on ‍‌​‌‌​‌‌‌​​‌‌​‌​‌​​​‌​‌​​​‌‌​‌​‌‌​‌‌​​‌​‌​‌‌‌‌‌‌‌‍contract, and must be a. cause of action arising upon a contract or .ascertained by the decision of the court. The set-off and counterclaim-in this case dоes not arise out of the contract or transaction set forth, in the petition as the foundation- of the plaintiff’s claim, or connected with the subject of the action. Mutuality of demands is nеcessary to entitle a defendant to a set-off or counterclaim. “A claim on the pаrt of sc defendant, which he will be.entitled to set off against the claim of a plaintiff against him, must be one upon which he could, at the date of the commencement of the suit, have maintained аn action on his part against the plaintiff.”- Simpson v. Jennings, 15 Neb. 671; Bank of Crab Orchard v. Myers, 120 Neb. 84.

The defendant in. this case contends that the plaintiff wаs not in fact.a corporation, for that its life had expired prior to the execution of the contract by operation of law, and that C. I. Tenney was then doing business under the corporate name as a trade-mame. It is also seriously contended that C. I. Tenney is the real plаintiff in interest. The ‍‌​‌‌​‌‌‌​​‌‌​‌​‌​​​‌​‌​​​‌‌​‌​‌‌​‌‌​​‌​‌​‌‌‌‌‌‌‌‍argument of the defendant upon the question is plausible and persuasive. However, we are confronted with certain well-established principles of law. When a party cоntracts with an imperfectly organized corporation, he is estopped to deny its corporate existence and is precluded from "recovering from its membérs individually as if they were рartners. Nebraska Nat. Bank of York v. Ferguson, 49 Neb. 109; Livingston Loan & Building Ass’n v. Drummond, 49 Neb. 200; Estate of Davis v. Watkins, 56 Neb. 288; Exchange Nat. Bank v. Capps, 32 Neb. 242. Since the defendant entered into this contract with the corporation and has dеalt with the plaintiff as a' corporation, he *610is estopped to deny its corporatе existence, after having received the benefits of the contract. The defendant has nо just complaint because he now finds himself in the position which he thought he was in when he entered ‍‌​‌‌​‌‌‌​​‌‌​‌​‌​​​‌​‌​​​‌‌​‌​‌‌​‌‌​​‌​‌​‌‌‌‌‌‌‌‍intо the contract. Under this view of the case, the order sustaining the special appeаrance of C. I. Tenney disallowing the attachment and striking from the answer the set-off and cross-pеtition was proper.

Having reached this conclusion, other questions presented by the briefs become unimportant. The judgment of the district court is

Affirmed.