Barker v. Platt
17 N.Y. St. Rep. 180
N.Y. Sup. Ct.
1888
Check Treatment
Ingraham, J.

The cause of action set up in the complaint is clearly an action in tort, and not on the contract between plaintiff and defendant. For the plaintiff to maintain his cause of action he must prove that the moneys collected by the defendant belonged to the plaintiff, and that the defendant had collected and received the money without authority from the plaintiff. The cause of action arises out of the unlawful conversion by the defendant of the plaintiff’s money, and it is entirely immaterial whether the defendant sold the lumber as the agent of the plaintiff or whether the plaintiff sold it directly. If the defendant had authority to collect the money, the plaintiff cannot recover. The subject of the action, therefore, was wholly distinct from the contract between the parties, and from any claim of the defendant for money due him from the plaintiff under that contract. The case of People v. Dennison, 84 N. Y. 280, therefore applies. If this claim should be sustained, and the plaintiff should fail to prove on the trial that the defendant had unlawfully converted his money by collecting it without authority, the plaintiff must fail in his action; yet the defendant could proceed under the counterclaim, and recover an affirmative judgment against the plaintiff upon the contract. To establish a counter-claim in an action in tort under section 501 of the Code, the cause of action must have arisen out of the transaction set forth in the complaint as the foundation of the plaintiff’s claim, or connected with the subject of the action, and this counter-claim alleged in the answer of the defendant, not arising out of the transaction set forth in the complaint as the foundation of the plaintiff’s claim, or connected with the subject-matter of the action, is not allowed by that section. The demurrer must therefore be sustained, and judgment ordered for plaintiff, with costs, with leave to defendant to amend his answer within 20 days, on payment of costs.