143 N.Y.S. 916 | N.Y. App. Div. | 1913
This is a suit in equity to cancel a contract made by the plaintiff with the decedent, John Bancroft Devins, on the 3d day of April, 1911, for the purchase of the entire capital stock of the New York Observer, a weekly newspaper devoted to the interests of the Presbyterian religious denomination, of which
The material allegations of the complaint charging fraud were put in issue, and the personal representatives of the decedent alleged, as a counterclaim, that under the contract as modified an installment of money became due from the plaintiff to them in their representative capacities on the 4th day of April, 1912, and they demand the dismissal of the complaint and an affirmative judgment on the counterclaim.
We are of opinion that the motion was properly denied, regardless of the question as to whether the counterclaim is authorized, for, since the material allegations of the complaint are put in issue, the plaintiff was not entitled to judgment on the pleadings. (Code Civ. Proc. § 547.) In such case plaintiff’s remedy was by demurrer or by motion on the trial.
The question, however, upon which a decision of the appeal is desired is whether in an action to annul a contract on the ground of fraud, a defendant may properly interpose a counterclaim for moneys due under the contract, and since the question has been fully argued we deem it proper to express an opinion thereon. The fact that the cause of action and the counterclaim are not triable by the same branch of the court is of no importance on the question. The courts appear to have had considerable difficulty in determining when a counterclaim is authorized under the provisions of sections 500 and 501 of the Code of Civil Procedure; and thus far no plain rule on
In People v. Dennison (84 N. Y. 272), which was an action to recover public moneys, the. payment of which to contractors had been induced and obtained by fraud and collusion with State officers, and which the Court of Appeals had previously held sounded in tort and could not be sustained on the theory of liability founded on contract (80 N. Y. 656), it was held that a counterclaim for a balance due to the contractors for work done under the contract was not a proper counterclaim under section 150 of the Code of Procedure. That decision, however, was placed upon the ground that the action was for a tort. The action at bar, however, is not one in tort. The relief demanded is of an equitable nature, and the fraud is alleged merely as ground for the relief sought.
Subsequent, however, to the decision in People v. Dennison (supra) it was held in Ter Kuile v. Marsland (81 Hun, 420) that a counterclaim for moneys due under a contract of agency was properly interposed in an action against the agent for conver
It follows, therefore, that the order should be affirmed, with ten dollars costs and disbursements.
Ingraham, P. J., Scott, Dowling and Hotchkiss, JJ., concurred.
Order affirmed, with ten dollars costs and disbursements.