Springer v. Bien — 16 Daly (N.Y.) 275

Majority

p. 275

John H. Springer, Respondent, against Julius Bien et al., Appellants.

(Decided June 2d, 1890.)

Headnote

In an action to restrain the defendants from using a certain name and trademark, and for an accounting for moneys collected under that name, the judgment was for that relief only ; but among the findings of fact was a

. finding that the plaintiffs had employed one of the defendants to sell plaintiffs’goods on a certain commission, as to which there was no issue of fact. Held, that such finding was immaterial, and not res judicata against such defendant as to the terms of his employment in a subsequent action by him against the plaintiffs.

As a reply to an answer is required by section 514'of the Code of Civil Procedure only where a counterclaim is pleaded, new matter in an answer, not stating a counterclaim, is deemed controverted, and may be traversed or avoided in any way.

In an action for an accounting, defendants set up a counterclaim. An interlocutory judgment for plaintiff, rendered before any evidence had been given in regard to the counterclaim, contained a clause dismissing the

p. 276

counterclaim. Held, on affirming the judgment on appeal, that such clause should be stricken from it, and defendants be allowed to litigate their counterclaim upon the accounting.

Appeal from an interlocutory judgment of this court entered on the decision of. the judge on a trial by the court without a jury.

The facts are stated in the opinion.

Franklin Bien, for appellants.

Palmer, BootTiby, Grildersleeve, for respondent.

This is an action in equity brought by the plaintiff against the defendants, constituting the firm of Julius Bien & Co., for an accounting as to moneys received by them since May 4th, 1889, upon orders for theatrical" engraving procured by the plaintiff for them prior to that time, under a contract by which they agreed to pay the plaintiff ten per cent, on all moneys received by them on orders for such engraving brought by the plaintiff to them, which ten per cent, was to be paid as such moneys were received by the defendants from such orders.

All the material allegations in the complaint, except the terms of the agreement and the allegation that there was anything due the plaintiff, were either admitted by the answer or upon the trial of the action. And the findings of fact in respect to that agreement made by the learned Chief Justice were fully supported by the evidence in the case. Indeed, we do not understand the appellants to seriously challenge any of them upon this appeal.

But the defendant claims that a judgment in an action in ,the Supreme Court between the same parties and others, is a bar to the plaintiff’s claim here, and is res adjudicóla as against the plaintiff upon the question as to what his agreement with the defendants was. That action was commenced in the ■Supreme Court by the defendants in this, as plaintiffs, against the plaintiff in this action and others, as defendants, to restrain

p. 277

them from the use of a certain name and trademark, and from doing business under that name or collecting moneys thereunder, and for an accounting for the moneys theretofore collected under that name, and for no other relief; and the judgment in that action was for that relief and that only. The allegation in the complaint in the action in the Supreme Court, in regard to what the compensation to the plaintiff in this action should be, was substantially as alleged by the plaintiff in his complaint in this action; and the plaintiff’s answer in the Supreme Gourt action admitted that allegation. There was therefore no issue of fact to be tried upon that question in that action; and the terms of the agreement in respect to compensation were only alleged in the complaint in the Supreme Court action as one of the links in the chain upon which the right to an injunction was founded. Notwithstanding this, the plaintiffs in the Supreme Court action procured from the judge who tried it the following finding of fact:—

“ Eleventh. That these plaintiffs, and the said James Mitchell as well as these plaintiffs, agreed to employ and did employ the said John H. Springer, for which he was to receive ten per cent, as aforesaid, which said commission should be paid to him as long as he remained in the employ of the defendants and the said James Mitchell prior to December 11th, 1888, and with these plaintiffs since that time.”

The eighth finding of fact in that action contains a similar finding. Obviously this finding was not a material matter within the issue which was expressly litigated and determined in the Supreme Court action, nor was it comprehended or involVed in that action, as no judgment whatever could have been rendered in favor of the defendant in that action for his claim in this.

The only question to be determined in that action was whether the defendants in it had wrongfully used the name and trademark then in controversy, and whether they should be enjoined from the further use of them.

Campbell v. Consalus ( 25 N. Y. 613 ), was an action brought

p. 278

to foreclose a mortgage. The defense set up payment. On the trial the plaintiffs claimed that prior to the commencement of that action an action had been begun by the defendant therein against the plaintiff’s assignor, to cancel the mortgage on the ground that it had been paid, and that in such action the referee to whom it was referred found that the mortgage had not been paid and that there was due thereon . the sum of $2,754.88, and that the complaint in that action had been dismissed with costs. The referee in the action to foreclose the mortgage held that the prior judgment was binding to the extent that it found that the mortgage had not been paid, but that the finding of the referee in the prior action that there was due on the mortgage the sum above mentioned, being an immaterial finding and not embraced within the issues, was no evidence whatever of the amount due and was not res adjudieata upon that point. The referee’s report was confirmed, and on appeal affirmed by the General Term-and the Court of Appeals. The Court of Appeals held that, inasmuch as the finding of the referee in the prior action as to the amount due was an immaterial finding and upon a matter not raised in the pleadings, it was not res adjudieata between the parties; that the pleadings in that action “ did not directly or necessarily require the referee to find or report how much was due on the .mortgage . . . But the evidence and inquiry as to the amount due was merely incidental 6r collateral to the issue whether anything was due. And it would appear from the cases before cited that the principle of res adjudieata does not apply to matters raised only incidentally or collaterally.” See also People v. Johnson ( 38 N. Y. 63 ).

Hence the" learned judge who tried the case committed no error in finding as he did in respect to the findings of fact and of law presented to him bearing upon that subject.

Appellants also contend that inasmuch as in the XLIst section of the answer they alleged that the agreement in the complaint stated, by its terms, was not to be performed within one year from the making thereof, and that there was no note

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or memorandum in writing of the agreement, and inasmuch as there was no reply to this allegation, that therefore the defense was admitted, and this action should not be main-' tained by reason thereof.

The first answer to this contention is that section 514 of the Code only requires replies to answers where a counterclaim is set up. This was not a counterclaim, but a defense, requiring no answer. New matter in an answer, not stating a counterclaim, is deemed controverted and may be traversed or avoided in any way (Arthur v. Homestead Hire Ins. Co., 78 N. Y. 462 ).

But even if this were not so, from the time of the passage of the statute of frauds to the present day, no case can be found which adjudicates that a party may not recover for work actually done or services rendered under a contract obnoxious to such statute, and this action is to recover for money earned, and not ■ for future or prospective damages arising from a breach of contract.

None of the exceptions to the admission or exclusion of evidence were argued on this appeal, either orally or in the briefs of counsel, and they therefore do not require any examination.

The defendants in their answer set .up a counterclaim. On the trial no evidence was given in regard to it, nor indeed had the time arrived to give such evidence. But the plaintiff at the close of the case moved to dismiss the issue made by the answer as far as the counterclaim was concerned. The- court very properly denied the motion. Manifestly through some inadvertence, the learned judge who tried the case signed the fourth conclusion of law presented by the plaintiff, as follows: “The plaintiff is entitled to have judgment against the defendants dismissing the counterclaim set forth in the answer and supplemental answer herein.” And the judgment contains the following: “And it is further adjudged that the counterclaim set forth in the answer and the supplemental answer of the defendant herein be and the same is hereby dismissed.” This clause should be stricken

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from the judgment so as to allow the defendants to litigate their counterclaim upon the accounting if so advised. As thus modified the judgment should be affirmed, but, under the circumstances, without costs of this appeal to either party as against the other

J. F. Daly, J., concurred.

Judgment accordingly.

Cases cited

Campbell v. Consalus 25 N. Y. 613 N.Y. p. 277
People ex rel. Reilly v. Johnson 38 N. Y. 63 N.Y. p. 278
Arthur v. Homestead Fire Insurance 78 N. Y. 462 N.Y. 1879-11-11 p. 279