People v. Corner — 12 N.Y.S. 936

Majority

p. 936

People v. Corner.

(Supreme Court, General Term, Fourth Department.

February, 1891.)

Headnote

Action by the State—Counter-Claim.

Defendant in an action in the supreme court by the state on a contract cannot set up a counter-claim for an alleged breach of the contract, but his remedy is by an application to the board of audit, which is the only way in which claims against the state can be passed on.

Appeal from judgment on report of referee.

The referee found, viz.: “That the plaintiffs,- between July 9, 1888, and January 21, 1889, inclusive, sold and delivered to the defendants at the Hew York State Reformatory at Elmira, brushes and brush materials at and for the price, and for the value, of $11,627.97. All of said materials were so sold and delivered after August 2, 1888, and all of said brushes after that date, except $1,263.39, in value of the same.” He also found a payment had been made of $2,085.13. He also found the defendant indebted in $7.88, for moneys expended to the use of the defendant. As conclusions of law the referee found “that the counter-claim set up in the defendant’s answer is not

p. 937

available to the defendant, or allowable against the state in this action or court.” In the defendant’s answer it was stated that sundry orders had been delivered to the officers of the Hew York State Reformatory at Elmira, and that the same had been accepted by the superintendent; that the orders had not been filled, and that “the plaintiff herein had, for a good and valuable consideration, agreed to make, manufacture, and produce for the defendant, and deliver to him a large quantity of brushes, many thousand gross in number, and of various kinds and descriptions, which particular kinds and descriptions this defendant is now unable to designate; that of said orders, contracts, and agreements some, on the said 2d day of August, 1888, had been partially carried out, and kept by the said plaintiffs, and a partial number of the brushes so to be manufactured by the plaintiffs, and delivered to the defend.ant, only have been so manufactured and delivered, while others of said orders or agreements the said plaintiff had not even partially complied with, or carried out, on the said 2d day of August, 1888, and they had not manufactured or delivered to the defendants any of the brushes or goods which, under such orders or agreements, they had contracted to manufacture and deliver. * * * And defendant further alleges that, by reason aforesaid set forth in this second answer, and defense, all of which matters are herein set forth upon information and .belief, he, the said defendant, has been damaged in at least the sum of $10,000; and such sum this defendant asks this court to set off against any sum the plaintiffs may, upon the trial of this action, show themselves entitled to by reason of the matters set forth, in the said complaint; and defendant asks that such damages as said defendant may show himself entitled to by reason of the matters set forth in this second answer and defense upon the trial of this action may be used to cancel or offset to the extent thereof the damages which the plaintiffs may, upon the trial hereof, show themselves entitled to by reason of the matters set forth in their said complaint, and that plaintiffs’ said complaint be dismissed, with costs, and for such other or further relief as to the court may seem just and proper.” Defendant gave some evidence.tending to.establish the allegations of his answer. The case states: “Plaintiffs’ counsel seasonably objected to all testimony offered by defendant tending to prove the counter-claim or cause of action alleged in the answer, on the ground that such claim was not available to the defendant, or allowable against the state in this action, and, at the close of all the evidence, duly requested the referee to so find and hold.” The appellant requested the referee to find: “The defendant is entitled to recoup or counter-claim against the claim of the state, and the amount due from the defendant to the state in this action, the said sum of damages, or so much thereof as may be necessary.” The referee refused so to find. An exception was taken to such refusal, and defendant appeals.

Argued before Hardin, P. J., and Martin and Merwin, JJ.

Frederick Collin, for appellant. Chas. F. Tabor, Atty. Gen., and Erasing F. Babcock, for respondent.

Appellant’s answer set up new matter, and, under the answer, he sought to establish new and' independent orders given to the plaintiff, accepted by the plaintiff; a failure to perform in accordance-with the orders and acceptances, and, by reason of the breach, to be allowed such prospective profits as would have come to him in the event of a fulfillment of the orders. Such new matter constituted a counter-claim. Wilder v. Boynton, 63 Barb. 547 . Assuming that such new matter constitutes a cause of action in favor of the defendant, and that equitably and justly he was entitled to recover, by reason of such new matter, damages from the state, the question here presented is whether or no such recovery or allowance can be had in this action. If the plaintiff had not commenced this action, it is very clear and well settled by an unbroken line of authorities that the defendant

p. 938

could not have brought and maintained an action against the state. In seeking redress for the injuries sustained by him, if any, by reason of a breach of the terms of the orders referred to in his answer, his remedy would necessarily have been sought - in a court of claims established by the state for ascertainment of damages in such and other eases. People v. Denison, 59 How. Pr. 157 ; affirmed, 84 N. Y. 272 . Judge Rapallo, in speaking of the counter-claim in the case just cited, says: “Another mode of redress is provided by statute in such cases, and if the defendants have any just claim against the state they must apply for relief to the board of audit, the tribunal instituted by the state for passing upon such claims. As this claim was not triable or recoverable in this action, the judgment rendered herein does not conclude the defendants in respect thereto. ” In Reeside v. Walker, 11 How. 290 , it was said: “To permit a demand in set-off against the government to be proceeded on to judgment against it would be equivalent to the permission of a suit to be prosecuted against it; and, however this may be tolerated between individuals, by a species of reconvention, when demands in set-off are sought to be recovered, it could not be as against the government except by a mere evasion, and must be as useless in the end, as it would be derogatory to judicial fairness.” In O'Hara v. State, 112 N. Y. 154 , 19 N. E. Rep. 659 , it was said: “There is but little analogy between the position of a state in reference to the prosecution of claims against it and the condition of a citizen, subject at all times and in numerous tribunals to be brought into court and be prosecuted for his liabilities.. The state can be prosecuted, in a legal senáe, only by its own consent, and after it has created a tribunal to hear and decide claims against it.” In Rexford v. State, 105 N. Y. 281 , 11 N. E. Rep. 514 , it was said: “The state can only be sued by its own consent, and for liabilities which it chooses to assume. People v. Dennison, 84 N. Y. 272 , 281. And this has been expressly held where the cause of action alleged rested upon some misfeasance or non-feasance. ” Appellant has called our attention to Danolds y. State, decided in this court in December, 1881, and affirmed by the court of appeals. 89 N. Y. 86 . We find nothing in that case which sustains the contention of the appellant, it having been held in that case that, after a valid contract has been entered into by the state, it cannot “destroy or avoid the obligation of the contract. ” The case involved an inquiry into the force and validity of a contract, and the measure of damages for a breach of it. Those questions had been presented to the board of audit, and no question arose during the progress of that litigation akin to the one now before us: In U. S. v. Giles, 9 Cranch, 228 , a somewhat similar question to the one now before us was under discussion, and in the course of the argument it was said: “This defendant could not maintan a suit against the United States. To give him the benefit of the set-off would be a violation of the prerogative of the United States.” Thereupon “the court stopped the counsel for the United States upon this point, saying they were satisfied.” In the course of the opinion delivered by Livingston, J.; it was said, at page 237: “If, then, in a suit against Giles himself, a claim for these credits, under existing circumstances, could not be sustained, neither can it in an action on this bond without permitting the defendants to do indirectly what the marshal could not have done directly, and, in this way, avail themselves of what the law seems to regard as a default, or at least a negligence on the part of their principal.” Concurring, as we do, in the result reached by the learned referee, which he has fortified by an extensive opinion citing and reviewing numerous authorities, and the learned counsel for the appellant having conceded in the argument that he has “been unable to find any New York state authorities squarely responding to the question, ” we may very appropriately omit further comment. We think the case was properly disposed of by the referee, and we therefore sustain his report. Judgment affirmed, with costs. All concur.

Cases cited

Wilder v. Boynton 63 Barb. 547 N.Y. Sup. Ct. 1872-09-03 p. 937
People v. Denison 59 How. Pr. 157 N.Y. Sup. Ct. p. 938
People v. Dennison 84 N. Y. 272 N.Y. 1881-03-01 at 281 p. 938