Baker v. Platt — 17 N.Y. St. Rep. 180

Majority

p. 180

Samuel B. Baker, Pl’ff, v. George P. Platt, Def’t.

(Supreme Court, Special Term, New York County,

Filed June 23, 1888.)

Headnote

Counter-claim in tort—When not allowable—Code Civ Pro. § 501.

In an action by plaintiff for the conversion of moneys due Mm and collected by defendant without authority, a claim for commissions due defendant for sale of property as plaintiff’s broker cannot be set up as a counter-claim under the provisions of section 501, Code Civil Procedure.

Demurrer to the counter-claim set up in the answer.

The plaintiff is a lumber merchant doing business in the city of Chicago, and defendant a broker who sold plaintiff’s property on commission, but without authority, as it is alleged, to receive payment therefor. Defendant nevertheless induced certain customers of the plaintiff to pay over to him (defendant) about $2,500, due for lumber sold by plaintiff through defendant, which sum he retained and failed to pay over.

The action was for conversion. Defendant admitted receiving the money, claimed to have had authority so to collect, and set up as a counter-claim in the action his alleged claim for $3,000, alleged to be owing from plaintiff to defendant, for commissions on goods sold for plaintiff.

Charles Bulkley Hubbell, for pl’ff; Charles H. Griffin, for def’t.

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

p. 181

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 The People, etc., 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 counter-claim 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 twenty days, on payment of costs.