People v. Corner — 36 N.Y. St. Rep. 107

Majority

p. 107

The People, Resp’ts, v. Cassius C. Corner, App’lt.

(Supreme Court, General Term, Fourth Department,

Filed February 20, 1891.)

Headnote

Set ora—Not allowable against the state.

In an action brought by the state upon contract, the defendant cannot set off damages by reason of the breach of other contracts by the state. To permit him to do so would be to allow him to do indirectly that which he could not do directly.

Appeal from a judgment entered in Chemung county in favor of the-plaintiff for $10,661.96, upon the report of a referee. The referee found, viz. : “ That the plaintiffs between July 9, 1888, and January 21, 1889, inclusive, sold and delivered to the defendant at the New York State Reformatory at Elmira, brushes and brush materials at and for the price, and of 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 $1,263.89, 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: First: “ That the counterclaim set up in the defendant’s answer is not 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 New 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 2nd 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 defendant only have been so manufactured and delivered, while other of said orders or agreements the said plaintiff had not even partially complied with or carried out on the said 2nd day of August, 1888, and they had not manufactured or delivered to the defendant 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

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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: “ Plaintiff’s counsel seasonably objected to all testimony offered by defendant tending to prove the counterclaim 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 counterclaim against the claim of the state and the amount due from defendant to the state in this action, the said sum of damages, or so much thereof as maybe necessary.” The referee refused so to find; an exception was taken to such refusal.

Frederick Collin, for app’lt; Charles F: Tabor, attorney general, and Fraslus F. Babcock, for resp’ts.

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 counterclaim. 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 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 cases. The People v. Dennison, 59 How. Pr., 157 ; S. C., affirmed 84 N. Y., 272 .

Judge Rapallo, in speaking of the counterclaim 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 their 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., U. S., 290, it was said:

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“ To permit a demand in set-off against the government to be proceeded on to jud'gment 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 ; 20 N. Y. State Rep., 647, 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 sense, ■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., 231 ; 7 N. Y. State Rep., 10, 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 nonfeasance.” Appellant has called our attention to Danolds v. State, decided in this court in December, 1881, and affirmed by the court of appeals, 89 N. Y., 36 . 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 contractthe case involved an inquiry into the force and validity of a contract, and the measure of damages for a breach of it. These 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 United States v. Giles and others, 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 maintain 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 defendant 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.

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We think the case was properly disposed of by the referee, and we therefore sustain his report.

Judgment affirmed, with costs.

Martin and Merwin, JJ., concur.