Newton v. Lee — 53 N.Y. St. Rep. 162

Majority

p. 162

Franklin D. Newton, App’lt, v. Gertrude E. Lee et al., Resp’ts.

(Supreme Court, General Term, Second Department,

Filed May 8, 1893.)

Headnote

Set-off—Rights of subeties against assignee of claim.

In an action by an assignee of a claim for goods sold and delivered, the answer denied the sale and set up that the defendants were only sureties for the payment of the account of a company to whom said goods were sold under a contract; that there had been a breach of the contract, and asked to set-off the damages thereby occasioned. Held, on demurrer, that such defense was a good one; that plaintiff took the claim subject to all defenses for breach of the contract out of which it arose; and the defense is good so far as the entire extinguishment of the entire assigned claim, if the proof of damages is sufficient.

Appeal from interlocutory judgment overruling demurrer to a portion of the answer.

Nelson S. Spencer, for app’lt; James W. Perry, for resp’ts.

The complaint states that certain articles of personal property were sold and delivered by the Naugatuck Malleable Iron Company to the defendants; that the bill for the value of the same is unpaid, and that the company has assigned the claim to the plaintiff. The defendants deny the sale, the value claimed and the assignment to the plaintiff. The answer then proceeds to make a distinct and separate defense to the effect and purport that the sale was made to the American Bit Brace Company, and not with the defendants. That this Bit Brace Company made a contract with the Naugatuck Malleable Iron Company to furnish castings from patterns furnished by the American Bit Brace Company. That the Naugatuck Company, on the 13th of July, 1892, made an order for castings, and thereby caused great loss to the American Bit Brace Company; and the defendants ask to recoupe, set-off and counterclaim this damage against the plaintiff’s claim. The distinct and separate defense further states that the defendants were only sureties for the payment of the account of the American Bit Brace Company to the Naugatuck Company. The separate answer states a clear case where the counterclaim, existing against the Naugatuck Company at the time of the assignment, should be available to destroy tine claim assigned to the plaintiff, as far as it was to go, or, as stated in the demand for judgment, as far “as shall be necessary to extinguish the plaintiff’s demand.” The demurrer was properly overruled. Code, § 502, sub. 1; Baker v. Hotchkiss, 97 N. Y., 395 .

The plaintiff took the contract with all defenses against the

p. 163

assignor for the breach of the contract out of which the claim arose, and the defense is good so far as the entire extinguishment of the assigned claim if the proof of damages is sufficient. No personal claim is made against the plaintiff. Bates v. Rosekrans, 37 N. Y., 409 .

Judgment affirmed, with costs.

Dyioian and Pratt, JJ., concur.