Peabody v. Beach — 13 N.Y. Super. Ct. 53

Majority

p. 53

Alfred Peabody, Edward P. Flint, and George H. Kellogg v. Asahel Beach, Elisha Bloomer, Frederick Hadley, and Ralph Hill.

Headnote

In an action against two or more, as joint debtors for money lent, one of the defendants cannot defeat the action by setting up, by way of set-off or counterclaim, a claim to damages in 1ns own favor individually against the plaintiiis for fraud and' failure, and neglect to perform their duty to him as his agents under a power of attorney authorizing them to attend to his private business, to manage the same for his benefit.

(Before Hoffman, Slosson and Woodruff, J.J.)

Heard, April;

decided, June, 1856.

Appeal from a judgment by Mr. Justice Hoffman at Special Term, sustaining a demurrer to a counter-claim.

The action was brought by the plaintiffs against all the defendants on a joint contract made by them to the firm of Flint, Peabody & Co., composed of the plaintiffs and one James P. Flint, who, prior to the commencement of the action, had released all his interest to plaintiffs.

The defendant, Elisha Bloomer, answered severally, that he had appointed the plaintiffs and the said Flint to attend to his, Bloomer’s, interest in the management of the sale of a certain machine belonging to him, that the plaintiffs and Flint accepted the agency, and that they combined to defraud Bloomer, by suffering the machine to be sold in violation of that duty as his agents, and to his damage of $5,000. To this portion of the answer the plaintiffs demurred, and judgment upon the demurrer was rendered at Special Term in their favor.

Moody, for the defendant; Bloomer, appellant.

This action, being upon contract, it was competent for Bloomer to set up a counter-claim, arising also upop. contract in his favor against all the plaintiffs. Parsons v. Nash, ( 6 Howard, 454 .) The 150th section of the Code clearly indicates that there may be cases in which the counter-claim may not be due to, or in favor of, all the defendants, and a counter-claim, under the Code, has a broader

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signification and more extended application than the old statute of set offs, Lindsay v. Jackson, (2 Paige, 587,) Gleeson v. Moon, ( 2 Duer, 462 .) There is no good reason why Bloomer should not be allowed to apply his demand in extinguishing the claim of the plaintiffs against all the defendants; had he paid the demand in cash, and the plaintiffs had brought their suit for their claim, he clearly might have set up the payment in bar, and that plea, under the Code, would have been a counter-claim as much so as that set up in this action.

The judgment on the demurrer should, therefore, be reversed, and judgment rendered for the defendant.

.Le Forrest, for the plaintiffs.

The facts alleged in that portion of the answer which is demurred to might, if proved, sustain a separate action for damages by Bloomer alone against the firm of Elint, Peabody & Co., consisting of the plaintiffs and James P. Elint, but they cannot be availed of in the present action by way of counter-claim.

1. The defendant’s claim is against the plaintiffs and James P. Flint jointly. If the damages counter-claimed were made the ground of an original action by Bloomer as plaintiff, it would be necessary for him to unite Elint as a co-defendant with the other partners of Elint, Peabody & Co.

2. If it should be said that Bloomer does not claim damages upon a contract between him and Flint, Peabody & Co., but upon an alleged tort, then the counter-claim is unauthorized, because the complaint is on a contract alone.

3. The proposed counter-claim, if permitted, can be available to Bloomer alone, and not to his co-defendants. A several judgment could not be had in this action between the plaintiffs and Bloomer severally.

4. The obstacle in the way of the counter-claim last referred to is not relieved by § 150, nor by § 154 of the Code of Procedure.

5. Nor can the matters averred, for the reasons already stated, be availed by way of set-off, or rather defence, and for this I cite the following authorities, 3 Johnson Chanc. Rep., 574; id., 351; Collyer on Partnership, 761. I, therefore, claim that the judgment appealed from be affirmed, with coste.

This action is brought to recover moneys alleged to be due to the plaintiffs in their own right, and as asignees of their copartner Flint, from the defendants, as joint debtors, for money lent and advanced to the defendants, and paid, laid out, and expended for their use as copartners.

The defendant Bloomer, answering separately, among other defences sets up a set-off, or counter-claim, in his own favor individually, for damages sustained by himself, by reason of the plaintiff and the said Flint’s fraud and negligence, in this, that he appointed the plaintiffs and the said Flint his agents, under a power of attorney, to manage and attend to his interests in California, which power of attorney he avers the plaintiffs and the said Flint received and undertook to perform, keep, and execute the trusts, duties, and obligations thereby given, conferred and imposed. By the fraudulent violation of their duty in this respect, the defendant avers that he has sustained damages, which he insists upon as a set-off or counter-claim in this action.

We fully agree to the conclusion at which Mr. Justice Hoffman arrived in the examination of the demurrer to this defence, at the Special Term, that to an action against several joint debtors, for a debt due by them as copartners, one of them cannot avail himself either by way of set-off or counter-claim of such a defence. If the defence have any foundation, as very imperfectly, (we think), exhibited in the answer, it belongs to Bloomer alone.

If it can be regarded, under the averments in the answer, as arising upon contract, then it is a fatal defect that there is no mutuality between the two claims which are exhibited. If it be deemed a tort set up in the answer, then it is not so connected with the subject of the action that it constitutes any ground of recoupment. And in no aspect is the defence such that in this action there can be a separate judgment against the defendants, who are jointly liable, and who do not and could not set up the defence upon which the defendant Bloomer relies. The case of Parsons v. Nash, ( 8 How. 454 ,) instead of sustaining such a counter-claim, appears to us to tend to the contrary.

"When one of several joint debtors pays the debt, that is payment for all, and any or all of them may set up the payment in bar. Here there is no pretence that either of the other defendants could have done so.

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But,, without pursuing the subject, it must suffice to say, that the elaborate opinion pronounced at. Special Term by Mr. Justice Hoffman, appears to us to be entirely sound in its conclusion, and it is unnecessary to enlarge upon the subject here.

The judgment appealed from must be affirmed, with costs.