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SECOND DEPARTMENT, MARCH TERM, 1899.

[Vol. 38. This appeal was transferred from the first department to the second department.

Gibson Putzel [Benjamin G. Paskusz with him on the brief], for the appellant.

A. C. Brown, for the respondents. WOODWARD, J.:

The plaintiffs, as the assignees of certain claims of Siebrecht & Wadley, brought this action to recover the sum of $695.75 alleged to be due from the defendant for certain shrubs and flowers sold by the plaintiffs' assignors to the defendant. The defendant put in a counterclaim by way of answer alleging that in August, 1896, the plaintiff Henry A. Siebrecht, Jr., was employed by the defendant in charge of its flower department; that the said Siebrecht was given full charge of the department, and that his duties included the purchase of all flowers and shrubs for the defendant's department store; that while so employed the plaintiff Henry A. Siebrecht was engaged in business with one Wadley, under the firm name of Siebrecht & Wadley, as a wholesale dealer in flowers, shrubs, etc., and that the plaintiff Siebrecht, Jr., entered into a conspiracy with his father by which nearly all of the supplies for the department store, in this line, were purchased of the firm of Siebrecht & Wadley at prices greatly in excess of their fair market value. The defendant produces a bill of particulars, itemizing the account in so far as it is able to do so, in which it shows payments, in excess of the fair market price of the goods, aggregating $2,449.50, for which sum it demands judg. ment. The plaintiffs demurred to this counterclaim on the ground that it was not of the character specified in section 501 of the Code of Civil Procedure, and the validity of this contention is the question presented upon this appeal. The demurrer was sustained and defendant's counsel duly excepted.

It is conceded that two of the items in the bill sued upon are identical with those contained in the defendant's bill of particulars, and which show an overcharge of something over eighteen dollars ; and as the demurrer is to the counterclaim as a whole it is difficult to find any process of reasoning by which it could be sustained as to the cause of action which the defendant undoubtedly has as to

App. Div.]

SECOND DEPARTMENT, MARCH TERM, 1899.

the eighteen dollars “ arising out of the contract or transaction set forth in the complaint as the foundation of the plaintiff's claim." (Code Civ. Proc. $ 501.) But it is not necessary to consider this minor question; a fair construction of section 501 of the Code is sufficient to justify this counterclaim.

The plaintiffs in this action are alleged to be the persons who conspired to defraud the defendant; they came into possession of their claim with a full knowledge of all the facts, and if the defendant is willing to waive the tort and rely upon its right to recover upon the implied contract to repay moneys which have come into the possession of the plaintiffs or their assignors, without valuable consideration, no end of justice is to be promoted by denying this right. The transaction set forth in the complaint as the foundation of the plaintiffs' claim is the purchase by the defendant of certain flowers and shrubs of the plaintiffs' assignors. The counterclaim of the defendant is that in the sale of these and other flowers and shrubs the plaintiffs' assignors, in conspiracy with the plaintiffs in this action, had overcharged the defendant, and by so doing had, in law, entered into an implied contract to refund the money which they had thus wrongfully exacted from the defendant. Can there be any

doubt that the defendant's counterclaim is “A cause of action arising out of the contract, or transaction, set forth in the complaint as the foundation of the plaintiffs' claim, or connected with the subject of the action ?” (Code Civ. Proc. $ 501, subd. 1.)

“The word connected,'” say the court in the case of Carpenter v. Manhattan Life Ins. Co. (93 N. Y. 552, 556), “ may have a broad signification. The connection may be slight or intimate, remote or near, and where the line shall be drawn it may be difficult sometimes to determine. The counter-claim must have such a relation to, and connection with, the subject of the action that it will be just and equitable that the controversy between the parties as to the matters alleged in the complaint and in the counter-claim should be settled in one action by one litigation; and that the claim of the one should be offset against, or applied upon, the claim of the other.” It is difficult to conceive of a state of facts where it would be more in accord with the principles of justice and equity to permit of a counterclaim than in the case at bar. One of the plaintiffs, while an employee of the defendant, enters into an arrangement with his

SECOND DEPARTMENT, MARCH TERM, 1899.

[Vol. 38. father, the other plaintiff, to defraud the defendant. They afterward come into the ownership of the claim, a part of which was involved in the frandulent transaction, and attempt to collect the same at law, refusing to acknowledge the rights of the defendant, thus compelling an action in tort if it is to have any remedy for the wrong. We are of opinion that the counterclaim of the defendant is so intimately connected with the subject of the action,” that it would work a great wrong to the defendant to permit the demurrer to stand.

The authorities in this State are overwhelmingly in favor of the position of the defendant in this action, that it has a right to waive the tort and to proceed upon the implied contract; and the fact that the defendant, while setting up the facts showing the conspiracy to defraud has confined its demand to the amount actually shown to have been wrongfully taken, is, in the absence of affirmative acts pointing in a contrary direction, conclusive as to the election of the defendant to waive the tort and to proceed under the implied contract.

“The rule of pleading established by the Code,” says Mr. Justice BARKER in delivering the opinion of the court in the case of McDonough v. Dillingham (43 Hun, 493), “ requires the complaint to contain a plain and concise statement of the facts constituting the plaintiff's cause of action, and a demand for such judgment as the plaintiff supposes himself entitled to on the facts set forth therein. Nothing more is necessary in any case. The pleader is not required to state, either in the summons or the complaint, the class of action to which he conceives his cause of action belongs, as the same are denominated in judicial procedure. If the complaint states facts entitling the plaintiff to any relief whatever, then it is for the court to determine, when the question is properly presented, whether the cause of action averred is founded in contract or tort. The character of the cause of action must, in all cases, be determined by an analysis of the averments in the complaint, together with the nature of the relief demanded.

In all cases where the pleader avers the sale and delivery of property to the defendant at a fixed and agreed price, which remains unpaid, and also alleges he perpetrated a fraud in making the purchase, by mearis of false representations as to his solvency, and a question of doubt

App. Div.]

SECOND DEPARTMENT, MARCH TERM, 1899.

is presented as to whether it was the intention of the pleader to set forth a cause of action ex contractu or er delicto, the omission to allege that damages lave accrued to the plaintiff by reason of the fraud is accepted by the court as a circumstance indicating the purpose of the pleader to rely upon the contract as constituting the cause of action.”

“ An action in the nature of an action of assumpsit lies against one who has obtained money from another by a frand, and such claim is a proper subject of set-off in an action brought by the party against whom it exists. An assignee of such party takes a cause of action subject to such defense. This money thus obtained is, in contemplation of law, money received for the use of the party who is defranded, and the law implies a promise on the part of the person who thus obtains it to return it to the rightful owner. The tort arising from the manner in which the money was obtained may be waived and the action founded upon the implied contract.” (Rothschild v. Mack, 115 N. Y. 1, 8. See, also, People v. Wood, 121 id. 522, 528; Byebie v. Wood, 24 id. 607, 611; Starr Cash Car Co. v. Reinhart, 2 Misc. Rep. 116.)

The judgment appealed from should be reversed.

All concurred.

Interlocutory judgment reversed and judgment directed for defendant on demurrer, with costs, with leave to the plaintiffs to withdraw demurrer and serve reply within twenty days, on payment of the costs of the demurrer and of this appeal.

JAMES P. SUMMERS, Respondent, v. FREDERICK L. COLVER,

Appellant.

38 553 55 618

Motion - its consideration on appeal iimited to the grounds stated below contract

that trork shall be artistically and financially satisfactorythe decision must be made in good faith.

Where counsel, upon making a motion, specially calls attention to the point he

desires the court to pass upon, he cannot, under cover of the exception to the denial of the motion, urge a different point upon appeal.

App. Div.-Vol. XXXVIII. 70

SECOND DEPARTMENT, MARCH TERM, 1899.

[Vol. 38.

Where upon the trial of an action brought against Frederick L. Colver person. ally, upon

contract of employment signed “Frank Leslie's Publishing House, Frederick L. Colver, Manager," the counsel for the defendant, in making a motion to dismiss the complaint upon the ground that it does not state facts sufficient to constitute a cause of action, urges the point that the question as to whether the services rendered by the plaintiff under the contract mentioned in the complaint were satisfactory or unsatisfactory, is one exclusively " for defendant, the employer, and not to be passed upon by court or jury," and makes no claim that the action was not properly brought against the defendant, the defendant is estopped from asserting upon appeal that he is not the

proper party to be charged with damages in the action. Under a contract of employment fixing the employee's salary at forty dollars per

week for the first four weeks, and providing “At the end of that time if your management of our press work is artistically and financially satisfactory, your salary will be $50 per week thereafter. This arrangement to be for one year under same conditions,” conceding that the employer is the sole judge as to whether the employee's management of the press work is “artistically and financially satisfactory,” this power must be exercised in good faith, and the employer cannot discharge the employee before the expiration of the year, for the purpose of reducing expenses, and arbitrarily say that the employee's work was not artistically and financially satisfactory.

APPEAL by the defendant, Frederick L. Colver, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 21st day of March, 1898, upon the verdict of a jury, and also from an order entered in said clerk's office on the 4th day of April, 1898, denying the defendant's motion for a new trial made upon the minutes.

This appeal was transferred from the first department to the second department.

E. H. Pilsbury [L. A. Wray with him on the brief], for the appellant.

Michael J. Scanlan, for the respondent.

WOODWARD, J.:

The plaintiff brings this action to recover damages for a breach of contract, the terms of which are set forth in a letter, of which the following is a copy of the material portions : 66 Mr. JAMES P. SUMMERS :

“DEAR Sır. — In accordance with our verbal understanding we take pleasure in engaging your services as foreman of our press

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