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SECOND DEPARTMENT, MARCH TERM, 1899.

[Vol. 38.

In the case at bar, it is true, evidence was originally offered as to the entire amount of the claim, and the present counterclaim is a part of the original claim, a part of which has been adjusted; this is due to no fault of the defendants, but to the fact that in the original action the recovery of the defendant was necessarily limited to the amount which he then held and against which he asserted a lien as well as a counterclaim. (See Sewall v. Robbins, 139 Mass. 164.) In Sage v. McAlpin (11 Cush. 165, 166) the court say: "The record of a judgment in a former suit is not always competent evidence on the trial of a subsequent action between the same parties, but is so only when the point in issue is the same in both or when some question raised, and to be passed upon in the last, has already arisen and been determined in the first. * * Did a reasonable time extend to and include the 22nd of January, was the only question which arose or was determined in the first, but in the second the inquiry and point in issue was, if it extended two days further and included also the twenty-fourth. It was a question of fact to be ascertained and determined in each case from all the evidence pró- duced and all the circumstances disclosed at the respective trials."

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So, in the case at bar, the question on the first trial was whether the plaintiff owed the defendant an amount equal to or exceeding the sum claimed by the plaintiff; the question now involved is whether the defendants are entitled to recover that portion of the claim in excess of the former recovery which could not be adjudicated in the first trial.

In Burlen v. Shannon (99 Mass. 200, 205) the court reviews the Massachusetts cases and quotes from the chief justice in the same case (14 Gray, 439) as follows: "The parol evidence was rightly admitted to ascertain what questions were in fact tried and submitted to the jury. This evidence showed that two such questions were submitted; that if either of two things were true they would return a verdict for the plaintiff. A verdict on that direction for the plaintiff proved nothing more than that the jury found one of the propositions true, but without finding which." The court then adds: "The whole current of our own decisions fully supports the limitations of the doctrine of estoppel which we now sanction and adopt." To the same effect is the case of Duncan v. Bancroft (110 Mass. 267), though not so clearly stated. (See, also, Sewall v. Robbins, supra; Ilymes v. Estey, 116 N. Y. 501, 509.) Reason, justice

App. Div.]

SECOND DEPARTMENT, MARCH TERM, 1899.

and the authorities concur in the conclusion that the trial court erred in its conclusion of law.

A serious question in this case, however, is whether the defendant could split up his counterclaim or set off. A counterclaim, in most respects, is to be treated as an affirmative action on the part of the defendant. The rule is well settled that a party cannot split up an entire cause of action and maintain several actions, each for part of his demand. The recovery of one judgment bars his whole claim. There is some authority to the effect that the same rule applies to a counterclaim. It was so held by the late General Term of the first department in Inslee v. Hampton (11 Hun, 156), and also by the Superior Court of New York in De Wolf v. Crandall (2 J. & S. 14). In O'Connor v. Varney (10 Gray, 231), Varney made a contract to erect a building. He sued for work done under the contract, to which O'Connor set up that the work was so imperfectly done that it would require a greater sum than the amount sued for to complete the contract. O'Connor recovered judgment in that action, and thereupon brought an action against Varney to recover damages for the non-performance of the contract. It was held that the judgment in the first action was a bar to the second; that if the defendant in the first action claimed greater damages than the amount for which the plaintiff sued, he should have stayed the first action and brought his cross-action. It was there said: "He cannot use the same defence, first as a shield, and then as a sword." In the American and English Encyclopædia of Law, subject Res Judicata (Vol. 21, p. 224), it is said: "A set-off cannot be split up so as to have a portion adjudicated in the first suit and a subsequent action brought for the remainder." But the authorities cited in the work in support of its text seem hardly to go to this extent. In all the cases cited, however, the defendant might have had full relief by seeking a judgment in his own favor; and the question still remains whether the rule is applicable to cases where the defendant necessarily is confined in the use of his set-off or counterclaim to a defeat of the plaintiff's demand, and is not permitted to obtain an affirmative judgment. From an early period in the legislation of our State assignments of choses in action have been permitted, and the assignee authorized to sue in his own name; but such assignments have been made subject to any counterclaim or defense existing against the

SECOND DEPARTMENT, MARCH TERM, 1899.

[Vol. 38.

assignor at the time of the assignment. When an assignee sues on a claim he may be defeated in the claim on account of some setoff in favor of the defendant against his assignor, but, of course, he is not subject to the additional misfortune of having an affirmative judgment rendered against him for his assignor's debt. A set-off can only be used to the extent of defeating the plaintiff's claim. (Kast v. Kathern, 3 Den. 344.) In the case cited the Supreme Court reversed so much of a judgment as gave the defendant an affirmative recovery. Judge JEWETT there said: "What remedy a defendant has under such circumstances to recover the balance due to him over the plaintiff's debt is not very apparent. None is provided by statute." We do not. think, however, that any provision by statute is necessary. If A., being of doubtful solvency, has a claim against B., which he transfers to C. at a time when he is indebted to B. in many times the amount of his own claim against B., why should B. be compelled to either sacrifice the whole excess of indebtedness due from A. to him in case he interposes that indebtedness as a set-off in the suit of C. or to pay C. in full and run the risk of recovering nothing from A. on account of his insolvent condition? Or suppose A., being wholly insolvent and having many small claims against B., should assign such claims to many different persons while B. held but a single demand against A. far exceeding the aggregate amount of the small claims. In such a case the injustice of the rule would be still greater, and if the rule obtains at all I do not see how B. could obtain relief in equity. It seems to me that wherever the defendant cannot obtain affirmative judgment from the plaintiff he has the right to split his set-off, and that his recovery in such an action only extinguishes his set-off to the amount of the plaintiff's claim. This double suit on the same claim is not an anomaly in legal procedure. It certainly at one time obtained in England, and I think is still the practice. It was held in Hennell v. Fairlamb (3 Esp. 104) that where a party in a previous action had interposed a set-off for more than the plaintiff's claim and succeeded on that set-off, he might bring another action for the surplus. I think the same rule should apply in this case, and that the judgment should be reversed.

Judgment reversed and new trial granted, costs to abide the event. All concurred.

Judgment reversed and new trial granted, costs to abide the event.

App. Div.]

SECOND DEPARTMENT, MARCH TERM, 1899.

JOHN D. HICKS and Others, Respondents, v. JESSE TORRENCE
MAGOUN, Appellant, Impleaded with HARRY JOHNSON, Individu-
ally and as the Surviving Partner of the Copartnership of
ARTHUR JOHNSON & BROTHER, and Others, Respondents.

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Building contract — construction of an agreement abrogating it and providing that materials furnished be paid for — arbitration - effect of an agreement to submit "all questions relative to this contract" to an architect — award ineffective, because indefinite.

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After a building contract had been partly executed, the parties thereto entered
into an agreement which provided that the contract should be annulled, and that
"for any labor and materials furnished by the second party (the builder) and used
in construction under said first-mentioned contract and answering its require-
ments, and for any material furnished by the second party for construction
under said first-mentioned contract, and answering its requirements, and now
on the ground adjacent to said construction,
the first party (the
owner) is to be debited with a proportionate part of the contract price fixed or
provided for in said first-mentioned contract, but the second party is to dispose
of any and all such unused materials to the best advantage, but only on terms
to be approved by Henry Ives Cobb, architect, and the first party is to be
credited with the proceeds of the sale thereof," and further provided that “all
matters between the parties, pertaining to or growing out of the contracts
aforesaid, shall be settled and adjusted between them on the basis hereinbefore
set forth." The agreement also provided, "It is further mutually agreed that
all questions relative to this contract shall be referred to Henry Ives Cobb,
architect, whose decision shall be binding upon both parties."
Held, that the provision of the agreement, that "all matters between the parties,
pertaining to or growing out of the contracts aforesaid, shall be settled and
adjusted between them on the basis herein before set forth," indicated an under-
standing that the contractors were to be paid such proportion of the original
contract price as the labor performed and the materials furnished which
answered the requirements of the contract bore to the whole amount;
That the provision that all questions arising under the contract should be referred
to the architect, related only to disputes which might arise between the parties
as to the amount of work performed or of material furnished, and the relations
which these bore to the original contract price, and did not constitute him a
general arbitrator or invest him with power to determine the amount due to
the contractors under the contract;

That, even conceding the authority of the architect to determine that question,
an award made by him, which was wholly inconclusive and did not finally
determine the questions which he assumed to decide, was not conclusive upon
the contractors or upon those claiming under them, especially where it did not
appear that any questions ever arose between the parties or were submitted to

38 573 a167a540

SECOND DEPARTMENT, MARCH TERM, 1899.

[Vol. 38.

the architect, or that either of the parties was ever notified to appear before him, or that the contractors ever recognized or acquiesced in the so-called award.

APPEAL by the defendant, Jesse Torrence Magoun, from a judgment of the Supreme Court in favor of the plaintiffs and certain of the defendants, entered in the office of the clerk of the county of Queens on the 21st day of February, 1898, upon the report of a referee.

The action was brought to foreclose a mechanic's lien upon prem ises now belonging to the defendant Magoun for building materials furnished to the firm of Arthur Johnson & Brother.

Henry A. Monfort, for the appellant.

George M. Baker, for the plaintiffs, respondents.

John De Witt Warner, for the respondent Johnson.

Edward L. Frost, for the respondent Post.

Pierre M. Brown, for the respondents Andrews.

WOODWARD, J.:

In the fall of 1895, Joseph T. Torrence entered into a contract in writing with Arthur Johnson & Brother of St. Louis, Mo., to erect a lodge, stables and water tower upon the premies of the former at Westbury, Queens county, Long Island. At the same time a verbal contract was made to rebuild certain houses already upon the premises, and to construct certain fences and to furnish the materials and labor necessary to accomplish such work. After the greater part of the work under the verbal contract had been completed, and when the work of constructing the lodge, stables and water tower was well under way, the parties reached an understanding by which the written contract was terminated, and a new agreement was entered into, in writing, in which it was agreed that the contract of a previous date should be annulled, and that the parties should be mutually absolved from further obligations under the contract. It was then covenanted and agreed between the parties that "For any labor and materials furnished by the second party (Arthur Johnson & Brother) and used in construction under said first-mentioned contract and answering its requirements, and for any material

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