The Xenia Branch Bank a. Lee.

The circumstance that the defendant has to superadd an allegation of demand, protest, and notice to the plaintiffs as indorsers, does not alter the case. This added fact is only a means

a. Richards, 22 Barb., 143), although the defendant may recoup his damages, or set up a counter-claim on a cause of action arising out of the contract or transaction set forth in the complaint as the foundation of the plaintiff's claim, or connected with the subject of the action. (Code, § 150, subdv. 1.)

The defence interposed, though good as a lien, and therefore a justification for withholding the things claimed, is not good as a counter-claim upon which the defendant is entitled to affirmative relief. His remedy is to foreclose his lien in the manner provided by law. That portion of the answer objected to, therefore, will not be stricken out because it is good as a defence; but in so far as it is alleged or asserted to be a counter-claim, it must be disregarded. If the lien be established the plaintiff must fail, and judgment be rendered against him on the question of the right to possession, but nothing more. The motion to strike out will, for the reasons assigned, be denied, with $5 costs to abide the event.

ROBINSON a. FLINT (Supreme Court, First District, Special Term, 1858).—This was an action for damages, for false representations in inducing the plaintiffs to enter into a contract, and for a breach of the contract. The two grounds on which damages were claimed were separately stated in the complaint as separate causes of action. The defendants demurred on the ground, 1. That the first statement did not state facts sufficient to constitute a good cause of action; and, 2. That the two causes of action were improperly united.

Mr. Hudson, for the plaintiffs.

Foster & Thompson, for the defendants.

INGRAHAM, J.-The complaint avers sundry contracts made by different persons for furnishing iron to the Sacramento Valley Railroad Company, by which a certain quality of iron was to be furnished at a certain price. The plaintiffs afterwards assumed the contract from the company, provided it could be carried out as originally contemplated. They then applied to the defendants to ascertain if the iron originally purchased by the company was still on hand in Boston, and whether the defendants would carry out the contract as originally contemplated. It then avers that the defendants, intending to defraud the plaintiffs, represented to them that the iron was still on hand, kept for the company, and that they were in a condition to carry out the contract, when such representations were known to the defendants to be untrue; that in consequence of such false representations they made a contract with the defendants to deliver the said iron; that the defendants delivered other iron of an inferior quality, and that the plaintiffs were damaged thereby.

These facts show a cause of action for a fraudulent representation. What the damages may be, or whether the plaintiffs claim in their complaint damages such as can be recovered in the action, is not a question to arise on demurrer. The demurrer admits all the facts, and the only question is, whether a good cause of action is made out by them. Of this there can be no doubt. The complaint shows a false representation, known to be false, made on the foundation of a contract with a person deceived thereby, and damages in consequence of such decep

The Xenia Branch Bank a. Lee.

of showing how the defendant's cause of action arises out of the transaction relied upon, and is made complete or consummate. If it were more doubtful than it seems to us to be, that the

tion. I know no other requisite to make out a sufficient cause of action for a false representation.

The second cause of demurrer is the improper joinder of actions. In addition to the first cause for the tort, the complaint contains a second cause of action, founded on the same contract, which, after referring to the contract, and averring that the defendants by it agreed to send the iron to San Francisco, states that they did not send the iron before mentioned, but delivered iron of inferior quality of much less value, and that they sustained great damage thereby.

It is contended that this claim arises on the contract, and that the other being in tort, the two causes are improperly joined together.

It must be conceded that causes of action arising out of different transactions must be of one of the classes enumerated in section 167, and that one cause for contract and one for tort cannot under such circumstances be united. The latter cause of action is evidently intended to be a claim on contract for not delivering the iron as agreed to by the defendants. It avers no fraud or false representation upon which a tort could be charged, and without that it cannot be said to belong to the same class, as a cause of action, with the first; unless it can be brought within the provisions of the first subdivision-viz., "Where the several causes of action all arise out of the same transaction, or transactions connected with the same subject of action."

It has been held that causes of action, although arising out of the same transaction, cannot be joined if they are inconsistent with each other. (Smith a. Hal lock, How. Pr. R., 73; Sweet a. Ingram, 12 Ib., 331.)

But I have not been referred to any case where the court have held that two causes of action arising out of the same transaction, and upon both of which a recovery may be had, may not be united, even if they differ in their nature, and could not therefore be united if they arose out of different transactions.

Section 167 of the Code provides that the plaintiff may unite several causes of action, whether they be such as were denominated legal, or equitable, or both, where they all arise out of the same transaction, or transactions connected with the same subject of action.

The plain reading of this section is, that the plaintiff may unite, first, as many legal causes of action as he pleases, arising out of the same transaction: second, as many equitable causes of action as he pleases, arising out of the same transac tion: third, as many legal and equitable causes of action as he pleases, arising out of the same transaction: fourth, as many causes of action as he pleases, arising out of different transactions connected with the subject of the action.

In Smith a. Hallock (8 How. Pr. R., 73), Justice Strong says that this section refers to cases which are consistent with each other-not to those which are con tradictory.

In Dorman a. Kellam (4 Abbotts' Pr. R., 202), the court held such causes to be improperly united, but those causes did not arise out of the same transaction. In Badger a. Benedict (4 Abbotts' Pr. R., 176), the point was distinctly held that such causes might be united-viz., one in tort and one in contract, both of which arose out of the same transaction.

By transaction, I understand the whole proceedings, commencing with the ne

The Xenia Branch Bank a. Lee.

counter-claim in this case arises out of the same transaction on which the plaintiff's claim is founded, we should still think it clear that the defendant's counter-claim might be set up. The

gotiation and ending with the performance of the contract, where the matter in controversy arises out of a contract; and I see no difficulty in carrying out, under the present system of pleading, what is the fair meaning of the words used in section 167. The answer is only to be a statement of facts showing that upon each count the plaintiff has no right to recover. The judgment, if on both claims, would only be for so much money; and there is no difficulty now in en tering up judgment as formerly, even if the causes are in tort and contract. The only point upon which there would be doubt as to the proper proceeding, might be as to the execution. In one case (tort) it might be against the person-in the other, against the property. The answer to this is, if the plaintiff thus unites claims, he loses his right to proceed against the body, and must be content with the other execution.

My conclusion is, that the demurrer is not well taken, and that plaintiffs must have judgment.

Judgment for plaintiffs on demurrer, with leave to defendants to answer on pay ment of costs.

FELLERMAN a. DOLAN (New York Common Pleas, Special Term, 1858).-This was an action for slander, in which the answers set up: 1. A denial; and, 2. A counterclaim for a slander uttered by the plaintiff against the defendant.

DALY, J.-Without passing upon the question whether, in an action of slander, slanders by the plaintiff against the defendant may be set up by way of counterclaim, it is sufficient for the decision of this motion to say, that it does not appear from the answer that the defamatory words alleged to have been uttered by the plaintiff against the defendant, had any connection with the subject-matter of this action, except an averment at the end of the answer, that they had stated by way of conclusion. If slander of the defendant by the plaintiff could be the subject of a counter-claim, where the plaintiff brings an action of slander, which I very much doubt, it would have to appear upon the face of the pleadings that it arose out of the transaction which was the foundation of the plaintiff's claim, or was connected with the subject of the action. In this case no connection is shown between the two causes of action. It does not appear that the words uttered by the defendant were uttered by way of recrimination, after the uttering of the words attributed to the plaintiff at the same interview, and in the presence of the same hearers or bystanders; but, on the contrary, the defendant denies absolutely each and every allegation in the complaint.

He first denies that he uttered the words attributed to him in the complaint, and which constitute the plaintiff's cause of action, and then sets up that he has a cause of action against the plaintiff for words spoken by the plaintiff respecting him, shortly before the day when, it is alleged in the complaint, that he uttered the words attributed to him against the plaintiff. This is, therefore, a distinct cause of action, in no way connected with the other action, or forming any part of the transaction on which the plaintiff's claim is founded. The defendant does not set up that what the plaintiff said respecting him induced him to speak of the plaintiff as alleged, in retaliation. On the contrary, he does not admit, but expressly denies, that he said any thing about the plaintiff. By his own showing, then, there is no connection between the two. One did not arise or grow out of

The Xenia Branch Bank a. Lee.

third clause in the analysis above made of the first subdivision of section 150 of the Code clearly allows it.

The present is a case in which the counter claim is directly and immediately "connected with the subject of the action." The subject of the action is either the right to the possession of the bills of exchange in controversy, or it is the bills of exchange themselves. The defendant's counter-claim is not only connected with, but inseparable from, either or both.

The object of the action is damages, but the subject is the bills of exchange, or the right to their possession. If the plaintiffs show themselves entitled to these bills, they must recover damages. If the defendants show themselves entitled, then they are in a condition to assert their right to have the amount thereof from the plaintiffs. The plaintiffs' claim, and the defendants' counter-claim, are then connected with the subject-matter which is to be inquired into in this action; and the investigation of the subject will determine whether the plaintiffs are entitled to the bills or to their value as damages, or the defendants are entitled to hold them, with recourse to the plaintiffs as indorsers.

And this suggests the propriety and wisdom of the provision of the Code under consideration, and the reason which induced its enactment. After the question upon which the right of the plaintiffs to have these bills of exchange has been fully investi gated and determined in favor of the defendants, there would seem no sensible reason for turning the defendants over to a new suit to recover against these plaintiffs as indorsers, with all the additional expense and delay which such new action might involve, and in which also the title of these defendants might be again put in issue.

It is plausibly argued that the counter-claim provided for in the first subdivision of & 150 embraces only what was formerly called recoupment, and that recoupment implied an admission

the other; and without something of the kind they cannot be said to arise out of the same transaction, or to be connected together at all.

They are distinct causes of action of the same genus or kind, and that is all. The allegation of the defendant at the close of the answer, that all the matters set up in the answer are connected with the subject of the plaintiff's action, does not make it so. We look to the substantive facts on which he rests his counter-claim, to determine whether the claim is connected with the subject of the action or not. The motion must be granted.

The Xenia Branch Bank a. Lee.

of the plaintiff's claim, and sought an abatement therefrom, either to the extinguishinent of a part or the whole thereof. Such was, no doubt, the character of recoupment. It implied that the plaintiff's claim was to be allowed, but that another cause of action was to be satisfied out of it. (Nichols a. Dusenbury, 2 Comst., 286; Vassear a. Livingston, 3 Kern., 257; Batterman a. Pierce, 3 Hill, 171.)

But now the definition of counter-claim must be considered in connection with section 174 of the Code, which authorizes the Court in the same action to grant to the defendant any affirmative relief to which he may be entitled.

This opens to the defendant the full right to assert his claim to any relief, legal or equitable, to which, upon the facts alleged in his answer, he would be entitled had he prosecuted his crossaction.

It permits a defendant, therefore, to set up, in answer to an action on a note or bond, facts which show not only that he ought not to be required to pay the note or bond sued upon, but that the note or bond ought to be given up to be cancelled; or, in the language of Mr. Justice Bosworth, in Gleason a. Moer (2 Duer, 642), it permits the defendant to ask "any equitable relief to which he is entitled against a legal demand-which formerly could only be had by filing a bill in chancery—and also the affirmative relief, which in equity suits could be had only by a cross-bill;" and for the same reason it must be held to permit the defendant to have relief in its nature strictly legal, if it arises out of the very matter or subject which the plaintiff's claim brings under investigation. (Ogden a. Coddington, 2 E. D. Smith's C. P. R., 326, 327.)

Again: the right of the plaintiff to claim, and the right of the defendant to counter-claim, upon any given or supposed facts in controversy, must, we think, be reciprocal.

Now, suppose the defendants were plaintiffs setting up their title to the bills of exchange in question, and claiming to recover the amount of these bills from the Xenia Bank (the pres ent plaintiffs) as indorsers, it could not for a moment be doubted that the then defendants (the present plaintiffs) could, under this same first subdivision of section 150, set up in answer the very facts which they have in this complaint alleged, and pray, as a counter-claim, that these bills be delivered up to them as