PART U. CHAPTER VI. PLEADINGS IN COURTS OF RECORD, INCLUDING TITLE I. The consecutive pleadings in an action. ARTICLE THIRD. ANSWER. claim § 501.* [Amended, 1877.] The counterclaim, specified in the last Countersection, must tend, in some way, to diminish or defeat the plaintiff's defined. recovery, and must be one of the following causes of action against the plaintiff, or, in a proper case, against the person whom he rep resents, and in favor of the defendant, or of one or more defendants, between whom and the plaintiff a separate judgment may be had in the action. 1. 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. 2. In an action on contract, any other cause of action on contract, existing at the commencement of the action.(*) [Substituted for portions of Co. Proc., § 150. The words, "must tend in some way to diminish or defeat the plaintiff's recovery," were added in 1877. See Waddell v. Darling, 51 N. Y., 327; National Fire Insurance Co. v. McKay, 21 N. Y., 191; Seligman v. Dudley, 14 Hun, 186. The object of the amendment was to exclude certain causes of action having no connection whatever with that set forth in the complaint, and which could not in any way affect the judgment upon the latter, although the literal reading of the statute would allow them to be interposed, as, for instance, where, in an action to foreclose a mortgage, the defendant set up as a counterclaim a demand on his part for the foreclosure of a mortgage upon a different piece of property. See, also, Smith v. Hall, 67 N. Y., 48. Notwithstanding this amendment, the language is still obscure, but, as the provision has remained unaltered, since its amendment, in 1852, no other radical 201 [26] JUSTICE'S MANUAL changes have been made in it. Rules respecting ance of Counter claims. The next two sections, which have been prepared with great care, are intended to supply its defects. It is supposed that such provisions of the R. S., relating to set-offs, as were not superseded by, or inconsistent with Co. Proc., § 150, remained in force. The following portions of the section of the R. S., regulating set-offs, are regarded as thus abrogated . 1. It must be a demand arising upon judgment or upon contract, express or implied, whether such contract be written or unwritten, sealed or without seal; and if it be founded upon a bond or other contract having a penalty, the sum equitably due, by virtue of its condition, only shall be set off. 2. It must be due to him in his own right, either as being the original creditor or payee, or as being the assignee and owner of the demand. "3. It must be a demand for real estate sold, or for personal property sold, or for money paid or services done; or if it be not such a demand, the amount must be liquidated, or be capable of being ascertained by calculation. "4. It must have existed at the time of the commencement of the suit, and must then have belonged to the defendant. "5. It can be allowed only in actions founded upon demands, which could themselves be the subject of set-off according to law. "6. If there be several defendants, the demand set off must be due to all of them jointly." 2 R. S., 354, Part 3, ch. 6, tit. 2, § 18, subd. 1-6 (3 R. S., 5th ed., 634; 2 Edm., 365, 366). The remainder of the provisions of the R. S., regulating set-offs, are preserved, as far as they are consistent with the existing practice, by the next section.] § 502.* [Amended, 1877.] But the counterclaim, specified in subthe allow division second of the last section, is subject to the following rules: 1. If the action is founded upon a contract, which has been assigned by the party thereto, other than a negotiable promissory note or bill of exchange, a demand, existing against the party thereto, or an assignee of the contract, at the time of the assignment thereof, and belonging to the defendant, in good faith, before notice of the assignment, must be allowed as a counterclaim, to the amount of the plaintiff's demand, if it might have been so allowed against the party, or the assignee, while the contract belonged to him. 2. If the action is upon a negotiable promissory note or bill of exchange, which has been assigned to the plaintiff after it became due, a demand, existing against a person who assigned or transferred it, after it became due, must be allowed as a counterclaim, to the amount of the plaintiff's demand, if it might have been so allowed against the assignor, while the note or bill belonged to him. 3. If the plaintiff is a trustee for another, or if the action is in the name of a plaintiff, who has no actual interest in the contract upon which it is founded, a demand against the plaintiff shall not be allowed as a counterclaim; but so much of a demand existing against the person whom he represents, or for whose benefit the action is brought, as will satisfy the plaintiff's demand, must be allowed as a counterclaim, if it might have been so allowed in an action brought by the person beneficially interested. (*) [Subd. 1 has been modelled upon subd. 8 of § 18 of the R. S., cited in the note to the last section; subd. 2, upon subd. 9 of the same section; and subd. 3, upon subd. 10 of the same section, and so much of subd. 7 as is not abrogated. This section, as enacted in 1876, contained also a subd. 4, founded upon subd. 11 of § 18 of the R. S. The amendatory act of 1877 struck out subd. 4, and thus probably effected a change in the law relating to counterclaims against receivers and trustees of insolvent and imprisoned debtors. It will be noticed that this section contemplates the abolition of the word, "set-off", as descriptive of a legal remedy, and the substitution of the word, "counterclaim", in all cases where the defendant interposes a cross demand; whether it accrued originally against the plaintiff, or against the person whom he represents. This was, apparently, the intention of § 150 of the Code of Procedure; for a right to enforce a set-off is certainly an equitable "cause of action arising on contract", and existing against the plaintiff ", even where the plaintiff is the assignee of the original demand. The understanding, however, seems to have been otherwise.] 66 PART II. claim, when de fendant 505. In an action against an executor or an administrator, or Counterother person sued in a representative capacity, the defendant may set forth, as a counterclaim, a demand belonging to the decedent, or other person whom he represents, where the person so represented capacity. would have been entitled to set forth the same, in an action against him. (*) [Section 25 of the same titlo of the R. S. (3 R. S., 5th ed., Edm., 367), adapted to the present system.] 636; 2 tor or adminis trator. 506.* In an action brought by an executor or administrator, in Id.; when plaintiff is his representative capacity, a demand against the decedent, belong- an execuing, at the time of his death, to the defendant, may be set forth by the defendant as a counterclaim, as if the action had been brought by the decedent in his lifetime; and, if a balance is found to be due to the defendant, judgment must be rendered therefor against the plaintiff, in his representative capacity. Execution can be issued 203 (a) This section is applied to justices' courts by § 2945, p. 44. JUSTICE'S MANUAL upon such a judgment, only in a case where it could be issued upon a judgment, in an action against the executor or administrator.(*) [Id., §§ 23 and 24. The demand against the decedent must have been due and payable in his lifetime. See Jordan v. S. & L. Nat. Bank, 74 N. Y., 467, which is applicable to this section.] Verifica tion, how TITLE II. Provisions generally applicable to pleadings. $525.* [Amended, 1879.] The verification must be made by the and by affidavit of the party, or, if there are two or more parties united in whom made. Form of affidavit of verification. interest, and pleading together, by at least one of them, who is acquainted with the facts, except as follows: 1. Where the party is a domestic corporation, the verification must be made by an officer thereof. 2. Where the people of the State are, or a public officer, in their behalf, is the party, the verification may be made by any person acquainted with the facts. 3. Where the party is a foreign corporation; or where the party is not within the county where the attorney resides, or, if the latter is not a resident of the State, the county where he has his office, and capable of making the affidavit; or, if there are two or more parties united in interest, and pleading together, where neither of them, acquainted with the facts, is within that county, and capable of making the affidavit; or where the action or defence is founded upon a written instrument for the payment of money only, which is in the possession of the agent or the attorney; or where all the material allegations of the pleading are within the personal knowledge of the agent or the attorney; in either case, the verification may be made by the agent of or the attorney for the party.(") [Part of Co. Proc., § 157.] § 526. The affidavit of verification must be to the effect, that the pleading is true to the knowledge of the deponent, except as to the 204 (a) Applied to justices' courts by § 2946, p. 44. matters therein stated to be alleged on information and belief, and that as to those matters he believes it to be true. Where it is made by a person, other than the party, he must set forth, in the affidavit, the grounds of his belief, as to all matters not stated upon his knowledge, and the reason why it is not made by the party.(") [From Co. Proc., § 157. The requirement, that the agent or attorney should set forth his knowledge in the affidavit, has been omitted, because § 524 requires that the pleading should show whether he makes an allegation upon knowledge, or upon information and belief. Where the affidavit of verification by an attorney was inconsistent with an allegation in the answer, the court set aside the answer and required the defendant to serve a copy of an answer verified by himself. Jaillard v. Tomes, 3 Abb. N. C., 24. Where all the allegations are made upon the knowledge of the person verifying, the affidavit may omit the statement as to information and belief. Ladue v. Andrews, 54 How. Pr., 160. A statement that the attorney "could not find the party in the city", gives no sufficient reason for a verification by an attorney, and such an answer may be treated as a nullity. Lyons v. Murat, id., 23.] 205 PART IL (a) See § 2235, p. 328. |