The provisions of section 974 of the Code of Civil Procedure no doubt are applicable to a case where a counter-claim is set up as a defense in the answer which presents an issue to be tried, often the only one in the case, upon which an affirmative judgment is demanded against the plaintiff, and for which a separate action might be maintained to recover damages of the plaintiff. Does the answer here set up any such defense?
The action is of an equitable character, based on the articles of copartnership, and the relief sought is an accounting or settlement of the copartnership accounts and a dissolution of the copartnership.
The defendant claims in his answer that he has sustained damages by reason of the plaintiff's violation of the thirty-third article of the copartnership agreement, which provided that the good will of the business should be sold to such of the partners as would within three calendar months bid the highest price for the same. The answer alleges that the plaintiff has disregarded this provision, and has appropriated to himself the good will of the business; that the good will as an asset was worth $200,000, which sum he seeks to counter-claim, etc., against any sum which may be found due the plaintiff. It then proceeds to state, as a separate counter-claim, that the plaintiff fraudulently misappropriated partnership funds to a large amount, stating wherein this was done; that he fraudulently failed to pay over money, and defrauded defendants' firm of large amounts on certain accounts, and concludes with a general allegation that he appropriated the good will of the business, claiming to offset the same, and prays that an issue be framed and sent to a jury to determine the amount of damages due by the plaintiff to the defendant by reason of plaintiff's violation of the *Page 578 contract, which amount he claims should be allowed him in the accounting between the partners. The allegation as to the amounts appropriated are clearly matters for an accounting, which can be easily ascertained, and are properly within the scope and purpose of an equitable action of this character. As to the $200,000, and a claim of $12,500 for the good will, they are not so distinctly stated as to make out a cause of action per se. But they are commingled with other statements and allegations in reference to the transactions, which evince that they were considered and regarded by the pleader as connected with the accounting; and as they can only arise from a breach of the provision in the contract referred to, they sound in contract and are proper items which may be proved upon the accounting, and be set off against any sum found due the plaintiff. These matters present no counter-claim which shows a separate and distinct cause of action which entitles the defendant to a trial by jury. Had it been intended to claim damages for the fraudulent appropriation of the good will, or of the partnership funds or property, the answer should have so stated in a separate and distinct form, with proper allegations, so as to make out a cause of action for which a separate action might be brought. As we have seen, this is not done; and the entire pleading shows merely that the defendant presents his claims as a partner for adjustment upon the accounting, without any design to claim damages as an independent cause of action. Whether a separate action could be maintained to recover the value of the good will or for damages, without an equitable accounting of the copartnership affairs, it is not necessary to determine upon this appeal; and it is sufficient to say that no counter-claim is made out which demands that a separate issue should be made up for a trial by jury.
The order was right and should be affirmed.
All concur.
Order affirmed. *Page 579