Upon the trial, previous to the introduction of evidence, the defendant moved that the complaint be dismissed on the ground that the answer contained material allegations of new matter, constituting a counter claim for $200, and as it had not been controverted by a reply, the allegations must, for the purposes of the action, be taken as true, and the plaintiff's claim being only $200, the defendant was entitled to a judgment upon the pleadings. This motion was denied, and the defendant excepted. This decision presents the most important question in the case, and I think the defendant has misapprehended the effect of the pleadings. Let us bring here under notice the provisions of the Code which, it is supposed, control the question. The answer is to contain: (1.) A general or specific denial of each material allegation of the complaint controverted by the defendant; (2.) A statement of any new matter constituting a defence or counter claim. (Code, § 149.) The counter claim must be one existing in favor of a defendant and against a plaintiff, between whom a several judgment may be had in the action, and arising out of one of the following causes of 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 arising on contract, any other cause of action arising on contract, and existing at the commencement of the action. (§ 150.) When the answer contains new matter, constituting a counter claim, the plaintiff may, within twenty days, reply to such new matter, denying generally or specifically each allegation controverted by him, c. (§ 153.)
By § 168, every material allegation of new matter in the answer, constituting a counter claim, not controverted by *Page 256 the reply, shall for the purposes of the action be taken as true.
A good cause of action was set forth in the complaint, and the defendant, by his answer, put in issue the material allegations of the complaint. The new matters pleaded did not dispense with the necessity of trying the issues formed directly upon the complaint. The defendant did not and does not now claim that the new matter in the answer showed that the plaintiff had no cause of action, but he claimed that the new matter showed that he, the defendant, had a cause of action or counter claim against Ritchie, the assignor, in which his damages were equal to the damages claimed by the plaintiff, and that when these damages were set-off or recouped, they left the plaintiff without any right to damages, and that therefore his complaint should be dismissed. This position cannot be sustained. The new matter stated constituted in no sense a set-off. It constituted, if applicable to the case made by the complaint, that is, if it related to the same contract or employment stated in the complaint, a defence upon the ground of failure on the part of Ritchie to perform the agreement. A set-off could in no way arise out of such failure. Did the answer, in which the defendant proposed to recoup and set-off his damages, state facts authorizing a recoupment, or facts involving the doctrine of recoupment in any wise? Clearly not. The facts, assuming that the pleader intended them to apply to the cause of action stated in the complaint, did not involve the doctrine of recoupment in any form. They showed a special agreement with Ritchie in relation to the engravings, and a failure on his part to perform the agreement, whereby the defendant alleges that he sustained damages. He had never received the engravings. If the facts stated were true, then he had a good cause of action against Ritchie for damages for a breach of the special agreement, but Ritchie had no cause of action against him. In short, the very facts which would give the defendant a *Page 257 cause of action against Ritchie for damages for a breach of the agreement, would show that Ritchie never had any cause of action against him, and there would be nothing out of which to recoup his damages.
Recoupment always implies that the plaintiff had a cause of action, but the defendant alleges that he too has a cause of action growing out of a breach of some other part of the contract upon which the action is founded, or for some other cause connected with the contract, and it is in the nature of a cross action. Under the former system of pleading the defendant could not make the defence by a special plea in bar, as it was a rule that such plea must state facts forming a bar to the action, whereas recoupment in its very nature admitted the plaintiff had a cause of action. (Nichols v. Dusenbury 2 Comst., 284.)
The counter claim of the Code is undoubtedly broader and more comprehensive than set-off and recoupment. It authorizes a resort by the defendant, to causes of action by way of defence, other than set-off or recoupment. It has attempted, however, to limit and define the defendant's rights. It clearly authorizes set-off and recoupment, and I had no doubt they were authorized by the first Code, under the word defence, in the section relating to the answer. However that was, it is clear they are authorized by the amendments of 1852, and something more. By the second subdivision of § 150, in an action arising on contract, the defendant may avail himself by way of defence of any other cause of action arising also on contract, and existing at the commencement of the action. It is not claimed by the defendant that this provision has any application to the present case. It is claimed that the plaintiff, as assignee of the demand, took it subject to all equities to any set-off or right of recoupment which the defendant had, and this claim is undoubtedly well founded. As we have seen, the defendant had no right of set-off, recoupment, or cause of action against this plaintiff, who by becoming assignee *Page 258 did not subject himself to a cause of action existing against his assignor so as to have judgment against him for damages. If the provision of the Code just cited, should be construed as authorizing a defendant, when sued by an assignee in an action on contract, to avail himself of any other cause of action on contract against the assignor, so far as to satisfy or compensate the damages in the action by the assignee against him, it would not benefit the defendant in this case. Here the facts stated in the answer related to the same engagement or contract, upon which the plaintiff's action was founded, and if the plaintiff had a good cause of action the defendant had none. If the plaintiff, as the assignee of Ritchie, had no cause of action, then the defendant had no cause of action against Ritchie, which he could use against the plaintiff. In short, it was necessary to try the issue joined by the denial in the answer, and upon the trial of that issue all the rights of the defendant in this action could be protected. If Ritchie failed to perform his agreement the plaintiff could not recover, and the defendant then, if he had sustained damages by a breach of the agreement by Ritchie, could bring his action against him. The facts stated in the answer did not constitute a counter claim, and no reply was necessary to put them in issue. No error, therefore, was committed in refusing to dismiss the complaint.
Ritchie, the assignor, was sworn as a witness for the plaintiff. He was examined touching the transfer of the cause of action to the plaintiff. The counsel for the plaintiff then proposed to examine him on the other issues in the case. The counsel for the defendant thereupon objected that Ritchie should not be admitted to be examined on the part of the plaintiff, but he specified no ground of objection The defendant is the appellant, and he must show error before he can ask to have the judgment reversed. If the case or exceptions are so settled that it is doubtful whether error was committed, the judgment ought not to be reversed *Page 259 In the present case it seems to me quite clear that the objection to Ritchie being examined to maintain the issues on the part of the plaintiff, was that he was still the owner of the demand, and that the action was prosecuted for his immediate benefit, and I think the court must have so understood the objection. Being of this opinion, I shall not consider the question now raised of the necessity of notice under the 399th section of the Code. The judgment should be affirmed.
Judgment accordingly.