I am unable to agree with the conclusion reached for the reason that the facts pleaded as a counterclaim also constituted a complete defense to an action on the policy either by the corporation defendant or the individual defendants; as to the former, by reason of the fraud alleged, and as to the latter, in addition to their participation in the fraud, by reason of their alleged insolvency, liquidation and dissolution, any of which events terminated the policy under its terms. In this connection it is to be noted that , in order to establish the fraud it would be necessary to show the insolvency, liquidation and dissolution.
The fact that the counterclaim asks for affirmative relief cannot deprive the plaintiff of its right to a trial at law of the action. The defendant is not deprived of its defense, but alleges a good defense against not only the corporation plaintiff but against the individual defendants, by reason of the same facts which give rise to its counterclaim. (Bennett v. Edison Electric Illuminating Co., 164 N. Y. 131.) In that case affirmative relief was sought by the defendant and the court denied the defendant’s request to have a prior separate trial of that issue, saying: “ The provisions of- the Code referred to, we think, have no application to an issue of this character, but were intended to provide for the mode of trial of an issue arising upon a counterclaim in which the facts alleged do not constitute a defense and are not available as such.”
There was no abuse of discretion in denying the motion and the order should be affirmed.
Order reversed, with ten dollars costs and disbursements, and motion granted, with ten dollars costs.