#### Louis Block, Appellant, *v.*Myer Nussbaum, Respondent.

First Department,

July 10, 1914.

Pleading — libel — defense — justification — demurrer to second amended answer.

In an action for libel based upon a letter -alleged to charge that the plaintiff obtained moneys by false representations inducing the sale of stock, a defense that the money from the sale of the stock was obtained by reason of false and fraudulent representations to the effect that the plaintiff was engaged in the sale of the stock for the benefit of the corporation, and not for himself; that such statements were false and known to be such when made and were intended to and did deceive the defendant and another who relied upon them in making purchases, is good, and a demurrer thereto should be overruled.

Where a defendant has been permitted by the court to serve a second amended answer, the plaintiff may test its validity by demurrer.

Appeal by the plaintiff, Louis Block, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 18th day of April, 1914, overruling his demurrer to the first separate defense set up in the answer, and striking out his demurrer to the third separate defense.

*Charles P. Robinson,*for the appellant.

*I. H. Zinovoy,*for the respondent.

McLaughlin, J.:

Action against an attorney for an alleged libel contained in a letter sent by him, while acting as attorney for one Riley and himself, to an attorney representing the plaintiff.

*464The answer originally interposed admitted the authorship of the letter and the sending of the same to the attorney who was at that time acting for plaintiff, and then set forth three separate defenses: (1) Justification; (2) a general release executed by plaintiff to defendant; and (3) privilege. The plaintiff, demurred to all three defenses upon the ground that they were insufficient in law upon the face thereof. The court at Special Term overruled the demurrer as to the first and second defenses and sustained it as to the third. From the order overruling the demurrer as to the first and second defenses the plaintiff appealed. No appeal was taken by defendant from the order sustaining the demurrer as to the third defense. Pending the appeal, however, the defendant availed himself of the privilege given to him of serving an amended answer, which was substantially the same as the one originally served. The time for plaintiff to reply, demur or otherwise plead to the defenses expired on the 25th of January, 1914," but from the time the answer was served until the 23d of March, 1914, plaintiff took no further steps with reference to said third defense. This court, on the appeal taken, reversed the Special Term and sustained the demurrer to the first defense, but permitted the defendant to serve an amended answer (160 App. Div. 678). After this decision was handed down the defendant served a second amended answer, which with the exception of the first defense was substantially the same as the first amended one. Upon its receipt plaintiff served a reply to the second defense and demurred to the first and third. The demurrer was returned by the attorney for defendant, with a notice that the time to serve a demurrer to the third defense had expired. Plaintiff then obtained an order to show cause why defendant’s attorney should not be compelled to receive the demurrer. The plaintiff also made a motion to sustain the demurrer to the first and third defenses. Both motions were heard together and resulted in an order overruling the demurrer to the first defense -and striking out the demurrer as to the third, and plaintiff appeals.

I am of the opinion that the demurrer as to the first defense was properly overruled. The defects existing in the first separate defense in the answer originally served, and which were pointed out in the opinion of Mr. Justice Clarke on the former *465appeal, I think have been remedied by the insertion of other allegations. Facts are here pleaded which show that the money obtained by the sale of the stock was by reason of false and fraudulent representations, to the effect that plaintiff was engaged in the sale of the stock for the benefit of the corporation and not for himself; that such statements were false, and known to be such when made; and were intended to and did deceive the defendant and Biley — they relying upon them in making the purchase.

I am also of the opinion that the court improperly struck out the demurrer as to the third defense. The defendant had a right to serve the second amended answer, because this court granted him that privilege, and the plaintiff could test its validity by demurrer just as he could the original one. *(Stearns*v. *Lichtenstein,*48 App. Div. 498.) The second amended answer took the place of the first, as the first did of the original. (L*ewis*v. *Pollack,*85 App. Div. 577; *Ullman*v. *Tanner,*127 id. 808.)

So much of the order appealed from, therefore, as overruled the demurrer to the first defense is affirmed and that part of it which struck out the demurrer to the third defense is reversed, the motion denied, and the matter remitted to the Special Term to pass upon the demurrer, without costs to either party.

Ingraham, P. J., Scott, Dowling and Hotchkiss, JJ., concurred.

Order modified as stated in opinion, motion denied, and matter remitted to Special Term, without costs to either party. Order to be settled on notice.