#### Robert W. De Forest, Plaintiff, *v.*Clarence Andrews, Defendant.

(Supreme Court, New York Special Term,

April, 1899.)

1. Action on a bond by an attorney as assignee — Construction of Code Civil Procedure, § 73.

An answer, interposed by the obligor of a bond to an action thereon, which alleges that the plaintiff took an assignment of the bond in-contravention of section 73 of the Code of Civil Procedure, will be held insufficient on demurrer where it does not on its face disclose that the assignment was taken by the plaintiff for the very purpose of bringing suit on the bond and for no other purpose whatever.

2. Same — Defense of res adjudicata cannot be predicated on a verdict.

A mere -verdict in a prior action between the same parties, involving the same transactions, is not sufficient to support the defense of *res adjudicata.*

3. Same — Counterclaim of a tort — Other partners not parties.

A conversion, to which the plaintiff’s assignors were strangers, cannot be made a counterclaim to the plaintiff’s present action on contract on a bond; nor, assuming that the facts pleaded are sufficient to sustain an action on contract against a partnership of which the plaintiff was a member, can such contract cause of action be made available as a counterclaim where the other partners are not parties to the present action. '

4. Same — Insufficient denial that money is unpaid on a bond,

Where the complaint in an action on a bond alleges that a sum named is “ due, owing and unpaid thereon”, the defendant’s denial that the sum named or any other sum whatever is due or owing thereon, raises no issue, as he has admitted that the sum named is unpaid.

This action is brought to recover a balance claimed to be due upon a bond executed by the defendant to the plaintiff’s assignors in the sum -of $20,000, to secure the payment of which a mortgage covering certain premises in the city of New York, of even tenor *146and date with the said bond, was given as,collateral security.. The complaint also alleges the sale of said premises under the fore-/ /closure of a prior mortgage- thereon, the payment to the plaintiff of the surplus moneys arising under such ¡sale;, that no',other payments have been made on account of the principal or interest of said bond since the receipt of said- surplus moneys,- and that there is now due the sum of $14,432.96;' and demands judgment for the said sum- with interest from December 17, 1894, the, date of the said payment of the surplus money^?

The'answer denies only that the plaintiff is.a *bona fide*holder of said bond for value, and that there is now due or owing upon said bond and mortgage the -sum alleged in the, complaint or- any sum whatever/ and sets up Under six separate and distinct defenses certain transactions had between the defendant and a firm of which'he alleges the plaintiff was a member; that the plaintiff took the assignment of said bond for the pui'Pose of suing thereon, in violation of section -73 of the pode of Civil Procedure, and is, therefore, barred from bringing this' action; that in .an action heretofore brought by the defendant against the plaintiff herein and others, involving the subject-matter ] of this suit, á verdict was rendered in favor of the defendant herein, and that said verdict is.res *adjudicaba*as to"the issues involved in the present action; the fifth defense alleges, a cause Of action for conversion, and the sixth and seventh defenses set up ¡counterclaims by reason of transactions had between the defendant and the plaintiff’s said-firm. |

The plaintiff demurs to the said answer and to each and every of the separate defenses therein, on the ground that they are insufficient in law ujion the face thereof ;j to the counterclaim set forth in the fifth defense On the grounds that it appears on the face of the answer that another. action is pending between the same parties for the same cause of action,- that the counterclaim is not of the character specified in section 501 of the -Code of Civil Procedure, in that the causé of action arises, if at all, in tort, does not arise out of the contract or! transaction set forth in the complaint, is not connected with the subject-matter of the action, and does not set forth a cause of action against the plaintiff and in favor of the defendant in which a separate judgment may be had; to the sixth separate defense on the grounds that it does not state facts Sufficient to constitutes a cause of action, and that the alleged counterclaim set forth therein is not of the char*147acter specified in. section 501 of the Code of Civil Procedure, for the same reasons assigned as the grounds , of the demurrer'to the fifth alleged defense; and to the seventh separate defense, on the ground that the counterclaim contained therein is not of the character specified in section 501 of the Code of Civil Procedure for the reasons stated in regard to the counterclaims alleged in the fifth and sixth separate defenses.

Robert Thorne, for plaintiff.

John C. Tomlinson, for defendant.

Beekman, J.

1. There is no claim, nor does the answer show, that the bond upon which suit has been brought was not enforceable against the defendant in the hands of the plaintiff’s assignors. That being the case, and the plaintiff having succeeded to all of their rights under the assignment, I fail to perceive how the matters which are set forth in the second defense can be a bar to the action. The demurrer to this defense is sustained.

2. The third defense is also insufficient. Although the defendant avers, in terms, that the plaintiff took the assignment of the bond in suit with the intent and purpose of bringing an. action . thereon against the defendant, the facts which he pleads in support of this utterly fail to sustain his conclusion. It has been held that the object of the statute (§ 73, Code Civ. Pro.) was to prevent attorneys from buying claims for the purpose of obtaining costs by the prosecution thereof, and that to constitute the offense the purchase must be for the very purpose of bringing such suit and for none other. Baldwin v. Latson, 2 Barb. Ch. 306; Moses v. McDivitt, 88 N. Y. 62. No such, purpose is disclosed upon the face of the pleading.

3. The fourth defense is also bad. A mere verdict in an action between the same parties, concerning the same transactions, no judgment having been rendered thereon, is not sufficient to support a plea of *res adjudicata.'*Bigelow on Estoppel, 51.

4. The fifth defense is by way of counterclaim, and sets up a cause of action for conversion. As the, plaintiff sues on contract, such a counterclaim cannot be interposed unless it arises out of the contract or transaction set'forth in the. complaint as. the foundation of the plaintiff’s claim, ór connected with the subject of the action. § 501, Code Civ. Pro, The transaction upon *148which the plaintiff’s demand is based wasj the loan of money by plaintiff’s assignors, for which the bond-in suit was given. The matters alleged in the counterclaim are not in any proper sense connected with the subject of the action, hut constitute a different transaction to which the plaintiff’s assignors were strangers, and against whom no such claim could have beeh asserted. The plaintiff, as their assignee, stands in their shoes. If it be claimed that the facts alleged are, also, sufficient ¡to support a ■ cause of action on contract, the answer is that the j defendant has framed his plea on the theory of a tort, and he should be held to the particular form in which he has moulded his claim and characterized it. Davis v. Aikin, 85 Hun, 554. If, however, it may be considered that a causé of action on contrast has been stated, then the defense is open to the further objection, taken to it by the demurrer,, that it states a cause of action against a copartnership of which the plaintiff was a member, and' is, therefore, not enforceable here, the plaintiff’s copartners not being parties to the action. The demurrer to this defense must, therefore, be sustained.

5. The sixth defense and counterclaim, is open to the shine objections, and in addition I do not thinkj that the facts therein-stated are sufficient to. constitute á cause of: action.

6, The seventh and last defense and counterclaim is challenged by the demurrer on the ground that it sthtes a cause of action against a copartnership of which the plaintiff was a member, and cannot, therefore, be set up against him, his copartners not being parties to the record. The objection is well taken.

I do’ not think that the averments in the so-called first defense are sufficient to put in issue, any of the material allegations contained in the complaint. Thé defendant does not deny the assignment, and his characterization of it is- insufficient to impeach plaintiff’s ownership and right to prosechte the claim. The plaintiff alleges that he has received a payment on account'-of the bond; that no other payments have been made thereon, and “ that ' there, is now due, owing and unpaid thereon from this defendant to the plaintiff the sum-of $i4,432.96,withj interest.from the said 17th day of December, 1894.” The defendant denies only “ that .there is now due or owing upon said bond and mortgage from this defendant to the said plaintiff the sum of fourteen thousand four hundred and thirty-two and 96/100 dollars ($14,432.96) or any sum whatever.” -But having admitted ¡the statement that the *149amount claimed is unpaid, he concedes the only material portion of plaintiffs averment of the breach.

It follows that the demurrer must be sustained, and judgment ordered thereon for the plaintiff for the relief demanded in the complaint, with costs, bnt with the usual leave to the defendant to amend on payment of costs.

Ordered accordingly.