Case Name: ELLIOTT et al. v. NEW YORK ENDOWMENT CO.
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1893-12-01
Citations: 26 N.Y.S. 107
Docket Number: 
Parties: ELLIOTT et al. v. NEW YORK ENDOWMENT CO.
Judges: 
Reporter: West's New York Supplement
Volume: 26
Pages: 107–109

Head Matter:
(73 Hun, 519.)
ELLIOTT et al. v. NEW YORK ENDOWMENT CO.
(Supreme Court, General Term, Second Department
December 1, 1893.)
Counterclaim—When Allowable.
In an' action against a corporation for goods sold, a counterclaim for money due on a subscription by plaintiff to defendant’s stock will not be allowed, where plaintiff, by the terms of subscription, agreed to pay . 10 per cent, of the amount of stock in cash, and the residue by deducting 15 per cent, from his account each month for goods sold defendant; but defendant should have shown the amount of the monthly, accounts due, and set up as a counterclaim 15 per cent, of the amount thereof.
Appeal from circuit court, Kings county.
Action by Harry R. Elliott and another against the New York Endowment Company for goods sold and work done. Judgment was entered on the verdict in favor of plaintiffs, directed by the court, and defendant appeals.
Affirmed.
Argued before BARNARD, P. J., and DYKMAN and PRATT, JJ.
Cantor, Linson & Van Schaick, (John L. Linson, of counsel,) for appellant.
John Andrews, for respondents.

Opinion:
DYKMAN, J.
This is an appeal from a judgment entered upon a verdict made by direction of the court upon a trial at the circuit. The complaint of the plaintiffs stated—First, that they were copartners in business; second, that the defendant is a domestic corporation; third, that between the 1st day of January and the 1st day of September, 1892, the plaintiffs sold and delivered to the defendant goods, consisting of stationery, and did printing and lithographing work, of the value of $1,665.75; fourth, that the defendant had paid $900 on account of the claim, leaving a balance of $764.75, for which the plaintiffs demanded judgment. The answer of the defendant stated, first, that it had no knowledge or information of the facts stated in paragraphs 1, 3, and 4 of the complaint, then set up a counterclaim against the plaintiffs, upon an allegation that they had subscribed the sum of $1,000 to the stock of the defendant, and paid the sum of $100 on account thereof, and demanded judgment in its favor. There was a reply, in which the plaintiffs denied that they subscribed the sum of $1,000 for the stock of the defendant, or that they ever received any notice of assessment, but admitted that the defendant requested the plaintiffs to take $1,000 worth of stock of the defendant, upon the following terms: That the plaintiffs should pay 10 per cent, of the amount of stock in cash, the balance of said stock to be paid for by a deduction of 15 per cent, from the amount to be paid by the defendant to plaintiffs each month for goods to be sold and delivered, and work and labor to be performed, by the plaintiffs; that they paid $100; and that the defendant failed to perform its agreement. After-wards, the defendant withdrew its denial to the third paragraph of the complaint, which alleged the performance of the work and the sale of the property. Upon the trial a witness was called by the plaintiffs who proved the amount of interest due upon the demand, and upon cross-examination was handed a paper, the signature to which was proved by him to be one of the plaintiffs. Thereupon, the plaintiffs rested, and the counsel for the defendant asked leave of the court to amend his answer. Counsel for the plaintiffs objected to the amendment because the application should have been made to the special term, for the defense related to matters which have arisen since the commencement of the action, because in that case it would be necessary to serve a supplemental pleading setting up such new matter. Thereupon, the judge denied the motion to amend. The counsel for the defendant then read the deposition of a witness, taken upon commission, which showed, among other things, a letter from the plaintiffs, as follows:
"In reference to our conversation of this P. M., we find the best we are able to do will be to subscribe now for $1,000 of stock, with the privilege of two thousand, 10% down, and the balance to be paid as follows: 15% to be deducted from our account with you each month, and credited towards the payment of balance. Trusting this will be satisfactory to you, we are,
"Yours, truly, H. R. Elliott & Co."
At the close of the testimony the counsel for the plaintiffs requested the court to direct a verdict in their favor, and the court stated:
"No doubt it is true that stock can be paid for, so as to make it fully-paid stock, by any arrangement to pay for it in this way; but it seems to me equally plain that in a litigation between a company and the plaintiff, who has sold and delivered goods to the company, and performed labor for the company, where a counterclaim is interposed by reason of a subscription on the part of the plaintiff to that company's stock, that contract to subscribe can be enforced only according to its terms. Now, the contract subscribed here was made in writing. That is to say, under the rules of evidence, as I understand them, and feel bound to apply them in this case, in order to get at what the real transaction between the company and these plaintiffs was, we must look at the letter they wrote, and at the subscription,—written, as I must assume at this stage of the case, in the absence of any further evidence, with the authority of these plaintiffs. Taking the letter and the subscription together, it amounts simply to this: that they agreed to subscribe for this stock, and to pay all that they did not pay at once by deducting 15% from their monthly accounts. If you, the defendant, had proved here what the monthly accounts were, and had asked a deduction of 15% from each of these monthly accounts on the part of your counterclaim, as a set-off or deduction, I think you would be entitled to have it; but, in the absence of any proof as to what the monthly accounts were, and what the 15% was, I think the plaintiffs are entitled to a verdict for the entire amount claimed, and I direct a verdict accordingly for $830.62; to which there was an exception."
We concur in the views so stated, and find no difficulty in confirming the judgment, with costs. All concur.