Case Name: Joseph Czerney, Appellant, v. Frank Haas, Respondent
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1911-05-12
Citations: 144 A.D. 430
Docket Number: 
Parties: Joseph Czerney, Appellant, v. Frank Haas, Respondent.
Judges: 
Reporter: Appellate Division Reports
Volume: 144
Pages: 430–440

Head Matter:
Joseph Czerney, Appellant, v. Frank Haas, Respondent.
First Department,
May 12, 1911.
Pleading—answer to action on promissory note alleging breach of con- . tract — when allegation as to consideration sufficient — evidence — judicial notice — value of foreign coin—pleading—answer stating all elements of contract — when tender of performance unnecessary. — assignment — counterclaims existing against assignor — counterclaim as defense to suit by assignee.
A-separate defense in an action on a promissory note is not defective in failing to allege a consideration for the agreement of the plaintiff’s transferor to deliver goods pursuant to a contract of sale on which the note was given in part payment, where in addition to stating that the ■ contract of sale, which the transferor failed to fulfill upon demand, was made “ for a valuable consideration ”—that being a legal conclusion — it also alleges that the "transferor agreed to sell and deliver the goods “ at ■ certain stipulated times in certain stipulated quantities, the terms of which are annexed hereto and made part hereof and that the defendant herein has .performed all the conditions on his part to be performed,” if the actual terms of the sale are set forth in letters of the parties annexed to the answer. „
It is a permissible inference that the defendant agreed at the time the contract was made to pay the transferor at the rates specified in the annexed letters setting forth the prices and quantities of the goods. And it is immaterial that it appears that the note was not given until after the contract of sale was made.
The court will take judicial notice that the word “Heller” used in the letter in stating the price is a modern Austrian coin of a certain value, as defined in English dictionaries.
The defendant does not fail to allege all the elements of the contract merely because the letter annexed to the answer does not contain them, if taking the answer and the annexed letter together all the necessary elements are stated.
Where the defendant alleges that he performed all the conditions of the agreement on his part to be performed, but that the plaintiff’s transferor failed on demand to deliver the goods called for by the contract, he need not allege a tender of the purchase price or readiness to pay, even though no credit was given, for as the plaintiff’s transferor refused to perform, as admitted.by his demurrer, no tender was necessary. . .
It sufficiently appears that the defendant’s counterclaim for breach of contract arose prior to the action although the date of the breach is not specifically stated, where, in addition to the allegation that the plaintiff’s transferor failed to make deliveries as called for by the contract, the dates of delivery as set forth by the letter annexed to the answer are prior to the date upon which the action was commenced.
A counterclaim against an assignor set up in an action brought by his assignee can only be allowed to such extent as will satisfy, the plaintiff’s demand. It may be used as a defense only, not as the basis of an affirmative judgment.
IiíeBAHAM, P. J., and Scott, J., dissented, with opinion.
Appeal by the plaintiff, Joseph Czerney, from an interlocutory judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of New York on the 21st day of December, 1910, upon the decision of the court, rendered after a trial at the New York Special Term, overruling the plaintiff’s demurrer to a separate defense and counterclaim contained in the answer.
Edgar N. Dollin, for the appellant.
Louis H. Moos, for the respondent.

Opinion:
Clarke, J.:
The complaint alleges that the defendant, April 5, 1910, made and delivered to 0. Slanina & Co. a promissory note to their order for value received for $717, payable two months after date at the First National Bank of Q-uttenberg, N. J.; that thereafter and before the commencement of this action said note was duly indorsed and delivered by the said payees thereof to the plaintiff, and the plaintiff is now the holder and owner thereof; that no part of said note has been paid¿ and that the whole amount is due, with interest.
For a first separate and distinct defense and by way of counterclaim, defendant alleges that the plaintiff is not the real party in interest, but that 0. Slanina & Co., a copartnership composed of Carl Slanina and Fritz Lang of Zuckmantel bei Toplitz-Schonau, Bohemia, áre the real parties in interest; that the plaintiff took the said note as their agent and is the holder thereof for the purpose of collection only; that the said company and.the plaintiff know and are chargeable with the knowledge of all the facts hereinafter set forth; that the defendant was and now is engaged in the sale of mineral waters and mineral water bottles and other articles in the city of New York; that in November, 1909, the defendant and the said firm of Slanina & Co. for a valuable consideration directly and through them agent, the plaintiff herein, entered into an agreement for a valuable . consideration with ' the plaintiff whereby said firm agreed to sell and deliver to the defendant 50,000 vichy or seltzer siphons at certain stipulated times in certain stipulated quantities,' the terms of which are annexed to. the answer and made part thereof," and that the defendant herein has performed all the conditions on his part to be performed; that subsequent to the making of said agreement as aforestated, and before the delivery of the said bottles, and in reliance upon the aforesaid contract and upon the warranties and representations' made to the defendant as aforestated, this defendant signed a promissory note made, payable to the said Slanina & Co., being the note mentioned in the plaintiff's complaint; that thereafter said firm in violation of their said, agreement failed and refused to deliver the said vichy siphons so contracted for though due demand was made therefor, by reason of which defendant was forced and compelled to go to the open market and purchase other vichy siphons similar in character and style to the ones contracted for and was forced and compelled to pay therefor an added and addi tional cost of $2,000; that subsequent to the giving of the said note the said firm failed and refused to make the future delivery as called for in the contract, thus necessitating the purchase of similar siphons as aforestated from other firms; that prior and subsequent to the making of the contract with the firm of Slanina & Co., this defendant entered into an agreement with other firms and people for the delivery and sale of the said siphons, relying upon the contract made by this defendant with the said firm, and the warranty made by the plaintiff as agent, as to delivery; that defendant, in order to fill his contracts so made with the third parties, was compelled to purchase bottles similar in character and style to the ones ordered from the said Slanina & Co., at an additional cost of $2,000; that solely by reason of the premises and. the default of the said 0. Slanina & Co. and by reason of the breach of the contract entered into and the failure to deliver the said bottles, this defendant suffered damages in the sum of $2,000; wherefore he demanded that the complaint be dismissed on his counterclaim and the defendant have judgment on the counterclaim in the sum of $2,000. . •
Attached to the answer is the following paper signed by C. Slanina & Co., dated November 15, 1909, addresséd to the defendant: "We beg to acknowledge receipt of your written contract given to our representative, Mr. Joseph Czerney of Brooklyn, for the following:' 50,000 pieces 28 oz. siphons at following prices: 44 Heller for 28 oz. with or without ring at bottom (white); 56 Heller for 37 oz. with or without ring at bóttom (white)'; 66 Heller for 44 oz. with or without ring -at bottom (white), F. O. B. our factory, 2% for breakage, 2% for cash and beg to thank you for same. Our understanding of same is as follows: The shipments will be made: During the month of Feb., 1910,1 wagon; during the month of Mar., 1910, 1 wagon; during the month of Apr., 1910, 1 wagon; during the month of May, 1910, 1 wagon; during the month of June, 1910, 1 wagon; during the month of July, 1910,1 wagon, or 1 or 2 wagons more as needed. Tou will receive from us, A No. 1 Bohemian bottles, such as we send to America, the said bottles having a pressure of 300 lbs! per cubic inch. We also guar antee the bottles to weigh 2% or 3 lbs. and will ship same in barrels. We would also ask you to please send mold for siphon top to fit on bottle."
To this counterclaim was interposed the fofiowing demurrer: 1. That the said alleged counterclaim or defense is insufficient in law upon the face thereof ; 2, that the said aEeged counterclaim is not of the character specified in section 501 of the Code of Civil Procedure as appears upon the face thereof; 3, that" the said alleged counterclaim does not constitute a cause .of action arising out of the contract set forth in the complaint as the foundation of the plaintiff's claim, nor is it connected with the plaintiff's action; 4, that said aEeged" counterclaim does not state facts sufficient to constitute a cause of action.
An interlocutory judgment was entered at Special Terna overruling the demurrer, with costs, with leave to withdraw the demurrer and reply to the counterclaim upon the payment of. costs and directing thát in case of the failure of plaintiff to serve a reply and pay .said costs that defendant "have final judgment for' the relief demanded in the counterclaim and for that purpose defendant's damages be assessed by a jury, and that the judgment on said counterclaim when so assessed, together with the costs awarded are to be included in the final judgment if rendered in favor of defendant and to be set off if uncollected and final judgment is rendered in favor of. the plaintiff against any recovery awarded to the plaintiff.
The appellant claims that the pleading is defective, first, in that it faffs to aEege a consideration for the promise of 0. Slanina & Oo. to deliver the siphons to the defendant and in that the words "for a valuable consideration," appearing in the 6th paragraph of the answer, merely set forth a Conclusion. While the words quoted taken alone undoubtedly state only á conclusion there is more than these words to be found in paragraphs 6 and T. Paragraph 6 aEeges that defendant and Slanina & Oo. entered -into an agreement whereby the latter agreed to sell and deliver to the defendant 50,000 siphons at certain stipulated times in certain stipulated quantities, the terms of which are annexed hereto and made part hereof and that the defendant herein has performed all the conditions on his part to be performed." The terms are set forth in the annexed let ter.- They are forty-four heller, etc.; fifty-six heller, etc., and sixty-six heller, etc. Fifty thousand pieces are to be shipped at these prices, and it is designated when and in what quantities the shipments are to be made. This paragraph is a description, then, of what Slanina & Co. were to do under the contract. They were to ship 50,000 pieces at certain prices at certain times to defendant. Then follows paragraph 7, which-describes what defendant did in consideration therefor—"subsequent to the making of said agreement and before the delivery of the said bottles, and in reliance upon the. aforesaid contract and upon the warranties and representations made to the defendant herein, as aforestated, this defendant signed a-certain promissory note made' payable to the said 0. Slanina & Co., being the note mentioned in the plaintiff's complaint herein, as this defendant is informed and believes." From the paragraph as worded it is clear that defendant gave Slanina & Co. the note in suit in consideration of their promise to déliver the siphons as agreed, and in part payment, at least, therefor; that the contract is alleged to have been made .in November, whereas the note was not given until the following April, should make no difference. It is a permissible inference that the defendant agreed, at the time the contract was made, to pay the company at the rates specified in the letter annexed to the answer. It is true nothing' is said about payment by note, but certainly defendant could pay as he chose so long as he met his obligations and -performed his part of the contract. It is only necessary that there was a promise to pay by defendant in return for the offer of the Slanina Company to deliver.
It is objected in this connection that the annexed letter does not set forth the prices of the siphons because the term " Heller " is not an English word. The court, it is said, should not, therefore, take judicial notice of the meaning. It appears, however, that the word has been recognized by our standard dictionaries. The Century Dictionary states that a " Heller " is a modern Austrian coin, one-hundredth part of a crown, and in the Standard Dictionary, under coin, we find " Heller,' Austria, copper, national equivalent 1/200 florin." The United ' States equivalentes ",00%," and that it is " current." Secondly, the appellant claims that the letter annexed to the answer, being pleaded as the contract between' the parties, fads to contain the elements of a contract. At best, it is said, it is an unaccepted offer or an acceptance without an offer.. But the contract pleaded is not limited to the letter, Paragraphs 6 and 7 set forth the body of the contract. They allege that the parties entered into an agreement to sell and deliver 50,000 siphons at certain'stipulated prices, at certain times and in certain quantities, the terms of which are detailed in the annexed- letter; that in performance of its part of the contract defendant gave the note in question; then comes the letter, which, after acknowledging the receipt by the Slanina Company from defendant, of a written contract, sets forth the prices, the times of delivery and the quantities to be delivered, .as promised in paragraphs 6 and 7. The pleading does not allege the letter as containing the whole contract, but as supplemental to and explanatory of the contract set forth in the paragraphs named. Reading together the paragraphs and the letter we have a contract containing all the necessary requisites.
The third point raised is, that even if the defendant had properly pleaded a contract, since such contract would provide for the purchase of goods by the defendant in the future, no credit being given, the defendant must allege a tender of the purchase price or readiness or willingness to pay. But the pleading alleges that the defendant has performed all the conditions of the agreement on his part to be performed and that he signed the promissory note made payable to Slanina & Co.., being the note mentioned in plaintiff's complaint. By the demurrer it is admitted that Slanina & Co,, in violation of them agree- • ment, after the note was delivered, failed and refused to deliver the siphons so contracted for, though due demand was made therefor, and refused to make the future deliveries called for in the contract; Having, therefore, refused to perform, no tender was necessary.
Finally, it is contended that the counterclaim does not show that defendant's claim existed before the commencement of the action. The counterclaim is based on damage sustained through default in delivery. It is pleaded that the last delivery called for in the contract was to have been in July, 1910. The action was not commenced until August twenty-fourth following. The counterclaim does not specifically state on what particular day the breach upon which the claim is based occurred, or in so many words that the claim existed prior to the action. But it does allege in paragraph 8 that Slanina & Co., in violation of their agreement, "failed and refused to deliver the said vichy. siphons so contracted for," and in paragraph 9 that the.said company "failed and refused to make the future delivery as called for in the said contract." The dates of delivery so called for were, according to the annexed letter, during each month from ¡February to July, 1910, inclusive. It, therefore, sufficiently appears that the claim arose prior to the action. " The pleading may be deficient -in technical language or in logical statement, but, as against a demurrer the pleading will be deemed to allege' whatever can be implied from its statements by fair and reasonable intendment." (Kain v. Larkin, 141 N. Y. 144.)
The form of the interlocutory judgment is improper. As the action is brought by the assignee of an assigned claim, and the counterclaim is against the assignor of said claim, it can only be allowed to such extent as will satisfy plaintiff's demand. (Code Civ. Proc. § 502, subd. 3.) The counterclaim under such circumstances is a defense and not a basis for an affirmative judgment.. The words " that the judgment on said counterclaim when so assessed, together with the costs awarded, are. to be included in the final judgment herein, if rendered in favor of the defendant," should be stricken out.
As so modified the interlocutory judgment appealed from should be affirmed, with costs to the respondent, with leave, however, to the appellant upon payment of said costs to withdraw the demurrer and interpose a reply within twenty days after service of the order to be entered hereon.
Lattghlin and Miller, JJ., concurred; Ingraham, P. J., and Scott, J., dissented.