Opinion
June 19, 1924.
Phillips, Jaffe Jaffe ( Benjamin Jaffe, of counsel), for the appellant.
Charles Eno, for the respondent.
This action is upon a check made by one Picker to the order of plaintiff, which check was certified by defendant. The separate defense, which is also pleaded as a counterclaim, is to the effect that plaintiff's agent represented to Picker that plaintiff needed $500 to pay its landlord for the supply of electric current in plaintiff's building, part of which was occupied by a corporation in which Picker was interested; that Picker, upon the statement that the money would be used to pay the landlord and to prevent Picker's store from being deprived of light, gave the plaintiff the check in suit. As matter of fact plaintiff had the check certified forthwith and gave its landlord its own worthless check with the result that the electric supply in Picker's store was actually discontinued.
Although defendant, appellant, urges that this constitutes a defense, it is axiomatic that it does not. Carnegie Trust Co. v. First Nat. Bank, 213 N.Y. 301. In its counterclaim, however, defendant, repeating the allegations of the defense, continues, that upon discovering the diversion and conversion of said check Picker duly demanded of the plaintiff herein that it return to him the said check, which plaintiff has refused to do, and although in the counterclaim the pleader continues that by reason of the foregoing said Picker has been damaged in the sum of $500, we think that a liberal construction of the pleading warrants the view that it is founded upon a waiver of whatever tort is involved and proceeds ex contractu as for money had and received. Rothschild v. Mack, 115 N.Y. 1, 7, 10. As a cause of action in contract (which it is alleged had been assigned by Picker to the defendant) it constitutes a permissible counterclaim under subdivision 2 of section 266 of the Civil Practice Act.
In passing it may be remarked that there seems to be no reason why Picker could not have set up and assigned his cause of action against plaintiff for a return of the money loaned, for from the pleadings that appears to have been the nature of the transaction.
Order modified by striking out so much thereof as strikes out defendant's separate defense, and also by striking therefrom the adjudication that plaintiff is entitled to judgment and the direction for the entry of judgment for plaintiff, and order as so modified affirmed, without costs to either party.
All concur; present, BIJUR, MULLAN and LEVY, JJ.
Order modified and as modified affirmed.