McConihe v. Hollister

By the Court, DowíteR, J. The only question presented by the appellant is, whether the answer is a counter-claim and entitled to be taken as true without proof. The facts alleged in the answer, if proved, would be a good defense. Some of the allegations are such as are proper only for a defense, and which no good pleader would have inserted in a counter-claim. We are inclined to the opinion that where an answer does not in form set up a counter-claim, but contains allegations sufficient either for a defense or counter-claim, it should be construed to set up a defense merely. The rule was rightly laid down in Burrall v. De Groot, 5 Duer, 379. In this case the answer, in substance, alleges that the note and mortgage were obtained by the railroad company from the defendant William Hollister by false and fraudulent representations respecting the amount of cash subscriptions to the capital stock of the company, and its indebtedness; that the note and mortgage were merely attempted to be assigned by the company by an instrument purporting to be the bond of [272] said company, and as collateral security for the payment of said purported bond ; and that this bond was executed by the officers of the company without authority, and is void. It is evident from these allegations, that if the statements in this answer were in the form of a complaint in a separate action, asking that the note and mortgage be surrendered and can-celled, the Racine and Mississippi Railroad Company would be a necessary party defendant. The defendant, then, could not set up the facts alleged in his answer, as a counter-claim in this action, for the reason that a new party must be brought before the court. Coursen v. Hamlin, 2 Duer, 513. Order of the court below affirmed, with costs.