
    Abraham Rothschild, Resp’t, v. Clarence Whitman et al., App’lts.
    
    
      (Court of Appeals, Second Division,
    
    
      Filed April 26, 1892.)
    
    Malicious prosecution—Counterclaim—Code Civ. Pro., § 501.
    In an action for malicious prosecution and causing the arrest therein of plaintiff on an order of arrest in September, 1887, defendants set up as a counterclaim a cause of action for deceit by plaintiff in obtaining goods from them on credit by false representations in January, 1887, which constituted one of the causes of action upon which plaintiff was arrested. Held, that the counterclaim and claim did not arise out of the same transaction, nor was the counterclaim connected with the subject of the action by plaintiff, and could not be maintained.
    Appeal from an order of the general term of the supreme court in the first judicial department, reversing a judgment entered upon the decision of the court at special term overruling a demurrer to a counterclaim pleaded by three of the defendants.
    
      The plaintiff alleged in his complaint that, on the 1st of September, 1887, the defendants, “ not having any just or probable-cause of action against the plaintiff, did * * * wrongfully,, unlawfully and maliciously begin an action against ” him and. “ did cause to be issued out of the supreme court * * * a. certain alleged order of arrest ” therein and did cause him to be arrested thereunder and kept in custody for about a week, so that he was compelled to abandon his business and expend a large-sum of money “ in and about said arrest.” He further alleged, that afterwards, on his motion, the order of arrest was duly vacated. “ upon the ground that the same was illegal, unauthorized, and that the court had not jurisdiction to grant the same, * * and defendant discharged thereunder, and that said proceeding-has been wholly and finally terminated in favor of the plaintiff and against the said defendants by final order of- the said court.”
    The defendants, Whitman and Creighton, after pleading certain defenses, alleged “ for a further defense and by way of counterclaim ” that the plaintiff, as the manager of a certain firm, induced them to sell it goods worth $2,790.23 on credit, knowing and intending that said firm “ would not and could not ” pay for the same, and that he effected said sale by fraud, deceit and false-representations as to the financial standing of said firm; that after the receipt of said goods and others of great value obtained in the same way from other persons, the plaintiff and said firm, “ with intent to cheat and defraud their creditors and in execution of their intention not to pay for ” the same, secretly shipped them away and concealed, sold and otherwise disposed of' the bulk thereof; that the plaintiff used the proceeds of the goods so obtained and disposed of to reopen one off the stores formerly occupied by said firm and to conduct therein under another name a business of the same character that he had lately conducted as manager; that the defendants had no knowledge of the falsity of said representations, but relied upon the same, and were deceived thereby to their damage-in the sum of $2,790.23: “ that the matters hereinbefore alleged constitute part of the grounds and one of the causes of action for which the arrest of the plaintiff, complained of in this action, was-made, and the vacating of said arrest was not on the ground that said allegations were untrue, but because of a misjoinder of causes of action and parties.”
    By a separate answer the same facts were pleaded “ by way of mitigation and defense.”
    The plaintiff demurred “ to the alleged counterclaim ” on the ground that “it does not constitute a cause of action arising out of the contract or transaction set forth in the complaint as the-foundation of the plaintiff’s claim, nor is it connected with the subject of the action.”
    The special term, in overruling the demurrer, held that if the-complaint was for malicious prosecution, the counterclaim was-properly pleaded ; that if it was for false imprisonment, the counterclaim was not properly pleaded; that as the complaint was susceptible of either construction, the meaning least favorable to the pleader should be taken, and that the plaintiff by alleging malice .and want of probable cause was estopped from saying that there was no connection between the counterclaim and the subject of the action.
    The general term reversed upon the ground that the counterclaim was not connected with the subject of the action, in any legal sense, and that it did not arise out of the same transaction.
    
      John S. Davenport, for app’lts; Otto Horwitz, for resp’t.
    
      
       Affirming 32 St. Rep., 560.
    
   Vann, J.

A counterclaim must tend in some way to defeat or diminish the plaintiff’s recovery, and must be either, (1), a cause of action arising out of the contract or transaction set forth in the complaint as the foundation of the plaintiff’s claim, or connected with the subject of the action, or, (2), in an action on contract, .any other cause of action on contract existing at the commencement of the action. Code Civ. Pro., § 501.

The counterclaim in question is a cause of action tending to ■diminish the plaintiff’s recovery and, to that extent, conforms to the requirements of the statute. As this is not an action on contract, before we can determine that the counterclaim should stand as a pleading, we must ascertain whether it arose out of the transaction set forth in the complaint; and, if it did not, whether it is connected with the subject of the action within the meaning of the Code. What is the transaction set forth in the complaint •as the foundation of the plaintiff’s claim ? It is the commencement of an action against him, with malice and without probable cause, and his arrest therein under process that was afterwards set aside as illegal. What is the counterclaim ? A cause of action for damages caused by deceit in the purchase of goods on credit. The deceit was practiced and the goods obtained in January, 1887, while the action was commenced and the arrest made in the following September.

While the deceit was .the inducement to the action and arrest, it arose out of neither,, because it preceded both and existed independently of both. Although it was the alleged ground of the action and arrest, it was not the cause of either, but was rather the pretext, or ostensible reason. A groundless and malicious prosecution is caused by the act of commencing the actian, not by the reasons given for commencing it. An illegal arrest, such as that in question, is caused by the issuing and service of the order of arrest, not by the facts recited therein. There is no relation of cause and effect between an illegal act, or the ■determination to do one, and the excuse alleged for doing it. We think that the claim and counterclaim did not arise out of the ■same transaction, and that the plaintiff’s claim rests upon an en- ■ tirely different, foundation from the defendants’ counterclaim. Bach was a separate and distinct wrong and a transaction by itself.

The question remains whether the counterclaim was connected with the subject of the action, or, in other words, with the facts constituting the plaintiff’s cause of action. Chamboret v. Cagney, 32 Supr. Ct., 378; Lehmair v. Griswold, 40 id., 100.

The complaint and answer set forth independent torts, differing radically in nature and committed upon occasions widely separated. Whether the subject of the action is malicious prosecution, or false imprisonment, it is distinct and independent of the claim of the defendants. There is no necessary or legal connection between the two. It is not like an action for converting wood and a counterclaim for waste in cutting the same wood, Carpenter v. Manhattan Life Ins. Co., 93 N. Y., 552; or where certain goods are the subject of the action and a "claim is made for the value of the same goods, Thompson v. Kessel, 30 N. Y., 383; or where a mutual claim is made to a trademark. The Glen & Hall Mfg. Co. v. Hall, 61 N. Y., 226.

On the contrary, the effort is here made to set up one tort committed in January against another committed in September, the •one being for an injury to property and- the other for an injury to the person. The circumstance that the deceit which constituted the former was the pretext, or excuse for perpetrating the latter, establishes no such connection as to satisfy the statute, any more than if A. slanders B. on the 4th of July and B. thrashes him for it at Christmas. Schnaderbeck v. Worth, 8 Abb. Pr., 37; Fellerman v. Dolan, 7 id., 395 n.; Askins v. Hearns, 3 id., 184, 187.

The judgment should be affirmed, with costs, with leave to the •defendants to amend their answer within twenty days upon the payment of costs.

All concur.  