
    Pearl Van, Respondent, v. George Madden, Appellant.
    Third Department,
    May 5, 1909.
    Pleading — admission on demurrer — conditional' sale — counterclaim not connected with subject of action.
    A failure to demur or reply to a counterclaim is an admission of the allegations therein, but not an admission that it is properly interposed.
    Where the complaint in an action by the vendor of chattels under a contract of conditional sale alleges the conversion of part of the property and a wrongful . trespass upon the balance by the defendant who had assumed the contract of the vendee, a counterclaim which alleges that the. .property was returned at plaintiff’s request and that the property so taken by plaintiff was neither retained for the period of thirty days from the retaking nor sold at public auction after the service of notice as required by sections 116 -and .117 of the Lien La-w, is unauthorized for it does not arise .out of the transaction set forth in the complaint and is not connected with the “subject of the action,” within the meaning of section 501 of the Code of Civil Procedure.
    Appeal by the defendant, .Q-eorge Madden, from so much of an order, of-.the Supreme -Court, made at the Fulton Special Term and entered in the office of the clerk of the county of Fulton on the 3d day of February, 190,9, as denies the defendant’s motion for judgment on a counterclaim,
    N. Frank O’Reilly, for the appellant.
    
      William H. Bass [Clarence W. Smith, of counsel], for the respondent.
   Smith, P. J.:

The complaint shows .that the plaintiff is a dealer jn circus and show tents, poles, .seats, etc. Upon the 20th day of May, 1908, he entered into a contract with one Mrs. B. ,F. Mitchell for the sale' of a complete outfit of tents for the performance of Uncle Tom’s Cabin and of accessories thereto. The said vendee was to pay the sum of $250 down and $2,5 per week thereafter until the- sum of $600 was paid, until which time the title was to remain in the plaintiff. On or about the 2d day of July, 1908, this defendant assumed the contract-of the vendee. About the 15th day of July, 1908, tlie defendant without the/knowledge or consent of- the plaintiff as alleged in the complaint, shipped to the plaintiff at Northville part ■of the tenting and other paraphernalia; but a part thereof was riot returned after demand, the value' of such part being $100. The complaint alleges that -the part .that wa.s ¡returned was unlawfully and wrongfully damaged in the suin of $100, and there is a further claim of $62.80 for freight and cartage upon the same. There is a demand for judgment for $262.80. The answer admits the contract with Mrs. Mitchell as to certain personal property and -alleges the payment by Mrs., Mitchell of $250 thereon ; admits, the assumption .by defendant of the obligations of said Mrs. Mitchell on or about the 2d’ day of July, 1908; admits the shipment to the plaintiff of the property mentioned, and denies specifically all -other allegations of the complaint. The answer then contains what purports to be a separate and distinct defense “ and by way of counterclaim.” Under this defense and counterclaim the defendant alleges the contract with Mrs. Hitchell, the assumption thereof by the defendant, and the payment- by this defendant of the sum of $'60 thereupon. The answer further alleges the return to the plaintiff of this property upon the 15tli day of July, 1908, “at the request and demand1 of the said plaintiff; ” that the said property so taken by the plaintiff was not retained for a period of thirty days from the time of such retaking, nor within thirty days thereafter were the articles sold at public auction, nor was any notice seiwed, as required by sections 116- and 117 of the Lien Law of the State (Laws of 1897, chap. 418, as amd. by Laws of 1900, chap. 762). The defendant’s prayer for relief-is for judgment against the plaintiff for the sum of $310, with interest thereon- from the 1st day of July,, 1908, and' the dismissal of the complaint, with costs.

To this counterclaim neither reply nor demurrer has been served, and the- order appealed from denies defendant’s motion for judgment thereupon.

A failure- to- demur or to-reply undoubtedly admits the allegations of the counterclaim. Such failure, however, does- not admit- that the- counterclaim was properly interposed. The provisions of sections 498 and 499 of the Code of Civil Procedure-refer to objections to the complaint and not to objections to the counterclaim. (lipman v. J. A. I. Works, 128 N. Y. 58; Spofford v. Rowan, 124 id. 108.) If, therefore, the counterclaim were improperly interposed in this action, the motion for judgment thereupon was properly denied.

It is assumed by both counsel-upon-the argument that the complaint states a cause of' action for a tort, for a wrongful conversion and a wrongful trespass,' and it seems to be agreed that unless this causé of action arose out of the contract or transaction set forth in the complaint as a foundation of plaintiff’s claim, or be connected with the subject of the action, the counterclaim was not properly interposed. It is insisted, however, upon the part of the defendant that this counterclaim complies in all respects with this requirement of the Oode. With this insistence we cannot agree. The transaction of which the plaintiff complains is the wrongful conversion of part of the property with which the counterclaim has no connection whatever, and the wrongful trespass upon the balance of the property, with which property the counterclaim has a remote connection. It is not always easy to interpret the meaning of those words in section 501 of the Code of Civil Procedure, “ connected with the subject of the action.” In Chamboret v. Cagney (2 Sweeny, 378) the question arose as to the construction to be given to the words, “subject of the action,” contained in section 150 of the Code as it existed in 1870. Judge Freedman, in discussing this provision of the Code, says: “ I have not been able to find that the precise meaning of the, words, ‘subject of the action,’ as used in that subdivision, has ever been judicially determined. In Borst v. Corey (15 N. Y. 509) the Court of Appeals’held that the term ‘ subject-matter ’ of suits, as used in section 49 (of 2 B. S. 301) is synonymous with the term, ‘cause of action’ used elsewhere in the same statute. Analogy, as well as sound reasoning, call for a similar construction of the words, ‘subject of the action.’ These words must be deemed to mean the subject-matter in dispute, or, to be still more explicit, the facts constituting the cause of action. In the case at bar plaintiffs brought the action for a trespass upon their property. The object of the action is to recover damages, but the subject thereof is the trespass committed by the defendant. The counterclaim interposed by the defendant is based partly upon plaintiffs’ fraudulent -concealment of property not taken by the defendant, and partly upon the failure of plaintiffs’ title to property which was taken. But it is not connected with the trespass upon which pláintiffs rely, nor can it be claimed that it arose out of the transaction set forth in the complaint. I concede that section 150 of the Code was enacted to simplify and expedite the administration of justice; that it is a remedial and beneficial provision which should at all times receive a liberal construction, and from the start I felt strongly inclined to uphold the .counterclaim. Subsequent reflection, however, has convinced me that it cannot be done without a great stretch of the meaning of the words ‘subject of the action’ beyond their true and proper significance.” That case was referred to and approved in Rothschild v. Whitman (132 N. Y. 476). In Bernheimer v. Hartmayer (50 App. Div. 316) the plaintiffs sued for the value of certain chattels which it is claimed were wrongfully detained by the defendant. The defendant counterclaimed for the value of the storage of these same articles, alleging that they were left with the defendant after the defendant had directed them to be removed. It was there held that the counterclaim was not authorized under this section of the Code of Civil Procedure. From these authorities we conclude that the order was right and should be affirmed, with ten dollars costs and disbursements.

All concurred. *

Order affirmed, with ten dollars costs and disbursements. 
      
       See-Code Proc. § 150, as amd.-by Laws of 1853, chap. 393.—[Rep.
     
      
       See respectively 3 R. S. 301, §§ 50, 49.— [Rep.
     