
    Maders v. Lawrence.
    
      (Supreme Court, General Term, Third Department.
    
    July 2, 1888.)
    1. Set-Off and Counter-Claim—Action for Price of Goods—Breach of Warranty.
    In an action on a promissory note given for the difference due plaintiff on an exchange of horses, damage for breach of plaintiff’s warranty of his horse is a proper counter-claim under Code Civil Proc. N. Y. § 501, subd. 1, providing that a counterclaim must be 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. ”
    
    2. Same—Breach of Warranty—Limitation.
    It appeared that more than six years had elapsed since the warranty was made, but that the statute of limitations had not run on the note. Held that, while defendant’s right to maintain an independent action for such damage was barred, the same might nevertheless be interposed as a counter-claim to such note.
    3. Sale—Warranty— Sufficiency of Evidence.
    Defendant testified that plaintiff warranted the horse, and the evidence showed that he became worthless in consequence of the defects complained of. Plaintiff denied the warranty. Held, that the evidence warranted a verdict for defendant.
    Appeal from Essex county court.
    Action by George Maders against Zachariah Lawrence on a promissory note. Judgment for defendant. Plaintiff appeals. Code Civil Proc. 2sT. Y. provides that a counter-claim must be 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.”
    Argued before Learned, P. J., and Landon and Ingalls, JJ.
    
      T. A. Rowe, for appellant. T. F. Conway, for respondent.
    
      
      On the subject of what may be pleaded as a counter-claim, see Lapham v. Osborne, (Neb.) 18 Pac. Rep. 881, and note.
    
   Ingalls, J.

This action was commenced in justice’s court, and the plaintiff complained upon a promissory note, of which the following is a copy:

“Ausable Forks, N. Y., August 25, 1879.
“Six months from date, for value received, I promise to pay George Maders fifteen dollars, with interest.
his
“Zachariah X Lawrence. mark.
“Witness: J. S. Dwyer.”

By an amended answer, the defendant (1) denied the complaint, and each and every allegation thereof. (2) By way of counter-claim, stated, in substance, that the plaintiff and defendant exchanged horses, and that the note in question was given by the defendant to the plaintiff as the difference between the horses; that at the trade the plaintiff warranted his horse to be perfectly sound, and very valuable; that the horse proved to be unsound, viz., had the heaves, was lame, and of little or no value. (3) For a third answer or defense the defendant alleged that the note mentioned in the complaint was wholly without consideration, and void. Upon the trial the parties were witnesses, and the defendant stated the warranty substantially as alleged in the answer, and the plaintiff denied that he warranted the horse. Evidence was produced to the effect, by the defendant, that the horse which he received from the plaintiff upon the exchange became worthless in consequence of the defects of which he complained. The jury rendered a verdict in favor of the defendant, of no cause of action. We are satisfied that the evidence justified the verdict.

It is contended by the appellant that, as the defendant had an immediate right of action upon the warranty, and more than six years having elapsed from the making of the contract and the commencement of this action, the statute of limitations constituted a bar to the defendant’s counter-claim, based upon such pretended warranty. This presents the material question upon this appeal. As between the parties to this action, the giving of the promissory note in suit constituted bue part of the transaction, as the contract which gave rise to such note also included the warranty in question, and the defendant was at liberty to assert the breach of such warranty, with an allegation of damages in consequence thereof as a counter-claim. Code Civil Proc. § 501, subd. 1; Farrell v. Krone, 24 Wkly. Dig. 89; Hopkins v. Lane, 87 N. Y. 501. The case last cited supports the proposition, although the doctrine was not then applied on account of a defect of parties.

In the case at bar the plaintiff asserted the note as a valid cause of action, based upon an adequate consideration, and the defendant assailed the same upon the ground that in the contract, and as a part thereof, the plaintiff warranted his horse to be perfectly sound and very valuable, when in fact he was unsound and worthless; and the defendant insisted upon the damages arising from such breach of warranty as a defense to said note. The plaintiff, by commencing such action upon the note, invited any valid defense which the defendant had, arising from the transaction which originated the note, and which legitimately assailed the consideration thereof. We think the practical effect of asserting such note by the plaintiff was to give efficacy to the defense of the defendant by way of counter-claim, or, at least, as a defense to the extent of the note, by defeating the consideration thereof. It would seem unreasonable and unjust to allow the plaintiff, under the circumstances, to delay an action upon the note until after six years from the giving thereof, and then assert the same, and defeat the defendant’s claim or defense upon the ground that the statute of limitations barred such defense. We do not think the law necessitates such a result. If the defendant had commenced an action upon the warranty, doubtless such statute would have barred a recovery ; but we conclude that a very different rule obtains when the plaintiff asserts a cause of action as to which such statute has not attached, and the defense is merely resorted to as an attack upon the consideration of the obligation which is the subject of the action, and arising from the same transaction. Such defense is resorted to by the defendant as a shield, and not as a sword. By prosecuting the note, the plaintiff, in effect, asserts that the same had a good and adequate consideration to support it, and the defendant, by interposing the defense, denies such consideration; thus accepting and meeting the issue in that respect tendered by the plaintiff. Again, the case fails to show that any such question was insisted upon at the trial, but, on the contrary, the case was tried upon the merits, and the plaintiff was defeated, and it seems quite apparent that substantial justice was administered in the justice’s court, and the county court has given its approval of such proceedings. It is but reasonable to require parties who litigate in the justice’s court to fairly raise the questions upon which they rely, and not to conceal them, and seek upon appeal to take advantage thereof, to the prejudice of the adverse party. We conclude that no error has been committed which requires us to reverse the judgment, and the same is therefore affirmed, with costs.

Learned, P. J., and Landon, J., concur.  