
    Joseph Bernascheff, Plaintiff, v. Louis Roeth et al., Defendants.
    (Supreme Court, New York Special Term,
    April, 1901.)
    Pleading — Partial defenses — Denials in another part of the answer must be incorporated — Counterclaim as a partial defense — Coda C. P., §§ 501, 507, 508.
    Separate defenses, setting up new matter and constituting only-partial defenses to the entire action, must, unless stated to be partial, be considered upon demurrer as complete defenses and be tested as such.
    Separate defenses setting up new matter are to be treated as separate pleas, and the defendant is not entitled to the benefit of denials contained in another part of the answer unless they are incorporated by reference into the separate defense or defenses.
    A counterclaim, interposed to a complaint to foreclose a mechanic’s lien, which alleges damages resulting from poor work in the performance of the contract, which is the basis of the lien, and also damages to the flagging in the rear yard of the premises in question caused by the plaintiff’s negligence, the total damages amounting to less than the face of the lien, must be deemed as pleaded in mitigation of damages only, is a partial defense so far as relates to the injury to .property and, when not stated to be partial, is bad on demurrer.
    Action to foreclose a mechanic’s lien. Demurrer to separate defenses and counterclaim of the answer.
    J. I. Wiener, for plaintiff.
    T. A. McCarthy, for defendants.
   Gildersleeve, J.

This is a demurrer to the separate defenses and counterclaim of the answer. So far as the separate defenses? setting up new matter, are concerned, they appear to be at' the best only partial defenses. Section 508 of the Code provides that a partial defense “ must be expressly stated to be a partial defense to the entire complaint, or to one or more separate causes of action therein set forth.” This the answer fails to do. Unless a pleading is expressly interposed as a partial defense, it must be assumed to be pleaded as a complete defense, and upon demurrer it must be tested upon that assumption. See Golden v. Health Department, 47 N. Y. Supp. 628. When new matter is set up by an answer, and the answer is demurred to, all the allegations of the complaint are to be taken as true, and the allegations of the complaint referred to in the answer are to be treated as' incorporated in it; and if so read the answer does not set up a defense to the cause of action alleged in the complaint, a demurrer on that ground will prevail. See Douglass v. Coonley, 156 N. Y. 521. An affirmative defense, set up in an answer, is to be treated as a separate plea, and, upon demurrer thereto, defendants are not entitled to the benefit of denials made in another part of the answer, unless incorporated by reference and made a part of the affirmative defense. See Douglas v. Ins. Co., 138 N. Y. 210. In the case at bar, the separate defenses, setting up new matter, do not refer to the other portions of the answer or make them a part of such defenses. So far as the counterclaim is concerned, section 501 of the Code requires that it should be: “ (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. (2) In an action on contract, any other cause of action on contract, existing at the commencement of the action.” In the case of Rice v. O’Connor, 10 Abb. Pr. 362, we find the following: “ A counterclaim must exist in favor of defendant, and against the plaintiff, at the time the action was commenced, and an answer alleging that plaintiff is indebted, etc., and that the sum claimed is now due, etc., is bad on demurrer.” A counterclaim must be a complete cause of action existing in favor of the defendant where he asserts it. See Cragin v. Lovell, 88 N. Y. 259. Section 507 of the Code provides that, while defendant may set up as many defenses dr counterclaims, or both, as he has, whether legal or equitable, still “ Each defense or, counterclaim must be separately stated, and numbered. Hnless it is interposed as an answer to the entire complaint, it must distinctly refer to the cause of action which it is intended to answer.” In the case at bar the cause of action of the plaintiff is founded on a building contract with reference to No. 1560 Avenue A, in this city, which contract was made on July 30, 1900. The complaint demands $731.75 on the contract. The work, according to the complaint, was properly done and finished about August 25, 1900. The plaintiff filed his notice of lien on September 5 and served copy on defendants on September 8,1900. He then brought this action to foreclose the lien. The counterclaim repeats in part the making of the contract, as alleged in the complaint, on July thirtieth, but states that the work was badly done and resulted in damage to the defendants, for which they counterclaimed. The answer alleges the breach of the contract, and also damage to the flagging in the rear yard of the premises in question, through the negligence, carelessness and incompetence of plaintiff, and for both the breach of contract and injury to the flagging defendants claim the sum of $250 damages. Their counterclaim, therefore, unites a cause of action for breach of contract and a cause of action based on plaintiff’s negligence. These causes of action are separately stated and numbered, as required by section 507 of the Code. The counterclaim appears also to have arisen from the same contract or transaction which forms the basis of plaintiff’s cause of action. The damages caused by plaintiff’s negligence, as well as those caused by plaintiff’s failure to perform the work according to the contract, were clearly., connected with the subject of the action. However, it will be remembered that the plaintiff, under the contract, claims $731.75, to which the defendants interpose a counterclaim of $250. This counterclaim, therefore, is deemed to be pleaded in mitigation of damages only. See Douglas v. Coonley, supra; Douglass v. Ins. Co., supra; also, Golden v. Health Department, supra. Part of the counterclaim is founded upon damage to property, but what proportion of the $250 does not appear.' Section 508 of the Code provides that Matter tending only to mitigate or reduce damages, in an action to recover damages for * * ' * an injury to property, is a partial defense, within the meaning of this section.” The same section requires that a partial defense must be expressly stated to be such, as we have above seen. I am inclined to the opinion that, notwithstanding the principle that pleadings against demurrer will be liberally construed and deemed to allege whatever may be implied from their statements by fair -and rea-. sonable intendment (see Kain v. Larkin, 141 N. Y. 144), the demurrer in the case at bar should be sustained in all respects, with leave to defendants to serve an amended answer on payment of costs. j

Demurrer sustained, with leave to defendants to serve an amended answer on payment of coats»  