
    Frederick Deders, Respondent, v. Joseph M. Wood, Appellant.
    (Supreme Court, Appellate Term, First Department,
    May, 1916.)
    Pleading — in action on contract — counterclaim — Municipal Court Act, § 151.
    Trial — refusal to permit trial to proceed—evidence — appeal.
    Under section 151 of the former Municipal Court Act, which provided that a counterclaim must be a cause of action arising out of the contract or transaction set forth in the complaint or in an action on contract any other cause of action on contract existing at the commencement of the action, defendant in an action to recover wages as a chauffeur may counterclaim his damages for conversion of his ear by plaintiff.
    Where the attention of the trial judge was called by defendant’s counsel to the fact that his introduction of evidence had not been completed, even though the court had stated that judgment would be entered in favor of plaintiff it was its duty to recall such statement and permit the trial to proceed until counsel had finished with his defense, and the refusal of the court to do so was prejudicial and deprived defendant of a substantial right calling for the reversal of a judgment in favor of plaintiff.
    Appeal by defendant from a judgment of the Municipal Court of the city of New York, borough of Bronx, second district, rendered in favor of plaintiff.
    
      Louis J. Rosett (Allan A. Deutsch, of counsel), for appellant.
    George R. Simpson (Louis Susman, of counsel), for respondent.
   Guy, J.

Defendant appeals from a judgment entered by direction of the court in favor of plaintiff, after a trial without a jury, in an action brought to recover wages alleged to be due plaintiff for services as a chauffeur from July 24, 1914, to August 10, 1914.

The pleadings were oral, but each side served written bills of particulars.

Plaintiff testified that in November, 1913, he was employed by the defendant Wood as chauffeur at a salary of twenty dollars a week, and continued in his employment until July 15, 1914, when defendant, who still owned the car, turned the car over to one Levine under an arrangement which gave Levine the right to hire the car and divide the profits with the defendant Wood; that he worked for Levine up to and including July twenty-third, and worked again for defendant Wood from July 24 to August 10, 1914.

Defendant testified that plaintiff was continuously in his employ from the time of the original hiring up to the date of his discharge on August 10, 1914, and sets up as a separate defense breach of duty toward the defendant, his employer, and violation of instructions, in that on or about the 20th of July, 1914, in violation of express instructions given to plaintiff as defendant’s employee, plaintiff took defendant’s auto upon a trip to Stamford, Conn., with a party of other persons unknown to defendant, and that upon said trip defendant’s auto was damaged to an extent that necessitated the expending of $170 for repairs, which defendant seeks to recover against plaintiff as a counterclaim.

Plaintiff did not testify to any conversation held with defendant terminating his employment at the time the defendant entered into the arrangement with Levine, or to any conversation or correspondence resulting in the renewal of his employment by the defendant, and plaintiff’s testimony on that point is merely a conclusion of the witness.

The nncontradicted evidence of the defendant is that by his arrangement with Levine to rent his car out to others the garage expenses, gasoline bill and plaintiff’s pay should first be deducted, and Levine receive 10 per cent, of the net results of the hirings, the other 90 per cent, to go to defendant.

On all the evidence it is clear that plaintiff was an employee of the defendant at the time he took defendant’s auto to Stamford in direct violation of his employer’s orders, and that in doing so and using defendant’s auto for his own purposes he was guilty of conversion, by reason of which the defendant was damaged the amount of the bill for repairs resulting from such wrongful use and conversion of defendant’s property.

Defendant does not deny that plaintiff continued in his employ for a considerable period subsequent to the injury to the car, and plaintiff’s testimony as to the length of time stands, therefore, nncontradicted. Plaintiff made out a prima facie case of employment during the period from July 24, 1914, to August 10, 1914, which, inasmuch as defendant saw fit to continue the employment after the alleged conversion, would have entitled the plaintiff to wages during that period had there been no counterclaim set up for damages for the conversion of defendant’s car by the plaintiff. If such counterclaim for damages resulting from 4ort can be set up in an action on contract, then defendant was entitled to go to the jury on his counterclaim and introduce proof in support thereof.

It is contended by plaintiff that under the old Municipal Court Act, which was in effect at the time of the trial of this action on January 8, 1915, a counterclaim for tort Could not be interposed in an action on contract, and that therefore the issues presented by the counterclaim were not properly at issue. This contention, however, cannot be sustained. Section 151 of the former Municipal Court Act provides that a counterclaim must 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.” A cause of action for conversion cannot, therefore, be made a counterclaim in an action .upon contract unless it arises out of the same transaction, or is connected with the subject of the action. De Forest v. Andrews, 27 Misc. Rep. 145.

The counterclaim which defendant interposed herein does relate to the cause of action set up in plaintiff’s complaint, namely, the employment of plaintiff by defendant and the performance of his duties by plaintiff for the defendant; and the tort alleged in the counterclaim is of the nature of a tort growing out of contract, the tort consisting of the wrongful, dishonest and unfaithful manner in which plaintiff performed his duties, and in converting to his use the defendant’s property placed in his possession in connection with his employment by the defendant. There was, therefore, on the evidence, so far as defendant was permitted to introduce evidence, two issues of fact on defendant’s counterclaim which should have been submitted to the jury: First, was plaintiff in the employment of defendant at the time of the alleged conversion and wrongful use of defendant’s auto by plaintiff; second, was such conversion or use to which plaintiff put the property of defendant authorized by defendant either directly or through Levine? In directing a verdict for plaintiff the learned trial judge, therefore, committed reversible error. It also appears that defendant was not permitted to complete the introduction of evidence, but according to the corrected record, which has been verified by the trial judge, before he had rested and at the conclusion of the testimony of one of defendant’s witnesses, the court directed judgment in favor of plaintiff, saying: I have heard enough; ” and when defendant’s counsel remonstrated and stated he had other evidence to introduce, refused to allow him to proceed further. When the attention of the court was called by counsel to the fact that his introduction of evidence had not been completed, even though the trial court had already stated that judgment would be entered in favor of plaintiff, it was his duty to at once recall such statement or direction and permit counsel to proceed with the trial of the case until he had finished with his defense. While doubtless this was a mere inadvertence or misunderstanding on the part of the trial judge, it deprived the defendant of a substantial right and must be deemed to have been highly prejudicial.

The judgment must, therefore, be reversed and a new trial ordered, with thirty dollars costs to appellant to abide the event.

Bijub and Cohalan, JJ., concur.

Judgment reversed and new trial ordered, with thirty dollars costs to appellant to abide event.  