
    Richard A. Jones, Respondent, v. James M. Leopold and Alfred M. Leopold, Composing the Firm of James M. Leopold & Co., Appellants.
    
      Complaint—when allegations of false representations maybe disregarded—stay of proceedings where counter actions, an'ising out of the same transactions, a/>'e brought —a defendant is not bound to set up a counterclaim.
    
    Where the complaint in an action avers certain false and fraudulent representations, claimed to have been made by the defendants to induce the plaintiff to enter into the transactions out of which the debt claimed to be due arose, but the complaint, as a whole, shows that it was not the intention of the plaintiff to bring his action in tort, but one resting solely upon a money demand, the averments of fraudulent representations do not characterize the action and may be disregarded.
    After the commencement of an action in the Supreme Court, the defendants therein brought an action in a local court. Both causes of action were to recover sums of money and both arose out of the same transactions.- The plaintiff, in the local court action might have- set up his cause of action as a counterclaim in the Supreme Court action, but a determination of the Supreme Court action would not necessarily settle all of the issues arising out of the transactions upon which both actions were brought.
    
      Held,, that the defendants in the Supreme Court action were not obliged to set up their claim as a counterclaim in the Supreme Court action, but might properly bring an independent action thereon, and that the .court had no power to stay the trial of an action so brought until the trial of the Supreme Court action.
    O’Brien and Laughlin, JJ., dissented.
    Appeal by the defendants, James M. Leopold and another, composing the firm of James M. Leopold & Co., from an order of the Supreme Court, made at the New .York Special Term and entered in the office of the clerk of the county of. New York on the 11th day of March, 1904, granting the plaintiff’s motion to stay all proceedings in an action pending in the Municipal Court of the city of New York, in which the defendants herein are plaintiffs and the plaintiff herein is defendant, until the final determination of the above-entitled action.
    
      Anson M. Beard, for the appellants.
    
      Mark M. Schlesinger, for the respondent.
   Hatch, J.:

This action is brought to recover the sum of $2,700, moneys which the plaintiff avers he had deposited with the defendants, who compose the firm of James M. Leopold & Co., and which sum he claims is now due. and owing to him. The action was commenced on the 15th day of January, 1904. The defendant procured an extension of time to answer and no answer has yet been served. While the complaint avers certain false and fraudulent representations claimed to have been made by the defendants to induce the plaintiff to enter into the transactions out of which arises the debt claimed to be due, yet the complaint as a whole shows that it was not the intention of the plaintiff to bring his action in tort for a conversion of the moneys, but to recover solely upon a money' demand. The prayer of the complaint is for a money judgment, with interest upon specified sums from particular dates. The averments of fraudulent representations, therefore, do not characterize the action and may be disregarded. (McDonough v. Dillingham, 43 Hun, 493; Foote v. Ffoulke, 55 App. Div. 617; Siebrecht v. Siegel-Cooper Co., 38 id. 549.)

After the commencement of this action the defendants herein began an action in the Municipal Court of the city of New York to recover the sum of $96.96 upon a money demand. It appears from an examination of the two complaints that the two causes of action arose out of the same subject-matter and that if the defendants in the first action chose to plead their demand as a counterclaim and establish the same, it would defeat plaintiff’s action, either wholly or pro tanto. After the commencement of the action in the Municipal Court the plaintiff procured an order at Special Term directing that all proceedings in the Municipal Court action be stayed until the final determination of the action in the Supreme Court. It is the settled rule that “ where the decision in one action will determine the right set up in another action and the judgment on one trial will dispose of the controversy in all the actions, a case for a stay is presented.” (Dolbeer v. Stout, 139 N. Y. 486; Allentown F. & M. Works v. Loretz, 16 App. Div. 72; Cushman v. Leland, 93 N. Y. 652.) This rule, however, is without application to the facts of the present case. A determination in the first action would not necessarily settle all of the issues arising out of the transactions upon which the actions are brought. The defendants in the first action may plead a denial of the averments of the complaint or any new matter in avoidance and may defeat the plaintiff’s • action by showing that either he never had a cause of action or if he had one that his right to enforce the same did not at the time of the trial exist. Such conclusion would not necessarily determine the defendants’ right in that action to recover upon the money demand in the action which they have instituted. Nor could they recover any. affirmative judgment in such action upon their claim, unless they pleaded it as a counterclaim and demanded an affirmative judgment. This, 'however, they are not bound to do, as they have and had at the commencement of their action the legal right to resort to a cross action for the purpose of establishing such demand. The right is substantial, as.a party under such circumstances is authorized to institute an action which he may control. Of this right he cannot be deprived because it was possible to litigate all the matters "in one action." (Brown v. Gallaudet, 80 N. Y. 413; Consolidated Fruit Jar Co. v. Wisner, 38 App. Div. 369.)

The defendantshaving the legal right to institute an. independent action to enforce ■ their claim, there was no power in the court to stay the trial of such action. The injunction, therefore, which stayed all proceedings in the last action was without authority in law and- beyond the. power of the court to grant.

It follows that the order should be reversed, with ten dollars costs and disbursements, and the motion for a stay denied, with ten dollars costs, and the stay vacated.

Ingraham and McLaughlin, JJ., concurred; O’Brien and Laughlin,. JJ., dissented.

Order reversed, with ten dollars costs and disbursements, motion denied, with ten dollars costs, and stay vacated.  