
    John J. Waters, Respondent, v. Minnie Lang and Barney Waller, Appellants.
    (Supreme Court, Appellate Term,.First Department,
    February, 1913.)
    Conversion—pleading—counterclaim — indebtedness of plaintiff to defendant.
    In an action for the conversion of two horses which defendant had sold for $300, defendant, claiming that plaintiff was indebted to her in the sum of $375, counterclaimed for $75. The trial court while submitting to the jury the issue as to the value of the horses failed to submit the issue raised by defendant’s counterclaim. Held, reversing a judgment in plaintiff’s favor for $475, that defendant should have been permitted to show that plaintiff was indebted to her in the amount alleged.
    The fact that defendant had not complied with the Lien Law in selling the horses did not preclude proof of the original counterclaim which arose out of the contract under which the horses were delivered and was connected with the subject of fhe action.
    Appeal by the defendants from a judgment of the Municipal Court of the city of New York, borough of Manhattan, third district, rendered in favor of the plaintiff.
    Bernard Drachenberg (Arthur G. Fuchs, of counsel), for appellants.
    Wing & Wing (Theodore H. Lord, of counsel), for respondent.
   Seabury, J.

The plaintiff sues to recover for the alleged conversion of two horses. The defendant Lang claimed that the plaintiff was indebted to her in the sum of'$375, and that she had sold the horses for $300, and interposed a counterclaim for $75. The court below failed to submit to the jury the issue raised by the,counterclaim, and submitted to the jury the issue as to the value of the horses, which the defendant Lang was alleged to have converted. The action resulted in a judgment for the plaintiff for ,$475 and costs. We think this result is unjust to the defendants, and that the defendant Lang should have been given an opportunity to prove that the plaintiff was indebted to her in the sum of $375. If she should succeed in establishing this claim, then it is clear that the $375 should have been deducted by the jury from the sum which they found to represent the value of the horses converted. The fact that the defendant did not comply with the Lien Law in selling the horses, did not preclude her from proving a counterclaim which alleged that originally $375 was due her from the plaintiff and allowing the plaintiff credit for the $300 which was realized from the sale of the horses. The claim alleged by the defendant arose' out of the contract under which the horses were delivered, and was connected with the subject of the action. Code Civ. Pro., § 501; Carpenter v. Manhattan Life Insurance Co., 93 N. Y. 552; O’Brien v. Dwyer, 76 App. Div. 516.

It follows that it was error to dismiss the counterclaim, and that the judgment should be reversed and a new trial ordered, with costs to appellants to abide the event.

Lehman and Page, JJ., concur.

Judgment reversed and new trial ordered, with cost to appellants to abide event.  