
    Herman Vasseur v. John Livingston.
    The clause in § 399 of the Code, "which requires ten days’ notice • of the intended examination of an assignor to he given, is not applicable "when the defendant was himself a party to the contract upon which the action is founded.
    It is no objection to the examination of an assignor, that he made the assignment for the purpose of becoming a witness in the action.
    Quere, whether when an assignment is valid on its face and passes the title, an inquiry into the motives of the parties in making it, with a view to exclude the testimony of the assignor, ought to be allowed ?
    Where a contract for work and labor provides that the work shall be completed within a certain time, parol evidence to show that the time was extended by the party for whom the work was to be performed is admissible.
    A counter claim is a cause of action existing against the plaintiff on the record, and for which a separate action in law or in equity could be maintained against him.
    Hence it cannot be set up in an action by an assignee when it shows a cause of action against the assignor only.
    Judgment for plaintiff affirmed, with costs.
    
    (Before Oakley, Ch. J., Duer and Slosson, J.J.)
    Feb. 9;
    Feb. 24, 1855.
    Appeal by the defendant from a judgment for the plaintiff, for $316.28, including costs. The complaint alleged that the defendant had employed one A. H. Ritchie, to make for him four engravings at the price of $50 for each plate; that Ritchie had accordingly engraved and completed the plates, but that the defendant had refused to receive and pay for them. It also averred that Ritchie’s claim had been duly assigned to the plaintiff, and demanded judgment for $200, with interest from the 20th of May, 1853, the day on which the plates, it was alleged, were completed.
    The answer denied the employment of Ritchie upon the terms stated in the complaint, and for a further answer alleged that Ritchie on the 2d of April, 1853, received from the defendant four daguerreotypes, under an agreement in writing that he would engrave four plates or portraits from such daguerreotypes, at the price of $50 each, and would finish and deliver the same within six weeks from the said 2d day of April. That Ritchie Rad failed to perform this agreement, and.that by reason of his neglect and delay, the engravings became and were of no value to the defendant.
    The defendant for a further answer said that at the time such agreement was made, he was, and still is engaged in the publication at regular intervals, of an illustrated biographical work, for the use of which the said engravings were intended, and the agreement with Ritchie was made with this knowledge on the part of Ritchie, and with reference to such intended use of said engravings by the defendant in such illustrated biographical work, for the then ensuing monthly issue; that by reason of the neglect and omission of Ritchie above stated, the defendant was prevented from using said engravings in the number, or issue, for which the same were intended, and lost great gains and profits that would and ought to have accrued to him from such intended publication, and both by reason of this neglect and breach of contract of the said A. H. Ritchie, sustained damages to the amount of two hundred dollars, which he offered to recoupe and offset against any damages to be established by the plaintiff.
    The answer then denied that Ritchie’s demand had been assigned to the plaintiff, and demanded judgment against the plaintiff, $200 damages, besides costs of the suit.
    The eause was tried upon these issues before Oakley, Ch. J., and a jury, on the 9th of January, 1855.
    Before the introduction of any evidence on the part of the plaintiff, the defendant moved to dismiss the complaint, on the ground that the answer contained material allegations of new matter constituting a counter claim, which not having been controverted by a reply, must, for the purposes of the action, be taken as true, and that the defendant was therefore upon the pleadings, entitled to judgment.
    The motion was denied by the court, and the defendant excepted.
    A. R. Ritchie, the assignor,
    was then called as a witness on the part of the plaintiff, and produced and proved an assignment in writing to the plaintiff, for the consideration of $1, of his demand against the defendant, upon which the action was brought. He testified that he had received no other consideration for the assignment than the plaintiff’s note for $175, which he had deposited in trust for collection, and which, was paid at maturity; that he had not furnished the plaintiff with money to take up the note, but believed he knew where the money came from. That about the time the note matured, a Mr, Johnston, the plaintiff’s brother-in-law, borrowed money of him, which he had no doubt went to take up the note, and was furnished to the plaintiff for that purpose ; and that he had taken from Johnston a note not yet due, for the money so borrowed.
    The counsel for the plaintiff then proposed to examine Ritchie, to prove the demand stated in the complaint. The defendant objected to his examination. The objection was overruled, and the defendant excepted.
    Ritchie then testified that in the spring of 1853, he had received from the defendant four daguerreotypes, from which he undertook to engrave four likenesses, for a biographical work the defendant was then publishing. That he gave to the defendant a receipt containing the terms of his agreement, which was produced and shown to the witness by the defendant, and is in the words and figures following:
    “1. J. G\ Chapman, Maryland,
    “2. D. A. Davis, N. C.,
    “ 3. S. S'. Haldeman, Penn.,
    “4. O. C. Pratt, Oregon.
    “Received of John Livingston, daguerreotypes of the above persons, to be engraved, at $50 each; to be finished and delivered within six weeks from this date.
    “April 2d, 1853.
    “ A. H. Ritchie.”
    That he, the witness, had completed the engravings, but that the plates were not ready for delivery within the time limited. The witness then proceeded to testify to certain facts tending to show that the time for the completion of the plates had been extended by the defendant; that he had not furnished the witness in time with the necessary lettering; and, that after the six weeks had expired, the witness had furnished him with proofs from the plates, which he had not only received without objection, but Rad directed certain alterations to be made therein, to render the likenesses more perfect.
    The defendant objected to this evidence, on the ground that no evidence was admissible to vary or modify the written agreement set forth in the answer. The objection was overruled, and the defendant excepted.
    The testimony on the part of the plaintiff being closed, the defendant was sworn and examined as a witness on Ms own behalf, to prove that there had been no extension of the time limited for the performance of RitcMe’s agreement.
    The OMef Justice, in charging the-Jury, submitted to them two questions of fact. Eirst, whether the time for the completion of the plates had been extended, or all objections to the delay been waived by the defendant; and second, whether the assignment by RitcMe was made in good faith, so as to divest Mm of all interest in the cause, or whether it was a mere pretence, he still remaining the actual owner of the demand; and he instructed the jury, that if upon either of these questions their opinion should be in favor of the defendant, he would be entitled to their verdict.
    There were no exceptions to the charge. The jury retired, and on their return rendered a verdict for the plaintiff for $210.20.
    The defendant, in person, now moved for a reversal of the judgment, and insisted that as there was no reply to the allegations of new matter contained in the answer, those allegations ought to have been taken as true, and the complaint, therefore, to have been dismissed. That section 112 of the Code, provides that the action by an assignee shall be without prejudice to any set-off or other defence existing at the time of the assignment, and that it could not be doubted that the facts, which from the want of a reply were admitted to be true, constituted a good defence. That by section 168 of the Code, every allegation of a counter claim not controverted by a reply, must be taken to be true, and that the claim set up in the answer was manifestly a counter claim within the definition of the Code. The defendant further contended that RitcMe ought not to have been examined as a witness, no notice of his intended examination having been given, as required by section 399 of the Code, and cited Knickerbocker v. Aldrich, 7 How. P. R. 1; Falcon v. Keen, 8 id. 341. The defendant further argued, that the evidence tending to vary the agreement set forth in the answer, by showing that the time for its performance had been extended, ought to have been excluded; and that upon the facts proved, the court ought to have held that the assignment to the plaintiff of Ritchie’s claim was merely colorable, and, therefore, void.
    
      Q-. A. Bowman, for the plaintiff,
    insisted that—
    I. No reply to the defendant’s answer was necessary.
    First. — The plaintiff is assignee of the demand upon.which the action was brought. If there was a breach of the contract on the part of the assignor, as is set up in the answer, the plaintiff could not recover; but no recoupement or counter claim could be allowed against him for damages sustained by defendant in consequence of such breach; for such damage, if any, defendant has his remedy against the assignor.
    Second. — The breach of the contract, alleged in the answer, is in issue upon the pleadings without a reply, and the allegation of the damage to defendant by the alleged non-performance of plaintiff’s assignor required no reply, the effect of such damage, even if admitted, being contingent upon the decision of an issue already joined. The fact of performance must be decided, and upon that the whole importance of the constructive admission of damage claimed upon the pleadings depends;-thus, the utmost that can in any view of the matter be claimed as the effect of plaintiff’s omission to reply, is simply this — that upon proof of the breach of the contract by plaintiff’s assignor, the amount of damage is admitted, and proof on that point dispensed with; this admission could only be material in the case of an action brought by the original claimant.
    Third.' — Since the amendment of section 168 of the Code, (April 16, 1852,) it is no longer, every allegation of new matter constituting a defence, but “ every allegation of new matter constituting a counter claim” that requires a reply, in order to avoid a constructive admission of its truth. It is clear that the averment of the answer, that the work was to have been completed in six weeks, and was not so completed, does not constitute a counter claim, and that no admission of the truth of that averment can be inferred from the omission to reply to it. If, therefore, tlie additional allegation of damage constitutes a counter claim, and required a reply to repel the inference of its admission, nothing that is material in this action is admitted by the omission to reply.
    H. The objection to Ritchie as a "witness, merely went to his credit, and was for the consideration of the jury. It is disposed of by the verdict.
    IH. The evidence of the extension of the time within which the work was to be done, was properly admitted. It was not within the rule prohibiting parol evidence to vary an agreement in writing.
    IY. The motion for a nonsuit was properly denied. The plaintiff had made out his case.
    Y. The question as to the real ownership of the demand — i. e., whether plaintiff was the actual party in interest, was a question for the jury. As such, it was distinctly submitted to them by the charge of the court. By their verdict they have found upon that point in favor of plaintiff.
    
      
       Affirmed in the Court of Appeals, 3 Kernan, 248.
    
   By the COURT.

Duer, J.

We are of opinion, and clearly so, that all the exceptions taken on the trial were properly overruled, and that the judgment that has been rendered for the plaintiff must be affirmed.

As to the objection that Ritchie was improperly admitted as a witness, we might content ourselves with saying that the objection was not placed upon the trial upon the ground that is now relied on, namely, that notice of the intention to examine him had not been given; for had this ground then been taken, we have no right to say that it would not have been removed by proof of the actual service of notice. But assuming that notice of the intended examination of Ritchie was not in fact given, the conclusive answer to the objection is, that none was necessary, and that the contrary supposition, as we have before and not un-frequently held, is founded upon a mistaken construction of those provisions of the Code which relate to the subject. As we read and understand section 399 of the Code, the clause which requires ten days’ notice of the intended examination of an assignor to be given, is connected with and refers solely to that which immediately precedes it; hence, is not applicable at all when the action is brought by an assignee against a defendant who was himself a party to the contract upon which the action is founded.

The next objection that we shall notice, that upon the facts proved, or admitted by Ritchie, the Judge ought to have held the assignment by the plaintiff to be void, is also and plainly untenable. Ritchie, it is true, frankly confessed that he made the assignment for the purpose of making himself a witness, but this, since the repeal of the provision in section 899, which forbade an assignment for that purpose, or, more properly, rendered the assignor in such a case an incompetent witness, he had a perfect right to do, and to confer this right must have been the intention of the Legislature in repealing the provision. As the Code now stands, the only question is, whether the assignment operated to pass to the assignee the title to the demand in suit, and if this is a question, as appears to have been assumed on the trial, depending upon the good faith of the parties, it was properly submitted to the determination of the jury, and their decision of it in favor of the plaintiff, which their verdict involves, must be regarded by us as conclusive. The Judge would certainly have erred, if, upon the evidence before him, he had himself made an opposite decision. Speaking individually, I strongly incline to the opinion, that the Judge, instead of submitting the question to the jury, ought himself to have determined that the assignment was valid, and the assignor a competent witness. When an assignment has been duly executed and delivered, and, by its terms, vests the legal title in the assignee, it is valid as between the parties, whatever may have been their motives or intentions in making it, and I apprehend, that evidence of an agreement or understanding between them that it should not operate at all, but that the judgment, if recovered, and its fruits, should belong wholly to the assignor, could not be held to divest the title which, by the execution and delivery of the instrument, the assignee acquired. Proof of such an agreement would go very far to impeach the credit of the assignor as a witness; but, as it seems to me, that it would not in judgment of law render him the real party in interest, it would not render him incompetent. And such, in the case of Davison v. Miner, (9 How. Pr. R., 524,) appear to have been the views of a learned Judge, whose opinions I have long been accustomed to think carry with them a far more than ordinary, weight and authority.

Another objection to the plaintiff’s recovery, which was strongly pressed 'by the defendant, is, that evidence tending to show that the time for the completion of the engravings ■ according to Ritchie’s agreement, had been extended, or the objections to his delay in performance waived by the defendants, ought not to have been received, since the effect of the evidence was to modify and vary the written agreement set forth in the answer, and proved upon the trial, contrary to the rule of law which forbids any subsequent alteration of such an agreement except by some other agreement or instrument of equal authority; that is, an agreement or instrument in writing.

This objection, at first view, seems to be plausible, yet, unless we refuse to follow an unbroken series of decisions, we are bound to say that the rule of law on which the defendant relies, although undeniable when properly understood, has no application to the case before us. It is not a case within» its provisions, although it may seem to be embraced within its terms.

Ño rule of evidence, we apprehend, is more clearly and certainly settled, than that in an action upon a written contract for work and labor stipulated to be performed within a definite time, an extension of the time, or an entire waiver of objections to a delay in performance, may be shown by parol evidence of the declarations, or acts in pais, of the party, who at the time was entitled to claim the performance. I have stated that this rule is established by a long series of decisions, but, without citing the English cases, I shall content myself with referring to some in our own Reports; and I add, that it seems to me that the rule, as I have stated it, is, in reality, only a special application of one far more general, namely, that the performance of a condition the breach of which would otherwise create a forfeiture, or bar a recovery, may, in all cases, be dispensed with by the party to whom the performance is due; of which the waiver, by an acceptance of rent in ar-rear, of a right to re-enter for the non-payment of the rent on the day stipulated in the lease, is a striking instance. (Keating v. Price, 1 John. Ca. 22; Fleming v. Gilbert, 3 John. R., 528; Gorte v. Gorte, 10 John. 402; Botsford v. Burr, 2 John, Ch. R., 405; Crane v. Maynard, 12 Wend. 408; Betts y. Perine, 18 Wend. 219; Smith v. Grogerty, 4 Barb. 616.)

looking at the evidence in this case, it would seem, according to the testimony of Ritchie, that not only the defendant dispensed with a performance of the agreement within the time limited, but himself prevented its performance by his failure to furnish in due season the lettering necessary to be engraved on the plates; but as this question seems not to have been submitted to the jury, it cannot be said that their verdict involves its decision, and we have certainly no right to decide it ourselves. The question, however, of an extension of the time limited for the completion of the plates was distinctly submitted to the jury, and upon this, as well as upon that of the good faith of the assignment, their verdict is conclusive.

A single exception, and it is the last, remains to be noticed, and although it is that on which the defendant seemed mainly to rely, it will not be found to require many observations.

There is no reply, it is said, to the allegations in the answer of new matter constituting a counter claim, and these allegations are therefore admitted to be true, and as the counter claim is for a sum equal in amount to that demanded by the complaint, the admission of its truth, it is urged, necessarily operated to extinguish the demand.

The Judge, therefore, erred in refusing, upon this ground to dismiss the complaint.

Now, it is quite true, that when there is no reply to an allegation, which is a counter claim in the proper sense of the term, the justice of the claim is admitted, but it is equally certain that when the allegation is a defence, only, and not a counter claim, a reply is unnecessary, and the burden of proving it rests upon the defendant. Hence the objection so confidently relied on is manifestly groundless, if the allegations of new matter in the answer amount to a defence, and no more than a defence, and the supposition that they constitute a counter claim is founded on an entire misapprehension of the meaning or proper application of the term. And such exactly is the case before us. A counter claim has been very justly defined to be a cause of action existing against the plaintiff on the record, and for which a separate action at law or in equity could be maintained against him. (Gleason v. Moon, 2 Duer, 642.) It follows from tMs definition, that when the action is brought by an assignee, an allegation in the answer of a demand, that from its nature could only be enforced in an action against the assignor, although from the facts set forth it may possibly be good as a defence, as a counter claim is irrelevant and senseless. What, then, is the new matter alleged in the present answer? It is that Ritchie failed to perform his agreement, and that from his non-performance the defendant has sustaned damages to the amount of $200, for which a judgment is demanded. The failure of Ritchie to perform his agreement was a good defence, which as such required no reply, and which the defendant was bound to prove, and which had he proved to the satisfaction of the jury, he would have obtained their verdict. He has had all the benefit of it as a defence to which he was entitled; but the claim for damages as resulting to the defendant from Ritchie’s breach of his agreement, is a demand that from its nature could only be enforced in an action against Ritchie himself, and for which it is certain that the plaintiff on the record could never be made liable. In brief, a counter claim is a substitute for an action, or, more properly, is itself an action commenced by arf answer instead of a summons; and, hence, unless as an action it is maintainable against the plaintiff on the record, it is nugatory.

The allegation that under § 112 of the Code the assignee of a demand takes it subject to every defence that existed at the time of the judgment is undeniably true, but is wholly inapplicable. A counter claim, which is not also a set-off, is not'a defence. It is a distinct and independent-cause of action, which is not used simply to repel the claims of the plaintiff, but for which a judgment against him is, in all events, demanded. Previous to the Code it could not be set up by a defendant at all, and the permission to set it up in an answer, although with a change of its name, assuredly has not changed its legal character. A recoupement or a set-off is a defence; but the defendant who avails himself of such a defence admits, in whole or in part, &e demand of the plaintiff as alleged in the complaint. In the case before ns — the counter claim, as it is called, which is alleged in the answer, is a positive denial that the cause of action set forth in the complaint ever existed — and is, therefore, neither a recoupement, nor a set-off. It is true, that had the facts, upon which it exists, been established by the evidence, the recovery of the plaintiff would have been wholly defeated; but it is equally certain that in no event could a verdict or judgment have been rendered against the plaintiff for damages for which, if sustained at all, his assignor Ritchie alone was hable. It follows that there is no counter claim in the answer to which the plaintiff was bound to reply.

The judgment appealed from must be affirmed with costs. 
      
       It is for this reason that the plaintiff in an action in -which a counter claim has been interposed, is not permitted to discontinue -without leave of the court. (Cockle v. Underwood, 3 Duer, 676.)
     