
    THE BOSTON SILK AND WOOLLEN MILLS, Plaintiffs and Appellants, v. GEORGE EULL, Survivor, &c., Defendant and Respondent.
    The district courts of the city of New York are not courts of justices of the peace within the meaning of subdivision 3 of section 304 of the Code.
    A plaintiff who sues in a court of record, in an action arising on contract and for the recovery of money only, and who recovers judgment for less than fifty dollars in consequence of a counterclaim interposed and established by the defendant in the action, is entitled to the costs of the action as a matter of course, provided his claim, together with the defendant’s counterclaim, exceed #400 in amount. A justice of the peace has no jurisdiction of such an action, within the meaning of subdivision 3 of section 304 of the Code, and the fact that the issues between the parties might have been tried and disposed of in a district court in the city of New York does not change the rule.
    Before Barbour, C.J., Fithian and Freedman, JJ.
    
      [Decided June 11, 1869.]
    Appeal from an order made at Special Term, reversing the decision of the Clerk of this Court to the effect that the defendant is not entitled to the costs of this action, declaring the defendant entitled to such costs and directing the Clerk to adjust them.
    The appeal involves the question, which party is entitled to the costs of the action. The complaint was for goods sold and delivered between the 4th day of November and the 30th day of December, 1867. The answer “ by way of set-off or counterclaim ” set up an agreement as to quality, and to the further effect that all goods thereafter delivered, but not coming up to said quality, might be returned, and that credit should be allowed to the defendant therefor; that dealings took place between the plaintiffs and defendant during the years 1865,1866, and 1867, upon the basis of said agreement; that considerable portions of the goods so delivered under the agreement did not come up to the stipulated quality and were returned and received back, and credit allowed therefor to the defendant; that among the goods thus purchased were ninety-eight gross of tape, amounting to the sum of three hundred and ninety-two dollars, which were not of the quality stipulated for, but were, as soon as discovered, returned, on or about December 18,1867, which sum the defendant claimed as a set-off or counterclaim against any sum which the plaintiffs might recover for the goods stated in the complaint.
    The plaintiffs, in their reply, deny specifically each and every allegation in the answer, referring to the counterclaim therein set up.
    Upon the trial, the plaintiffs established their demand for ' $405.72, and defendant established; his demand for $392. Under the direction of the Court, the jury found a verdict for • plaintiff for $13.72.
    Upon the adjustment of the costs the defendant presented a bill of costs, which the Clerk declined to adjust, on the ground that the plaintiffs, and not the defendant, were entitled to costs.
    Upon this decision, an application was made at Special Term for an order directing the Clerk to adjust the defendant’s costs.
    The Judge at Special Term granted defendant’s motion and directed the clerk to adjust defendant’s costs.
    From this order the plaintiffs appealed to the General Term.
    
      Mr. George H. Forster for appellants.
    The costs in this suit depend on the construction of sec. 54, subdivision 4, and sec. 304, subdivision 3, of the Code, which are ■ as follows: •
    
      “ No justice of the peace shall have cognizance of a matter of account where the sum total of the accounts of both parties, * proved to the satisfaction of the justice, shall exceed four hundred dollars ” (Code, sec. 54, subdivision 4).
    “ Costs shall be allowed of course to the plaintiff, upon a recovery in the action of which a court of justice of the peace has no jurisdiction ” (Code, sec. 304 and subdivision 3.)
    " It is enough to entitle plaintiff to costs, that the facts of his case, as proved in a court of record, establish it to be one of. which a justice of the peace, by section 54, has no jurisdiction.” A plaintiff who sues in a court of record in an action arising on contract and for the recovery of money only, and proves contested demands which, with those established by the defendant, exceed §400 in amount, is entitled to costs as a matter of course, if he recover any sum whatever (Stilwell v. Staples, 5 Duer, 691 ; vide Crim v. Cronkhite, 15 How., 250).
    ' The fact that the Marine Court of the City of Hew York would have had jurisdiction of this action, while a justice of the peace would not, does not deprive plaintiff of the costs. The rule of the Code as to costs is a rule extending throughout the State, and the fact that the justices of the Marine and District Courts in the city of Hew York have a more extended jurisdiction than justices of the peace, does not make the rule as to costs different in this city from what it is in other parts of the State.
    The rule of the Code is the same for this city as for the parts of the State where courts of justice of the peace are held.
    
      Mr. Samuel C. Conable for respondent.
    This is an action of which a court of justice of the peace has jurisdiction (Laws of 1857, vol. 1, ch. 344, sec. 3, page 708, provide that the district courts in the city of New York shall have jurisdiction).
    “ In action similar to those as provided by sections fifty-three and fifty-four of the Code of Procedure, when the sum recovered shall not exceed two hundred and fifty dollars, notwithstanding the account of Tooth parties may exceed four hundred dollars.”
    
    This statement was an amendment of sections 53 and 54 of the Code, which limited the jurisdiction to §400.
    The case of Stilwell v. Staples, 5 Duer, 691, relied on by plaintiff, was decided at the October term, 1856; and before this amendment, and is based upon the statute as it is therein stated.
    
      The district courts of this city, then, have jurisdiction of this action (Crane v. Holcomb, 2 Hilt., 269).
    The district court of this city is a court of a justice of the peace within the meaning of subd. 3, sec. 304 of the Code.
    The case of Crane v. Holcomb, 2 Hilton, 269, decided at December Term, Common Pleas, is a complete authority in all points in favor of defendant.
    It establishes not only that the district is a court of a justice of the peace within the meaning of subd. 3 of sec. 304 of the Code, but also that it has jurisdiction of this action.
    The defendant claimed payment on the same by way of goods returned and Icept under an agreement to return them, of $392, and insisted upon being allowed .the same merely in reduction of plaintiff’s claim, and the jury' so allowed it. .
    It is well settled that payments made towards satisfying a debt are not demands, and constitute no part of an account, but extinguish the debt pro tanto (Crim v. Corthill, 15 How., P. R., 252; Malison v. Bloomfield, 10 Wend., 556; Mills v. New York, 10 Wend., 557; Lamoure v. Caryl, 4 Den., 370 ; 2 Cow., 418).
    The only account, therefore, proved or involved in the case was $13.72, the balance after deducting defendant’s payments.
   By the Court:

Freedman, J.

It appears sufficiently, from the allegations of the answer, that the ninety-eight gross of tape returned did not constitute any portion of the goods for the recovery of the price of which this action is brought. But whatever doubt might be indulged in upon a superficial perusal of the answer alone, is dispelled by the testimony of the defendant himself, who, upon his examination, testified that the ninety-eight gross were among a number of deliveries received from about June to October or November, 1867, that they had been settled for by note, which became due on the 24th day of December, 1867, and was paid at maturity.

The affidavits of George H. Francis and George H. Forster, submitted on the hearing at the Special Term, also prove distinctly that the ninety-eight gross of tape formed no part of the goods for which the suit was brought. There can, therefore, be no doubt that the defendant’s claim of three hundred and ninety-two dollars constituted a counterclaim within the meaning of section 150 of the Code (Lignot v. Bedding, 4 E. D. Smith, 285; Halsey v. Carter, 1 Duer, 667; Welch v. Hazleton, 14 How., 97; Gillespie v. Torrance, 25 N. Y., 306).

Counterclaims, under the Code since 1852, embrace both set-offs and recoupments as they were understood prior to that time (Pattison v. Richards, 22 Barb., 146).

A set-off is a money demand by the defendant against the plaintiff, and refers to a debt or demand independent of and unconnected with the plaintiff’s cause of action. It may exceed the plaintiff’s claim or fall short of it.

Becoupment, however, always implies that the plaintiff had a cause of action; the doctrine of recoupment was generally confined to damages for non-performance of the very contract sued upon (Seymour v. Davis, 2 Sandf., 239, and Dennig v. Kemp, 4 Sandf., 147), and a balance could not be certified in favor of a defendant before the Code (Sickels v. Pattison, 14 Wend., 257). Since the Code, however, of 1852, it seems that if the defendant’s demand is sufficient, a defendant may not only defeat a plaintiff’s claim by recoupment, but recover a balance, notwithstanding the former rule, to the effect that, in cases of recoupment, as opposed to set-off, a defendant could only use his claim to defeat that of the plaintiff (Ogden v. Coddington, 2 E. D. Smith, 317).

But while the counterclaim authorized by the Code embraces both set-off and recoupment, it is broader and more comprehensive than either (Vassar v. Livingston, 3 Kern, 256; Beardsley v. Stover, 7 How., 294). It secures to the defendant the full relief which a separate action at law, or a bill in chancery, or a cross-bill would have secured him on the same state of facts (Gleason v. Moen, 2 Duer, 642). It may be for either liquidated or unliquidated damages (Schubart v. Narteau, 34 Barb., 447), and for unliquidated damages arising on a contract different' from the contract on which the action is -brought (Lignot v. Redding, 4 E. D. Smith, 285), and of an equitable or legal nature (Currie v. Cowles, 6 Bosw., 453).

The plaintiffs in this action sued, to recover the price of specific quantities of goods sold and delivered within a certain specified period of time.

The counterclaim- of the defendant consisted of a money demand against the plaintiffs wholly independent of and unconnected with the plaintiffs’ cause of action, namely, of a claim for the value of other goods, which had been returned; although settled for, and taken .back by the plaintiffs, and which had nothing whatever to do with ■ the goods for which plaintiffs sued This claim, therefore, did not, properly speaking, go in reduction of plaintiffs’ claim; the defendant could not recoup it, but it constituted a set-off within the definitions hereinbefore laid down, for which the defendant might have brought a separate action Against the plaintiffs,-for the right of the plaintiffs to claim and of the defendant to counterclaim was reciprocal, as has been established by the verdict of the jury.,

The jury found in favor of the plaintiffs for the full amount of their claim, four hundred and five dollars and seventy-two cents, and in favor of the defendant for the full amount of the ■ defendant’s set-off, three hundred and ninety-two dollars, and, after deducting the same from the amount due to the plaintiffs, rendered a verdict for the difference, to wit", thirteen dollars and seventy-two cents in favor of the plaintiffs.

The total amount of the accounts and demands of both parties proved on the trial consequently was seven hundred and ninety-seven dollars and seventy-two cents.

Subdivision 3 of section 304 of the Code provides, that costs shall be allowed, of course, to the plaintiff, upon ’a recovery- in -the actions of which a court of justice of the peace has no jurisdiction, regardless of the, amount of the recovery (Stilwell v. Staples, 5 Duer, 691); and subdivision 4 of section 54 of the Code says that no justice of the peace shall have cognizance of a matter of account where the sum total of the accounts of both parties, proved to the satisfaction of the justice, shall exceed four hundred dollars. In construing these sections of the Code together, the right of the plaintiffs to recover the costs of the action seems not only clear, but appears to be fully established by the decisions in Stilwell v. Staples (5 Duer, 691), Crim v. Cronkhite (15 How., 250), Gilliland v. Campbell (18 How., 177), and see Glackin v. Zeller (52 Barb., 147).

The defendant insists, however, that this is otherwise since the passage of chapter 344 of Laws of 1857 (vol. 1, page 708), entitled “An act to reduce the several acts relating to the district courts in the city of New York into one act,” and claims .that as under the third section of said act jurisdiction has been conferred upon said district courts in actions similar to those as provided by sections 53 and 54 of the Code, where the sum recovered shall not exceed two hundred and fifty dollars, notwithstanding the accounts of both parties may exceed four hundred dollars, the district courts of the city of Hew York had jurisdiction of this action, and that for that reason and the further reason that they are courts of the justices of the peace within the meaning of that phrase in the Code, he is entitled to costs. It is true that by the language of the said third section the jurisdiction of the district courts is to be ascertained, not as has been the case before, by the amount claimed, but by “ the sum recovered.” It seems the plaintiff may claim any amount, and if he does not recover more than two hundred and fifty dollars, the court has jurisdiction; but the plaintiff can in no case recover more than two hundred and fifty dollars.

Section 49 of the same act provides, however, that where the amount found due to either party exceeds the sum for which the justice is authorized to enter judgment, such party may remit the excess, and judgment may be entered for the residue. Assuming, therefore, that the district courts of the city of New York had jurisdiction to try the issues between the parties to this action, the question of costs is to be determined by construing together section 303, subdivision 4 of sections 304 and 305 of the Code; and in such case neither party is entitled to costs against the other, under the decision in Kalt v. Lignot (3 Abb., 190 ; affirming same case, reported in 3 Abb., 33, and 12 How., 535). The decision in the case of Crane v. Holcomb (2 Hilt., 269), relied on by the defendant as establishing a contrary doctrine, will be found, on close' examination, not to be in conflict with the last-cited case, for the reason that the answer in Crane v. Holcomb, in which case the plaintiff sued as indorser and holder of a promissory note made by the defendant, did not-set up an independent, demand against the plaintiff, for which the defendant might have maintained a separate action against the plaintiff, but an equitable defence against the greater part of plaintiff’s claim, namely, a counterclaim against the payee, while he was holder of the note, and then alleged further that the note came to plaintiff’s possession after maturity, and subject to defendant’s claim against it. The case was therefore correctly decided, notwithstanding the decision seems to have been placed upon different grounds.

But the question still to be determined is whether the district courts of the city of New York are courts of justices of the peace within the meaning of that phrase in the Code. The defendant has not been able to cite a case in which this point has been decided. Crane v. Holcomb, supra, is no authority on this point; and in Maguire v. Gallagher (2 Sandf., 402), the Court expressly declined to base its decision upon this theory. The district courts referred to were created in 1813 (2 R. L., p. 370, section 85), and were known until the year 1848 under the style of “ assistant justices’ courts of the city of New York.” By chapter 153 of the laws' of 1848 (p. 249), they were reorganized, and designated as “justices’ courts of the city of New York.” During the same session their name or style was changed to “ assistant justices’ courts of the city of New York” (Laws 1848, p. 404); and the Code of the same year refers to these courts by the same style (Laws 1848, p. 509). In 1849, the style of said courts was again changed' to that of “ justices’. courts' in the. city of New York, and in. 1852 to “district courts in the city of New York” (Laws 1852, chap. 324, p. 471). By the act of 1857, hereinbefore referred to, the last-named style was retained, and the said courts have been known by that name ever since. It will be found, however, upon an examination of the various statutes of this State passed since 1813, and which are too numerous to be mentioned in detail, that during the whole period of their existence under the aforesaid various names these courts have enjoyed and maintained, before and since the Code, and at all other times, a jurisdiction entirely distinct from that of courts of justices of the peace; they were organized in a different manner; they were regulated by special enactments, and treated as a distinct class of city courts of a jurisdiction inferior to that of courts of record, but greater than that possessed by courts of justices of the peace; provisions of law applicable to the latter were held applicable to the district courts only so far as they were made so by statute ; and the Code itself has maintained to the present day a marked and wide distinction between proceedings in, appeals from, and regulations appertaining to said district courts and courts of justices of the peace. The history of legislation upon this subject is therefore adverse to the claim set up by the defendant; and in Mills v. Winslow (2 E. D. Smith, 18), the General Term of the Court of Common Pleas expressly decided in broad terms that the said district courts and the marine court of the city of New York are not courts of justices of the peace within the meaning of the Code. The cases of Jackson v. Whedon (1 E. D. Smith, 141), and Davis v. Hudson (5 Abb., 64), tend to establish the same doctrine.

Another important reason why the construction contended for by the defendant cannot be sanctioned, is, that no statute should be so construed as to work injustice. If the plaintiffs had commenced their action for the recovery of the sum of four hundred and five dollars and seventy-two cents claimed by them in a district court, and the defendant had failed to appear, the plaintiffs could have taken judgment only foi two hundred and fifty dollars. Their claim would have become merged in the judgment, but the judgment would not have constituted a bar to the claim of three hundred and ninety-two dollars of the defendant, and the defendant could have collected his entire claim in a separate action instituted for that- purpose in a court of ■record.

The order appealed from should be reversed, with ten dollars •costs, and the decision of the Clerk affirmed  