Becker v. Northway

• Decision Date: 14 July 1890
• Citation: 44 Minn. 61
• Parties: GERHARD BECKER <I>vs.</I> W. P. NORTHWAY and Intervenor.
• Court: Minnesota Supreme Court

Page 61

44 Minn. 61

GERHARD BECKER vs. W. P. NORTHWAY and Intervenor.

Supreme Court of Minnesota.

July 14, 1890.

Appeal by plaintiff from orders of the district court for Hennepin county, Rea, J., presiding, overruling his demurrers (1) to the answer, and (2) to a complaint in intervention.

G. E. Matile and Matile & Brice, for appellant.

E. D. Jackson, for respondents.

GILFILLAN, C. J.

The action is upon defendant's written guaranty of payment of any indebtedness arising from samples sent one J. L. Barry by plaintiff for the purpose of taking orders for plaintiff by Barry, the condition of the guaranty, as expressed in the writing, being "that said Barry is to account, as per invoice, for all samples received from said Becker." The complaint alleges the delivery by plaintiff to Barry, on the faith of the guaranty, of samples to the value of $450.62, and the failure of Barry to account for them, and asks judgment for such value. The defendant answered, setting up as a first defence that, on a date specified, Barry executed to plaintiff his promissory note for $650, and a mortgage on real estate to secure it, and delivered them to plaintiff, under an agreement by which plaintiff was to negotiate and sell the same at their face value, and pay the proceeds to Barry, but, instead of doing so, he foreclosed the mortgage, bid in the property at the sale, — it then being worth at least $1,000; and, for a second defence, it alleges that Barry, being in the employment of plaintiff as a salesman during a period being part of that during which the samples were delivered, earned, at the commissions agreed on between them, in taking orders and selling goods for plaintiff, $335.03, of which but $253.95 has been paid, leaving $81.08 unpaid. The answer also alleges that Barry is insolvent, and plaintiff a non-resident; and it also alleges the fact that Barry has intervened in the action, and sets forth the complaint in intervention to show the grounds thereof. It asks that the amounts found due Barry be applied in liquidation of the claim alleged in the complaint. Barry intervened in the action, and in his complaint sets forth the claims that are set forth in the defendant's answer, and asks judgment for the amounts of the claims, less the amount claimed in the complaint. Plaintiff demurred both to the answer and the complaint in intervention, and his demurrers were overruled.

As between plaintiff and defendant, the claims set forth in the answer were not legal counterclaims, because they were not causes of action in favor of defendant. The commissions earned by Barry would be a defence pro tanto to the cause of action alleged in the complaint, just as partial payment by Barry would be; for, those commissions being earned, manifestly, in the use of the samples and the business and purpose for which they were furnished, they were proper items to be allowed in accounting for the samples. The matter of the note and mortgage, conceding that Barry might elect to treat it as a claim founded on contract, would not be a legal defence, but, if sustained at all, must be sustained as an equity in favor of defendant, within the meaning of Gen. St. 1878, c. 66, § 96, subd. 3. The test of such equity was stated by this court as early as Gates v. Smith, 2 Minn. 21, (30.) "The test of the sufficiency of any particular defence, equitable in its nature, must be whether, had the same facts been presented by a bill in chancery, would that court have entertained the case, and granted the relief sought here?" This was approved and applied in Barker v. Walbridge, 14 Minn. 351, (469;) Birdsall v. Fischer, 17 Minn. 76, (100;) Williams v. Murphy, 21 Minn. 534. Could the defendant have maintained an equitable action to enforce, for his protection, the set-off of the claims in favor of his principal, assuming that on the matter of the note and mortgage to be founded on contract, to the entire or partial extinguishment of this plaintiff's claim against him? In the absence of special circumstances, courts of equity followed the rule of law in the matter of set-off. But the rule was subject to exceptions. As said by the court in Lindsay v. Jackson, 2 Paige, 581: "In a case not within the statute of set-off, a court of equity...