Falkenstern v. Herman Kussy Co., No. 16.

• Court: United States State Supreme Court (New Jersey)
• Citation: 137 N.J.L. 200,59 A.2d 372
• Decision Date: 13 May 1948
• Parties: FALKENSTERN v. HERMAN KUSSY CO.
• Docket Number: No. 16.

137 N.J.L. 200
59 A.2d 372

FALKENSTERN
v.
HERMAN KUSSY CO.

No. 16.

Court of Errors and Appeals of New Jersey.

May 13, 1948.

Appeal from Supreme Court.

Action by Marion Falkenstern, as assignee of the Fruitcrest Corporation, against Herman Kussy Co. to recover on a matured debt owed by defendant to plaintiff's assignor for goods sold and delivered, wherein defendant filed a counterclaim as assignee of two choses in action against plaintiff's assignor. From a final judgment in favor of plaintiff entered on orders striking the answer and counterclaim, 55 A.2d 11, 25 N.J.Misc. 447, defendant appeals.

Judgment affirmed.

59 A.2d 373

Schneider & Schneider, of Newark (Jacob Schneider, of Newark, of counsel), for plaintiff-respondent.

Bilder, Bilder & Kaufman, of Newark (Walter J. Bilder and Sanford Freedman, both of Newark, of counsel), for defendant-appellant.

OLIPHANT, Chancellor.

This is an appeal from a final judgment in favor of the plaintiff-respondent and against the defendant-appellant entered on two orders striking the answer and counterclaim of the appellant.

The respondent, as assignee of the Fruitcrest Corporation, a New York corporation, instituted an action to recover $1,412.50 with interest and costs. The complaint contained four counts all predicated upon the same cause of action (for $1,412.50): the first for the price of goods sold and delivered; the second on a book account; the third for the reasonable value of the goods and the fourth a count in debt. The answer admitted all the material allegations of the complaint but denied the assignment.

By way of counterclaim, the appellant as assignee sought unliquidated damages against the respondent on two separate and

59 A.2d 374

distinct causes of action. The first count alleged that in 1946 the Fruitcrest Corporation sold to one Wallace, Burton & Davis Company certain canned goods for export shipment. The goods were delivered to the purchaser, were sold and shipped out and paid for but upon their receipt by the purchaser's customer were found to be unfit for consumption. The theory of this count was a breach of the warranty of fitness, for which the purchaser had paid its customer damages.

The second count was on the same theory covering a similar yet different transaction with the original purchaser covering the same types of merchandise but in different amounts, which merchandise had not been resold in the trade. The purchaser sought to recover what it had paid Fruitcrest, the respondent's assignor, plus the amount of resale profit it would have received if the goods were merchantable.

The respondent made a motion to strike the counterclaim on several grounds, including (1) the counterclaim was improper, (2) the counterclaim presented an issue involving unliquidated damages and was improperly set off to the complaint which involved a liquidated claim, and (3) the counterclaim was improper in that it presented issues which could not be conveniently tried with those presented by the complaint.

The trial court struck the counterclaim. The learned trial judge held that since the complaint sought liquidated damages and the causes of action pleaded in the counterclaim were for unliquidated damages, as such they were not the proper subject matter of set-off citing R.S. 2:26-190, N.J.S.A.; Godkin v. Bailey, 74 N.J.L. 655, 65 A. 1032, 9 L.R.A.,N.S., 1134; John Wills, Inc. v. Citizens National Bank, etc., 125 N.J.L. 546, 16 A.2d 804; Yeskel v. Gross, 105 N.J.L. 308, 144 A. 312. He held further ‘An assignee of a chose in action takes what the assignor had, subject to all set offs, discounts, and defenses which the debtor has not only against the assignee but also against the assignor before notice of the assignment; R.S. 2:41-1, N.J.S.A., but the assignee does not...