On appeal from the Supreme Court.
For the defendant-appellant, Bilder, Bilder & Kaufman (Walter J. Bilder and Sanford Freedman, of counsel).
For the plaintiff-respondent, Schneider & Schneider (Jacob Schneider, of counsel).
The opinion of the court was delivered by
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 counter-claim 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 counter-claim, the appellant as assignee sought unliquidated damages against the respondent on two separate and 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 counter-claim on several grounds, including (1) the counter-claim was improper,
(2) the counter-claim presented an issue involving unliquidated damages and was improperly set off to the complaint which involved a liquidated claim, and (3) the counter-claim was improper in that it presented issues which could not be conveniently tried with those presented by the complaint.
The trial court struck the counter-claim. The learned trial judge held that since the complaint sought liquidated damages and the causes of action pleaded in the counter-claim were for unliquidated damages, as such they were not the proper subject-matter of set off citing R.S. 2:26-190; Godkin v. Bailey, 74 N.J.L. 655; John Wills, Inc., v. Citizens National Bank, &c., 125 Id. 546; Yeskel v. Gross, 105 Id. 308. 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, but the assignee does not thereby, without more, assume the liabilities of the assignor. Discount connotes a set off or reduction arising out of the claim sued upon, and defenses imply ...