George F. Root Company, Respondent, v. New York Central and Hudson River Railroad Company and Another, Defendants, Impleaded with John Peirce Company, Appellant

George F. Root Company, Respondent, v. New York Central and Hudson River Railroad Company and Another, Defendants, Impleaded with John Peirce Company, Appellant. First Department, February 11, 1915. Mechanic’s lien — foreclosure — pleading — answer — counterclaim founded upon separate, transactions — counterclaim based on negligence —■ separate defense — partial defense. In a suit to foreclose a mechanic’s lien for material furnished and labor expended in the completion of a certain building, the general contractor, as defendant, cannot set up a counterclaim based upon the plaintiff’s failure to properly place material in a building which the defendant had constructed under an entirely different contract, which material fell and caused damage which the defendant was compelled to pay. This, because the counterclaim did not arise out of the transaction upon which the plaintiff sues, and also because it is based not upon contract but upon alleged negligence, and, hence, is not within the provisions of section 501 of the Code of Civil Procedure. Nor is such matter available as a complete defense, where there is no allegation that the injury caused to the defendant by the plaintiff’s negligence equals or exceeds the balance due the defendant from the owner of the building, or any denial of the plaintiff’s allegation that the sum due from the owner to the defendant contractor is in excess of the plaintiff’s claim at the time his lien was filed. Nor is such matter available as a partial defense if not so pleaded. A failure to set out a partial defense as such is ground for demurrer. Appeal by the defendant, John Peirce Company, from an interlocutory judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 11th day of November, 1914, upon the decision of the court sustaining a demurrer to the separate defense and counterclaim contained in the amended answer of the appellant. Thomas J. Blake, for the appellant. Louis B. Williams, for the respondent. [MAJORITY — Dowling, J.:] Dowling, J.: The action is brought to foreclose a mechanic’s lien for services rendered and materials furnished on certain premises known as the “Y. M. C. A. building,” then being erected on land owned by the defendant railroad company at Park avenue, between Forty-ninth and Fiftieth streets, in the city of New York. The John Peirce Company is the general contractor with the owner for the erection of said building, and as such contractor, with the knowledge and consent of the owner, it entered into a contract with the defendant John E. Landeen, by the terms of which Landeen was to furnish and install certain plastering, comer bead, metal furring and lathing necessary for the completion of said' building. Thereafter Landeen, the subcontractor, with the knowledge and consent of the owner and the contractor, entered into an agreement with the plaintiff in May, 1913, for the furnishing and installation of metal furring, lathing and corner beading necessary for the completion of said premises, and also necessary for the completion of the contracts between the contractor and Landeen, and between the contractor and the owner. Plaintiff entered upon the performance of its contract with Landeen, and with the knowledge and consent of the owner and the contractor, fully performed the same and, with like knowledge and consent, and at the request of Landeen, performed certain extra work, the total value of all the work done and materials furnished being $4,719.04, of which $2,700 has been paid on account. At the time of the filing of plaintiff’s lien the contractor had duly performed all the conditions of its contract with the owner and was entitled to a payment on account of said contract in an amount far in excess of the plaintiff’s lien. Landeen, the subcontractor, had also performed all the conditions of his contract with the contractor, and had performed certain extra work on the same premises, and was entitled to receive from said Peirce Company an amount in excess of plaintiff’s lien. The lien was duly filed and copies thereof served on the owner and contractor. All these facts are set forth in the complaint. To the foregoing the defendant Peirce Company answered, denying that there was, at the time of the commencement of this action and the filing of the lien, due and unpaid to Landeen from the Peirce Company “ a sum far in excess of the amount of plaintiff’s lien,” and also denying that there was due to the Peirce Company from the owner an amount in excess of the plaintiff’s lien. Otherwise, the allegations of the complaint were not denied. The defendant set up as a separate and distinct defense that in October, 1908, it had entered into an agreement with the owner to construct a cab stand in a section of the Grand Central Station in the city of New York, and that prior to September . 8, 1918, said contractor entered into an agreement with Landeen whereby the latter was to furnish the materials and do the lathing and plastering on the ceiling of said cab stand in accordance with the plans and specifications of Warren & Wetmore, architects; that at about the same date the plaintiff entered into an agreement with Landeen whereby the former agreed to furnish and install the necessary metal furring and lathing for the ceiling of said cab stand, and to do the work in accordance with the plans and specifications aforesaid; that Landeen and the plaintiff proceeded to perform the work, but failed and neglected to do the same in accordance with the plans and specifications, as the result of which failure and neglect of the defendant Landeen and the plaintiff the work performed by them was so defective that on or about December 10, 1913, a large part of the ceiling fell down, to the damage of the defendant; that in order to replace the said ceiling which had fallen through the sole negligence and default of Landeen and the plaintiff, and to make good the damage done to the surrounding premises upon which the ceiling fell, the defendant was compelled to pay out, the sum of $3,356.30. The same facts are then repeated and set up as a counterclaim against any sum which might otherwise be found due to the defendant Landeen from defendant Peirce, and judgment is demanded dismissing the complaint and that the Peirce Company recover affirmative judg- ' ment against the plaintiff and defendant Landeen for the sum of $3,356.30. First taking up the question of the counterclaim, it is plain that the same is not a proper counterclaim within the provisions of section 501 of the Code of Civil Procedure, which provides that a counterclaim “ must tend, in some way, to diminish or defeat the plaintiff’s recovery, and must be one of the following causes of action against the plaintiff, * * *: 1. A cause of action arising out of the contract or transaction, set forth in the complaint as the foundation of the plaintiff’s claim, or connected with the subject of the action. 2. In an action on contract, any other cause of action on contract, existing at the commencement of the action.” The counterclaim pleaded does not come within the 1st subdivision because it is not a cause of action arising out of the contract or transaction sued on, hut an entirely different contract or transaction. Nor does it come within the 2d subdivision, for it sets forth no cause of action on contract against the plaintiff. The defendant admits that it had no contractual relationship with the plaintiff. If any cause of action is sought to he set forth therein as against the plaintiff, it is one of negligence, and thus does not come within this subdivision. The case of Cody v. Turn Verein (48 App. Div. 279) has no application on the question of whether this counterclaim is a valid one or not, for in that case the counterclaim was asserted by a contractor against a subcontractor for damages sustained for the breach of another contract between them, bringing it within the 2d subdivision of the Code section, and differentiating it clearly from the case at bar. The demurrer to the separate defense was properly sustained, because while it is alleged that by reason of the negligent performance of the work on the ceiling of the cabstand, the Peirce Company was damaged in the sum of $8,356.30, there is no allegation that said sum equaled or exceeded the balance on the contract in question for the Y. M. C. A. building due from the Peirce Company to Landeen, nor does said separate defense contain any denial that there was a balance due from Peirce to Landeen in excess of plaintiff’s claim at the time the lien was filed. It, therefore, is invalid as a complete defense. If it was intended to plead the facts as a partial defense it should have been so stated, and the failure to state them as such is ground for demurrer. (Code Civ. Proc. § 508; Bernascheff v. Roeth, 34 Misc. Rep. 588; Burkert v. Bennett, 35 id. 318.) The judgment appealed from will, therefore, be affirmed, with costs. Ingraham, P, J., McLaughlin, Scott and Hotchkiss, JJ., concurred. Judgment affirmed, with costs, with leave to defendant to amend on payment of costs.