App. Div.]

First Department, March, 1921.

THE PEOPLE OF THE STATE OF NEW YORK ex rel. ROBERT E. MANLEY, Respondent, v. CHARLES L. CRAIG, as Comptroller of the City of New York, Appellant.

First Department, March 4, 1921.

See head note in People ex rel. Smyth v. Craig (ante, p. 857).

APPEAL by the defendant, Charles L. Craig, as comptroller of the city of New York, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 29th day of October, 1920, granting relator's motion for a peremptory writ of mandamus requiring him to draw his warrant to the amount of $4,000 payable to the relator.

The bill as rendered for which the warrant is directed is for $4,000; $2,500 is for services rendered after relator had been appointed as Deputy Attorney-General; $1,500 thereof is for services rendered to the Attorney-General as counsel prior to the appointment of relator as a deputy.

John F. O'Brien of counsel [George P. Nicholson and Russell Lord Tarbox with him on the brief; John P. O'Brien, Corporation Counsel], for the appellant.

Isidor J. Kresel, for the respondent.

SMITH, J.:

This case presents the same situation as is presented in the case of People ex rel. Smyth v. Craig (195 App. Div. 857), and the order should be modified in accordance with the opinion in that case so as to require the comptroller to draw warrant for the sum of $2,500 payable to the relator, and as modified should be affirmed, without costs.

CLARKE, P. J., and DOWLING, J., concur; PAGE, J., dissents; GREENBAUM, J., dissents with an opinion, which is printed on page 856.

Order modified as directed in opinion and as so modified affirmed, without costs.

First Department, April, 1921.

[Vol. 195.

MARY UDOVICHKY, Appellant, v. JORDAN BACHEFF,

Libel

Respondent.

First Department, April 1, 1921.

slander not pleadable as counterclaim or defense.

In an action for libel slander cannot be pleaded as a counterclaim, a defense, or a partial defense in mitigation.

APPEAL by the plaintiff, Mary Udovichky, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 14th day of December, 1920, denying plaintiff's motion for judgment on her demurrer to certain defenses and counterclaims, brought on and tried as a contested motion under section 976 of the Code of Civil Procedure.

Leonard Klein, for the appellant.

Rosalie F. Janoer, for the respondent.

LAUGHLIN, J.:

The action is for libel in maliciously composing and mailing to the plaintiff's husband a letter reflecting on her chastity. The amended answer puts in issue the allegations of the complaint with respect to the plaintiff's marriage and those charging that he composed and mailed the letter and his purpose in so doing, and pleads one separate and distinct defense, two partial defenses by way of mitigation, two separate and distinct defenses and the same facts by way of mitigation, one separate and partial defense by way of mitigation, and six separate and distinct defenses and counterclaims combined. The plaintiff demurred to each of, the six combined defenses and counterclaims on the grounds that as defenses they were insufficient and as counterclaims they were unauthorized, in that they did not grow out of the transaction set forth in the complaint, and are not connected with the subject of the action; and also that they fail to state facts sufficient to constitute a cause of action. The appeal, therefore, relates only to the six combined defenses and counterclaims. The

App. Div.]

First Department, April, 1921.

counterclaims are all for slander. The complaint alleges that the libelous letter was written and mailed on or about the 14th day of August, 1920. In each of the first three counterclaims the defendant charges that the plaintiff slandered him the latter part of July, the fore part of August and in the month of September, 1920, respectively, by maliciously and falsely charging in the presence and hearing of divers persons that he kept his wife, who was a sane woman, in an insane asylum "to rid himself of her." In the other three counterclaims the plaintiff is charged with having maliciously and falsely stated in the presence and hearing of divers persons at three different specified times, which correspond as to dates with those referred to in the other counterclaims, that the defendant cohabited with his daughter. It is unnecessary to consider whether the counterclaims are sufficient in law, for it is quite plain that they are not authorized by section 501 of the Code of Civil Procedure. The complaint is in tort and none of the counterclaims purports to state a cause of action arising out of the transaction set forth in the complaint as the foundation of the plaintiff's claim, or a cause of action connected with the subject of the action, which is the alleged libel. It is not even pleaded that the libel was provoked by the slanders, and manifestly it could not have been provoked by the slanderous words alleged to have been uttered after its publication; but by thus drawing attention to the absence of any allegation tending to show any connection 'between the slanders and the libel, I do not wish to be understood as implying that the counterclaims would have been proper if it had been alleged that the libel had been provoked by the slanderous utterances of the plaintiff. (See Sheehan v. Pierce, 70 Hun, 22; Rothschild v. Whitman, 132 N. Y. 472; Prosser v. Carroll, 33 Misc. Rep. 428.)

It is difficult to understand on what theory it is claimed that these alleged slanders of the defendant by the plaintiff constitute a defense to the action for libel. Plainly the alleged slanders subsequent to the libel could in no view constitute a justification therefor; and with reference to those which preceded the libel, it is not even charged that the libelous letter was written in answer thereto or was provoked thereby. (See Maynard v. Beardsley, 7 Wend. 560; Lee v.

First Department, April, 1921.

[Vol. 195.

Woolsey, 19 Johns. 319.) The slanders are pleaded as complete defenses and not in mitigation, but they would not even constitute a partial defense in mitigation. (Hess v. New York Press Co., 26 App. Div. 73.)

The order should be reversed, with ten dollars costs and disbursements, and motion granted, with ten dollars costs.

CLARKE, P. J., DOWLING, SMITH and GREENBAUM, JJ.,

concur.

Order reversed, with ten dollars costs and disbursements, and motion granted, with ten dollars costs.

ORMSBY MCHARG, Respondent, v. COMMONWEALTH FINANCE
CORPORATION and Others, Defendants.

LAURENCE MCGUIRE and JAMES E. LANDY, Appellants.

First Department, April 1, 1921.

Corporations - receivers
corporation

- jurisdiction to appoint receiver of foreign action by stockholder for accounting and appointment of receiver — stipulation between parties discontinuing action without costs - plaintiff personally liable for services and expenses of receivers.

-

The courts of this State have jurisdiction to intervene in behalf of stock-
holders of a foreign corporation and, through a receivership of the prop-
erty within the jurisdiction of the court, to preserve the assets of the
corporation against waste, unlawful diversion or mismanagement.
In an action by a stockholder of a foreign corporation in the right of the
company for an accounting by the directors for acts of waste and negli-
gence and for the appointment of receivers, in which receivers were
appointed who entered on their duties and incurred expenses but were
restrained from taking possession of the property of the defendant, the
plaintiff is personally liable for the services, disbursements and counsel
fees of the receivers, where he entered into a stipulation with the defend-
ants to discontinue the action without costs and to have the order appoint-
ing the receivers vacated, and moved on notice to the receivers only for
an order of discontinuance. His liability rests not only on the ground of
the stipulation whereby he relieved the defendants of liability but also
on the ground that the defendants did not have notice of the application.
Neither the corporation nor the individual defendants can be compelled
to bear the expenses of the receivership without proof that the facts
warranted the appointment of the receivers; that issue was not determined.

App. Div.]

First Department, April, 1921.

APPEAL by Laurence McGuire and another, as receivers of the defendant Commonwealth Finance Corporation, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 2d day of February, 1921, discontinuing the action without making any provision for the payment of the expenses of said receivership and the compensation of said receivers.

John J. Kirby of counsel [John Delahunty, attorney], for the appellants.

Benjamin F. Schreiber of counsel [Alfred Rathheim with him on the brief; Benjamin F. Schreiber, attorney], for the respondent.

LAUGHLIN, J.:

This is an action by a stockholder of the defendant company, which is a foreign corporation, in the right of the company for an accounting by the directors for acts of waste and negligence, and for the appointment of receivers, and for an injunction restraining the directors from interfering with the possession of the receivers.

The action was commenced on the 10th of September, 1920. Defendants all appeared and joined issue on some of the material allegations of the complaint. Plaintiff thereafter moved for the appointment of a receiver of the property of the corporation within this jurisdiction, and the appellants were duly appointed receivers on the 11th of December, 1920, and they duly qualified that day and filed an undertaking in the sum of $100,000, as required by the order appointing them, which was duly approved as provided in the order, and they incurred liability for or paid a premium of $500 therefor. The receivers entered upon the performance of their duties and employed and consulted with an attorney and proceeded to take charge of the property of the company, but on arriving at its place of business were advised that an order to show cause containing a stay of proceedings on the order appointing them as receivers had been granted by one of the associate justices of this court, and later on such an order was served on them. It required them to show cause why the stay should