App. Div. 413] First Department, April, 1921. sale, obtained an order for the respondent to show cause on July twenty-third why he should not be punished for contempt of court for failing and neglecting to file his report and for disobeying the order requiring him so to do. An order was entered by the County Court of Bronx county dated August 4, 1919, adjudging the respondent guilty of contempt and directing the sheriff to commit him to the county jail until he paid $250 fine and $10 costs and filed with the clerk his report as referee, accompanied by vouchers of the persons to whom payments had been made out of the sale referred to. That after the proceeding to punish the respondent for contempt was commenced the respondent from time to time made payments on account of the moneys which he had received as referee and which he had converted to his own use and the proceeding was adjourned from time to time in order to enable him to repay the amount converted. The execution of the order was delayed until August 14, 1919, and the respondent on that day paid the balance due, and having previously filed his report, no further action was taken by the sheriff. The respondent filed no answer to the petition but, on the reference ordered to one of the official referees to take proof and report, he appeared personally and by counsel, and crossexamined the witnesses for the petitioner. The respondent did not take the stand in person nor did he call any witnesses, nor did he before the referee deny, nor does his counsel in the brief submitted to this court now deny, the facts as set forth in the petition and found by the learned official referee to be established by the evidence. The official referee reports: "There being no dispute of the proven facts I find the respondent guilty of misconduct as an attorney-at-law in that (1) the respondent converted to his own use moneys received by him as referee in a foreclosure action; (2) the respondent failed to deposit moneys as directed by the order appointing him referee; (3) the respondent failed to file a report of his proceedings as such referee or to account for moneys collected until after he had been found guilty of contempt of court for his failure to obey the orders of the court directing him so to do." First Department, April, 1921. [Vol. 196 The evidence fully sustains said findings and they are approved by the court. The respondent has thus been found guilty of a very gross breach of professional duty. He was not only an attorney and counselor at law but by his appointment as referee by the court he had become pro hac vice a part of the judiciary of the State. As such he conducted the sale of real property under a judgment of the court and received in cash a large sum of money as a trust fund. He thus became a trustee of the highest character. He disobeyed the positive direction of the order under which he was appointed and did not as directed deposit said money immediately upon receipt in the duly designated trust company, but promptly converted it to his own use. He failed further to obey the directions of the law to file his report within the designated period and failed to act in response to numerous repeated requests both as to the filing of his report and the paying over of the money, necessitating the institution of proceedings to punish him for contempt, in which he was found guilty and fined by the court. It is true that before this proceeding was instituted he had paid his fine, filed his report and paid to the persons entitled the amount due in the foreclosure proceeding. His counsel in his brief submitted to this court says: "No answer was interposed to the petition in this proceeding nor has the respondent ever denied the truth of the allegations therein set forth. He comes before this Court frankly but remorsefully acknowledging his misconduct as one of its officers and fully cognizant of the seriousness of his offense both in misapplying funds in his possession not belonging to him and in failing to obey an order of the court for which neither the respondent nor his counsel presume to offer any excuses." He urges in mitigation his failure to deny the charges and his refusal to perjure himself by taking the stand in his own behalf. He also points out that no pecuniary loss has been suffered by those entitled to the proceeds of the foreclosure sale and that these moneys were made good by him before the institution of this proceeding. He further submits some twenty letters from judges before whom he has practiced, public officials with whom he has come in contact and residents of the community in which he lives certifying to his App. Div. 417] First Department, April, 1921. legal ability, his fair dealings with the courts and his previous good character. When he was appointed as referee he had been at the bar upwards of twelve years. He was not a young and inexperienced attorney. From the evidence before us he had had a very active and considerable practice in the courts. It is impossible to find any excuse or palliation for the gross betrayal of the trust imposed upon him, not only as an attorney and counselor at law, but as the special officer of the court as its referee and trustee for moneys paid to him as such. The respondent is disbarred. LAUGHLIN, DOWLING, MERRELL and GREENBAUM, JJ., concur. Respondent disbarred. Settle order on notice. EDWIN D. DEWITT, Appellant, Respondent, v. NEW YORK HERALD COMPANY, Respondent, Appellant. First Department, April 29, 1921. Pleadings acceptance in answer of due performance of contract which is subject of action defense cannot be predicated on breach without denial of allegations of performance — realleging, by reference, allegations and admissions in other paragraphs of answer not a realleging of denials therein - failure to deny contract as alleged as affecting allegations in defense inconsistent therewith when counterclaim and defense may be combined counterclaim not stating facts is demurrable. Where, in an action by an advertising director against a newspaper for commissions and for damages for a wrongful discharge, the plaintiff alleges due performance of the contract, and the defendant in its answer accepts the contract as alleged, there can be no defense predicated on a breach of the contract without a denial of the allegations of performance. Nor is such denial accomplished by realleging in a separate defense, by reference, the allegations and admissions contained in other paragraphs APP. DIV.- VOL. CXCVI. 27 First Department, April, 1921. [Vol. 196 of the answer, without the denials contained in said paragraphs, and a demurrer to the separate defense is properly sustained. It is a well-settled rule that unless a contract as alleged is denied, allegations in a defense inconsistent therewith are of no avail, since that is not a form of denial authorized by the Code of Civil Procedure. It seems, that there is no objection to combining a defense and a counterclaim where it is claimed that the same facts constitute both; but a counterclaim must be a cause of action in favor of the defendant and the facts showing the cause of action must be stated therein and, if the facts so stated are insufficient to constitute a cause of action, a demurrer to the counterclaim must be sustained. Hence, in this action a demurrer to a counterclaim is improperly overruled, where the facts constituting the counterclaim are not alleged, but the defendant merely alleges breaches of an alleged contract, the validity of which it attacks, and on which plaintiff relies. APPEAL by the plaintiff, Edwin D. DeWitt, from so much. of an interlocutory judgment of the Supreme Court, entered in the office of the clerk of the county of New York on the 16th day of December, 1920, as overrules plaintiff's demurrer to the counterclaim contained in defendant's amended answer and directs final judgment for defendant for the relief demanded in said counterclaim in the event of default by the plaintiff in the service of a reply thereto within ten days after the expiration of defendant's time to serve a second amended answer. Appeal by the defendant, New York Herald Company, from so much of said judgment as sustains the plaintiff's demurrer to the third separate defense contained in defendant's answer. Allen S. Wrenn of counsel [Gregory, Stewart & Wrenn, attorneys], for the plaintiff. Theodore Kiendl, Jr., of counsel [William C. Cannon with him on the brief; Stetson, Jennings & Russell, attorneys], for the defendant. LAUGHLIN, J.: The complaint contains two counts. The first is for $65,362, a balance of commissions alleged to have been earned and to be due and owing from the defendant to the plaintiff App. Div. 417] First Department, April, 1921. under a contract in writing, a copy of which is annexed to and made a part of the complaint, bearing date the 3d day of October, 1918, by which, it is alleged, the defendant employed plaintiff as advertising director for the New York Herald and Evening Telegram, owned and published by it, for the period of three years from the 22d day of October, 1918, the contract to continue thereafter until service by one of the parties of a ninety days' notice of a wish to discontinue the same. Plaintiff alleges that he entered upon the per formance of his duties under the contract and continued in the performance thereof and duly performed all the terms and conditions to be performed on his part thereunder until on or about the 17th day of January, 1920, when the defendant wrongfully discharged him and prevented and has since continued to prevent him from further performing the agreement. Facts are alleged tending to show the amount the defendant received from the advertisements during the period down to the time of the discharge of the plaintiff and the amount of commissions to which he was entitled thereon under the contract and that there was a balance owing as alleged. The second count is for $500,000 damages for the wrongful discharge; and in that count the complaint realleges due performance of the contract by the plaintiff, his wrongful discharge on the 17th day of January, 1920, and that he then was and ever since that date has been ready, willing and able to perform and has tendered performance, but that the defendant prevented performance. The contract annexed to the complaint purports to be an agreement between the defendant and the plaintiff for the services and for the period as alleged. It recites that the defendant thereby agreed that it would pay the sum of $55,000 annually during the term of the agreement for the employment of solicitors to promote its advertising in the New York Herald, and $25,000 annually for hiring solicitors for the promotion of its advertising in the Evening Telegram, and that said sums were deemed sufficient for the purposes named and would be paid by the defendant" to the staff of each paper on the recommendation" of the plaintiff to the general manager of the defendant, but that if in the judgment of the plaintiff it should be unwise to expend the full amount named, "then the unexpended |