Howard Iron Works v. Buffalo Elevating Co.

The jurisdiction of the- County Court is limited by section 14 of article 6 of the Constitution of the State of Hew York, which provides : “ * * * " County Courts shall have the powers and jurisdiction they now possess, and also original jurisdiction in actions for the recovery of money only, where" the defendants reside in- the county, and in which the complaint- demands judgment for a-sum not exceeding two thousand dollars. The Legislature may hereafter enlarge or restrict the jurisdiction of the County Courts, provided, however, that their jurisdiction shall not be so extended ■ as to authorize an action therein for the recovery of money only, in which *388the sum. demanded exceeds two thousand dollars, or in .which any person not a resident of the county is a defendant.”

Section 340 of the Code of Civil Procedure provides: “ The jurisdiction of each County Court extends to the following actions: * * ' *

“3. To an action for any other cause,, where the defendant is, or if there are two or more defendants, where all of them are, at the timé of the commencement of' the action, residents of the "county and wherein the complaint demands judgment for a sum- of money only, not exceeding two thousand dollars ; or to recover one or more chattels, the aggregate value' of which does not exceed one thousand dollars, with or without damages for the taking or detention thereof.”

b Section 348 provides : “ Where a County Court, lias jurisdiction of an action or a special ¡rroceeding, it possesses the same jurisdiction, power and authority in and over the same, and in the course of the proceedings therein, which the Supreme Court possesses in a like case; and it may render any judgment, or grant eithér party any relief, which the Supreme Court might, render or grant in a like case, and may enforce its mandates in like manner as the Supreme Court. * * *”

Section 3333 of the Code of Civil Procedure defines the word “action” as follows: “The word ‘action,’ as used in the New Revision of the Statutes, when applied to judicial proceedings, signifies an ordinary prosecution, in a court of justice, by a party against another party, for the enforcement or' protection of a right, the redress or prevention of a wrong, or the punishment of a public offense.”

' In Heffron v. Jennings (66 App. Div. 443) this court decided that in an action brought in the County Court to recover a sum of money'only, if a judgment in excess of $2,000 is demanded in the complaint, the County Court acquired no jurisdiction of the subject-matter of the action, and had no ¡power to make an order permitting the complaint to be amended so as to reduce.the sum demanded to that amount, or to do any other act by which jurisdiction could be acquired; that in no case may a plaintiff in such an action demand or recover a judgment for more than $2,000.

It follows that in such a case a demurrer would be sustained, if *389interposed to the complaint upon the ground “ that the court has not jurisdiction of the subject of the action.” (Code Civ. Proc. § 488, subd. 2.) It is, however, urged on behalf of the-respondent that a different,rule applies to a defendant in such an action, who seeks byway of counterclaim to recover a judgment against a plaintiff; that as to him the jurisdiction of the court is in no manner limited or restricted. In other words, admitting that the plaintiff in an action brought in County Court to recover a sum of money only may not, under any circumstances, demand or recover a judgment for more than $2,000, but insisting that the defendant in such an action may recover judgment against the plaintiff for any amount, a million dollars it inay be, provided only he has -a demand which is the proper subject of counterclaim, pleads it as such and establishes it by proof upon the trial of the action.

The rule contended for is unreasonable and inequitable; it would not tend to promote the orderly administration of justice, and unless made necessary by the express words of the Constitution or statutes of the State, it ought not to be adopted. There is certainly no decision as yet, by any court in this State, which makes such a holding necessary. We must assume that the purpose of the framers of the Constitution and of the law-making power of the State, when dealing with the subject under consideration, was a reasonable one, and' such a purpose, if discoverable, should be given force and effect even although, because of some seeming omissions in the provisions of the Constitution and Code, there may be spelled out another purpose which is unreasonable, unjust and inequitable. It is not reasonable or just that a plaintiff who brings an action in a court of limited jurisdiction, to recover a claim of a few hundred dollars, the limit for which such court could award him judgment, should thereby become compelled to have adjusted before that tribunal matters involving many thousands of dollars, even although growing out of the same transaction which was the basis of plaintiff’s claim. It is not equitable that one party to an action may only recover a certain sum, because the jurisdiction of the court as to him is limited, and that the other party to .the action may recover a much greater sum, solely because as to him the jurisdiction of the court is unlimited.

There is nothing extraordinary or peculiar about the nature of a *390cause of action which maybe made the subject of counterclaim by a defendant, which distinguishes it from a plaintiff’s cause of action. In all essential respects they are identical, and no good reason is apparent why different rules should exist for their enforcement in courts of record. Concededly, a plaintiff may select the court in which to enforce his claim, and the same is equally true of the defendant. He is in no manner bound to submit his rights respects ing any cause of action he may have to the court of record selected-by the plaintiff. He may do so if he wishes, and if so must plead it as a counterclaim, but he is not bound to do so. He may bring an independent action in any court which he may select.

A counterclaim is plainly defined by section 501 of the Code. As applied to this.' case it is “ a cause of actibn 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.”

The Court of Appeals, defining a counterclaim in Cragin v. Lovell (88 N. Y. 259), said, per Earl, J.: “ By section 501 of the Code a counterclaim is defined to be a cause of action against the plaintiff in- favor of the defendant. It must tlién be a cause of action upon which the defendant could sue the plaintiff and which he holds and possesses against the plaintiff at the place where the actibn is commenced. A defendant cannot avail himself of a counterclaim which the court before which the action is pending has no jurisdiction to try and determine. A counterclaim must be a complete-cause of action existing in favor of the defendant where he asserts it; otherwise he has no counterclaim there.”

- Involved in tills case are “ causes of action,” two in number; no more, no less, ño matter what may be their technical names respectively. The factor the nature'of. the controversy is in no manner changed by calling one plaintiff’s “ cause of action ” and the other “ counterclaim.” Why should a ' rule as to the court’s jurisdiction apply to one and not to the other, a rule which would absolutely oust the court of jurisdiction in case the plaintiff’s claim had amounted to $30,000, but which confers jurisdiction in case a claim for the same amount is presented by the defendant ?

It is apparent from the provisions of the several Constitutions and statutes of the State relating to the subject that, it was the primary purpose to refuse jurisdiction to County Courts of actions brought *391to recover a sum of money only involving large amounts, and in none of such provisions is any distinction made, in express terms at least, because of the fact that the right to recover such amounts might be asserted by a defendant rather than a plaintiff. The Constitution of 1846, article 6, section 14, provided“ The County Court shall have such jurisdiction in cases, arising in Justices’ Courts and in special cases as the Legislature may prescribe, but shall have no original civil, jurisdiction except in such special cases.”

So far as we have been able to discover, this provision of the Constitution remained unchanged until the adoption of the new judiciary article in 1869.- Immediately following the adoption of the Constitution of 1846, the Legislature, by section 30, chapter 280 of the Laws of 1847, assumed to confer upon County .Courts original jurisdiction of “ actions of debt, assumpsit and covenant when the debt or damages claimed shall not exceed two thousand dollars.” The act was declared to be constitutional by the Supreme Court. (Beecher v. Allen, 5 Barb. 169.) The act, however, was in effect repealed the. following year by chapter 379 of the .Laws, of .1848, and that act ás amended was incorporated into the Code- of Procedure of 1849 (Laws of 1849, chap. 438, §§ 29, 30.) The Legislature did not assume.by either of those acts (1848, 1849) to confer upon County Courts original jurisdiction of actions for the recovery of money only. In 1851, after the decision in Beecher v. Allen (supra) had been rendered, the Legislature passed an act (chap. 479) amending section 30 of the Code- of Procedure of 1849, so as to provide as follows: - “ The County Court has jurisdiction in the following special cases, but has no original civil jurisdiction except in such cases “ 1. Civil actions in which the relief demanded is the recovery of a sum of money not exceeding five hundred dollars * * * and in which all the defendants are residents of the county in which the action is brought at the time of its commencement.”

Subsequently, and in 1855, the case of Kundolf v. Thalheimer (12 N. Y. 593) was decided by the Court of Appeals, which overruled Beecher v. Allen (supra), and held in substance-that the Legislature could not confer upon County Courts original jurisdiction of common-law actions. The doctrine of that case was in effect overruled in Arnold v. Rees (18 N. Y. 57), and it-was held, in "substance, that the Legislature had power, under the Constitution of *3921846, to confer original jurisdiction upon County Courts of causes of action which were, cognizable at common law, and such as the one in suit, and the power of the Legislature to confer jurisdiction of such actions under the Constitution of 1846 has never been denied since the decision of Arnold v. Rees (supra), so. far as we have been able to discover. At all events, the provision contained in section 30 of the Code of Procedure in 1851 was incorporated into all the subsequent amendments thereto enacted prior to the adoption of the judiciary article in 1869* and the County Courts of the State have uniformly exercised the jurisdiction • thereby conferred.

Article 6, section 15, of the judiciary article of the Constitution adopted in 1869, provided: “ The County Courts shall have the powers and jurisdiction they now possess* until altered by the Legislature. They shall also have original jurisdiction in all cases where the defendants reside in the county, and in which. the damages claimed shall not exceed one thousand dollars * * *. They shall also have such other original jurisdiction a§ shall .from time to time be conferred Upon them by the Legislature.” That provision remained unchanged until the adoption of the Constitution of 1894 (supra). .

. Following the adoption of the judiciary article the Legislature passed an act (Laws of 1870, chap. 467)* which provides :

“Section 1. The County Courts* in addition to the powers they now possess, shall have jurisdiction in civil actions Where the relief demanded is the recovery pf a sum of money not exceeding one thousand dollars or the recovery of personal property not--exceeding in value one. thousand dollars and in which all the defendants are residents of the county in which the action is brought at the time of its commencement.”

Chapter 480 of the Laws of 1880 purported to amend that see^ tion by increasing the jurisdiction of County Courts in civil actions “ where the relief demanded is the recovery of a sum of money not exceeding three thousand dollars.” The act was declared, unconstitutional (Buckhout v. Rall, 28 Hun, 484), but, independent of the constitutional question, it is to be noted that section 1 of chapter 467 of the Laws of 1870 was repealed by chapter 417 of the Laws of 1877, and the whole subject was regulated by the Code of Civil Procedure adopted by Laws of 1876, chap. 448, providing:

*393“ § 340. The jurisdiction of each County Court extends to the following actions and special proceedings in addition to the jurisdiction, power and authority conferred upon a County Court in a particular case by special statutory provision:

“ 1. To an action for the partition óf real property; for dower, * * *

“ 2. To an action in favor of the executor, administrator or assignee of a judgment creditor, * * *■

“ 3. To an action for any other cause where the defendant is, or if there are two or more defendants, where all of ■ them are, at the time of the commencement of the action, residents of the county, and wherein the complaint dema/nds judgment for a sum of money only, not exceeding one thousand dollars, or to recover, one or more, chattels, the aggregate value of which does not exceed one thousand dollars, with or without damages for the taking or detention thereof.”

That provision of the Code of Civil Procedure prescribed the. jurisdiction of County Courts until amended by chapter 946 of the. Laws of 1895, when subdivision 3 was changed so as to give the. court jurisdiction in actions “ wherein the complaint demands judgment for a sum of money only, not exceeding two thousand dollars,” and the section as thus amended has not since been changed-

We have referred to the provisions of the Constitutions and statutes of the State relating to the jurisdiction of County Courts of' actions like the one at bar for two reasons: First. To show that it. has been the uniform purpose since the adoption of the Constitution of 1846 to limit the jurisdiction of such actions to those where, only comparatively small amounts were involved. For a time no-original jurisdiction of such actions was conferred ; then only where the relief demanded did not exceed $500, afterwards increased te $1,000, and finally to $2,000.

Second. To show that during all the years from 1846, and, at least, prior to 1877, the test of jurisdiction was not “ wherein the complaint demands judgment ” for a particular sum, but when the a debt or damages claimed ” (Laws of 1847, chap. 280, § 30); the “relief demanded.” (Code Proc. § 30); “the damages-claimed ” (Const. 1869, art. 6, § 15, judiciary article); the “ relief demanded ” (Laws of 1870, chap. 467, § 1), and even after the *394adoption of the Code of Civil Procedure in 1877, wherein the words “wherein the complaint demands judgment” were used, the Legislature, in chapter 480, Laws of 1880, again used the language '“ where the relief demanded.” The test was, what was the amount of the damages, or relief claimed or demanded, because of the causes of action which the respective parties sought to litigate 1 If such amount was in excess of the court’s jurisdiction, it was without power to adjudicate upon "such respective causes of action.

Under the express language of the provisions of the Constitutions and statutes prior- to 1876, it cannot be claimed that it was intended to apply a different rule of jurisdiction where the “ relief ■demanded ” or “damages claimed ’’was by a defendant rather than by a plaintiff. The test was, what was the amount involved in the respective causes of action it was sought to litigate before the court as determined by the demands of the respective parties ? We think such test was in no manner changed by the language used in the 'Code of 1876, or in the Code and Constitution now in force.

The provision of the Constitution of 1894, already referred to, ■compels this conclusion : By article VI, section 14, the jurisdiction ■ of County Courts is expressly limited “in actions -for the recovery ■of money only ” to cases “ in which the complaint demands judgment for a sum not exceeding two thousand dollars.” That provision takes care of the plaintiff and of his cause of action. Ho word or sentence could be added to make the jurisdiction of' a County Court more certain or definite in respect to an action brought by a plaintiff, or in respect to a cause of action upon which he might seek to recover in such court. The Constitution says, substantially in so many words, a plaintiff may bring an action in the County Court to recover a sum of money; and demand judgment for any amount not exceeding $2,000. If more than that sum is demanded the demand ousts the court of jurisdiction. After thus ■declaring, must we assume that the framers of the Constitution ■intended to say that the Legislature must not permit a plaintiff to bring. such an action in a County Court, “ wherein the complaint demands judgment for more than two thousand dollars ? ”

The proposition is absurd, because the Constitution by express words had already said just that. The same section subsequently ■provides: “ The Legislature may hereafter enlarge or restrict the *395jurisdiction of the County Courts, provided, however, that their jurisdiction shall not be so extended as to authorize an action therein for the recovery of money only, in which the sum demanded exceeds two thousand dollars,” etc. In this provision nothing is said about the “ complaint ” or the plaintiff* That had all been taken care of by the preceding part of the same section. What then was intended by the clause last quoted ? Clearly it means an action ” as defined by section 3333 of the Code of Civil Procedure, which was in force when the Constitution was adopted, and which ■makes no distinction between a cause of action presented by a plaintiff and one presented by a defendant. Each is declared to be añ action. The Constitution in express terms said, the County Court shall not have -jurisdiction of a plaintiff’s cause of adtion, in case judgment in excess of $2,000 is demanded in the complaint. It also in effect said, the Legislature may not confer jurisdiction upon ■the County Court of a defendant’s, cause of action — a counterclaim is nothing more — if the sum demanded exceeds $2,000. Any other interpretation would render this subsequent provision meaningless.

We are not, however, left to reasoning in the abstract upon the ■proposition. The case of Cragin v. Lovell (supra) . must be regarded as decisive of the question. In that case,, as we have seen, it was held : “ It (a counterclaim) must then be- a cause of action upon which the defendant could sue the plaintiff. * * * A defendant cannot avail himself of a counterclaim which the court before which the action is pending has no jurisdiction to try and determine.”

In Bishop’s Code Practice (§ 196) it is said: “ The counterclaim must be a cause of action. This means a cause of action upon which the defendant could sue the plaintiff. It must also be a cause of action of which the court in which the action is brought has jurisdiction.”

The defendant could not have sued the plaintiff in County Court for the'cause of action set up in its answer. The amount for which judgment is demanded would have ousted the court of jurisdiction (Heffron v. Jennings, supra), and, therefore, it was not a proper subject of counterclaim.

Article 5, section 16, of the Constitution of the State of Texas *396provides that County Courts of that State shall not have jurisdiction of ■ civil actions in which the matter in controversy exceeds a .sum specified.. In construing that provision it was held in Gimbel & Son v. Gomprecht & Co. (89 Tex. 497): “ A plea in reconvention is in effect a suit, against the plaintiff, and the County Cburt has no jurisdiction over a claim so pleaded, when in excess of the amount -over whicñ that, court has jurisdiction.”

In the case of Pennybacker v. Hazlewood, a case in which the Court of Civil Appeals of the same State construed the section (61 S. W. Rep. 153), it was held that where a defendant set up a counterclaim for $1,255, which was in excess, of the jurisdiction of the court, the court was without jurisdiction to try the same. In both these cases' it was held that defendant’s plea did not oust the court of jurisdiction of plaintiff’s cause of action, but that the court did not have jurisdiction of the defendant’s alleged cause of action, solely because it exceeded the amount prescribed by the •Constitution.

There can be no difference in the meaning of the words, “ matter in controversy” and the words “ damages claimed’.’ or “relief demanded,” as used in the statutes of this State to which attention has been called. The provisions of the Constitution of 1894 and the whole trend .of legislation upon the subject lead to the conclusion that the limitation of $2,000 applies to a counterclaim (defendant’s cause of action) the same as to plaintiff’s cause of action, and that where a recovery is demanded for either in excess of $2,000, the County Court has not jurisdiction of the cause of action in which judgment in excess of that sum is asked.

The jurisdiction of County Courts, as prescribed "by .section 340 of the Code of Civil Procedure, was not extended or enlarged by section 348. The word “ action,” as used in that section, has the - meaning given it by section 3333 : “ signifies an ordinary prosecution, in a court of justice, by a party against another party.” It has reference to the cause of action which either party is seeking to enforce in the County Court. The meaning of the section was considered in' Mead v. Langford (56 Hun, 279); also in Thomas v. Harmon (46 id. 75); and it, was held, in substance, that the -section only conferred jurisdiction to grant such relief as was incidental to or an incident of the plaintiff’s cause of action.

*397If a plaintiff brings an action upon a promissory note made by a defendant, the defendant may set up by way of counterclaim a claim for work, labor and services which he may have against the plaintiff, but such demand is in no sense incidental to or an incident of plaintiff’s cause of action. It is a separate and independent cause of action, and can only be interposed as a defense to plaintiff’s demand because permitted by the Code of Civil Procedure (§ 501, subd. 2). It was not intended by section 348 to confer upon County Courts jurisdiction of counterclaims. Such jurisdiction must be found wholly independent of that section of the Code of Civil Procedure.

Jurisdiction of counterclaims, or of a defendant’s cause of action, is not conferred upon County Courts by any express words of the Constitution or statutory provisions. Such courts for half a century have, however, exercised such jurisdiction, and the power has never been questioned. But the authority must be found in the words “actions” in which the “ relief demanded” or the “damages claimed,” or “ actions * * * in which the complaint demands judgment for a sum not exceeding two thousand dollars.” Ought it to be held that a complaint which is required to contain “ a plain and concise statement of the facts constituting each cause of action ” (Code Civ. Proc. § 481), can only be presented or submitted by a plaintiff ? Just such a statement or complaint must be made if the cause of action constituting a counterclaim is set up in an answer. (Code Civ. Proc. § 500.) An answer which only sets up a counterclaim in no manner answers or controverts the allegations of the complaint. It admits all of them, but complains against the plaintiff because of an independent cause of action; one for which the defendant might have brought another action against the plaintiff. However inconsistent or inharmonious the provisions of the Code of Civil Procedure may be, it is certain that County Courts have not jurisdiction of counterclaims, unless such demands are to be regarded as actions brought by a defendant against a plaintiff, and that a statement of the cause of action which constitutes the basis of the action is a complaint, notwithstanding it may be contained in the answer.

It may be stated as a proposition of law that a cause of action set up in an answer interposed by a defendant, although under the *398name of “ counterclaim,” is subject to precisely the same rule as to . the jurisdiction of the County Court as would be a similar cause of action if alleged of set up by a plaintiff. In either case, if the judgment demanded is in excess of $2,000 the County Court has no jurisdiction of such cause of action, or of “the subject of the action.”

. The respondent’s contention is untenable, that -in any event the County Court had jurisdiction of defendant’s counterclaim to the extent of $2,000, and that, therefore, the plaintiff, instead of demurring to the answer, should have made a motion to compel the defendant to reduce its demand to $2,000. If we are right in the conclusion that the jurisdiction.of the County Court as to defendant’s cause of action stands upon the same basis as does .a plaintiff’s cause of action, the demand for judgment in the one case as in the other determined the jurisdiction of. the court.

The conclusion is reached that the defendant having set up in its answer a cause of action, by way of counterclaim, for which it demanded an affirmative judgment against the plaintiff in- excess of $2,000, the County Court had no jurisdiction of such cause of action, or of “ the subject of the action,” and, therefore, the answer was properly demurred to by the plaintiff upon that ground. It follows that the interlocutory judgment should be reversed,, with costs.

Interlocutory judgment reversed, with costs, with leave to the defendant to serve an amended answer within twenty days after service upon it of a copy of the judgment herein, upon payment of the costs of the demurrer and of this appeal.

Adams, P. J., and Williams, J., Concurred; Nash, J., dissented; Hiscock, J., not voting.

“County Courts shall have * * * original jurisdiction in actions for the recovery of money onlyj where the defendants reside in the county, and in which the complaint demands judgment for a sum not exceeding two thousand dollars.”. (Const, art. 6, § 14.)

Jurisdiction over counterclaims is conferred by the sections of the Code of, Civil Procedure which define a counterclaim and enact rules respecting its allowance. (§§ 500-512.)

The contention of the appellant is that the County Courts have no *399jurisdiction of a counterclaim, “ unless it be considered as a cause of action in favor of the defendant against the plaintiff which may be brought against him in the main action, and which would, therefore, be governed by the same rule of jurisdiction ” as that conferred upon the court to entertain the plaintiff’s cause of action; hence, the court has no jurisdiction over a counterclaim which exceeds or where judgment is demanded for a sum exceeding $2,000. The proposition has for its foundation the premise, as stated in the brief for the appellant, that “ there is no specific grant of jurisdiction to the County Court over counterclaims.” It is further suggested that it may be asserted that section 348 of the Code of Civil Procedure extends the jurisdiction of County Courts' to cover counterclaims, and it is asked by virtue of what power did the County Court entertain jurisdiction of counterclaims prior to 1816, when neither this section nor any similar to it, existed ? It was by virtue of the power conferred by the act of 1852 (Chap. 392), amending certain sections of the Code of Procedure, in which the name “ counterclaim ” was given to the “ new matter constituting a defence,” authorized by the Code of Procedure of 1849 (Laws of 1849, chap. 438, § 149, subd. 2). The amendment of 1852 provided (amdg. § 149, subd. 2) that the answer of the defendant must contain a statement- of new matter constituting a defense or counterclaim, and in the amendment of section 150 defined a counterclaim in substance as it has been since and is now defined by section 501 of the Code of Civil. Procedure.

The Code of T849 provided:

“ § 8. This, act is divided into two parts.

“ The first relates to, the courts of justice-and their jurisdiction,

“ The second relates to civil actions commenced in the courts of this State after the first day of July, 1848, except when otherwise provided therein, and is distributed into fifteen titles. The first four relate to actions in all the courts of the State, and the others to actions in the Supreme Court, in the County Courts, in the Superior Court of the City of New York, in the Court of Common Pleas for the City and County of New York, in the Mayors’ Courts of cities, and in the Recorders’ Courts of cities, and to appeals to the Court of Appeals, to the . Supreme Court, to the County Courts, and to the Superior Court of the City of New York.”

*400By this provision, which was a re-enactment of section 8 of the "Code of 1848 (Laws of 1848, chap. 379), 'the rules of procedure* practice and pleading were made applicable to all the courts therein named.-. That section is omitted in the Code of Civil Procedure (Laws of 1876, chaps.' 448, 449), but the first act is entitled: “-An Act relating, to courts, officers of justice, and civil proceedings,” and chapter 1 is entitled : “ General provisions relating to courts and the members and officers thereof.” Title 1 of chapter 1 is entitled: The courts of the State ; their general powers and attributes, and general regulations pertaining to the exercise thereof.”'

It must, therefore, be inferred that the procedure in all the courts ■of record of original jurisdiction -enumerated in the Code of Civil Procedure (§ 2) is the same. The amount for which the defendant may take an affirmative judgment upon a counterclaim- is not specified, but it may be assumed that as the County Court has jurisdiction in actions for money only to an amount not exceeding $2,000, that jurisdiction over counterclaims is intended to be limited to a like sum.

In Heffron v. Jennings (66 App. Div. 443) it was held that the County Court had no jurisdiction in an action for slander in which the complaint demanded judgment for $5,000, and that the court had not power to allow the plaintiff to amend the complaint by reducing the amount of damages claimed to $2,000.

The. decision was placed upon the letter of the Constitution (art: 6, § 14) and the legislative enactment pursuant thereto, that the jurisdiction of County Courts shall extend in actions for money -only to actions in which the complaint demands judgment for a sum of money not exceeding $2,000 (Code Civ. Proc. § 340, subd. 3).

Where* however, the action is commenced by the service of a summons- the court acquires jurisdiction when it is served, and heneé has power to amend the complaint.- filed afterward, if ft demand judgment for too large an amount. ( Van Clief v. Van Vechten, 130 N. Y. 571, 581, 582.)

The situation here is analogous. Having acquired jurisdiction of the action, the court can control the form of the pleading subsequently filed and require the defendant to reduce the amount of its claim for damages by amendment to a sum within the jurisdiction of the court. ,

*401But why need the defendant amend ? The counterclaim here set up is in its character and substance such as an answer may contain. (Code Civ. Proc. § 501.) Where a counterclaim is established which equals the plaintiff’s demand, the judgment must be in favor of the defendant. Where 'it is less than the plaintiff’s demand, the plaintiff must have judgment for the residue only. Where it exceeds the plaintiff’s demand,, the defendant must have judgment for the excess or so much thereof as is due from the plaintiff. Where part of the excess is not due from the plaintiff, the judgment does not prejudice the defendant’s right to recover from, another person so much thereof as the judgment does not cancel. (§ 503.) In a case not specified in the last section, where a counterclaim is established which entitles the defendant to an affirmative judgment demanded, in the answer, judgment must be rendered for the defendant accordingly. . (§ 504.) Why may not the County Court apply these rules to the counterclaim of the defendant, by the extinguishment of the. plaintiff’s cause of- action established upon the trial, and give judgment to the deféndant for the excess, if any, to the amount of $2,000, for which the County Court has jurisdiction?

If the defendant had set up the facts constituting the counterclaim in a manner and form now alleged to its damage in an amount exceeding the plaintiff’s claim, without alleging how much, and demanded judgment that the plaintiff take nothing because of the allegations of its complaint, and for the sum of- $2,000, there would not have been anything in the answer showing want of jurisdiction. The defendant would have made its proofs the same as under the issues as now framed, and the defendant would take judgment in accordance with the demand of the answer; Why may not this be done under the present answer as well? The court is not precluded. It may allow the defendant to make its proofs and, if the defendant elects, allow judgment to be taken for a sum within the jurisdiction of the court. In either case, under the pleading suggested and the one now interposed, the trial of the issue would be the same; the plaintiff would not be in any way or manner injured. The defendant might lose the rest of its claim, but that would be at its election. If the defendant, in an action brought in the County Court, may not interpose his counterclaim as suggested, great injus*402tice may be done. If, in an action upon a promissory note for less than $2,000, brought in the County Court. by a plaintiff who is insolvent, but indebted to the plaintiff on contract, the plaintiff’s note, perhaps, for $30,000, must the defendant allow judgment to go against' him and not be allowed to set up his demand as a counterclaim ?

If the question rested upon the application of equitable principles, certainly this would be most inequitable. But the case -rests upon rules applicable to the construction of statutes. The question is one of power, I am unable to see why the power may not be exercised in the manner suggested. There is no express constitutional or legislative inhibition.- That it. may be done is impliedly , suggested, if it has not direct approval, in the case of Van Clief v. Van Vechten (supra).

1 am of the opinion that the judgment of the County Court should be affirmed.

Interlocutory judgment reversed, with costs, with leave to the defendant to plead over again upon payment of the costs of the demurrer and of this appeal.