Perkins v. West Coast Lumber Co.

GAROUTTE, J. This action is brought by an attorney at law to recover upon a special contract for professional services rendered to the defendant. Under such contract plaintiif was to be paid a monthly salary. Judgment was rendered in his favor for the sum of eighteen hundred and seventy-nine dollars, and this appeal is prosecuted from that judgment, and also from an order denying a motion for a new trial. The principal question in the case arises out of a counterclaim for damages pleaded by defendant, wherein it is claimed that the de[28]fendant was damaged in the sum of about three thousand four hundred dollars by reason of bad legal advice given it by plaintiff in certain prospective litigation wherein it was a party in interest.

The action was commenced by the plaintiff on Ajiril 24, 1890, and a counterclaim was first pleaded July 21, 1894. For the purpose of avoiding the statute of limitations, the defendant alleged that its cause of action for said damages arose out of the transactions set forth in the complaint; that at the time said advice was given defendant had no other legal adviser, and that it was agreed and understood, at the time the original contract was entered into between the parties, that it included the counsel and advice above mentioned, and that at the time the advice was so given a formal agreement as to compensation should be made and should include the service so given. To this counterclaim the plaintiff pleaded that it was barred by the provisions of subdivision 1 of section 339 of the Code of Civil Procedure, and the court found in favor of this pica.

The counterclaim is not barred by the statute of limitations. While the claim would have been barred upon June 21, 1S94, if incorporated into a complaint as forming' the basis of a recovery, yet it does not follow that it may not be set up as a counterclaim at that time. The claim was not barred when the conrplaint- Avas filed, and that fact alloAvs it to be set up as a counterclaim, though if standing alone the statute would run against it before the answer was filed. As to a counterclaim, the filing of the complaint suspends the running, of the statute of limitations. By section 438 of the Code of Civil Procedure, it is held that the ansAver of a defendant may set up a counterclaim “existing at the commencement of the action.” Lyon v. Petty, 65 Cal. 322, fully supports this view. In ansAver to this position, respondent claims that it is only in actions arising upon contract set up as counterclaims that the statute of limitations is held in abeyance by the filing of the complaint. We are satisfied that the principle applies also to counterclaims of the character here relied upon. Volume 13 of the American and English Encyclopedia of Law, page 767, entirely supports this position.