## Facts

- Philip Munson, a bean farmer, contracted to buy foundation seed from New York Seed Improvement Cooperative, Inc. and paid a $5,000 deposit.
- The cooperative later reported foundation seed was unavailable, and Munson agreed to buy “registered” seed for a total price of $14,500.
- Munson alleged the registered seed was defective and that he attempted to return it but could not do so.
- Munson sued for breach of the sales contract; the cooperative counterclaimed for $9,500, the unpaid balance after crediting the deposit.
- Munson replied to the counterclaim with a general denial and did not plead breach of warranty, failure of consideration, or similar affirmative defenses.
- After opening statements, Munson offered proof about the seed’s poor quality and his attempt to return it.
- The trial court ruled those matters were not raised by the pleadings, excluded the evidence, dismissed Munson’s complaint, and directed a verdict for the cooperative on its counterclaim.

## Issues

1. Whether a buyer must plead breach of warranty or failure of consideration as an affirmative defense to a seller’s counterclaim for the price to introduce evidence that the goods were defective and that the buyer attempted to return them.
2. Whether a general denial to a counterclaim for the price is sufficient to place the seller’s performance and entitlement to the contract price in dispute.

## Decision

- The New York Court of Appeals reversed insofar as the lower courts treated Munson’s defenses as waived for failure to plead them as affirmative defenses.
- The Court held Munson’s general denial was sufficient to put the cooperative’s counterclaim for the price in issue.
- The Court concluded Munson was not required to plead breach of warranty as an affirmative defense to offer evidence that the seed was defective and that consideration for the price had failed.
- The matter was remitted for further proceedings consistent with allowing such proof under the general denial.

## Legal Principles

- Under CPLR 3018(b), an “affirmative defense” is a matter of avoidance that assumes the adversary’s allegations are true but supplies a separate reason the claim should fail.
- Defenses that negate an element of the claimant’s prima facie case—such as nonperformance, nonconformity of goods, or failure of consideration in an action for the price—may be raised under a general denial and need not be pleaded as affirmative defenses.
- In a seller’s action (or counterclaim) for the contract price of goods, a buyer’s evidence that the goods were defective and that the seller is therefore not entitled to the price is admissible when it directly contests the seller’s right to recover.

## Conclusion

The Court of Appeals held that Munson’s general denial adequately contested the cooperative’s entitlement to the unpaid seed price, so he could present evidence of defective seed and failed consideration without having pleaded breach of warranty as an affirmative defense.


Munson v. N.Y. Seed Improvement Coop., Inc., 64 N.Y.2d 985 (N.Y. 1985)