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nected with the subject of the action; and therefore the relief demanded by it and that prayed for by the plaintiff cannot be entirely independent of each other. It is in counterclaims of the second subdivision alone that the doctrine can be employed and applied with any practical results. And, of these cases, it is plain that all those in which the complaint and the counterclaim both demand a money judgment comply with the rule. It is only when one or the other seeks to recover some equitable relief that its violation becomes possible. The limitation thus established by the New York courts may be, and probably is, correct; but at the same time it is a judicial interpolation into the statutory language which contains no such restriction. The legis lature has said: "When the action arises on a contract, any other cause of action also arising on a contract may also be a counterclaim." What grant of authority could be clothed in more general terms than this? The courts, however, say, "It is not true that any other cause of action arising on contract may be a counterclaim it must be connected with the subject of the action, and must operate in some way to defeat, in whole or in part, the plaintiff's right of recovery." This mode of interpretation, when carried beyond very narrow limits, becomes a usurpation of the law-making function, and an actual repeal of statutory provisions.

§ 746. The decisions made by the courts of other States present the same general notions in respect to the nature and scope of the counterclaim. In Wisconsin the counterclaim is recognized to the fullest extent as including relief of an equitable nature, and as being available in actions brought to obtain specific remedies, such as those affecting or establishing the plaintiff's title to land. In a suit to quiet title to land, the plaintiff alleged his possession and claimed his title under a certain tax-deed, which, with all the proceedings in relation thereto, was particularly described. The defendant answered by way of counterclaim that he was in possession and asserted his title under another tax sale and deed, which, with the proceedings, was sufficiently set forth. He prayed judgment that the title might be decreed to be in himself. This answer was held to be a good counterclaim, the court declaring that it conformed in every particular with the definition.

1 See Allen v. Shackelton, 15 Ohio St. 145, 147, per Wilder J.; Hill v. Butler, 6 Ohio St. 207, 216, per Swan J.

given by the code.1 The Supreme Court of Missouri has also described the counterclaim in entire conformity with the judicial definitions already given.2 The language of the provision in the Indiana code is somewhat broader than that which is found in most of the other codes. The interpretation put upon it, however, will aid in ascertaining the general spirit and object of the entire legislation which introduced this class of defences. In an action to rescind a conveyance of land made by the plaintiff to the defendant on the ground of an alleged fraud, the answer, pleaded as a counterclaim, denied the fraud, insisted upon the validity of the deed, stated the plaintiff's continued and wrongful possession and acts of waste, and demanded judgment for the possession of the land, for the rents and profits thereof, and for damages on account of the waste. This answer was held to be good counterclaim so far as it sought to recover the possession and the rents and profits, but not in respect to the demand for damages on account of the waste.3

1 Jarvis v. Peck, 19 Wisc. 74, per Dixon C. J.: "It does not deny the plaintiff's demand, except so far as it is founded upon his possession, but seeks to extinguish it by an equitable cross-action. It is a claim which of itself would constitute a cross-action in favor of the defendant against the plaintiff in a separate suit."

2 Holzbauer v. Heine, 37 Mo. 443, per Wagner J.: "It must contain the substance necessary to sustain an action on behalf of the defendant against the plaintiff, if the plaintiff had not sued the defendant. It must have a tendency to show an independent cause of action, -a claim existing in favor of the defendant against the plaintiff, arising either out of the contract or transaction sued on, or out of some other contract. The term is new to the law; but it is sufficiently plain and simple. When the defendant has a cause of action against the plaintiff, upon which he might have maintained a suit, such cause of action is a counterclaim. The parties, then, have cross-demands; and, in fact, there are two causes of action before the court for trial in the same suit. Both parties are to a certain extent plaintiffs, and both defendants. The answer, then, does not substantially differ from a petition; and the reply performs substantially

the same office as the answer to the petition. Each party claims affirmative relief from the other. If both parties establish their claims, the judgment is rendered for one or the other, according as his demand may be found to be in excess." See also Hay v. Short, 49 Mo. 139, 142, which corrects a dictum of Holmes J. in Jones v. Moore, 42 Mo. 419.

8 Woodruff v. Garner, 27 Ind. 4, per Frazer J.: " Was this counterclaim good on demurrer? It is not questioned that it averred facts sufficient in an independent suit to entitle the defendant to a judgment; but it is urged that these facts could not be pleaded by way of counterclaim in this suit. A counterclaim is defined to be any matter arising out of, or connected with, the cause of action which might be the subject of an action in favor of the defendant, or which would tend to reduce the plaintiff's claim for damages.' It may not be easy to define the full meaning and application of this statute; and it will therefore be safer, and less likely to produce confusion, if the court shall at present consider only the question of its influence upon the case immediately in judgment. To say, as was inadvertently done in Slayback v. Jones, 9 Ind. 470, that the counterclaim is the

§ 747. The foregoing citations fully sustain both the conclusions reached in the preliminary independent analysis of the statute, and the course of reasoning upon which they were based. The feature or limitation which is pointed out by some of the cases, as necessarily involved in all counterclaims belonging to the second subdivision, — namely, that the recovery therein must defeat, modify, or interfere with, the relief otherwise recoverable by the plaintiff, — results from the fact that the codes make no provisions for two independent and antagonistic judgments rendered in favor of the adverse parties in the same action. One judgment alone is contemplated by the statute, which shall determine the substantial rights of the parties. Even in equitable actions, where relief may be conferred upon defendants as against the plaintiffs or as against each other, such relief must be compatible with that granted to the plaintiff, so that the whole may be contained in one judgment without opposition or contradiction. If an action upon contract is brought to recover money alone, either debt or damages, and a counterclaim for money, arising upon an entirely distinct contract, is interposed, the resulting judgment would necessarily be single, since it would be rendered merely for the difference between the two adverse sums found due by the jury or the court. The implied restriction upon the use of counterclaims, therefore, applies only where one or both of the cross-demands are equitable. It cannot be enforced in an action to recover possession of lands or to recover possession of chattels, since in neither of these instances does the cause of action "arise out of contract," and a counterclaim under the second subdivision is therefore impossible.

§ 748. I shall finish this inquiry into the general nature of the counterclaim by a brief statement of the mode in which it should be formally pleaded. The defendant must, in some express

same thing as recoupment, would be giving a definition obviously less comprehensive than that given by the statute above quoted. The counterclaim comprehends recoupment, and much more. It hardly admits of a question that it embraces also what was known as the crossbill in equity against the plaintiff. Unless this be so, it would result, that, in many cases, what formerly might have been settled in one litigation, would, under the

code, require two or more separate suits to determine it. This is not the spirit of the code." In Eastman v. Linn, 20 Minn. 433, which was also an action to quiet title, a similar counterclaim for the recov ery of the land in question by the defendant was sustained. For an exhaustive discussion of the counterclaim as defined by the Indiana code, and for a statement of the rules in relation to its use, see Campbell v. Routt, 42 Ind. 410, 413–416.

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and definite manner, indicate his design of treating and relying upon this particular portion of his answer as a counterclaim. Whether it stands alone, and thus constitutes the entire answer, or whether it is united with other defences or counterclaims, it must be so distinguished by the formal language employed, that the plaintiff and the court may recognize it at once as a counterclaim, and not as a simple defence. It is not enough that the defendant state facts, which, if true, would constitute a cause of action against the plaintiff: he must also state his intention to regard these facts as constituting the affirmative cause of action, and not to regard them as a defence. This intention must be indicated either by naming the matter thus pleaded "a counterclaim,” — that is, by declaring that it is pleaded as such, or by concluding it with a prayer for a judgment granting the desired relief. The better practice is — and it should be universal- to use both of these characteristics marks; to commence the particular allegations with the formal statement that they are pleaded as a counterclaim, and to end them with the usual prayer for relief as in a complaint or petition. This practical rule of pleading is fully sustained by the decided cases. There is one controlling reason why the defendant should designate, in a certain and obvious manner, the special character of the pleading. In all the States but one or two, the plaintiff must reply to a counterclaim, or its averments of fact are admitted to be true. He ought not to be subjected to this penalty unless he is told in the most express terms that the pleading is a counterclaim. It would

1 Bates v. Rosekrans, 37 N. Y. 409, 411, per Hunt J.; McConihe v. Hollister, 19 Wisc. 269; Hutchings v. Moore, 4 Metc. (Ky.) 110; Wilder v. Boynton, 63 Barb. 547; McAbee v. Randall, 41 Cal. 136. See, contra, Brannaman v. Palmer, Stanton's Code (Ky.), p. 90. In Bates v. Rosekrans, Hunt J. said: "I think the answer given by the court below is also a sound one; to wit, that the pleading does not purport to be a counterclaim. designates itself simply as a "further defence," and there rests. No particular form of words is necessary to make a pleading a counterclaim; and if the party had, in any reasonable language, intimated that he intended to make a personal claim in his own favor against the plaintiff, it would have been sufficient. The ordinary

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and most satisfactory form of giving that intimation is by a statement that the pleading is a counterclaim, or by a prayer for relief." In McConihe v. Hollister, the court said: "We are inclined to the opinion, that where an answer does not in form set up a counterclaim, but contains allegations sufficient either for a defence or for a counterclaim, it should be construed to set up a defence merely." In Wilder v. Boynton, the answer alleged "as a second defence" a breach by the plaintiff of the contract sued on, and ended as follows: Whereby the defendant sustained damages to the amount of, &c.; which sum the defendant will recoup against any demand of the plaintiff." This was held to be a sufficient pleading of the matter as a counterclaim.

have been better if the courts had laid down the most explicit rule, and had required the defendant to name his pleading: but the cases do not go to this length; and a prayer for relief, appended to the proper allegations of fact, will supply the place of a name. It has been held, that when the defendant has set up facts which really constitute a defence, but has mistakenly called them a counterclaim, formally pleading them as such, he must stand by the designation, and cannot treat them as a defence, and have the benefit of them as a bar to the plaintiff's recovery.1 This ruling, however, is without any cogent reason in its favor, would often work injustice, and seems opposed to some of the cases already quoted.2

II. The Parties in their Relations with the Counterclaim.

§ 749. 1. The Relations of the Defendant in general with the Counterclaim it must, in general, be a Demand in Favor of the Defendant who pleads it. In all the States whose codes do not contain a provision in favor of sureties or joint-debtors, the rule is established without exception that the counterclaim must be a demand, existing in favor of the defendant who pleads it; in other words, the defendant cannot set up and maintain as a valid counterclaim a right of action subsisting in favor of another person, even though there may be close legal relations between himself and such other person. The sure test is very simple. Could the defendant have maintained an independent action. upon the demand if he had made it the basis of a separate suit? If he could not, then he cannot use it as a counterclaim. To this proposition there is no judicial dissent nor exception; and the cases which I shall cite are intended to illustrate the various circumstances in which the rule has been applied.

§ 750. The most common case is that of a surety. When sued alone, or together with the principal debtor, he cannot interpose as a valid counterclaim any cause of action existing in favor of that principal, not even one arising from a breach by the plaintiff of the very contract in suit. There are instances in

1 Ferreira v. De Pew, 4 Abb. Pr. 131 (Sp. Term), per Brady J.; Campbell v. Routt, 42 Ind. 410, 415. See also McAbee v. Randall, 41 Cal. 136, where the defendant, having named his answer a coun

terclaim," was not permitted to treat it as a "cross-complaint."

2 See De Leyer v. Michaels, 5 Abb. Pr. 203.

3 Gillespie v. Torrance, 25 N. Y. 306,

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