proceedings declared void, and the bonds themselves cancelled. One of the defendants individually set up as a counterclaim a debt to himself from the town for money loaned. This answer was overruled on the merits, the court holding that it did not fall within the definition of any species of counterclaim. The omission to rest the decision upon the obvious ground, if it existed, that a counterclaim in favor of one defendant was improper, was a plain though silent admission that this objection was untenable. In such an action a separate judgment is not only possible, but is, in fact, absolutely necessary.1 § 760. As the Iowa code is unlike that of any other State in this respect, I quote somewhat freely from a very recent case, which gives a construction to its language, and explains its peculiar provisions. In an action against a husband and wife jointly, three counterclaims or cross-demands were pleaded as follows: (1) By both defendants jointly to recover damages caused by the plaintiff's malicious prosecution of the wife; (2) by the husband alone to recover damages caused by the malicious prosecution of his minor children; (3) by the husband alone to recover damages caused by the malicious prosecution of himself. The judgment of the court, giving a construction to the statute, and passing upon the validity of this counterclaim will be found in the footnote.2 1 Town of Venice v. Breed, 65 Barb. 597, 605, 606. 2 Muselman v. Galligher, 32 Iowa, 383, 389. There are, first, "set-off," which is an independent cause of action arising on contract or ascertained by the decision of the court, and can be pleaded only in an action on contract; secondly, "counterclaim," which is a cause of action in favor of the defendants, or some of them, against the plaintiffs, or some of them, arising out of the contract or transaction set forth in the plaintiff's petition as the foundation of his claim, or connected with the subject of the action; thirdly, "cross-demand," which is a statement of any new matter constituting any cause of action in favor of the defendant, or all the defendants, if more than one, against the plaintiff, or all the plaintiffs, if more than one, and which the defendant or defendants might have brought when the suit was commenced, or which was then held, whether matured or not, if matured when pleaded. § 761. By the decisions which have been reviewed in the foregoing paragraphs, certain specific rules are clearly established for all the States whose codes may be classed in either of the two general groups mentioned at the commencement of this section. First, when the defendants in an action are joint contractors, and are sued as such, no counterclaim can be made available which consists of a demand in favor of one or some of them. Secondly, when the defendants in an action are jointly and severally liable, although sued jointly, a counterclaim, consisting of a demand in favor of one or some of them, may, if otherwise without objection, be interposed. Thirdly, since it is possible, pursuant to express provisions of all the codes, for persons severally liable to be sued jointly under certain circumstances in a legal action, — that is, in an action brought to recover a common money judgment, a counterclaim in favor of one or more of such defendants may be pleaded and proved. Fourthly, in all equitable suits wherein persons having different interests, and against whom different reliefs are demanded, may be, and constantly are, united as codefendants, a counterclaim existing in favor of one or more of such defendants may be interposed, free from any objection based entirely upon the situation of the parties. Fifthly, when two or more persons have a joint right of action, and unite as plaintiffs to enforce the same, a counterclaim cannot be admitted against one or some of them in favor of any or all the defendants. Sixthly, when two or more persons have separate rights of action, and they are properly united as plaintiffs in one action to enforce these rights, a counterclaim may be set up against one or more of them, as the case may be. Seventhly, if two or more plaintiffs should bring an action joint in form, and should allege and claim to recover upon a joint cause of action, even a contract, but in fact the joinder was improper because as to some, or perhaps all but one, there existed no right of action, a recovery could be had in favor of the one or more who established a cause of action, and the complaint be dismissed as to the others; and it would seem to follow as a necessary corollary connected with, the plaintiff's cause of action. If it is said they were "crossdemands," they were inadmissible, because they were in favor of one defendant alone. The claim of damages for the tort to the wife was declared to be one in her own favor, if it existed at all; and the husband could not join with her in enforcing it, whether she brought an action on it as a plaintiff, or pleaded it as a "cross-demand" in an action against her. that a counterclaim might be interposed against the one or more of the plaintiffs under such circumstances in whose favor a separate judgment could be rendered. Lastly, in equitable actions, counterclaims in favor of one or some of the defendants, and against one or some of the plaintiffs, must be permissible as a general rule, since in equity the common-law doctrine of joint right and liability does not generally prevail, and separate judgments, or judgments conferring separate relief, among the parties, are almost a matter of course. § 762. Counterclaims otherwise proper may be inadmissible or ineffectual for the want of the necessary parties before the court, since the same rules as to parties must apply to them as would be applied if the facts alleged and the relief demanded were stated in a complaint or petition as the basis of a separate action. This objection will more frequently present itself in counterclaims that are equitable in their nature. As the relief must be denied to the plaintiff in an equitable action unless he has brought all the necessary parties before the court, and may be denied unless he has brought in all the proper parties, and as the defendant pleading a counterclaim is in the same condition as an ordinary plaintiff, while the plaintiff against whom it is pleaded is in the position of an ordinary defendant, it follows, first, that the relief demanded by the counterclaim must be refused if all the necessary parties are not present; and, secondly, that it may be refused if any proper parties have been omitted. These propositions require no argument or citation in their support. They result inevitably from the fact that the counterclaim is in its nature a cross-action, governed by the same rules which control a suit when proceeding in the ordinary and direct manner. Several examples of legal actions in which the counterclaim has failed for want of the necessary parties have already been quoted; namely, those decisions in which counterclaims against the plaintiff in the action, and others jointly liable with him, or in favor of the defendant and others jointly interested with him, have been overruled. A single additional authority will suffice to illustrate a principle which really needs no illustration. In an action to foreclose a mortgage, brought by an assignee thereof, the mortgagee not being a party to the record, the defendants alleged, as an equitable counterclaim, facts tending to show that 1 See supra, §§ 754 et seq. the mortgage and the note secured by it were procured to be executed by the mortgagee's fraud, and that the plaintiff took with notice of the fraud, and prayed that the note and mortgage might be cancelled, and the plaintiff enjoined from enforcing them. The court said: "It is evident, that, if the allegations of this answer were in the form of a complaint in a separate action asking that the note and mortgage be surrendered and cancelled, the railroad [the mortgagee] would be a necessary party defendant. The defendant then could not set up the facts alleged in his answer as a counterclaim in this action, for the reason that a new party must be brought before the court." 1 In a few States this difficulty is very properly met and obviated by express provisions of their codes, which authorize the addition of new parties in order that the relief demanded by the counterclaim or set-off may be granted.2 III. The Subject-Matter of Counterclaims, or the Nature of the Causes of Action which may be pleaded as Counterclaims. § 763. This general subdivision is naturally separated into three heads, which I shall proceed to examine in the order stated. A. Nature of the subject-matter generally, with special reference to the question whether the counterclaim may be an equitable cause of action and may result in the granting of equitable relief, or whether it must be restricted to legal causes of action and reliefs. B. The particular questions which arise under the first clause or branch of the statutory definition. C. Those which arise under the second clause or branch of the same provision. A. Whether a Counterclaim may be an Equitable Cause of Action, and the Means of obtaining Equitable Relief; or whether it must be restricted to Legal Causes of Action and Reliefs. § 764. From the decisions cited in the foot-note, the following doctrines and rules are clearly and firmly established. In an 1 McConihe v. Hollister, 19 Wisc. 269. See also Coursen v. Hamlin, 2 Duer, 513; Cummings v. Morris, 25 N. Y. 625; but see Du Pont v. Davis, 35 Wisc. 631, 640, 641, which holds that an equitable counterclaim of reformation, and the like, may be sustained, and the relief granted, without the presence of parties collaterally interested; as, for example, the grantor in the deed to be reformed. The case of Hicks v. Sheppard, 4 Lans. 335, which holds the contrary, was expressly disapproved. 2 Ohio, §§ 96, 98; Kans. §§ 97, 99; Neb. §§ 103, 105; Ind. § 63; Iowa, § 2662. See these sections quoted at large, supra, § 584, note. equitable action, a counterclaim consisting of an equitable cause of action, and demanding equitable relief, may be interposed if it possesses all the other elements required by the definition, and may, in many if not most cases, be pleaded by one or more of the defendants less than all, against one or more of the plaintiffs. The language of the statute does not confine the use of this affirmative species of defence to legal actions, nor require that it should necessarily be of a legal nature itself. Adapting itself to the character of the action in which it is introduced, in those which are legal it resembles, although much broader and more comprehensive, the former set-off and recoupment, while in those which are equitable it often takes the place of a cross-bill or complaint. In a legal action, also, an equitable counterclaim may be set up and affirmative relief may be granted by its means. As the codes in express terms permit equitable defences in such actions, and as in the self-same provision, and by means of the same language, the statute authorizes the joining of as many defences and counterclaims, whether legal or equitable, or both, as the defendant may have, to deny the possibility of an equitable counterclaim in a legal action, would make it necessary, if any consistency were preserved, to deny also the possibility of an equitable defence. The courts, as may be seen from the citations made below, have, with a few unimportant exceptions, been unwilling to nullify the language, and defeat the design of the legislature in this manner, and following its plain meaning and import, they have freely admitted and sustained the equitable counterclaim in all actions, whether legal or equitable, where that form of relief was appropriate, and was authorized by the descriptive terms of the statute.1 § 765. Whether all affirmative equitable relief granted to a defendant must be limited to the cases in which a counterclaim is possible, that is, whether a defendant is unable to set up a case for equitable affirmative relief, and obtain a judgment therefor in Hicksville, &c R. R. v. Long Island R. R., 48 Barb. 355, 360; Fisher v. Moolick, 13 Wisc. 321; Sample v. Rowe, 24 Ind. 208; Lombard v. Cowham, 34 Wisc. 486, 491, 492, and cases cited, which show that in Wisconsin every equitable defence must be a counterclaim; Vail v. Jones, 31 Ind. 467; Charlton v. Tardy, 28 Ind. 452; Du Pont v. Davis, 35 Wisc. 631, 639-641; Spalding v. Alexander, 6 Bush, 160; Jarvis r. Peck, 19 Wisc. 74; Grimes v. Duzan, 32 Ind. 361; Woodruff v. Garner, 27 Ind. 4; Eastman . Linn, 20 Minn. 433; Andrews v. Gillespie, 47 N. Y. 487, 490; Cavalli v. Allen, 57 N. Y. 508, 514. See, per contra, that the counterclaim must always be a legal cause of action, Jones v. Moore, 42 Mo. 413, 419. |