set up as counterclaims that showed no cause of action whatever against the plaintiff, but one (if at all) existing against some other person not a party to the suit. This error is most likely to arise in actions brought by an assignee of a demand, where the defendant has a claim which would be valid against the assignor. Such claim may, under some circumstances, constitute a perfect defence to the suit, and it may be a set-off according to the provisions of statutes prior to the code; but it cannot be a counterclaim, for the simple but most cogent reason that it does not entitle the defendant to any possible recovery against the plaintiff.

§ 742. (4.) In reference to their subject-matter, the codes which form the first group separate counterclaims into two general classes namely, first, those which arise out of a cause of action different from the one alleged by the plaintiff; and seeondly, those which arise out of or are connected with the same cause of action as the one alleged by the plaintiff. In the first of these classes the cause of action stated by the plaintiff must spring from contract, and the counterclaim must arise out of another contract. These counterclaims are identical with the "set-off" of the codes which belong to the second group, and they embrace, but are not restricted to, the "set-offs" used in the former procedure. They include that ancient "set-off,” and also much more; for they cover all cases of damages as well as of debt resulting from the non-performance of contracts; and, according to the construction supported by the overwhelming weight of authority, they also extend to cases of equitable relief arising from contract. In the second of these classes the cause of action that may be set forth by the plaintiff is not defined or limited in any manner, and may therefore, unless limitations not contained in the statute are to be interpolated by the courts, be of any kind and nature. The counterclaim, however, is restricted in its scope and character, and must conform to one or the other of three requisites: (a) If a contract is set forth in the complaint or petition as the foundation of the plaintiff's demand, the counterclaim must arise out of that same contract; and this plainly embraces the ancient recoupment of damages, although far broader in its operation than that species of defence. (b) If a "transaction" is set forth as the foundation of the plaintiff's demand, the counterclaim must arise out of that "transaction;" and, so

far as "transaction" is something different from or additional to "contract," this is a provision not identical in its effect with either "set-off" or "recoupment:" it clearly embraces many instances of equitable cross-demand and relief in favor of the defendant; and the only real doubt is, whether it extends also to legal causes of action. (c) Whatever be the nature of the claim. asserted by the plaintiff, for the codes contain no restriction in respect of this matter, any counterclaim may be pleaded "which is connected with the subject of the action." I have thus given a simple analysis of the statutory provision, taking the language as the legislature has used it without modification, neither adding to nor subtracting from it. If the courts have at any time placed further limitations upon the scope and operation of the counterclaim, if they have ever refused to admit the broad and comprehensive classification here made, they have done so by narrowing the general language of the statute, and restricting its obvious import. How far judicial decisions have gone in this process of limitation, and how much authority should be conceded to their interpretation, I shall attempt to ascertain and to determine in subsequent portions of this section. My sole object now is to let the statute speak for itself by presenting an analysis and arrangement of its various clauses. It is certain, from this inspection of its very language, that there is no express restriction upon the nature and effect of the relief which may be demanded and obtained by means of a counterclaim, no express requirement that it must be legal rather than equitable, nor that it must be confined to a money judgment in the form of debt or damages. Nor is there any express provision that the counterclaim must be something essentially antagonistic to, or tending to defeat or lessen, the cause of action set forth by the plaintiff in his complaint or petition. It will be seen, in the further discussions of this section, that the incident last mentioned is declared by several carefully considered decisions to be a necessary element or feature of the counterclaim, implied in its very nature and in the name given to it by the legislature. I do not question the correctness of this conclusion: I merely call attention to the fact, that, in reaching it or any similar result, the courts have added to or taken from the express terms of the codes.

§ 743. I shall now collect the opinions of several eminent and able judges, selected from a number of leading cases, in order

that the reader may be able to compare their conclusions with the results of the foregoing analysis, and to ascertain the general principles upon which the courts have proceeded in constructing the theory of the counterclaim as it is now understood and accepted in the various States. These selections and quotations will be found in the foot-notes.1 The assignee of a demand having brought suit upon it, the defendant alleged as a counterclaim a contract with the assignor, a breach thereof by him, and resulting damages, and prayed judgment for the amount of such damages against the defendant. No reply being served to this answer, the defendant urged that its averments were admitted, and that he was entitled to judgment on the record. In rejecting his claim, the New York Court of Appeals described the counterclaim at large, and stated principles of universal application.2

1 Leavenworth v. Packer, 52 Barb. 132, 136, per Potter J.: "A counterclaim is a kind of equitable defence which is permitted, under the provisions of the code, to be set up, when it arises out of the contract set forth in the complaint. It is broader and more comprehensive than recoupment, though it embraces both recoupment and set-off; and it is intended to secure to a defendant all the relief which either an action at law, or a bill in equity, or a cross-suit, would have secured on the same state of facts. But it must be something which resists or modifies the plaintiff's claim." See also Clinton v. Eddy, 1 Lans. 61, 62; Boston Mills v. Eull, 6 Abb. Pr. N. s. 319, 321; Pattison. Richards, 22 Barb. 143, 146; Ogden v. Coddington, 2 E. D. Smith, 317; Gleason v. Moen, 2 Duer, 639, 642; Schubart v. Harteau, 34 Barb. 447; Lignot v. Redding, 4 E. D. Smith, 285; Currie v. Cowles, 6 Bosw. 453; Wolf v. H., 13 How Pr. 84; Davidson v. Remington, 12 How. Pr. 310.

2 Vassear v. Livingston, 13 N. Y. 248, per Denio J.: "There is nothing in the nature of a counterclaim stated in the answer. There was never any contract between the plaintiff and the defendant; and although the new matter was, if true, very pertinent to preclude the plaintiff from recovering upon the demand assigned to him, it had no tendency to show an independent cause of action in favor of the defendant against the plaintiff.

Section 150 of the code defines a counterclaim. It must be a claim existing in favor of the defendant against the plaintiff, arising either out of the contract or transaction sued upon, or some other contract. Here the defendant had no claim against the plaintiff. If the facts were truly stated, he had grounds for defending himself against the plaintiff's suit, but none whatever for an independent recorery against him. A counterclaim 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 is quite obvious that nothing of that nature is stated in this answer." In the same case, the court below, after stating the doctrine in a similar manner, added: "A counterclaim which is not also a set-off is not a defence. It is a distinct and independent cause of action, which is not used simply to repel the claims of the plaintiff, but for which a judgment against him is in all events demanded. Previous to the code, it could not be set up by the defendant at all; and the permission to set it up in an answer, although with a change of its name, assuredly has not changed its legal character. A recoupment or a set-off is a defence; but a defendant who avails himself of such a defence admits, in whole or in part, the demand of the plaintiff as alleged in the complaint." S. C. 4 Duer, 285, 293, per Duer J. See also Merrick v. Gordon, 20 N. Y. 93, 97, per Comstock J.

§ 744. The doctrine is maintained in several cases, that, as an essential feature or element of every counterclaim, the cause of action which it sets up must be of such a nature that the relief obtained by its means will necessarily interfere with, defeat, lessen, or modify the relief granted to the plaintiff in virtue of the cause of action alleged in his complaint or petition. In other words, the two demands must be, to some extent at least, antagonistic, and tending to destroy or limit each other. In an action brought to foreclose a mortgage upon land, the holder of the legal title, to whom the premises had been conveyed by the mortgagor, was made a defendant; but no personal judgment for the debt was demanded against him in the complaint, and he was notified to that effect in the usual manner. He pleaded a counterclaim, setting up the following facts: that the plaintiff conveyed the land to the mortgagor by a deed, with full covenants of title; that the mortgagor conveyed the same premises to the defendant by a similar deed, and also assigned the plaintiff's covenants and all rights of action for their breach; that said covenants had been broken by the existence of an outstanding paramount title and prior incumbrances, and the defendant had been evicted under the same, to his great damage, for which damages judgment was demanded against the plaintiff. Evidence in support of this answer was excluded at the trial, and the defendant appealed. The New York Court of Appeals, sustaining the ruling below, announced the doctrine that the demands of the plaintiff and of the defendant must be reciprocal, in order that there can be any place for a counterclaim. In an action to recover the price of goods

1 National Fire Ins. Co. v. McKay, 21 N. Y. 191, 195, per Comstock J.: " Upon the defendant's own statement, I do not see that any thing was in litigation between him and the plaintiff, or that any judgment could be rendered against him except one for costs for interposing a groundless defence to the action. No cause of action existed against him. The complaint claimed nothing against him personally, and stated no facts as the foundation of such a decree. The answer showed that he had no title or interest in the mortgaged premises to be affected by the decree. His defence must therefore be deemed to have been put in for the mere purpose of establishing a le

gal cause for an independent suit on the plaintiff's covenants, without any demand against himself being at all involved in the controversy. Without undertaking at this time to expound the provisions of the code which relate to the counterclaim, I am satisfied that they do not apply to such a case as this. Of course the claim could only be enforced in this case by a judg ment in the defendant's favor for the damages sustained in consequence of the eviction. But the plaintiff might, notwithstanding such a judgment, be entitled to a decree for a foreclosure and sale. The alleged counterclaim does not impair or affect the right to that relief. I apprehend that a counterclaim, when estab

sold and delivered, the answer contained a so-called counterclaim which purported to show that the plaintiff held lands under a deed of trust which he was in equity bound to convey to the defendant, and prayed a judgment directing such conveyance. The Supreme Court in New York decided that these facts, if properly pleaded, would not constitute a counterclaim in opposition to the cause of action stated in the complaint; and directly held the doctrine that a counterclaim must in some sort defeat the plaintiff's recovery, or interfere with the judgment that would otherwise be rendered in his favor.1

§ 745. These cases must be considered as establishing the doctrine, that the defendant's cause of action, in order to constitute a valid counterclaim, must to some extent defeat, modify, qualify, or interfere with, the relief which would otherwise be obtained by the plaintiff. The sweeping statements and broad generalities of the opinions ought, however, to be limited within their proper bounds, by pointing out the only possible instances in which the principle can apply. It is said by one of the judges that the

lished, must in some way qualify, or must defeat, the judgment to which the plaintiff is otherwise entitled. In a foreclosure suit, a defendant who is personally liable for the debt, or whose land is burdened by the lien, may probably introduce an offset to reduce or extinguish the claim. But where his personal liability is not in question, and where he disclaims all interest in the mortgaged premises, I do not see how he can demand a judgment against the plaintiff on a bill, or a note, or a bond, or a covenant. Such is virtually this case. The defendant has, as he insists, a cause of action against the plaintiff upon a broken covenant; but that cause of action, if it exists, does not enable him to resist or modify the relief to which the plaintiff is entitled." See also Agate v. King, 17 Abb. Pr. 159 (Gen. Term, 1862). An action to foreclose a mortgage against K. and others. K. owned the land, but was not personally liable for the debt, and no personal judgment against him was demanded. He set up, as a counterclaim, a demand for $6,000 damages arising from a breach by the plaintiff of a distinct contract to convey land. This was held not to be a counterclaim: it clearly did not

fall under the first subdivision: it did not fall under the second subdivision, because, in an action to foreclose a mortgage as against all the defendants except the one personally liable, the cause of action does not arise out of contract; and also because no judgment was asked against K. Some portions of the opinion do not agree with the reasoning of Comstock J. quoted above: while the decision reached is in harmony with that case, the dicta of the judge are not entirely so. And see Carpenter v. Leonard, 5 Minn. 155.

1 Mattoon v. Baker, 24 How. Pr. 329, 331 (Gen. Term), per Bockes J. After reciting the allegations as given above, the opinion proceeds: "Would this constitute a defence to the plaintiff's action for goods sold? Clearly not. Nor would it be such a counterclaim as the defendant would have a right to interpose by way of answer to the plaintiff's alleged grounds of action. Such equitable claim for relief would afford no answer to the plaintiff's claim for judgment. He would still be entitled to recover according to the allegations of his complaint, without any deduction even on account of the matters stated in the answer. A counterclaim, to