judgment in his favor against the plaintiff? If not, they do not constitute a counter-claim. § 615.739. Implies an Opposing Claim. Limitation herein. It has sometimes been said that "counter-claim," ex vi termini, implies a claim, and also an opposing claim; and that, therefore, there cannot be a valid counter-claim unless there is a demand on behalf of the plaintiff. This is no doubt true within certain limits. The counter-claim as well as the defence assumes that the plaintiff sets up a claim in his complaint. There could be no answer of any kind, defensive or affirmative, unless the plaintiff in the first instance filed or served a pleading containing some demand. But a counter-claim does not necessarily imply that the demand is a valid one. The term, if not invented, was applied by the legislature to this species of answer, which is allowed to be used in cases where the plaintiff sets up certain specified causes of action; but the code nowhere requires that the cause of action thus alleged should be a good one. To interpolate any such limitation into the language of the statute would be giving an unnecessary meaning to a very simple epithet chosen by the lawmakers to designate a particular kind of pleading. The plaintiff must file a complaint averring facts which are said to constitute a cause of action in his favor. The defendant is expressly permitted to unite in his answer as many defences and counter-claims as he may have. Suppose that he pleads some defence either by way of denial or of new matter, and also a counter-claim. On the trial he establishes his defence, and thus defeats the plaintiff's recovery upon the alleged cause of action. Does this success cut off his power to go on and prove the facts constituting his counterclaim, and to obtain the judgment thereon? Such a conclusion would be a monstrous perversion of the statute, and would be a virtual repeal of its express provisions which permit the defendant to unite as many defences and counter-claims as he may have. When the legislature authorized him to join defences and counterclaims in this manner, it certainly intended that he should use them all, and did not mean that he should go through the empty form of pleading them, and afterwards abandoning those which are affirmative in their nature because successful in those which are negative. This conclusion is self-evident: it necessarily 1 [Le Clare v. Thibault (1902), 41 Ore. 601, 69 Pac. 552: "Before a defendant can be permitted to plead a counter-claim as a defence to plaintiff's cause of suit, results from the positive provisions of the codes, and cannot be avoided without their virtual repeal. I have dwelt upon this subject at some length, not because there can be any legitimate and well-founded doubt concerning it, but because there are certain judicial dicta in a few cases which are supposed to convey a different meaning.1 § 616. * 740. Cause of Action Alleged must exist in Favor of Defendant who pleads it. Exception hereto in Codes of Indiana and Iowa. (2) The cause of action thus alleged must exist in favor of the defendant who pleads it. As the counter-claim is defined in nearly all the codes, a defendant is not permitted to set up facts which entitle any other person, defendant or otherwise, to relief. He himself must be the party entitled to the judgment demanded, so that he would be the proper plaintiff, or one of the proper plaintiffs, if the cause of action had been made the basis of an independent suit. It is not, of course, to be understood that a counter-claim must always exist in favor of a single defendant: two or more, when sued jointly, may have a joint cause of action he must admit the existence, at least, of a part of his adversary's demands." Sydner Pump Co. v. Rocky Mount Ice Co. (1899), 125 N. C. 80, 34 S. E. 198: When a non-suit has been entered, it is too late to file a supplemental answer containing a counter-claim, since when there is no action pending there can be no counterclaim. Davis v. Seattle National Bank, (1898), 19 Wash. 65, 52 Pac. 526: "A defendant may deny liability and at the same time plead a counter-claim or offset, without subjecting himself to the charge of pleading inconsistent defences, if there is no direct contradiction in the special facts pleaded."] 1 See Mayor, etc. of N. Y. v. Parker Vein Stp. Co., 12 Abb. Pr. 300; 8 Bosw. 300; Bellinger v. Craigue, 31 Barb. 534; Prouty v. Eaton, 41 Barb. 409. See also Schenectady v. Furman, 61 Hun, 171, post, §744, note. It is settled, however, in Minnesota, that a counter-claim must of necessity admit the cause of action set up by the plaintiff, and that the defendant cannot deny this cause of action, and at the same time plead a counter-claim. In one case the court said: "The nature of a counter-claim would seem to render necessary the admission by defendant of a claim against him in favor of the plaintiff arising out of the contract or the transaction, as the case may require, which is the cause of action, or the ground of the plaintiff's claim set forth in the complaint. All claim of the plaintiff being denied, it was held there could be no counter-claim. Steele v. Etheridge, 15 Minn. 501, 509; Mason v. Heyward, 3 Minn. 182; Whalon v. Aldrich, 8 Minn. 346, 348; Koempel v. Shaw, 13 Minn. 488; Morrison v. Lovejoy, 6 Minn. 319. I add here the more recent cases which illustrate the general nature and requisites of the counter-claim, with respect to all the features described in the paragraphs of the text. Nothing in these decisions requires any modification of the views stated in the text; in fact, my discussion of the counter-claim in all its bearings is sustained by the current of authority. Davis v. Toulmin, 77 N. Y. 280, and cases cited; Francis v. Edwards, 77 N. C. 271; Quebec Bk. v. Weygand, 30 Ohio St. 126; Schee v. McQuilken, 59 Ind. 269; Blakely v. Boruff, 71 id. 93; Thompson v. Tookey, 71 id. 296; Stockton v. Stockton, 73 id. 510; Rucker v. Steelman, 73 id. 396; Exline v. Lowery, 46 Iowa, 556; Town v. Bripgolf, 47 id. 133. against the plaintiff; in which case it might be, and properly should be, pleaded as a counter-claim by them all. To the general rule above stated there is an exception already pointed out in the codes of Indiana and of Iowa, which permits a surety when sued to take advantage of a demand against the plaintiff in favor of his principal, and a joint debtor, when sued, to interpose one in favor of another joint debtor. § 617. * 741. Cause of Action must exist against the Plaintiff. (3) The cause of action must exist against the plaintiff in the suit, so that a judgment for the relief demanded can be rendered against him. This feature of the counter-claim is evident upon the most cursory reading of the statutory provision; and yet the books are full of cases in which matters have been set up as counter-claims 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 counter-claim, for the simple but most cogent reason that it does not entitle the defendant to any possible recovery against the plaintiff.2 § 618. *742. Subject-Matter of Counter-Claim. General Classes. Statutory Restrictions as to Scope and Character. Analysis of Statutory Provisions. (4) In reference to their subject-matter, the codes which form the first group separate counter-claims into two general classes namely, first, those which arise out of a cause of action different from the one alleged by the plaintiff; and secondly, 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 1 [U. S. T. Co. v. Stanton (1893), 139 N. Y. 531, 34 N. E. 1098; Dolbeer v. Stout (1893), 139 N. Y. 486, 34 N. E. 1102; Trester v. City of Sheboygan (1894), 87 Wis. 496, 58 N. W. 747; Momsen v. Atkins (1900), 105 Wis. 557, 81 N. W. 647; Smith v. Dawley (1894), 92 Ia. 312, 60 N. W. 625.] 2 [Walker v. Ins. Co. (1894), 143 N. Y. 167, 38 N. E. 106. In an action by the indorsee after maturity of a promissory note, an indebtedness of the payee to the maker, existing at the date of the transfer of the note, is not a counter-claim, but a defence: Lynch v. Free (1896), 64 Minn. 277, 66 N. W.277. Where an agent sues in his own name, defendant may set up as a partial defence a demand against the principal, but this "is not really a counter-claim," since it is not "a demand which may be the basis of a judgment against the plaintiff :' Bliss v. Sneath (1894), 103 Cal. 43, 36 Pac. 1029.] these classes the cause of action stated by the plaintiff must spring from contract, and the counter-claim must arise out of another contract. These counter-claims 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 counter-claim, 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 counter-claim 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 counter-claim 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 to this matter, - any counter-claim 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 counter-claim, 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 judi1 [Warren v. Hall (1895), 20 Colo. 508, 38 Pac. 767.] 1 cial 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 counter-claim, 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 counter-claim 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. § 619.743. Illustrative Opinions. 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 counter-claim as it is now understood and accepted in the various States. These selections and quotations will be found in the foot-notes.1 The 1 Leavenworth v. Packer, 52 Barb. 132, 136, per Potter J.: "A counter-claim 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 |