assignee of a demand having brought suit upon it, the defendant alleged as a counter-claim a contract with the assignor, a breach thereof by him, and resulting damages, and prayed judgment for the amount of such damages aganist 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 counter-claim at large, and stated principles of universal application.1 § 620. *744. Doctrine that Counter-Claim must be Antagonistic to, and tend to defeat, lessen, or modify, the Claim of Plaintiff. The doctrine is maintained in several cases, that, as an essential feature or element of every counter-claim, 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.2 In an action brought to 1 [Dolbeer v. Stout (1893), 139 N. Y. 486, 34 N. E. 1102.] 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 counter-claim. 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 recovery against him. A counter-claim 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 counter-claim which is not also a setoff 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. 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 counter-claim, 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 counter-claim. In an action to recover the ... whole or in part the plaintiff's claim for judgment.. It must be a claim existing in favor of the defendant and against the plaintiff between whom a several judgment may be had in the action.", Miser v. O'Shea (1900), 37 Ore. 231, 62 Pac. 491; Peterson v. Bean (1900), 22 Utah, 43, 61 Pac. 213, citing the text.] 1 National F. Ins. Co. v. McKay, 21 N. Y. 191, 195, per Comstock J.: "Upon the defendant's own statement, I do not see that anything 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 legal 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 counter-claim, 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 counter-claim does not impair or affect the right to that relief. I apprehend that a counter-claim, when estab 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 price of goods sold and delivered, the answer contained a so-called counter-claim 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 counter-claim in opposition to the cause of action stated in the complaint; and directly held the doctrine that a counter-claim must in some sort defeat the plaintiff's recovery, or interfere with the judgment that would otherwise be rendered in his favor.1 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 counter-claim, 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 counter-claim 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. In an action to foreclose a mortgage where the plaintiff asked for a judgment upon the bond for a deficiency, the defendant's counter-claim of damages was allowed: Hunt v. Chapman, 51 N. Y. 555. The doctrine of Nat. F. Ins. Co. v. McKay has been enacted in the New York C. C. P., § 501. "The counter-claim must tend, in some way, to diminish or defeat the plaintiff's recovery;" Lipman v. Jackson Arch. Iron Works, 128 N. Y. * that a counter-claim which is entirely inconsistent with any cause of action on the plaintiff's part and which cannot be proved as a claim until it is decided that the plaintiff has no claim, does not 'tend to diminish or defeat the plaintiff's recovery.' This rule, if established, will evidently limit materially the principle stated in § 739, ante; but it is difficult to see why the result necessarily follows from the code provision cited. The learned judge seems to admit that his decision is inconsistent with Glen & Hall Manuf. Co. v. Hall, 61 N. Y. 226; post, §*765; but the doctrine now embodied in § 501 of the code was firmly established when the latter case was decided. In Schenectady v. Furman, the action was brought to recover for work done, under resolutions of the common council of a city, in,removing certain alleged obstructions in a stream running through the defendant's land; the counter-claim was for the injury done to the land; the resolutions being held invalid, the counterclaim was disallowed, for the reason given above. 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 counter-claim 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 Limitation Established § 621. * 745. Application of Doctrine. by New York Courts. Purely Judicial. Criticism. These cases must be considered as establishing the doctrine that the defendant's cause of action, in order to constitute a valid counter-claim, 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. any deduction even on account of the matters stated in the answer. A counter-claim, to be available to a party, must afford to him protection in some way against the plaintiff's demand for judgment, either in whole or in part. It must therefore consist in a set-off, or claim by way of recoupment, or be in some way connected with the subject of the action stated in the complaint. It must present an answer to the plaintiff's demand for relief; must show that he is not entitled, either at law or under the applications of just principles of equity, to judgment in his favor, as, or to the extent, claimed in the complaint. It must therefore contain not only the substance of what is necessary to sustain an action in favor of the defendant against the plaintiff, but it must also operate in some way to defeat, in whole or in part, the plaintiff's right to recover in the action. An answer which does not meet this requirement is insufficient, whether regarded as a defence or as a counter-claim. If a person be sued on a promissory note, he cannot set up, by way of defence or counterclaim, a contract with the plaintiff for the purchase of lands, and allege payment of the purchase-price, and claim a decree in the action for a specific performance; nor could he, in such an action on a promissory note, have a foreclosure of a mortgage against the plaintiff, especially if the latter were not personally liable for the mortgage debt." The same principle was again approved by the New York Court of Appeals in a recent decision. "Counter-claim," it was said, "is a new term introduced into the code, and which is limited and defined therein. When the action is upon contract, unless the coun ter-claim arises out of the contract or transaction set forth in the complaint as the foundation of the plaintiff's claim, or be connected with the subject of the action, it must be a legal or equitable cause of action against the plaintiff arising upon contract, and existing at the commencement of the action. It is manifest, however, that every cause of action existing in favor of the defendant against the plaintiff, arising upon contract, cannot be the subject of a counter-claim. It must be a cause of action upon which something is due the defendant which can be applied in diminution of the plaintiff's claim. For instance, a cause of action for the specific performance of a contract in reference to real estate arises upon contract, and yet cannot be set up as a counter-claim, unless it grew out of, or is connected with, the cause of action alleged in the complaint. . . . The object of introducing counter-claims into the practice under the code was to enable parties to settle and adjust all their cross-claims in a single action as far as they could." Waddell v. Darling, 51 N. Y. 327, 330. See also Pattison v. Richards, 22 Barb. 143, 145. This doctrine was fully approved and adopted by the Supreme Court of Wisconsin in the very recent case of Dietrich v. Koch, 35 Wis. 618, 626. In the case of Cavalli v. Allen, 57 N. Y. 508, which was an action to recover the possession of land, brought by a vendor against the vendee in possession, on the ground that a balance of the purchase-price remained unpaid, the defendant was permitted to set up as a counter-claim a note which he held against the plaintiff, and thus to extinguish the amount due on the land contract. It is said by one of the judges that the counter-claim "must consist in a set-off or claim by way of recoupment, or be in some way connected with the subject of the action stated in the complaint." This rule could only be broken by counter-claims belonging to the second subdivision. In respect to all those falling within the first subdivision, they all, by the very terms of the definition, arise out of the same contract or transaction set forth in the complaint, or they are connected with the subject of the action. There is, therefore, in this class, no room for a possible violation of the rule laid down by the learned judge. The counter-claim must, from its very nature, be connected 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 counter-claims 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 counter-claim 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 legislature has said: "When the action arises on a contract, any other cause of action also arising on a contract may also be a counter-claim." 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 counter-claim: 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. § 622. * 746. Decisions in other States. The decisions made by the courts of other States present the same general notions in respect to the nature and scope of the counter-claim.1 In Wisconsin the counter-claim is recognized to the fullest extent as including relief of an equitable nature, and as being available in 1 See Allen v. Shackelton, 15 Ohio St. 145, 147, per Wilder J.; Hill v. Butler, 6 Ohio St. 207, 216, per Swan J. |