New York Common Pleas rejected a counter-claim which alleged that at the time of the letting mentioned in the complaint the plaintiff leased other premises to the defendant, and that he had before the commencement of this suit wrongfully broken into said premises and taken therefrom certain chattels of the defendant, which he had injured, destroyed, or lost, and prayed judgment for the value of the goods so taken. The court declared that this cause of action clearly did not arise out of the contract or transaction set forth in the complaint, nor was it connected with the subject of the action: it was a naked and independent act of trespass.1 § 662. *786. Same Subject. Similar decisions have been made in other actions than those for the recovery of rent. In a suit upon a note given for the purchase price of land conveyed to the defendants, they were not permitted to counter-claim damages for the plaintiff's wrongful entry upon the land so conveyed, and cutting and carrying away a growing crop the title to which had passed by the deed. It has, however, been recently held by the Supreme Court in New York, that a cause of action for a tort may arise out of the transaction set forth by the plaintiff; and such a counter-claim was fully sustained in an action on contract.3 1 Drake v. Cockroft, 4 E. D. Smith, 34, 39. See also Gallup v. Albany R. Co., 7 Lans. 471; Edgerton v. Page, 20 N. Y. 281, 285; Mayor, etc. of N. Y. v. Parker Vein Stp. Co., 12 Abb. Pr. 300; McKensie v. Farrell, 4 Bosw. 192, 202; Avery v. Dougherty, 102 Ind. 443; Thorp v. Philbin, 15 Daly, 155; Brugman v. Burr, 30 Neb. 406; which were all actions for rent in which counter-claims for damages from torts of the lessor were rejected. In Littman v. Coulter, 23 Abb. N. Cas. 60, however, an action for rent, the defendant was allowed to counter-claim damages for the conversion by the plaintiff of the defendant's goods, under a claim of lien thereon for the rent. 2 Slayback v. Jones, 9 Ind. 470; and see Humbert v. Brisbane, 25 S. C. 506; per contra, see Gordon v. Bruner, 49 Mo. 570, 571 (which was decided on the doctrine of election); Tinsley v. Tinsley, 15 B. Mon. 454, 459; Smith v. Fife, 2 Neb. 10, 13; Apperson's Adm. v. Triplett (Ky. 1890), 13 S. W. 791; in all which, counter-claims of damages from trespasses to land were sustained; but a counterclaim of damages arising from a personal tort cannot be sustained, Conner v. Winton, 7 Ind. 523; Merritt Milling Co. v. Finlay, 110 N. C. 411 [Anderson v. John. son (1900), 106 Wis. 218, 82 N. W. 177]. Wadley v. Davis, 63 Barb. 500. The discussions of the text are further illustrated by the following recent cases: Brady . Brennan, 25 Minn. 210 (action on contract, counter-claim for conversion by waiving the tort); Goebel v. Hough, 26 id. 252 (action by a lessor for rent, counter-claim of damages for plaintiff's wrongful trespass on the premises); Devries v. Warren, 82 N. C. 356 (plaintiff and defendants were co-tenants of land; plaintiff sold his share to defendant and took defendant's bond for the price; in an action on the bond, defendant could not counter-claim damages done to the land by the plaintiff before the sale); Harris v. Rivers, 53 Ind. 216 (in action on a promissory note, no set-off for tort § 663. *787. Damages Arising from Fraud. Cross-demands for damages resulting from fraud will naturally occur, and, it would seem, might be easily sustained. But there have been decisions which reject even such counter-claims. In an action on two promissory notes, the defendants- the makers-alleged that they executed a trust deed of land as security for their notes, and proceeded to state acts of fraud committed by the plaintiff in collusion with the trustee in the deed, by which the land was sacrificed and bought in by the plaintiff at far less than its value, and prayed judgment for the damages resulting from the fraud. The Supreme Court of Missouri overruled this counter-claim in an opinion which contains many palpable errors, and which has been disregarded by subsequent decisions of the same tribunal.1 The Supreme Court of Indiana, however, sustained a counterclaim in every way analogous to the one just described.2 It would seem that little or no difficulty would be met in giving such a construction to the statutory definition as will embrace the cases of damages resulting from the plaintiff's frauds. If the action was on contract, such damages formed a most familiar example of the former "recoupment;" and it is only necessary to extend that doctrine to analogous cases in which a "transaction" is to be substituted in place of a contract. § 664. *788. (3) Cases in which the Plaintiff's Cause of Action is for a Tort and the Defendant's Counter-Claim is in Form upon Contract. The examples of this class of controversies have generally been actions for the wrongful conversion of goods in which the counter-claim of debt or damages upon contract was interposed, and rested either upon the theory that both demands arose out of the one transaction set forth by the plaintiff, or upon the notion that the plaintiff's cause of action might be regarded as founded upon an implied contract, the tort being waived. Such an action having been brought in form for the conversion of goods, the answer contained a counter-claim setting up a liability of the plain possible); Collier v. Ervin, 3 Mont. 142 (action on contract, no counter-claim for a tort unless it arose out of the same transaction, etc.). (1901), 157 Ind. 120, 60 N. E. 1025: The rule is well settled in this State that a claim or demand arising out of tort cannot be pleaded as a set-off against a cause of 1 Jones v. Moore, 42 Mo. 413, per action arising out of contract. AbrahamHolmes J. 2 Vail v. Jones, 31 Ind. 467. son v. Lamberson (1898), 72 Minn. 308, 75 N. W. 226.] [Harris v. Randolph County Bank tiff as a stockholder in a certain manufacturing corporation, averring all the facts required by the statute to create a personal responsibility in him for a debt of the company. This attempted counter-claim was of course overruled, as it had not the least connection with the transaction stated in the complaint, nor with the subject of the action. I submit the following doctrine as correct on principle, and as derived from a true interpretation of the statute. Whenever the facts are such that an election is given to the plaintiff to sue in form either for a tort or on contract, and if he sues on contract the defendant may counter-claim damages for the breach of that contract, the same counter-claim may also be interposed when the suit is in form for the tort: the facts being exactly the same in both phases of the action, the counter-claim would clearly arise out of the real transaction which was the foundation of the plaintiff's demand." The term "transaction" refers to the actual facts and circumstances from which the rights result and which are averred, and not to the mere form and manner in which these facts are averred. Although there are decisions which repudiate this interpretation of the codes, and reject the liberal rule drawn from it, I think the doctrine thus stated is now approved and supported by the decided weight of judicial opinion as expressed in the more recent authorities.3 1 Chambers v. Lewis, 28 N. Y. 454; 11 Abb. Pr. 210. See also Allen v. Randolph, 48 Ind. 496. In Scheunert v. Kaehler, 23 Wis. 523, which was an action for the conversion of goods, a counterclaim of damages from the breach of the contract between the parties out of which the plaintiff's cause of action arose was rejected, the court adding that it must also have been rejected even had the plaintiff brought his suit in form on the contract, which he might have done, because the right of action would still in fact be for a tort. The following recent cases show that the courts are strongly inclined to hold that a counter-claim on contract is impossible in an action for tort, since the two could not in the nature of things arise out of the same transaction: People v. Denison, 84 N. Y. 372, 379; Smith v. Hall, 67 id. 48; Humphrey v. Merritt, 51 Ind. 197; Hess v. Young, 59 id. 379; Boil v. Simms, 60 id. 162; Manney v. Ingram, 78 N. C. 96; Holliday v. McMillan, 83 id. 270; Ring v. Ogden, 44 Wis. 303; Ferris v. Armstrong Manuf. Co. (Supreme, 1890), 10 N. Y. Suppl. 750; Loewenberg v. Rosenthal, 18 Ore. 178; but Spousenberger v. Lemert, 23 Kans. 55, held that in an action against a constable for his failure or neglect to serve process properly, the defendant's fees in the same case were a good set-off or counter-claim. [Harden v. Lang (1900), 110 Ga. 392, 36 S. E. 100; Bell v. Ober & Sons Co. (1900), 111 Ga. 668, 36 S. E. 904; Follendore v. Follendore (1896), 99 Ga. 71, 24 S. E. 407; Giles v. Bank of Georgia (1897), 102 Ga. 702, 29 S. E. 600; Britton v. Ferrin (1902), 171 N. Y. 235, 63 N. E. 954; Hecht v. Snook (1902), 114 Ga. 921, 41 S. E. 74.] 2 Ritchie v. Hayward, 71 Mo. 560; Kamerick v. Castleman, 23 Mo. App. 481. 8 [Story & Isham Co. v. Story (1893), 100 Cal. 30, 31 Pac. 671; Wimmer e. Simon (1894), 9 Utah, 378, 35 Pac. 507; § 665.789. Same Subject. The tort complained of by the plaintiff may not be a conversion of chattels. The fact that a cause of action upon contract in favor of the defendant may arise out of the transaction set forth in the complaint or petition in an action in form for damages resulting from a tort, was distinctly recognized, and the doctrine that a counter-claim setting up such a demand should be admitted, and should not be rejected in deference to notions which the new procedure was designed to supplant, was clearly and cogently enforced by the Supreme Court of Indiana in an opinion from which I make a quotation.1 Warren v. Hall (1895), 20 Col. 508, 38 might, and perhaps should, determine in Pac. 767. "In replevin by a lessor to obtain possession of his lessee's furniture, under a provision of the lease authorizing it to be taken and sold to satisfy unpaid rent, the lessee may counter-claim for damages for breach of the lessor's covenant, in the same lease, to keep the demised premises in repair," citing § 788 of the text: Collins v. Morrison (1895), 91 Wis. 324, 64 N. W. 1000.] In 1 Judah v. Vincennes Univ. Trs., 16 Ind. 56, 60. The plaintiffs trustees of the Vincennes University sue to recover the value of certain bonds belonging to the corporation, received by the defendant as its attorney, and converted by him to his own use. He admits the receipt and detention of the securities, and alleges, by way of counter-claim, that the University was indebted to him for certain professional services, particularly described, including his services in procuring these very bonds, among others, to be issued to it by the State, and prays judgment for the amount of such indebtedness. pronouncing upon the validity of this answer as a counter-claim, the court say: The point is, that the action is in form trover, - an action ex delicto, and that, under such action, the defendant cannot avail himself of any claim which he may have against the plaintiffs for services rendered, or money expended, on their behalf, even if it was in the recovery of the identical property which is the subject of the present action. We are clear that it was the intention of those who initiated and inaugurated the present Code of Procedure that parties litigant each suit all matters in controversy between them which could legitimately be included therein, keeping in view their substantial rights. As proceedings so distinct as those were at law and in equity are no longer required to be separated, but are now blended in one action, we are unable to see any reason for requiring two actions to determine a controversy in which the rights of each party are so dependent upon the rights of the other as in the case at bar. There is most surely an equitable view of this question, as presented in the case at bar, which renders it distinct and different from an ordinary case in which one should convert the property of another, and then set up as a defence that the owner was indebted to him for some other and distinct transaction." See also Birch v. Hall (Supreme, 1888), 3 N. Y. Suppl. 747. The Supreme Court of North Carolina has recently approved this doctrine in the most emphatic and general manner, holding that opposing demands on contract and for tort may arise out of the same transaction, Bitting v. Thaxton, 72 N. C. 541, 549. In St. Louis, F. & W. R. Co. v. Chenault, 36 Kans. 51, the treasurer of the plaintiff, a railroad company, who was sued for the conversion of the company's funds, was allowed to counter-claim demands against the plaintiff, in payment of which he had appropriated the money. In Cow Run Co. v. Lehmer, 41 Ohio St. 384, an action for the conversion of oil delivered to the defendant for storage, the allowance for evaporation, and the charges for storage, both provided for by the contract, were held to be proper subjects for counter § 666. * 790. (4) Cases in which the Demands of both Parties are for Damages Arising from Tort. Counter-claims of damages from torts, when attempted to be enforced against causes of action for damages also arising from other torts, have, with few exceptions, been rejected. The courts have been inclined to adopt, or at least to assume, a general principle that such a cross-demand can never arise from the transaction set forth by the plaintiff as the foundation of his claim. It will be seen, however, that this doctrine has not been universally accepted.1 In all the cases placed in the foot-note, the proposed counter-claims were over-ruled on the ground that the cross-demands were for unconnected torts.2 Opposed to this array of authorities, all announcing the same general doctrine, there are a few cases which sustain a counterclaim of tort against a tort under special circumstances. The claim. For a case in which such a counter-claim was rejected because it did not "arise out of the same transaction," etc., see Pattison v. Richards, 22 Barb. 143. See the additional cases cited ante under §*788. [Smith v. Building Ass'n (1896); 119 N. C. 257, 26 S. E. 40; Lovell v. Hammond Co. (1895), 66 Conn. 500, 34 Atl. 511] 1 [Gilbert v. Loberg (1894), 86 Wis. 661, 57 N. W. 982: "In an action by a landlord against tenants for waste the defendants may counter-claim for the value of personal property placed by them on the premises during their tenancy, and which the landlord has converted by preventing its removal." Renaker v. Smith (1901), 109 Ky. 643, 60 S. W. 407 In an action to recover damages for trespass and destruction of crops by defendant's cattle, defendant cannot plead as a counter-claim the damages which he has suffered from trespasses by plaintiff's cattle, though they resulted from plaintiff's breach of his agreement to keep up a portion of the division fence, as the claim of defendant did not arise out of the same transaction stated in the petition.] 2 Askins v. Hearns, 3 Abb. Pr. 184, 187; Schnaderbeck v. Worth, 8 Abb. Pr. 37; Barhyte v. Hughes, 33 Barb. 320; Henry v. Henry, 3 Robt. 614, 17 Abb. Pr. 411; Murden v. Priment, 1 Hilt. 75; Shelly v. Vanarsdoll, 23 Ind. 543; Lovejoy v. Robinson, 8 Ind. 399; Macdougall v. Maguire, 35 Cal. 274, 280; the last case holding that the objection is not removed by replying and going to trial instead of demurring. See, further, Ward v. Blackwood, 48 Ark. 396; Rothschild v. Whit man, 132 N. Y. 472; Allen v. Coates, 29 Minn. 46; Heckman v. Swartz, 55 Wis. 173; Terre Haute & I. R. Co. v. Pierce, 95 Ind. 496; Keller v. B. F. Goodrich Co., 117 Ind. 556; Lake Shore & M. S. Ry. Co. v. Van Auken, 1 Ind. App. 492; Rothschild v. Whitman, 57 Hun, 135; Sheehan v. Pierce (Supreme, June, 1893), 23 N. Y. Suppl. 1119 (in an action of slander, a counter-claim for slander not allowed). 8 Tarwater v. Hannibal & St. Jo. R. R., 42 Mo. 193. In McArthur v. Green Bay, etc. Canal Co., 34 Wis. 139, 146, the action was brought for injuries done to the plaintiff's boat while passing through the canal, caused by a break in the canal alleged to have resulted from defendant's negli gence; the defendant set up, as a counterclaim, that the break itself was caused by the plaintiff's negligence, and prayed a judgment for the damages. This counter claim was sustained, the court saying. "If it does not arise out of the transaction set forth in the complaint, it certainly is connected with the subject of the action." See also Walsh v. Hall, 66 N. C. 233, 237, in which the plaintiff sued to recover possession of a horse which defend |