Trull, 13 How. Pr., 248; 16 id., 576, note.) 2. Van Pelt has a right of election whether the damages shall be claimed by way of recoupment in the suit on the note, or reserved for a crossaction. The defendant cannot make this election for him. 3. If the defendant has a right to set up the counter-claim, and have it allowed in this action, it must bar any future action by Van Pelt for the breach of warranty; and as no balance could be found in defendant's favor, he might thus bar a large claim in canceling a small one. If the right exists in this case, it would equally exist if the note was but $100 instead of $1,800. 4. Supposing the other notes given for the timber to have been indorsed by different persons, for the accommodation of Van Pelt, and all to remain unpaid, each of the indorsers would have the same rights as the defendant. If they were to set up the same defence, how would the conflicting claims be reconciled?

In the case which was shown on the trial, there would seem to be a strong equity in favor of the defendant to have the note canceled or reduced, by applying towards its satisfaction the damages which appear to be due to Van Pelt for the breach of warranty. It is, however, an equity, in which Van Pelt is interested to as great, and possibly to a greater, extent than the defendant, and cannot be disposed of without having him before the court, so that his rights, as well as those of the defendant, may be protected. That remedy may be open to the defendant still, notwithstanding the judgment; especially if the insolvency of the parties renders that course necessary for his protection. (14 Johns., 63, 17 id., 389; 2 Cow., 261; 2 Paige, 581; 6 Dana, 32; 8 id., 164; 2 Story's Eq. Jur., §§ 1446, a. 1437.) My conclusion is, that the court below was right in holding that the defendant could not set up the breach of warranty in defence, partial or total, to the suit on the note; and as the warranty presented the only ground on which there could be a claim of defence under the answer, there is no necessity for considering the other questions presented in the case.

All the judges concurring.

Judgment affirmed.

RITCHIE v. HAYWARD.

71 Mo. 560. [1880.]

HOUGH, J. This was a suit to recover the value of 600 gunny sacks alleged to have been wrongfully converted by the defendants to their own use. The defendants admitted that the sacks came into their possession, and that they had not returned the same, and set up by way of counter-claim that the plaintiffs, at the time named in the petition, agreed to sell and deliver to the defendants, on board a steamboat at Muscatine, Iowa, for transportation to Hannibal, Mo., which was then the defendants' place of business, 1,0461⁄2 bushels of choice peach-blow potatoes in gunny sacks, at the price of sixty cents per bushel, the said sacks to be returned by the defendants to the plaintiffs; that, in consideration of said agreement, and relying upon the honesty and good faith of the plaintiffs, the defendants then and there paid to the plaintiffs, in advance, the sum agreed to be paid for said potatoes, to-wit: $627.90; that the potatoes delivered by the plaintiffs under the said contract were much inferior in quality to the potatoes paid for, and agreed to be delivered, and were delivered in the same sacks, to recover the value of which the present suit was brought; that, by reason of the failure of the plaintiffs to comply with their contract, the defendants had been damaged in the sum of $141, for which sum they prayed judgment.

That portion of the defendants' answer setting up a counterclaim was, on motion, stricken out by the court, on the ground that a counter-claim founded upon a contract could not be pleaded to an action founded on a tort. This ruling of the court has been assigned as error. The counter-claim allowed by the statute must be one existing in favor of the defendant and against the plaintiff, between whom a several judgment might be had in the action, and arising out of one of the following causes of action: First, a cause of action arising out of the contract or transaction set forth in the petition as the foundation of the plaintiff's claim, or connected with the subject of the action; second, in an action arising on contract, any other cause of action arising also on contract and existing at the commencement of the action. R. S. § 3522.

The counter-claim pleaded by the defendants, if it be such as the statute recognizes, must fall within the first class. If the facts stated by the defendants be true, they certainly have a cause of action against the plaintiffs. It is not, however, a cause of action arising out of any contract set forth in the petition, for no contract is therein set forth. The facts set forth in the petition are that the defendants came into the possession of certain sacks belonging to the plaintiffs and wrongfully converted them to their own use. These facts constitute in a legal sense a "transaction," which is a more comprehensive term than "contract." Xenia Bank v. Lee, 7 Abb. Pr. 372. The details of the transaction, the evidential facts, are not stated, but the ultimate facts only, those which will entitle the plaintiffs to relief, when established by other facts proved at the trial. It is plain, however, that the word "transaction" as employed in the code cannot be restricted to the simple statement of the wrong complained of by the plaintiff, for it would seem to be impossible that a cause of action could accrue to the defendant out of an injury inflicted by him upon the plaintiff. It must be held to include, therefore, all the facts and circumstances out of which the injury complained of by him arose, and if these facts and circumstances also furnished to the defendant a ground of complaint, or cause of action, against the plaintiff, the defendant will be entitled to present such cause of action as a counter-claim, showing by proper averments that it is a part of the same transaction which is made the foundation of the plaintiff's claim. In this view of the case, it is immaterial what form of action is adopted by the plaintiff. As is said by Mr. Pomeroy in his treatise on remedies, "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 the form for the tort; the facts being exactly the same in both phases of the action, the counterclaim would clearly arise out of the real transaction which was the foundation of the plaintiff's demand." § 788. Had the plaintiffs sued on the contract set up by the defendants, no possible objection could have been made to the defendants' counter-claim. The statute, in our opinion, preserves their right to set it up, although the plaintiffs have elected to sue for a conversion of the sacks, and not for a breach of the contract to return them. Vide

McAdow v. Ross, 53 Mo. 199. The judgment will be reversed, and the cause remanded. The other judges concur.

DEITRICH v. KOCH.

35 Wis. 618. [1874.]

LYON, J.: The plaintiff seeks by this action to procure the discharge of two certain judgments recovered against him in the year 1863, and he states in his complaint the facts which he claims entitle him to relief. The portion of the answer demurred to does not controvert the right of the plaintiff to have the judgment discharged. The allegations thereof relate exclusively to the invalidity of the deed of May 9th, 1870, which is the subject of the counter-claim contained in the answer. This portion of the answer is pleaded both as a defence and a counter-claim, and is demurred to as not stating a defence to the action or a good cause of action by way of counter-claim.

It is very clear that, as distinguished from a counter-claim, the portion of the answer demurred to fails to state facts constituting a defence to the action. Conceding, for the purposes of the case, that, were an action brought by the other heirs of Carl and Margarethe Deitrich against the plaintiff to annul the deed of May 9, 1870, the facts stated in the answer are sufficient to entitle the plaintiffs in such action to the relief demanded, we are brought to consider whether such cause of action is a proper counterclaim to this action. If it is not, the answer is demurrable; for a demurrer lies to an answer containing a counter-claim, when it appears upon its face that it does not constitute a counter-claim to the action. R. S., ch. 125, Sec. 16. (Tay. Stats., 1441.)

The term counter-claim, of itself, imports a claim opposed to, or which qualifies, or at least in some degree affects, the plaintiff's cause of action. It has been held in New York that a counter-claim, to be valid, must to some extent impair, affect or qualify the plaintiff's right to the relief to which he would otherwise be entitled by his action. In Matton v. Baker, 24 How. Pr. R., 329, the court says: "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, according to law, or under the application of just principles of equity, to judgment in his favor, or to the extent claimed in the complaint." (P. 332.) See also Pattison v. Richards, 22 Barb., 143; and National Fire Ins. Co. v. McKay, 21 N. Y., 191. In the latter case, Judge COMSTOCK uses the following language: "I apprehend that a counter-claim, when established, must in some way qualify or must defeat, the judgment to which a plaintiff is otherwise entitled." (P. 196.) That the New York courts have held correctly on this subject, we entertain no doubt what

ever.

We are unable to perceive that the counter-claim here interposed, if established, can qualify or in any manner affect the plaintiff's cause of action. Should the defendants succeed in proving that the deed of May 9, 1870, ought to be annulled, this fact, of itself, will not affect the plaintiff's cause of action. Upon proper proofs, he will still be entitled to have the judgments against him discharged. It necessarily follows that the cause of action stated in the answer is not available to the defendants as a counter-claim to this action. We conclude that the demurrer is well taken, whether the portion of the answer demurred to be regarded as a defence or a counter-claim, and this renders it unnecessary for us to determine whether, if the allegations of the answer are true, the deed in question ought to be cancelled in some proper proceeding for that purpose.

Judgment affirmed.

Section 5. Union of Defences.

WILLIAMS v. LANGFORD.

15 B. Monroe (Ky.) 566.. [1855.]

This suit was brought by the administrator of Williams against David Langford, (a man of color) who was the slave of Williams until the 23rd of September, 1842, when he was emancipated by deed duly admitted to record. On the day after the date of the deed of emancipation, Langford, with four others