be the subject of counterclaim;86 but cases may and do arise where a counterclaim for tort is proper in an action for tort, upon the ground that it arises out of the same transaction upon which the plaintiff's claim is based.87

In an action for an assault the defendant may plead as a counterclaim that the assault alleged was in fact upon him by the plaintiff, instead of upon the plaintiff by him; in such case the transaction which is the basis of each claim is necessarily the same. 88 But the mere fact that one tort may be consequent upon another does not connect them as subjects of the action.89 Thus, in an action for assault and battery committed upon a servant, damages for wrongful conduct by the servant during his employment, and for failure to leave when discharged, are not properly subjects of counterclaim." Nor does the statute authorize one slander to be set up against another; although both are uttered at the same time and place, and in the same conversation, each slander constitutes a separate transaction. In such a case there is no single transaction which, "viewed in one aspect," gives plaintiff's right of action, and, in another aspect, defendant's right of action."1

A counterclaim in an action for tort which is founded on the converse of the same cause of action as that alleged by the plaintiff, is proper; e. g. mutual charges of negligence as the cause of a fire.92 But in an action against a railway company for killing stock damages cannot be counterclaimed for the wrecking of the train by reason of plaintiff's neglect to keep his stock from the track. 93 Nor is it permissible in an action for unlawful detainer to set up a counterclaim for damages on account of loss of business, for deterioration in the value of furni

86 Wigmore v. Buell, 116 Cal. 97, 58 Am. St. Rep. 140, 47 Pac. 927, 38 L. R. A. 71; De Martin v. Albert, 68 Cal. 277, 9 Pac. 157; Miscer v. O'Shea, 37 Or. 231, 82 Am. St. Rep. 751, 62 Pac. 491.

87 Story etc. Commercial Co. v. Story, 100 Cal. 30, 34 Pac. 671.

88 Deagan v. Weeks, 67 App. Div. 410, 73 N. Y. Supp. 641; Gutzman v. Clancy, 114 Wis. 589, 90 N. W. 1081, 58 L. R. A. 744.

89 Macdougall v. Maguire, 35 Cal. 274, 95 Am. Dec. 98; Ward v. Blackwood, 41 Ark. 295, 48 Am. Rep. 41.

90 Barr v. Post, 56 Neb. 698, 77 N. W. 123.

91 Wrege v. Jones, 13 N. Dak. 267, 112 Am. St. Rep. 679, 100 N. W. 705; Macdougall v. Maguire, 35 Cal. 274, 95 Am. Dec. 98.

92 Heigle v. Willis, 50 Hun, 588, 3 N. Y. Supp. 497; Pacific Express Co. v. Malin, 132 U. S. 531, 33 L. Ed. 450, 10 Sup. Ct. 166; McArthur v. Green Bay Canal Co., 34 Wis. 139.

98 Lake Shore etc. R. R. Co. v. Van Auken, 1 Ind. App. 492, 27 N. E. 119; Louisville etc. R. R. Co. v. Simmons, 85 Ky. 151, 3 S. W. 10.

ture purchased for use on the leased premises, and for repairs which are alleged as the result of acts on the part of the plaintiff.** But in an action for waste the tenant may counterclaim for the value of personal property which he placed on the premises during the tenancy, and which the landlord has converted.95

It

§ 636. Contracts and torts.-Cases are frequently found which contain the broad general statement that a counterclaim cannot set up a tort in an action on contract;96 and in some cases the courts have even gone so far as to hold that a tort can never be the subject of a counterclaim." In nearly all of these cases, however, it will be found that such a statement was wholly unnecessary, because of the fact that the matter counterclaimed did not arise out of the transaction set forth in the plaintiff's complaint, or was not connected with the subject of the action. goes without saying, that in an action on contract a counterclaim for a tort cannot be set up when the tort is not connected with the subject-matter of the plaintiff's claim or involved in the original transaction.98 There may be cases, however, where the tort may be waived and recovery sought upon the implied contract. Such a case falls within the second subdivision of the statute limiting the subjects of counterclaim, and the counterclaim becomes one for a contract in an action on a contract.99 Whenever the facts are such that the plaintiff may elect to sue either in contract or in tort, if he sues on contract, and the defendant is entitled to counterclaim for the breach of a contract, it follows that he may set up the same counterclaim when the suit is in tort,100 for, as has already been said, the mere form in

94 Ralph v. Lomer, 3 Wash. 402, 28 Pac. 760.

95 Gilbert v. Loberg, 86 Wis. 661, 57 N. W. 982.

96 Poly v. Williams, 101 Cal. 650, 36 Pac. 102; Pattison v. Richards, 22 Barb. 143; Hess v. Young, 59 Ind. 379; People v. Dennison, 84 N. Y. 272.

97 Harris V. Randolph County Bank, 157 Ind. 120, 60 N. E. 1025; Blue v. Capital Nat. Bank, 145 Ind. 518, 43 N. E. 655; Gantt v. Duffy, 71 Mo. App. 91; Barhyte V. Hughes, 33 Barb. 320; Avery v. Dougherty, 102 Ind. 446, 52 Am. Rep. 680, 2 N. E. 123.

98 Jeffreys v. Hancock, 57 Cal. 646; Ebensen v. Hover, 3 Colo. App. 467, 33 Pac. 1008; Collier v. Ervin, 3 Mont. 142; Braithwaite v. Akin, 3 N. Dak. 365, 56 N. W. 133.

99 Poly v. Williams, 101 Cal. 648, 36 Pac. 102; Braithwaite v. Akin, 3 N. Dak. 365, 56 N. W. 133; Harris v. Simpson, 50 Ark. 422, 8 S. W. 177.

100 Harris v. Curet, 9 Abb. Pr. (N. S.) 199; Gopen v. Crawford, 53 How. Pr. 278; Thompson v. Kessel, 30 N. Y. 383; Austin v. Rawdon, 44 N. Y. 63; Folsom v. Carli, 6 Minn. 420, 80 Am. Dec. 456; St. Louis Public Schools v. Broadway Sav. Bank, 84 Mo. 56.

102

which the plaintiff may set out his cause of action cannot determine the right of the defendant to set forth his counterclaim in his answer. If the facts in the transaction are so connected with those set forth as to defeat their legal effect, the defendant is not precluded from setting them up by reason of the form which the plaintiff may have chosen for presenting his own side. of the case.1 101 On this theory, a counterclaim may frequently be based upon a breach of contract, although such breach amounts also to a tort." In Oregon, the rule is that a tort cannot be pleaded as a counterclaim in an action on a contract unless it constitutes a breach of the contract.103 A counterclaim for fraud in inducing a contract arises out of the transaction set forth in the complaint in an action on the contract;104 and damages for the negligent performance of a contract may be counterclaimed in an action to recover damages for a breach of the contract;105 and conversely, in an action for the negligent performance of a contract, the defendant may counterclaim a demand for services in performing the contract.106 Thus, in an action upon a contract for money expended by a tenant in repairing a building, the owner may defend by showing that the building was burned in consequence of the carelessness of the tenant;107 and in an action for rent the defendant may counterclaim for damages for failure to repair. 108 A fraudulent representation as to the number of acres of land leased is a proper subject of counterclaim to reduce the stipulated rent by the amount of damage actually sustained.109

§ 637. Construction of statute.--Where the question is whether the demand counterclaimed arises out of the transaction set out in the plaintiff's complaint, or is connected with the subjectmatter of the suit, the entire transaction between the parties, and the rights resulting therefrom, are to be determined by the court

101 Story etc. Commercial Co. v. Story, 100 Cal. 35, 34 Pac. 671.

102 Schwinger v. Raymond, 83 N. Y. 192, 38 Am. Rep. 415; Thompson v. Kessel, 30 N. Y. 383; Le Clare v. Thibault, 41 Or. 601, 69 Pac. 552. 103 Zigler v. McClellan, 15 Or.

499, 16 Pac. 179.

104 Warren v. Hall, 20 Colo. 508, 38 Pac. 767.

105 Wheelock v. Pacific Pneumatic Gas Co., 51 Cal. 223; Stoddard v. Treadwell, 26 Cal. 294; Zigler v.

McClellan, 15 Or. 499, 16 Pac. 179; Niver v. Nash, 7 Wash. 558, 35 Pac. 380; Farmers' etc. Nat. Bank V. Woodell, 38 Or. 291, 61 Pac. 837, 65 Pac. 520.

106 Griffin v. Moore, 52 Ind. 295; Lapham v. Osborne, 20 Nev. 168, 18 Pac. 881.

107 Zigler v. McClellan, 15 Or. 499, 16 Pac. 179.

108 Cook v. Soule, 56 N. Y. 420. 109 Holton v. Noble, 83 Cal. & 23 Pac. 58.

upon the proof relative to the transaction, and consistently with the case as presented by both parties.110 In Oregon, it is held that a counterclaim is allowable only when the subject thereof arises out of, and is legally connected with, the contract which is the subject of the original complaint; but at the same time the court held that the statute ought to be liberally construed, to the end that all controversies coming fairly within the terms of the statute may be settled in a single action between the parties.111

§ 638. Counterclaims arising upon contract.-The application of the second subdivision of the statute-viz. counterclaims upon contracts in actions upon contracts-seldom presents any difficulty, for the general rule is that in actions upon contracts any other cause of action arising also upon contract and existing at the commencement of the action may be set up in a counterclaim.112 It is the universal rule that a defendant may counterclaim on a demand arising out of the same contract sued upon by the plaintiff;113 and most of the codes contain a provision, similar to that in California, permitting counterclaims for causes of action arising out of distinct contracts.114 In some states, however, the right to counterclaim is limited to demands arising out of contract in suit.115 In Oklahoma, however, it is held not to be necessary, that a counterclaim be founded or arise out of the contract set forth in a petition, if it arises out of the transaction or is connected with the subject of the action.116

The chief difficulty under this subdivision, forms of action being abolished by the codes, is to determine whether a particular de

110 Story etc. Commercial Co. v. Story, 100 Cal. 30, 34 Pac. 671; Car penter v. Manhattan Life Ins. Co., 93 N. Y. 552.

111 Wait v. Wheeler etc. Mfg. Co., 23 Or. 298, 31 Pac. 661.

112 Cal. Code Civ. Proc., § 438. 113 McDougald v. Hulet, 132 Cal. 154, 64 Pac. 278; Allison v. Shinner, 7 Okla. 272, 54 Pac. 471; Wait v. Wheeler etc. Mfg. Co., 23 Or. 297, 31 Pac. 661; Le Clare v. Thibault, 41 Or. 601, 69 Pac. 552; Hofius V. Stimson Mill Co., 21 Wash. 113, 57 Pac. 342.

114 Davis v. Hurgren, 125 Cal. 48, 57 Pac. 684; Arapahoe County v. Denver, 30 Colo. 13, 69 Pac. 586; P. P. F. Vol. I-25

Miller v. Hunt, 6 Idaho, 523, 57 Pac. 315; Orr v. Gerrold, 8 Kan. App. 441, 57 Pac. 48; Driver v. Salt Lake etc. Co., 22 Utah, 143, 61 Pac. 733; Davis v. Frederick, 6 Mont. 300, 12 Pac. 664; Foulks v. Rhodes, 12 Nev. 225; Braithwaite v. Akin, 3 N. Dak. 365, 56 N. W. 133; Sheafe v. Hastie, 16 Wash. 563, 48 Pac. 246; Shelton v. Conant, 10 Wash. 193, 38 Pac. 1013.

115 Bloch Queensware Co. v. Metsger, 70 Ark. 232, 65 S. W. 929; Citizens' Bank v. Carey, 2 Ind. Ter. 84, 48 S. W. 1012; Allison v. Shinner, 7 Okla. 272, 54 Pac. 471.

116 Wyman v. Herard, 9 Okla. 35, 59 Pac. 1009.

The following rule has "The test by which to

mand arises on contract or from a tort. been laid down for a test in such cases: determine whether a particular demand arises on contract within the meaning of the statute of counterclaims is this: if the demand could have been redressed at common law by any of the forms of action which might be resorted to to recover damages for breaches of contract, then it is the proper subject of a counterclaim under this provision, otherwise not." 117

If the plaintiff's cause of action is for damages for a breach on the part of the defendant, the defendant may interpose a counterclaim for a breach of the same contract by the plaintiff.118 But damages which do not legally result from the breach. of the contract cannot be recovered unless they are specially claimed and set forth in the pleading. Thus damages sustained. by the vendee on goods, by reason of his inability to comply with a contract made by him with a third person, do not legally result from a breach of the contract of his vendor to deliver the goods to him; and in an action by his vendor against him, such damages cannot be recouped, unless they are specially alleged and set forth in the answer.119 Damages arising from the plaintiff's breach of a contract entirely disconnected with the note in suit are a proper element of counterclaim.120

§ 639. Jurisdiction. It may be laid down as a general rule, that where the jurisdiction of a court is limited to a certain amount the demand of the defendant in his counterclaim must be within that amount; the entire claim of the defendant must be within the jurisdictional amount, so that, if a separate action were brought upon it, the court could take cognizance of it.121 Thus, in an action on contract in a superior court, in which the jurisdictional amount is three hundred dollars or over, a counterclaim, arising upon a different contract from that pleaded by the plaintiff, not set up as a defense, but as a ground for affirmative relief, is not within the jurisdiction of the court where the demand is less than three hundred dollars; any action thereon must be by independent suit in a justice's court. 122 An important distinction

117 St. Louis Public Schools V. Broadway Savings Bank, 12 Mo. App. 108.

118 Dennis v. Belt, 30 Cal. 247. 119 Cole v. Swanston, 1 Cal. 51, 52 Am. Dec. 288.

120 Halfpenny v. Bell, 82 Pa. St. 128.

121 Maxfield v. Johnson, 30 Cal. 545; Griswold v. Pieratt, 110 Cal. 265, 42 Pac. 820.

122 Griswold v. Pieratt, 110 Cal. 265, 42 Pac. 820.