2. An answer in a suit to foreclose a mortgage securing note for the price of an interest in a mine, alleging that plaintiff made an agreement to purchase, at the lowest price, such interest for defendant; that subsequently plaintiff falsely represented that he was the owner of an interest therein, which had cost $2,500, when he had paid only $2,165 therefor, and defendant, relying thereon, purchased the interest for $2,500, giving the note and mortgage as part payment; that defendant sent money to operate the mine, but plaintiff converted part of it to his own use, falsely representing that he had used it for expenses,does not state a counterclaim in equity under Hill's Ann. Laws, § 73, as modified by section 393; the only matter alleged which is at all connected with the contract on which the suit is founded, and the subject of the suit, the note and mortgage, being misrepresentation as to the cost of the interest in the mine, which it is not reasonable to suppose defendant had in contemplation when executing the note.

3. Under Hill's Ann. Laws, providing that each defense and counterclaim shall be separately stated, a counterclaim is not well pleaded where joined with the other parts of the defense.

4. A counterclaim may be based on a breach of the contract sued on, though the breach amount to a tort.

5. It being necessary that an answer in pleading a counterclaim contain the substantial requisites of a complaint, it is insufficient where not stating that defendant sustained any damage from plaintiff's fraudulent representations, or that an accounting was demanded of him.

Appeal from circuit court, Baker county; Robert Eakin, Judge.

Suit by Edmond D. Le Clare against N. H. Thibault and another. Decree for plaintiff, and defendants appeal. Affirmed.

This is a suit to foreclose a mortgage. It is alleged in the complaint that on April 6, 1901, the defendants, in part consideration for the purchase of an interest in certain quartz mines in Baker county, Or., executed to plaintiff their promissory note for the sum of $2,000, payable in six months, with interest, secured by a mortgage on the premises so purchased; that, no part of the note having been paid, the prayer is that the mortgage be foreclosed, and said interest in the mines sold to satisfy the debt. The answer denies the material allegations of the complaint, except as thereinafter stated, and avers as a first separate defense that at the time said property was purchased it belonged to the Empire Mining Company, and plaintiff did not then own, nor has he since secured, any interest therein; that the note and mortgage were taken in his name in trust for the company; and that the defendants have paid said company the sum so secured since this suit was instituted. For a second defense, and by way of counterclaim, it alleges, in substance, that about March 1, 1901, an agreement was entered into whereby plaintiff was to purchase, at the lowest price, an interest in said mines for the defendant N. H. Thibault, who was to furnish him the money therefor, and give him $50 a month for his services in operating the mines and one-fifth of the net proceeds of their output; that about April 6, 1901, plaintiff falsely represented to said defendant that he was the owner of an undivided one-fourth interest in said mines, and the latter, relying

thereon, was induced thereby to purchase said interest for $2,500, paying $500 down, and giving the note and mortgage mentioned in the complaint; that N. H. Thibault, being absent from said county, sent the necessary means to operate the mines, requesting plaintiff to furnish monthly statements of the expenses incurred, and he, complying therewith, but intending to cheat, wrong, and defraud said defendant, falsely reported that he had expended certain sums greater than those actually paid out, thereby converting to his own use the difference between the payments so made and those represented, but, plaintiff having neglected to keep any books, it is impossible for defendants to state the sums so appropriated, excepting in the following particulars: That he induced the employés at the mines to execute blank receipts, wrote over their signatures false sums purporting to have been paid them, and fraudulently represented that he had incurred on account thereof an expense of $2,449.35, when he had so expended only $1,527.60; that he wrongfully represented that said interest in the mines cost $2,500, when he paid therefor only the sum of $2,165; and that plaintiff is insolvent and unable to respond in damages. The prayer of the answer is that an accounting be decreed between the parties concerning all matters arising out of the relations existing between them, and, if any sum be found due plaintiff on the note, it may be offset by such sums as may be ascertained to be due from him to the defendant N. H. Thibault, and that the latter may have a decree against him for any remainder of such overpayments. A demurrer to the separate defenses on the ground that neither stated facts sufficient to constitute a defense having been sustained, and the defendants declining to plead further, a decree was rendered against them foreclosing the mortgage, and they appeal.

Joseph J. Heilner, for appellants. C. A. Johns, for respondent.

MOORE, J. (after stating the facts). It is not alleged in the first separate defense that the Empire Mining Company is either a corporation or a partnership, or that it was authorized to receive the money due on the note, or capable of discharging the defendants from their liability in consequence of the alleged payment. The allegations of new matter in the answer having been challenged by demurrer, the averments of fact therein are to be most strongly construed against the pleader (Cederson v. Oregon R. & Nav. Co., 38 Or. 343, 62 Pac. 637, 63 Pac. 763); and, the answer having failed to state the right of the alleged cestui que trust to receive the money, no error was committed in sustaining the demurrer to this part of the answer.

It is contended by defendants' counsel that the averments of fact in the second separate defense are such that a suit thereon might be maintained by the defendants against the plaintiff, and that the matters thus alleged

are so connected with the subject of the suit as to constitute a counterclaim in equity, and therefore the court erred in sustaining the demurrer to this part of the answer. The statute prescribing the mode of putting in issue the averments of the complaint and of alleging facts establishing a defense in an action at law is as follows: "The answer of the defendant shall contain: (1) A specific denial of each material allegation of the complaint controverted by the defendant, or of any knowledge or information thereof sufficient to form a belief. (2) A statement of any new matter constituting a defense or counterclaim in ordinary and concise language without repetition." Hill's Ann. Laws, 72. The counterclaim mentioned in section 72 must be one existing in favor of a defendant and against a plaintiff, between whom

several judgment might be had in the action, and arising out of one of the following causes of action: (1) A cause of action arising out of the contract, or transaction set forth in the complaint as the foundation of the plaintiff's claim. (2) In an action arising on contract, any other cause of action arising also on contract, and existing at the commencement of the action. Id. § 73. In suits in equity, however, the statute prescribing this form of defense is as follows: The counterclaim of the defendant shall be one upon which a suit might be maintained by the defendant against the plaintiff in the suit; and in addition to the cases specified in the subdivisions of section 73, it is sufficient if it be connected with the subject of the suit." Id. § 393. Construing these secions in pari materia, and changing the word "action" to "suit," the rule applicable to a counterclaim in equity would be an enlargement of subdivision 1 of section 73, supra, identical with section 150, Howard's New York Code, from which it was probably coped, making it read as follows: "A cause of suit arising out of the contract, or transaction set forth in the complaint, as the foundation of the plaintiff's claim, or connected with the subject of the suit." While the common'aw forms of action have been abolished in this state (Hill's Ann. Laws, § 1), the distinction between actions at law and suits in equity has not been abrogated (Id. 380; Beacannon v. Liebe, 11 Or. 443, 5 Pac. 273; Ming Yue v. Navigation Co., 24 Or. 392, 33 Pac. 641; Willis v. Crawford, 38 Or. 522, 63 Pac. 985, 64 Pac. 866). Thus, in a suit to foreclose a mortgage, a demand triable before a jury, and having no relation to the subject of the suit, cannot be used as a setoff to the plaintiff's demand. Burrage v. Mining Co., 12 Or. 169, 6 Pac. 766. A counterclaim in equity must be connected with the subject of the suit, and contain such an averment of facts as to authorize the defendant to maintain a suit thereon against the plaintiff. Sears v. Martin, 22 Or. 311, 29 Pac. 890. "The subject of the action," says Mr. Bliss in his work on Code Pleading (seetion 126), “is, ordinarily, the property or con

tract and its subject-matter, or other thing involved in the dispute." To the same effect, see Pom. Code Rem. § 775; 22 Am. & Eng. Enc. Law, 396. According to this definition, the subject of the suit in the case at bar is the promissory note and its incident, the mortgage, given to secure its payment. The matters set forth in the second separate defense, except in one particular, did not arise out of the contract set forth in the complaint as the foundation of plaintiff's claim, and it remains to be seen whether the averments of fact in the answer are connected with the subject of the suit. The connection of the counterclaim with the subject of the suit, to render it available, must be direct and immediate, and such as it is reasonable to assume that the parties had in contemplation when dealing with each other. 22 Am. & Eng. Enc. Law, 397; Pom. Code Rem. § 794. The only part of the answer that is at all connected with the subject of the suit is the averment that plaintiff wrongfully represented that the interest in the mines which he purchased for the defendant N. H. Thibault, and for which the note was given, cost $2,500, when he paid therefor only $2,165. It is unreasonable to suppose that the defendants, when they executed the note, had any thought of the plaintiff defrauding them, or that he intended to wrong N. H. Thibault in purchasing an interest in the mines for him; and, as the contemplation of the parties when entering into the contract or performing the transaction which forms the subject of the suit constitutes the test of the connection with it, it follows that the facts alleged in this part of the second separate defense do not bring the case within the provisions of subdivision 1, § 73, Hill's Ann. Laws, as modified by section 393 thereof; and the counterclaim, in so far as it relates to the purchase price of the interest in the mines, is not available on that ground.

Another reason why the alleged misrepresentations in respect to the purchase price of an interest in the mines cannot become the foundation of a counterclaim grows out of the failure of the defendants to comply with the statute prescribing the method of alleging the facts constituting such defense, which is as follows: "The defendant may set forth by answer as many defenses and counterclaims as he may have. They shall each be separately stated, and refer to the causes of action which they are intended to answer in such manner that they are intelligibly distinguished." Hill's Ann. Laws, § 73. The subject of the suit being the note, the only part of the defense that could be in any manner connected therewith is the alleged misappropriation by the plaintiff of a part of the purchase price, and, as the facts censtituting such defense are not separately stated, but are joined with the other parts of the defense, the counterclaim cannot be based upon subdivision 1 of section 73, as modified by the rule in equity prescribed by section 393, supra.

It is maintained by defendants' counsel that the averments of facts constituting the second separate defense conclusively show that in pursuance of a contract entered into between the parties plaintiff became the agent of the defendant N. H. Thibault, and, having converted to his own use money be longing to the latter, the fiduciary relation thus established and the alleged insolvency of the plaintiff give a court of equity jurisdiction of the counterclaim, independent of the provisions of the statute regulating the applicability of such defenses, and hence the court erred in sustaining the demurrer to this part of the answer. Invoking the maxim that equity will not suffer a wrong without a remedy, it has been held that a counterclaim arising in a different right will sometimes be allowed in a suit by reason of circumstances that render it equitable to do

so.

Burrage v. Mining Co., supra; McDonald v. Mackenzie, 24 Or. 573, 14 Pac. 866; Mitchell v. Holman, 30 Or. 280, 47 Pac. C16. The rule is well settled that the insolvency of a party against whose demand a counterclaim is sought to be interposed is a sufficient ground for equitable interference in cases not provided for by statute. Wat. SetOff, § 431; Wray's Adm'rs v. Furniss, 27 Ala. 471; Pond v. Smith, 4 Conn. 302; Doane v. Walker, 101 Ill. 628; Keightley v. Walls, 27 Ind. 384. Assuming, without' deciding, that the allegations constituting the second separate defense are sufficient to confer upou a court of equity jurisdiction of the subjectmatter, we will examine the averments of new matter in the answer to see if they state facts sufficient to constitute a defense. Before a defendant can be permitted to plead a counterclaim as a defense to plaintiff's cause of suit, he must admit the existence, at least, of a part of his adversary's demands. Dove v. Hayden, 5 Or. 500. In the case at bar, the answer having specifically denied each material allegation of the complaint "except as hereinafter stated," it may well be doubted if this qualified denial permits the defendants to rely upon the counterclaim interposed. An answer setting up a counterclaim must contain the substantial requisites of a complaint, and allege facts which legally entitle the defendant to recover in a suit instituted by him for that purpose against the plaintiff; and, if his pleading omits any allegation that would be necessary to state a cause of suit, it will be vulnerable to a demurrer interposed on that ground. 19 Enc. Pl. & Prac. 753, 754. To secure an accounting in equity, it is necessary to allege that the party seeking such relief has made a demand therefor of the adverse party, who refused to comply therewith. 1 Enc. Pl. & Prac. 98; Perry v. Foster, 62 How. Prac. 228; Magauran v. Tiffany, Id. 251. While the counterclaim relied upon would seem to sound in tort, it is alleged to have originated in contract, and a demand arising upon contract is none the less available to a defendant in a suit on the contract because a breach

thereof may amount to a tort (22 Am. & Eng. Enc. Law, 390); and, this being so, to render the counterclaim available it was necessary to allege the nature of the contract, the extent of the breach, and the amount of damages (19 Enc. Pl. & Prac. 761; Merrill v. Everett, 38 Conn. 40). The answer does not state that the defendants sustained any damage by reason of plaintiff's alleged fraudulent representations, nor does it aver that they demanded of him an accounting. The plaintiff may have fully compensated the defendants for all damages they sustained in consequence of his alleged false representations, and, if he did so, they have no cause of suit against him.

The answer having failed, in the particulars indicated, to state facts sufficient to constitute a counterclaim, no error was committed in sustaining the demurrer, and the decree is affirmed.

(27 Mont. 99)

BOUCHER v. BARSALOU et al. (Supreme Court of Montana. July 14, 1902.) APPEAL-PRESUMPTIONS-EVIDENCE-JUDG

MENT ROLL-RES JUDICATA,

1. Where the record on appeal showed that on the overruling of objections to the admission in evidence of the judgment roll in a former action the judge, without objection, directed the stenographer to enter a statement that it had been admitted that an appeal from the judgment was pending, it will be presumed, on appeal in the action in which the judgment roll was introduced, that the fact of the pending appeal sufficiently appeared to the court.

2. Where a judgment for the ownership of the property was rendered for plaintiff in an action of forcible entry and detainer, and an appeal taken, that judgment was not admissible to show plaintiff's ownership in a subsequent action in ejectment by the plaintiff in the forcible entry and detainer action against the defendant therein pending the appeal in the former action.

Appeal from district court, Silver Bow county; John Lindsay, Judge.

Action by Frank Boucher against Joseph Barsalou and another. From a judgment for plaintiff, defendants appeal. Reversed.

Robt. McBride and W. J. Naughton, for appellants. McHatton & Cotter, for respondents.

MILBURN, J. In April, 1898, there was tried in the district court of Silver Bow county an action wherein Frank Boucher, respondent herein, was plaintiff, and Joseph Barsalou, appellant herein, was defendant. The action was under the forcible entry and detainer act to recover possession of the same property in question in the suit now before us on appeal. It resulted in a judgment in favor of the plaintiff, Boucher, and against the defendant, Barsalou, for the ownership of the property. From this judgment Barsalou appealed, and the appeal was pending undetermined in this court at the time of the

2. See Judgment, vol. 30, Cent. Dig. § 1174.

was not admissible. While it cannot be suc

is one in ejectment. It is not necessary to make a full statement of the case as tried and heard in the court below. Upon the trial the plaintiff offered in evidence the judgment roll in the first-mentioned case, to the introduction of which the defendants objected, giving as their reason that the court would take judicial notice of the fact that an appeal had been taken to the supreme court, and that the said case was then pending in that court wholly undetermined, and that that appeal annulled or superseded the effect of the said judgment roll for any purpose whatever, either as an estoppel or otherwise, and that, therefore, it was incompetent, irrelevant, and immaterial for any purpose. The court overruled the objection, and admitted the judgment roll in evidence. The appellants complain of this admission as error. Judgment was rendered and entered for plaintiff. Respondent contends that, inasmuch as the trial court could not take judicial notice of the contents of its records in former actions and proceedings, and the judgment being final as to that court, if appellant was desirous of relying upon an appeal and supersedeas it was incumbent upon him to prove the appeal by the records in the cause. Examining the duly certified record on appeal, we find that it is unnecessary for us to consider this last point, for the reason that we discover that the court at the time of the ruling upon the objection which was made to the admission of the judgment roll directed the court stenographer to enter in the record a statement that it had been admitted in connection with the said judgment roll, that the action had been appealed to the supreme court, and that it had not yet been decided by that court. Such appeal was taken in time. There is not anything in the record contradicting, or showing that counsel for plaintiff and respondent in any wise disavowed, or attempted to disavow, this statement of fact thus put in the record. The record must therefore be taken as true. It is not unusual for the court, in presence of counsel for all parties, in order to expedite the trial, to direct the reporter to make a note, in the presence of the court during the trial, to the effect that such and such a material matter is admitted as proven. The presumption is that the statement of the court thus made is true. Hence we must assume that it sufficiently appeared to the court at the time that the said cause first referred to was at that particular time pending on appeal and undetermined in the supreme court. It is apparent also that the only purpose for which this judgment roll was offered in evidence by the plaintiff was to show that all questions respecting the ownership of the said property had been tried and determined in favor of the plaintiff, Boucher, in the first suit, and were no longer open to contention. In other words, the sole purpose was for estoppel, and to enforce the judgment, and for this purpose it is clear that it

of the Code of Civil Procedure, that the judgment roll in a certain cause cannot be introduced in evidence in another cause for some purposes (Boston & M. Consol. Copper & Silver Min. Co. v. Montana Ore Purchasing Co. 25 Mont. 66 Pac. 752; Smith v. Smith [Cal.] 66 Pac. 81), it must be held that an action is deemed to be pending until its final determination upon appeal, or until the time for appeal is past, unless the judgment is sooner satisfied; and that such judgment roll should not be admitted in such other cause if such admission is for the purpose of enforcing the judgment which appears in the judgment roll so admitted. We have found no case which more carefully and conclusively demonstrates this to be the law than the case of Smith v. Smith, supra, and the cases cited therein. Perhaps the judgment might have been admissible in the case before us for the purpose of procuring a continuance until after the determination of the first appeal in this court, but such introduction for such purpose would only be made by the defendants. The matter we are considering is the introduction of the roll in evidence by the plaintiff, who obtained the said judgment in the first case; and, as we have said, the only purpose of its introduction was to enforce the judgment obtained in the unlawful detainer case, and to prevent the introduction of evidence by the defendants supporting their equitable defense. We realize the difficulties surrounding the question, but consider that the safest and best rule is the one that we adopt; otherwise the plaintiff might prevail, and obtain a judgment in the second suit, based upon a judgment obtained in a formerly determined suit, and then the judgment in the first suit might be reversed in the supreme court on appeal. Thus he would have a valid judgment in the second suit based upon a judgment which did not exist. Obiter, to illustrate, it may be said that, although we do not in this case take judicial notice of the fact, we find by examination of the records of the appeal of the case first mentioned herein that the judgment of the court below was in fact reversed. Boucher v. Barsalou, 24 Mont. 242, 61 Pac. 1134.

It is unnecessary to consider the other al leged errors of the court assigned by appellant. Respondent has moved the court to allow an amendment to the transcript on appeal by inserting as part of the judgment roll as introduced in evidence as heretofore mentioned a copy of the original complaint which was filed in the justice's court and amended in the district court; also by inserting a copy of the notice of appeal in the cause last referred to. Although we consider the insertion of these papers as unimportant, we have before the determination herein allowed them to be added. Reversed and remanded. Reversed and remanded.

BRANTLY, C. J., and PIGOTT, J., concur.

(27 Mont. 68)

RADUE v. PAUWELYN. (Supreme Court of Montana. July 14, 1902.) EXECUTORS-REJECTION OF CLAIM-SUIT ON

NOTE-WAIVER.

1. The fact that an executor rejects a note presented as a claim against the estate does not authorize suit on the note before its maturity.

2. The consent by defendant in an action on a note, commenced before its maturity, to the filing of a substituted complaint after the maturity of the note and the filing of an answer does not estop him from relying on the premature bringing of the action as a defense.

Appeal from district court, Silver Bow county; Wm. Clancy, Judge.

Action on a note by Frederic Radue against Cyril Pauwelyn, as executor of James Tuohy, deceased. From a judgment for defendant, plaintiff appeals. Affirmed.

O. M. Hall and G. W. Stapleton, for appellant. Jno. W. Cotter, for respondent.

CLEMENTS, District Judge. This is an action by the appellant against the respondent, as executor of the last will of James Tuohy, deceased, upon a promissory note executed March 24, 1893, payable two years after date. James Tuohy, the maker of the note, died October 2, 1893, and on November 2, 1893, respondent was duly appointed executor of his will. After respondent quali fied as executor, and had given notice to the creditors of the deceased, appellant presented his claim to the executor, and the same was disallowed and rejected on December 26, 1893. On December 28, 1893, this suit was commenced. On October 31, 1898, by consent of parties, appellant filed a substituted complaint, setting forth the same cause of action alleged in the original complaint. On November 14, 1898, respondent filed an amended answer setting up the fact that the suit was commenced prior to the maturity of the note. On March 13, 1899, appellant filed a replication to the amended answer, admitting that the suit was commenced December 28, 1893, and that the note sued on matured March 24, 1895. At the time of the filing of the replication, respondent moved for judgment on the pleadings, which motion was granted.

It is admitted by the pleadings that suit was commenced prior to the maturity of the note, but appellant insists that the cause of action accrued, not upon the maturity of the note, but upon the rejection of his claim by the executor; that such rejection constituted such a breach of the contract as that an action would lie; and also that respondent is estopped from invoking the premature bringing of the suit as a defense, by consenting to the filing of the substituted complaint after the action accrued, and by answering the same. The authorities cited do not support the views urged by appellant, and the record in the case discloses nothing which can aid the appellant in the way of entitling him to recover upon

an action prematurely brought, or make inapplicable the general rule of law that the right of action must be complete when suit is brought.

The judgment of the district court is affirmed. Remittitur forthwith.

BRANTLY, C. J., and PIGOTT, J., concur. MILBURN, J., being disqualified, did not hear the argument, and takes no part in the foregoing decision.

(27 Mont. 79)

BEINHORN v. GRISWOLD. (Supreme Court of Montana. July 14, 1902.)

UNFENCED LAND-TRESPASSING CATTLE-IN

JURY-LANDOWNER'S LIABILITY.

1. Pol. Code, § 3258, and the custom of the state making the maintenance of a legal fence by a landowner a prerequisite to recovery for trespass by domestic animals of another, do not charge the landowner with the duty to keep cattle lawfully at large from coming on his land, or make their entry thereupon rightful, so as to make him liable for injuries to such animals caused by the existence of dangerous agencies on the land, but not wantonly or intentionally caused.

Appeal from district court, Lewis and Clarke county; Henry C. Smith, Judge.

Action by Fred. Beinhorn against L. S. Griswold. From a judgment for plaintiff, defendant appeals. Reversed.

E. C. Russell and Lewis Penwell, for appellant. Stranahan & Stranahan, for respondent.

PIGOTT, J. Action to recover damages for injuries alleged to have been caused by the negligence of the defendant. The complaint states that the defendant negligently left exposed a vat containing poisonous liquid; that by reason of such negligence certain cattle of plaintiff and of one Holm drank from the vat some of the liquid, and died from the effects of the poison; and that Holm assigned his demand for damages to the plaintiff. The answer puts in issue the allegation of negligence, and avers that the death of the cattle was caused by the carelessness of the plaintiff and Holm. The plaintiff secured a judgment, and the defendant moved for a new trial on several grounds; one being the insufficiency of the evidence to prove negligence on the part of the defendant. From the order denying a new trial the defendant has appealed.

The facts upon which the plaintff bases his allegations of negligence are substantially these: During the year 1898 the defendant was the lessee in possession of the Non-Such gold mine and mill site. The property was not inclosed by a legal fence. For the proper conduct of his mining operations he employed the cyanide process, using large quantities of poisonous chemicals, consisting principally of cyanide of potassium, which he diluted with water, and kept in suitable receptacles on the surface of the mining property, but not suffi