"a cause of action 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 action." We cannot agree that the transaction out of which defendant's cause of action arose is the "transaction set forth in the complaint as the foundation of the plaintiff's claim," and are therefore of opinion that the demurrer was properly sustained. The statute just referred to is common to a number of states. Thus far the courts have not arrived at a definition of the term "transaction," as used therein, which is wholly satisfactory. It is quite generally agreed, however, that it is broader in meaning than the word "contract," and includes torts; otherwise it would not have been employed. Probably the definition given in Pomeroy on Code Remedies, section 774, is the most accurate and comprehensive, i.e., "that combination of acts and events, circumstances and defaults, which, viewed in one aspect, results in the plaintiff's right of action, and, viewed in another aspect, results in the 'defendant's right of action." The fact that two transactions originate at the same time and place, and between the same parties, is not the test. The question in such cases is, "Did each cause of action accrue or arise out of the same transaction the same thing done?" Anderson v. Hill, 53 Barb. 239. It is clear in this case that they did not. The act set forth in the complaint as the foundation of plaintiff's claim, and which gave rise to his cause of action, was the speaking by defendant of the defamatory words charged in the complaint. The act which gave rise to the defendant's cause of action was the speaking by plaintiff of the defamatory words charged in the counterclaim. Each act was complete in itself -- a separate tort- and constituted a transaction, within the meaning of the above section. It cannot be said that the utterance of the slanderous words by the defendant resulted in a cause of action in his favor for the plaintiff's tort. The latter arose from a wholly distinct act, namely plaintiff's utterance of the slanderous words. There was no single transaction, which, "viewed in one aspect," gave plaintiff's right of action, and, in another aspect, defendant's right of action. The transactions were separate. Our conclusion that one slander cannot be set up as a counterclaim against another slander is in harmony with the views of the courts of New York under the same statute (Sheehan v. Pierce, 70 Hun, 22, 23 N. Y. Supp. 1119; Fellerman v. Dolan, 7 Abb. Prac. 395) 1 2 1 A part of the opinion, in which the court held that the trial court erred in denying the defendant's motion for a new trial because of improper exclusion of evidence, is omitted. 2 Compare Quinn v. Hession, 4 L. R. (Ir.) 35 (1878). See Clark, Code Pleading (1928) §§ 100-101. Suppose plaintiff sues for an assault and battery. Under a statute like that involved in the principal case, can defendant counterclaim for an assault and NEW YORK CIVIL PRACTICE ACT (1921).1 § 266. Counterclaim defined. A counterclaim may be any cause of action in favor of the defendants or some of them against the plaintiffs or some of them, a person whom a plaintiff represents or a plaintiff and another person or persons alleged to be liable.2 § 271. New parties set up in counterclaim. Where a defendant sets up any counterclaim which raises questions between himself and the plaintiff along with any other persons, he shall set forth the names of all the persons who, if such counterclaim were to be enforced by cross action, would be defendants to such cross action. · Where any such person is not a party to the action he shall be summoned to appear by being served with a copy of the answer. A person not a party to the action who is so served with an answer becomes a defendant in the action as if he had been served with the summons. Any such person named in an answer as a party to a counterclaim may reply thereto within the time within which a defendant might serve an answer to a complaint, or he may serve a notice of appearance on the party interposing the counterclaim.3 battery committed on him by plaintiff in the course of the same continuous encounter? See Gutzman v. Clancy, 114 Wis. 589 (1902). Suppose plaintiff sues for an assault and battery. Under a statute like that involved in the principal case, can defendant counterclaim for a libel on him published by plaintiff one day before the assault? See Macdougall v. Maguire, 35 Cal. 274 (1868). Suppose plaintiff sues defendant, an aeronautical engineer, for damages due to unskilful performance of a contract to design an airplane. Under a statute like that in the principal case, can defendant counterclaim for slander based on statements by plaintiff that defendant had done "a rotten job" in designing the airplane in question? See McPherson v. Klemm, 270 N. Y. 511 (1936). 1 As now in force. 2 As amended by N. Y. Laws 1936, c. 324, § 2. See Note, 37 Col. L. Rev. 462 (1937). Prior to this amendment, § 266 provided as follows: "A counterclaim, except as otherwise provided by statute, must tend to diminish or defeat the plaintiff's recovery, and must be one of the following causes of action against the plaintiff, or, in a proper case, against the person whom he represents, and in favor of the defendant, or of one or more defendants, between whom and the plaintiff or the plaintiff and another person or persons alleged to be liable a separate judgment may be had in the 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 or connected with the subject of the action; 2. In an action on contract, any other cause of action on contract existing at the commencement of the action." 3 This section is based on the English practice. Court (England) 1883, Order XXI, Rules 11-14. see Ch. XIX, § 2, infra. See Rules of the Supreme As to third-party practice, FEDERAL RULES OF CIVIL PROCEDURE (1938). 1 RULE 8 (c)1... When a party has mistakenly designated a defense as a counterclaim or a counterclaim as a defense, the court on terms, if justice so requires, shall treat the pleading as if there had been a proper designation. RULE 13. COUNTERCLAIM AND CROSS-CLAIM. (a) Compulsory Counterclaims. A pleading shall state as a counterclaim any claim [, not the subject of a pending action,] which at the time of filing the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party's claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction.2 (b) Permissive Counterclaims. A pleading may state as a counterclaim any claim against an opposing party not arising out of the transaction or occurrence that is the subject matter of the opposing party's claim.3 (c) Counterclaim Exceeding Opposing Claim. A counterclaim may or may not diminish or defeat the recovery sought by the opposing party. It may claim relief exceeding in amount or different in kind from that sought in the pleading of the opposing party.* . (e) Counterclaim Maturing or Acquired After Pleading. A claim which either matured or was acquired by the pleader after serving his pleading may, with the permission of the court, be presented as a counterclaim by supplemental pleading. (f) Omitted Counterclaim. When a pleader fails to set up a counterclaim through oversight, inadvertence, or excusable neglect, or when justice requires, he may by leave of court set up the counterclaim by amendment. (g) Cross-Claim Against Co-Party. A pleading may state as a cross-claim any claim by one party against a co-party arising out of the transaction or occurrence that is the subject matter either of 1 For the remainder of the rule, see p. 232, supra. 2 Second Preliminary Draft of Proposed Amendments to Rules of Civil Procedure for the District Courts of the United States (1945) 18, proposes to omit the matter placed in square brackets in the text and to substitute the word "serving" for the word "filing," and to add at the end of Rule 13(a) the following: "except that such a claim need not be so stated if at the time the action was commenced the claim was the subject of another pending action." Cf. Prudential Ins. Co. v. Saxe, 134 F. (2d) 16 (App. D. C. 1943) [certiorari denied, 319 U. S. 745 (1943)]. 3 In Warren v. Indiana Refining Co., 30 F. Supp. 281 (N. D. Ind. 1939), a counterclaim to a counterclaim was held to be permissible under Rule 13(b). . Paragraph (d) relates to counterclaims against the United States. the original action or of a counterclaim therein. Such cross-claim may include a claim that the party against whom it is asserted is or may be liable to the cross-claimant for all or part of a claim asserted in the action against the cross-claimant. (h) Additional Parties May Be Brought In. When the presence of parties other than those to the original action is required for the granting of complete relief in the determination of a counterclaim or cross-claim, the court shall order them to be brought in as defendants as provided in these rules, if jurisdiction of them can be obtained and their joinder will not deprive the court of jurisdiction of the action. (i) Separate Trials; Separate Judgments. If the court orders separate trials as provided in Rule 42 (b), judgment on a counterclaim or cross-claim may be rendered 2 when the court has jurisdiction so to do, even if the claims of the opposing party have been dismissed or otherwise disposed of. RESTATEMENT, JUDGMENTS (1942). § 56. Judgment for Defendant on His Counterclaim. Where the defendant interposes a counterclaim upon which judgment is rendered in his favor, he cannot thereafter maintain an action on the cause of action stated in the counterclaim, except as stated in § 57. § 57. Judgment for Defendant on Counterclaim where Affirmative Judgment Not Permitted. Where the defendant interposes a counterclaim on which an affirmative judgment in his favor cannot be rendered, and judgment is rendered for him on the counterclaim, he is not precluded from subsequently maintaining an action for the balance due on the cause of action stated in the counterclaim. § 58. Effect of Failure to Interpose Counterclaim. Where the defendant does not interpose a counterclaim although he is entitled to do so, he is not precluded thereby from subsequently maintaining an action against the plaintiff on the cause of action which could have been set up as a counterclaim. § 59. Judgment for Plaintiff on Defendant's Counterclaim. Where the defendant interposes a counterclaim and judgment on the merits is rendered against him on the counterclaim, he cannot thereafter maintain an action on the cause of action stated in the counterclaim, but he is not precluded from maintaining such an action if the judgment is not on the merits. § 60. Recoupment and Set-off. The rules stated in § §56-59 are applicable to defenses by way of recoupment and set-off. 1 Second Preliminary Draft of Proposed Amendments to Rules of Civil Procedure for the District Courts of the United States (1945) 18, here inserts: "or relating to any property which may be the subject matter of the original action." 2 Second Preliminary Draft, supra, 19, here inserts: "in accordance with the terms of Rule 54(b)." - SECTION 6 REPLICATIONS AND LATER PLEADINGS STEPHEN, PLEADING (Williston ed. 1895) *63-*64.1 HITHERTO it has been supposed that the defendant either pleads in bar, by way of traverse, or demurs to the declaration; but we will now suppose him to plead either one of the kinds of dilatory plea, or a plea in bar, by way of confession and avoidance. In either case the plaintiff has the option of demurring to the plea - as being, in substance or form, an insufficient answer, in point of law, to the declaration, or of pleading, to it, by way of traverse, or by way of confession and avoidance of its allegations. Such pleading, on the part of the plaintiff, is called the replication. If the replication be by way of traverse, it is necessary (as in the case of the plea) that it should tender issue. So, if the plaintiff demur, an issue in law is necessarily tendered; and, in either case, the ultimate result is a joinder in issue; upon the same principles as above explained with respect to the plea. But if the replication be in confession and avoidance, the defendant may then, in his turn, either demur, or, by a pleading, traverse, or confess and avoid, its allegations. If such pleading take place, it is called the rejoinder. In the same manner, and subject to the same law of proceeding, viz. that of demurring, or traversing, or pleading in confession and avoidance, is conducted all the subsequent altercation, to which the nature of the case may lead; and the order and denominations of the alternate allegations of fact (or pleadings) throughout the whole series, are as follows: - declaration, plea, replication, rejoinder, surrejoinder, rebutter and surrebutter. After the surrebutter the pleadings have no distinctive names; for beyond that stage they are very seldom found to extend.2 STILES v. LACY. SUPREME COURT, ALABAMA. 1844. 7 Alabama 17. ERROR to the County Court of Marengo. The defendant pleaded, that subsequent to the making of the promises in the plaintiff's declaration, he obtained a certificate in bankruptcy from the District Court of the United States for New 1 Footnotes omitted. 2 For forms of replications by way of traverse and by way of confession and avoidance, see Stephen, Pleading (Williston ed. 1895) *66-*67. |