Adamson v. Shaler

• Decision Date: 10 November 1913
• Citation: 208 F. 566
• Parties: ADAMSON v. SHALER et al.
• Court: U.S. District Court — Eastern District of Wisconsin

208 F. 566

ADAMSON v. SHALER et al.

United States District Court, E.D. Wisconsin.

November 10, 1913

Percy B. Hills, of Washington, D.C., and Arthur L. Morsell, of Milwaukee, Wis., for complainant.

Erwin &amp Wheeler, of Milwaukee, Wis., for defendants.

GEIGER District Judge.

Rule 30 of the new equity rules (201 F. v, 118 C.C.A. v) deals with the form, contents, and effect of answers in so far as they are or may be directly responsive to the averments of the bill, and also provides that:

'The answer must state in short and simple form any counterclaim arising out of the transaction which is the subject-matter of the suit, and may, without cross-bill set out any set-off or counterclaim against the plaintiff which might be the subject-matter of an independent suit in equity against him, and such set-off or counterclaim so set up shall have the same effect as a cross-suit, so as to enable the court to pronounce a final judgment in the same suit both on the original and cross-claims.'

The cases of Terry Steam Turbine Co. v. B. F. Sturtevant Co (D.C.) 204 F. 103, and Marconi Wireless Telegraph Co. v. National Electric Signaling Co. (D.C.) 206 F. 295, illustrate the diversity of opinion which has arisen respecting the scope of the rule. In the former, Judge Dodge, declaring the evident purpose of rule 30 to be the abolition of cross-bills, and requiring everything to be done by way of answer only, and that the term 'counterclaim' must refer to such matter as properly constitutes a counterclaim in equity, says:

'The terms 'counterclaim' and 'set-off' have often been used interchangeably; but, since rule 30 uses both, it must mean by 'counterclaim' any claim, not such as to constitute a set-off, which, in equity, a defendant might assert against the plaintiff, in the same suit. As will hardly be disputed, the rule has been that no cross-claim can be thus asserted, unless its subject-matter grows out of, and the relief sought depends upon, the subject-matter of the plaintiff's bill. These conditions existing whether the cross-claim be in tort or contract, and whether for liquidated or unliquidated damages, the defendant may obtain affirmative relief against the plaintiff in the same suit; or, in the words of rule 30, the court can pronounce a final judgment in the same suit both on the original and cross-claims. Cross-claims of this kind only have been what are recognized as 'counterclaims' in equity. The term appears to have come into general use through the Codes of Procedure adopted in many states. In them, speaking generally, 'counterclaim' is expressly defined as a cross-claim of the kind above described.'

After referring to the provisions of the New York Code defining a counterclaim to be 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 (and the provisions of the Wisconsin and other Codes are similar) he proceeds:

'To make 'counterclaim' include all cross-claims upon which the defendant might sue the plaintiff in equity, even if having no connection, however remote, with the plaintiff's cause of action, is to permit two original bills in the same suit, which is certainly in violation of well-settled principles. See Stuart v. Hayden, 72 F. 402, 410, 18 C.C.A. 618; Id., 169 U.S. 1, 18 Sup.Ct. 274, 42 L.Ed. 639. Had so radical a change in these principles been intended by rule 30, the reasonable supposition is that it would have been unmistakably declared.

'It is said that rule 30 does unmistakably declare such an intention in the words 'which might be the subject of an independent suit in equity against him' (i.e., the plaintiff), and by the provision 'shall have the same effect as a cross-suit.' But the words and the provision relied on relate, as they stand in the rule, not to cross-claims in general, but to counterclaims in equity only. So used, it seems to me that they are more probably to be understood as a requirement that affirmative relief sought upon a counterclaim must be within the equitable jurisdiction of the court.'

I adopt these views and the conclusion that the language of the rule must be limited to the accomplishment of the evident purpose. When w...