MCHARD V. WILLIAMS.

[8 SOUTH DAKOTA, 381.]

COUNTERCLAIM, WHEN ARISES OUT OF THE SAME TRANSACTION, OR IS CONNECTED WITH THE SUBJECT OF THE ACTION.-Under a statute providing that the defendant may plead any counterclaim arising out of the cause of action set forth in the plaintiff's complaint, or connected with the subject of the action, a defendant, sued to foreclose a mortgage on real property, may plead that at the time the note sued upon was given, and as part of that transaction, he executed to the plaintiff a chattel mortgage to secure the same note, that the plaintiff afterward without the consent of the defendant, altered such mortgage i a material respect, and, subsequently pretending to foreclose it, the plaintiff unlawfully took and carried away certain personal property described therein, and converted it to his own use to the damage of the defendant in a sum specified.

COUNTERCLAIM, CONSTRUCTION OF STATUTES RESPECTING.-Statutes giving defendants a right to assert counterclaims should be liberally construed.

C. G. Hartley and Pepper & Scott, for the appellant.

Hassell & Meyers, John Pusey, and S. V. Ghrist, for the respondent.

882 CORSON, P. J. This is an appeal by the plaintiff from an order overruling his demurrer to a counterclaim interposed by the defendant. The action was brought to foreclose a real estate mortgage. The defendant Williams filed an answer, in which he sets up two counterclaims. The demurrer to the first was sustained, and it will not be further noticed. The demurrer to the second was overruled. This counterclaim is as follows: "7. For a further answer and for second counterclaim to the causes of action set forth in plaintiff's complaint, this defendant alleges that on the 9th day of July, 1887, at the time the note for $300, described in the first paragraph of the complaint, was given, and as a part of that transaction, this defendant duly made, executed, and delivered to the plaintiff a certain written instrument, to wit, a chattel mortgage, dated on that day, and signed by this defendant, which said chattel mortgage was so given as security for the payment of the said $300, on four mules belonging to this defendant, and the said chattel mortgage, at the time of its exccution and delivery as aforesaid, provided for no attorney's fee; that thereafter, and before said chattel mortgage was filed for record in the office of the register of deeds in and for said Hand county, in which county this defendant resides, the plaintiff, by himself or agent, and with the knowledge, consent, and authority of plaintiff, and without any consent thereto by this defendant, materially al

tered and changed the said chattel mortgage by inserting therein a provision for the payment of an attorney's fee of $100; that after the said mortgage had been so altered, the plaintiff caused it to be filed in the office of the said register of deeds; that on or about the 10th day of May, 1892, this defendant was lawfully possessed of and was the owner of the mules described in the said chattel mortgage, of the value of $700; that on said last-mentioned day, at said Hand county, the said plaintiff, pretending to foreclose said fraudulently altered chattel mortgage, unlawfully took and carried away said mules, and converted and disposed of the same to his own use, to the damage of this 883 defendant seven hundred (700) dollars; that this defendant knew nothing of the said fraudulent alteration in said chattel mortgage until after said plaintiff had disposed of said mules."

It will be observed that it is alleged that the giving of the chattel mortgage was a part of the same transaction set out in the complaint, the chattel mortgage being given to secure the same note that was secured by the mortgage on real estate sought to be foreclosed by this action. But appellant contends that the counterclaim is not based upon the chattel mortgage, as the pleader, in effect, shows that the chattel mortgage was void, and hence it is out of the case, and that the claim of the defendant is based upon the wrongful conversion of the mules by the plaintiff, not constituting a breach of any contract, but a tort, which cannot be counterclaimed against a cause of action on contract. Respondent, however, insists that the counterclaim was proper, under subdivision 1, section 4915 of the Compiled Laws, and that the cause of action set out in the counterclaim arose out of the transaction set forth in the plaintiff's complaint, or was connected with the subject of the action. The cause of action set out in the counterclaim, it seems to us, clearly arose out of the transaction, or was connected with the subject of the action, set forth in plaintiff's complaint. A part of that transaction, as set out in the counterclaim, was the giving of the chattel mortgage under which the plaintiff assumed to sell defendant's mules. The mere fact, therefore, that the acts of the plaintiff regarding the chattel mortgage, subsequent to its execution, are claimed to have invalidated it, and rendered plaintiff's sale of the mules illegal, and subjected the plaintiff to liability to the defendant for their full value, does not render the sale any the less a part of the transaction connected with the subject of the action: Laney v. Ingalls, 5 S. Dak. 183; Ainsworth v. Bowen, 9 Wis. 348; Streeper v. Thompson (Tex. Civ. Arp., Sept. 5, 1893), 23 S. W. Rep. 326; Carpenter v. Manhattan

Life Ins. Co., 93 N. Y. 552; Bliss on Code Pleading, secs. 372377. In Carpenter v. Manhattan Life Ins. Co., 93 N. Y. 552, the court of appeals of New York uses the following 384 language: "The counterclaim must have such a relation to and connection with the subject of the action that it will be just and equitable that the controversy between the parties as to the matters alleged in the complaint and in the counterclaim should be settled in one action by one litigation, and that the claim of the one should be offset against or applied upon the claim of the other. Here it is sufficiently accurate to say that the subject of the action was the wood wrongfully taken by the defendant, and the counterclaim was for damages sustained by the defendant, in the wrongful impairment of its security, by the severance of the same wood from the land, and thus diminishing the value of the land by the value of the wood. In such case it is certainly just that the defendant should counterclaim its damages for the severance of the wood against the plaintiff's claim for the conversion thereof. In the forum of conscience, the plaintiff was under obligation to restore the wood to the defendant as a portion of its security for its claim against the mortgagor. Thus it can with great propriety be said that defendant's claim had some connection with the subject of the action." If the note set out in plaintiff's complaint, and to satisfy which he seeks to sell defendant's real property, was in effect satisfied by a sale of defendant's personal property, mortgaged to secure the same note, it would be manifestly unjust to compel the defendant to submit to a judgment upon the note, and a sale of his real property to satisfy the same, and leave him with simply a right of action against the plaintiff for the value of his mules.

One of the more important purposes of the adoption of the code system of pleading was to avoid as far as possible a multiplicity of suits, and to enable parties to determine their differences in one action. And to this end counterclaims were designed, not only to include recoupment and setoffs at common law, but to enlarge their scope, so that but few cases could arise in which all litigation between the parties to the action might not be settled in the same suit. The learned counsel for 385 the appellant has argued the case upon the theory that the provisions relating to counterclaims should be strictly construed, but in this he is clearly in error. These provisions should receive a liberal construction, as, in the language of Mr. Justice Fuller, in Laney v. Ingalls, 5 S. Dak. 183, it "enables litigants to determine their controversies without additional expense, and, in case

a plaintiff is insolvent, it is often the only means by which a defendant may obtain justice."

The order of the circuit court overruling the demurrer is affirmed, and the case remanded for further proceedings according to law.

COUNTERCLAIM-STATUTES ALLOWING-CONSTRUCTION. Statutes allowing counterclaims must, as remedial statutes, be liberally construed with a view to effect the object for which they were passed, that is, to prevent a multiplicity of actions, and enable, as far as possible, the settlement of cross-claims between the same par ties in the same action: Monographic note to Woodruff v. Garner, S9 Am. Dec. 484.

COUNTERCLAIM-GENERAL NATURE.-Where a contract is the basis of a transaction and a breach of it may amount to a trespass, or entitle the injured party to an action for negligence, fraud, or otherwise, in form ex delicto, such party is not deprived of his right to plead a counterclaim as a setoff against the action. The wrongdoer is not allowed to deprive the injured party of the advantage of the contract by having tortiously violated it: Folsom v. Carli, 6 Minn. 420; 80 Am. Dec. 456. See the monographic note to Woodruff v. Garner, 89 Am. Dec. 482-492.

HURON V. BANK OF VOLGA.

[8 SOUTH DAKOTA, 449.]

PUBLIC NUISANCE, AUTHORITY OF MUNICIPAL CORPOPATION TO RESTRAIN BY SUIT.-If a building situate in a epulous part of a city is so injured by fire as to endanger the property and lives of the inhabitants of the city, it may maintain a suit n equity to compel the owner to tear down and remove such buildng. Its remedy is not limited to indictment or abatement.

INJUNCTION AGAINST PUBLIC NUISANCE.-A court of equity has jurisdiction to restrain an existing or threatened public nuisance at the suit of the state or the people of a municipality, or some public officer representing the state or the municipality.

T. H. Null, for the appellant.

A. W. Wilmarth, for the respondent.

450 FULLER, J. The complaint in this action by a municipal corporation against a private corporation to abate a public nuisance alleges, and the specific findings of fact by the court conclusively show, that the Wright House, a large, three-story, wooden structure, owned by the defendant, and situated conspicuously upea orainess street in the most densely populated portion of the city of Huron, was badly damaged and partially destroyed by a fire which occurred during the month of March, 1891, and that by reason thereof conditions arose and still exist

AM. BT. RER. VOL LIX.

in and about said structure which endanger the property and lives of the inhabitants of said city. As the existence of a public nuisance extremely dangerous and unusually repulsive in character, may well be conceded from the undisputed evidence, further facts will not be recited. By the decree of the court defendant was directed to tear down and remove its ruined and dilapidated building, and upon failure so to do within thirty days the plaintiff was authorized to tear down and remove and abate the same. The defendant in the court below, and now upon appeal from the judgment, relies wholly upon the proposition that the corporate authority was without power to maintain the action. Unless a public nuisance is specially injurious to the private person, the statute authorizing a civil remedy therefor precludes him from maintaining an action, and counsel for appellant maintain that respondent's exclusive statutory remedy is by indictment or abatement: Comp. Laws, secs. 4688, 4690. Respondent's charter provides that "the city council shall have power to restrain, prohibit, and suppress nuisances at common law," and a proper regard for the peace and tranquility of society, as well as the interests of the members thereof, suggests the advantages resulting in a doubtful case from the right of a municipal corporation to obtain a judicial determination of the existence of a public nuisance before proceeding to demolish and destroy a building lawfully erected, which, without fault of the owner, appears to have become menacing and harmful to the inhabitants of a city. In discussing the question Judge 451 Dillon says: "As there is in such cases a judicial remedy in favor of the citizen, so, on principle, the right of the corporate authorities to resort at their election to the courts in proper cases to aid them when the citizen is in the wrong, should, in the author's judgment, be also recognized": 1 Dillon on Municpal Corporations, 4th ed., sec. 379. Judge Woods observes, in his treatise on the Law of Nuisances, that: "Except in cases of great emergency, when the emergency may safely be regarded as so strong as to justify extraordinary measures upon the ground of paramount necessity, or when the use of property complained of is so clearly a nuisance as to leave no room for doubt upon the subject, it is the better course to secure an adjudication from the courts, before proceeding to abate it": Wood on Nuisances, 2d ed., sec. 744. "A court of equity has jurisdiction to restrain existing or threatened public nuisances by injunction, at the suit of the attorney general, in England, and at the suit of the state, or the people or the municipality, or some proper officer representing the commonwealth, in this country": 3 Pome