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Counterclaim, Cent. Dig. §§ 49-51; Dec. Dig. [Ed. Note.-For other cases, see Set-Off and § 29.*]

Smith, P. J., dissenting.

Appeal from Circuit Court, Edmunds County; J. H. Bottum, Judge.

reyance of the land with the usual coveable as a counterclaim, although sounding in nants of warranty has such an interest there- tort. in as entitles him to maintain an action to quiet title. Styer v. Sprague, 63 Minn. 414, 65 N. W. 659; Sutliff v. Smith, 58 Kan. 559, 50 Pac. 455; Pier v. Fond du Lac Co., 53 Wis. 421, 10 N. W. 686; Begole v. Hershey, 86 Mich. 130, 48 N. W. 790. This is on the ground that he may be liable on the warranty and must obtain the relief in order to procure the deferred payment. If the record were such as to indicate an interest of plaintiff such as this, we would experience, in ascertaining whether the Merediths were

interested in their land, no difficulty in harmonizing our previous decisions. See Norris V. McGaffick, 21 Iowa, 201; Marray v. Quigley, 119 Iowa, 6, 92 N. W. 869, 97 Am. St. Rep. 276.

Though plaintiff executed a warranty deed,

the situation has become such as to preclude

liability on its covenants. Whatever inter-
est the Salyards acquired under the deed,
they have since transferred by quitclaim
deed to Ethel Hounchin or Clarence Edwin
Meredith, and so done in pursuance of a
contract to keep them harmless. Manifest-
ly no claim because of defect in title, then,
may be successfully asserted against them,
and, if not, the plaintiff is not in a situation
ever to be required to respond in damages,
owing to any breach of the covenants of war-
ranty; and as plaintiff is entitled to, and
has obtained, judgment on the deferred pay-
ment, manifestly, as he is neither liable on
the covenants of his deed nor under obliga-
tion to perfect the title, in order to be enti-
tled to recover the deferred payment, he has
no interest in the land which can be affected
by any decree which might be entered, and
for this reason cannot maintain the suit.
The petition was rightly dismissed.
Both decrees have our approval.
Affirmed.

Action by the Advance Thresher Company against Ed Klein. From a judgment overruling a demurrer to defendant's counterclaim, plaintiff appeals. Affirmed and remanded.

Chas. N. Harris and Clarence O. New

comb, for appellant. Barron & Barron and C. M. Stevens, for respondent.

McCOY, J. Plaintiff, who is appellant in this court, brought this action to recover from defendant, the respondent, a balance

of $1,728.55 claimed to be due on six promissory notes set out in the complaint. To this complaint the defendant made answer admitting the execution and delivery of said notes, and as a counterclaim alleged that on or about April, 1909, plaintiff and defendant entered into a certain contract for the sale of a threshing rig, consisting, among other things, of a steam engine and separator, purchased from plaintiff by defendant for the agreed contract price of $4,412.50, and that the said notes mentioned in the complaint were given in consideration of a part of said purchase price under said contract; that under and by the terms of said contract of sale, and as a part of the same transaction, plaintiff agreed, upon notice and at defendant's request, to remedy any defects in said engine and to put it in good order, and that in and by the terms of said contract defendant agreed, upon request of plaintiff, to render assistance to plaintiff while repairing said engine; that pursuant to the said contract and about July, 1909, at the request of defendant, plaintiff sent one of its servants and agents to the farm of defendant to repair the said steam engine; that plaintiff's said servant and agent entered upon the work of repairing said engine, and while so acting, and Code Civ. Proc. § 127, subd. 1, provides as such servant and agent, and while so that a counterclaim must be a claim existing engaged in said work and in the performance in favor of a defendant and against a plaintiff, of his duties within the scope of his aubetween whom a several judgment may be had in the action, and arising out of the contract thority, requested defendant's minor son, or transaction set forth in the complaint as Andrew Klein, to assist him in the prosethe foundation of plaintiff's claim, or connected cution of said work; that while said son with the subject of the action. Held that, where plaintiff sued defendant on several notes was so engaged in assisting the said servgiven for the balance of the purchase price of ant and agent of plaintiff the said servant a threshing outfit sold to defendant, under a and agent of plaintiff so carelessly and contract by which plaintiff agreed to remedy any defects in the engine, etc., and defendant negligently started up and operated said agreed to render plaintiff assistance while mak- engine that it caught the foot and leg of ing such repairs, a claim by defendant for in- said minor son under one of the wheels of juries sustained by his minor son by the neg- said engine, and so drew said foot and leg ligence of plaintiff's servant while repairing the threshing engine was a cause of action aris- under the wheel of said engine that the ing out of the same transaction, and was avail-same was crushed, and the bones and flesh

ADVANCE THRESHER CO. v. KLEIN. (Supreme Court of South Dakota. Oct. 3, 1911.)

SET-OFF AND COUNTERCLAIM (§ 29*)-SUBJECT

OF SET-OFF-"SAME TRANSACTION."

or fails to set forth in his complaint the entire transaction out of which the claim arose defendant may supplement this omission by setting forth in his answer the omitted facts, so that the entire transaction may be before the court. The plaintiff is not at liberty to select an isolated act or fact, which is only one of a series of acts or steps in the entire transaction, and insist on a judgment on that fact alone, if the fact is so connected with others that it forms only a portion of the transaction. See, also, 34 Cyc. 686 and 687. In the case at bar, the notes set out in the complaint constitute but a component part or portion

so mangled and mashed that it was necessary to amputate, and the defendant caused to be amputated the leg of said minor just below the knee; that at all the times herein set forth the said Andrew Klein was the minor son of defendant, and as such was under defendant's guardianship and in his custody, control, and employment; and plaintiff's said agent and servant requested said minor son to assist him in said work as the ward and employé of defendant, and such assistance was rendered to plaintiff's said servant and agent under and in pursuance of the contract between plaintiff and defendant as hereinbefore set forth; that on account of said injury defendant of the entire transaction of the sale of the was compelled to and did expend $550 threshing machinery by plaintiff to defendfor nursing and in medical attendance upon ant. The contract of sale with all its muand medicine for said minor son, and said tual agreements and provisions, the acts of minor son has been rendered permanently all the parties and their agents performed lame and unable to perform work and la- under and by virtue thereof in carrying bor, and defendant thereby deprived of the out and performing the mutual provisions services of said minor son until he shall thereof, the repair of the engine, the assistbecome of age, to his damage in the sum of ance to be furnished in such repair on the $2,500. Wherefore defendant demands judg- part of defendant, are all parts of one and ment against the plaintiff in the sum of the same transaction, just as much as the $2,500, and that said amount, sufficient to giving or the payment or nonpayment of the cancel the amount due on said notes and notes sued upon. The question then arises, the obligation set forth in plaintiff's com- Was the alleged negligent injury to the deplaint, be set off against the same, and fendant's son so connected with the transacthat defendant have judgment for the bal- tion or subject-matter of the action as to ance thereof, together with costs. To this constitute a proper counterclaim? counterclaim plaintiff interposed a demurrer upon the grounds: (1) That said counterclaim is not founded upon the contract set forth in plaintiff's complaint, as a foundation of plaintiff's claim, or connected with the subject of the action; (2) nor does the counterclaim state a cause of action arising on contract, but is a separate and distinct cause of action founded on tort. The court overruled said demurrer, to which ruling the plaintiff excepted and now urges such ruling as error.

The principal contention of appellant is that the counterclaim is not connected in any manner with the contract sued upon, namely the notes; that the notes sued upon form the basis of the cause of action; and that the counterclaim must be connected with the contract sued on, and form a part of the transaction of the giving of the notes only. We are of the opinion that this contention is not tenable. The consideration of this question involves the construction of subdivision 1, § 127, Code Civ. Pr. A like provision is found in the Codes of many other states. In the case of Story v. Story & Isham Commercial Co., 100 Cal. 30, 34 Pac. 671, the court held that the "transaction" comprehended within the meaning of this section of the Code is not limited to the facts set forth in the complaint, but includes the entire series of acts and mutual conduct of the parties in the business or proceeding between them which formed the

The question, based largely on the New York decisions, seems to be well stated in 34 Cyc. 687: "It is difficult to determine or to lay down a rule for determining when a cause of action set forth in the counterclaim is so connected with plaintiff's cause as to be allowable under the section allowing a counterclaim connected with the subject of the action, for the word 'connected' may have a broad signification; the connection may be slight or intimate, remote or near; the best rule for determining the required connection being that 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 and by one litigation, and that the claim of one should be offset against or applied upon the claim of the other. But some connection between the claims themselves, independent of their being held by the parties to the action, is required, which may be shown from their originating in the same contract, or transaction, or both, involving some right or interest in the subject of the action. The term 'connected with the subject of the action' should, however, be construed liberally with a view of settling disputes in one action as far as possible." This same rule is quoted with approval and followed by this court in

22

[Ed. Note.-For other cases, see Pleading, Cent. Dig. §§ 1408-1412; Dec. Dig. § 420.*] 2. CONTINUANCE (§ 30*) - AMENDED PLEAD

INGS DISCRETION OF COURT.

Where, in an action to determine adverse claims to land, defendant relied on a tax deed, which the court, during the trial, held invalid, the refusal to grant a postponement, on the allowance of an amended answer alleging payment of taxes and improvements, was not an abuse of discretion, in the absence of any showing in support of the application for a postponement; plaintiff knowing or being bound to know, that defendant had paid taxes and had made imProvements, and that the rights thereto must be adjusted to justify relief.

[Ed. Note.-For other cases, see Continuance, Cent. Dig. §§ 99-112; Dec. Dig. § 30.*]

SWER.

930, 59 Am. St. Rep. 766, and again in trial, on the ground that plaintiff has had no Northwestern Port Huron Co. v. Iverson, opportunity to meet the proof that may be introduced under it, was properly overruled, since S. D. 314, 117 N. W. 372, 133 Am. St. Rep. it was intended to challenge the sufficiency of 920. Keeping in view the principles that the amended answer; but plaintiff, if not preone of the most important purposes of the pared to proceed with the trial, must apply for a postponement. 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 also that if 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 suit and by one litigation, it would seem that the counterclaim of defendant in this action is proper under the provisions of section 127, Code Civ. Pr., although sounding in tort. This counterclaim is for damages alleged to have been caused by the negligent acts of the servant and agent of plaintiff while repairing the engine pur-3. CONTINUANCE (§ 30*)—AMENDMENT OF ANchased by defendant from plaintiff. The said servant and agent was performing such services for plaintiff under and by virtue of the contract of sale out of which the notes sued upon arose; and the son of the defendant was also performing services for plaintiff in assisting in the repair of said engine under and by virtue of the same contract. Both were performing services and assuming to act in relation to the carrying out of the provisions and business created by the terms of the contract, as a part of the mutual obligations and conduct required thereunder between plaintiff and defendant. The alleged damages baving occurred under such circumstances and in such connection sufficiently connects the counterclaim with the subject-matter of the complaint, so as to render it equitable and just that both matters should be determined in one suit and by one litigation. The matters set out in the complaint and the matters set out in the counterclaim are intimately and closely connected, and have their origin in the same transaction. The said acts of said servant and agent of plaintiff, which constitute the negligence complained of in the counterclaim, were performed under and by virtue of the contract of sale which furnished the basis for the consideration of the notes sued upon.

The order appealed from is affirmed, and the cause remanded for further procedure.

SMITH, P. J., dissents.

HANNAHS v. PROVINE et al. (Supreme Court of South Dakota. Oct. 26, 1911.)

1. PLEADING (§ 420*)—AMENDED PLEADINGSOBJECTIONS.

An objection to the introduction of evidence under an amended answer, filed during the

Under Laws 1903, c. 70, providing that no action for the recovery of land sold for taxes shall be commenced unless all taxes shall be paid or tendered, etc., an owner, suing for the recovery of taxable land, sold for unpaid taxes legally levied, should not be permitted to commence his action or to proceed without a tender or deposit of the sum required to redeem, and hence could not be prejudiced by refusal of a continuance, on allowance of a trial amendment to the answer setting up the taxes paid by defendant.

[Ed. Note. For other cases, see Continuance, Cent. Dig. §§ 99-112; Dec. Dig. § 30.*] 4. TAXATION (§ 834*)-INVALID TAX DEED. A tax deed, conveying taxable land sold for unpaid taxes legally levied, constitutes color of title, though void on its face; and a holder in good faith is entitled to compensation for improvements made on the premises, and taxes paid, on the owner recovering the property. [Ed. Note.-For other cases, see Taxation, Cent. Dig. §§ 1648-1649; Dec. Dig. § 834.*] 5. PLEADING (§ 428*)-OBJECTIONS-TIME TO MAKE.

defeat a suit by the owner for the recovery of Where defendant, relying on a tax deed to the land, interposed an answer alleging that he and his grantor made valuable improvements on the premises in good faith under color of title, ments and the cost thereof, and that the same and which states the character of the improveare on the land and worth what they cost, an objection on the ground that it is insufficient to justify the admission of evidence of the value of the improvements, was properly overruled, when made after issue joined by reply.

[Ed. Note. For other cases, see Pleading, Dec. Dig. § 428.*]

6. APPEAL AND ERROR (§ 931*)—FINDINGSPRESUMPTIONS.

The findings of the trial court are presumptively correct, and will not be disturbed, unless it clearly appears that they are not sustained by the evidence; and the party complaining must show that fact.

[Ed. Note.-For other cases, see Appeal and Error, Cent. Dig. §§ 3762-3771; Dec. Dig. § 931.*]

7. TAXATION (§ 829*)-TAX DEEDS-RECOVERY OF PROPERTY.

An owner, in order to recover land sold for taxes, should not be required to pay the expenses incurred by defendant's grantor in tak

ing out the tax deed relied on to support defend- | United States to one Meisenbach and a warant's title, and adjudged invalid.

[Ed. Note. For other cases, see Taxation, Dec. Dig. § 829.*]

Appeal from Circuit Court, Potter County; Loring E. Gaffy, Judge.

Action by George B. Hannahs against W. W. Provine and others, prosecuted after the death of defendant named against Rebecca M. Provine, as special administratrix. From a judgment for insufficient relief, plaintiff appeals. Modified and affirmed.

Robert B. Fisk, for appellant. A. L. Ellis, A. Gunderson, and D. J. O'Keeffe (Gaffy, Stephens & Fuller, of counsel), for respondent.

ranty deed from Meisenbach and wife to himself, conveying the land in controversy, the defendant having introduced evidence in support of decedent's tax title, the plaintiff having introduced evidence in rebuttal tending to invalidate such title, and the court having ruled that such tax title was invalid, decedent was allowed to serve and file an amended answer, wherein he alleged, by way of counterclaim, in addition to the allegations of his original answer, that he and his grantor paid the taxes on the land described in the complaint for each of the years from 1891 to 1902, both inclusive, stating the amount for each year, that his grantor paid $12.15 as expenses in taking out the tax

HANEY, J. This is an action to deter-deed, that he and his grantor made valuable mine adverse claims to a quarter section of improvements on the premises in good faith land in Potter county. A judgment quieting title in the plaintiff, upon compliance with certain conditions, having been entered, and the plaintiff's application for a new trial denied, this appeal was taken.

Though the cause was tried in October, 1903, and judgment entered on January 27, 1904, it was not submitted in this court until June 11th of the present year-an apparently unreasonable delay, for which this court is not responsible. The defendants originally were W. W. Provine, Rebecca M. Provine, his wife, and A. L. Ellis. Mr. Provine having died after the appeal was taken, the special administratrix of his estate was substituted as one of the parties defendant. Defendant Ellis' claims having been abandoned, the only rights requiring consideration are the plaintiff's and decedent's, as they appear from the record to have existed when the cause was tried in the circuit court.

and under color of title, stating the character of the improvements and the cost of each, that all such improvements are still on the land and worth what they cost, and that none of the sums so expended for taxes and improvements have been repaid by the plaintiff. The trial was postponed for one day to enable the plaintiff to meet these issues. When the trial was resumed the plaintiff objected to the introduction of any evidence under the amended answer, for the reason that no opportunity had been given to meet the proof that might be introduced under it, which objection was, in effect, overruled; the record stating it was "simply ignored."

[1, 2] This objection was properly overruled. It did not challenge the sufficiency of the amended answer in any respect. If the plaintiff was not prepared to proceed with the trial, he should have applied for a further postponement. The amendment, if one was required, which is not at all clear, was entirely proper and within the discretion of the trial court; the purpose of the action being to determine what, if any, interest in or lien upon the property was held by either of the defendants. And, assuming that the plaintiff's objections to the order allowing the amendment amounted to an application for further time, there was no abuse of dis

The plaintiff states in his complaint: "(1) That he is the owner, in fee simple, of the following described parcel or tract of land, to wit: * * (2) That the defendants * * * claim some right, title, or interest in or to the said land and premises, adverse to the right, title, and interest of the plaintiff." All these allegations not expressly admitted are denied by decedent's original answer, which "admits that this defendant | cretion in denying such application. The claims some right, title, or interest in and to said land and premises, and alleges that such interest is a fee-simple title in this defendant, by virtue of a tax deed duly issued thereon to his grantor, and the deed from the grantee in such tax deed." And as a second and further defense it is alleged that he "is the owner in fee simple of said land by virtue of payment of taxes thereon, and that he and his grantor, while in possession of said premises, have paid taxes thereon for more than 10 years." Plaintiff replied, denying "each and every allegation in said answer and counterclaim contained."

During the progress of the trial, the plaintiff having introduced a patent from the

In

plaintiff knew, or should have known, when he summoned the decedent into court to assert his claims, that the latter had paid taxes and made improvements upon the premises while in possession of the same, and that he could not prevail in the action without an adjustment of the decedent's rights regarding such taxes and improvements. absence of any showing in support of an application for a postponement of the trial, this court cannot conclude that the trial judge, who was conversant with all the circumstances, abused his discretion by proceeding to determine what, if any, sums should be paid to the decedent for taxes and improvements.

[3] Moreover, the statute then in force payment of the amount of taxes justly due contained these provisions: "No actions on said land, $10 for taking out the tax deed, shall be commenced by the former owner or and the value of the permanent improveowners of lands, or by any person claiming ments placed thereon by the defendant. (2) under him or them, to recover possession of That the plaintiff is entitled to have the title land which has been sold and conveyed by of the land in suit quieted in him on payment deed for nonpayment of taxes or to avoid of the taxes, interests, costs, and charges paid such deed, unless such action shall be com- by the defendant and his grantors, in the menced within three years after the record- amount found by the court, the sum of $10 exing of such deed, and not until all taxes, pended in costs in taking out said tax deed, interest and penalties, legal costs and ex- and on payment by the plaintiff to the defendpenses shall be paid or tendered by the par- ant of the value of the permanent improveties commencing the action. * * And ments placed on said land in suit, in good faith whenever, in any action at law or in equity, by the defendant and his grantors as found the validity of any tax certificate, or tax by the court, and on payment of the costs of deed, arises upon the pleadings or otherwise, this action, all within 60 days from the entry except where the property sold was not tax- of judgment herein. And the court further able, where the tax was for an illegal pur- finds that the defendant W. W. Provine, in pose, or where the tax was paid before the case said plaintiff fails to pay such sums sale occurred, such action shall not proceed within said 60 days, is entitled to have said in favor of the party assailing such certifi- title of said land quieted in him on payment cate or deed, unless he shall, within such to the plaintiff, or to the clerk of this court time as the court shall deem reasonable, de- for his use, of the value of said premises posit in court, for the benefit of the party without the improvements as found by the claiming thereunder, an amount equal to the court, less the amount due thereon to the sum required by law to redeem from the defendant for taxes paid thereon by the detax sale or sales involved together with the fendant and his grantors, as found by the costs and disbursements of the action then court, within 90 days from the date of judgincurred by the party claiming under such ment and decree entered therein, to wit, the certificate or deed." Laws 1903, c. 70. As sum of $244.72, less costs of action. (3) The the plaintiff should not have commenced this court finds that in case the plaintiff does not action, or have been allowed to proceed after pay the sums above required of him to pay the validity of decedent's tax title arose, in the time required, and the defendant does without a tender or deposit of the sum re- not pay to the plaintiff the value of such quired to redeem, it is difficult to discover land without the improvements as found by how he could have been prejudiced by the the court, within 90 days from the date of course pursued by the trial court. the judgment and decree entered herein, that a special execution issue herein to the sheriff of Potter county, South Dakota, directing him to levy upon and sell said premises in the manner required by law for selling real property under execution, and after notice of such sale he sell said premises, and from the proceeds of such sale he first pay the costs of this action and of such sale under said execution; second, that he pay to the defendant the amount found due defendant for taxes, interest, costs, and charges paid on said premises; third, that he pay to said defendant the sum found due the defendant for the permanent improvements on said premises as found due by the court, and that he pay the residue received for said premises on such sale to the plaintiff in this action, or to his attorney of record and take a receipt therefor, that he issue to the purchaser of said premises at such sale a certificate of sale, as required by law on sales of real estate on execution, and that he make a return to this court of his proceedings thereon."

[4, 5] The tax deed, though void on its face, constituted color of title; the land was taxable; it does not appear to have been sold for taxes levied for illegal purposes; the taxes had not been paid; the evidence justifies the finding that the decedent was holding the property in good faith; the objection that the amended answer was not sufficient to justify the admission of evidence as to the value of decedent's improvements, raised, as it was, after issue joined by plaintiff's reply, was properly overruled; so the only matter which demanded serious attention was the amount expended for taxes and improvements properly chargeable against the plaintiff. Parker v. Vinson, 11 S. D. 381, 77 N. W. 1023; Meadows v. Osterkamp, 13 S. D. 571, 83 N. W. 624. The court found the just and true amount of the taxes to be $145.28; the value of the land without the improvements to be $700; the value of the improvements to be $1,500; that decedent's grantor paid $10 for taking out and recording the tax deed; that the plaintiff has not paid or tendered any of said sums, or part thereof, or offered to pay the same; and concluded: "(1) That the proceedings leading up to the selling of said land and premises, at the tax sale of 1892, for the taxes of 1891, are not sufficient to support a tax deed, and

[6] As to the true amount of the taxes, the value of the property without the improvements, and the value of the improvements, counsel for plaintiff has wholly failed to point out wherein the evidence is insufficient to justify the decision. Causes are not

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