Opinion by
Mr. Chief Justice Moore.
1. It is maintained that the new matter in the answer does not constitute a counterclaim; that, if the facts there set up form a defense to the cause of action stated in the complaint, the plea was equitable in character, which, as no cross-bill was interposed, was unavailing; and that as the only issue to be determined was whether or not Mrs. McLench, as a surety for the defendant, was compelled to pay the notes in question, which dispute was determined by the testimony according to the averments of the complaint, an error was committed in refusing to direct a verdict for the plaintiff.
An answer must contain a general or specific denial of each averment of the complaint that is disputed by the defendant, and may set forth a statement of new matter constituting a defense or counterclaim. Section 73, B. & C. Comp., as amended (Laws 1903, p. 204). The set-off referred to must be one existing in favor of a defendant and against a plaintiff, between whom a several judgment might be obtained in the action, and growing out of one of the following matters:
“(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.” Section 74, B. & C. Comp.
*451It will be remembered that the writing which Mrs. McLench signed January 29, 1898, provided that any valuable improvements made by the defendant upon the 260 acres of land specified should belong to him. It will also be kept in mind that the answer avers that he placed on the premises permanent improvements the worth of which exceeded $1,700. If such betterment augmented the value of the 101 acres of land which were sold, so that by reason of the improvement a greater compensation was realized than would otherwise have been obtained, the defendant might have been entitled to a credit for that sum as a counterclaim, arising on contract and existing at the commencement of this action.
2. An answer setting forth a counterclaim must contain the necessary averments of a complaint and state facts which show that the defendant is entitled to recover from the plaintiff, if an action had been instituted for that purpose: Le Clare v. Thibault, 41 Or. 601 (69 Pac. 552). The answer herein does not allege that pursuant to the terms of the contract any permanent improvements were made upon the particular tract of land that was sold. So far as disclosed by the defendant’s pleading, all the lasting improvements may have been made on the 159 acres of land that remained, and such being the case, the facts stated are not pleaded as, and do not constitute, a counterclaim.
3. Though, a bond, covenant, or agreement made for a valuable consideration to convey real property, specified in a last will previously made, is not deemed a revocation of such prior devise (Section 5552, B. & C. Comp.), the voluntary conveyance for a valuable consideration by Mrs. McLench of the 101 acres of land, which she had antecedently devised to her son, took that real property out of the operation of her last will (Section 5573, B. & C. Comp.), which testament was thereby impliedly revoked pro tanto: Graham v. Burch, 47 Minn. 171 (49 N. W. *452697: 28 Am. St. Rep. 339, 357) ; Hattersley v. Bissett, 51 N. J. Eq. 597 (29 Atl. 187: 40 Am. St. Rep. 532) ; Ametrano v. Downs, 170 N. Y. 388 (63 N. E. 340: 58 L. R. A. 719: 88 Am. St. Rep. 671).
4. When, as surety, Mrs. McLench gave to the holders of the promissory notes the sum respectively due each, the payment discharged an obligation which she had assumed, whereupon the instruments were, in effect, assigned to her, authorizing an action to be maintained against her son as the principal.
5. The will having been abrogated to the extent of the land which was conveyed, the bequests made to Mrs. Caldwell and Mrs. Watson of $1,030 and $2,100, respectively, continued a charge upon the remaining 159 acres of land that were devised to F. G. McLench. This equitable lien having been imposed on his land, as a security for the payment of the legacies given to his sisters, which larger sum he asserts has been discharged, if he is obliged to liquidate the bequest made to Mrs. Caldwell, the payments will disturb the distribution which Mrs. McLench intended to make when she executed her will.
6. The separate defense interposed seems to be based on the assumption that the part of the land devised to the defendant was, by a sale thereof pursuant to the agreement with his mother, converted into a fund out of which the notes described in the complaint, with others, were to have been paid, whereby the money so disbursed was to be treated as an advancement and in lieu of the land. Such averment is tantamount to an allegation of an equitable conversion, a doctrine invoked by courts of chancery in support of the maxim that equity regards as done what ought to be done. This principle, however, cannot be relied upon in a court of law. 7 Am. & Eng. Ency. Law (2 ed.) 465.
The matters thus alleged by the defendant, as a reason why the plaintiff should not recover herein what she *453seeks, are facts which, in onr opinion, do not constitute a defense in a law action, but, if available at all, require the interposition of a court of chancery, and are material for his defense, necessitating the filing of a complaint in equity in the nature of a cross-bill, which pleading not having been tendered, the answer interposed does not set up a defense. Section 391, B. & C. Comp.
7. No demurrer to the answer was filed, and the court, invoking the rule applicable in such cases, construed that pleading with greater liberality than is usually accorded, to a complaint. We believe, however, that the answer is insufficient, even under the liberal rule referred to; but, in view of the fact that the sufficiency of the defendant’s pleading was not challenged in any manner until testimony in support of the averments was offered, justice demands that he ought to be permitted to interpose the defense suggested, if it is availing.
The judgment is therefore reversed, and the cause remanded for such further proceedings as may be necessary, not inconsistent with this opinion. Reversed.