The questions involved are: (1) Was the counterclaim pleadable; (2) was the motion to strike proper or was it in effect a demurrer; (3) if a demurrer, did it search the record so as to test the sufficiency of the complaint ?
Whether the counterclaim is pleadable depends on whether the plaintiff is suing as an individual or in a representative capacity, and whether the defendant association is such a defendant as can plead a counterclaim. The main difficulty with the complaint is that it does not expressly state the plaintiff is suing in a representative capacity. The appellant relies on the statement in
Isaacs v. Milwaukee Chair Co.
(1938),
Whether an action is one brought in an individual capacity or in a representative capacity is sometimes difficult to determine. The mere labeling of a complaint does not determine its nature. The nature of an action is to be determined as a whole and all allegations in the complaint must be considered. 13 Fletcher, Cyc. Corp. (perm, ed.), p. 271, sec. 5912. It is not necessary under sec. 260.12, Stats., 30 W. S. A., p. 68, that all the names of all the stockholders in a representative suit be given or that they be named as parties in the caption or in the complaint of a representative suit.
The appellant relies on sec. 263.14 (1), Stats., 30 W. S. A., p. 544, providing: “A defendant may counterclaim any claim which he has against a plaintiff, upon which a judgment may be had in the action.” The present form of this rule on counterclaims was created by this court’s order effective October 1, 1943. 242 Wis. p. v. Prior to 1943, sec. 263.14 (1) (c), Stats. 1941, the right to counterclaim any cause of action against a plaintiff was restricted to a nonresident plaintiff. This idea was generalized by the adoption of the present form of the rule in sec. 263.14.
Under the counterclaim statute existing prior to 1943 a personal counterclaim would not lie against a plaintiff who commenced a derivative action against a corporation.
Brahm v. M. C. Gehl Co.
(1907),
It is generally implied that a counterclaim to be set off against a plaintiff must be against him in the same capacity in which he brings the suit. The rule is stated in 47 Am. Jur., Setoff and Counterclaim, p. 748, sec. 51:
“The general rule is that a demand held as fiduciary or representative cannot be set off or counterclaimed against personal liability. Also, as against a plaintiff suing in a representative capacity, the defendant cannot set up as a bar to the action any counterclaim or defense which he has against the plaintiff as an individual.”
In 13 Fletcher, Cyc. Corp. (perm, ed.), p. 245, sec. 5889, it is stated:
“Ordinarily, where the action is derivative, the corporation cannot interpose a counterclaim for the amount unpaid on plaintiff’s subscription to stock. An unconnected grievance or an individual right cannot be counterclaimed in such an action, where the action is derivative, as it is against plaintiff in a different right.”
If a plaintiff sues as an individual he should not be charged in that action with claims due the defendant from someone whom the plaintiff represents in a different capacity, nor should one who is sued in his legal capacity as a representative of another be allowed to counterclaim on the basis of claims due him individually from the plaintiff. By like reason the plaintiff suing in a representative capacity should not be subject to a counterclaim against him in his individual
The defendant association is not an adverse party contemplated in sec. 260.08, Stats., 30 W. S. A., p. 19, which defines a defendant as the adverse party and a plaintiff as the complaining party. A corporation which is a nominal defendant and against whom no relief is asked and on behalf of whom the relief is sought by a plaintiff stockholder in a representative suit is not a party defendant within the contemplation of sec. 263.14 entitled to plead a counterclaim against such a plaintiff. The type of claim which a defendant may counterclaim under sec. 263.14, 30 W. S. A., p. 544, is restricted to a claim upon which a judgment may be had in the action. We conclude a counterclaim against a plaintiff under sec. 263.14 must be against the plaintiff in the same capacity in which he is suing.
The next question is whether the motion to strike can be treated as a demurrer. The motion was in the form of an order to show cause supported by an affidavit. The grounds stated in the affidavit were that the counterclaim was irrelevant and was not properly pleaded as a counterclaim. Motions to strike irrelevant matter in a pleading are provided for in sec. 263.43 and sec. 263.44, Stats., 30 W. S. A., pp. 701, 713. The plaintiff was not foreclosed from making a motion to strike the counterclaim on the grounds of irrelevancy by sec. 263.18, 30 W. S. A., p. 597, relating to demurrers and replies to counterclaims, or by sec. 263.19, 30 W. S. A., p. 599, relating to waiver by not demurring or replying as urged by the defendant.
A motion to strike out in its entirety a separate defense on the ground it did not constitute a defense is in its legal effect a demurrer.
Williams v. Journal Co.
(1933),
This demurrer does not permit the court to search the record back to the complaint to' see if it is defective. A demurrer to a defensive answer searches the record and gives rise to the question whether the complaint states a cause of action. This was a common-law rule and the rule under the code.
Ferson v. Drew
(1865), 19 Wis. *225;
State ex rel. Madison v. Maxwell
(1937),
In the facts before us the reason for the old rule of searching the record back to the complaint does not exist. The rule arose when answers were defensive and did not contain affirmative matters. The reason a demurrer to an answer
By the Court. — Order affirmed.