Apelt v. Melin , 138 Minn. 269 ( 1917 )

Dibell, C.

This is an appeal by the defendants from an order striking out their counterclaim.

The action is on a promissory' note. The defendants answered and interposed a counterclaim. The plaintiff demurred to the counterclaim upon the ground of insufficiency of facts. Upon the application of the plaintiff the counterclaim was stricken. No application is on file and the ground of it does not appear. We assume that it was upon the ground that the cause of action stated was not a proper subject of counterclaim and therefore irrelevant. There is some 'authority for a motion to strike out in such a case. Fergus Printing & Pub. Co. v. Board of Co. Commrs. of Otter Tail County, 60 Minn. 212, 62 N. W. 272. And see American Exchange Bank of Duluth v. Davidson, 69 Minn. 319, 72 N. W. 129. In any event no objection was made to the procedure and we make none. Of course,a failure to demur is a waiver of the objection that the cause of action pleaded is not the proper subject of counterclaim. 2 Dunnell, Minn. Dig. § 7619; Dunnell, Minn. Pl. § 375.

The answer alleges that the note in suit was given for usurious interest; that to secure the principal sum loaned the defendants gave the plaintiff William Apelt and Louisa Apelt, his wife, a deed in form which was in fact a mortgage; that at the same time they executed a collateral agreement on its face purporting to be a profit-sharing contract; that in fact the agreement was that the plaintiff and his ;wife were to have 18 per cent upon their loan, and that the arrangement for a deed and contract was simply a cover to hide usury. In effect the counterclaim is an action against the plaintiff and his wife to have the deed declared to be a mortgage, to have it adjudged that the obligation which it was given to secure was usurious, and to quiet title in the defendants. To the action Louisa Apelt is a necessary party. The land was conveyed to the plaintiff and her jointly. They were both parties to the alleged usurious agreement. Without her presence there can be no effective decree. It is not sought to make her a party. It is the general rule that a cause of action which the defendant cannot maintain against the plaintiff alone, or one which cannot be determined without bringing in new parties plaintiff, cannot be maintained, at least without bringing in such new parties. See G. S. 1913, §§ 7757-7758; Dunnell, Minn. Dig. Supp. 1916, § 7602; Dunnell, Minn. Pl. § 357, et seq.; Campbell v. Jones, 25 Minn. 155; Wilcox v. Comstock, 37 Minn. 65, 33 N. W. 42; Little v. Simonds, 46 Minn. 380, 49 N. W. 186; Clay County Land Co. v. Alcox, 88 Minn. 4, 92 N. W. 464; Crosby v. Scott-Graff Lumber Co. 93 Minn. 475, 101 N. W. 610. Upon this state of the record there was no error in striking out the counterclaim.

Order affirmed.