until after the pleadings are closed. (Rule 12(c).)" 23 A. B. A. Jour. 629, 631. 658. Effect of subdivision. The purpose of the subdivision is to necessitate a prompt and due setting up of all defenses and objections, though some latitude is offered with regard to objections going to the existence of a fundamental cause of action or defense. Lack of jurisdiction of the subject matter constitutes ground for dismissal of the case at any time, at the suggestion of the parties or otherwise. 659. Public policy: May be raised in reviewing court. In Berge v. Berge, 366 Ill. 228, 8 N. E. (2d) 623, Mr. Justice Farthing said: "The validity of the contract was not questioned in the trial court. The defendant here challenges its legality. Where it appears that the contract sought to be enforced is against public policy its validity is not waived by failure to plead it. (Leeds v. Townsend, 228 Ill. 451, 81 N. E. 1069; Cansler v. Penland, 125 N. C. 578, 34 S. E. 683, 48 L. R. A. 441; Fuqua v. Pabst Brewing Co., 90 Tex. 298, 38 S. W. 750, 35 L. R. A. 241; Jacobson v. Bentzler, 127 Wis. 566, 107 N. W. 7, 4 L. R. A. (N. S.) 1151.) The defendant is not estopped from attacking the validity of the contract." SOURCE AUTHORITIES 660. Arkansas. 661. When any of the matters enumerated in section 111 do not appear from the face of the complaint, the objection may be taken by answer. If no such objection is taken, either by demurrer or answer, the defendant shall be deemed to have waived the same, except only the objection to the jurisdiction of the court over the subject of the action, and the objection that the complaint does not state facts sufficient to constitute a cause of action. Crawford's Civ. Code of Ark. Ann. (1934) 114. 662. California. Statutory provisions. RULE 13 Rule 13. Counterclaim and Cross-Claim. (a) COMPULSORY COUNTERCLAIMS. A pleading shall state as a counterclaim any claim, not the subject of a pending action, which at the time of filing the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party's claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction. (b) PERMISSIVE COUNTERCLAIMS. A pleading may state as a counterclaim any claim against an opposing party not arising out of the transaction or occurrence that is the subject matter of the opposing party's claim. (c) COUNTERCLAIM EXCEEDING OPPOSING CLAIM. A counterclaim may or may not diminish or defeat the recovery sought by the opposing party. It may claim relief exceeding in amount or different in kind from that sought in the pleading of the opposing party. (d) COUNTERCLAIM AGAINST THE UNITED STATES. These rules shall not be construed to enlarge beyond the limits now fixed by law the right to assert counterclaims or to claim credits against the United States or an officer or agency thereof. (e) COUNTERCLAIM MATURING OR ACQUIRED AFTER PLEADING. A claim which either matured or was acquired by the pleader after serving his pleading may, with the permission of the court, be presented as a counterclaim by supplemental pleading. (f) OMITTED COUNTERCLAIM. When a pleader fails to set up a counterclaim through oversight, inadvertence, or excusable neglect, or when justice requires, he may by leave of court set up the counterclaim by amendment. (g) CROSS-CLAIM AGAINST CO-PARTY. A pleading may state as a cross-claim any claim by one party against a co-party arising out of the transaction or occurrence that is the subject matter either of the original action or of a counterclaim therein. Such cross-claim may include a claim that the party against whom it is asserted is or may be liable to the crossclaimant for all or part of a claim asserted in the action against the cross-claimant. (h) ADDITIONAL PARTIES MAY BE BROUGHT IN. When the presence of parties other than those to the original action is required for the granting of complete relief in the determination of a counterclaim or cross-claim, the court shall order them to be brought in as defendants as provided in these rules, if jurisdiction of them can be obtained and their joinder will not deprive the court of jurisdiction of the action. (i) SEPARATE TRIALS; SEPARATE JUDGMENTS. If the court orders separate trials as provided in Rule 42 (b), judgment on a counterclaim or cross-claim may be rendered when the court has jurisdiction so to do, even if the claims of the opposing party have been dismissed or otherwise disposed of. Prior to the adoption of the Field Code in 1848, the common law recognized two forms of pleading by which the rights of the defendant to affirmative relief against the plaintiff were to be pleaded. These were (1) an answer by way of recoupment, and (2) the set-off. The latter was originally an equitable remedy, but later, by statute, was made part of the law of England and hence came to this country as part of our common law. However, courts of equity expanded the use of the set-off and gave it a wider extension than courts of common law. Hence the equitable set-off continued as a distinct type of counterdemand recognized and enforced only by courts of equity. In addition to these, equity permitted a cross-bill to be filed by the defendant against the plaintiff or any other party for the purpose of obtaining a full determination of the matter be SUBDIVISION (G) Comment 73. Cross-claims against co-parties. SUBDIVISION (H) Comment 74. Relation to Federal Equity Rule 30. 75. Former cross-bill practice. SUBDIVISION (I) Comment 76. Dismissal of other claims immaterial. fore the court. Phillips' Code Pleading (2d Ed.), § 369. Dealing with former Equity Rule 30 (set out hereinafter under "Source Authorities"), it is said in 3 Cyc. of Federal Procedure, § 879, note: "The term counterclaim is not defined by the federal statutes or by the Equity Rules. It was not known either to the common law or to the early English and American equity practice. It was introduced into the practice of this country apparently through the reformed codes of procedure adopted by many of the states. In those codes it was generally defined as a cause of action, (a) arising out of the contract or transaction set forth in the complaint as the foundation of plaintiff's claim, (b) connected with the subject of the action, (c) arising out of a contract independent of the contract sued on." In Atkinson v. Bank of Manhattan Trust Co. (C. C. A. 7th, 1934), 69 F. (2d) 735, Judge Sparks said: "While a counterclaim is not tech nically a matter of defense, yet it is frequently classed as a defense in the various codes, including Wisconsin." While former Equity Rule 30 contained liberal provisions eliminating certain technical limitations on the bringing in of cross-claims, the former separation between law and equity procedure made impossible the extension of such principles beyond the equity forum. See, for example, American Mills Co. v. American Surety Co., 260 U. S. 360, 67 L. Ed. 306, 43 Sup. Ct. 149 (1922). It Above Rule embodies the substance of former Federal Equity Rule 30, but extends its operation to law as well as equity cases. abolishes in practical entirety the technical restrictions existing at common law and even under the codes between set-offs, counterclaims and recoupment. It purports to make it obligatory on defendant to state as a counterclaim certain demands against any opposing party, else be barred from further prosecution of them. Independent claims may also be asserted, subject to jurisdictional restrictions stated. Claims arising after the answer may be brought in by supplemental answer. Co-parties may set up certain cross-claims against each other. Procedural provisions are made for bringing in new parties, severances and separate trials and judgments. The Rule is not to be construed to enlarge beyond the limits now fixed by law the right to assert counterclaims against the United States. 3. Construction of counterclaims: Statutes and rules. In Seibert v. Dunn, 216 N. Y. 237, 110 N. E. 447, the court said: "The doctrines of set-off and recoupment promote justice and diminish circuity of litigation. Courts and legislatures deem them remedial in char acter, and the rules creating and regulating them entitled to a construction fairly liberal." See also authorities under "Source Authorities," subdivision (a), post. 4. Whether counterclaim must be designated as such. It has recently been held that a defendant who did not designate his affirmative defense a counterclaim might nevertheless insist that it was. Tavitoff v. Stepovich (C. C. A. 9th, 1937), 91 F. (2d) 106. Under the circumstances of that case, such decision appears to have been entirely right. In view of Rules 7(a) and 10(a), however, it seems essential to specifically designate counterclaims as such. SUBDIVISION (A) COMMENT 5. Mandatory counterclaims-State practice. By the terms of above subdivision (a), the interposition of a counterclaim appears to be mandatory where at the time of filing his pleading a party has against any opposing party any claim arising out of the transaction or occurrence which is the subject matter of the opposing party's claim, and for the adjudication of which the presence of third parties over whom jurisdiction is not obtainable is unnecessary. In view of the provisions of former Federal Equity Rule 30, this presents no innovation. It may be noted, however, that practice in the several states is not altogether in conformity with such procedure. Thus, Judge Holmes said in Angle v. Shinholt (C. C. A. 5th, 1937), 90 F. (2d) 294: "It may be stated as a general rule under Texas jurisprudence that, while affirmative demands may be set up by cross-action, failure of the defendant to avail himself of this right is no bar |