Sea well, J.
The pleadings in this case themselves fill perhaps eighty of the ninety-one pages of the record. Space forbids detailed analysis, hut the foregoing summary is sufficient for an understanding of this appeal and the grounds upon which decision is based.
(1) The exception to the order referred to by the defendant as enlarging the scope'of the receivership cannot he sustained. The allegations of the complaint were sufficient to put it within the discretion of the court [194]*194to order tbe documents in question turned over to tbe receiver in tbe first place, if, indeed, tbe original order of tbe court did not include them; and tbe arm of tbe court is not shortened because tbe relief was not extended in tbe first instance. It is that sort of remedy wbieb the court may apply at any time pending tbe litigation in dealing with an insolvent corporation where tbe facts warrant tbe exercise of tbe power. Skinner v. Maxwell, 66 N. C., 45; Whitehead v. Hale, 118 N. C., 601, 24 S. E., 360; Witz, Biedler & Co. v. Gray, 116 N. C., 48, 20 S. E.,, 1019; Kelly v. McLamb, 182 N. C., 158, 108 S. E., 435; Bank v. Waggoner, 185 N. C., 297, 117 S. E., 6; Hurwitz v. Sand Co., 189 N. C., 1, 126 S. E., 171; C. S., 860.
(2) Tbe plaintiff insists that tbe defendant has erroneously designated tbe subject of bis counterclaim as abuse of prócess, whereas, as presented, it is in reality malicious prosecution. In an action for malicious prosecution, tbe offending proceeding must have terminated before complainant may bring bis action. Ludwick v. Penny, 158 N. C., 104, 73 S. E., 228; Brinkley v. Knight, 163 N. C., 194, 79 S. E., 260. That limitation does not apply to an action for abuse of process. Since, of course, tbe pending action to which tbe counterclaim refers has obviously not terminated, tbe plaintiff contends that tbe counterclaim is not available to tbe defendant, and that tbe demurrer should be sustained on that ground.
But passing this for tbe moment, it has been questioned whether, regardless of these categories, tbe proposed counterclaim is not affected by further infirmities growing out of tbe time and occasion of its presentation' — tbe circumstance that it bad not accrued, in other words did not exist, at tbe commencement of plaintiff’s action, and that it is not connected with tbe subject thereof within tbe meaning of tbe statute. C. S., 521; Kramer v. Electric Co., 95 N. C., 277; Phipps v. Wilson, 125 N. C., 106, 34 S. E., 227; Smith v. French, 141 N. C., 1, 53 S. E., 435; Sewing Machine Co. v. Burger, 181 N. C., 241, 107 S. E., 14; Godwin v. Kennedy, 196 N. C., 244, 145 S. E., 229.
Down to Smith v. French (1906), supra, it was uniformly held that a counterclaim growing out of tbe institution and maintenance of tbe action in which it is interposed was objectionable as not having matured when plaintiff’s action was commenced. Phipps v. Wilson, supra. Smith v. French, supra, adopted a contrary view, and tbe Court seemed to be conscious of establishing a new rule of general application in this regard. McIntosh, North Carolina Practice and Procedure, sec. 467. Query: whether Wright v. Harris, infra, and Godwin v. Kennedy, supra, has re-established the authority of Phipps v. Wilson, supra, and cases bolding similarly.
To be available, however, such a counterclaim must, nevertheless, grow out of tbe transaction upon which plaintiff’s action is based and be connected with that action within tbe meaning of tbe statute.
[195]*195When the defendant’s counterclaim lies in tort, the statute finds the test of eligibility in plaintiff’s pleading. C. S., 521 (1). In the instant case the transaction set out in the complaint as the basis of plaintiff’s action is not the same as that out of which the counterclaim arose — both time and circumstance negative that — and it is more than questionable whether defendant’s alleged cause of action, as alleged, is sufficiently connected with the subject of plaintiff’s action to come within the statute, however available it may be in an independent action. The circumstance that it grew out of plaintiff’s action does not, ipso facto, establish such relation. The subject of plaintiff’s action is certainly not the action itself or any remedy plaintiff may pursue, or the manner in which these proceedings are instituted or prosecuted. That subject matter is the default of defendant in retaining plaintiff’s property, collecting and refusing to pay over its moneys, endangering its assets, and refusing to pay plaintiff’s claim. The subject of the counterclaim as laid, however, does lie in the wrongful institution of plaintiff’s action and the manner of its prosecution. The connection between the two is not that of substance but of historical sequence. There is, of course, a thread of sequence in the sense of the common expression, “One thing led to another,” but there is no agreement between the subject matter of plaintiff’s action and that of defendant’s counterclaim in interest or substance or similarity of causes. Weiner v. Style Shop, 210 N. C., 705, 708, 188 S. E., 331. To be within the statute, we are persuaded that the connection must he more than incidental or casual — the subjects must be germane. Giving to the statute that liberal construction to which it is entitled, it is nevertheless true that the wider latitude given it as a substitute for the narrow and more technical practice of the common law brought with it certain dangers which necessitated a limitation on its scope. Counterclaims, as we know them, were born of the statute, and with the cowl of its restriction upon them. Proper regard for the orderliness of judicial investigation demands that its enabling features shall not be expanded at the expense of its reasonable restrictions. We think the statute was intended at least to eliminate mere recriminations between the parties and prevent the hearing from becoming a squabble or brawl.
“ ‘The time has come,’ the walrus said,
‘To talk of many things;
Of ships and shoes and sealing wax,
Of cabbages and kings.’ ”
We find no such indecorum in defendant’s well-written pleading, as suggested in Lewis Carroll’s whimsy. But at the same time we do not find that substantial connection between defendant’s counterclaim and [196]*196the subject of plaintiff’s action which, we think the statute requires to make it available here. If asserted at all, it must be by independent action.
Moreover, on a careful examination of the pleading, we are constrained to hold that the court below was correct in holding that defendant’s counterclaim is, at most, a plea of malicious prosecution. It challenges the original proceeding, ex stirpe, as maliciously instituted and prosecuted, but it alleges no act of the plaintiffs in that proceeding which could, under proper legal definition, constitute abuse of process.
The gravamen of an action for malicious prosecution is the wrongful institution or prosecution of the action or proceeding without probable cause, to the hurt and damage of the complainant. In such case “a suit for malicious prosecution will lie where the plaintiff’s property or business has been interfered with by the appointment of a receiver, the granting of an injunction, or by writ of replevin.” Cooley on Torts, 3d Ed., p. 348.
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Sea well, J.
The pleadings in this case themselves fill perhaps eighty of the ninety-one pages of the record. Space forbids detailed analysis, hut the foregoing summary is sufficient for an understanding of this appeal and the grounds upon which decision is based.
(1) The exception to the order referred to by the defendant as enlarging the scope'of the receivership cannot he sustained. The allegations of the complaint were sufficient to put it within the discretion of the court [194]*194to order tbe documents in question turned over to tbe receiver in tbe first place, if, indeed, tbe original order of tbe court did not include them; and tbe arm of tbe court is not shortened because tbe relief was not extended in tbe first instance. It is that sort of remedy wbieb the court may apply at any time pending tbe litigation in dealing with an insolvent corporation where tbe facts warrant tbe exercise of tbe power. Skinner v. Maxwell, 66 N. C., 45; Whitehead v. Hale, 118 N. C., 601, 24 S. E., 360; Witz, Biedler & Co. v. Gray, 116 N. C., 48, 20 S. E.,, 1019; Kelly v. McLamb, 182 N. C., 158, 108 S. E., 435; Bank v. Waggoner, 185 N. C., 297, 117 S. E., 6; Hurwitz v. Sand Co., 189 N. C., 1, 126 S. E., 171; C. S., 860.
(2) Tbe plaintiff insists that tbe defendant has erroneously designated tbe subject of bis counterclaim as abuse of prócess, whereas, as presented, it is in reality malicious prosecution. In an action for malicious prosecution, tbe offending proceeding must have terminated before complainant may bring bis action. Ludwick v. Penny, 158 N. C., 104, 73 S. E., 228; Brinkley v. Knight, 163 N. C., 194, 79 S. E., 260. That limitation does not apply to an action for abuse of process. Since, of course, tbe pending action to which tbe counterclaim refers has obviously not terminated, tbe plaintiff contends that tbe counterclaim is not available to tbe defendant, and that tbe demurrer should be sustained on that ground.
But passing this for tbe moment, it has been questioned whether, regardless of these categories, tbe proposed counterclaim is not affected by further infirmities growing out of tbe time and occasion of its presentation' — tbe circumstance that it bad not accrued, in other words did not exist, at tbe commencement of plaintiff’s action, and that it is not connected with tbe subject thereof within tbe meaning of tbe statute. C. S., 521; Kramer v. Electric Co., 95 N. C., 277; Phipps v. Wilson, 125 N. C., 106, 34 S. E., 227; Smith v. French, 141 N. C., 1, 53 S. E., 435; Sewing Machine Co. v. Burger, 181 N. C., 241, 107 S. E., 14; Godwin v. Kennedy, 196 N. C., 244, 145 S. E., 229.
Down to Smith v. French (1906), supra, it was uniformly held that a counterclaim growing out of tbe institution and maintenance of tbe action in which it is interposed was objectionable as not having matured when plaintiff’s action was commenced. Phipps v. Wilson, supra. Smith v. French, supra, adopted a contrary view, and tbe Court seemed to be conscious of establishing a new rule of general application in this regard. McIntosh, North Carolina Practice and Procedure, sec. 467. Query: whether Wright v. Harris, infra, and Godwin v. Kennedy, supra, has re-established the authority of Phipps v. Wilson, supra, and cases bolding similarly.
To be available, however, such a counterclaim must, nevertheless, grow out of tbe transaction upon which plaintiff’s action is based and be connected with that action within tbe meaning of tbe statute.
[195]*195When the defendant’s counterclaim lies in tort, the statute finds the test of eligibility in plaintiff’s pleading. C. S., 521 (1). In the instant case the transaction set out in the complaint as the basis of plaintiff’s action is not the same as that out of which the counterclaim arose — both time and circumstance negative that — and it is more than questionable whether defendant’s alleged cause of action, as alleged, is sufficiently connected with the subject of plaintiff’s action to come within the statute, however available it may be in an independent action. The circumstance that it grew out of plaintiff’s action does not, ipso facto, establish such relation. The subject of plaintiff’s action is certainly not the action itself or any remedy plaintiff may pursue, or the manner in which these proceedings are instituted or prosecuted. That subject matter is the default of defendant in retaining plaintiff’s property, collecting and refusing to pay over its moneys, endangering its assets, and refusing to pay plaintiff’s claim. The subject of the counterclaim as laid, however, does lie in the wrongful institution of plaintiff’s action and the manner of its prosecution. The connection between the two is not that of substance but of historical sequence. There is, of course, a thread of sequence in the sense of the common expression, “One thing led to another,” but there is no agreement between the subject matter of plaintiff’s action and that of defendant’s counterclaim in interest or substance or similarity of causes. Weiner v. Style Shop, 210 N. C., 705, 708, 188 S. E., 331. To be within the statute, we are persuaded that the connection must he more than incidental or casual — the subjects must be germane. Giving to the statute that liberal construction to which it is entitled, it is nevertheless true that the wider latitude given it as a substitute for the narrow and more technical practice of the common law brought with it certain dangers which necessitated a limitation on its scope. Counterclaims, as we know them, were born of the statute, and with the cowl of its restriction upon them. Proper regard for the orderliness of judicial investigation demands that its enabling features shall not be expanded at the expense of its reasonable restrictions. We think the statute was intended at least to eliminate mere recriminations between the parties and prevent the hearing from becoming a squabble or brawl.
“ ‘The time has come,’ the walrus said,
‘To talk of many things;
Of ships and shoes and sealing wax,
Of cabbages and kings.’ ”
We find no such indecorum in defendant’s well-written pleading, as suggested in Lewis Carroll’s whimsy. But at the same time we do not find that substantial connection between defendant’s counterclaim and [196]*196the subject of plaintiff’s action which, we think the statute requires to make it available here. If asserted at all, it must be by independent action.
Moreover, on a careful examination of the pleading, we are constrained to hold that the court below was correct in holding that defendant’s counterclaim is, at most, a plea of malicious prosecution. It challenges the original proceeding, ex stirpe, as maliciously instituted and prosecuted, but it alleges no act of the plaintiffs in that proceeding which could, under proper legal definition, constitute abuse of process.
The gravamen of an action for malicious prosecution is the wrongful institution or prosecution of the action or proceeding without probable cause, to the hurt and damage of the complainant. In such case “a suit for malicious prosecution will lie where the plaintiff’s property or business has been interfered with by the appointment of a receiver, the granting of an injunction, or by writ of replevin.” Cooley on Torts, 3d Ed., p. 348. The gist of an action for abuse of process is the improper use of the process after it has been issued. Glidewell v. Murray-Lacy & Co., 124 Va., 563, 98 S. E., 665, 4 A. L. R., 225; 1 Am. Jur., Abuse of Process, § 34. “The distinctive nature of an action for abuse of process, as compared with an action for malicious prosecution, is that the former lies for the improper use of process after it has been issued, not for maliciously causing process to issue.” 1 Am. Jur., Abuse of Process, § 3. In an action for abuse of process “Two elements are necessary: first, an ulterior purpose; second, an act in the use of the process not proper in the regular prosecution of the proceeding.” Cooley on Torts, 3d Ed., p. 355; R. R. v. Hardware Co., 143 N. C., 54, 59, 55 S. E., 422; Jackson v. Telegraph Co., 139 N. C., 347, 356, 51 S. E., 1015. “The test as to whether there is an abuse of process is whether the process has been used to accomplish some end which is without the regular purview of the process, or which compels the party against whom it is used to do some collateral thing which he could not legally and regularly be compelled to do.” 1 Am. Jur., Abuse of Process, § 6; Annotations, 80 A. L. R., 580. For illustrations of such abuse, see 1 Am. Jur., ibid., § 11, et seq. In point is the comprehensive and clear analysis in Ludwick v. Penny, supra (158 N. C., 104, 73 S. E., 228), containing appropriate references to Judge Cooley’s basic distinctions above noted. See, also, Wright v. Harris, 160 N. C., 543, 551, 552, 76 S. E., 489.
Defendant contends that it is an abuse of process to sue out and prosecute an action maliciously and without probable cause, and that may be, in consequence at least, morally true, although it would be more exact to term it an abuse of the courts. But the distinction is one of the law, and is sound in principle from an administrative point of view. There is no abuse of process where it is confined to its regular and legitimate function [197]*197in relation to tbe cause of action stated in tbe complaint. Jackson v. Telegraph Co., supra; Wright v. Harris, supra; Jerome v. Shaw, 172 N. C., 862, 90 S. E., 764; Annotations, 80 A. L. R., 580; 86 A. L. R., 398.
If tbe plaintiff bas brought tbe action or instituted tbe process and prosecuted tbe same witb malice and without probable cause, tbe complainant may have bis full relief by an action for malicious prosecution.
As we have stated, tbe defendant bas alleged that tbe plaintiff bad an ulterior purpose in tbe institution and prosecution of tbe original action, but there is no allegation of any act done by tbe plaintiff which could be classified as abuse of process. Mere adjectival denunciation will not be sufficient. Facts must be alleged upon which tbe court could determine that tbe gravamen of bis action is of that character.
We need not consider tbe question whether tbe counterclaim sufficiently states a cause of action for malicious prosecution, since such an action could not be brought until tbe termination of tbe present action, out of which it is said to arise.
(3) Conceiving its counterclaim to be a plea in bar of plaintiff’s action, tbe defendant insists that tbe order of compulsory reference is invalid, because made over objection before that plea bad been determined. Bank v. Fidelity Co., 126 N. C., 320, 35 S. E., 588; Graves v. Pritchett, 207 N. C., 518, 177 S. E., 641.
Tbe rule that a plea in bar should be disposed of before tbe case is beard on its merits is one of convenience and far from invariable. There are instances in which tbe court is justified, in its discretion, in bearing tbe plea along witb tbe general-evidence on tbe merits. McAuley v. Sloan, 173 N. C., 80, 91 S. E., 701. Generally speaking, however, tbe rule is as contended by the defendant.
But defendant’s proposed counterclaim is not a plea in bar. It is a cross-action sounding in tort — tbe infliction of an injury for which defendant demands full compensation.
A plea in bar is one which goes to tbe plaintiff’s right to maintain bis action — not merely a plea which, in tbe course of tbe trial, may prevent bis recovery of tbe sum demanded or any sum because of a mere balancing of demands. It bars or defeats tbe right of action itself. As expressed in Jones v. Beaman, 117 N. C., 259, 261, 23 S. E., 248, it is a plea “that denies tbe plaintiff’s right to bring and maintain bis action.” McAuley v. Sloan, supra; Bank v. Evans, 191 N. C., 535, 132 S. E., 563. “Tbe office of a plea in bar at law is to confess tbe right to sue; avoiding that by matter dehors, and giving tbe plaintiff an acknowledgment of bis right, independent of tbe matter alleged in plea. Flagg v. Bonnell, 10 N. J. Eq., 82, 84. It is said in Hurst v. Everett, 91 N. C., 399, 403, that “A counterclaim includes every defense to tbe action, except a demurrer, which does not amount to a plea in bar. ... In that [198]*198sense, a counterclaim is a cross action against tbe plaintiff, and in stating tbe cause of action it is governed and judged by tbe same rules wbicb apply to tbe complaint: tbe facts alleged must be sufficient to constitute tbe cause of action, and tbe relief to which tbe defendant is entitled should be properly demanded. Pomeroy on Rem. and Rem. Rights; Garrett v. Love, 89 N. C., 205.” A plea in bar is not asserted as a cause of action.
It is true that in McDowell v. Tate, 12 N. C., 249, it is held that one having an eligible demand equal to or greater than that of tbe plaintiff may plead it as a set-off, and such a plea is called a plea in bar. In Derr v. Stubbs, 83 N. C., 539, and in McClenahan v. Cotten, 83 N. C., 333, it is held that such a plea is still available under tbe Code. But its designation as a plea in bar may be understood from the following quotation from Electric Co. v. Williams, 123 N. C., 51, 53, 31 S. E., 288: “It originated in tbe Bankrupt Act of IY and Y Anne, cb. 11, suggested, perhaps, by tbe compensatio of tbe civil law, but was given general application by tbe statutes of 2 George, II Chapter, 22, and 8 George, II Chapter, 24, wbicb enact: ‘That where there are mutual debts between tbe plaintiff and defendant, one debt may be set against tbe other, and either pleaded in bar or given in evidence upon tbe general issue at tbe trial, wbicb shall operate as payment, and extinguish so much of tbe plaintiff’s demand.’ 3 Bl., 304. Payment extinguished tbe debt at tbe time of payment, while a set-off required mutual existing debts, and operated as payment only when pleaded and by judgment of tbe court.”
Tbe device is based on tbe fiction of payment, and tbe countervailing demand, in set-off, is limited to .that function. Tbe rule serves no economy, as do ordinary pleas in bar, since tbe validity of tbe opposing claims demanded, and in practice received, simultaneous investigation of tbe same kind. Moreover, there is no reason to continue this limited common law prototype of modern counterclaim, since tbe statute, C. S., 521, gives full relief by admitting demands of that character as counterclaims at their full value, wbicb tbe common law did not. This, however, is not a matter of present concern.
A cross action for an unliquidated demand sounding in tort cannot be made tbe subject of set-off, and it is not so pleaded in tbe case at bar. Tbe simple allegation that plaintiff’s action is without foundation and malicious, or that there is an abuse of process, does not operate as a plea in bar.
Tbe disposition of this appeal leaves tbe order of reference valid and standing without tbe vain requirement that tbe court should make it again.
There is
No error.