If any defense or counter-claim is set up in the answer, the demurrer thereto must be overruled.
We need not inquire what would be the value of the matter set up in defendants’ pleading as a legal defense to the note; but, looking for an equitable defense to a legal action, and having regard to the facts pleaded, we will ascertain whether defendants allege sufficient to grant them relief.
They certainly allege that the partnership is still in existence. *195They say that the business, not the partnership, has ceased. But the allegation is positive that the partnership is not dissolved, and they pray for a dissolution, settlement, and accounting, and that they have the benefit of such accounting in the result as an offset against the note sued upon. They show that neither settlement, dissolution, nor accounting has been had. They plead that the note grew out of the partnership business; that defendants owe the plaintiff some sum; and that plaintiff owes the partnership or the defendants something for money, property, and effects put into the business, and all connected Avith the same transactions in which the note in question was given. On demurrer, of course, the allegations are taken as true. If it can be gleaned from the answer that any defense or counter-claim is set up Avhich the court can entertain, the demurrer must fall. Viewing sections 1 and 2 of the answer in their entirety, we incline to the opinion that sufficient facts are alleged to entitle defendants to an accounting; and if such indebtedness, in money, property, and effects furnished, exists as defendants allege, it is a proper matter of defense.
The third section of the ansAver is a cross-complaint, praying for a reformation of the mortgage.
In order that a written instrument may be reformed in equity for mistake, it must appear that the parties agreed upon a certain contract; that they executed a contract, the one sought to be reformed; that the contract executed was not the one agreed upon; that the variance betAveen the contract agreed upon and the one executed occurred by mistake; in Avhat the mistake consisted; and that the mistake was mutual. As the matter at bar is now before this court, the facts are all admitted by the demurrer. It appears to us that the defendants allege and the plaintiff admits that the parties agreed that the mortgage should not be foreclosable on default in the annual interest; that they intended that the written instrument should express this agreement ; that the mortgage by mistake contained a provision making it subject to foreclosure on non-payment of annual interest; and that this mistake was mutual.
These allegations seem, under the authorities, to be sufficient to sustain a pleading for reformation. (Boone on Code Pleading, § 170, and cases cited; 2 Estee’s Pleading and Practice, *1962804, 2805, and cases; Story’s Equity Jurisprudence, ch. 5, “Mistake”; Chancellor Kent in Gillespie v. Moon, 2 Johns. Ch. 585; Barton v. Sachett, 3 How. Pr. 358; Wemple v. Stewart, 22 Barb. 154; 2 Pomeroy’s Equity Jurisprudence, § 839, et seq.)
The judgment of the District Court is reversed and the case remanded, with directions to that court to overrule the demurrer.
Reversed.
Blake, C. J„ and Habwood, J., concur.