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the defendant did not undertake within six years,"-"that the action did not accrue within six years."(u)

Wherever the contract is executory, the former plea is bad.(v)

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The latter form is the safest and best plea in all actions, whether on contracts or for wrongs.(w)

To a plea of set-off, the Statute of Limitations must be replied specially.(x)

A replication of the statute admits all the facts allegal in the plea, and only raises the question whether the cause of set-off accrued to the defendant within six years.(y) Thus, where the defendant pleaded that the plaintiff had given his promissory note to C., that C. was dead, and that P. was C.'s administrator, who had before the action indorsed the note to the defendant, and the plaintiff replied that the cause of set-off had not accrued to the defendant within six years, it was held that all the facts stated in the plea were admitted.(z)

A replication in assumpsit to a plea of the statute must be consistent with the promises laid in the declaration. For example, if the original promise were absolute, the promise laid in the replication must not be conditional. (a)

The plaintiff may reply to a plea of the statute, that he is within the saving clause, as that he was abroad at the time when the action accrued, and six years have not elapsed since his return—that he was an infant, &c.

(u) Before the Uniformity of Process Act, the plaintiff might (except in actions by original) at his election, have treated either the writ or the bill as the commencement of the suit, and, therefore, might have pleaded that the action did not accrue within six years before the exhibiting of the bill, or before the commencement of the suit, and the latter is the proper mode of pleading now.

A writ should not be replied specially, but given in evidence. Dickenson v. Teague, 1 C., M. & R. 241.

(r) Gould v. Johnson, 2 Salk. 422; 2 Ld. Raym. 838, S. C.

(w) 1 Saund. 33, f.

(x) Chapple v. Durston, 1 C. & J. 1.

(y) Gale v. Capern, 1 Ad. & Ell. 102; 3 N. & M. 863, S. C.

(z) Ibid.

(a) Tanner v. Smart, 6 B. & C. 606; 9 D. & Ry. 849, S. C.; Haydon v. Williams, 7 Bing. 168; 4 M. & P. 811, S. C.

It is doubtful whether fraud in the defendant be a good replication to a plea of the statute.(b)

Lastly, independent of the statute, if a note be twenty years old,(c) it will have been presumed to have been paid, in the absence of circumstances tending to repel the presumption.(d)

The lapse of thirteen years has been held sufficient to raise a presumption of the repayment of a loan not secured by a note.(e)

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*CHAPTER XXVII.

OF THE LAW OF SET-OFF AND MUTUAL CREDIT IN RELATION TO

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COMPENSATIO, in the Roman law, corresponds with set-off in the English law but the provisions in the civil law, for setting one demand

(b) Clark v. Hougham, 2 B. & C. 149; 3 D. & R. 322, S. C.; Ex parte Bolton, 1 Mont. & Ayr. 60.

(c) Such, for two hundred years, has been the common law as to a bond. The defence was introduced into Ireland by statute 8 Geo. 1, c. 4, and into England by the 3 & 4 Wm. 4, c. 42, s. 3.

(d) Duffield v. Creed, 5 Esp. 52.
(e) Cooper v. Turner, 2 Stark. 497.

Com

against another, are more liberal and extensive than in ours. pensatio is defined by the civilians, DEBITI ET CREDITI INTER SE CONTRIBUTIO.(a)

Set-off signifies the subtraction, or taking away of one demand. from another opposite or cross demand, so as to extinguish the smaller demand and reduce the greater by the amount of the less, or if the opposite demands are equal, to extinguish both. It was also, formerly, sometimes called stoppage, because the amount sought to be set-off was stopped, or deducted from the cross demand.

Set-off is in all cases useful to prevent circuity of action: but, where one of the parties is dead, insolvent, bankrupt, or removed beyond the jurisdiction of the English Courts, it is absolutely necessary, to prevent injustice.

*Yet it should seem that set-off is unknown to the common [*288] law, perhaps, because it was thought very inconvenient to try two cross demands in a single action, and because, in the early stages of our jurisprudence and commerce, its necessity was not so apparent. Some writers, have indeed, held, that there is such a thing as a setoff by action at common law; (b) but it is conceived that the authorities cited in support of this doctrine are cases rather of conditional contract, or of payment, than of set-off. It is true that Lord Mansfield says,(c) that "where the nature of the transaction consists in a variety of receipts and payments, the law allows the balance only. to be the debt;" but that is, because the entries on each side of an account current are mutual payments rather than mutual cross demands.

But though the practice of set-off was unknown to Courts of law before the statutes, it was recognised in Courts of equity long before: and the want of it at law was found productive of great injustice. "The natural sense of mankind," says Lord Mansfield, "was first shocked at this doctine in the case of bankrupts; they thought it hard that a person should be bound to pay the whole that he owed to a bankrupt, and receive only a dividend of what the bankrupt owed him."

This defect, therefore, was supplied in the case of bankruptcy, by

(a) Dig. 16, 2, 1.

(b) Montague on Set-off, pp. 1 and 2.

(c) Green v. Farmer, 1 Black. 651; 4 Bur. 2214, S. C.

the statute 4 Anne, c. 17.(d) Afterwards by the statutes of Geo. 2, the same equitable provision was made for the set-off of debts generally in the Courts of law, and especially after the death of one of the parties. Then the Lords' Act, and the Acts for the relief of the Insolvent Debtors, adopted the same provision; and, lastly, the Courts of law, anxious to do justice at the termination as well as at the commencement of a suit, in the exercise of their equitable jurisdiction over their respective suitors, have allowed the set-off of costs and judg

ments.

In examining the subject of set-off and mutual credit in its relation to negotiable instruments, let us consider, first, the provision of the general statutes of set-off; secondly, of the Bankrupt Act, and the Acts for the Relief of Insolvent Debtors; and thirdly, the doctrine of the Courts of equity. The fourth branch of the subject, I mean the set-off of costs and judgments in the different Courts, is, perhaps, foreign to the design of this Treatise; but it may [*289]

be proper to notice, lastly, a few cases, in which a stipulation, though not properly the subject of a set-off, is yet held to be a bar to the action.

First, The general statutes of set-off are, the 2 Geo. 2, c. 22, s. 13, and the 8 Geo. 2, c. 24, s. 4. These statutes only give a setoff in case of mutual debts; that is, of ascertained money demands.(e)

Hence, it follows, that there can be no set-off unless the demand for which the action is brought, and the counter demand sought to be set off, are both of them for specific sums of money; and, therefore, there can be no set-off at all to an action in form ex delicto, as trover, nor to an action ex contractu, unless for a liquidated sum. Therefore, also, a guarantee cannot be set off.(ƒ)(1)

(d) Ibid.

(e) Though secured by a penalty, 8 Geo. 2, c. 24, s. 5. See Collins v. Collins, 2 Bur. 820; Lee v. Lester, 7 C. B. Rep. 1008.

(ƒ) Crawford v. Stirling, 4 Esp. 207; Morley v. Inglis, 4 Bing. N. C. 58; 5 Scott, 314, S. C.

(1) In an action for damages for negligence in keeping the plaintiff's sheep, founded upon a special written contract, the defendant will not be permitted to deduct from the damages the compensa

tion which he claims for keeping the sheep. Such compensation, if any be due, must be sought in a distinct action. Crowninshield v. Robinson, 1 Mason, 93. So no set-off is admissible in an action

The subject of set-off must be a legal, and not a mere equitable debt; and, therefore, the assignee of a bond cannot set-off the amount secured by that instrument,(g) but the indorsee or assignee of a bill or note may set it off, because negotiable instruments are assignable at law.(1)

(g) Wake v. Tinkler, 16 East, 36.

on an open policy of insurance, although the demand be for a total loss, as the damages are uncertain and unliquidated. Gordon v. Bowne, 2 Johns. 150. But premium notes may be deducted under an express stipulation in the policy to that effect. Cleveland v. Clap, 5 Mass. 201. Dodge v. Union Marine Ins. Co., 17 Ibid. 471. In an action for the recovery of damages for the breach of a warranty in the sale of goods, defendant is not entitled to a set-off of demands against the plaintiff. Wilmot v. Hurd, 11 Wendell, 584. See also: Dowd v. Fawcett, 4 Devereux, 92. George v. Cahawba Railroad Co., 8 Alabama, 234. An unliquidated demand cannot be pleaded in set-off. De Tastett v. Croussillat, 2 Wash. C. C. 132. State v. Welsted, 6 Halsted, 397. Hepburn v. Hoag, 6 Conn. 613. McCord v. Williams, 2 Alabama, 71. Woodruff v. Laflin, 4 Pike, 527. Homas v. McConnell, 3 McLean, 81. Whitaker v. Robinson, 8 Smedes & Marshall, 349. Hawks v. Lands, 3 Gilman, 227. Smith v. Smith, 1 Smith, 337. Crenshaw v. Jackson, 6 Georgia, 509.

Damages resulting from the breach of a contract are unliquidated where there is no criterion provided by the parties, or by the law operating on the contract, by which to ascertain the amount of the damages. M'Cord v. Williams, 2 Alabama, 71.

It is a general rule that where indebitatus assumpsit will lie upon a simple contract, the debt due thereon may be pleaded in set-off. Austin v. Feland, 8 Missouri, 309.

A debtor draws and delivers to his creditor an order on a third person pay. able at sight, and directs the amount, when received, to be placed to the credit of his account. The creditor, without the knowledge or assent of the drawer, takes the drawee's acceptance payable at sixty days, and before the expiration thereof the acceptor dies insolvent. Held, that the drawer's claim against his creditor on account of the draft was a claim for unliquidated and uncertain damages, for the failure to collect it, and could not be allowed as a set-off in a suit brought by the creditor to recover the original demand against the drawer. Harrison v. Wortham, 8 Leigh, 296.

But unliquidated damages may be set off, under the plea of payment in an action arising from the same transaction. It is admitted in such cases rather as an equitable defence than in strictness a set-off. Hubler v. Tamney, 5 Watts,

51.

117.

150.

Gogel v. Jacoby, 5 Serg. & Rawle, Henion v. Morton, 2 Ashmead, Abercrombie v. Owings, 2 Richardson, 127. Turnpike Co. v. Harris, 8 Humphrey, 558. Elliott v. Heath, 14 N. Hamp. 131.

In Pennsylvania, however, an unliquidated cross demand, arising from a dis tinct and independent contract, may be set off. Ellmaker v. Franklin Fire Ins. Co., 6 Watts & Serg. 439. Phillips v. Lawrence, Ibid. 150.

So also in Illinois. Edwards v. Todd, 1 Scam. 462. Kaskaskia Bridge Co. v. Shannon, 1 Gilman, 15.

(1) Wheeler v. Raymond, 5 Cowen, 231; 9 Ibid. 295. Gilchrist v. Leonard,

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