lipi uii iii .:mm»-% UNIVERSITY OF CALIFORNIA LOS ANGELES SCHOOL OF LAW LIBRARY SUMMARY OF THE LAW OF SET-OFF: WITH AN APPENDIX OF CASES ARGUED AND DETERMINED IN THE COURTS OF LAW AND EQUITY UPON THAT SUBJECT. BY BASIL MONTAGU, ESQ. Of Gray's Imi, Burrister at Law. c:*>tm»>-::::' XRW-YORK: PRINTED nv AND FOR I. HILEY Sc CO. lLe,citvi)ograpbtc Prfw* 18GG. T KriL 3 3^00! TABLE OF CITED CASES. ("The figures which immediately follow tlie names refer to the Summary, and tliose which stand in the column refer to the Appendix.] ABSOLOM V. Knight, page 18. Atkinson v. Elliot, 48, 51, 52. Barclay v. Hunt, 5. Barker v. Braham, 5. Barnes v. Crafter, 7. Baskerville v. Brown, 38, 45. Bavlev v. Morlev, 31. Billon V. Hyde, 58. Bishop V. Church, 34. Bize V. Dickason, 32. Blackbourn v Mattliias, 42. Bottcmley v. Brook, 2". Brown v. BuUen, 57. Bulman v. Burkitt, 36. Butler V. Innys, 6. Clenlowe v. Lowe, 6. Cockran v. Rt.binson, 40. Collins V. Collins, 20, 45. Colson V. Welsh, 19, 49. pale V. Sollet, 1. Decze, Ex parte, 47, 49. Dennie v. Elliot, 11. Dickson v. Evans, 56. Dobson V. Lockhart, 2, 54, 55. Dowsland v. Tliompson, 44. Drinkwater v. Dowding, 29 Dunmore v. Tavlor, 21. Duthy V. Tito, 7. Edwards, Ex parte, 62. Evans v. Prosser, 35. Fletcher v. Dyche, 23. Ford V. Miles, 6. Freeman v. Hyctt, 22 French v. Andradc, 25. V. Fenn, 25. George v. Claggett, 31. Gibson v. Hudson's Bay Co. 28. Glai.stcr v. Hewer, 10. Gower V. Hunt, 41. Graham v. Fraine, 18. Green v. Farnur, 1 Grimwood v. Barrit, 44. Groomc,F.x parte, 54. Gross V. Fisher, 37. Grove v. Dubois, 32, 57 App. 42 Hale, Ex parte, 56. Ht.ll V. Ody, 14. Hampton v. Jarrat, 41. Hancock v. Entwissle, 53. Hankey v. Smith, 49. Hooper v. Till, 36. Howlet V. SU-ickland, 22. Hutchinson v. Sturges, 19 James v. K^Tinier, 3. 27 Jacques v. Withy, 20. Jeffs V. Wood, 48. Kilvington v. Stevenson, 35 Knibbs V. Hall, 38. Lanesborough v. Jones, 47, 61. Laycock v. Tufthel, 18. Lechmere v. Hawkins, 39 33 Lofting v. Stevens, 28. Lock V. Bennet, 56. 12 17 M.irch V. Chambers, 56. Martin v. Winder, 36. Meliorucchi v. Exchange, 28 Mitchell V. Oldfield, 9. Mordecai v. Nuling, 7. Morland v. Hammersley, 12. Muiray, Ex parte, 30. NedrifF v. Hogan, 21. Nunez v. Modjgliani, 6. 41 O'Connor v. Murphy, 11 Ockenden, Ex ]Kute, 50. 21 Ord V. Kuspini, 21, 41 17 Pitt V. Carpenter, 37. 21 Powell v. Smith, 7. 19 Prtscot, Ex parte, 52 Puller v. Roe, 26. Qiiintin, Ex parte, 62. Rabone v. Williams, 31. Randle v. Fuller, 12. Rtnnington t. .Stt \ens, 45 54 Reynolds v. Bccring, 35 RobeHs V. Bijrgs, 9. Rudge V. Biroli, 27. 25 Ryal v. Row Is, 48. App. 12 47 46 17 39 5 57. 2B 13 21 10 16 14 VI TABLE or CITED CASES. Sapsforcl v. Fletcher, 18. Schoole V. Noble, 11. Sciimshirc v. AUU rton, 29. Scoliin V. Robinson, 7. Scott V. Surman, SO. Sliij)iTian V. Thompson, 34. Slipper V. Stidstone, 25. Smith V. Barrow, 23. V. De Silva, 2.3. V. Hodson, 52, 59. Stacy V. Decy, 26. Sturdy v. ATiumd, 2. Symmons v. Knox, 43. App. 14 Tegetmeyer V. Lutnley, 35. 11 Terlo V. Lowe, 8. Thrustout V. Grafter, 9- Tito V. Duthy, 7. Turlington's case, 5. 30 20 Vaughan v. Davies, 13. Webster v. Scales, 27. 49 Weighail v. Waters, 22. 30,37 Whitehead v. Vaughan, 55. 4 Wills V. Crabb, 7- 44 Winch V. Keely, 27. Wood V. Akers, 33. TABLE OF CONTENTS. Analysis, Introductory Chapter, Set-off at Law, BOOK L Section L Set-off at Common Law, Section II. Set-off by Statute, ----- Chap. I. Set-off in General, . _ . Chap. II. Set-off in the Case of Bankrupts and Insolvent Debtors, Set-off in Equity. Practice, BOOK IL App. 7 n 18 5 ib. 15 ib. 46 61 63 >et-off.[23 n. AtComm At Law. [5] ) A person who is equitably entitled to a judgment, may set- off such judgment, though his name is not upon the record.(^) (o) Schoole V. Noble and two others, viz. S. & B. 1 II. Bl. 23, (App. 11.) The pIuintift"brought trespass at^amst tlie defendants for breaking and enterinp,- his house, Sec. Defendants S. and B. had suffered judgment to go by default : Noble went on to trial, and obtained a verdict. Damages Avere assessed against S. and B. at one half-penny each ; on which Runnington, Sergeant, obtained a rule to shew cause why the costs v/hich might be taxed against S. and B. on the judgment by default, and the damages assessed, siiould not be deducted out of the costs taxed to Noble on the postea, and allowed to the plaintiff, and, in the mean time, execution against them stayed. This was moved on an affidavit, stating that the defendants S. and B. had acted under the authority of Noble, v/ho had undertaken to pay the damapfc^ and costs. — Rule absolute. (/O Dennie v. Elliot,^Hill and others, 2 H. BI. 587. A. D. 1795. (App. 12.) Dennie obtained judgment against the present defendants ; Hill obtained vi rule to set off a judgment v.hich he had obtained iigainst Dennie, on an afii- davit that Dennie appeared to be insolvent, that his goods were all distrained for rent, and that he v,as not to be met with. This was opposed on an aili- davit of Dcnnie's, stating that Hill had told him that Elliott, one of the other defendants, vras to indemnify Hill, as having acted under his orders, and that the plaijitiff had offered not to take out e.^fecution against Hill. But the rule was made absolute. (y) O'Connor v. Murphy, 1 H. Bl. 659. A. D. 1791. (App. 10.) There were two causes, (Murphy v. O'Loughlin, and O'Connor v. Murphy) and nonsuits in each. The first was an action of trover for a ship, wiiich was the property of O'Connor and one O'Sullivan (who were partners in trade,) and of which O'Loughlin was master. The second action was by the indor- see against the maker of a promissory note. yV nioiion to set-off arising upon these judgments, was made on the giound that the action against O'Lough- lin was defended at the joint expense of O'Connor and O'Sullivan, and that O'Sullivan was interested, together with O'Connor, in the promissory note, on which the present action was brought. Lord Lou;i,hboiough eaid that, \ntliout any regard to O'Sullivan's interest in the promissory note, O'Clonnor v.as erpiitably entit led UUhe costs of thenoJisuil in the action of trover against O'Loiighli.M ; and therefore he ought to be pcrniitled to set them off, as f?i' as they would goagainst the costs in the present action. — Rule alisoluto 12 SET-OFl AT COMMON^ LAV/ It is ihe settled practice of tiic Court of Kiiig'b Eeiicli,(/') that the attorney's lien upon the judgment of his client shall, (r) Cases in K. B— Muchell v. Oldfidd, 4 T. R. 123. A. D. 1791. (App. 13.) Mitchell had absconded ; upon an application by Oldfieidto set-off oppo- site judt^ments, Bcurcroft shewed cause on behalf of Milchell's attorney, contending, as he was not concerned as attorney in llie other action, he had a lien for his costs on the judgment obtained by his client. Lord Kenyon thought it right tliat the attorney in this case should be sat- isfied his costs before the defendant was allowed to make the set-off. Duller, J. Though this court have said that they will not interfere on the bchaifofthe attorney, and prevent t!ie plaintiff's settling his own cause with- out fust paying the attorney's bill ; yet, when the adverse party, against waom a judgment has been obt.dned, applies to get^ rid of that judgment, the court will take care that the attorney's bill is satisfied.- Rule absolute, on tiie defendant's undertaking, inter alia, to pay the allor- ncy'sbill. Randle v. Fuller, 6T.R. 456. A.D. 1793. (Appendix 14.) A rule obtain- ed by the defendant to shew cause why a judgment obtained by ium against the plaintiff should not be set-off against a judgment obtained by the plaintiff in this action, was opposed liy the plaintiff's attorney, claiming a lien upon the judgment obtained by his client ; and stating tb.at the plaintiff Irad ab- scoiided, and that he had no other security for his bill than the judgment. The court, understanding that, by the practice in the C. P. the attorney's lien only extended to the defendant's residue upon balancing the accounts, desired the matter to stand over — .md, after deli'oeration, Lord Kenyon, C.J. said, " It has been expressly determined in Mitchell v. Oldfield, that the attorney had a general lien on the costs and damages re- covered, without any such restriction as was now endeavoured to be put upon it : and that, upon the reason and justice of the case, he could find no reason to impose such a restriction. That, whatever might be the practice in the court of C. P. he was glad to find that his opinion was warr^aited by tl^ie settled practice of this court. Tae law on this head is conaidered as settled in Glaister v. Hewet, 8 T. R. 69. 3 Geo. HI. (Appendix 9.) Morland and Ilarp.mersley v. Lashley ; Same v. Lashley and Ux, B. R. A. D. 1795. innotes, 2 H. Bl. 441. Both these causes were tried atthe sit- tings Trin. 34 Geo. III. The first was an action upon the separate bond of the defendant : the second upon the joint bond of the defendant and his wife. In the first, the plaintifi" obtained a verdict, and in the second was nonsuited. In the same term Henderson on the part of the plaintiff obtained a rule to shew cause, why the costs of the nonsuit should not be deducted from the sum given by the verdict in the first cause. Palmer shewed cause contending on the authority of Mitchell v. Oldfield, 4 T. R. B. R. 123. that the attorney for the defendants had a lien on the judgment for his costs. In support of the rule Henderson cited Barker v. Braaam, 3 VVils. 396. and attempted to distinguish the present case from Mitcneli V. Oldfield, because there were different attornies in the different. causes in tuatcase, but here the attorney was the same in both. But SET-OFF AT COMMON LAW. upon his rippliciitJon,(A-) be first satisfied, before the opposite: piirty is permitted to set-clf any judgment v.hich he has ob- tained, \vhether there are the same or different attornies in the Lord Ktiivon slicI liiat circumstance made no difierence between the cases, and, as toiiie case in ^^'ilson, it did not there appear that any application was made on the part of the attorney. That an attorney hud a lien on the judg- ment lor his costs Avhich it would be unjust in the court to take from luni. Tl\e rule, th.erefore, was made absolute, with a reservation of the attorney's lien. But as his costs were ecjual to the costs of the nonsuit, the rule was afterwards abandon.ed. The followinf^ are cases in C. P. Roberts v. Figgs, 28 Geo. II. 2 Barnes. Suppl. 12. cited bv counsel in Thrustout v. Crafter, C. P. 2 Blackst. 826. T. T. 12 Geo. III.' A rule to shew cause why 1 3 guineas costs taxed against the plaintiff in a former cause, should not be set-off against 16 guineas costs recovered against the defendant in this cause : it was shewn for cause that the plaintiff \vas insol- vent : and that liis attorney had a lien upon these costs for lusbill : but it was held by \\'ilmot, C. J. et cur. that the attorney's lien was only upon what the plaintiff was entitled to have, viz. the difference. Thruslout v. Crafter, 12 Geo III. 2 Blackst. 826. (App. 7.) Schoole v. Noble and others, 1 H. Bl. 23. A. D. 1788. Application to set-off judgments. The court held that the attoniey can only have such a lien on the costs, as is subject to th.e equitable claims of the parties in the cause. Nunez v. Modigliani, 1 H. Bl. 217. A. D. 1789. (a;itc. note c.) An ap- plication to set-off costs, Lawrence, Serjeant, was stopped by the court, wlio said that it liad been decided in the case of Schoole v. Noble and others, in this court, ti:at an attoniey had only such a lien on the costs, as were subject to the equitable claims of the parties in the cause. Vaughanv. Davies, 2. II. Bl. 440. A. D. 1795. (App. 11.) This was an application by the deferidant to set-off judgments. Adair, Serjeant, shewed cause, on the part of live attorney for the plain- tiff, on affidavits, stating that he had no fund to resort to but the sum reco- vered by the plaintiff for the payment of his bill, the plahitiff himself being insolvent: tlie set-off therefore ought not to be allowed, till the attorney's bill was satisfied. He said that the coiut would protect an attorney who was their ofi'icer, who would otherwise be Mithout remedy ; and that in the court of King's Bench the equitable right of setting-off the sum recovered in one action against that recovered in another, was always suljjei I to the alloiniy's lien for his bill ; for which he cited Mitchell v. Oldfield, 4 T. R. B. R. 123. and Morland V. Lashley, B. R. 'I'rin. 34 Cieo. III. Ilwi On this day, after consideration, the court said that the attorney's lien did not extend to prevent the parties in the cause from having the bmelit of tile set-off, wnicii was applied for in this case, and therefore ma(k' the rule absolute. Buller, J. mentioneint and scAcral bond may be set-oirto an action brought l)y only one oi'the obligors. (2a-) A debt on a bond purporting to be a joint and several bond, but execitted only by one of the obligors, may be set-ofF to an action eomnicncedby the obligor who has executed it. (2/-) French, Assignee, v. Fenn, T. T. 1783. Cooke, Bank. Laws (App. 19.) Action for money had and received, (ieneral issiu* and set-ofF. Verdict for plaintiffs on a case. " On the 2 1th of January, 1778, Cox, Holford and Fenn agreed to purchase a row of pearls for an adventure in trade, and that Fenn should advance the money : the profits and loss to be equally divided In thirds : and Cox and Holford were to pay Fenn interest, till the pearls were sold, for the money advanced by him on their account. In November 1778, Cox became a bankrupt : after which the defenrlant sent the row of pearls to China, where it was sold for 60U0/. and, the net produce thereon being 5000.'. was remitted to the defendant." The question for the consideration of the court Avas, " Vv'Iietlier the defendant was entitled to set-off the sums owi for that the set-off Avas allov*able. C2''J Slipper, assignee of Lans, v. Stidstone. 1 Esp. Cases, N. P. 47. A. D. 1793.5 Term Rep. 493. (App. 20.) This was an action of assumpsit for goods sold and delivered. Plea of the general issue, with notice of set-off. The set-off was, a debt due by the bankrupt to the defendant and one Abbot, Avho had been in partnership with him ; but Abbot the partner was dead be- fore the bringing of the present action. Lord Kenyon allowed the set-off. In the following term, Law obtained a rule to shew cause why there should not be a new trial, on the supposed iiiisdirection of the judge ; but he afterwards abandoned t!ic rule, it being understood that the Court of K. B. concurred in opinion v/ith the Chief Justice ; and he, on being asked, admitted the point not to be maintainable. French v. Andrade, GT. R. 582. y\. D. 1796. (App. 21.) This was an action upon promises : to Avhich the defendant pleaded that the plaintifi" and one John Newton, who died before the conunenccment of the action, were indebted to the defendant in divers sums of money, ccc. for work and labour, money paid, 8cc. that those sums renrained unpaid at the death of John Newton, ancl at the time of commencing this action were and still are due from the plaintiff to the defendant, and that they exceed the sum due from the defendant to the plaintiff, against which simi the defendant is willing to set-arty, it might be otherwise, and then the i[>enalty vvould have been considered as the debt, because it would have depended upon the 2 Geo. II. The distinctions be- tween the two statutes, as stated in the foregoing reports, may possibly contuse and mislead : neither of the stat^^es relate to any bonds, except bonds conditioned for the payment of money, and both statutes require that the action should be brought in the right of the plaintiff, and not in the right of another IN GENERAL. 29 As to principal agent. A debt arising upon the contract of an agent who deals as principal, may be set-off" against any demand between the a- gent and die debtor. (27*) The debts bet\veen the agent and debtor may respectively be set-oft' against each other : and the debtor may set oft' a debt to him from the agent to a demand by the principal. (2/-) [2?-] The cases on lliis subject of contracts by factors are divisible into three classes. 1st. IVhere the agent actually receives payment. 2dly. Where the debtor of the agent insists ujiona right to set-off a debt due to him from the agent, which is either to an action by the Jirincilial or to an action by the agent, 3dly. Where the agent insists iijion a right to sct-rff. 1st. Where thefactor actually receives payment. Scrimshire v. Alderton, 2 Str, 1183. H. T. IG Geo. II. The plaintiff, who vas a farmer, sent oats to his factor in London. The custom of the trade appeared to be, that, formerly, factors had Ad. per quarter for sel- ling them, ■ and gave immediate notice to the farmer of the name of the buyer and the price : but, this being inconvenient to farmers at a distance, it had for many years past been customary for the farmer to allow 2d. per quarter more, upon the factors' taking the risk of the debts : since which they had ceased to inform the farmers of the buyers. The goods in the present case were sold : but, the .^actor failing, the pkuntiff before actual payment gave notice to the defendant (the buyer) not to pay the factor, which Ik; did notwithstanding: and thereupon this action was brought. The C. J. Lee was of opinion that this new method had not deprived tlie farmer of his remedy against the buyer, provided there was no payment to the factor. — And the only reason of advancing 2d. per quarter was, to have both at stake : and here being notice before actual payment, there could be no harm done. And therefore he directed the jiuy in favour of the plaintiff. They went out and found for the defendant. They were sent a second and third time to reconsider it, and still adhered to their verdict: and being asked, man by man, they separately declared they found for defendant. Upon this a ne>v trial was moved for : and, no lause being shewn, was accordingly granted ; and at the sittings after term it came on again before a special jury : when the C, Justice declared that a factor's sale does, by the general rule of law, ' rcatc a contract between the owner and buyer. liut, notwithstanding this, the jury found for the defendant: and, being asked their reason, declared that they tliought from the rirrumstances no credit was given as between the owner and buyer, and that the latter was answeiable to tlie factor onlv, and he only to the owner. Vide Escot v. Mil ward, (in this note,) where this case is considered as law. Drink'.v.'xter and otiiers, assignees of Dowding, v. Goodv\iii, Coup. J. 1 .\. D. 1773. Assumpsit. General issue. W.rdict for i)laintiffs on a speciui case. J. Dowding, tlie Irankrupt, was a clothier, and employed Jeffries a liiclor, who sold to the defendant the goods in question marked I. DOWDING: the clothes were sold by Jeffries, as factor, and the defendant knew him to 30 3ET-CrFF BY STATUTE If an agent have a commission del credere, it is presumptive proof that he dealt as principal. {2s) be so, in the usual course of his business, and in his own name. The money was puid by the defendant to Jeffries, after notice to him from the assignees not to pay it. Jeilries was a creditor of Do wding's to a greater amount than the value of the goods. After hearing the argument, Lord Mansfield — " Jeffries sold these goods to the defendant Goodwin in his own name, and without any rell;rence to the principal, or without even making the principal creditor for them. But the goods are marked 1. DO W DING ; therefore the defendant must have known he was the principal, and that v/as the reason of making that fact a part of the case." A few days after, his Lordship, in delivering the opinion of the court, said, " We think tliat a factor who receives clothes, and is authorised to sell them in his own name, but makes the buyer debtor to himself, though he is not ansAverable for the debts, yet he has a right to receive the money : his receipt is a discharge to the buyer ; and he has a ri.^-lit to bring an action against him to compel the payment, and it would be no defence for the buyer in that action to say, that, as between him and the principal, he the buyer ought to have tliat money, because the principal is indi-bted to him in more money than that sum : for the principal himself can never say that, but ■where the factor has nothing due to him : there is no case in law or equity where a factor, having money due to him to the amount of the debt in dis- pute, was ever prevented from taking money for clothes in his hands. Ex parte lUurray, 1783. Cooke B. Laws', 400. One Murray of Belfast in Ireland, in 1782, consigned a quantity of linens to B. and H. of London, to be disposed of by them as his factors, upon a del credere commission, B. and H. sold the linens for 192/. 14^, and, before they received the money> became bankrupts. The assignees afterwards received the money, which Murray demanded of the assignees, who refused to pay it, insisting that Murray might come in as a creditor vinder the commission. Murray peti- tioned that the assignees might be ordered to pay him the money his linen sold for, after deducting the commissions and charges, and a small surn due from Murray to the bankrupts on another account. His Lordship, after hearing the point of law argued, was clearly of opinion that, the purchaser not having paid for the linens previous to the bankrupt- cy, Murray the consignee was entitled to receive the price of the linen, and accordingly ordered the assignees to pay him the money. Scott v. Surman, Vv'illes 400. A. D. 1743. (Appendix.) The assignees, after the bankruptcy of the factor, received some bounty money due to the principal for having imported some goods. In an action by the principal against the assignees, the court, on a case reserved, were unanimously of opinion that the plaintiff was entitled to recover. 2dly. Where the debtor of the agent insints tifton a right to set-off a debt dw to him from the agerd. Scott V. Surman, Assignees of Scott, A. D. 1742. (Appendix) Willes 100. Assumpsit. Verdict for plaintiff for 358/. iOs. subject to the opinion of the court on a case in substance as follows. The plaintiff abroad consigned some IN GENERAL. 31 It has been decided that if a factor is autlioriscd to sell goods tar to Scott liis fiictor in England ; ulio received and sold it to be paid for in notes at four months date, after deducting 31/. due from the fleeter to the ven- dees The factor became a bankrupt. The sum of 358/. 10.s\ consisted of the proceeds of the tar actually received by the asignees from the vendees, and of the 31/. The court were unanimously of opinion that judgment should be entered for the plaintilT for 329/. 106'. the balance remaining after de- ducting 31/. from 358/. 109. Rabone v. Williams, cited 7 T. R.360.(App. 29.) Action for goods sold to the defendant by means of the house of Rabone and Co. at Exeter, factors to the plaintiff. The defendant, th.e vendee of the goods, set off a debt due to him from Rabone and Co. the factors, upon another account, alleging that the plaintiff aad not appeared at all in the transaction, and that credit had been given by Rabone and Co. the factors, and not by the plaintiff. Lord Mans- field, Ch. J. Where a factor, dealing for a principal, but concealing th.at principal, delivers goods in his own name, the person contracting with him. has a ri.>ht to consider him to all intents and purposes as the principal ; and tliough the real principal may appear and bring an action upon that contract agaii;ist the purciiaser of the goods, yet that purchaser may set-off any claim he may have against the factor in answer to tlie demand of the principal-^ Tliis lias been long settled. In Bailey v. Morley, London sittings alter Michaelmas 1788, Lord Kenyon recognised the law of this case. The case of George v. Clagget, 7 T. R. 359. (App. 29.) was decided upon the authority of this case. Escot v. Milward, Cooke, and in George v. Clagget, 7 Ter. Rep. 359. (App. 29.) Sittings after Micliaelmas Term 1793. This action was tried at (juildhall before Mr. J. Duller, in which it appeared the plaintiffs were merchants in London, and in June 1783, had a quantity of wiieat consigned to them from Ostend, the sale of which they intrusted to one Farrer as their factor. The factors in the corn trade, like tliose in the linen trade, receive a del credere connnission, besides their factorage, and never communicate the names of the purchasers to the owners, except in case of the factor's failure. I'arrer, on the 9th June 1783, sold 21 1 quar- ters of the plaintiff's wheat to the defendant Milwaid. On the 16th June, FaiTer being about to stop payment, gave up the wheat under his care to the phdniiffs, and sent them the names of the buyers. On the 20th June Far- rer stopped payment, and a short time afterwards his creditors executed a dcL-d of composition. On the 21st June, the plaintiff delivered th.e defend- ant, Mihvard, a bill of parcels of the wheat sold to lum by Farrer as their factor, and desired him to accept a bill, at a month, for the amount ; which he refused, insisting that he had a right to set-off a debt due to him from Farrer, against tiie price of the wheat. Mr. J. Ikilkr, in i»is charge to the jury, declared the doctrine liid down by LordCh. J. Lee, in Scrimshire v. Alder- ton, 2 Str. Rep. 1168. to be law; but as the factor was insolvent for some tinie befoie, irad avoided all dealings for a month, had desired that llure mi -lit be no buying in his name, and had not dealt willi the defentlanl for a year befoie, but was then in his debt, there was a verdict for the plaintiff on the ground of fraud. In George v. Claggett, 2 Esp. Cases, .5 57. E. 37 Ceo. 111. 7 Perm Rep. 32 SET-OFF BY STATUTE in his o^^ni name, and he make the buyer debtor to himself, he deals as principal : though the goods, when sold, arc marked 359. A. D. 1797. (App. 29.) Action for goods sold to the defendants by- Messrs. Rich and Ij[eapy, who were the plaintiff's factors, with a com- mission del credere, and who dealt as principals. The plaintiff claimed a right as principal to recover the price from the buyer, the money not having been actually paid over to the factors before the commencement of the action. The defendant claimed a right to set-off a debt due to him from Rich and Heapy. Lord Kenyon ruled that the defendants were entitled to hold the goods ; and that the defendants, having dealt a\ ith Rich and Heapy as prin- cipals, should not be turned i\3und by the plaintiff's setting up himself as principal, and considering them only as factors : that he had in a case before him adopted a similar principle founded on a determination of Lord Mans- field, A iz. that where a factor deals for a principal, but Avhicli principal does not appear, and the factor delivers the goods in his own name, if the person dealing with the factor on his own account has any demand against the factor, iic has a right to consider the factor as the principal : and to set-off any de- mand he may have against the factor, against the value of the goods so sold, and that such would be a good answer to any action brought by the princi- pal for the price of the goods. His Lordship therefore ruled that the defendant was entitled to a verdict, which was so found by the jury. There was a motion for a new trial. The court were clearly of opinion that the directions given at the trial were right ; and that this case was not distinguish- able from that of Rabone and Williams. 3dly. IV/iere the ageiit insists ution a right to set-off. Grove y. Dubois, 1 T. R. 112. A. D. 1786. (App. 25.) Assumpsit by assignees of Bankrupt. Set-off. Verdict on a special case, " that the bank rupt, being an underwriter, subscribed policies filled up with the defend- ant's name for his foreign correspondents Avho were unkno"\vn to the bank- rupt ; that losses hr.ppened on the policies before the bankruptcy ; that the defendant paid the amount of the losses to his foreign correspondents after such bankruptcy ; that the defendant had a commission del credere from his correspondents, was made a debtor by the bankrupt for premiums, and al- ways retained the policies in his hands." The court, saying that the whole turned on the nature of a commission del credere, were of opinion, that the defendant,was entitled to set-off the money due on the policies to this action brought against him bv the assignees of the bankrupt. Bizev.Dickason, l' T. R. 285. A. D. 1786. (App. 27.) The plaintiff, who had a commission del credei'e, Vwas indebted to the bankrupt in the sum of 1356/. Os. od. The bankrupt, an underwriter, had subscribed policies filled up with the plaintiff's name upon which losses had happened, and upon which there Avas due 661/. 9.?. 10i7. The plaintiff, taidng for granted that he Avas not entitled to set-off the 661/. 9.9. 10a'. paid his Avhole debt of 1356/. 0,?. od. to the assignees ; but aftenAards, discoveiing his mistake, he brought an action for money had and received : and, upon a case stated for the opinion of the court, recoA'e red the sum of 661/. 9s. lOrf. Wilson, assignee of Fletcher, v. Watson and Creighton, M. 23 Geo. Ill Ksp. Ni^i Pri. 974. The defendants were insurancc-brokere, and the bank IN GENERAL. 33 Tvitli tlie name of tlie principal *. and the foctor sell a»s factor in the usual course of his business, and the buyer kn.ow him to be tactor.{'2t) To a demand of an agent who deals as ])rinci]xil, tiie buyer cannot set-off a debt lo him from the principal. (2i') .4s to husband and wife. A debt due to a man in right of his wife cannot be set-off in an action against him on his own bond.(2x) A debt of the wife's, dum sola, cannot be set-off against a claim made bv the husband alone ; unless after marriage, he make the debt his own. (2^) rupt before his bankruptcy, had underwritten foi- them several policies on the ^oods, the property of others, which had been losses, and tor which the bankrupt was liable : to an action brought against the defendants for money due to the bankrupt, they pleaded a set-oft" of these losses : but it was held that the losses being on goods the property of others, the dc!jts were properly to them, not to the brokers, and therefore could not be set-otf to a demand against the broker himself. (2«) Vide Escot v. Milward, Cooke 400. 7 T. R. 359. George v. Clag- get, 7 T. R. 339. Grove V. Dubois, 1 T. R. 112. Bize v. Dickascn, I T. K. 2S5. in the last note. The case of Escot v. Milward, and common sense,^ seem to show that the del credere commisson is only presumptive proof. (2/) Drinkwater V. Goodwin, Cowp. 251. in note (2r). {2v) D. Lord Mansfield in Drinkwater v. Goodwin, Cowp. 251. in note (2r). (2x) Ex parte Walker, C. B. E. 4 Geo. III. B. N. P. 179. {2y) Wood V. Akers, 2 Esp. Cases, N. P. 594. M. T. 38 Geo. III. This was an action of assumpsit for money and goods sold and delivered. Plea non-assumpsit with notice of set-ofi". The articles containjd in the set-off were three several sums of money which were stated to have been paid by he defendant for plaintiff, aud by his direction. One of them was a sum of ■ix guineas, stated to have been piiid to a Mrs. Grundy, whicli the plaintiff's wife, who was a sister of the defendant, owed her for lodging before l.er intermarriage with the plaintiff. The counsel for the pluinliiV objected to the allowance of this sum in the present action, on t:»e ground that lliis was an action by the husband alone, and the del)t attempted lo l)e set-off was a del)t due 1)y the wife before the nvirriage, for wnicli the action should be against husbanrl and wife. It was answered tliat the husljand havin;^ order- ed the money to be puid, had tliereby made the debt his own. Eyre, Ch. J. said, that for a debt of the wife dum sfJa, ilie action must be against husband and wife, and therefore could not be set-off against a claim made by t!ie husband alone, and for wliich tlie action was brougiit: but if it ap[)L-ared that llie husband, after the marriage, iiad ordered tiie debt to l>e paid, he tlureUy made it his own, and that it could be set-oil". The defendant proved tlial the 34 SET-OTF BY STATUTE jis to executor or administrator, A debt from an executor in his own nghi cannot be set-oiF against a debt to the tcstator(2z) even though the executor is residuary legatee. (3ft) A debt which accrued in the Hfe-time of the testator cannot be set-off against a debt that accrues to the executor after the death of the testator.(36) husband had done so, and was allowed the sum in his set-off: but the plain- tiff had a verdict for tlie residue of his demand. (2-) Bishop V. Church, 3 Atk. 691. A. D. 1748. The plaintiff was the residuary legatee, and surviving executrix of her husband, to whom Church and one Owen had given a joint bond. Church, one of the oblip,ors died, and the plaintiff was" indebted upon her own private account to Owen, who was a bankrupt. Lord Chancellor said, it was admitted this could not be set-off at law, nor did he know of any instance here. The debts are due in different rights : the act of 2 Geo. II. does not comprehend this case, nor is it within 5'Geo. II. [postea,] for here was no mutual credit between the par- ties, and this had been before determined in Ex parte Hope. (3a) This may be collected from the foregoing case of Bishop v. Church ill the' last note : but, query whether equity would not interfere where there Avas a residuum. Vide Lanesho' v. Jones, 1 P. W. 3230, &c. postea— (and vide Set-off in Equity, postea.) (36) Shipman v. Thompson, Bull. N. P. 180. A. having been appointed by B. his attorney, to receive his rents, did, after his death, receive rents in arrear in B's life-time : B's executrix brought an action for the money in her own name ; the defendant gave notice to set-off a debt due to him from the testator which was not allowed at the trial, because the testator never had any cause of action against the defendant, for the money was not received till after his death. The same case is reported in Ch. J. Willes' Rep. 103. A. D. 1738. C. B. (App. 30.) This came before the court on a case reserved at the trial before Mr. Baron Fortescue. The plaintiff's late husband by his will made the plaintiff and Dr. Morgan (since deceased) his executors : in his life time he had appointed the defendant his steward by letter of attorney, ■who, afterthe testator's death, received of several tenantsseveralsumsof money due to the testator in his lifetime. The plaintiff brought this action inherown name, not naming herself executrix^ for the money so received. The de- fendant gave notice to set-off several sums due from the testator to him, which the judge would not permit the defendantto set-off. The cjuestions reser- ved were, 1st. Whether the plainliffshould not have declaredas executrix: 2dly. Whethev the defendant ought not to have been permitted to set-off the mo- ney due to him from the testator. The court, after argument, gave judg- ment for the plaintiff. The reasons given by the Court of Common Pleas do not ai)pear in Lord Ch. J. Willes' papers : but the same case was refer- red to the opinion of Mr. Baron Fortescue, before whom the cause was tried, who, after hearing the cause argued, gave the folloAving judgment in favor of the plaintiff. " As to the set-off: we cannot consider the convenience or the inconvenience on one side, or the other, but must go accordmg to the act : IN GENERAL. II. The next requisite to enable a person to give a set-off in evidence is, that " the debts be due at the eommencement of the action.^'{'3c) for the statute 2 Geo. II. ch. 22. s. 13. says, ov if either fiarty sues or is sued as executor or administrator^ where there are mutual debts between the testator or intestate, and either party, one debt may be set-off against the other ; so that it is confiPied by the statute expressly to cases where the suit is as executor or administrator. And therefore, in the present case the suit not beiu'^- as executor, I think it is not within the statute, and that the debts due from tiie testator to the defendant cannot be set-off against the plaintiff in an action brought by her in her own name and not as executor. And supposing this to be so, it was urged as one reason why the action here ouglit to have been brought by the plaintiff as executrix : but this sta- tute will not alter the law as to that point from what it was before ; and if the statute has not remedied all the inconveniences, we must take it as it is, and cannot, I think, extend it further. So the postea must be delivered to the plaintiff, and she must have her judgment." To the above Mr. B. For- tescue afterwards added this note: " N. B. The Court ofC. B. on a case made, were of the same opinion, as to both points." The same point, rela- tive to the set-off, has been since determined in the Court of King's Bench in two cases, Kilvington v. Stevenson, E. T. 1768, on demurrer; and Teg- getmeyer v. Lumlev, T. T. 25 Geo. III. on a motion for a new trial.— Te^p-etmeyer v. Lumlev, T. 25 Geo. III. MS. Action of covenant by execu- tors^for rent due in the life-time of the testator and also since his death. Plea of set-off for money due from the testator. Verdict for defendant. Erskme moved for a new trial on the ground that the defendant could not set-off a debt from the testator to an action for rent since his death, and cited the cases ol Ridout and another, assignees, v. Brough, Cowp. 133. and Shipman v. Thomijson, Buller's Ni. Pri. 180. He also cited a note-book of Mr. J. Yates of the case of Kilvington v. Stephenson, where it was held on demur- rer that a debt from the testator could not l)e set-off against an action for troods sold by executors, as it would disturb the course of administraUon.— Cowpcr shewed cause— They have sued as executors, and as such protect themselves from costs, and have united both demands. 1 he balance be- tween the narties in the general account is the justice of the case. 1 he case l-st cited is only a deiTumd for a debt subsequent to the death, without any prior dem;UKl, and the reason that presses is the distuibance oi assctls The anwswer to that is, it is the executor's fault. Lord Mansfield said he was satisfied on the authoritv of tlie cases cited, and made the rvde for a new trial absolute. Reported in Willes' Reports 261, in n"te ( App. W.) (30 Reynolds v. lieering B. R. M- 25 Geo. Ill Douglas' Rep 12 n. where it was determined on a demurrer, that a judgment olna.ned by the defendant against the plaintiff, after the declaration was delivered -»;' >«^';>';^ the plea pleaded, may be pleaded as a sel-oH ; and that although U dul n < appear that the cause of acti.,n on winch the dehndant s judgment v. ob- taincd was prior to the commencement ol the planu.tl s ac mn. But in Kvans V. Prosser, B. R. E. 20 G.o. III. 3 Term Rep. )«r,. (Appen. 41.) v 36 SET-OFF BY STATUTE A judgment recovered by the defendant after the com- mencement of the plaintiff 's action cannot be sct-oti' in that action. (3c) A judgment recovered by the defendant before the com- mencement of the plaintiff's action may be set-off, though a wi^it of error is pending on the judgment. (3c) An attorney may set-off his bill, though it was not delivered a month before the commencement of the action: it ought, if possible, to be delivered time enough to be taxed ; but it seems that it must be delivered time enough to prevent the plaintiff's being sui'prised at the trial. (3 r/) was deterrnined that a plea of set-off that the plaintiff was indebted to the defendant at the time of the plea pleaded is bad ; and that it should state thai he was indebted at the commencement of the action. On the day after the judgment v.as given in Evans v. Prosser, i'uller, J. said, he had Icok- ed into the case of Reynolds v. Beering, and found that it could not be sup- ported. One question which arose there was, whether a judgment could be pleaded by way of set-off pending a v/rit of error : which the Court were of opinion might be done ; and so far the judgment was right. On the other point there ruled, namely, that a judgment recovered after the action was brought, and before plea pleaded, might be pleaded by v/ay of set-off — ■ perhaps the Court did not consider the strict law so much as the justice of the case. But this point cannot be supported : on which judgment was given for pkuntiff. fodj Martin v. Wmder, note in Doug. Rep. 195. Law moved, on tlie part of the defendant, who was an attorney, for a rule to shew cause why the proceedings should not be staid till his bill should be paid, or till a month from tire delivery of it should expire, that he might be enabled to set it off: the Court held that, though an attorney cannot bring an action on his bill till it has been delivered a month, that circumstance is not necessary to enable him to set-off — he must not produce it at the trial by surprise ; but it is suffi- cient, in such case, to deliver it to the plaintiff time enough to have it taxed before the trial. Upon hearing this opinion of the Court, Law withdrew liis motion as unnecessary. Bulmah v. Burldtt, 1 Esp. Cases, N.P. 449. H.T. 36Geo.in. Assump- sit for goods sold and delivered. Plea of the general issue and a set-off. — The action was brought to recover the amount of a tailor's bill. The set-off Avas, for business done for the plaintiff as an attorney. It became a question whether the party was bound to deliver a bill, under the statute 2 Geo. ILin the same manntr as if he had been plaintiff in the actioi*. Lord Kenyon. The rule is, that when an attorney means to avail himself of his bill for bu- siness done, and to give it in evidence, he must deliver in a bill signed to the plaintiff; but it is not necessary llwit a month's time should intervene be- tween the delivery and the action. The cause was referred. Hooper v. Till Sc Ux. Doug. 199. A. D. 1779. iNIotion to make a rule absolute for taxing an attorney's bill after judgment : Lord Mansfield absent IN GENERAL. SECTION II. Of a person'' s option to waive or to avail himself of lis right to set-off. It is optional with the defendant whether he will waive or avail himself of his right to sct-off.(3 CO ints in the case of bankruptcy is, " t/mt the debt or cj'edit exist between the parties before the bankruptcy. {J±n) The c i^es on this head are divisible into two chisscs. 1 ^t. Whether the debt or credit existed before the bankrupt- cy ; 2dly. Whether the debt or credit existed between the parties before the bankT*iiptc}'. As to the existence oftJie debt or credit before the bankruptcy. A demand arising upon an instrument payable after tho bankruptcy, cannot be set-ofl'; unless it is payable at all events, on a day certain. (4o) (4'7) The words of the statute are: "When there hath been mutual, Sec. between the bankrupt and any otiier person at any time before such per- son became bankrupt," &c. Vide note (Ac) page 46. (4o) The cases on this head are of two classes. Int. liliere the instrument is payable, at all ez'e?its, on a day certain after the bankrufitcy. 2dly. IVhere the payment after the bankruptcy is uncertain, either as to the time or as to the erent. 1st. Where the instrument is payable, at all events, on a day certain after the bankruptcy. Ex parte Prescott, 1 Atk. 231. A. D. 1753. A creditor for 110/. and a debtor upon bond given to the bankrupt for 340/. payable on the 4th of March, 1756, witii interest, petitioned that the 1 10/. might be set-off against the debt of 340/. Lord Chancellor ordered that, upon the petitioner's agreeing to pay the balance forthwith to the assignees, which the act of parliament (alluding to 7 Geo. I. relating to creditors Wiiere debts are payable at a future day,) requires, the balance only sliould be ptdd. Smith V. Hodson, 4 Term Rep. 211. A. D. 1791. (Appen. 49.) The de- fendant accepted a bill for 442/. drawn bv the bankrupt on the 4th of March, 1788, and payable on the 7th of May, 1788. The bill was for 42/. for a va- luable consideration, and 400/. for the accommodation of the; bankrupt. The bankruptcy happened on the 29th of April, 1788. The Court, upon a ver- dict for t;ie plaintiff, on a special case, were of opinion that the defendant was entitled to set-off his demand upon this bill, and ordered a nonsuit to be entered. Atkinson V. Elliot, 7 T. R. 371. A. D. 1797. (App. 52.) Assumpsit and case reserved. On the 6th of Septemlier, 1796, the bankrupts accepted a bill of tlie defendant's at sis months date, for 230/. for goods sold to the bankrupt s by the defendant. On the 13th of December, 1796, the bank- ruptcy happened. In an action commenced on the 12th of February, 1797, by the piaintifts against the defendant, the defendant insisted upon his right to set-otf til', a )ovebill for 230/. thoughit was notdue till the 9th of March 1797. l^ord Kenyon. In my opinion, the case Ex parte Prescott was properly decided) and tnat has since been followed by a series of determiuat'on«. jy THE CASE OF BANKRUrXCY. 53 If the demand depend upon a contingency, but is secured hv Lawrence, J. This is direcllj' witliin the autliovity of the case. Ex parte Prescott. Postea to the defendant. 2dly. Where the payment after the bankriiptc]} is imcertain^ either as to the time, or afi to the event. Ex parte Groome, 1 Atk. 115. A. D. 1744. On articles previous to the marriage of the petitioner, the husband covenants to leave his wife 600/. on the contingency of survivintj him : a cominission of bankruptcy is taken out against the husband, who dies before any dividend is made. The peti- tioner applied to be admitted a creditor for the 600/ ; but the petition was dismissed, the Chancellor observing tliat there was no such thing as drav.ing a line between the contingency not happenuig before the bankruptcy, and yet happening before the time of the distribution. Hancock v. Entwissle, 3 Term Pvcp. 435. A. D. 1789. (App. 47.) In an action on a bill of exchange, the plaintilTs having proved their case, the only question was, whether the defendants were entitled to a set-ofl", arising from an agreement made in March 1788, between the defendants of one part, and the bankrupt of tlie otiier, by which, (after reciting that a loss had Ix-en sustained by the defendants, in consequence of the purchase of some cotton, by the bankrupt as their broker, for reimbursing which they made a claim on him.) in order to put an end to all controversy, it was agreed tliat the loss, though exceeding 1900/. should be fixed at that sum and no more ;and that, in payment or s..tisfaction of that sum, the bankrupt slioukl, from lime to time, witiiin the space of four years, recommend parcels of cotton, not exceeding 130 bags at onetime, to tlie defendtints for their purchase, and that the defendants should purciiase them, paying for them in notes at three months date, jind the bankrujit undertook that the clear jirofits on such .'.a/t-.s- should, in the course of fjiir years^ be sufficient to discha-ge the 1900/. but if the 8a:ne should not be fmid wiihin that time, then the bankiiifit agreed, immr- diatelij after the exliirationoffuur years, in case he should then be living, to fiay them the difference. And if tiie purchases should occasion a loss to the defendants, the bankrupt undertook to make good such loss. Loid Kenyon, before wiiom the cause was tried, being of opinion that the defendants were not entitled to set-off, the pLiiitilf obtained a verdict. And upon a motion for anew trial, Lord Kenyon, Cli. J. said, if this deed had never lieen enter- ed into, t:ie claim which the defendants had on liie bankrupt could not have been set-uff in this action, because it rested merely in damages ; it arose from the misconduct of the I>unkrupt, and migiit iiave been settli-d in an action. But l)y tlis deed the damages are li(|uidated, and the parties agreed on cert.iin tilings to l)e done in the course of lour years, as the means of making a recompense to tlie defendants, to the amount of that simi. If a ceitain sum of money had been payable at all events by instalments, and one of the payments had become due b?iorc tiie bankru|)t(y, tlie whole might have been proved under t'le con)mission. Hut it isclearlliat Ihebanknipl was not discharged by his bankruptcy, from the operation of this deed ; for when he obtains his certificate, he may be enabled to perform the stipulations con- tained in it. Tiien, if he were not disciiarged from his covenants by his cer- tificate, this debt could not be proved under the commission, nor can^it be 54 S£T-Ori' BY STATU'lJ' a penalty which is forfeited at law before the bankruptcy, it may be set-ofr.(4/)) If the payment depend upon the sur^ ivorship of two persons who are aUve at the bankruptcy, it cannot be set off. (4^) It seems tliat an instrument of indenmity given by a princi- pal to a surety, and priyable after the bankruptcy of the princi- set-ofT, for it had no existence as a debt at the time of the bankruptcy. The distinction has been -well settled in a variety of cases, as in those of Ex parte Groome, and Ex parte Winchester, that if the demand be payable at all events, though at a future day, it may be proved under the commission ; but where it depends on a contine;ency, whether it will be paid or not, it cannot be proved unless it be secured by a penalty which is forfeited at law, in which case the Court will take hold of the legal right to give the party a remedy under the commission. But in tliis case tliere v.as no legal demand at the time of the bankruptcy. And the rule was discharged. Dobson, assignees, v. Lockhart, 5 Term Rep. 133. A.D. 1793. (App. 1.) Assumpsit for goods sold. Set-ofT, of a bond on the following facts. On the 11th of October, 178S, the bankrupt and the defendant became bound to A. and B. in 900/. conditioned to pay 450/. and interest on demand. On the 16th of May, 1789, the bankrupt, one Foster, and the defendant, became bound toC. D. and E. in 1000/. conditioned to pay 500/. and inter- est, on the 1st of June, 1789. These two bonds were executed by the de- fendant, as a surety for the bankrupt and for his debt only. On the 21st of May, 1789, to indemnify the defendant against these bonds, the bankrupt became bound to the defendant and G. Lockhart (who was only trustee for the defendant) in 1400/. conditioned to pay 700/, on the 13th of February, 1790. Afterwards, and after the bankruptcy of the principal, viz. on the 14tb of December, 1789, the defendant vuis obliged to pay 470/. to A. and B. on the first bond, and 236/. 17s. to C. D. and E. on the second bond. Plaintiffs nonsuited, with liberty to apply to the Court to enter up a verdict, if the Court should be of opinion that they were entided to recover. The judgment of nonsuit was afFivmed on the general issue, but part of the judgment of BuUer, J. may be applicable to this plea. He says, I agree with the plain- tiff 's counsel that thei'e is no case in which it has been held that, where it depends on some future event which does not take place until after the bank- ruptcy, whether or not there will be any debt against the bankrupt, the debt can either be proved under the commission, or set-off against a demand made by the assignees.' — N. B. It does not appear in this case, at what time the bankruptcy happened ; but it seems to have been between the 21st May, 1789, and the 14th December, 1789. Vide Drinkwater v. Goodwin, Cowp. 251. and Cowper v. Birch, 6 T. R. 28. — Where a liability to pay before the bankruptcy, though no payment be made till after the bankruptcy, is suf- ficient to entitle a person to a lien. (1/0 D. Lord Kenyon in Hancock v. Entwissle, 3 T. R. 435. in the last note. {4(j) Ex parte Groome, I Atk. 13 5. note (4o). IN THE CASE OF BANKRUPTCY. 55 pal, may be set-off : if the suret}- be liable to pay, before the bankruptcy, though no payment is made by him till after the bankruptcy. (4;-) The debt cannot be set-off, though the event be determined after the bankruptcy, and before the dividend is made. (4^ ) If a loss happen upon a polic}" of insurance before the bank- ruptcy of a principal who has entrusted the broker with the policy ; the broker may set-off any debtor credit due to him, to a demand upon him by the assignees for the amount of the losses which he receives from the undenvriters after the bank- ruptcy. (4?') If a purchase be made on speculation by three persons before the time when one of them becomes a bankrupt ; and if, after such bankruptcy, the speculation be carried into effect by those 'v\ho continue soh'ent, and it turn out beneficial, the amount of the produce may be set-off to any demand due from either of the solvents to the bankrupt before the bankruptcy. (4i;) As to tJie existence of the debt or credit between the parties before the bankruptcy. A bill of exchange taken up and paid, after the bankruptcy (4r) Dobson v. Lockhart, 5 T. R. 133. note (4o). Vide 2 T. R. 100, and Ex paite Cocksliott, Cooke's Bank. Laws. 149. (4s) Ex parte Groomc, note (4c/). (40 Whitehead v. Vaughan, T. T. 25 Geo. III. B. R. Cooke's Bank. Laws, 579. Mitford put a poHcy^ of insurance into the liands of Vaughan his broker, that he might get it underwritten, whicli was done on the 3(1 May, 1781, by diflerent persons, \'auglianl)einghiniself one. In May, 1784, a loss happened ; but, being an average loss, the actual sum due from the underwriters on the policy was not licjuidated lUid ascertained till a time sulv sequent to the bankruptcy of Mitford, which Avas in July, 1784. The as- signees demanded tlie average loss received by the defendant, but, by sct- tlng-ofl' what he had received in the general account with the iianknipt, the balance was 108/. 5.v. 6^/. which the defendant paid into Court. Upon acjueslion whether tiie defendant was entitled to insist upon this set-ofl', it v.as argued for the plainlifT, that the debt became due from the defendant upon the re ceipt of tlie average loss, vliich was after tlie bankruptcy, and therefore could not besct-c^n". Mr. J. Buller said, the plaiiitilV was wrong every way : 1st. The bankrupt had a good cause of action before the bankruptcy, foi this debt was due before the bankruptcy, though not ascertained ; 2dly. The statute 5 Geo. II. c. 30. is decisive ; lor, by tliat statute, the balance only is the debt. The assignees are to take the account, ajul nothing i- inri^.d to their use but the balance. (4x;) Ante, page 25, and Appendix 19 56 SET-OFF BY STATUTE oi'the acceptor, by anindorser, cannot be set-oft' by him under a commission against the acceptor.(4.T) A note indorsed to the claimant after the bankruptc}^ cannot be set off. (4?/) It is incumbent upon an indorsee to show that the indorse- ment was made before the bankruptcy : but the possession b\' the payee of a note made before the bankruptcy seems to be reasonable evidence that it came into his possession at the time it bears date. (4?/) SECTION II. The mode of balancing the accounts. The accounts may be balanced either upon an action at \u.w or before the commissioners or the assignees. (4r) (4x) Ex parte Hale, 3 Vez. jun. 304. A. D, 1796. The acceptor of a bill of exchano-e for 200/. indorsed by the petitioner, becoming a bankrupt, the petitioner was obliged to take it up ; and, being indebted to the bank- rupt's estate to the amount of 90/. he prayed that he might be at liberty to set-off" the 90/. The Lord Chancellor dismissed the petition so far as it sought to set-off the 90/. and there was not any objection to the proof of the 200/. But videHankev v. Smith, 3 T. R. 509. (App. 46.) (4z/) March, assignee of ?.Iay, v. Chambers, T. T. 18 Geo. II. Bull. N. V. 180.2 Str. 1234. The assignee of of a bankrupt brought an action for work and labour ; the defendant gave notice of set-off ; and, at the trial, produced a negotiable note given by the bankrupt antecedent to his bankrupt- cy, to Scott ; and Scott's hand was proved to tlie indorsement to the defend- ant, but no proof was given when it was indorsed ; upon Avhich the plaintiff called two witnesses, who gave strong evidence to show it was after the bank- ruptcy ; however, the defendant had a verdict ; but a new trial was granted, because such indorsee ought not be in a better condition than the drawer, v/ho would only have come in as a creditor under the commission. Dickson v. Evans, 6 T. R. 59. A. D. 1794. The Court granted a new- trial, Mr. J. Rooke having nonsuited the plaintiff, by allowing the defend- ants to give in evidence, upon a set-off, notes made, but without any proof that they were indorsed to the defendant before the bankruptcy. Lawrance, J. observed, that if the notes had been made payable to the defendant liim- self, he should have thought it reasonable evidence of their having come to liis hands at the time they bore date. (4:) The words of the statute are : " The said commissioners, or the major part of them, or the assignees of such bankrupt's estate, shall state the account between them, and one debt may be set against another : and what shall appear to be due on either side, on the balance of such accounts, and on setting such debts against one another, and no more, shall be claimed or paid on either side respectively. Lock V. Bennet, 2 Atk. 49. A. D. 1740. Where there are mutual de- mands between a creditor and a bankrupt under the clause in 5 Geo. 11. ch. 30. s. 29. in which are these words, "'no more shall be claimed and paid IN THE CASE OF BANKRUPTCY. 57 Upon an action at law in the case of bankruptcy, it seems that a sct-ofi' may be given in evidence without special plead- ing or notice. (5c) When an account is balanced before the commissioners or the assignees, it cannot be litigated but by an application to the Great Seal. (5^) than appears to be due on either side, upon a balance of accounts stated." — The master of the rolls was of opinion, that upon an action at law the defend- ant might set-off his demand against the plaintiff', as is done in other cases by virtue of the statute of 2 Geo. II. ch 22. s. 13. and 8 Geo. II. ch. 24. s. 6. and that there is no occasion to come into a court of equity to pray i\n in- junction to a suit at law, and that the plaiinifi' at law may account. (5a) Grove v. Dubois, I Term Rep. 112. A. D. 1786. (App. 25.) In the case of bankruptcy the defendant gave a notice of set-oft' for money had and received by the assignees for his use. It appeared in e^idence that the as- signees had not received any money, but that the defendant had paid and hiid out money on account of the bankrupt. Duller, J. I agree that the no- tice of set-off" is bad ; but this loss may be proved and set-off' under the gene- eral issue by the 28th section of 5 Geo. II. ch. 30. The words of the sec- tion are : " That where it shall appear to the commissioners, or the major pait of them, that there hath been mutual credit given by the bankrupt and any other person, at any time before such person became bankrupt, the said commissioners. Sec. shall state the account between them, iuid one debt may be set-off against another, and what shall appear to be due on either side, on the balance of such account, and no more, shall be claimed and paid, on either side respectively." Therefore we see, by this section of the sta- tute, that the assignees could legally claim no more than the balance upon the account between the pailies. In Dickson v. Smith, 6 Term Hep. 57. A. D. 17^4. Lord Kenyon. " It is said that the rule by which we are to proceed in a court of law under the statutes of set-off", is a diff'erent rule from that by which the commissioners proceed under the statute of 5 Geo. II. ch. 30. but it must be rememliered that that act proceeds on the law of the case, and applied the same rule to the conmiissioners of bankrupts — N. B. the practice is to plead or give notice of set-oif upon an action at law in the case of bankruptcy, in the same manner as under the general statutes rela- ting to set-off: and tliis practice seems to be just, and to be attended with nxany advantages. (5A) lirown, executor, v. BuUen, assignee. Doug. 407. A. D. 1780. This was an action for money had and received for the amount of a dividend de- clared by the commissioners to be due to the testator. The del'endants al- leged that there was a balance due from the testator to the i)ankrupl. 'i'lie defendants pleaded the general issue, witli notice of set-off. At the trial, Lord Mansfield would not permit the defendants to avail themselves of the notice of sei-off", saying, that as the conmiissioners have a power of setting-off" nui- tual debts, the sum proved must be taken to be the balance due ; l>iit if it should ha|)pen that only one side of the account appeared before the com- nassioncis, or thataiiy ai title was omitted, on cither side, on ai)plication to [ 58 SET-OFF BY STATUTE PART 11. OF SET-OFF IN BANKRUPTCY BY THE GENERAi, STATUTES OF SET-OFF. THE general statutes of set-off extend to the case of bank- ruptcy. (5c) If the assignees of a bankrupt proceed at law on a contract made by tlie bankrupt after tlie bankruptcy, it seems tliat the defendant may set-off any debt on a contract made on his part after the bankruptcy. (5f/) the Great Seal, the account would be again opened, and referred to the com- missioners, or, in casjs of difficulty, to the Master. Verdict for tiie plain- tiffs, with leave to move for a nonsuit : the Court unanimously agreed that Lord Mansfield's direction was ri'^l.t. (5c) Ryal V. Laridn, B. R. M.'20 Geo. II. 1 Wils. 155. B. N. P. 181. (App. 48.) To an action of indebitatus assumpsit by the assignees of a bank- rupt, the defendant pleaded a stt-ofi'of a greater sum due to liim from the bankrupt before the bankruptcy ; and upon demurrer, it was holdtn that the statute for setting otf mutual debts does not extend to assignees of bank- rupts ; that these can never be considered as mutual debts, for where there are nuitudl debts, there must be mutual remedies. (Ante page 23, where it is expressly required that th.e debt of each party should be due in his own right.) Kidout, assignees, v. Brough, Cowp. 133. T. T. 14 Geo. III. A. D. 1774. Assumpsit for money had and received for the use of the assignees shice the bankruptcy, and the same for the use of the bankrupt before the bankruptcy. Set-off of money due from the bankrupt b-.fore the bankrxiptcy, and also of mo- ney due from the assignees since the bankruptcy. Demurrer. The Court were clearly of opinion thatthe defendant might set-off a debt due to liim from the bankrupt, for the assignees are the bankrupt ; and seemed to impeach the deci- sion in 1 Wils. 155. That the statutes of set off do not extend to assignees under a commission of bankruptcy, as against the general principles of law, justice and good sense. But, on the other grounds, judgment was for the plaintiff. (5cZ) I class these under the gcne-ral statutes of set-off, because the partic- ular statute in the case of bankruptcy expressly requires that the debts should be due before the bankruptcy. Billon v. Hyde, 1 Vez. 326. A. D. 1749. There were dealings between tlie plaintiff and a bankrupt before the bankruptcy ; which continued after a secret act of bankruptcy had been committed. The assignees brought as- sumpsit against the plaintiff, and recovered all sums which l^ad been paid to him by the bankrupt after the bankruptcy. IN THE CASE OF INSOLVENT DEBTORS. 59 PART III. OF SET-OFF IN THE CASE OF INSOLVENT DEBTORS. ^^^HEN there is mutiml credit between an insohent debtor whose property is assigned under the Lords' act, and any other The plaintiff in equity insisted that, notwithstanding that recovery by the strict rule of law, still an allowance ought to be made him for all that was paid by him to the bankrupt v. iti.in the same period of time ; which was not allowed at tiie trial, or by the commissioners. The Chancellor, on the ground that the assignees ought not to have the power of affirming the contracts on one side and disaffirming them on the other, ordered the cause to stand over, and recommended it to the assignees to compound in some manner : to which recommendation they afterwards attended. Smith, assignees, v. Hodson, 4 T. R. 2 1 1 . A. D. 1 79 1 . ( App. 49.) The de- fendant had accepted a bill for 400/. for the accommodation of the b.^nkrupts, which was not due at the time of the bankruptcy. On tiie eve of the bank- ruptcy, the bankrupt sold to the defendant goods to tiie amount of 500/. at six months credit. In an action by the assignees for the price of these goods, the defendant pleaded a set-off of the bill which he had accepted ; and on a case reserved, Lord Kenyon, in delivering the opinion of the Cou'.t, said : "" This is an action on tae contract for tlie goods sold by the bankrujn ; and, although the assignees may either affirm or ilisaffirm the contract of llie bankrupt, yet, if they do affirm it, they must act consistently throughout ; they cannot, as lias often been observed in cases of this kind, blow iiot and cold : and, as the assignees in this case treated this transaction as a contract of sale, it must be pursued through all its consequences, one of wliich is that the party buying may set up the same defence to an action brought !)y the as- signees, whic'.i he might have used against the bankrupt himself, and con- sequently may set-off another debt which was owing from the bankrupt to him. Tlierefbre, on the distinction between trover and assumpsit, we are all of opinion judgment of nonsuit must be entered. N. B. Though, in the foregoing case, the decision may be founded upon the 5 Geo. II. ch. 30. as botii the debts were due before tlie bankruptcy, so as to be set-off under that statute, yet the principle seems to be the same as that laid down in Billon v. Hyde. OO SET-OFF BY STATUTE. person, the assignee must balance the account^ ; and the re: sidue alone passes by the assignment. (5e) (5(') 32 Geo. II. ch. 28. s. 23. And be it further enacted, that in all and every case and cases where mutual credit sliall have been given between any prisoner or prisoners who shall he dischart^ed under this act, and any other person oi- persons, bodies politic or corporate, before the delivery of any schedule or inventory of the estate and effects of such prisoner or prisoners upon oath, as by this act is herein before directed: then, and in every such case, the respective assignee or assignees of such prisoner or prisoners shall have power, and is and are hereby required, on his or their pan or parts, to state and allow an account between them, and nothing more shall be deemed to be vested by any assignment which shall be made in pursuance of this act, as the estate or effects of such prisoner or prisoners, than what shall appear to have been due to him, her, or them respectively, and to be justly coming to him, her, or thenij on or before the balance of such account when truly stated. BOOK II. OF SET-OFF IN EQUITY.(5/) i\ Court of Equity will grant relief in any case where there is an equitable, without a legal, right to set-off. (ojr) If, upon the dissolution of a partnership, there is a surplus after payment of partnership debts : a debtor to the partr.ership, who is a separate creditor of either of the firm against whom a commission of bankruptcy has issued, may set-off the joint debt against the surplus to which the bankrupt is entitled. (5//) (5/) I class the cases in notes (5//) and (5/) under Sct-nffin Equity, be- cause they appear to be decided solely on eiiuiluble principles : for the words mutual credit in the 5 Geo. II. extends to questions at law as well as to ques- tions arising on petition to the Chancellor : and it seems to be clear tluit in these cases there could not be any set-off at law. In Ex parte Ockenden, 1 Atk. 235, ante, page 50, the Lord Chancellor says ; " The clause in the act of 5 Geo. II. relating to mutual credit has been carried, to be sure, fuither, :aul rightfully, tlian a mere matter of account : but I do not know tliat a court of equity has gone further than courts of law in the cases of a set-off." It is, perhaps, scarcely necessary for me to say that I consider tl.is Book as incomplete. (5,§-) Vide James v. Kynnicr, 5 Vez. jun. 108. A. D. 1792. ante p. 3, (App. 5.) and the following notes. (5/0 Lanesborough v. Jones, 1 P. W. 32;). It seems if A. and B. are joint traders, and T. S. owes A. and B. on their joint account 100/. and A. owes the said T. S. 100/. on his separate account : T. S. cannot deduct so iTiuch as A's proportion of the 100/. comes to, out of tlie jf)Int delA ; for that the copartnership debts of ,\. and B. are to be hrsl paid, before any of tlie separate debts : but if there be a surplus, beyond \\lial will pay the part- nership debts, then, out of A's share of the surplus, T. S. may deduct the se- parate debt of A. Ex Parte Quintin, 3 Vez. jun. 2 IK. A. D. 1796. The i)artnerslii|) between Shepheid and Williams, atlorniLS ai.d solii ilors, was (fissohed in November 1794. In January, 1795, a ronnnissionol'bankruplry issued ai^aiiist Shep- herd. ^^'illiams paid all tlie |)arlnersliip debts. Tiie jjetitioncrs were in- debted to the partnership lor business done, Sic. and were separate creditors of Sliepherfl to a greater amo\int, for money received by him as ilieii' agmt. The prayer of the petition was to be permitted to set-olV the Iniiiki upl's share of the deljts due to the partnership, against the debts due separately lr<;m the i)ankrupt to the ])ctiuoners, and to prove the residue of sue li separate debts 62 sET-orr by statute. If there are two commissions of bankruptcy against the same person, the one a joint, the other a separate commission, and there are the same assignees under both commissions, it is said that a debtor under the joint commission may set-off a debt due to him under the separate commission. (5?) under the commission. Williams was contented to receive one fourth of the debt due to the partnership ; which Avas the proportion of the interest. Solicitor General and Mr. Cooke for the petitioii cited what is added by the reporter to Lanesborough V. Jones, 1 P. W. 326. and Mitchell v. Oldfield, 4 Term Rep, 123. Attorney General, contra, cited Ex parte Edwards, 1 Atk. 100, and said the petitioners had no such right to set-off at the time of the bankruptcy ; and the intermediate act of the other partner paying the partnership debts could not put them in a different situation. Lord Chancellor. As at law there can be no doubt ; for the action must be brought in the name of the two, and you cannot set-off the separate deijt of one ; I agree the right is not to be varied by any thing that has been done since the commission ; but the right is manifest, the account being clear. In equity it would be very hard where it appears that all joint debts are paid and that the other partner is satisfied, and there is a surplus in which he is interested in one moiety, and the indebted partner in the other — it would be very hard if, to the extent of that moiety, the creditor of tliat partner cannot set-off ? I make the arrange- ment. The assignees are to stand in the place of Shepherd ; Williams, be- ing contented to receive his fourth, is only nominal : then shall I allow the assignees to take the rest, and not permit the debtor to set-off? I think the equity is a clear and and a strong one. In Ex parte Edwards, there could be no purpose in directing the account, but with a view to allow it. Oi'dered according to the prayer of the petition. (52) Ex parte Edwards, 1 Atk. 100. A. D. 1745. The petitioner, being a creditor under a separate commission against A. and a debtor to a joint commission against A. and B. petitioned that the action brought by the as- signees for the debt he owed to the joint commission m.ight be stayed, and that his demand upon the separate estate might be allowed, as a set-off a- gainst'the debt he owed the joint estate, especially as the same persons are assignees under both commissions. Lord Chancellor. I doubt v/hether the debt could be set-off under the statute relating to mutual debts ; because dif- ferent persons are concerned in one debt and in the other, and in distinct rights : but, as the petitioner's case appears to be a hard one, I v/ill refer it to the commissioners of the bankrupts to sec how much the petitioner ov/ed to the joint estate, and how much was owing to liim from the separate es- tate, and to certify the same to me, and let the action brought by the assig- nees be stayed, and, in the mean time, all further considerations reserved till the commissioners have certified. In Ex parte Quintin, 3 Vez. jun. 248. A. D. 1796, the Lord Chancellor says : In Ex parte EuAvards, there could be no purpose in directing the account, bttt vrith a view to allow it. PRACTICE. IN Practice, when an application is made to set-ofF judg- ments against each other by the party to whom the hirger h,uni is due, the rule is for a stay of proceedings on acknowledging satisfaction for the lesser sum ; but when the lesser sum is due to the party applying, the rule is to have it deducted, and for a stay of proceedings on payment of the balance. (5/r) The notice of set-off is usually written underneath the plea, and deliAcred there\vith to the plaintiff's attornc}^ ; and a copy of the notice should be kept by the defendant's attorney, it being necessary' to prove the delivery of it at the trial. (5/) The plaintiff may demand a particular of the sum which the defendant intends to set-off. (5/t) Bull. N. P. 336. Say costs, 24. Tyd. K.B. 679. Tyd's costs, 66. Mitchell V. Oldficld, 4 T. R. 124. (App. 13.) (51) 1 Cromp. 160. Tvd K. B. 408. APPENDIX. Dobson and Jnoth-er, Assignees of Patrick, against E. Lockharf,K. li, H. T 3S Geo. II J. A. D. 1793. 5 Ytr. Rcji. 133. THIS was an action of assumpsit for goods sold and delivered by the bankrupt against the defendant as a surviving partner ; to which the defendant plead- ed, 1st. The general issue ; 2dly. A set-off on a bond given by tJie bankrupt to the defendiuit, and G. Lockhart, his late partner ; odly. (Another plea, not supported in fact ;) 4tlUy. Tliat on the 11th of October 1788 tlie b:uikrupl and tlie defendant became bound to 5". Nicholson, and two otlier persons, in 900/. conditioned to pay 450/. with lawful interest on demand ; tliat on the 16th May 1789, the bankinipt, one Foster, and tlie defendant, became bound to y. Wakefield and two other persona in lOOu/. conditioned to pay 500/. and interest on the 1st of June 1789 ; that those two bonds were executed by tlie defendant as a surety for tiie bankrupt, and for his debt only ; that before tlie bankruiitcy, ss. on the 2ist of May 1789, the bank- rupt became bound to G. Lockhart and tJie defendant in 1400/. conditioned to pay 700/. on the 13th of February 1790 ; that the last bond was given for the purpose of indemnifying the defendant against the two former, and that the name of G. Loci- hart was used merely as a trustee for the defendant ; that afterwards, and :dter Patrick became a bankrupt, on the 14tii of December 1789, the defendant was obliged to pay Nicholson and Co. 470/. on the first bond, and Wakefield !xn(i Co. 236/. 17^. on tlie second bond ; that those two sums are still due to the defendant, and exceed the money due to the plaintiHs on the promises mentioned in the tleclara- tion, and that tlie defendant would set tliem ott' against the demand of the plaintiffs, h-c. 5thly. (after stating the two first bonds as in the last plea, and that the defen- dant was merely a surety, C-c.) that before tiie bankruptcy of Patrick, to wit, on the 21st of M,iv 1789, it was agreed between tlie defendant and the bankrujjt that, in order to indemnify the defendant against these two bonds, the latter .siioulil hecomfr bound to the former in 1400/ conditioned to pay 700/. witli interest on the 13th of Februaiy 1790, and asafiulhcr iiulemnity, tliat tlie defendant should retain and keep sucii monev, not exceeding the money to be secured by tlie last bond, as should at any time be due from G. L. and the defendant to tiie l)aiikru[)t, in respect of any dealings between lliem in trade, until llie two first bunds should be satisfied, and that the defendant siioiJd, out of the money which should be due fi-om C. L. and himself to the bankrupt, retain and set-ofVso much money, not exceeding the last bond, as he siiould at any time pay oti the two first bonds ; tliat the bankrui)t ac- rordingly executed such bond for 1400/. &.c. that aftir the bankruptcy, in De- cember 1789, the defendant was obliged to |)ay to NithoUon and Co. aiul to Ji'ake- Jield and Co. 2cc. (aa in the last plea ;) that tin- iikjiuv tine from the defendant to tlie bankrupt on the promises in the (hrlaiation was so due ami ouingt«) him I'dp and on account of certain dealings between him and C. L. and the yames upon the signature ofthedee), Ex parte Frescot {c), and Lord Xen tioii's opummin Smith v. Hodson (d) in support of the conclusion, that to sustain a set-off in equity thei-e need not be strictly mutual debts, where there is clear mutual credit, (e) were stopped by the Court. Lord Chancellor. Is there any doubt, that, where there are upon account mutual credits between two parties, though they cannot set-off at law, yet it is the common ground of a bill ? If yanies had brought an action against Alure upon the note supposing no bankruptcy liad taken place, 1 should have stopped that action, while he was debtor upon the bond. When there comes a case of bankruptcy, it is much stronger. Between solvent persons, there might be a ground to say, Indul- gence was given, the credit extended ; and therefore that credit ought to be con- tinued. But the moment a banki-uptcy comes the account is to be settled. They miglit sue Bedford's executors at law : but I should stop the action. Therefore there is a clear mutual credit. The Solicitor General, Mr. Cox, and Mr. Mure for the defendants. — It Is unneces- sary to controvert, that your Lordship would allow an equitable set-off, if there were either mutual debts or mutual credits : but this is a case neither of mutual debts nor mutual credits in equity. This debt was one of those, which by the agreement in 1793 Keighley, took upon himself The plaintiff was from that mo- ment completely released ; though his name remained upon the bond. The debt was wholly transferred. Though the bond was not exchanged, the agreement (a) Ante, vol. 3. 248. (b) 1 CooPs Bank. Laiv, 569 (c) 1 Ati. 231. (d) 4 Term Rep. B. jR.2il. (e) See more authorities coWcciQdl Cook's Ba.'iL Lav), 568. APPENDIX. 7 ie"stende(l to this debt as well as the rest ; and after that agreement your Lordship would nol have permitted yames to be sued. He was therct'orc a mere strai'ger as to th;it bond at tlie time oi' tlie tr:msaction of the note. Then the Mures :.pply for payment, not to yavits, but to •Bccljord and Ktighley. Tlie case first attempted by tlie bill was, that the money was paid in the discharge of the bond. That is now given up ; and it is admitted that another arrant,^enunt took place. The proposi- tion was, that Keighlry, not James, should advance the money; and the (|nestion was, whether KeighU-y should be authorised for that accommodation to use tlie sum which he had deposited for the pvuxhasc of j^amts' share. If that transaction had taken place, and Kcighky had, instead of makinfj the ]iayment, taken a note, all this equity woidd have arisen between him and the Murts ; upon this ground, that upon the consideration that he was liound to pay the bond, he ag^ieed to pay the money. But what was done was not in pursuance of that ; for the plaintiff thoug-ht fit to take up part of that sum from Kdg/ilty's banker. That became liis money ; and he chose to lend it to the Mures for their accommodation. In wliat sense' is the plaintilf indebted to the Mures? Whatever was tlie consideration, that did not make a mutual credit. In French v. Feiui there were direct nnitual credits between two persons tiiemselves. In Ex parte l^tintin all your Lordship did was to get over the point of form. There could not liave been a set-ofl' at law ; but the partner, v. ho would have been entitled to a moiety of the clear surplus, was himself debtor individually to the petitioners. There were clear mutual debts ; and the only difhculty was as to the form of the action at law. But it is not upon anv difliculty of that" kind that we rest, but that after the purchase of yuvics'm- terest there was no mutual debt or credit between yavies and Mure, but only lie- twecn Ktighley U-wd Mure ; m\(\\\\va.\. ycmies did was only for the accommodation of his former partnership, himself not bein,^ liable, or even asked for pa\ ment- They only desired him to permit Keighley to lend so much of tliat money; but he savs, he will iiimself do it. Lord Chancellor. I have not a particle of doubt upon this case; whicli i.s the clearest I ever heard. It mig-ht have been matter of consideration, wliether the bill should be filed by Keighley or James; and I rather think the e(|uity of tlie former the more preg-nant and obvious, f()r with tlie knowledg-e of the Mureshi- lias paid part of the consideration, for \\ hich, he was to make himself liable to the debts, throug'h the medium of James. Giving' up the bond -will put an end to the suit compietelx- ; and I may as w( 11 make the declaration upon tliis bill as any other. At the time of tliis transaction tiie Mures had not accejited Keighley, nor g-iven up that particular bond. The transaction of the change of die jiai tnersliip was not then a completed transaction. Under these circumstanceu Kiighley going- on with the purchase had money applicable to the settlement of that transaction, wiien the business could be finished. The aj/plication was made to James, that he would ag^rec, that money should y;o to the relief of the Mures, creditors of the partnersliip. The mode, in which he does it, is by taking- this note. The ti-;.nsaclion going- on between Keighley and him, I never wuuld let him jn-oceed upf.n that note. The fact is beyond a doubt, that the partnership eflic'cts of Beckford and James have paid this debt to the Mures. The decree must be accoiation of the premises ; but was n(»n-suited in the jjresi-iit cause, the Hil- ary icrm a(>/. 13*. 6r/. (tlie damages recovered by tlie defendants) togetlier with the costs of Uie '..Iter action which had not yet been la\e«l would, when taxed, considerably cx- -.t them, b^'ainie tbi; ;)luliitiM: 10 APPENDIX. bas aiioUic-r deinaiul atjainst Ilcver one of tiu- ilcft'M(iaiitH.(. 1751. 1 Hen. Blacks. 657. A RULE was obtained by Adair, Serj. to sliew cause why the costs ofa non- suit in an action (t trover, brought by Murphy, the present defendant, against one O' Lough/in, should not be set-off against tlie costs of a nonsuit In this cause ; it ajipearcd that the action of trover had been brought for a ship claimed by Miirphv, but which proved to be the joint property of 0'Co«?;or the present plain- tliri and one O'SuHiTan, (who were partners In trade) and of which U" LmighUn was the master. The present action was brought by O'Connor as indorsee of a iii'omissorv note against Murphy as drawer. In which O'Connor was nonsuited : and le now- made this application, upon the gi-oimd, that the action ag-alnst O' Lovvhllr. was defended at the joint e:\pense C)i O'Connor and O' Sullivan, and that O'SuUiran was interested together with O'Connor in the promissory note, on which the present action was brought, Map.suali., Serj. shewed casise ; he said the coiu'ts had In several Instances {d) after the statute of set-off, refused to allow the costs of one action to be set-off against those of another ; and the reason then given was, that It required the assistance of an act of jiarliament to enable the defendant in action to set-off a mutual debt, and that act did not extend to the case of costs. Afterwards, however, by a sort of equitable Interpretation of the statute, the court allowed tlie costs of cross actions to be setagaist each other. But they had never allowed this to be done, whei-e the costs w'cre not mutual debts, and for the recovery of which there were not mutuaJ i-emcdies : for, had they gone beyond that, thev would have extended tliis equitable construction of the statute furtlicr in a case for which it was evidently not intended than in tiu)se cases fi;r which It was expressly made. As G" Sullivan did not join In the action on the promissory note, he ought not now to be permitted to say that he was interested in It merely to en.title himself to thr benefit of a set-off"; and as Murphy had a remedy only against O'Connor for the costs of the present nonsuit, those, costs were a debt due from O'Connor alone, and not jointly from O'Connor and O' Sullivan. Therefore, supposing the costs of the action of trover coidd be taken as a debt due from Murphy to O'Connor and O Sullivan jointly, yet even then the costs of tlie two nonsuits could not be deemed mutual debts. This he said distinguished this case from Nunez v. Modigliani, ante 217, and Schoole v. Noble, ante 23. Besides, Murphy could not bring an action against O'Connor and O' Sullivan \o\vAy for the costs of the present nonsuit, neither could any person but O" Loughlin sue Murphy hv the costs of the former one. Tlie costs therefore of the two nonsuits could not by any means be taken to be mutual debts. The cases of Paynter v. Walien, C. B. East'A. Geo. Ill Bull. N. P. 179. Pyal v. Larkin, 1 Wils. 155, and jRidoutv. Brough, Covcp. 133, shev.- that under the statutes of set-off, where the defendant has an equitable claim on the plaintiff^ however (a) It appeared in an affidavit produced on shewing cause that Hev^er, one of the defendants, was indebted to the iilaiiitlfl" in 67/. on two promissory notes cb-awn by Hevoer, one payable to the plaintifii and the other to Smith and Co. or order, and by them Indorsed to the plaintiff. (6) Ante, 4 vol. 123. (c) Subject to the lien of the plaintiff's attorney ; and it was referred to the Master to see what was the extent of that lien. {d) 2 St. 1203. APPENDIX. 11 cJear and just ; }'et if an action vill not lie for it, at tlie suit of the defendant alone, and //.' his o^cn right, it caiuiot be deemed a mutual debt, and therefore cannot be set-ofl'.(<^) Lord Loughborough stopped Adair, who was proing' to reply, and said, that •without any rcg-ard to 0'5»///t'a«'i interest in the promissory note, O'Connor was equitably entitled to the costs of the nonsuit in the action of trover ag-ainst O'L'jugh'Hn, and therefore he oup,-ht to be permitted to set them oft', as far as they would g'o, against the costs in the present actioii. Rule absolute. Schooley. Mble, Lett, and Byrne. T. T. 28 Geo. III. J. D. 1788. 1 Hen. Blacks. 23. THE plaintifi'broucfht trespass ag^ainstthc defendants for breaking and entering his house, Sec. Defendants Lett and Bynw had suftered judg-ment to go by default, yoble went on to trial, and obtained a verdict. Damages were assessed against Lett wnil Byrne atone halfpenny each. On which, Run.vixgtox, Serj. obtained a rule to shew cause wliy the costs which might be taxed against Lett and Bvrne on the judgment by defudtj and the damages assessed, shf.-uld not be diduet- ed out of tlie' costs taxed to Noble on the postea, and allowed to the plaintifls, and in the mean time execution against th<-m stayed. This was moved on an aftidavit, stating tliat the defendants Lett awA Byrne had acted under the authoritj of Noble, wlio'liad undertaken to pay the damages and costs. Boxn, Serj. against the rule, said that this was a new application, and against iustice, in as much as it tended to deprive the attorney of thai lien on the costs, to which he was legallv intitled. But The coiu-t licld that the attorney could only have such a lien on the costs as wa>; subject to the equitable claims of the parties'in the cause, and therL-fore maile the Rule absolute. Vaughan v. Daxnes. 2 Hen. Blacks. 440. //. T. 35 Geo. III. A. D. 1795. THE plaintiff" recovered a verdict for 200/. against the defendant in an action of trespass for taking his goods, and tlie defendant had previously obtained judgment against the plaintift", on a bond for 2000/. wlu) was surnndered in execu- tion of that judgment. And now on the motion of Bo xd, Serj. a rule was granted lo shew cau.se, why it should not be referred to tlu- ]n-otlionotary to take an account of the damages recovered on the verdict ol)lained by tlie plaintiff, and tax his costs thereon, and whv the defendant should not be discharged frcnn the payment of such damages and costs, wlien so ascertained and taxed, upon his entering satisfaction for the amount thereof on the judgment recovered by him, in i)art discharge of that judgment. 2 Blacks. 826. Thrustout v. Crafter, ante vol. 1. 23. Schoolev. Noble, 217- Nunez V. Modigliani, 657. O'Connor v. Murphy. . .rp «. Ad.\ir Serj. shewed cause, on the part of the attorney for the plaintiff, on .affi- davits, stating that he had no fund to resort to but tlie sum recovered i)y the plaint ift for the pannentof his bill, tlie plaintift'himself being insolvent, tlie set-off therefore ought not' to be allowed, till the attorney's l)ill was satisfied. He said tliat \he: court would protect an attorney w!io ^^'as their officer, wlio would <)tiierwise be without remedy, and tliat in tlie'court of King's Bench tlie etiuilable right of setting; off* the sum recovered in one action against that recovered in another, was always subject to the attorney's lien for iiis bill, for which he cited Mitchell v. OUlfield, 4 Term Rep. B. R. 123. and Morelnmls. Lashley, B. R. Trin. 34 Geo. III. But On this day, after consideration, the court said that the attorney's lien did not extend to prevent the parties in the cause fnun having the bene lit of the set-oil wliich was applied for in this cxse, and theref«»re mudc tiie Rule absolute. BuLi.En, J. mentioned th.at a similar decision had taken i^Iace this term in iho court of Chancery, in a case of Barton v. Etherington. (rt) But sec those ca«os, and qu. whether they support this pniposilion in its fa extent. 12 APPENDIX. Morland and Ilammersley v. JM^kley. Eame v. Lashlcy and Ux. T. T. 54 Geo. III. 2 ilen. Blacks. 441. BOTH tliese ca\ises were tried at the sitting's Tr. 24 Geo. III. TIic first was an action upon the separate bond of" the defendant ; the second upon the joint bond of the defendant and his wife. In tlie first, the plaintiff obtained a verdict, and in the second was nonsuited. In the same lerin, Haidtrson, on the part of the plaintifli obtained a rule to siiew cause why the costs f)f the nonsuit should not be deducted from the sum given by tlie verdict in the first cause. Pahner shewed cause, contending- on tlie authority of 7T//;cAe// v. OUIficld, 4 Term Eep. B. JR. 123, that the attorney for the defendants had a lien on the judgment for his costs. In support of the rule Henderson cited Barker v. Braham, 3 Wlls. 396, and attempted to distinguish the present case fi-oni Mitchell y. O'.df.cld, because there were different attornies in the differerit causes in that case, but here the al- toiTiey was the same in both. But Loi-d Kexvox said that circumstance made no difference between the rases, and as to the case in IViUon, it did not there appear that any application was made on the part of the attorney. That an attorney had a lien on the jud.^ent for his costs, which it would be unjust in the court to take from him. The ride therefore was made absolute, with a reservation of the attorney's lien. But as \>\- costs were equal to the costs of the nonsuit, the rule was afterwards abandoned. (^) Dmnie v. Elliott, Hill, and another. M. T. 35 Ceo. III. 2 Ken. Black';. 587. J. D. 1795. IN this case a rtile was granted to shew cause why execution for tlie damages and costs recovered by the plaint! H^in this cause, amounting- to the sumof 52/. should not be stayed, the defendant HUl undertaking to stay all proceedings on the judg- ment by him obtained in another action brought bv the plaintiff', wherein Hill had his costs taxed at tlie sum of 43/. 19*. 3d. and also undertakin.c;' to pay to tlie plain- tiff or his attorney the sum of 8/. 9d. being the balance due to tlie plaintifl', after setting-off the costs so due to the defendant Hill from the plaintiff, on an affidavit by Hill, that the plaintiff aiD]ieared to be insolvent, that his goods were all distrain- ed for rent, and that he himself was not to he met with. In opposition to the rule, Le Blanc, Serjeant, produced an affidavit of tlie plain- tiff, stating that Hill ha.d told him that Elliot, one of the ether defendants, was to indemnify Hill, as having acted under his orders, and that the plaintiff had ofiered not to takeout execution against /////. The attoi-ney fur tlie plaintiff alio made an affidavit that he had no security for his costs, which the plaintlfll was unable to pav, and which he verily believed he should lose, if the set-off were allov.-cd, as he had no chance of recovering- them, but out of tlie damages and costs to be received un- der the judgment for the plaintiff. Le Blanc also relied on the practice of th.e court of King's Bench, and cited Mitchell \. OUipid, 4 Term Rep. B. R. 123, and Randle v. Fuller, 6 Term Rep. B. R. 456. In support of the rule, B,jnd, serjeant, insisted on tl.e knov.n prrctice in this court, that the attorney's lien for liis costs was subject to tlie equitable claims of the parties In the cause, which he said was settled in the cases of Schoolew Noble, ante vol. 1. 23 ; Nunez v. Modi^licini, 217 ; O'Connor v. 3Iurphy, 657 ; t.nd Vaugltan V. Davies, vol. 2. 4'10. , The court hekl the practice liere to be clearly established by those cases, what- ever might be the rule in the King\- Bench, and therefore tliat it was not now to be disputed. Rule absolute. Hallx. Odij, 2 Pull, and Bos. 20. M. T. 40 Geo. III. A. D. 1799. COCKELL, Serjeant, this day shewed cau.se against a rule nisi, f^r setting-off the costs of an action of ejectment recovered by the present defendant, against {he present plaintiff in the King's Bench, against the costs of an action of trespass Ik (a) See also 6 Term Rep. B. E. 455. Randle v. Fuller. APPENDIX, 15' tbi? court, in which the plaintifT liad recovered ft verdict ; and insisted that in all the cases where a set-ofi" ni'ihis kind liad been allowed, both actions had been in the same court ; as in Thrustoutd. Barnes v. Crofter. 2 Blach. 526. Sc/wole v. Noble and otlieis, 1 Hen. Blach. 23. Nunez v. Modigliani, 1 Hen. Blacks. 217- Vaughan v. Da- vies, 2 Hen. Blacks. 440, and Dennie v. Elliot, 2 Hen. Blacks. 537. But the court ovci'- ruled t!ie objection, saying- that a set-ott'had even Ijeen allowed l)etween costs in a C(>iiit of equity, and costs in a court of law; and Heath, J. observed tliat he re- Hiembered a case, where an ejectment liaxinj^ been broiif;;ht in the Kings Bench, and afterwards a formedon in this court, proceeding's were &ta3-cd in tlic latter until the costs of the former were paid. Cockell, Serjeant, then stated that lie opposed the rule on the part of the ])lain- (ifl's attorney, v%h(i had not been paid his costs, and represented that the plaintiff himself was now in prison. He cited Mitchell v. Oldfcld, 4 Term. Rep. 123, to sJiew tliat the attorney had a lien on the judj^-ment for the amount of his costs. ShepherJ, Serjeant, contra, relied on Dannie v. Elliot ; where it was held, that whatever niiifht be tlie rule in the King's Bench, yet according- to the practice of this court, the lien of the attorney was subject to the equitable claims of the jiai-ties. ioriEi-DON, Chief Justice, finding- it to be the pi-acticeof this court that an at- torney shall not take his costs out of the fund, which by his diligence he has re- covered for his client, where tlie opj-.ositc party is entitled to set-oft', it docs not become me to s.iy more that I find it to be the settled practice with much sur- prise, since it stands in direct contradiction to the practice of every other court, as well as to the principles of justice. In the court of Chancery the same parties are often concerned in many suits ; and 1 nevtr knew the idea entertained of arrang-ing- the fimds, till the respective attornies were paid their costs. However, as the at- torney in this case has acted with a knowledg-e of the settled j)ractice of ;hc court, he can have a rig-ht to claim the advantage of a more just princijjle ; and it will only remain for the court to consider, whether tlte practiee of the coiu-t oi' Kir.g^s Bench should not be adopted here for the future. Heath, J. I have no objection to have tlio practice reconsidered. RooKE, J. There can be no objection to reconsidering the ])raclice ; but it ose(a) ; and he thoug-hl it right that the allorn<-y in this ease should be satisfied for his costs before the defendant was allovv< il to make the set-(j(r. BuLLEB, J.— Thou;,'h tliis court have said that tliry villiv/t iniTfcrc on ihc ( 14 APPENDIX. behalf of the attoriipy, and prevent the plamtiff settling' his own cause without first paying the attorney's bill(o) yet wlie.n the adverse party, against whom a judg- ment has been obtained, applies to get rid of that judgment, the court will take ciu'e that the attorney's bill is satisfied. The court made the rule absolute, on the defendant's undertaking to pay the at- torney's bill, and on his entei'ing a remittitur in the cause in whicli this defendant \\a.s plaintiff. (<-■) Randlev. Fuller, M. T. 36 G. III. A. D. 1795. 6 T. R. 456. A RULE was obtained to shew cause Avhy the master should not, upon taxation of the costs in this cause, set off tlie sum of;"!"/. 3.i-. 6(/. against such costs as should vipon taxation be found due from the defendant to the phiintilf, and if more should be found due to the plaintiff than that sum then wliy u]5on payment of the balance execution should not be stayed. This was founded upon an aftidavit stating that tlie above-mentioned sum was due from tlie plaintiii' to the defendant upon a judgment in a former action; and that the plaintiff had already received part of his debt under an execution. Shepherd shewed cause upon an afiidavlt of the plaintiff's attornej-, claimingallen upon the costs and damages recovered in the present action, and requiring to have such lien, which amounted to more than the sum demanded by the defendant, to be set-off, satisfied in the first instance ; and stating furtlier that the plaintiff' had ab- sconded, and that the attorney had no other securitj^ for his bill than the costs and damages recovered. He contended that the practice of tlie coui-t permitting a set- off in such cases as the present was never enforced adversely to tlie attorney's lien if insisted upon by him; and that injustice it ought not to be extended furtlier, as the attorney wlio had been at the trouble and expense of prosecuting a suit ought not to be in a worse situation because his client was liable to otlier demands on other accounts than those inchidcd in the suit prosecuted by such attorney. And he referred to Mitchell v. Oldfield{a) Vaughnn in support of the rule said that the principle had been laid down in the court of Common Pleas to be that the attorney had only a lien subject to the equi- table claim against his client ; if therefore the jjlaintifl'hcre could only conscientiously recover the balance as between him and the defendant wlio had a cross claim upon him, tlie attorney ought not to stand in a better situation than his principal, and still less ought he to prejudice the rights of the defendant as against the plaintiff in the cause. And he cited Thrustoiu d. Barnes v. Crafter{b) Schoole v. Noble{c) and Nunez y. Mfjligliani^d) as shewing the practice in tlie Common Pleas ; and Welch V. Ifole(e) where tliis court refused to obllg'e the defendant to pay the attorney's demand, the defendant having compromised his debt with the plaintiff" without the attorney's knowledge. (/" ) The court desired the matter to stand over for fm'ther inquiry ; and on this day, Lord Kenvon, Ch. J. said — It had been expressly determined in Mitchell v. Oldjield that the atto!-ney had a general lien on the costs and damages recovered, without any such restriction as was now attempted to be put upon it ; and that upon the reason and justice of the case he could find no ground to impose such a restric- tion. That whatever might be the practice in tlie coiu'tof Common Pleas, he was glad to find that his opinion was warranted by the settled practice of this court. (^) Rule discharged. Sa/isford v. Fletcher, H. T. 32 Geo. III. J. D. 1792, 4 T. ie. 511. REPLEVIN for taking goods in the plaintiff's dwelling house. Avowry for 50/. rent due at Christmas 1790 from Brookes to Fleicher''s testators for this house , another avowry for the same rent due at the same time from the phiintiff to the defendant's testator. Pleas in bar, first, as to 20/. (parcel of the 50/.) nothing " (/>) Vid. Welch V. Hole, Dougl. 226, and Griffin v. Eyles, Hen. Blach. Pep. C. B. 122- (c) See Scad v. Di/ppcr, post, 6 vol. 361, and Randle v. Fuller, post, 6 vol. 456. (fl) Ante, 4 vol. 123. (e) Dougl. 238. 3d. edition. lb) 2 Black. Sep. 826. (/) Vide Sead v. Dupper, ante, 361. (c) 1 Hen. Black. Rep. 23. (^) Morland v. Rashleigh, Tr. 35 G. 3- {d) lb. 217. B. R. S. P. in an-ear ; 2clly. As to 30/. tlie residue, a tender and no subsequent demand ; Sdly, " Tliat WiUiam Fietchtr (deceased) in his life -time and at the time ( f liis death, " and tlie said William Fletcher (the defendant) from tiie time of his deatli until " and at the same time when, &c. held the said dwelling- house in which, &c. *' with the appiu'teniuices as tenants thereof to the Duke o\' Portland, at and under *• the vearlv rent of 5/. of lawful money o'( Great Britain to be paid at the four most " usual feasts or days of payment of rent in tlte \ear, that is to say, Sec. by even '• and equal portions. And th.at l^efore the s.'iid time \\ hen, &.c. 2t)/. of tlie said " last mentioricd rent for four years, endinp^ at the feast of the Nativity of om- Lord ** Christ 1790, became due and. in arrear from the said William Fletcher (the do- " fendant) to the said Duke. And thereupon the said Duke, at the said feast of, ** Sic. demanded payment ef the arrears of the said rent from the said W. Fletcher, " (the defendant) but the said W. Fletcher then and tliei e refused to pay the same ; " whereupon the said Duke afterwiu-ds, and bef re the said time when, &c. de- " mandcd the payment of tl\e said arrears of rent ii-om the said ir. Brookes, a.s the " occupier of the said dwcllin;^ house, and threatened to distrain ujxjn the jjoods " and chattels in ajid upon the said dwelling- house and premises ; whereupon the " said W. Broohes, in order to prevent the said i;-oods and chattels in and ujion iho " said dwellinp* house and premises from being' i])port of the demurrer, urged, that the ]ika in bar was no answer to the avowrv, for thoug-h it was not pleaded in form as a set-oft, it was so in ef- fect; and it has been held tlnitthc statutes of .set-oil' do not extend to a replevin. Absolovi v. Knight.{a) Neitiier can the payment of a debt of the avowant be con- sidered as payment of rent, so as to prove the plea that notliing is in arrear. The plaintitf, having- stated the special grounds from wliieli he draws the conclusion that nothing is in arrear, cannot be jK-rmitted to r( sf)rt to other gnninds to su])port it. Now the circumstances here pleaded at the most only amomit to this, that the avow- ant has contr.acted a debt with him ; for the relation in which be stands to the plain- tiff cannot vary the case. It does not appear that the avowant had anv notice that the plaintiff' had paid the ground-rent; and no person can be allowed to charge another with a debt against his consent, or without his knowledj^^e. This there- f)rc cannot be considered as a payment for the avowant, because the pla'mliif was not authorised In make it. But even if it Iiad bef-n paid witli tiie avowant's ediiseiit, and he had afterwards rei);iid the ])laintiff, the former might have avowed for tiic whole rent in arrear; and \v\ if it could have been considered as part jiayment ol" the rent bv tlie tenant at first, the dc fendant could not afterw ards have avowed for that part of the rent ; and it is not alleged in the i)lea that the defendant has not re- paid him. In all the land-tax acts a special provision is made to enable the tenant to deduct the land-tax which is a charge \\\wn the land, out of the rent to be |)aitl to the landlord : tiiis furnishes a strong argument tosliewthat in the eontemi)lali()n of the legislature paying the land-tax by the tenant would not have been consider- ed as i>arl payment of tile rent to the lessor, othcrwi.sc it would have been iniga- tory to have inserted this clause in those acts. Lord Kii.NVOv, Ch. J. — It is incumbent on a party, who wi.shcs to establish a point contr:irv to all justice and e(|uity, to produce some direct airthorlty, shewing that there is an inflexible rule of law established in opposition tc justice : but nu huch authority has iieen ])roduced by the defendant to support hit claim. Tlif ge- neral principles that have been relfed on in the argument, tiiat .1 set-olfcunnot be pleaded to an avowry for rent, and that no person can make another his tU-btor by vohmtarilv paving the debt of that other ])erson against his con<>nt, are not jpus- lioiK (1. With regard to the first, it is nuKJi to be i.-imenled that it siiouhl have bc-en ao decided ; however, for the sake of certainty in the law, we must sui)mit ti> {a) Barnes 450. 4to edition, and BmII. N. P IHl. Grahaiv V. Fraine, II 24 C ? B H. and Laycock y. 'ftiffnd, F.. 27 G 2. li. R. S 1' iO APPENDIX. those (Iccislons, till tie leg'islaturc alter the law. But this is not across demand ■ the ground-i-fnt paid by tlie plaintiff' was in dischai-s>-e of a demand superior to the improved rent ; it wfi.s the tir.st charg'e from v.'liicli tlie defendant was to exonerate himself before he piijt any of t!ie rent due from the plaintiti' into his own jjocket Tills was a payment in respect of the occupation. And to the other position I i)er - fectly subscribe ; Ijiit it cannot i^'overu this case. Here tlie plaintiti was sub-teuant to an estate of the defendant's iield under tlie Duke oi Portland ; the i^round-rent being- in arrcar, the Duke of PurtlaiKPs ag-ents ap-plied to the plaintiti fcr j;; yrnent, which they had it in their power toenforce by distress ; and they even th; eater.ed to do so ; it was therefore hy coinpulsion that the plaintiti' paid this mor.ey, wliicl) w;is due in repect of the very property whicli he held as tenant to the defendant, -..nd of the same property for whicli this distress was made. This then is clearly dis- tinpfuishable from the case of a voluntary payvicnt made to charg^e another person with a debt ag-ainst his consent. And now the defendant ins.sts that, thouc,h .dl this property was liable to tlie i^-round-rent, and thoug-h this was the first chaig-e (,a the land, he is to i-eceive the whole of the reserved rent from the plaintilt, without making any deduction from the grotmd-rent. But a more unconscientious prcj;o- sition Wiis never stated in a coiU't of justice. BuLLER, J. («) — There is a g-rciit diilerence between a payment and a set-ofi'; the former may be pleaded to an avovvry, thoug-h tiie latter cannot. That is a good pavment wliich is paid as part of the rent itself in respectof the kind : but a set-oft' supposes a different demand, arising- in a diHl-rcnt right. A case put at the bar ad- mits of a decisive answer : it was said that if the tenant had paid the g-round-rcnt, and the defendant had afterwards repaid him, the latter could not avow for the •whole rent; but, whether the payment of a sum of money is to be considered as a payment by one person for the debt of another must depend on the will and consent «f both pai'ties ; and if it be once considered by both as payment, tlie debt cannot afterwards be revived. And my answer to the case supposed is this, that the pay- ment there never was considered by both as a payment ; and, if not, the whole rent remains due. I consider this case as a lease by tlie defendant to tliC plaintitt'at tiie annual rent of 50/. out of which 51. per anr.iim vvas to be paid to the g-ronnd-Iai id- lord ; and therefore apayment of that g-round-rcnt is a payment of so much rent to the defend-mt, an.d may be pleaded in answer to the avowry for rent. Neither can wa suppose upon this record that the defendant ever repaid the plaintiff this ground-rent ; for, if lie had, he mi,£^ht have replied that fact. Grose, J. — The principles relied on by the defendant's counsel are not disputed, but they are not applicable to this case .It must be admitted that a plaintiti' cannot olead a set-ofl" to an avowry for rent, and that one person caiinot make another his debtor by a voluntary ]myment. But tliis is neither the one nor the other. It is a compulsory payment made by the plaintiff to ]jrotect him from a distress for tlie g-round-rent due to the original landlord. Judg-mcnt fir the plaintiff. Ord V. Rus/iim, T. T. 'Z7 Geo. III. 2 Es/i. Cas. 569. A SSUMPSIT on a bill of exchange accepted by the defendant, which was due uTX. some time in the year 1784. Pleas. Non-assumpsit, Statute of Limitations, and a Set-off. rhe set-oif consisted of bills of exchange and promissory notes of the plaintiff's, wliich the defendant had taken up or paid on his account ; they were all dated in the year 1784. tWo objections were made to the set-off. — First. Thatinorder to entitle tlie de- fendant to go into evidence respecting those bills and notes, they ought to liave been made the special objects of a set-off. Loi'd Kenyon overruled the objection, and held, that they were good evidence under the count for money paid to the plai-atifi"'s use. The second objection was, that though the idaintiff's demand against the de- fendant had accr'.icd so far back as the year 1784, yet in fact he had kept it alive by having sued out process within the six years, and continued it ; but that as the defendant had not done so, his demand against the plaintiff must be held to be ban-ed by the statute ; and so not such as could demand a set-off. (a) Abs. Ashhurst, J. APPENDIX. 17 Lord Ken'yon- said, that as the transactions heUvcen tho plaintiff and the defen- dant W" re all of the same date, and as the bills seemed to have been «;ivcn In the course of those transactions, and for their mutual aeconiniodation, it woukl be the hic'iK-'St iiijiistiee to alknv one to have an operation \>y law and not the other, and that he would therefore hold the latter to bo c^ood as well as the former, and sutler tliemio be sot-oft'. Ti'.e defendant proved the payment of the bills and notes as a set-ofT, and had a verdict. JDunmorew Taylor^ H. T. ?A Geo. III. Pcakc 41. ASSUMPSIT for pj-oods sold and delivered. Set-off for goods sold and deli- vered, and also for goods hargair.ed and sold. Oil tlie cross examination of the plaintiff's witness it appeared that the defendant had made a wagp;-on for the plaintiff, but had refused to deliver it unh-ss the plain- tiff v.'ould get some person to join him in giving a security for the balance which the delivery of the waggon would make in his favour. The plaintiff was then in- solvent. It was objected that this contract, being only executory, could not be made the subject of a Ket-oif. BiLLER, J. tlicught it could be set-off as goods bargained and sold. When the cause had proceeil'^d further, it appeared that ii was afterwards agreed that the phiintHirtliould noi iiiive the waggon, but that the defendant should keep it. Upon v.-iilch tlic plaiutifrhad a verdict. Ncjtc. After liic cause was over Mr. J. Bulhr said th.ithc thought an indebitatus ajium/isit would lie in this case, but that there was some nicety in the question. Freeman v, Hyatt, M. T. Geo. III. K. D. 1 Blacks. 39 i. ACTION for money due for a parcel of cloth. Dunning moved to stay the trial of tlie cause, in order to send a commission into Portugal, to establi.'sh a fact by way of set-olf; viz. That in a former parcel of cloths, sent to Portugal, .iiul bought of the same plaintitt", it appeared on opening the bale, that they were burnt in the pressing, wliich had greatly lowered tlieir value. Nortony Solicitor-General, objected, that the set-ofl' was not maintainable. You migiit as well set-off the damages which you are entitled to recover for a lj.attery. You should bring your special action on the case : And of that opinion was the court, and denied the motion. ILivlet and Jnothcr V. Utrickland^ E. T. 14 Geo. III. A. D. 1774. B. R. CoTJji. 56. THIS was .in action of covcnnnt. The defendant pleaded th.nt he had sustained gi-e ate r damages by reason of the breaches conunitted on the part of the plain- tiff, th.an tlie value of the damages sustained by the ])laintift' on accoimt of the bieacFies alleget! in the declaration : all the breaches assigned in the plea were for uon-delivcry of alium in due time. The plaintifidenuuTed, and for special cause assigned, that it was i.ot eomi)Ctent to the defendant to pU ad these damages by way '.r.vt-off. Mr. Chamiri- for the phiintiff. The covenant is not for money, therefore the Mi.niages cannot be set-ofl", either by stat. 2 C. 2. c. 22. or 8 G. 2. c. 24. For they are not d'bts, nor rccovcruLle as sucti. A tender is (*nly pleadable to an action of contract for monf-v. Ill no part of tli'c plea is it alleged, that these are mutual debts. Rut further '\\\ this case, the dam.ages to be recovered ujmn the covenant are totally imrerlain ; the measure of them depemling upon the discretion of the jury. It is im()ossible iherc- fore for the p.iiiie.s to aflix .any prt cise balance ; cons<(juently the act of iiarlianuiit (.annot extend to them. If the constnu tion which is contend<) a.'5 decisive of the present ; which Wood, contra, admitted. Per Curiam. It is perfectly clear that the debt due from tiie plaintiff as sur- viving partner may be set-ofl' against tlie denwuid he has in Ids own right on the defendant. Judgment for the defendant. Fletcher v. Dijche, T. T. 27 Geo. III. A. D. 1787. 2 T. R. .>3. ASSUMPSIT for work and labour, for goods sold and delivered, money paid, &c. Pleas, non assumpsit ,- 2dly. Set-ofl" for money paid, and had and reeeiv-^ ed ; 3dly. A plea of set-off as follows : That heretofore, lo wit, on the 27th day of Jime 1785, tu wit, at, &c. the plaintiff by a certain writing obligatory sealed, &.c. became held and firmly bound to the defendant in the sum of 236/. to be paid la the defendant, when he the plaintiff should be thereto afterwards requested, with and under a certain condition thereto subscribed and underwritten, reciting that the defendant had contracted and agreed with the committee chosen for the order- ing, appointirg,.'inddirectingof tlierepairsof the parish churchof St. Mary-lc-Bosv, London, for repairing of the said parish churcli, according lo a certain particular or plan thereof given ; and reciting, that one 'Jolui Bowiey, therein called the abo\t- bounden yo/in Do^ccky, but whc) never executed tlie said writing obligatory, aiul the plaintiff', iiad contracted and agreed with the defendant, that they would do, per- form, and execute, all the smith's and ironmonger's work, to be done and perform- ed in and about the repairs of the said parish church, and which were mentionei! and expressed in the said particular plan, or estimate, and in the manner llieicin directed to be done, and find and providv: all tiie materials for the doing thereof within tiic time or space of six weeks from the day of the date of the said willnig obligatoiy, at and for the price or sum of 118/. I8.1. whith was agreed to be ])ai>l in three months after the said p.'j-ish chureii should be completely repaired ; auil had agreed that if they should iiot have done and performed tiie said smith's and ironmonger's work within tlie time therein before mentior.ed to have been agreed upon and limited for the doingtiiereof, they would Ibrfeit and pay to the defentlant the sum of 10/. for every week after tlie expiration of tlie time agreed upon and limited f jr the doing thereof, until the said smith's and iionmonger's \\ork sliouh! be completeK finished ; the condition iheiofore ofthe said writing obligatory was, that they the'said yohii D'yjjU'y mu\ the plaintlH should within the time or space of six weeks [lerform in a good and workmanlike manner, according to the said jil.ui, all the smith's and ironinonger's work, Sic. an 22 APPENDIX. defendant in factsaith, that the said yohn Dowley and the plaintlflFdid not, nor did either of them, within the said time or space of six weeks from the day of the date of the said writing oblig^atory, do, perform, or execute, or cause, &c. all the smith's and ironmonger's woi-k, 8tc. but neglected and omitted so to do, and therein failed and made default, and on the contrary thereof suli'ered and permitted the said smith's and ironmonger's work to be and remain unfinished for the space of four weeks next after the expiration of the time agreed upon and limited for the doing thereof as aforesaid ; whereby, and by force of the said writing obligatory, and condition, the plaintiff became liable to pay to the defendant the sum of 40/. being at and after the rate of 10/. for each aiid every week of the said four weeks, after the expiration of the time so agreed upon and limited for the doing of the said smith's and ironmonger's work, during which the same so remained unfinished as aforesaid ; and the said sum of 40/. and every part thereof at the time of the com- mencement of this suit was and still is really and justly due and owing from the plaintiff to the defendant upon and by virtue of the said writing obligatory, and the condition thereof; and which said sum of 40/. so due and owing from the plaintiff to the defendant exceeds the damages sustained by the plaintiff, by reason of the not perfoi-mlng of the said several promises and undertakings in the said declara- tion mentioned, and out of which said sum of 40/. he the defendant Is ready and vriUlng and hereby offers to set-off and allow the amount of the damages sustained by the plaintiff, according to the form of the statute. Sic. and this the defendant is ready to verify, wherefore, &c. To this third plea there was a general demurrer, and joinder in demuiTer. Law, In support of the demurrer, contended that the third ])lea setting off the four penalties, at the rate of 10/. for four weeks after the expiration of the time limited for doing the smith's and Ironmongers's work, could not be supported. First, because it attempts to set-off a penalty instead of the money justly due. If this set-off can be allowed at all, it must be under the 8 Geo. 2. c. 24. s. 5. But that statvite does not extend to this case ; for that only allows the debt really and justly due to be set-off. So that a penalty cannot be set-off at all ; now this is strictly a penalty ; the words creating the penalty are " that the plaintiff shall forfeit and pay 10/. weekly, &c. And it cannot be considered as a mere compensation to the defendant for non-performance of the work within the time limited ; for it does not appear that the defendant was himself under any limitation in point of time as to the performance of his contract with the commissioners. It Is likewise excessive, because it bears no proportion to the whole sum to be paid for the work done. And there are no other limits to the penalty than the penalty of the bond itself If it be contended by the defendant's counsel, that this Is In the nature of a liquidated sa- tisfaction. It is to be observed that this Is not like any of those cases which have been determined on that ground. In the case of Rolfo v. Peterson(a) where the lessee covenanted to pay an Increased rent for ploughing up meadow ground, it was considered not as a penalty, but as a liquidated satisfaction : for it was only an agreement to p.ay a larger sum for using the land in a particular way. But the pre- sent case is that "of a strict penalty. In consequence of not performing an agreement, for which there does not appear to be any equivalent to the party. There are se- veral cases where penalties have been considered in the nature of liquidated dama- ges, but those are cases where the penalties have barely exceeded the sums really due, and they have been allowed to save the parties expense. Such was the case of Tall V. Ryland, 1 Ch. Cas 183. In Ntdriffe v. Hogan,{b) it was _ determined that a penalty cannot be set-off. If an action had been brought on this bond, it would Lave been competent to the jury to have given less damages than the amount of these penalties. 2 Rol. Abr. 703.pl. 9.(c) Before the statute 8 and 9 W. 3. the jury might have given less damages than the penalty. 1 iew. 111. And since the statute they ought to give the damages really sustained by the non-performance of the work. Here the party might be put In as good a plight as if the condi- tion of the b^nd had been performed : tills rule was laid down by 'Lord Somers,{d) that in such case a court of equity would i-elleve ; therefore the defendant should have averred that the damages' really incurred by the non-performance of the agreement amoiuited to the sum wliich he intended to set-off. This is not (a) 6 Bro. Pari. Cas. 470. (/>) 2 Burr. 1024. (c) Vide 4 Burr. 2229. 2231. {d) Free, in Chan. 487. APPENDIX. 23 like Uxe case of demurrag'e, which is a stipulated rate of hire, and not a forfeiture; for there tlie owner of the ship loses the use of her during the whole time she is detained, and the other party has the use of her the whole time. But secondly- This cannot be set-oft', because there is no strict mutuality. It sets off money, which, by the condition of the bond, was to become due from the plain- tiff and another, and not from the plaintift" iJone, by virtue of an antecedent agi-ee- ment between the three. Andtliough this bond was only executed by the plaintiff yet the defendant is estopped from saying that this debt is not due from tlic plain- tiff and another ; he cannot dispute their joint liability. Besides, the breuch as- signed is not wai-ranted by the condition. The bond is conditioned for the per- formance of certain work in a limited time by two, or payment by two oi'lOi.per week. The bi-each should have been assigned, that the two had neither done the work, nor paid the money, whereby the penalty became forfeited. AVhereas it is assigned, that the two had not done the work, 8ic. whereby the one became liable to pay tlie 10/. per week : but no such liability was created by tlie bond itself. The other side was stopped by the court. AsHHLRST, J. The sums set-off are in the nature of liquidated damages, and are such a kind of penalty, if tlicy may be called by that name, as a court of eqiuty would not relieve against. The object of thepai-ties in naming this ^\e^■kly sum was to prevent any altercation with respect to the quantum of damages which the defendant might sustain by reason of the non-performance of the contract. It would have been difhcuit for the jury to have ascertained what damages the defen- dant had really suffered by tlie breach of the agreement ; and tlicreforc it was pro- per for the contracting parties to ascertain it by their agreement. So that this is a case of stipulated damages, and it is not to be considered as a penalty. If so, and the parties have entered into a joint and several bond, it becomes the separate debt of botli, and therefore may be set-oft' against either. Then it has been ob- jected, tliat there is no mtituality in the debts ; because, first, it is a joint debt ; and secondly that the plaintift' should have a compensation from the otlier party. As to the first, it is sufficient to say, that tills is a separate as well as !X joint debt, and therefore maybe set-off". And as to the other ground of objection, it is not necessary to determine that question in tiiis case ; but if it were, I think he might have compensation in another form, by bringing an action for money paid, laid out, and expended to his use. But that is not material as between these parties. BuLLEti, J. The principal question to be considered is, whether this is in the nature of liquidated damages of a penalty. When there is a penalty in tlie bond, it is strange tliat tlie sum mentioned in the condition could be called a penalty. I do not know how there can be an equitable and a legal penalt)-. But this is as strongly a cxse of liquidated damages as can possibly exist, and is like the case of demurrage. In cither case it is impossible to ascertain precisely what damage* the party has really sustained ; andtheref)rc the contracting parties agree to pay a stipulated sum. Then it was contended that tlie defendant might have recovered less damages tlian the amount of this stipulated sum before a jury ; but tliat is not so. In tlic case of Lowe v. Feers,(a) where a stipulated sum was claimed for breach of a marriage contract, hovd Mans/ie/d sii'u\, " wliere tlic precise sum i.s " fixed and agreed upon between the parties, that very sum is the ascertained da- " mage, and the jury arc ronfined to it." As to the case in 1 Lev. that was de- termined on the ground of its being a catciiing bargain. Tlie plaintift 's counsel then objected to this set-off because there was no mutuality ; buttliat depemls on the question, whetlierthe debt is due from the [ilainliftand anotlier person, or from the plaintift' alone. If the former, the debt cannot be set-oft'; I)ut it appears tli»t the bond w.hs executed by tlic plaintiff alone. No debt can arise upon the b(md from tlie otlier party who did not execute. The plaintiff" tlicreforc alone can be sued upon the bond ; .so that there is a mutuality. Grose, J. was of the same opinion. But the court afterwards gave the plaintiff leave to amend on paj-ment of cost's. (a) 4 flurr. 322.x 24 Ari'ENDIX. Vullcr and Others, Astsignecfi, is'c. nf Forben and Gr'egorij, BankrujUs^ \ , Roe and Others^ M. 7". *34 Geo. III. Peake 197. ASSUMPSIT on .i pvomlssorv note for 9800/. dated March 8, 1793, payable to Charles Cald-ivelt, Esij. and Company, or order, and by them indorsed to the bankrupts under the firm of " Messrs. B. Burton, Forbes and Gregory." The defendants pleaded the g-eneral issue, and g-ave notice of sct-of}'. Bart/iolonievj Burton, and the bankrupt i-6;-A«, carried on the business of g'cncral merchants in London, from the jear 1762 to 1769, and on the Slstof Januaiv 1769 tlie bankrtipt Gregory was admitted a partner in the liouse. Burton died "on the LTth of April 1770, but the business was still carried on under the old firm of " Burton, Forbes :uid Gregory." On the 21st of May 1774, Forbes and Gregory became partners with Charles Cald- -wcU and Thomas Smith, in a banking'-housc at Liverpool, under the firm of Charles Caldwell & Co. aud that partnership continued to the time of their respective bank- niptcies, which haj)])ened in the montli of March 1793, viz. that of Forbes and Gr^ory on the 16th, and that of Caldwell & Co. on the 18th of that month. The two houses of Forbes and Gregory and Caldxvell &. Co. were distinct and sepa- rate houses ; Caldnaell and Smith having- no concei-n in the business carried on by Forbes ajid Gregory in London, thoug-h the latter were partners in, and equally cf)ncerned with Caldme/l and Smith in the banking- business carried on at Liver- pool, vmder tlie firm of " Charles CaLkcell & Co." Cahhvell and Smith were also in partnership with the defendants under the firm oC i?f/f & Co. wliich company kept a banking- accoimt with the house of Caldwell & Co. at Liverpool ; and tliat house being in advance for the defendants, thej', on the 8th of March 1793, made and sig-ned the note on which the action was brought ; and the house of Caldwell & Co. at Livei-po.ol, being indebted to Forbes and Gregory 'to a large amount, indorsed tlie note to them. This note was given for the balance then supposed to be due from tlie defendants to Caldwell &. Co. but it was afterwards discovered that a sum of 3859/. 1;. with which the defendants were debited for simdr)- bills supposed to ha^'e been drawn by Major (Ca/r/we// &. Ca.'o- agent at Trui'o) was improperly charged; such bills never having been in f;ict di-awn. Bower, for the defendants, contended that Forbes and Gregory being partners in the hou'te of Caldwell & Co. must take this note, charged witli ever}- incumbrance whicli it would be liable to in the hands of Caldwell & Co. and therefore that the d'^fendants had a right to deduct the abovementioned sum of 3859/. Is. and to set- off not only the sum of 680/. 8s. lOd. due to t]\em from Forbes and Gregory as the a-ccptors of several bills di-awn by Caldwell & Co. on them ; but also the sum of 260/. I8y. 3/. due to the defendants from Caldwell &. Co. on several bills drawn by Cald- well & Co. on Forbes and Gregory, which were itot accepted by them. Some of these bills had been drawn b}- Caldwell &. Co. for checks drawn upon them by the defen- dants as their bankers ; and the bills not being ])aid when they became due, in con- sequence of the failure of Caldwell & Co- and Forbes and Gregory, the defendants ■were obliged to take them up, and had paid to the severaliiolders of them the full A'alue thereof. The others were either payable to the defendants, or indorsed to them by the respective payees. Ersk I NE, for the plaintiffs, contended that Forbes ^vidi Gregory being a distinct a-id separate house, and creditors of Caldwell &. Co. to an amount much beyond that for which this note was given, were not liable to pay the before mentioned sum of 3859/. \s. or the bills which they had ;«3f accepted. For payment of those sums the defendants must look to the estate of Caldwell & Co. who were their debtors. Lord K.EXY0N. This note was given to Caldwell 8c Co. as a banking house, and constitutes an article in the accounts between the defendants and them. They cannot as between themselves raise a distinct account, though they might indorse to a third person. Tlie affairs of the company are in ]jresum])tion of law known to all the partners, and all are equally liable. Tlie defendants send this bill to Caldwell & Co. to cancel part of the debt due to them : Can they, by an act between them- selves, divert tliis money to anotlier purpose, and leave the whole of the defen- d.ant's debt outstanding ? Tne plaintiffs, therefore, had a verdict for the balance due to them, after de- ducting the several before mentioned sums of money, and also the sura of 1024/. APPENDIX. 25 ■which it %vn3 admitted that Forbes and Gregory had received of the defendants pre- vious to their bankruptcy, iu the follovvini^ term a motion was made for a new trial, but the court refused to grant a rule to shew cause. Grove and Another., Assignees of LiotarrU a Bankrufit., v. Dubois., H. T. ,26 Geo. III. A. D. 1796. I T. R. 112. THIS was an action for money had and received by the defendant to and for the use of the bankrupt, before lie bceame a bankrupt; and for money had and received t) and for the use of tl\e jjlaintifls, as assig;nees ; to which the de- fendant pleaded the general issue, non assumpsit; whereupon issue was jt)incd. The defendant also gave a notice of set-oii' for money had and received by the as- sigTiees for his use. The case came on to be tried at the sittings after Michaelmas Term 1785, be- fore Lord Mr.nsfield, at Guildhall, when tlie Jury found a verdict for lliC )>huntifls, damages 375/. 16*. and costs \s. subject to the opinion of this eourt on the follow- ing case. " Tliat the bankrupt, John Liotard, being an underwriter, siibscribed policies ** nlled up with the defendant's name for lii:? foreigi\ correspondents, who were ** unknown to the b.inkruj)!. "That losses happened on the policies before the bankruptcy of Liotard ; that ** the dc-tendant paid the amount of the losses to his foreign correspondents afier " such bankruptcy. " That the defendant had a commission del credere from his corres]xmdents ; " was made debtor by the bankrupt for premiums ; and always retained the poii- "cles in his hands. "Tlic question for the opinion of the court is. Whether, under the notice of *' set-ofl', or under any of the statutes respecting bankrupts, the defendant be "entitled to sot-off'this account with Liotard ? " If the Court shall be of opinion thattlie defendant Is entitled to set-off, then a " verdict to be entered for tlic defcniU.nt." S. Hayivood, for the plaiatin's, relied upon the 28th section of the 5 Geo. 2.c 50. which requires mutuai credit to be gi\ en, in order to enable tlie defendant to set-oil s which was not the case here ; for the credit was not given to tlie broker, but to the principal ; like tlie common case of insurance brokers, who were nothing more tlian mere agents, and were alw.ays so considered. Tlie case of TVHson and ulliers, assig- nees of Fletcher v. Creighton and another(rt) is in point. That was an action for monev had and received, &c. to and for tlie use of the bankrupt, and to and for the use of the assignees, ami on :m account .stated. Tlie defendant pl.:aded the general issue, non assumpsit, and gave notice of set-off; Tliatthe plaintHiii were m- debtcd to the defendant in 3000/ for losses upon several policies of assurance under- ■writlcn bv tlic bankrupt, and which losses happened before the bankrujitcy. It w :i.s tried before Lord Mansfield at Guildliall, at the sittings after Easter 1 erm, 1782, when the jm-v found a verdict f( r the plaintHfs, subject to the opinion of the court on the following case: "Thattlie defendants had considerable .v «''t' ="*•*'»>- nees for the recovery of the premiums debited to the defendants by th.- bankrupt. The only difference between that case and the present was the circuinxtaiicc ol the defendant's having a commission del credere from his comspont a conttn, (a) Trin. 22 Geo. 3. // // 1> 26 APPENBIX. gency, which contingency is the faikire of the underwriter; and therefore it is only to be considered as a collateral security, which vested no such interest in the policy, as tlie broker could have proved under the commission at the time of issuing it ; much lest did it vest any interest in him at the time of making tlie policy. Ex parte Adney. Coivfi. The broker could not have brought an action in his own name upon such a po- licy, without averring the interest to be in the principal, («) by which it would have appeared that no credit had been given to him, and consequently that he did not come witliin the meaning of the 5 Geo. 2. c. 30. s. 28. If therefore he could not have brought an action in his own right, and had not such an interest in the policy as would have enabled him to have proved his debt under the commission at the time of its issuing, it is absurd to say that he could set it off to a clear demand whlcli accrued before tlic bankruptcy. Chilton v. JViffin and another, 3 Wils. 13. Goddard v. Vanderhavcn, 3 Wils. 2&2.{b) But even supposing an interest vested in the broker, and he could have brought an action in his own right, yet he could not set-ofi'the present demand; for in fact there was no debt existing at the time of tlie banluniptcy. The payment was made to the principal afterwards ; and at any rate the broker's claim could not arise be- fore such payment. This comes du'ectly under the principles uniformly laid down in the cases last cited. No particular event had then happened to fix the broker;, no demand had been made on the underwriter, and refusal. It does not appear upon this case but tliat it was a voluntary payment; and if the defendant paid this sum before the expiration of the time whlcli was allowed to him, he ought not to be permitted to take advantage of his act in prejudice to the rest of the creditors,, and set-off this debt. The broker was in the nature of an assignee of a bond, or indorsee of a promissory note. And it was determined in the case of Marsh and another, assignees of May, against C/jai«ier;?,(c) til at a note, indorsed to the debtor of a bankrupt after the bankruptcy, could not be set-off. So here, whatever interest the broker had in the Eolicy as against the plaintiffs, it accrued afterpayment of the loss to his principal ; ut that interest, being transferred subsequent to the bankiniptcy, could not be set- off against a debt vested before. At all events, it was setting up a debt in right of another person against a pei'sonal demand upon himself. That upon the whole, whatever difference the commision del credere miglit make between the broker and his employers, it could make none between the present par- lies. Tlie transaction between them would have been exactly the same, if no such commission had existed ; audit was too much to contend that a private agreement be- tween two of the parties, without the knowledge of tlie third, should vary the na- ture of the contract, and materially affect and injure the rights of his creditors. Smith, contra, distinguished this case from that of Wilson and another, assignees,, against Creighton ; for here, the broker was the only person who had any dealings with the bankrupt; his name alone was inserted in the policy; no other person was known to the bankrupt, who must therefore liave treated with him as principal ; and who, it was more natural to suppose, gave the credit to him, than to any other per- son, to whom, from the nature of the transaction, he must liave been an utter stranger. He obser\'ed that this case was very different from that of sureties; fortherethe obligee relied upon the principal ; the whole dealing was witli him ; and he only, looked to the other as a collateral security ; but here tlie broker was liable in the first instance. He was then stopped by the court. Lord Mansfield, Cli. J. The whole turns on the nature of a commission del credere Then what is it? It is an absolute engagement to the principal from the broker, and makes him liable in the first instance. There is no occasion for the principal to commimlcate with the underwriter, though the law allows the prin- cipal, for his benefit, to resort to him as a collateral securit}'. But the broker is liable at all events. BuLLER, J. I remember many actions broug-ht at Guildhall against brokers with commissions del credere; and I never heard any inquiry made in such cases, (a) Vide 19 Geo. 2. c. 37. (h) Vide Young and another v. Hockley, 3 Wils. .346. (c) 2 Stra. 1234. APPENDIX. -27 whether there had been vl previous demand upon the under\^Titer and refusal ; and I can venture- to say, tliat such is not the practice. It makes no dm'ercnce at the time of makint^ the policy, whether the underwriter knew the principal or not; he trusted to the broker; the credit was given to him, and not to the otlier. I agree that tlie notice of set-oti is bad; but tliis loss may be proved and set-off imdei tlie general issue of the 2Sth sccti(jn of the 5 Geo. 2. c. 30. The words of that section are, " That where it sh;dl appear to the cf/mmissioners, ortiie major *' part of them, that there hath been nuitual credits given by the bankrupt and any *' other person, or nmtual debts between the bankriijit andain other person, at any *' time before such person become bankrupt, the said commissioners, &.c. shall state " the account between them, and one debt may be set against another, and what " shall appear to be due on either side on the balance of such account, and no more, " shall be claimed, and ])aid on either side respectively." Therefore we see by tliis section of tiie statute that the assignees could legal- ly claim no more than the balance upon tlie account between tlie parties. judgment for tlie defendant. (n) Bize V. Dickason and Jnother^, Assignees of Bartenshlag^ T. T. 26 Geo. HI. J. D. 1786. 1. T. R. 285. THIS was an action for money had and received by the defendants, as .is- signees of the bankrupt, f-ir" the plaintifl''s use. Plea, the general issue. The cause came on to be tried at the sittings .after Easter Term, 1787, at Guild- hall, London, before Buller, Justice, wlien the jury found a verdict for the jdaintiff; damages 661/. 9*. IQd. and costs 40^'. subject to the opinion of the court on tlie following case : That the bankrupt, John RoJolph Bartenshlag,he\ng an underwriter, subscribed policies filled up with the plauititl 's n:ime for his foreign correspondents, who were unknown to the bankrupt. Tliat losses happened on such policies to the amoimt of 655/. 9*. 7d. before thf hankruptcy of Bartcnshlag, and were adjusted by him. That a loss on another policy t') the .amount of 61. Os. 3d. happened hforr the ■■said bankruptcy, but xaat not adjusted till lifter such bankruptcy. That tlie plaintifl'pai'd the amount of tlie losses to his foreig-n correspondents after such bankruptcv. That the plaintiff had a commission */ cm/crc from his coiTcspondcnts ; wax m.ade debtor by the bankrupt for the premiums; and always retained the policies in his hands. . . That a divi. the defendants bought a quantity of woollen cloths for exportation f Rahoni- si-n. and C. at F^xeter, factors to the plaintUr The defendant, iIk* v( ndee of the goods, set-ofl'a debt due to him from Rnh„nr and Co. the factors, iijx.n anotiier accoimf, all.gingtii.-it the plaintifl had not appeared at :dl in the tranNaction. and th'.- credit had ijccn given by Rabonc and Co. the factors, and not by tJjc plainlilT so APPENDIX. A rule having' been obtained, calling- on the defendants to shew CRuse why the verdict should not be set aside, and a new trial had, on the autliority of the case of Estcott V. Mihuard, Co. Bank. Laws 236, Gi/>/js and Giles were now to have shewn cause against that rule : but Erskine and Walton were called upon to su;)port it. Tiiey relied on the cases of Scrims/lire v. Jl.ierton,(a) and Estcott v. Miliuard, as reported in Co. Bani. Laivs, to shew that under the circumstances of this case the principal mig'ht resort to the buyer at once, he iiaving- given notice before actual payment by the defendants ta the factors. But a more accurate note of tlie case of Estcott v. Miliuard(l)) having now been •btained from Mr. J. Bulltr, before whom that cause was tried, and read. Tile court were clearly of opinion that the directions given by the learned judge on the trial of this cause were right ; and tliat this case was not distinguishable from tliat of Rabone v. Williams. Therefore they discharged the rule.(c) Millisent Shijiman v. J. Thomfison^ T. T. 11 and 12 Geo. II. C. P. J. D, 1738. IVilles'' Reji. 103. THIS came before the court on a case reserved at the trial before Mr. Baron Fortescuc. The plaintiif 's late husband by his will made the plaintiff and Dr. Morgan (since deceased) his executors. In his life-time he had appointed the defendant his steward by letter of attorney, who after the testator's death received of several te- nants several sums of money due to the testator in his life -time. The plaintiff brouglit this action in her own name, not naming herself executrix, for the money so received. The defendant gave notice to set-off several sums due from the tes- tator to him, which the judge would not permit the defendant to set-off. The questions reserved were ; 1st. Whether the plaintiff sould not have declar- ed as executrix ; Lord Mansfield, Ch. J. — '* Where a factor, dealing for a principal but concealing that principal, delivers goods In his own name, the person contracting with him has a right to consider him to all intents and purposes as tlie principal ; and though the real principal may appear and bring an action ujion that contract against tlie pur- ch'.ser of the goods, yet that purchaser may set-off any claim he may have against the fiictor In answer to the demand of the principal. Tills has been long settled." Upon this opinion, the rest, being a mere matter of account, was referred. In Bayley v. Morley, London sittings after Mich. 1788, Lord Kenyan recognized the law of tliis case. (a) 2 Str. 1182. {b) London sittings after Mich. 1783. Action for goods sold. The goods were sold by Farrar a corn factor, who gave no account of the sale to tlie plaintiff, nor made any entry of It In ills books. He was insolvent for some time before, had avoided all dealing for a month, had desired tliat tliere might be no buying in Ms name, and had not dealt with the defendant for a year before, but was then In his debt. There was a verdict for the plaintiff on the ground of fraud. (c) The same point was also ruled by Lord Kenyon in Stracey, Ross, and others, V. Decy, London sittings after Mich. 1789. Assumpsit for goods sold ; pleas non assumpsit and a set-oft'. The plalntlft's jointly carried on trade as grocers, but Ross was the only ostensible person engaged in the business, and appeared to the world as solely interested therein. By the terms of the partnership Ross was to be the apparent trader, and the others were to remain mere sleeping partners. The de- fendant was a policy broker, and being indebted for grocery (as he conceived) to Ross, he effected insurances and paid premiums on account of Ross solely, to the amount of his debt, under the Idea that one demand might be set-off against the other. Ross's aftalrs being much deranged, payment of the money due from tlie defendant was demanded by the firm, and was refused by him upon the ground of his having been deceived by the other partners keeping back and holding out Ross as tlie only person concerned in the trade. Lord Kenyon Ch. J. was of opinion that as the defendant had a good defence by way of set-oft' as against Ross, and had been by the conduct of the plaintiffs led to believe that Ross was the only person he con- tracted with, they coidd not now pull off the mask and claim payment of debts sup- posed to be due to i?ojj alone, without allowing the parties the same advantages and eqoities in their defence that they would have had in actions brought by Ross. ■Verdict for the defendant. APPENDIX, 31 •2(lly. Whether the defendant ousjht not to have been permitted to set-off the money due to him from the testator. The Court, after argument, gave judgment for the plaintiff.(fl) (a) The reasons given by the Court of Common Pleas do not appear in Lord Chief Justice fF/Z/e.?' papers ;but the same case was; referred to tlie ()])inioii of Mr. B. Furtcsate^l) before whom the cause was tried, and wlio, in the Ea.'itcr term i>re-. ceding, after liearing the case argued by Mr. Makepeace for the defenchml, and Sir T. Abney for the plaintiff, gave the following judgment in favour of the i)laiiUiif. : " It is insisted on for the defendant that this money received by hint is vested iu the executrix in auter droit, that as sh6 hatli no riglit of her own tiie action nuist foUowthe right, and that therefore she s]iouldha\c brouglit the action ascxeciitiix and not in her own right. And the case of H-.ntov., cited in 6 Mod. 4. was cited, where it is said if executor bring trover and dcctare that he is possessed as executor to y. S. if on evidence it appear that they were his own goods he sliail be nonsuited and pay costs; and it was insisted thai by a parity of rcascming where llie executor brings an ac- tion in his own name and it appears that they were tlie goods of the testator, he ought to be nonsuited. As to this ; there is no - suinpsit for money received aftu\. Hannc. U'P ienip- Jlard-u: 204; Guidtliwaytc v. Fctiie, r, Iktrnf. ik. E. 234 ; ^nd Bdlard v. Spimctr. 7 D. St f.. 358. io which 'lunt cane a con- li-ary tJelcrmioAiiou hi tvtMrtV v. Kyxm-l'^r.^ 4 i> & k- "277. v:m «vet -rjlejl 32' APPENDIX. paid no costs, because there was no wtTt' cause of action, bnt anew action asceHain- ing the ancient cau.sv , wliich is still a debt of the testatm's. And in the case of yenkitii V. Ploinbe, as appears from Salkeld, this distinction of insimul computasset is also taken ; and it was Siiid that if the defendant received this money by the ap- pointment of the plaintiOi it was assets immediately, if without his consent yet the bringing' of the action is such a consent that upon judgement it shall be assets im- mediately before execution, which otherwise it would not be until after execution ; and the reason is because it is recovered at;-ainst a person who never was indebted to the testator, and the ,>riij;inal debt was discharged. To apply this to the present case ; here is money received by the defendant since the testator's death, and tlu rcfore it could not be received to the use of the testa-' toi', but mast be received to the use of the executor. The executor has consented bv bringing the action, and the money is assets immediately upon the judgment. It is c^uite a new debt created from the defendant to the executor since the death of the testator, and anew cause of' action which was not subsisting before. The defendant was never indebted to the testator for this money, and the original debt- ors, tlie tenants, are distiiarged. No douijt jiad the action been brought against the tenants, it must have been brought against them by tlie plaintiff as executrix, because it was a debt as to tliem subsisting in the testator's life -time, and no new cause of action arising to the executrix. It is said that, as this case of yenkbis v. Plombe is stated in 6 Modern, Pcuell J. and Gould J. doiibted : but whatever they might have done on the first argument, it is plain they were satisfied afterwiu-ds ; for in page 182 it appears that the judgment was given per totam curiam. It is said that the defendant had an authority by letter of attorney to receive the testator's rents, that this authority did not determine with the testator's death, and that therefore as Ihe defendant received it by the authority of the testator it is mo- ney had and received to his use, and it shall not be presumed to have been received by the consent of the executor. But I think, as this is a naked authority and not coupled with any interest, it coidd not subsist after the testator's death. In Combers case, 9 Pep. 76. b. it was resolved th:it where a4pcrson luis authority as an attorney to do an act, he must doit in the name of him who gave the authority ; for he ap- points the attorney to be in his place and represent his person ; and for that reason the attorney caniiot act in his own name, nor do it as his own act, but in tlie name and as the act of him who gave the authority. And if this be so, it is impossible to say that this defendant received this money as attorney for the testator or that he represented his person, in regard that the testator was dead ; it is the executrix only who represents the person and stands in the place of the testator. This has been likened to the case of an assignee of a bankrupt, of whom it is said that though the property of the bankrupt's goods or debts be vested in him, yet he Tnust sue as assignee ; and no doubt he must for all debts due to the bankrupt. But if goods be taken from the assignee, or money received from a debtor of the bank- rupt after the assignment, I do not know that it has been any where adjudged that an action brought in his name would be ill. But be that as it will, this is the case of an executrix and not of an assignee of a bankrupt, and it was (I think) plainly and clearly adjudged in the case of ytnkins v. Plombe that an executor in such case may bring an action in his o\a\ name ; and I do not find that it was ever adjudged to the contrary. With reg-ard to the case of Chapman v. Darby, Carth. 232, where it was holdcn that, where the plaintiff brouglit assumpsit for so much money had and received to his use as administrator, tlie promise was not ill laid ; no doubt it is so, and so al- lowed in yenkins v. Plombe that the plaintiff may bring the action cither way ; so that this case of Cliapman v. Darby does not prove that tlie administrator may not bring the action in his own name, but only that he may do it as administrator ; and no doubt he may do it either way. As to the case of Curry v. Stephenson, Carth. 335. Holt Ch. J. took exception to the declaration tliat it was not well, because the mo- ney was received after the death of the intestate, and then it was received to the use of the plaintiff generally, and not as administratrix; and the point was, that though it was received by the defendant after the intestate's death, yet it was be- fore administration granted ; and this is t!ie reason on which the book seems to gp why it was disallowed, which is not the present case. As to the set-off; we cannot consider the convenience or the inconvenience on one side or the other, but must go according to the act ; for the stat. 2 Geo. 2. c. 22. s. 13. says, or //" either party sues or is sued as executor or administrator where thei-e are mutual debts between the testator or intestate and either party, one debt m.ay be set against the other , so that it is confined by the statute expressly to cases where the suit is as executor or administrator. And therefore in the present case the suit not being as executor, I think it is not within the statute, and that the debts AfPENDlX. 33 ColliTtB x.Collins, T. T. 32 Geo. II. A. D. 1759. 2 Burr. 820. THIS WHS an action of debt upon bond. Tlic condition iippe.ared, upon Oyn, to be, "to p.ay tlie plaintiff an annuity of ♦' 10/. a year during' his life ; and likewise to maintain him in meat, drink, washing "and lodg-ing-, in the dwcUinp^-liouse at CnindaU-End, for and during his Life?* To thi.? declaration, the defendant pleaded (by leave) several pleas. As to the ]Kiyment of the annuity of 10/. per n/i/i!i/7i.— There was a pica of a stt- off ; (viz. that only 69/. is due to tlie j)laintilf on account of the said annuity ; and tliat tJie plaintiff owes him more than 60/. viz. 500/.) As to the maintaining the piaintifi'. Sec. — There was a jilea that the plaintiff left the house voluntarily, and did not board and lodge in the house : so that lie (the defendant) was not obliged to board, wasli and lodge him. But the dcfend:uit avers tliat he was always ready to inaintaln him, &c. at and ix the house. [V.infra^ Tlie plaintiff demurs : and the defendant joins in demurrer. The latter plea depended upon the words of the condition ; which was — "Tliat " \f Joseph Collins the younger, his heirs executors or administrators, do and shall " well and truly pay or cause to be paid'unto Joseph Collins the elder, and liis as- " signs, yearly and every year during his life, one annuity of 10/. of lawful money '* of Great Britain, clear of all taxes, he. on tlie 25th of March and 29th of Septem- " Ijcr yearly ; and if the said yoseph Collins the younger, siiall find, provide and allow " to and for the 3\Cid Joseph Collins the elder, good and sufficient meat drink wash- " ing and lodging i.v the dvielling house at CrunJull-End idovcaaid ; tlien this obliga- •' tion to be void ; but if default shall be made in the panncnt of the said annuity " of 10/. or any part tlicreof, at or upon any or either of the days abovementioncd " f )r tlie payment thereof; or if he the said yoseph Collins the younger, shall ne- " gleet or ref.ue to maintain and keep the said yoseph Collins the elder, during his " natural life as aforesaid ; then, and in either of the said cases, to be and remain *' in full f u'cc and virtue." The defendant (liaving leave to plead several pleas &c.) pleaded a set-off (as 19 before mentif.ned) to the former part of the condition, which was for payment of the annuity. And as to the latter, lie pleaded that tlie house at Crundall-End was tlie house where the said yoseph Collins the younger, dii-elt, and ever since has dwelt, with his f:imily ; and that he did admit the said yoseph Ccllins the elder, and re- ceive him into tlie said house ; and did until his departure aftcrmentloncd, find provide and allow to the said yoseph the elder, meat, drink &.c. [in the >vords of the condition :] but that he the said yoseph the elder, of his own accord, departed from tlie said house at Crundall-End, and has ne^-er yet returned, to be there provid- ed with meat, dririk, &c. fut supra; J nor hatii ever required to be provided wit!» any, or to havcfany allowed, 'jheke. And the said y&j<-/»/i tiie young-cr, has «/- due from the testator to the defendant cannot be set-off against this plaintiff" in an action brouglit by her in her own name, and not as executor. And supposing this to be 80, it was urged as one rea.son wliy the action liere ought to have been brought by the jilaintiff as executrix ; but this statute will not alter the law as to tliat point from what it was before ; and if the statute lias not ivmedied all the in- conveniencics, we must take it as it is, and cannot (1 think) extend it further. So the postca must be delivered to tlie jilaintift", and slie nuiat luiNe her judg- ment." MS. Mr. Justice W. (tiien Mr. Baron) Fortescue. To the above Mr.'B.Forfcjcue afterwards added this note ; " N. B. The court of: B. C. on a ca.se made were of the same opinion as to both points." (1) (1.) The s.inie point, relative to the set-off, has been since determined by the court of King's Bcncii in two cases, Kihin^ion v. Stevenson, East. 17M, on domiir- rtr; and Tegetmeycr v. Lumlcy, Tr. 25 Ceo. 3. on a motion for a new trial. Vid. ' J>o*t.2Gi. But a debt due to the d( f n.lant as surviving partner r\\:\\ be net-ofl ag"dlnst a demand on hiui in hi:) owni riglit ; Slifpcr v. Slidstone, 5 Durnf & E. 493 » & e coiiverso a debt due from the piaimiff us suniving partner to the defendant way be Het-off against a debt due from the d'.-f.ndaiit ^o «ho plaintiff ilJ lU5 ovrr yjgbt". frerKh v Andrndts 6 D. It K. 382. 34 APPENIJIX. ways bepi ready to have (jrovidccl the said yoseph the elder, with meat, drink, &c. Cut supraj AT and in the said dwellhig-housc, \i\\c\\a.i}i not departed, or would have retm-ned ihither : but tiiat he always has refused and still docs refuse to returtii but has continued absent from thence. Therefore he could not provide him with meat, drink, &c. Cut supraj at or i^ the said diveHing-house. To tliis plea tlie plaintilF demurred ; and the defendant joined in demiirrer. Mr. Serjt. Foolc, on behalf of the plaintill', aig-iied tliat this case of an annuity or yearly payment does not fall within the statute of 8 G. 2. c 24. § 5. concerninsf set- offs ; because the action i^ not brou^-lit for a sum complete and certain, but for a part of a growing sum payable /or life,- whcreoffuture payinents will be continual- ly be coming tlue. Now if tile judgment be here entered for the remainder (as that act directs,) It passes in rem judicatam ,■ and the plaintiff' cannot recover any more, on any future default of {)ayment upon the same bond. By sec. 4. of this act, the provision forscttingmutual debts one against the other, ■svas looked uj)on as highly just and reasonable at a// times : it is therefore provid- ed that the clause in 2 G. '2. c. 22. " for setting nmtual debts one against the other" shall be and remain in full force forever. Section 5. of this act of 8 G. 2. c. 24, provides *' that by virtue of the said clause " in 2 G. 2. c. 22. (which is tlicreby made perpetual,) mutual debts m.ay be set " against each other, either by being pleaded in bar, or given in evidence on the " general issue, in the manner therein mentioned, notwithstanding that such debts " ai-e deemed in law to be of a. different nature ,■ unless in cases wliere eitlier of the " said debts shall accrue by reason of a penalty contained in any bond or specialty; V and in all cases where either the debt for wJiicli the action hath been or shall be " brought, or the debt intended to be set against the same hath accrued or shall " accrue by reason of imy such penalty, the debt intended to be set-off shall be "pleaded in bar, in which plea shall be shown how much is truly and justly due " on either side : and in case t)ie plaintiff' shall recover in any such action or suit, "judgment shall be entered for no more than shall appear to fae truly and justly " £"''. ^? ^^^^ plaintiff, after one debt being set against the other as aforesaid." This is not a bond conditioned for performance of covenants or agreements con- tained in any deed or writing : it contains a quite different and distinct condition- Tlie present action is an action of debt upon a bond conditioned to pay an annuity and maintain a parent. Mr. Serj. Hewitt contra — This is a new case. The setting-off of mutual debts arises on 2 G. 2. c. 22. sec. 1.3. (which was a tem- porary act,) and on 8 G. 2. c. 24. gee. 4, 5. (which makes the former perpetual.) This last section (§ 5.) provides, generally " That luherever the debt arises upon *" a hand or specialty 'uith a penalty, and accrues by reason of such penalty, a set-off ** maybe pleaded," My brother Foole says, " It extends only to cases where the " debt is a sum certain." But the words of the act are general ,- and are not at all confined to sums certain. And the plaintiff mov afterwards recover, for subsequent deftiults ; notwithstanding tlie prior judgment: "for \.\\c penalty will always remain a 4Hty. Ovvr plea covers the whole demand. IMr. Serj. Poule was beginning to reply. But an observation having been made by Mr. Just. Denison, upon t!ic latter part of the condition ; Mr. Serj. Hewitt desired it might stand over till next paper-day ; (intending to make a motion, in the interim, for leave to amend.) To which reqiiest tlie court agreed. Ultepius CoNciT^iu.^r. On the next paper-day, (26th June,) Mr. Serjeant Poole proceeded in his reply .- (Serjeant Hewitt not having moved to amend.) He argued tliat a set-off could not be pleaded under this act : for this act is general, and lias no such provision as tliere is in the act of 8, 9 W. 3. c. 11. sec. uh. viz. <' That the judgment .sliall " sta?id as security." And therefore if the plaintiff' should now recover judgment, there would be an e7id of the bond ; and there would remain no secui-ity at all for /«r on demurrer. Then the act provides, " That if after juffj7?7e«f of aRv/;art of the plaintiff 's just demand, the plaintiff would have been entitled to take his Judg^ MEN t forthe wAo/e/)e«fir/i'y ; (Though execution was to be stayed on payment oj the damages already incurred andcojf^ .•) and this judgment for the ■vihole penalty was to stand as a security, to a.T\s\\'(ti- future breaches. But the payment here intended was to be an actual payment. ¥ov stoppage, or eetthig-off debt against debt, was not then equivalent to actual payment : but cross actions must at that time have been brouglit, forthe respective mutual debts. Since these two vei-y beneficial acts of 2 G. 2. c. 22. and 8 G. 2. c. 24. stoppage, or ^e«/w|'-o/" of mutual debts, is become equivalent to actual payinent : said a balance shall be struck, as in equity and justice it ought to be. At common /uto, before these acts, if tlie plaintiff was as much, or even more indebted to the defendant than the defendant was indebted to !iim, yet the defen- dant had no metiiod to strike a balance : he could only go into a court of equity, for doing what is most clearly just and right to be done. ' The 2 G. 2. c. 22. was made to answer this just and reasonable end ; and enacts generally, "That where there are mutual debts between the parties, one debt may *' be set against the other." Upon which act of 2 G. 2. doubts about the different natures of debts have arisen ;the 8 G. 2. c. 24. was thereupon made : the 5th section whereof is a general provision ivithout exception. So that the objections whick iiavebeen here made, on the part of the plaintiff, are made by construction only. It is objected, first, •' That this is not an action brought upon a penalty for non- " performance of an agreement or covenant contained in any indenture deed oc ** ivriting.'" _ This is an agreement between the parties, and an agrceinent in i-riting : the condi- tion of the bond is an agreement in 'jjriting ,- and people have frequently gone into courts of equity upon conditions of bonds, c? being agi-eements in writing, to have % specif c performance of them. It is said that if the plaintiff should take his judgmcjrt upon this act of parlia- onent, it would no? he a. judgment for tiie penalty, but a judgment only f.r tlie sum due, and no more ; and that after the matter has once -passed in rem judicataitt^ the plaintiff cannot afterwards recover any m.ore upon this bond, wliatevcr may be- come due by future non-payments ; for that here is «o /Jrw/.S70?: " that the j'udg- " men shall stand as a security for future payvients,"" as there was in the act of 8, 9 W.3. c. 11. made for the better preventing- frivolours and vexatious suits. The judgment is indeed by this act of 8 G. 2. directed to be entered " for no "more than shall appear to be justly and truly due to the plaintiil':" But it is clearly within the words and meaning o{ the act,' that the penalty is to remain as a security against future breaches, in this case of a >sef-o/ pleaded, as mucli as it would have done upon the act of 8 9, W. 3. c. 11. \f payment \x.xd been m^id^ agreeably to the directions therein contained. But as this has not been before settled, " That a set-off may be pleaded in such a " case as this, where the conditlonis for the pajTnent of an annuity or growing sum.** It -would be hard to bind the plaintiff down strictly to Jiis demurrer. Therefore my Ibrqther Poole may move to ivitkdraw tlie demurrer, and to reply in aproper manner ; APPENDIX. 37 which v,\\\ give the plaintiff an opportunity of disputing the debt pleaded by way of set-off, if he thinks proper. Which Mr. Serj. Poo/c moved accordingly : and the court granted it; but added ^Rt it 6hould be upon payment of costs. Stdcey Ross Sc al. r. Decy. M. 1789. Esp. Cases, 469, TT was an action for goods sold and delivered : Plea of set-off. **■ It appeared in evidence, that the plaintiffs had entered into a partnership as grocers ; and it v^'as agreed tliat J^oss should keep the shop in his own name only ; under those circumstances he dealt with the defendant for the partnership goods, for whicfi this action was brought. The defendant had done business for the plaintiff i?o** on his own account, and not on account of the partnersliip, to a greater amount llian the demand now made against him by the partnership, and this he ofiered to set-off. It was opposed on the ground of tlie demands accruing in different capacities, that so it was inadmissible. Lord Ken- YON was of opinion, that the set-off was good; his lordship said, the plaintiffs had subjected tf.cmselves to it, liy holding out false colours to the world, by permitting Jtoss to appear as tlic sole owner ; that it was possible Uie defendant would not have trusted i?ow only, if he had not considered the debt due to himself as a security against a counter-demand. Erskine observed, that the defendant h;ui thereby a double advantage ; for, if he dealt with Rosf as the only partner, and had had a demand against tlie partnership account, he miglit have maintained an action against them all ; yet here he wa.s per- mitted to consider Rots as tlie only partner. Lord Kf.syok admitted this consequence to follow from the fiiUary held out to the world by such as stand in the situation of sleeping partners, but allowed tlie set-ofl'to the extent claimed ; and the defendant had a verdict. Jaqueaw IVithy, H. T. 27 Geo. III. J. D. 1787. 1 T. R. 557. 1^ ASE for money had and received, money lent and advanced, &c. Pica set-off ^ 340/. upon a judgment recovered in Trinity \x-rm, in the 22d year, &.c. l)y the defendant against the plalnlifl' in this court, wfilch Is still in force and unsatisfied. The plaintiff in his replication admitted the judgment, &.c. but said tliat the defendant in Mic/iaehnai term in the 23d year, &:c. in order to obtain s.atlsfuctlon of the said judgment, cliarged Iilm in execution of the said judgment in tlu- cn.st.xly of the marshal of the MarshaUea, Sec. and kept .ind detained him in siicli custody, andin execution of the said judgment, until the 6tl» of February 1783, wlien lie was by and i-^^ith the consent, privity, autltority, ar.d licence oftlie defendant, and by hi.t order and direction, released and enlarged frovt- and out of the said custody, and wholly discharged from the Baid execuilon at the siutof the defendant of aj>d upon the said judgment. Rejotjuier, That the plaintiff on the 28th of February, 1783, at Ids instance and request, was by and with the consent, privity, authority and licence of the defen- dant, and by his order and direction, released atid enlarged from and out of the said custody, i«:. and dlscliarged from the said execution of tlie said siiil of the (lefen- dant of . ind upon the said judgment so recovered, &.c. for and in consldcrMlon of the plaintHf'9 then and there niakingand delivering to the defendant a certain writ- ing obligatory, bearing date the CSth of Febni.ary, 1783, in 6H1/. wliii a condition to satisfy thejiidgmcnt either by instalments or by an aiinuily, ancl also for and in consideration of a warrant of attorney, executed in l!ie plaintiff on the '.'HI h of February 1783, given to the defendant to confess judgment on the said writinR obllgatoiy in the court of our lord the king of the i)eiKh. That after ward> ami within twentv the judgment again, or cluu'ge the defendant's person in execution. So lure, if the detVndant has neglected to avail himself of the advantage of tlie security, it iit his own fault, and he must take the consequences. Judgment for the plaintlff.(A) Percevall Hutchinson v, William Sturgefi, T. T. li (J^ \5 Geo. II. A. O. 1741. C. l\]Vitlcs 261. [H. U Geo. II. Rol. 444] A DEBT on a bond for 8/. given by the defendant to tlie plalntiffonc of the bcr> rors of the virges of tlie King's household and an officer and minister of the Ki og'a Court of his palace at Westminster ,- dated the 25th of July, 1740. The defendant pleaded that the plaintifi" was indebted to the defendant inj 10/. for work and labour, &c. in 10/. for goods sold and delivered, 8«.c. and in 5/. for money had and received, &c. amounting in the whole to the sum of 25/. wliic h ex- ceeds the debt of the plaintitl', and wiiich the defendant oH'ered to set-oJli &,c. ac cord- ing to the statutes, &.c. The plaintilf prayed that the condition of the bond might be enrolled, ar d then demvuTed to the defendant's plea. The condition of the bond was for the : .ppear- ance of 5. Daniel before the judges of tiie King's Court of his palace at West.n-.imter at the next Court of the King of his palace to he holden at Soiuhiuark in tiie county of Surry on Friday the 25tli of July to answer T. Squier in a plea of trespas j on tlic case, to his damage of 99*. This case was argued on the 7th of Februaiy, 1740. by Bootle Serj. for t' ic plain- tiflT, and Agar Serj. for the defendant ; and now the opinion of tlie court v r.is given as follows, by Willes, Lord Chief Justice. " The question is whether these debts ftliich the defendant sets forth in hi,s ))lea can be set-oft' against tlie pl-.iintift 's dema' nl There are two statutes(c) in relation to this matter ; and it will be jiroper to c jr.sider un- der which statute this falls, and how the determinations have already been in tJie construction of tiicm. The words of the first statute, which is the 2 Geo. 2. c. 22. a. 11. : ire " where there are mutual debts between tlie j)laintifl and the defeiuhmt.or if i ilher jiarty sue or be sued as executor or administrator where tiiere :u-e mutual u elits between the testator or intestate and eitiier party, one dt bt may be set against die othei , and such matter may be given in evidi nee on the general issue or ph-adt d in bar as llie nature of the case shall require; .and if intendeil to be given in e\ idencc, notice shall be given, &c. Upon the oi stniction of this statute several questions ajx)si' before the making of the slat. 8 Geo. 2. c. 24. 1st. Whether debts on simpk- ronli'act could be sct-olT in comn icn cases nguinsL a debt on sjuciality ? 2'lly. If in common cases, wlicther they could whore an cxtcu tr,r or administra- tor is |)laintiP .' And 3dly. Wliether in the case of a bond the penalty was 1 o be considered an debt ? &c. In Kemvs v. J3ftson,{d) Tr. f) Geo. 2 in B. C. it was lioldon i'4 the rase of un ex. eculortliat simple coulia' t debts ci.nnot be .set-off against «icl ts on specialties; for that tiicilebt'* must be cf an 'qual nrtturc ; o i. but n )t for tlie same rca.son. For if u blalc orders it to be bo, it will justify llie {a) A Burr. 2442. (Ij) Birch v. ^harlaml, pn.^t. 715. (c) S' u 2'Dnrr. 824 ; 1024, 5; 1230 i and 4 Burr 2221. {J) 8 Von is that this was only substituted in the room of an action, to prevent circuity or a bill in equity. It was therefore held that you cannot set-off a debt barred by the statute of limitations, because you cannot recover it by action. This judg'menl was never reversed. And in tiie case of ^oy v. Roberts in the Exchequer ,"./. 6 Geo. ;'. tiicre was tlie same resolution. But in the case of Stevens v. Lofton(a) M. 6 Geo. 2. this court carried it further, and held in the case of an action upon a bond between common persons a debt upon simple contract which was pleaded Tould not be set-off, ffoing- upon this reason that tliere oug-Jitto be the same construc- tion on every part of the act; but in this I think they were mistaken; for where the cases are diflerent the construction ought to be diifercnt too. And of this opi- nion were the Court of King-'s Bench, vvlien it came before them on a writ of error, (6) and would have reversed the judgment but for another objection, the debt pleaded being less than the penalty though more than the mon»y due i)y the condition ; and tills being a case before the stat- 8 Geo. 2. they held, and I tlilnk very rightly, that at law the penalt}^ niust be considered as the debt. And in the case of Broim v. Holjoat,{c) P. 8 Geo. 2. B. Ji. on a writ of error out of this court, the coml of King's Bench reversed the judgment of this coiu-t which had determined that a debt on simple contract could not be set-off against a debt due for rent ; and I think tliat the judgment was rightly reversed for the reasons I have already mentioned. In tliat case Lord Hardwicke said it would not work a devastavit, and seemed a little to doubt how it would be in the case of executors. But his doubt was removed by the statute 8 Geo. 2. c. 24. passing-just at that time. By that statute it is enacted that mutual debts may be set against each other either by being pleaded or given is evidence on the general issue, though such debts are deemed in law to be of a diffe- rent nature, unless in cases where either of the said delfts shall accrue by reason of a penalty in the bond, &c. in which case the debt intended to be set-oft' shall be pleaded in bar, in which plea it shall be shown how much(t/) is truly and justly due on either side ; and in case the plaintiff" recovers, judg-ment shall be entered for no more tiian is truly and justly due to the plaintift' after one debt is so set-off against the other. This statute has solved all the difficulties before mentioned. Butas this is not a bond vf\\.\\ the condition for the payment of money, we are all of opinion that the case Is not v/ithin this statute, but must stand on the stat. 2 Geo. 2. For we are of opinion that the debts pleaded cannot be set-off in the present case, tliis being a bail-bond, and the plaintift'not suing in his own right but in the natui'c of a trustee for Sr/uier. If this were otherwise, all bail-bonds might be defeated. But it might be as well said that when a man sues as executor the defendant may set-off a debt due from the plaintiff to the defendant in his own right,(e) as that the defendrvnt can set-off in the present case ; and yet that is contrary not only to common sense but also to the plain words of the statute. If Indeed this had been a bond to the sberiffassignedover to the party according- to the statute„we should have thought otherwise, and that the penalty must be considered as the debt, this not be- ing a case within the statute 8 Geo. 2. But the bond here being sued by the officer himself, we a.'e all of opinion that the debt due from the officer cannot be set-off, and tliat judgiaent must be for the plaintiff. (a) 8 Fin. Al>,\ 562. pi. 31. (b) Vid. Sir JF. Kel. 139 : 2 Barnard, 338 ; and 8 Vht. AW. 562, pL 33. (c) Barnes 290 ; 8 Vin. Abr. 562.pl. 32, and 35 ; and Bull. N. P. 179. {d) The defendant in pleading a set-off, to debt on bond, must setoutthe sum justly due on the bond ; md that averment is traversalile. Syvimons v. Knox, 3 DurnJ. & E. 65. even though laid under a videlicet, Grhnv:ood\. Barrit, 6 D & E. 460. (f ) Nor, when an executor sues for a cause of action arising after the testator's death, can the defendant set-off a debt due to him from the testator. Shipman v, "Thampson, T. 11 Sc 12 Geo. 2. C B.sup. 103 ; and Tegetnieyer and another, executors, V. Lumley, T. 25 Geo. 3. B. R. The latter was an action of covenant for rent, part of which became due in the testator's lifetime, and part since his death. Tlie de- fendant at the trial, b.'^fore Lord Mansfield at the sittings after Easter term 25 Geo. 3.*set-off a debt due from the testator to him, and the plaintiffs were nonsuited. Erakine xaQ\f:ported, because it was rot only contra- I'Vto the settled mode of pleading, but also contrary to justice, for the plaintiff* might be thus deprived of the costs of the action to which he was entitled. And as 1 1 Sullivan v. Montagu, the principal question was, whether the judge could certify af'cr tlie cause was over. But The court said, on the authority of Sullivan v, Montagu, that the pica "V^as good j and that the replication was no answer to it. APPENDIX. 43 of a motion made on the pnrt of tlie defendant, Bro'.vn, for a rule upon Bashenille, fae plaintitt", to show cause why tlie verdici (which h,.d been found for BaskcrviiU) should not be set aside ; and wh}' tlie defendant, Brovjii, should not have the costs of a nonsuit. Mr. .Yurfon and Mr. llifw, on behalf of the plaintiff, Baskerv'dle, now shewed cause ag-ainsi this rule. And, besides urging- what they liad insisted upon at the trial, they added further, That tlie statute only sa\->i '• that the defendant ma,' set- " otf the debt due to him from the plaintili ;" but does not compel him to do so : and here the defendant, Bro'ivn, had actually made his election '* not to Jo it," by taking a verdict f )r his :i>/io/e demand in the cause wherein he was pl./uitifi. And they insisted lliat the nature of the debt is changed, and the former debt txtin^\Lh- eJ by the verdict ; so that it cannot be set oft^ in an action tried ijter tluit \e.ditt had been given. T) this, it was answered by Mr. Morton and Mr. Stowe (in support of the rule), that the debt remains unchanged in its nature, and unextinguished, notwithstanding the verdict. And it miglit liaie been still set-off, they si'.iil, in the present action. Without any inco.ivenience : for i^ Brown should attempt to take out execution for tlie Mihols, in the otlier action wherein he was plaintifl", after a set-off in this actii)n, either the court would set the matter right, (even with costs,) or Baskcrville might have redress by an audita fpurelu. But Brown was obliged, they said, to take his vertllct for the w/io/s of his demand : for he could not be sure that Bnsktrvilk would try his cause at all : and then Brovn would have entirely iust this sum of 11.'. 18j. Brown did all he could to come at a fair balance : he could do no moi-e then plead it, or give notice to set it off, as it stood at the time of the ])lea ]ileaded. The. fault was in Baskerville. He ought to have set ofihis demand upon Broii-n of 11/. 13.J. against Broivn''s demand upon him of 30/. And then com]>lcte justice had been done easily and at once. He oug/it not to have brought his action against Broiiin at all. Clk. advis. Lord Mansfield now delivered the resolution of the court. The meaning of the act of p:a-liament, he said, was, that in all cases of mutual debts, the less sum should be deducted out of the greater, if the defndant desires it. But Brown could not compel Baskervi'le to set-oil liis less demand upon Brown, ag.xinst Browds greater demand upon him : nor co'.iid Brown ]\:<\v s:d"ely taki-n his verdict fir less tlian his whole demand. Yet Baskerville himself might have done this without prejudice, and with perfect safety : and he ought to have done it. — But he declined doing it ; and at the same time brings his action against Brown, for what he might, without prejudice, have set o(i' against Brown^s demantl upon him. Therefore it was litigious and vexatious in him not to do it, when he might safe- ly and easily have done it ; but chose, instead of it, to commence an action against Brown^ B )th actions stood together for tri.d : but it happened that the cause of Brown V. Baikervillc stood first. Brown took his verdict for the whole demand upon the tvv) notes; there being no plea nor notice of anysetolfin tJiis cause wherein Brown was plaintiff. Then came on BasZ-erville's cause, in which he was plainlitV, and Brown the de- fendant ; in which cause. Brown had given notice to set-off so much as was equal to B'lskeroillc's demand upon him. Tliis he would have done : but it was opposed i and the objection seemed specious. Bat we .ai-e all clearly of ojiinion, upon full consideration, " that the debts might " be setofVone again.st'the other in this latter cause, notwithstaiuling Bro^vnWv.w- " ing taken a verdict in the former for his wliole demand." For if at tiie time if tjie action brought, the defendant may setoff one debt .igainst the other, or phad (if alarger sum be due from the plaintifl" to him, tlian from him to the plaintifl, ) in bar of the plaintiff's action ; Brown had a riglit in the cause \s herein he w:.-* defendant, to give this notice of a set-off, at the time when he gave it. Ami //.;*- krville might, in the cause wherein h<- was defendant, iia\e set otl su'h part of the brger sum ilue from him to the [(laintiff Brown, as was eriMal to the ....c.^A^ (a) Taunton Sfi. Au. 17H8. cor. Bnllrr. J. \l,) Mr. Justice Butler was Billim; toiUic Lord Chancellor. -6 ' APfENDlX, eltlier the plainfiflT's or the defendant's demand accrues by reason of any pcnaltv-, the debt intended to be set-off shall be pleaded in bar, in which plcashall be sliow'u how mucii is justly and truly due on either side. So that under this act the de- fendant cannot g'ive a notice of set-off with the g-encral issue : but he is required to plead it in bai", in which plea he must state what is really due on the bor.d. And as far as my experience goes, the plea in this case is warranted by the usual form of plcadiuj^ : it has not been usual to jilead that a large sum of money, to ii-it, so much is due, but that a specific mm is due and no more. And this mode is certainly consonant to the 8 Geo. 2. c. 24. 'i'hen.asthe defendant set fortli what was really due without a vidclictt, the plaintlfi would be taken to have admitted it, ii he had not traversed it in his replication. Demurrer overrided. But as Bald'xin suggested tliat it had not been the practice to traverse this aver- ment in the replication, tlie court gave the defendant leave to amend on paying the costs. liankeij and others^ jissi,^necs of Jofni Ls* Benjamin Vaughan^ v. Smith and ot.hers, E. 29 Geo. III. A. D. 1789. B. R. in A'otefi 3 T. R. 507. 1"^ O this action upon the case for goods sold and delivered by the bankrupts the de- ilndants pleaded the general issue, and gave notice of set-ofi"applic;.ble to the bill of exchange iiereafler mentioned. At the trial at the sittings aht:r Jlic/iachnas term 1788, at Guildhall before Lord Kenyan, the jury gave a verdict for the plaintihs, da n ages o20^. 16*. subject to t!ie oj)ini(m of this court on the following case : — On tiie 26tli o? yuly last a commission of bankrupt issued against tlie Vaughans, who on ihe 29th of the same month were declared bankrupts, yolui Faiighan committed an .act of bankruptcy on tlie 22d, and Benjamin Vaitghan on the 23d af ^/ulv. 1 he plaiiitiiTs 01! the 5th ui' August were duly chosen assignees, &c. On the 3d oi'yjilj the Lankjrupts, w!io were sugar-refiners, sold the defendants sugar and molasses to the amount of 452/. 2*. 8i. and on the 21st of the same month sold other sugars to them to the amount of 68/. 135.4:/. making- together 520/. 16j. for which this action was brought. O.ie William Broadhurst, on the 6th cS yune, 1788, drew a bill of exchange on the bankrupts for 600/. payable to his order two months after date for value deli- veredto him in raw" sugar ; whicli bill was duly accepted by the bankrupts, arid in- d >rsed by Broadhurst, and delivered by him to Towgood & Co. who on the 2d of ^ul]' la.st, and after the bill was accepted and indorsed, discounted it wiih tl)e de- fendants, and delivered tlie same to them. 'Ihe defendants on the 5lh oi' August last proved imder Vauglians commission, 791. 4*. as the balance due to them on tiie bill of exchange, after deducting 520/. 16.?. On the 10th oi September, 1788, one of the de- fendants, Francis Ke')nble, was examined licfore the commissioners named in tliecom- inissicm against the ban!cruj)ts,wheu he deposed,That he, together witii yos-Kemble, Smith, and Travers,\\\e other defendants, carried on the trade and business of gro- cers ; that on the 2d oi yuly last, W. Toivgood a])plied to liim to discount the bill in question ; that he 1 1 ad before that time heard that Vaughans'' iiouse was in difficul- ties, but he knew that B. Vaughan was a partner with y. Vaughan, and he thought him a good man ; that W. Towgood said there had been rumours of Vanghans^ sto])- ping, and that as tJie house of him ("this examinantj vias engaged in the sugar trade they could buy goo Is to cover the bill ; that he said he did not care what rumours tliere were, as, he believed the house of y. Vaughan & Co. to be perfectly safe, and that they only wanted time ; that at the time he toot the bill he vieatit to buy sugars to cover the bill ; that accordingly' some sugars and molasses were bought on the next day ; and that betv.'cen that time and the 22d Oi yuly, sugars and molasses to the amount of 520/. 16j. \vere bought by tiieir (this examinant's) house of the bankrupts ; that he had never discounted a bill for TV. Toivgood before, and that he knew that Toivgood''s father Avas a banker. The defendant, yostph Kemble, was also examined befoix' the commissioners, who deposed that he was the person who bought the abovcmen- tioned sugars of the banla-upts, and that at the time he boug'ht the same he did not inform tliem of their house being in possession of tlie bill ; that onereason cfhis going to the house o/V'aughan &• Co. to purchase the sugars and molasses loas their bc- ins; in possession of the bill ; and that aL the time when the bill was discounted for Tuivgood he did not indorse the same, but by a memorandum in writing agreed to indorse it when he should be thereunto required ; tl^.at he accordingly indorsed ita few d^ys afterwards and after he had heard that Vaughaii's house had stoj)pe) was brought, it would have been otherwise. Bllleh, J. — In order to constitute mutual ci-edit, it is not ncccs.san- that the parties mean particularly to trust each other in tliat transaction. For if a "bill ofj cx- chant^e, which is acceiited, be sent out into the world, credit is given to the ac- ceptor by every person who t;ikes the bill : now that constituted liic iredit on one side in tliis case ; then, on the other, credit was given to the defendants Ly ths bfxuiiaapis for tlie goods. Tlie case was also argued on the ground nf fraud : but the court, not considering' the transaction to be fraudulent, gave judgment for the dcieiuiants. But on a sub- sequent day in Easter term they observed that there were circumstances to be left to the jury, on which they ought to exerci.se their judgment, whether or not iKiud to the defendants could be imputed ; and lor that rca.sonthey ordered it to be sent down to anotl'.e;- tr a!. Holrojd, for tfic defendants. Hancock and others, Asdgnecs of Edcnsor, a Eunkru/it^ v. Kutvjislc and others, M. T. 30 Geo. III. A. D. 1789. 3 T. R. 435. THIS was an action on a bill of exchange; and, the plaintifTs having proved ilieir case, the only cjuestion was whether the delendants were eniiikd to » set-oti aiising iiom an agTcenient, made in March, irtib, between the defend:. nts of the one pai*t, and t!ie bankiupt of the otlier, by which, (after reciting that ii loi;a had been sustained by the defendants in consequence of the ]hu chase of sonii cot- Ion by the bankrupt as their broker, for rcinibuisiiig which they made a claim cu him,) in order to put an end to all controvcisy concerning U, it was agn-etl titut the loss, though exceeding 1900/. should be fixed at that sum, ar.d no iiun ,• and that in payment or sati.sfHction of that sum the bai»kru|)t .•-.lioiild, from time to time, within the s|)ace of four years rccomniend parcels <>f cotton, not e.xreeding l.JO b. j,s at. one time, to the defendants for their purchase, and that liie deleiulanis bhoulil pur- cliase them, paying for them in notes at three month's date. j{i:d the laiJrupi un- dertook that the clear profits on such sales should in the count tffi,ur years be sujjicieat to discharge the IdOOl. but if the same should not be paid la'thiii that lime, then tie bankrupt agree I intniecliiUely rfer the expiration (f the fair years, in Case he should be then living, to pa. them tut dij/ercnce. And if tlic purchases should occasion .. K .-ii* to the defendants, the bi.nkruiit undertook to make gixid biich loss. Lord A'en.on, before whom the cause was tried, being of opinion that the dcli.ndai.ls were not entitled to set-off', the plainlilfs obtaineil a verdict. On a firmer day a rule was obtained to .sliow cause wliv n new tri:l should not be granted ; against which Erskine and Marryat were now to liave sliewn cau.^-e : Ihit Law .ind S. Ilu^wond, in «unp«irt of the rule were la mig'ht !iave been proved under the commission. But it is clear th-.t the bani- mission issued, and tiiey were duly dechu'ed b:inki'upts, and tiie plaintifs ( hosen assignees of their estate and efliects. The bill for 4-1-2/. drawn by the bankrupts, and accepted by the defendant, became due tlie 7th of May, 1788 : the diflnilunt did not pay it on that day, but in Scptc^nber following jjuid to Gibson and yolir:so>i, the holders thereof, 200/. on account of the bill ; and in October f illowing, before the six months credit upon the goods was expired, he paid the residue witli intcrcst- The jury thought the bankrupts gave an undue preference to the defendant in the sale ; and gave a verdict for the plaintilVs, damages 400/. The questions for the opinion of the Court are ; 1st. Whether the plaintifis can support this action for the price of the goods ? 2dly. If they can support this action, whether the defen- dant cannot set-ofl" against it the money paid by him on the above-mentioned bill for 442/. Eussell, for the plaintiffs, was desired by the Court to confine himself to the second point, as they entertained no doubt upon the first. As to which he con- tended that though the sale were good to charge the defendant in this action, yet he w:is not entitled to support his set-oH under the 5 Ceo. 2. c. 30. *. 28. (n) The words which will be relied on are mutual credit : But they were l)y no nieana intended to be used in so extensive a sense as the one now put on lluni l)V the de- fendant. The giving of crfi//f is merely giving a future day of ))a\ment fiir a pre- existing debt ; and to entitle a defendant to set it oiV, it must exist prr\ioiis to the act of bankruptcy. As where goods are sold to be paid for at a future day, the (a) Which enacts that where " there hath been mutual credit given hv the bnnk- " rapt and any otluT person, or mutual i/e/»f* bet w«cm the bankrupt nm\ any otlier " pcrs m, at any time before such person became bankrupt, the mnunissioners. he. " shall state tiie account between them, anil one debt may be set iij,'ain«t anollieri " and wliat shall a!>')ear to be due on either siih- on the halaiirc ..f snrh rrrDtii.t, and " on setting tuck drhtu tij^iintt oiit another, and no more, bhali be claimed or piud orv '* cit!»er side respectively." C 50 APPENDIX. sendee becomes a debtor fi)r the value upon the delivery, though payment cannot be exacted from lilm till tlie day arrives : In the meantime the vendor is his credi- tor to that amount ; and in tliat sense only is the word credit to be understood in the act. This ap]5ears further from the subsequent words of tlie statute ; for the commissioners are directed to state the account between the parties, and claim or pay onlv so much as shall appear due on the balance of such account. In order therefore for'a party to set-off any demand, it must be such as may be made an item in the account, and either certain or reducible to a cei-tainty at the time of the act of bankruptcy committed. The ;u-t itself says, that the balance of tlie account is to be made appear " on setting- stick debts against one another ;" which plainly shew s that nothing- more was meant by the word creuits tlu.n such debts as were p:iyable at a futvu'e day. Then how does the statute apply to this case ? There w:'s no debt existing between the bankrupts and the defendant at the time of the bank- ruptcy ; nor was it certain there ever w-ould be one ; i'or in cascoftiie deftiidant's bankruptcy or refusal to pay, the holder miglit have proceeded against the estate of the drawers and recovered the amount ; and that perhaps after the defendant's ac- ceptance had been admitted as an item of account between him and the bankrupts. And at all events no debt could arise till after payment by the defendant, which was long after the bankruptcy, and therefore coidd not be sct-ofi ; for at that time the bill was outstanding in tl-e hands of third persons, and was therefore the sub- iect of mutual credit, if at all, between them and the binkiupts. But in Groome^s case(a) Lord Hard-vcicke was cleai-ly of opinion that a debt arising on a contingency after the bankruptcy, could not be set-oil'. And it has been dctci mined that though a note indorsed after an act of bankruptcy may be proved imder a commission against the drawer, (Zi) yet it cannot be set -oil' against an action by his assignees. (c) The cases Ex parte I)eeze,(d) Ex parte Frescot,(e) and French, assignee of Cox v. i^e«7!,(y) were all of them cases wliere the bankruyjts were actually indebted to the de- fend:mts, bi?fore the bankruptcies, in the sums wliich they set-off against the de- mands of the assignees ; which differs them matcriall}- from the present. But even supposing this were such a demand as could in a fair transaction be set-ofi in a court of law under the statute, yet it cannot avail the defendant in this case, where the whole is vitiated by fiaud. It therefoi-e becomes material to examine what part of the transaction may be substantiated, and wdiat is void. There is no fraud in the mere act of sale ; and the defendant must be bound by that so far as he made himself liable for the amount of the goods : that wo\dd have been the case had the sale been made to a person who was no creditor of the bankrupt's. But tlie objec- tion arises to the fraudulent use now attempted to be made of the sale. No party is entitled to set-off a demand against the assignees of a bankrupt, for which he could not have maintained an action, or wliich he could not have proved under a commission. Now if tlie defendant could not have done either in the present in- §tance, before the bankruptcy, he shaii not be permitted to recover the amount in- directly in this manner; for that would be to permit him to avail himself of his own fraud. Gibbs, for the defendant, insisted, first, that if the whole were to be consideretl as a bona fide ti'ansaction, the defendant was entitled to set ofi the sum paid under his acceptance ; and, 2dly. That the finding- of the jviry, as to tlie undue pi-eference, could not vary the case in favour of the plaintiffs in this action. The first question depends on the stat. 5 Geo. 2. c. 30. s. 28 ; the true construction of which is, that wherever there is mutual credit between the bankrupt and another person be- fore the bankruptcy, the debts may be set-ofi' against each other, although one of them may accrue after the bankruptcy, and although that one debt could not foim an item of an account, so as to enalile the bankrupt and sucii other person to strike a balance. The plaintiff's argument, that nothing c;in be set off under the statute, but that which may form an item of an account at the time of the bankruptcy, and the pajrment of which is only postponed for a time, directly militates ag-ainst the decision oi French v. Fenn. If that case be law, the construction now attempted to be put on this statute by the plaintiff's counsel cannot prevail. In that case Fenn {a) 1 Atk. 119. ih) Ex parte Thomas, 1 Atk. 73. (c) Marsh v. Chambers, 2 Str. 1234. (d) 1 Atk. 228. (c) lb. 230. (/) Tr. 23 Geo. 3. Co. M. L. 2d ed. APPENDIX. 51 owed nothing' to Cox previous to the bankrujrtcy . so here Lc^is and Potter owed Holsonnoilwwj:; previous to tlieir bankruptcy; but Fenn had bctii intrust; d bv Cox wiih that, upon which he probably would become ins debtor, nitniily the side uf the jewels, in which Cox was interested one-tliird pait ; so Lcviia and Potter had been entrusted by HoUaon widi that ui)()n which tliey probably would become his debtors, ss. with his acceptance for 442/. he having eiiects to the amount of 42/. only ; There, Fain, upon the credit of the jewels intrusted to him, trusted Cax on another accoimt ; so here, Lev:h imd Potter, on tlie credit of the acceptance in- trusted to thorn, trusted Hoison on anotlier account, namely, for the goods in question ; — There, after the bankruptcy of Cox, Fain received a sum of monc}' upon the sale of tiie jewels intrusted to him, which becanu' due to Cox's estate ; so here, after the bankruptcy, HoJson paid a sum of money upon the acceptance in- trusted to them, f )r whicli he has a claim upon tlieir estate. In that case the court allowed the set-olV; and yet at the time of Cox's bankruptcy no balance coiddhavc been struck between the parties, because the defendant's claim arose from tlie produce of the pearls afterwards. What that])roduce would be could not be known at the time of the bankruptcy, and consequently covdd not then form an item in an account between the parties. Secondly. The finding- of the jury, as to the undue preference, is either nugatory as to the plaintifls, or it operates as a ground of non- suit. The plaintiifs have an option either to atlirm or disaHirm the conti-act ; if the former, the defendant is entitled to set-olf his demand ; if tlie latter, though the plaintiffs might recover in trover, they cannot maintain this action. The jury found that there was a fraud in the sale : the plaintiffs cannot tlierefore contend that the fraud is confined to the use made of the sale. If the defendant had obtained his defence by fraud, it would not have availed : but it does not follow that, because there was a fraud in the sale oftlte goods, from tiie bankrupt to the defendant, the latter shall not set-off a cross-demand against the price of the goods. The fraud (if any) was in the sale of the gootls ; and tlie effect, which it lias, is this, (a) tliat the bankrupt conveyed no property in the goods to tiie defendant, and that it was a naked delivery ; if so, the plaintids sliould bring trover, not assumj^sit. Russetl in reply. Wltli respect to the case of French v. Fenn, whicli seems to have been principally relied on by the other side, there are two very material distinctions between that and the present ease ; there did exist mutual debts between the par- ties in that case, though the precise amount was not actually ascertained at the time of the bankruptcy ; but still it was capable of being reduced to a certainty at any time by the sale of tlie jewels. And if Fenn had become a bankrupt instead of Cox, it cannot be denied buttiiat Cox miglit have come in under /•'t'»;i'« comini.ssion for a third of the value of those jewels. .'\.gain, in that case the jewels were in the hands of the party between whom and tlic bankrupt the account w:ls to be settled and tlie mutual debts and credits allowed : whereas here the acceptance was in the hands of tlilrd persons at the time of the bankruptcy, without any certainty that they w juld ever be discharged by the defendant. Cur. adv. vuit. Lord Ke vvov, Ch. J. n iw lelivered the o|)inion of tiie court. His Lordship, after stating tiie facts, said, W'* have considered tliis case, aiul are of opinion that the defends it li.as nude a sulHcient defence against the action in lis present form, and consequently tiiat a judgment of Ho/ij«/f must be entered. It Is expressly stated in tiie case that the goods in question were delivered by tiie bankrupts to the defendant with a view to defraud the rest of their creditors ; and tlierefore uii aetion miglit have been framed to disifHrm tlie contract, wliicli was thus tiiiclured with fraud ; for if the assignees liad brought an action of trover, tliey might have recovered the value of the goods. 'Pie statute 5 C?co. 2. f- 30. *. 28. enactn tiiat where it shall appear to the commissioners that thire liatii bi-eii mutual credit be- tween the bankrupt and any otiier person, or mutual debts between the bankrupt and any other person, before the l)ankruptcv, the roiiimiKsioiu is or the assignees shall state the account between them, and one delit may he set iigiiiii.ii anotiicr ; and the balance only of sucli accounts sliall he claimed and paid on elllur wide j in the m )st extensive W)rdi. Andtherefirc we are perfectly sutisfied with thirciiHcs ex parte Di.ze,{b) and French v Fenn. Uut if an action of trover lud been (a) Co'A B L. Cd cd (A) 1 Atk. 228. 52 APPENDIX, broug-ht, instead of assumpsit, this case would have difFered materially from those tw) ; because in both those cases the g-oods had g-ot into the hands of the respec- tive parties prior to the bankruptcy, and without any view of defrauding- the rest of the creditors ; and therefore, accordinj^ to the justice of tb.ose cases, whether tr.)ver or assumpsit liad been broug-ht, the whole account ou^ht to have been set- tled in the wiy in which it was, because the situation of tlic parties was not al- tered with a view to the bankruptcy : but here it was ; and if trover had been brous^ht, the defendant would have had no defence, and those cases would not have availed him. B it this is an action on the contract for tnc goods sold by the bank- rupt. And alth'.)Ug-h the assig-nees may either afhrm or disaffirm tiie contract of the bankrupt, vet if they do affi.-m it, they must act consistently throughout ; tliey can- not, as has' often been observed in cases of this kind, blow hot and cold ; and as the assis^nees in this case treated this transaction as a contract of sale, it must be pursued' tlu'oug-h all its consequences ; one of whicli is, tb.at the party buying' may set up the same defence to an action b'-out^'-lit by the assignees, which he mig-ht have used ag-aiustthe bankrupt himself; and consequently may set-ofi another debt •wh'ch was owniG^ from the bankrupt to him. This doctrine is fully recognised in Hitckinsv. Campbell, {a) and in A7';|' v. Leith.{b) Now here the assig-nces, by brin'/mg' this action on the contract, recognised the act of the banki'upt, and must be bound by the transaction in the same manner as the bankrupt himself would have been ; and if he had brought the action, the whole account must have been settled, and the defendant would have had a right to set-ott'the amount of the bill. Therefjve, on the distinction between the actions of trover and assumpsit, we are all of opinion that a judgement of nonsuit must be entered. Judg-mcnt of nonsuit. Atkinson and others, Jssi,q,'nee3 of Hodgci, a Bankruht v. Elliot and another^ M. r. 38 Geo. III. A. D. 1797. 7 2'. R. 378. O jN the trial of this action of assumpsit for money had and received, the follow- ing- case was reserved for the ojjinion of this coui't. On the 2d May, 1796, the defendants sold to Hodges, the bankrupt, 300 barrels of tar for 430/. at 6 months' credit, and on the 3d of the same month tiiey drew a bill on him at six months' date for the amount, Avhich Hodges accepted On the 2d September, 1796, HrJges also purchased at 6 months' credit of the defendants 200 barrels of tar for 230/. for which he g-ave the defendants his acceptance to their draft dated 6th September, 1796, at six'months' date. Tlie first mentioned bill for 430/. became due on the 6ih November, 1796, which Ho 'ges was not able to pay, but on the 9th of the said month he g-ave the dt fendants a bill upon Walpole and Co. for 100/. die the Ilth of December foUnvinr-, and on the following day {No- •uember, lOJi) indorsed and gave defendants a bill of exchange drawn by him on and accepted by Bulloch and Son, dated 27tli October, 1796, at six weeks after date for 500/. and the defendants gave him the following- memorandum or undertaking: " Memorandum ; I promise to pay to Mr. N. Hodges 170/. when his bill on Messrs. « BuHock and Son is paid, which bill I received November 10th, 1796, (signed) « Thomas E'lht and Co.— Bill dated October 27th, at 6 weeks, f ;r 500/." It •was not in the contcm-^'lation of either party to do more than take up the first men- tioned acceptance of H, Iges with tlie bill of Bullock and Son, and therefore ufier paym-jnt of what wis d le on that acceptance, so given as .aforesaid, for the first iTi'^ntio'ied parcel of goods, the residue was to be returned to Ho Iges. — The accept- ance by Messrs. Bullock and Son for 500/. became due on the 11th of December, 1766, and was then dily paid bv them to the defendants, the holders thereof ; and the abivementioned b'll on WilpoleAwlCo. for 100/. was likewise paid on that d -v. On the 13th of 'D:icember, 1796, a commission of bankruptcy issued against H^ Iges who was duly declared a bankrupt, and the nlaintiffs were chosen assignees of 'I'S est-\te and effects. Tiiey immediately applied to the defendants for payment of the 170.''. thev had been overpaid in the said bill for 500/. on Bullock and Son, pursuant to their undertaking above stated, when they objected to it alleging (fl) 2 Bl. Rep. 827. (6) Ante 2 'ool 141. APPENDIX. 53 that they then held Hodges' acceptance for 230/. above mentioned, and claiming a right to retain the said UOl. in part payment of the same, though it did not bt-come due and payable tilltlie 9th of March last, when the six months' credit for the goods sold to HoJges (which was their usual credit and customary mode of dealing) ex- pired. T le action was commenced on the 12th of Februar',' last. Rrakr for the plaintiffs, after stating the question to be wlicthcr the defendants ^vere entitled to set-ortthe bankrupt's acceptance, or rather to retain tlie 170/. the remainder of the bill for 500/. towards satisfaction of their demand on the b:inknipt for 230/. the price of the goods sold by them to him on the 2d of Septtmher, 1796, argued in the negative. This question depends on the contract between the parties made on the 10th of November, 1796. Now tlic deposit of the bill for 500/. with the defend.ints on that day was not a general deposit to answer all demands that they might have on the bankrupt, but for the specific purpose of securing to tlieni the 23J/. the remainder of the value of the first goods sold by them to the bank- rupt ; and by that memorandum the defendants expressly agreed to return the over- plus of 170/. to the bankrupt as soon as the bill for 500/. was paid. Tl>e attempt, therefore, on the part of the assig-nees, to retain this in satisfaction of anotlier debt is in direct opposition to their agreement ; it being stated as a fact in the case tliat nothing more was in the contemplation of the parties, when the bill for 500/. was deposited with the defendants, than to secm-e to them the amount of the bankrupt's first acceptance for the first parcel of tlie goods. As between the original parties to this contract it is clear tliat tlie defendants coid show the real sum due on the Ixnid to entitle him to liis. set-off: and it w:is decided in Sjmmons v. Knox that the averment of that sum was traversable. The ) which w*» an (a) F.. '1% Go. .". n U ('•) Arte 4 vol. 590. 56 APPENBIX. action for a malicious prosecution, the declaration stated tliat the indictment " afterwards, to ivit, on the 25th oi' February 1791, came on to be tried ;" by the record of that indictment it appeared that tlie trial was on a diflerent day ; on which the plaintifi' was nonsuited ; and on a motion to set aside that nonsuit, this court thought the objection fatal, " though it were laid under a videlicet, the day being material" Judgment for the Plaintiff INDEX. A CCOUNTS. connected, 1 . unconnected, 1 . how balanced in bankruptcy, 56. ACTION. how far debt must be due at commencement of, 15, 17, 35. in wliat a set-ofi"may be given in evidence, 19. for arrears of annuity, 20. ADMINISTR.\TOR, 15, 18,23,34. AGENT and PRINCIPAL, 23, 29. AGREEMENT. special, 19, ANNUITY, 20. ARREST. illegal, without deducting an opposite demand, 5. ASSIGNEE of bail bond, 28. of bankrupt, 49, 61. ASSUMPSIT. for general damages, 19. for a sum certain, 19. ATTORNEY. his lien in K. B. and C. P. 12. his bill when to be set-off, 36. AUTER DROIT, 18, 24, 51. BAIL BOND, 28. BANKRUPTCY, 46. BILL of EXCHANGE, 49, 5 5. particulars, 63. BOND. joint and several, 25. bail, 28. of indemnity, 54. CASE, 18. CO -M .MISSION, del credere, 30. CO>4NECTED ACCOUNTS, 1. CONTINGENT DEBTS, 53. CORPORATION, 27. 58 INDEX. COSTS. interlocutory, 5. COVENANT, action of, 19. COUNTRY CAUSES, Set-off in, 40. COURT, inferior and superior, o7 . payment of money in, 40. CREDIT, mutual, 47. DAMAGES. liquidated, 21. unliquidated, 21. DEBTORS, insolvent, 46, 59. DEBTS. contingent, 52. extinguishment of, 20. joint and several, 23, 61. mutual, 15, 18. of plaintiff, 18. on bond, 19. DEFENDANT'S demand, 18, 20. DELIVERY of GOODS. set-off before, 21. DEMAND, equitable, 48. DEMURRER, 44. DETINUE, 18. DISCHARGE from execution, 20. DIVIDEND in Bankruptcy, 55. EQUITABLE SET-OFF. at laM-, 10. in equity, 61. demand, 48. EXCHANGE, bill of, 49, 55. EXECUTION, discharge from, 20. EXECUTOR, 15, 18, 23, 34, 40. EXTINGUISHMENT of DEBT, 20. FORFEITURE of penaltv, 54. FORTY SHILLINGS, debt reduced to, by set-off', 37. GENERAL ISSUE, 15. GREAT SEAL, 57. HUSBAND and WIFE, 23, 33. INDORSEMENT of BILL, 56. INSOLVENT DEBTOR, 46, 59. INSURANCE, i^olicy of, 55. INTERLOCUTORY COSTS, set-off of, 5. INTESTATE, 15, 18,22. 14. INDEX. 59 JOINT and SEVERAL. bond, 25. debtors, 23. JUDGMENT. Set-off of, at common law. in different courts, 7. different sorts, 8. equitable demands on, 10. under the statute, 36. entry after, 45. JURISDICTION of COURT, 37. LEGACY, 48. LIEN in general^ 49. of attornetf.) 12. in K." B. inC. P. LIMITATIONS, statute of, 20, 45. LIQUIDATED DAMAGES, 21. MALICIOUS PROSECUTION, 5. MONEY, payment into Court, 40. MOTION, set-off bv, 6. MUTUAL credits, 47, debts, 15, 17. NOTICE of SET-OFF, 15, at wluit time it must be given, 41. general, 41. special, 41. generally given in country causes, 4 1 . nature of, 40. OPTION, defendant's, to set-off, 37. P \RTICULARS, Bill of, 67. PARTNERS, 23, 24, 25, 26. dissolution of, 61. PAYMENT of Money into Court, 40. PENALTY. in speci »lty, 15, 40. forfeited at law, 54. PEPJURY, 5. Pi.AINTU- 1- 'b demand, 18. PLEA of SET-OFF, 1 5, 44. in t^eneral, 44. in the case of a specialty, 45. whetlier pleadable after rule lo abide by plea, 4U. rule to abide bv, 40. PLEADlNi; SK'I-oVf. ill baiikiuj)i(:y, 46. niofic of, 3.). wncn obii^jalory or optional, 15, 40. 60 INDEX. when defendant's demand is the greatest, 40. or tiie least, 40. PRACTICE, 63. PREFERENCE of Notice or Plea, 40. PRINCIPAL and AGENT, 23, 29. and Surety, 55. REPLEVIN, 18. REPLICATION, 44. SEAL, Great, 57. SET-OFF, at Law. common, 5. by statute in general, 15. SPECIALTY 15. STATUTE of LIMITATIONS, 20. SURETY, 53. SURPLUS, 61. SURVIVORSHIP, 54. TESTATOR, 15, 18, 22, 39. TORT, 18. TRAVERSE, 43, 45, TRESPASS, 18. TRUSTEES, 23, 27. UNCONNECTED ACCOUNTS, 1. are the subjects of set-off, 1 . UNDERWRITER, 55. UN LIQUID ATD DAMAGES, 21, USURY, 48. VERDICT, 38. WAIVER of SET-OFF, 37. WIFE and HUSBAND, 2o, 33. F I J\ri S. 000 744 287 m 11 m I m W U.> u ;,/' ( ''