prove as a defence, that there is a custom of the trade that the amount of damage done to goods dyed may be deducted from the price of the dying (c). And although there can be no set-off in replevin, even in the instance of an avowry for rent (d); yet, as the landlord's just claim is only to the balance of rent issuing from the premises, after his ground-rent, and land-tax imposed upon him in respect of the premises, or any annuity, &c., he may have charged thereon, are satisfied, the tenant has a common law right to plead in bar that he has satisfied such prior claims for the landlord (e).

The defence of set-off does not exist at common law: it is founded on the statute 2 Geo. 2, c. 22, s. 13 (made perpetual by the statute 8 Geo. 2, c. 24, s. 4), by which it is enacted, that "where there are mutual debts between the plaintiff and the defendant, or if either party sue or be sued as executor or administrator, where there are mutual debts between the testator or intestate and either party, one debt may be set against the other; and such matter may be given in evidence upon the general issue, or pleaded in bar, as the nature of the case shall require; so as at the time of pleading (f) the general issue, where any such debt of the plaintiff, his testator or intestate, is intended to be insisted on in evidence, notice shall be given of the particular sum or debt so intended to be insisted on, and upon what account it became due, or otherwise such matter shall not be allowed in evidence under such issue."

The 5th section of the 8 Geo. 2 provides, that by virtue of the preceding clause mutual debts may be set off against each other, as before mentioned, although such debts be of a different nature; but that in cases where either of the debts accrues by reason of a penalty contained in any bond or specialty, the same shall be pleaded, and the plea shall state how much is justly due on either side: and the plaintiff shall have judgment for the just balance only.

(c) Bamford v. Harris, 1 Stark. R.

343.

(d) Sapsford v. Fletcher, 4 T. R. 512, per Lord Kenyon, C. J.

(e) Sapsford v. Fletcher, 4 T. R. 511; Taylor v. Zamira, 6 Taunt. 624; 2 Marsh. 220, S. C.; Andrew v. Hancock, 3 Moore, 278; 1 B. & Bing. 37; Spragg v. Hammond, 4 Moore, 431; 2 B. & Bing. 59, S. C.; Laycock v. Tufnell, 2 Chitty R. 531 a.

(f) If defendant has pleaded the general issue only, the court or a judge will allow him to withdraw it, and plead it de novo with a plea of set-off; Blackbourne v. Matthias, 2 Stra. 1267. Set-off must since the new rules on pleading be specially pleaded, and cannot be given in evidence under the general issue or a notice of set-off, post, 854.

It is not compulsory on the defendant to avail himself of his right of set-off: he may satisfy the plaintiff the whole of his debt, and then resort to an action for the money due from the plaintiff (g); but if the evidence of the debt claimed to be due from the plaintiff to the defendant be doubtful, the fact of the defendant's having omitted to set it off when he had an opportunity, might induce the jury to find against the demand. If the defendant's set-off exceed the plaintiff's demand, an action lies for the surplus (h).

2. When a Set-off is available in Reference to the Plaintiff's Cause of Action.

The statute does not apply, except in the case of mutual debts; that is, to claims in the nature of a debt, reduced or reducible to a certain or specific pecuniary amount, and recoverable in an action ex contractu, as assumpsit, debt, or covenant (i). A set-off is allowed to an action on an annuity bond (k). It does not apply to a claim in respect of which the plaintiff seeks to recover unliquidated damages, which it is peculiarly within the province of a jury to estimate and assess (1). No set-off can therefore be pleaded to a special count in assumpsit for not indemnifying the plaintiff as the accommodation acceptor of a bill in defendant's favour, and which avers that the plaintiff was forced and obliged to pay the bill, with interest, charges and expenses. The court observed, that if the contract declared upon be such as might entitle the plaintiff to recover special damages, the statutes of setoff do not apply, although no special damage be laid; that the jury might possibly give damages for the manner in which the plaintiff had been forced and compelled to pay the bill; but that the defendant might, perhaps, have pleaded a set-off to that part of the count which charged the defendant with the amount of the acceptance paid by the plaintiff (m).

(g) Laing v. Chatham, 1 Camp. 252; see further, post, 856. A plaintiff who arrests for the whole of his side of an account without giving credit for an acknowledged or clear debt due to the defendant, may be treated as having acted maliciously, and without probable cause; see Austin v. Debram, 3 B, & C. 139; 4 Dowl. & R. 653, S. C.

(h) Hennell v. Fairlam, 3 Esp. R. 104.

(i) Morley v. Inglis, 5 Scott, 314; 4 Bing. N. C. 58; 6 Dowl. 202, S. C. (k) Collins v. Collins, 2 Burr. 820; 2 Kenyon, 530, S. C.

(1) Auber v. Lewis, E. T. 1818, K. B.; Manning N. P. Dig. tit. Set-off, 2nd ed. 251; Tidd, 9th ed. 663, 664; Grant v. The Royal Exchange Assurance Company, 5 M. & Selw. 442.

(m) Hardcastle v. Netherwood, 5 B. & Al. 93; see Colson v. Welsh, 1 Esp. R. 378.

Nor is a set-off available in an action for not accepting a bill of exchange for the price of goods, if the suit were commenced before the expiration of the period the bill was to run (n). Nor is it allowed in an action on a policy of insurance on a ship or goods, averring a total loss (o); or in assumpsit against an agent for not accounting (p); or in debt on bond conditioned for replacing stock (q).

In an action for a breach of a covenant for quiet possession, a set-off cannot properly be pleaded (r).

Nor can money due upon a guarantee of the debt of a third person form the subject of a plea of set-off, a guarantee being a mere contract of indemnity (s).

We shall hereafter (t) have occasion to point out the distinction between the sum reserved as a penalty, and a sum reserved as liquidated damages between contracting parties, in the event of a breach of their agreement. When the sum is to be treated as a penalty, it cannot be set off (u): aliter, where the full amount is recoverable as liquidated damages (x).

Where upon a contract for the sale of goods or for work, &c. it is expressly agreed that the price shall be paid in ready money at the time of the delivery of the goods, the vendor has a lien on the goods for the price, although he is indebted to the purchaser in a larger amount; and even upon the bankruptcy of the vendor, his assignees cannot be sued in trover for the goods sold, or upon which the work was done, unless the price be actually tendered (y). But although goods were to be paid for in ready money when delivered, yet if the vendor parts with them, he loses his lien, and

(n) Hutchinson v. Reed, 3 Camp. 329. But in the case of bankruptcy a defendant may set off a debt due to him from the bankrupt against a claim by the assignees against the defendant for not accepting a bill of exchange in part payment of goods sold by the bankrupt to the defendant; Gibson v. Bell, 1 Bing. N. C. 743, post, 853.

(0) Grunt v. The Royal Exchange Assurance Company, 5 M. & Selw. 439; Hughes on Ins. 463, 474.

(p) Birch v. Depeyster, 4 Camp.

385.

(9) Gillingham v. Waskett, M'Clel. R. 198.

(r) Warn v. Bickford, 7 Price, 550; Weigall v. Waters, 6 T. R. 488.

(s) See Morley v. Inglis, 5 Scott, 314; 4 Bing. N. C. 58; 6 Dowl. 202, S. C., recognizing Crawford v. Stirling, Esp. 207; and see the cases there cited.

(t) Post, 8€3.

(u) Nedriffe v. Hogan, 2 Burr. 1024; Bul. N. P. 180; Freeman v. Wyatt, 1 Bla. R. 394; Dowsland v. Thomson, 2 Bla. R. 910; Honclett v. Strickland, Cowp. 56; Gillett v. Mawman, 1 Taunt. 137.

(r) Fletcher v. Dyche, 2 T. R. 32; and see Duckworth v. Alison, 1 M. & W. 412, ante, 572.

(y) Clarke v. Fell, 4 B. & Ad. 404; 1 N. & Man. 244, S. C. and infra, note (z).

then, in suing for the price, the defendant's set-off will be let in. This was decided in Eland v. Karr(z), where, to the plea of setoff, the plaintiff replied that the defendant agreed to pay ready money, and upon general demurrer the replication was held to be bad. It was urged by the plaintiff's counsel that the set-off was unjust, because the defendant having obtained the goods at a lower or ready-money price, thereby attempted to avail himself of a mode of payment adapted to a credit price; but the court answered, that in estimating the plaintiff's damages, the jury might take into consideration the loss he had sustained by not being paid in ready money. In Cornforth v. Rivett (a) it was held that upon such a contract the defendant might even set off the plaintiff's acceptance, of which the defendant had become the holder after the sale and before the delivery of the goods: Lord Ellenborough observing, that supposing that it could have been shown that the bill was really the bill of another person put into the defendant's hands to set off against his debt, that might have presented a different question.

And it has been decided that an express agreement by a broker that he will sell goods for his principal, and pay over the whole proceeds, without setting off a debt then due to him from his principal, is not binding upon the broker, so as to deprive him of his legal right of lien or set-off, although the plaintiff declare specially upon such agreement (b).

And although a creditor borrow money from his debtor, and give a promissory note for it, and afterwards expressly promise repayment, a set-off is available (c).

If the moneys claimed under a special count as damages may also be recovered under the common count in the declaration, and the defendant plead a set-off as to the latter count, he shall have the benefit of his set-off, and the plaintiff shall not be permitted to exclude it by having declared specially (d). It would be

(z) 1 East, 375, recognised in Mayer v. Nias, 1 Bing. 311; 8 Moore, 375, S. C. See per Lord Ellenborough in Fair v. M'Iver, 16 East, 130; and per Patteson, J., Groom v. West, 1 P. & Dav. 19; 8 Ad. & E. 758, 770, S. C.

(a) 2 M. & Sel. 510, recognised in Clarke v. Fell. See also Mayer v. Nius as to the effect of the vendor keeping his dishonoured acceptance,

though he at first refused to take it as payment for the goods.

(b) M'Gillivray v. Simson, 2 C. & P. 320; 9 D. & R. 35, S. C. (c) Lechmere v. Hawkins, 2 Esp. R.

626.

(d) Birch v. Depeyster, 4 Camp. 385; 1 Stark. R. 410, S. C., but not S. P. In this case there was a special count by the owner of a vessel against the captain, for not accounting for

unjust to deprive a defendant of his set-off, because the plaintiff has, without occasion, inserted a special count as for damages, in his declaration upon the demand included in the common count.

On the other hand, there are some cases in which a set-off may be excluded by declaring specially for damages. Thus, if a bill be delivered by A. to B. for a special purpose, viz. to deliver it to a creditor of 4. in payment of a debt, but B. receive and retain the amount, A. may avoid a set-off for money due from him to B., by suing the latter specially for the breach of the promise to deliver the bill to the creditor; and if A. sue merely for money had and received, B.'s set-off will be available (e). And a set-off against the holder even of an overdue bill of exchange may be defeated by his indorsing it to a third person for value, without notice of the set-off (ƒ).

3. What Debts or Demands due to a Defendant may, by virtue of the Statutes, be made the subject of a Set-off.

The general principle is, that the demand sought to be set off must be of a liquidated nature.

In an action by a servant against his master for wages, the latter cannot set off the value of goods lost by the servant's negligence; but if it be proved to have been part of the original agreement between them, that the servant should pay out of his wages for all his master's goods lost through his negligence, the value of the goods so lost may, we have seen, be deducted under the general issue from the amount of the wages (g),

It appears that the price of goods bargained and sold, but not delivered in consequence of the plaintiff's refusal to pay the money, so that the defendant has a lien on the goods for the price, may be set off (h); or money due on a judgment, though a writ of error be pending thereon (i).

The defendant cannot set off a debt due to him upon a judgment whereon he has charged the plaintiff in execution; and