SET-OFF.

STATUTORY PROVISION.

5734. The right of set-off is established by Statute, which makes express provisions for its reasonable exercise.

5735. Obligation to Allow.-Where there are mutual debts between two individuals, he who claims a settlement must allow the amount that he owes in mitigation of his claim.

5736. Agreement no Bar.—The right of set-off cannot be impaired by any alleged agreement between individuals which may be pleaded as a waiver of the right; for,

5737. Void Contract.-A contract to pay ready money does not deprive the contractor of his set-off; thus,

5738. Illustration.—If A owes B £5 with a stipulation for credit, and A sells £20 worth of goods to B, exacting a promise or stipulation for "cash," yet B can only be required to pay the £15, however formal his stipulation to pay cash for the goods may have been; and

5739. Goods not Delivered.-The price of goods sold, but not delivered, may be pleaded as a set-off, though the vendor may elect to retain his lien (5511) upor. the goods.

5740. Mutual Debts.-The equal right of set-off can only be claimed in respect of mutual debts between individuals.

DAMAGES.

5741. Debts Against Damages.—If an action is brought for uncertain damages, resulting from the breach of a contract for the performance of some particular duty, and not for a debt or mere money demand, the defendant cannot set off a debt due to him from the plaintiff, against such claim for uncertain damages; and

5742. Damages Against Debts.-When an action is brought for a debt, the defendant cannot set off uncertain damages against the debt; but,

5743. Certain Damages.-As soon as damages are ascertained, and have thus been resolved into a debt, they may be set off against another debt.

AGENTS.

5744. Set-off Barred.—If an agent, who has got possession of the money of his principal, commits a breach of duty by retaining the money in his own hands, and the principal brings a special action against him for the breach of duty, the agent cannot plead a set-off ; but,

5745. Set-off Allowed.—If a principal sues an agent simply for money had and received, then the agent may plead a set-off if he has one; notwithstanding,

5746. Actions. In disputes between principal and agent, the former cannot sustain a special action adopted for the purpose of barring the agent's just set-off, when a simple action would have met the justice of the case.

it

HOLDERS OF BILLS.

5747. A set-off against the holder of an over-due bill is good, but may be defeated by the holder endorsing it to a third party for value. FACTORS.

5748. Ignorance of Purchaser.-When a factor sells goods on commission, which goods belong to a third party, and the purchaser is a creditor of the factor, he may set off his claim against the factor as a satisfaction for the goods he has so purchased, unless the factor distinctly tells such purchaser that the goods are not his; but,

5749. Knowledge of Purchaser.-When a purchaser buys goods. of a factor, knowing that they are the goods of a third party, such purchaser cannot set off a debt due to him by the factor, whether the factor notified him of the fact or not; on the other hand,

5750. Liability of Principal.—If a creditor buys goods of a factor, knowing them to be the goods of a third person who is indebted to him, such creditor has his right of set-off against such third person, and may effectually refuse to pay the factor; in like manner,

AUCTIONS.

5751. Set-off Against Vendor.-If an auctioneer sells goods, which are well known to be the property of A, and B (a creditor of A) buys at the auction, he is entitled to his set-off in paying for the goods, in defiance of any condition of sale which the auctioneer may have prescribed to the contrary.

EXECUTORS.

5752. Debtor's Set-off-When a person is indebted to the estate of a deceased person, he is entitled to his set-off against the executor. 5753. Executor's Set-off.-An executor cannot legally set off against each other debts which are due to or payable by him, as an executor on the one hand, and as an individual on the other.

IN BANKRUPTCY.

5754. If a person is indebted to a bankrupt estate, he is entitled to his set-off (if any) against the assignees.

JOINT STOCK LIABILITIES.

5755. Solvent Companies.—A creditor of a joint stock company, which is solvent, may set off the debt of the company against calls upon him, in respect of shares; and

5756. Voluntary Liquidation.-It has been held that a shareholder of a company which is under voluntary liquidation (a), may set off in full the debt due to him against calls made upon him in respect of shares; but,

5757. Compulsory Liquidation.—When a joint stock company is in course of compulsory liquidation (a), a shareholder cannot plead that he is a creditor, as a set-off against calls; for,

5758. Calls in Fuli.-When a company is winding up, under legal compulsion (a), all calls must first be paid in full, irrespective of set-off.

STATUTE OF LIMITATIONS.

5759. A debt barred by the Statute of Limitations can (in ordinary cases) be set off against a debt not so barred (6672).

LEGACIES.

5760. A legacy may be set off against a debt of a legatee to the testator, even though the debt be otherwise barred by the Statute of of Limitations (6672).

AFTER ACTION.

5761. Judgment Debts Paramount.-Debts arising after action commenced cannot be set off against the debt out of which the action arises.

5762. Joint Plaintiffs.-Where there are several joint plaintiffs suing for the recovery of a joint debt, a separate debt, due from one of them to the defendant, cannot be set off against the joint debt claimed by all, unless such set-off can be sustained under an express agreement of all the parties; thus,

5763. Individual Debts.-When a firm of traders sue another firm on a general account, the defendants cannot set off an amount due to them for goods supplied to one of the plaintiffs in his private capacity (b).

5764. Town and Country Attorneys.—If a country attorney, acting on behalf of his client, employs a town agent to recover a debt due to such client, and the town agent receives and retains the money, and the client sues him for the amount, the town agent cannot set off a debt due to him from the country attorney.

(a) See "Winding-up of Companies."

(b) See "Partnership."

RECEIPTS.

5765. Money having been paid and accepted, the next point which arises, is the giving and taking of a receipt.

STAMPS.

5766. Graduated Scale Abolished.-Formerly there was a graduated scale of charges for receipt stamps, ranging from 6d. when the amount reached £5, up to 10s. for the largest amounts, receipts under £5 being exempt; but,

5767. Uniform Amount.-Receipt stamps are now at the uniform cost of one penny each, irrespective of amount; and,

5768. Exemption.-The exemption of ordinary receipts from stamps now extends only to sums under £2; for,

5769. Penalty.-Receipts, as a general rule, for sums amounting to £2 or upwards, must be stamped, under a penalty of £10; though, 5770. Exceptions.-Friendly societies, banks, and some other bodies are exempted from the use of receipt stamps in certain cases, under special acts.

OBLIGATION OF PARTIES.

5771. Mutual Advantage.—In all cases of payments it is usually advantageous for both parties, that a receipt should be tendered and accepted; but,

5772. Debtor's Interest.—When there is any particular point to be gained by procuring a receipt, the debtor, upon setting out to tender the money, should provide himself with a written form of receipt, duly stamped, or otherwise provide writing materials and stamp in case they should be required; for,

5773. Creditor Exonerated.—A creditor is not legally bound to furnish a receipt for money paid to him by a debtor, nor yet the materials for producing one; but,

5774. Creditor Liable.-If a debtor, upon paying money to a creditor, tenders a form of receipt (stamped if amounting to £2), the creditor is then legally bound to sign such receipt, and to pay the debtor for the stamp, under a penalty of £10 for refusal.

RECEIPTS AS EVIDENCE.

5775- Not Conclusive.—As a creditor is not legally bound to furnish a receipt for money received, on the other hand the law does recognize a receipt, when produced, as conclusive evidence of payment; for,

5776. Question for a Jury.-Though a receipt, as evidence, is not to be despised, the courts always leave it an open question for the jury, whether, under the circumstances, and in the face of rebutting evidence, a receipt is to be taken as conclusive; therefore,

5777. Collateral Evidence.-The possessor of a receipt, who is, notwithstanding, sued in respect of the amount to which it refers, should be prepared with collateral evidence to sustain the validity of such receipt, or he may have reason to regret his misplaced confidence in the document.

CHEQUES.

5778. Substitutes for Cash.—The course of trade in modern times, has led to the use of cheques upon bankers, as substitutes for cash, in almost all considerable payments; consequently,

5779. Important Knowledge.—It is important that the law relating to cheques should be known by every one engaged in the active business of life.

5780. Definition.-A cheque is an order upon a banker to pay to a person named a sum of money on behalf of the drawer (5959). 5781. Obsolete Laws.-Formerly there were severely restrictive laws, which compelled the stamping of certain cheques, while others were exempt from stamps; and

5782. Old Restriction.—In the "good old times" all cheques for sums under 20s. were absolutely void, and any person drawing, negotiating, or facilitating the use of cheques thus forbidden, was liable to a penalty of £20 for every offence; but,

5783. Restriction Abolished.—A cheque for any amount (however small) may now be legally drawn, and appropriated at the option of the parties.

STAMPS.

5784. Amount.-The stamps upon cheques, unlike those upon receipts (5768), are irrespective of amount, however small; therefore 5785. Invariable.-Every cheque, for any amount, large or small, must have a penny stamp impressed or affixed thereon, under a penalty of £10 for omission; and

5786. All Parties Liable.—All the parties who may draw, nego.