Taylor v. Hardin

Brown, C. J. 1. The bill of exceptions and facts agreed upon as the material parts of the record in this case, show that the partnership transactions between plaintiff and defendant were distinct from the loan of money, to secure which the mortgage was given by Hardin. It is true, he says he expended most of the money which Taylor loaned him for horses, wagons, provisions, etc., to enable him to carry out his part of the partnership agreement. The use to which he applied the money in no way changes the nature of the two contracts, or connects them together as one transaction. If Hardin was bound by the contract of partnership to furnish timber to be sawed at the mill, and to haul it to the mill, and the lumber from the mill to the railroad, and he borrowed money of his partner, which he used in the purchase of mules, wagons, and other necessary supplies, to enable him to carry out his contract with his partner, this loan was as distinct from the partnership as if he had. borrowed the money from a third person. The two contracts being distinct, we are of opinion that Hardin could not set up a claim for damages which he alleges were due him by his partner in the partnership business, against plaintiff’s claim for borrowed money, by way of set-off or recoupment. 2. It was not seriously contended in the argument that Hardin was entitled to set-off his damages against the note given for the borrowed money. But it was urged by the learned counsel that he was entitled to set up the damages by way of recoupment. We do not so understand the law. [581] Recoupment is a right of the defendant to have a deduction from the amount of the plaintiff's damages, for the reason that the plaintiff has not complied with the cross obligations or independent covenants arising under the same contraet. See Revised Code, section 2858. And it may be pleaded in all actions ex contractu, where from any reason the plaintiff under the same contract is in good conscience liable to the defendant. Section 2861. This was an action ex contractu upon a contract distinct from the contract of partnership, and the defendant was not entitled by way of recoupment to set up a claim for damages growing out of the partnership business. Judgment reversed.