Halfpenny v. Bell

Mr. Justice Paxson delivered the opinion of the court, May 29th 1877. [130] It was held in Hunt v. Gilmore, 9 P. F. Smith 450, that unliquidated damages arising ex contractu from any bargain, may be set off under the Defalcation Act of 1705, 1 Sm. Laws 49, whenever they are capable of liquidation by any known legal standard. Tested by this rule, the offer of evidence embraced in the plaintiff’s assignment of error ought to have been received. That the damages were unliquidated, and that the offer was to prove a set-off arising out of a distinct and separate cause of action, is not material. There was no difficulty under the well-settled rules of law in liquidating the damages; that they arose out of a separate cause of action constitutes no objection. Matters growing out of the same transaction, as a general rule, are the subjects of an equitable defence; our Defalcation Act allows other and totally distinct transactions to be proved by way of set-off, in order to avoid circuity of action. We see no reason why the defendant below should not set off as a defence to the note in suit, the damages, if any, sustained by him under the agreement of 13th of June 1868. The objection that such damages arise from tortious acts, is not tenable. The agreement, although inartificially drawn, is a covenant to repair. Under it Bell, the plaintiff below, acquired the right to float his logs down the stream through the defendant’s property, subject to the condition of promptly repairing any accidental injury occasioned thereby. It does not necessarily follow that the damages which the defendant claimed to set off, arose from any tortious acts. If they did, we concede, under all the cases, they could not be allowed. Judgment reversed, and a venire facias de novo awarded.