Phillips v. Lawrence

The opinion of the Court was delivered by Kennedy, J. The defendants below are the plaintiffs in error, and offered, as a defence to a part of the plaintiffs’ claim, to defalcate a demand which they, as appears by the affidavit of one of them, filed in the action as a defence in part to the plaintiffs’ claim, alleged they had against the plaintiffs, arising out of a contract made and executed by and between them, whereby the plaintiffs sold and delivered to the defendants, in the month of August 1838, 201 bags of walnuts, warranting them to be of a quality equal to samples thereof shown at the time. The defendants, however, by the affidavit filed, allege that about one-half of the walnuts so sold and delivered were of an inferior quality to that of the samples, also of different marks from the samples, and in short that they were rotten and of no value whatever; by reason whereof they, the defendants, sustained a loss equal to from $400 to $500. The court below were of opinion that the demand or claim thus set up by the defendants below against the plaintiffs there, could not be set off or defalcated under our Defalcation Act, and accordingly rendered a judgment against them for the whole amount of the plaintiffs’ demand. In this it is alleged that the court erred. The [153] only question, therefore, which presents itself, is, whether the defendants had not a right to set off their demand against the plaintiffs on account of their having delivered to them under the contract for the sale thereof, walnuts of an inferior quality and greatly less value than what, by the terms of the contract, they had undertaken and bound themselves to do. In order to determine this question, it is proper to refer to the terms of the .Act for defalcation, which are, that “if two or more dealing together be indebted to each other upon bonds, bills, bargains, promises, accounts, or the like, and one of them commence an action in any court of this Province (Commonwealth), if the defendant cannot gainsay the deed, bargain or assumption upon which he is sued, it shall be lawful for such defendant to plead payment of all or part of the debt or sum demanded, and give any bond, bill, receipt, account or bargain in evidence, &c.” Now, that the demand of the defendants against the plaintiffs is founded upon a bargain alleged to have been made between them, is clear from the terms of the affidavit of defence, and therefore within the express terms of the Act; so that one might naturally be led to conclude that the defendants’ demand came within the spirit and meaning of the Act, as well as the letter of it, unless indeed it' should be found from experience to be impracticable to give to the Act such an operation, or be found contrary .to the general purport of the Act as expressed in the other parts of it. But this has not been shown, and, I think I may add, not even attempted. The only objection made is, that the claim of the defendants sounds wholly in damages of an unliquidated nature. If by this it is meant that the damages claimed by the defendants of the plaintiffs for the breach of their contract of warranty, are not such as may, and I will say, must be ascertained by the jury from evidence to be adduced by the defendants, showing the amount of their loss in dollars and cents, as it were, the objection is not correct; for it will be necessary that the defendants prove to the satisfaction of the jury the actual amount of their loss, and what it is equal to in dollars and cents; beyond the amount so proved, the jury cannot go or allow the claim of the defendants. The value or amount of the loss in such case may be quite as easily ascertained by a jury from the evidence with exactness, as the value of goods sold and delivered upon an account in assumpsit to recover what they may be proven to be reasonably worth; yet I apprehend that no person would say that a claim for the price of the goods in this latter case could not be set off by the seller in an action brought against him by the vendee on a bond, bill or note. For a claim upon an account is expressly recognised and mentioned in the Act. The case, then, under consideration is clearly “a case of damages,” as Mr Justice Sergeant well observes in Nickle v. Baldwin, (4 Watts & Serg. 292), “ arising ex contractu, capable of liqui [154] dation by a legal standard, and therefore falling within the Defalcation Act, as well as within the express language of the 7th section of the Act of the 20th of March 1810, by which the defendant is required, in a suit before a justice of the peace, on pain of being for ever barred, to set off his demand, whether founded on bond, note, penal or single bill, writing obligatory, book account, or damage on assumption.” Indeed, it is plain that the decision of the case just referred to, and the principles laid down in it, rule and govern the present case. It may be that that case was considered as coming more directly under the provisions of the 7th section of the Act of 1810; but then it serves to show clearly the extent to which the Legislature considered that the right of set-off might be carried in all cases; and that if a defendant in a suit brought against him before a justice of the peace did not choose to exercise or avail himself of it, he should for ever thereafter be debarred from recovering such claim as he was allowed to set off. Wherever the nature of the case is such that a jury, in assessing damages in favour of the party claiming them, are fairly at liberty to take into consideration the mental suffering of such party produced by the conduct of the opposite party, or with a view to promote the peace and quiet of society, and to protect every one in the full enjoyment of his rights, they are at liberty to give vindictive or exemplary damages, the damages in such cases may with propriety be called unliquidated, and may perhaps be considered the subject of set-off under our Defalcation Act; but of this I do mot wish to be understood as giving any definitive opinion. But I can entertain no doubt that the Defalcation Act allows a defendant to set-off a demand such as the defendants allege they have in the present case against the plaintiffs, arising ¡out of a bargain or contract, where, although the sum claimed, legally speaking, consists of damages, and cannot be reduced to certainty by the terms of the bargain itself, yet the law has fixed and given a standard by which it can be ascertained by a jury of the country. The thing is not only practicable, but it is just and equitable that it should be so; for there is no reason or justice in compelling a defendant to pay a debt or sum of money owing by him to the plaintiff, when the plaintiff is owing, at the time of suit brought, to the defendant, a debt or sum of equal or greater amount, or, if of less amount, without having it defalked. It may also be further remarked, that this construction of the Act naturally tends to promote the interest of the public, as well as that of the parties, by preventing a multiplication of suits, putting an end to litigation with as little delay as possible, and thus avoiding all that additional expense and waste of time that would otherwise be necessarily incurred. Judgment reversed, and record remitted with a procedendo.