Geo. E. Lloyd & Co. v. Manufacturers & Merchants Warehouse Co.

Mr. Justice Waterman delivered the opinion of the court. Becoupment is a defense arising out of the subject-matter of the plaintiff’s claim. It is an innovation upon the strict rules of the common law, sanctioned by the courts for the purpose of doing equity between the parties; it tends to promote justice and avoid a multiplicity of suits. It is necessary that this defense arise out of and be connected with the transaction or contract upon which the suit is brought, but it is not essential that the opposing claims should be of the same character. A claim originating in tort may, by way of recoupment, be set up as a defense to a claim growing out of contract, provided both arise out of the same subject-matter and are susceptible of adjustment in one action. Waterman on Set-off and Becoupment, Secs. 463-464. Set-off is a counter demand which the defendant has against the plaintiff; it usually arises out of a transaction extrinsic to the plaintiff’s cause of action; and if the set-off allowed be more than the allowable claim of the plaintiff, judgment for the excess may, "in the action, be awarded to the defendant against the plaintiff. Waterman on Set-off, Sec. 2; Kingman v. Draper, 14 Ill. App. 577; Steere v. Brownell, 124 Ill. 27; East v. Crow, 70 Ill. 91. Unlike the defense of recoupment a claim for damages based upon a tort can not be set up against one founded entirely upon contract. Set-off must be pleaded or interposed under notice; recoupment may be had under the general issue. What is said, many times, to the effect that unliquidated damages can not be set off, has reference only to unliquidated damages arising out of tort. The words “ guarantee against lower quotations ” are not a contract to maintain prices, but an agreement that the price given to appellee shall be as low as that allowed to any one. Such agreement is not in violation of the “ anti-trust statute.” The peculiar significance which particular words, letters or characters have in various lines of business and in contracts made in respect thereto need not be old, or known to all. The letters “O. K.” in receipts, speedily became common and well understood; the same was the case with il O. I. P.” in fire insurance policies. In interpreting a written contract the first question is, what did the parties mean by the words and characters they made use of. In determining what each is bound to do, proof of usage so ancient, common and well understood that the parties must be presumed to have contracted with reference thereto, may be given. The receipt “ in full of all claims ” is not conclusive as against matters not then known, and which appellant had concealed from appellee. Between the parties thereto, a receipt is always open to explanation. Frink v. Bolton, 15 Ill. 343. The judgment of the Superior Court is affirmed.