Smith v. Washington Gaslight Co.

Alvey, J., delivered the opinion of the Court. The bill in this case was filed to obtain an injunction to restrain execution on a judgment at law, and to have such judgment extinguished by set-off of alleged damages to which the appellant is supposed to be entitled as against the appellee. Without determining whether the appellant’s right to the damages alleged is not concluded by the decision of the Supreme Court of the District of Columbia, recently affirmed on appeal by the Supreme Court of the United [17] States, in the case of tlie appellant against the appellee, for specific performance, and compensation in damages for partial non-performance of the contract in regard to the gas-tar, we shall inquire whether the damages claimed by the appellant in this ease, under the facts disclosed, form the proper subject-matter of set-off to the judgment against him. Taking the allegations of the bill as true, as we are required to do on this application, the case stated forms no ground for the relief sought. Set-off in equity is allowed upon the same general principles as at law. There must be mutuality in the demands, and the amounts should be liquidated and certain. And while the practice in equity may be more liberal than at law, in respect to mutual credits, set-off can no more be allowed in equity than at law, in cases of demands for uncertain damages, as on breaches of covenant, or for torts. The principles governing Courts of Equity upon this subject, were very fully expounded by Chancellor Kent, in the case of Duncan vs. Lyon, 3 John. Ch. Rep., 359; and, in tracing the doctrine, the Chancellor says: “ The doctrine of set-off' was borrowed from the doctrine of compensation in the civil law. Sir Thomas Clarke shows the analogy, in many respects, on this point, between the two systems.; and the general rules in the allowance of compensation, or set-off by the civil law, as well as by the law of those countries in which that system is followed, are the same as in the English law. To authorize a set-off, the debts must be between the parties in their own rights, and must be of the same kind or quality, and be clearly ascertained or liquidated. They must be certain and determinate debts. (Dig. 16, 2 de Compensationibus, Code, 4, 31, 14, and Code, 5, 21, 1; Ersk. Inst., Vol. 2, 525, 527; Pothier, Trait, des Oblig., Nos. 587 to 605).” And Mr. Justice Story states the rule in very much the [18] same terms, and says, what appears to be established by all the authorities, that the mere existence of cross-demands will not be sufficient to justify a set-off in equity; and that it is only when the party seeking the benefit of it, can show some' equitable ground for being protected against his adversary’s demand, that set-off in equity will be allowed. 2 Sto. Eq. Jur., secs. 1436, 1440, and 1441; White vs. O’Brien, 1 Sim. & St., 551; Rawson vs. Samuel, 1 Craig & Phil., 172. The judgment here sought to be enjoined and'extinguished by set-off, was voluntarily confessed, and there is no question as to the legality of the claim upon which it was founded; and the effort now is to have set-off as against such judgment, an unliquidated and uncertain claim of damages, alleged to have accrued by reason of the negligent or fraudulent conduct of the appellee’s officers and agents. But it is clear such ground of claim are matters of wrong, sounding in unliquidated damages, and, therefore, not the proper subject of set-off; for, as was said by Chancellor Kent, in Murray vs. Toland, 3 John. Ch. Rep., 575, when speaking of the right to set-off a similar unliquidated claim, “ Such misconduct is properly to be inquired into, in a distinct suit for that purpose, and so it was decided in Winchester vs. Hackley, 2 Cranch, 342. It is also a subject of legal, and not of equitable jurisdiction.” And being so, it would be unreasonable to delay the appellee in the collection of its judgment, until an action may be brought against it by the appellant to try the question of the right to the damages proposed to be set-off. It is true, one judgment may be set-off against another, but not a mere claim of unliquidated and uncertain damages on the one side, and an undisputed judgment on the other. For such an instance of set-off no case has been produced, and we suppose none can be found. But the appellee is a corporation incorporated by the Congress of the United States, and established in the [19] District of Columbia, where the transactions occurred out of which the supposed claim for damages arose, and the appellant contends that the non-residence of the appellee, and the non-subjection of it to the jurisdiction of the Courts of this State constitute a special equity, or an equitable ground for being protected against the judgment threatened to be executed. To this proposition, as applicable to the case before us, we cannot assent. It is not pretended that the appellee is insolvent, nor that redress for any wrong that the appellant has suffered may not be had in the Courts of the U nited States, exercising jurisdiction over the District of Columbia. The transactions betyveen the appellant and appellee took place in the District of Columbia, and there is the appropriate place for their investigation. The mere fact that the appellee is located and doing business in the city of Washington, does not give a Court of Equity here jurisdiction to i*es train the judgment against the appellant, and to enforce a set-off. Of that question the case of Beall vs. Brown, 7 Md., 398, is conclusive ; and, indeed, it was conceded by the appellant that if the doctrine of that case be applied to this, he could have no standing in Court. It was contended, however, that the decision in Beall vs. Brown, asserted a doctrine very much broader than the requirements of the case, and that its authority should be restricted to what the facts required of the Court to decide. But, upon examination of the case, we fail to discover that the Court decided any proposition that was not fairly and fully presented. Nor is that case at all singular or anomalous, as seemed to be supposed by the appellant’s counsel. In the case of Murray vs. Toland, 3 John. Ch. Rep., 569, before referred to, it was insisted that set-off should be allowed, because the complainant might have difficulty in obtaining satisfaction of his demand of a party wffio [20] resided in Spain, if the latter were permitted to recover judgment, and withdraw the fund in question. But Chancellor Kent, in answer to the application, said: “Such a principle would check all suits at law, and ex- . tend the doctrine of set-off to every possible case, if it so happened that the plaintiff at law was not within the jurisdiction of the Court. The inconvenience of following & party to his place of residence abroad, does not appear to me to be, of itself, a sufficient ground for departing from the settled doctrines of the Court. The Court cannot be governed by the mere question of comparative convenience. What would be proper, if the party resided in a country where there was no'regular law or justice, or where he was absolutely inaccessible, is not a point before me. A residence at Cadiz is, surely, not such a case; nor is Spain, with all her infirmity, to be put out of the pale of civilized nations.” (Decided 15th June, 1869.) Entertaining no doubt of the correctness of the order refusing the injunction, we must affirm it, with costs to the appellee; and as there is no relief obtainable in this case, the bill will be dismissed. Order affirmed and bill dismissed.