Hoover Commercial Co. v. Humphrey

Reed, J., delivered the opinion of the court. This is an action brought in the circuit court by ap-pellees, cotton buyers, against appellant, a mercantile-corporation, to recover damages for breach of an oral contract of sale of fifty hales of cotton, to be delivered at a future date. The declaration alleges that the cotton was to he of certain grades, shown by samples at the time the contract was made; that the bales were to weigh — 817 — five hundred pounds each, and that the delivery was to be made during the month of November, 191.1; that fifty bales were tendered by appellant, hut only two were of the required staple, and appellees refused to accept, and rejected, the remaining forty-eight hales; and that appellant failed to carry out its contract and deliver the balance of the cotton. Appellants demanded judgment for seven hundred and twenty dollars, the amount they claimed as damages. To this declaration appellant filed a plea of the general issue, and gave notice thereunder that appellees were indebted to appellant in the sum of two hundred and forty dollars, being the amount of its loss from having to sell the forty-eight bales of cotton rejected at a price less than stipulated in the contract of sale; appellant averring that the cotton tendered and refused would class equal to that of the samples shown, and should have been accepted by appellees. To further show appellant’s claim of set-off, we quote the conckiri-ing part of its notice, as follows: “And that said defendant will set off and allow the said plaintiff on the said trial so much of said sum of two hundred and forty dollars so due and owing from the said palintiffs to the said defendant against anj^ demand of said plaintiff, to he proved on the said trial, as will be sufficient to satisfy and discharge such demand, and for judgment over in favor of defendant for the excess, according to the form of the statute in such cases made and provided; and will give in evidence that the sale set forth in this notice was the only controverted sale of cotton made by defendant to plaintiffs, and that performance, according to sample, was tendered and rejected, defendant offering to comply fully with its contract and tendering performance according to its terms.” Hpon the trial the jury returned a verdict in favor of appellees for the full amount claimed. It is contended that the court erred in granting an instruction — 818 — directing the jury to ‘ ‘ disallow the claim of defendant insisted on by way of set-off.” The claim of the plaintiff for damages from breach of contract presented in their declaration and the claim of defendant for damages from breach of contract as presented in its set-off are each based on one and the same transaction. Plaintiff entered suit against defendant for failure to deliver-cotton of the staples contracted for. Defendant, by its set-off, sought to recover from plaintiff for failure to accept the cotton because it was of the staples shown by the samples. Defendant, in its plea of general issue, denied plaintiff’s right of action in toto. Could it at the same time, by way of set-off, present the defense shown in its notice? The law touching the plea of set-offs is found in the statutes of the state. It was said in the case of Henry v. Hoover, 6 Smedes & M. 418, that: “The principle of set-off was unkown at common law. . . . The right of set-off in the practice of this country is derived from the statutes of the different states, and the mode of availing of that right is also provided by their statutes.” Our present statute (section 745 of the Code of 1906) reads: “Where a mutual indebtedness exists between the plaintiff and defendant, the defendant, may plead and set-off against the demand of the plaintiff any debt . . . which he may have against the plaintiff.” This language is practically the same in the Codes of 1892, 1880, 1871 and 1857. It will be seen that the statute contemplates a mutual indebtedness between the parties. This implies that there was a dealing together between them, so that each became indebted to the other. “Mutual” means reciprocally acting, giving, receiving, interchanging. A mutual account is one in which there must be reciprocal demands, charges by each party against the other, — 819 — like accounts between merchants. If the demand is only on one side, the account is not mutual. The question now before us was fully dealt with in the case of Shewalter v. Ford, 34 Miss. 417. In that case action was brought to recover a part of the purchase money of a slave, because of the breach of warranty of soundness, the slave having died shortly after the purchase from disease existing at the time of the sale. The defendant denied the unsoundness of the slave, and filed with his answer a note evidencing the balance of the purchase price, and demanding judgment thereon against the plaintiff. The court decided that set-off was not a proper defense, holding that a defendant could not deny in toto the plaintiff’s right of action, and at the same time set off in his answer a substantive and independent cause of action, inconsistent with plaintiff’s claim, and involving the justice of its issue and legality, and which of itself amounts to an assertion that the plaintiff’s demand is ill-founded. We quote, as follows, from the opinion delivered in that case by Judge Handy: “The claim set up in the answer could be regarded in but one of two lights; either as a set-off, or as a cross-action. It is plain that it cannot be considered as a set-off because it is based upon a total denial of the plaintiff’s right of action, and has no feature of a claim for an allowance against the sum which the plaintiff might recover; and if it could be regarded as a set-off, under our laws upon the subject, it required no replication. If it be regarded as á cross-action to recover the amount of the note, as was clearly the object, it could not be entertained; for, under no rule of practice known to our laws, can a defendant be permitted, in a case like this, to deny in toto the plaintiff’s right of action, and, at the same time, to set up a substantive and independent cause of action inconsistent with the plaintiff’s claim, and involving the issue of whether the plaintiff’s demand is well-founded or not, and demand judgment upon the — 820 — ground that the plaintiff’s claim is ill-founded. Hence the court acted properly in disregarding this part of the defendant’s answer as immaterial.” It will be noted that since the decision in the case of Shewalter v. Ford the statute authorizing the plea of set-off has been several times re-enacted, and included in the several codes adopted since that date. By such enactment it appears that the legislature has adopted, along with the statute, the construction given by the decision in that case. It is dear that the claim of set-off interposed by defendant in this case is “based upon a total denial of the plaintiff’s right of action.” It cannot be a claim for an allowance against any sum which plaintiff might recover. If plaintiffs have a right of action, then defendant has none. The existence of the right in either of the parties negatives the existence in the other. There was not a mutual indebtedness between the parties. Following the holding in Shewalter v. Ford, supra, we decided that the trial court did not err in instructing the jury to disallow the claim of appellant insisted on by way of set-off. The notice filed by appellant can hardly be regarded as in the nature of recoupment. That is a defensive, rather than a offensive, proceeding. It has in view a claim in behalf of each contending party. It will not apply in this case, where it is necessary to show that plaintiffs have no right of action to sustain defendant’s claim. Myers v. Estell, 47 Miss. 4; Hayes v. Slidell Liquor Co.,, 99 Miss. 583, 55 So. 356; Telephone Co. v. Cox, 103 Miss. 541, 60 So. 641. Even if it could be held that the court erred in giving the instruction complained of, we do not see that appellant has been harmed thereby. The appellant’s testimony, touching its loss by the rejection of the forty-eight bales, was not excluded from the jury. The issue of the breach of the contract was clearly presented, and — 821 — its submission to the jury was upon the testimony introduced. Was the cotton tendered equal to the sample? This was the question for decision by the jury. The verdict of the jury resolved it against appellant. The instruction did not interfere with a decision as to whether appellant performed or breached the contract. Affirmed.