Sec 1027

To a suit by A. against B., B. is not permitted to answer that behind A. is C., who is B.'s debtor, unless it should be alleged that the suit is really for the benefit of C.3 If, however, the suit is for C.'s benefit, and if A. sues merely as trustee for C., then a debt due by C. to B. may be set off by B.4

Sec 1028

Set-offs with regard to partners are governed by the same principles as set-offs with regard to agents. If a firm permits a particular partner to deal as if he were the sole person interested, it must take the consequences, and when he sues for a debt due, as it may be alleged, to the firm, a personal debt due by him to the defendant may be set off.5 On the other hand, he cannot, by bringing the suit in his own name, cut off the defendant from using a set off against the firm, if the firm is the party beneficially interested.1 Nor to an action by the firm can a debt by one of the partners be set off;2 nor to a suit by a partner, a debt due by the firm.3 Under the judicature act, however, separate debts may be admitted as counter-claims.*

Principal's debt may be set off against agent.

So as to partners.

1 2 Smith's L. C. 7th Am. ed. 314, citing Shipman V. Thompson, Willes, 103; Shaw V. Gookin, 7 N. H. 16; Fry V. Evans, 8 Wend. 530; Mercein V. Smith, 2 Hill, N. Y. 210; Laurence V. Neilson, 21 N. Y. 158; Wolfersberger V. Bncher, 10 S. & R. 10; Hillier V. Ins. Co., 3 Barr, 470; Steel V. Steel, 12 Penn. St. 64; McDonald V. Black, 20 Ohio, 185; Mellen V. Boarman, 13 Sm. & M. 106.

2 2 Smith's L. C. ut supra, citing Clarke V. Hawkins, 5 R. I. 219; Miller V. Receiver, 1 Paige, 444; Holbrook V. Receivers, 6 Paige, 220;" Robinson V. Howes, 20 N. Y. 84; Laurence V. Neil-son, 21 N. Y. 158; Berry V. Bretts, 6 Bosw. 627; Receivers V. Gaslight Co., 3 Zab. 283; Naglee V. Palmer, 7 Cal. 543.

In Morgan V. Bank, 8 S. & R. 73, it was held that the assignees of an insolvent stockholder cannot compel the transfer of his stock without paying the full amount due by him to the bank. And in The Receiver V. Gaslight Co., 3 Zab. 283, it was held that the right to set off a debt due by a bankrupt to meet a suit by his assignees will be sustained on equitable grounds, notwithstanding apparent want of mutuality. The defendant was consequently held entitled to set off the amount due to him as a depositor and noteholder of the bank, at the time it became insolvent, against the receivers appointed to wind up its affairs, without a previous demand of payment, although such a demand might have been requisite under ordinary circumstances. See statement of case in 2 Smith's L. C. 7th Am. ed. 313.

3 Wh. on Agency, sec 406, 465, 741, 830; Turner V. Thomas, L. R. 6 C. P. 610.

4 Ibid.; Isberg V. Bowden, 8 Ex. 852.

5 Leake, 2d ed. 1014; Gordon V. Ellis, 2 C. B. 821. As to joint plaintiffs and joint defendants, see supra, sec 1021. As to release see infra, sec 1038.

Sec 1029

Under the set-off statutes, claims for unliquidated damages are inadmissible, though such claims may be received under the English judicature act as counter-claims, and may in like manner be put in evidence under the statutes of some of our states Under the old practice, and by the statutes of other states, wherever the claim cannot be ascertained exactly at the time of pleading, it is inadmissible as a set-off.5 Thus a loss on a policy of insurance could not under the old statutes be proved as a set-off;6 nor to an action for freight could there be set off damages accruing to the defendant, from the plaintiff's delay in getting the ship ready, except so far as such damages are assessed by the charter-party,7 nor a claim for damage to the goods carried;8 nor a cause of action exclusively in tort to a cause of action exclusively in contract.9 It is otherwise with regard to set-offs for damages assessed and liquidated by the contract,10 as where by the contract a particular sum is to be paid in lieu of notice for the dismissal of a servant.11 Under statutes providing for the admission of counter-claims, claims for unliquidated damages may be admitted in defence.1 - Under the Pennsylvania statute, unliquidated damages arising ex contractu may be set oft*, whenever capable of liquidation, on trial, and when such damages were due at the inception of the suit, though the contract was distinct from that on which suit was brought. If the counter-claim be in excess of the plaintiff's claim, the defendant may have a certificate of a balance in his favor.2 Hence, it has been held that in an action on a note the defendant may set off usurious interest paid in another transaction.3 Damages sounding in tort, however, cannot, in Pennsylvania, be defalked, unless in cases in which the defendant could have waived the tort and sued in assumpsit.4

Unliqui-dated damages not admissible as set-off, though admissible as counterclaim.

1 See Wh. on Ag. sec 465, 723, 741, 762; supra, sec 1022.

2 France V. White, 6 Bing. N. C. 33; Piercy V. Fynney, L. R. 12 Eq. 69.

3 Mitchell V. Sellman, 5 Md. 376.

4 Manchester R. R. V. Brooks, L. R. 2 Ex. D. 243.

5 Leake, 2d ed. 1008 et seq.; Williams V. Flight, 2 Dow, N. S. 11; Hutchinson V. Sidney, 10 Ex. 438; Brown V. Tib-bits, 11 C. B. N. S. 858; Crampton V. Walker, 3 E. & E. 321; Union Ins. Co. V. Howes, 124 Mass. 470; Barry V. Cavanagh, 127 Mass. 394; S. C, 130 Mass. 436; Ford V. Burchard, 130 Mass. 424; Clyde V. Knight, 12 R. I. 194; Parker V. Hartt, 32 N. J. Eq. 225, 844;.

Woods V. Ayres, 39 Mich. 210; Howell V. Medler, 41 Mich. 641.

6 Grant V. Exchange Co., 5 M. & S. 439; Thompson V. Redman, 11 M. & W. 487; Beckwith V. Bullen, 8 E. & B. 683.

7 Seeger V. Duthie, 8 C. B. (N. S.) 45.

8 Meyer V. Dresser, 16 C. B. (N. S.) 646.

9 Zeigelmuller V. Seaman, 63 Ind. 489; Smith V. Printup, 59 Ga. 610.

10 See Leake, 2d ed. 1010; Duckworth V. Alison, 1 M. & W. 412; Legge V. Harlock, 12 Q. B. 1015.

11 East Anglian R. R. V. Lythgoe, 10 C. B. 726.