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Decisions of the Superior Courts of New South Wales, 1788-1899

Gore v. Hughes (1842) NSW Sel Cas (Dowling) 398; [1842] NSWSupC 68

bill of exchange - set off

Supreme Court of New South Wales

Dowling C.J., Burton and Stephen JJ, 30 April 1842

Source: Dowling, Select Cases , Vol. 6, S.R.N.S.W. 2/3464, p. 249

A defendant may claim a pro tanto set off of liability under one bill of exchange against a claim by a plaintiff under another bill of exchange between them.*

Assumpsit by the indorsee against the indorser of a promissory note made by Thomas Harper dated the 28th December 1839 for £250 24 months after date averring non payment by Harper, who presented a notice of dishonour to the defendant. Count for £500 interest due 7th January 1842 for forbearance of monies due, yet defendant disregarding promise has not paid to the damage of plaintiff of £500.

Plea. As to the sum of £100 parcel of the monies in the said promissory note in the 1st count of declaration mentioned defendant says "that before at the time of the commencement of this suit, plaintiff was and still is indebted to defendant in the sum of £100 upon a certain bill of exchange dated 25 May 1841 drawn by J.H. Scrutton upon plaintiff and accepted by him, and by Scrutton indorsed to defendant which sum of money so due and owing to the defendant equals the damages sustained by the plaintiff by reason of the non performance by defendant of the promise in the first count so far as the same relates to the said sum of £100 parcel &c and which stated sum so due and owing from plaintiff to defendant the defendant is ready and willing and hereby offers to set off and allow to plaintiff being the full amount of the said damages in respect of the said sum of £100 parcel &c as offered according to statute".

To the third plea as to the sum of £100 parcel to plaintiff says that the sum of £100 wherein the plaintiff is indebted to the defendant upon the said bill of exchange in the said third plea mentioned is not equal to the damages sustained by him the plaintiff by reason of the non performance by defendant of the promise in the declaration mentioned so far as they relate to the said sum of £200 parcel of the monies specified in the said promissory note in the said section mentioned issue on this plea.

Dowling C.J. At the trial before Burton J. at the sittings in last term the defendant proved the bill of exchange pleaded as a set off, but the plaintiff had a verdict upon the issue in that plea for the whole sum sought to be recovered without deducting the amount of the bill of exchange proved, on the ground that as the plea went to the whole damage alleged by the plaintiff, and did not cover the interest due to plaintiff for so much of the damage as he had sustained by reason of the non payment of £100 parcel of his debt and damages, the issue must be found for him.

A motion was afterwards made to reduce the damages by deducting the amount of the bill of exchange proved, for although the issue on the plea of set off might be found for the plaintiff so as to give him his costs, yet as it was admitted by him in his replication that there was a sum of £100 due by him to the defendant, the latter was entitled to have the verdict reduced by that amount. Contra the cases of Cousins v. Paddon (1835) [ Cousins v. Paddon (1835) 2 Cr. M. & R. 574, 150 E.R. 234]; Tuck v. Tuck (1839) [ Tuck v. Tuck (1839) 5 M. & W. 109, 151 E.R. 47.] and Kilner v. Bailey (1839) [ Kilner v. Bailey (1839)5 M. & W. 382, 151 E.R. 162] were cited to shew that as the defendant's plea went to the whole of the plaintiffs claim in respect of £100 parcel of his demand and as it appeared that there was interest due to him as part of his damage sustained in respect of that sum, the issue must be found for the plaintiff for the whole sum, and that his plea of set off was not divisible. If the plaintiff's claim as damages was £100 and 10s - a plea of set off for £100 would not cover the demand, and the cases shewed that the defendant could not have the benefit of his set off pro tanto upon that issue.

After a careful consideration of those cases, it will be found that whatever may have been the form of the issues raised therein the question in contest has been a mere question of costs, and the sum proved by way of set off or admitted by the plaintiff to be due, has been credited to the defendant. Here the defendant only seeks by his plea to have credit for £100 in reduction of the plaintiffs demand whether his demand be compounded partly of principal and partly of interest. His plea may have been informally drawn in the commencement of it, as an answer pro tanto of the plaintiffs whole damages, composed of principal and interest on the £250 note declared upon, but looking at the whole plea taken together he clearly claims the set off of £100 only - "so far as the same relates to the said sum of £100 parcel of the damages sustained by the plaintiff by reason of the non performance of the promise in the first count". It may not be equal to it as compounded of principal and interest, but it is at all events a parcel of the damages so made up.

The plaintiff by his replication admits that he is indebted to the defendant in the sum of £100 on the bill of exchange mentioned in the defendant's plea, but he denies that that sum is equal to £100 parcel of his demand, because there is interest still due by way of damages upon that amount. Technically speaking, this is true, but as the plaintiff admits £100 to be due, and as the defendant substantially claims only allowance for that sum so admitted, it appears to us that notwithstanding the more technical form of the plea, that he ought to have been allowed it in reduction of damages, although the issue in form might be rightly found for the plaintiff. This is clearly with the justice of the case, and will prevent circuity of action.

It may be that the plaintiff might have had a good defence to the bill of exchange pleaded by the defendant as set off, but if so he might have raised such answer in this action, for by leave of a Judge, plaintiffs may in this Court reply double but plaintiffs not having done this and on the contrary having admitted that he is indebted to the plaintiff to the amount of £100 therein he is precluded from using that argument. On the whole we think that the defendant is by the amount admitted by the replication to be due to him.

Burton and Stephen JJ concurred.

Rule absolute.

Published by the Division of Law, Macquarie University