One summoned as trustee, is to be allowed all his demands against the principal, of which he could avail himself in any form of action, or any mode of proceeding between him and his principal, excepting, of course, all claims for unliquidated damages for mere torts.1

The demands must also be due in the same right. A debt due from an executor, or administrator, cannot be set-off against a claim due to the estate.

Cases where set-off will be allowed without filing the account. In actions on policies of insurance, the underwriters have a right to set-off against a loss, not only their premium arising on the same policy, but also premiums arising upon other policies, entered into between the same parties, unless the policies have been assigned, with the assent of the underwriter. This right arises from the lien, which the law gives the underwriters in such cases.2

In consequence of the several statutes in relation to the settlement of insolvent estates, providing for an equitable distribution of the assets among all the creditors, - where mutual demands exist between a deceased insolvent and another person, and the executor or administrator, sues such person at law, the latter has a right to plead his own demand by way of setoff without filing it, and the plaintiff can only recover the balance, if any thing should be due, upon a settlement of all their mutual claims and demands; and the right of such person to a set-off will not be lost, by

1

1 Hathaway v. Russell, 16 Mass. Rep. 473.

* Cleveland v. Clap et al. 5 Mass. Rep. 201.

3 McDonald v. Webster, 2 Mass. Rep. 498. Jarvis v. Rogers, 15 Mass. Rep. 407.

his having neglected to present his claim to the commissioners.1

But his claim can be used, only to meet the claim made against him, and he cannot recover any balance, if one should be found due to him.2

So if the creditor of an insolvent estate bring his action, in consequence of his claim being disallowed by the commissioners, the executor or administrator may plead any demand his insolvent had against the creditor, by way of set-off, and if the claim due the estate, exceed that of the creditor, he may recover the balance.s

It is hardly necessary to remark, that where goods have been delivered or money paid by the defendant, in satisfaction of the sum demanded in the action, the aid of the statute is not required, and the account need not be filed; it is equivalent to payment, and may be given in evidence under the general issue.* Thus where there was a parol agreement between a lessor and lessee, that the interest accruing on a sum of money, due from the former to the latter, should be retained by the lessor and applied to the payment of the rent, as it became due, it was holden in an action on the covenants of the lease, to recover the rent, that the lessee might retain, and set-off the rent, against the interest, pursuant to the agreement, it being considered in the nature of a payment.5

1 McDonald v. Webster, 2 Mass. Rep. 498. Jarvis v. Rogers, 15 Mass. Rep. 407.

2 Ibid.

'Stat. 1784. ch. 2. Sewall et al. v. Sparrow, 16 Mass. Rep. 24. 4 Wilby v. Harris, 13 Mass. Rep. 496.

"Farley v. Thompson, 15 Mass. Rep. 18.

When a promissory note is indorsed by the payee, to a third person, for the purpose of preventing the maker from availing himself of his right to set-off, he may give in evidence under the general issue in an action by the indorsee, his demands against the indorser.1

What will destroy the right of set-off. If the plaintiff had assigned his claim for a valuable consideration, before the debts due the defendant were contracted, and notice was given to the defendant, the latter cannot set-off such debts.2 But an assignment afterwards, although notice is given to the defendant, will not deprive him of the right of set-off.

If the debtor, however, after the assignment, promise the assignee, to pay him the debt, without reserving the right of setting off his demands, or if the debtor have notice of the intended assignment, and make no objection and give no notice of his counter demands, he will be precluded from availing himself of them, in the way of set-off.*

It is no objection to the set-off, that the defendant has commenced a suit against the plaintiff, upon his demands; nor, if the plaintiff be the indorsee of a discredited promissory note, that a suit has been commenced, and is pending, and defaulted, against the indorser, on the demands against him, which are filed.5

1

Stockbridge v. Damon, 5 Pick. Rep. 223.

2 Vide Hallowell and Augusta Bank v. Howard, 13 Mass. Rep. 235. 3 Hatch v. Greene, 12 Mass. Rep. 195.

Mass. Rep. 193.

Goodwin v. Cunningham, 12

4 Jones v. Witler, 13 Mass. Rep. 304. Gardiner v. Corson, 15 Mass. Rep. 500.

"Sargent v. Southgate, 5 Pick. Rep. 312.

But if judgment had been entered in such action, it would have merged the demand, and probably prevented its being allowed in set-off.

If the plaintiff discontinue his action, after the defendant has filed his account, there is an end of the suit, and the defendant cannot have any judgment for the account filed by him, though he will be entitled to his costs.1

Incidents to set-off. A defendant, who has demands against the plaintiff, which may be filed in setoff under the statute, is not obliged to avail himself of this privilege, but may commence a separate action for the debt due to him.2

When by reason of an account filed in set-off, the plaintiff's damages are reduced to an amount less than twenty dollars, he nevertheless recovers full costs; this would be otherwise, if the items in the account were delivered in payment of the plaintiff's demand.1

3

SECT. II. SETTING OFF JUDGMENTS.

When judgments in cross-actions are recovered at the same term, the court, in which the judgments are rendered, will, on application, set-off one judgment against the other, so far as the same will extend, and issue execution for the balance; and for that purpose,

either action may be continued, until judgment can be rendered in both.1

2

This power is assumed by the court, for the furtherance of justice, and does not depend upon any statutory provision. The court will exert this power liberally, for the purposes of equity, by continuance of cases, until judgment in a cross-action can be rendered, and even for the purpose of enabling a party to commence a suit for that purpose. No reference is had to the cause of action on which the judgment in the cross-action is rendered, for whether originating in contract or tort, the certainty and extent of the claim, is rendered equally obvious by the verdict.

Judgments may be set-off against each other, when a part only of the debtors on one side, are creditors on the other, and even where a part of the debtors on one side, are joint creditors with others, if those others consent to such an arrangement."

In an action by a Judge of Probate on a probate bond, brought for the benefit of an heir, legatee, or other person, the judgment will be set-off against a judgment recovered by the defendant, against such person, although the judgments are not in form between the same parties.*

But the court will not permit one judgment to be set-off against another, between the same parties,

1

Makepeace v. Coates, 8 Mass. Rep. 451. Greene v. Hatch, 12 Mass. Rep. 195. Hatch v. Greene, 12 Mass. Rep. 195. Adams et al. v. Manning et al. 17 Mass. Rep. 178. Winslow v. Hathaway et al. 1 Pick. Rep. 211.

2 Mitchell v. Oldfield, 4 Term. Rep. 123.

3

Hathaway v. Russell, 16 Mass. Rep. 473. Mitchell v. Oldfield, 4 Term. Rep. 123.

4 Barrett v. Barrett, 8 Pick. Rep. 342.