The whole subject has, however, recently been examined by the same high tribunal in a case coming up from Alabama, in which, although it was decided upon the local law of that State, the reasonableness of the American doctrine, "that upon the principles of justice and convenience and with a view to prevent litigation and expense, where fraud has occurred, or where [446] there has been a failure of consideration, total or partial, or a breach of warranty, fraudulent or otherwise, all or any of these facts may be relied on in defense by a party when sued on such contract, and that he shall not be driven to a cross-action," was ably and elaborately maintained. (m) The more liberal rule has also been recently adopted in Massachusetts. So in an action (n) brought by a factor to recover against his principal, the plaintiff's negligence in selling the defendant's goods being set up by way of diminution of damages, the previous cases were reviewed, and the court said, "The question for a time may have ranked in the class of legal uncertainties; but it appears to us at present, to be settled on reasonable and satisfactory principles." (0) (m) Withers v. Greene, 9 Howard, 214; and same doctrine affirmed in Van Buren v. Digges, 11 Howard, 461. (n) Dodge v. Tileston, 12 Pick., 328. (o) And to this the courts of that State have adhered. In Harrington v. Stratton, 22 Pick., 510, in an action on a. promissory note given on an exchange of horses, the defendant offered to prove false representation made by the plaintiff in reduction of damages; and the Supreme Court of Massachusetts, after reviewing the English and American cases, particularly those in New York, at length distinctly disclaimed any distinction between a suit brought on the original contract, and on a security given for the price; and held that in either case the defendant might show a partial failure of consideration, to reduce the damages; but that notice would be necessary to let in the defense. And again, in assumpsit on a promissory note for an ox, it was held by the same court, Perley v. Balch, 23 Pick., 284, that the purchaser might avail himself of a partial failure of consideration, or of deception in the quality or value of the chattel, to reduce the damages, and was not obliged to resort to a separate action for the deceit, or upon the warranty. In a recent case in the same State, the subject has been again considered. In a suit on a note given for a chaise warranted to be a first-rate chaise, the defendant offered evidence to show that there were defects in it, and contended that the difference between the amount agreed to be paid for the chaise and what the jury should deem its true value at the time of the sale, was the amounnt of deduction to which he was entitled. But the judge charged that if there were defects in the chaise at the time of the sale, the defendant was entitled to have so much deducted from the note, as the chaise was worth less on account of such defects; and this was held right on exception, the court saying, "There was no question before the jury as to the actual worth of the chaise, no question whether either party had made a good or bad bargain." Goodwin v. Morse, 9 Met., 278. As to the defense of a judgment recovered in a former suit, where the same services have been credited, see Briggs v. Richmond, 10 Pick., 391. In Hunt v. The Otis Company, 4 Met., 464, where a plaintiff had entered into a manufactory with knowledge of a regulation adopted by the company, requiring all persons employed by them to give them four weeks notice of an intention to quit their service, and quitted their service without giving such notice, he was held In England, the rule adopted in this country has been [447] liable, in a suit brought against them for his wages, for all damages caused by his not giving the notice; and in such suit the amount of such damages may be deducted from his wages. In Pennsylvania, damages arising from a breach of warranty of goods sold, may be set-off under the statute of that State in an action on a note given in a different transaction. Phillips v. Lawrence, 6 Watts & Serg., 150; Carman v. Franklin Fire Ins. Co., 6 Watts & Serg., 155. Where the plaintiff sold land to the defendant for $3,000, and took bonds for the price to the amount of $1,500; at the time of the sale, the land was incumbered by judgments to the amount of $750. Under these judgments the land was sold, and the defendant bought it in for this sum. The plaintiff sued on the bonds, and the defendant set this up as a total failure of consideration. But it was held that the defendant could only set-off or deduct the amount paid by him on the incumbrances, and that the plaintiff was entitled to recover the balance. McGinnis v. Noble, 7 Watts and Serg., 454. In Connecticut the rule appears un settled. In McAlpin v. Lee, 12 Conn., 129, the Supreme Court of Connecticut recognized the doctrine of Reab v. McAlister, and applied it to an action of book debt brought to recover the price of property sold under a special agreement, which proved inferior in quality to that contracted for, and allowed the defendant in the assessment of damages a deduction of the agreed price, and the value of the property sold, the court saying that the rule was the same whether the action was for goods sold and delivered, or upon a bill or note given for the stipulated price. But in Pulcifer v. Hotchkiss, 12 Conn., 235, in an action on a note given for a patent, the same court held that the defendant could not show that the plaintiff had made false representations in regard to its value, and that the consideration had partially failed, but that he must resort to his action on the warranty. In Delaware, see Draper v. Randolph, 4 Har., 454. In Alabama the Supreme Court has recently, in a very learned and elaborate opinion, adopted the doctrine of recoupment, by that name, and applied it to the case of a warehouseman who had advanced on cotton deposited with him. In an action brought for these advances, it was held competent for the owner of the cotton to recoup the damages sustained by the destruction of the cotton through the plaintiff's negligence. Hatchett v. Gibson, 13 Alaba. N. S., 587. See, also, Robertson v. Davenport, 27 Ala., 574. So, in the same State, if an overseer employed at a stipulated price per annum, is sick a part of the time and thus unfitted for active service, the employer may recoup the damages sustained by the imperfect performance of the contract. Jones v. Deyer, 16 Ala., 221; Hunter v. Waldron, 7 Ala., 753. See, also, McLane v. Miller, 12 Ala., 643. So in Maine, in an action on a note given for the good-will of a business, a partial failure of consideration (growing out of the fact that the plaintiff had returned to practice), though unliquidated, may be given in evidence to mitigate the damages. Herbert v. Ford, 29 Maine, 546. In Tennessee the doctrine has been introduced to but a limited extent. It has been declared applicable only to cases where a special contract has been partially executed, but not according to its terms. Here the defendant is liable to the plaintiff, not on the special contract, but on an indebitatus assumpsit, for so much as the defendant may be found liable ex æquo et bono, to pay for the partially or defectively executed contract; and in such case, in order to ascertain what the defendant does, ex æquo et bono, really owe, he shall be allowed by way of recoupment such damages as he has sustained by reason of the nonperformance of the contract, as it was entered into by the plaintiff, and which he could recover by a cross-action. Porter v. Woods, 3 Humphreys, 60; Crouch v. Miller, 5 Humphreys, 586. But on an executed contract, as in debt or indebitatus assumpsit, for the price of a slave sold and delivered, the defendant cannot recoup the damages accruing by reason of a breach of warranty. Henning v. Van Hook, 8 Humphreys, 678. So where an engineer sues for his stipulated salary, damages sustained by his employer by reason of his unskillful performance of his duties, cannot be set off. N. & K. Turnpike Co. v. Harris, 8 Humph., 558; and see, also, Allen v. McNew, 8 Humphreys, 46. In Mississippi, fraud in the sale of a slave may be proved in an action on the note given for the purchase money, under [448] but partially recognized. (p) In an action of assumpsit for goods sold, brought to recover the price of some cinq foin seed, warranted by the plaintiff to be good, new-growing seed, it was held competent for the defendant to show that it did not correspond with the warranty. The plea was the general issue without notice, but the defense went to the whole action. And in assumpsit (q) for a horse sold, the plaintiff having warranted him, it was held that the defendant had a right to give the breach of warranty in evidence, in reduction of damages. Again, (2) where the work was imperfectly done, for an agreed sum, Vaughan, B., said, "I think the rule that there should be an abatement of price for the non-performance of any part of the contract by the plaintiff, is a convenient rule." But, in other cases, the rule has not been adhered to. (8) It has been held, indeed, that an attorney cannot recover against his client for work which was useless towards accomplishing the object which the client had in view. (t) But in a recent case, (u) the rule of Templar v. M'Lachlan, above cited, (v) was re-affirmed; and it was held that if the work was only partly useless, the client's remedy is by a cross-action. It is worthy of remark, however, that in none of these cases is the term recoupment applied to a defense growing out of the defendant's counterclaim. It is uniformly restricted in England, I believe, [449] to that limitation of the plaintiff's demand which shows that he has really not suffered the loss which he alleges. In a recent case in the English Exchequer, (w) the whole subject was considered by that court. The suit was special assumpsit on a contract to build a ship for the plaintiff according the plea of non-assumpsit. Simmons v. Cutreer, 12 Smedes & M., 584. In Kentucky, also, it has been held that in an action brought on the contract for the price of goods sold, the defendant may give in evidence the breach of any warranty, or any fraudulent representation in the sale, and thus recoup the damages he has sustained. Culver v. Blake, 6 B. Munroe, 528. In Wisconsin it has been held by the Supreme Court, in accordance with the decisions in New York, that "matters in diminution of the plaintiff's demand, arising out of the same transaction and not technically an off-set," can be set off by way of recoupment, provided notice be given with the plea. Norton v. Rooker, Wisconsin Reports, by T. P. Burnett, 1844, 33. (p) Poulton v. Lattimore, 9 Barn, & Cres., 259 (1829). (q) Street v. Blay, 2 B. & Adol., 456 (1831). (r) Allen v. Cameron, 3 Tyr., 907, 1 Cr. & Mees., 833 (1833). (*) Hill v. Featherstonhaugh, 7 Bing., 569. (t) See also, Bracey v. Carter, 12 Adol. & Ellis, 373, where the same principle was recognized. (u) Shaw v. Arden, 9 Bing., 287. (w) Mondel v. Steel, 8 M. & W., 858. to certain specifications; and the breach charged, that the work was insufficiently done, by reason of which the plaintiff had been obliged to re-fasten and repair her. The defendant pleaded a former suit brought by himself for the contract price, in which the now plaintiff gave evidence of the same breach of contract as that alleged in the present declaration; and averred that the jury deducted the compensation due the now plaintiff in that suit. The plea was held bad, substantially on the ground that in the former action the plaintiff could only have been allowed a deduction of damages from the agreed price so far as the ship fell short of the contract at the time of delivery, and not for subsequent repairs. Parke, B., said, "The ground on which it was endeavored to support the plea, in a very ingenious argument, was this: That a defendant in an action for the stipulated price of a chattel, which the plaintiff had contracted to make for the defendant of a particular quality, or of a specific chattel sold with a warranty, and delivered, had the option of setting up a counter-claim, for breach of the contract in the one instance or the warranty in the other, in the nature of a cross-action; and that if he exercised that option, he was in the same situation as if he had brought such an action, and consequently could not after judgment in one action bring another; and the case was likened to a set-off under the statutes. This argument was founded on no other authority than an expression of Lord Tenterden, in giving the judgment of the court in the case of Street v. Blay; his Lordship having said that a breach of warranty might be given in evidence in an action for the price of a specific article sold, in mitigation of damages 'on the principle, it should seem, of avoiding circuity of action.' But we are all of opinion that no such inference is to be drawn from that expression. What was meant was, that the sum to be recovered for the price of the article might be reduced by so much as the article was diminished in value by reason of the non-compliance with the warranty; and that this abatement was allowed in order to save the necessity of a cross-action. Formerly, it was the practice where an action was brought for an agreed price of a specific chattel sold with a warranty, or of work which was to be performed according to contract, to allow the plaintiff to recover the stipulated sum, leaving the defendant to a cross action for breach of the warranty or contract; in which action, as well the difference between the price contracted for and the real value of the articles, or of the work done, as any consequential damage, might have been [450] recovered; and this course was simple and consistent. In the one case, the performance of the warranty not being a condition precedent to the payment of the price, the defendant, who received the chattels warranted, has thereby the property vested in him indefeasibly, and is incapable of returning it back; he has all that he stipulates for as the condition of paying the price, and therefore it was held that he ought to pay it, and seek his remedy on the plaintiff's contract of warranty. In the other case, the law appears to have construed the contract as not importing that the performance of every portion of the work should be a condition precedent to the payment of the stipulated price, otherwise the least deviation would have deprived the plaintiff of the whole price; and therefore the defendant was obliged to pay it, and recover for any breach of contract on the other side. But after the case of Basten v. Butter, a different practice, which had been partially adopted before in the case of King v. Boston, began to prevail, and being attended with much practical convenience, has been since generally followed; and the defendant is now permitted to show that the chattel by reason of the non-compliance with the warranty in the one case, and the work in consequence of the non-performance of the contract in the other, were diminished in value. (Kist v. Atkinson, Thornton v. Place), &c. The same practice has not, however, extended to all cases of work and labor, as for instance that of an attorney (Templar v. M‘Lachlan), unless no benefit whatever has been derived from it; nor in actions for freight (Sheels v. Davies). It is not so easy to reconcile these deviations from the ancient practice with principle in those particular cases above mentioned, as it is in those where an executory contract, such as this, is made for a chattel to be manufactured in a particular manner, or goods to be delivered according to a sample (Germaine v. Burton), where the party may refuse to receive, or may return in a reasonable time, if the article is not such as bargained for; for in these cases the acceptance, or non-return, affords evidence of a new contract on a quantum valebat ; whereas, in a case of a delivery with a warranty of a specific chattel there is no power of returning, and consequently no ground to imply a new contract; and in some cases of work performed there is difficulty in finding a reason for such presumption. It must, however, be considered that in all these cases, of goods sold and delivered with a warranty, and work and labor, as well as the case of goods agreed to be supplied according to contract, the rule which has been found so convenient is established; and that it is competent for the defendant, in all of those, not to set off by a proceeding in the nature of a cross-action, the amount of damages which he has sustained by breach of the contract, but simply to defend himself by showing how much less the subject-matter of the action was worth, by reason of the breach of contract; and to the extent that he obtains, or is capable of obtaining, an abatement of price on that account, he must be considered as having received satisfaction for the breach of contract, and is precluded from recovering in another action to that extent, but no more. "The opinion, therefore, attributed on this record to the learned judge is, we think, incorrect and not warranted by law; and all the plaintiff could by law be allowed in diminution of damages on the former trial, was a deduc[451]tion from the agreed price, according to the difference of the time of de livery between the ship as she was, and what she ought to have been according to the contract; but all claims for damages beyond that, on account of the subsequent necessity for more extensive repairs, could not have been allowed in the former action, and may now be recovered." (x) (x) For other English cases, see Leggett v. Cooper, 2 Stark., 93; Kist v. Atkinson, 2 Camp., 63; Okell v. Smith, 1 Stark., 107 (86); White v. Chapman, ib., 113 (91); Denew v. Daverel, 3 Camp., 451; Sheels v. Davies, 4 Camp., 119; Caswell v. Coare, 2 Taunt., 107; Montriou v. Jefferys, 2 Car. & P., 113; Hammond v. Holiday, 1 C. & P., 384; Bamford v. Harris, 1 Stark., 274. |