defendant, on the ground that since the suit was commenced the Statute of Limitations had commenced to run against the claim stated in his notice of set-off. The objection was overruled by the court, and counsel for the defendant excepted. Counsel for defendant thereupon admitted the plaintiff's claim of $531,000 stated in his declaration, and claimed his readiness to make proof of his offset to the amount of $646,348, and insisted upon his right to proceed with the trial, establish his claim, and have a verdict for the surplus in his favor, and requested the court to permit him to do so. Counsel for plaintiff objected, the court sustained the objection, and defendant's counsel again excepted. These two exceptions are now before us for consideration, and only these.

The question is simply this: Whether, under our statute, when the defendant has given notice of set-off and claims a balance in his favor, the plaintiff can discontinue his suit, or be permitted to discontinue it, without the consent of and against the wishes of the defendant.

Set-off is a mode of defense. By it the existence of the demand sued upon is, in a certain sense, admitted; but at the same time, the defendant sets up a demand against the plaintiff to counterbalance it, in whole or in part, and under our statute the defendant may have judgment for any balance found in his favor. Originally the defendant's claim could only be allowed to the extent of the plaintiff's demand proved on the trial. Toml. Law Dict.; Babbington on Setoff 1. At common law the defendant was in no instance allowed to recover judgment for damages for a positive claim against the plaintiff. To obviate the rigor of this rule of law, and to avoid a multiplicity of suits where mutual cross-demands existed, unconnected with each other, and to have the whole adjudicated upon in one action, was the great object of the statute of set-off. Ward v. Fellers, 3 Mich. 281.

The right of set-off at law is given by statute, and is, of course, limited by it. The common law never recognized it. Bacon Abr. tit. "Set-off;" Woods v. Ayres, 39 Mich. 345.

How. Stat., sec. 6886 of the chapter authorizing set-off in justice's court, reads as follows: "If the amount of set-off duly established, be equal to the plaintiff's debt, judgment shall be entered for the defendant, with costs; if it be less than the plaintiff's debt, the plaintiff shall have judgment for the residue only, with costs; if it be more than the plaintiff's debt, and the balance found due to the defendant from the plaintiff in the action be three hundred dollars or under, judgment shall be rendered for the defendant for the amount thereof, with costs; and execution shall be awarded as upon a judgment in a suit brought by him; but no such judgment shall be rendered against the plaintiff when the contract which is the subject of suit, shall have been assigned before the commencement of such suit, nor for any balance due from any other person than the plaintiff in the action." The same provisions are made applicable to proceedings in courts of record, in cases of set-off. See How. Stat., secs. 7367, 7368.

MERCHANTS' BANK OF CANADA V. SCHULENBERG

399

The object of the statute is beneficial and equitable, and in its operation it proceeds upon equitable principles. Downer v. Eggleston, 15 Wend. (N. Y.) 55, 56.

The doctrine of set-off was borrowed from the doctrines of compensation of the civil law, and constituted an important part thereof. 2 Poth. Obl. No. 13, p. 99; Duncan v. Lyon, 3 Johns. (N. Y.) ch. 359; Reab v. McAlister, 8 Wend. (N. Y.) 115; Whitaker v. Rush, I Ambler 407. This doctrine was also followed to some extent in the English courts before the statutes of set-off were enacted. See Chapman v. Derby, 2 Vern. 117; Lindsay v. Jackson, 2 Paige (N. Y.) 581. And while it is true that the right of set-off is statutory and we can not enlarge the right beyond what the statute reasonably allows, yet the courts may, and it is their duty in determining, regulating and applying the practice in securing and enforcing that right, to be liberal in their action, and to give the law such construction as will secure all the benefits and advantages intended.

The right of the plaintiff at common law to voluntarily submit to a nonsuit, or to discontinue his suit at any time before the jury have rendered their verdict, is well supported by the authorities, and has always been the practice in this state when no set-off has been pleaded. 3 Chit. Pr. 910; 1 Burril's Pr. 241; Wooster v. Burr, 2 Wend. (N. Y.) 295; Circuit Court Rule 26; 1 Green's Pr. 447, 279; Slocomb v. Thatcher, 20 Mich. 52. I think that when the set-off is purely defensive, and no affirmative action is required on the part of the court or jury, the right of the plaintiff to become nonsuited at his pleasure, before verdict or judgment, should be in the discretion of the court; which discretion should not be exercised against the right, except in cases where the rights of the defendant might be prejudiced.

Under the statute, however, authorizing a judgment to be rendered in case of set-off for any balance found due the defendant upon the trial, the rule is and should be different. In such a case, really two suits are pending before the court to be tried at the same time. In the one, the plaintiff has the affirmative of the issue; and in the other, the defendant has the affirmative. It is only after the trial, when the extent of each party's claim has been ascertained, that the liquidation of the smaller claim occurs by way of set-off, or can be made by the court or jury.

The statute requires the defendant to bring forward his claim for adjudication at the time the plaintiff brings his suit, and thereby determines the time when the defendant shall have his claim adjudicated, at the peril of doing so at his own expense. In all other respects, the case stands as though two separate suits were brought to determine the rights of the parties; and I fail to see why both cases should not be governed by the same rules, and receive the same treatment at the hands of the court. Simple justice requires this, and I can see no reason why the equitable rules upon which the whole doctrine of set-off is based should not be carried out in the practice in these cases. Adopting this rule, the plaintiff would have no more right to discontinue the defendant's suit than the latter would that of the former; and such, I think, should be the law.

These views find support in the following authorities, which I think should govern this case: Thomas v. Hill, 3 Tex. 270; Bradford v. Hamilton, 7 Tex. 55, 58, 59; Francis v. Edwards, 77 N. Car. 271, 275; Riley v. Carter, 3 Humph. (Tenn.) 230; Ress v. Van Patten, 13 How. Pr. (N. Y.) 258; Cockle v. Underwood, 3 Duer (N. Y.) 676; Van Allen v. Schermerhorn, 14 How. Pr. (N. Y.) 287.

I think the exceptions of defendant's counsel to the action of the court, in not allowing the defendant to make full proof of his claim and take judgment therefor, were well taken.

The judgment must be reversed with costs and a new trial granted.

Campbell, J. concurred.

COOLEY, C. J.: In this case the defendant relied upon a set-off, which, he claimed, was larger than the plaintiff's demand, and he brings the case to this court, assigning for error the order of the circuit court permitting the plaintiff, notwithstanding his objection, to submit to a nonsuit.

The general right of the plaintiff to discontinue his suit or to submit to a nonsuit, at any time before verdict, is undoubted, and in the absence of any statute taking away the right, it exists in the cases where set-off is relied upon, to the same extent as in other cases. This is fully recognized in Cummings v. Pruden, 11 Mass. 206, and Branham v. Brown, 1 Bailey (S. Car.) 262. In several states statutes have been passed taking away the right, but we have no such statute. The fact that the statute of set-offs permits judgment to be taken by the defendant for the balance found due him, does not preclude a discontinuance. Cummings v. Pruden, supra.

But it is said there are decisions to the contrary of these, and several are referred to. The Texas cases are not in point, as they are decided under the civil law, which does not prevail in this state. Egery v. Power, 5 Tex. 501; Walcott v. Hendrick, 6 Tex. 406; Bradford v. Hamilton, 7 Tex. 55.96 The case of Francis v. Edwards, 77 N. Car. 271, was decided upon a construction of the code of that state, and therefore has no bearing. In Riley v. Carter, 3 Humph. (Tenn.) 230, the defendant had obtained judgment for his set-off in justice's court, and the plaintiff removed the case to the circuit court by certiorari, and then, in that court, was given leave to dismiss his suit. This was palpable error, and the court so held; but we discover no analogy between that case and this. The defendant had his judgment, and unless error was shown, had a right to retain it. The three New York cases of Cockle v. Underwood, 3 Duer (N. Y.) 676; Rees v. Van Patten, 13 How. Pr. (N. Y.) 258; and Van Alen v. Schermerhorn, 14 How. Pr. (N. Y.) 287, are not in point because decided under the state code; but so far as they can. be considered as having a bearing, they are against the defendant instead of for him, for they all recognize the power of the court

Accord: Jackson v. Furst, (Tex. Civ. App.) 154 S. W. 243 (1913). See also, in Louisiana: Jones v. Jenkins, 9 Rob. (La.) 180 (1844); Davis v. Young, 35 La. Ann. 739 (1883); State v. Rost, 48 La. Ann. 455, 19 So. 256 (1896).

in its discretion to permit the plaintiff to discontinue; which is all that is necessary to sustain this judgment.

The judgment should be affirmed.97
Champlin, J., concurred.

Affirmed.

RINGGOLD v. HAVEN & LIVINGSTON.

SUPREME COURT OF CALIFORNIA, 1850.

I Cal. 108.

Action against the defendants as common carriers for not safely transporting goods of the plaintiff from New York to San Francisco. Plea the general issue. On the trial defendants moved for a nonsuit on the ground that the plaintiff's evidence disclosed that the contract for transportation was with Livingston, Wells & Co., and not with defendants. The court refused the nonsuit on the ground that defendants were liable as having made the contract without disclosing their principal. On appeal two questions were considered: Ist. Had the court the legal right to order the plaintiff to be non

"There is a conflict of opinion upon the point discussed in the principal case, due, in part, to the language of the statutes and their interpretation. In accord with the view of Cooley, C. J., see Usher v. Sibley, 2 Brev. (S. Car.) 32 (1806); Cummings v. Pruden, 11 Mass. 206 (1814); Branham v. Brown, I Bailey L. (S. Car.) 262 (1829); McCredy v. Fey, 7 Watts (Pa.) 496 (1838); Sewall v. Tarbox, 30 Maine 27 (1849); Buffington v. Quackenbross, 5 Fla. 196 (1853); Clarke v. Wall, 5 Fla. 476 (1854); Fowler V. Lawson, 15 Ark. 148 (1854); Fink v. Bruihl, 47 Mo. 173 (1870); Gilmore v. Reed, 76 Pa. St. 462 (1874); Anderson v. Gregory, 43 Conn. 61 (1875); Huffstutler v. Louisville Packing Co., 154 Ala. 291, 45 So. 418 (1908). The trend of authority is contra. Means v. Welles, 53 Mass. 356 (1847); Hancock Ditch Co. v. Bradford, 13 Cal. 637 (1859); McLeod v. Bertschy, 33 Wis. 176, 14 Am. Rep. 755 (1873); Tabor v. Mackkee, 58 Ind. 290 (1877); Egolf v. Bryant, 63 Ind. 365 (1878); Mathews v. Taaffe, 44 Minn. 400, 46 N. W. 850 (1890); East St. Louis v. Thomas, 102 Ill. 453 (1882); In re Lasak, 131 N. Y. 624 (1892); Boone v. Bush, 91 Tenn, 29, 17 S. W. 792 (1891); Northwestern Mut. Life Ins. Co. v. Barbour, 95 Ky. 7, 23 S. W. 584, 15 Ky. L. 394 (1893); Rumbough v. Young, 119 N. Car. 567, 26 S. E. 143 (1896); Samaha v. Samaha, 18 App. Dist. Columbia, 76 (1910); Lay v. Collins, 74 Ark. 536, 86 S. W. 281 (1905); Gray v. Granger, 48 Wash. 442, 93 Pac. 912 (1908); Menke v. Barnhart, 137 Ill. App. 223 (1907); Zuckerman v. Witkowski, 115 N. Y. S. 157 (1909); Hamlin v. Walker, 228 Mo. 611, 128 S. W. 945 (1910); Gurr v. Brinson, 138 Ga. 665, 75 S. E. 979 (1912); Long v. Bagwell, 38 Okla. 312, 133 Pac. 50 (1913).

In England the rules of the supreme court, order 21, rule 16, provide: "If, in any case in which the defendant sets up a counterclaim, the action of the plaintiff is stayed, discontinued, or dismissed, the counterclaim may nevertheless be proceeded with." Roberts v. Booth, L. R. (1893) 1 Ch. Div. 52; Adams v. Adams, L. R. (1892) I Ch. Div. 369. In equity see Pullman's Palace Car Co. v. Cent. Tr. Co., 171 U. S. 138, 43 L. ed. 108, 18 Sup. Ct. 808 (1897); Boyle v. Stallings, 140 N. Car. 524, 53 S. E. 346 (1906); Inman v. Hodges, 80 S. Car. 455, 61 S. E. 958 (1908); Frost v. Idaho Irrigation Co., 19 Idaho 372, 114 Pac. 38 (1911); Tee v. Noble, 23 N. Dak. 225, 135 N. W. 769 (1912); Brooks v. White, 22 Cal. 719, 136 Pac. 500 (1913); Holmes v. Holt, 90 Kans. 774, 136 Pac. 246 (1913).

26-CIV. PROC.

suited without his consent? 2nd. Did the court err in refusing the motion for a nonsuit? Both questions were answered in the affirmative and a new trial was granted. Upon the first point the opinion of the court was as follows:98

BENNETT, J.: As to the right of the court to direct a compulsory nonsuit. Upon this point we are met by a contrariety of authorities and a diversity of argument. In some of the states, the affirmative, in others the negative, of the proposition is asserted in theory and maintained in practice. In some, it is held, that the court has no right, in any case, to nonsuit the plaintiff even though his evidence be insufficient in law to support his action; whilst, in others, it is settled, that a jury should be allowed to receive no cause until the court is satisfied that the evidence is sufficient in law to authorize the jury to find a verdict in favor of the plaintiff. In all, however, it is agreed, that cases may sometimes, under certain forms, be withdrawn from the jury and reserved for the sole consideration and determination of the court. This last is a common ground in the English courts, in the federal courts of the Union, and in the courts of the various states. The only difference upon the subject which appears to exist, is as to the manner in which the conceded end shall be reached. In the federal courts, and in the courts of some of the states, the object is attained by means of the cumbrous and complicated machinery of a demurrer to evidence; in the courts of others of the states, through the simpler and easier process of motion for nonsuit at the trial. In both cases, the same end is arrived at; and the one remedy as well as the other can be applied only where the plaintiff shall have failed to have made out a case which the law says is proper to be submitted to a jury. The former practice is constantly passing more and more into disfavor, and the latter usurping its place. Thus, at the present day, in the English courts, although it is held, in theory, to be optional with the plaintiff whether he shall be nonsuited or not, and that he may compel the defendant to resort to a demurrer to evidence, yet the constant practice there is for the plaintiff, upon the suggestion of the judge that the evidence is insufficient, to submit to a nonsuit, with leave to move the court in banc to set it aside.98a Graham's Pr. 270. In the state of New York the practice of compulsory nonsuit is perfectly well settled. Clements v. Benjamin, 12 Johns. (N. Y.) 298; Pratt v. Hull, 13 Johns. (N. Y.) 334; Stuart v. Simpson, 1 Wend. (N. Y.) 376; Betts v. Jackson, 6 Wend. (N. Y.) 173. The reasoning of the court upon this subject in Pratt v. Hull is convincing: "The answer to this abstract question,” they say, "can not admit of a doubt. This must be a power vested in the court. It results necessarily from their being made the judges of the law of the case where no facts are in dispute. It is a pure question of law, whether under a given state of facts, the plaintiff is in law entitled to recover. Unless this is a question of law for the courts, there is no meaning in what has been considered a salutary

The statement of facts is abridged from the opinion of the court, only a part of which is printed.

But see note 89 to Washburn v. Allen, ante p. 394.