statute requires that an acknowledgment or new promise shall be in writing, the stating of an account does not, either with an express parol promise or an implied promise to pay it, fix a new period from which the statute starts to run; and if the statute had begun to run upon the original account, or any of the items thereof, before the account was stated, it continues to do so, notwithstanding the stating of the account, unless there is a promise in writing to pay the account as stated. It is true the rule is generally that, when a party indebted upon an account receives and retains it beyond such time as is reasonable under the circumstances, and according to the usage of the business, for examining and returning it, without communicating any objections, he is considered to acquiesce in its correctness, and he becomes bound by it as an account stated; and a court of equity will not open it, except in cases where there have been mutual mistakes, omissions, fraud, or undue advantage, so that the balance stated is in truth vitiated, and in equity ought not to stand. But these rules relative to stated accounts are held not sufficient to enable a party to start the statute afresh, by stating his account, where the statute expressly ignores the force of a new promise to pay such balance implied from such statement, without objection, to raise a new promise to overcome the force of the statute of limitations, as such action by a party, if permitted, would place it within the power of parties to abrogate the provisions of the statute in reference to the effect of parol acknowledgments.*

statute of frauds, Cocking v. Ward, 1 C. B. 858; Seago v. Dean, 3 C. & P. 170; as the action is upon the account stated, and not for the original indebtedness, Milward v. Ingram, 2 Mod. 43.

sequa v. Fanning, id. 587; Atwater v. Fowler, 1 Edw. (N. Y.) Ch. 417; Phillips v. Belden, 2 id. 1; Lockwood v. Thorne, 11 N. Y. 170; Buren v. Hone, 2 Barb. (N.Y.) 586; Dows v. Durfee, 10 id. 213; Beers v.

1 Chase v. Stafford, 116 Mass. 529; Reynolds, 12 id. 288; Townley v. Denison,

Sperry v. Moore, 42 Mich. 353.

2 Freeland v. Heron, 7 Cranch (U. S.), 147; Langdon v. Roane, 6 Ala. 518; Terry v. Sickles, 13 Cal. 427; White v. Hampton, 10 Iowa, 238; Mansell v. Payne, 18 La. Ann. 124; Wood v. Gault, 2 Md. Ch. 433; Brown v. Vandyke, 8 N. J. Eq. 795; Coopwood v. Bolton, 26 Miss. 212; Murray v. Toland, 3 Johns. (N. Y.) Ch. 569; Con

45 id. 490; Pratt v. Weyman, 1 McCord (S. C.) Ch. 156; Tharp v. Tharp, 15 Vt. 105.

3 Farnam v. Brooks, 9 Pick. (Mass.) 212; Roberts v. Totten, 13 Ark. 609; Goodwin v. United States Ins. Co., 24 Conn. 591.

4 Reed v. Smith, 1 Idaho, 533; Weath. erwax v. Cosumnes Co., 17 Cal. 344.

CHAPTER XXIV.

SET-OFF, RECOUPMENT, &c.

SEC. 281. Set-off, when Statute begins to

run against.

Claims which go to reduce
Plaintiff's Claim.

282. Bringing of Action suspends SEC. 283. Executor may deduct Debt due Statute as to Defendant's

Estate, when.

284. Statutory Provisions as to.

SEC. 281. Set-off, when Statute begins to run against. The statute of limitations is not only applicable to a claim that is the subject-matter of the action against which it is pleaded, but it is also applicable to a set-off that is pleaded by a defendant; and where a demand upon which the statute has run is set up in bar of an action, or in diminution of the principal debt, the plaintiff may plead the statute thereto; or, if the set-off is given in evidence under a notice, the statute may be set up against it on the trial.1 The rule may be said to be that, if a defendant pleads a set-off, the plaintiff may reply the statute; but a set-off is available as a simultaneous cross-action would be, and, if it is to be barred at all, must be barred at the time of the commencement of the action. In other words, the bringing of an action by one party saves from the operation of the statute all such claims of the defendant against the plaintiff as are properly the subject of set-off, and which are in fact pleaded as a set-off in that action.2 Where there are cross

1 Hicks v. Hicks, 5 East, 16; Harwell v. Steele, 17 Ala. 372; Ruggles v. Keele, 3 Johns. (N. Y.) 261. In Trimyer v. Pollard, 5 Gratt. (Va.) 560, it was held that where the defendant does not plead a setoff, but files his account and gives notice of a set-off, as the plaintiff cannot reply the statute, he is at liberty to rely upon it at the trial. Hinkley v. Walters, 8 Watts (Penn.), 260. A debt which upon its face appears to be barred cannot be used as a set-off without evidence to take it out of the statute. Taylor v. Gould, 57 Penn. St. 152; Watkins v. Harwood, 2 G. & J. (Md.) 307; Shoenberger v. Adams, 4 Watts (Penn.), 430; Levering v. Rittenhouse, 4 Whart. (Penn.), 130.

not accrue within six years before the commencement of the action. In an action to foreclose a mortgage, it was held in Iowa that the defendant may plead in setoff an account against rm of which the plaintiff is a member ad that the statute of limitations is not a bar to the set-off. Allen v. Maddox, 40 Iowa, 124. In Caldwell v. Powell, 6 Baxter (Tenn.), 82, the defendant had an account against the decedent for board and lodging, apparently acquiesced in by her, and the decedent held a note against him. Upon her decease, the defendant executed a new note to her executor for the old note, without any deduction on account of his claim against her. In an application for an injunction to restrain the collection of the note, the plaintiff was enjoined to collect the note, except as to the excess over that portion of the account not barred by the statute of limitations.

demands between the parties, which accrued at nearly the same time, both of which would be barred by the statute, and the plaintiff has saved the statute by suing out process, but the defendant has not, it has been held that, nevertheless, the defendant may set off such demands. Thus, in the case last cited, the action was predicated upon a bill of exchange due in 1784. The defendant pleaded thereto the general issue, the statute of limitations, and a set-off. The set-off consisted of bills of exchange and notes of the plaintiff which the defendant had taken up on his account, all of which were dated in 1784. The plaintiff objected to the set-off on two grounds: first, that, in order to entitle the defendant to go into evidence respecting the bills and notes, they ought to have been made the special object of a set-off; and, second, that although the plaintiff's demand accrued in 1784, yet he had kept it alive by having sued out process within six years from the date of its accrual, and had continued it; but that as the defendant had not done so, his demand against the plaintiff must be held to be barred, and therefore was not a proper ground of set-off. Both of these objections were overruled, LORD KENYON, as to the last one, remarking, "that, as the transactions between the plaintiff and the defendant were all of the same date, and as the bills seemed to have been given in the course of those transactions, and for their mutual accommodation, it would be the highest injustice to allow one to have an operation by law, and not the other, and that he would therefore hold the latter to be good as well as the former, and suffer them to be set off." It will be observed, however, that in this case the demands were similar, and had relation to the principal claim, and in order to give effect to the lastnamed rule this condition must always exist.2

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SEC. 282. Bringing of Action suspends Statute as to Defendant's Claims which go to reduce Plaintiff's Claim.—The rule may be said to be that the bringing of an action by the plaintiff stops the running of the statute up all demands due from him to the defendant, which, in that action, aree proper subject of a set-off, and which are in fact pleaded as required by statute. Not only does the bringing of an action stop the operation of the statute as to a proper matter of set-off, but it also seems that it revives a claim which is actually barred, but which is the proper subject of recoupment in the action, as damages growing out of the same transaction. Thus, in an action to recover the price of goods sold, unsoundness may be set up by way of defence, although an action to recover damages therefor is barred. So in Georgia,

it has been held that in an action on a note the defendant is not precluded from setting up a failure of consideration, or a parol warranty of the property for which the note was given, and a breach thereof, although an action upon such warranty, is barred.1 So, too, the statute does not defeat a defence of partial payment, although the statute might be a bar to an action to recover therefor if it stood alone. Thus, where an action was brought upon a bond, it was held that a defence of payment by board furnished to the obligee, under an agreement that it should go in reduction of the bond, was admissible, although the statute had run upon most of the account. So it has been held in England that a debt otherwise barred may be a good set-off, where there has been an express agreement that the debt should be applied upon the demand in suit.3

SEC. 283. Executor may deduct Debt due Estate, when. — It has also been held that an executor may retain a debt due by a legatee, which is barred by the statute as a set-off against the legacy to him; and the same rule has been applied as to administrators, and it has been held that they may set off a similar debt against the debtor's share under an intestacy, on the ground that one of the next of kin of an intestate can take no share of the estate until he has discharged his obligation to it, and paid the debt in full."

ground that, where a person seeks to enforce a claim, he must take his rights subject to all the counter rights of the defendant incident to the same claim. The same rule is also applied to a defendant, who, when he insists upon the allow ance to him of claims upon which the statute has run, is held to be precluded from setting up the statute against similar demands put in by the plaintiff, especially when there is an implied agreement that one shall go in discharge of the other pro tanto, as is the case in matters of book accounts. Gullick v. Turnpike Co., 14 N. J. L. 545. In Massachusetts, it is held that the filing of a claim in set-off by a defendant is equivalent to the commencement of an action thereon, so far as regards the statute of limitations, and that, if the plaintiff discontinues his action, the defendant may bring his action thereon within three months thereafterwards, although the time of limitation has expired, the same as the plaintiff in an action may do when his action has failed because of some defect in process, &c. Hunt v. Spaulding, 18 Pick. (Mass.) 521. And such would doubtless be held to be the rule in all the States

where the statute contains similar provisions.

1 Munroe v. Hanson, 9 Ga. 398. See also Evans v. Younge, 8 Rich. (S. C.) 113, where, in an action upon a bond given for the price of land, a defence that there was a deficiency in the quantity of land, and a consequent partial failure of the consideration, was held admissible, although an action to recover therefor would have been barred. See also Richardson v. Bleight, 8 B. Mon. (Ky.) 580.

2 King v. King, 9 N. J. Eq. 44.

8 Smith v. Winter, 12 C. B. 487; Rowley v. Rowley, L. R. 1 Q. B. D. 463.

4 Courteney v. Williams, 3 Hare, 539.

5 In re Cordwell's Estate, L. R. 20 Eq. 644. In Pennsylvania, it has been held that an heir who is claiming a share of an intestate's estate may set up the statute in bar of a claim due from him to the estate. Drysdale's Appeal, 14 Penn. St. 531. But in Rose v. Gould, 11 Eng. L. & Eq. 10, under a similar state of facts, a contrary doctrine was held, and the latter case seems to be supported by the cases previously cited in this and the preceding note.

SEC. 284. Statutory Provisions as to. — In Wisconsin, by statute, the commencement of an action by the plaintiff is treated as the commencement of an action by the defendant upon any debt or contract which can properly be alleged by way of set-off, and the time of the limitation of such debt is to be computed in the same manner as though an action had been commenced thereon at the time when the plaintiff's action was commenced; and if the statute had run upon the set-off at that time, it is barred the same as the principal debt would be, and if the plaintiff's action is discontinued or dismissed, the time between the commencement of the action and its termination is not computed as any part of the time for the running of the statute upon the matter alleged by way of set-off. So, also, in Arkansas, the statute is expressly applied to any debt or simple contract set up as a set-off, whether by plea, motion, or otherwise.2 In Michigan, a similar provision to that contained in the statute of Wisconsin exists; also in Massachusetts, Vermont," and in Maine. But in the statute of the latter State it is provided that if the plaintiff's action fails by the non-suit or other acts of the plaintiff, the defendant alleging the set-off, they may commence a new action thereon within six months from the time of the termination of the suit. But these statutory provisions are only confirmatory of the doctrine previously stated in the text, held under statutes which contained no such exceptions; but the wisdom of inserting them in the statute is manifest, in that the rule is thus made permanent, and not subject to any question or exception.

8

1 See Appendix, Wisconsin.

2 Appendix, Arkansas.

3 Appendix, Michigan.

4 Appendix, Massachusetts.

5 Appendix, Vermont.

• Appendix, Maine.