Arnold v. Carter
| Decision Date | 11 May 1906 |
| Citation | 54 S.E. 177,125 Ga. 319 |
| Parties | ARNOLD v. CARTER. |
| Court | Georgia Supreme Court |
Syllabus by the Court.
In an affidavit of illegality to the foreclosure of a mortgage on personalty, the mortgagor may avail himself of the defense of recoupment; but he cannot plead set-off in such a proceeding nor can he have the foreclosure enjoined in order to avail himself of a set-off in equity, where the plaintiff is neither insolvent nor a nonresident.
Error from Superior Court, Oglethorpe County; H. M. Holden, Judge.
Action by W. D. Carter against N.D. Arnold. Judgment for plaintiff and defendant brings error. Reversed.
Saml. H. Sibley and H. McWhorter, Jr., for plaintiff in error.
Henry C. Tuck and Paul Brown, for defendant in error.
FISH C.J. (after stating the facts).
When an execution issued upon the foreclosure of a mortgage on personalty, the mortgagor may file his affidavit of illegality, "in which affidavit he may set up and avail himself of any defense which he might have set up, according to law, in an ordinary suit upon the demand secured by the mortgage, and which goes to show that the amount claimed is not due." Civil Code 1895, § 2765. The sections of the Civil Code on the subject of recoupment are as follows "Recoupment is a right of the defendant to have a deduction from the amount of the plaintiff's damages, for the reason that the plaintiff has not complied with the cross-obligations or independent covenants arising under the same contract." Section 3756. "It differs from a set-off in this: The former is confined to the contract on which the plaintiff sues, while the latter includes all mutual debts and liabilities." Section 3757. "Recoupments for overpayments by defendant, or payments by fraud, accident or mistake." Section 3758. Section 3759. In Mell v. Moony, 30 Ga. 413, it was decided that a mortgagor could set up recoupment in an affidavit of illegality to the foreclosure of a chattel mortgage. A similar ruling was made in Alston v. Wheatley, 47 Ga. 646. Since those decisions were rendered, a statute was enacted, in 1878, providing that "in all cases where, under the laws of this state, recoupment may be pleaded, if the damages of the defendant shall exceed, in amount, those of the plaintiff, the defendant shall in such cases recover of the plaintiff the amount of such excess." Civ. Code 1895, § 3759. Recoupment "goes to show that the amount claimed is not due" the plaintiff. As recoupment may be pleaded in a proceeding to foreclose a mortgage on personalty, it necessarily follows, under the provisions of the act of 1878, that if, in such a case, the defendant pleads recoupment and proves that his damages exceed the amount which he owes the plaintiff on the demand secured by the mortgage, the defendant is entitled to a judgment against the plaintiff for the amount of such excess. It follows that Carter could set up, in an affidavit of illegality to the foreclosure of the mortgage in the city court, by way of recoupment, all of his claims coming within the scope of that defense, such as payment, overpayment, etc.; and if they exceed the amount of the debt secured by the mortgage, he would recover a judgment against Arnold, the mortgagee, for such excess.
Some of the claims set up by Carter in his petition against Arnold do not come within the scope of recoupment, but are clearly matters of set-off. Such is the item of $18.75 for lumber which Carter claims to have furnished Arnold, and for which the petition alleges Arnold agreed to pay Carter, and also $5 for moving an engine, and $5.90 for building a chimney on Arnold's place, all of which items of indebtedness according to the allegations of the petition, were incurred by Arnold in 1903. And so, too, are the damages which Carter alleges he sustained by reason of the failure of Arnold to sell the nine bales of cotton delivered to him during the fall of 1903 by Carter, with direction to sell the same when so delivered; Carter claiming that, as tenant, he had the right to control and direct the sale of this cotton, and that he instructed Arnold to sell the same on its delivery to him. The mortgage sought to be foreclosed purports to have been executed May 16, 1904, to secure the rent to be paid for that year by Carter to Arnold and a note given by Carter to Arnold for guano to be used during that year. Evidently, therefore, the alleged transactions as to the lumber, engine, chimney, and the failure to sell the nine bales of cotton, all occurring in 1903, had no connection whatever with the debts which the alleged mortgage was given to secure in 1904, but were entirely separate and distinct therefrom, and could not be set up by way of recoupment, but could be pleaded only as set-off. "Set-off is a defense which goes not to the justice of plaintiff's demand, but sets up a demand against the plaintiff to counter-balance his in whole or in part." Civ. Code 1895, § 3745. It does not attack or deny plaintiff's claim, but admits it. As we have seen, section 2765 provides that the mortgagor may, by affidavit of illegality to the foreclosure of a...
To continue reading
Request your trial