Erickson v. Stables

• Citation: 13 Haw. 428
• Parties: ISAAC ERICKSON v. THE VOLCANO STABLES AND TRANSPORTATION COMPANY, LIMITED.
• Decision Date: 15 June 1901
• Court: Supreme Court of Hawai'i

13 Haw. 428

ISAAC ERICKSON

v.THE VOLCANO STABLES AND TRANSPORTATION COMPANY, LIMITED.

Supreme Court of the Territory of Hawai‘i.

Submitted March 19, 1901.

Decided June 15, 1901.

OPINION TEXT STARTS HEREEXCEPTIONS FROM CIRCUIT COURT, FOURTH CIRCUIT.

Syllabus by the Court

A contract debt due the defendant from the plaintiff arising out of a transaction independent of that sued on may be plead and established as a set-off to the plaintiff's demand.

In an action in assumpsit based on a written contract a claim for unliquidated damages growing out of a negligent or willful failure to perform the same contract cannot be properly plead as a set-off or counter-claim. Such a demand can only be recognized and allowed when presented by way of recoupment.

Smith & Parsons for plaintiff.

Wise & Nickeus for defendant.

FREAR, C.J., GALBRAITH AND PERRY, JJ.

OPINION OF THE COURT BY GALBRAITH, J.

This is an action in assumpsit for $379.76 balance due on a written contract for construction of certain buildings. The answer of the defendant is (1) the general issue (2) a plea of set-off of an alleged debt not growing out of the same transaction and (3) a plea of set-off for unliquidated damages growing out of breach of contract sued on. A jury was waived and the cause tried to the court and a verdict rendered in favor of the plaintiff for the amount claimed and costs. The defendant comes to this court on exceptions.

The first exception is to the ruling of the court sustaining objection to testimony relative to the method of book-keeping and correctness of the defendant's books.

The statute authorizing a bill of exceptions provides that when any question of law shall arise in any trial and it is wished to present the same to the Supreme Court for decision by exceptions that the “cause of so much thereof as may be necessary to a full understanding of the question,” shall be reported (Sec. 1436, Civil Laws 1897). From the meagre presentation on this exception it does not appear that the questions asked were material or relevant to any issue in the case and we are bound to presume that the Circuit Judge ruled correctly.

Exception number 2 was to the ruling of the court in excluding proof of a debt due the defendant from the plaintiff. Balance due on a book account, an independent and distinct transaction from that sued on. It seems that the ground on which this testimony was excluded was that this alleged debt was one growing out of an independent transaction-one in no way connected with the contract in suit. The statute of this Territory on set-off reads: “It shall be competent to the defendant in any civil action to plead an off-set of like kind and denomination, existing in the same right, between him and the plaintiff.” Civil Laws, 1897, Sec. 1261. The Supreme Court of Connecticut said “A set-off is made where the defendant has a debt against the plaintiff arising out of a transaction independent of the contract on which the plaintiff sues.” Avery v. Brown, 31 Conn. 401. This definition of a set-off is adopted by Waterman in his text book. See Waterman on Set-Off, p. 3, and is generally recognized as being concise and complete. Encycl. L. Vol. 22, p. 211 and note.

The very idea of a set-off is that it is a debt growing out of a separate transaction from that sued on. “The two claims are not parts of a mutual account, the balance only of which is due.” Magoon v. Marks, 11 Haw. 766. The claims must be of “like kind and denomination,” not necessarily growing out of the same transaction, and must “exist in the same right.” This book account, it seems, comes within the statutory definition of set-off and as it was plead in the defendant's answer proof of it should have been admitted.

The bill of exceptions fails to disclose that any exceptions was taken and allowed to the rulings complained of in exceptions 3 and 4 and these cannot be considered.

Exception 5 is to the ruling excluding testimony offered to prove unliquidated damages growing out of a negligent or willful failure to properly perform the contract in suit. The case of La Motte et al. v. Angel, 1 Haw. 237 and many cases from other jurisdictions are cited in support of this exception.

It seems from an examination of the authorities cited at the argument and in the brief that counsel has failed to keep in mind the well defined distinction and difference between set-off and counter-claim and recoupment. For definition of counter-claim see 4 Encycl. Law...