Opinion
July Term, 1827.
From Burke.
1. The word "set-off" entered by a defendant with the general issue shall be taken as a plea in bar where the amount is equal to or greater than the plaintiff's demand; where less, it shall be taken as a notice of set-off only.
2. An account signed by one with another, whose bond the first holds for a larger amount, should be left to the jury as evidence of a payment on the bond.
DEBT for $472, due November, 1799, and secured by bond. The memorandum of the defendant's pleas was entered in these words, "General issue, payment and set-off," no formal pleas being filed; and the plaintiff's counsel, when the cause was called for trial, asked leave to amend the pleadings (250) by replying the statute of limitations to the last plea; but Ruffin, J., who presided, declared that he considered the entry to be equivalent, in the loose practice permitted in this State, not to a plea, but to a notice of set-off, and the matter proposed to be replied could be used on the pleadings as they were, and therefore refused the amendment as unnecessary.
On the trial, the defendant, after proving some partial payments, claimed the benefit of a further payment of $90, of which the evidence alleged was a written receipt signed by the plaintiff's intestate in his life, and the defendant being unable to produce the receipt itself, proposed to prove its loss by his own oath, in order to let in evidence of its contents, which proof the judge refused to hear.
By way of set-off the defendant then offered in evidence an account for £ 78, acknowledged and signed by the plaintiff's intestate 20 November, 1802. More than three years having elapsed from that time till the bringing of this action, the judge treating the word "set-off" as an informal notice only, instructed the jury that the account was barred.
A verdict was found for the plaintiffs, and a motion for a new trial being overruled, the defendant appealed to this Court, where the cause was submitted without argument, no counsel appearing on either side.
A set-off to the full amount of the plaintiff's demand may be pleaded in bar of the action. If it is less than the demand, it cannot of itself be pleaded in bar; but the defendant avails himself of it by annexing it to some plea which with the sum set off amounts to a full defense, and giving notice of the set-off — most commonly thus, in the short entries on our dockets, general issue and notice of set-off; and if the particulars of the set-off are required, they must be (251) furnished. And so it is, I apprehend, when it is pleaded in bar. The particulars must be furnished if required; and should the set-off, when offered in the form of a plea, be found not to amount to the plaintiff's demand, the defendant may use it as a notice of set-off. At least this is a common practice, and I can see no objection to it. The entry in this case is "General issue — set-off." This I should have understood as offered in the form of a plea, and had it amounted to the full demand, it could not be objected that it was barred by the statute of limitations; for that which confesses and avoids cannot be shown under a general replication, which is nothing but a bare denial. But if the defendant insists on this being a plea, it is clearly insufficient, for it is not an answer to whole demand. It can be used only as a notice of a set-off, and if good, is applied to extinguish the plaintiff's demand to an equal amount. It necessarily follows that it may be repelled by showing that it is barred by the statute of limitations, without any replication to that effect; for in fact, when it comes in as a notice, no answer of record is given to it, that is, it is not noticed in the pleadings farther than before stated. But I think the judge erred in not submitting it to the jury as a payment. A payment differs from it only in this, that a payment is, by consent of the parties, either expressed or implied, appropriated to the discharge of a debt; a set-off is a mutual, independent claim, which still continues to exist as such, and one which the parties did not intend should be appropriated to the satisfaction of an existing demand, but that each should have mutual causes of action, and of course mutual actions if they pleased against each other. In this cause, Tate was indebted to McDowell to the amount of several hundred dollars, and Tate furnishes Greenlee with articles to the amount of £ 70, and Greenlee signs an account acknowledging their receipt. It is unfair to presume that Tate intended anything (252) else but to pay his debt as far as the amount would go, and that McDowell received them with the same intention. It is not probable that McDowell intended to come under an obligation to pay Tate that sum, whilst Tate owed him a large debt, or that Tate intended to enforce payment from him; and whatever might be Tate's original intention, if McDowell received them to be applied as a payment or credit to the bond, and this was known to Tate and assented to by him, it becomes a payment — that is, it is appropriated. And the conduct of Tate is a strong exposition of his understanding of it, for he has kept it for upwards of twenty years, without attempting to enforce payment; and although the statute in relation to set-offs has not changed the nature of mutual debts, and converted that to a payment which in its nature is not, yet, in the interpretation of the acts of the parties, to get at the intention which gives character to the act, it has had a great effect, as in the present case. It is not presumed that Tate intended this as a set-off, or an independent demand, for if he attempted to enforce it, McDowell would set off his large demand against it, and make him pay costs; and if he did not, but waited to set it off until McDowell should bring suit, McDowell could entirely defeat it, by virtue of the statute of limitations.
I do not pretend that the statute has changed the nature of the thing, but only that when its character depends on intent, it has waived the presumption of that intent and thereby given to it a different character.
PER CURIAM. Judgment reversed, and a new trial granted.
Approved: Peace v. Nailing, 16 N.C. 289; Norment v. Brown, 79 N.C. 363; McClenahan v. Cotten, 83 N.C. 332; McRae v. Malloy, 87 N.C. 196; Sugg v. Watson, 101 N.C. 188; Electric Co. v. Williams, 123 N.C. 54; Hicks v. Kenan, 139 N.C. 346.
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