Smead, Collard & Hughes v. Chrisfield

The defendants set up, by way of counterclaim, that Chrisfield, one of the parties, during the last year had *20borrowed money of the plaintiffs, in the name of both defendants, and paid large sums for excessive interest, which are asked to be deducted from the notes declared upon in the petition.

To this the plaintiffs demur, and assign that the matter described, is not in the nature of a counterclaim, or set-off. By the section 94 of the code, we can not perceive that the defendant’s claim can be supported. If. it was a counterclaim, it is not stated with any certainty; no amount is alleged, no specific notes are named, as having been given, nor any certain allegation of an existing right to lessen the amount for any “ cause arising out of, or connected with, the plaintiff’s claim.”

But if it was alleged that the claim constituted a set-off) how must it be regarded?

By the section 97, a set-off must be “ a cause of action arising upon a contract, or ascertained by the decision of the court.” We suppose that the commonly received rale, that the claim sought to be set off) must be liquidated, or capable of being liquidated, applies, under the code, as it ever has in our former practice under the old law (Swan’s Staff, 850); or it may be, as intimated in that statute, the judgment of a competent court between the same parties. Whether the defendant’s claim comes within either of these divisions, must determine the question.

The right to be allowed, by recoupment, for any excess of interest paid, is certainly confined to a suit brought upon the note, or contract, on which usury has been received. This is the language of the law of Eeb. 18,1848 (Curwen, 849). But this is not the condition of the defendants. They sustain no such relation to the plaintiffs; nor does the last clause of section 6 of the law referred to, which authorizes the excessive interest to be recovered back, by action against the party receiving it, give the defendants any right to recover, in the form as now presented. The claim does not arise upon contract; the only contract between the parties was to pay what they undertook to pay; and if both have broken the law, the *21one by receiving and the other by paying, they are both in “ pari delicto,” and therefore without the remedy given by law to recover back the usurious interest. They would be left where the court finds them. A remedy, however, is given; it is a special one — the creation of the statute, not the act of the parties — and can not,_ therefore,be setup to defeat this action.

The demurrer is sustained.