Please cite to the original publication
Recoupment. Under the doctrine of compensatio, known to the Roman Law, mutual debts could be set off against each other. At early common law, however, it seems that mutual cancellation of debts could only be had through an agreement between the parties--implied by the striking of an account, or expressed in the making of a compromise. By the time of Henry VIII, however, a defendant was allowed to introduce new matter which would tend to defeat or diminish the plaintiff's recovery. This was known as recoupment. At first it was limited to a showing of payment, or of former recovery. Later, recoupment was developed so as to allow a defendant to show, for the purpose of reducing the plaintiff's recovery, any facts, arising out of the transaction sued upon or connected with the subject thereof, which facts might have founded an independent action in favor of the defendant against the plaintiff. Thus, in an action for work and labor, the defendant might prove that the work was improperly done; and, in an action for goods sold and delivered, damages could be recouped because of a breach of warranty. Similarly, rent accruing during disseisin could be recouped by a disseisor, and in an action upon one clause of a contract, recoupment has been allowed for a breach by the plaintiff of another clause of the same contract. It was not necessary that the opposing claims be liquidated, nor that they be of the same character, i. e., a claim in "tort" could be set off against one in "contract." It was essential, however, that the claims of both plaintiff and defendant involve the same "subject matter," or arise out of the "same transaction," andthat they be susceptible of adjustment in the same action.
Date of Authorship for this Version
The Pleading of Counterclaims (with Leighton H. Surbeck), 37 Yale Law Journal 300 (1928)