The principal defendant entered into a contract with the trustee to iron carriages for the trustee, for an agreed compensation. During the progress of the work, the defendant, without the consent or knowledge of the trustee (till after the service of the writ upon him), appropriated to his own use stock and materials belonging to the trustee, giving the trustee credit upon his books for the stock so used in the sum of $67.15. The trustee, upon learning of the transaction, did not indicate any disavowal of it by instituting any proceedings against the defendant, nor did it appear that he found any fault by reason of it. Held, that the act of the defendant might be considered as ratified by the trustee, who was entitled in this proceeding to set off the sum of $67.15 against the amount due the defendant upon said contract.
[fn*]FOSTER, C. J., C. C. [fn*] SMITH, J., did not sit.
There is no equity in the claim which the plaintiff here seeks to enforce by the equitable process of foreign attachment.
It is doubtless well settled, as suggested by the plaintiff's counsel, that, ordinarily, a set-off of unliquidated damages is not allowable; though an unliquidated demand capable of being reduced to a certainty by a simple calculation may be set off. Drew v. Towle, 27 N.H. 427. The case finds that the defendant, during the performance of his contract with the trustee, and in aid of that performance, "appropriated to his own use stock and materials belonging to the trustee, without the permission of the trustee, and without his knowledge till after the service of the writ upon him." It does not appear that there was any intentional fraud on the part of the defendant, who "gave the trustee credit upon his books for the stock so used in the sum of $67.15." It does not appear but what this was its fair value, nor that the trustee was dissatisfied with the defendant's conduct in this respect, nor that he did not intend to ratify the act, and adopt the valuation placed to his credit by the defendant.
He brought no suit in trespass or trover against the defendant, as he might have done if he had not chosen to adopt, or at least to acquiesce in, the defendant's act.
The damages which the trustee was entitled to recover of the defendant, or to set off against his claim, may, therefore, I think, in this "equitable proceeding," be regarded as liquidated, and as the subject of set-off.
If the trustee had chosen to sue the defendant, in trespass or trover, the amount of damages recoverable would have been greater than that which he now seeks to set off, because a jury would certainly award the value which the defendant himself placed upon the stock, with something additional for its taking or detention. If such an action had been commenced, the court would no doubt have continued the present suit until the trustee's damages had become liquidated; and now, in this "equitable proceeding," we cannot listen to the complaint of the plaintiff that the trustee has not seen fit to seek to increase the amount of the damages, which, sooner or later, he would be entitled to set off against the defendant's claim.
In Hankey v. Smith, 3 T. R. 507, it was held that "mutual credit may be constituted, though the parties do not mean particularly to trust each other: as, if a bill of exchange accepted by A get into the hands of B, and B buy goods of A, there is mutual credit between A and B, though A do not know that the bill is in B's hands."
Upon the whole, considering the nature and character of this proceeding, I am of the opinion the trustee's claim in set-off should be allowed, and that the ruling of the court below should be affirmed.
CUSHING, C. J.
The principal defendant used the stock and materials of the trustee, and gave him credit for them. I understand, from the disclosure, that the trustee elects to ratify this inchoate contract, which, in the absence of any suggestion of fraud or collusion, I think he has a right to do. The ratification, of course, dates back to the time of the transaction, which being anterior to the service of the trustee process, the trustee can only be charged for the balance remaining in his hands.
LADD, J. I concur.
The exceptions must be overruled.