Subject_1 COMPENSATION - RETENTION. Subject_2 SECT. IV.
Who entitled to Propone Compensation and Retention.
Middleton v. The Earl of Strathmore
Date: 26 February 1743 Case No. No 33.
Compensation found pleadable by a person who had no right to the debt upon which it was founded.
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It has been frequently found, that compensation might be pleaded by a person who had no right to the debt upon which the compensation was founded: Thus an heir, pursued for his predecessor's debt, has been allowed to plead compensation upon a debt due to his predecessor, though that debt was moveable, and belonged not to him the heir, but to the executor, Hay contra Crawford, No. 31. p. 2511.: And, upon the same principles, we see compensation every day sustained in a competition of creditors, upon a creditor's objecting to the interest of another creditor, that his debt is compensated by the like debt due by him to the common debtor.
The like question having now occurred in the case of an heir pleading compensation upon a moveable debt; The Lords gave the like judgement, and ‘sustained the compensation.’
N. B. It is not quite clear that this practice is agreeable to the principles of law: For though compensation operates ipso jure et retro, yet that is only when it is applied, and it is not the operation of the law, but of the judge upon the application of the party; which it is much doubted that any should be allowed to make, but the person who has right to the debt upon which it is founded.
Fol. Dic. v. 3. p. 143. Kilkerran, (Compensation.) No 3. p. 134.
