There are some limitations and qualifica tions to the law of recoupment, as thus es tablished. Thus, it has been held that the defendant is not entitled to any judgment for the excess his damages in recoupment may have over the plaintiff's claim, nor shall he be allowed to bring an independent ac tion for that excess ; Britton v. Turner, 6 N. H. 481, 26 Am. Dec. 713 ; Stow v. Yarwood, 14 Ill. 424 ; McLane v. Miller, 12 Ala. 643 ; Batterman v. Pierce, 3 Hill (N. Y.) 171; Brunson v. Martin, 17 Ark. 270. If recoup ment is put upon the ground of a cross-action and not a more defence for the reduction of damages, there is no reason why he should not have judgment to the extent of his injury. Such seems to be the practice in Louisiana, under the name of reconvention; Miller v. Stewart, 12 La. Ann. 170 ; and such will probably be the practice under those systems of pleading which authorize the court, in any action which requires it, to grant the defend ant affirmative relief ; Ogden v. Coddington, 2 E. D. Sm. (N. Y.) 317. See, also, Calvin v. McClure, 17 S. & R. (Pa.) 385; Davidson v. Remington, 12 How. Pr. (N. Y.) 310.
The damages recouped must be for a breach of the same contract upon which suit is brought ; Deming v. Kemp, 4 Sandf. (N. Y.) 147 ; Miles Elkin, 10 Ind. 329 ; Halde man v. Berry, 74 Mich. 424, 42 N. W. 57. For example, when chattels have been sold with an express or implied warranty, and there were latent defects unknown to the purchaser, he may retain the goods without notifying the vendor, and either sue for his damages or recoup the same in an action against him for the price ; Buffalo Barb Wire Co. v. Phillips, 67 Wis. 129, 30 N. W. 295 ; Tillyer v. Glass Co., 13 Ohio C. C. 99, 7 0. C. D. 209 ; even if the sale were on approval, but the contract did not limit the purchaser to the return of the property, if unsatisfac tory: Shupe v. Collender, 56 Conn. 489, 15 Atl. 405, 1 L. R. A. 339 ; or one who has pledged stocks as collateral to a note, if sued on the note, may recoup the damages result ing from wrongful appropriation of the stocks by the pledgee; Rush v. Bank, 71 Fed. 102, 17 C. C. A. 627, 36 U. S. App. 248. The surety on a note, in an action by the payee, may set up, by way of recoupment, the breach of warranty of the property sold to the maker for which the note was given; Loring v. Morrison, 15 App. Div. 498, 44 N. Y. Supp. 526; but if a surety is sued alone, he cannot recoup for a warranty in favor of his principal, without the consent of the lat ter ; Phcenix Iron Works Co. v. Rhea, 98 Tenn. 461, 40 S. W. 482. It may be for a tort ; but it seems that the tort must be a violation of the contract, and it is to be measured by the extent of this violation, and no allowance taken of malice ; Allaire Works v. Gulon, 10 Barb. (N. Y.) 55 ; Brigham v. Hawley, 17 Ill. 38 ; Heck v. Shener, 4 S. & R. (Pa.) 249, 8 Am. Dec. 700. The language of some cases would seem to imply that re coupment may be had for damages connected with the subject-matter or transaction upon which the suit is brought, but which do not constitute a violation of any obligation im posed by the contract, or of any duty impos ed by the law in the making or performance of the contract; Stow v. Yarwood, 14 I11. 424.
But these cases will be found to be decided with reference to statutes of counter-claim. And even in the construction of such statutes it has been doubted whether it is not better to confine the damages to violations of the contract ; Lovejoy v. Robinson, 8 Ind. 399; Cram v. Dresser, 2 Sandf. (N. Y.) 120.
It is well established, in the absence of statutory provisions, that it is optional with the defendant whether he shall plead Ms cross-claim by way of recoupment, or resort to an independent action; Cook v. Moseley, 13 Wend. (N. Y.) 277; Hall v. Clark, 21 Mo. 415. Nor does the fact of a suit pending for the same damages estop him from pleading them in recoupment, although he may be com pelled to choose upon which action he shall proceed ; Naylor v. Schenck, 3 E. D. Sm. (N. Y.) 135 ; Good v. Good, 5 Watts (Pa.) 116. Payment after action brought, although never pleadable in answer to the action, was usually admitted in reduction of damages ; Pemigewasset Bk. v. Brackett, 4 N. H. 557; Bischof v. Lucas, 6 Ind. 26 ; 1 M. & W. 463. But the defendant can never recoup for dam ages accruing since action brought; 20 E. L. & E. 277; Harger v. Edmonds, 4 Barb. (N. Y.) 256; Gordon v. Kennedy, 2 Binn. (Pa.) 287.
The right of recoupment will usually be allowed to sureties and indorsers in cases where it would be permitted for the benefit of the principal debtor, as, for example, a successful recoupment by the maker of a note will enure to the benefit of the indorser when sued with the maker; Wolf v. Michael, 21 Misc. Rep. 86, 46 N. Y. Supp. 991.
It has been maintained by some courts that the law of recoupment is not applica ble to real estate. Accordingly, they have denied the defendant the right, when sued for the purchase-money, to recoup for a par tial failure of title ; Greenleaf v. Cook, 2 Wheat. (U. S.) 13, 4 L. Ed. 172; Key v. Hen son, 17 Ark. 254. But most of these cases will be found denying him that right only be fore eviction. A confusion has been intro duced by regarding failure of title and fail ure of consideration as convertible terms. The consideration of a deed without cove nants is the mere delivery of the instrument ; Rawle, Coy. 588. A failure of title in such case is not a failure of consideration, and it therefore affords no ground for recoupment. The consideration of a deed with covenants does not fail till the covenantee has suffered damages on the covenants, which in most cases does not happen till eviction, either ac tual or constructive. After this has happen ed, his right to recoup is now pretty generally admitted. This is nothing more than allow ing him to recoup as soon as he can sue upon the covenants ; Mayor of New York v. Ma bie, 13 N. Y. 151, 64 Am. Dec. 538; Rice v. Goddard, 14 Pick. (Mass.) 293; Pence v. Hus ton's Ex'rs, 6 Gratt. (Va.) 305; Dart, Vend. 381; Rawle, Cov. 583.