Geo. E. Lloyd & Co. v. Manufacturers & Merchants Warehouse Co.

Becoupment is a defense arising out of the subject-matter of the plaintiff’s claim. It is an innovation upon the strict rules of the common law, sanctioned by the courts for the purpose of doing equity between the parties; it tends to promote justice and avoid a multiplicity of suits. It is necessary that this defense arise out of and be connected with the transaction or contract upon which the suit is brought, but it is not essential that the opposing claims should be of the same character.

A claim originating in tort may, by way of recoupment, be set up as a defense to a claim growing out of…