COMPENSATION. - Set-off is the extinction, total or partial, of two or more debts (and the corresponding credits) when someone is at the same time creditor and debtor of another.
A distinction is drawn between legal set-off and judicial set-off: the former produces ope legis the total or partial extinction of reciprocal items of credit and debt, where certain requisites are present; the latter operates through the intervention of the judge, who, by imputing in payment what the creditor in turn owes to the debtor, does nothing in substance but recognize the existence of the requisites of set-off, whose cause resides nonetheless in the law. It is also customary to speak of voluntary set-off, when, outside the two hypotheses mentioned above, the interested parties agree to set off their obligations against each other reciprocally.
The requisites needed for set-off to take place, at least in legal and judicial set-off, are: a) identity of the subjects, who must be holders (including by universal or particular succession) of reciprocal obligations of a properly juridical nature, that is, of obligations ex iustitia, not ex caritate, gratitudine, etc.; b) the liquidity of the credits, that is, their validity and the certainty of the an and of the quantum debeatur; c) the enforceability of the credits, that is, the fact that the credits to be set off are vested with an action; d) the homogeneity of the objects on which the set-off is to operate (the laws, moreover, generally require that the object of the credit be a quantity of fungible things).
The CIC implicitly contemplates judicial set-off in can. 1690, in connection with the counterclaim, which is defined as «actio quam reus coram eodem iudice in eodem iudicio instituit contra actorem, ad submovendam vel minuendam eius petitionem...».
A specific case of judicial set-off may be considered to be the set-off of judicial costs (can. 1911).
By the general principle that the costs of the trial follow the losing party (can. 1910), the judge should in fact, in the case of partial victory of each of the parties to the suit, grant to each the benefit of the costs pro rata victoriae. And thereby that opposition of liquid, enforceable and homogeneous credits would precisely be brought about, on which legal set-off operates ipso iure: which amply justifies the pronouncement of the judge by which the costs of the trial are declared set off in whole or in part.
But it is not only in the case of partial defeat that set-off of judicial costs may take place. If the litigants are relatives or connections by marriage, if the controversy was of doubtful resolution and consequently the good faith of the losing party cannot be denied, if finally there is a just and grave cause, for example, the poverty of the losing party, the law (can. 1911) gives the judge, for intuitive reasons of expediency and equity, the discretionary power to set off the costs totally or partially, that is, leaving to each of the litigating parties the costs borne by it in the course of the entire trial and those subsequently entailed.
For the set-off of injuries, v. INGIURIA and DIFFAMAZIONE.
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Ermanno Graziani