It is not, we conceive, a necessary subject of inquiry here, whether or not the defense set up by the first and third pleas, to which the demurrer was sustained, was permitted at common law. The decisions of the common law 'courts are not uniform on the point, and a resort to them seems to be unnecessary, inasmuch as our statute allows the defense. The tenth section is in these words: “ In any action commenced, or which may hereafter be commenced in any court of law in this State, upon any note, bond, bill or other instrument in writing for’ the payment of money or property, or the performance of covenants or conditions by the obligee or payee thereof, if such note, bond, bill or instrument in writing was entered into without a good or valuable consideration; or if the consideration upon which such note, bond, bill or instrument in writing was made or entered into, has wholly or in part failed, it shall be lawful for the defendant or defendants, etc., to plead such want of consideration, or that the consideration has wholly or in part failed, etc., and if it shall appear that the consideration has failed in part, the plaintiff- shall recover according to the equity of the case.” (Scates’ Comp., ch. 73, page 292.)
A part of the consideration for the note sued on, was, that the land sold was free from incumbrances. The pleas allege the fact of the existence of a certain incumbrance by mortgage, which the defendant had to pay and discharge, and thereby extinguish the incumbrance. To the extent then of this incumbrance there was a failure of consideration. Morgan v. Smith, 11 Ill. 199; Whisler v. Hicks, 5 Blackford, 100; Smith et al. v. Ackerman, ib. 541; Buell v. Tate, 7 id. 54; Pomeroy v. Burnet, 8 id. 142.
We think too, the defendant, under the pleadings, might have, recouped the amount thus paid. Babcock v. Trice, 18 Ill. 420. There is a natural equity as to claims arising out of the same transaction, that one claim should compensate the other, and that the balance only should be recovered. The damages claimed by the defendant, grow out of the contract for the sale of the land, and present a plain case for recouping damages. It is a salutary principle to permit parties to adjust the whole controversy in one action, out of which has grown the doctrine of recoupment, and at this day, almost universally applied. The defendant should have been allowed, either under his pleas of partial failure of consideration, or on the principle of recoupment under the other pleas, the amount he paid to extinguish the mortgage set out in his plea, and the plaintiff should have had a judgment for the balance only. To enable the defendant to get this allowance, this judgment must be reversed, and the cause remanded.
Judgment reversed.