COMPENSATION, crim. law; Compeusatio crimiuura, or recrimination (q. v.)
2. In cases of suits for divorce on the ground of adultery, a compensation of the crime hinders its being granted; that is, if the defendant proves that the party has also committed adultery, the defendant is absolved as to the matters charged in the libel of the plaintiff. Ought. tit. 214, Pl. 1; Clarke's Prax. tit. 115; Shelf. on Mar. & Div. 439; 1 Hagg. Cons. R. 148. See Condonation; Divorce.
COMPENSATION, contracts, civil law. When two persons are equally indebted to each other, there takes place a compensation between them, which extinguishes both debts. Compensation is, therefore, a reciprocal liberation between two persons who are creditors and debtors to each other, which liberation takes place instead of payment, and prevents a circuity. Or it may be more briefly defined as follows; compensatio est debiti et crediti intter se contributio.
2. Compeasation takes places, of course, by the more operation of law, even unknown to the debtors the two debts are reciprocally extinguished, as soon as they exist simultaneously, to the, amount of their respective sums. Compensation takes place only between two debts, having equally for their object a sum of money, or a certain quantity of consumable things of one and the same kind, and which are equally liquidated and demandable. Compensation takes place, whatever be the cause of either of the debts, except in case, 1st. of a demand of restitution of a tbing of which the owner has been unjustly deprived; 2d. of a demand of restitution of a deposit and a loan for use; 3d. of a debt which has for its cause, aliments declared not liable to seizure. Civil Code of. Louis. 2203 to 2208. Compensation is of three kinds: 1. legal or by operation of law; 2. compensation by way of exception; and, 3. by reconvention. 8 L. R. 158; Dig. lib. 16, t. 2; Code, lib. 4, t. 31; Inst. lib. 4, t' 6, s. 30; Poth. Obl. partie. 3eme, ch. 4eme, n. 623; Burge on Sur., Book 2, c. 6, p. 181.
3. Compensation very nearly resembles the set-off (q. v.) of the common law. The principal difference is this, that a set-off, to have any effect, must be pleaded; whereas compensation is effectual without any such plea, only the balance is a debt. .2 Bouv. Inst. n. 1407.
COMPENSATION, contracts. A reward for services rendered.
COMPENSATION, chancery practice. The performance of tbat which a court of chancery orders to be done on relieving a party who has broken a condition, which is to place the opposite party in no worse situation than if the condition had not been broken.
2. Courts of equity will not relieve from the consequences of a broken condition, unless compensation can be made to the opposite party. Fonb. c. 6; s. 51 n. (k) Newl. Contr: 251, et. seq.
3. When a simple mistake, not a fraud, affects a contract, but does not change its essence, a court of equity will enforce it, upon making compensation for the error, The principle upon wbich courts of equity act," says Lord Chancellor Eldon, "is by all the authorities brought to the true standard, that though the party had not a title at law, because he had not strictly complied with the terms so as to entitle him to an action, (as to time for instance,) yet if the time, though introduced, as some time must be fixed, where something is to be done on one side, as a consideration for something to be done on the other, is not the essence of the contract; a material object, to which they looked in the first conception of it, even though the lapse of time has not arisen from accident, a court of equity will compel the execution of the contract upon this ground, that one party is ready to perform, and that the other ma, have performance in substance if he will permit it." 13 Ves. 287. See 10 Ves. 505; 13 Ves. 73, 81, 426; 6 Ves. 675; 1 Cox, 59.