value at that time in its then condition. Against this plaintiff strenuously contends and argues that defendant converted the property when it took it from the side of the highway and put it into the new bridge, at which time it is shown to have been of substantially the value claimed.

To follow out the various arguments and theories as to when and how often this steel changed back and forth from personal property to real estate, or when and why or how. the conversion, if any, took place, as mooted by the contingent conclusions of the trial court might, as the court suggested, involve an "entanglement" of questions which, in the language of Imlac, have "long divided the wise and perplexed the good" and we see no reason to pursue them, for we think the court erroneously rejected defendant's claim of recoupment and the exact time when defendant converted LeVan's steel to its own use is of minor importance. He purchased this steel to use in the construction of a bridge for defendant over Mill Creek which he had contracted to build. He used it for that purpose. The township rejected the bridge he built because imperfect, unsafe and not according to contract, notifying him of the rejection and its reasons. After due demand that he perform and reasonable time therefor the township did what he under his contract should have done. It tore down the defective and unsafe bridge and built another of the same kind, according to the same plans and specifications as that he had agreed to build. In doing so it saved and used some of the old material which he had furnished for and used in the first bridge in part performance of his contract.

While plaintiff claims a tortious conversion he has waived the tort and sued in assumpsit founding his action upon a claim of quantum meruit, for the value of material furnished by his assignor under and used

in an attempt to perform his contract with defendant to build a specified bridge, for the construction of which defendant used the material after he had failed to fully perform and abandoned the work; but had plaintiff's action sounded in tort for a conversion, recoupment could have been interposed with equal force.

"That term is expressive of a right of a defendant to deduct or abate from the plaintiff's damages any right of action which defendant may have, growing out of the same transaction, founded either in tort or in contract; but the right is the same, whether expressed by one term or another, or claimed by a plaintiff or defendant." Bancroft v. Peters, 4 Mich. 619.

Recoupment is not strictly limited to the exact provisions of the contract involved, or sued upon, but is said in Waterman on Set-Off and Recoupment (2d Ed.), p. 480, to be contradistinguished from set-off in three essential particulars:

"1st. In being confined to matters arising out of, and connected with, the transaction or contract upon which the suit is brought; 2d. In having no regard to whether or not such matter be liquidated or unliquidated; and 3d. That the judgment is not the subject of statutory regulation, but controlled by the rules of the common law. * It is sufficient that the counter-claims arise out of the same subject-matter, and that they are susceptible of adjustment in one action."

*

*

The scope of such defense was early recognized by this court in Ward v. Fellers, 3 Mich. 282, where recoupment is discussed at some length. The opinion says of its application:

"It is sufficient that the counter-claims arise out of the same subject-matter, and that they are susceptible of adjustment in one action."

In Allen v. McKibbin, 5 Mich. 449, which holds recovery might be had on quantum meruit for part performance of a non-apportionable contract, the basis

of recovery being a new implied agreement deducible from delivery and acceptance of some valuable service or thing, the court said in discussing the defense that no question could be raised as to the right to recoupment "as the damages, if any, arose out of the same transaction.”

As assignee, plaintiff is entitled to recovery only and just as LeVan, his assignor, might had no assignment been made. Howell v. Medler, 41 Mich. 641.

The trial court found, with abundant supporting evidence, that the reasonable cost and expense to defendant in removing the defective LeVan bridge out of the way, and cleaning and straightening the steel found imbedded in it, was the sum of $200. This was distinctly an item of damages resulting to defendant from LeVan's nonperformance of his contract, and exceeded the amount claimed in plaintiff's bill of particulars, or any proven value of the steel used by defendant and for which it was holden. Clearly the counter claims of these parties arose out of the same subject-matter, or transaction, and were susceptible of adjustment in one action.

Though by different avenues of approach, which is immaterial, the right result was reached by the trial court and its judgment is affirmed.

BIRD, C. J., and OSTRANDER, MOORE, BROOKE, FELLOWS, STONE, and KUHN, JJ., concurred.

PRATT v. DUNCAN.

1. TRIAL-DIRECTED VERDICT-INSTRUCTIONS-BILLS AND NOTESFRAUD-BONA FIDES-HOLDER IN DUE COURSE.

Plaintiff, in an action on certain promissory notes, was not prejudiced by the court's submitting to the jury whether the contract was procured by fraud and if so whether plaintiff was a bona fide holder, where he should have instructed them that the contract was contrary to public policy and void as between the original parties and plaintiff must fail unless he established his bona fides. 2. APPEAL AND ERROR-DIRECTED VERDICT.

The evidence, together with its legitimate inferences most favorable to the other party, must be accepted on a motion to direot a verdict.

3. BILLS AND NOTES-BONA FIDES-HOLDER IN DUE COURSE-QUESTION FOR JURY.

Evidence that plaintiff, a bank officer, received collateral for collection, and, when collected, credited the proceeds to an account called the "collateral account," and, if not collected, turned it over to an attorney employed by the original holder for collection, considered together with his knowledge of the contract to which the notes were originally attached and made a part, etc., presented a question for the jury as to whether plaintiff was a bona fide holder.

Error to Berrien; Bridgman, J. Submitted October 22, 1918. (Docket No. 100.) Decided April 3, 1919.

Assumpsit by W. I. Pratt against John F. Duncan on certain promissory notes. Judgment for defendant. Plaintiff brings error. Affirmed.

Cady & Andrews, for appellant.
Stratton & Evans, for appellee.

FELLOWS, J. Plaintiff claims to be the bona fide
See note in 31 L. R. A. (N. S.) 287.

holder of certain promissory notes executed by defendant. These notes were detachable and were detached from a contract for the putting on of a gift enterprise devised in Iowa City, Iowa, of similar purport to the ones before this court in Boston Piano & Music Co. v. Seckinger, 198 Mich. 312; Harrison v. Grier, 198 Mich. 672; Boston Piano & Music Co. v. Clothing Co., 199 Mich. 141; and Stevens v. Venema, 202 Mich. 232, and with the same company involved in Loveland v. Bump, 198 Mich. 564. A reference to these cases will disclose the detail.

The instant case was tried before any of the above cited cases was decided. Defendant's notice under the plea of the general issue was broad enough to admit of the defense that the contract was against public policy, and the trial judge was inclined to dispose of the case on that ground, but was dissuaded and submitted to the jury the question of whether the contract was procured by fraud, and if so whether plaintiff was a bona fide holder of the note. The claimed fraudulent representations were of the same character as those involved in the Clothing Company Case, promissory in their nature, and under the holding in that case should not have been submitted to the jury. But under the authority of the cases above cited, the contract was contrary to public policy, and the court should have instructed the jury that it was void as between the original parties, and plaintiff must fail unless he established his bona fides. Such being the case, plaintiff was not prejudiced by the submission of a branch of the case to the jury which should have been disposed of adversely to him by a peremptory instruction.

The question of plaintiff's bona fides being involved, considerable latitude of cross-examination into the relations of the parties and their business transactions should be indulged. We are not persuaded that the