XXXIV. On Occult Compensation

What is occult compensation? - Occult compensation is nothing other than an occult equivalent recovery of one's own thing, the occult reparation of damage unjustly suffered in one's own goods. This compensation is usually called extra-legal, to distinguish it from legal compensation, which touches certain particular cases, when two persons, debtors to each other, each receive in payment the thing owed to the other; which compensation, by force of the law itself, by full right, has place. Legal compensation obtains even when the debtors are unaware, up to the concurrent quantity of each debt, provided nevertheless that both are of the same nature and goodness and can be exacted immediately. But a delay which is conceded to the debtor for paying does not prevent compensation. - But legal compensation is not admitted 1. when restitution is sought of a thing of which the owner was unjustly despoiled; 2. when restitution of a deposit or loan is sought; 3. when there is question of a debt whose title has its origin from support payments which do not fall under seizure, such as wages, pensions, etc.; 4. when the creditor has renounced the right of compensation. But renunciation cannot be made to the damage of other creditors or sureties. C. I. 1285 seqq.; C. G. 1289 seqq.; C. A. 1438 seqq.; C. H. 1195 seqq.; C. B. 273, 274, 387 seqq. Cf. here 966.

Whether occult compensation is licit? - Occult compensation, with certain conditions concurring, is licit according to the common opinion of the doctors. The reason is that it is nothing other than a just defense from injury, by which the debtor continually vexes you by unjustly retaining your thing, or that to which you have a right from justice.

What are the conditions required for the lawfulness of occult compensation? The conditions commonly required that occult compensation be made justly and licitly are: 1. That the spiritual and temporal damage of the debtor be prevented; namely, lest he remain in an erroneous conscience and in sin, lest he again restore what he now does not owe; by admonishing him of the cessation of the obligation, by feigning, e.g., condonation, etc. Yet one is not held to this from justice, but only from charity, which does not oblige with grave inconvenience. 2. That the grave damage of another be prevented, for instance if suspicion of theft threatens another. To this also one is not held from justice, but only from charity, since he is the cause of that damage not per se, but only per accidens. 3. That the thing which is accepted in compensation from the debtor is not another's; because otherwise you would not exact the debt from the debtor, but from another who owes nothing. 4.

That you cannot recover the debt otherwise, by asking it from the debtor, or before a judge, or certainly not except with great difficulty, expenses, lawsuits, annoyances, etc. The reason is that one cannot regularly by his own authority despoil the possessor, since this belongs to the judge, or magistrate, having public authority. Besides, the public good requires that no one declare right for himself where recourse to a judge is easy. St. Thomas, 2. 2, q. 66, a. 5 ad 3.; C. B. 227.; C. L. 2535 seqq. 5. That compensation be made, as much as can be done, in a thing of the same species as that which was owed. For otherwise the debtor, without his consent, is altogether unjustly compelled to exchange his own thing.

But if it cannot be made in a thing of the same species, it can indeed be made in another, but with lesser detriment to the debtor, as much as can be done. - 6. That the debt be certain; for in doubt the condition of the possessor is better, and therefore here he would be unjustly despoiled of his own thing. - Lugo d. 16, s. 5.; Ithur. Cas. 3, n. 14, 15.; L. 521.; St. Thomas, 2. 2, q. 66, a. 5 ad 3.; E. M.

Whether compensation can be made by retaining a thing handed over to the creditor in deposit or on loan? Many deny it, relying on the positive dispositions of the law. C. I. 1289.; C. G. 1293.; C. H. 1200, 1747.; C. A. 1440.; L. ult. § 1. C. de Compensationibus; C. Bona fides de Deposito. "Yet others more probably teach that those laws proceed only in the external forum, in which it is presumed that the debt could have been recovered by another way, and the faith of deposit preserved.... The reason is that the fact that the thing has been deposited with you does not make it more its owner's than before, nor does it oblige you to defend it against the true owner, who wishes to vindicate it, or against him who has a true right to receiving it, if that right is certain to you: indeed you ought to give it, if damage threatens you from another source. Therefore similarly you will be able to take it for yourself, if you have true dominion of it, or a true right against its owner for recovering your debt." Lugo d. 16, n. 89.; Gousset in a. 1293.; C. B. 273, 274.

Whether, with impossibility or grave inconvenience of recurring to a judge excluded, someone sins gravely against legal and commutative justice by secretly compensating himself? Resp. to the 1st: Negatively, generally speaking, because ordinarily, from this inversion of order, grave scandal or grave disturbance of the republic does not follow. Resp. to the 2nd: Negatively, if you accept your own thing, which still pertains to your dominion, or if you accept it in an equivalent in fungible things, as money for money, wheat for wheat, etc., because in these the debtor is not compelled to undergo any burden besides that to which he was held. But affirmatively, speaking of itself, if you accept a thing of another genus, e.g., a horse for money, without cause and necessity; because in the case you compel your debtor to sell the horse, and therefore to undergo a grave burden besides that to which he was held. But you have no right to impose this new burden upon him; yet per accidens you can permit it to follow, where a sufficient cause and necessity are present for recovering your own thing in the way you can. For then the debtor ought to impute this other burden to himself, since he does not pay what he was held to pay. Lugo d. 16, n. 91.; C. A. 1413, 1414.

Whether a creditor can compensate himself before the time, for a future debt? - Resp. Affirmatively, if there is a true moral danger that the debtor will not satisfy his debt at its own time. "The reason is that defense by natural right is licit not only when you are already actually offending me, but also when you are prepared to offend me, and I cannot escape otherwise than by anticipating." Yet, "if some damage comes to the debtor on account of the anticipation of compensation... all of it must either be diminished from the principal debt, or restored to the debtor. The reason for this is that no one can be punished for a future delict before it happens." Lugo d. 16, n. 93.

Whether someone can compensate himself with only a right to a thing? Resp. Affirmatively. For by a right to a thing, from a strict obligation of justice in another, although immediately and directly the person is obliged, nevertheless mediately and indirectly the thing itself is obliged to you. Wherefore, as you can licitly compel the person to pay you by recurring to a judge, so also you can licitly compel him to pay you by taking the thing which is owed to you, when recourse to a judge is impossible. And indeed the matter is evident, that there is no injury of commutative justice if you take for yourself what another from the same justice owes and does not wish to give. - L. 614.; Lugo d. 16, n. 97.

Whether occult compensation can licitly be made when only probability of right stands? Ithur. Cas. 3, n. 11, has this: "Whenever the opinion has been equally probable for each party, or, as frequently happens, one's own is more probable to each, compensation is made justly not in the whole, but certainly in half of the debt." The 1st reason is because in such a case "a judge can adjudicate the whole to neither, but ought to divide the thing between the litigants....

But it is licit for no one through occult compensation to acquire more than what could be adjudicated to him by a judge after allegations and proofs." The 2nd reason is because "whenever the right to the same thing is equal, the advantage of each party ought to be equal, justice so requiring, whose office it is to consult equality." But Cardinal Lugo, after reporting the common opinion which requires a certain right for compensation, then adds these things: "This doctrine, if it is understood as it sounds, is difficult, nor does it seem to be constantly retained by its own authors....

I will add some examples: first, concerning him who has been defamed by Peter, it is asked whether for the reputation which Peter does not wish or is not able to repair for him, it is licit for the defamed person to make compensation by denying monies which he owed to the same Peter. Lessius responds that he can, because the opinion is probable which teaches that infamy must be compensated by money when it cannot be restored in its own genus... although the truer opinion denies this.... Secondly, when two have mutually defamed each other, they can, when the damage is equal, compensate for themselves, so that neither is held to restore as long as the other does not wish to restore.... Which compensation in that case is founded only on a probable opinion, since the contrary is also very probable. Thirdly, he who ought to have a legacy from a less solemn testament, since it is a probable opinion that those legacies are owed in the forum of conscience, although the contrary opinion is sufficiently common and probable, can nevertheless retain the legacy, or accept it anew, or secretly compensate himself." Hence Lugo generally concludes: "it seems probable that a creditor, before the matter is brought to judgment... can secretly compensate his debt to himself.... Reason also seems to prove this, because, notwithstanding the possession of the debtor, the judge would pronounce sentence, or certainly could pronounce it for the creditor, by embracing the probable or more probable opinion which favors him.... Why therefore will the creditor himself, when he cannot recur to a judge without grave inconvenience, not be able to embrace the same opinion which the judge ought or could have embraced, and compensate the debt to himself?"

But the same Lugo notes that although a judge in judging is held to follow the more probable opinion, nevertheless the creditor in occult compensation does not seem to be obliged to this, because the reason on account of which especially a judge cannot do this is that "from office and from an implicit pact toward the Republic he seems to be held to inquiring into the truth as much as he can, which reason does not militate in the creditor, who is held by no such pact toward the Republic. Yet concerning this I wish to assert nothing; indeed I willingly abstain from final judgment concerning this whole point about compensation to be licitly made with an opinion only probable." d. 16, n. 94 seqq.; L. 521, 544, 700, 817, 928.; l. 1, n. 30. But the reason of the common opinion is: 1.

The danger in this matter of easy deception; hence, practically speaking, there is present a grave danger of injuring another's rights. 2. Because if the other truly possesses the thing in good faith and by a title at least reasonably presumed, he now has a certain right at least of detention of the thing, and consequently he cannot be despoiled of the thing until there is certainty concerning another's right and dominion of the thing. - Hence, as is clear, when there stands only probability of fact from which a right arises, it is in no way licit to despoil the peaceful possessor of his thing.