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COMPENSA′TIO is defined by Modestinus to be debiti et crediti inter se contributio. Compensatio, as the etymology of the word shows (pend‑o), is the act of making things equivalent. A person who was sued, might answer his creditor's demand, who was also his debtor, by an offer of compensatio (si paratus est compensare); which in effect was an offer to pay the difference, if any, which should appear on taking the account. The object of the compensatio was to prevent unnecessary suits and payments, by ascertaining to which party a balance was due. Originally compensatio only took place in bonae fidei judiciis, and ex eadem causa; but by a rescript of M. Aurelius there could be compensatio in stricti juris judiciis, and ex dispari causa. When a person made a demand in right of another, as a tutor in right of his pupillus, the debtor could not have compensatio in respect of a debt due to him from the tutor on his own account. A fidejussor (surety) who was called upon to pay his principal's debt, might have compensatio, either in respect of a debt due by the claimant to himself or to his principal. It was a rule of Roman law that there could be no compensatio where the demand could be answered by an exceptio peremptoria; for the compensatio admitted the demand, subject to the proper deduction, whereas the object of the exceptio was to state something in bar of the demand. Set‑off in English law, and compensation in Scotch law, correspond to compensatio. (Dig. 16 tit. 2; Thibaut, System, &c. §606, 9th ed. contains the chief rules as to compensatio.)
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Page updated: 8 Dec 06