1117. When 2 persons are mutually debtor and creditor of each other, both debts are extinguished by set-off in the cases and manner hereinafter mentioned.
1118. Set-off takes place by the mere operation of law between debts which are due and liquidated and are each in respect of a sum of money or a certain quantity of indeterminate things of the same kind and quality.
So soon as the debts exist simultaneously they are extinguished in so far as their respective amounts correspond.
1119. Set-off is not prevented by a term granted by indulgence for the payment of one of the debts.
1120. Set-off takes place whatever be the cause or consideration of the debts or of either of them, except in the following cases:
1. The demand for restitution of a thing of which the owner has been unjustly deprived;
2. The demand for restitution of a deposit;
3. A debt in respect of an alimentary provision not liable to seizure.
1121. The surety may avail himself or herself of the set-off which takes place when the creditor owes the principal debtor.
But the principal debtor cannot plead set-off in respect of the debt of the creditor to the surety.
A joint and several debtor cannot plead set-off in respect of what the creditor owes to his or her co-debtor, except as to the share of the latter in the joint and several debt.
1122. A debtor who accepts an assignment made by the creditor to a third person, cannot afterwards plead against the assignee the set-off which before the acceptance he might have pleaded against the assignor.
An assignment not accepted by the debtor, but of which due notification has been given to him or her, prevents set-off only in respect of the debts due by the assignor posterior to such notification.
1123. When the 2 debts are payable at different places, set-off cannot be pleaded without allowance for the expense of remittance.
1124. When set-off by the mere operation of law is prevented by any of the causes mentioned in this section, or by others of a like nature, the party in whose favour the cause of objection exists may alone demand the set-off by exception; and in such case the set-off takes place only from the time of pleading the exception.
1125. When there are several debts subject to set-off due by the same person, the set-off is governed by the rules provided for the application of payments.
1126. Set-off does not take place to the prejudice of the right of a third person.
1127. He or she who pays a debt which is of right extinguished by set-off, cannot afterwards in enforcing the debt in respect of which he has failed to plead set-off, avail himself, to the prejudice of a third person, of the privilege attached to such debt, unless there were just grounds for his ignorance of its existence at the time of payment.
1127A. In addition to the cases in which set-off may be pleaded under the foregoing articles, set-off may be pleaded in all cases in which it may be pleaded by the law of England. (Added by 34 of 1956)