Defalcation

Tbe act of a defaulter. The reduction of the claim of one of the contracting parties against tbe other, by deducting from it a smaller claim due from the former to the latter. The law operates this reduction In certain cases; for, if the parties die or are insolvent, the balance between them is the only claim; but if they are solvent and alive, the defendant may or may not defalcate at his choice. See Set-Off. For the etymology of this world, see Brackenbridge, Law Misc. 186. Defalcation was unknown at common law; Com. v. Clarkson, 1 Rawle (Pa.) 291.