·noun That which is lopped off, diminished, or abated.
II. Defalcation ·noun An abstraction of money, ·etc., by an officer or agent having it in trust; an Embezzlement.
III. Defalcation ·noun A lopping off; a diminution; abatement; deficit. Specifically: Reduction of a claim by deducting a counterclaim; set- off.