Hurst v. Sheets

¶1The demurrer should have been overruled. The defendant Trussell was' not a Iona fide assignee. According to the averments in the petition at the time he took the assignment, he was fully cognizant of Sheets’ total' insolvency, and received the same subject to the right of the plaintiff to offset his judgment, pro tanto, against that of the defendant.

¶2Section 3328 of the .Revision of 1860 is in aid of the common law enabling the party, through the sheriff, when he had executions on both judgments, to do directly and in a summary way what he had a right to call upon a court of equity to do in the absence of any such statute. Greene v. Dooling et al., 5 Mason, 201; 2 Story’s Eq. Jur., .§§ 1430-1444. It is true courts of equity will observe great caution in interfering in such cases — a jurisdiction which Judge Story said was full of delicacy and danger in cases of complicated trusts and assignments, where there was no statute to regulate it. But Lord Mansfield, in Green v. Former., 4 Burr., 2214-2220, remarked that “ natural equity says, that cross-demands should compensate each other by deducting the less sum from the greater, and that the difference is the only sum which can be justly due.” In obedience to this principle of natural justice, and to avoid circuity of suits, the law-giving power of this State has made very broad the doctrine of set-offs, and a court of chancery should not refuse to give effect to its provisions, especially where an equity intervenes, as in this case; for it will be remembered that under the circumstances of this assignment, if the plaintiff had caused an execution to be issued upon his judgment, and placed in the hands of the officer at the *325time said officer had in his hands the execution upon the Sheets’ judgment, still the officer aforesaid could not very well allow the set-off of one execution against the other without determining equities which may have interposed by virtue of the assignment and thereby usurping the power of a court of equity. In this case the bill states facts involving the Iona fides of the assignment as between Sheets and Trussell, and if these facts are shown to exist, we do not see why a court of equity would not direct that these judgments should compensate each other.

¶3In the case of Green v. Darling et al., supra, Stoey, J., has discussed this question at great length reviewing both the English and American authorities. He refers to a great number of decisions which are on both sides of the question. Some of them which favor the right of set-off, we take the occasion to cite¡ In Greene v. Hatch, 12 Mass., 195, it was held, “ that judgments might be set-off against each other notwithstanding an assignment, where the demands on which the judgments were founded were coeval and the assignee had hotice.” In O' Callaghan v. Sawyer, 5 John., 116, it was decided, that a holder of a note assigned after it became due took it subject to all equities which existed against it between the original parties, not only as to the note itself but as to the set-offs. And this decision has been followed, in the Bank of Niagara v. McCracken, 18 John., 493, and Ford v. Stuart, 19 John., 342, and may be considered, says Judge Stoey, as the settled law of the State not only as to set-offs of debts, but of judgments against each other. In the latter case the principle applies as well where the judgments have been assigned as where they remain in the original parties, &c. See, also, Chamberlain v. Day, 3 Cow., 353. Following these authorities we will reverse the order sustaining the demurrer, and remand the cause.

¶4Beversed.