Henderson v. James Gilliam & Co.

Hemphill, Ch. J. In relation to the offset pleaded against Gilliam, it is sufficient to say that the account was not due to the defendant Henderson in his individual right, but to him in partnership with others ; and that it was all, with the exception of one item, barred at the institution of the suit. In relation to the offset pleaded against Carter and Dinwiddie, the objection is raised (and which is in fact common to the whole discount,) that the debts are not mutual; that the debt, attempted to be set off", does not accrue in the same, but in a different right from that of the plaintiff; or, in other words, that the separate debts of the plaintiff, due to the defendant, cannot be set off against their joint demand. It is certainly true, as a general rule, that neither in Courts of [74] equity nor in law, will a set off of a separate debt against a joint debt, or of a joint debt against a separate debt, be allowed. Special circumstances may occur which, in equity, will justify such an interposition. Where there is an agreement that a separate, may be discounted against a joint debt, or conversely, or where it appears that a joint credit was given on account of a separate debt, and also under other equitable circumstances, not necessary to be enumerated, the debts, though not mutual or in the same right, will be allowed to be interposed against each other. (Story. Eq. Jur. Sec. 1437.) These rules were, perhaps, derived from the phraseology of the statute of George II., which allowed mutual debts •to be set against each other. This was certainly the origin of the rule in Courts of Common Law, for it was under this statute that they derived their authority to admit of discounts. Such appears to have been the rule in relation to compensation at the Civil Law, viz.: that compensation should be allowed, only in demands which are in the same right. (Id. Sec. 1442.) The act allowing discounts in this State, does not expressly declare that the debts shall be mutual or in the same right. It gives -general authority to the defendant, to make all the discounts he can, against the claim of the plaintiff. This is very indefinite. If, by the Common Law, then introduced, the defendant was not permitted to set .off any demands due him from the plaintiff, a general permission under the statute, to make all the discounts he could, without specifying the character of claims which might be set off, was giving very little or very enlarged rights, dependent upon the construction of the vague terms in which the authority is expressed. The construction hitherto has been, that the act intended to confer on defendants rights of a like character with those granted by the statute of George II. Whether the act be susceptible of a more enlarged interpretation, can be determined when the question has been more fully argued or more maturely considered. Although, on the allegation that Carter and Din [75] widdie are insolvent, the defendant has some apparent equity to set off so much of their debt to him, as would be equal to their share of their joint demand against him, yet we do not think it sufficient to authorize a departure from the general rule. He has made no showing that they are insolvent, except his bare allegation. In cases where Courts have permitted opposite demands, on judgment, although the parties to the different records may not be the same, to be set off against each other, where this is attempted on the ground of insolvency, that fact has been shown by affidavit or some other evidence of the fact. (Collyer on Partnership, Sec. 765.) Upon the whole we are of opinion that there was no error in the judgment, and it is ordered that the same be affirmed. Judgment affirmed.