Simpson v. Huston

Hemphill, Ch. J. The appellee, Emery S. Huston, had recovered a judgment against the appellant, John J. Simpson; and this is an application, by appellant, to enjoin the collection of said judgment, and to have the same reduced • or extinguished, by setting off against it a judgment which the Fleurys had recovered against the appellee, and which by the Fleurys had been assigned to the appellant. The most material allegatipns (with reference to the special exceptions, which the Court sustained to the petition) are, the statement of the recovery of the Fleury judgment; its transfer to appellant; that he had frequently applied to appellee to have one judgment set off against the other, which the latter had always refused; that the appellee is notoriously insolvent, and has no property out of which the judgment against him [479] can be made ; and that execution thereon has been returned no property found; and that the judgment against appellee has been drawing interest, and amounts now to a sum specified in the petition. And the appellant further represented, that in consequence of the insolvency of the appellee, he (the appellant) would entirely lose the amount of the Fleury judgment against the appellee, thus assigned to him, unless the appellee should be restrained from collecting his judgment against the appellant, and unless the judgments should be mutually set off against each other. The appellee demurred, and for special cause excepted in substance, that it was not alleged in the petition, that there was anything due on the judgment of the Fleurys against the appellee. 2nd. No allegation that the execution returned “no property found” was the only or last execution, or that the money had not been made on some execution subsequently issued. 3rd. It does not appear at what time execution issued on said judgment, nor but that more than a year had elapsed after the issue of execution, before the transfer. These exceptions-being sustained, and the appellant declining to amend, the petition was dismissed. We are of opinion that the first exception was not well taken. It was not expressly averred that the judgment remained unsatisfied, but this was the legitimate inference from the facts alleged, viz: the insolvency of appellee, the return on the execution, of no property found, and that the judgment has been drawing interest from the date of its rendition, and now amounts to a sum which was specified. It might be insisted— and upon high authority—that the allegation that the judgment was unsatisfied, was not essential, in the statement, by the plaintiff, of his cause of action or ground for relief; that the recovery of the judgment, and its transfer to the plaintiff, were all that were necessary to establish, prima fade, the plaintiff’s right; that if this had been an action of debt upon the judgment, it would not have been necessary to allege that the judg [480] meat still remained in full force and effect, and that the plaintiff had not obtained satisfaction therefor ; that such allegation, though usual, is, according to Chitty, unnecessary, (Yol. 1, p. 371;) and that no greater certainty of pleading was requisite in an application of this kind, than in an cction to revive the judgment. There is great force in this view; and if it be admitted, without any qualification, then payment or satisfaction being mere matters of defence, must be set up by defendant, and need not be averred by plaintiff. But, notwithstanding this authority, it does seem that there would be great propriety in averring that the judgment still remained in force, or unsatisfied. The fact of its being unpaid constitutes the right of action, and the averment of such fact, or something equivalent, could scarcely be regarded as surplusage. In Mr. Chitty’s “ Precedents ” the allegation is inserted in the declaration in debt on judgment, omitting to note, as had been done in Chitty’s Pleadings, that such averment was unnecessary. But it is not material to consider whether such averment be essential or not, inasmuch as facts of an equivalent import have been averred. The main point in this cause is that suggested by the third exception, which, in effect, raises the question whether a dormant judgment, not barred by the Statute of Limitations, can be set off against one on which execution could issue. This places the exception on the highest ground which it could have been designed to assume, and which is the least favorable to the rights of the plaintiff. But even admitting that such may be the case, and that such is the fair inference from the averments of the petition, yet, under the circumstances as averred, we are of opinion that the exception cannot be sustained, and that the plaintiff’s equity is such as to entitle him to the protection of the Court, from coercion, holding as he does, a judgment, upon which indeed no execution can issue, but which, nevertheless, is a debt adjudicated and determined by law, and upon which, in fact, executions would be totally unavailing, so complete is the insolvency of defendant. [481] There is no doubt of the power of Courts, independent of Statute, to set off mutual judgments against each other. Such power has long been exercised, by both Courts of Law and Equity. Under our system, it would be purely a matter of speculation to enquire into the peculiar grounds upon which these Courts respectively acted, and .the extent to which they would go, in affording relief in the exercise of this jurisdiction. The Courts in this State are competent to afford relief in every case in which it could possibly be extended by either Courts of Law or Equity. It has not been made to appear that the case of a dormant judgment, against one in active force, has been presented for consideration; and under ordinary circumstances, it would most probably not be considered as a valid set-off, or one which should be allowed on principles of equity. But a controlling -circumstance for the plaintiff in this case is, the insolvency of the defendant. This is such as to preclude the possibility of collecting the judgment, (even if execution could go,) by any coercive means. The judgment against defendant is, in law, as conclusive as that against the plaintiff. The only difference is, that one will and the other will not authorize executive process. But the debt established by both is alike conclusive, and a matter which would be a good defence to a proceeding to revive the one, would defeat or extinguish the other. The great object of all discounts or set-offs is, to adjust the indebtedness between the parties, and to permit executory process to be enforced only for the balance that may be due. Set-offs before trial have the further recommendation, that they cut off litigation and settle the matters in one controversy; after judgment, they save the oppressive and ruinous sacrifice of property, and especially in cases where the insolvency of one of the parties prevents the possibility of recovery or compensation from him. Nothing would be more unjust, or more inequitable, than to permit a creditor to sacrifice, perhaps ruin, a debtor by execution, when he, although adjudged by law to be indebted to his debtor, is neither making an effort to pay, nor can the debt be [482] by possibility collected from him, unless by the debtor’s retaining the money which the creditor is attempting- to force off to himself. The fact that one of the parties, by a slight delay, has put it out of his power to issue execution, without revival by scire facias, does not make his demand the less due or conclusive ; and at all events in cases like the present, where the defendant is hopelessly insolvent, against whom executive process would be wholly nugatory, it would be perfectly competent for the Court to restrain the execution against the plaintiff, until the revival of his judgment against the defendant, if this, in a case of insolvency, were deemed essential. And it would be quite competent for the plaintiff, in cases of this kind, to pray in his petition, not only for a set-off, but also that Ms judgment be revived if it be really dormant, and in the mean time that execution against him should be enjoined. We are of opinion that the facts, as averred, present such a case as entitles the plaintiff to the relief prayed for in the petition ; (2 Wm. Blackstone, 869; 2 Story, Equity, Set-off; 2 Burr. 1230; 4 Term R. 123; 8 Id. 69; 1 Johns. R. 144; 3 Id. 247; 7 Monroe, 456; Simson v. Hart, 14 Johns. R. 62; 7 Tex. R. 549;) and consequently there was error in sustaining the demurrer and dismissing the petition, and it is ordered that the judgment be reversed and cause remanded. Reversed and remanded.