Bartlett v. Pearson

Whitman C. J. did not sit in the case. The opinion of the majority, Wells J. dissenting, was drawn up by Shepley J. Bennet Lawrence and the defendant had mutual dealings in account. Lawrence for a valuable consideration, assigned his account against the defendant to one of his creditors. The defendant had notice of that assignment, and was requested to pay the amount due from him. A suit [15] was commenced by the assignee in the name of Lawrence against the defendant, who commenced a cross action against Lawrence, who became a bankrupt, and the present plaintiff, as Iris assignee, was permitted to prosecute the suit commenced against the defendant. These suits were referred to referees, who ascertained the amount due to each of the original parties, and after deducting the amount found to be due from Lawrence to the defendant from the amount found to be due from the defendant to Lawrence, awarded, that the plaintiff should recover against the defendant a balance of ninety-eight dollars with costs; and that the defendant should recover against Lawrence one cent damages with costs amounting to more than ninety-eight dollars. These reports having been accepted, the counsel for the defendant, having waived his lien upon the costs, moved, that so much of the defendant’s judgment for costs, as would satisfy the sum of ninety-eight dollars, should be set off against the damages recovered by the plaintiff against the defendant. The court ordered such a set-off to be made, and to this order the plaintiff filed his exceptions. The assignment made by Lawrence to his creditor, conveyed the equitable title to the balance due from the defendant to Lawrence at the time, when the defendant had notice of that assignment. The defendant could not diminish that balance by any claim accruing or procured subsequently. The as-signee of a chose in action receives it subject to all the equities then existing between the assignor and his debtor. It is liable to no other burdens or deductions. Jenkins v. Brewster, 14 Mass. R. 294; Sargent v. Southgate, 5 Pick. 312; Sanborn v. Little, 3 N. H. R. 539; Weeks v. Hunt, 6 Verm. R. 15; Jefferson County Bank v. Chapman, 19 Johns. R. 322; Ritchie v. Moore, 5 Munf. 388; Newman v. Crocker, 1 Bay. 246; Hooper v. Brundage, 22 Maine R. 460. The statute provisions of this State are based upon the same principles, c. 115, § 35, and c. 1 If, § 35, There can bo no doubt, that courts of justice, when called upon to order one judgment to be set off against another, are [16] obliged to act upon such rules of law, as will protect the rights of parties. The defendant first became entitled to the amount due from Lawrence to him for costs, when he obtained a judgment for them. It is said, that costs are incidental and accessory to the debt. They are in fact not connected with it, but are an allowance made by statute to a party to compensate him for the trouble and expense, which he may incur in the prosecution of his suit for the recovery of his debt or damage. They are not •a part of his debt, claim, or damage. If the assignee of a chose in action could only acquire a title to it, subject to all equitable claims then existing between the assignor and his debtor, and also subject to all the costs, which they might occasion by litigation respecting them, the law would be materially altered, and his rights valuable, at the time, might prove to be of no value. It is difficult to perceive, that the defendant has stronger claims in equity than in law to have the set-off made. He was notified, that the balance due from him had been assigned. If he could not adjust it with the assignee, he might have decided how much was due from him and have tendered that balance ; or have offered, as soon as the suit had been entered in Court, to be defaulted for that amount, and thus have protected himself, against all further costs, and havp placed himself in a position to recover costs, if the balance should not prove to be greater. He might, as he did, lawfully commence a cross action. If he chose to exercise that legal right, he can have no just cause of complaint, if he be left to pursue that legal course to the end, and to obtain all his legal rights by it, without asking to be relieved from the result, by having another person’s rights impaired to do it. It is further insisted, that the plaintiff was not entitled to file a bill of exceptions in this case. That the question, whether a set-off should be ordered, was one submitted to the judicial discretion of the District Court. Courts may be at liberty to exercise such a discretion by ordering or refusing to order judgments to be set off, when they [17] can do so without a violation of the legal rights of either party. But when a set-off is not authorised by statute, and when it would deprive a party of any of his legal rights, there can be no doubt, that he would be entitled to have them protected by a bill of exceptions. The exceptions are sustained, the set-off prayed for is disallowed, and judgments are to be entered in each case accordingly.