Ferguson v. Bassett

Mason, Justice. In allowing a set-off of judgments, courts of law have proceeded upon the equity of the statute authorizing set-offs, and their power .consists in the authority they hold over suitors in their courts. The doctrine of the common law courts was that suitors might ask the interference of courts of law in effecting a set-off not “ ex debito justitie” hut ex gratia curie. (Simson v. Hart, 14 J. R. 68.) And as these motions in the common law courts were addressed very much to the discretion of the courts, a refusal of the common law courts to direct a set-off was not considered as res adjudicata, so as to prevent a bill in chancery to compel the set-off. (14 J. R. 63.) Very different, however, has been the rule on a bill in chancery filed to obtain a set-off. In such case there is no discretion. (Nicoll v. Nicoll, 16 W. R. 448.) The practice of allowing the attorney’s lien for costs to prevail against the right of set-off, was not fully recognized in the common law courts in England. - The King’s Bench allowed the lien, and the Common Pleas refused it. The common law courts in this state, however, have been uniform in their decisions, in disallowing the attorney’s lien for costs, holding that the lien did not stand in the way of the right of the opposite party to have his set-off allowed. Such, at any rate, has been the uniform rule in the common law courts in this state, since the decision of the case of Porter v. Love, (8 J. R. 457.) The uniform doctrine of the cases has been, that the attorney’s hen for costs is no bar to the right of set-off. (8 J. R. 357; Ross v. Dole, 13 J. 307 ; Cooper v. Bigelow, 1 Cow. 206; The People v. N. Y. Com. Pleas, 13 W. R. 649.) The doctrine of the Court of Chancery in this state was precisely the same up to the year 1829. Chancellor Kent, in the case of the Mohawk Bank v. Burrows, (6 J. Ch. R. 317,) followed the doctrine of the common law courts, and held that the attorney’s or solicitor’s lien for costs did not affect the equitable right of set-off between the parties. In the case of Dunker v. Vandenburgh, (1 Paige R. 622,) Chancellor Walworth seems to have questioned, if not relaxed the rule somewhat; and in the case of Gridley et al. v. Garrison et al., (4 Paige R. 647,) the learned chancellor affirms the unqualified doctrine that the attorney’s hen for costs is paramount to any claim of the adverse party to set off a judgment re [171] covered against the client in another suit. And the chancellor steadily adhered to this doctrine, in his court, up to 1836, when he was overruled by the Court for the Correction of Errors, on appeal taken to that court from his decision in the case of Nicoll et al. v. Nicoll, (16 W. R. 446.) In this latter case the complainant held a judgment of upwards of $16,000 against the defendant, and the defendant had recovered a judgment for costs in an ejectment suit for $166.89, against the complainants, and the complainants filed their bill to compel a set-off of so much of their judgment as would satisfy the judgment against them. The chancellor held the attorney’s lien to be paramount, and disallowed the set-off, and the court of dernier resort, on appeal, overruled the chancellor and allowed the set-off—affirming the broad doctrine that the attorney’s lien for costs must yield to the equitable right of set-off, and that the latter claim in equity overrides the former. This, therefore, seems to be the settled doctrine both at law and in equity in this state. I do not hesitate to say, was this an open question with us, thft'I "Could assign satisfactory reasons against such a rule, as the King’s Bench in England has long since done, and as all of the courts of Westráinster Hall have recently asserted. The judges of the common law courts in England, assembled in Hilary Term in 1832, and unanimously agreed and adopted the rule to allow the attorney’s hen in such .cases, and adopted a rule to that effect, binding upon all the common law courts in England. (1 Dowl. Pr. Cases, 196 ; 3 id. 638.) I do not consider, however, in view of the repeated adjudications of the courts of this state, that we are at liberty to discuss the sufficiency or insufficiency of the reasons of this doctrine. The only remaining question to be considered, therefore, is, whether the assignment of this verdict by the plaintiff Ferguson, before the entry of the judgment thereon, to the Messrs. Parker and Palmer, his attorneys in that suit, gives to them any higher or greater equities as assignees than they had before; or whether in short, such assignment has the effect to deprive this defendant, Bassett, of his right of set-off. The general rule is well settled, that the assignee in such a case stands precisely in the situation as regards the right of set-off as his assignor stood at the time of the assignment. It has been repeatedly adjudged that where the equitable right to set off a judgment existed at the time of the assignment as against the attorney’s lien for costs, that the same continued as against the assignee, and that too, although the attorney was the assignee. (3 Paige B. 365.) It can make no difference, therefore, with this case that the verdict was assigned to the Messrs. Parker and Palmer, if the right of [172] ' set-off existed at the time of the assignment, for it is well settled, that the assignee takes subject to all equitable as well as legal claims which might be urged against the assignor at the time of the assignment. (Cooper v. Bigelow, 1 Cow. R. 56 and 206 ; 4 Hill’s R. 561.) It becomes important, then, to inquire whether there was a right of set-off existing in this case as against the assignor at the time of the assignment of this verdict. I am inclined to think that in the case under consideration that no right of set-off existed at the time of the assignment, for the reason that the plaintiff’s claim against the defendant consisted in a verdict merely. In the case of Garrick v. Jones (2 Dowl Pr. Cases, 157,) the party moving had obtained a verdict which he moved to set off against a judgment in favor of his adversary, and the motion was denied on the sole ground that final judgment had not been obtained. This case was cited by Judge Cowen in the case of Graves v. Woodbury, (4 Hill R. 562,) with approbation, and the principle of the case affirmed by the court, and I do not hesitate to say, after a careful examination of the latter case that in my opinion it determines the right of set-off in this ease against the defendant and in favor of the plaintiff. The right of set-off only exists in the cases of judgments obtained. (10 W. R. 615 ; 6 Cow. R. 598; 4 Hill R. 559.) It was held in the case of The people ex rel. Fry v. The Delaware Common Pleas, (6 Cow. 598) that a judgment obtained by attachment in a Justice’s Court without the defendant appearing there, cannot be set off on a motion, against a judgment in a court of record, for the reason that a judgment rendered upon attachment in such a case without being contested is only prima facie evidence of a debt, and is impeachable in an action upon it; the court saying they may as well set off a bond or note, on motion, as such a judgment. The same may be said of the verdict of the jury in the case under consideration—it was only prima facie evidence of the debt like the judgment in the 6 Cow. R. supra. It was still open to the review of the whole trial by the court on the application of either party, and might never pass into a judgment—and if the right of set-off did not exist at the time of the assignment it could not arise afterwards when the judgment was entered. (4 Hill R. 559 ; 2 Ed. Ch. R. 73.) I am of opinion that the assignment of the verdict carried with it the costs also; but as the papers before me may not show the whole of the case, I will deny the plaintiff’s motion to set off this judgment without prejudice to his rights to commence an action to compel this set-off, if he has any legal 51aim to make the set-off in this case. I must regard this as a motion addressed to [173] ■the discretion of the court ex gratia curie, and not a right which the party can claim ex débito justitie as he could have claimed, had he instituted a plenary suit by summons and complaint to compel this set-off, and I think where there is as much doubt as there is in this case, that the safer way is to deny the summary application b^motion and turn the party over to his plenary suit if he desires further to contest it. Motion denied without costs.