Bank of Niagara v. M'Cracken

Woodworth, J. delivered the opinion of the Court. One question to be decided is, whether the defendant can avail himself of matter, by way of set-off, arising after the commencement of the suit in the Court below, and prior to its removal to this Court. The set-off relied on, goes to the merits of the plaintiff’s detiiand. When a causé is removed by habeas corpus, the suit in this Court is not a continuation of the suit below; and, therefore, as a general rule, the plaintiff may recover for a debt due before the commencement of the suit here, and the defendant may rely on new grounds of defence; but thé Court will, in some cases, notice the suit below, so as to protect the plaintiff against manifest injustice, if the defence does not go to the merits. As exceptions to the general rule, it is said, “ that the pleas of the statute of limitation and of coverture, are, perhaps, the only ones which the plaintiff has been permitted to defeat, by replying the suit below.” This doctrine is fully settled in Vosburgh v. Rogers, (8 Johns. Rep. 91.)(a) The defence then is, that on the 28th of June, 1819, the de [495] fendant was the owner and holder of bank bills of the M-agara Bank, to the amount of 419 dollars, at which time the plaintiffs were the holders of the note in question. The bills have been kept by the defendant ever since, and were produced in Court at the trial. They were not payable at any particular place, and would have sustained an action, without a demand at the bank. I cannot, therefore, perceive any well founded objection to the set-off of these bills against the plaintiffs demands; they are equally available to the defendant, as if he had been sued by an individual, against whom he held promissory notes, due at the time the action was commenced. On the 20th of July, 1819, the bills were offered at the bank, as part payment, and refused; and, although the plaintiffs had, on the 10th of July, assigned to Silvester Mather, 630 dollars, part of the money due on the note, (of which assignment the defendant had notice on the 15th of July,) that will not aid the plaintiffs, for the rights of these parties cannot be varied, so as to deprive the defendant of the defence that existed on the 28th of June preceding. If a valid assignment was made, Mather must have taken it, subject to all the equity existing at that time, between the plaintiffs and the defendant. (Tindal v. Brown, 1 Term Rep. 167. Freeman v. Haskin, 2 Caines, 368.) The residue of the note was assigned on the 24th of July, after the defendant had offered the bills in payment, and that rests on the same ground as the assignment to Mather. We are of opinion, that the sum of 419 dollars, with interest, from the 20th of July, 1819, be deducted from the verdict. Judgment for the plaintiff, accordingly» Footnotes [(a)] Vide 1 Dv.nl, Pr. 227,228. Bennet v. Rathburn, 17 Johns, Re.p. 37,