Pignolet v. Geer

By the Court.*—Monell, J. The only facts which we think can be considered on this appeal, as affecting the decision of the motion at special term, are, that a motion has already been made in this court to set off these judgments, which was denied, and that a motion for an injunction in this action has also-been denied. So far as any questions arise upon the denial in the opposing papers, of the equities of the plaintiff’s case, we are of opinion that such questions should not be disposed of upon a motion, but that the parties should be allowed to sustain their respective allegations by proof at the trial. The learned justice who decided the motion at special term was of opinion that the decision of the motion in this court, to set off these judgments, was a final determination of the rights of the parties, and'that, therefore, the court was precluded from granting the relief demanded by the .plaintiff in his amended complaint. This view, we think, was erroneous. Where one debt is absolutely assigned to a stranger, pending the litigation, and before it is liquidated by a final judgment, the same cannot be set off against the other on a motion. (Gay a. Gay, 10 Paige, 369.) And in Barber a. Spencer (11 Id., 517), the chancellor says: “ The right of set-off, upon a summary application to a court of law or equity, exists only in cases where the debts on both-sides are liquidated by judgment or decree, before the assignment of either to a third person.” It is presumed that the decision of the motion; both in this court and the Court of Appeals, was upon the authority of the cases cited and others sustaining the same doctrine. But a court of equity, in an action brought for the purpose, may allow a set-off, where the equitable right to such set-off existed before the assignment to a third person, notwithstanding neither of the demands had at that time been liquidated by judgment or decree. (Cases supra, and Ainslie a. Boynton, 2 Barb. S. C., 258; Bradley a. Angel, 3 Comst., 475.) [268] A right of set-off at law is regulated, and controlled by the statute, and hence, a court of law, or even a court of equity, upon a summary application, can allow the set-off only in those cases authorized by the statute. But in an action brought for a set-off, the right of set-off does not always depend upon the statute, nor upon the question whether both demands are liquidated by judgment. In Gay a: Gay (supra), the chancellor says: “If an equitable right of set-off exists, while the parties have mutual demands against each other, because the debt due to the party claiming the set-off is so situated that it is impossible for him to obtain satisfaction of such debt by an ordinary suit at law, or in equity, to recover the same, this court, upon a bill filed, will compel an equitable set-off of one debt against the other. And the insolvency of the party against whom the set-off is claimed, is a sufficient ground for the exercise of the jurisdiction of the Court of Chancery, in allowing a' set-off in cases not provided for by the statute, although the demands on both sides are not liquidated by judgment or decree, so as to authorize a set-off upon a summary application, by motion.” Bradley a. Angel, and Ainslie a. Boyton (supra), are to the same effect. The decision, therefore, of the motion refusing, to allow the set-off, does not preclude the party from obtaining the relief in an action, and he has the right, notwithstanding the denial of the motion, to bring his action upon the equity side of the court, to compel an equitable set-off. The amended complaint alleges that David Geer became insolvent prior to 1855, and has since continued insolvent. That when he, the plaintiff, took the assignment of the two judgments he seeks to set off, he believed that the judgment against himself • belonged to said Geer, and was ignorant that any other person claimed the same, or any part of it. It is further alleged that the claim of the defendant Darius W. Geer, and of Young & Buthven, to the said judgment, or to some interest in it, is subordinate to the right of the plaintiff to set-off said judgments. Whether these allegations are sufficient, or whether the proof, upon the trial of the action, will sustain the right of the plaintiff to compel the set-off, are questions which, we think, should not have been determined upon this motion, but should have [269] been left to be decided at the trial. It is for such reason that we do not feel at liberty to' consider the affidavits used by the defendants in opposition to the motion at special term. They show a strong defence to the action, but the plaintiff may, nevertheless, be able to establish on the trial, and to satisfy the court, that he is entitled to the equitable relief he asks for. For these reasons, we think the plaintiff should have been allowed to serve his amended complaint, and to bring in Young & Ruthven and make them parties defendants in the action. As the case made by the amended complaint, prima facie, is sufficient to authorize the court to compel the set-off of the judgments; and as the judgment compelling such set-off might be ineffectual unless the defendants were restrained from collecting the judgment against the plaintiff, the injunction asked for by the plaintiff should have been granted. The order appealed from should be reversed. Footnotes [*] Present, Moncrief and Monell, JJ.