Soloman v. Holt

By the Court. Woodruff, J. On the 15th October, 1853, M.' A. Cohen sold goods to the defendants, amounting to $77 38, as he testifies, for cash. The bill not being paid, he, on the 16th November, 1853, assigned the claim to the plaintiff, who, in December following, brought this suit to recover the sum due, and the summons herein was issued on the 19th December, and served on the 20th. The defence consists of a claim to set off the amount of a promissory note made by the said M. A. Cohen, and endorsed by him, for $104 16, dated August 16th, 1853, and payable four months after date, and which therefore became due on the day on which the summons herein was issued. The defendants produced this note on the trial, and such production was prima facie evidence of ownership; but from whom they received it, or when or upon what consideration, was in nowise shown. The justice below rejected the set-off, and the defendants bring this appeal. The Code of Procedure, § 112, provides that in the case of an assignment of a thing in action, the action by the assignee fib all be without prejudice to any set-off, etc., existing at the time, or before notice of the assignment. It is at least doubtful, therefore, whether this case depends solely upon the construe [143] tion of the 8th subdivision of the [18] 39th section of the statute relating to set-off. ( 2 R. S. 354.) "Under that statute, I am much inclined to the opinion that no such set-off was allowable. At the time of the assignment there was no right existing in any person to set off this note; it was not due to any person. Had M. A. Oohen then brought his action upon this account, and the note were then proved to belong to the defendants, they could not use it as a set-off. (3 Barb. 40; 19 Wend. 398.) Had the plaintiff brought this action npon receiving the assignment, the note could not have been set off. The suggestion that a court of equity will make an equitable set-off, although the respective mutual debts have not all matured, has no application to any proofs laid before us here. No evidence appears in the return that Cohen is an insolvent, or that the plaintiff is an assignee for the benefit of creditors. Besides, if the defendants had desired any such equitable interposition, they should have become actors, and set up the grounds (insolvency of Cohen, trust for the benefit of creditors, etc.), and prayed equitable relief. I do not by this mean to intimate that under the 8th section, above referred to, any such relief could be had. I apprehend that in cases like the present the rule, both at law and in equity (in the absence of fraud or other peculiar ground for equitable interposition) is the same. (See 2 R. S. p. [174] 234, § [40] 64.) But the phraseology of the Code is such as to warrant a belief that the legislature designed to modify the 8th section of the statute above referred to, and allow a set-off where the claim existed in the defendants’ favor at any time before notice of the assignment; and yet this case does not call for any opinion on this point, for if this be so, it was vital to the defendants’ claim that they show when they acquired the title to the promissory note urged as a set-off, since it was not by its terms payable to them. I have looked in vain through the return for information on this point. The note appears to have been made and endorsed by Cohen to Messrs. Fatman & Co., and they transferred it to one Alfred L. Holt, in payment for cigars sold to [144] them by him. It is not shown that he ever transferred the note to the defendants, nor but that he is at the present time the owner thereof. The defendants thought proper to rest their case in this respect upon the mere fact of possession at the time of the trial. This, I think, was not enough. They fail to bring themselves within the statute, whatever view may be taken of the 112th section of the Code of Procedure, upon the effect of which section it is not intended to express any opinion. The judgment must be affirmed. Judgment affirmed.