Skiles v. Houston

Mr. Justice Green delivered the opinion of the court, October 5 th, 1885. When the plaintiffs intestate died, he was already indebted by a complete and perfect obligation to the defendant Houston. Suit could have been brought immediately by Houston and recovery had for the whole amount, notwithstanding the noto held by Henderson against Houston, because the latter was not yet due : Zuck & Henry v. McClure & Co., 2 Out., 541. It is evident then that when, upon Henderson’s death, the note against Houston passed to his administrator, it did so clogged with the whole of Henderson’s debt to Houston for the very reason that it was a perfected debt at the time of Henderson’s death. Nor, in such case, is Henderson’s insolvency at all material. This is precisely what we decided in Light v. Leininger, 8 Barr, 403. In that case Coulter, J., said : “ In answer to the argument of his (the administrator’s) counsel here, that the debt or demand was assets in the hands of the administrator, I have only to remark that, as the decedent could not have received the demand in his lifetime, it was not a debt recoverable at his death, and never went into the hands of his administrator as assets.....It is only the balance that is a debt and in relation to that balance he stands on the same platform with the other creditors.” Had the position of these parties been reversed so that Henderson’s debt to Houston was not due and payable at Henderson’s death, but Houston’s debt to Henderson was then due and payable, the application of the same principle would have prevented Houston from setting off his debt against Henderson in an action by Henderson’s administrator, because, at Henderson's death, there was no right of set-off and the right of action passed to the administrator unaffected by the right of set-off. It is true if the estate were solvent the set-off would be allowed, not because the right of set-off existed at the intes [258] 'tate’s death, but because it existed at the time of suit brought, and as the set-off could be recovered in any event, circuity of action would thereby be prevented. But if the estate were insolvent the rights of other creditors which commenced at the intestate's death would intervene and the right of set-off could not be exercised to their detriment. This was the case in Bosler v. Exchange Bank, 4 Barr, 32, and the distinction between that case and the present, as above stated, is carefully pointed out in Light v. Leininger, supra, and again in Jordan v. Sharlock, 3 Norr., 366. Thus in the former case we said: “ The case of Bosler v. The Exchange Bank (4 Barr, 32), upon Which the plaintiff hung his hopes, is not in point. The decision in that case went on the ground that the character of the claims was fixed at the time of the decedent’s death; and as the note of the defendant in that case was not due, his representative was entitled to demand and receive from the bank the amount of the deposit of the deceased as assets. We rule this case on a principle so strong in affinity to that as to be almost identical; that is, that at the time of the death, the law of set-off which then took effect extinguished the plaintiff’s claim.” And in Jordan v. Sharlock we said: “Bosler v. The Exchange Bank, 4 Barr, 32, and its sequents, were decided on a widely different principle. When Bosler died, the bank had no debt for which it could sue ; while Bosler’s right of action was perfect before his death. But at the moment of Lis death the law took possession of his estate for the benefit of his creditors, he being insolvent. It was not the case of a mere voluntary transfer; but new rights sprang into being on the instant of his death. At his death the debts did not ipso facto cancel each other for the reason that the bank had no immediate right of action. Consequently, when the estate by operation of law passed into legal administration, and was in gremio legis* the rights of creditors immediately attached, and tlie estate being insolvent, equity demanded equality among the creditors of the same class.” It will be perceived at once that if at Bosler’s death the bank’s right of action had been perfect against him, the 'basis of the foregoing comment would be destroyed, and the other principle, also recognized, that mutual debts actually due and payable in the same right do ipso facto cancel each Other would have become applicable, as was distinctly held in Light v. Leininger. In the present case the defendant’s right of set-off already existed at the time of the plaintiff’s death. But if it already existed it would be a strange anomaly to say that it is taken away by the non-maturity, at that same time, of the decedent’s claim against him. Plaintiff's counsel admit, and it is undoubtedly true, that if the intestate’s claim against the defendant was mature at the intestate’s death, the [259] right of set-off was complete. Why was it not equally complete in case of the then immaturity of the intestate’s claim? Certainly not because of anything decided in Bosler v. The Bank because that decision denied the right only because it did not exist at the death of the intestate, and as other rights intervened at the moment of the death, they could not be impaired by a right which only came into existence subsequently. Here the right of set-off existed prior to the death of the intestate and therefore prior to the rights of the other creditors to equal distribution. The distinction is very plain and does not require further elaboration. Judgment affirmed.