Standard Engineering & Construction Co. v. Smyser-Royer Co.

Opinion by Williams, J., In an action of assumpsit on an agreement to pay $210, defendant pleaded a set-off of $4,375, due it from the legal plaintiff. The evidence at the trial was that the legal plaintiff had been discharged in bankruptcy more than a year before the presentation of the defendant’s claim in this suit, which claim had not been proved in bankruptcy. The court below held that it was, pro tanto, a good set-off, and reserved a point as to whether it was invalidated under the provisions of Section 57n of the Bankruptcy Act of 1898. The plaintiff moved for judgment n. o. v., which the court refused, and from the judgment entered has appealed. 1. Appellant argues that the set-off could not be maintained. Section 57n provides: “Claims shall not be allowed against a bankrupt estate subsequent to one year after the adjudication; or if they are liquidated by litigation and the final judgment therein is rendered within thirty days before or after the expiration of such time, then within sixty days after the rendition of such judgment.” Under this section it has been held that to the extent of. the claim .made against a debtor, a counter [441] claim of such debtor against the bankrupt may be set off although it was not proved against the bankrupt’s estate; but the surplus in favor of the creditor of the bankrupt cannot be recovered: N. & W. Ry. Co. v. Graham, 145 Fed. 809 (C. C. A.); and see Wagner v. Burn-ham, 224 Pa. 586, which reaffirms the principle in part. 2. It is further contended that the evidence raised a question for the jury. The plaintiff filed no reply to the counterclaim, introduced no evidence relating to it, and mpst be held to have admitted the facts alleged therein under Rule 9, of the Municipal Court. 3. The set-off was good against the use-plaintiff. The right assigned was a mere chose-in-action, not negotiable, and the assignee acquired no greater right against the debtor than the assignor had: Pulaski Ave., 235 Pa. 151. 4. The counterclaim was only good in so far as it extinguished the liability for $210, and for this purpose the Municipal Court had jurisdiction. The judgment is affirmed.