Metzgar ex rel. Uhler v. Metzgar

The opinion of the court was delivered by Gibsoñ, C. J. Our defalcation act, having been found extremely beneficial, in -practice, has been construed more largely, than the words would seem to bear. Even the English statute, although more narrow in its words and construction,- Has not been held to require that the debts to be set against each other, should haye 231 arisen out of the same transaction. The object is to promote convenience by preventing circuity of action; and that requires the defalcation of all demands which do not involve any great degree of intricacy in the inquiry. Why, then, should not the act embrace the debt of an intermediate assignee? The words certainly do not restrict the remedy to transactions between the original parties; and there are no equitable considerations to exempt the case of a subsequent assignee. At the time of the assignment, the right of defalcation existed in full force between the obligor and the intermediate assignee. By what right, then, can the latter put a subsequent assignee in a more advantageous situation than he held himself. ■ In. this state, no assignee; whether legal or equitable, can afieet to be prejudiced by yvant of notice; it being his duty, as established by many decisions, to sound the obligor before he parts with his money, as to the amount actually due. With or without actual notice, therefore, he is precisely in the situation of the preceding obligor, whose title he bears. Nor is there more force in the 'objection, that a judgment cannot be set off before a jury. Judgments.are frequently set against each other by the court; and there is no colour of argument against defalcating them from unascertained demands. - A judgment may be the foundation of an action; and there is no reason why it should not be set up as a cross demand, equally with a bond or recognisance. It would be unjust to subject to the costs of a trial, a defendant who has a judgment sufficient to extinguish the plaintiff’s demand altogether. The English decisions ineontrovertibly establish the right of set-off in similar cases; and, although not the point decided, it was taken for granted by this court in Wain v. Iiewes, (5 Serg. Rawle,'468.) On both grounds, then, the set-off was properly allowed. . Judgment affirmed. '