Crayton v. Clark

COLLIER, C. J. To entitle the defendant to set off a noté which has been assigned to him, he must prove that the assignment was made prior to the commencement of Ihe action. [Minor’s Rep. 7.] Nor can the defendant set off a demand on which he cannot maintain an action in his own •name. [1 Ala. Rep. 413.] And when the plaintiff’s note is offered as a set off, its genuineness must be proved. [Minor’s R. 178; 6 Ala. R. 893.] In Cass v. Northrop, 1 S. & P. 89, it was decided, that where the defendant relies upon a note made by the plaintiff, which he claims as an indorsee, the indorsement must be proved. In the case at bar it was proved, that the note which the defendant obtained was not indorsed when it was delivered to him, alid there is an entire want of evidence to show an indorsement at a subsequent time. The cases cited are conclusive upon the point, that the defendant’s legal title is not a fair inference from the appearance of the payee’s name written upon the paper, and . consequently the set off was improperly admitted. ' In respect to the sum paid by the defendanf'upon the judgment which was rendered against him as garnishee, its admissibility as a set off will depend upon the fact whether the defendant was informed at the time he made the answer, that the nominal plaintiff had pstrted with his interest in the note sued on. If he then possessed this information, or acquired it afterwards, within time to have enabled him to amend his answer before judgment was rendered thereon, he should have made it known to the court; and if he failed to do so; he could not avail himself of the payment as a ]set off, notwithstanding the judgment against him. Where the payee of a note assigns it by delivery merely, so as to make it necessary to sue in the name of the assignor for the use of the party beneficially interested, the maker cannot set off a demand acquired against the payee after he. had notice of the assignment. [1 Bay’s Rep. 246; see also, [791] 5 Cow. Rep. 231; 9 Id. 295; 2 Verm. Rep. 569; 4 Id. 26; 2 Miss. R. 60; 11 Serg. & R. Rep. 48; 3 Hals. Rep. 209; 3 Wash. C. C. Rep. 93; 6 Verm. R. 12; 11 Wend. Rep. 504.] We have a statute which provides that promissory notes and other writings for the payment of money, or any other thing, may be assigned by indorsement, so as to invest the assignee with a right of action in his own name. This statute entitles the maker of a promissory note thus indorsed to-avail himself against the indorsee of all “ sets off possessed against the same, previous to notice of the assignment but does not prescribe the mode in which the notice shall be given in order to exclude sets off acquired after the payee had divested himself of his interest in the paper. We cannot think it is necessary for the indorsee, or an agent deputed by him, to give the notice ; but it is quite sufficient if the maker is informed of the transfer by one who has knowledge of the fact, and speaks understandingly. [4 Dall. Rep. 370.] If with notice thus communicated, he should purchase demands against the payee, to be used as sets off, they should be rejected upon the ground that it would be a fraud upon the as-signee’s rights thus to use them. This reasoning applies with all force in favor of the beneficial holder of paper transferred by delivery; though it is not embraced by the letter of the statute. The common law it will be seen by the cases cited, is competent to protect his interest, and would reject all demands against the nominal plaintiff acquired after notice of assignment. It follows that the ruling of the circuit court is not in conformity to law — its judgment is consequently reversed, and the cause remanded.