President, Bank of Mobile v. Poelnitz

BRICKELL, C. J. The statute renders mutual debts, liquidated or unliquidated demands not sounding in damages merely, subsisting between the parties at the time of suit brought the subject matter of set-off. — Code of 1876, § 2991. All contracts in writing for the payment of money or other thing, or for the performance of any act or duty, are assignable by indorsement. Except as to commercial paper, the assignment is subject to all payments, sets-off and discounts, had or possessed against the same previous to notice of the assignment or transfer. — Code of 1876, §§ 2099, 2100. The exception in favor of commercial paper relieves it from liability to set-off, only when it has been negotiated in good faith before maturity. — Code of 1876, § 2995. The indorsee 150 of commercial paper acquiring it after maturity, or before maturity, merely as collateral security for a pre-existing debt,, takes it subject to all defenses which the maker could prefer against the payee, if he had remained the holder.— Glasscock v. Smith, 25 Ala. 474; Fenouille v. Hamilton, 35 Ala. 319; McKenzie v. Br. Bank Montgomery, 28 Ala. 606; Cullom v. Br. Bank Mobile, 4 Ala. 2. The rule has been sometimes limited to defenses affecting the instrument itself, as a want, or illegality, or failure of consideration. But in Carroll v. Malone, 28 Ala. 521, it was after very careful consideration of our statutes, from which the provisions of the-Code do not materially vary, held, that the indorsee was subject to set-off, and discounts, as well as to defenses, affecting the instrument itself. Applying these principles to the present case, the right of the appellee to the set-off claimed, seems clear. We concur with the chancellor in the opinion that the evidence discloses that the appellant acquired the note made by the appellee on which the appellant has commenced suit at law, by negotiation with and transfer from Crawford, Walsh, Smith & Co., and not by transfer from the Insurance Company. The iranfer was on the 28th day of February, 1874, after the maturity of the note, and was subordinate to the appellee’s right of set-off. This right is not affected by the fact that the debt owing him by Crawford, Walsh, Smith & Co., was due him individually, and the debt due them was the joint debt of the appellee and others. The uniform construction, the statute of set-off has received, is, that one of several joint debtors, is entitled to set-off a debt due to him alone from the common creditor. — Pitcher v. Patrick, Minor, 321; Carson v. Barnes, 1 Ala. 93; Jones v. Jones, 12 Ala. 244; Sledge v. Swift, 53 Ala. 110. The suit at law against the appellee was commenced after the maturity of the debt wdrich he prefers as a set-off. We can not therefore perceive the necessity for a resort to a court of equity, to obtain relief which the statutes expressly secure to the appellee, if at law, the set-off is pleaded. True the bill avers, and the averment is proved, that Crawford, Walsh,. Smith & Co., are insolvent, and their insolvency would furnish just ground for equitable intervention, if there was difficulty or embarrassment in making the set-off available at law; or if the law did not provide for it as a set-off. T. C. & D. R. R. Co. v. Rhodes, 8 Ala. 206; Donelson v. Posey, 13 Ala. 752; White v. Wiggins, 32 Ala. 424. But-the set-off being due at the commencement of the suit, and 151 the statute declaring it as available against the assignee, or indorsee, as it would have been against the assignors, or indorsers, there is no ground of equity jurisdiction. The result is, the decree must be reversed, and a decree here rendered dissolving the injunction and dismissing the bill at the costs of the appellee.