Ferris v. Burton

HutchiNsoN, Chancellor, after -stating the case, announced the opinion of the co'urt. Itis objected that the Orators can have no decree by reason of tbe deficiency of their hill; Andrew Bostwick, not being -made a party defendant. We discover no necessity or use in making him 'such party. The orators complain of nothing which would entitle them to a decree against him, if he were defendant. Bostwick, can exercise no control over the demands on either 'side. He, being not served with process in Burton’s suits at law, and, consequently not being a debtor in said judgments, need not join to help the -orators get rid of those judgments in the particular way they choose to pursue. If Burton Were sure he could establish the partnership between the orators and Bosiwickiwhich he has set up in his cross bill, he might want to bring in Bostwick with the Orators as defendants to that bill, for" foe purpose of a decree that would cover all his claims font stand — 450 — against Bostivick, and attach those claims to the others now litigated. But the defendant has not seen fit to pursue his motion to have Bostwick notified and made a defendant to his cross bill: and he has no right to complain .that the orators have not joined him in theirs.. . If Bostwick had a joint interest with the orators in the notes they pray to have offset, there would be some ground for the objection. But, it appears by the bill of complaint, and, indeed, by the testimony in the case, that he has no interest whatever in those notes. The orators, as assignees of Bostwick, have kept them till they have made them their own : and they, standing as joint endorsees of Bostwick, jointly retain the whole interest. If they hold the joint legal interest, they as fully, from the facts now before the court, hold the equitable interest,, as well with regard to Bostwick, as to Burton. Again, it is urged that, if the orators have any remedy at all, they have ample remedy at law. If this be so, it is not by virtue of our statute, authorizing an offset of judgments. A part of the orators’ demands are not judgments. The judgments, also, must be before the same court, to come within the statute. If, by the remedy at law, is intended an application to the discretionary power of the courts of law to compel offsets, where equity requires it, the remedy is inadequate for the same reason ; the demands are not all rendered incontestibly certain by judgments. Courts at law must act upon the rights of parties, first, by pursuing the ways the law directs to decide what those rights are ; then,give proper effect to the rights thus ascertained. Let the claim of the orators be presented to a court of law, and the defendant would have a right to plead non assumpsit to these notes, and have a jury trial: and while this should progress, might press the collection of his judgments and wholly evade the offset. The discretionary power of this court, as a court of law, to compel offsets on motion, only reaches the demands that have passed into judgments; which is not the case before us, but in part.— See 2, Aik. 11. 221, Connable vs. Bucklin. — It is further urged that this court, as a Court of Chancery, have not power to compel this set offset. The objections, taken together, seem to imply that we have greater power as a court of law than as a court of chancery. We might truly, meet the same embarrassments, at — 451 — the threshold, in each capacity; but, sitting as a court of chancery, we can so control them as to prevent injustice. We can lay an injunction upon the judgments of the defendants, while the s.uit is pending, as was done in this case. If the defendant, in his answer, had denied giving the notes of the orators, we might have directed an issue to the jury, who would settle that question. But the answer of Burton, acknowledging the giving of the notes, has removed that difficulty, and placed the cause on the same ground as if judgment were rendered for the amount. It is unnecessary, perhaps, to observe, that chancery power was necessary to compel this answer, which thus removes the objection to our exercising the consummating power óf this court, should equity require it. Again, the statute of limitations, both pleaded and insisted upon in the answer, is urged in bar of the orators’ claim of offset. We may dispose of this by simply observing, that the answer expressly admits that these notes .were given, and have never been paid •' But, further, the notes were witnessed, and would run fourteen years, which term had not elapsed when this suit was brought. The statute would run against the judgment upon the two first notes in eight years; but the same was merged in the bond for the liberties of the prison, which comes not within the statute. But the answer admits that all remains unpaid, which sweeps away this ground of defence. Indeed, it seems not to have been much relied upon by the counsel. The defendant charges, in his crossbill, that the orators and Bostwids were partners in the lumbering concern, and as such,* holden to him for all his claims against Bostwids, that grew out o that concern. This is absolutely denied by both the orators in their answers ; and there is no testimony tending to prove it, as relates to the demands not included in the judgments already recovered. It is urged, however, that the decision in these actions, that the partnership existed, is proof between these parties, during that period, in relation to other demands. This position cannot well be maintained. They might be partners with regard to some transactions,and not so with regard to others. Whether that decision was right or not, it binds all-parties with regard to the matters therein adjudicated; but it goes no further. It does not bind — 452 — this court against doing what equity requires-in relation ta other' matters, not then under consideration/ In seems probable that those decisions are a hard" ship upon the orators. They, in- denying the direct charge of, partnership, admit that they were partners off Bostwick in his mercantile concerns about two years,- ending in Sept. 1309 ; but answer that the connexion was then wholly dissolved.- And they positively deny any connexion with him in the lumber concern.— Bostwick, who stands an indifferent witness in this controversy,entirely supports the answers of the orators upon these points: and there is no testimony tending to contradict those answers. There may have been testimony on those trials, showing a partnership-prior to Sept. 1809, and the said Jonathan might have been unable to prove the dissolution, or to prove it sufficiently published in the view of the court and jury $ bntthe testimony now before us dan leave do doubt of the dissolution prior to the lumber concern. The orators now claim that their notes,and demand due on the jail-bond, shall offset against the two judgments the defendant holds against Jonathan Ferris, on the ground of a mutuality of interest, and the probable loss of their said debts without such offset, by reason of the poverty of the defendant. This mutuality results from the partnership of the orators, of which we entertain no doubt. They being joint partners in all their- advances to Bost* wick,'and in all their liabilities as his partners, while they continued so; also as his sureties, and in all the payments they made in consequence of such liabilities; and the four notes being assigned to them jointly by Bostwick,- they are jointly entitled, both in law and equity, to receive the pay on these demands, so far as either has any interest in them. Their interest in two notes is undisputed. With regard to the other two, it is disputed. The defendant insists, in his answer, and in his cross bill, that two of these notes were only delivered to the orators as security for signing the bank note ; and he further insists, that the bank note was wholly paid by BostwicJc, except forty dollars paid by the defendant himself. And he attaches to his answer what he ' says he verily believes to be a copy of a writing to that effect, given back by the orators, when they received said notes. He ' also urges the after concessions of the orators to him that the facts — 453 — were so. This writing, if there was such a one, is not produced in evidence, and the orators in their answer to the cross bill, deny its ever existing : jand deny that two of said notes were delivered merely as security for their signing the bank note$ but allege, that all four of said notes were delivered for them to receive the pay, and apply the same in satisfaction of their general expenditures in behalf of Bostwick. They further answer, that they paid towards said bank note, or rather on the execution for the same debt, four hundred dollars at one time, and three hundred at another time, and the officer’s fees, amounting to eleven dollars and seventy five cents, which said sums have never been paid them,as they fully believe. On the part of the defendant, Esq. Wetmore testifies, that he was sheriff,and had the execution to collect, and that Burton paid him forty dollars, and Bostwick paid the remainder. On the part of the plaintiffs, Bostwick testifies explicitly that he did not pay the whole, but that the orators paid half, of said execution. That the orators received two of those notes as security for signing the bank note, merely, and that the bank note] was paid by Bostwick without charge to the orators, form a substantial charge in the cross bill. This makes the orators witnesses for the defendant on that point. And, as they in their answers deny this,as before mentioned, and as Bosiwick’s testimony fully sup» ports these answers, we must take the fact to be so, notwithstanding the positive testimony of Esq. Wetmore. Not that we doubt at all the integrity and recollection of Esq. Wetmore. The money actually paid by the orators,might have been delivered hyBostwick, and he might have felt no interest to inform Esq. Wetmore from whom the money came. What is still more probable, the money paid by the orators might have been endorsed, and the officer’s fees paid, as related in the answers of the orators, and a delay agreed upon : and, afterwards, an alias or pluries execution taken out for the remainder, and the whole paid to Esq. Wetmore, as he now relates. 'As we find this fact to be,if the lien of the orators upon the two notes,'-first payable, were as charged by the defendant in his cross bill, still, that lien .was not destroyed by the redemption of .the pledge, as contended by the defendant. The — 454 — pledge continues, unless we believe tilt? charge of the defendant in bis cross bill, that the orators, in the fall of 1810, acknowledged the hank note paid without charge to them, and their lien upon the two* notes destroyed. We are not at liberty to treat this as true j for it is denied by the answers, and there no testimony tending to prove it. This result fenders unimportant the controversy about the receipt, or the terms of it; the receipt, set up by the defendant in his answer to the orators’ bill, and in his crossbill. This the defendant attempts to support by the testimony of John H. Burton* His testimony, upon this point,is far from being positive. He has •no transcript of the writing, andhis recollection is so imperfect that he cautiously inserts at every sentence, “ if he recollects right,” &c. Besides, his testimony leaves the receipt in the hands of Bostwich, to whom it belonged, and he, instead of showing it lost, so it cannot now be produced in court, swears that he believes no such writing ever existed. We should require but little testimony to convice us that Bostwich took a writing of some kind, from the orators, when he assigned to them notes to the'amount of four thousand dollars : especially if, as the orators affirm, the . application of the avails, or amount,was to be the subject of a future settlement. But, when we are called upon to decide upon the ■ exact terms of that writing, without having it, or any sworn transcript, before us, we should act upon something more definite and positive, than the testimony of J. H. Burton: and this, more especially, as all. the facts, before us, shew a state of things, in which it would seem probable that the orators would be apt to require, and Bostwich willing to give, security for any monies they might' be liable to pay, by reason of their previous connexion with him, or their having become security inhis behalf. We, therefore,decide that the orators have a joint interest in the four notes assigned them by Bostwich, in whatever shape they may now be, whether, in notes, or judgments, or prison bonds : and that'the whole amount is comprised in that joint interest. The two judgments in favor of Burton, the defendant, are against Jonathan Ferris, only.' Yet the same partnership of the •orators renders these, in equity, the joint debts of the orators. If — 455 — Jonathan should pay them, he could Compel Elijah to contribute bis share. The remedy upon Elijah is more circuitous than that upon Jonathan. But they are jointly liable to pay, or contribute towards paying, these judgments. They have an absolute, a joint, and an equal interest in paying the same, or procurring their discharge. There is, therefore, in equity, a complete mu-/ tuality in the demands, which the orators pray to have set off against each other. The next question presented is, do the circumstances- proved, show this offset equitable ? It is always equitable, that mutual debts, due in money, should be discharged by an offset rather than that each should collect of the other, unless this equity is destroyed by some extraneous circumstances shown on the hearing. Hence the provisions of our statute for direct offsets, where the demands are, in form, as well as substance, mutual. Hence also, the Chancery law to compel offsets, when injustice would be the result of refusal. In searching for the equity in the present ease, we find that no sort of partnership existed between the orators and Bostivick, during any part of the period, in which the defendant’s debts accrued. Further, that Burton gave credit to Bostwick alone, and had no suspicion that Bostwick, when he delivered him goods,and paid monies for him, was binding or could bind the orators. There is no ground to suspect,that the orators, at any time, drew from Bostwick the funds which gave him credit, as -charged in the defendant’s cross bill. It appears probable, from the testimony of Bostwick, that all the goods he sold to Burton were, in fact, paid for by the orators, except about $500 worth purchased in Montreal. It is a fact not contested, that Burton is so depressed with poverty, that, should the orators pay him the amount of his two judgments, the only prospect the orators would have, of collecting the amount of said notes, would be the recovering back the same money so paid upon said judgments. But a ■circumstance, that, more than any other, seals the equity of this .offset is, that Burton has disclosed in his answer, that it was expressly agreed between him and said Bostwick, that, whatever he should pay for said Bostwick, and the amount of the goods he should deliver him in said lumbering business, should be set off — 456 — against said notes. The orators pray that this 'very offset should be made, so far as Burton has established the amount of his claims, by recovering judgment for the same. This the defendant now resists : but the equity is too apparent to be rejected by the court. The defendant however, insists, that, if any offset is made, he is entitled to an allowance of various other claims, besides the two judgments, for goods delivered to, and payments made for, said Bostwick. Of these he has furnished a schedule in his answer and crossbill. These have never been established as claims, even against Bostwick, by any recovery; on the contrary, it appears by the defendant’s own showing, that these were all under consideration on the trials in the suits in which said judgments were rendered, and were rejected and disallowed. Were it not so, they could not be supported in law or equity, as claims against the ora-t ors, by any testimony now before the court. All but one or two Jtems accrued as claims against Bostwick, after the assignment of the notes to the orators, and notice back to Burton, and his promise to pay to the plaintiffs. He had given a note to Bostwick of three thousand dollars or more, besides the four notes thus assigned to the orators. He had no right, after such notice,and his promise to pay to the orators, to continue paying to Bostivick, or suffer Bostwick to become his debtor, so as to create a claim to go against these notes thus assigned. But it is said these notes were given too large by $4 96, that amount of goods having been sold after the bills were made out, and before the notes were given 5 also that the payment to Samuel Burton, of seven or eight hundred dollars, was prior to the giving of said notes. These rest on similar principles with the others. There is no pretence that the orators knew this, or had reason to suspect it, or inquired after it. The defendant knew it, or might have known it: and was bound to know it before he promised the plaintiffs, or be silent about it afterwards. It appears from the testimony, that the whole amount of all the notes was too large by $496; but it does not appear that either of these four thus assigned, was larger than was intended. The defendant held another note of three thousand dollars, or more,which might be the one that was too large. He may so treat it, and settle with Bostwick accordingly. He — 457 — must so treat it, ratber tharfim'álce an inroad Upon the amount he had promised to pay to the orators, by facts of which they knew nothing, till it was too late to seek their remedy upon the endorser. Mien and Phelps, for the orators. Moyce, for the respondent. These claims being removed out of the way, the decree of the 'court is, that the offset be made according to the prayer of the amended bill, but without cost to either party, interest must be cast on the demands, and the balance ascertained. If there proves to be a balance in favor of the orators, that will be decreed them, and they may have execution for such balance: and the judgments be entered in the suits at law as of 1821 ,and satisfied by the offse ts, [in whole or in part, as the balance of the offsets shall render proper.