Lawrence v. Vila

Dixon, C. J. This cause was before us at the January term, 1864, upon the appeal of Mrs. Boys, plaintiff, executrix, &c., from a judgment of compulsory nonsuit. 18 Wis., 169. We then held that the suit was by Mrs. Boys in her capacity of executrix, and that it was properly so brought. We are still of the same opinion. Upon a cause of action which arose in the lifetime of the testator, or intestate and upon which he had a complete right of action, the executor or administrator must sue in his representative capacity; but upon a cause of action accruing to the executor or administrator after the death of the testator or intestate, the executor or administrator may sue either in his own name, or as executor or administrator. It was so decided by this court in Knox v. Bigelow, 15 Wis., 428; and authorities to the same effect are very numerous and very uniform. Mowry v. Adams, 14 Mass., 327, and cases cited; 16 — 386 — Mass., 71; 1 Pet, 692; 1 Blackf., 176; 3 id., 253; 9 Wend., 486; 2 Hill, 210; 4 id., 57; 4 Cow., 87; 5 id., 268; 3 Barb. Ch., 71; 2 N. H., 481. It was held upon tbe former appeal tbat tbis is a case of tbe latter bind; tbat tbe cause of action accrued to Mrs. Roys by virtue of tbe transfer from Mr. Pin-ney ; and tbat sbe took title, and could sue upon tbe cbose in action transferred, in ber capacity of executrix. Tbe suit being brought by Mrs. Roys as executrix, tbe first question is, was tbe defendant properly excluded from giving evidence as a witness in Ms own bebalf? Tbis depends upon tbe construction to be given to section 51, cbap. 137, R. S. Tbe reading of tbe first clause of tbe section might, at first blush, seem to include every action in which an administrator or legal representative sues or defends in a representative capacity. An attentive consideration of tbe language of tbat clause, and of tbe object of tbe legislature as manifested by tbe whole section, convinces us tbat such was not tbe intention. Tbe jourpose, and the' only purpose, of judicial investigation in regard to the’ construction of doubtful provisions of statute law, is to ascertain tbe intention of tbe legislature which enacted tbe statute; and when tbat is done, tbe intention is not to be defeated either by a too narrow or too liberal application of tbe words employed. Words susceptible of different applications are to be' limited or extended so as to subserve tbe object wMcb tbe legislature bad in view. Tbe object of tbe legislature is plain enough. It was to prohibit a living party from testifying in bebalf of himself, when, by reason of death, tbe other party to tbe transaction, having bad tbe same knowledge or means of knowledge, cannot be present in court to confront Mm or make bis statement of tbe transaction. We are of opinion tbat tbe words “wben tbe opposite party sues or defends as administrator or legal representative of any deceased person,” are not inaptly cbosen to express this object, and tbat they are to be appbed to cases of a strictly representative character; tbat is to cases where tbe admistrator or other legal representative stands in — 387 — the place of a deceased person, and sues or defends upon a cause of action or matter of defense which accrued to the deceased in his lifetime, and upon which the deceased, if still living, might himself sue or defend. In cases like the present, where an executor or administrator sues upon a contract entered into by himself, or a chose in action purchased by him, he does not, in strictness, represent his testator or intestate. He sues upon his own contract, and may, if he chooses, at the trial or elsewhere in the course of the proceeding, entirely ignore his representative character, and recover as upon a demand due to him in his own right, as the authorities above cited folly show. Again, we think the defendant ought to have been admitted for another reason. The plaintiff sued both as executrix and as-signee. The cause of action accrued to her solely by virtue of the assignment. In such case, there being distinct provisions of the statute regulating each, and not in harmony with one another, we think the competency of the opposite party to be a witness must be tested by looking to the origin of the cause of action and of the plaintiff’s right to sue. If the cause of action comes from an original assignor who is still living, and the plaintiff’s right to sue by virtue of the assignment alone, then, for the purpose of this question, it is to be regarded as a suit by an assignee. Any other construction would lead to very harsh consequences, and which were never intended. The original assignor might, as happened in this case, be admitted to testify, when the opposite party to the transaction about which he testifies would be absolutely excluded. It needs no argument to show that this would be an entire departure from the intention of the legislature as evidenced by all its actions upon this subject. This far we have discussed the question of the competency of the defendant to be sworn and examined as a witness, but the extent of such examination has not been considered. It follows that his right to be sworn and examined is the same as — 388 — it would have been if the action bad been brought by Mr. Pin-ney as the survivor of the firm of Roys & Pinney. In such case he might have been examined as to the conversation between himself and Mr. Pinney, and to which Mr. Pinney testified. He might also have been examined as to any material transaction between himself and Mr. Pinney, either where Mr. Pinney was acting for himself individually or as a member of the firm of Roys & Pinney. He might perhaps have been examined even as to transactions between himself and Mr. Roys, where Mr. Pinney was actually present and had the same knowledge or means of knowledge as Mr. Roys. But as to anything which occurred between him and Mr. Roys, in the absence of Mr. Pinney, or of which Mr. Pinney had no personal knowledge, the defendant clearly could not have been examined. He would have been prohibited under the third clause of the section above referred to, which forbids the examination of a party to a civil action “ in relation to any matter in controversy arising out of any transaction managed or conducted by an agent of the opposite party, * * unless such agent is still living.” In partnership affairs each partner is, as to the business which he transacts for the firm of which he is a member, the agent of such firm. Mr. Roys, the deceased, was the agent of the firm of Roys & Pinney. The other questions presented by the case were not considered by the court in consultation, and consequently not decided, except that we were all of opinion that a matter pleaded as a counter-claim may be sustained as a set-off, if established by proper evidence at the trial. The facts constituting the set-off being stated in the answer, the demand of the defendant for ■ judgment as upon a counter-claim may be rejected, or the court may order an amendment. I have, however, devoted considerable time to the examination of these questions, and will, before dismissing the case, state my views so far I have come to any definite conclusions. In the first place, I think there can be no pretense for saying — 389 — that the first and third numbered subdivisions of the answer, called “ counter-claims,” can be sustained as such at all. They both relate to transactions growing out of the unsettled affairs of the old firm of Vilas, Roys & Pinney. If they related to transactions between the defendant and the subsequent firm of Roys & Pinney, the case would be no better, considering them as counter-claims. In either case they are excluded by the express definition of the statute. “ A counter-claim must be one existing in favor of a defendant and against a plaintiff between whom a several judgment might be had in the action.” R. S. ch. 125, sec. 11. It is clear that there can be no several judgment in favor of the defendant and against Mrs. Roys as executrix, upon a claim arising out of the unsettled affairs of the firm of Vilas, Roys & Pinney, nor upon a claim against the firm of Roys & Pinney. As to the second numbered sub-division of the answer, called the “ 2d counter-claim,” I am not clear that it does not state a proper matter of counter-claim to this action. -The material words are, that “ said Roys and said Pinney each agreed to pay to this defendant one third part of any costs and expenses which might be incurred,” &c. This is an averment of a several promise on the part of Mr. Roys to pay one third of the expenses of collecting the mortgage, and as such would seem to be the proper subject of a counter-claim within the statute.. But my examination of the question whether this claim can be allowed as a set-off has led me to doubt its validity as- a counter-claim, or whether the statute regulating counter-claims can be applied to an action brought by an executor or administrator for a debt which has accrued to him since the death of his testator or intestate. The ■ courts of other states and of England have, as will presently be shown, invariably refused to allow the defendant to set-off a demand against the testator- or intestate in such cases, on the ground that it would change the course of distribution. The effect of allowing a counterclaim would be the same, and in this respect the distinction — 390 — between, a set-off and counter-claim, wherever one exists, would seem to be immaterial. The allowance of either would diminish the assets in the hands of the executor or administrator, and alter the course of distribution in proportion to the sum allowed. I am not, therefore, satisfied whether this claim against the deceased, Mr. Roys, can or cannot be allowed as a counterclaim to this action, and I leave it, so far as I am concerned, undecided. As to the individual promise of Mr. Pinney to pay one third of the costs and expenses of collecting the mortgage, it is clear that cannot be the subject of a counter-claim. It is not a claim in favor of the defendant against the plaintiff. It is a claim against a third person, not a party to this action. If Mr. Pinney had brought suit, and it had been set up against him, it would have fallen under the head of counter-claims ; but when set up against his assignee, it does not. Vassear v. Livingston, 13 N. Y., 248. Upon the questions whether these several claims are available as matters of set-off, I am of opinion that those stated in the “ 1st and 3d counter-claims” are not. The rule as to set-off in a court of law is, that the cross demand must be liquidated, founded on judgment or contract, and one for which an action at law will lie. A claim recoverable only by action of account or bill in equity cannot be set off at law. Sherman v. Ballou, 8 Cow., 310; Barb, on Set-off, 32; R. S., ch. 126, sec. 1, subd. 1. It may perhaps be insisted that the abrogation of all distinction between legal and equitable remedies under the code has changed this rule; and that now unliquidated demands, or those which are recoverable only by suit in equity, are the -proper subjects of set-off in a suit at law. However this may be, it still seems to me that these claims must share the fate of the individual claim against the deceased, Mr. Roys, as being claims •existing against him at the time of his death, and which cannot be set off against a demand accruing to the executrix after his /death. If I am right upon that point, as I am almost positive — 391 — 1 am, then these claims, as matters of set-off, must be excluded on that ground. I have already observed, as to the individual claim against the testator, Mr. Roys, stated in the “ 2d counter-claim,” that according to the rule prevailing in other states and in England, it cannot be allowed as a set-off in this action. Willes, 103, 264, and note (a); Buller’s N. P., 180; 2 N. H., 419; 7 id., 16; 4 Johns. Ch., 11; 8 Wend., 530; 21 id., 674; 10 Paige, 319; 6 N. Y., 168; Hardin (Ky.), 252; 2 Bibb, 262; 2 Hill, 214. The reason of the rule has also been given, that the pro rata distribution would be broken in upon. The demand, when collected, is assets out of which the defendant is entitled to be paid only in due course of administration, the same as other creditors. If the set-off were allowed, he might in fact receive more than a pro rata dividend, and thus gain an undue preference over other creditors. The statutes under which these decisions were made are referred to and quoted in some of them, but I have not examined sufficiently to determine whether our statutes respecting set-offs before commissioners to adjust and allow claims against the estates of deceased persons, and in actions by executors or administrators for the recovery of debts or demands due the estate (sections 9 and 18, ch. 101, R. S.), have established a-different rule or not. This point, as well as some others of which I have spoken, was not argued at the bar, and I am not prepared to pass upon it without argument. ' Upon the point whether the several demand against Mr. Pinney may be set off, I have less doubt. The casein this particular is the same as if the action had been brought by Mr. Pinney as survivor. It is a general rule, both at law and in equity, that a debt owing by one of two or more partners cannot be set off against a partnership demand. Howe v. Sheppard, 2 Sumner, 409; Ladue v. Hart, 4 Wend., 583; 7 Cranch, 565; 2 Bay, 146. But the rule has some exceptions, one of which seems to be, that to a demand by a surviving partner who sues as such, the defendant may set off a debt due him from such — 392 — survivor individually; and, vice versa,, a debt due to a defendant as surviving partner may be set off against a demand on bim in bis own right. Slipper v. Stidstone, 5 Term R., 593. See same case, 1 Esp., 47, and note. So it bas also been beld that a debt due from the plaintiff as surviving partner to the defendant, may be set off against a debt due from the defendant to the plaintiff in bis own right. French v. Andrade, 6 Term R., 580. I conclude, therefore, that the several demand against Mr. Pinney, which belonged to the defendant at the time of the assignment to the plaintiff, may be set off in this action. By the Court. — Judgment reversed, and a new trial awarded.