Reynolds v. Martin

Day, J. l. account: assignment of: counter-claim, — The judge who tried this cause executed the following certificate: “Appeal allowed. And I hereby certify that this case involves the determination of a question ox law upon winch it is desirable to have the opinion of the Supreme Court, to-wit: The construction [326] of sections 2086 and 2087 — Can the maker of an open book account avail himself of any defense or counter-claim against the assignee which he may have against any assignor, before suit is commenced thereon in the name of the assignee?” No other question than the one above presented will be considered' on this appeal. See Rules of the Supreme Court, § 12. The sections referred to in this certificate are as follows : “2086. When b,y the terms of an instrument its assignment is prohibited an assignment of it shall, nevertheless, be valid, but the maker may avail himself of any defense or counter-claim against the assignee which he may have against any assignor thereof before suit is commenced thereon. “2087. An open account of sums of money due on contract may be assigned, and the assignee will have the right of action in his own name, but subject to the same defenses and counter-claims as the instruments mentioned in the preceding section.” These sections are identical with sections 951-2 of the Code of 1851, and 1798-9 of the Revision, except that in those sections the words “set-off, legal or equitable,” are employed instead of the words “counter-claim,” which are used in the Code of 1873. The revision recognized a distinction between a set-off, a counter-claim and a cross-demand* See sections 2886, 2889 and 2891. No such distinction was recognized by the Code of 1851. See section 1740. The Code of 1873 abolishes this distinction, the counter-claim embracing what was denominated a set-off in the Code of 1851, and what was included under the terms of set-off, counter-claim and cross-demand in the Revision, so that the sections under consideration are identical in meaning with sections 951-2- of the Code of 1851. See Code of 1873, § 2659. In Zugg v. Turner, 8 Iowa, 223, a set-off was claimed under sections 951-2 of the Code of 1851. In that ease Polger made an assignment to Zugg of a claim which he held against [327] Turner, and Turner had notice of the assignment. At the time of the assignment Eolger was not indebted to Turner. After Turner had notice of the assignment Eolger became indebted to Turner in the sum of fifty dollars for rent, and after Eolger became so indebted Zugg. sued Turner upon the assigned account. In said action Turner claimed a set-off for the amount due him from Eolger for rent. It was held that he was entitled to the set-off. That decision, it seems to us, is decisive of the question submitted in this case. Indeed, the statute is so plain that it is scarcely susceptible of construction. It provides : “The maker may avail himself of any defense or counter-claim against the assignee which he may have against any assignor thereof, before suit is commenced thereon.” The object of the statute is to render claims assignable which were not so at common law. . It is not unreasonable that the effect of the assignment should b& such as this statute prescribes. It is clear, from the agreed statement of facts, that before the plaintiff sued the defendant the defendant held a demand against Eoulk which could have been set up as a counter-claim if Eoulk had sued the defendant. The demand, under the statute, is, therefore, available against plaintiff, the assignee of Eoulk. Under the facts agreed upon the plaintiff holds his claim subject to the defendant’s counter-claim. The court should have set aside the verdict and granted a new trial. Be VERSED.