Condon v. Shehan

Simkall, J. : The relief sought by the complainant rests on this ground of equity: That the defendent, Condon, in September, 1870, commenced a suit before E. L. Bramlette, Esq., justice of the peace, against him, which, in the following November, was consummated into a judgment; that afterward, in December of the samé year, Condon became the debtor of the complainant in a larger .amount, by the assignment to him, by one L. Scully, of a demand, by open account, against Condon; that suit is pending, for the complainant’s use, in the circuit court, against Condon, founded on this [713] debt; that Condon is insolvent; that, in the event of the recovery of a judgment, which the complainant is entitled to, nothing can be realized upon it by execution ; that Con-don has caused the property of complainant to be seized to satisfy his judgment. The prayer is to suspend proceedings under' this judgment until there shall be a trial at law of complainant’s suit; and that any recovery which the complainant may make against the defendant may be set-off against the defendant’s j udgment. The defendant answered, and, among other things, denied that there was any thing due upon the debt assigned by Scully to complainant. A motion to dissolve the injunction (resting upon bill and answer) was denied, and from that order an appeal was taken. The doctrine is quite familiar, that the courts of law will not entertain a demand as a set-off, unless it was due, and owned by the defendant, before the suit was instituted. Carpen, admr. v. Canavan, 4 How. 376. The defendant pleading the offset stands in relation to it, as plaintiff asserting a demand against the plaintiff in the nature of a cross action. His right of action must have existed at the date of the plaintiff’s suit. The respective causes of action must have been simultaneous. The complainant did not acquire his debt against the defendant until the defendant had recovered his judgment. It is manifest then that he had no such claim or debts, as could be a set-off against the judgment, unless a different rule prevails in equity from that enforced at law. As a general proposition both courts are governed by the same principles. Elder v. Lassell, 2 Blackf. 349; Van Beauren v. Van Gaasbeck, 4 Cow. 496. But before' and since the passage of the statutes of offsets courts of equity, in virtue of their general jurisdiction, granted this sort of relief (in special cases), although the debts were mutual and independent. As if there were an express agreement to make the offset, equity would give it effect, or, if there be mutual credit between the parties, founded at the time upon the existence of a debt from the crediting party to the other. [714] Chancery interfered, independent of the statute, where the demands were intimately connected, or the one was the consideration of the other, or there was some obstacle at law, as non-residence, insolvency or the like. Tribble v. Saul, 4 Monr. 455; Green v. Darling, 5 Mason, 212. In this last case Judge Story remarked, “ since the statutes of set-off of mutual debts and credits, courts of equity have generally followed the construction of the statutes by courts of law, and have applied the doctrine to equitable debts. They have rarely if ever broken in upon the decisions at law unless some other equity intervened.” The mere existence of cross demands is not enough to invoke the interposition, Ranson v. Samuel, 1 Craig & Phill. 161, 178; Ruckerville Bank v. Hemphill, 7 Ga. 413. Subjecting this case to the test of these principles, and there is no equity unless it arise out of the defendant’s insolvency. That is denied though not as specifically as it ought to have been, if it was meant to be stated that defendant had property amenable to legal process. There was no mutuality of dealings between the parties. The credits and debts did not arise out of a connected transaction, one credit did not induce or form the consideration of the other. There is no supervening equity which would form the consideration for disposing of the question upon any other principle than would control a court of law, or which takes the subject out of the statute, except the alleged insolvency of the defendant. But that gives no additional or peculiar merit to the complainant. For, at the time Condon sued before the magistrate and recovered his judgment, he is alleged to be insolvent, and so continued to be after complainant purchased and took the assignment of the demand sought to be used as a set-off’. The complainant became his creditor with knowledge of his pecuniary condition; he bought the claim from Scully for the purpose, it might be inferred, of setting it up in recoupment of the judgment against himself. Condon did not obtain the credit from him, because the complainant was his debtor, growing out of some mutual [715] dealings, and from which the presumption might arise that there should be mutual set-offs. There was no contract or connection between the parties in reference to complainant’s debt against the defendant until the complainant, without defendant’s knowledge or privity, bought the account from Scully. In such circumstances there is nothing to withdraw the case from the operation of the statute. See Jordan v. Jordan, 12 Ga. 88, 89, 90. We are of the opinion, therefore, that the injunction ought to be dissolved. The order of the chancery court is reversed and judgment here dissolving the injunction.