Burnham v. Tucker , 18 Me. 179 ( 1841 )

The opinion of the Court was drawn up by

Shepley J.

This is an action on a promissory note, made by the defendant, and payable to David Webster, or order, and by him indorsed to the plaintiff after it was over due. The defendant held a note payable to himself, and signed by Webster, and also one signed by Webster and another, both bearing date before the note in suit. These notes were not filed in set-off, but by an agreement between the parties the sot-off is to be allowed if a judgment upon them obtained by the defendant against Webster could be set off against the judgment in this suit.

According to the rules by which courts of equity are governed, these demands being distinct and independent could not be set off. Greene v. Darling, 5 Mason, 201.

Our statutes provide, that distinct and independent claims may be set off whether existing by note or in account.

In the case of Sargent v. Southgate, 5 Pick. 312, it was decided upon a statute similar to ours, that a demand might be filed and a set-off take place, when the suit was not between the same parties as those to the claim filed, it having been brought in the name of an indorsee of a note over due. A different opinion had been before intimated in the cases of Holland v. Makepeace, 8 Mass. R. 418, and Peabody v. Peters, 5 Pick. 1. In Shirley v. Todd, 9 Greenl. 83, this Court did not decide whether it would adopt the doctrines of Sargent v. Southgate.

If the assignee of a note over due, takes it subject to the same infirmities, equities and defences, as if it remained in the hands of the original owner, there does not appear to be any other mode of accomplishing the object of making the defence effectual, but by carrying out the intention of the legislature, and allowing demands to be filed or judgments obtained upon them to be set off, although the parties to the record are not the same. That the assignee does take, in such cases, subject to a notice implied by law, and to the same infirmities, equities and defences as might be made against the payee, has been decided in many cases. 4 Burr. 2214; 10 Mass. R. 51; 5 Pick. 1, and 312; 5 Johns. R. 118; 18 Johns. R. 493; 9 Greenl. 83.

Nor are the books without precedents for setting off judgments recovered in different names when the beneficial interest in them is mutual.

In the case of Ford v. Stuart, 19 Johns. R. 342, one will be found. That was an action upon a promissory note, payable to Obadiah Ford, or bearer, and transferred after it was over due to one Vanderbilt, and by him to the plaintiff. The defendant under a notice for a set-off, offered a judgment in favor of Adrian Post, against Obadiah Ford,-and an assignment of it to himself, after his note to Ford had become due, and before it was transferred, and the set-off was allowed. The court refused in the case of Holland v. Makepeace, to permit a purchased demand to be made use of as a set-off, and our statutes do not contemplate the filing or setting off of purchased claims. While no such set-off as that made in Ford v. Stuart could take place under our statute, that case affords a strong illustration of the application of the principle, that the indorsee of a promissory note over due at the time of indorsement can secure to himself no other or greater rights than 'the payee had in it at the time of indorsement.

In the case of Moody v. Towle, 5 Greenl. 415, this Court ordered a judgment recovered by the maker of the note against the payee to be set off against so much of a judgment recovered on the note by an indorsee as exceeded all the just claims of the indorsee against the indorser, the note having been- transferred as collateral security for such claims.

The plaintiff in this case under our statute provisions and the mercantile law, could secure to himself by an indorsement of the note when over due only such rights as the payee himself could have enforced, and the set-off must be allowed.