Cramond v. President of the Bank of the United States

1 Binn. 64, 1803 Pa. LEXIS 17

Opinion

[Yeates J.

This point has less weight than at first it appeared to have, since the present is a new claim for dividends, to which there has been no opportunity of answering until now.]

As tp the general question. Set-offs are favoured by law. Collins v. Collins.

Footnotes

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(a) They are instituted to prevent circuity of action. 1 St. Laws 65. The objection that a new distribution of assets would be produced by allowing the set-off, has been made in another case, and overruled. Brown v. Holyoke. (b) If there be mutual debts subsisting between the testator and I. S., the executor will be indemnified in setting off I. S.’s debt against his testator’s, though they be of different characters. Priority of payment must have a relation to the source of payment — the assets; now assets in this case are only the balance due from a debtor to the testator, cross claims deducted. If this objection is invalid, it then returns to the case of a plaintiff in full life; and surely in that case a court will not allow the plaintiff to take money from the hands of his creditor who happened to be a garnishee, and turn him round to a suit on the ground of a debt which without a single inconvenience could be 'adjusted by set-off.

Mutuality is necessary to a very slight degree. Slipper v. Stidstone. (c) Buying the plaintiff’s paper before action brought, entitles the defendant to set-off. Primer v. Kuhn, (d)

Cases of double set-off, to which it is said there is nothing similar, are nevertheless very numerous. A defendant may have a set-off in his own right,- and also in the right of his deceased partner. Slipper v. Stidstone. French v. Andrade. (e) If he deals with a factor who conceals his principal, and is afterwards sued by the principal, he may set-off a debt due by the factor, and' at the same time one due,by the principal. Rabone v. Williams; (f) and in like manner the assignee of a bond is liable to two set-offs, one by the original obligor, and another by any particular defendant.

The operation of the attachment law is unquestionably favourable to set-off. By the judgment in the foreign attachment, the plaintiff becomes creditor of the garnishee by substitution, and all the legal consequences accordingly attach on him. How is it possible to separate from this number the right of set-off? The security under the law can work no injury; for it is a security to refund; and all that can be demanded under it is the amount received in virtue of the attachment. And if no plea to the scire facias be good except one which is tantamount to nulla bona, then it is impossible for the garnishee to plead a release; a position which cannot be maintained.

Yeates J.

Set-offs are agreeable to reason and justice; and in actions by or against executors, where there are mutual debts, they are allowed with great reason. But this mutuality of debt is the essential circumstance in a set-off; and was there any thing of the kind in this case? The debt of the bank was due to Brotvn, it owed nothing to Clotv and Cay at the time of their death. The object of a foreign attachment is none other than to get the party’s appearance by attaching his property, and it would produce great confusion to turn it to the purpose of settling collateral accounts like this. To allow the defendants to pay themselves in this way, would be an injustice to the other simple contract creditors of Clow and Cay, whose right to this debt from Brown to Clow and Cay vested in them generally upon the death of the latter, and could not be diminished by the subsequent act of the defendants; it is upon'this point that a majority of the court rely in giving judgment for the plaintiffs.

Smith J.

The ground I go upon is that the money was fixed as between executors and garnishee the instant the testator Clow, surviving partner of Cay, died. I give no opinion upon the point of mutual debts and set-off.

Brackenridge J.

I am of opinion that if judgment had been rendered against the garnishee before the death of Clow and Cay, so as to have made it a debt of the garnishee’s to them, then the set-off might have been made; but the instant they died, the right to the whole of Brown's money vested in, the creditors generally,.who became thereby entitled to its distribution for their benefit.

Judgment for Plaintiffs.

Bull. N. P.X79.

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5 D. (stE. 493.

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- X Dali. 452.

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6 D. (St E. 582.

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7 D. (st E. 360.