Fistere v. Janapoll

241 A.D. 353, 272 N.Y.S. 332, 1934 N.Y. App. Div. LEXIS 8249

Opinions

Per Curiam.

We think that section 151 of the Debtor and Creditor Law applies only to a set-off of mutual debts. It allows a set-off against “ any indebtedness ” to the plaintiff of “ any amount owing ” to the defendant. This has relation, it appears to us, to mutual debts and not to other causes of action. This is confirmed by the title of section 151 which reads: “ Right of set-off against unmatured debts.” Since the existence of mutual debts, where they had matured, could always be litigated under section 266 of the Civil Practice Act, it must be that the only purpose of section 151 of the Debtor and Creditor Law was to allow debts to be set off even where they had not matured.

It would follow, therefore, that section 151 of the Debtor and Creditor Law does not modify section 266 of the Civil Practice Act, but merely confers upon a defendant the right to set off an unmatured debt in cases where formerly this could not have been done. Here the plaintiff’s claim does not constitute an “ indebtedness ” of the defendant (Waxman v. Williamson, 256 N. Y. 117), and, therefore, the right to set off “ any amount owing ” does not exist under section 151 of the Debtor and Creditor Law. The plaintiff’s claim is for money diverted unlawfully and without consideration from the plaintiff’s assignor. Such a claim does not constitute a “ debt.” Therefore, we think the right of set-off does not exist here.

The order should be affirmed, with twenty dollars costs and disbursements, with leave to the defendant, appellant, to serve an amended answer within ten days from service of order upon payment of said costs.

Mabtin, O’Malley and Untebmyeb, JJ., concur; Finch, P. J., and Mebbell, J., dissent and vote to reverse and deny the motion.