Martin v. Wells, Fargo & Company's Express

28 P. 958, 3 Ariz. 355, 1892 Ariz. LEXIS 11

Opinion

SLOAN, J.

On the ninth day of September, 1886, in the district court in and for the county of Pima, George T. Martin recovered judgment against Wells, Fargo & Company’s Express in the sum of $1,848.35. Afterwards, and pending a motion for a new trial, Martin remitted the sum of $319.35 of said judgment, leaving $1,529 as the judgment in force. This judgment was appealed from by Wells, Fargo & Com- party’s Express, and affirmed in this court February 15, 1889, ante, p. 57, 20 Pac. 673. On the ninth day of October, 1886, while the motion for a new trial was still pending, and before the appeal was taken, Martin assigned his judgment to one H. D. Underwood by an instrument in writing which reads as follows: “In the district court of the first judicial district in and for the county of Pima. George T. Martin vs. Wells, Fargo & Company’s Express, a corporation. Judgment docketed for $1,529, net, and costs. For value received, I hereby assign, transfer, and set over the above-mentioned judgment to H. D. Underwood, of Tucson, A. T., with orders to pay the following amounts, viz.: C. H. King, $125.00; Geo. L. Hood, $125.00; A. B. Sampson, $100.00,—allowing all lawful proceedings therein, saving the said H. D. Underwood harmless and from any costs in the premises. In witness whereof I have hereunto set my hand and seal this 9th day of October, 1886. Geo. T. Martin.” Afterwards, on the twentieth day of October, 1886, Wells, Fargo & Company’s Express obtained judgment in the county court of said county of Pima against said George T. Martin in the sum of $1,828.50. On the second day of March, 1889, after the judgment in the suit of Martin •against Wells, Fargo & Company’s Express had been affirmed in this court, said Wells, Fargo & Company’s Express filed its motion in said district court to set off the two judgments. At the hearing, Underwood, as the assignee of the Martin judgment, appeared and resisted said motion. After hearing the proofs offered, the court allowed the motion, and granted the set-off. From this order Underwood appeals to this court.

Both judgments, at the time the order was made, were among the records of said district court, as we take judicial notice that, by an act of the legislative assembly approved March 2, 1887, the county court in which the judgment against Martin was rendered was abolished, and its records transferred to and made part of the records of said district court. The power of a court of law, in a proper proceeding, to set off one judgment against another, when the demands remain mutual, is undoubted. It does not depend upon any statute, but rests upon the general jurisdiction of a court over its judgments and its suitors when before it. The practice is so ancient and well established that it is now regarded as one of the inherent powers of a court of law. The exercise of this power rests within the discretion of the court, and its action is therefore not ordinarily subject to review, and will only be disturbed when it appears that it has operated to the injury of third parties, or when for some other reason it appears that there has been a manifest abuse of discretion.

But one question is presented by the record in this ease, and that is whether or not it appears that the setting off of the judgment obtained by Wells, Fargo & Company against the judgment obtained by Martin has operated to deprive Underwood of any right he may have had by virtue of the assignment to him of the Martin judgment. Without a statute, a judgment is assignable only in equity. Such an assignment carries with it all existing equities, including the right of set-off between the assignor and the judgment debtor. Not only does the assignment carry with it all existing equities, but also any which may thereafter arise between the assignor and the judgment debtor before notice of the assignment to the latter which might be urged by the latter as a proper set-off to the judgment. The only statute upon the subject of assignment of judgments, as well as other non-negotiable choses in action, in foree at the date of the assignment of the Martin judgment to Underwood, was section 5 of chapter 48, Compiled Laws, which provided that, “in case of an assignment of a thing in action, the action of an assignor shall be without prejudice to any set-off or other defense existing at the time of or before notice of the assignment,” and which simply expressed what was the equitable doctrine of assignments in the absence of a statute. The assignment of the Martin judgment was made on the ninth day of October, 1886. Without expressing any opinion as to whether this assignment from its terms was anything more than an assignment for the benefit of certain creditors named therein, we will, however, assume that it was an absolute assignment for value, subject, however, ■to such equities as an assignment of a non-negotiable chose in action carries with it. Was there, then, on the date of the assignment, any existing equity in the way of a right of set-off between Martin and Wells, Fargo & Company? If so then the assignment to Underwood carried with it such equity. The bill of exceptions purports to contain all the evidence ad duced at the hearing of the motion. It sets forth that the judgment obtained by Wells, Fargo & Company, and set off against the judgment obtained by Martin and assigned to Underwood, was rendered on the twentieth day of October, 1S86. When the demand arose which was the basis of this judgment does not appear. It is fair to presume that, if it was a liquidated demand at the time of judgment rendered, in the suit of Martin, it would have been set off in that action. If it was unliquidated it could not have been set off until it ripened into judgment, and hence could not have constituted an existing equity at the date of the assignment. If, then, no equitable right of set-off existed at the date of the assignment, it becomes important to know in this connection whether any existed before Wells, Fargo & Company’s Express had notice of the assignment. There is no evidence as to whether or not the corporation had such notice. Underwood attempted, long after the judgment obtained against Martin had been entered, to give constructive notice by filing and recording his assignment in the county recorder’s office o£ Pima County. Even had it not been after the right of set-off unquestionably arose between the original parties interested, this did not amount even to constructive notice, inasmuch as no law provided for the recording of such assignments. Underwood having appeared in the court below to resist the motion upon the ground that he was the equitable owner of the judgment, and upon the face of the record Martin still appearing to be the owner thereof, it seems to us that the burden rested upon Underwood to show that Wells, Fargo & Company’s Express had notice of the assignment before judgment was obtained by it against Martin, when the right of set-off must unquestionably have existed had no assignment been made. We are aware of the case of Graves v. Woodbury, reported in 4 Hill, 559, 40 Am. Dec. 296, which seems to assert a contrary doctrine, and to hold that, when a judgment debtor seeks to set off, as a claim against his judgment creditor, a judgment which has been assigned without notice to him, to entitle him to the remedy he must show, that, by reason of want of notice, he has been injured thereby. We see no reason or justice in this rule, nor does it comport with the section of the statute which we have quoted above. The judgment debtor is certainly entitled to notice so that he.may thereafter be put upon his guard against dealing with the assignor, or perhaps obtaining other demands against him on the belief that the assignor is still his creditor. If this is not done, he is entitled to be protected. It being the duty of the assignee to give notice to the judgment debtor of the assignment, in order, therefore, to defeat the right of set-off between the judgment debtor and his assignor which the former seeks to enforce against the judgment the assignee must show that he gave the judgment debtor notice, or that in some way the latter had actual notice of the assignment before the right originated. There being no proof that Wells, Fargo & Company’s Express had notice of the assignment of the Martin judgment before obtaining judgment against Martin, we cannot, therefore, find that the court erred in setting off the two judgments, and its judgment is therefore affirmed.

Gooding, C. J., Kibbey, J., and Wells, J., concur.