In Stocking v. Toulmin, 3 Stew. & P. 35, it was held that the statute which declares that promissory notes may be assigned by indorsement, and that the maker shall be allowed the benefit of all payments, sets off and discounts, had, made or possessed previous to notice of the assignment, in the same manner as if the same had been sued by the payee therein, did not give the right to set off against *577a subsequent indorsee, a debt due from an intermediate as-signee. And in Kennedy v. Manship, 1 Ala. Rep. 43, it was decided that a set-off by the maker of a promissory note¿ against an intermediate indorser, cannot be allowed, unless there is a contract between the parties to admit it, founded on some new consideration. The court said, a mere willingness to set off one demand against another, o'r even an express understanding so to do, without some new consideration to Support it as a contract, Cannot have the effect to defeat thd right of thd plaintiff to recover. If such an understanding fexisidd between the parties, why was the execution of it deferred, of why should an innocent holder be ihade' to suffer by the laches of him who has neglected to protect his own interest. These cases establish that no equity arises under the act of 1812, to let in as a defence a demand due by an intermediate holder to the maker. So a set-off due to the maker of a note by one who has become beneficially interested in it, without thd legal title by indorsement, cannot be enforced, so as to defeat the right of a subsequent indorsee to recover on the notd. [Pitts v. Shortridge’s Adm’r, 7 Ala. R. 494. See also Sheffield & Co. v. Parmlee, 8 Id. 889; Smith v. Taylor, 9 Id. 633; Robinson v. Breedlove, 7 Porter’s R. 543.]
The case at'bar is not distinguishable irt principle fron'l those cited. If the indorsement of a note by one Who was its proprietor, without being its assignee in the mode contemplated by the statute, could free it from the' right of the maker to avail himself of a set-off against the person thus indorsing it, we can perceive of no reason why, upon the return of the note to the payee, or its transfer by delivery merely,the same consequence should not follow. A note in the' ordinary form, does not, when indorsed, become subject to thd law merchant, and the indorsement by one who was its proprietor by delivery would not make out a continuous chain, constituting the indorsee the' legal holder from the payee. So that, whether such proprietor deduced a title by indorsement or otherwise', the' effect would be the same.
The fact that Thomas agreed to receive of the defendant *578the two small notes in satisfaction of that declared on, cannot vary the case. This agreement was not founded on any new consideration, and according to Kennedy v. Manship, supra, can have no influence against the plaintiff. The ruling of the circuit court was not prejudicial to the defendant below, and its judgment is therefore affirmed.