Hamill v. First Nat. Bank of Las Vegas

Chief Justice Helm

delivered the opinion of the court.

The First National Bank, plaintiff below, was in no better position than its assignor, Huntington & Co., so far as defenses to the note were concerned; for if we assume that the note was transferred before maturity,— a proposition earnestly controverted by counsel for appellant,— yet the assignment was mei’ely “nominal,” “ without consideration,” and for the “purpose of avoiding the crediting of said rental against the note.” No authorities need be cited to show that one asserting ownership under such circumstances is not entitled to the immunity of bona fide assignees who take commercial *3paper before due and for valuable consideration. The bona fides and the consideration are both wanting.

The present discussion may therefore be confined to the following question: Could Hamill have defended against a suit upon the note by Huntington & Co., the original payee, by showing the agreement in relation to rent, and establishing the fact that the amount, of rent due and unpaid exceeded the principal and interest of the note?

The lease was in the name of Reynolds alone, while the note was payable to Huntington & Co.; but Reynolds was a member of this partnership, and the leased premises were used by the firm. They were necessary in carrying on its business. The firm, therefore, received the benefit of the lease the same as if it had been executed in the firm name. Under these circumstances, the agreement to credit rent upon the note was an ordinary and natural business transaction, of special advantage to the company. It can hardly be said that this agreement was not mutual, or that it was without consideration. It is quite possible that the company would not have loaned Hamill the money but for the security thus furnished.

Treating the fact that the firm enjoyed the benefit of the lease contract as unimportant, their liability in the present action sufficiently appears. As a general rule, debts due from one member of a partnership cannot be set off against debts or accounts belonging to the firm. But the application of this rule may be avoided by the conduct of the firm itself. “ If it can be shown that all parties concerned have expressly or impliedly agreed that a debt owing by one of them only shall be set off against a debt owing to them all, or vice versa, effect will be given to that agreement.” Lindl. Partn. *294, *661, and cases cited; Pecker v. Sawyer, 24 Vt. 459; Hood v. Riley, 15 N. J. Law, 127; Clark v. Taylor, 68 Ala. 453. See, also, Eaves v. Henderson, 17 Wend. 190, as to a subsequent account like the one for rent in this case.

*4We have not overlooked the rule of evidence relating to the extension of written contracts by contemporaneous oral agreements. It does xiot appear -that the agreement in question was oral, and we are not at present called upon to affirm or deny the application of this rule. However, without intimating a conclusion upon the subject, wé suggest that there are decisions in cases analogous in this respect to the one at bar, which seem to hold that the evidential rule in question is not controlling.

The portion of the answer under consideration stated a defense. If its averments were defective, the objection should have been taken by demurrer, and not by motion to strike. The judgment of the court below is reversed.

Reversed.