If this case is before us for review upon the pleadings and proofs, as under the former practice, and appeal from the decree of the Court of Chancery, I think the order appealed from should be reversed, and the judgment at Special Term affirmed.
The action is brought as a bill in equity to compel the set-off or application of a judgment entered in the name of the defendant Terry against the plaintiff for $319.43, upon and toward the satisfaction of that amount, parcel of a judgment recovered by the plaintiff against the defendant Carter. *Page 108
It appeared on the trial, that the two actions in which such judgments were recovered were pending at the same time, had been referred to the same referee, and he reported therein on the same day. That the action against the plaintiff was brought by Carter in his own name, the cause of action being an alleged claim for rent, and that, on the day on which the referee made his report, Carter assigned the claim to his attorney, the defendant Terry, in consideration of his indebtedness to Terry.
The action in favor of the plaintiff, so far as I can discover from the case, was an action to recover damages for an alleged fraud in the sale of certain personal property.
Immediately after the assignment to Terry, he applied exparte to the Supreme Court for an order substituting him as plaintiff in place of Carter, and thereupon, on the 23d of July, 1857, entered up and docketed judgment on the report, in his own name, for $149.17, reported due, and $170.26, costs, amounting together to $319.43.
On the 3d of August following, the plaintiff perfected his judgment against the defendant Carter, for $820, the amount reported by the referee, and $221.12, costs, amounting together to $1,040.12. An appeal appears to have been taken from this judgment, and the same was affirmed in General Term, and executions were issued thereon, which were returned unsatisfied, in 1859, and thereupon a ca. sa. was issued, upon which, the defendant Carter was taken and imprisoned, and so remained at the time when this action was commenced to compel the set-off.
Upon these facts, I am not able to perceive, that, on the 21st day of July, 1857, when the defendant Carter assigned his claim for rent to the defendant Terry, the plaintiff had any title, legal or equitable, to the set-off which, in this action, he claims, and, if not, then, he certainly did not acquire any right after such assignment took place.
At law, his right of set-off did not exist. He was sued for money due upon contract. He was suing to recover damages for a tort; as to such claims, no right of set-off existed. If either party had desired to make such set-off in the actions *Page 109 then pending, it could not be allowed. (Code, § 150, notes. G and H [p. 221 Voorhies' Code], under this section, title "Set-off"; 2 R.S. 354 [18], subd. 1.)
On the day of the assignment, no right of set-off existed. It was only upon the entry of judgment, that the plaintiff came into a situation to claim a set-off, either by motion, or by bill in equity, and before that time the claim of Carter had been assigned, for a valuable consideration, to his attorney, the defendant Terry. Non constat, at that time, that the plaintiff would recover any judgment.
It may be conceded, that Terry took the assigned claim, subject to all the equities which then existed, in favor of the plaintiff. This seems to be the ground on which the reversal of the judgment was placed by the General Term. But, at that time, no equities did exist, according to any facts proved or found in this case, if the opinion of the judge at Special Term may be consulted to ascertain what he did find.
He says, "had the insolvency of Carter, charged in the complaint, been proved, I should now hold the plaintiff entitled to the set-off on that ground. But, insolvency being denied in the answer, and there being no proof, the plaintiff cannot have relief on that ground."
If it had been proved, as charged, that Carter, being insolvent, had notice that the referee had or would probably report against him, and had, with Terry, fraudulently contrived this scheme of assigning the claim, in order to prevent the exercise of the equitable power of the court to set off one judgment against the other, a different question might have been presented. No such facts appear to have been found.
Upon the mere fact, that the plaintiff had obtained a report in his favor, no right, legal or equitable, arose which prevented the assignment to Terry.
In this view, it is wholly immaterial, whether the substitution of Terry as plaintiff was regular or not, though I apprehend it was perfectly good, until it was set aside on motion for that purpose. The assignment prevented any right of set-off accruing, not the entry of the judgment in Terry's name *Page 110
And the views thus expressed are in no wise inconsistent with the case of Nicoll v. Nicoll (16 Wend. 446). They proved, upon the single ground, that, in the absence of insolvency or fraud, the assignment was operative to prevent a set-off against a claim founded in tort, and not in judgment, when the assignment was made. By this, I do not mean to say, that mere insolvency would make any difference, since, at that time, the right of set-off did not exist.
I think the conclusion of the judge at Special Term was correct, and that the order of the General Term should be reversed, and the judgment at Special Term should be affirmed.
Order of General Term reversed, and judgment of Special Term affirmed, with costs. *Page 111