Case ID: va_15/html/0208-01.html
Source: Caselaw Access Project
Author: {"author": "JUDGE TUCKER, * JUDGE EEEMING.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Dangerfield v. Rootes, Administrator of Baylor.
    Tuesday, November 27, 1810.
    Set-Off — Unliquidated Claims. — A debtor ought not to be allowed a set-off (even in equity) for unllquidated and disputed claims against his creditor, purchased by him after suit brought by the creditor against him.
    This was an appeal granted by a Judge of this Court, under the act passed January 27, 1810,  from an order of the Superior Court of Chancery for the Richmond District, dissolving an injunction, which John Dangerfield had obtained to stay proceedings on a judgment confessed by him, at the suit of Thomas R. Rootes, administrator of John Baylor, jun. deceased, on a bond to the said Baylor, in his life-time. Pending the suit on that bond, the appellant, (as alleged in his bill,) for a valuable consideration, purchased of John Nicholson several claims which the latter had (in right of his wife) against the said Baylor, as executor and devisee of his father, John Baylor, sen., as administrator of his mother, and as executor of his brother, George Baylor; but which were much disputed by him in his life-time. Suits in Chancery to recover them had been brought, and by his death had abated.
    The object of Dangerfield in making the purchase was to set off those claims against his own debt then in suit: and, in his bill, he alleged that the claims of Mrs. Nicholson were debts of the first dignity against the estate of the said John Baylor, jun. a part thereof, viz. a legacy of 3001., being charged on the estate real and personal devised to him by John Baylor, sen. ; and the residue (as was alleged) due from him as administrator of his mother, and executor of his brother George.
    Rootes, the administrator with the will annexed of John Baylor, jun. having filed his answ'er, denying the plaintiff’s equity, and insisting that the money due on the bond from Dangerfield ought not to be thus intercepted, since he might thereby be compelled to commit a devastavit; the Chancellor dissolved the injunction; being of opinion that “it was settled in the case of Alexander v. Morris and others, 3 Call, 105, to be improper for a debtor, after suit brought, to trump up claims against his creditors, in order to discount them; especially, when purchased at an under rate; and that, if the principle was correct in that case, as between those parties, it should be applied with increased force in this case; since it might have the effect of subjecting the administrator to acts, which, but for that, he might avoid.”
    Upon a petition lor an appeal, it was granted by Judge Roane, '"for the following reasons assigned by him in his written mandate, addressed to the Clerk of the Court of Chancery: “I.am far from being prepared to say that the ground taken by the Chancellor, in dissolving this injunction, is erroneous: yet I think the case deserves deliberate consideration ; and, on that ground, I am of opinion to allow the appeal; especially, as the act of Assembly has provided for a prompt decision in such cases. The case of Alexander v. Morris, 3 Call, 105, has indeed a general dictum, seeming reprobate discounts, ‘trumped up,’ after the suit has been brought; but that case may have turned upon the extreme (not to say fraudulent) circumstances, under which the discounts in question were acquired; and it is the best and safest rule of interpretation to test a case by the actual circumstances of it. On the other hand, it is held in the case of Hudson v. Johnson, 1 Wash. 10, ‘that it has been always the practice, and very properly, to allow discounts up to the time of trial, but so as not to destroy the plaintiff’s action, and entitle the defendant to costs.’ There can be no substantial difference between acquiring the bond of an obligor (after a suit has been brought by him) by a fair assignment for valuable consideration, (our act having legalized such acquisitions,) and acquiring his bond, subsequently, for money lent him, which would undoubtedly be received as a discount, I presume, under this last decision, with the aforesaid restriction, that the whole sum in suit is not to be thereby extinguished, and the plaintiff subjected to costs. The decision in this case does not even allow the complainant the benefit of the proffered discount, (if substantiated,) and within the limits of the restriction aforesaid: and any construction upon this point, as at law, would seem to hold a fortiori in equity; keeping, nevertheless, a steady eye upon the real justice of the case. If, under the English statutes upon this subject, it was once held that debts subsequently acquired might be set off; (See Douglas’s Reports, 112, Reynolds v. Beer-ling, in a note;) and it has only been recently decided otherwise in the case of Evans v. Prosser, (Douglas’s Additions, p. 10,) whereby it appears to have been a vexed question in that country; it at least deserves consideration whether the former principle is not the law in Virginia, under the more latitudinous words of our act on the subject. Those words are, ‘that the defendant shall have liberty on the trial to make all the discount he can against the debt, and, on proof, the same shall be allowed him in Court.’
    *‘ ‘On the ground of the doubts entertained in this case, I am of opinion to allow the appeal; the complainant first giving bond and security in the amount of double the debt and interest recovered against him by the judgment which was enjoined.
    “Spencer Roane.”
    In this Court, a number of points were made in argument, by Botts, for the appellant, and Call and Wickham, for the appellee ; but, as the decision here turned on a single point, and the doctrine upon it (with the principal authorities relating to it) is sufficiently expressed in the following opinions of the Judges, the arguments of counsel may with propriety be pretermitted.
    Saturday, December 1.
    
      
       Sessions Acts of 1809, c. 11, s. 3.
    
   The Judges pronounced their opinions.

JUDGE TUCKER,

after stating the case, proceeded as follows:

In the case of White, Whittle & Co. v. Bannister’s Ex’rs, this Court appears to me to have laid down the same doctrine with that expressed in Alexander v. Morris, and to have gone the full length of the Chancellor’s reasons for the dissolution of this injunction. The case of Brown’s Adm’x v. Garland, (though an action at law), contains, I apprehend, a direct application of the same principles. These authorities, I conceive, fully support the opinion of the Chancellor; and I will add the strong and pertinent observation of Mr. Wickham in his argument, that if set-offs of this kind were encouraged by the countenance and sanction of this Court, a debtor by bond, or other liquidated demand, who was unable or unwilling to pay his debt, when judgment was recovered against him, would be sure to look out for the most complicated and perplexed claim that he could hear of against his creditor, as that would ensure him a respite of ten or twenty years before the claim could be properly liquidated. The only question before the Court being upon the propriety of dissolving the injunction, I am of opinion the Chancellor’s decree ought to be affirmed.

I desire to be understood as giving no opinion whatever upon any other point in the cause.

JUDGE ROANE concurred in dissolving the injunction.

* JUDGE EEEMING.

This case seems to rest upon the single point, whether the appellant has a right to produce the unestablished claim (however just) of Nicholson, purchased up, for what consideration does not appear, as a set-off against his own bond, long after a suit had been instituted on it?

There are several decisions of this Court which seem expressly against the principle. As White, Whittle & Co. v. Bannister’s Ex’rs and others. In that case the Court . would not allow a judgment against the executors, assigned to the appellants as a set-off against rent due to the estate of their testator; because, said the Court, “if creditors, purchasing from the executors, or as in that case, renting an estate from them, should be permitted to bring forth their claims against the testator, in discount, they might thereby not only gain an advantage over other creditors, but the executors might be involved in the trouble of accounting for the assets on every purchase; and in case of mistakes, might subject themselves to a devastavit. The objection has additional weight where J;he plaintiffs purchased up the debt for the purpose of a discount.” If, in that case, then, a judgment against the executors was not admitted as a set-off, a fortiori, shall an unestablished claim (however just it may ultimately prove to be) be disallowed. The cases of Brown’s Adm’x v. Garland and others, (1 Wash. 221,) and Alexander v. Morris, (3 Call, 105,) go to establish the same principle.

The only case I have been able to find which seems to have a contrary tendency, is that of Hudson v. Johnson; (1 Wash. 10,) but, when examined, it appears very different from the case before us. There the defendant, on the trial of the issue of payment, produced a receipt from the attorney who prosecuted the suit, dated after its commencement, which receipt was allowed as a discount; the defendant having proved, that on application to the plaintiff to know where his bond was, he replied that it was in possession of Lewis, his attorney: but the receipt having been given subsequent to the suit, the Court adjudged to the plaintiff his costs.

I am of opinion that there is no error in the decree before us, dissolving the injunction.

Decree unanimously affirmed. 
      
       1 Wash. 166.
     
      
       1 Wash. 221.