Case ID: ny-super-ct_54/html/0488-01.html
Source: Caselaw Access Project
Author: {"author": "Per Curiam.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

WILLIAM E. STILLINGS, as Assignee, &c., Appellant, v. HUGH SMITH, Respondent.
    
      Set-off of judgments—Action commenced by assignor for benefit of creditors prior to, but judgments rendered thereon subsequent to, the assignment, right as to set-off—Onus of proof as to facts in bar of the motion to set-off.
    
    Judgments for costs recovered by a defendant against an assignor who assigns for the benefit of creditors, subsequent to the assignment, in actions commenced by the assignor previous thereto, may be set off against a judgment for damages and costs recovered subsequent to the assignment, in an action commenced prior thereto by the assignor, against the defendant holding the judgments for costs; it not appearing that there is not sufficient funds in the hands of the assignee to satisfy any lien of the plaintiff’s attorney upon the latter judgment.
    This, although the assignee in nowise identified himself or interfered with the actions in which judgments for costs were obtained.
    
      Facts claimed to constitute a bar to motion to set-off must be shown by the party claiming such bar.
    Before Sedgwick, Ch. J., Freedman and O’Gorman, JJ.
    
      Decided May 18, 1887.
    This is an appeal by the plaintiff from an order of the special term, entered December 11, 1886, granting a motion that two judgments entered in the court of common pleas in favor of the defendant and respondent and against Richard Taylor, the assignor of plaintiff, one.for $279.57 on December 4, 1885, and the other for $82.44 on September 11, 1886, and that $150,40 of a judgment entered in this court in favor of said defendant and against said Richard Taylor for $255.48 on October 16, 1886, making in all, with interest, the sum of $529.30, be set off against a judgment for said last mentioned sum of $529.30, entered in this court on October 22, 1886, in favor of said Richard Taylor, and against said defendant, Hugh Smith, in which action (being the above instituted one) plaintiff has been substituted, and that said judgment last mentioned be cancelled and discharged of record.
    Three actions were commenced by Richard Taylor, plaintiff’s assignor, against the defendant, one in the court of common pleas and two in this court. In the action in the common pleas, and in one of the actions in this court, the defendant recovered judgment for costs. From the judgment recovered against him in the court of common pleas, the said Taylor appealed, and judgment upon the dismissal of his appeal was duly entered against him for costs, making the three judgments in favor of the defendant and against said Taylor, above mentioned, the aggregate of which judgments exceeds the amount of the judgment above mentioned rendered against said defendant by the sum of $105.08. All the actions were commenced before, but the judgments therein were entered subsequent to the assignment for the benefit of creditors made by Taylor, and all the actions were prosecuted to judgment in the name of Taylor, the assignor. Taylor, plaintiff’s assignor, was financially irresponsible. The assignee made affidavit that he had never in any wise identified himself or intermeddled as assignee, or otherwise, with the proceedings or actions in which the judgments were rendered against Taylor, and refused to take the appeal to the general term of the common pleas.
    The court at special term, on granting the motion, delivered the following opinion:
    Ingraham, J.— The plaintiff, in the case of Taylor v. Smith, No. 2, having made' a general assignment for: the benefit of creditors, that judgment became vested in and owned by the assignee. The causes of action in the actions in which judgment was entered in favor of the defendant against the plaintiff, having been by the general assignment transferred to the assignee after the commencement of such actions, the assignee under section 3247 of the Code would be liable for the costs in the like case, and to the same effect as if he were the plaintiff, and the court has power, by order, to direct the person so liable to pay them. The assignee therefore being liable for the judgment entered in favor of the defendant against the plaintiff, and being the owner of the judgment entered in favor of the plaintiff against the defendant, a proper case is presented for a set-off. It does not appear that there is not sufficient funds in the hands of the assignee to satisfy any lien that the attorney for the plaintiff has upon the judgment in action No. 2. Motion should therefore be granted without costs.”
    It was not made to appear in the court below that the judgment in favor of the plaintiff had been appealed from, and that the appeal was pending. Nor was it made to appear that there was not sufficient funds in the hands of the assignee to satisfy any lien the plaintiff’s. attorney might have on the judgment recovered against the defendant.
    
      Archibald C. Shenstone. attorney, and of counsel for appellant, among other things, argued :
    I. There is no authority in the Code or other statutes, enabling the owner of judgments to have them offset under the circumstances of this case. Defendant’s relief, if any can be afforded him, must be sought in equity, and is not available by motion. Swift v. Prouty, 64 N. Y. 545. The right of set-off is only applicable to mutual claims. There is no mutuality between the judgments here. (1) The judgment of plaintiff is for an actual indebtedness, due and owing from defendant to the assignee of the original plaintiff. The judgments of defendant are merely for costs suffered in two independent actions by Richard Taylor, individually, and without the consent or knowledge of his assignee. (2) No right of set-off ever existed as between defendant’s judgments and plaintiff’s, because they were never mutual, i. e., other equities had intervened before both judgments had been obtained. Swift v. Prouty, 10 Hun, 232; Firmenich v. Barr, 1 Ib. 532 ; Taylor v. Mayor, 82 N. Y. 17; Myers v. Davis, 22 Ib. 493. (3) The claim of plaintiff which has passed into a judgment, and against which relief is sought, was assigned and transferred to the assignee by the general assignment of the original plaintiff December 2, 1885, and prior to the recovery of any of the judgments of defendant Smith. Hence, said judgments are not mutual, and never were. “If, before the demand of the party claiming the set-off becomes mature, the opposite claim has been assigned, whether the assignment carries the legal or only an equitable title, the right of set-off no longer exists.” Myers v. Davis, 22 N. Y. 493; Martin v. Kunzmuller, 37 Ib. 400 to 404 ; Wells v. Stewart, 3 Barb. 40; Beckwith v. Union Bank, 4 Sandf. 604, affirmed 9 N. Y. 211.
    n. The court erred in granting the motion ‘allowing the set-off on the grounds stated in the opinion. The assignment of the cause o.f action to make an assignee liable for the costs, must be an absolute assignment. The assignment, as in this case, to an assignee for the benefit of his creditors is not such an absolute assignment as will bring him within the liability for costs under Code § 3247. It is more in the nature of the assignment for a collateral purpose, as was held not to be within the meaning of that section in Dowling v. Bucking, 52 N. Y. 658; Peck v. Yorks, 75 Ib. 421. The case of Columbian Ins. Co. v. Stevens, 37 N. Y. 536, does not apply, because in that case the receiver continued the prosecution of the action after his appointment, while in this case nothing was done by the assignee, nor with his knowledge or approval.
    III. The onus was on the moving party to make out a proper case for set-off. (a) There is nothing to show that the judgments desired to be offset against each other were absolute, final and unappealed from. As a matter of fact the judgment in favor of this plaintiff had been appealed from, and the appeal was then and still is pending. Where an appeal is pending there cannot be set-off. Pierce v. Tuttle, 51 How. 670 ; De Figamere v. Young, 2 Robt. 672; Prouty v. Swift, 10 Hun, 233. (5) Nothing appears in any of the papers showing that at the time Taylor made the general assignment he was the owner of the causes of action in the actions which resulted in the judgments in favor of the respondent. The onus was upon him, such respondent, to prove that those causes of action belonged to Taylor at the time of his assignment to this appellant and passed by such assignment, before he could have them offset against a judgment which it was admitted passed to and was claimed by the assignee, (c) If the court was correct in holding that this was a case in which under Code § 3247 the court could by order compel the assignee to pay the costs, yet it was necessary in order to give the respondent the right on motion to set off his judgments against a judgment which had previously been assigned to this appellant, to first procure an order compelling such payments of costs by the assignee. The court could not pass upon the rights and equities of this assignee as to his liabilities to pay such costs on the motion as made. There should have been a prior, independent motion for such relief.
    IV. The assignment of the cause of action in this action by the original plaintiff, Richard Taylor, to this plaintiff, as his assignee, was an assignment subject to the lien of the attorneys of Taylor, and the rights of such attorneys to such lien should not be foreclosed and cut off by tins motion (Code § 66).
    
      Norwood & Coggeshall, attorneys, and Carlisle Nor-wood, Jr., of counsel for respondent, argued:
    I. Were both parties equally responsible financially, the right to set-off would be clear. Barbour on Set-off, 33; Montagu on Set-off, 6; Baker v. Hoag, 6 How. 201.
    II. That right is much stronger when, as in this case, one of the parties, and that one the party particularly resisting, is financially irresponsible, so that the respondent would be compelled to lose the whole or the greater part of his claim while paying in full that against him. Holbrook v. Receivers Am. F. Ins. Co., 6 Paige, 231; Willard’s Equity, Potter’s ed., Set-off; Simson v. Hart, 14 Johns. 74; Smith v. Felton, 43 N. Y. 420; Davidson v. Alafaro, 16 Hun, 353.
    HI. If, as between the original parties the position contended for in this appeal could not be maintained, what greater right or equity has the plaintiff herein than his assignor could have claimed or enforced ? As assignee he takes the rights, and those only which his assignor had. Burrill on Assignments ; Willard s Eq., Potter’s ed., 467; Murray v. Lylburn, 2 Johns. Ch. 441; Douglass v. White, 3 Barb. Ch. 621; Curtis v. Leavitt, 15 N. Y. 195; Van Heusen v. Radcliffe, 17 Ib. 
      580; Griffen v. Marquardt, etc., 17 Ib. 28 ; Leger v. Bonnaffe, 2 Barb. 475 ; Warren v. Fenn, 28 Ib. 333.
    IV. By making a general assignment for the benefit of creditors, all the causes of action in the actions then pending became vested in his assignee, and the judge below was right in deciding that under section 3247 he, said assignee, became liable for costs as though he were plaintiff, and the court had power to direct him to pay them. Miller v. Faklin, 20 Wend. 630 ; Peck v. York, 75 N. Y. 42.
   Per Curiam.

Upon the facts as they were made to appear on the motion, the order is right and proper. If the appellant could have shown an additional fact, which within the authorities cited by him would have been a-bar to the motion, he should have done so.

The order should be affirmed with $10.00 costs and disbursements, upon the opinion of the learned judge at special term.