Case Name: Clopton's Adm'r v. Morris and Another
Court: Supreme Court of Appeals of Virginia
Jurisdiction: Virginia
Decision Date: 1835-04
Citations: 6 Leigh 278
Docket Number: 
Parties: *Clopton’s Adm’r v. Morris and Another.
Judges: BROOKE, J., concurred.
Reporter: Virginia Reports
Volume: 33
Pages: 397–404

Head Matter:
*Clopton’s Adm’r v. Morris and Another.
April, 1835,
Richmond.
Assignment — Bonds—Set-Off against Assignee -Case at Bar. — N. holding- bonds of C. for $4000 payable at a future day, assigns them to M. and B. and then becomes Insolvent: S. holds a bond of N. to him, for$224f on demand; after N.’s assignment of C.’s bonds to M. and B. but before C. has notice of such assignment, an agreement is made between S. and C. whereby S. assigns N.’s bond held by him toC. and C. gives his note to S. to pay him the amount thereof, six months after the date when C.’s bonds to N. assigned to M. and B. were to fall due; at the time of this agreement between S. and C. they were both apprised of N.’s insolvency, and their purpose was to save to S. the debt which N. owed him, if "by this means it could he saved; and it was understood between them, that if S.'s assignment of N.’s bond to C. should turn out not to be a legal one, or if by reason of any law unknown to either party. C. should be unable to set off N. 's bond assigned him by S. against his own bonds to N. assigned to M. and B. then neither 0. should have recourse against S. on his contract of assignment, nor S. have recourse against 0. on his note for the contents of N.’s bond assigned by S. to him; in an action by M. and B. against C. on his bonds to N. assigned by N. to them, Held, 0. is entitled to set off N. ’s bond to S. assigned by S. to'C.
Demurrer to Evidence — Effect—Waiver and Admissions. — On a demurrer to evidence, the demurrant waives all his own evidence that at all conflicts with that of the other party, .admits the truth of his adversary’s evidence, admits all inferences of fact that may fairly be deduced from that evidence, and submits it to the court to deduce such fair inferences.
Morris and Bullock, assignees of Nicholas, brought three actions of debt, in the circuit court of Buckingham, against the administrator of Clopton on three bonds for 1333 dollars each, executed by Clopton in his lifetime to Nicholas, and by Nicholas assigned to the plaintiffs. The defendant pleaded, 1. payment, generally; and 2. payment by Clopton to Nicholas, before notice of Nicholas’s assignment to the plaintiffs. An issue was made up on the first plea by a general replication to it. To the second plea, the, plaintiffs replied specially, that ^Clopton did not pay the debts to Nicholas before notice of his assignment to the plaintiffs, because the assignment of a bond for 2247 dollars, dated the 27th August 1814, executed by Nicholas to one Scott, and by Scott pretended to be assigned to Clopton on the 11th August 1819, was, in fact, a fraud and collusion between Scott and Clopton, and was not a bona fide real sale and transfer of the bond, but the same was left by Scott in Clopton’s hands, as a deposit, in order that Clopton might endeavour to set off and discount the same, and thereby defraud the plaintiffs of so much of the debts due to them on his own bonds; and so Scott’s pretended assignment to Clopton, was not a real and absolute transfer of the bond, but conditional, collusive and fraudulent, made with purpose to defeat the plaintiffs’ recovery of the debts due them from Clop-ton. The defendant put in a rejoinder, traversing the matters pleaded in the replication, and tendering an issue; which was joined.
The three actions were consolidated by consent. And at the trial of the issues, the plaintiffs demurred to the evidence adduced by the defendant to prove his pleas, and the defendant joined in the demurrer. The evidence adduced on both sides was set out in the demurrer, and was as follows :
The plaintiffs gave in evidence, 1. the thr.ee bonds of Clopton to Nicholas, dated the 16th April 1818, for 1333 dollars each, payable on the 25th days of December 1819, 1820 and 1821; with the assignment thereof by Nicholas to the plaintiffs; namely, his indorsement of his name thereon in blank. And they proved, that these bonds being in their possession, written notice thereof, and of the assignment to them, was given to Clopton, on the 24th August 1819.
2. The deposition of A. Dupuy- — That he delivered the notice of the assignment to Clopton: that Clopton, on that occasion, told the deponent, that he should claim *set-off for the amount of a bond of Nicholas to Scott, which Scott had assigned to him; that he had taken the assignment of this bond from Scott, as an accommodation to Scott; that he had not given a valuable consideration for it, and was not responsible to Scott for the amount, unless he should be able to use it as a set-off against his own bonds assigned by Nicholas to the plaintiffs; *and that in case he should get the set-off, Scott was to wait with him for the amount, or take land in discharge of it.
3. The testimony of C. Yancey — That Clopton told the witness, that Scott had assigned him a bond of Nicholas, and he had given Scott his own note for the same amount; that all he gained was time; that Scott had agreed to give him his own time to pay the money, provided he could succeed in setting off Nicholas’s bond assigned him by Scott, against his own bonds to Nicholas; that he considered himself safe in the transaction; if he made nothing, he was to lose nothing. That the witness afterwards having communicated this conversation to the plaintiff Morris, Morris said he wished to avoid a law suit, and that as Clopton’s whole object was to gain time, perhaps if a longer indulgence than Scott had proposed to give him were offered to Clopton, he might relinquish this scheme of set-off, and pay the plaintiffs their money; and authorized the witness to make such a proposition to Clopton. That the witness accordingly made a proposition to Clopton, that the plaintiffs would give him two years indulgence: Clopton hesitated, but finally declined it; saying, he thought matters had better stand as they were, that he had undertaken to get the set-off, and that when suits should be brought against him by the plaintiffs, he should not consider them as his suits, but should write to Scott to defend them at his own costs, for he would have nothing to do with them.
*4. The testimony of D. Pryor— That some time after the transfer of Nicholas’s bond by Scott to Clopton, Clop-ton told the witness that he was not to be, and could not be, loser by the transaction.
5. The deposition of N. Poindexter; from which it appeared probable, that Clopton’s bonds to Nicholas had been assigned by Nicholas to the plaintiffs, some considerable time before the notice of the assignment was given to Clopton.
6. A general deed of conveyance and assignment by Nicholas to trustees, of all his property, for the benefit of his creditors, dated in August 1819, and acknowledged before magistrates on the 6th of that month. This document proved that Nicholas had then failed, and that Clopton’s bonds to him had been previously transferred to the plaintiffs.
And then the defendant gave in evidence, 1.A bond executed by Nicholas to Scott, dated the 27th August 1814, for 2247 dollars, payable on demand, with interest from the 20th April preceding; and an assignment thereof by Scott to Clopton, expressed to be for value received, dated the 11th August 1819.
2. The testimony of N. Shelton — That he having received news of Nicholas’s failure, communicated the same to Scott, and advised him to endeavour to get the debt due him from Nicholas secured through a debtor of Nicholas in Buckingham; this person, out of delicacy towards Nicholas, declined having any thing to do with the transaction, but informed Scott and the witness, that Clopton was indebted to Nicholas : that, thereupon, the witness and Scott sought an interview with Clopton, with a view to secure the debt due from Nicholas to Scott, if possible: that the witness asked Clopton, whether Nicholas held his bonds; to which Clopton answered he had no reason to believe that he did not — if he had transferred them, he did not know it: that Clopton said, time was an object with him, for he should not be *able to discharge his bonds to Nicholas, as they should fall due, without selling property: that it was then proposed, that the time of payment ot each of Clopton’s bonds to Nicholas should be extended for six or twelve months from the dates they were respectively to fall due; whereupon, an arrangement was concluded, and Scott took a receipt from Clopton, in these words — ! ’Received from D. Scott a bond executed by W. C. Nicholas to said Scott for 2247 dollars, subject to interest from the 20th April 1814, with a credit of 100 dollars on the 27th August 1814. I am to account to Mr. Scott for 1333 dollars on the 2Sth June 1820, and for 1333 dollars on the 2oth June 1821, and for the balance on the 25th June 1822. Given under my hand this 11th August 1819; (signed) B. M. Clopton.” That, after the business was arranged, it was suggested by R. Patteson, and understood and agreed between the parties that in case the assignment [by Scott to Clopton] should turn out not to be a legal one, Clopton was not to be made to pay the money twice. That Clopton had not paid Scott the amount of the bond assigned to him, but would have to pay it, in case the transaction was a legal one. That the witness saw nothing like fraud or improper conduct in Clopton or Scott.
3. The testimony of R. Patteson, who was present at the transaction related by the witness Shelton, and confirmed his evidence. Patteson was a subscribing witness to the receipt of Clopton to Scott, of the 11th August 1819. He testified, that Scott assigned Nicholas’s bond for 2247 dollars, to Clopton, at the same time: that the witness considered the contract to be concluded, and by no means to depend on any future stipulations between the parties; that Scott was bound to Clopton, and Clopton bound to him for what he had agreed to give. That, after the arrangement was made, there was an express understanding, that if by reason of any law unknown to either party, Clopton should fail to sustain *the bond of Nicholas assigned to him by Scott, as a set-off against his own bonds to Nicholas, in that event neither should molest the other, both because each was bound to the other and could not, and because, if they could, neither had the disposition; that that express understanding was made at the witness’s suggestion, to prevent Clopton from becoming uneasy, but the witness considered it as amounting to nothing, for it left the parties where they stood without it. That it was understood at the time, that Nicholas had failed, but it was not known that he had passed away Clopton’s bonds. That the witness believed, that the transaction between Scott and Clopton was perfectly fair, and free from fraudulent intention in either party.
The circuit court held, that the law upon the demurrer to evidence was for the plaintiffs, and gave them judgments for the debts claimed in the declarations; from which Clopton’s administrator appealed to this court.
Stanard, for the appellant,
premised, that if the evidence adduced on the part of the demurrant, was in conflict with that of the other party, as set out in the demurrer to evidence, the demurrant’s evidence must be entirely disregarded, and full credit given to the evidence offered by the other party. Green v. Judith, 5 Rand. 1; Hans-brough’s ex’ors v. Thom, 3 Leigh 147. The state of the case, then, was to be collected from the evidence given for the defendant. And upon that evidence, the case was simply this — Clopton was bound to Nicholas by bonds for debts payable at a future day; he had heard of Nicholas’s failure, but he had no knowledge that Nicholas had assigned his bonds to any other person. Nicholas was indebted to Scott by bond, to a less amount; and for the purpose of securing the debt due from Nicholas to Scott, Scott gave an assignment of Nicholas’s bond to Clopton, expressed to be for value received, and *took Clopton’s obligation to pay him the amount in three in-stalments, deferred for six months, respectively, after Clopton’s debts to Nicholas fell due. After this bargain between Scott and Clopton was concluded, there was an understanding between the parties, that if, by reason of any law unknown to either, Clopton should fail in setting off Nicholas’s bond assigned to him by Scott, against his own debts to Nicholas, neither should molest the other; that is, Scott should make no demand on Clopton’s obligation to him, and Clopton none on Scott’s contract of assignment. And all this was before notice of Nicholas’s assignment of Clopton’s bonds to Morris and Bullock. In this transaction, he said, it was difficult to see any thing illegal or unfair: there was nothing unfair on the part of Scott, unless it was unfair to secure the debt due him from Nicholas, by procuring the undertaking of Clopton to pay it, and giving him indulgence for the payment, as a motive and consideration for the undertaking; nothing unfair on the part of Clopton, unless it was unfair in him to seek such indulgence for a debt from Scott, which he was not sure he could obtain from Nicholas. Clopton acquired, by Scott’s assignment, a legal title in the bond assigned to him. He might certainly have set off this bond against his own bonds to Nicholas, if these had remained in Nicholas’s hands, and he had brought suit on .them; his right to such discount, arose at the time it was assigned to him; and Nicholas’s assignees were bound to'allow the same discount, since it would have been good against Nicholas — to allow all just discounts against their assignor, before notice of assignment given to the obligor. 1 Rev. Code, ch. 125, g S, p. 484. The subsequent understanding, — that, if Clopton should not be able to set off the bond assigned him by Scott, against his own bonds to Nicholas, neither party “should molest the other,” — nowise varied the case: it left the parties, as the witness Pattéson said, where they stood before; for Scott was responsible upon *his contract of assignment to Clopton, and Clopton was responsible on his obligation to Scott, for equal amounts, and if Clopton should be unable to effect the set-off, or otherwise to recover the amount of the assigned bond from Nicholas, the two contracts would extinguish each other. These equities of the parties attached to their respective contracts, and would have followed them into whosoever hands they might pass. It could hardly be doubted, that if Clopton had purchased Nicholas’s bond from Scott, by the payment of the value oi it in cash, at any agreed rate of discount, the bond would have been his property, and he might have set it off against his own bonds to Nicholas. Then, what was the difference, in principle, between paying the value in cash, and giving his obligation to pay it at a future day? The contract of assignment of the bond, too, was supported by valuable consideration ; a consideration moving from Clopton to Scott, in the undertaking of Clopton to pay Scott the amount at a future day; and a consideration moving from Scott to Clop-ton, in the credit given him for the money, beyond that which he was entitled to for the debts he owed Nicholas. In short, he said, the true and the only question on the merits, was, whether Clopton had a right to acquire such a set-off against his bonds to Nicholas, before notice of the assignment of them? If he had such right, he had exercised it, and that honestly and fairly. The issue on the second plea, was made up by the replication and rejoinder; and it was, whether the assignment of the bond by Scott to Clopton was a real and fair transaction, or pretended, fraudulent and collusive? And there was no fact in evidence, that could warrant an inference that the transaction was not really in fact, what it appeared to be on its face, or even a suspicion of fraud, practised or intended.
Johnson, for the appellees,
said, the true rule, with regard to demurrers to evidence, was, that the demurrant admitted the truth of all his adversary’s evidence, and *all inferences of fact fairly deducible from it, and waived all his own evidence which was contradicted by that of his adversary; but he did not waive such of his own evidence as was nowise contradicted by that of the other party. If he did, the practice of setting out the demurrant’s evidence as well as the other party’s, which the settled rule of practice in such cafees required, was idle and nugatory. The de-murrants here, for example, would not have waived the evidence they offered of Clop-ton’s bonds to Nicholas, and Nicholas’s assignment thereof to them, if those points had been put in issue; for there was no evidence on the other side contrary to it. So, it would be found, that the parol evidence adduced by the demurrant, was not contradicted, in the least particular, by the evidence offered by Clopton : the evidence of one party was perfectly consistent with that of the other; there was no question which was true and which false; all might be true; and the question ought to be, what was the true state of the case to be collected from the whole evidence. But he contended, that, in truth, there was no substantial variance, much less contrariety, between the evidence on the one side and the other —that every material fact stated by Clopton to the plaintiffs’ witnesses, touching his transaction with Scott, was fairly, and indeed necessarily, inferrible from the testimony of the witnesses introduced for the defendant; the only difference being, that Clopton stated the circumstances of the transaction to the plaintiffs’ witnesses, somewhat more in detail than it was stated by his witnesses (or rather bjr Scott’s, for he was the real defendant). He entered into a minute examination of the testimony to shew this. But, he said, let the evidence of Shelton and Patteson be taken alone, and construed with due regard to the subject matter. The debt which Nicholas owed Scott being jeoparded by Nicholas’s failure, and Scott’s object being to secure it out of the debt which Clopton owed to Nicholas ; and this being communicated *to Clopton, and he being willing to assist in the accomplishment of it; it was agreed between them, that Scott should assign the debt Nicholas owed him to Clopton, as for value received, that he might use it as a set-off, if he could, against the debts he owed Nicholas; and that Clopton should give Scott his note to pay him the amount, if he could effect the set-off. The assignment was plainly conditional; though it was absolute in form, and expressed to be for value received, and though Clopton’s assumpsit to Scott, to pay him the amount of the bond, was also absolute on its face, yet the contract was, in truth, that if Clop-ton could not effect the set-off, neither was he to have anj' recourse against Scott on his contract of assignment, nor Scott any recourse against him on his undertaking to pay the money. It was truly said by the appellant’s counsel, that, in that case, the two contracts would extinguish each other. And the whole efficacy of the assignment of the bond, thus depending on the condition that it could and should be used as a set-off, the question was, whether the law would step in and perform the condition, allow the set-off, and so make that a real and effectual contract, which otherwise would be wholly ineffectual? Clopton ac quired no title to the assigned bond, by force of the assignment alone; his title to it could only be perfected by the performance of the condition subsequent, namely, making it available as a set-off; which he could never do but in the action against him on his bonds to Nicholas. This was not a just discount against Nicholas, acquired before notice of his assignment to the plaintiffs: the most that could be said was, that the acquisition had been commenced — put in train; but it was not complete, and it never would be, unless this court should allow the set-off. Then, wa°s the purpose a fair one, and such as the law would aid the parties in accomplishing? Nicholas had failed; he had aright, in disposing of his effects, or any part of them, to give a preference *to one creditor over others, and the creditor who should be preferred by him, would have a just right to such preference; and with full knowledge, and indeed in contemplation of this, and with the avowed purpose of securing Nicholas’s debt to Scott, out of Clopton’s debt to Nicholas, whatever disposition Nicholas had made or should make of that portion of his effects, Scott made a assignment to Clopton of the debt Nicholas owed him, and Clopton took the assignment, to be used as a set-off against the debts he owed Nicholas, in order that if the set-off could be effected, the amount of it should be paid to Scott, instead of Nicholas, or any creditor whom he should prefer. What was this but a contrivance to give Scott a preference for satisfaction out of this fund, over any creditor of Nicholas to whom he might give the preference? to anticipate and defeat Nicholas’s right to give such preference, and any preferred creditor’s just right to such preference? He said, a contrivance to defeat the just rights of other persons, of whatever nature they might be, was fraudulent in law; therefore, this transaction was, in its substance and purpose, fraudulent and collusive; and, as it could only be perfected, — as the condition on which its efficacy depended, could only be performed, by the agency of the law,— there was no principle on which the law should lend its aid. The cause had been argued for the appellant, as if the court should look at the outward form of the transaction, and consider nothing but Scott’s absolute assignment of Nicholas’s bond to Clopton for value received, and Clopton’s absolute assumpsit to pay him the amount at a future day; though this view of the transaction was directly contrary to the avowed purpose of the parties, and to their express understanding. But both Scott’s contract of assignment to Clopton and Clopton’s assumpsit to Scott, were simple contracts; and the real considerations on both sides, and all the circumstances, were open to examination, even at law. Indeed, the right of set-off'x'was in its nature equitable, though the statutes authorized the courts of law to administer it. Scott’s contract of assignment to Clop-ton was a mere nudum pactum; there was no real consideration whatever to support it. Clopton had paid nothing for it: he was not bound by his contract, or b3r the law, to pay any thing for it, unless the assigned bond should be available to him as a set-off; if it should not, Scott’s contract of assignment, and Clopton’s assumpsit to Scott, would both be merely void, since ■neither party could have any recovery against the other on either contract. The witness Mr. Patteson understood this; the parties understood and agreed to it. And as to the consideration moving from Scott to Clopton, in the indulgence given to Clopton for payment of the money, for six months beyond the time at which Clopton’s debts to Nicholas were to fall due, and the remission of the interest for the six months; that was no consideration to support Scott’s contract of assignment to Clopton, but, in fact, a premium to Clopton to take the assignment, and to assist in the contrivance for securing the debt Nicholas owed Scott. If Clopton had never told the plaintiffs’ witnesses so, yet it would result plainly from the account of the transaction given by the defendant’s witnesses, that the defence of this set-off, was notCloplon’s defence, but Scott’s; that Clopton could not lose, if the defence'faiied; that Scott alone could gain, if the defence succeeded. The court had only to decide, whether Scott’s claim against Nicholas could be set off by Clopton in this action, for Scott’s benefit, or rather by Scott in Clop-ton’s name? And as the attempt was in its substance unjust, so it was wholly irregular in practice: for the defendant’s plea was payment to Nicholas, without notice of his assignment to the plaintiffs; not a plea of set-off, or of payment, with notice of the particulars of payment or of set-off, as the statute required, 1 Rev. Code, ch. 128, f 87, p. 510. Yet the attempt was to prove a set-off.
*Stanard, in the reply,
said the notice of set-off required by the statute, was waived by the plaintiffs’ replication, which distinctly admitted notice of the intended set-off, and the precise nature of it.
Demurrer to Evidence — Effect—Waiver and Admissions.— The principal case is cited and approved in Muhleman v. National Ins. Co., 6 W. Va. 514; Gunn v. Ohio River R. Co., 42 W. Va. 689, 26 S. E. Rep. 550; Rohr v. Davis, 9 Leigh 34. See monographic note on “Demurrer to the Evidence” appended to Tutt v. Slaughter, 5 Gratt. 364.

Opinion:
BROCKENBROÜGH, J.,
stated the pleadings, and the evidence of both parties set out in the demurrer, and then said — The law as to demurrers to evidence may now be considered as fully settled by the cases cited at the bar, of Green v. Judith, and Hansbrough's ex'ors v. Thom. The practice of inserting in the demurrer, the evidence as well of the demurrant as of the party demurred to, is too well established to be now shaken : but the demurrant waives all evidence on his own part, that conflicts with that of the other party; he admits the evidence of his adversary to be true, and admits all inferences of fact that may be reasonably and fairly deduced from that evidence; and submits it to the court to deduce such fair and reasonable inferences. He thus gives every advantage to the evidence of his adversary; but still, if there is any part of his own evidence which does not conflict with that of the other party, nor with the fair and reasonable inferences from it, the demurrant's evidence will be duly estimated by the court in rendering its judgment. Let us test this case by these principles.
The plaintiffs gave in evidence the three bonds on which the suits were brought, with the indorsement on each of the name of Nicholas the obligee, whose hand-writing they proved; they also proved, that on the 24th August 1819, a written ,notice was delivered to Clopton, the obligor in those bonds, that -they had been regularly transferred by assignment to the plaintiffs, in whose possession they then were. So far, the evidence of the plaintiffs was proper to shew their title to recover, and being in no manner in conflict with the evidence of the . defendant, was entitled to full weight. Whether the *rest of the plaintiffs' evidence, that of their witnesses, Dupuy, Poindexter, Yancey and Pryor, was in conflict with the .evidence of the defendant, I shall presently consider.
The defendant, to support his plea, that Clopton had paid the debt to Nicholas, before notice of Nicholas's assignment to the plaintiffs, — offered in evidence, as a set-off, the bond executed by Nicholas to Scott for 2247 dollars &c. and proved the assignment of that bond by Scott to Clopton, thirteen days before notice was given him of Nicholas's assignment of Clopton's bonds to the plaintiffs. This evidence of set-off would probably not have been admissible under the plea of payment, without an account filed with the plea stating the nature and particulars of the set-off, so as to give the plaintiffs full notice of it, according to the statute, but for the replication, which shews that the plaintiff had full notice of its character, and its amount, and therefore dispensed with the filing of it, or rather admitted that it was filed.
.Further to prove, that the set-off so offered was a genuine one, and that the bond from Nicholas to Scott set forth in the replication was bona fide and for valuable consideration, and not for collusion and fraud, assigned by Scott to Clopton, before notice of Nicholas's assignment of Clopton's bonds to the plaintiffs, the evidence of Shelton and Patteson was introduced by the defendant ; and the evidence of these witnesses is admitted by the demurrant to be true. And what does it prove? That Clopton,, before he had notice of Nicholas's assignment to the plaintiffs, took an assignment from Scott of Nicholas's bond to him; and that he gave his own obligation to Scott for it. Did no valuable consideration pass between them? Yes: Clopton gained the time of six months, on each of the payments which he bound himself to make to Scott, in satisfaction of Scott's assignment to him. Was this a contrivance, between them, to defraud the plaintiffs of a part of their *debt, by obtaining a set-off for the benefit of a third person? It could not be intended to defraud the plaintiffs, because the parties did not know that the plaintiffs held Clopton's bonds. Nor can it be fairly inferred, that there was a design to defraud any one. Clopton gained to himself an advantage, by purchasing the bond from Scott; and this negatives the position, that his intention was to benefit Scott at the expense of others. If it were doubtful whether such was the intention, the court ought not to infer such fraudulent design against the opinion of two intelligent men, witnesses to the transaction, and who are admitted by the plaintiffs to have told the truth. I conclude, then, that the assignment by Scott to Clopton, was a bona fide transaction, and that the latter became thereby the real owner of Nicholas's bond to Scott, and had a right to set it off against the plaintiffs' demand.
There are some parts of the evidence of Dupuy and Yancey, the witnesses of the plaintiffs, which do conflict with the testimony of Shelton and Patteson; not as to the transaction when it occurred, but arising from the declarations of Clopton at a posteriour period. I refer, more especially, to that part of Yancey's evidence, in which he states that Clopton told him, he did not consider the suits as his suits, but Scott's; and that he should insist on Scott's employing counsel to defend them, to pay costs, and manage them as his own, for he should have nothing to do with them. But we are bound to disregard that evidence, because it is in conflict with that which the plaintiffs have admitted to be true. If they had not withdrawn the subject from the consideration of the jury, it is possible, nay it is probable, that that tribunal might, on weighing the evidence on both sides, have decided that it was a collusive, and not a bona fide transaction; it might have rightly so decided; and if so, this is another instance, added to that of Green v. Judith, of the hazard and danger of a demurrer to evidence.
*1 think the judgment should be reversed, with costs; and a judgment entered for the appellees- for the balance due them, after deducting the amount of the set-off, with the costs of the appellees in the circuit court.
CARR, J.
The settled rule, with respect to demurrers to evidence, is, that the court must reject all conflicting evidence on the part of the demurrant, take for true all the evidence demurred to, and draw all inferences from it, which a jury might fairly draw. We are to take the facts proved by the evidence of the defendant, without regarding any countervailing evidence adduced by the demurrant. The question is, whether the bond of Nicholas assigned by Scott to Clopton, was a good discount against Clopton's bonds to Nicholas, in the hands of the plaintiffs, his assignees? The transaction between Scott and Clopton, took place several days before notice of Nicholas's assignment to the plaintiffs was given to Clopton; and if it vested in Clop-ton a right to the assigned bond, there can be no doubt that it was a good discount, both under the plain words of the statute, and according to numerous decisions of this court. Scott's assignment to Clopton was absolute, and it purports to be for valuable consideration ; and a valuable consideration was in fact given for it, in the written as-sumpsit of Clopton to Scott, though, I presume, this last fact is matter of no moment, in the question of set-off; for though it had been given to the assignee, the bond in his hands would be equally biding on the obligor, and equally a discount against his own bond to the obligor. But the subsequent understanding and agreement are said to vary the case. They certainly could not affect the power of the assignee over the bond: he might have sold it, destroyed it, assigned it away; and, in either case, must have accounted lor it under his written promise. Many of our cases decide, that the assignee of a bond is in no better situation than the obligee, *in case of any discount or equity affecting him. If Nicholas himself had sued on these bonds of Clopton, and Clopton had offered this discount, could he have resisted it? I cannot see on what possible ground. The amount of the subsequent agreement, was merely, that if by any 3aw unknown to the parties, the assignment should be pronounced invalid, Clopton should not be exposed to a double payment. But there was no such law ; this subsequent understanding was perfectly nugatorjq and could have no effect, to invalidate the assignment. It was founded in the caution and ignorance of the parties. They intended, the one to sell and the other to buy the bond, with the express view of setting it off against the debt for which Clopton had given his bonds to Nicholas, knowing, at the same time, that Nicholas had failed, and that this was the only mode in which the bond could be made available. But although they knew that no notice had been at that time given to Clopton, of any transfer of his bonds by Nicholas, they did not know, but there, might be something else, some matter of fact or law, which might render the assignment invalid; and they provided for that event; a provision wholly idle, both because the assignment was good and lawful, and because if it had not been, the law made the very provision, which the parties undertook to make. I think the judgment should be reversed, and entered for the defendant on the demurrer.
CABEEL, J.
I am of the same opinion. The real issue between the parties was, whether the bond of Nicholas to Scott was actually and bona fide assigned by Scott to Clopton, before the latter had notice of the assignment of Clopton's bonds to the plaintiffs? I shall not go into a minute examination of the evidence of the defendant set •out in the demurrer. I am satisfied, beyond a doubt, that that evidence, unopposed by the evidence of the plaintiffs, proves an actual, absolute *and bona fide assignment to Clopton, of the bond executed by Nicholas to Scott, before notice of the assignment of Clopton's bonds. And if there be, in the plaintiffs' evidence, any thing calculated to make a different impression, that evidence being contrariant to the evidence of the defendant, must be disregarded, according to the established law in relation to demurrers. In every action by the assignee of a bond, the defendant is allowed to avail himself, by way of discount, of every right acquired before notice of the assignment, in the same manner, and to the same extent, as if the bond had not been assigned, and as if the action had been in the name and for the benefit of the obligee. Now, if this action had been brought by Nicholas himself, and for his own benefit, no one, I think, could doubt, but that, on the evidence adduced by the defendant, the judgment ought to have been in his favour.
BROOKE, J., concurred.
TUCKER, P.
Upon looking into this record, I think the question arising out of it lies within a very narrow compass. On the one hand, it is beyond question, that the assignee must allow all just discounts, not only against himself, but against the assignor before notice of the assignment was given to the defendant. On the other hand, it is, I think, equally clear, that discounts mean counter demands of the defendant himself against the plaintiff; that they do not embrace demands of third persons against him, and that such demands are not within the meaning of the statute. Therefore, where the defendant offers a discount of a bond or note of the assignor to a third person, he must shew that he is the owner of that bond or note; and without such ownership, he cannot be entitled to the discount; for without it, he could not maintain an action; and a set-off or discount is but a substitute or a cross action. *Indeed, without the ownership, payment to the party claiming the discount, would be no discharge, as against the real owner; and, whether the payment be in cash, or in a credit by way of discount, the obligor in the discounted note would be equally exposed to the action of the owner, notwithstanding the discount or payment to the other party. Then, the only question is, whether Clopton or Scott was the real owner of the bond of Nicholas to Scott, which purports to have been assigned to Clopton, about thirteen days before Clopton received notice of Nicholas's assignment of his bonds to the plaintiffs?
I cannot perceive any reasonable ground to doubt, that Clopton, by that assignment, became he owner of the bond. There was an express assignment made by Scott to him, which passed the ownership, whether we consider it the legal or equitable title. Scott could never set up the legal title (if he retained it, according to the case of Garland v. Richeson, 4 Rand. 266, to which decision I refer, though my reason has never been convinced by it) against the person to whom he had actually assigned for a valuable consideration; and the obligation given to Scott by Clopton was a valuable consideration. If, therefore, Clopton had assigned over to another, Scott would have been bound; so, if Nicholas had paid the' money to Clopton, Scott would have been barred; or if Clopton as assignee had sued Nicholas, the judgment would have been a bar to any subsequent claim of Scott. So too, upon the plea by Nicholas of no assignment by Scott to Clopton, it is obvious, the evidence in this record would have negatived the plea, there having been an actual assignment for valuable consideration.' Nor, in this view of the subject, does it make any difference, that it was understood that Clopton might return the bond, if he could not get the discount; for this is not only what the law would in effect have declared, without the agreement, but moreover, *it was a privilege given to him which he might waive, and the existence of which, for that reason, could not impair his complete ownership of the property. Clopton, then, was the owner of the property. He had a complete title to demand payment from Nicholas, and had Nicholas sued him, would have had a complete right to set off this demand in that suit. And if so, he had the same right to set it off against the plaintiffs' demand, as he obtained the complete right to the set-off before notice of the assignment.
The objection, however, seems to be, that, as in the event of his failing to get the discount, he might return the bond to Scott, Scott was still interested, and he was not so. But Scott would have been interested, independent of this agreement; for as he did not assign without recourse, he' was liable as assignor. If, therefore, the existence of an interest in the assignor, would be fatal to the discount, no defendant could avail himself of an assigned bond by way of discount, unless he took the bond without recourse; a proposition which, I presume, will not be contended for. And as to the supposition that Clopton was not interested, that is negatived by the transaction. He was to pay full value, it is true, and he has not yet paid up the consideration. But in case the discount was allowed, he was to get time; and "time is money'' in the eye of the law, as well as in the estimation of the sage. Forbearance to sue, is a sufficient consideration to support an assumpsit; for the forbearance may be an inconvenience or risque to the creditor, and is generally an advantage to the debtor; and these are ample considerations. In this case, Clopton's interest was deep and direct. If the discount was not allowed, there would be an instant judgment against him for his whole debt. If the discount was allowed, that judgment would be avoided, and he would be only bound to Scott for payment in easy instalments. The first might bring inevitable ruin *to his affairs; the last would relieve him from a destructive pressure, and enable him to pay off his debt without distress. Is not this an interest? Would not this be a profit to Clopton? And shall he be compelled to relinquish it? Shall he be deprived of it, when he purchased it before notice of the assignment to the plaintiffs? Had he actually paid the consideration, had he purchased the bond at a large discount from Scott, I presume, it would not be contended, that he should be defied his discount, when he procured the assignment prior to notice. The statute was intended to protect and preserve the rights of a debtor, who purchases fairly before notice of assignment. But it does not protect a right or interest of one description, more than another. It protects the defendant's right in this case, to have the benefit of his contract with Scott for time, as much as it would have protected his right to the money, had he actually paid up to Scott the consideration money for the assignment. As to the alleged fraud, and want of bona tides, I see nothing of it.
Judgment reversed; and judgment entered for the appellees, for the debts in the declarations demanded, to be discharged by the payment of 990 dollars, with interest &c. that being the balance of the debt due by Clopton on his bonds to Nicholas assigned to the appellees, after discounting therefrom the amount, with interest, of Nicholas's bond to Scott assigned to Clop-ton.