Case Name: Jeduthan Cobb against Henry Haydock and Son
Court: United States Circuit Court for the District of Connecticut
Jurisdiction: United States
Decision Date: 1810-04
Citations: 4 Day 472
Docket Number: 
Parties: Jeduthan Cobb against Henry Haydock and Son.
Judges: 
Reporter: Day's Reports
Volume: 4
Pages: 472–474

Head Matter:
Jeduthan Cobb against Henry Haydock and Son.
April, 1810.
A. and B. gave a joint promissory note payable to C. or order; and soon afterwards, C. gave a note for a smaller sum to A. only. While both notes remained unpaid, C. assigned the first mentioned note (to I). who had no notice of C.’s indebtedness to A. Part of the amount of the note assigned was applied inpayment of a precedent debt from C. to D. and for the residue goods were taken up by C. at the time. B. was present at this transaction, assented to the assignment, and said the note was good and would be paid. Afterwards/?. became insol-rent, and D. brought a suit the^narne*5 of C. and recov-eredjudgment against A. for mount.** C? at" so being insolvent, A. brought a bill in chancery for a set-off of C.’s note to him against such judgment. The court held that A. was not entitled to a set-off either in equity or at common law, and dismissed the bill with costs. ⅜
THIS was a bill in chancery praying for a set-off.
The case, as it appeared from the bill and answer, was as follows: The respondents recovered judgment, before this court, at this term, against the complainant in a suit in the name of Stephen Howard, brought on a promissory note for 1,016 dollars and 68 cents, executed by the complainant and Ashbel Stanley, dated the 24th of February, 1796, payable to Howard on the 1st of October following, with interest after six months. On the 22d of December, 1795, the respondents sold goods to Howard to the amount of 37\l. 9s. 1 Od. JVew-York currency, on credit; and on the 26th of April following, they received from him said note in payment, it being agreed that the surplus should be paid in goods at that time, which were accordingly delivered. Stanley was present at this transaction. One of the respondents asked him if the note was good, and would be paid; to which he answered in the affirmative, observing that he was as willing to pay it to them as to any one. Soon after the assignment of the note, the respondents directed their clerk to give notice to the complainant, which they believed was done without delay. The complainant, however, denied having received notice of the assignment until October, 1796.
On the 24th of March, 1796, Howard being justly in- . debted to the complainant m the sum of 100/. lawful money of Connecticut, to secure the payment thereof eave his promissory note for that amount, payable to the ° r complainant, on demand, with interest after 14 months, On the 1st of April, 1796, Howard became insolvent, and absconded, having never paid any part of this note; Stanley is a certificated bankrupt; and the complainant has no remedy at law that will be available.
The respondents, at the time they received the note first mentioned, had no knowledge of Howard's indebtedness to the complainant, or that he had ever given him a note as above stated. They avowed their intention to sue out execution on the judgment against the complainant.
The bill therefore prayed the court, as a court of chancery, to decree that said sum of 100/. and interest may be set off and applied in part satisfaction of said judgment, and to grant an injunction for a stay of proceedings.
J. T. Peters, for the complainant,
contended, that the court ought to decree a set-off in this case, on the principle that an assignee takes a note subject to the same equity to which it was subject in the hands of the assignor. Haydock ⅛* Son had no more right here than Howard would have had if he had retained the note. In that case, there could not have been a question as to the complainant’s right of set-off. The case of Mitchell V. Oldfield, 4 Term Refi, 123. was cited.
Daggett, for the respondents,
said, that a note executed in Connecticut, and negotiated in JVew-York, might, in the state of JVew-York, be sued in the name of the as-signee. Lodge v. Phelfis, 1 Johns. Cas. 139.
Stanley told Haydock Ct Son, at the time of the assignment, that the note was due, and he was willing to pay it. The declarations of Stanley are to be imputed to Cobb. The acknowledgment of one copartner saves a debt out of the statute of limitations. Whitcombe y. Whiting, Doug. 652.
Set-offs are made only in case of mutual debts bettoeen the same fiarties. This is true in chancery as well as, at law. Rx parte Ockenden, 1 Atk. 237.
If I have a note against B. and afterwards execute a note Paya^le to him or order, that he may sell it and raise money, and yet neglect to deduct my own note . against him, it is more equitable for me to pay the note thus sold, than for the assignee to lose it.

Opinion:
Livingston, J.
delivered the opinion of the court. In deciding this cause we shall have no reference to the case of Lodge v. Phelfis. Who has the greatest equity to this money, Cobb or Haydock isf Son ? The note in question is a joint note against Cobb and Stanley. Before receiving an assignment, Haydock & Son consult Stanley, and are assured that the note will be paid. Haydock isf Son then sell their goods on the specific security of this note. Cobb stands in a different situation. He trusted to the personal security of Howard. The equity of the case is most clearly in favour of Haydock (sf. Son. But if this case were to be decided at common law, the result would be the same. Here is a joint note against Cobb and Stanley. Honiara!⅛ note to Cobb alone could not have been set off at law against the note of Cobb and Stanley to him, if no assignment had been made. The note of Howard is not reduced to judgment; and therefore the case of Mitchell v. Oldfield does not apply.
Bill dismissed with costs.