Case Name: THOMAS N. NAUDAIN v. JAMES M. ORMES AND J. STANLEY JONES
Court: Supreme Court of the District of Columbia
Jurisdiction: District of Columbia
Decision Date: 1881
Citations: 3 MacArth. 1
Docket Number: No. 9765
Parties: THOMAS N. NAUDAIN v. JAMES M. ORMES AND J. STANLEY JONES.
Judges: 
Reporter: Reports of cases argued and determined in the Supreme Court of the District of Columbia (District of Columbia - reported by Mackey)
Volume: 10
Pages: 1–4

Head Matter:
THOMAS N. NAUDAIN v. JAMES M. ORMES AND J. STANLEY JONES.
Equity. —
No. 9765.
AYhen a judgment creditor is indebted to the complainant upon certain promissory notes, and the complainant asks that such judgments may be set off against the amount due him upon such notes, it is necessary to allege in the hill of complaint filed for that purpose that such judgment creditor is insolvent, or to aver some other fact or circumstance which prevents the complainant from having an. adequate remedy at law for the recovery of the amount due on his-notes.
STATEMENT OE THE CASE.
Demurrer to bill of complaint. The facts stated in the bill are substantially as follows:
The plaintiff was the owner and holder of two promissory notes, dated August 26,1872, made by the defendant Ormes, payable to the order of and endorsed by the other defendant, Jones. They were transferred, before maturity, to the plaintiff, and demand of payment and notice of dishonor were waived by the defendant Jones, the endorser. The notes were secured by trust deeds on real estate in the city of "Washington. The notes not being met at maturity, the property was advertised and sold under the powers contained in the deeds of trust, and the proceeds were not sufficient, by the sum of $1,836.57, to pay the notes. The property was bought at the sale by the plaintiff, who now owns it.
That oue Mary E. Godey, tire executrix of the last will of William H. Godey, about the 26th day of September, 1873, recorded a judgment against the defendant Ormes in the sum of $342.18, and afterwards duly sold and assigned the same to Jones, which assignment was entered of record. That the said judgment was recovered prior to the recording of said deeds, and thereupon became a lien upon said property.
That Jones is the owner of said judgment, and refuses to permit the said judgment to be credited upon the amount due from him to plaintiff upon the notes, and threatens to issue a writ of execution to be levied upon said property, and complainant fears that if he should institute proceedings upon said notes, Jones would sell and transfer his interest in said judgment to defeat the application of the amount of said judgment as a credit upon the amount due from Jones upon said notes. The complainant is willing that the amount of said judgment, interest and costs, may be credited upon the amount due him from Jones.
The complainant prays a judgment for the amount due him upon the notes; that Jones be restrained from assigning or selling said judgment, and that the amount of said judgment may be credited upon the notes.
The defendant Jones interposed a demurrer to the bill of ■ complaint, and for cause show'ed as follows:
That the plaintiff' is not entitled upon said bill to the relief .prayed for, because he had adequate remedy at lawq and because he hath not, by said bill, made or stated such a case as entitles him in a court of equity to any discovery, or to any relief against him, as to the matters and things in said bill contained.
The special term allowed the demurrer and entered a decree dismissing the bill as to Jones. From this decree the plaintiff appealed.
Enoch Totten, for complainant, submitted the following points and authorities:
1st. If the bill were considered deficient in that it does not allege the insolvency of Ormes and .Jones, an opportunity should he given to correct such deficiency by amendment. The records of this court clearly show such insolvency.
2d. The Godey judgment is perfectly good, and undoubtedly forms a prior lien upon the property. It would be inequitable to permit J ones to collect or sell this judgment, and thus avoid the application thereof to the debt due from him to plaintiff. Our statute permits the law court to set off “ mutual debts, * * * whether the said debts be of the same or a different-nature.” (Rev. Stats. Dist. Col., 96.) Equity usually follows the law in regard to set-off; but where the equities of the case justify it, equity courts will go beyond the law in order to do justice between the parties. (2 Story Eq. Jur., see. 1436; Williams v. Davies, 2 Simons R., 461; Simpson v. Hart, 1 John. Ch., 80; S. C., 14 John., 63.)
James S. Edwards, for defendant Jones.
Equity will not restrain proceedings under a judgment on the ground of a set-off in respect to distinct and unconnected debts, in the absence of any other circumstances calling for the aid of a court. (Dade v. Erwin’s Ex’rs, 2 How., 383.)
The mere existence of cross-demands is not of itself sufficient to constitute an equitable set-off, or to warrant an injunction; and a court of equity will not, on the ground of an open and unsettled account between the parties, restrain a judgment creditor from profiting by his judgment. (Rawson v. Samuel, 1 Cr. &Ph., 161.)
A set-off or counter-demand, acquired after verdict, though greater than the amount of the verdict, will not authorize an injunction against the proceedings, since it would be manifestly unjust that the plaintiff should be delayed or hindered in obtaining the benefit of his verdict by interposing a claim not yet established by law. (White v. O’Brien, 1 Sim. & Stu., 551. See, also, High on Injunctions, p. 85, and others.)

Opinion:
By the Court :
There is no allegation in the bill that the defendants are insolvent, or .that J ones is not in a condition to pay the balance due tbe complainant upon the notes; neither is there any averment, such as fraud or mistake, which would confer equity jurisdiction or prevent the complainant from collecting the balance due upon his note by an action at law. For ' aught that appears upon the face of the bill, the remedy at law is full and adequate. The decree below was, therefore, right. It. has, however, been suggested at the bar that the notes are now outlawed and the defendants insolvent, and an opportunity is asked to amend the bill of complaint so as to set forth the circumstances necessary to supply the want of equity in its allegations. The order of the court will be to affirm the judgment, but to remand the cause to the special term, with leave to the complainant to amend his bill in the respect just mentioned.