Court Opinion

ID: 6423149
Source: CourtListenerOpinion
Date Created: 2022-06-25 12:01:40.481326+00
Date Added: 2024-06-11T15:51:51.893032
License: Public Domain

Devens, J.
The defendant, in answer to the action brought in the name of the plaintiff, but for the benefit of Rice as assignee thereof, upon a judgment obtained by the plaintiff against him, relies upon the St. of 1883, c. 223, § 14. The first clause of this section provides that “ in actions at law in the said courts, the defendant shall be entitled to allege as a defence any facts that would entitle him in equity to be absolutely and unconditionally relieved against the plaintiff’s claim or cause of action, or against a judgment obtained by the plaintiff in such action.”
This answer alleges that, at the time the judgment in the original suit was obtained, the note there sued, which was signed by him, and upon which Rice was either co-promisor or indorser, had been actually paid by Rice, as the plaintiff well knew. It further alleges that the judgment had not been assigned to Rice, and that Rice had held, as collateral security, fifty-two shares of stock intended to be transferred to the nominal plaintiff, which in fact had never been transferred, *280but which had been wrongfully converted by Rice to his own use, and thus that it would be inequitable and unjust that the judgment against the defendant upon the note should be collected from him. The purpose of the statute was not to create any new equitable defences in addition to those already existing, but to permit a defendant in an action at law to avail himself of those which were recognized by courts of equity, and thus relieve him from the necessity of initiating a new procedure in order to obtain the benefit of them. That a defence should be established under it, such defence must be one within the rules and principles of equity jurisprudence.
A court of equity will interfere, undoubtedly, to restrain a party from executing a judgment when facts appear showing that it would be against conscience that he should do so, of which facts the injured party could not have availed himself in a court of law, or of which he might have availed himself, but which he had been prevented from doing by fraud or accident, unmixed with any fraud or negligence in himself or his agents. Marine Ins. Co. v. Hodgsen, 7 Cranch, 332. Hendrickson v. Hinckley, 17 How. 443. Embry v. Palmer, 107 U. S. 3. The defendant, in now asserting that the note on which judgment was recovered against him was then paid, presents no different inquiry from that which was involved in the original suit. The plaintiff then asserted the note to be unpaid. He practised no fraud, and if this assertion was untrue, the defendant had then the opportunity to controvert it, as it was the precise issue in the case. Nor is there anything to indicate that it would be unconscionable that the plaintiff should enforce his judgment for the benefit of Rice. The note on which it was founded was given by the defendant, on full consideration, which he actually received, although he transferred it as collateral security immediately thereafter. He made no answer or appearance in the cause, and was defaulted. It was his own duty to have paid the note, and he had not done so. Even if the note had actually been paid by the indorser, so that an action should more properly have been brought by him, rather than by the holder, for money advanced for the payment of the note, of which the defendant has only recently become aware, he shows no reason why, equitably, this judgment should not *281be enforced. He was subjected to no deception, he made no inquiries, and took no pains in the matter, and he has lost no rights unless he has been deprived of some defence which he might make in a suit brought by Rice in his own name, which we will presently consider.
The answer that Barton, the nominal plaintiff, has never assigned his judgment to Rice, and that the defendant is entitled, equitably, to a set-off against Rice, are apparently inconsistent. If there was no such assignment, there can be no off-sets or equities between Rice and the defendant to be considered, and against Barton the defendant asserts no defence except that which we have just considered. As the plaintiff alleges that he has assigned the judgment to Rice, and that this suit is brought for Rice’s benefit, we consider whether the defendant now presents any off-set or defence which should prevent Rice from recovering. He avers that Rice received from him fifty-two shares of stock, including the ten shares for the purchase of which the loan was made, which were to be delivered to Barton as collateral security for the payment of the note; that in fact they never were delivered to Barton, but that Rice retained them and wrongfully surrendered the certificates of this stock, which had been indorsed in blank by the defendant, and took out new certificates in his own name. Inasmuch as the note was to be paid by the defendant, if the stock were still held as collateral security for such payment, and was delivered for this purpose to Rice, the defendant, before paying the judgment, has no right to demand possession of it nor an accounting for it. Fisher v. Fisher, 98 Mass. 303. If Rice has wrongfully sold it, the plaintiff may have a claim for damages against him, but it is one which before liquidation he cannot set off against the judgment on the note. A claim for unliquidated damages, it is well settled, is not the subject of a set-off. Loring v. Otis, 7 Gray, 563. Barry v. Cavanagh, 127 Mass. 394, and 130 Mass. 436.
The defendant, in his answer, avers that “ it is not equitable or just that said Rice should have and retain all of this defendant’s said stock, including said ten shares, for payment of which said note was given, and still seek to recover of the defendant, in addition thereto, the full amount of said note, and the *282defendant claims and prays for all his rights in equity in the premises.” But he does not allege that Rice is not entirely responsible, so that he can recover the stock, or full damages therefor, if it is not returned to him when the judgment on the note which it was his duty to pay has been paid, nor does he here tender the amount due upon it so as to entitle himself to a return of the collateral security.

Judgment on the verdict.