Court Opinion

ID: 6641859
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:46:17.993369+00
Date Added: 2024-06-11T15:59:16.150241
License: Public Domain

Gantt, J.
This is an action in equity to set-off one judgment against another. The plaintiff avers that on the 27th day of December, 1872, he recovered a judgment against the defendant Clark, which remains unsatisfied, and that on the 3d day of January, 1873, the defendant Clark recovered a judgment against him; that the defendants refuse to set off this judgment against the plaintiff’s judgment, and plaintiff therefore prays that the set-off may be made. The defendant McCandless answers the plaintiff’s petition, and avers, that at the commencement of his action, the plaintiff procured an order of attachment to be issued and levied on the property of Clark, and that the defendant Clark employed him to procure the discharge of the attachment, and as compensation for his services, Clark *166agreed to assign, and did -assign to him the undertaking given by plaintiff to procure the issuance of the order of attachment; that the action upon the undertaking was for his sole use and benefit, and that he was the owner of the judgment, and the cause of action upon which the judgment was obtained. To this answer the plaintiff demurs on the ground that the answer does not state facts sufficient to constitute a defence to the plaintiff’s petition. The demurrer was overruled by the court below, and judgment of dismissal, and for costs was rendered.
The demurrer admits all the facts stated in the answer, and by this admission, it appears that before the plaintiff had established his claim against the defendant, Clark, by judgment, and before any right of action had accrued to the defendant, Clark, on the undertaking given by plaintiff to procure his order of attachment, the defendant, Clark, had assigned all his interest in the instrument to the defendant, McCandless, who accepted the same as compensation for his services in procuring the discharge of the attachment. This was an assignment of an instrument upon which a cause of action might or might not accrue; a cause of action afterwards did accrue upon the instrument, but at the time and before the right of action accrued, it was the property of the defendant, McCandless.
Now is the plaintiff entitled to have so much of his judgment set off against the judgment recovered in the name of Clark, as shall be equal to it and thereby extinguish said judgment? By section thirty-one of the code, it is only provided that in an action by the assignee of a thing in action, his action shall be without prejudice to any set-off now allowed/ but negotiable instruments transferred upon good consideration before due, are not subject to set-off. This section, however, simply gives the right of set-off in an action by the assignee, and limits the set-off to such as is now allowed. Section one hundred and four provides that the set-off can only be pleaded in an *167action founded on contract, and must be a cause of action arising upon contract, or ascertained by tbe decision of the court. At common law a set-off is not allowed. Ross and Ricker v. Johnson, 1 Handy, 388; but the defendant was entitled to retain or claim by way of deduction all just allowances or demands accruing to him, or payments made by him in respect of the same transaction or account which formed the ground of action. But this was not a set-off, in the strict legal sense of the word, because- it was not in the nature of a cross demand or mutual debt, but a deduction rendering the sum to be recovered so much less. 1 Chitty’s Pleadings, 601.
Set-off, therefore, as a right demandable can only be applied to the purposes for which it is conferred by statute; and this statutory right extends only to actions founded on contract, and not to mutual judgments. Hence, as the code gives the right of set-off, only in actions founded on contract, an application to set off mutual judgments is not a statutory right. •
The power, however, to do so is an inherent one in the court, and not being conferred by statute, it is not a legal power nor its exercise demandable of right; it is discretionary, and the propriety of its exercise must be determined from all the circumstances of each case in which the set-off is sought to be made. Burns v. Thornburg, 3 Watts, 88. Holmes v. Robinson, 4 Ohio, 91.
The application being one addressed to the discretion of the court, it will be exercised so as to do equity, and not sanction fraud or inflict injury. “But in order to warrant the set-off, it seems to be well settled that the actual debts must exist in the same right.” Holmes v. Robinson, supra. Duncan v. Lyon, 3 Johns Ch., 351.
But in the case at bar, the payments are not mutual and do not exist in the same right. The one is owned by the plaintiff, and the other by the defendant, McCandless; *168and for this reason, and in view of the fact that McCandless for a good consideration became the owner of the instrument, the subject matter of his action, before it became a ground of action, and therefore acquired an equity equal to if not superior to the claim of the plaintiff, it seems clear a court of equity should refuse • the application of the plaintiff.
But it seems clear that the defendant, Clark, never had a cause of action, or such tangible interest in the instrument which could, under any circumstances, be made the subject of, or become subject to set-off. And hence, whether we consider the case as one purely in equity, or in the light of an attorney’s lien, I think that McCandless has a superior equity to that of the plaintiff in the subject matter of the action. In Shapley v. Bellows, 4 New Hampshire, 353, it is laid down as a general rule of law that an attorney has a lien upon a judgment to the extent of his reasonable fees and disbursements in the suit in which it was obtained, and that this right of lien is paramount to any rights of the parties in the suit, or to any set-off.
Again, although Swan in his Treatise seems to argue that unliquidated damages may be made- the subject of set-off, under almost any circumstances, under the statutory right, yet I could not find one case in Ohio which goes to the extent of his view of the statute; but on the contrary I find in Evans v. Hall, 1 Handy, 434, it is held that a claim for unliquidated damages is not the subject of set-off. And I think the weight of authority clearly establishes the rule of law that a claim sounding merely in damages, the recovery of which is still uncertain, or a claim which arises ex delioto, cannot be the subject of set-off. Jones v. Grew, 1 Blackf, 191. Wright v. Smith, 3 Watts. and Serg., 534. Sherman v. Ballou, 8 Cow., 309. Hopkins v. Megguire, 35 Maine, 80. McCracken v. Elder, 34 Penn. State, 239. Hackett v. Connett, 2 *169Edwd. Ch., 72. Edwards v. Davis, 1 Halst., 104, 390. Nims v. Rood, 11 Vermont, 96. Tribble v. Taul, 7 Monroe, 455. McKinney v. Bellows, 3 Blackf., 31. Dyer v. Dewy, 1 Gill, and John, 440. Burgess v. Tucker, 5 Johns, 107.
In Duncan v. Dyon, 3 Johns Ch., 358. Chancellor Kent says, “ that to authorize a set-off the debts must be between the parties in their own right, and must be of the same hind or quality, and be clearly ascertained or liquidated * * * and courts of law and equity follow the same general doctrines on the subject of set-off.”
In any view of the case, the judgment of the district court was right and must be affirmed.
Judgment aeeirmed.
Me. Justice Maxwell concurs.