Court Opinion

ID: 6143649
Source: CourtListenerOpinion
Date Created: 2022-02-05 14:47:47.636295+00
Date Added: 2024-06-11T08:54:45.767153
License: Public Domain

Brady, J.
The case of Keep v. Lord, (2 Duer, 78), which was not cited on the argument, is decisive upon the questions *279involved in this appeal, unless it be held that the plaintiff stands in precisely the same condition as the assignor, or in other words, unless it be held that this is an action in effect by the assignor himself. Judge Bosworth has, in the case referred to, fully and ably reviewed the cases bearing upon the doctrine of equitable set-offs submitted on this appeal, and has arrived at the conclusion that it does not apply in such a case as this. He has based his decision, however, upon the ground, among others, that it is not a suit between the assignor and the defendants, but between the assignee and the defendants, treating the assignee as a bona fide purchaser, or at least as a person who could not be affected by a set-off which would be good against his assignor. And herein, in my judgment, lies the error in the conclusion at which he arrived. The debt in the case of Keep v. Lord, set up by the defendant as a set-off, became due prior to the debt sued upon, and such is the case here. The defendant’s set-off was due prior to the claim prosecuted by the plaintiff. If the assignor were the plaintiff, the set-off would be valid under the statute, and such would have been the case if the assignor had been the plaintiff in Keep v. Lord. In that case, however, the question whether the assignee for the benefit of creditors is a bona fide purchaser, or can be regarded as other than a mere representative of the assignor, does not appear to have been considered. It seems to me, on principle, that he cannot be considered as a purchaser. He parts with nothing, and the cestui que trusts neither yield a security nor give a new consideration. Root v. French, 13 Wend. 570; Coddington v. Bay, 20 John. 651; Clark v. Flint, 22 Pick. 231. He is the agent or trustee appointed to gather the estate of the assignor, and distribute it among the creditors in the manner directed by the assignment. He takes the place of the assignor in reference to the estate, and when he enforces a claim, does it not as a purchaser innocent or bona fide, but as the attorney or trustee of the assignor, standing in his place, enforcing his rights only, and being entirely devoid of any personal or private interest or title. The creditors are not parties to the deed of assignment. They *280are under no obligation to conform to its provisions or accept its benefits, and as between them and the plaintiff there is neither privity of contract nor privity of estate. The assignee occupying the position stated, whatever would be a defence against his assignor, would be a defence against him, and the existence of a demand in favor of the defendant, due at the time the debt matured against him, would be a set-off under the statute. I ■ consider the following cases illustrative of the rule that a general assignee of a debtor in failing circumstances stands in precisely the same condition as the debtor himself. Frow v. Downman, 11 Ala. 885; Clark v. Flint, 22 Pick. 231; Knowles v. Lord, 4 Whar. 507; Leuckenbach v. Breckenstein, 5 W. & Serg. 149; Leger v. Bonaffe, 2 Barb. S. C. 475; In re Howe, 1 Paige, 128; Haggerty v. Palmer, 6 Johns. C. R. 437; Pierson v. Manning, 2 Mich. (Gibbs) 453. Sergeant, J., in Knowles v. Lord, says that a voluntary assignment by a debtor has never been considered as placing the assignee in any other situation in point of equity than the assignor; and in Pierson v. Manning, the doctrine that such an assignee was in legal contemplation a purchaser for a valuable consideration, was denounced by Pratt, J., as an absurdity. He says that assignees under voluntary assignments are naked trustees having no real interest in the transaction, and they are not purchasers in fact. See also Story’s Eq. § 1228. Regarding the plaintiff, then, as standing in the same condition as his assignor, not as a purchaser, but as a trustee or representative, and in no better situation than the assignor, I think the set-off should have been allowed, and that the judgment should be reversed.
Hilton, J.
My ruling at the trial was from a recollection of adjudged cases, (3 Barb. S. C. 40; 4 Sand. S. C. 604; 2 Duer, 78); and the views expressed in the above opinion were not presented. Upon reflection, I am satisfied that the ruling was erroneous, and I concur in reversing the judgment upon the grounds stated by my brother Brady.
Daly, First Judge.
Since the above opinion was written, the *28117th volume of New York (3 Smith) Reports has appeared, containing two cases, Van Heusen v. Radcliff (p. 580,) and Griffin v. Marquardi (p. 28,) in which it has been held, in accordance with the views of Judge Brady, that an assignee for the benefit of creditors is not, in respect to the assigned property, a purchaser for a valuable consideration; and the first of these cases may be regarded as determining the question finally in this state.
Judgment reversed.