Court Opinion

ID: 6839440
Source: CourtListenerOpinion
Date Created: 2022-07-23 20:13:35.301218+00
Date Added: 2024-06-11T16:04:48.264972
License: Public Domain

On Petition for Rehearing.
The appellees are entitled to some corrections in our opinion. The assignment of the claim in suit, designated as “Exhibit B,” was executed by appellant, and not by the state court receiver. We found no beneficiary was shown therein, overlooking the name of that receiver in a disconnected position; but we are now satisfied the insertion of his name was intended. It is due- appellees to state that the final order in the former suit of the bank recites they are, by virtue of the assignment of the rents, “the owners of and entitled to said money and are entitled to have the receiver forthwith pay said money to them.” Finally, we accede to the contention this is a suit in equity, and not at law.
Exhibit B purports to certify to the satisfactory proof of the claim. But it is merely a further step in the confirmation to appellees of the rights of their assignor, G. R. Little, through the state court receiver, to this claim against the bank, subject to any defense against Little. There was no adjudication as to appellant, further than that the claim belonged to appellees. Regarding this as an equity suit, we withdraw our holding that it was one at law, and that the set-off was sufficiently pleaded under the state procedure.
Counsel for appellees again invoke the rule that a demand at law is not an available defense in a suit in equity. American Mills Co. v. American Surety Co., 260 U. S. 360, 43 S. Ct. 149, 67 L. Ed. 308. And by the application of that rule they would deprive appellant of the benefit of the set-off and compel payment of their claim at the utter risk of failure to collect his demands against Little. But equity rule 30 affords a protection against that result in providing an answer may contain, without cross-bill, a set-off or counterclaim which might be the subject of an independent suit in equity, ■ “so as to enable the court to pronounce a final judgment in the same suit.” A set-off had its origin in equity, and is a defense, provided it rests on some equitable basis, for example, the insolvency of the debtor, or any circumstances rendering it probable the set-off may be lost, or other want of adequate remedy at law. 19 Ency. Pl. & Pr. 718, 719; 24 R. C. L. pp. 799, 804, 805.
We find no occasion for a rehearing, as all of the questions involved were presented on the original appeal. The District Court, on holding the cross-bill, insufficient, should have granted appellant, in furtherance of justice, leave to amend his pleading to comply with equity rule 30. The orders heretofore made will stand, with the further direction to the District Court to grant him such leave to amend within a reasonable time, and thereafter to proceed consistently with this opinion. The costs of this appeal will be taxed to the appellant.
The petition for rehearing is denied.