Court Opinion

ID: 4933933
Source: CourtListenerOpinion
Date Created: 2021-09-24 01:11:57.8938+00
Date Added: 2024-06-11T08:14:35.676632
License: Public Domain

Libbey, J.
The question in this case is whether the defendant’s account against the payee of the note in suit, filed in set-off, is admissible as a defence to the action on the note by the plaintiff, an indorser who took it after it was dishonored.
The rule established in England will not allow it. The rule there is that the plaintiff in such cases is liable only to the equities arising out of the note itself, or the consideration for it; or to the allowance of such demands due the maker of the note from the payee as might be found by either express or implied understanding of the parties to have been agreed to be applied in discharge of it. Burroughs v. Mass. 10 Barn. and Cressw. 558.
The same rule has been held in several of the states where the terms of the statutes regulating set-off, were held not- to be broad enough to permit the set-off. In New Hampshire, Chandler v. Drew, 6 N. H. 469. In Connecticut, Stedman v. Gillson, 10 Conn. 55; Robinson v. Lyman, 10 Conn. 30. In New York, Johnson v. Bridge, 6 Cowen, 693; Raymond v. Wheeler, 9 Cowen, 295 ; Bridge v. Johnson, 5 Wend. 346; Haxton v. Bishop, 3 Wend. 13 ; Driggs v. Rockwell, 11 Wend. 504. In Illinois, Gregg v. James, 1 Breese, 107. In New York the rule established in the cases cited has been changed by a statutory provision allowing the set-off.
The question received a very full and careful consideration by the court in Massachusetts, in Sargent v. Southgate, 5 Pick. *170312; and it was there held, that where the note in suit was indorsed and transferred to the plaintiff by the payee after it was dishonored, any demand which the maker held against the payee before the transfer, which he had a right to set-off as against the payee, might be set-off in a suit by the plaintiff.
The doctrine of Sargent v. Southgate has been repeatedly recognized by this court as sound law. Shirley v. Todd, 9 Maine, 83; Barney v. Norton, 11 Maine, 350; Burnham v. Tucker, 18 Maine, 179; Wood v. Warren, 19 Maine, 23.
It may now be regarded as the settled law of this state.
Our statute regulating set-offs, (B. S., c. 82, § 60,) recognizes the right of set-off as a defence in cases like this, of claims not between the parties to the suit, and provides that, in such case, no judgment shall be recovered against the plaintiff for any balance due the defendant.

Exceptions overruled.

Appleton, C. J., Walton, Barrows, Daneortii and Peters, JJ., concurred.