Court Opinion

ID: 6505633
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:17:53.825816+00
Date Added: 2024-06-11T15:54:43.605432
License: Public Domain

CHILTON, C. J.
The kill shows that the lots, to which there is a failure of title, constitute the consideration of the notes held by Martin as the personal representative of Slatter ; that he has obtained a judgment, and the amount will be collected out of the estate of Wray, unless enjoined ; that Slatter’s estate is insolvent, and if it is allowed to collect the judgment, the estate of Wray must lose the demand existing against the estate of Slatter. It further shows, that the defence now insisted upon could not have been set up at law to prevent a recovery upon the notes. It may readily be conceded, then, that as to the demand which Slatter’s administrator has, the jurisdiction of the court of equity, arising upon the face of the bill, is ample.
But this is not the question before us. Does the bill show an equity in favor of the complainants, as against Eurniss, who is assignee of one of the notes executed on the same day with those on which the judgment in favor of Slatter’s administrator was rendered, but given for lots to which there is no failure of title, and as to which the covenants in the deed, which are alleged to have been broken, have nothing to do ?
That the notes were given on the same day, does not, of itself, so connect them as to make them parts of the same transaction. The consideration was distinct, and does not become blended merely because the notes, bear even date. The covenants in the deed from Slatter, alleged to have been broken, have no reference to, nor connection with, the lots for which the note held by Eurniss was given, nor with the note itself, so as to enable the court to work out an equity in favor ' of the complainants as inherent in the transaction.
Does an equity exist, regarding them as distinct transactions? The estate of Wray has an equity against the estate of Slatter, to the extent of the notes given for the lots to which there is a failure of title, and it has a demand against *478said estate for the residue ; but as to this residue, it is but a cross demand, existing in the form of damages for a breach of the covenant contained in the deed. These damages are unliquidated, and could not, ordinarily, be the subject of set-off, either in a court of law or equity. But it is insisted in the case before us, that an equity attaches to have the set-off allowed by reason of the insolvency of Slat'ter’s estate. This would certainly be a good ground for equitable interposition as against Slatter’s estate ; “ but, although the insolvency of one of the mutual debtors, existing at the time of filing the bill, would be a sufficient ground of equitable jurisdiction as between them, yet, where one of the mutual debts, existing in the form of a note, is assigned to a third person, it seems clear that the insolvency of tho obligee, commencing after the obligor has notice of the assignment, can never attach as an equity against the note in the hands of the assignee, nor furnish in itself a ground for setting off against it the debt of the obligee to the obligor.” — Wathen’s Ex’r v. Chamberlain, 8 Dana, 164. The equitable right of set-off is given by the insolvency of Slatter’s estate. But for this, so far as regards the demand held by Furniss, which is independent of the demand accruing upon the breach of the warranty, there would exist no equitable right of set-off. Now when did this equity accrue? The bill does not inform us, and in this it is fatally defective and void of equity. For we take the true rule to be, as asserted in the case above cited, and in Ridgway v. Collins, 3 Mar. 412, “ that an equity against an obli-gee, to be made available against his assignee, must have existed before notice of the assignment.” This seems to harmonize with the rule which applies at law as prescribed by the statute. — Clay’s Digest, 381, § 6. ' '
In the case of The Tuscumbia, Courtland and Decatur Railroad Co. v. Rhodes, 8 Ala. 206, the transfer only vested an equitable interest in the assignee, the subject-matter being an account; and besides this, the company was insolvent when the assignment was made. The same may be said of Donaldson’s Adm’r v. Posey, 13 Ala. 752, 770, where the contest was between two persons claiming equities, and we gave the preference to the older. The cases of Hunter v. O’Neil, 12 Ala. 37, Cullum v. Branch Bank at Mobile, 4 ib. 21, and *479Long v. Brown, ib. 622, show that the complainants have an equity as against Slatter’s administrator, but none of them apply to cases like the present, where the rights of an as-signee are involved.
The bill merely states the assignment of the note by Slat-ter to Furniss, giving no elate, and that the estate of Slatter was decreed insolvent by the Probate Court, on the 5th day of March, 1850. For aught that appears, the assignment and notice of it accrued long before the insolvency ; and as it is incumbent upon every complainant to show by his bill a. title to the relief which he seeks, and none is shown here, the bill, as to Furniss, was properly dismissed.
Decree affirmed.