Camden Nat. Bank v. Green

• Decision Date: 24 May 1889
• Citation: 17 A. 689,45 N.J.E. 546
• Parties: CAMDEN NAT. BANK v. GREEN.
• Court: New Jersey Court of Chancery

17 A. 689

45 N.J.E. 546

CAMDEN NAT. BANK

v. GREEN.

Court of Chancery of New Jersey.

May 24, 1889.

(Syllabus by the Court.)

Howard M. Cooper, for complainant. C. S. Bergen, for defendant.

BIRD, V. C. Albert Green, in his life-time, procured this bank to discount a note for him in the sum of $1,500. Before it came due, Green died, leaving $846.06 of the proceeds of said note to his credit on the books of the bank. He left also a last will, by which he gave all his estate to his wife, the defendant, and made her his sole executrix and legatee. She proved the will, and qualified as executrix, and then sent her agent to the bank, with a check covering the $846.06, and had that sum passed to her own individual credit. She had also drawn several checks on other banks for the balance of deposits to the credit of her husband at the time of his death, which the said agent had placed to the credit of Mrs. Green in the bank of complainant. The whole amount of the said deposit exceeded the sum of $1,500. Before the said note became due several checks had been drawn against the said deposit by Mrs. Green, and several additional sums had been deposited in favor thereof. But, notwithstanding the drafts made on said fund, at no time was it reduced below the sum of $846.06, the balance of the proceeds of the note so discounted at the time of the testator's death; and when the said note fell due it was charged up to the account of Mrs. Green, there being at that time $1,500 to her credit. Nevertheless Mrs. Green drew her check for the whole amount which was due to her prior to the charge of the note so discounted, and, payment being refused, she brought her action at law, and recovered a judgment for the whole amount of the credit. The bank offered to show that it was entitled to retain the balance of the proceeds of this note by virtue of an agreement between the bank and said agent, but, failing in that, it was without relief in a court of law. Hence the complainant seeks the aid of a court of equity in the hope of sustaining a defense to such claim to the extent of the $846.06. Four points have been pressed upon my attention by the complainant: (1) That the $846.06 which was transferred at the request of Mrs. Green from the account of her deceased husband were the proceeds of the note which had been discounted for his benefit; (2) that the account of Mrs. Green was never reduced below the amount of $846.06; (3) that the bank has not filed any claim with the executrix within the time required by law; (4) that the executrix has taken proceedings to declare the estate of the said decedent insolvent.

1. It was thought not to be of slight importance in this effort to sustain an equitable set-off, which cannot be recognized at law, to show that the controversies between the parties grew out of the same pecuniary transaction, or pertain to the same matter or thing, so that the natural equity spoken of in the books enables the court to protect the one party against injustice from the other. Story, in his Commentaries on Equity Jurisprudence, § 1434, says: "But if there is a connection between the demands, equity acts upon it, and allows a set-off under particular circumstances." See, also, Id. § 1437; Jordan v. Bank, 74 N. Y. 473; Bathgate v. Haskin, 59 N. Y. 537, 538; Lindsay v. Jackson, 2 Paige, 581. Nor can there be the slightest doubt but that, had this $846.06 remained in the bank to the credit of the deceased testator when the note fell due, the bank would have had the right to apply it to the payment of the note pro tanto. Jordan v. Bank, 74 N. Y. 473; 1 Morse, Banks, §§ 328-330; 1 Jones, Liens, §§ 241, 242 et seq.

2. It is of consequence in such cases to be able to trace and identify the same fund, subject-matter, or thing which represents the transaction, or concerning which the parties contracted. It is this which gives rise to the lien or equitable claim which is recognized as distinguishable from set-offs allowed at law. And this idea is expressed with not a little force and clearness by Lord MANSFIELD in Bale v. Sollet, 4 Burrows, 2133. Though the action was at law, the language of his lordship can never be quoted amiss in the discussion of any such issue. The question was whether a broker was entitled to £40 out of £2,000 for his services in the sale of lands for which he received £2,000, without pleading it by way of set-off. The court said: "This is an action for money had and received to the plaintiff's use. The plaintiff can recover no more than he is in conscience and equity entitled to, which can be no more than what remains after deducting all just allowances which the defendant has a right to retain out of the very sum demanded. This is not in the nature of a cross-demand or mutual debt; it is a charge which makes the sum of money received for the plaintiff's use so much less." It is said that in the case in hand the bank never parted with the $846.06 parcel of the proceeds of the discounted $1,500 note up to the time that that became due. It is true that the $846.06 was transferred to the account of Mrs. Green; but it is insisted that that can make no difference in the...