De Laval Separator Co. v. Sharpless

• Decision Date: 08 April 1907
• Citation: 111 N.W. 438,134 Iowa 28
• Parties: DE LAVAL SEPARATOR CO. v. SHARPLESS ET AL.
• Court: Iowa Supreme Court

134 Iowa 28

111 N.W. 438

DE LAVAL SEPARATOR CO.

v.SHARPLESS ET AL.

Supreme Court of Iowa.

April 8, 1907.

Appeal from District Court, Pottawattamie County; O. D. Wheeler, Judge.

Action in equity to restrain the enforcement of a judgment against the plaintiff by defendant Sharpless, the party in whose favor the judgment was recovered, or by defendants Harl & Tinley, assignees of such judgment, on the grounds that defendant Sharpless is insolvent and that plaintiff had, prior to the assignment, a valid claim against Sharpless in an amount exceeding the amount of the judgment. Plaintiff's application for temporary writ of injunction having been denied, the plaintiff appeals. Reversed.C. F. Vogel and Stillman & Price, for appellant.

Harl & Tinley, for appellees.

McCLAIN, J.

From the allegations in the pleadings, which are deemed true for the purpose of determining the correctness of the ruling of the trial court refusing a temporary injunction, it appears that in February, 1904, the defendant Sharpless obtained a judgment in the district court against the plaintiff herein on a replevin bond in an action wherein this plaintiff sought to recover certain cream separators, which had been sold by it to Sharpless, wherein it was held that said cream separators were the property of said Sharpless and wrongfully taken from him under the writ of replevin (see De Laval Separator Co. v. Sharpless, 129 Iowa. 114, 105 N. W. 384); that at the time said judgment was recovered Sharpless was indebted to plaintiff on account for the purchase price of said separators, and others of the same description, purchased by him from plaintiff, in an amount exceeding the amount of his judgment; that defendants Harl & Tinley had an attorney's lien on the judgment in favor of Sharpless for services in recovering such judgment, and took an assignment thereof before it was affirmed on appeal to the Supreme Court in payment of the services already rendered and to be rendered in the case; that prior to said assignment plaintiff had not made or asserted any right or claim against Sharpless on account of his indebtedness to plaintiff, and Harl & Tinley accepted the assignment in payment of their fees for services already rendered and to be rendered, in reliance upon said assignment and their lien, without knowledge that plaintiff had any claim against Sharpless; and that he is, and has been, since the institution of the replevin suit, insolvent, so that plaintiff is, and has been, without adequate remedy at law to prevent the irreparable injury which would result from the enforcement by Sharpless or Harl & Tinley, his assignees, of the judgment recovered by Sharpless against the plaintiff.

As against Sharpless, the right of the plaintiff to have relief in equity to prevent the enforcement of the judgment, so as to defeat the setting off of Sharpless' indebtedness to plaintiff, Sharpless being insolvent, is perfectly plain. The facts bring the case completely within the general jurisdiction of equity to enforce a set-off. In the replevin suit, in which Sharpless recovered his judgment, the indebtedness of Sharpless to plaintiff on account could not be interposed as a counterclaim (Code, § 4164); and, if Sharpless were to be allowed to enforce his judgment, plaintiff would be in the position of being compelled to pay this judgment, although Sharpless is indebted to it in amount in excess of the judgment in his favor. That a court of equity will furnish relief by way of decreeing an equitable set-off in such cases is well settled. Marshall v. Cooper, 43 Md. 46, 59;Railroad v. Greer, 3 Pickle (Tenn.) 698, 11 S. W. 931;Merrill v. Souther, 6 Dana (Ky.) 305;O'Neill v. Perryman, 102 Ala. 522, 14 South. 898; 1 Pomeroy, Equity Jurisprudence (3d Ed.) § 189. To defeat this equitable right of plaintiff, defendants Harl & Tinley insist on their assignment, taken without notice, as they allege, that plaintiff had any claim against Sharpless. So far as their rights under the assignment are predicated upon their attorney's lien, they are, however, subject to any right of set-off which plaintiff had at the time the judgment was recovered. Their lien was on money due their client in the hands of the adverse party (Code, § 321); and if, at the time the judgment was recovered, Sharpless owed plaintiff more than the amount of the judgment recovered by him against plaintiff, then there was no money in the hands of plaintiff due to Sharpless. Watson v. Smith, 63 Iowa, 228, 18 N. W. 916;Tiffany v. Stewart, 60 Iowa, 207, 14 N. W. 241;Benson v. Haywood, 86 Iowa, 107, 53 N. W. 85, 23 L. R. A. 335;Marshall v. Cooper, 43 Md. 46, 61. As assignees of the judgment, Harl & Tinley are in no better situation than Sharpless was as against plaintiff's equitable right of set-off at the time the judgment was assigned to them. With reference to assignment, a judgment is simply a chose in action, and the assignee takes subject to any defense or right of set-off, legal or equitable, which was available in favor of the judgment debtor as against the assignor. Fred Miller Brewing Co. v. Hansen, 104 Iowa, 307, 73 N. W. 827; Ballinger v. Tarbell, 16 Iowa, 491, 85...