Morrow's Assignees v. Bright

• Decision Date: 31 January 1855
• Citation: 20 Mo. 298
• Parties: MORROW'S ASSIGNEES, Plaintiffs in Error, v. BRIGHT, Defendant in Error.
• Court: Missouri Supreme Court

20 Mo. 298

MORROW'S ASSIGNEES, Plaintiffs in Error,

v.BRIGHT, Defendant in Error.

Supreme Court of Missouri.

January Term, 1855.

1. In an action by the general assignees of an insolvent to recover a debt due the assignor, the defendant was allowed to set up as an equitable defence or set-off the amount of a note paid by him after the assignment, as security of the assignor upon a note which was under protest at the date of the assignment.

Error to Ray Circuit Court.

This was an action by Morrow's general assignees for the benefit of creditors against Bright, for about eight hundred dollars due upon a note account stated and agreement, all of which were included in the assignment. Bright pleaded as a set-off five hundred dollars paid by him since the assignment, on a protested note of Morrow's, on which he was indorser. The assignment was dated April 9, 1853. The note was given December 27, 1852, was protested before the assignment, and paid by Bright after the assignment. The offset was allowed by the Circuit Court, and the plaintiffs appealed.

Napton, for plaintiffs in error.

I. Morrow and Bright were not mutually indebted at the date of the assignment. There was nothing due by Morrow to Bright when the assignment was made, and if Morrow became indebted to Bright after the assignment, that is surely no set-off against the demand assigned. (13 Vermont, 440.) A debtor cannot, by his assignment, prevent a settlement of mutual subsisting indebtedness between himself and another; but he has a right to prefer some creditors to others, and to make such appropriations of his effects as he pleases. If the set-off claimed here be allowed, will it not place it in the power of the assignee's debtor at all times, to defeat the intentions of the assignor, and disarrange the order of claims, by buying up the claim of a postponed creditor, and in that way, procuring its full allowance, when by the directions of the deed of assignment, it would only get a pro rata share with other claims of its class?

II. There is no question of notice here, as the court below assumed the law to be that the set-off must be allowed without regard to notice.

III. It cannot be pretended that the payment made on the protested note was an equitable defence or set-off against the plaintiffs, as it grew out of a transaction totally independent of the indebtedness assigned. (15 Mo. 399.)

Gardenhire and Vories, for defendant in error.

I. The interest of the plaintiffs in the insolvent's debts is exactly that of the insolvent himself, as it stood affected by countervailing equities at the time of the assignment. It is therefore immaterial whether the liability set up as a defense was originally absolute or contingent, the relations of the parties being unalterable by the accidental insolvency of one of them. (Krause v. Beitel, 3 Rawle, 203; 1 Atk. 230; 2 Paige, 581; 1 Root's Conn. 427; 7 Mo. 524.)

II. It does not appear that the defendant had any notice of the assignment...