Skinner v. Chase

• Decision Date: 18 January 1898
• Docket Number: 123-1897
• Citation: 6 Pa.Super. 279
• Parties: Frank Skinner, to use, Appellant, v. George Chase
• Court: Pennsylvania Superior Court

6 Pa.Super. 279

Frank Skinner, to use, Appellant, v. George Chase

No. 123-1897

Superior Court of Pennsylvania

January 18, 1898

Argued October 22, 1897

Appeal by plaintiff, from order of C. P. No. 2, Phila. Co.-1895, No 52, making absolute rule to set off judgment held by defendant against plaintiff.

Rule to set off judgment held by defendant against plaintiff against a judgment held by plaintiff against defendant. The rule was made absolute by the court below. Plaintiff appealed.

The facts sufficiently appear in the opinion of the court.

Error assigned was making absolute the rule of defendant permitting him to set off judgment which he obtained by purchase seven months after the plaintiff had assigned his interest in suit against defendant.

J. M Moyer, for appellant. -- If the assignments are good, then the purchase by Chase of the Kennedy judgment for the purpose of set-off comes like the doctor at the funeral, too late.

As against Skinner, had he not previously assigned his interest in the Chase suit, the judgment not presented by way of set-off would be one thing, but as against Skinner's assignees it can only avail subject to their equities and rights: Weidner v. Schweigart, 9 S. & R. 387.

Charles A. Chase, for appellee. -- The judgment was assigned to defendant who set it off against the judgment subsequently obtained against himself. He certainly had as much right to obtain redress as the original legal plaintiff who could have attached him as garnishee. The rule to set off one judgment against another had exactly the same effect as an attachment was more expeditious, less expensive and placed the plaintiff under no disadvantage whatever: Hazelhurst v. Bayard, 3 Yeates, 152; Russell v. Spear, 4 W. N.C. 476; Rider v. Johnson, 20 Pa. 190.

If however, the security offered as a set-off has been merely borrowed for the purpose, it will not be allowed: McGowan v. Budlong, 79 Pa. 472.

The power to set off judgments has been exercised immemorially, and arises from the court's equitable powers over its suitors: Garner v. Price, 4 Kulp, 10. See also discussion of the subject by Rice, P. J., in Shoemaker v. Flosser, 5 Kulp, 437.

It has been decided in the following cases that a judgment can be set off against a judgment notwithstanding equities in third parties: Stout v. Moore, 7 W. N.C. 456; Hazelhurst v. Bayard, 3 Yeates, 152; Waln v. Hews, 5 S. & R. 468; Cornwell's Appeal, 7 W. & S. 305.

Before Rice, P. J., Wickham, Beaver, Reeder, Orlady, and Porter, JJ.

OPINION

RICE, J.

On May 9, 1895, Frank Skinner sued George Chase, and on December 6, 1895, obtained judgment for want of an appearance.

On December 9, 1895, Chase applied to have the judgment opened. His application was granted, and on April 8, 1897, the plaintiff obtained a verdict for $ 223.97, upon which judgment was entered on April 13th.

On the following day (April 14th) Chase was granted a rule to show cause why a judgment entered in common pleas No. 1 in favor of Thomas Kennedy against Frank Skinner, and assigned by Kennedy to Chase on December 11th, should not be set off against the judgment against him. Depositions were taken, by which the following facts were established:

On December 16, 1895, Skinner borrowed of William P. Elder $ 200, and as collateral security for the loan (which was renewed in June, 1895), pledged his wife's diamond earrings, and assigned the above-mentioned claim against Chase. On January 6, 1896, this claim was marked of record to Elder's use; and so the record stood at the time of the trial and at the time the rule under consideration was granted. It appears, however, that on June 1, 1896, the loan was repaid by the check of Skinner's wife drawn upon her personal bank account, and the diamonds were returned to her. At the same time Elder executed the following receipt and assignment: " Received from Mrs. Sallie P. Skinner her check for two hundred dollars in full payment for a loan for that amount made by me to Frank Skinner on June 17, 1895. I hereby assign and transfer unto her all my interest in the claim of Frank Skinner against George Chase in common pleas No. 2, June term, 1895, No. 52, previously assigned and marked to my use as collateral security by Frank Skinner, the plaintiff, and all benefit to be derived therefrom and I direct that said claim be marked to the use of Sallie P. Skinner."

It is said that this transaction was a fraud concocted by Skinner for the purpose of hindering and delaying his creditors by the use of his wife's name; but this position is not sustained by any competent and satisfactory proof. On the contrary, the uncontradicted testimony is, that the diamonds were given to Mrs. Skinner by her father; that she had a separate estate which she inherited from him; that the money which she advanced to pay the Elder loan did not come from her husband, and that he has not repaid her.

It is urged, in the second place, that as she bought the judgment with notice that Chase owned the Kennedy judgment against her husband she took subject to the right of Chase to set off the latter judgment against the former. If she were a mere purchaser this would be true: Filbert v. Hawk, 8 Watts 443; Clement v. Philadelphia, 137 Pa. 328. But the equity of Mrs Skinner antedates the formal assignment to her. It had its inception when she permitted her diamonds to be pledged as security for her husband's debt, which was before Chase bought the judgment that he asks to use a set-off. When she advanced the money to pay the debt she became entitled to be put in the place of the creditor, upon the established principle of equity that a surety, or one who stands in the situation of a surety for one whose debt he pays, is entitled to have the benefit of the collateral securities which the creditor has taken as an additional pledge for his debt. The assignment was but the formal recognition of that equity by the parties concerned.

Here however, another difficulty is encountered. Chase bought the Kennedy judgment without any notice whatever that there was an outstanding equity in any one which would prevent him from setting it...