35 Ill. 142 | Ill. | 1864
delivered the opinion of the Court:
On this assignment of error on this record, the plaintiff in error raises this question: Could Hoffman and Gelpcke, being intermediate indorsees of the note of Lord and Smith, which was payable in specie, properly refuse to take in payment of it a certificate of deposit issued by them for a larger sum payable in currency ? Holding the note at its maturity, as indorsees, and having previously issued the certificate of deposit to third parties, through whose indorsement the defendants in error acquired it, .were they bound to receive it in satisfaction of this note, the note being for specie, and the certificate for currency only ?
It is in proof, by the testimony of Siller, that the refusal of Hoffman and Gelpcke to receive the certificate in payment of the note, was based on the fact that the certificate was for currency whilst the note was for specie. A. J. Smith states, that he does not remember that this was the nature of the objection; he merely states the paying teller of Hoffman and Gelpcke, who was this Mr. Siller, refused to accept it in payment, saying, that Lord and Smith were better than Hoffman and Gelpcke. This witness does not deny that the refusal was based on the fact that the note was for specie, whilst the certificate was for currency, worth less, at that time, than specie.
But be this as it may, this certificate was pleaded by way of set-off by a notice under the general issue, and the question is, was it so pleadable ?
This form of presenting a defense of this kind is statutory, and relates to claims or demands against the plaintiff in the action. Those claims or demands must be mutual. In this case, the claim sought to be set off by the defendants in error against their note, was not a claim against the plaintiff in the action, nor against the payee of the note, and is not made, by the statute of this State, a subject matter of set-off. In most respects, this case is like the case of Root v. Irwin, 18 Ill. 148.
If Hoffman and Gelpcke were the holders of this note at any time, by indorsement, a set-off, as against them, could not be set up against their indorsee. The statute does not provide for such a case. As was said by this court, in the case above cited, at the common law, if the makers, the defendants in error, paid the note to intermediate indorsers (Hoffman and Gelpcke), while in their hands at or after its maturity, that might be a good payment and available to the makers of the note in the hands of any one to whom it might subsequently be assigned, but it would not then come within the provisions of the statute.
The note having been transferred after due, the makers should plead specially under the statute, the demand to be used as a defense, or so much thereof as may be necessary, and not plead a set-off. • The assignee of a note after due takes it subject to all the claims and demands the maker had against the payee and indorsers, and which he can set up in his defense to a suit brought by the assignee the same as though the suit was brought by the payee. Scates’ Comp. 292.
But where the case is not within the statute, the defendant, who is the holder of the cross-demand, may, in case of insolvency, have a set-off in equity. In such a proceeding he can have the cross-demand fully adjusted, and the assignee of an overdue note from an insolvent, takes it subject to this equity.
The defendants here never had any defense against the payees of this note, nor any claim against them of any nature. It is only while the note was in the hands of an intermediate indorser, that any defense existed, and then only as against the indorsers. Hor have they any claim or demand against the plaintiff.
When this case was before this court at the April Term, 1862, it was erroneously considered that Hoffman and Gelpcke were the payees of this note, hence the decision of the case as reported in 29 Ill. 153.
The views here presented conflict with that decision. No claim to a set-ofi' is shown, consequently the judgment of the court below must be reversed and the cause remanded.
Judgment reversed.
