8 Mo. App. 451 | Mo. Ct. App. | 1880
delivered the opinion of the court.
This is an action on nine notes, some of which were due-'bills and others in form negotiable promissory notes, made by the defendant, and by the payee, one Henry Gambs, assigned •or indorsed to the plaintiff." For the purposes of this case it may be admitted that the plaintiff received them all after maturity. It appeared that Gambs had been public administrator of St. Louis County, and was a defaulter and lai’gely indebted upon his bond, on which the defendant and three other persons were sureties. The defendant, ■before the time when Gambs transferred these notes and
The doctrine of the commercial law of England, that the indorsee of an overdue negotiable bill or note takes it as against the maker, subject to the equities arising out of the bill or note transaction itself, but not subject to set-offs arising out of independent transactions between the indorser and the maker, has been adopted here, and such is now the law in Missouri. Gullett v. Hoy,. 15 Mo. 399; Unseld v. Stephenson, 33 Mo. 163; Arnot v. Woodburn, 35 Mo. 99. The leading case is Burrough v. Moss, 10 Barn. & Cress. 558, and this has been extensively followed. As Baron Parke said in Whitehead v. Walker, 10 Mee. & W. 698 : “ But a set-off is not an equity ; it is a mere collateral matter; it is a right to set-off a cross-demand against the plaintiff’s cause of action, which was introduced to prevent a multiplicity of actions.” So, in the case at bar, the right which the defendant had was merely the right to set off as against Gambs, the payee, the demand of the defendant growing out of the collateral matter of the suretyship. It is true that when these obligations were indorsed to the plaintiff' by Gambs there was an existing indebtedness of Gambs to
It is, however, true that there may be an agreement that an existing demand in favor of the maker shall be set off •against the paper in the hands of the indorsee, so that the latter would hold it as if the mere cross-demand were an equity. But the burden is upon the maker to show this, and to prove that, owing to the agreement, the rule of the •commercial law does not apply. Upon this record we find no evidence of such an agreement. Gambs indorsed the paper to the plaintiff, who stands as a trustee to make the assets available for the sureties, one of whom he cannot favor at the expense of the others. If there was a common understanding among the sureties that the defendant, in contributing, should be allowed to set off his payments against the demands which were peculiar to him, the defendant may show this. The case must, however, be- reversed, as the law governing it was not applied, and the facts will appear upon a new trial.
What has been said applies only to the notes which are negotiable by the laws of this State Wag. Stats. 216, sect. 15; Baileys. Smock, 61 Mo. 218. To the-non-negotiable paper this peculiar doctrine of the commercial law does not apply. Such paper is governed, moreover, by the provi
There is nothing in the point that the plaintiff, representing, for the purposes of this collection, all the sureties, cannot sue one of them. It is also obvious that it is not the ■office of this suit to settle the ultimate equitable rights of the sureties among themselves.
The judgment is reversed and the cause remanded, to be proceeded with according to this opinion.