87 F. 669 | 9th Cir. | 1898
The Harrisburg Trust Company brought an action in the circuit court to recover upon a promissory note for $8,000 made on March 81, 1894, by the defendant in error, in favor of the Guarantee Loan & Trust Company, payable on demand, with interest at the rate of 10 per cent, per annum, which note was on July 16, 1894, sold and delivered to the plaintiff in the action. In his answer to the complaint the defendant in error set forth an affirmative defense, which was, in substance, as follows: Thai, the note was never indorsed by the payee; that it was delivered to the plaintiff, or to one Edward L. Bailey, an officer thereof, together with other negotiable paper, as a pledge to secure the repayment of an advancement made by the said Bailey, individually, or as an officer of the plaintiff; that said note bears no indorsement save a credit of interest, and $500 on account of the principal; that on May 23, 1896, there was standing to the credit of the defendant with the said .Guarantee Loan & Trust: Company the sum of $2,092.80, and on said day the Guarantee Loan & Trust Company certified a certain cheek, purporting to be drawn by the defendant, payable to the order of the county treasurer, in the sum of $2,085.30, which check was not accepted by the county treasurer, but has remained and is the property of the defendant; that on October 3, 1896, the defendant demanded from the Guarantee Loan & Trust Company the delivery of said note, and tendered in payment thereof the said eerti
The right to set-off is wholly statutory, and in this case its existence and its definition must depend upon the provisions of the statutes of the state of Washington. The Code of Washington (2 Hill’s Code, § 806) provides as follows:
“Sec. 80G. The defendant in a civil action upon a contract expressed or implied may set off any demand of a like nature against the plaintiff in interest which existed and belonged to him at the' time of the commencement of the suit. And in all such actions, other than upon a negotiable promissory note or bill of exchange negotiated in good faith, and without notice before due, which has been assigned to the plaintiff, he may also set off a demand of a like nature existing against the person to whom he was originally liable, or any assignee prior to the plaintiff of such contract, provided such demand existed at the time of the assignment thereof, and belonging to the defendant in good faith before notice of such assignment, and was such a demand as might have been set off against such person to whom he was originally liable, or such assignee while the contract belonged to him.”
This statute is clear and explicit, and requires no interpretation. When a defendant is sued by an assignee of á chose in action, he cannot plead against the assignee a set-off which he holds against the assignor, unless the demand sought to be set off existed at the time of the assignment, and belonged to the defendant in good faith, before notice of such assignment. A similar statute is found in the state of New York, and it has there been held that the demand which constitutes the set-off must be one which existed against the assignor at the time when he made the assignment. Martin v. Kunzmuller, 37 N. Y. 396; Faulkner v. Swart, 55 Hun, 261, 8 N. Y. Supp. 239; Brisban v. Caines, 10 Johns. 45. So far as the record in the present case informs us, the account of the defendant in error as a depositor with the Guarantee Loan & Trust Company did not exist prior to May 23, 1896, which was nearly two years subsequent to the transfer of the note to the plaintiff in error. By the terms of the statute, therefore, the certified check and the amount represented thereby, upon deposit with the Guarantee Loan & Trust Company, cannot be pleaded as a set-off to the note, unless there are other facts in the case which are sufficient to take it out of the statutory provision. It is contended by the defendant in error that the fact that