31 N.J. Eq. 554 | New York Court of Chancery | 1879
The Vice-Chancellor.
The bill in this case is founded on a claim to a right of equitable set-off. The defendant, Bell, in December, 1878,
Bell’s answer attempts a denial of all the facts of the complainants’ case except his non-residence; but, in respect to the one most important—insolvency—it can only be regarded as an attempt. It lacks both frankness and precision. If the facts stated in the bill present a case which, undisputed, gives the complainant a right to the remedy of equitable set-off, the injunction should not be dissolved.
The cross-demands’in this case must, in equity, be considered as subsisting between the same parties. It is true Bell’s recovery is against both Jackson and Laverty, but Laverty holds indemnity, and, if he should be compelled to
The fact that Bell is a resident of a sister state, is no reason why he should be denied the fruits of his judgment, or even delayed in their collection; nor should we attempt to coerce him, by restraining him in the collection of his judgment, to come into our tribunals to litigate with his adversary. If, upon the case made by the bill, we would not enjoin one of our own citizens, we must not enjoin him. This court must give the same measure of justice to the citizens of a sister state that it metes out to its own. Murray v. Toland, 3 Johns. Ch. 569; Rawson v. Samuel, 1 Cr. & Ph. 161.
The remedy by set-off, as enforced in equity, is undoubtedly somewhat broader and more liberal than that given by statute, but it has limits. The mere existence of a cross-demand is not enough to establish a right to it, nor will the existence of an unsettled account, out of which a cross-demand may arise, be sufficient. Hewett v. Kuhl, 10 C. E. Gr. 24; Whyte v. O’Brien, 1 Sim. & Stu. 551; Dodd v. Lydall, 1 Hare 337; Gordon v. Pym, 3 Hare 223 ; 2 Story’s Eq. Jur. § 1436. Yor will a suitor who has recovered damages at.law for a breach of contract, be restrained in their collection, though he be a non-resident and insolvent, merely because he may hereafter be found- to be indebted to the defendant on the adjustment of an unsettled account. Paw-son v. Samuel, ubi supra. And even where the cross-demands are debts of fixed and certain amount, but had their origin in distinct and independent transactions, equity will not set-off one against the other unless such course is made necessary by some peculiar, equitable consideration, as, for example, where there has been a mutual credit given by each upon the footing of the debt of the other, so that a just presumption arises that the one is understood by the parties to go in liquidation or set-off of the other. Dade v. Irwin, 2 How. 389
But where the claims originate in separate transactions, or have perfectly independent sources—as, for example, where one party makes a claim for damages for the breach of a contract and the other sets up that the first is indebted to him for a balance due on an unsettled account; or where one party sues for freights for the transportation of certain goods and the other claims that he has suffered loss by the negligence of the first in the transportation of other goods —in such cases a court of equity will neither afford a remedy by set-off', nor stay the collection of a judgment founded on one until a counter-judgment has been recovered on the other. Rawson v. Samuel, ubi supra; Stimson v. Hall, 1 H. & N. 831; Atterbury v. Jarvie, 2 H. & N. 114.
Chancellor Kent, in Duncan v. Lyon, 3 Johns. Ch. 351, said a demand resting entirely in uncertain and unliquidated damages cannot be set-off against a debt. After quoting Lord Mansfield’s remark in Howland v. Strickland, Cowp. 56, that not only the statute of set-off, but the reason on which it is founded, comprehends mutual debts only, he says: “A claim for uncertain and unliquidated damages is not a debt. This is the settled doctrine of the courts of law, and the same rule prevails in equity. No case can be found where a set-off has been allowed, where the demand was for uncertain damages. To authorize a set-off', the debt must he between the same parties, in their own right,, and must
Applying these rules to the case made by the complainants’ bill, it would seem to be clear that the complainants are not in position to demand the aid they seek. Both their right and the' amount they claim are unestablished and unascertained. They do not pretend that their claim originated at the same time, nor in the same source, that their adversary’s did, or that there is the slightest connection between the two claims. If they are entitled to the remedy by set-off', or to stay the hand of their adversary until they can recover a counter-judgment, it would be difficult to imagine a case of cross-demands in which a similar claim could not be successfully set up.
The injunction must be dissolved, and the bill dismissed, with costs.