| New York Court of Chancery | Oct 6, 1840
The demurrer in this case proceeds upon the ground that the complainant has a remedy at law to recover his damages, if he is entitled to any, for the breaches of 'the alleged agreement; and that he has no equity to set off unliquidated damages, arising from such an agreement, against the amount due on the bond and mortgage to Webster ; and also upon the further ground that if an offset was allowable in such a case, it was sufficient to set up that defence in the answer to the original bill.
The demurrer appears to be .well taken upon both of these grounds. The claim of the complainant Jennings, independent of the question of set-off, appears to be-a mere claim for unliquidated damages, for an alleged breach of the agreement, with Stone, to make all necessary repairs upon the dam, for the benefit of the mills and machinery of both. There is not sufficient stated in the bill to show that the agreement was under seal, and was a charge upon the mills which were owned by Webster at the time such agreement was made. Neither does that fact appear to be material in this case ; as Webster might still be personally liable to Stone or his assignee upon his covenant, even if it was a covenant running with the premises or mills then owned by him, and was duly recorded so as to make it a binding charge upon those mills in the hands of the subsequent purchasers thereof. (Mills v. Auriol, 1 Hen. Black. Rep. 433;
It is perfectly clear, however, that an unliquidated demand, in no way connected with the mortgage debt for the recovery and satisfaction of which a bill of foreclosure is filed in this court, which demand is not a proper subject of offset at law, cannot be offset against the mortgage debt in this court 5 unless there is some peculiar equity in the case to take it out of the general rule. For upon a mere question of offset under the provisions of the revised statutes, the principles of this court and of courts of law are the same. (Holden v. Gilbert, 7 Paige’s Rep. 211.) And the demand set up in the appellant’s bill, in this case, is one which could not have been offset in a court of law, in a suit brought against him on the bond given with the mortgage to the respondent. But an attempt is made in the bill to take this case out of the general rule, by an allegation that the respondent has parted with some of his property, and threatens to put the rest of it out of his hands,'"so as to deprive the appellant of the poAver of collecting any thing of him. This is not equivalent to a charge of insolvency ; and is not sufficient to draw the investigation of an unliquidated claim into this court, as a set-off, in a case in which this court would not otherwise have the right to decree a set-off.
Again ; if this was a proper case for a set-off under the proA'isions of the revised statutes, as a liquidated demand which could have been set off in a suit at law, the decree of the court below must still be affirmed. A cross-bill is not, necessary or proper in such a case j unless it appears that a discovery is required to enable the defendant in the original suit to avail himself of that defence, or that for some other reason he could not obtain the set-off in that suit by plea or answer merely. The opinion intimated by Chancellor Sanford, in Troup v. Haight, (Hopk. Rep. 270,) that a cross-bill might be necessary, is not entitled to the force of a judicial decision, and was not called for by the case before him j nor does it appear to be founded up
Upon the grounds, therefore, that there is no equity in this cross-bill to authorize a set-off in a case not provided for by the revised statutes, and that if it was a case within the provisions of those statutes it was sufficient to set up the defence by plea or answer, and that no cross-hill was necessary or proper, the demurrer was properly allowed by the vice chancellor. The decree appealed from must there-fore he affirmed with costs.