63 Mo. App. 166 | Mo. Ct. App. | 1895
The plaintiff, as assignee of the G-oelitz Brothers Candy Company, sues in this action to recover from the defendant the sum of $308.25, the amount of a current deposit. The defendant admitted the deposit, but claimed that the Candy Company owed it a much larger sum, and that the amount of the deposit had been applied as a credit thereon. The plaintiff denied the right of set off, and alleged in his replication that the debt from the Candy Company to the
Is this a case where the equitable doctrine of set-off- can be applied? The remedy by set-off was unknown to the common law, and mutual debts could not be applied in satisfaction of each other, unless it had been expressly agreed that the one debt should go in discharge of the other. Hence a defendant, who held a claim against the plaintiff, was compelled to bring his separate action. Out of this hardship or injustice sprang the equitable doctrine of set-off, which permitted a defendant under circumstances which called for equitable interference — that is, where the remedy by cross action would prove inadequate — to restrain by bill the action at law, to the end that the mutual demands might be adjusted and- set off one against the other. Thus, if the plaintiff was insolvent, his insol
On the other side of the question the argument is that the various statutes authorizing voluntary assignments prohibit preferences, and that, immediately upon the execution of the deed of assignment, an- equity arises in favor of the general body of creditors to have the assets distributed ratably and without preference, and that to grant one creditor, whose debt was not due at the date of the assignment, the right to offset it by a debt presently due from him to the assignor, would be a preference, in that it would, by thus anticipating the maturity of the debt against the assignor, change the contract to the prejudice of other creditors. Bradley v. Angel, 3 Comstock, 475; Myers v. Davis, 22 N. Y. 489; Fera v. Wickham, supra; Richards v. La Tourette, 119 N. Y. 54; Chipman v. Bank, 120 Pa. St. 86; Spaulding v. Backus, 122 Mass. 553; Chance v.
All of the authorities agree that the assignee is not a purchaser for value without notice, and they also agree that he holds the assigned estate subject only to equities existing at the date of the assignment. Whether under a state of facts like we have here the right to an equitable set-off exists against the assignor at the date of the assignment, is the question upon which the courts have split. The cases first cited hold to the affirmative of the proposition upon the theory, as before stated, that insolvency alone creates the equity, and that, as the insolvency of the assignor necessarily precedes the making of the assignment, the equity must also have existed at the time it was made. The supreme court of this state in the case of Huse v. Ames, supra, adopted the other view, and we must follow it, regardless of our individual opinions.
But it is urged by- counsel for appellant that the determination of that particular question was not necessary to the decision of the matter in controversy between Huse and Ames, and, therefore, that what the court may have said in reference to it is nothing more than an obiter dictum, and not binding on this court. We can not assent to this. The facts were that Huse, as the assignee of the Lindell Hotel Association, sued 'Ames for the amount of a board bill. At the date of the assignment Ames was an accommodation indorser for the association on several notes not then due, which exceeded in amount the board bill. He afterwards paid them and he sought by way of equitable set-off to have the board bill satisfied by applying the amount as a credit on what he had subsequently been compelled to pay for the-association. The supreme court held that the right of equitable set-off did not exist. The same disposition could have been made of the ease for
We, therefore, conclude that under the authority of that case the judgment of the circuit court in the case at bar was1 right, and it must be affirmed. All the judges concurring, it will be so ordered.