Steele v. Sellman

79 Md. 1 | Md. | 1894

Page, J.,

delivered the opinion of the Court.

This action was brought hy Robert Sellman against Nicholas W. Steele, the surviving obligor of James H. Steele, Jr., to recover the amount due upon the joint and several obligation of the Steeles for the sum of two thousand dollars, payable five years after the 17th day of August, 1886, (the date of the bill,) to Pinkney L. Davis, who assigned the same to the plaintiff, on the sixth day of July, 1891. The defendant pleaded, 1st, that Pinkney L. Davis was at the time of the assignment, indebted in a “greater amount” to the defendant, upon his writing obligatory to James H. Steele for $5000, &c., which obligation the said James assigned to the defendant, prior to the assignment in the declaration mentioned, and that the same was not paid, and the defendant was willing to set-off against the plaintiff's claim; 2nd, “being for defence on equitable grounds,” the same facts set out in the first count, and further, that Pinkney L. Davis was, prior to the time of the assignment to the plaintiff hoplessly insolvent, and ever since has been, and still is; and 3rd, that before said assignment to the plaintiff, Davis released in writing all his right, title, and claim to the said writing obligatory. A demurrer to these pleas was sustained. The defendant then filed an amended plea, and a demurrer to this having been sustained, filed a “second amended plea,” in which it is alleged that the obligation in the declaration mentioned is joint and several, that Davis, the payee, at the time of the assignment to the plaintiff was, and is still, indebted in “an equal ■amount,” upon the hill obligatory of James Steele as set out in the original first plea. Replication, that the defendant on 14th September, 1891, before this suit was instituted or plea pleaded, brought suit on the single bill in the plea mentioned, and that said suit was still pending. Rejoinder, that the true amount owing by Davis to the defendant was greater than that due to plaintiff, and that said suit was brought for the excess; 2nd, that before filing his plea, the defendant had dismissed the said suit; and 3rd, “by way of equitable defence,” that at the time of said assignment to the plaintiff, Davis was and is yet insolvent, as set out in defendant’s third original plea, and, further, that the assignment was without valuable consideration and fraudulent. To the third, a demurrer was sustained, and upon the first and second, issue was joined. At the trial two exceptions were taken by the defendant upon the admissibility of evidence, and two to the action of the Court in granting and rejecting the respective prayers offered by the parties.

The'first questions we are called upon to consider arise upon the disposition of the pleadings.

The plaintiff was the assignee of a non-negotiable chose in action. He therefore took it subject to all the legal and equitable defences of the debtor to which it was subject in the hands of the assignor, at the time of the assignment. The defendant, therefore, could make the same legal and equitable defences against the plaintiff, as were available to him against Davis at the time of the assignment, and before notice thereof, and to the saihe extent. Code, Art. 8, sec. 3.

This is so well settled that it is unnecessary to cite' cases to sustain it. Gittings vs. Seevers, 24 Md., 376; Harwood, et al. vs. Jones, 10 G. & J., 405; Tims and Wife vs. Shannon, 19 Md., 296.

Our Code confers the right to plead set-off in the broadest terms. “In any suit brought on any judgment, or bond, or other writing sealed by the party, if' the defendant shall have any demand or claim against the plaintiff, upon judgment, bond or other instrument under seal, &c., * * he shall be at liberty to file such demand or claim in bar, or plead the same in discount of the plaintiff’s claim, and judgment for the excess of the one claim, &c.” Code, Art. 75, sec. 12. Thus, liberty is granted to file such demand or claim in bar or plead the same in discount, and no restrictions are imposed as to the amount. If the demand or claim filed in har be for a larger amount than the plaintiff’s claim, in a proper case, judgment will be given for the defendant for the excess. In a case like this, however, where the set-off arises on account of what is due by a third party, no judgment it is true can he rendered, in the same suit, for the excess; but we think no valid ground can be assigned why the statute should for that reason be held to operate so as to deprive the defendant of his liberty to file his demand or claim in bar of the plaintiff’s right to recover. Waterman on Set-off, secs. 660, 657; Kast vs. Kathern, 3 Denio, 344; Peacock vs. Jeffery, 1 Taunton, 426; Byles on Bills, 353.

The objection that the set-off is bad because the plaintiff’s cause of action was executed by the two Steeles? whereas the bill mentioned in the plea is the act of James Steele only, we think cannot be sustained. The plaintiff’s cause of action is the joint and several obligation of the parties, and it is well settled that “where two or more parties enter into a joint and several bond, it becomes the separate debt of each, and may therefore be set-off by the obligee in an action brought against him by either of the obligors. ” Waterman on Set-off, secs. 231, 232; Fletcher vs. Dyche, 2 Durnford & East, 36; Culver vs. Barney, 14 Wendell, 161; Cate vs. Gray, Hemp, 155; Owen vs. Wilkinson, 5 C. B. (N. S.,) 526.

We are of the opinion therefore there was error in sustaining the demurrer to the first of the defendant’s original pleas. The second of the original pleas though stated to be on equitable grounds is substantially a plea of set-off. The facts therein set forth, if admitted to be true, would constitute a full and sufficient answer to the plaintiff’s claim; the plea therefore ought to have been maintained. The third of these pleas was properly held to be bad. The demurrer to the replication to the second amended plea should have been overruled. That the defendant had commenced suit on his single bill, and that the suit was still pending was no sufficient answer to the plea of set-off. Though, as was said in State vs. Balto. & Ohio R. R. Co., 34 Md., 374, set-off is “in the nature of a cross suit, the object of which is to prevent circuity of action,” and does “not exist where the subject-matter of the set-off could not form the ground of an independent suit,” yet it is a defence, and is to be raised by plea. The statute, Code, section 12 of Article 75, expressly recognizes this. It permits the defendant to “file such demand or claim in bar or plead the same in discount, &c. ” And this has always been so held. In Evans vs. Prosser, 3 Durnford do East, 187, the declaration was in assumpsit; plea set-off; replication, the defendant had brought an action against, the plaintiff on the same cause of action, and the plaintiff had paid the money in Oourt; held, on the axxthority of Broion vs. Basherville, 2 Burrows, 1229, “that the replication was ill.” In Naylor vs. Schenck, 3 E. D. Smith, 138, the Oourt said: “They (the defendants) are not prosecuting two actions, one of which abates the other. In an endeavor to recover their damages they find themselves prosecuted by their adversary. They may defend by setting up any matter which the law recognizes as a defence, whether it be a cause of action or whether it be a judgment. * * * The principles governing the defence of set-off are, in this respect, distinctly applicable to this subject; and it was held, so early as in the time of Lord Mansfield, that the pendency of a prior action for a defendant’s claim did not prevent his using it as a set-off, not even if his prior action had progressed to a verdict.” Stroh vs. Uhrich, 1 Watts & S., (Pa.,) 57; Lightbody vs. Potter, 10 Wend., 534; Wiltsie vs. Northam, 3 Bosworth, (N. Y.,) 165; Lindsay vs. Stewart, 72 Cal., 540; King vs. Bradley, 44 Ill., 342; Gunn’s Adm'r vs. Todd, 21 Mo., 303.

(Decided 13th March, 1894.)

As to the rulings of the Court below contained in the first and second exceptions, we do not think it is necessary for us to consider. In the view we have expressed, it is quite immaterial whether the suit in Baltimore City Court was pending or not. The rejection of the evidence set out in these exceptions could not affect the defendant’s case.

The prayers of the plaintiff being founded upon the theory that the defendant could not maintain his defence if, at the time of the institution of the suit, or of the filing of the plea, there was a suit pending to recover the claim mentioned in plea, for the reasons above expressed, ought not to have been granted. We think there was also error in rejecting the defendant’s prayer. The judgment will be reversed, and a new trial awarded.

Judgment reversed, and new trial awarded.