
    JANUARY TERM, 1845.
    James H. Maury vs. Thomas D. Jeffers, et al.
    M., holding the note of J. and L., indorsed it before maturity to the Grand Gulf Bank ; J. and L. failed to pay the note at maturity, and M. was compelled to take it up, and sue J. and L. thereon ; at the trial of this suit, J. and L. plead an offset of the notes of the bank, and proved that they held these notes before the maturity of their note, and while it was the property of the bank ; held, that the notes of the bank were not a legitimate offset.
    Where the payee of a note assigns it before due, and afterwards, on the makers failing to pay it, takes it up and sues the makers thereon, the makers are not entitled to the benefit of any offset they held against the assignee; the statute (How. & Hutch. 373,)'regulating assignment of notes, and the defence thereto, not applying to such a case.
    On appeal from the circuit court of Claiborne county.
    This was an action of assumpsit, brought by the appellant against the appellees, in the court below, upon a promissory note, made payable to the appellant. The defendants pleaded — 1, Non assumpsit; 2, Payment, in the following words:
    “ And for a further plea in this behalf, the said defendants by leave, &c., say actio non, because they say that heretofore, to wit, on the 4th day of January, in the year 1842, and before the commencement of this suit, while the said promissory note was owned by and in the possession of the president and directors of the Grand Gulf Railroad and Banking Company, to whom the said plaintiff had transferred the said note, and before any notice of the transfer of said note by the said president and directors to the said plaintiff, to whom said note was made payable, to wit, at the county aforesaid, they, the said defendants, fully satisfied and paid to the said president and directors of said Grand Gulf Railroad and Banking Company, to whom said promissory note had been transferred by said plaintiff, the said sum of money therein specified, and all the interest then due thereon, and this they are ready to verify; wherefore they pray judgment, &c.”
    With this plea were filed the notes of the bank, equal in amount to the sum sued for. The other facts in the cause are detailed more at length in the opinion of the court. The notes were allowed as partial offsets by the court, and this appeal taken.
    
      James H, Maury, in proper person.
    The notes of the Grand Gulf Bank would have been a good set off under the plea of payment if the suit had been brought against the defendants by the bank. But if the bank, while owner of the note, had sued the present plaintiff as indorser, he would have had no defence in the fact, that the makers had had in-their chest the means of paying the note, whether the means consisted of money or set-offs. ■
    In an action by the indorsee against the indorser of a note, it is sufficient that the makers refused, or failed to pay it on presentment. By the failure of the maker, the indorser became bound to pay the note himself; and, having done so, he is restored to the demand against the maker. And whether the failure of the makers resulted from an inability, or from a mere unwillingness to perform their obligation, can make no difference.
    A set-off must have the character of mutuality. It must be a debt due from the plaintiff to the defendant, which in this case is not pretended. I Chitty P.
    The statute H. & H. 373, sec. 12, by which assignable paper is, after assignment, subjected to such “payments, discounts, and set-offs as existed prior to notice of the assignment, applies to payments made by the maker of the note, and to such set-offs as he might have had against the payee, prior to notice of the assignment. But in a suit by the payee of a note against the maker, the transactions of neither party with third persons can be brought in question.
   Mr. Justice Thacher

delivered the opinion of the court.

This is an appeal from the judgment of the circuit court of Claiborne county.

The appellant instituted his action of assumpsit upon a promissory note which had been made by the defendants to the appellant, as payee. Before the maturity of the note, the appellant had sold it to the Grand Gulf Railroad and Banking Company, and upon its maturity it was not paid by the makers, whereupon the appellant was duly notified in his capacity of indorser. Some time after protest, the appellant took up the note, by paying the Banking Company its amount of principal and interest, and instituted his action. The defendants plead non assumpsit and payment, and filed with the latter plea, as set off, an amount of the circulation notes of the Banking Company. On the trial one of the defendants was permitted to prove that he had the said circulation notes in his possession before the maturity bf the note sued upon, while it was the property,,and before it was paid to the Banking Company. The court below charged the jury, that if the defendant in question was the owner of the circulation notes, while the Banking Company was the owner of the note sued upon, and was also their owner at the time of the trial of the action below, they should, in estimating the appellant’s damages, deduct the amount of the circulation notes from the amount of the note sued upon. The court below refused, upon appellant’s application, to charge the jury that he was entitled, under the circumstances, to recover the whole amount of the note sued upon, — that the facts of the defendant’s holding the circulation notes of the Banking Company, without offering to pay them to that Company, furnished no defence to the action; that appellant was bound, as indorser, to pay the note to the Company, and was not released from any of this liability by the fact that the defendants, or either of them, had in possession, as before described, some of the circulation notes of the Company. A verdict was found for the appellant for the amount of the note and interest, deducting the amount of the circulation notes.

The statute, H. H. 373, s. 12, protecting the rights of the makers of promissory notes assigned by indorsement, previous to notice to them, gives the makers the benefit of all set-offs, made, had or possessed against the same, in the same manner as if the same had been sued and prosecuted by the payee therein. In this case the appellant was the payee of the note. He assigned it by indorsement to the Banking Company. The effect of this indorsement was a contract between the appellant and the Banking Company, in which the former undertook to pay the note, if the makers did - not. The makers failed to pay the note. After the protest of the note, the appellant paid it according to his contract, which operated as a rescission of his assignment to the Banking Company. The note was simply a security which the Company held for the payment of the money advanced by it to the appellant, and upon the payment of that amount by appellant, after protest, he became repossessed of the note, not by the assignment of the Company, but by taking up his own paper, which he was bound to do, and he was thereby reinstated in all his rights over against the makers, without restriction or diminution. The case as presented is not within the statute. The court below therefore erred in refusing the charges requested by the appellant, in charging as it did for the defendants, and in admitting the evidence relative to the set-off of circulation notes.

The judgment is therefore reversed, and a new trial must be awarded by the circuit court of Claiborne county.  