
    The Jefferson County Bank against Chapman.
    • a debt ór deoik "must bbeS<a ex¡stiugdat”the of^plaintiff’s
    ref6gai of a bank to the consequent payment oHts ficVeát evidence "yilt0¿prevent the bona fid* purchaser or holder of their bills, after that time, from set-bills in aS"uit himUSbyagathe
    a inand"of paymentof a bank note, at the bank, is requisite to enable the holder to thSfon%rSUto entitle him to set-off in a suit bfnkf Qwre.
    
    IN ERROR to the Court of Common Pleas of Jefferson county. The bank sued Chapman on a promissory note, mat^e by him the 26th of April, 1819, by which he promised *-° pay *° Daniel Holloway, or order, the sum of one hun^red dollars, at the Jefferson County Bank, ninety days after date. The defendant pleaded non assumpsit, with notice of á set-off. At the trial, the defendant, by way of set-off, offered in evidence genuine bills or bank notes issued by the plaintiffs, signed by the President and Cashier of the hank, dated prior to the commencement of the suit. The plain-' tiff’s counsel objected to the set-off. It appeared that the v * 1 bank stopped payment of its bills prior to July, 1819, and 11 1 / , , „ , ’ had not resumed the payment of them since. 1 he Court below admitted .the evidence, .and decided that the bills should be received in defence, as á set-off against the demand of the plaintiffs, and directed the jury to find a verdiet for the defendant, for 2 dollars and 23 cents,, being ^be balance of the bills given in evidence by the defendaht, ° J over and above the amount of the note and interest. The .. . . . ... - jury found a verdict accordingly, A bill ot exceptions was ^taken to the opinion of the Court
    
      L. Lynch, for the plaintiffs in error,
    contended, that the, defendant ought to have proved a demand of payment of the bills which he offered as a set-off, at the bank. (Bank of Utica v. Magher, 18 Johns. Rep. 341.) A different rule, in this respect, ought to prevail in regard to the notes or bills of a bank, than that which exists as to the notes of individuals. Batik notes are the circulating medium of the country. Banks would be exposed to great inconvenience, if suits might be brought on their notes, without any demand of payment ever having been made.
    Again; the defendant ought to have proved, that the bills offered as a set-off, were in his hands before the commencement of the suit. (Carpenter v. Butterfield, 3 Johns. Cases, 145. Ogden v. Cowley, 2 Johns. Rep. 274. Dickson v. Evans, 6 Term Rep. 57.)
    Again ; under the circumstances of this case, the bills were not the subject of a set-off, for if allowed, it would be a fraud on the other creditors of the bank. When a bank refuses to pay specie, it must stop business, and this is evidence of its insolvency. A note purchased after the insolvency of the maker, though before a suit brought by him, cannot be set off against a debt due to the insolvent. (Johnson v. Bloodgood, 1 Johns. Cases, 51.)
    
      Talcot, contra.
    Whatever may have been the intimation of the Court, in the case of the Bank of Utica v. Magher, as to the necessity of a demand at the bank, the rule, if it were settled, would not apply to this bank. The 8th section of the act to incorporate the Jefferson County Bank, (sess. 39. c. 231.) declares, that the bills or notes issued by the bank, “ shall be binding and obligatory upon the same, in like manner, and with the like form and effect, as upon any private person or persons, if issued by him or them, in his or their private capacity or capacities.”
    
      Lynch, in reply,
    said, the statute referred to, did not prescribe the remedy, but merely declared the nature of the obligation of bills or notes of the bank, not under seal.
   [Spencer, Cb. J.

observed, that the court did not mean, in the case of the Bank of Niagara v. M'Cracken, (18 Johns. Rep. 493.) to decide, that the demand of payment of a bank note, not payable at any particularly place, need not be made at the bank, previous to its being offered as a set-off in in a suit brought by the bank. The decision of that point was not necessary in that case ; and he considered the question as now open.]

Woodworth, J.

delivered the opinion of the Court. The evidence offered by the defendant in the Court below, did not make out a valid defence, because, it did not appear that the defendant wras the owner or possessor of the bills before the commencement of the suit. He relied on the fact, that they bore date previously, a circumstance unimportant and altogether irrelevant; for aught that' appears, he may have obtained the bills after he was sued, and if so, they could not be the subject of set-off.

This principle is well settled, in a variety of cases. In Dickson and others v. Evans, (Term. Rep. 57.) the plaintiff brought an action, as assignee of a bankrupt 5 it was held, that the defendant could not set off cash notes issued by the bankrupt, payable to bearer, bearing date before his bankruptcy, unless he showed further, that such notes came to his hands before the bankruptcy. The principle of this case applies : A set-off is in the nature of a cross action ; the defendant must prove every thing necessary to constitute his demand. It is a general rule, that the onus probandi lies on the person who wishes to support his case, by a particular fact, and of which he is supposed to be conusant. In Carpenter v. Butterfield. (3 Johns. Cas. 145.) this point is decided. A debt or demand to be set off under the statute, must be an existing debt or demand, at the time of the commencement of the plaintiff’s suit. The evidence given is defective in this respect, and did not entitle the defendant to a set-off.

As the first exception disposes of the cause, we are not called on to decide whether a demand of payment at the bank was necessary. In the case of the Bank of Niagara v. M'Cracken, (18 Johns. Rep. 493.) one question raised on the argument was, that payment of the bills had never been demanded at the Bank of Niagara; but it appeared in evidence that the defendant offered them to the plaintiffs, in part payment of his note, and they refused to receive them. This was equivalent to a demand. I observed in that case, “ that the bills were not payable at any particular place, and would have sustained an action without a demand at the bank.” This was my individual opinion. The case did not require the decision of the Court on that point; nor did the Court intend to decide it.

The bank stopped payment in July, 1819, but there is no proof of insolvency; it is merely stated that it had not resumed payment; nor does it appear that an assignment of its property and effects have been made. We are not to intend, that there is a want of ability to discharge all legal demands ; but rather, that owing to the peculiar state of the country, they required time to call in their funds. How, thens can the bona fide purchase of their paper be called a fraud on creditors ? I think it was not. Had the defendant made out in evidence, that he held the notes before the suit was commenced, he would have established his off-set, provided a demand of payment was unnecessary. The Court below erred in admitting the evidence. The judgment must be reversed, and a venire de novo awarded.

Judgment reversed.  