
    George Caines, Plaintiff in Error, against James Brisban and John Brannan, Defendants in Error. George Caines, Plaintiff in Error, against Richard Alsop and others, Defendants in Error.
    
    In an action ofassumpsit "for defendant plead-carried oñ"bui£ name of the pláintiff-, that <i>e plaintiff, an «gent of A.,sold the goods, as; 8ucb age“t as-of the defendant a.,1 anchen01' that11™ d¡dPiot¡ slutltbePg¿odf; was heS^síía"
    
      it seems that; be pleaded, but notice of it must ™der
    seetas that par^?eesd 0‘° pi™ntdfFbbe oífy tee^tbe defend-' “deKuefrom Mrf«pri^p<’a”
    timtPi°“;^p“r! interested,c,íh¿l ibel™?ai hfe p’iaiiftik; his agent, (under priil°ofewhicl the action was brought,) assigned the debt due-from being valid under the
    IN ERROR, from, the court.
    These were actions of assumpsit, in both of which the pleadings were similar, and which were argued together in this court,
    The declarations, in both cases, wére for goods sold and deli- . , , , . , vered; to which the defendant below pleaded, ’
    . 1. Non assumpsit. r
    
    .nil 2. That the goods, in the declaration mentioned to have been sold to the plaintiff, if any were so sold and delivered, were certain law books, and other printed works and publications, and that before, and at the timé of, the selling and delivery thereof, if any were so sold and delivered, and before, and at the time of making the promises, &c., one Isaac Riley carried on the trade and business of a bookseller, by the above plaintiffs, under the'name, style, and firm of Brisban #■ Brannan, (Alsop, _ _ . _ ., . in i r> r Brannan, Sr Alsop,) but, in trüth, for "the proiit and on account of Riley, and at his risk; that whilst Riley so carried on the trade of á bookseller, he, by the above plaintiffs, sold and delivered the books; and that after the several supposed assumptions, &c., and before the filing of ‘the bill in this suit, Riley was indebted to one Thomas Fairchild, or pretended so to be, in some considerable sum of money, and being so indebted, -or pretending so to be, Riley, by John Brannan, his agent,.as, and under the name of, acting attorney for the firm of Brisban <$/■ Brannan, assigned the demand against the defendant to Thomas Fairchild, to be collected by Thomas FaircMld, in the name of the plain- .; . / T ' ■ 1 . . 1 tiffs, but, in truth, for, and on account, and in payment of the debt due to Fairchild from Riley, aud io enable Riley, under the names of the plaintiffs,- to recéivé from the defendant the amount? benefit, and advantage thereof: and that the'bill filed in this sui^was filed by Fairchild, in the names of the plaintiffs., for the purpo.se of enabling .Fairchild to pay and satisfy his de» 'mands, or some- portion of them, against Riley.,, who is-the person that is really, ultimately, and beneficially interested in this, suits and that before the assignment to Fairchild, and before filing the bill, Riley was indebted to the defendant in a large, .-sum of money, to wit, fee,, for Work and labour, &c., for money lent and advanced, &c., on an account stated, fee,'
    3.' That after the sale, fee., and promises, fee., Riley became Solely interested in. the tyhóle of the supposed right,, title,'debt, due, or demand .of the plaintiffs against the-defendant,: and being So solely interested, he, Riley, .whilst hercontinued so' solelyInterested therein, on the 10th of January, _ 181 %-became an. insolvent debtor, within the true intent and meaning of the act of the 3d of April, 13.11, entitled “ An act for thé benefit of insolvent debtors and their creditors.” That after Riley became insolvent, and before the repeal of the act.- of the legislature, and whilst Riley continued'ta claim to he so solely interested in the whole of the supposed right, title, debt, due, or demand of the plaintiffs, on the 1.8th of January aforesaid, John Brannan? one of the plaintiffs,, in the .character, and by the'description, of acting attorney for the firm of Brisban 8r Braman, the plaintiffs-, .but,.in truth, by the direction, and in the behalf, and on account of Riley? assigned the right, Sec.'? to Fairchild, to be by him collected in the names of the plaintiffs, but, in truth,, on account of Riley:, and in part payment and satisfaction, when -collected, of a debt, or pretended debt, due from Riley to Fairchild; and that it was so made to pay á debt due to Fairchild, in preference to . other debts due from Riley, and hi contemplation of applying for the benefit of the act, when, he was an insolvent debtor within the true intent and meaning thereof, and with intent to defraud his other creditors, of which Fairchild had notice, he, Fairchild, not being a creditor who had, before the.passing'of . the act, imprisoned, impleaded, or prosecuted Riíéyyon any: civil process issuing out of any court, within and under-the, authority , of this- state,., for debt,, or any contrac t ...express- of implied,that, after the assignment, Riley, .according, to due form- of" law,.at Flatbush, in the county of King’s,, presented a petition to W£lUamFvjrmm, first.judge of, the court of. common pleas of that county, praying’that his estate might be assigned, and he discharged from his debts, according to the provisions of the act of the 3d of April, 1811; whereupon such proceedings were had, that the estate of 'Riley was, in due form of law, assigned to certain assignees, and all the right of the plaintiffs,- and of Riley, in the supposed debt against the defendant, became vested in law in his assignees; and William Furman, by a discharge under his hand and seal, bearing date the 1st of May, 1812, discharged Riley from all his debts; and that the bill filed in this suit was filed by Fairchild, in the name of the plaintiffs, to enable Fairchild to collect the supposed debt, and apply the same .in paying and satisfying the debt of Riley to Fairchild, in preference to the other creditors of Riley.
    To the second plea the plaintiffs replied, that Isaac Riley did hot, by the plaintiffs, under their name, style, and firm, or otherwise, howsoever, sell and delivér to the defendant the goods, books, &c. , in manner and form, &c.
    To this replication the defendant below demurred, and assigned for causes 1. That the replication does not traverse, or confess and avoid the matter alleged in the plea, nor answer it but by way of inference and argument only. 2. Because the matter set forth in the replication is matter óf evidence, and no •material issue can be taken thereto. The plaintiffs below joined in demurrer.
    The plaintiffs below demurred, generally, to the third plea and the defendant joined in demurrer. The court below gave judgment for the plaintiffs below on both demurrers, and the issue on the first plea having-been tried, the jury gave a verdict for the plaintiffs below, and final judgment was entered thereon in the usual form.
    [See the decision of .the supreme court, and the reasons assigned, in 10 Johns, Rep. 45. 396.]
    The following are the reasons offered by the plaintiff in error for reversing the judgment:
    1. Because, by the common law, assignments of debts,-or choses in action, aré not permitted, and are recognised at law' only to avoid sending the assignee into equity; in consequence af this, assignment of debts, as being mere equities, are, when recognised by law, governed by equitable principles. By these principles, notice to the debtoris indispensable, to take away from him any of his rights against his creditor, the assignor. By the same principle, until notice of the assignment of a debí is given to the debtor, it is, as to him, as if it had never been made; and, until the time of notice given, he deals with his creditor on the same terms and footing as if, there were no, assignment j-that the consequence of this is,; that the debtor’s right.of setting off the amount of any credits given by him-to his creditor, continues; to the .time of notice of-the assignment,, and is not regulated, or governed, by the time of the' assignment made, (or its date,) but by the time of the -notice of assignment given to him. , ■ ,, .
    2. Because, by the first decision, of the supreme .court, the tight of set-off, which a debtor has, under the statute, against his creditor, will he taken away by a secret assignment of his debt, Without notice, when he may have been dealing with his ere-, ditor, on the faith, of paying that very debt, and without 'which faith he would not have dealt at all. •
    3. Because, by the ,same decision, a wide door is opened to fraud and deceit, especially in.cases ñf insolvency, like those before the court ; for a tradeig particularly, might, (if a secret assignment of á debt, without notice, be good against the set-., off of subsequent creditors,) by assigning the debts due to him. as soon "as contracted, receive payment of the whole, from, his unsuspecting debtor; who might be obliged to .pay the same-debt over again to the assignee, and then have to look -for his own money under an insolvency of sixpence in the pound, -
    4. Because, by the same decision, a host of cases, which have Jong been considered as the landmarks of trade; will be overturned, and the whole, system of commercial dealing be shook to its very basis.
    5. Because,-by the first principle of the second decision of the supreme court, against a debt contracted through the me- . dium of a factor, who has, no claim on the. money,.a right of set-off against the- principal seems to be denied, though such principal may owe the defendant ten times the amount; and' this merely because a factor may sue in-his own name for account of his principal. " ,
    6. Because, under that part of the decision of the supreme court, any man who chooses to trade through the medium of a. factor, or ágent, might, by bringing Ins actions in the name of the agent, render the whole statute of set-off a dead letter.
    
      7. Because the supreme court, have , given,. as a: r.eásoh foftheir second judgment, a fact which was immaterial to the isstie, and which, by their first judgment in the above causes, they determmed to be so.
    8. Because, by the second decision of the supreme court, it appears that trusts have been confounded with the uses, on wJhieh they are held, and a transfer of the Míe being supposed to create a complication of the ttust, making thereby a complication of a trust depend, not on a diversity of interest, but.a change of parties.
    9. Because, by the second .decision of the supreme court, the right, of set-off is construed to exist only between parties to the record, the necessary result of which must be, that either an assignment of a debt, or a contract made through an agent, though for the benefit of another, would destroy the effect of the act; and, thus, a statute formed on equitable, principles be made to operáte against equity. ' '
    10. Because, by the Second decision of the supreme court, it appears, that though the construction of the statute, objected to ■ in the last and ninth reason; should be relaxed,’and a set-off admitted in favour Of cestiiff que trusts, still such set-off must,; by the judgment of the court, be limited to cases where the set-off is less, or equal to the amount of .the debt demanded, and will not extend to cases where the set-off is of a larger sum than the debt claimed ; from whence this incongruity will follow, that a payment may be.made with a small sum which cannot be made with a larger; or, in other words, that, against a demand for 100 dollars, a set-off of 100 dollars will be a good bar to a recovery, but a set-off of 150 dollars will not.
    11. Because,, under the same decision, the remedial act fox* die amendment of the larv is construed strictly, not according to its spirit, but its letter* and the particular relief, afforded by the first section, is made to destroy the general relief afforded by the tenth ; and thus to operate as a virtual repeal, in a particular instance,, of .‘a subsequent clause of the same act, by which a general and universal right is -given in all instances.
    12. Because, under the second decision of the supreme court, where a suit must, in order to satisfy the forms of law, necessarily be in the. names of the plaintiffs, a defendant cannot show in whom the right to the subject matter of the suit is, in bar to an- action prosee,uted on account of a person wh.o has no fight; and thus the recovery will be controlled by the names of the^parties, and not by their rights, as shown on the record..
    13. Because, under the second decision of- the supreme court, in cases of insolvency or bankruptcy,, where, by the statute giving relief, the assignees are not authorized to sue in their- own. ñames, their legal right'; to the debts assigned, can never be pleaded as a bar to a recovery on an assignment made in fraud of their rights, under the. statute; the result of which would necessarily be, that a colluding creditor might recover the whole of the insolvents, debts', and, under .¡the judgment, of :a court of law, put them into the hands of the insolvent himself, against his own assignees, under the statute, who would have no remedy but by a suit in equity against the insolvent.
    14. Because, under the insolvent act of April, 1811, all suits by the assignees,, for the real and personal estate of the insolvent; must be in' their names; therefore, the second decision of the supreme court is, ia that point, erroneous in its very foundation.-
    
      15. Because, under the insolvent act of April? 1811, assignments made by.debtors, who become insolvent, within the meaning of that statute, after its passing, are prohibited and declared fraudulent, and are therefore "void by operation of law; jet, according to the decision óf, the supreme court, assignments thus, made against law, are. a good basis on Which to ground a recovery at law; contrary to the maxim of ecu dolo mato non oritur actio, that is', a fraudulent act can never give .a right of action.
    The. following reasons were offered by the defendants in error . for affirming the judgment:
    As to the second pleá,
    1. Because the replication is a full and sufficient answer to-the plea. The defendant pleads, that Isaac Riley was indebted to him in a sum exceeding the plaintiff’s demand;; and that Riley carried on business by the plaintiffs, in their partnership name, and, by them, sold the goods for which .the suit is-brought to the .defendant. ' Now, the whole' ground of the claim to set-off comes from the alleged fact, that Rileys though under the name of anbther, was, in truth, the vendor of the goods, and that, therefore, it was á case of mutual indebtedness between, him and the defendant.- The plaintiffs traverse the fact, that Riley, by the plaintiffs, or otherwise, sold the goods; and whatever might be the indebtedness of Riley to the defendant, it is manifest that that cannot be the subject of set-off against the plaintiff’s demand, unless they acted for, or on behalf of Riley.- The very allegation, then, upon which the "whole claim, to set-off rested, is directly and" distinctly denied in as broad terms as it is alleged ; and this is consistent with, the known and established rules of pleading. The replication may at once deny. the particular fact intended to be put in issue, and conclude to the country.
    2. The plea is, also, in itself a nullity. At common law, debts could not be set off, but the party was put to his cross action. Our act, which has varied the common law, allows the defendant to plead the general issue, and give notice of the matter he intends to set off. It is a rule, that where a statute gives a remedy, not known to the common law, that remedy, alone can be pursued. In this case the rule should be rigidly inferred. The remedy given is simple and inartificial, calculated' to expedite justice, and to rescue parties from the labyrinth of legal subtleties and forms.
    3. But even admitting that Riley was a cestuy que trust, for whose use the goods were sold, yet a court of law cannot recognise and settle such interfering' and complicated trusts as are unfolded by this plea. The plaintiffs having openly acted as the owners in the sale of the goods, the promise enured to them, and they can rightfully maintain the. action in their names. Riley, at most, then, had only an equitable interest; the legal title was. in them ; and they, by the direction of the cestuy quetrust, have assigned the demand to Fairchild for a bona fide consideration. A court of law is incompetent, from its constitution,, to prove the nature of their respective rights.
    4. It is not a suit in which our statute authorizes a set-off, which applies to the case where two or more persons, having dealings together, are indebted to each other, and one brings a suit against the other. -The plea discloses no mutual dealings between the plaintiff and defendant, There never was a time when the plaintiff could, at law, have availed himself of this asserted set-off. The original contract was between other parties, and the plaintiff in this suit was never indebted to the defendant. No bálance could be certified against them in favour 9f the defendant. ‘
    As to the third plea,
    
      1. This plea proceeds upon the ground, that Riley was fairly indebted to Fairchild, and that the, assignment from the plaintiffs, -to secure that debt, while Riley contemplated taking the benefit of the insolvent law, of the 3d of April, 1811, was void, As giving him. an unjust preference'over other .creditors* At common law such assignment, is clearly valid ; for one creditor has a right, if he can, to obtain payment or security, in preference to another. Vigilantibus won dormientibus subvenit lex. If the. assignment is. invalid, it must be made so by the act. Now, the act does not' invalidate the assignment; . it merely provides, that -if the debtor, after being prosecuted or imprisoned, shalTgive such preference, Ae.-shallnot be entitled to the benefit 'of the act. It is an objection to the discharge of the debtor, not to the validity, of the assignment. It is directly the converse of the provisions of the English bankrupt laws, by which t-iie bankrupt is discharged, but: the assignment avoided* •
    2. But even if such assignments were, by the general provisions -Of the .act;, ¡invalidated, yet -this plea is wholly de-. fee live, in not stating that Riley was prosecuted after the passing of the act, and made the assignment after the prosecution. On the contrary, it is expressly averred, that he was not prose-., cuted by Fairchild, and it is no where alleged- that he was • prosecuted by any' one else. To bring the case within any of The provisions of-the act, even, as an objection to the intended-application of Riley for a discharge, it was- necessary to allege that a preference was given, not only after á suit comrnenced, ■but that siich suit was., in fact,; commenced after the passing of the act.. This results expressly from the last proviso of the first section!
    3. But independently of these grounds, the: defence in the plea is utterly untenable, on any' principle., The' defendant ádmits the-debt, and the .plai-riti-ffs are the only persons in law recognised' as capable, of recovering it. The'.asserted- fraud on Riiey’s creditors cannot release'the defendant from his liability. Whether the plaintiffs, after-reeovei-y,,"would hold, the money in trust for Fairchild, or for Riley’s creditors, is a question between them, which the defendant is neither bound nor admitted to litigate. Tft-is not pretended that the assignees have-ever. interposed, or forbid payment to the plaintiffs or Fairchild.
    
    
      Caines, for the plaintiff in error.
    The-principle'of the decision of the supreme court, in the case in 10 Johns. Rep. 46., (Brisban & Brannan v. Caines,) is, that a secret assignment of a debt deprives the debtor of his right of set-off. That position is erroneous: that the assignment may produce such an effect, it is necessary that it should be accompanied with notice ; and the assignment is valid, in respect of the debtor, not from the day of the assignment, but from the time that notice was given. The date of the assignment is altogether immaterial. Here, the plaintiff in error never had notice; his right of set-off, therefore, continued unimpaired.
    The replication of the plaintiffs below is bad: it is argu? mentative, does not answer the plea, is a negative pregnant, and tenders an immaterial issue.
    In the second case, (10 Johns. Rep. 396.,) the supreme court put their decision upon an objection that never was made; it was not contended that the agent could not bring the suit, but it is admitted that either principal or agent might have brought it. They say, too, that the trust is “ interfering and complicated but it is contended that it is a simple trust, and that Riley, and not Fairchild, is the cestuy que trust. But, admitting that Fair-child were the party beneficially interested, still the set-off would be good for want of notice. A set-off must be allowed where-ever a cross action could be brought, for a set-off is'in the nature of a cross action; and, if Fairchild had an interest, it should be allowed, in order to prevent a suit in equity, The court say, that the statute of set-off refers merely to the parties on record : but it is contended, that it is unimportant who are the parties to the record; we are to look merely to the persons beneficially interested. It is no objection, as it was considered by the court below, that the plea shows a demand larger than the one declared.for, and that the plaintiffs to the record owe nothing. Nor is it an objection that the set-off was pleaded. By the 1st section of the act for the amendment of the law, a set-J % 5 off is made a defence, and by the. 10th section a defendant may plead as many several matters as he may think necessary to his defence. By the . teri pound act, the defendant is allowed to plead or give notice of a'set-off. Where a larger sum is due from the plaintiff, it is more proper to plead than to give notice. But supposing the plea to be bad, the plaintiffs have made i t good, by replying, without objecting to the matter of form, by special demurrer. As to Fair child?? interest, it. appears, from the pleadings, that he- only, had an authority: to .collect, and nothing more.
    As to the second- plea in bar ; that' plea states an assignment by Riley to Fairchild, in preference to his other creditors. It is a principle applicable to the insolvent act of 1811, that after the passing of that law, if any ope should become an insolvent under the-act, he Cannot, after becoming shch insolvent, assign or distribute any" of hii; property. G.ne object of' this statute is; to prevent fraud; it should, therefore, be construed liberally. The statute itself, in the 1st section, prohibits this very actit compels the debtor to swear that he has not made .any preference among his creditors, or any preferential assignment of his property after he had become insolvent. Every penalty in a law implies a,prohibition, and,, in the 7th section of the act, thére.'ís a penalty imposed on preferential assignments. This' assignment was made by Riley subsequent tq his' becoming an insolvent. • . -, - ' - ■
    The suit was. not brought, as is. asserted :by. the court below, in the names of the right persons, but should have been .in the' names of Riley's, assignees. . i By the common law., choses in ac-,lion, could not be assigned but ,thq act enables assignees to collect debts in their own names. ' A plaintiff must"show that the debt which he demands is not only due from the defendant,, but is due to himself; and the demurrer to this plea confesses; that the debt was due to Riley. After the assignment of Riley's es- ' '' ■ y ... i' tale, the defendant could pay the debt tono other-than Riley s assignees': of this assignment he had complete notice, previous to the commencement of the suit, for a newspaper notice is a sufficient notice under the; statute.. Had the defendant paid the money, after notice, to the insolvent, it would have been in his own and would have been no defence in an action by Riley's assignees.
    
    Henry, for the defendants in error,
    The principles cono tended for on the opposite side, are not disputed: it is only necessary to show that they do not apply to this case. From the plea, it. appears that the defendant dealt with the.plaintiffs as principals; that the de bt. was- assigned to Fairchild-, for a fair and valuáble consideration, to pay a debt due from Fairchild té Riley* and that Rdirchii^-^f^s- not a mere agent- or attorney to 'collect the .money. In the replication it is denied that the were
    Under the second plea, the defendant could not Avail himself of the set-off: a set-off can only be between persons dealing together, and mutually indebted; and there must not only be mutuality of, indebtedness, but an individuality. The supreme court says, “ you shall not impair the right of a third person by this set-offthey say, “ you shall not impair the fight of the factor by this set-off^ neither Will we heat1 it, because it will draw-info examination the accounts of the factor..”
      Fairchild -claims under the assignment' which was made for a good considefation. Mr. Gaines asserts, that Riley was the person rCally 'interested: now, how are the rights oí Fairchild tobe tried? Can the court award an interpleader? Ór would they examine into these complicated trusts,-on affidavits ? -
    The court below considered the plea bad, because it was a special plea in bar, and not .the general issue, With notice* The right of set-off was not given by the common law, but was introduced by statute, and the statute having prescribed the mode-in which a party may avail himself of his set-off, he can resort to no other. This was, no doubt, intended by the legislature to save .costs, and to avoid the intricacy and expense of special pleading. The IOth section of the act, for the amendment of the law, relied on .by the opposite counsel, does not vary the form; that section merely gives a defendant the right of multiplying his grounds of defence. •
    It is said, that the replication to the plea made it good: it is true that a plea, defective in matter of form,, is cured by the replication; but here the plea is defective in substance. It is not insisted that a set-off is admissible only between parties to the record; but the main fact alleged in the plea • is, that the plaintiffs sóidas factors, and not as principals', the replication denies this allegation, and lakes aft issue upon the very-foundation of the equity on which the defendant rested. ■ -
    As to the.second special plea, it will appear, upon examination, that there is an acknowledgment of a debt due from Riley to Fair child.j of course, that there was a consideration for the assignment; but that Fairchild was preferred to thqsother creditors. The English- bankrupt law, it is true, Would, render such a preference void, but under the insolvent act of 1811, it is valid-as to the creditor preferred, and the whole penalty rests wp°H - the-insolvent, by precluding him-from the benefit of the act. There was. then a perfect right vested, in Fairchild, of, which the -act never intended to devest him," There is no ihtimation, in any part of the plea, that Riley was either prosecuted oí'- imprisoned; therefore, the plea is defective in substance, under the statute. 'It was urged, on the other side, that the 7t,h §e,ction- of the act imposed a penalty upon those -who took advantage of the preference ; but that refers to trusts, and not •to assignments for the payment of debts. The .plea is also bad, because it doe? not appear to whom the assignment was' made..;
    It was contended, also, on the other side, that Rileyls equitable interest passed to his assignees; and that they might have sued in their own names. This is denied: the assignees would have no other right than what the insolvent himself possessed, Süp» pose the insolvent were the assignee of a bond',-o,r a ceshiy qua trust, his assignees coiild hot bring an action intheir own names, but could have the same rights only, to recover the debt, as the insolvent had, The action was properly brought in the name of the present'plaintiífs; and, as Was said by the supreme court; the claim of Fairchild, on the one hand, and of the assignees of Riley, on- the other, cafindt-be tried -in this. suit. Suppose .the"-' mOney were to be brought into court, would the supreme court put the assignees of the insolvent, and the holder of the chose - in action, upon-their trial by affidavits ? .
    
      Caines', .in -reply,
    denied that the defendant below dealt with the plaintiffs as principals; the very words of. the plea show that. the plaintiffs were mere agents. The individuality and mutuality of the. parties, therefore,. existed; for the. parties were the: defendant and Riley, who-Was the only person interested before the assignment to Fairchildand it does not appear, from the pleadings, that the plaintiffs had any lien upon- the goods or debts. of Riley. In,, iipswer to the objection, that .the plea does not state that Riley was prosecuted or imprisoned before the. assignment to Fairchild, lie said, that' it was stated that, bn . such-, a day, Riley- became an insolvent, within the intent and mean» ing of. the act, and, also, that the assignment was made on a day after that on which he became an insolvent.
    
      
      
         5 Johns. Rep. 105. 8 Johns. Rep. 152.
      
    
    
      
      
        Bull. N. P. 179.
      
    
    
      
      
        4 Ves. jur. 118. 2. Burr. 826. 8 Johns. Rep. 156.
    
    
      
      
        1 Term Rep. 632, 623. 1 Johns. Cas. 54. Tutlle v. Bebee, 8 Johns. Rep. 152.
      
    
    
      
      
         Ruggles v. Keeler, 3 Johns. Rep. 263.
    
    
      
      Tidd's 606.
    
    
      
      
        Garth. 253. Rep. 60.
      
    
    
      
      
        Bac. Abr. Pleas &. Pleadings. Hob. 104. Vaugh 8. 58. Co. Litt. 285.
    
    
      
       1 Term Rep. 62. 12 East, 656.
    
    
      
      
         Montague on Set-off, 23.
    
    
      
       Cowp. 251
    
    
      
       1 Atk. 193.
    
   Cantine, Senator.

The plaintiff in efroi claims to have the-judgment of the supreme, court, in this cause, reversed, on the ground, that both his special pleas, in bar, are good,. and well pleaded.; and that the replication of the defendants in error, to the first special plea, is bad ; because , it traverses what is merely matter of inducement; that it tenders an immaterial issue; and is argumentative.

The supreme court determined that both pleas were bad, and on that determination their judgment is founded; on the. sufficiency, or insufficiency, of the replication they gave no direct opinion. .

Though I cannot subscribe to the correctness of all the reasoning of the court, in support of their judgment, yet, from the view I have taken of the subject, my mind has been brought to a conclusion in favour of its affirmance.

There appears no good reason against the right of set-off in this "’cause, if the plaintiff in error can avail himself of that right, under a special plea of set-off. The. statute allows a set-off where ‘Í two or more persons, dealing together, are indebted to each other, or have demands arising on contract, or credits, against each other,” Assuming for a fact, what the plaintiffin error averred in his plea, that the goods were, sold to him by Riley, through his "agents, Brisban $• Brannan, for the profit and account of the said Riley, and at his risk, it is, manifestly, a dealing together, between Riley and the plaintiff in error, within the very words of the act.

This suit might have been brought in the name of Riley, as well as in the name of the present defendants in error: and, in such case, no one would have pretended to controvert tbé plaintiff’s right of setoff: has, then, that right been impaired by the assignment to Fairchild, or by the circumstance of the suits being brought in the name of Brisban Brannan,-the agents, of Riley? Ithinknot; this case presents.no interfering, orcomplicated trusts ; but a simple and' direct transmission of interest from one to another, making only a change of parties to the same interest. The assignment to Fairchild could not at all affect the rights which the plaintiff in error had previously acquired; he took, subject to the equities between the original parties: it would be in the highest degree unjust, and would render the' Statute of set-off a dead letter, to permit a creditor to deprive his debtor of his right of set-off by á transfer of his demand to third person; the .supreme, court have uniformly taken cognizsince of the assignment of choses in action, to avoid driving; parties into a court of equity. In the case of Andrews v. Becker, (1 Johns. Cas. 411.,) the defendant pleaded a release of the action from the plaintiff on the record; to this there was á replication, stating that the'bond, on which the suit was brought, had been assigned -to Adams & Parish, of which the defendant had notice : this replication was held to be good, and , the interest of the assignees protected : the same principle is recognised and fully established in anumber of subsequent decisions., (Wardell v. Eden, 2 Johns. Cas. 121. S. C. 1 Johns. Rep. 531. Littlefield v. Storey, 3 Johns. Cas. 425.)

These decisions are' certainly agreeable to equity and common sense ; but upon • the same principles, and for the same reasons, are we also bound to protect defendants in their right of set-off, acquired before a transfer of interest by the plaintiffs on record. : . ' -

To limit the right of set-off to the parties to the records would greatly narrow down the beneficial operation of the statute. The former decisions of the supreme court have been uniformly in favour of extending the benefit of this statute to-the parties in interest, though not parties to the record. In the case of Johnson v. Bloodgood, (1 Johns. Cas. 51.,) the court decided, that they Would'protect the- interest of the 'cestuy que trust against a set-off, which would have been good against the. plaintiff on the récord, had the interest remained in him. The same principle is contained in the ease of Littlefield v. Storey, (3 Johns. Cas. 425.) The case of Ruggles v. Keeler (3 Johns. Cas. 263.) is analogous to the present,; the court, there'permitted the defendant to set- off a demand against one, Walker Lewis, in bar of. the plaintiff’s right of action, on' the ground of 'Mewis*being the party in interest, Ruggles having assigned the de-’ mand to him. - And in the case of Tuttle v. Beebee, (8 Johns. Rep. 152.,) the court permitted the defendant to set' off .bonds,. which had been assigned to him by third persons, against , the: plaintiff. From these decisions, it is manifest that the supreme court, in regulating the right of set-off,- have always had regard to parties in interest, though pot parties to the record1, On the argument in this court, it - was contended, in behalf of the defendants in error, that, being factors of Riley, they had a right to-¿bring the suit in their names, and to, retain in. their own hands,, whatever might be due them from Riley, as having .a legal lien, on those demands to satisfy themselves first; and, in support of this principle, they cited Drinkwater v. Goodwin, (Cowper, 255.,) and insisted that the plaintiff could not, therefore, set off, it) this suit, his demand against Riley.

It is not necessary to deny that, as factors*, they had a lien on this demand for what Riley might owe them.. To controvert the correctness of the conclusion, that the plaintiff’s right of set-off wás thereby destroyed, let it be conceded, that if Riley had been indebted to them at the time when the goods were purchased, or prior to the time when the plaintiff in error acquired any right of set-off, that their lien would have had the preference of the plaintiff’s set-off; it does not follow that, if such lien did not exist, the plaintiff would still be deprived of a right of set-off. The case of Drihkwater v. Goodwin is not analogous to the present case; there the defendant claimed the benefit Of a payment to. the factor of Drinkwater, and showed .affirmatively that the factor was a creditor, having a lien on the demand in controversy. In this cage it appears affirmatively that the factors have no lien; because, as agents of Riley, they have assigned the demand to Fairchild, for his' use and benefit' alone, and to secure to him the payment of a demand he had against Riley. The assignment, in: this case, must, therefore, be Considered in the same light as one made immediately by Riley to Fairchild, and in which the. defendants in error have no sort of interest whatever..

The next inquiry is, could the plaintiff in error plead his set-off specially in bar of this action; or should he have pleaded the general issue, and given notice of it, as the act directs. The remedy by set-off is a creature of the statute ; it did not exist at common law; the plaintiff in error was bound, therefore, to confine himself to the remedy as appointed by the statute. The supreme court, in the case of Tuttle v. Beebee, before cited, say, that this statute must be liberálly expounded. It is undoubtedly proper, and for the advancement of justice, that it should be so construed ; but there is certainly a wide difference between a liberal construction of a statute* and a total departure from its provisions. A strict construction of the act would limit the right of set-off to the parties to the record; but to answer its benefic ial purposes, it is necessary to extend that right to the parties in interest,, though not parties to the record. Again, the act directs that, where the plaintiff js overpaid, the jury shall find a verdict fof the defendant, and certify the amount due from the plaintiff &C. A strict and literal.construction of-this-branch of the statute would produce the difficulty suggested by the Supreme court in their decision of this cause. A liberal construction would permit the defendant to sét off as much as was necessary to prefect himself against the claim of the party in interest, though not to the record ; and yet the. remedy appointed would be pursued, because exactly in the form prescribed by the act.: nor .is there any good reason- to suffer a departure from the form prescribed; it is not at all necessary to promote the ends of justice. This form was undoubtedly appointed to facilitate legal pi’ooefedings, and to disincumber them from the intricacies óf special pleading ; and it affords as ample and perfect relief, as can possibly be had by means of a plea of set-off. If it had not .been intended to confine a party to the form prescribed, the provision Would have been, in the alternative, that lie might plead his set-off specially, Or pleád die general issue,-with notice of it, ' This appears manifest from the consideration that our statute is taken from oue of Géo. II., on this subject, in which'the remedy, by set-off is thus given in the alternative. ■ .

In l Saunders, 136., (note 4.,) Sergeant Williams, in speaking of remedies given by statute, says, “ The distinction seems to be this;; where a statute makes unlawful that which was lawful before, and appoints a specific remedy, .that remedy must be pursued, and no other.” And in the case of Miller v. Taylor, (4 Burr. 2406.,) this rule was considered as-applicable to civil cases. ,

A subsequent section .of the same act, gives to. a party a right to plead as many several matters as lie shall think necessary for his defence ; and .it was' strongly urged, that-a just and liberal constfuctihn of this section gives the right to plead a set-off specially. What was the object of that- section of the . act.? What was-the relief intended to be granted? It was to remove a difficulty which'exis-te'd at commoii law. Before this act,-:a party wás not permitted to plead different defences-tó the, same action. But it is not necessary to permit a set-off to be. pleaded’, spe-óiaHy, to carry The objects of this section into-full and entire effect ; every benefit ín.téñ'ded jo be secured.by it, is- equally attainable by a plea of the general issue with notice; and.because a defendant may now'plead as many matters as he may judge necessary for his defence, it by no meaiis follows that he inay also alter a prescribed form. The legislature having thought proper to appoint the mode by which a party shall avail himself of a set-off, and that mode affording a full arid perfect remedy, it would be manifestly wrong to permit a departure from it.

But if the plea is good, the replication is so also ; it tenders a full and perfect issue. What is the fact put in issue by the plea? Why, that the plaintiff purchased the .goods of Riley, through Brisban e Brannan, his agents, and that thé plaintiff had a set-off against Riley. Suppose the replication had also negatived the averment, that Riley Was really and ultimately beneficially interested in this suit;, and the cause had been brought to trial before a jury ; and, On the trial, the plaintiff had failed to prove that the goods were sold and'delivered to him by Brisban dr Brannan, Us the agents of Riley, would it have been competent for him to prove that Riley was beneficially inte» rested in any other manner ? Clearly not. The interest of Riley, through Brisban Brannan, is the fact put ori trial by the plea; that fact is fully answered by the. replication, and an issue tendered ; the plaintiff’s demurrer, therefore, was not well taken..

The plaintiff’s last plea is manifestly bad. I will add one reason to those contained in the decision of the supreme court. The act of 1811, which prohibits'a preferential assignment by a debtor, has this exception in it: “ But this proviso shall not extend to any debtor who shall have been imprisoned, impleaded, or prosecuted, as aforesaid, before the passing of this act; nor shall such debtor be required to take that part of the oath which relates to a preference among creditors.’.’

The plaintiff’s plea has no averment, that Riley was not imprisoned, impleaded, or prosecuted, before the passing of the act. If, then, an assignment, under this act, to a bona fide creditor, made by a debtor imprisoned, impleaded, or prosecuted, after the passing of the act,, was void; yet, if such debtor had been imprisoned, impleaded, or prosecuted^ before the act was passed, he had a right, by tlie very, provision of the act, to make a preferential assignment to a bona fide creditor; such assignments were left on the same footing as though this act had never Rad existence. The plea admits that Fairchild was a bona fide creditor; arid, for aught that appears upon the face of this plea, Riley had a just and legal right to make the assignment to him. ‘ I am, therefore, of opinion, that the judgment of the supreme court ought to be affirmed. \

Sanford, Senator.,

Without examining all the questions which learning and! ingenuity have' brought into discussion, in ■ this cause, my mind tests- with satisfaction upon two' points, which are decisive/

Whether'the second plea is good or bad, I think the replica* lion sufficient. The plea alleges,- that Riley was the real vendor Of the goods; this allegation is material ; arid is, indeed, the basis of the:, whole plea, The replication denies that Riley .was the real vendor of the goods; and thus selects a single certain material fact, from the various matters set forth, in the plea, and puts it in issue. The other facts are admitted, this alone being denied. The question, whether Riley was the-real vendor,. or not, appears to me to be a fair and material issue, and one which must determiné tile whole cause.

The third plea is bad in substance.' Taking the facts as they .are stated, Fairchild, a creditor, had a right to obtain payment from Riley, his debtor; and Riley had a right to, páy this- creditor, in preference to others. Riley assigned the debt demanded by the suit to Fairchild, who received it in part payment of Riley’s debt to him. The intention oí'Riley tó prefer FtíiVcMd to other creditors, and to apply for his own discharge from- his debts, cannot invalidate this assignment,, or payment.. S.uch a transaction is dearly valid af common- lawj and. is not-impeached by the Statute of the 3d of April, 1811.

For these reasons., I am' of opinion, that the determinations of the - supreme court, upon,both demurrers, were correct, and that their judgment ought to be affirmed.- /;

This being the unanimous opinion of- the court,-it was-there* upcm.ordered:and adjudged, that the judgment of the supreme court be ..affirmed and further, that the defendants, in error, recover against the plaintiff, their damages, by reason of. the delay of the execution, and also their costs, in defending the writ of error, in- this cause,, tobe taxed, &c.;' and that the record be-remitted, &c.

Judgment of affirmance;  