McGehee v. Harrison ( 1874 )

BRICKELL, J.

The acceptor of a bill of exchange contracts, absolutely and unconditionally, that he will pay the bill upon due presentment at maturity. As to' the payee and indorser, he is the principal debtor, bound to the same extent as the maker of a promissory note. If an indorser is compelled to pay the bill, it is not thereby extinguished, and his right of action against the acceptor converted into an action for money paid. He is remitted to his original title, and stands as if he had never parted with the bill. If Shular & Ardis were the acceptors of a bill of exchange, of which the defendant was the payee and indorser, and the defendant paid this bill, it became in his hands a valid set-off to any debt due from him to them. If his debt was not evidenced by negotiable paper, the set-off is operative against any transferree of Shular & Ardis, to the extent to which it would have operated against them when notice of the transfer was given. It matters not what was the consideration of the bill of exchange, or of its acceptance, so long as thereby the relation of the payee and the acceptor was not changed. It may have been an antecedent debt of John H. Murphy So Co., of which firm Shular & Ardis were surviving partners; or it may have been wholly or partially founded on a new consideration. It is not the consideration of the debt, but the relation of the parties to it, that determines its validity as a set-off. Nor js it material that Shular So Ardis, after the acceptance of the' bill, or after its payment by the defendant, considered themselves as forming a new partnership, with which the debt claimed of defendant was contracted. No notice of this new partnership, if it was formed, was given to defendant; and if notice had been given him, the partnership was composed only of individuals who were jointly and severally liable to him on the bill of exchange. If Shular So Ardis were the plaintiffs in this action, the debt due by their acceptance of the bill could be set off against them, though after the acceptance they had formed a new partnership, not having a new member, with which the debt claimed of defendant was contracted. The rule certainly is, that a set-off, to be valid, must be due to or from the same persons in the same right. The debt is considered as due in the same right, when the plaintiff can sue, and the defendant'be sued, in their own names, without specifying any representative character, and the party to the suit has a lien upon, or a legal right to the application or distribution of the fund when collected. A surviving partner may sue or be sued in his own name, and debts due to or from him in his own right may be set off against debts due to or from him as surviving partner. Miller v. Franklin Bank, 1 Paige, 544; Waterman’s Set-off, 173. In that case, the party, suing, or sued, is the same individual, against or by whom the set-off is preferred; and hence it is allowed. So, if Shular So Ardis were here plaintiffs, the set-off preferred would be against the same individuals who were suing. The right of set-off, under our statute, exists against the plaintiff, to the same extent to which it existed against Shular So Ardis. The charge of the circuit court is not maintainable, then, unless there had been clear and uncontradicted evidence that the bill of exchange had been paid to the defendant. On this point, the evidence was by parol, and was conflicting; and it has been too often ruled by this court, to be regarded as an open question, that when the evidences of a fact material to the determination of the cause is conflicting, a general charge, of the character given by the court is erroneous. The judgment is reversed, and the cause remanded.