Jones v. Howard ( 1876 )

Campbell, J.,

delivered the opinion of the court.

1. George T. Howard and J. G. Taylor were not partners inter se with M. J. Howard, since there was not between them a communion of profit as such, but they were nominal partners.

2. The plaintiff in error cannot set off his claim against M. J. Howard, one of the defendants in error. A set-off must be against all the plaintiffs. It is the creature of statute, and to constitute set-off there must be mutual indebtedness. The debt set off must be one on which the defendant can maintain his action against the plaintiffs, for set-off is a cross-action, and must be properly brought in favor of the defendant against the plaintiff’s, where there are more than one. If the demand set off by the defendant exceeds that of the plaintiff, judgment is to be rendered in favor of the defendant against the plaintiff; and this shows conclusively that a set-off must be a demand on which judgment for any excess of it over the demand against the defendant can be rendered against all the plaintiffs. In Cowles v. Cowles, 9 How. Pr. (N. Y.) 361, cited by Waterman on Set-off and Recoup. § 219, it is held that, where it appears that one of several plaintiffs is the sole party in interest, the defendant may set off a demand against him as if he had sued alone; but this is placed on the provisions of the statutes of New York for dismissing from the action all the plaintiffs except the “ sole party in interest,” and allowing the set-off against him. This decision sustains the view that a set-off must be against all the plaintiffs. In the case at bar, the three plaintiffs are properly united as such, and the two nominal partners cannot be turned out of court, because they are properly in, and have the right to stay in to the end.

In an action by a partnership, in which a dormant partner joins as plaintiff, the defendant has been allowed by some courts to set off against the demand sued on any claim he could so use, if the partner with whom he dealt, in ignorance that he bad a dormant partner, had sued alone; because otherwise great wrong might be done the defendant, who acted on the belief that he with whom he dealt had no partner. The principle of this is obvious ; but it wholly fails of application in the case at bar, if it can be adopted by us in any case. The plaintiff in error knew that M. J. Howard, George T. Howard and J. G. Taylor were associated in business, under the name of “ Howard & Co.” He dealt with “ Howard & Co.,” and incurred liability to them. It is not necessary to disregard the statute of set-off to shield him from injury as the consequence of innocent ignorance. He promised to pay Howard & Co., knowing full well that the three plaintiffs were “ Howard & Co.” Let him pay them, or set off a demand against them. Although they are not partners, they are rightfully joint plaintiffs, entitled to maintain the action as such. Hilliker v. Loop, 5 Vt. 116.

3. The demand attempted to be set off is, under the eviclenee, one against M. J. Howard, and not against “ Howard & Co.,” as to all of it bearing date prior to 1st March, 1871, and, therefore, cannot be set off in this action.

These views render unnecessary the consideration of any other question. Judgment affirmed.