McKnight v. Chauncey , 1 Seld. Notes 97 ( 1853 )

Action upon five promissory notes of $1,000 each, and an account of $850, which plaintiff claimed to recover as surviving assignee of Charles Chapman. The account was admitted. The notes were given by defendants to Chapman for his interest in a steam planing mill, which defendants purchased of Chapman, and assumed the debts; and they alleged that Chapman fraudulently represented to them that certain debts were paid, which proved not to have been paid,' and were afterwards paid by them—and they claimed a set-off against the notes to that extent.

The plaintiff, after the assignment of the notes to him, and before he obtained possession of them, filed a bill against Chapman, the assignee, to obtain them; and the defendants were made parties, and an injunction obtained and served on them, restraining them from paying the notes to Chapman; and they claimed to be exempt from the payment of interest, while the injunction was in force. Both these claims were overruled by the referee.

Held, that notwithstanding the injunction, the defendants might have paid the money to the plaintiff, who was entitled to it, or might have paid it into court; and not having done so, were rightly charged with interest.

That the referee having found a report against the existence of fraud in relation to the outstanding debts of the planing mill, his finding could not be disturbed on appeal.