Tuttle v. Bebee , 8 Johns. 152 ( 1811 )

Thompson, J.

delivered the opinion of the court. The principal question in this case is, whether the defendant ought not to have been permitted to set off the bonds offered in evidence, which had been given by the plaintiff, and duly assigned to the defendant, before the commencement of this suit. It has been repeatedly ruled in this court, that we will recognise and protect the rights of an assignee of a chose in action. (1 Johns. Rep. 531. 3 Johns. Rep. 426.) This doctrine was carried so far, in the case of Andrews v. Beecker's (1 Johns. Cas. 411.) that a release by the obligee of a bond, after an assignment of it, and notice to the obligor,- was held a nullity, and not to be regarded. This is conformable to what is laid down by the court of C. B. in Legh v. Legh; (1 Bos. & Pull, 448.) and Eyre, Ch. J. adds, that it follows, as a necessary consequence, that the obligor, in such case, cannot be permitted to plead payment of the bond to the obligee. The assignee seems to be recognised as the real party in the suit, except not allowing him to bring the suit in his own name. And this arises from what Bul'er, J. (4 Term Rep. 340.) calls a quaint inaxim laid down in our old books, that for avoiding maintenance, a chose in action cannot be assigned. “ The good of that rule,” he says, 61 seems very questionable, and in early as well as in modern times, it has been so explained awajr, that it remains, at most, only an objection to the form of the action, in any case.” Although he admits that courts of law have adhered to the formal objection that the action shall be brought in the name of the assignor, yet, he sees no use or convenience in preserving that shadow, when the substance is gone; and that it is merely a shadow is apparent from the later cases, in which the courts have taken care that it shall never work injustice. The case of Bottomly v. Brook, in the C. B. referred to by Mr. Justice Ashhurst, in Winch v. Keely, (l Term Rep. 623.) is a very strong case on this subject. It was an action of debt on a bond. The defendant pleaded that the bond was given for securing money lent to the defendant by E. Chancellor, and was given, by her direction, to the plaintiff, in trust for her, and that E. Chancellor, before the action brought, was indebted to the defendant in more money than the amount of the bond. To this plea there was a' demurrer, which was withdrawn by the advice of the court. So that the court did not look to the person on the record legally entitled, but to the person beneficially interested. The authority of this case was afterwards recognised by the K. B. in the case of Rudge v. Birch; (cited 1 Term Rep. 622.) and in Winch v. Keely, Mr. justice Ashhurst says, u It is true, that formerly courts of law did not take notice of an equity or a trust, but of late years, as it has been found productive of great expense to send par tie's to the other side of the hall, they have not turned them round upon this objection. Then, if this court will take notice of a trust, why should they not of an equity. It is certainly true that a chose in " action cannot strictly be assigned; but this court will take notice of a trust, apd see who is beneficially interested.” Courts of law have lately been more liberal in noticing, and protecting the rights of assignees of chases in action; and some principles formerly adopted. on this subject have been overruled. In the case of Bauman v. Radenius, (7 Term Rep. 666.) a case is mentioned by the counsel, in argument, where an action was brought in the name of a nominal plaintiff, by the persons beneficially interested, and Lord Mansfield, upon the trial, allowed the defendant to produce a release from the-nominal plaintiff, and which he held conclusive. But this is directly at variance with the decision of this court in the case of Andrews v. Beecker ; and of the C. B. in the case of Legh v. Legh, The right of an assignee to avail himself of a set-off, in a case precisely like the present, has been recognised by the supreme court of South Carolina, in the case of The Administrator of Comply v. Alken. (2 Bay, 481.) Considering that the statute of set-oiF ought to be, as it always has been, liberally expounded to advance justice, and prevent circuity of action, xve are of opinion, that the set-off ought to have been admitted; and we the more readily adopt this course, because it ¡appears to be most in harmony with the general rules that have governed this court in protecting-the rights of assignees.

A new trial must, therefore, be awarded, with costs, to abide the event of the suit.

Spencer, J.

observed, that though he concurred in the opinion of the court, he did it with hesitation, as he thought the decision went much further than courts of law had gone before, on this subject.

New trial granted-