Stanbery v. Smythe , 13 Ohio St. (N.S.) 495 ( 1862 )

By the Court.

The charge first given presupposes that the note was assigned to Smythe, for a valuable consideration, and in due course of business, before it became due, but after the transfer of the deposit account and notice thereof to him. "We think the court did not err in its charge to the jury, that under such circumstances, the defendant could not avail himself of the account as a setoff in that suit, for various reasons. It was a suit at law, and the account, though ordered to be paid to Stanbery, was not a debt due from Smith to him. Until acceptance by Smith, there was no legal liability on his part to pay that account to Stanbery, or to any one but the depositor himself. As between Smith and Stanbery there were not, at the time the note was assigned to Smythe, mutual debts, to be set off or compensated under the statute. The paper is not, in form a banker’s check for the payment of a sum certain, but a transfer of sundry deposits, with the interest accuring thereon, requiring an accounting to ascertain the amount really due, and authorizing suit in the name of the assignor for its collection.

Again, the right of setoff, if it existed, must have been mutual. Smith, his note not being due, could not havo claimed such setoff under the statute and Stanbery’s assignor, or Stanbery himself, could have prevented a subsequent setoff at law, by suing the account before the note became due. Stanbery may have intended to make the set-off ; but Smith could not have compelled it. Wells v. Stewart, 3 Barb. 40.

Secondly. As to the effect of an assignment of a part of a deposit account: There was testimony tending to prove, that Smith was the real owner of the note in suit, and the one for whose benefit it was prosecuted; such ownership, therefore, was one of the “ aspects” presented by the testimony, and covered by the third instruction. The question is fairly raised by said ;nstruction, whether, in a suit at law, upon the note by Smith, the payee, the defendant could, by way of setoff, set up an assignment of part only of an entire demand, due from Smith to a third person, leaving the residue of such demand to be subsequently litigated with others. We are of the opinion that this could not be done, first, for the reason already adverted to, arising out of the character of the assignment itself, and the want of mutuality; and, secondly, because it, in effect, permits a single cause of action to be split up and subdivided to an indefinite extent, which sound policy and the rights of the depositary alike forbid. If any remedy then existed, it was to be sought in equity, making the holders of the residue of the deposit account parties, and determining all their rights in one and the same controversy. This, owing to the insolvency of Smith, might perhaps have been done, under proper averments, when the suit below was instituted, or may now be done under the code, which permits defendants to ask equitable relief in suits to enforce legal liabilities, by a cross-petition. But such blending of legal and equitable rights was not warranted by our former practice, nor is it sustained, to the extent this case requires, by the case of Beesley v. Crawford, 19 Ohio Rep. 126, to which we have been referred, in which a defendant was permitted to set off a legal demand against the cestui que trust of the claim sued on, and the real plaintiff in the action.

The cases cited from Massachusetts and Pennsylvania, are of but little authority upon this question, because, owning to the-peculiar jurisprudence of these states, their courts have always blended legal and equitable rights and remedies in one and the same action, while the decisions in New York fully sustain the views expressed by us.

Judgment affirmed.