Reppy v. Reppy

CüRUlEit, Judge,

delivered the opinion of the court.

By way of defense and counter-claim, the defendants in their answer set up various demands owned and held by them against the plaintiff, B. S. Reppy, the husband of tho other plaintiff. As against him, a portion of these demands, at least, constitutes a proper subject of setoff. But the claim sued on is made up of two notes, both of w^nch are payable to Mrs. Reppy alone. The defendants admit their execution, and then proceed to allege that at the time the notes were executed they were not aware of their being made payable to their creditor’s wife, Mrs. Reppy; that the consideration moved exclusively from her husband, and' that he drew them payable to his wife fraudulently and with a view to hinder and delay his creditors generally, and among them the defendants. It is further alleged that B. S. Reppy was, at the time the notefe -were executed, insolvent and unable to meet his liabilities, and that'he has so remained ever since; and further, that a judgment against him would be of no valuo.“ It is also alleged that Mrs. Reppy paid nothing for the notes; that they were made payable to her without value or consideration. The answer then concludes with a prayer for the divestiture of Mrs. Reppy’s title to the notes, and that the’samo be vested in her husband, and for an allowance of the demands due the defendants *573 in reduction or satisfaction of the amounts due on the notes. The answer was stricken out, and the question is raised whether the facts alleged exhibit grounds for equitable relief.

The notes sued on, as the answer shows, were given-for a debt due by the defendants to B. S. Reppy. The act of Reppy, therefore, in making the notes payable to Mrs. Reppy, may be regarded as a voluntary assignment or transfer of the claim to her without consideration. IE this was done, as the answer avers, to defraud, hinder, and delay Rcppy’s creditors, the assignment, in the language of the statute, was “ clearly and utterly void.” (Gen. Stat. 1865, p. 439, § 2 ; Potter v. McDowell, 31 Mo. 62 ; Pawley v. Vogel, 42 Mo. 291 .) If the assignment was thus void, then no title passed as against Reppy’s creditors, and particularly as against the defendants. In equity, at least, the title may be treated sfe still in Reppy; and the answer is framed upon the theory of an equitable defense or counter-claim. The facts being as alleged — and they stand as though admitted — it would involve the grossest injustice to permit tho amount of the notes to bo collected out of the defendants and leave them to a barren 'remedy, against a bankrupt debtor.

In regard to a set-off or counter-claim, equity usually follows the law, but not always. When an insolvent plaintiff is suing, equity will take jurisdiction of unliquidated claims, and allow off-sets -which would not be allowed at law. (Waterman on Set-off, 80, note, and 371-2, note; Bradley v. Angell, 3 Comst. 475; Ainslee v. Boynton, 2 Barb. 253 .) But a demand can not be set off in equity any more than at law, unless it existed against the plaintiff, in favor of the defendant, at the time of the. commencement of the suit, and had then become due. (Waterman on Set-off, 427, § 381.)

In my opinion the court committed error in striking out the defendant’s answer and counter-claim. I therefore recommend a reversal of the judgment and the remanding of the cause.

Tho other judges concur.