Jordan v. National Shoe & Leather Bank

The action was brought to recover a balance due on the bank account of Cornelius Poillon, the plaintiff’s intestate, and it was defeated by the allowance of a set-off accruing on his note, discounted by the bank, but which did not become due until the 31st day of October, 1876, while he died on the eleventh day of that month. At the time of his decease, therefore, no right to set off one demand against the other existed. The statute upon this subject has provided that in suits brought by executors and administrators, demands existing against their testators or intestates and belonging to the defendant at the time of their death, may be set off by the defendant in the same manner as if the action had been brought by and in the name of the deceased. (3 R. S. [5th ed.], 636, § 16.) The chancellor held in a case decided by him upon the effect of this provision, that the set-off would be proper, provided the right to make it accrued at any time before the commencement of the action (Rawson v. Copland, 3 Barb., Ch., 166), and that would sanction the disposition which was made of this case at the *515Circuit, by which the set-off was allowed. But that case has not been considered in all respects a sound exposition of the statute. By the case of Ketchum v. Milne, decided by the Court of Appeals and reported in Selden’s Notes (No. 3, p. 56), it was held that a set-off of a demand existing against the intestate could not be allowed in an action brought foi the recovery of another, accruing after his decease upon a contract made and only partially performed before the period of his decease. That was considered to be in conflict with the decision made by the chancellor, and his decision was for that reason practically overruled in the case of Patterson v. Patterson (59 N. Y., 574-581). "What the statute, as it has been construed by these authorities, was intended to require in order to create the right of set-off where an action has been brought by an executor or administrator, is that both demands shall have accrued and become payable at the time of the decease of the testator or intestate. By an existing demand the legislature intended a demand which had accrued and became payable. That was not the nature of the demand allowed as a set-off in this case.

"Where that is not the case, the policy as well as the requirements of the laws concerning the payment of the debts of deceased persons is that they shall participate equally in the assets of the estate, so far as they may be required for that purpose, and that would be defeated by construing this section of the statute as allowing the set-off of demands accruing and becoming due after the death of the deceased debtor.

The judgment appealed from should be reversed and a new trial ordered, with costs to abide the event.

Judgment reversed and new trial ordered, costs to abide the event.