Massachusetts Bonding & Life Ins. v. Fish

“The holder of a promissory note, who took it after maturity, holds it subject to every objection, including equitable *191set off, to which it was subject in the hands of his assignor.” Baker v. Kinsey, 41 Ohio St. 403.

“In equity there are many exceptions to the technical rule that joint and separate debts can not be set off against each other, and insolvency is a sufficient ground for such exception.” 12 Michie Digest, 328, and cases cited.

The insolvency of the bank was sufficiently shown by proof of its assignment for the benefit of its creditors.

The full amount of the deposit was properly set off against the note, including that part deposited after the transfer of the note to the bonding company, but before notice thereof to the makers.

In Follett v. Buyer, 4 Ohio St. 586, 591, it is said by Judge Thurman:

“When an overdue or nonnegotiable note is assigned, the assignee takes it subject to all the equities existing between the payee and the maker; and hence it is competent for the latter, notwithstanding the assignment, to show that it was obtained by fraud, or without consideration, or that before he received notice of the assignment it had been paid or otherwise discharged. So, too, he may set off any liquidated demands which he held against the payee when he first obtained information of the assignment,” etc.

No prejudice resulted from erroneous rulings on evidence called to our attention; they all related to the claim that Fish was principal and his wife surety ón the note. The right to equitable set off in this ease grows out of the insolvency of the bank and not the relation of principal and surety on the note. Evidence erroneously admitted on the latter point would have no prejudicial effect upon the case; there was enough competent evidence to warrant the judgment without it.

Judgment affirmed.