A creditor upon an open account who has assigned his claims to a
third person with the assent of the debtor is still competent to
maintain an action at law in his own name against the debtor for
the use of his assignee, but the debtor is still allowed to offset
his claims against the assignee.
The defendant cannot offset a claim for bad debts, made by the
misconduct of the plaintiff in selling the defendant's goods as
factor, the plaintiff not having guaranteed those debts. But such
misconduct is properly to be inquired into in a suit for that
purpose.
The plaintiff's declaration stated the claim to be for money
paid and advanced by him for the use of the defendant, now
plaintiff in error. Upon the trial of the issue of nonassumpsit,
two bills of exception were taken by the counsel for the defendant
in the circuit court, which are brought up with the record. The
jury found a verdict for the plaintiff for $4,155 damages.
The first bill of exception stated that the plaintiff below
offered in evidence sundry bills of exchange drawn
Page 6 U. S. 343
by the defendant upon the plaintiff to an amount equal to the
balance demanded by the plaintiff of the defendant, and also
several accounts current between the defendant, and the mercantile
firm of Richard S. Hackley & Co. of the City of New York, of
which the plaintiff and Seth B. Wigginton were two; that the said
bills of exchange were debited to the defendant in the said
accounts, as being due from him to the said Richard S. Hackley
& Co., and that the said accounts contained various other
articles of debit and credit to a considerable amount, commenced on
the ___ day of _____ and continued till the ___ day of _____, when
the firm of Richard S. Hackley was changed into that of Richard S.
Hackley & Co., and concluded on the ___ day of _____.
That in these accounts the balance stated to be due from the
defendant to the said Richard S. Hackley on the ___ day of _____ is
transferred, with the consent of the said Richard S. Hackley, to
the said Richard S. Hackley & Co., and that the account in
which the said balance is so transferred to the said Richard S.
Hackley & Co. and the formation of that firm were communicated
by the said Richard S. Hackley himself to the defendant before the
institution of this suit, and that the defendant thereafter, made
to the said Richard S. Hackley & Co. several remittances in
money and commodities towards the discharge of the said balance,
and addressed to them several letters concerning the same, which
remittances and letters came to the hands of the said Richard S.
Hackley & Co. Whereupon the defendant moved the court to
instruct the jury that if the balance aforesaid was transferred as
aforesaid to Richard S. Hackley & Co., it was not a subsisting
debt from the defendant to the plaintiff alone at the commencement
of this suit. But the court (consisting of Marshall, Chief Justice,
and Griffin, district judge) overruled the motion, being of opinion
that though the debt was in equity transferred to Richard S.
Hackley & Co., yet the suit was maintainable for their benefit
in the name of Richard S. Hackley. At the same time, the defendant
was permitted to give in evidence any discounts which he might
claim against Richard S. Hackley & Co.
The second bill of exceptions stated that the plaintiff, to
support his action, gave in evidence sundry accounts
Page 6 U. S. 344
current between himself and the defendant in which the plaintiff
had credited the defendant, as being in the plaintiff's hands for
collection, for the proceeds of a quantity of flour, which he had
sold for the defendant, but had afterwards charged to the defendant
several sums on account of the alleged insolvency of some of the
purchasers of the said flour. It also appeared that in the account
current and accounts of sales, the proceeds of sale of the said
flour were stated to be outstanding, subject to collection, and the
plaintiff did not undertake to guarantee the debts. Whereupon the
defendant, in order to repel that evidence, offered to prove that
the sums so charged to the defendant were lost by the mismanagement
and misconduct of the plaintiff, in having made the sales to
persons known by him to be unworthy of credit; but the court
refused to permit such proof to be made to the jury in this action,
being of opinion that such misconduct was properly to be inquired
into in a suit for that purpose.
This case being submitted without argument, the judgment was
Affirmed with costs.