I. The books are full of cases where one judgment is set off against another on motion; but where the claim of a third party is interposed, the remedy by motion is insufficient, and a bill of equity is necessary to dispose of the rights of all parties. Hence the jurisdiction in this case. Simpson v. Hart, 14 Johns. 74; Gay v. Gay, 10 Paige, 369; Barber v. Spencer, 11 Paige, 517.
II. The appellants contend that the complaint does not show any sufficient interest on the part of the plaintiffs in the subject of the suit, because it does not appear with sufficient certainty whether the plaintiffs are the owners of the Madonna, the bark against which the judgment was obtained. But it is clear that the allegations of the complaint admit of no other construction than that the suit of Conway was brought against the bark of the plaintiffs, and that by virtue of that suit they are bound by their property to the payment of the judgment. The complaint avers property in the Madonna on the twenty-third of February, 1855; suit brought against said bark on the twenty-seventh of February, 1855; and that the present plaintiffs came in and claimed said bark and defended the action; and afterwards, that " they are unable to collect their judgment against Conway by reason of his insolvency and that of his bondsmen, while they are bound for payment of his judgment." The natural and only meaning and effect of these averments taken together is, that the bark Madonna was the property of these plaintiffs when the claim of damage for the collision attached to her. After that it is quite immaterial whether she was sold or not, for under the decision of this Court, in the case of Meiggs & Pray v. Scannell, no sale could divest the lien; nothing was transferable except the surplus beyond the judgment.
The case presents all that is essential to the set-off of a Court of Equity. It is true, there is not identity in name, because one judgment is against the bark Madonna and the other judgment is against Conway and his sureties. But the parties in both cases are substantially the same, identical in substance and in truth. The Courts have always disregarded mere names in the matter of parties to a suit. In Barrett v. Barrett, 8 Pick. 341, a judgment in favor of the Judge of Probate in a suit upon a probate bond brought in his name for the benefit of a legatee against an executor and his sureties, was set off against a judgment recovered by the executor in his individual capacity against the legatee. So it was held in Driggs v. Rockwell, 11 Wend. 504, that a party had a right to set off a demand against the real plaintiff for whose benefit the suit was brought, although he was not the nominal plaintiff on record. See also, cases cited in 8 Pick.
Every judgment against the property of a party is really a judgment against him under our system; except in cases of fraud, a judgment has no reach beyond the property of a party, it proceeds against his lands or goods; and this judgment which is against his vessel, his property, is substantially and actually a judgment against him. It binds him by his property .
When the counsel for the appellants objects to the set-off for want of mutuality, he is confounded by terms. All that a Court of Equity requires in decreeing a set-off is to be assured of the substantial identity of the parties whose rights are extinguished the one by the other, and their interest in the claims that are set off. In this case an absolute mutuality would exist as soon as it was ascertained that there is an equivalent in the remedy on both sides.
III. The Court below was the proper tribunal. The party should proceed in the Court where the judgment against him is obtained. The reason and propriety of this is obvious. That judgment is the one which he is seeking to control. He comes into Court with an offer to satisfy his own judgment, as the condition of the relief he demands against the other. His remedy is sought in the Court whose judgment he wishes to affect by the suit. The other judgment is under his control, and he is ready and offers to enter a credit upon it, as a plaintiff would offer a deed to be cancelled, or a sum of money to be paid for specific performance, or any condition within his power to be performed, dependent upon the decree of the Court granting or refusing his prayer. See Cook v. Smith, 7 Hill, 186. See also, Ross v. Hicks, 11 Barb. S.C. R., p. 481. The counsel for the appellants has apparently been misled by the latter case. He cites it in his brief to sustain a doctrine quite opposite to what is the real doctrine of the case.
IV. As to the equitable grounds upon which the plaintiffs rely for a set-off, the two judgments arise out of the same subject matter and the same controversy. The defendant, Conway, has avoided the payment of the decree against him by giving straw bondsmen, and by reason of such fraudulent action the judgment held by these plaintiffs is worthless, whilst that against them is good. Surely it would be difficult to present a stronger case to a Court of Equity. The misfortune of the plaintiffs' position is, that their bark was held by the process of the State Court, while in the Court of Admiralty they could not prevent the defendant, Conway, from liberating his vessel by substitutive bondsmen of his own choice. If, as the appellants say, a set-off is in the discretion of a Court of Equity, there never was a juster occasion for the exercise of that discretion.
Nor is there any more force in the objection of defendants, that the plaintiffs have waived their decree in admiralty by not pleading it in bar of the action in the Twelfth District Court, thereby assenting to another trial. Indeed, such a position can hardly be gravely advanced. It is asserting, in other words, that the plaintiffs have lost their decree by not interposing it as a defense to the other action; that their decree has thereby become satisfied, or abandoned, or extinguished by some mysterious process. The truth is, all that the plaintiffs have lost is the opportunity of defeating the first action, and now they are obliged to come and satisfy the judgment obtained in it. If they had pleaded their decree in admiralty juris darrein continuance, which was the only was they could have pleaded it, but which they were not obliged to do, they might have prevented a recovery against them and thus restrained the whole amount of their decree to make what they could of it. Now they are forced to admit the validity of the judgment against them and to pay the amount by a deduction from the amount of their decree.
JUDGES: Terry, C. J., after stating the facts, delivered the opinion of the Court. Baldwin, J., and Field, J., concurring.
OPINION
TERRY, Judge
In support of his first ground of demurrer, appellant contends that the complaint does not show plaintiffs' interest in the subject of the controversy--the judgments being in rem, one against the Madonna, and the other against the Elvira (the defendants having no personal judgment against the plaintiffs)--and that it does not sufficiently appear that the Madonna is the property of plaintiffs, or that defendants are seeking to enforce their judgment against plaintiffs.
The argument in support of this position is based on a supposed transfer of the Madonna by plaintiffs to third parties, and a replevin suit instituted by those parties to recover the vessel from the hands of the Sheriff, which facts no where appear in the record of this cause, and therefore, are not matters for our consideration.
The complaint shows that the Madonna was, in February, 1855, the property of plaintiffs; that they appeared and defended the suit against the vessel as owners, and there is nothing in the record to raise a presumption that they are not now the owners of it. The complaint shows a judgment binding on plaintiffs' property, and which they must satisfy in order to release this property. This is, we think, a sufficient showing of interest in the subject.
It is also contended that plaintiffs have not shown any equitable reason for setting off these judgments. But we think it would be difficult to find a case addressing itself more strongly to the consideration of a Court of Equity. The bill charges, and the demurrer admits, that the parties each recovered a judgment in rem against the property of the other; that defendant, by giving a bond with sureties which he knew to be worthless, deprived plaintiffs of their lien on the property, against which he recovered judgment; that defendant, as well as the sureties on his bond, are insolvent; and that a fraudulent assignment of the judgment had been executed for the purpose of defeating plaintiffs' right to set off their decree against it. Under these circumstances it becomes the imperative duty of a Court of Equity to interfere to prevent the consummation of a fraud.
In the case of Simson v. Hart, (14 John. 74) the facts of which are similar to those contained in this record, the Court says: " Nothing could be more unjust than to leave to the respondent the power of collecting his judgment of the appellant, against which, from the insolvent condition of the respondent and the embarrassed state of his father, the appellant could not indemnify himself by collecting any part of his judgment from them; and although it is difficult to settle precisely the extent of the jurisdiction of the Court of Chancery, one of its acknowledged and most salutary attributes consists in the power to put a stop to proceedings injurious or unconscientious. I have no hesitation in saying, that chancery had original and rightful jurisdiction of the suit, and was fully authorized, by a series of adjudged cases, in issuing a perpetual injunction against the respondent's suing out or executing an injunction on his judgment, upon the appellant's entering satisfaction for so much as the respondent's judgment amounted to, on his judgment; or, which would have produced the same result, decreeing that the respondent should acknowledge satisfaction of record upon the like terms."
There is no force in the objection that the judgments are not in the same right. It is well settled that although the demands, as being joint and several, are not, strictly speaking, due in the same right, yet if the legal or equitable liabilities or claims of many become vested in, or may be urged against one, they may be set off against separate demands, and vice versa .
In Gay v. Gay, (10 Paige, 376) the Chancellor held: " If an equitable right of set-off exists, while the parties have mutual demands against each other, because the debt due to the party claiming the set-off is so situated that it is impossible for him to obtain satisfaction of such debt by an ordinary suit at law, or in equity, to recover the same, this Court, upon a bill filed, will compel an equitable set-off of one debt against the other. And the insolvency of the party against whom the set-off is claimed is a sufficient ground for the exercise of the jurisdiction of the Court of Chancery, in allowing a set-off in cases not provided for by the statute, although the demands on both sides are not liquidated by judgment or decree, so as to authorize a set-off upon a summary application, by motion. (See Lindsey v. Jackson, 2 Paige Rep. 581, and cases there referred to.) And where there are cross demands between two parties, of such a nature that if both were recoverable at law they would be the subjects of legal offset, then if either of the demands is matter of equitable jurisdiction only, the set-off may be enforced in equity." (Clark v. Colt, 1 Craig & Phil. Rep. 154. See, also, Barbour v. Spencer, 11 Ib. 518.)
Appellant objects that the plaintiffs failed to set up their judgment recovered in the Federal Court, puis darrein continuance in bar of defendants' action, and insists that, by failing to do so, they waived their rights under the judgment. It is difficult to perceive in what manner appellants were prejudiced by the neglect complained of, and we know of no rule by which such neglect can amount to anything more than a waiver of the right to insist on their judgment as at bar. It certainly cannot affect the validity of the judgment, or plaintiffs' right to set it up in another proceeding.
The objection that the right to an equitable set-off has been lost by laches of the plaintiffs, and by their attempts to defeat defendants' execution, is supported by facts which appear only in the brief of appellant, and not in the record.
The objection that the judgment was assigned before filing this bill is answered by the fact that upon the record the assignment is admitted to have been fraudulent, and certainly the defendants can claim nothing in a Court of Equity by reason of such an assignment.
This disposes of the objections to the equity of the bill. The demurrer to the jurisdiction of the Court is equally without merit. The plaintiffs' application was made to the Court having control of the judgment against them, which they desired to have cancelled and satisfied. The judgment in the Federal Court was under their control, and they could themselves direct as to its disposition, while the judgment against them could only be controlled by the Court in which it was rendered.
" Where judgments obtained in different Courts are to be set off, the moving party must go into the Court in which the judgment against himself was recovered." ( Cook v. Smith, 7 Hill, 186; Ross v. Hicks, 11 Barb., S.C. 481.)
The only remaining question raised by the appellant is as to the lien of the attorney for his costs, which question was settled by this Court in ex parte Kyle (1 Cal. R., 331) and Mansfield v. Dorland (2 Ib. 517) and we have no desire to disturb those decisions.
Judgment affirmed.