1789.
tion : And, as they declare, that where two are indebted to each other, they may set off their demands, it only remains to investigate the objections which are urged against the defalcation contended for, on behalf of the Plaintiff in error.
The Plaintiff below, in effect, says, that he has obtained the benefit of the insolvent act ; and, if he is compelled to pay, or allow, this bond in discount, his property is taken away to pay his old debts. This is true ; but, it is to be answered, by remarking, that the very insolvent act, on which he relies for the protection of his person, makes his future effects liable for debts preceding his discharge ; and herein consists the well known distinction between bankruptcy and insolvency. See 1 State Laws 164. ʃect. 7. Jenk. Cent. 256. Caʃe 49. This was the condition upon which he obtained his liberty ; and, having obtained it, shall he be thus allowed to evade the condition ? As, upon an execution against him, his effects would be liable, it can make no odds to him, in point of justice, whether his creditor obtains payment by a cross suit, or by defalcation. By the former mode, indeed, he might have an opportunity of secreting his effects the moment that they were recovered in the action brought by him, and thus prevent his creditor from deriving any benefit by a subsequent judgment and execution. Such practices, however, have been too frequent to escape notice, and are to flagrant to be countenanced and supported in a Court of Law. Besides, the right of set-off is far more material against an insolvent debtor than any other person ; for, it is contrary to conscience that he should recover against those to whom he is, in truth, indebted in an equal, or larger sum. 2 P.Will. 129 .
But, the Plaintiff below may also urge, that the Plaintiff in Error in an aʃʃignee with whom he never dealt. See 1 State Laws 48. and, endeavour to establish an analog between his case, and that of a debt due to a man in right of his wife,which can not be set off in an action against he husband on his own bond. Bull N.P. 179. The reason, however, is essentially different. What is due to a husband in right of his wife, he must sue for in the mane of himʃelʃ and wife ; and, as discount is in the nature of a suit, to permit the setoff in the case alluded to, would be adding a party to the suit, that is the wife, who was not named in the writ. Besides, debts due to the wife are not absolutely vested in the husband ; for, if he does not reduce them into possession, they survive to her, and do not go to his executors.
But the ʃecond Act of Assembly, does not say any thing with respect to the party's dealing together ; and even if there were any force in an objection grounded on those words, the answer would be easy, that the assignee of a negotiable, or aʃʃignable inʃtrument, is as much contracted with by the words of the obligation, “ and his aʃʃigns,” as the original obligee ; and, under the Act of Assembly he is equally the “credior ” of the obligor. See 1 State Laws 165.
