Q.B.D. Bowyear v. Pawson. 1881 Company, and that on the 8th of November, 1880, Wilson by deed, assigned the amount of this debt and interest to himself and the defendant in equal shares as tenants in common. In respect of one moiety of the plaintiff's claim the defendant alleged that his share of this £811 was in excess of that moiety, and in respect of the other moiety that he was entitled to be exonerated by his co-surety Wilson, and to call upon him to contribute in equal shares to the payment of the plaintiff's claim, and that Wilson's share of the £811 and interest was in excess of this other moiety of the plaintiff's claim: The defendant claimed to set off these two moieties of the £811 and interest against the two moieties of the plaintiff's claim. It was argued for the defendant, with respect to the first moiety of the plaintiff's claim, that the defendant was entitled to set off a moiety of the sum of £811 in respect of which it was alleged that the defendant and Wilson were entitled to be paid by the plaintiff. In other words, it was said, that if A. was entitled to be paid a sum of money by B., the latter could set off in equity his share of a debt, whether legal or equitable, which A. owed to him and another or others. It was not contended that any provision in the rules framed under the Judicature Acts applied to the case, but it was urged that it was reasonable and equitable to allow the set-off. It seems to us not to be either reasonable or equitable. For in such a case A. might reasonably say that when B. and the person or persons alleged to have a claim against him choose to sue him, he would be prepared with his defence, but that B. had no right to mix up the separate transactions between him and A. with other and independent transactions in which B. had only a joint interest. Then as regards the other moiety, the defendant's contention is ingenious, but it seems to us hopeless. The defendant, admitting his liability to the plaintiff, alleges that if he paid the plaintiff he would be entitled to call on Wilson to contribute a moiety of the debt and that Wilson [544 has a set-off in respect of that moiety against the plaintiff. But the defendant does not show that he had any right to call on Wilson to appropriate the debt due to him from the plaintiff to the exoneration of the defendant, nor any contract with the plaintiff to accept a set-off of Wilson's debt as a discharge of the defendant. The attempt on the part of the defendant to establish a set-off of this extraordinary kind to the plaintiff's claim was explained by what was stated in the course of the argument, viz., that after the 1881 Bowyear v. Pawson, Q.B.D. commencement of the action the defendant had obtained an order at chambers that Wilson should be added as a co-defendant. It would seem that, with a view of meeting the plaintiff's claim against both defendants, the assignment of the 8th of November, 1880, had been executed. The order to join Wilson as a defendant was subsequently set aside by the court, and the pleadings in this action represent the effort of the defendant to avail himself of the assignment, as if Wilson were still a party to the action. It would seem that the defendant has sought to treat his joint and several covenant with the plaintiff as if it were joint only. This attempt must fail for the reason that the defendant's covenant is several as well as joint. We are of opinion that the demurrer to the statement of defence must be allowed. Judgment for the plaintiff. Solicitors for plaintiff: Harper, Broad & Battcock. See Borries & Imperial, etc., 7 Eng. R., 138. In New York, one defendant against whom a several judgment may be rendered, may set off a claim in his favor against the plaintiff: Bathgate v. Has kin, 59 N, Y., 533, 537-9; Taylor e. Root, 4 Keyes, 335, 4 Abb. App. Cas., 382; Parsons e. Nash, 8 How. Pr.. 454; Perry . Chester, 12 Abb. (N.S.), 131; Read v. Jaudon, 35 How. Pr., 303; Merrill. Green, 66 Barb., 582, 55 N. Y., 270; Vose v. Briggs, 30 Barb., 477, affirmed 15 N. Y., 477; Newell v. Washburn, 22 Barb., 647; Schubert v. Harkan, 34 id., 447. See Lewis . Acker, 11 How. Pr., 163; Simson e. Hart, 14 Johns., 62; Mitchell. Oldfield, 4 T. R., 163; Graves . Woodbury, 4 Hill, 559; South . Tanner, 2 Taunt., 254; Williams v. Allen, 7 Cow., 316; Scott v. Shears, 9 Cush., 504; Minor v. Mechanics, etc., 1 Peters, 73-4; Carter v. Hope, 10 Barb., 180; Hess v. Fox, 10 Wend., 436. So in Ohio: Wagner e. Stocking, 22 Ohio St. R., 297. If goods be nominally sold by two persons, as partners, belong in fact to 'one, when the two sue as partners for the purchase price, the debtor may interpose a set off in his favor against the one really owning the goods sold: Lewis v. Park, 53 Verm., 336. Where one of two partners being indebted to the firm, gives his note to the other for his proportion of the debt, it is, in effect, a division of so much of the firm property; the note is the individual property of the partner receiving it, and as such is a proper counter-claim or set-off in an action upon a bond executed upon dissolution of the firm, by the payee of the note to the maker, conditioned for the payment of the partnership debts: Merrill v. Green, 55 N. Y., 270, affirming 66 Barb., 582. A surviving partner, in an action against himself to recover a debt which he individually incurred, can set off a claim of the firm against the plaintiff : Johnson v. Kaiser, 40 N. J. L., 286. Where one defendant is sued upon an individual liability he cannot set up, as a counter-claim, a claim which he holds jointly with another against the plaintiff Baldwin e. Briggs, 51 How. Pr., 477, 53 id., 80; Baldwin . Berrian, Id., 81; Linderman . Disbrow, 31 Wisc., 465. Where defendants are jointly and not severally liable, one cannot set off a demand due from the plaintiff to one of the defendants separately: Perry v. Chester, 12 Abb. Pr. (N.S.), 131 ̊; Peabody . Bloomer, 3 Abb. Pr., 353, 5 Duer, 678; National, etc., c. Boylan, 2 Abb. N. C., 216. A separate debt due B. cannot be allowed as a set-off to the joint debt due by him and C. to A.: Tyrell e. Tyrell, 54 Md., 167. In a proceeding against partners to compel payment of moneys in their hands which they have collected as attorneys, one of the partners cannot set off a claim due to him individually Bowling Green, etc., 64 Barb., 146, 52 N. Y., 489. Joint claims in favor of two out of a number of defendants cannot be counter-claimed, set off or recouped, when the action is such that a joint judgment cannot be rendered against such two separately from the others: Bockover c. Harris, 43 N. Y. Superior Ct. R., 548. A debt owing to defendant jointly with another, cannot be set off in an action upon a demand against the defendant alone. A joint debt cannot be set off against an individual one: Campbell v. Genet, 1 Hilton, 290. In a suit by A., defendant cannot set off a claim against A. & B. as partners, though growing out of the claim sued upon by A.: Mynderse . Stevens, 1 Lans., 488; Cummings . Morris, 25 N. Y., 625. See Walsh v. Ostrander, 22 Wend., 178. One defendant may set off his individual claim against a joint claim against him and another: Miller v. Kreiker, 2 Leg. Chron. Rep., 267, 76 Penn. St. R., 78. Where a partnership contained more than two members and one has died, and there is nothing to show that all the rest together stood as one partner only, a balance in the partnership affairs in favor of the decedent cannot, in an action at law, be offset against a claim against his estate brought by the survivors: Elder's Appeal, 39 Mich., 474. The defendant and Underwood being partners, a note made by defendant and indorsed by Underwood, but given for matters unconnected with the partnership, was sold to plaintiff. Payments were made to plaintiff by defend ant, at the request and for the benefit of Underwood, upon an agreement between Underwood and defendant that 1881 they should not be applied on the note, but should be charged to Underwood and credited to defendant on the books of the partnership, which was done. Held, that the referee was right in refusing to allow these payments as a set-off against the note. After the transfer of the note to plaintiff, a settlement of the partnership transactions between defendant and Underwood was had. Underwood was found indebted to defendant on that account; such indebtedness was unliquidated at the time of the purchase of the note by the plaintiff, and it required an accounting to liquidate it. Held, that the amount of this indebtedness could not be set off in an action upon the note: Allgoever v. Edmunds, 66 Barb. 579. As to right of a surety to interpose a counter-claim in favor of his principal: 2 Eng. Rep., 687 note. A surety cannot, in a suit to which his principal is not a party, avail himself of a counter-claim in favor of the principal against the creditor: See ante, p. 229 note. Arkansas: See Marshall v. Sloan,. 26 Ark., 513. Massachusetts: See National, etc., v. Peck, 127 Mass., 298. New York: Emery v. Baltz, 22 Hun, 434; Lasher . Williams, 55 N. Y., 619; Coe v. Cassidy, 6 Daly, 241. Pennsylvania: See Domestic, etc., v. Laylar, 86 Penn. St. R., 287. West Virginia: B. & O. R. R. v. Bitner, 15 W. Va., 455; Id., 467. In an action between co-sureties for contribution, the defendant cannot avail himself of an indebtedness of the plaintiff to the principal as a defence: Davis e. Toulmin, 77 N. Y., 280. If the principal have made to the creditor, or a co-surety, any payment or given him any security for the debt, it seems a surety could avail himself thereof Davis . Toulmin, 77 N. Y., 280; ante, p. 229 note. Where one holds a mortgage on real estate to secure the payment of money owing to him by the mortgagor, and before the payment of the money secured by the mortgage the mortgagee becomes indebted to the mortgagor, on book account, a junior incumbrancer. whether general or specific upon the mortgaged premises, has the right to 1881 Midland Insurance Co. v. Smith, have such indebtedness due from the mortgagee to the mortgagor applied in extinguishment of the mortgage debt. This right of the junior incumbrancer is absolute, and in general is not subject to be defeated by the parties to the mortgage, unless there are equities in favor of the mortgagee which should operate to defeat the application of the rule. But where the balance due from the mortgagee to the mortgagor upon account has passed to the assignees of the latter, under an assignment for the benefit of creditors, and the mortgagee has, without notice of a subsequent mortgage given by the mortgagor to another person upon the same premises, settled with such assignees, and paid such balance of account over to them, the junior mortgagee has no right to have such indebtedness of the mortgagee to the prior mortgagor applied in extinguish ment of the prior mortgage. While the prior mortgagor holds the demands againet the mortgagee, the 5611 Q.B.D. latter has a perfect right to pay him, and such payment will be valid, if made while he is without notice of any equity of the subsequent mortgagee; and payment to the assignees of the prior mortgagor under similar circumstances will be equally valid: Prouty . Price, 50 Barb., 344. A surety may take an assignment, from his principal, of a claim against the creditor and interpose it as a setoff, notwithstanding an attorney's lien : Perry v. Chester, 36 N. Y. Superior Ct. R., 228. A surety may interpose the defence that his obligation was given upon certain conditions to be observed by the creditor, which he has not performed: Bookstaver v. Jayne, 60 N. Y., 146. The principal debtor, though the ob ligation be joint and several, may interpose a counter-claim in his favor against the creditor: Norris v. Sharp, 65 Ind., 47; Himrod v. Baugh, 85 Ills., 435; Waterman v. Clark, 76 id., 428. [6 Queen's Bench Division, 561.] March 23, 1881-Q.B.D. *THE MIDLAND INSURANCE COMPANY V. SMITH and Wife. Fire Insurance-Loss occasioned by the felonious Act of the Wife of the AssuredRights of the Insurer-Risks covered by Policy-Felony-Action maintainable without showing that Felon prosecuted. An insurance company granted a fire policy to S., and during the currency of the policy S.'s wife feloniously burnt the property insured. The company, not admitting any claim on the policy, brought an action against S. and his wife for the damage done by the act of the wife: Held, First, that the action could not be maintained, as the insurer has no rights other than those of his assured, and can enforce those only in his name after admitting the claim on the policy. Secondly, that the action for the felony if it were maintainable was maintainable without showing that the felon had been prosecuted. Semble, that a felonious burning by the wife of the assured, without his privity, is covered by the ordinary fire policy. STATEMENT OF CLAIM was in substance as follows: It stated that the plaintiffs, by a policy of insurance, 562] agreed with the defendant, Charles Smith, that if certain property therein described, or any part thereof, should be destroyed or damaged by fire at any time between the 21st of June, 1880, and the 24th of June, 1881, the plaintiff's would make good such loss or damage to an amount not exceeding £200; that on the 25th of October, 1880, the Q.B.D. Midland Insurance Co. v. Smith. 1881 defendant, Mary Smith, knowing the premises, and being by the direction and with the consent of the defendant, Charles Smith, in sole charge and control of the dwelling house in which the goods insured were, and of the goods so insured, and maliciously purposing and intending to burn and damage by fire such property insured, and to injure the said company, and to create a claim on the said policy against the said company, wilfully lit, or caused to be lit, fires in the said dwelling house, and thereby caused such property insured to be, and the same was, damaged and in part destroyed by the said fires; that the defendant, Charles Smith, had made a claim upon the plaintiffs, which claim arose from the said acts of the defendant, Mary Smith, and that by means of the premises the plaintiffs had incurred trouble and expense in investigating the said claim, and had become liable thereto, if any such liability existed. The plaintiff's claimed £150, and to have the said policy given up by the defendant, Charles Smith, to be cancelled. Demurrer. March 22. Dodd, for the defendants. Waddy, Q.C., and Jackson, for the plaintiffs. The arguments and authorities cited appear from the judgment. March 23. WATKIN WILLIAMS, J.: This action is one of an extraordinary, and so far as I am aware, of an unprecedented character. The questions of law involved in the case, which was argued before me yesterday, arise upon demurrer to the statement of claim, and I now proceed to give judgment. The facts, which for the purposes of the argument are assumed to be true, are as follows: The plaintiffs, an insurance company, granted to the defendant, Charles Smith, a policy of fire insurance, dated the 26th of June, 1880, by which they agreed with him that if certain property in a certain house should be destroyed or damaged by [563 fire they would pay or make good all such loss or damage during the currency of the policy. The defendant Mary, the wife of the defendant Charles Smith, having been left by him in charge of the house and property insured did, with the malicious intention of destroying the insured property and of injuring the insurance company and of creating a claim upon the policy, wilfully set fire to and destroy the house and the insured property. Charles Smith, the assured, then made a claim upon the policy against the company. The company thereupon brought this present action against Smith and |