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Opinion of the Court, per ALLEN, J.

the substantial business interests of the debtor, as well as to the payment of a single debt. An arrangement was accordingly made by which, upon being secured against losses, the defendants undertook to make advances upon the purchase of produce, by their debtors to the amount of its cost, to be consigned to them for sale on commission, and they to receive the usual commission upon the sale, and to be entitled to apply one-half of the net profits to the payment of their debt, and pay the other half to the consignors, their debtors, expressly agreeing that they would not retain but one-half, or seek to set off their debt against the other half. The consideration for the agreement was sufficient in the law. The commissions and their earnings in the business, and interest upon the advances, was a sufficient consideration, aside from the additional security they got upon the services and labor of the debtors and their future earnings. It was certainly an agreement which, as honorable men, the defendants should have kept. It is true that they allege a violation of the agreement by the debtors as an excuse for their disregard of their undertaking, but the referee has not found this allegation true, and the evidence does not satisfactorily establish it. The sole question with us, however, is as to the legal effect of the arrangement rather than the honorary obligations resulting from it. The mutual promises and the benefits secured to the defendants constituted an ample consideration to support any lawful undertaking that they might have assumed as a part of the agreement. It certainly was sufficient to hold them to a performance of every part of it, unless the promise not to retain one-half of the profits to apply on the old debt is an exception.

The court, in Eland v. Karr (1 East., 375), regarded a similar contract valid, so as to entitle the promisee to damages sustained by not receiving the ready money as promised. Unless the authorities are decisive to the contrary, a party should be held estopped by his solemn agreement made upon a sufficient consideration from asserting a privilege or right which he may lawfully waive in a matter not affecting public


Opinion of the Court, per ALLEN, J.

interests or policy. If the defendants have induced the assignors of the plaintiff to enter upon a course of action, and engage in a commercial adventure for the mutual benefit of both, and to assume the risks and undertake the labor incident to it, upon the faith of their promise to do or forbear an act lawful in itself, they should upon principle and within well-established rules be estopped from taking action inconsistent with their promise, to the prejudice of the promisee.

An early case which has been supposed to bear upon the question is Atkinson v. Elliott (7 T. R., 374), and involved the right of set-off as against assignees in bankruptcy. The bankrupt was indebted to the defendants in two amounts, payable at different times. After the first debt became due he lodged in the creditors' hands a bill of exchange for a larger sum, which would become due before the second debt would be payable, and took from the creditors a promise to pay the difference between the bill and the first debt, when the bill should be paid. After the payment of the bill to the defendants, and before the second debt became due, the debtor became bankrupt, and the court held that the creditor might retain the surplus of the bill to satisfy the demand on the bankrupt lastly becoming due. It was decided upon the statute (5 Geo. II, ch. 30, $ 28), authorizing in case of bankruptcy a set-off, where there are either mutual credits or mutual debts between the bankrupt and any other person, and upon the authority of Ex parte Prescot (1 Atk., 230), in which no question akin to that made here was involved. The court did not pass upon the effect of an agreement not to claim a set-off as between the parties, but adjudicated the rights of the parties under the bankrupt acts. There was no express promise not to set off the one debt against the other, although the parties only contemplated a provision for the debt first becoming due, and at the time of the bankruptcy and the commencement of the action by the assignees the second debt which was set off had not become due, and the setoff would not have been allowed between the original parties. Eland v. Karr (1 East., 375) is the leading case, and that upon

Opinion of the Court, per ALLEN, J.

the authority of which the subsequent cases relied upon by the defendant were decided. That was assumpsit for goods sold and delivered to be paid for on request. Plea, a set-off upon various bills of exchange, and for money had and received. Replication, that at the time of the sale it was agreed that the defendant should pay for the goods in ready money. To this replication there was a demurrer upon which judgment was given for the defendant. The court decided that at the time of the commencement of the action there was a debt due from the plaintiff to the defendant capable of being set off under statute. (2 Geo. II.) All the court say, bearing upon the question presented here, is, that “the form of the plea was an order to set off and allow out of the debt due to the defendant, so much as the damages sustained by the plaintiff, assented to by the defendants, not performing his promises, and in estimating the plaintiff's damages in this case, the jury would take into consideration the loss he had sustained by non-payment of the ready money.” It was of this case that Lord ELLENBOROUGH, Ch. J., said: “I defer to the authority, but am not convinced by it.” (Fair v. McIver, 16 East., 130.) In the case last cited, which was by the assignees of a bankrupt to recover for goods sold, to be paid for on delivery, the set-off of a bill of the bankrupt was disallowed, for the reason that the defendants did not hold it in their own right. The same judgment that was given in Eland v. Karr, might have been given for the reasons assigned for a like judgment in the subsequent cases of Cornforth v. Rivett (2 M. & Sel., 510) and Hogan v. Shorb (24 Wend., 458), to wit, that the seller of goods to be paid for in cash on delivery, by parting with his goods without receiving the money, waived the condition. He had the remedy in his own hands, and was not obliged to part with his goods until the price was paid. It was not the case of an agreement respecting cross debts. Mayer v. Nias (1 Bing., 311) was the same in principle as Cornforth v. Rivett. It was a sale of goods for ready money, and the purchasers paid for them by delivering to the seller's agent a dishonored bill of the vendor, which the seller at first refused

Opinion of the Court, per ALLEN, J.

to take, but which he afterward took and kept; and it was under these circumstances that the assignees in bankruptcy of the seller were not allowed to recover for the goods. In the cases already referred to there was no promise or agreement looking to mutual credits, nor an agreement not to set off one debt against another. The transaction did not contemplate the creation of a debt upon the one side, but for payment at the time of the delivery of the goods. The later case of McGillivray v. Simson (2 C. & P., 320) was somewhat different in its circumstances, but went off on the authority of Eland v. Karr, Cornforth v. Rivett, and Mayer v. Nias (supra). It was an action by the assignees of Inglis and another, bankrupts. The bankrupts, under the firm name of Inglis & Co., were indebted to the defendant in the sum of £418 48. 2d., and, as successors of the firm of Inglis, Ellice & Co., they owed him £1,844 78. 5d., and were insolvent. Being so indebted, they consigned certain timber to the defendant for sale, upon his undertaking to account for and pay over the proceeds of the sale without deducting therefrom the sums of money, or either of them, so due to him. Chief Justice ABBOTT, at nisi prius, held that the promise not to set off the new debt was not binding, but that the debt of the old firm could not be set off. On being reminded that the latter debt had been assumed by, and was the debt of the new firm, the chief justice said that if it were so, the two promises must be set against each other, and the parties left to their legal rights; and that, by the old rule, the debt of three could not be set off against two. A technical rule was allowed to prevail against the equitable rights of the party contending with assignees in bankruptcy, to the end that a promise made upon a good consideration might not be entirely without effect. A rule nisi for a new trial was refused solely on the authority of the cases before referred to, which were entirely dissimilar in their circumstances, and governed by a different principle.

The equity case of Taylor v. Okey (13 Vesey, 180) was decided in deference to the opinion of Lord KENYON in

Opinion of the Court, per ALLEN, J.

Lechmere v. Hawkins (2 Esp., 626), but not in harmony with the present rule in equity, which will not, in all cases of cross-demands, allow a set-off ; but only when equitable ground can be shown for protection against his adversaries' demand. (Story Eq. Jur., § 1436.)

A single case in our own courts needs to be referred to. (Downer v. Eggleston, 15 W. R., 51.) The marginal note by the reporter justifies the claim made by the defendant in this action, but it is not supported by the case and the prevailing opinion of the chancellor. The action was upon a written instrument, by which the defendant agreed to account for certain timber belonging to the plaintiff if he should dispose of it to the full amount of the proceeds, deducting charges, etc. The defendant pleaded the general issue, with a notice that he would prove that the plaintiff had agreed that the proceeds of the lumber should be applied to the payment of a bond of the plaintiff, held by the defendant. On the trial the defendant gave evidence tending to prove the agreement as alleged; and the plaintiff gave evidence inconsistent with that given in behalf of the defendant. The circuit judge held that the bond could not be set off against the claim of the plaintiff under the statute of set-off; but if the agreement was made as alleged by the defendant it should be allowed, and submitted that question to the jury who found against the defendant. On a motion for a new trial the Supreme Court held that the circuit judge erred in his construction of the statute, and that the bond was a proper set-off in the action; but refused a new trial on the ground that the jury necessarily found that an arrangement had been made by which the lumber was not to be applied to the payment of the bond. Upon a writ of error to the Court for the Correction of Errors the chancellor gave the prevailing opinion, and, after citing some of the English cases with approval, refers to the fact that the alleged agreement was made, if at all, before the first installment upon the plaintiff's bond, sought to be set off, had become due; that the plaintiff was under the same obligation to pay his bond at the time appointed as the

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