68Graham v. Tilford, 1 Met. (Ky.) 112; Walker v. McKay, 2 Met. (Ky.) 294 (see also Merchants' Nat. Bank v. Robinson, 97 Ky. 552, 31 S. W. 136, 28 L. R. A. 760); Chambliss v. Matthews, 57 Miss. 306; Myers v. Davis, 22 N. Y. 489; Martin v. Kuns-muller, 37 N. Y. 396; Roberts v. Carter, 38 N. Y. 107; Fera v. Wickham, 135 N. Y. 223, 31 N. E. 1028, 17 L. R. A. 456; Fuller p. Steiglits, 27 Oh. St. 355,22 Am. Rep. 312. See also Backus v. Spaulding, 129 Mass. 234; Huse v. Ames, 104 Mo. 91,15 S. W. 965; Follett v. Buyer, 4 Oh. St. 586. Cf. Tus-cumbia etc. R. Co. p. Rhodes, 8 Ala. 206; Morrow's Assignees v. Bright, 20
Mo. 298; Williams p. Helme, 1 Dsv. Eq. 151; Miller p. Kreiter, 76 Pa. 78.
69 Beokwith v. Union Bank, 9 N. Y. 211.
70 Koegel v. Michigan Trust Co., 117 Mich. 642, 76 N. W. 74; Henderson p. Michigan Trust Co., 123 Mich. 688, 82 N. W. 510; King v. West Coast Grocery Co., 72 Wash. 132,129 Pac. 1081; See also Stitt v. Horton, 166 Ind. 656, 76 N. E. 241 (where the assignor is insolvent), and see Scott v. Armstrong, 146 U. S. 499, 36 L. Ed. 1059,13 S. Ct. 148; Matter of Hatch, 166 N. Y. 401, 60 N. E. 49, 40 L. R. A. 664.
71See infra, Sec.433.
assignor who really ought to pay it. This limitation, however, of the debtor's right of set-off does not seem to have prevailed.72 It seems rather to have been thought equitable for the debtor to be allowed to assert the right and to compel the assignee then to sue the assignor. If the same reasoning is followed where one or the other claim was not due at the time of the assignment, it would be reasonable to conclude that the debtor having in such cases a right against the assignor, in whom the legal right to the assigned claim still remained after the assignment, might set the claim off. It should be said, however, that the particular words of the statutes governing the right of set-off or counter-claim in different jurisdictions may be so clear as to make arguments based on general principles inapplicable.
A debtor is also entitled to set off against an assignee claims due from the latter and this is true even though the action is brought in the name of the assignor.73 As an action on an assigned claim at law was until recent years necessarily brought in the name of the assignor, it need not appear in the plaintiff's writ or declaration that the action was for the use of an assignee.74 It might seem necessarily to follow from this that the validity of an assignment is not an issue in an action brought in the assignor's name and cannot be set up; and indeed this has been held.75 But just as equity would not permit the assignor whose name was used in the proceedings to control or affect them to the injury of the assignee, and courts of law gave effect to this equitable protection of the assignee,76 so courts of equity should not allow the owner of a claim to be defrauded by having the claim collected in his name by one not entitled to do so; and as a payment to one claiming falsely to be an agent of another would not discharge the liability to the principal, an attempted satisfaction of the claim of a creditor by a payment to one falsely claiming to be assignee would be equally invalid. Even though judgment in the case goes in favor of the assignor and not of the alleged assignee, if the latter is actively controlling the litigation and will apparently direct the issue of execution and collection of the claim, the debtor should not be allowed without liability to allow the procedure of the court to be used by the alleged assignee to defraud the supposed assignor. And if the debtor is under such an equitable duty he should necessarily be protected from judgment by a defence. Whether the debtor would have to apply to equity to enjoin prosecution of the action by the alleged assignee, or whether an equitable plea to the action at law would be allowed to defeat the action and the judgment then rendered be regarded not as an adjudication of the claim itself but only of the right of the alleged assignee to prosecute an action upon it, or whether on motion in the action at law setting up that the action was being prosecuted without authority of the plaintiff the court should stay further proceedings, might depend upon local procedure.77 Wherever the right of the assignee must be enforced in his own name any difficulty of procedure disappears, since it becomes part of the plaintiff's case to prove a valid assignment,78 unless the debtor has debarred himself from contesting its validity by a recognition of it after knowledge of the facte.79 So the debtor may object that the character of the claim is such that public policy forbids its assignment.80
72 See cases cited supra, n. 67.
73 Cavendish v. Geaves, 24 Beav. 163, 174; Winchester v. Hockley, 2 Cranch, 342, 2 L. Ed. 299; Wartman v. Yost, 22 Gratt. 595. In Pates v. St. Clair, 11 Gratt. 22, the court gave judgment for costs against the Assignee for whose benefit the action was being prosecuted in the name of the assignor.
74 Hamilton v. Brown, 18 Pa. 87.
75"Nor will the defendant be permitted to controvert the validity of the transfer. The assignee need not show any legal right in himself." Hamilton v. Brown, 18 Pa. 87, 79. See also Gilmore v. Bangs, 55 Ga. 403. Lanoey v. Foes, 88 Me. 215, 219, 33 Atl. 1071.
76See infra, Sec.433.
77 In Riley v. Taber, 9 Gray, 372, an officer who, after receiving an execution with notice that a claim on which judgment had been recovered, had been assigned to another person and prosecuted at his cost, collected the amount of the execution and paid it to the nominal plaintiff, was held liable to the assignee. There seems equally good reason for holding liable one who with knowledge of an assignment knowingly takes any step in the course of litigation, or apart from litigation, to satisfy a claim in a method technically valid, but which will defraud the person beneficially interested in the claim. The beneficial interest of the original owner of a claim who has made no valid assignment should certainly receive as much protection as the interest of an equitable assignee. 78 Globe Works v. United States, 46 Ct. Cl. 407; Jarrell v. Lillie, 40 Ala, 271; Stair v. Richardson, 108 Ind. 429, 9 N. E. 300; Wood v. Noely, 7 Baxt. 586. So where the claim is based on a negotiable instrument the obligor may show that an alleged transfer was legally void. Bullock v. Dodds, 2 B. &. Ald. 268; Gather v. Farmers' Bank, 1 Pet. 37,7 L. Ed. 43; Nichols v. Fear-son, 7 Pet. 103, 106 9 L. Ed. 623; Stone v. Mitchell, 7 Ark. 91; Lynch v. Dodge, 130 Mass. 468. In Commercial Nat. Bank v. Spaids, 8 Bradweli, 493, an acceptor who had paid an indorsee who claimed through a transfer for a gaming consideration made void by statute, was held liable again to the payee.