Sec 1024

When a surety is sued on his obligation as surety, he is entitled to set off any debt due from the creditor to the principal, by which the debt of the principal to the creditor could be diminished.5 A surety may also set off a debt due himself by the creditor in reduction of the principal indebtedness.6

Sec 1025

After a debt is assigned, the assignee is regarded as the real creditor, and the defendant, in a suit brought on it, may set off a debt to him from the assignee,7 though the assignee takes the debt burdened with any equities which may have attached to it full out of the bankrupt's assets, to the spoliation of others.1 The same distinctions apply to receivers of insolvent firms or corporations, although authorized to sue in their own names.2 before notice to the defendant of the assignment.1 No debt, however, incurred by the assignor to the defendant after he has had notice of the assignment can be set off by him against the assignee.2 - To a suit by the bona fide endorsee for value of a note, a demand in favor of the maker against the endorser is not admissible as a set-off, although the note when the endorsee took it was overdue.8

Agents' debt cannot be set off against principal.

Surety may avail himself of debts due his principal.

After assignment debt due assignee may be set off in suit by him.

1 Campbell V. Graham, 1 Russ. & M. 453; McMahon V. Burchell, 5 Hare, 325.

2 Wh. on Agency, sec 447, 467, 755; Reutschler V. Hucke, 3 Ill. Ap. 144; as to partnership, see infra, sec 1028.

» Leake, 2d ed. 1014; George V. Cla-gett, 7 T. R. 359; Semenza V. Brinsley, 18 C. B. N. S. 467: Dixon ex parte, L. R. 4 C. D. 133; Oulds V. Harrison, 10 Exch. 572; Parker V. Donaldson, 2 W. & S. 9; Gardner V. Allen, 6 Ala. 187.

4 Borries V. Bank, L. R. 9 C. B. 38; Dresser V. Norwood, 17 C. B. N. S. 466.

5 Leake, 2d ed. 1017; 2 Smith's L. C. 7th Am. ed. 320; Murphy V. Glass, L. R. 2 P. C. 408; Bechervaise V. Lewis,.

L. R. 7 C. P. 372; Green V. Darling, 5 Mason, 201; Newell V. Salmons, 22 Barb. 647; Crist V. Brindle, 2 Rawle, 121; Knour V. Dick, 14 Ind. 20; see Hanson ex parte, 12 Ves. 346; S. C, 18 Yes. 252; Dale V. Cooke, 4 Johns. Ch. 15.

6 Ibid., Stephens ex parte, 11 Yes. 24; see Dart V. Sherwood, 7 Wis. 523.

7 Clark V. Cort, Cr. & Ph. 154; Me-grath P. Gray, L. R. 9 C. P. 216; Shel-den V. Kendall, 7 Cush. 217; Com. V. Bank, 11 Metc. 129; Spencer V. Bab-cock, 22 Barb. 326; Beckwith V. Bank,. 5 Selden, 211; Ward V. Martin, 3 Monroe, 18; and cases cited supra, sec 842.

Sec 1026

An assignee in bankruptcy or insolvency, not being a purchaser, takes subject to any equity available against the assignor.4 In Massachusetts, unliquidated claims,5 "demands not yet due,6 and demands growing out of partial failure of consideration,7 may be set off in an action brought by the assignees of an insolvent during his life, or by his executors after his decease."8 No claim, however, acquired after the bankrupt or insolvent assignment, and no claim got up in contemplation of such assignment, can be set off against the assignee.9 A claim, therefore, bought by a debtor, after notice that a petition in insolvency is about to be filed, cannot be used by him as a set-off.10 Nor can a debt due from an assignor be set off against a suit brought by the bankrupt assignee to recover the price of the bankrupt's effects sold by the assignee to the defendant; as otherwise one purchaser might pay himself in Distinctive rule as to assignee in insolvency and bankruptcy; and to receivers.

1 Cavendish V. Graves, 24 BeaV. 163; Aldrich V. Campbell, 4 Gray, 284; Hunt V. Shackleford, 55 Miss. 94; see fully supra, sec 842 for cases.

2 See supra, sec 836, 842 et seq.; Watson V. R. R., L. R. 2 C. P. 593. That a court of equity will intervene where there is no due remedy in this respect at law, see Blake V. Langdon, 19 Vt. 485. As we have already seen, a debt, to the assignor, to be a set-off, must be due at the time of the assignment, supra, sec 844.

3 Chandler V. Drew, 6 N. H. 469; Stedman V. Gillson, 10 Conn. 55; Robinson V. Lyman, 10 Conn. 30; see Chambliss V. Matthews, 57 Miss. 306.

4 Smith V. Hodson, 2 Smith L. C. 7th.

Am. ed. 129; Tuckers V. Oxley, 5 Cranch, 34; Holbrook V. Receiver, 6 Paige, 220; Maas V. Goodman, 2 Hilt. 275; Stow V. Yarwood, 20 Ill. 497. See Lloyd V. Turner, 5 Sawyer, 463; Edmunds V. Harper, 31 Grat. 637. 5 Bemis V. Smith, 10 Met. 194.

6 Demmon V. Bank, 5 Cush. 194; Bigelow V. Folger, 2 Metc. 255.

7 Knapp V. Lee, 3 Pick. 452; Jarvis V. Rogers, 15 Mass. 407.

8 2 Smith's L. C. 7th Am. ed. 308.

9 Irons V. Irons, 5 R. I. 264; Clarke V. Hawkins, 5 R. I. 219; Northampton Bk. V. Balliett, 8 W. & S. 317.

10 Smith V. Hill, 8 Gray, 572; Ogden V. Cowley, 2 Johns. 274; Richter V. Selin, 8 S. & R. 425.