Trammell vs. Harrell, 4 Ark. 602

Mr. Justice Dickinson delivered the following opinion: There are two points raised, in this cause. The first is a question of set-off, and the second, whether, under our statute, the right of action survives. Both of these questions depend upon the proper construction to be put upon our statutes prescribing the rule'in such cases. We will first dispose of the question of survivorship.

According to the principles of municipal justice, both in England and in this country, as the law now stands, where two or more payees or obligees have a joint interest in a bond or note, and one of them dies, the right- of action survives to the other. This principle, it is believed, pervades the whole system of modern jurisprudence, and it is, certainly, one every way consonant to justice and equity, affording freedom to commerce, and increased facilities in the remedies on choses in action.

To fetter or to confine it would certainly be to retrograde in the science of law, and to deprive ourselves of the benefit of the general improvement of the age. We deem these remarks strictly applicable, because they go to qualify and explain general terms in our statute, which seem to indicate a different doctrine. The &h sec. of Ch. 58, of the Revised Code, p. 476, declares, that “all survivorships of real and personal estate are forever abolished.” Now, the inquiry is as to the meaning of this sentence.

Was it intended to abolish the right of action surviving to a joint payee or obligee, and confine us to comparatively encumbered remedies? or, was it to prevent this very state of things that the whole sentence was inserted? In order to ascertain the true meaning of the act, we will first inquire what was the old law, the mischief and remedy upon this subject. The territorial law declared, that the doctrine of survivorship, in cases of joint tenancy, should never be allowed. Now, it is apparent, that the Revised Statutes only re-affirm and re-assert that principle.

All the States in the Union have similar provisions, and they are all upheld by alike high and patriotic considerations. The doctrine of entails and primogeniture, and the jus accrescendi, and the abolition of all patents of nobility, were the feudal badges which the American governments intended to sweep away, and thus break down all hereditary family succession, by unfettering property, and distributing it equally and justly among all the members of society. What is the meaning of “ all survivorships of real and personal estate ?” It means that kind of an estate that springs out of a joint tenancy.

To constitute a joint tenancy, there must be a unity of interest, of title, of time, and possession, and this usually relates to realty, although it is sometimes true in regard to personal estate. The destruction of any one of these unities will terminate the joint tenancy. 2 Black. Com. 185. Co. Lit. 193. Joint tenancies are now regarded with so little favor, both in courts of law and equity, that, whenever the expression will admit of it, the estate shall always be regarded as held in common. Fisher vs. Wigg, 1 P. W. 14, n, 1 Ld. Raym. 622.

And Lord Cowper says, that a joint tenancy, in equity, is an odious thing. Things personal may be held in joint tenancy; as, if a personal chattel be given to two or more, absolutely, they are joint tenants thereof, and, unless the jointure be severed, the same doctrine of survivorship will take place as in lands and tenements. 2 Black. Com. 399. 1 Vernon, 488.

Between partners in trade or farming, generally speaking, there can legally be no survivorship, as to personal property, in possession; for each of their respective shares goes to their personal representatives, and they become tenants in common with the survivor, the maxim being inter mercatores jus accrescendi locum non habet. Co. Lit. 3, 282, 182, a. A court of equity will bar survivorship, although the deceased wished the stock to survive. And if two persons take a farm, the lease will survive, but, if they lay out money in the way of trade, that shall not survive.

Although there is no survivorship as to partnership property, in possession, yet, according to the principles of the common law, there is, as to choses in action; for, when one or more partners, having a joint and legal interest in a contract, die, an action against the parties must be brought in the name of the survivor; and'-the executor or administrator of the deceased cannot join; neither can he sue, separately, but must resort to a court of equity to obtain from the survivor the testator’s estate. 1 East. 497. 2 Salk. 441.

These principles clearly show, that the kind of survivorship that the Legislature instituted to abolish, as to personal estate, related alone to a joint tenancy in such estate, and to the rents and profits issuing out of the realty. It was where the whole interest in an estate passed, and where the survivor took all that the act abolished, and not the mere right of action, which would always pass or survive to a co-obligee. Now, as to choses in action, as notes, bonds, and the like, there never was any survivorship, if they were given in any way of trade.

And this shows, that the survivorship in relation to personal estate, which the Legislature abolished, was never intended to include such a case. And the general words of the act must be taken in a qualified sense; for, unless that be done, they will defeat the very object and intention of the statute. Instead of remedying the evil, it would produce the very mischief intended to be cured. It would operate to the prejudice of trade and commerce, by encumbering the remedies by which rights would be asserted.

Such a construction put upon the act, would be in direct derogation of all the principles of commerce, which are now so firmly and beneficially established among all civilized nations. And men, instead of being encouraged to join their means and efforts together, for important objects and ends, for trade and other purposes, would stand aloof from each other, if, upon the decease of one partner, the other had not the sole right to wind up the business. We think this principle, so completely and intimately blended as it is in our commercial relations, too plain to require further illustration or argument.

We apprehend there can be but little difficulty in putting a right construction upon our act of set-off. which declares, that “ where two or more persons are mutually indebted to each other, by judgments, bonds, bills, notes, bargains, promises, accounts, or the libe, and one of them commences an action against the other, one debt may be set off against the other, although they may be of different natures.” This is the first

section of the act. The fifth and sixth sections provide, “that, if the amount set off be equal to the plaintiff’s demand, he shall recover nothing by his action; if less, he shall have judgment for the residue; and, if there be a balance due from the plaintiff to the defendant, judgment for that amount shall be rendered in his favor.” The very language of the first

section of the act clearly shows what kind of debts might be set off one against the other. They may be of different grades, but the persons themselves must be mutually indebted to each other, for so the act declares. What is the meaning of the term, “ when two or more persons are mutually indebted to each other?” The mutual indebtedness of the parties is precisely the same as if they were respectively or jointly indebted; and the one expression is precisely tantamount to the other. And this principle is not varied because our act makes a joint contract a separate one.

In that case, the paities cannot be said to be mutually indebted, but they are jointly or separately indebted, as they elect to treat the contract. Again, our act declares, if one of them commence an action against the other, one debt may be setoff against the other: the latter clause of the sentence still affirming and re-asserting, that the parties to the suit can alone set off mutual debts or demands. The mutuality of the persons being thus clearly established, it expressly negatives the idea that a joint note may "be set off against a separate, or e con-verso.

This mutuality of indebtedness may have existed when the right.accrued, or it may have arisen by the assignment of a demand, by another, or by operation of law. If a plaintiff’s demand exceed the set-off, he is entitled to judgment for the residue. Now, will you give him a judgment upon a joint demand, when there can be no mutuality of indebtedness, and against a party who never owed him any thing, and who, of course, cannot be said to be indebted to him? If such had been the intention of the act, would it not have expressed it so?

If the defendant’s demand exceed that of the plaintiff, he is entitled to judgment for the residue. How shall he take judgment over? Shall his co-defendant, as we.ll as himself, be entitled to a judgment upon a separate demand? Unquestionably not. All the States of the Union have statutes upon the subject of set-off, and most of them are very similar to our own. The language of some is, doubtless, more exact and certain than that of others, but we are not aware that, in any State, joint demands have ever been set off against several demands, or e converso.

Most of these statutes, too, convert joint liabilities into several obligations. The New-York statute declares, that, if there be several defendants, the set-off must be due to them all, jointly. Here the statute is express; and, although the language is more accurate than the terms used in our act, still, we hold the words mutually indebted to each other, and where one commences suit against the'other, that these debts are matters of set-off, are fully as clear and certain as the New-York act. Babington on Set-off, 37. Ex parte Hanson, 12 Ves. 446. 1 Leigh, N. P. 157. Chit, on Con. 329. Parker vs.

Nicholas, 4 Rand. 359. The language of the Kentucky and Tennessee statutes is very similar to ours, and the courts, we think, have put a similar construction upon them. And therefore, we are of opinion a joint demand is not allowed to be set off against a separate one, or a separate against a joint demand. In this case, however, the act of survivorship showed the whole right of action in the defendant below; and the demands, by operation of law, being mutual, and subsisting at the time of the institution of the suit, one claim was properly allowed to be set off against the other. Mr. Justice Lacy concurred.