James Hamilton v. S. Van Hook, 26 Tex. 302

Bell, J. We are of opinion that there is no error in the judgment of the court below for which the same ought to be reversed. The general rule undoubtedly is, that sekoffs must he mutual and due in the same right with the debts sued for. (2 Tex. R., 166.) An exception to this rule, however, is allowed, where the party against whom the set-off is pleaded can be shoAvn to be insolvent. In that case it would be inequitable to permit the party AVho Sues, to recover, leaving the defendant who holds a just demand for which the plaintiff is liable, without any remedy to enforce its payment.

The courts of this State will entertain any matters -of defence, either equitable or legal, which go to defeat the plaintiff’s action* But Avhere equitable matters of defence are presented, either by plea of set-off or reconvention, if they do not go to defeat the whole cause of action, the courts would, perhaps, reserve to themselves the right to consider them or not, according to the circumstances of the particular case. (Hanchett v. Gray, 7 Tex. R., 549; Henderson v. Gilliam & Co., 12 Tex. R., 71.; Castro v. Gentiley, 11 Tex.

R., 28.) In every case where a joint demand is pleaded in set-off to a separate demand, and the party pleading relies upon the insolvency of the parties against whom he holds the joint demand, to take the case out of the general rule, the burthen is of' course upon the party who pleads the set-off to show the insolvency. In the present ease, the, demand pleaded in set-off was a demand against several persons, only one of whom was plaintiff in this suit. The burthen of proof was therefore upon Hamilton to show the insolvency of all the parties who were liable upon his demand so pleaded in set-off.

His plea of set-off was not in fact a good one, because it ought to have named all the parties who were liable upon his demand, and to have averred their insolvency. This would have put the plaintiff upon full notice of the matters which the plea would put in issue. But the plaintiff did not except to the sufficiency of the defendant’s plea in this respect. The facts which the plea put in issue were: 1st. Who are the members of the Tellico ManufaC" taring Company? and, 2d, are all the members insolvent? The defendant, by his plea, treated all the members of the company as severally liable to him.

It is not necessary for us to decide, upon the evidence before us, whether they were or not. The court below instructed the jury upon the assumption that they were. The questions of fact Were all fairly submitted to the jury, and it was for them to find what persons composed the Tellico Manufacturing Company, and whether those persons were all insolvent or not.

The petition of Hamilton against the company, which was read in evidence, was admissible to show v/ho were members of the company, although it was not conclusive evidence upon that point which would estop Hamilton from showing the contrary, (1 Greenleaf’s Evid., 551.) The articles showing the organization of the company were also admissible, because they named certain persons as directors, and also showed that no one could be a director without also being a stockholder.

The' other questions which are made in the case we do not deem it necessary to notice, because they cannot affect the conclusion to which we have come, that the judgment of the court below ought to be affirmed. It is ordered accordingly. Judgment affirmed,