JAMES, L.J.
I really have no doubt in this case, which, in the view I take of the facts, seems to me to by a very simple one, and to involve no questions as to trustees and cestuis quo trust, and any peculiar rights arising from that relation.
The Government paid to Messrs, Cox and Co. a certain sum of money to the uses of Lord Charles Ker. He has assented to that payment being made to them for his use. After that Lord Charles Ker had a claim against them which made them liable, not merely to a suit in equity, but to an action at law by Lord Charles Ker for the money, as being money paid to his use. It appears to me that beyond all doubt they could have pleaded a set-off in that action for the money that was due to them from him. Both rights were Common Law rights. There was a simple contract debt due A. to B., and at the same moment a simple contract debt due from B. to A. There was a claim by Lord Charles Ker for money had and received to this use, and a claim by Cox& Co. for money due, so that if the action had been brought by Lord Charles Ker himself the right to set-off would have been clear. It is not brought by him, but it is brought by a person who claims as assignee of the chose in action belonging to him. Now an assignee subject to all rights of set-off and other defences which were available against the assignor, subject only to this exception, that after notice of an assignment of a chose in action the debtor cannot by payment or otherwise do anything to take away or diminish the rights of the assignee as they stood at the time of the notice. That is the sole exception. Therefore the question is, as this right of set-off existing at the time when the notice was given by the Duke of Roxburghe? Under the old law the proper course for the Duke to take would have been, not to come into a Court of Equity, but to use the name of Lord Charles Ker at law; the proper course for an assignee of a chose in action, unless there were some equitable circumstances to justify him in coming to a Court of Equity, having been to sue at law in the name of the assignor. In that case set-off could have been pleaded as against the assignor, and in the present mode of procedure that defence is equally available.
The Vice-Chancellor decided the case on the ground that Messrs. Cox and Co. had a banker’s lien. We have not heard out the Appellant’s argument on that point, and I therefore give no opinion upon it, and do not express any dissent from the conclusion to which the Vice-Chancellor came, but my conclusion is arrived at independently of that question, and on the ground that there is a clear right of set-off.
BAGGALLAY, L.J.
I am of the same opinion. some time before the 6th of December, 1877, Lord Charles Ker obtained permission to retire from the army. Under the provisions of the Act of 1871 the value of his commission was estimated at £3000, which sum was in the ordinary course paid by the Paymaster-General on the 6th of December to Messrs. Cox and Co., who were the properly constituted agents of the regiment in which Lord Charles Ker held his commission. According to the usual practice and the rules of the service which govern the army agents in these matters, that sum of £3000 was carried by Messrs. Cox and Co., not to any account between themselves and Lord Charles Ker, but to a deposit account between themselves and the Commissioners, there to remain until the retirement of the officer was notified in the Gazette. The Gazette notice of his retirement appeared on the evening of the 18th of December, and in accordance with the rules to which I have referred that sum of money then standing to the account of the Army Purchase Commissioners became payable to Lord Charles Ker himself. If at that time Lord Charles had demanded that sum of £3000, Messrs. Cox and Co. would have been entitled to set off any sum of money in such he was indebted to them, subject of course to their not having received notice of a valid charge created on that fund previously to the time when the right of set-off arose. It is admitted here that there was no notice whatever given to Messrs. Cox and Co. of the present claim of the Duke of Roxburghe until the morning of the 19th of December, and , in point of fact, any notice given by him before the money came into the possession of Messrs. Cox and Co. would have been ineffectual, as was decided in the case of Somerset v. Cox (1), which has been repeatedly recognized and followed. There was therefore no notice given by the Duke of Roxburghe to Messrs. Cox and Co. before the morning of the 19th which could have created a valid charge on the money in the hands of Messrs. Cox and Co., and this was after the right of set-off had arisen. I think that the conclusion at which the Vice-Chancellor arrived was correct, and though we decide the case on another ground, I do not express any dissent from the view expressed by him of the righst of Messrs. Cox and Co. in respect of a lien as bankers.
LUSH, L.J.
This case appears to me to be free from any reasonable doubt. As soon as the retirement of Lord Charles Ker was gazette, there being, as it appears, no regimental claims, the £3000 became Lord Charles Ker’s money in the hands of Messrs. Cox and Co., and he might undoubtedly have brought an action at Common Law immediately for that £3000 as for money had and received for his use. At that very time Lord Charles Ker owed Messrs. Cox and Co. a sum of £647, and they might undoubtedly have pleaded a set-off of that amount in that action. That is exactly the case before us; there is a Common Law claim, on the one hand, for £3000 which Messrs. Cox held to and for the use of Lord Charles Ker, and a claim, on the other hand, to set off against that payment a debt of £647 which Lord Charles Ker owed to them. The £3000 became money in their hands the property of Lord Charles Ker, and their right of set-off arose before the notice was given by the Duke of Roxburghe of his retirement.