James M. Smith, Respondents v. Benjamin F. Felton, Appellants

Summary

The New York Court of Appeals reversed the judgment for the plaintiffs and ordered a new trial, holding that the defendants were entitled to an equitable set‑off of their deposit against the promissory note held by the assignees. The court based its decision on the insolvency of the assignor and the equitable principle that cross‑demands may be set off when justice otherwise cannot be done.