LOUIS BNYDERS, sons co. v. Aamsrnone. 21
way militated against the equitable doctrine of set—otf, there recognized
and established. It was only out of the assets remaining after these just
and equitable set-offs were allowed that the preferred and other creditors
were to be paid. There the bankrupt was discharged, but here, in these
bank insolvent systems, provision is made for a remedy against share-
holders to make good any deticiency of assets, whether to pay preferred
creditors or other claimants. To deny this right of set—0H' in cases like l
this is to exonerate the shareholders, or at least to force the depositor to
a bill under section 2 of the act of June 30, 1876, (1 Supp. Rev. St. U.
S. 217; 19 St. 63,) instead of leaving the receiver to proceed against
them under section 1 of that act, or section 5234 of the Revised State
utes. This is adding to the injustice of the denial the expense and delay
of litigation, which it is one of the objects of the statutes and law of set-
off to reasonably avoid.
As stated in Aldmbh v. Campbell, 4 Gray, 284, 285, cases like this are
“.not,to be determined upon technical rules of set-off, but upon princi-
ples regulating the settlement of insolvent estates, whether of persons liv-- '
ing ,or; deceased.? And, as said by the chan-cellor, in Lindsay v. Jacksrm, . `
2,Paige 581, 585: "Although- equality among creditors is equity,,here isa ,
prior and a paramount equity which must be provided for; an equity which:
is;distinctly_ recognized by, the-insolvent acts of this state,.-which, have.
also declared the other principle, and enforced it to a certain extent.".
The case of Bank v. iaylor, 56 Pa. St. 14, or others like it, cited in Arm--
strcag, y. Scott, supra, does notaiiect this equity, because in that case the.
debt proposed to be set off wasassigned to the debtor of the bank after.
the act of insolvency, which makes all the difference imaginable, for it.
is well settled that the rights ofthe parties become Hxed at the moment.
and by the act of insolvency, and any subsequent change of the then sit-
uation, byassignment or other transfer, cuts off this equity of " insolvency
set-oti',"’ if I may call it so. It is against this kind of transfer or assign-
ment, and in declaration of this principle, that section 5242 of the United
Statesltevised Statutes, prohibiting such, transfers, is aimed, And it
seems to meplain that that sectionis no more in the way of allowing a.
set-0H' where the note passed into the hands of the receiver before` matu-
rity, thanwhere it passed to him after it became due. If it excludes one.
it-should exclude both, for either would as much as the otherdisturb-
that equality of distribution among cred;itors,,or that preference of cer-
tain claims, upon which the opinion insists. I take it, therefore, to be
plainly inanifest. that the opinion- in Armstrong v. Scott, supra, must be
confined in the application ofthe fact, so much insisted upon,-of the non-_
maturity ofthe note sought to be set off at the-time it came to the pos-
session of the receiver, to the ruling that the Ohioestatutes of, set-off do
not apply, orqallow a set-ot}`, except when the debt ·_W3S·· due;. and;. that.
under those statutes the deposi-tor cannot, claim the rightof equitable set-,
off as a statutory_ right or remedy-_,.if one pleasesto rely on that .distinc— .
tion; for it does not _seem to me-. to be_the intention ofthe opinion to.
deny the equitable doctrine of . seteoli which; I have endeavored to oute-
H9? ds @PPll9$-P1? te @#8 wie- ..1 _;B¤te.Wh¤th¢1f.such was the intention.0ruot.,;;