Daily globe. [volume] (St. Paul, Minn.) 1878-1884, 1878-10-08
SUPREME COURT.
Full TEXT OF DECISION FILED.
=. Z. Bach. as Receieer of the National Ia
change Bank Of Minneapolis, Respondent, u
ID. N. Wilson and Will;anl N. Randall.

r. l.. Bach. as Recei,er of the National Ez-
change Bank Of ~ minneapolis, Respondent, as.
FL. ~. Wilson and William II. Randall.
OPINION.
The note sued on was Joint note of the de-
PENDANTS given to the bank, dated on the 18th
April, 1877. and payable one month after its
date. The bank was put into the hands of the
receiver under the national banking law on the
24th day of May, 1877, which was after the
maturity Of said note. Giving TO the aver
ments of the answer the most favorable con-
struction claimed by appellants, the three sew
erat notes set up as ground for the equitable
relief sought originated in the settlement of
transaction between the defendant Kimball
alone and the bank and Tidd and Fales.
Said notes were given to Kimball by the bank
ana I1dd q Fales as joint makers, being dat
ed April 16, 1877, and payable respectively in
twelve, fifteen and eighteen months next there
after with interest. Neither of these notes
were due at the time the receiver was appoint
cd, nor were they or either of them due when
TINS action was commenced, which appears to
nave been In November, 1877. 1t is alleged in
the answer that the defendant. Kimball. trans
ferred or assigned one-half of these notes to
the defendant, Wilson, prior to the commence
ment OF this action, but whether before or af-
ter the appointment of the receiver is not stat
ed. 1t cannot be assumed that Wilson ACQUIRED
any interest IN the notes prior to that time as
no such fact is alleged in the pleadings. The
insolvency of both the bank and Tidd & Fales.
the other makers of the notes, is properly al
leged. The further fact is alleged, though
clearly an immaterial one in this action, that
claim for the.amount of these notes has been
duly made to the receiver and disallowed.
Upon this state of facts the defendants ask
that the plaintiff be estopped from collecting
his demand against the defendants, and that so
much of the defendants' demands as NAV be
necessary be set off against that due to the
bank IN payment of the same and for other
and further relief as may seem just.
The respective rights and liabilities existing
between the bank and its creditors and debt
ors became fixed when its insolvency occurred
and 1t passed into the hands of the receiver ap-
pointed by the controller of the currency All
the property and assets of the association
then became a fund legally dedicated first to
t the u satisfaction ion. Of any claim of
deficiency in the proceeds of the
bonds pledged for the redemption
of its notes to meet the amount necessary to
be expended for that purpose; and, second, for
ratable distribution of the balance among it's
general creditors, upon the principle of equality.
No subsequent lien could be created or right,
or preference obtained in respect to any of the
assets or property of the bank. which did not
exist at that time.
National Bank vs. Colby. 81 Will, 6O9.
The rights of the parties hereto then must
be determined with reference to the condition
of things existing when the receiver herein was
appointed; and unless the defendant KimbaIl.
the then holder and owner of the notes against
the bank, had at that time the equitable right
of set off here claimed, it is clear that it does
not exist in favor of the defendants.
q. s. Trust Co. VS.. Harris, Bom 76
Clark vs.. Brockway, Reyes, Is.
In matter of receiver of Middle district,
219. At that time the joint note of the de-
PENDANTS to the bank was overdue If it had
been paid at maturity according to its terms,
the proceeds would have passed into the hands
of the receiver as cash assets, subject without
| doubt to be equally and ratably distributed
among the general creditors of the association
after settlement of the prior claim of the gov
| eminent according to the provisions of the
National Banking law. Kimball, the then
| owner of the claims against the bank, could
| not have acquired any preference over its other
general creditors in respect to the moneys thus
| received by it on account of the payment OF
the note against the defendants. Their failure
to pay it when due ought not to place
them in any better position than
they would have occupied had they
| faithfully discharged their own obligation
at maturity according to its terms. 1t would
be a strange principle in equity which would
enable party to derive an advantage from his
own delinquency, which he could not otherwise
have enjoyed. When the receiver was appointed
Kimball was the sole owner of the three notes
against the bank, which are now sought to be
used as an equitable offset to it's claims against
the defendants. This claim was overdue. II
was a joint one in favor of the bank against
notes then belonging to Kimball, having orig.
mated in an entirely separate and distinct
transaction. These notes were Joint demands
against the bank and Tidd & Fales, and not vet
due. The respective claims being thus wholly
independent of each other and between
different parties, they do not occupy
the position of mutual demands between the
same parties, originating in a mutual credit
and there was clearly no connection between
them upon which under any circumstances a
court of equity could act for the purpose of
compelling an equitable offset or that would
Justify the application of any other rules in re-
spect to the matter of set off than those
recognized at law.
Two (2) Story Eq Ju., sections 1874, ex seq.
Bridsau VS.. Fisher, II Mimi, 103.
Greene VS.. Darling and jerks 5 Mason, 2O1,
The mere fact that the bank and Tidd &
Fales became insolyent after giving their joint
notes to Kimball could not operate to change
the character or terms of these obligations or
hasten their maturity. Hence if the
due note sued on was the indi-
vidual obligation of Kimball, this circumstance
of insolvency alone would furnish
no equitable ground for postponing it's pay
ment till the matur ty of his note against th.
bank, or for compelling an application of the
former upon the latter in the way of set off.
Bradley vs. Angler, ex., etc., 8, N. Y, ATS.
But in this case the note due the bank was
not the individual note of Kimball, but the
joint note of both defendants, and certainly
he had no right when the receiver was appoint
ed to insist upon suspension of the payment of
such joint obligation because he had individ-
ual claims against the bank and others payable
at a future day.
For these reasons the demurrer to the an
swer was properly overruled, and the order ap-
pealed from is affirmed. CORNELL. ].