The Corvallis gazette. [volume] (Corvallis, Or.) 1862-1899, 1895-02-07
LOWER COURT SUSTAINED.
Supreme Court Disallows the
Set-offs of Avery and Others
in the Hamilton, JOB As
signment.

signment.
This case was appealed to- the: supreme
court from decision made by Judge Fuller
ton, sustaining objections to and rejecting
the several Offsets claimed by the appellants
against their several debts due Hamilton,
Job & Co. Il will be remembered that
simultaneous with the closing3of the banks
door, B. r. Job commenced a suit against
Zephin Job for a dissolution of the partner
ship, asking that a receiver be appointed.
J. R. Bryson was appointed such receiver.
After the appointment of the receiver, suit
was commenced by the Agricultural College
against the bank, and B. R. and Zephin Job,
at the request of majority of creditors,
made an assignment to J. r. Bryson. The
court ordered Receiver Bryson to surrender
the property to himself as assignee. In re-
sponse to the notice to creditors, j. N. Ap-
plewhite, being indebted in the sum of
white, drawn upon 81. J. & Co., in his favor,
June 10, 1893, (the date the bank closed)
for 500; P. Avery, being indebted in the
sum of $3.50, offered the check of the Ben
ton Co. FIGURING Mills Co., drawn the same
day on FL. J. & Co., in his favor for $l49. 30;
John Smith, being indebted in the sum of
$1,000, presented a certificate of deposit is
sued by said firm to said Benton County
FIGURING Mills Co., for $4, 900, and duly as
signed to him June 18th, and also draft
issued by Fl. ]. & Co. upon Ladd & Tiltop,
for $44. 90, duly assigned after appointment
of receiver. Both checks issued to Apple
white and P. Avery ''were given to and
received by them subsequent to the closing
of said bank, with knowledge thereof, and
could not therefore have been presented for
payment prior thereto" The allowance of
these set-ofs was objected to by Ladd as
one of the creditors of the bank. The opin.
ion delivered by Judge Moore is as follows;
s'rhe record discloses that j. R. Bryson
was appointed receiver at about o'clock in
the afternoon of June 10, 1898, and that r.
Avery received his check, drawn that day
upon Hamilton, Job & Co. before that hour,
but that he accepted it with knowledge that
their bank had suspended payment, and the
question is presented as to whether Avery
is entitled to offset the said check against
his debt.
s'The rule appears to be we'll settled that
an equitable interest in an insolvent debtor 4
estate is vested in a receiver by his appoint.
ment, and that he takes the assets of the
debtor as trust fund for the equal bene fit
of all the creditors of the estate. The re.
ceiver can acquire no greater interest thar
the debtor had in the estate, and hence
chooses in action pass to the receiver subject
to tho equitable right of set-of existing Al
the time of his appointment. When re-
ceiver is appointed the accounts of the in
solvent debtor are closed, and no change:
thereafter be made by any assignment ol
credits against the estate, as this, if allowed
would injure the trust fund land defeat the
ratable distribution to which each credito
is entitled.
"In Northampton Bank VS.. Bullet, 4:
Am. Dec. 297, it was held that The impor-
tant period to determine the right of the
Of the assignment, butithe time the defend
ants had notice of it, and this principle p
plies as we'll in the case of set-off as pay
ment.' This would seem to imply that the
debtor of an insolvent might, until he had
received notice of the Insolvency, acquir
claims against the insolvent estate to of-se
his Indebtedness, upon the theory that h
was an innocent purchaser, for valuabl
consideration without notice. Applyin
this rule to the facts in the case at bar
Avery could not be an innocent purchaser
because when he acquired the check he ha'
Knowledge of the suspension, and hence i
not entitled to the offset claimed, thougl
in fact he had the check.a few hours sefor
the appointment of the receiver. The 9th g
claimants are even less favorably situated
as they not only obtained their checks will
knowledge of the suspension of said bank
but presumably after the appointment {
the receiver, and are therefore not entitle
to offset them against their several debts
"The appointment of a receiver in sui
to dissolve partnership does not of neces
sity preclude its debtors from acquirin
claims against it with which to offset thei
indebtedness. If the partners are solven
their creditors are not bound to wait unit
the equities between their debtors have bee
adjusted. The assets in such cases al
treated as still belonging to the firm, an
subject, in the ordinary method, to the pay
ment of the partnership debts. II the ru
were otherwise, partners embarrassed b
the scarcity of money, depression in bus
ness, or injury to their credit, could com
mence suit to dissolve the partnership ant
by securing the appointment of receive
continue their business through him as the
agent until ready to meet their obligation
when by dismissing the suit the receive
would be discharged, and they could resuu