Court Opinion

ID: 8740291
Source: CourtListenerOpinion
Date Created: 2022-11-26 10:45:49.508443+00
Date Added: 2024-06-11T17:00:22.148908
License: Public Domain

WHEELER, District Judge.
According to the report of the referee, five persons, one of whom is solvent and the others not, have a joint claim against the estate of $1,552.50, which has been proved, and each of them has become severally bound to pay the trustee some sum, and these sums amount to much more than this claim, which has been assigned to the Passumpsic Savings Bank, that advanced the money out of which it arose. The trustee has moved to have the proof expunged, because of these liabilities of the claimants to the trustee, as an equitable set-off, and the motion has now been heard. The set-offs provided for in the bankrupt act are in “cases of mutual 'debts or mutual credits between the estate of a bankrupt and a creditor.” Section 68a. This would seem to include a liability that has accrued to a trustee which had not accrued to the bankrupt, when the claim and liability are mutual. The mutuality required is the same as that of the act of 1867. In Gray v. Rollo, 18 Wall. 629, 21 L. Ed. 927, it seems to have been considered that under that act a separate debt could not be set off against a joint debt in equity or bankruptcy unless they had grown out of a transaction or under circumstances establishing that the joint credit had been given on account of the separate debt. Here *266the bankrupt corporation had not incurred the debt to the five, nor either of them his several liability, on account of any cross credit. The separate amounts of the several liabilities are not given, and a set-off against them of the joint claim might, and probably would, make the solvent joint creditor discharge liabilities of some or all of the other several debtors. The motion must therefore be denied. What the rights of the parties may be after dividend declared, if in any manner different, has not been presented or considered; but the denial will be made so as not to affect them. Motion to expunge denied, without prejudice.