Court Opinion

ID: 8184277
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:06:32.92816+00
Date Added: 2024-06-11T16:40:21.519893
License: Public Domain

Cassoday, J.
It is claimed that the appeal should bo dismissed because it was not taken ‘‘ within thirty days from the entry of the” order, as required by the statute. Sec. 1699, E. S. It is true that section provides, in effect, that such appeal shall not be taken after the expiration of such thirty days. Here the order is dated October 15,1892, and was entered October 21, 1892, and it is therein stated to be as and for September 19, 1892. The fact is that the order so entered was a modification of a prior order of such former date. This appeal was perfected November 12, 1892, which was within thirty days from the entry of the order appealed from, and hence was within the time prescribed bv the statute.
At the time the bank assigned to the defendant it was indebted to the plaintiffs, as mentioned in the foregoing statement, and such indebtedness was then due and payable. At the same time the plaintiffs were indebted to the bank in a large amount,— a part of which had become due and payable before the making of such assignment, and the balance thereof did not become due and payable until after the making of such assignment. The trial court allowed the plaintiffs to set off so much of their indebtedness as became due before the assignment, but refused to allow such setoff as to any portion of their indebtedness which became due after the making of the assignment. The correctness of such ruling is the important question presented for determination.
*267Undoubtedly the rights of the creditors and debtors of an insolvent assignor as'to setoffs become fixed immediately upon the completion of the assignment, in analogy to the rule applicable to debtors and creditors in the case of a deceased insolvent. Union Nat. Bank v. Hicks, 67 Wis. 192. Accordingly it has been held by this court that “ a bank cannot set off, against a deposit to the credit of an assignor for the benefit of creditors, a note held by it against him, but not due at the time of the assignment.” Oatman v. Batavian Bank, 77 Wis. 501, 20 Am. St. Rep. 136. Eor the reasons for the rule- see the opinion -of Mr. Justice Oeton in the case last cited. To the same effect is the decision of this court in Kinsey v. Ring, 83 Wis. 536; and see, also, Fera v. Wickham, 135 N. Y. 223.
The case at bar differs widely from that class of cases, and turns upon a different principle. Here it was not the indebtedness of the insolvent debtor that was not due when the assignment was made, but a portion of the indebtedness from the plaintiffs to the assignee of the insolvent debtor. An assignee of such insolvent debtor has no authority to waive the time of credit secured for the sole benefit of his assignor, and pay a debt not due, with credits or the avails of credits which are due to the assignor at the time of making the assignment, for to do so would tend to prejudice the creditors of the insolvent’s estate; but a debtor to such estate, whose debt was not due at the time of the making of such assignment, has the authority to waive the-time of credit which was secured for his own benefit, and pay the same at once in money or by way of setoff of the amount due him from such estate. This rule is firmly settled in other states, and has in effect been sanctioned by this court. Lindsay v. Jackson, 2 Paige, 581; Smith v. Felton, 43 N. Y. 419; Smith v. Fox, 48 N. Y. 674; Rothschild v. Mack, 115 N. Y. 1; Richards v. La Tourette, 119 N. Y. 54; McCagg v. Woodman, 28 Ill. 84. The case last cited is very *268much like the one at bar, and it was held that “ where a party has funds deposited with a banker, who holds the promissory note of the depositor, the latter may insist that his note shall be satisfied out of the deposit, although the banker, before the note became due, had voluntarily assigned all of his effects for the benefit of creditors.” So, in Smith v. Felton, supra, it was held “ that the amount of á partnership deposit with an insolvent banker was a proper subject of setoff in an action brought by the assignee in trust for creditors of such banker, on-a note held by the banker, made by one of the partners and indorsed by the other for partnership purposes, although such note was not due at the time of the assignment.” As pointed out by Chancellor Walwoeth in Lindsay v. Jackson, supra, and in the opinions of the courts in some of the other cases cited, a court of equity will permit such equitable setoff whenever justice requires it, even in a case not coming within the statute of setoffs. Thus, it has been held by this court that “ a judgment against an insolvent firm is a good equitable setoff to a debt to one of the partners from the judgment creditor or his assignee.” Seligmann v. Heller Brothers' C. Co. 69 Wis. 410. We are forced to conclude that the plaintiffs or petitioners were entitled to the setoff as prayed.
By the Court.-— The order of the circuit court is reversed, and the cause is remanded for further proceedings according to law.