Court Opinion

ID: 3467673
Source: CourtListenerOpinion
Date Created: 2016-07-05 20:34:03.742442+00
Date Added: 2024-06-11T13:58:53.509714
License: Public Domain

These two cases are factually governed by the same law on the subject of compensation. When the obligation which Watkins owed the bank became due, there was at the same time due Watkins by the bank, subject to check, a sum of money. And when the obligation which Williams *Page 266 
owed the bank became due, there was at the same time due Williams by the bank, subject to check, a sum of money, in both cases equally liquidated and demandable before the bank was declared insolvent. Neither Watkins nor Williams made demand on the bank to apply the money to their credit in the bank to the payment of their notes until after the bank became insolvent, but to the end, that compensation might operate and have effect, no demand or request was necessary, because "Compensation takes place of course by the mere operation of law, even unknown to the debtors; the two debts are reciprocally extinguished, as soon as they exist simultaneously, to the amount of their respective sums." Civil Code, arts. 2208, 2130; Act No. 64 of 1904, § 119, subd. 4. Bank of La. v. Fowler, 10 Rob. 196, bottom of page 200; Beatty v. Scudday, 10 La. Ann. 404; In re Canal Bank, etc. (Intervention of Wainer), 178 La. 961, 962, 152 So. 578, are supporting in principle. Ruling Case Law, vol. 3, Subject Banks § 157, p. 529. Supplement; same work, same subject, p. 825, is directly supporting. A number of cases, Bloodworth v. Jacobs, 2 La. Ann. 24, 25; Nolan v. Shaw, 6 La. Ann. 40, p. 46; Succession of Dorsey, 7 La. Ann. 34, 35; Bogert, etc., Co. v. Egerton, 11 La. Ann. 73; Morgan v. Lathrop, 12 La. Ann. 257; Murdock 
Williams v. Citizens' Bank, 23 La. Ann. 113; Hancock v. Citizens' Bank, 32 La. Ann. 590; Gordon  Gomila v. Miichler, 34 La. Ann. 604, p. 606; Kennedy v. New Orleans Sav. Inst., 36 La. Ann. 1, p. 13; Seixas v. Citizens' Bank, 38 La. Ann. 424, 425, p. 432, and others are to the effect that compensation does not take place, although the two debts are equally liquidated and demandable, unless there be request and consent to that effect. In some of the cases, but not in all of them, it is said that compensation does not take place when it is against equity, good conscience, and contrary to the course of dealing or understanding of the parties. In some instances that would be true, but some of the cases are not based on the reason that it would be against equity, good conscience and contrary to the understanding and course of dealing between the parties to hold that the debts were extinguished by compensation. They follow, in my opinion, other cases as a precedent, without taking into account the theory on which the previous case is founded. In the present two consolidated cases, there will be no disregard of equity, good conscience, or violation of understanding as a result of the compensation. I therefore think judgment should be rendered in favor of Watkins and Williams as prayed for in their respective petitions, and dissent from the opinion of the majority of the court on that subject.