V. OXLEY. TUCKERS charge of the separate debts. The separate creditors can only come upon the joint fund for their debtor's share of the surplus, after paying the joint creditors; and the joint creditors can only come upon the separate fund for the surplus, after payment of the separate creditors. A joint creditor can only prove under the separate commission for the chance of that surplus, and to assent to or dissent from the allowance of the certificate. Cooke's. B. L. (4th edit.) 237. 244. 250. Vez. jun. 238. Ex parte Elton. 4 Vez. jun. 837. Ex parte Abell. There is no statute in Virginia which authorizes set-off. The question depends entirely upon the 42d section of the bankrupt law of the United States, which is precisely like the 28th section of the act of parliament of 5 Geo. II. c. 30. Cooke's B. L. 541. 544. It is clear that the separate creditors cannot come upon the joint fund until all the joint creditors are paid; it is unreasonable that the joint creditors should take the whole separate estate without looking at all to the joint estate. In the present case it is not stated that the joint funds were exhausted. It does not appear but that the other partner is solvent. The assignee of Thomas Moore cannot collect the debts due to Thomas and Henry Moore, and it is inequitable that he should be obliged to pay their debts. In order to be set off under the bankrupt law, it must be a plain mutual credit. Cooke's B. L. 568. If due in different rights, it cannot be set off. A separate claim against one partner cannot be set off against a joint demand. 1 Wash. 77. Scott v. Trent. Simms, in reply. The defendants below might have proved their debt under the commission against Thomas Moore. The 34th section of the bankrupt law provides, that a discharge under a commission against one partner shall not discharge the other partner; which provision would be wholly unnecessary, if a joint debt could not be proved under that commission. It is true that there is no statute in Virginia authorizing set-off; but under the equity of the statute respecting the action of debt by the assignees of promissory notes and bonds, set-off has been allowed in that state. But the assignee of T. Moore, if he had an equitable right to the joint debts, might bring an action in the joint name, and a court of law would protect his equity. LIVINGSTON, J. I do not recollect any particu lar authority, but I have always considered it as one of the clearest principles of law, that a joint debt can not, at law, be set off against a separate claim February 15 MARSHALL, Ch. J. delivered the opinion of the court, as follows: In this case the plaintiffs in error, who were defendants in the circuit court, claimed to set off against a debt due from them to Thomas Moore, the bankrupt, a debt previously due to them from the firm of H. and T. Moore, which firm was dissolved, and the partnership fund had passed to T. Moore. This offset was not allowed; and its rejection is the error alleged in the proceedings of the circuit court. At law, independent of the statute of bankruptcy, the court is of opinion that this discount could not have been made in a suit instituted by Thomas Moore against the Tuckers; and if the words of the act of congress allowing set-off in the case of mutual debts and credits were to be expounded without regard to the provisions of that act in other respects, it is probable that they would not be extended beyond that technical operation, to which has been TUCKERS V. OXLEY. TUCKERS V. OXLEY allowed the term "mutual debts," in ordinary cases. But the bankrupt law changes essentially the relative situation of the parties; and the provisions making that change are thought, by a majority of the court, to have a material influence on the words of the 42d section of the act, which provide for the case of mutual debts and credits. It is the opinion of the court that this is a debt, which might have been proved under the 6th section of the act. It is a debt, which, by a suit against both the partners, might have been recovered against either of them, and either might have been compelled' to pay the whole. Although due from the company, yet it is also due from each member of the company; and the claim of the creditor for its satisfaction extended, previous to the act of bankruptcy, to the whole proper y of each member of the hrm, as well as to the joint property of the firm. It would be certainly impairing that claim to apply, by the operation of law, the whole particular fund to other creditors, who, at the time of the bankruptcy, had not a better legal claim on that fund than the Tuckers, without allowing them to participate in it. The court, therefore, would be much inclined to consider the creditors of the partnership as having a right, under the general description of creditors of the bankrupt, to prove their debts before the commissioners. But all doubt on this subject seems to be removed by the proviso to the 34th section. That section declares,that the bankrupt shall be discharged from all debts which were due from him at the date of the bankruptcy, and all which were or might have been proved under the said commission," Provided that no such discharge of a bankrupt shall release or discharge any person, who was a partner with such bankrupt at the time he or she became bankrupt, or who was then jointly held or bound with such bankrupt for the same debt or debts, from which such bankrupt was discharged as aforesaid." Thomas Moore, then, is discharged from the debt due from Henry and Thomas Moore to the Tuckers; and if he is discharged therefrom, it would seem to V. OXLEY. be an infraction of their pre-existing rights not to al- TUCKERS low them a share of his property. It is deemed by the court material in the construction of this statute, that, as the proviso shows the joint creditors to be within the description of the terms creditors of the bankrupt, so as to enable them to prove their debts under the commission, they are of necessity comprehended within the same terms in those sections which direct to whom the dividends are to be made. The words of the 29th and 30th sections are imperative. They command the commissioners to divide the estate of the bankrupt among such of his creditors as shall have made due proof of their debts, in proportion to the amount of their claims. Consequently, every creditor who proves his debt is entitled to a dividend. But, although the creditors of H. and T. Moore might have proved their debt before the commissioners, and have received a dividend out of the estate of the bankrupt, it may be contended that, having failed to do so, they are not entitled to set off their whole claim. The 42d section of the act directs, that where it shall appear to the commissioners that there hath been mutual credit given by the bankrupt and any other person, or mutual debts between them at any time before such person became bankrupt, the assignee or assignees of the estate shall state the account between them, and one debt may be set off against the other; and what shall appear to be due on either side, on the balance of such account, after such set-off, and no more, shall be claimed or paid on either side respectively. The term "debt," as used in this section, is fairly to be construed to mean any debt for which the act provides. A debt which may be proved Before the commissioners, and to the owner of which a dividend must be paid, is a debt in the sense of the term as used in this section. TUCKERS V. OXLEY. Were this doubtful, it cannot be denied that the advantage given by the section is reciprocal, and in any case where the set-off would be allowed, if the balance was against the bankrupt, it must be allowed if in his favour. It has already been stated that the Tuckers might have proved their claim before the commissioners. Can it be doubted that the whole of the debt due to the bankrupt would, under this section, have been deducted from that claim? We think it cannot be doubted. Then, the terms applying alike to each party, the debt due to the Tuckers must be set off from that which they owe the bankrupt. If the "assignee of the estate ought to have stated the account," and have only claimed the balance, his omitting so to do cannot enlarge his rights; he can only recover what he ought to have claimed. This, which seems to be the naked law of the case, is not unreasonable. It is fair to conclude that the Tuckers forbore to recover the money due to them from H. and T. Moore, in consideration of their dealings with T. Moore, after he traded on his separate account. This exposition of the bankrupt act appears to the court to conform to that which is given in England. As the bankrupt law of the United States, so far as respects this case, is almost, if not completely, copied from that of England, the decisions which have been made on that law by the English judges may be considered as having been adonted with the text they expounded. In England, it has never been doubted that a man, having a claim on two persons, might become a petiticning creditor for the bankruptcy of one of them. Such petitioning creditor has always been admitted to prove his debt before the commissioners, and to receive his dividends, in proportion, with the other creditors. He is, then, in contemplation of the act, a creditor of the bankrupt; and, consequently, all the |