§ 7300. The Question how Viewed by Other Courts.- It has been held by the Supreme Court of Ohio that the receiver of a national bank holds, in respect of the bank and its creditors, the substantial relation of a statutory assignee, and that "a right of setoff, perfect and available against the bank at the time of his appointment as receiver, is not affected by the bank's insolvency," — the reason being that he succeeds only to the rights of the bank existing at the time when it goes into liquidation. A Federal district judge, sitting in the Circuit Court of the United States in the same State, has, however, held that, under the provision of the national banking law' (and other provisions of the same act) prescribing the duties of the receiver in winding up such insolvent banks, -all unsecured creditors are placed on the same footing of equality. The court accordingly held that funds received by a creditor of a national bank, upon the discounting of his note by the bank, which were deposited with the bank subject to his check, and which had been drawn upon by him, but which were intended to meet the note when due, could not be pleaded as a set-off in an action on the note brought by the receiver into whose hands the note had come before maturity; and that this conclusion was not affected by the provision of the Code of Civil Procedure of Ohio, to the effect that a crossdemand, which may be pleaded as a counter-claim or set-off, shall not be extinguished as such by the assignment or death of either party. The conclusion is perfectly plain, and is consistent with the doctrine of the Supreme Court of Ohio, above referred to; for the reason that no right of set-off existed at the time when the receiver was appointed, because the note of the customer in the hands of the bank had not then matured. It is respectfully submitted that there is nothing in the language of the Revised Statutes of the United States which indicates a purpose on the part of Congress to establish any rule different from that which obtains under the principles of equity, and from that prescribed by the Ohio statute, in regard to this right of set-off; and that the statute ought not to be so con on the theory of money paid under "a mutual mistake." But Yardley v. Clothier, supra, is directly in point, and contains a learned opinion by Butler, J. There are State decisions belonging to the same category; but that they are not in accordance with the weight of modern judicial opinion may be easily made to appear. 1 Hade v. McVay, 31 Ohio St. 231; 8. c. 2 Nat. Bank Cas. 353. 63. Rev. Stats. U. S., § 5242. • Armstrong v. Scott, 36 Fed. Rep. ▲ Ibid. strued as to destroy a right of set-off existing at the time when the receiver was appointed, since that would give it a construction which would make it operate to destroy vested rights. Under any theory of the subject which the courts have adopted, the principle obtains which has been elsewhere noted,' that a debtor to the bank cannot, by purchasing claims against it subsequently to the appointment of a receiver, acquire a right of set-off as against the receiver. One test by which to determine whether there is a right of set-off is to consider whether the claim sought to be used as an offset is of such a nature that the creditor demanding the right of set-off would be entitled to stand as a preferred creditor in respect of such claim.' 7301. The Same Subject Continued. Cases are found which concede this right of set-off where the debt of the depositor to the national bank did not mature until after the appointment of the receiver; but they are not in accordance with sound principle, because they operate to give the depositor a preference over other creditors of the bank, and to convert his simple deposit into something in the nature of a trust fund. Of course, a depositor who has no right of set 1 Ante, §§ 3797, 6967. To illustrate this, take a Pennsylvania case where A. owed a national bank $35,000, and where B. had in the bank a deposit of $44,000 at the time when the bank stopped payment by reason of insolvency, and where on the next day B. assigned his deposit to A. Here it was held that A. could not set off the deposit as against his indebtedness to the bank, as it would operate to give a preference to one creditor over the others in contravention of the act of Congress (Venango Nat. Bank v. Taylor, 56 Pa. St. 14)-a conclusion which is perfectly plain. • Welles v. Stout, 38 Fed. Rep. 807. • Among these cases is Platt v. Bentley, determined in one of the departments of the Supreme Court of New York (11 Am. Law Reg. (N. 8.) 171; 8. c. 1 Nat. Bank Cas. 758), where the plaintiff, as receiver, took possession of the bank on September 5, 1867, and the defendant had on deposit to his credit at that date, $571.21, but the bank at that date held his note for $800, to become due on the 5th of November, 1867, -two months after the receiver, in fact, took possession. The depositor paid the amount of his deposit, and the receiver sued for the balance, and it was held that he could not recover, as the depositor had a right to have his deposit set off against the note. The court proceeded upon the view that such was the statute law of New York, and that there was nothing in the National Bank Act making a different rule. See, to the same effect, New Amsterdam Sav. Bank v. Garter, 54 How. Pr. (N. Y.) 385. But the Supreme Court of Errors of Connecticut, proceeding upon the sound 664 5809 off at the time when the bank passes into the hands of the receiver, cannot create such a right by assigning his deposit to a debtor of the bank; and this, on the principle that one cannot, by buying up claims of an insolvent person or corporation, after it has ceased to be a going concern, acquire a right of set-off, such as will give him a preference over its other creditors. A demand which the debtor of such a bank may have against it for the repayment of usurious interest which he may have paid to it, cannot be availed of by him in an action against him by its receiver, to secure a set-off." Indeed, such a set-off is not available against the bank while it continues to be a going concern. The reason is that, the statute having prescribed as a penalty for the taking of usurious interest by a national bank that the person paying unlawful interest, or his legal representative, may, in any action of debt against the bank, recover back twice the amount so paid, -the remedy to recover the penalty is exclusive, and he can resort to no other mode or form of procedure to right himself. The case refers itself to the well-known principle that where a statute creates a new right or offense and prescribes a specific remedy or punishment, such remedy or punishment is alone applicable, and to that extent the statute is exclusive. § 7302. Continued.-Where the action of the receiver is against a stockholder to collect an assessment, or to enforce his individual liability under the National Banking Act, and the stockholder is also a creditor of the bank, he cannot use his view, held that, upon the insolvency of a savings bank, a depositor cannot set off his deposit against the debt due from him to the bank, unless possibly, in the case where the deposit was made for the purpose of being applied on the indebtedness, and the bank officer knew the fact. And this would seem clear; for, in such a case, the set-off would be executed by the agreement of the parties. Osborn v. Byrne, 43 Conn. 155; s. c. 21 Am. Rep. 641. 1 Venango Nat. Bank v. Taylor, 56 Pa. St. 14; s. c. 1 Nat. Bank Cas. 842; ante, §§ 3797, 6901, 6967. 'Hade v. McVay, 31 Ohio St. 231; 8. c. 2 Nat. Bank Cas. 353. 555. Barnet v. National Bank, 98 U.S. • Ibid. Farmers' &c. Nat. Bank v. Dearing, 91 U. S. 29. credit by way of set-off,' under principles already fully discussed. In like manner, where the action is brought by the receiver against an indorser of a note maturing after his appointment, the indorser cannot set off his deposit in the bank; and this in accordance with the best opinion on the subject of the right of set-off as against a receiver, assignee, or other representative of insolvents, under statutes providing for a ratable distribution of their property among their creditors. Thus, in New York, one cannot set off a demand due him from an insolvent bank against a liability that has become fixed since the appointment of the receiver; for, while the receiver succeeds to the rights of the insolvent, he succeeds only to such rights as existed and were fixed at the time when he took possession." But no new or higher rights can arise against the creditors of the insolvent after his assets are impounded for ratable distribution among them. No subsequent lien can be created, or right of preference obtained, in respect of any such assets, or property, after the appointment of the receiver;' but the rights of the parties must be adjusted with reference to the condition of things which existed when the receiver took charge of the assets. If a note held by the bank was not then due, a deposit held by it cannot be availed of by the depositor as a set-off against the receiver, under principles which have been often acted upon by the courts. In an action by a receiver against a stockholder, the latter cannot establish a set-off upon evidence that the property was delivered by him to the bank upon an understanding that it should be applied upon his assessment 1 Hobart. Gould, 8 Fed. Rep. 57; Sawyer v. Hoag, 17 Wall. (U. S.) 610. 1 Ante, § 3786, et seq. Stephens v. Schuchmann, 32 Mo. App. 333; 8. c. 3 Nat. Bank Cas. 540. Jordan v. National Shoe &c. Bank, 74 N. Y. 467; 8. c. 30 Am. Rep. 319. • American Bank v. Wall, 56 Me. 167; Miller v. Franklin Bank, 1 Paige (N. Y.), 444; Colt v. Brown, 12 Gray (Mass.), 233. See Fry v. Evans, 8 Wend. (N. Y.) 530; Merritt v. Seaman, 6 N. Y. 168. Balch v. Wilson, 25 Minn. 299; 8. c. 33 Am. Rep. 467; ante, §§ 3797, 6967. United States Trust Co. บ. Harris, 2 Bosw. (N. Y.) 75, 76; Clark v. Brockway, 3 Keyes (N. Y.), 13; Re Middle District Bank, 1 Paige (N. Y.), 585; s. c. 19 Am. Dec. 452; Clarke v. Hawkins, 5 R. I. 219. if the bank should fail.' The obvious reason is, that the individual liability of the stockholders of such a bank is in the nature of a statutory guaranty in favor of the creditors of the bank, which guaranty cannot be frittered away by arrangements between the bank and the stockholder. - § 7303. Waiver of Right of Set-off. The voluntary payment by the maker of a promissory note, with full knowledge of all the facts, operates as an abandonment or waiver of all right to set off cross-demands or independent debts; and a bill in equity disclosing such facts presents no case for equitable relief by way of an equitable set-off." § 7304. Voluntary Liquidation of National Banks.-The National Bank Act provides that "any association may go into liquidation and be closed by the vote of its shareholders owning two-thirds of its stock." A national bank in voluntary liquidation does not lose the faculty of suing and being sued in its corporate name for the purpose of closing its business; and a creditor may maintain a suit against it while so in liquidation, upon a disputed claim, although he has filed a bill, under an amendatory act already set out, to enforce the individual liability of the stockholders. If the bank is reorganized by a majority of the stockholders under a new name, and the assets of the bank in liquidation are sold to the new 1 Witters v. Sowles, 32 Fed. Rep. 130. • United States Bung Man. Co. v. Armstrong, 34 Fed. Rep. 94, per Jackson, J. Rev. Stats. U. 8., § 5220. The succeeding five sections (§§ 5221 to 5225) prescribe the details of the liquidation. Section 5221 provides that notice of the intent to dissolve must be given under the seal of the bank by the president or cashier, to the Comptroller, and published for two months in a newspaper, etc., notifying all creditors to present their claims. By section 5222, within six months of the resolve to close, the bank must deposit with the United States Treasurer lawful money of the United States sufficient to redeem its outstanding circulation, which goes to the credit of the bank on redemption account. By section 5223, this deposit is not required from a bank consolidating with another. As to voluntary liquidations by other corporations, see ante, § 6692, et seq.; with which compare ante, §§ 4443 and 4538, et seq. Act Cong. June 30, 1876, § 2; ante, §7268. National Bank v. Insurance Co., 104 U.S. 54; 8. c. 3 Nat. Bank Cas. 20. |