96 F. 949 | E.D. Pa. | 1899
We agree with tbe conclusion of tbe learned referee. Under tbe Pennsylvania law, Simon Wiener took tbe judgment note in controversy subject to all tbe equities and defenses that would have been available against it if it bad remained in the. bands of bis brother, Albert. In addition to tbe cases cited by tbe referee, we may add Reineman v. Robb, 98 Pa. St. 474; Theyken v. Machine Co., 109 Pa. St. 95; Geiger v. Peterson, 164 Pa. St. 352, 30 Atl. 262; and Bank v. Roessler, 186 Pa. St. 431, 40 Atl. 963. This rule does not apply in its fullness to tbe assignee or indorsee of overdue negotiable paper, but tbe restriction in favor of such paper is obviously not applicable to tbe sealed instrument now under consideration.
One defense to the note in tbe bands of Albert Wiener was tbe fact that be still owed tbe company upon bis contract of subscription to tbe capital stock. This defense is now at tbe service of tbe other creditors, for it certainly cannot be endured that a creditor, who is also a debtor, of an insolvent, and is therefore withholding money to which bis fellow creditors are entitled, shall be allowed to take away from them part of the other assets of tbe bankrupt. He cannot be permitted to diminish a fund that be is under obligation to increase, and thereby deprive tbe other cred-' itors of money that it would be bis duty immediately to return. If tbe company bad continued to be solvent, it might or might not have been at liberty, under all circumstances, to set off his subscription against its liability on tbe note. That point is not now involved, for the fact of insolvency has supervened, and this creates a situation in which tbe rights of other creditors must also be considered. It would be highly inequitable to allow him to apply a part of tbe assets for bis own benefit, until be has put into tbe fund the money that be justly owes. He must cease to be a debtor before be can enforce bis claim as a creditor. Tbe appeal is dismissed, and tbe action of tbe referee is confirmed.
