115 Mich. 648 | Mich. | 1898
The Mechanics’ Bank of Detroit was, on the 18th day of April, 1893, indebted to the Central Michigan Savings Bank of Lansing in the sum of $4,000
Counsel for the petitioner cite many well-considered cases to sustain the proposition that equity will treat insolvency as a sufficient ground for allowing a set-off of claims, although not strictly “mutual credits,” and not within the rule applied by courts of law, and notwithstanding the fact that the claim sought to be set off is not due at the time of the assignment of the insolvent estate. But this has never been the rule in this State in cases where there are not “mutual credits.” There were no “mutual credits” here. Not only was it not expected that the fund would be kept towards the payment of the notes, but the notes were given, in the first place, for the purpose of securing a fund which should be subject to the check of the Lansing bank. This court has said several times that mere insolvency was insufficient to justify an equitable set-off of a claim not due. Lockwood v. Beckwith, 6 Mich. 174 (72 Am. Dec. 69); Hale v. Holmes, 8 Mich. 41; Kinney v. Tabor, 62 Mich. 527.
It is contended that these cases were overruled by Gibbons v. Hecox, 105 Mich. 513; but that case is distinguish
The present case does not involve a lien, but a question of set-off, and, while there is at first blush apparent justice in the proposition that the petitioner should not be compelled to pay ’its debt in full while holding an obligation against the insolvent bank, there are reasons for denying it. Our own decisions cited, which are clear and unmistakable upon this doctrine, are not unsupported, although it must be confessed that the decisions elsewhere are not harmonious. The rights of creditors intervened at the time that the Lansing bank went into the hands of the receiver, and their equities are, by many courts, looked upon as superior to those of persons seeking to set off claims not
“ There are many cases in Michigan that hold this rule, unless some special equities other than that growing out of insplvency should make an exception. It is correctly claimed that this is the rule by a great preponderance of the authorities. The learned counsel of the appellant cites but few cases, and some of them hardly dispute this rule. The rule that places a bank, under the law, on equality with all other creditors in such a case, seems to be reasonable.” Oatman v. Batavian Bank, 77 Wis. 505 (20 Am. St. Rep. 136).
We are of the opinion that the question is fully covered by the Michigan cases cited by counsel.
The order of the learned circuit judge is affirmed, with costs.