173 N.E. 656 | Ind. Ct. App. | 1930
In November, 1929, Bossert was appointed receiver for a certain bank which, at that time, was, and for many years prior thereto had been, doing business as a private institution under the banking laws of Indiana. When Bossert became receiver, appellant Miles was a depositor of the bank, having on deposit a general checking account of $155.13; Miles was also indebted to the bank in the principal sum of $154.25, as evidenced by a promissory note payable to the bank. The note being past due, this action was begun by the receiver to enforce collection. To the complaint, Miles pleaded in set-off, asking that the amount of his deposit be set off against the amount found by the court to be due on the note. A demurrer to the set-off for want of sufficient facts was sustained, and Miles refusing to plead further, judgment was rendered against him; this appeal followed.
The effect of the court's ruling on the demurrer was to hold that the bank deposit could not be set off against the sum found due on the note. In his brief supporting the ruling of the trial court, appellee concedes that if the bank had been a solvent going concern, then, under the provision of the Indiana Code governing set-off (§ 93 Civil Code of Procedure, § 371 Burns 1926), the right of appellant to the set-off could not be questioned. But, it is argued, that, since the bank is insolvent and in charge of a receiver as liquidating agent, an allowance of the set-off would be equivalent to creating a preference in favor of Miles, in violation of the rule requiring equality among creditors in the distribution of the assets of an insolvent estate. We do not concur in that view. When the receiver took over the assets of the bank, he succeeded to all the legal rights of the bank existing at that time; among the assets was Miles' debt to the bank. The amount of Miles' debt, measured by the bank's legal rights, was what remained after deducting *12
the amount of his deposit. No preference was created, and there was no violation of the rule as to equality among creditors. The principle involved and the reason therefor are well stated by the United States Supreme Court in Scott v. Armstrong (1892),
In support of his contention that the set-off was properly denied by the trial court, the receiver cites and relies on two cases: Marion Trust Co. v. Trustees Edwards Lodge, etc.
(1899),
We hold that the action of the court in sustaining demurrer to the set-off was error, for which the judgment is reversed, with instructions to grant a new trial.