This case discloses a purchase of demands against an insolvent debtor under circumstances that should prevent the purchaser from availing himself of them in set-off against a debt due from him to the insolvent and sought to be
To allow this set-off would not be consonant with equity or justice to the parties interested; would directly tend to defeat an equitable distribution of the assets among the creditors generally ; and would enable a debtor of an insolvent—one notoriously so, and who was about to become the subject of proceedings in insolvency — to give a preference to such creditors of the insolvent as he might be disposed to favor, making their debts available to the whole amount due, if the purchaser pleased to take them at that rate, as he might well do if he was to be allowed their full amount as an available set-off against his own debt to the insolvent; or, what would be equally objectionable, to allow the debtors of the insolvent to discharge their liabilities by a set-off acquired by purchasing the depreciated debts of the insolvent at a large discount from their nominal amount.
The St. of 1856, c. 284, § 28, directly forbidding such a set-off as this, was enacted too late to affect this transaction. But independently of that provision, in our opinion this claim for set-off should be refused.
We do not say that the party holding such demands by purchase from some of the creditors may not properly file the same as debts due from the insolvent, and receive his pro rata distributive share of the assets. That would do no injustice to the other creditors. Set off denied