56 Pa. 14 | Pa. | 1867
The opinion of the court was delivered, October 28th 1867, by
The only question in this case is, whether the defendant is entitled to use, as a defence to his bond, the deposit assigned to him by John Rynd. The hank became insolvent on the 27th day of March 1866. On that day it closed its doors and suspended payment, and on the 8th of May next following a receiver was appointed by the comptroller of the currency in accordance with the provisions of the Act.of Congress of June 3d 1864. The receiver still has the assets of the bank in charge. On the- 28th of March 1866 Rynd had to his credit for deposits made- in the bank the sum of $43,743.25, and on'that day he .assigned the deposit to Taylor, the defendant. It is this deposit, thus assigned, for which judgment was subsequently recovered, that the defendant claims a right to set off against a, claim of the bank against him on his bond for $65,000, given April 14th 1865.
It is plain that if he can use his equitable title to the deposit made by Rynd as a defence against the legal claim of the bank, a preference of one creditor of the bank over others is wrought out and secured after the act of insolvency.
But this is the very thing which, in our opinion, the Act of Congress aimed to prevent. The bank is a creature of the act, dependent upon it for all its pow'ers, and controlled by all the restrictions which the act "imposes. And creditors dealing with the bank can obtain only such rights as it is authorized to give.
In seeking for the meaning of the Act .of Congress we are to
It provides a system for closing the affairs of an insolvent bank, the clear design of which is to place all creditors, except the government and note-holders, on an equal footing. Its purpose is to disallow preference of one creditor over another, and it denies the power to make such preference at any time after an act of insolvency. The 50th section provides that after such an act a receiver may be appointed who shall take possession of the assets of every description, collect all debts, sell all real and personal property, and pay over all money so made into the treasury of the United States, subject to the order of the comptroller of the currency.
The section then provides for a rateable division of the money among the creditors after paying the government for the redemption of the circulating notes outstanding. The 52d section enacts “ that all transfers of the notes, bonds, bills of exchange and other' evidences of debt owing to any association” (bank) “ or of deposits to its credit; all assignments of mortgages, securities on real estate, or of judgments or decrees in its favur; all deposits of money, bullion or other valuable things for its use, or for the use of any of its shareholders or creditors; and all payments of money to either, made after the commission of an act of insolvency, or in contemplation thereof, with a view to prevent the application of its assets in the manner prescribed by this act (that is, rateably), or with the view to the preference of one creditor- to another, except in payment of its- circulating notes, shall be utterly null and void.”
This section is too plain to be misunderstood; read in connection with the 50th it admits of no doubt that the purpose of Congress was to secure all the assets of the bank existing at the time of its act of insolvency for rateable distribution.
We cannot assent to the argument that it was intended for no more than to avoid all acts of the bank itself, all voluntary transfers by it of its notes, bonds, deposits, &c., with a view to giving preferences. Its language is general, as applicable to legal as to voluntary transfers. .
But if the deposit made by John Rynd can be set off against the bond-debt due by Taylor to the bank, what is it but a transfer of the bond-debt to the satisfaction of a creditor, thus giving him a preference ? It is not contended that the bank was not prohibited from doing this, but it is insisted the transfer may be accomplished by an adversary proceeding at the suit of Rynd for the use of Taylor. It is not denied that Rynd, had he made nd assignment of his claim, could not hav’e obtained payment of the debt due him by calling upon the bank after the 27th day of March 1866, when its doors were closed, and when it suspended
The defendant has called our attention to Miller v. Black, 1 Barr 420. There an attachment execution had been laid upon
The ease has but a slight resemblance to the- present. It is true, the act contained a provision that “ all payments, securities, conveyances or transfers of property, or agreements made or given subsequently to the time when the act was to come into operation, by any bankrupt in contemplation of bankruptcy', and for the purpose of giving any creditor, endorser or surety, or other person, any preference or priority over the general creditors of such bankrupt should be deemed utterly void and a fraud upon the act.” This was aimed expressly against fraudulent acts of the bankrupt alone. And the act also contained a provision preserving liens on real and personal property valid by the laws of the state, and not inconsistent with the provisions of its 2d and 5th sections. Moreover, it enacted that the property of the bankrupt should be divested, and become vested in the assignee from the time of the decree in bankruptcy. The assignee was clothed with such rights as might have been exercised by the bankrupt “ at the time of his bankruptcy declared.” The ruling of the court appears to have rested upon the clause which preserved liens on the debtors’ property. Besides, it was a case of a voluntary petition. The petitioner might have withdrawn his application at any time before the decree, and the fact that he could have discontinued his proceeding was given as another reason why an execution against his property should be held valid.
It is by no means certain that had he been proceeded against by a creditor with a view to having him declared a bankrupt, the same ruling would have been made. However this may be, the provisions of the Bankrupt Act were so unlike those of the Banking Act that the decision of Miller v. Black gives us no assistance in the construction of the latter.
We hold, then, that there was error in allowing the deposit made by Rynd to be used as a set-off against the claim of the Bank v. Taylor. The defendant was' entitled to a credit for the $32,000, realized from the sale of the United States bonds, for there had been an understanding that the proceeds of such sale should be applied on the debt due by him, but he was entitled to no other credit.
The judgment is reversed, and judgment is entered for the plaintiff for the sum of $35,024, according to the case stated.