HUNT, Circuit Judge
(after staling the facts as above). The first question presented by the motion is whether the defendant, who al*900leges that he is'primarily liable upon the notes, although an indorser, may offset the notes against his deposit account with the bank, which has failed; and the second is whether a stockholder, who has not paid the assessment upon his national bank stock, may offset his deposit in the bank, which has failed, against the assessment demanded under the provisions of the National Banking Act.
[1] 1. The first question seems to have been considered very often, and a number of well-reasoned decisions have been made, wherein it has been held that an indorser cannot offset his deposit balance against his notes. This view is often based upon the ground that if he could, where the maker is a solvent person, to allow him to do so would extend to the indorsers of the paper an unwarranted preference. The Comptroller of the Currency has ruled to this effect, saying that, if the malter of a note is solvent and can be compelled to pay it, the indorser should not be permitted to take up the note by canceling the indebtedness of the bank to himself, for he might thereby be enabled, indirectly to obtain a preference over other creditors. The current of the decisions of later date seems to be that no preference shall be given to one over another depositor, and therefore that, where the maker is solvent, it is unjust to allow the indorser the set-off of a deposit.
In Davis v. Industrial Manufacturing Co., 114 N. C. 321, 19 S. E. 371, 23 L. R. A. 322, this general rule was recognized, and in Knaffle v. Knoxville Banking & Trust Co., 128 Tenn. 181, 159 S. W. 838, 50 L. R. A. (N. S.) 167, the Supreme Court of Tennessee said that, if the relief there prayed for by the petitioning surety were granted, an inequitable result .would be worked against the rule which ordinarily denied set-off where a depositor was in fact a mere surety on the note and it appeared that the principal obligor was solvent. Edmondson v. Thomasson, 112 Va. 326, 71 S. E. 536, Ann. Cas. 1913A, 1301, was decided in accordance -with a like rule. So, also, were the cases of New Farmers’ Bank’s Trustee v. Young, 100 Ky. 683, 39 S. W. 46, and Stephens v. Schuchmann, 32 Mo. App. 333. The Missouri case just referred to was an action by a receiver of an insolvent national bank against an indorser on promissory notes, wherein the indorser sought to set off his deposit in the bank. Section 5242 of the Revised Statutes of the United States (Comp. St. 1913, § 9834) received careful examination by the court, which in interpreting the intent of the statute held that it did not give the indorser of the note credit for the entire amount of his deposit while other creditors had to be satisfied with just what the assets of the bank might be..
In Re Middle District Bank, 1 Paige (N. Y.) 585, Chancellor Wal-worth said:
“If the real debtor is unable to pay, and tbe receiver is compelled to resort to tbe indorser, wbo is eventually to be tbe loser, be bas tbe same equitable .claim to offset bills wbicb be bad at tbe time tbe bank stopped payment. But no sucb offset should be allowed to an indorser where be is indemnified by tbe real debtor, or where tbe latter can be compelled to pay.”
A recent decision in New York, cited by the plaintiff, Borough Bank of Brooklyn v. Mulqueen et al., 70 Misc. Rep. 137, 125 N. Y. Supp. 1034, is to a like effect.
*901But, however sound these decisions may seem to me, I find it impossible to distinguish the present case from the rule of Yardley v. Clothier, 51 Fed. 506, 2 C. C. A. 349, 17 L. R. A. 462, where Judge Wales, speaking for the Circuit Court of Appeals for this circuit, affirms the conclusions reached by Judges Acheson and Butler in Yardley v. Clothier (C. C.) 49 Fed. 337. The Court, of Appeals quotes the provisions of section 5242 of the Revised Statutes of the United States, and refers to the frequent objection interposed in the distribution of insolvents’ assets upon the ground that the allowance of set-off creates preferences among creditors, yet reaches the conclusion that the controlling weight of authority has established the doctrine that, in the absence of express statutory prohibition, set-off of a debt owing to the defendant will be allowed if it was due when the creditors’ rights attached, whether the debt sued on was due at the same time or matured subsequently. Many cases are examined by the court, including Re Middle District Bank, 1 Paige (N. Y.) 584, Armstrong v. Scott (C. C.) 36 Fed. 63, and others.
Counsel for the plaintiff refers to the decision of Yardley v. Clothier, admitting that it is in point, in that the indorser of a note was there allowed the offset of his deposit, but would have the court distinguish it from the present case, for the reason that the point that, if the maker is solvent, the indorser cannot set off his deposit was not presented. Possibly the Court of Appeals would recognize the distinction urged, but I gather that the court considered the point that the defendant’s obligation in the case before it was that of an indorser simply, for. such a position had been referred to by the Circuit Court and, moreover, the action was one by a receiver against a defendant as an in-dorser. The Court of Appeals applied the rule that mutual accounts are to be adjusted in such manner that the balance constitutes the debt to be recovered, Furthermore, it is significant that the rule of set-off as declared in Yardley v. Clothier by the Circuit Court was expressly approved by the Supreme Court of the United States in Scott v. Armstrong, 146 U. S. 499, 13 Sup. Ct. 148, 36 L. Ed. 1059.
[2] 2. Upon the second question, in the absence of a controlling decision by a higher court, my view is that a stockholder is not entitled to set off against an assessment made against him pursuant to the Revised Statutes of the United States, where a bank has become insolvent, the amount of his individual claim against the bank. The reasoning of the Circuit Court of Appeals of the Ninth Circuit in Wingate v. Orchard, 75 Fed. 241, 21 C. C. A. 315, covers this branch of the present case. The court there put its decision upon the ground that the fund provided for under the Revised Statutes was not intended for any particular creditor, but to make good all debts equally and without any preference, and that in the event of the winding up of the affairs of a national bank the fund provided by sections 5226 and 5227 was for the express purpose of making good the contracts, debts, and engagements, and is manifestly a trust fund, to a pro rata share of which all creditors are equally and equitably entitled. The court distinguished the case of Scott v. Armstrong, 146 U. S. 499, 13 Sup. Ct. 148, 36 L. Ed. 1059, and cited in support of the conclusion reached De*902lano v. Butler, 118 U. S. 634, 7 Sup. Ct. 39, 30 L. Ed. 260. In the latter case the Supreme Court of the United States treated an assessment under section 5151 as made by authority of the Comptroller of the Currency, not as a voluntary one, and as only to be applied to the satisfaction of the creditors, equally and ratably. Scovill v. Thayer, 105 U. S. 143, 26 L. Ed. 968.
The present motion to strike out the whole answer is denied, without prejudice, however, to the interposition of another motion by the plaintiff, based upon the view expressed upon the second point discussed in this memorandum opinion.