Imágenes de páginas
PDF
EPUB

Amory vs. Amory.

The prayer of the bill, that the defendants as executors of the last will and testament of James Amory, deceased, may be restrained and enjoined from executing the will, under the orders of the county court admitting the same to probate, involves direct interference on the part of this court with an exclusive and independent power and duty of that court. That court possesses exclusive and independent probate powers. This court has none. The orders of that court within its jurisdiction are as conclusive as the judgments of this court. That court has charge of the estate of the testator, and has the lawful power to admit the will to probate, to issue letters testamentary, and to control the action of the executors according to the will, who are trustees of the legatees. All persons interested in the estate have lawful right to look to that court for protection That court has jurisdiction of the probate of the will and of issuing letters testamentary, and this complainant appeared and had her day in that court, the proceedings of which are sanctioned by the supreme court of the state. She cannot, as a non-resident of the state, claim the jurisdiction and action. of this court, upon the facts pleaded in her bill with the exhibits annexed as part thereof, and the demurrer must be sustained and the bill dismissed.

The above case was heard before Judges DRUMMOND and MILLER, the former being of opinion that the complainant might, in this Court, show fraud in the proceedings in the courts of New York. No certificate of disagreement, however, had been signed at the time of the passage of the act of Congress of June 1st, 1872, 17 U. S. Statutes, 196, providing that in cases of a difference of opinion between the circuit and district judges the opinion of the former shall prevail, and thereupon, upon Judge DRUMMOND'S suggestion that the same point could be made by answer as well as by demurrer, the demurrer was overruled, with leave to answer, and the case is still pending.

The opinion and note in American Law Register for September, 1873, are not strictly correct, the case having been heard at the January Term, 1872, and decided at the April Term, and prior to the passage of the act of Congress.

The opinion of Judge DRUMMOND is reserved until the final hearing of the cause. [Reporter.

Drake vs. Rollo, Assignee, etc.

DRAKE vs. ROLLO, ASSIGNEE, ETC., OF THE MERCHANTS' INSURANCE COMPANY.

CIRCUIT COURT-NORTHERN DISTRICT OF ILLINOIS-JUNE, 1872.

SET-OFF.

1. A claim for loss under an insurance policy may be set-off by the insured against his indebtedness to the company.

2. MUTUALITY.-Such claims constitute mutual debts or credits within the meaning of the 20th section of the Bankrupt Act.

3. The rights of the parties are to be determined by the state of facts at the time of the loss.

4. Though such set-off gives the complainant a preference, it results from the business relations of the parties as they stood at the time of the loss. 5. DEBT NOT DUE.-If his indebtedness is not due and the company is bankrupt, a bill in equity will lie to establish the set-off.

This was a bill to establish a set-off, filed by John B. Drake against William E. Rollo, assignee of the Merchants' Insurance Company.

On the 1st of June, 1869, the complainant borrowed of the insurance company the sum of $75,000, one-third of which was payable June 1st, 1872, and the remainder June 1st, 1874, to secure which he gave his notes and mortgage on certain real estate in Chicago. Subsequently he took several policies of insurance from the company, amounting to $17,000, upon which there was a total loss by the Chicago fire of October 9th, 1871. His claims under the policies were regularly proved up against the company on the 10th of November, 1871, and adjusted at their full amount.

The company having been rendered totally insolvent by this fire, on the 17th day of November, of the same year, a petition in bankruptcy was filed against it in the district court for this district, under which it was, on the 18th day of December, adjudged a bankrupt, and Mr. Rollo, the former secretary of

Drake vs. Rollo, Assignee, etc.

the company, was afterwards duly elected the assignee, and took possession of the estate.

The complainant did not prove his debt either before the register or with the assignee.

The complainant asked that his claims against the company for loss under his policies be set-off against his indebtedness to the company upon the note and mortgage.

Charles Hitchcock, for complainant.

A loss upon a policy of insurance, sustained before the filing of the petition in bankruptcy, may be set-off against a claim for money loaned. Kostor vs. Easen, 2 Moore & Scott, 112; Grove vs. Dubois, 1 Term R. 112; Bize vs. Dickason, Id. 285; In the matter of the Globe Insurance Company, 2 Edwards' Chancery R. 626; Holbrook vs. Receivers, &c., 6 Paige, 220– 231; Osgood vs. De Groot, 36 New York, 348; Jones vs. Robinson, 26 Barbour, 310; Bradley vs. Angel, 3 New York, 475. The debt need not be due. Ex parte Prescott, 1 Atkyns, 230.

McCagg, Fuller & Culver, for defendant.

DRUMMOND, J.: The only question in the case is, whether the set-off can be allowed; and we are of the opinion that the plaintiff is entitled to the set-off he claims.

It depends upon the 20th section of the bankrupt law. That section is as follows:

"That, in all cases of mutual debts or mutual credits between the parties, the account between them shall be stated, and one debt set off against the other, and the balance only shall be allowed or paid; but no set-off shall be allowed of a claim in its nature not provable against the estate: Provided, that no set-off shall be allowed in favor of any debtor to the bankrupt of a claim purchased by or transferred to him after the filing of the petition."

It is true in this case the plaintiff obtained part of the means which the company possessed with which to meet its liabilities. in case of loss, and by permitting a set-off, it enables the

Drake vs. Rollo, Assignee, etc.

plaintiff to receive payment in full of his claim, while the general creditors of the bankrupt company are only partially paid, and thus he becomes a preferred creditor. But it is a preference growing out of the business relations of the parties as they stood at the time of the fire which rendered the company insolvent.

As soon as the loss happened there was the relation of debtor and creditor, and there were no special circumstances qualifying that relation. When the plaintiff complied with the conditions of the policy after the loss, and furnished his proofs, as soon as the specified time had elapsed it became a subsisting debt against the company, and, at the same time, the plaintiff was the debtor of the company for money payable in the future. It was then a case of mutual debt and credit, within the meaning of the 20th section above cited. The parties here trusted each other, and when the plaintiff was called on to meet his indebtedness, he would have the right to retain the amount of the loss and pay the balance. The amount thus retained in one sense he does not owe, because the law seizes it in his hands if he so wills, and by its own force extinguishes the debt. And the money loaned not being due at the time the bill was filed, and constituting a mutual credit, it is competent for the plaintiff, the company being insolvent, to call on a court of equity to allow the set-off.

BLODGETT, J., concurring.

Consult the following case, Hitchcock vs. Rollo, Assignee, etc., and Sawyer os. Hoag, Assignee, etc., post, p. 293, these cases being three from a large number of cases argued and submitted together, being most of the socalled "set-off cases" arising from the great Chicago fire, of Oct. 9, 1871.

The other questions involved, the liability on stock subscriptions, and the right of set-off as against money deposited with a complainant as Treasurer, are decided in Scammon vs. Kimball, Assignee, etc., September, 1873, to appear in a subsequent Volume of this Series. [Reporter.

Hitchcock vs. Rollo, Assignee, etc.

HITCHCOCK vs. ROLLO, ASSIGNEE, ETC., OF THE MERCHANT'S INSURANCE COMPANY.

CIRCUIT COURT-NORTHERN DISTRICT OF ILLINOIS-JUNE, 1872.

SET-OFF.

1. ASSIGNEE-MUTUALITY.-The assignee of a claim against an insolv. ent insurance company for loss under its policies, assigned after notice of insolvency, cannot set it off against his previous indebtedness to the company. The debts and credits are not mutual under the 20th section of the Bankrupt Act.

2. Such a set-off would be unjust and inequitable.

3. RULE IN EQUITY.-Though courts of equity follow the law in allowing or refusing set-off, special circumstances may control the equity.

4. An assignee of a claim seeking to establish a set-off should show, not merely that he is the nominal owner of the claim, but that he has good equitable grounds for relief.

5. PURCHASED CLAIMS.-It seems, that a debtor to an insurance company might set-off a claim purchased before the filing of the petition, in good faith and for value, if without notice of the insolvency of the company.

6. TWENTIETH SECTION BANKRUPT ACT CONSTRUED.-A court of equity should construe the 20th section of the Bankrupt Act in furtherance of the main purpose of the law, and not permit one creditor to inequitably obtain payment in full, to the sacrifice of the claims of the other creditors.

7. The language of that section does not foreclose a court of equity from disallowing a set-off when it would work injustice.

This was a bill by Charles Hitchcock against William E. Rollo, assignee of the Merchants', Insurance Co., to establish a set-off.

This case, in many respects, resembles the case of Drake vs. Rollo, Assignee, etc., immediately preceding.

The complainant, on the 15th of May, 1867, borrowed of the insurance company the sum of $20,000, payable in five years, to secure which he gave his notes, secured by mortgage on real estate in Chicago.

« AnteriorContinuar »