Colt v. Brown

78 Mass. 233

• Court: Massachusetts Supreme Judicial Court
• Decided: November 15, 1858
• Status: Published

Opinion

Shaw, C. J.

The first injunction, having been from time to time continued and ultimately made perpetual, had the effect of sequestrating and setting apart the assets of the bank as they stood at that time. The defendant having then bills of the bank, taken in the course of business, to the amount of $1200, this was an equitable set-off,- and the receivers took the assets subject to that equity. To allow any further set-off would be inconsistent with the intent and spirit of the statutes, and would essentially effect a preference in favor of debtors to the bank by enabling them to pay in a depreciated medium. Atlas Bank v. Nahant Bank, 23 Pick. 480.

The rule thus adopted is quite within the principle of the doctrine of assignment. An assignment may be made of a chose in action, giving the assignee a good title in equity. The suit must be brought in the name of the assignor. But it was early held in such a case, that the debtor, after notice of the assignment, could not buy up notes of the assignor and set them off in the suit brought in his name for the use of the assignee. Makepeace v. Coates, 8 Mass. 451. This principle was afterwards embodied in the Rev. Sts. c. 96, § 10.

This assignment is for the benefit of a large class of creditors in a due course of legal proceeding. It is conceded that the first injunction was of great notoriety, and immediately impaired the credit of the bank and its bills. The injunction prohibited the bank from paying its outstanding bills, and also from receiving payment of any security otherwise than in cash. The negotiability of the bills was not altered by the proceedings; but whoever took them took the title of the holder. Crease v. Babcock, 10 Met. 525.

Judgment for the plaintiffs, deducting the $1200.