Mr. Justice Woods,
after stating the facts, delivered the opinion of the court.
The only question to which our attention is directed by the plaintiffs is that of set-off under the twentieth section of the act of March 2, 1867, c. 176 (14 Stat. 517), which.is as follows: “ 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.” This provision was in force at the time of the trial, and is now substantially incorporated in sect. 5073 of the Revised Statutes.
The contention of the plaintiffs is that they were entitled under this section to set off an unsecured account due them from Hopkins against the $58,025 remitted to them by him with directions to credit it on his mortgage debt, and which they refused so to apply.
Waiving the difficulty that they have not pleaded that account as a set-off, we shall consider the question made by them. That account is a claim provable against the bankrupt estate, and it was not purchased by or. transferred to them after the filing of the petition in bankruptcy. The controversy is, therefore, reduced to this issue: Were that account and the money transmitted by Hopkins to them, and held and not applied by them to the mortgage debt, mutual credits, or mutual debts which could be set off against each other under the twentieth section of the Bankrupt Act?
The plaintiffs insist that the term “ mutual credits ” is more comprehensive than the term “ mutual debts ” in the statutes relating to set-off ;■ that credit is synonymous with trust, and the trust or credit need not be money on both sides; that where there is a deposit of property on 'one side without authority to turn it into money, no debt can arise out of it; but where there are directions to turn it into money it may become a debt, the reason being that when turned into money it becomes like any other mutual debt. They say that the first of the two remittances under consideration is not proved to have been other than money, but as it was only $10,000 its application to the note could not be required. The larger remittance was in drafts, and their • application could not be required. But there was authority'to turn them into money, and that to get the money on them it was necessary that the
drafts should be indorsed by the plaintiffs, and that the indorsement to and collection by them put the money received in the same plight as if' the drafts had been sent to them for collection. We cannot assent to these views, and they receive but little support from the adjudged cases.
Ex parte Deeze
(1 Atk. 228) arose under the twenty-eighth section of the statute 5 Geo. II. c. 30, which provides that “ when it shall appear to the said commissioners [in bankruptcy] or the major part of them, that there hath been mutual credit given by the bankrupt and any other person, or mutual debts between the bankrupt and any other person, at any time before such person became bankrupt, the said commissioners, or the major part of them, or the assignees of such bankrupt’s estate, shall state the account between them, and one debt shall be set against another, and what shall appear to be due on either side on the balance of said account, and on setting such debts against one another, and no more shall be claimed on either side respectively.” In that case, a packer claimed to retain goods not only for the price of packing them, but for a sum of ¿£500 lent to the bankrupt on his note. Lord Hardwicke determined that he had such right on the ground of mutual credits, holding that the words “ mutual credits ” have a larger effect than “ mutual debts,” and that under them many cross-claims might be allowed in cases of bankruptcy, which in common cases would be rejected.
But this ruling was subsequently made narrower by Lord Hardwicke himself, in
Ex parte Ockenden
(id. 235), and was in effect overruled in
Rose
v. Hart, 8 Taunt. 499. In that case trover was brought for cloths deposited by the bankrupt previously to his bankruptcy, with the defendant, a fuller, for the purpose of being dressed. It was held that the defendant was not entitled to detain them for his general balance for such work done by him for the bankrupt previously to his bankruptcy, for there was no mutual credit within that section. And the court declared that the term “ mutual credits ” in the act meant only such as must in their nature terminate in' debts.
The rule established in this case, as to the nature of the credits which can be the subject of set-off, has been declared in
other cases.
Smith
v. Hodson, 4 T. R. 211;
Easum
v.
Cato,
5 Barn. & Ald. 861. The effect of the authorities is, that the term “ mutual creditsincludes only such, where a debt may have been within the contemplation of the parties.
These authorities make it clear that, even under the Bankrupt Act of 5 Geo. II., the plaintiffs would have no light to the set-off claimed by them. And they lose sight of the controlling fact that the money and the drafts which. they turned into money were remitted, with express directions to apply them on a specific debt.' Without the consent of' Hopkins they could never be changed into a debt due to him from the plaintiffs, and that consent has never been given.
• Whether or not he had the fight to direct the application, is immaterial. There was no legal obstacle to the application as directed. The fact that he gave the direction imposed on the plaintiffs the obligation to apply the money as directed, or to return it to him.
They had no better right to refuse to make the application and to retain the money and set off against it the debt due to them from Hopkins, than if they had been directed to pay the money on a debt due from him to another of liis creditors, or than they had to apply to the payment of his debt to them money which he left with them as a special deposit.
Hopkins sent them the money and drafts, upon the faith and trust that they would be applied according to his instructions. The refusal so to apply them did not change the relations of the parties to this fund, nor make that a debt which before such refusal was a trust. To so hold would be-to permit a trustee to better his condition by a refusal to execute a trust which he had assumed.
Winslow
v.
Bliss
(3 Lans. (N. Y.) 220) and
Scammon
v.
Kimball
(92 U. S. 362), cited by the plaintiffs to support their contention, are cases where a bank or banker was allowed to set off the money of a depositor against a debt due from him to the bank. The answer to these authorities is that the relation between a bank and its general depositor is that of debtor and creditor. When he deposits moneys with the bank, it becomes his debtor to the amountmf them.
Foley
v.
Hill,
2 H. L. Cas. 28 ;
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Mr. Justice Woods,
after stating the facts, delivered the opinion of the court.
The only question to which our attention is directed by the plaintiffs is that of set-off under the twentieth section of the act of March 2, 1867, c. 176 (14 Stat. 517), which.is as follows: “ 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.” This provision was in force at the time of the trial, and is now substantially incorporated in sect. 5073 of the Revised Statutes.
The contention of the plaintiffs is that they were entitled under this section to set off an unsecured account due them from Hopkins against the $58,025 remitted to them by him with directions to credit it on his mortgage debt, and which they refused so to apply.
Waiving the difficulty that they have not pleaded that account as a set-off, we shall consider the question made by them. That account is a claim provable against the bankrupt estate, and it was not purchased by or. transferred to them after the filing of the petition in bankruptcy. The controversy is, therefore, reduced to this issue: Were that account and the money transmitted by Hopkins to them, and held and not applied by them to the mortgage debt, mutual credits, or mutual debts which could be set off against each other under the twentieth section of the Bankrupt Act?
The plaintiffs insist that the term “ mutual credits ” is more comprehensive than the term “ mutual debts ” in the statutes relating to set-off ;■ that credit is synonymous with trust, and the trust or credit need not be money on both sides; that where there is a deposit of property on 'one side without authority to turn it into money, no debt can arise out of it; but where there are directions to turn it into money it may become a debt, the reason being that when turned into money it becomes like any other mutual debt. They say that the first of the two remittances under consideration is not proved to have been other than money, but as it was only $10,000 its application to the note could not be required. The larger remittance was in drafts, and their • application could not be required. But there was authority'to turn them into money, and that to get the money on them it was necessary that the
drafts should be indorsed by the plaintiffs, and that the indorsement to and collection by them put the money received in the same plight as if' the drafts had been sent to them for collection. We cannot assent to these views, and they receive but little support from the adjudged cases.
Ex parte Deeze
(1 Atk. 228) arose under the twenty-eighth section of the statute 5 Geo. II. c. 30, which provides that “ when it shall appear to the said commissioners [in bankruptcy] or the major part of them, that there hath been mutual credit given by the bankrupt and any other person, or mutual debts between the bankrupt and any other person, at any time before such person became bankrupt, the said commissioners, or the major part of them, or the assignees of such bankrupt’s estate, shall state the account between them, and one debt shall be set against another, and what shall appear to be due on either side on the balance of said account, and on setting such debts against one another, and no more shall be claimed on either side respectively.” In that case, a packer claimed to retain goods not only for the price of packing them, but for a sum of ¿£500 lent to the bankrupt on his note. Lord Hardwicke determined that he had such right on the ground of mutual credits, holding that the words “ mutual credits ” have a larger effect than “ mutual debts,” and that under them many cross-claims might be allowed in cases of bankruptcy, which in common cases would be rejected.
But this ruling was subsequently made narrower by Lord Hardwicke himself, in
Ex parte Ockenden
(id. 235), and was in effect overruled in
Rose
v. Hart, 8 Taunt. 499. In that case trover was brought for cloths deposited by the bankrupt previously to his bankruptcy, with the defendant, a fuller, for the purpose of being dressed. It was held that the defendant was not entitled to detain them for his general balance for such work done by him for the bankrupt previously to his bankruptcy, for there was no mutual credit within that section. And the court declared that the term “ mutual credits ” in the act meant only such as must in their nature terminate in' debts.
The rule established in this case, as to the nature of the credits which can be the subject of set-off, has been declared in
other cases.
Smith
v. Hodson, 4 T. R. 211;
Easum
v.
Cato,
5 Barn. & Ald. 861. The effect of the authorities is, that the term “ mutual creditsincludes only such, where a debt may have been within the contemplation of the parties.
These authorities make it clear that, even under the Bankrupt Act of 5 Geo. II., the plaintiffs would have no light to the set-off claimed by them. And they lose sight of the controlling fact that the money and the drafts which. they turned into money were remitted, with express directions to apply them on a specific debt.' Without the consent of' Hopkins they could never be changed into a debt due to him from the plaintiffs, and that consent has never been given.
• Whether or not he had the fight to direct the application, is immaterial. There was no legal obstacle to the application as directed. The fact that he gave the direction imposed on the plaintiffs the obligation to apply the money as directed, or to return it to him.
They had no better right to refuse to make the application and to retain the money and set off against it the debt due to them from Hopkins, than if they had been directed to pay the money on a debt due from him to another of liis creditors, or than they had to apply to the payment of his debt to them money which he left with them as a special deposit.
Hopkins sent them the money and drafts, upon the faith and trust that they would be applied according to his instructions. The refusal so to apply them did not change the relations of the parties to this fund, nor make that a debt which before such refusal was a trust. To so hold would be-to permit a trustee to better his condition by a refusal to execute a trust which he had assumed.
Winslow
v.
Bliss
(3 Lans. (N. Y.) 220) and
Scammon
v.
Kimball
(92 U. S. 362), cited by the plaintiffs to support their contention, are cases where a bank or banker was allowed to set off the money of a depositor against a debt due from him to the bank. The answer to these authorities is that the relation between a bank and its general depositor is that of debtor and creditor. When he deposits moneys with the bank, it becomes his debtor to the amountmf them.
Foley
v.
Hill,
2 H. L. Cas. 28 ;
Bank of the Republic
v.
Millard,
10 Wall. 152;
Bullard
v.
Randall,
1 Gray (Mass.),.
605. When, therefore, he becomes indebted to the bank, it is a case of mutual debt and mutual credit, which may well be set off against each other.
But in this case there was no deposit. The relation of banker and depositor did not arise, consequently there was no debt. When A. sends money to B., with directions to apply it to a debt due from him to B., it cannot be construed' as a deposit, even though B. may be a banker. The reason is plain. The consent of A. that it shall be considered a deposit, and not a payment, is necessary and is wanting.
Another answer to the contention'of the plaintiffs is found in the language of the twentieth section of the Bankrupt Act of March 2, 1867, c. 176, which differs materially from that of the twenty-eighth section of 5 Geo. II. c. 30. In our act the terms “ credits ” and “ debts ” are used as correlative. What is a debt on one side is a credit on the other, so that the term “ credits ” can have no broader meaning than the term “ debts.” We find no warrant in the language of the section or its context for extending the term “ credits'” so as to include trusts. Generally' Ave know that “ credit ” and “ trust ” are not synonymous terms. They have distinct and well-settled meanings, and Ave see no reason Avhy they should be confounded in interpreting. the twentieth section of the Bankrupt Act.
To authorize a set-off there must be mutual credits or mutual debts. The remitting of certain money assets by Hopkins to the plaintiffs, to be applied by them according to his instructions, did not make them his debtors, but his trustees. So that there were in the case no mutual credits or debts. The indebtedness was all on the side of Hopkins. The plaintiffs owed him nothing. They held his money in trust to apply it as directed by him.
They refused to make the application as he directed. They held it, therefore, subject to his order. They continued so to hold it until the rights of the trustee in bankruptcy attached, and until he sought to recover it by his counter-claim filed in this case.
The only contention-of the plaintiffs set up in this court is - that the Supreme Court of Ohio approved- of the action of the Superior Court of Cincinnati, in refusing to allow the plaintiffs
to set off the unsecured debt due to them by Hopkins against funds intrusted to them by him for an entirely different- purpose. We are of opinion that the decision of the Superior Court was correct. The judgment of the Supreme Court of Ohio must, therefore, be
Affirmed. ■