Lowden v. Northwestern Nat Bank Trust Co of Minneapolis, Minn, No. 743

CourtUnited States Supreme Court
Writing for the CourtCARDOZO
Citation80 L.Ed. 1114,56 S.Ct. 696,298 U.S. 160
PartiesLOWDEN et al. v. NORTHWESTERN NAT. BANK & TRUST CO. OF MINNEAPOLIS, MINN
Docket NumberNo. 743
Decision Date27 April 1936

298 U.S. 160
56 S.Ct. 696
80 L.Ed. 1114
LOWDEN et al.

v.

NORTHWESTERN NAT. BANK & TRUST CO. OF MINNEAPOLIS, MINN.

No. 743.
Argued April 3, 1936.
Decided April 27, 1936.

Messrs. Edward S. Stringer, of St. Paul, Minn., Marcus L. Bell, of Chicago, Ill., and Alexander E. Horn, of St. Paul, Minn., for Lowden and others, trustees, etc.

Mr. Claude G. Krause, of Minneapolis, Minn., for Northwestern Nat. Bank & Trust Co.

Page 161

Mr. Justice CARDOZO delivered the opinion of the Court.

On June 7, 1933, the Chicago, Rock Island & Pacific Railway Company filed in the United States District Court for the Northern District of Illinois its petition for reorganization under section 77 of the Bankruptcy Act. See 11 U.S.C. § 205 (see 11 U.S.C.A. § 205).* At that time the railroad had to its credit the sum of $36,908.72 in a checking account with the Northwestern National Bank & Trust Company of Minneapolis. The bank was then the owner of First and Refunding Gold bonds issued by the railroad of the par value of $100,000, not yet in default in respect of principal or interest. On June 19, 1933, seven days after receiving a copy of an order approving the petition for reorganization, the bank set off the deposit against the bonds by appropriate entries upon its books of account. Trustees of the estate of the railroad were appointed by the court in accordance with the statute, though whether before the attempted set-off or thereafter the record does not tell us. They brought suit against the bank in the United States District Court for Minnesota, not the court of bankruptcy administration, to recover the amount of the deposit set off against the bonds. After answer by the bank and a trial of the issues, the court entered a decree upholding the validity of the set-off, with a correction not now material as to the amount of the deposit. 11 F.Supp. 929. The trustees appealed to the Circuit Court of Appeals for the Eighth Circuit. That court, after certifying the facts substantially as summarized above, requested our instructions upon the following questions (Judicial Code, § 239, 28 U.S.C. § 346, 28 U.S.C.A. § 346):

Page 162

'Question 1. Does the right of set-off recognized by section 68(a) of the Bankruptcy Act apply to reorganization proceedings under section 77 of that act?

'Question 2. If the first question be answered in the affirmative, can a bank which owns the unmatured bonds of a railroad corporation set off a deposit account of the railroad with the bank against the bonds, upon the filing by the railroad of a petition for reorganization under section 77 of the Bankruptcy Act, alleging that the railroad is unable to meet its debts as they mature?

'Question 3. If the first and second questions be answered in the affirmative, may the United States District Court, for the District of Minnesota, in the suit by the trustees of the railroad's estate to recover the amount deducted from the account of t e railroad by the bank under the claimed right of set-off, recognize and establish as a proper set-off by the bank one which was not made until after the filing of the petition for reorganization and which has never been ordered, authroized, approved, or consented to by the court in which that petition was filed and approved?'

This court has had occasion recently to restate the rules announced in earlier decisions as to the mode of formulating questions coming here upon certificates. Triplett v. Lowell (Mantle Lamp Co. of America v. Aluminum Products Co.), 297 U.S. 638, 56 S.Ct. 645, 80 L.Ed. 949 (March 30, 1936). We will not answer abstract questions unrelated to the pending controversy, or questions unnecessarily general, or questions which admit of one answer in one set of circumstances and a different answer in another; the differentiating circumstances being imperfectly disclosed. White v. Johnson, 282 U.S. 367, 371, 51 S.Ct. 115, 117, 75 L.Ed. 388; United States v. Mayer, 235 U.S. 55, 66, 35 S.Ct. 16, 59 L.Ed. 129; United States v. Hall, 131 U.S. 50, 52, 9 S.Ct. 663, 33 L.Ed. 97; Webster v. Cooper, 10 How. 54, 55, 13 L.Ed. 325; Hallowell v. United States, 209 U.S. 101, 107, 28 S.Ct. 498, 52 L.Ed. 702; General Motors Corporation v. United States, 286 U.S. 49, 63, 52 S.Ct. 468, 76 L.Ed. 971, 82 A.L.R. 600. The questions now be-

Page 163

fore us have been framed without adequate regard to these established rules of practice.

Question No. 1 is too general and abstract, its relation to the controversy being indirect and problematical. 'In all cases of mutual debts or mutual credits between the estate of a bankrupt and a creditor the account shall be stated and one debt shall be set off against the other, and the balance only shall be allowed or paid.' Bankruptcy Act § 68a, 11 U.S.C. § 108(a), 11 U.S.C.A. § 108(a). The precept, framed on the example of ancient laws across the seas (4 Anne, c. 17, § 11;...

To continue reading

Request your trial
68 practice notes
  • U.S. v. Cerilli, No. 78-2105
    • United States
    • U.S. Court of Appeals — Third Circuit
    • June 29, 1979
    ...v. Rathbone, 175 U.S. 414, 419-21, 20 S.Ct. 155, 44 L.Ed. 219 (1899) (Brown, J.). 13 Lowden v. Northwestern Nat'l Bank & Trust Co., 298 U.S. 160, 165, 56 S.Ct. 696, 699, 80 L.Ed. 1114 14 Towne v. Eisner, 245 U.S. 418, 425, 38 S.Ct. 158, 62 L.Ed. 372 (1918). 15 Cabell v. Markham, 148 F.2d 73......
  • Sopo v. U.S. Attorney Gen., No. 14–11421
    • United States
    • U.S. Court of Appeals — Eleventh Circuit
    • June 15, 2016
    ...detention had been unreasonably prolonged or the best method for making that determination. See Lowden v. Nw. Nat'l Bank & Tr. Co. , 298 U.S. 160, 162, 56 S.Ct. 696, 80 L.Ed. 1114 (1936) (observing that the Supreme Court “will not answer abstract questions unrelated to the pending controver......
  • Okla. Dep't Of Sec. Ex Rel. Irving L. Faught v. Blair, No. 104
    • United States
    • Supreme Court of Oklahoma
    • April 12, 2010
    ...its nature.”). 38. Securities and Exchange Commission v. Elliott, 953 F.2d at 1572, citing, Lowden v. Northwestern Nat'l Bank & Trust Co., 298 U.S. 160, 56 S.Ct. 696, 698, 80 L.Ed. 1114 (1936). 39. Securities and Exchange Commission v. Elliott, 953 F.2d at 1572, citing, Bohack Corp. v. Bord......
  • S.E.C. v. Elliott, Nos. 89-5457
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • February 27, 1992
    ...clearly erroneous. The right to setoff exists where there are mutual debts between parties. Lowden v. Northwestern Nat'l Bank & Trust Co., 298 U.S. 160, 56 S.Ct. 696, 698, 80 L.Ed. 1114 (1936). The district court has discretion whether to allow a setoff against a receiver, and this decision......
  • Request a trial to view additional results
68 cases
  • U.S. v. Cerilli, No. 78-2105
    • United States
    • U.S. Court of Appeals — Third Circuit
    • June 29, 1979
    ...v. Rathbone, 175 U.S. 414, 419-21, 20 S.Ct. 155, 44 L.Ed. 219 (1899) (Brown, J.). 13 Lowden v. Northwestern Nat'l Bank & Trust Co., 298 U.S. 160, 165, 56 S.Ct. 696, 699, 80 L.Ed. 1114 14 Towne v. Eisner, 245 U.S. 418, 425, 38 S.Ct. 158, 62 L.Ed. 372 (1918). 15 Cabell v. Markham, 148 F.2d 73......
  • Sopo v. U.S. Attorney Gen., No. 14–11421
    • United States
    • U.S. Court of Appeals — Eleventh Circuit
    • June 15, 2016
    ...detention had been unreasonably prolonged or the best method for making that determination. See Lowden v. Nw. Nat'l Bank & Tr. Co. , 298 U.S. 160, 162, 56 S.Ct. 696, 80 L.Ed. 1114 (1936) (observing that the Supreme Court “will not answer abstract questions unrelated to the pending controver......
  • Okla. Dep't Of Sec. Ex Rel. Irving L. Faught v. Blair, No. 104
    • United States
    • Supreme Court of Oklahoma
    • April 12, 2010
    ...its nature.”). 38. Securities and Exchange Commission v. Elliott, 953 F.2d at 1572, citing, Lowden v. Northwestern Nat'l Bank & Trust Co., 298 U.S. 160, 56 S.Ct. 696, 698, 80 L.Ed. 1114 (1936). 39. Securities and Exchange Commission v. Elliott, 953 F.2d at 1572, citing, Bohack Corp. v. Bord......
  • S.E.C. v. Elliott, Nos. 89-5457
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • February 27, 1992
    ...clearly erroneous. The right to setoff exists where there are mutual debts between parties. Lowden v. Northwestern Nat'l Bank & Trust Co., 298 U.S. 160, 56 S.Ct. 696, 698, 80 L.Ed. 1114 (1936). The district court has discretion whether to allow a setoff against a receiver, and this decision......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT