Oatman v. Batavian Bank

• Decision Date: 14 October 1890
• Citation: 46 N.W. 881,77 Wis. 501
• Parties: OATMAN v. BATAVIAN BANK.
• Court: Wisconsin Supreme Court

77 Wis. 501

46 N.W. 881

OATMAN

v.BATAVIAN BANK.

Supreme Court of Wisconsin.

Oct. 14, 1890.

Appeal from circuit court, La Crosse county.M. P. Wing and Miller, Noyes & Miller, for appellant.

Fruit & Brindley, for respondent.

ORTON, J.

On the 2d day of January, 1889, one Royal S. Reynolds, being insolvent, made a voluntary assignment of all his property to the respondent, for the benefit of his creditors. At that time he had on deposit in the appellant bank, to his credit, the sum of $773.13. At the same time the said bank held and owned the promissory note of said Reynolds for $1,000, executed by him to one S. Martindale, and indorsed to said bank by said Martindale, on the 3d day of July, 1888, to become due 20 days after date, with interest at 8 per cent. per annum, and to bear 10 per cent. interest after due. The time of payment of said note had been extended from time to time by the said Reynolds paying the interest thereon in advance to such times; and finally, on the 6th day of December, 1888, the said Reynolds paid the interest thereon, and the time of payment thereof was extended to the 31st day of January, 1889, so that at the date of said assignment said note was not yet due. The respondent assignee demanded of the bank the payment of said deposit, and the bank refused, claiming, and still claims in this suit, that the note set off and canceled the deposit. Whether the said note had been so extended was a question of fact on the trial, but the jury found that it had been, and, as we think, on sufficient evidence. The bank held and owned other notes of the said Reynolds at the time the assignment was made, and they also had been extended beyond the date of the same, in the same manner of the said Martindale note, so that none of them were yet due. These other notes are not material, because the Martindale note is sufficient to cancel the said deposit, if it is allowed as a set-off thereto. The jury virtually found that none of the notes were due. The only remaining question, therefore, is one of law,--whether the Martindale notes, or any of them, not being due at the date of the assignment, was a proper set-off against the amount of said deposit. The defendant requested the court to charge that it was, and the court instructed the jury that it was not if it was not due at the date of the assignment. The learned counsel of the appellant contends that by virtue of a bank's equitable lien upon the deposit of its customer, as sceurity for the payment of his indebtedness to the bank, and by virtue of an equitable set-off of one against the other in case of the customer's insolvency, a court of equity will decree such an application of what he owes to the bank, due or not due, although it might not be strictly a legal set-off. There is not only plausibility in this claim, but it seems to be sustained by some respectable authorities. This was never allowed at common law, but it seems to have long prevailed in cases of bankruptcy, according to Carr v. Hamilton, 129 U. S. 255, 9 Sup. Ct. Rep. 295. It is difficult to see why a bank should have this exceptional advantage over an individual creditor. By our statute (Rev. St. § 4258) the set-off in all cases must be due, and it makes no exception in favor of banks, or on account of insolvency; and by our law of voluntary assignments all creditors must be treated alike, and their rights are fixed at the date of the assignment. Bank v....