Second National Bank vs. Robert Hemingray

[Trade Journal]

Publication: Central Law Journal

St. Louis, MO, United States
vol. 8, no. 7, p. 135-136, col. 2,1




December Term, 1878.


[Filed January 21, 1879.]


                                             Hon. William White, Chief Justice.

                                               "   W. J. GILMORE,

                                               "   GEO. W. MCILVAINE } Associate Justices.

                                               "   W. W. BOYNTON,

                                               "   JOHN W. OKEY,

SET-OFF NEGOTIABLE PAPER BANKRUPTCY. 1. The general rules in equity, as at law, is that joint debts can not be set-off against separate debts, unless there be some special equity justifying it. 2. If there are such equities, the bankruptcy of the party against whom they exist, is sufficient ground for the allowance of the set-off against notes not due at the time of the assignment. 3. When a banker induced a firm to continue its deposit account with him, by deceptively holding himself out as being still the holder of several negotiable notes made to him by the principal member of the firm, when in fact he had assigned them as collateral security for a debt; and there was an understanding between the firm and the banker, from the course of dealing between them, that the notes of the individual member were to be paid through the deposit account of the firm, and which he had a right to treat as his own for that and other purposes; on the bankruptcy of the banker: Held, that after satisfying the debt for which the notes of the individual member were held as security, the latter, as against the assignee of the bankrupt, is in equity entitled to set-off the account against the balance due on the notes. 4. In an action on a negotiable note which the plaintiff holds by assignment before due, in consideration of, and as collateral security for a loan made by him to the insolvent payee, against whom the maker is entitled to an equitable set-off to the note the plaintiff will be limited in his recovery against the maker to the amount of the debt which the note secures, and will not, in addition thereto, be allowed the amount of his attorney's fees in prosecuting the action. 5. The set-off as to the Allen note, and the deposit account of R. Hemingray & Co. is allowed in favor of R. Hemingray against the assignees in bankruptcy of Homans. The motion of the Second National Bank to be allowed the amount of its attorney's fees is overruled. Opinion by GILMORE, J. Second Nat. Bank of Cincinnati v. Hemingray.


Researcher notes: 
Supplemental information: 
Researcher:Bob Stahr
Date completed:July 22, 2010 by: Bob Stahr;