Page:Federal Reporter, 1st Series, Volume 2.djvu/166

 m BB LIS9BUBQBB. • 169 �the dividend upon the Hamill notes, the indebtedness to Hamill's estate is reduced only $12,871.34. �In this way Holmes & Lissburger pay Hamill's estate noth- ing for its debt of $85,839.71, and reeeive fuUpayment from his estate of the set-off of $12,871.3e. The question, how much do the bankrupts owe Hamill upon a settlement of aocounts, is lost sight of, and the erroneous assumption is made that the 15 per cent, is the entire debt of Holmes & Lissburger, and that it can, therefore, be set ofif against the entire debt of Hamill's estate. �Again,' HamiU's estate is entitled to reeeive from Holmes & Lissburger its debt, less the amount paid for its benefit by the bankrupts. The theory of Holmes & Lissburger ignores the state of the account between the parties, and exalts the pay- ment of a composition into the paymeut of a debt, and compels Hamill's estate to reeeive nothing; not because the indorsers have paid ail the notes, and bave, therefore, a com- plete set-off, but because they have paid only 15 per cent, of the debt. Tî Hamill had paid 50 per cent, upon the $127,- 230.89 forwhich Holmes & Lissburger wereprimarilyliable, would it be contended that the composition which they had paid upon the $85,839.77 should -be set off against the com- position which they were to pay upon this part of their indebt- edness to Hamill? In brief, the composition is to be paid upon the balance due to Hamill's estate, simply because Holmes & Lissburger owe that sum, and have no supreme right to reeeive their side of the account in fuU. �I am aware of the able opinion In re Purcell, 18 N. B. E. 447, and of the great respect which is due to a decision of Judge Choate, but I think that the strong equities in that case against an acceptance of the compositio;i perhaps led the court into the line of reasoning which he adopted. �The exceptions are overruled. The motion to confirm the report is granted. ����