Page:Federal Reporter, 1st Series, Volume 3.djvu/220

 MATTOOKS V. LOVERINO. 218 �thereupon, sued Cady & Co., in the circuit court of the United States for the northern district of Ohio, for the debt whioh they owed the bankrupts; but the court there (Baxter and Welker, 33.) held that Cady & Co. had a right to set o£f the notes which they had bought of the present defendants. Th« case is reported in 7 American Law Eecord, 612, et seq., pub- lished at Cincinnati, in April, 1879. The court found that Cady & Co. really bought the notes, and that it was not proved that they knew of the insolvency of Norris, Hull & Co. ; but they added that if they did know this it would make no differ- ence, agreeing on this point with Judges Hoffman and Swing, in the cases presently to be cited. �The plaintiffs move to amend by alleging, instead of a color- able sale by the defendants to Cady & Co., one which was actual, and enabled a set-off to be made, whereby the defend- ants gained an advantage at the expense of the general cred- itors. �In my opinion this amendment would not avail the plain- tiffs. There is no law, that I am aquainted with, which makes it illegal or inequitable for a creditor of an insolvent to sell his debt, though it should be to a person who may use it in set-off. It is, I agree, a mooted question, not yet passed npon by the supreme court, whether a debt bought after knowledge of the actual insolvency of the debtor, and befora his technical bankruptcy, can be set off. It has been held by two courts, of high authority, to be contrary to the spirit of the statute of bankruptcy, (Smith v. Hill, 8 Gray, 572; Hitchcock V. Rollo, 3 Biss. 276,) and was Judge Shepley'a opinion in the case at bar, though not essential, I think, to his decision. But, unfortunately, the spirit of a statuta must be controlled by its terms; and the act of 1867, § 20, (14 St. 526,) excepted from the right of set-off only such debts as were bought after the petition was filed, — that is, after tha technical bankruptcy; and expressio unius, etc. This was the ground of a most able, and, to my mind, conclusive opinion, by Judge Hoffman, (The City Bank, 6 N. B. E. 71 ;) which agrees with the decision of Baxter and Welker, 33,,ubisvpra, and with Hovey v. Home Ins. Co. 10 N. B. E. 224. In this ����