Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/689

 CHAP. XI.] CORPORATION AND CREDITORS. [§ 670. exclusion of other creditors. 1 Thus, the property of a national bank attached at the suit of a creditor, after the bank has be- come insolvent, cannot be subjected to sale for the payment of a demand, as against the claim for the property by a receiver of the corporation subsequently appointed. 2 And a suit against a national bank to collect a debt is abated by a decree of a Federal District Court dissolving the corporation and for- feiting its franchises, rendered upon an information against the bank tiled by the comptroller of the currency. 3 § 670. A person who is a debtor to the corporation on one account and its creditor on another, may ordinarily set off against what he owes the corporation the debt which the corporation owes him. Thus, a banker who was a director in an insurance company, can set off against its de- mand for money deposited with him, bearing interest and pay- able on call, the amount due on its policies issued to and held by him. And, the company having been adjudged bankrupt, his right to such a set-off is equally available against its as- signee. 4 But a shareholder cannot set off a debt owing him from the corporation, if the latter is insolvent, against his ing v. Chrome Steel Co., 94 N. Y. 334. See, also, Dutcher v. Importers and Traders' Bk., 59 N. Y. 5. Com- pare Robinson v. Bk. of Attica, 21 N. Y. 406; and Haxtum v. Bishop, 3 Wend. 13. An offer to allow judg- ment to be entered against it by a corporation is a transfer of its prop- erty within the meaning of this stat- ute. Kingsley v. First National Bk., 31 Hun (N. Y.), 329. As to the rule when the preferred creditors are also officers of the corporation, see §§ 759, 760. iSee Pfohl v. Simpson, 74 N. Y. 137; Whittlesey v. Delaney, 73 N. Y. 571; Turnbull v. Prentiss Lumber Co., supra. § 813. In a foreclosure suit a court of equity will prevent, if possible, the sale of the central portion of a rail- road which would leave the two ends valueless. Chicago, Danville, etc., R'y Co. v. Loewenthal, 93 111. 533. 2 National Bank v. Colby, 21 Wall. 609. 3 National Bank v. Colby, supra. Compare Bank of Bethel v. Pahquio- que Bank, 14 Wall. 383. Under the National Banking Act, a creditor of a national bank who establishes his debt by suit and judgment after refusal of the comptroller of the currency to allow it, is entitled to share in dividends on his debt (and on the interest then due) so estab- lished as of the day of the failure of the bank; and not upon the basis of the judgment, if the judgment in- cludes interest subsequent to that date. White v. Knox, 111 U. S. 784. 4 Scammon v. Kimball, 92 U. S. 362. See Scott v. Armstrong, 146 U. S. 499. 669