(concurring).
I concur in the result, but for reasons somewhat different from those stated in the majority opinion.
I understand the facts to be — and without dispute so far as the record herein is concerned — that: Prior to 2 P. M. on March 1, 1933, Samuel T. McDevitt owed the Park Savings Bank $1376.72 on a promissory note. At 2 P. M. on that date, the bank caused restrictions to be placed on withdrawals and announced that all deposits accepted thereafter would be credited to a special “bailee account” of each depositor. After 2 P. M. on said day, McDevitt deposited $455 and this was credited to him in accordance with the bank’s announcement. Later the bank’s affairs were placed in the hands of a receiver (John F. Moran), and still later, on September 13, 1933, McDevitt filed a voluntary petition in bankruptcy, and on September 27, 1933, a trustee (S. B. Sightler, Jr.) was appointed and qualified for duty. The trustee made demand upon the receiver for the sum of $455. This demand was refused on the theory that the bank had a right of set-off.
I find nothing in the record warranting the statement in the majority opinion that the bank directors by resolution required the funds deposited after 2 P. M. “to be treated as trust or bailee funds,” or the statement that the amount of the deposit of $455 was “entered as a trust account. * * * ” if- such form 0f resolution or entry had been used the bank would thereby have made itself by its own declaration the trustee of an express trust, and there would be no further question in the case, because it is a settled rule that a trustee cannot apply trust funds upon its individual debt due from the cestui que trust. It is true that it is asserted in the appellee’s brief that there was such a resolution, but this assertion is based merely upon a description in 63 Washington Law Reporter, 222 of the contents of certain pleadings and of the action of the trial court thereon in another case (John F. Moran, Receiver of the Park Savings Bank, v. C. R. Matheny, Equity No. 57,836) in the Supreme Court of the District of Columbia; but I think we cannot have recourse to such informal data for the facts in this case. If I correctly read the record, the facts upon which the trial court herein based its rulings appear only in the referee’s certificáis on review, and are as above set forth.
*598Nevertheless, I think the decision must go here as it did below — against the right of set-off asserted by the receiver — and I think it not necessary to determine just what words are most apt to describe the right in which the bank received the deposit, that is, whether as trustee, agent, other fiduciary, or bailee. The case is controlled, I think, by Dakin v. Bayly, 290 U.S. 143, 54 S.Ct. 113, 78 L.Ed. 229, 90 A.L. R. 999, and under that decision the essential question here is not what is the proper legal name of the right in which the bank acted, but whether, in receiving the deposit after 2 P. M. on March 1, 1933, it acted in a different right than it did when theretofore it took the promissory note of Mc-Devitt and thereon advanced him the $1376.72. In Dakin v. Bayly, checks with unrestricted endorsement had been deposited for collection with the Peoples Bank of Clearwater, Florida (hereinafter referred to as the bank of deposit), which forwarded them to the First National Bank of St. Petersburg, Florida (hereinafter called the bank of collection) for collection. The latter collected the items drawn on it by charging the accounts of its own depositors, and collected those drawn on other local banks by the settlement of balances between it and them. It then sent to the bank of deposit drafts to cover the amounts in question, but later dishonored them. Thereafter, in an action on the common counts and on an account stated brought by the receiver of the bank of collection against the bank of deposit, the latter sought to set-off the amount of these drafts. A statute of Florida (Comp.Gen.Laws 1927, § 6834) however, required of the bank of deposit only due diligence in the forwarding of checks for collection, and in the absence of negligence conditioned liability for the amount of the checks on receipt of final payment from the bank of collection. The Supreme Court held that the parties were presumed to have contracted with reference to this statute, and that the situation was as if they had expressly agreed that the bank of deposit was to act as agent only, and was not to become the debtor of the depositors unless and until it had received actual and final payment. Therefore the Supreme Court denied the set-oif sought. It said:
“The conclusion is that, while the Clear-water bank individually owed the receiver of the St. Petersburg bank, the latter did not owe the former, but at best the claim was made as an agent. If this be true, set-off may not be allowed, for a defendant sued upon his individual debt may not avail himself for this purpose of a demand against the plaintiff held in a fiduciary capacity. [Authorities cited].” 290 U.S. 143, at page 146, 54 S.Ct. 113, 114, 78 L.Ed. 229, 90 A.L.R. 999.
But the decision is not limited by the use of the phrase “fiduciary capacity,” for the Court went on to ask:
“Were the cross-demands of the parties of the same quality, or, to state it otherwise, did each claim from the other in the same right ?”
And this question the Court, because of the effect of the Florida statute above referred to, answered in the negative, pointing out that under the statute the bank of deposit must assert its claim—
“as representative or agent of depositors, for a recognition of its right to sue as owner would destroy the cause of action of the depositors against the St. Peters-burg bank or leave that bank subject to a possible double liability. If the cross-demand is asserted in an agency capacity, the debts are not held in the same right by the two banks, lack mutuality, and the one cannot be set off against the other.” 290 U.S. 143, at page 148, 54 S.Ct. 113, 115, 78 L.Ed. 229, 90 A.L.R. 999.
I think it clear in the instant case that the bank held its claim against McDevitt on the promissory note for $1376.72 in a different ■ right' or capacity than that in which it received his deposit of $455. What name is to be applied to the two differing rights or capacities is not material. The words “bailee account” are, of course, not apt, at least on this record, because there is nothing to show an actual segregation of the item deposited, in such manner as would put mere possession in the bank, with title left in McDevitt. .But certainly the bank used the term “bailee account” for some purpose, and I think obviously that purpose was to differentiate the right or capacity in which it took McDevitt’s deposit after its suspension of payment at 2 P. M. on March 1, 1933, from the right or capacity in which it did business prior to said moment, whether by accepting deposits or by making loans on promissory notes. Had the bank, after clear knowledge of insolvency and without McDevitt’s knowledge thereof, accepted McDevitt’s deposit in the same right or capacity as that in which it was doing business before *599its insolvency, it would have made itself the trustee and McDevitt the cestui que trust and his deposit the subject of a constructive trust. Marvin v. Martin (C.C. A.) 20 F.(2d) 746; Richardson v. New Orleans Debenture Redemption Co. (C.C. A.) 102 F. 780, 52 L.R.A. 67. The bank, I think, must be taken, because of its suspension of payment, to have had clear knowledge of insolvency. Appellant concedes that the suspension of payment was an act of insolvency. But there is no showing that McDevitt knew of the insolvency. To permit the bank after insolvency, and to protect itself against charge of fraud, to receive McDevitt’s deposit in a “bailee account,” and then to permit it to set-off against liis deposit a claim against him arising before its suspension of payment would be, I think, to permit the bank to blow hot and cold upon its receipt of Mc-Devitt’s funds. Had McDevitt, when he took his money to the bank, been informed it was insolvent, it is unthinkable that he would have made the deposit at all. The bank’s conduct in crediting his deposit to a “bailee account” should not be construed as putting him in a worse position, without his consent, than the one in which he would have been had he not made the deposit. Appellant urges that allowance of set-off will give McDevitt and his trustee in bankruptcy one hundred cents on the dollar, and that this is all they have a right to. This seems to me to beg the question. If, in crediting McDevitt’s funds to a “bailee account,” the bank obligated itself to no more than a payment of one hundred cents on the dollar, then the appellant’s contention is correct; but if (he bank in so crediting the deposit must fairly be said to have obligated itself to treat McDevitt as if he were a depositor in a different bank, then the appellant’s contention is incorrect, and this I think is the fairer and more reasonable construction to be placed upon the bank’s conduct. And the answer to this question makes, of course, a deal of difference to the bankrupt’s creditors. For if the set-off is disallowed, the trustee will reclaim the $455 in toto for the bankrupt’s creditors, but will respond to the bank on its claim of $1376.72 only according to the bankrupt’s pro rata.
The assertion of the appellant that Dakin v. Bayly is distinguishable because there the bank of deposit was an agent whereas here McDevitt was not, I think confuses the position of the parties. In Dakin v. Bayly, the person asserting the set-off was the bank of deposit in its right or capacity as agent of the ultimate owners of the checks. It was held as such agent to be in a different right or capacity than that in which it was obligated individually to the bank of collection. In the instant case the person asserting the set- • off is not McDevitt or McDevitt’s trustee but the bank, and I think the right or capacity in which it urges that its claim of $1376.72 against McDevitt ought to be used to cancel his $455 claim against it, is a different right or capacity than the one in which it stood when it accepted his deposit.
I think a second point in Dakin v. Bayly also concludes the instant case against the bank. It was there asserted that the bank of deposit accepted the drafts of the bank of collection as payment, thus assumed ownership of them, acknowledged the change in the relationship to its depositors from that of collecting agent to that of debtor, and so properly asserted the set-off. This position the Supreme Court repudiated for the reason that, as it said:
“As respects the set-off of cross-demands, the rights of the parties became fixed at the moment of the insolvency of the St. Petersburg bank [(he bank of collection] and consequent suspension of payment [authority cited] ; and the right to set off is governed by the state of things existing at the moment of insolvency, not by conditions thereafter arising [authority cited], or by any subsequent action taken by any party to the transaction [authority cited].” 290 U.S. 143, at pages 148, 149, 54 S.Ct. 113, 115, 78 L.Ed. 229, 90 A.L.R. 999. The facts there were that when the bank of collection closed its doors, it had, as sub-agent for the bank of deposit’s depositors, made collection and sent the drafts to the bank of deposit; that is to say, it failed while the drafts were in course of collection. The Supreme Court said:
“At the moment of suspension it remained liable as subagent to the depositors of the Clearwater bank, as we have shown. Could it also be subjected to an independent liability to the Clearwater bank? Was it not entitled to treat the agency relation originally existing as still in force, in the absence of notice from the owners of the collection items that the status had been altered? Could any position taken by the Clearwater bank of its own initiative affect without the depositor’s consent the pre*600existing relation of principal and subagent between the depositors and the St. Peters-burg bank? We think not. [Authority referred to.] Those depositors had an election either to sue the St. Petersburg bank or to bring action against the Clear-water bank for want of due diligence, or to treat the drafts as payment and hold the Clearwater bank as their debtor, but there is no intimation in the record that they made any election 'prior to the subagent’s insolvency, nor indeed that they then knew whether collection had been effected or remittance received by the Clearwater bank. There is no reason to presume that they elected to stand on their cause of action against the Clearwater bank for lack of due diligence in accepting drafts instead of currency, and thus created a right of action in that bank against the St. Petersburg bank by way of subrogation, or to affirm that the agency had terminated and its status become that of a debtor. Nor is any custom pleaded whereby the Clear-water bank was to become the debtor of the depositors of the checks upon receipt of something other than cash or equivalent from the sub-agent.” 290 U.S. 143, at pages 149, 150, 54 S.Ct. 113, 116, 78 L.Ed. 229, 90 A.L.R. 999.
So in the instant case I think that at the moment of suspension of payment the rights of the parties, as respects the set-off of the cross-demands, became fixed. At that moment the bank had a claim on its promissory note against McDevitt and if at that moment McDevitt had had funds on deposit in the bank, a right of set-off would have existed against such funds. But the relationship arising between the bank and McDevitt after suspension of payment by the acceptance of his deposit in a “bailee account” was a new and different one, and I think no position taken by the bank of its own initiative and without McDevitt’s consent could so alter the relationship existing prior to suspension of payment as to bring the one existing thereafter and by virtue of the “bailee account” deposit into, so to speak, the same legal plane.
I think the result is not changed by title 24, § 411 of the 1929 Code of Law for the District of Columbia, providing:
“Mutual debts and claims under contract between the parties to a common-law action, or between any of the several defendants and the plaintiff, or between one party and the testator or intestate of the other, or between the testators or intestates of both parties, may be set off against each other by plea in bar, whether said debts or claims be of the same or a different nature or degree, and whether the claims be for liquidated debts or unliquidated damages for breach of contract; and if either debt be in the form of the penalty of a bond the exact sum to be set off shall be stated in the plea. [Italics supplied.]”
The italicized language in my view refers to claims different in nature in the sense of arising upon different contracts, or different in amount, and not to claims arising in different rights or capacities.