Crain v. Baillio

Mathews J.

delivered the opinion of the Court. In this case the plaintiff claimed and obtained an injunction as subsequent purchaser, and third possessor, against an order of seizure and sale, which issued at the instance of the defendant in his capacity of Syndic, &c. and was levied on property which had been sold as part of the succession of the deceased J. H. Gordon, which he represents as Syndic and administrator as an insolvent estate. The case was heretofore before this Court, (7 Mar. N. S. 273) and the capacity of Baillio as Syndic, established and recognized, and cannot now be legally contested.' The injunction obtained in the present instance was dissolved by the District Court, from which the plaintiff appealed.

Compensation cannot be pleaded in cases of insolvency when the claim of the debt- or fefthe insolvent, proposed to be compensated, has been acquired by such debtor, subsequently to the failure of such insolvent. A claim due from an insolvent debt- or to a partnership firm, cannot be allowed in compensation ofadebtdue by an individual member of the firm to the insolvent.

The only question which the case presents, relates to the appellants’ right to compensate a priviledged debt, due from the deceased to Ship, Kay & Co. and regularly transferred to him, since the former judgment rendered by the Supreme Court. It is clear that compensation does not legally take place in cases of insolvency, when the debtor to the insolvent acquires claims against him subsequent to his insolvency. It was decided by our former judgment in this case, that the claim set up in compensation, being due to the firm of Shipp, Kay & Co, could not be pleaded, or allowed in opposition to one by Kay alone, to Gordon’s estate.

It is true that the plaintiff has since the purchase of the property seized,and since he became owner thereof, acquired a right to this claim from all the firm of Shipp, Kay & Co. but he acquired this right at a time when it could not be allowed in compensation of debts due by Gordon’s estate ; for it was then insolvent.

It is therefore ordered, adjudged and decreed that the judgment of the' District Court be affirmed with costs.