Holbrook v. Receivers of the American Fire Insurance

Citations

• 6 Paige Ch. 220

Syllabus

<p>Where a party who had obtained a loan from an insurance company upon bond and mortgage, and who had also insured his property with the same company, which property was destroyed by the great fire in New-York ; by which fire the company was rendered insolvent, and receivers of its effects were appointed under the act of the 18th of January, 1836 ; and such receivers, for the purpose of depriving the assured of his legal right to set off the amount of his loss against the amountdue from him to the company on the bond and mortgage, refused to adjust the amount due him upon the policy, as required by that act; Held that it was the duty of the receivers to allow the set off; and that the court of chancery, upon a summary application, was authorized to order the receivers to allow the same.</p> <p>A receiver of an insolvent corporation, appointed under the act of the 18th of January, 1836, or appointed by the court of chancery under the provisions of the revised statutes relative to proceedings against corporations in equity, is bound to offset a liquidated debt due to the corporation, against an unliquidated debt due from the corporation to the same person; in the same manner as trustees of insolvent debtors are bound to offset cross demands arising from mutual credits as well as from mutual debts. In such cases the right of set off is not confined to liquidated debts or to such as might have been offset in a suit at law between the original parties ; but it also extends to all mutual credits, arising ex contractu, between such original parties.</p>