Briscoe v. Hamer

Summary

The court held that a creditor of an insolvent bank could set off the bank’s debt to him against his promissory note, even after the Bank Commissioner took possession of the bank’s assets. Because the creditor’s claim exceeded the note, he was entitled to extinguish the note and receive a judgment for the excess as a general unsecured claim against the insolvent bank.

Holdings

1. A creditor may set off a mutual debt owed by an insolvent bank against the bank's claim on the creditor's note when both debts existed at the time the Bank Commissioner took over the bank.
2. When the creditor's established mutual claim exceeds the amount of the note, the note is extinguished and the creditor is entitled to judgment against the insolvent bank for the excess, with the excess treated as a general unsecured claim.

Questions Presented

1. Whether a creditor of an insolvent state bank may set off a mutual debt owed by the bank against the creditor's promissory note when the Bank Commissioner sues to collect the note.
2. Whether, when the creditor's mutual claim exceeds the note, the creditor may extinguish the note and obtain a judgment for the excess against the insolvent bank.

Disposition

reversed_and_remanded