
    Francis Gilbert, as Assignee of Alessandro Bolognesi and Aldo Bolognesi, Formerly Doing Business as A. Bolognesi & Company, Plaintiff, v. The Mechanics and Metals National Bank of the City of New York, Defendant.
    (Supreme Court, New York Special Term,
    May, 1916.)
    Bankruptcy — trustee in — action against creditor of bankrupt — assignment for benefit of creditors — offset.
    An action against a creditor of a bankrupt for debt cannot be maintained either by his assignee for the benefit of creditors or by bis trustee in bankruptcy in the name of such assignee. Where such an action was brought by the assignee for the benefit of creditors it may not be continued by the trustee in bankruptcy in the name of the plaintiff on the theory that defendant would have no right to offset a debt due it from the bankrupt and exceeding the amount of plaintiff’s claim, whereas if an action were brought by the trustee in bankruptcy defendant would have the right to make such offset.
    Motion for judgment on the pleadings.
    Olcott, Gruber, Bonynge & McManus, for plaintiff.
    Frank M. Patterson, for defendant. •
   Giegerich, J.

The trustees in bankruptcy did not take title through the plaintiff as assignee for the benefit of creditors of A. Bolognesi & Co., but took by a superior title (Black Law & Prac. of Bankruptcy, § 440; Whittlesey v. Becker & Co., 142 App. Div. 313); hence section 756 of the Code of Civil Procedure has no application and the action cannot be maintained either by the plaintiff, who no longer has title, or by the trustees in his name, for no title has been transferred from him to them. I cannot see that section 67 of the Bankruptcy Act has any application to the case. The plaintiff did not procure any lien upon the fund in question either by the assignment or by the institution of this aetipn. If he had procured any lien perhaps the trustees could have been subrogated to it, but it would not follow that they were authorized to continue the present action for the purpose of enforcing their rights. Counsel for plaintiff frankly states that the present action is sought to be continued by the trustees of the bankrupt estate in the name of the plaintiff on the theory that the defendant would then have no right to offset a debt due it from the plaintiff’s assignors and exceeding the amount of the plaintiff’s claim, whereas if an action were brought by the trustees in bankruptcy the defendant would, .under the Bankruptcy Act, have the right to make this offset. It would be regrettable if by such a device a debtor’s estate, thrown into bankruptcy by virtue of the act enacted for that very purpose, could be administered in defiance of the equitable provisions of the act relating to offsets. In other words, it would be strange, not to say unconscionable, if the creditors of the bankrupt could avail themselves of the benefits of the act while refusing to recognize the right of offset given by the act itself to one of their number and insist that he must pay his debt to the bankrupt in full and claim against the estate, not for the balance due him, but for the full amount of his independent claim. Motion for judgment on the pleadings dismissing the complaint granted, with ten dollars costs.

Motion granted, with ten dollars costs.  