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consent of the debtor, is to violate the contract of the parties, and work injustice to the debtor whose demand is thus anticipated and collected before maturity.

The argument is persuasive, and not without the support of respectable authority. Spaulding v. Bachus, 122 Mass., 553 (S. C., 23 Am. Rep., 391); Hannon v. Williams, 34 N. J. Eq., 255 (S. C., 38 Am. Rep., 378); Jordan V. National Shoe and Leather Bank, 74 N. Y., 467 (S. C., 30 Am. Rep., 319); Lockwood v. Beckwith, 6 Mich., 168 (S. C., 72 Am. Dec., 69); and Waterman on Set-off, Secs. 131, 132, all seem to support this position, as do other cases not cited. The most of these and like cases seem to be, and many of them are, expressly based on the principle stated and illustrated in Potheir on Obligations, 590, as follows:

"I am your debtor for six pipes of wine of a particular vintage. You are my debtor for six pipes of wine generally. I may demand the six particular pipes, and, therefore, you cannot offset the general debt for six pipes; but I may offset my particular pipes, if I please, against yours, because I could turn them out to you in payment of the general debt."

It is obvious that this illustration does not in

volve any principle of equitable set-off. It is only the statement of the general principle, applicable not only to the law of set-off, but to contracts as well, that an obligation payable in one commodity cannot be paid in another without the consent of

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the payee.

At most, as applied to the case in hand, it means that a debtor whose debt is due has no right, nothing more appearing, to set off against it a debt in his favor not due. But this is only stating a general rule of legal set-bff everywhere conceded. The fact of insolvency of one of the parties is not involved. In the absence of insolvency or some equivalent equity, it will not be anywhere contended that a debt not due can be set off against a debt that is due, any more than that six pipes of wine generally can be set off against six particular pipes of wine.

The case of Spaulding v. Bachus, supra, relied on for the distinction under consideration, is not strictly an authority for the position; for, while the learned Court does approve the distinction that a party cannot anticipate payment of an unmatured debt to himself by setting off against it a debt due from himself presently payable, notwithstanding the insolvency of the complainant, the suit in that case was by or for the benefit of an assignee by purchase, and the real question was whether a debt owing by the defendant to the assignor at the date of the assignment, though not then due, was to be regarded as an equity so attached to the assigned debt as to carry with it the right of set-off as against the assignee with notice of assignor's insolvency. The holding in the negative is not necessarily inconsistent with the right of set-off as between the original parties, and appears entirely consistent with the de

Nashville Trust Co. v. Bank.

cisions of this Court that a right of set-off, to be SO attached to the debt debt as to be available against it in the hands of an assignee for value, must be complete and perfect at the date of the assignment. Gatewood v. Denton, 3 Head, 381; Litterer v. Berry, 4 Lea, 193; Catron v. Cross, 3 Heis., 584.

v.

Lockwood v. Beckwith, Jordan v. National Shoe and Leather Bank, and Hannon Williams do fairly hold the proposition contended for by complainant's counsel. The effect of the sections cited. from Waterman on Set-off is, that the set-off will be allowed where the debt not due is in favor of the party against whom the right of set-off is asserted. It is only by implication that the learned author can be treated as against the right in cases like the present.

We cannot agree with these authorities, either in their reasoning or result.

The question is, Assuming the insolvency of the party owing the unmatured debt, can his debtor, when sued by the insolvent on a debt which is due, set off against it in equity the unmatured debt because of the insolvency? We are of opinion that both reason and the weight of authority answer in the affirmative.

In connection with the general principle of equity before alluded to, that a set-off will be allowed where the party appears in good conscience to be entitled to it, and where no opposing equal or superior equity will be defeated-and we are

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treating the case. now upon the idea that it is only the insolvent himself that is resisting-it must be remembered that it is only where, for some reason, the law cannot avail the party that equity intervenes at all. If both parties were solvent, so that both debts might ultimately be collected, the law would afford adequate relief, and no injustice would be wrought to either party. The one could not suffer by having to pay his own debt according to his contract, if he could ultimately compel the other to pay his debt according to his contract. But it is this very fact-that if the one pays the debt due from him, he cannot compel payment of the debt due to him, and will thereby suffer irreparable loss, and his inability to protect himself by set-off at law because his debt is not due-that creates his equity, and the necessity for equitable relief. Does it lie in the mouth of an insolvent to say that his contract is violated, and thereby defeat so manifest an equity, when it is apparent that he cannot himself perform that contract? Should a Court of conscience be so over-scrupulous of the rights of one party to a contract as to refuse to permit a slight variance even as to him, when it can plainly see that thereby it will wholly destroy the contract as to the other party?

Technicalities are not to be so sweeping in their consequences. This Court looks to the substance and not to the shadow of things. It is the very

fact that the contract cannot be performed literally

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as made, that calls upon the Court, ex aequo et bono, to compel such substantial performance as is possible.

But it will be found, upon examination, that this objection may be urged with equal force in almost if not every case where the doctrine of equitable set-off has been applied. Take, for example, the case of a judgment on the one side and a simple contract debt on the other. The judgment plaintiff is entitled to immediate execution. and to collect his money at once. He does not have to await the law's delay and the expense of litigation. He has not only the right to demand his money, but to compel payment at once by final process before the defendant can possibly obtain judgment and place himself on equal footing in respect to the debt due him. He must await the delay of legal proceedings, while the plaintiff in the judgment may, in the meantime, in the exercise of not only a contract right, but a contract right sanctioned by the final judgment of the Court, proceed to collection at once. And yet, it has never been considered that this right of a judgment plaintiff, if he is insolvent, stands in the way of equitable relief to the other party by injunction and set-off, although it cannot be said that there is here any less violation of the clear legal right than there is in setting off a debt not due against one that is due and payable.

The right of set-off in such and like cases is sanctioned by many authorities.