Joseph P. Bradley

“ In June, 1883, the insurance superintendent of Missouri for the time being, finding Hamilton's note and mortgage among the assets of the Life Association, filed a petition for executory process in the circuit court of the United States for the Western district of Louisiana for the seizure and sale of the property covered by the defendant's mortgage before referred to, and afterwards filed a bill of foreclosure against Hamilton, the appellee. The latter, besides an answer, filed a cross-bill, setting up the amount due on the policy of insurance by way of compensation and reconvention. ”

“ If any one is indebted to the company, especially if his debt was contracted with reference to, and because of, his holding a policy, there would seem to be strong reason for allowing him a set-off, and no good reason to the contrary. ”

“ It is conceded that the interest was paid on the mortgage debt up to March, 1879; and there is no question that the equitable value of the policy in November, 1879, was, as before stated, $5,407.05, after deducting all deferred premiums. This was more than enough, by over $1,300, to pay and satisfy the mortgage. The question is whether the appellee is entititled to such compensation or reconvention.
Natural justice and equity would seem to dictate that the demands of parties mutually indebted should be set off against each other, and that the balance only should be considered as due. ”

“ One objection raised against the allowance of set-off, or compensation, in the present case, is that when the Life Association became insolvent, and when the present suit was commenced, the insurance had not become absolute in Hamilton, and did not become so until July 14, 1884, previous to which time his children had a contingent interest therein, they being the beneficiaries in case he should die before that date. ”

“ The policy at the time the association failed (November, 1879) had nearly 5 years to run; suppose it 5. Present value of $10,000, 5 years deferred, at 5 per cent. compound interest, is $7,835.26. This sum, less the value of his children's expectancy, was the value of Hamilton's interest. He was then 51 years old. The mortality table shows that, out of 68,842 persons living at that age, 1,001 die the first year ”

“ But the common law, for simplicity of procedure, determined otherwise, and held that each claim must be prosecuted separately. 'The natural sense of mankind,' says Lord MANSFIELD, 'was first shocked at this in the case of bankrupts ”