time after the commencement of the bankruptcy proceedings. Thereupon the defendant petitioned the district court for an order directing that the said sum of $620, the amount of said judgment, be applied as a credit or offset upon its claims against the estate. The district court granted the prayer of defendant's petition, and ordered the offset to be made accordingly. The present bill is brought to set aside this order as erroneous.
1. I am of opinion that this proceeding is properly instituted under the provisions of section 4986 of the Revised Statutes of the United States, which gives to the circuit court general superintendence and jurisdiction of all cases and questions arising in the district court when sitting as a court in bankruptcy.
2. The case upon the merits must turn upon the construction of section 5073 of the Revised Statutes, which is as follows:
"Section 5073. In all cases of mutual debts or mutual credits between the parties the account between them shall be stated, and one debt set off against the other, and the balance only shall be allowed or paid; but no set-off shall be allowed in favor of any debtor to the bankrupt of a claim in its nature not provable against the estate, or of a claim purchased by or transferred to him after the filing of the petition."
The defendant bank held an unsecured claim, duly proved, against the estate of the bankrupt, and the assignee of the bankrupt held a judgment against the defendant bank for $620, for penalty incurred by the violation of the statute against usury. Were these "mutual debts" within the meaning of the statute? In order to make a proper case for set-off, under the statute, the debts must be mutual; must be in the same right. Sawyer v. Hoag, 17 Wall. 610, 622. If it be conceded that a judgment for this penalty, recovered by the bankrupt before his bankruptcy, would have been a debt, within the meaning of the statute, which could have been set off against the balance due on the bank's claim, does it follow that a judgment obtained by the assignee after the bankruptcy
