Peoples Bank & Trust Co. v. LA. State Rice Milling Co.

The rule that compensation cannot be pleaded by the debtor of an insolvent corporation in liquidation, or by the debtor of insolvent succession rests upon sound principles of equity. To hold otherwise would be tantamount to giving an unfair preference in favor of the creditor who is also a debtor, over other creditors who are not debtors; thus the creditor who is also a debtor would get the full benefit of his credit, while the creditor who is not a debtor would have to accept in full satisfaction only such part of his claim as the residuum of the assets of the insolvent concern could…