Response or Comment
Since the case of New York County Bank I. Massey, 192 U. S. 138, there has been no doubt as to the right of a debtor of a bankrupt's estate to exercise the right of set-off as preserved by § 68a of the Bankruptcy Act. In that case it was laid down dearly that such right of set-off may be exercised despite the provisions of § 60a, which covers the matter of preferences. The question very frequently arises when bankers apply deposit balances upon matured obligations of customers. If such application is made within four months of the time when the customer goes into bankruptcy, the contention that a preference has resulted is almost inevitable. The Massey case decided that under such circumstances there was not a voidable preference. There the deposits were made in the ordinary course of business, and the court carefully guards against expressing an opinion as to what the result would be in case of fraud or collusion between the depositor and bank.
Aigler, Ralph W. "Depositors' Checks in Payment of Matured Obligations Held by Drawee Bank as Preferences." Mich. L. Rev. 12 (1913): 50-2.