Mutual credits

In bankrupt law. Credits which must, from their nature, terminate in debts; as where a debt is due from one party, and credit given by him to the other for a sum of money payable at a future day, and which will then become a debt; or where there is a debt on one side, and a delivery of property with directions to turn it into money on the other.

8 Taunt. 499 ; 2 Smith, Lead. Cas. 179.

By this phrase, in the rule under which courts of equity allow set-off in cases of mutual credit, we are to understand a knowledge on both sides of an existing debt due to one party, and a credit by the other party, founded on and trusting to such debt, as a means of discharging it.

King v. King, 9 N. JEq. 44.

Credits given by two persons mufually ; ♦. e., each giving credit to the other. It is a more extensive phrase than "mutual debts." Thus, the sum credited by one may be due at once, that by the other payable in futuro; yet the credits are mutual, though the transaction wonid not come within the meahing of "mutual debts."

1 Atk. 230; Atkinson v. Elliott, 7 Term R. 378.