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The result of the whole opinion, therefore, was, in this particular case, that the bankrupt might have his discharge, but it will operate only upon those debts which he does not owe in a fiduciary capacity. In regard to such he will still be liable, unless the persons to whom they are owing come in and prove them, and take a dividend.
fiduciary creditor does not come in, prove his debt, his defalcation as a public officer; and that he might against such debts. Mr. Justice Thompson, of New and take a dividend nnder the proceedings, it is be discharged of the latter also, or not, as the credi-York, it is believed, concurs more nearly in opinion plain that the terms of the discharge, however gene-tor might elect to prove it against his bankrupt es- with Judge Story than do the judges before menral, cannot vary or control his rights; and that his tate, or stand-out. This construction was not enter-tioned. Thus then we have one law for Massachudebt will not be barred or extinguished thereby; but fained by the court, on the ground that the declara-setts, another for Ohio, and a third for Virginia: he may, if the discharge and certificate are pleaded tion in the 4th section, that the "discharge and cer"Alia lex Romæ, alia Athenis." to any suit for his debt, reply the fact that it is a tificate shall be a full and complete discharge of all fiduciary debt. Another discrepancy of construction in regard to debts, contracts, and other engagements of the bankrupt which are proveable under this act," does not The law declares that nothing therein contained our uniform system of bankruptcy has shown itself. leave the effect of the discharge in bar of any debt shall be construed to impair any liens, mortgages, or whatever, to depend upon whether it be proved by other securities of property real or personal, which the creditor and claimed against the estate or not; and from the fact that this form of expression could may be valid by the laws of the states respectively, not have been employed to narrow the effect of the &c. The laws of Massachusetts and Vermont aucertificate, but was probably selected to embrace all thorize a creditor to acquire a lien by the attach"contingent and uncertain demand, the holders of ment of a debtor's property on mesne process. In which are expressly permitted by the succeeding attachments are dissolved by the insolvent's being Massachusetts Judge Story has decided that all such section "to come in and prove under the act." declared a bankrupt; in Vermont, Judge Thompson The court further expressed the opinion,reference to this matter, was most manifestly to ex-in good faith, are declared to be valid liens, and are "That the object of the section of the law having made by creditors, before an act of bankruptcy and holds to the opposite doctrine, and attachments clude every person owing debts in consequence of of the federal government, they had, but six days be have no bankrupt law, for the district judge of that his defalcation as a public officer,-which, in officers sustained. Thus again, one law for one state and another law for another. Finally, in Missouri they fore, declared should be thenceforth deemed a felo-state (Wells) has declared the law to be unconstitu with all other persons with them in the exclusion, from entering this door of the tional, and from his decision there is no appeal. court with their own original petitions for the bene[Boston Daily Adv. fit of the act." The petition was dismissed. 13th. PREVIOUS LIENS-LANDLORDS' RIGHTS-ATTACHMENTS JUDGE STORY'S IMPORTANT OPINION RELATIVE TO. Landlord's and tenants.
There were one or two other questions, of minor importance, discussed, for which we have no room
In conclusion, the judge said, he agreed with Mr. Justice Thompson, of New York, in every particular. He also agreed with Mr. Justice M'Lean, of Ohio, as far as he went. It was the misfortune of all three, that they differed toto cælo from their learned brother, Mr. Justice Daniel, of Virginia, in his opinion, before referred to.
It will be recollected that Mr. Justice Story in the case of John Tebbetts, decided, among other things, that although a bankrupt could not ordinarily be discharged of fiduciary debts, yet if the fiduciary creditor comes in and proves his debts, he is barred of all other remedy therefor, except out of the assets. Before this decision was made, the city of Lowell proved a debt of several thousand dollars against Brain Morse, who was formerly a collector of that city, and a defaulter. The city proved the debt for the express purpose of objecting to the discharge of the bankrupt. But by the decision of the circuit court they were in fact barred by this very act. They accordingly petitioned the district court on Saturday, for leave to withdraw their petition.
The point was argued by Colby, of Lowell, for the city, and by Morse, of Lowell, for the bankrupt. Srague, J. was clearly of opinion, that, under the circumstances, the petitioners ought to be permitted to withdraw their proof of debt, and he ordered accordingly. [Boston Daily Adv. Sept. 12.
Judge McLean, of Ohio, has decided in a recent bankrupt case, that where the bankrupt owed debts of a fiduciary nature within the law, which were contracted before its passage, he might be discharged from his other debts not of a fiduciary character, but if the indebtedness originated since the passage of the law, he could obtain no discharge under it from any debt.
12TH. DEFAULTERS, &c. DENIED the benefit oF THE
of the United States district court sitting at PittsThe hon. Thomas Irwin, burg has given a decision in the case of bankruptcy of some importance to landlords and tenants. individual rented a farm for two years, from April 1841, payable yearly. The year's rent due last April sented his petition in bankruptcy. Previous to the was not paid, and in June following, the tenant prehearing of the petition, the landlord distrained the
1st. Can the court decree the petitioner a bank-property on the premises for the rent due. The rupt under the act, &c., when in his petition and bankrupt obtained a rule to show cause why an inschedule, he does not include all his creditors and Junction should not issue to restrain proceedings unthe debts due them? der distress, and have the property restored. The ing of opinion that the right of the landlord to discase was argued and the rule dismissed, the court be. train the property on the premises and to sell, was not impaired under the provisions of the bankrupt
2d. Can the petitioner be so declared a bankrupt
ferring to the parts of the law bearing upon the in-
law. It is not known whether the decision relative
We noticed a few days since, a decision in a federal court, in Missouri, shutting out defaulters and all persons who owed debts in a fiduciary relation from the benefit of the bankrupt law.
Judges Daniel and Mason, of Va., have just made similar decision in the U. S. court for the 5th circuit held in Richmond. The Compiler says: The decision was upon questions adjourned from the
Norfolk district court, as follows:
creditors and property, to be rateably distributed
2d. That a petitioner cannot be decreed a bank-
In the U. States district court of Missouri sitting in bankruptcy, a decision was made by Judge Wells, which is of sufficient interest to be generally known. It appears that the petitioner for the benefit of the bankrupt act, independently of his ordinary debts, was a defaulter as an administrator on an estate. ObDecision. Judge Randall on Thursday dismissed jections having been made to his discharge on this This decision has been submitted to the chief jus- a motion for an injunction to stay proceedings under ground by his creditors, the petitioners' counsel con- tice, and we understand, has been approved by him. a levy made by virtue of a landlord's warrant for tended that he might be declared a bankrupt and ob- | "The congress shall have power to establish uni- rent which goods had been distrained af er the tain a final discharge as to all debts not created in form laws on the subject of bankruptcies throughout petitioner for the bankrupt act had been declared consequence of such defalcation, notwithstanding the United States." [Constitution of the U. States. a bankrupt. The goods were liable under the prothe debtor was a defaulter at the time of his appliCongress, by virtue of this authority, has passed a due, and stop the sale. cess, but the assignee might pay the amount of rent cation. The Judge overruled the plea, and decided [Evening Journal. that the petitioner could not be declared a bank-law regulating insolvency primarily, and bankruptcy rupt, nor be discharged from any of his debts, in decisions of the courts are every day proving. This It is important for the safety of lessors, that leases incidentally, and that it is not a uniform system the The effect of the United States bankrupt act on leases. what way soever created. is not only not surprising, but it is the necessary con- hereafter made should make provision for the bankA decision was made by the U. S. district court sequence of the provisions of the act, for there is no ruptcy of the lessee, as on such an event his estate and of Kentucky, sitting in bankruptcy on the 30th ult. appellate power to regulate the eccentricities of the interest in the premises will pass to his assignees, at Lexington, in the case of a Mr. William Johnson, judges. The district court of the United States has if they choose to accept it, and not otherwise; if they which is of general interest. It appeared on the exclusive jurisdiction in all matters in bankruptcy, do accept it, they may transfer it to whom they petitioner's own showing that he was indebted some and is not bound to invoke the aid of any other tri-please-even to a beggar-and the assignees will six or eight hundred dollars to the city of Louisville, bunal; the district judge may, if he will, adjourn any not remain responsible for rent after such transfer. in consequence of his defalcation as clerk of the point or question into the circuit court to be there board of mayor and council, on account of monies heard and determined; but he is under no obligation law contains a special clause, avoiding the lease if In is insufficient and immaterial that the original received by him according to his duty as such officer, to do so, if he choose to execute the duty alone. the lessee should underlet, &c., because such a clause for licenses to hacks, coffee-houses, &c; and which Accordingly, the constructions put on this act by the applies only to voluntary transfers by the lessee, and he had failed to pay over according to the laws of different judges, are as various as might be expect- not to assignments by the act of law. Such a clause the city. The court decided that Johnson was a ed from men of various minds, learning, and ways will not prevent the interest of the lessee from passpublic officer within the statute; and that although of thinking. such terms, (i. e. public officers, &c.) may in some of Justice Daniel, of Virginia, one of the judges ing to his assignees, in bankruptcy, nor restrict them their predicaments in other acts of congress be con- of the supreme court, has decided that an insolvent in the disposal of it. fined to the officers of the federal government, yet, who owes debts arising from defalcation as a public In bankrupcy. On the 6th inst. Watson, Chew & regarding the subject of this statute with the con- officer, or as an executor, administrator, &c. cannot Co filed their petition, claiming that Leman & Adtext of the words, and their juxta position with the take the benefit of the bankrupt law. Mr. Justice dy should be declared bankrupts, and on the 7th inst. words executors, administrators and guardians, they Story, of Massachusetts, another of the judges of Mordecai Cohen distrained the goods of Leman & do here include all state officers; and that the officers the same court, has decided that such an insolvent Addy for rent due him on the 1st inst. of a city corporation, exercising within its territo- may be a voluntary bankrupt under the act, and may ing creditors thereupon filed a bill for an injunction The petitionrial limits a portion of the public authority of the be discharged from all his debts except those of a against a sale under the landlord's distress, until a state, are literally and in the sense of the law, pub-fiduciary character, and from those likewise, if the decree of bankruptcy and the assignee could be aplic officers. creditors chouse to present and prove them. Mr. pointed, to contest the landlord's right, or take steps The petitioner's counsel then contended for such Justice McLean, of Ohio, another of the judges of for an advantageous sale of the debtors property for a construction of the bankrupt act as that he might the supreme court, holds that the insolvent who owes the benefit of all concerned. On this case his honbe declared a bankrupt and be discharged of all his debts of this character may become a bankrupt, but or Judge Gilchrist ruled the following points yesterdebts except that which he owed in consequence of that no relief under the bankrupt law can be given day, in the court of bankruptcy:
1. That the district court of the U. S. sitting as a ¦ men, or miners; or any liens, mortgages, or other secourt of bankruptcy, has all necessary, chancery curities or property, real or personal, which may be powers and jurisdiction for the full administration valid by the laws of the states, respectively, and of the bankrupt act. which are not inconsistent with the provisions of the 28 and 5th sections of the act.
2. That a landlord levying, before a decree in bankruptcy, for rent due before such decree, has a lien, under the statute of Anne, of force in this state, on the property of his tenant, and such lien is undisturbed by the bankrupt act.
3. That the apprehension of the petitioning ereditors, that a sale under a landlord's distress warrant will cause a sacrifice of the tenant's goods to the injury of the other creditors, furnishes no ground to enjoin the landlord's proceedings.
4. That the facts that the landlord was a preferred creditor for his rent under a vuluntary assignment of his tenant, and that he had expressed his willingness (without personally accepting the deed of assignment) that the assignee should sell and pay him his rent, did not impair his legal remedy. [Charleston Courier.
proceeding; and as creating no lien or right in respect to assets so procceded against, (1 Paine R. 531 532-2 Litt. Ken. R 222 MeFerren vs. James.)
The decision on the question of lien in this case must accordingly rest upon the provisions of the revised statutes of this state, and the construction given the act by the state courts.
The act provides that a creditor stiuated as Heckscher is may file a bill in chancery against his judgment debtor, and any other person, to compel the discovery of any property, or things in action belonging to the judgment debtor, or money, &c. due to him, or held in trust for him, and to prevent the transfer, or the payment, or delivery, thereof, to the defendant; and shall have power to decree satisfaction of the judgment out of such effects as shall be discoverI regret to find the decisions of this court do not ed by the proceedings in chancery, whether originalharmonize with the learned and forcible reasoningly liable to execution or not, (2 R, S. 173, 4. Sec. of the circuit court of the first circuit: in respect to 38, 39.) the import and application of the phrase "any liens" used in the proviso above quoted. The term has Decision. Judge Monroe recently decided the fol- been understood and expounded here in several cases, lowing points in a case before the United States dis- as used in a familiar sense, and as comprehending all privileges and charges upon the thing recognized by trict court of Kentucky. The petitioner filed an affidavit that a portion of his creditors, since the fil-local statutes, or long established usages of the principles of general law, and the court has not stopped ing of his petition, had sued out execution and were about to sell his property, and asking the interfer- to weigh the qualifications or restrictions English judges have been disposed to attach to the subject. In that view it has not been deemed important to analyze and collate the decisions of the English courts of law, to ascertain to what extent hens are recognised and upheld; there the act of congress, being understood to have direct reference to the law in this respect as it exists in the particular state, irrespective of the source from which it may have been derived.
ence of the court. The court ruled:
1st. That the decree of bankruptcy, when rendered, relates to the time of filing the petition, and the assignee will have a right to recover, in trover, the value of any property taken and sold upon executions issuing after the filing of the petition.
2d. That the assignee will have no right to recover the value of property sold under an execution, alter the filing the petition, but which was issued and levied before the petition was filed.
3d. That whether or not the assignee will have a right to recover the value of property, taken in execution, which issued before the filing of the petition, but which was levied upon and sold after the¦ filing of the petition, is a vexed question, and not decided.
The common law decisions, it was thought, would therefore only supply evidence of the state law, in absence of any definitive statute, or usages, existing in the state on the subject, or at most could be resorted to, but for illustration, or as an exponent of provisions, derived from, or familiar to the common law.
It may be proper to observe, that the term "laws
of the states" employed in the act of congress, is not
From the Nae York Courier and Enquirer. United States district court, southern district of New York. fa the matter of John H. Coster, a bankrupt, His honor, Samuel R. Betts, district judge delivered the following decision: It is unnecessary to rehearse the facts in this case farther than to present the single point in controversy, which is, whether the choses in action, and effects, of the bankrupt not subject to execution, pass to the general assignee, under the decree of bankruptcy, or helong to the receiver appointed under a creditor's
On the first of February, 1842, Charles A. Heckscher, a judgment creditor, filed a bill in chancery pursuant to the laws of the state of New York, against the bankrupt; and on the 9th of Aprii obtained an order for the appointment of a receiver, and on the 25th of April a receiver was appointed by the court, to whom the bankrupt on the 27th of April assigned his choses in action, effects, &c. On the 16th of February, the bankrupt presented his voluntary petition to this court, to be declared bankrupt, and a decree of bankruptcy, thereupon, was rendered, on the 30th day of April.
It is very clear that the statute does not assume to act directly upon the assets of a judgment debtor, to bind them specifically in the way, real or personal estate is bound by judgment and execution. A power is conferred upon the court of chancery to entertain a suit of a special character, founded upon the equity therein designated.
Whether this be an inherent, or only a statutary jurisdiction of the court. the legislature has pointed out plainly its officers, and the method of its exercise; and the question is, whether it be a necessary incident to such suit. that the particular property, sought to be controlled, should be definitely bound by it from its inception.
Judge Story in his very able discussion of the subImportant decision as to attachments and previous state ject Foster's case 5 law Leporter 55) seems to regard the English rule, as the controlling consideration, liens. The very important and much roote tion as to the effect of attachments of the property and to adopt the conclusion, that, where there is no of bankrupts prior to the institution of proceedings possession of the thing, actual or constructive, there in bankruptcy, was decided by Judge Story on Sat can be no lien asserted in regard to it; and the logi urday, in an opinion of great length, in which he cal tendency of the reasoning, if not the expressed discussed the whole subject with his usual ability result is, to deprive judgment creditors of priority and clearness. The result to which he came was, of payment under the bankrupt act out of the real that such etfachments would not hold the property, but estate bound by their judgments, there being no pos Second. When a discovery is made, the court has would, in feet be dissolved by the proceedings in bank-session accompanying the lien claimed. power given it to prevent a transfer of every descripWithout the advantage of that decision to guide tion of property belonging to the defendant: This ruptcy. This decission is considered of ore impor- | tance by legal gentlemen, than any which is likely, its judgment, this court had adopted a different con-power would be unnecessary, if the property was alto arise under the bankrupt law, and in some of the clusion with respect to the meaning and operation of ready bound by the commencement of the action; states, it will make a vast difference in the effects of the word lien, here employed by congress, and had nothing more would then be required than an order bankrupts. Judge Story remarked, that as the deci- accepted it as importing any charge fixed by law upon that the specific thing claimed by the lien, should go But the tenor of the section masion was of great importance, he should furnish it the property, or imposed by the party, in consonance to its satisfaction. to the law riporter for publication, and he hoped the with existing laws and usages. nifestly denotes that the power is not conferred to council in the case would do the same with their aruphold and effectuate a lien as such, but to detain guments. [Boston Mere. Journal, every species of property and interest tangible, or [See extracts from the "Boston Daily Advertiser" equitable, where it may be operated upon when by under the Fiduciary head.] the ultimate judgment of the court it shall be found liable to the applications sought for.
Third, The fund or property is not necessarily allotted to the prosecuting creditor, after it is acquired by the receiver. The chancellor says "the receiver is the officer of the court. and holds the fund subject to the equitable rights of all parties to be disposed of under the order of the court."
Should this case, or any future one present the point, so as to bring the views of this court in direct collision with the opinion of the circuit court of the first circuit, I should not assume to execute my own conclusions, but shall adjourn the point to the circuit court, having immediate supervision of the decisions
of this court.
The question raised by this case, is, whether the judgment creditor, by virtue of his proceedings in chancery, acquired a lien on the property and effects of the bankrupt, so as to prevent their vesting in the general assignee on the rendition of the decree of bankruptcy?
The petition presented to the court as the foundation of the present motion, does not designate the property and effects of the bankrupt, which passed to the receiver by means of the chancery suit:-On the argument, however, it seemed to be conceded that the property consisted wholly of effects not subject to execution, choses in action, credit, &c. &c.
There are cogent considerations arising from the wording of the statute against this acceptation of its import. First, The action essentially looks to a disclosure of assets belonging to the judgment debtor: and not to the arrest of such as are patent and known, and accordingly the court is empowered "to compel a discovery:" Until this discovery is made, the supposed lien must be floating and in abeyance, and is, moreover, to remain contingent without any thing to rest on, whilst the court is considering whether the property discovered can be made subject to the demand.
It has been decided by the judge of this court on an injuction bill filed in the circuit court, that the general principles of chancery law, will not sustain a creditor's bill, to secure, or act, upon property, not liable to execution at law; and also, on a review of the state decisions, the judge adopted the conclusion that no doctrine was established in the state chancery upholding such jurisdiction, anterior to the passage of the revised statutes, (Lanson, vs. Mix, 6 Hunt's Magazine 72.)
The general assignee claims, that the estate of the But if the point has been definitely decided by the bankrupt, as it was when his petition was presented, became vested in him, by force of the decree in state courts in favor of the jurisdiction, such decibankruptcy, and the judgment creditor insists, that sion within the rule declared by the supreme court, by virtue of his proceedings in the court of chancery, (18 Feters 19) would not become a state law, and as he acquired a prior lien on the property, which is such obligatory upon the courts of the U. States. A bill filled by a judgment creditor independent of preserved to him by the bankrupt act. The proviso to the second section is "that nothing the statute, to arrest his debtors effects not liable to in this act contained, shall be constructed to annul, execution, and apply them in satisfaction of the destroy, or impair, any law ful rights of married wo-judgment, would be regarded by this court, a void
A line er vi terminies presupposes a definite object on which it acts; and laying out of view other considerations, how can it be in a legal sense asserted that a lien can subsist on the indebtedness or liability of third persons to the judgment debtor, which the creditor's bill in this case seems to have appropriated to the judgment debt?
These suits are employed as inquisitions, acting upon a defendant or his supposed trustee by a searching scrutiny, to ascertain, if per chance, effects of the judgment debtor may not be brought to light. They are ordinarily merely experimental. The receiver may even be appoiuted before it is known that there is any property, and his office, when property is discovered, is nothing more than to collect and preserve it, pending the litigation. (Bloodgood vs. Clark 4 Paige 557). Even his appointment, therefore, does not indicate any devotion of particular property by the judgment of the court to the objects of the suit, nor does the commencement of a suit seem to be regarded in the state courts as settling the right of priority, as between different parties instituting these creditory actions, but the matter is open to adjustment by the court upon the general equities subsisting in the cases, and established at the hearing.(Osbern vs. Heyer; 2 Paige, 342). This power of controlling, or disposing of the fund upon considerations of the equities of al' parties, would seem to exclude the idea of a specific lien on it in favor of any This description of action will undoubtedly one. protect every subsisting lien of a judgment, or execution creditor, against subsequent assignments of the party, or those made by operation of law; (1 Paine 431) and may aid such lien in render available under it, residuary trust interests, which could not
be sold by the execution at law. (McDermott vs. Strong, 4 John, Ch R 687) but that species of equitable jurisdiction and relief, is widely different from one, which imposes an original lien on property by force of filing a bill merely. The act in terms in no way declares the existence of the suit shall have such effect, and the remaining inquiry is, has it been adjudged by the state courts that a creditor's bill by force of the provisions of the statute imposes a specific lien on the estate of the defendant, subject to the proceedure? I find no such express adjudication, nor any principle established, that necessarily invol
ves that construction of the act.
The chancellor seems to consider the rule to have been so declared to Lord Hardwicke, (1 Paige 309 Beck vs. Burdett) but it is clear that the English chancery regarded a creditor's hill, es no force, different from any lis pendens respecting a particular thing which will not be so suffered during such suits to be transferred to another, and taken out of the jurisdiction of the court. (Edge!! vs. Heywood, 3 Atk. 356.537.)
And it is to be remarked that the observation of the chancellor in Beck vs. Burdett, must have been offered as a mere suggestion, because the decision was, that the complainant's bill did not bind the property in that case. The repetition of like language in Edmeston vs. Hyde, 1 Paige 639 640, (propounds no different doctrine: neither the facts, or the scope of the argument requiring more than the determina tion of the point whether a single creditor was entitled to the entire fruits of the action prosecuted by him, or if he must share them ex equo boto with others, standing in equal relation with himself at law, to the judgment debtor; and both those cases were decided under the general law, before the revised statutes went into operation, and are not, therefore, to be regarded as any exposition of the act in question.
lished rules of chancery or by imparting benefits The appeal, in the first instance, to the court of
What might previous to the decree, be only matter of precaution upon which the court of chancery would act with a view to existing an possible interests of all concerned, would, after a decree of bankruptcy, become referred into a legal and rested right in the assignee and creditor's which that court would be always ready to recognise and assist.
This, it appears to me, is the plain and sensible bearing of the spirit of the decisions upon the subject.
It moreover comports more with the comity due from one independent tribunal to another, to refer to the action of each, those matters subject to its particular control, than for either to attempt to act coercively in respect to the other.
Chancellor Walworth seems to have hesitated and struggled in his own mind with the question, whether equity did not demand a pro rata distribution of the debtor's estate amongst his creditors pursuant to the course of chancery in sumilar administration, and in the end yielded the point to the exclusive advantage of the prosecuting creditor, upon the consideration of his diligence and having incurred all the risk and expense of the prosecution. (1 Paige 639.)
This privilege of priority of payment not only must yield to rules of equal distribution, established by positive law as a bankrupt, or insolvent law, (Lucas vs. Attwood, 2 Stewart 293) but is adopted by the courts in the absence of a bankrupt law, essentially with a view to approximate in degree to the equity of a code which devotes all the means of a debtor without regard to the character or situation of his interest to the payment of his debts, (Hadden vs. Spader. 20 John R. 564)
I think, therefore, the judgment creditor in this case, has no rightful authority over the funds of the bankrupt, by means of this creditor's bill, which can withdraw them from distribution in subordination to the bankrupt act, and appropriate them exclusively
to his own debts,
A peremptory order upon the receiver in chancery, controlling him in the execution of his trust, would be in effect, a mandate on the court:-and I am not satisfied that the bankrupt act gives any such authority to this court, nor can I suppose, if the power is unquestionable, any occasion will ever arise in which its employment can become necessary. Should the court of chancery decline ordering the delivery of this property to the assignee, his remedy at law against the receiver would be in no respect barred or hindered thereby. 14TH. PROPERTY WHICH MAY
ALLOWED TO THE BANKRUPT.
RETAINED BY OR
Late decisions in bankruptcy. Judge Story of Boston, has decided-1st. That a debtor is entitled to all his earnings from the day that he files a petition to take 24. That the benefit of the general bankrupt lav. between the date of the petition and the appointmeat of the assignee, the debtor is bound to take care of the property for the benefit of the creditor, and is entitled to an allowance of the same as trustee. 3. That a wife can be deprived of jewelry given her by her husband, but not of jewelry owned by her before marriage, or given her after marriage by persons other than her husband. Presents to any persons made by an insolvent, can be claimed by the assignees.
The term lien does not seem to be used in the N. York or English cases, in a strict and tech ical sense, ¦ Nothing more is presented by the petition and mo-. as denoting a fixed security in the thing but rather tion for the decision of this court, than the general to express a priority of right acquired by the prove-question, whether filing a creditor's bill in the state cuting creditor over others, standing in other re- court of chancery constitutes a lien, or other securispects on legal and equitable equality with him. ty, on the effects of the bankrupt, valid by the laws of the state, and which hy virtue of the last proviso to the 24 section of the bankrupt act prevents such effects passing to the assignee of the bankrupt.
They regard the lis pendens as over-riding all subsequent transactions, and securing to the prose cuting creditor the enforcement of the remedies he might claim, had the estate or means of the debtor continued to the decree in the same situation they were when the bill was filed. (20 John R. 564, Hayden vs. Spader; 4 John 61, 687; Mc Dermott vs. Stacy, 2 Stewart, (Ala.) 378; Lucas vs. Alwood, 1 Peters 209; Mechanics' Bank vs. Seton, 1 Story, Eq. 293, 395); and accordingly speak of such operation of the suit as a lien.
I am of opinion that it does not. I apply this decision in its broader sense, and hold, that such creditor's bill creates no lien, or security, on real or personal property, and do not, therefore, discuss the point, whether any other than tangible property can be brought within the saving of that proviso.
U. States district court-Before judge Betts.-Tuesday, March 15. The court gave its decision on the motion in the case of Kasson, as to jewelry being part and parcel of wearing apparel. This the court did not deem to be correct. The law permitted a Iman to retain $300 worth of furniture and stores, and the wearing apparel of himself and wife, be it such as it may, but in that was not comprehended a
The delivery of the effects and property over to the receiver, works no change that strengthens the right of the judgment creditor.
The distinction, however, between a right to priwatch or articles of mere ornament which were ority of payment, out of a given fund, or particular If no bankruptcy existed, the question would yet tice of our equity courts was to permit a wife to personal property and must be given up. The pracproperty, and a specific lien thereon, is plainly re- remain to be settled by the court of chancery on hear retain the ornaments which belonged to her previous ognised by the authorities, and is exemplified in ing, whether this property, or any part of it was the relation of the United States and their suretics applicable to his judgment. That point has not been to marriage, (which would be properly termed pato a public defaulter or a debtor, in particular cases, decided in the state court, and the property accord-raphernalia.). This court does not feel disposed to on revenue bonds, &c., (3 Church, 73, 1 Paine 629; 5 ingly remains with the receiver as the depository of pursue a less liberal course, and feels anthorised even Mason 572; 1 Peters 586, 6 ibid 262; 4 Peters 147, the law until the rights of all parties may be settled. to go further, and permit her to retain presents from 291; 12 Peters 102), and in other instances of chan- | I regard it of no consequence that the steps in the her friends--such as miniatures of herself or childcery jurisdiction; as the right of partnership credi-state court preceded a few days those in the bank-ren-or even from her husband, provided his cirtors, to payment out of effects in cases of insolven-rupt court, and that the creditor perfected an assign cumstances permitted it, subsequent to her marria ro. cy, before the private creditors of any separate part- ment to the receiver two days before the final decree The court alluded in terms of much clog rence to ner; (1 Story 625) and the converse in respect to se-in bankruptcy. the condition of women under various Laws, and parate creditors and separate effects of the partners; It was no longer a race of diligence between com- wife is even allowed to retain the proceeds of her spoke of some, (Louisiana for instance), where the where the right to priority of payment out of the petitor creditors, but the fiat of the act of congress personal exertions, presents, &c. in her own right.] fund is maintained although the cases explicitly de-interposed the paramount and conclusive rule of eclare that such parties have no lien; (6 Vesey, 126; quality, shielding the property of the bankrupt from In the present case, Mr. Kasson possesses a gold transfer or encumbrance after his bankruptcy, and watch, which he must consider personal property, and give up to the assignee. The jewelry of his Chancery in the exercise of its ordinary jurisdic-dedicating it to the common use of his creditors. wife consists of some gold rings, a chain for the hait, tion, will give efficacy to this prior right of payment The decree of bankruptcy passes all rights of proby injoining any transfer of the fund or property perty of the bankrupt to the assignee instanter on its and a breastpin, which belonged to her before marpendente lit. 2 Story Ec. 190, 1) in as sia ple a man-entry; and it has been uniformally held in the bank-riage. These she had a right to retain. The watch ner as is authorized by the state statutes. Compar- rupt courts, that every interest the bankrupt possess. This also, she had a right to keep, provided the hus was given her by her husband after their marriage. ing these familiar incidents of a chancery suit with ed when proceedings in bankruptcy were instituted band was in such circumstances at the time as aitthe proceedings authorized under the state statute, passes to the assignee by force of the decree. thorised him doing so. On this latter point the geand it would seen manifest, that nothing was conneral assignee must be the judge. templated in the latter beyond placing the judgment on a like footing with suitors in that court, pursuing a similar remedy.
11 Vesey 3; 17 Vesey 521.)
This doctrine has been re, catedly declared in this court, and with great strength and fullness in the Massachusetts district, (5 Law Reporter, 24 ibid 56).
↓ The relief sought in this instance is an order on
the receiver to deliver the effects in question to the
were selected in order to present the various pomts to [The petitions of Mr. Kasson and Mr. Zarega If he does not come into court with a lien, by the court, so that a general decision might be obtained. The parties themselves were perfectly willing means of his judgment or execution on property to conform with the full requirements of the law.] sought to be made available thereto by aid of equity, This application, as a mere motion, in my judg[New York Tribune. his suit caures to the creation of the lien no further ment ought to have been addressed to the court of than on any other original bill in the court, where chancery. The receiver is the officer of that court,ive up all they have, to pay their debts. But when Right minded persons will always be willing to superior diligence would be recognized as giving and detains this property in that capacity. This right to priority of payment. court has, on several occasions, declined to interfere we come to the laws of forcible collection, how would it sound to be taken from a wife the little ornaments, And there would seem to be no reason for extend- with, and arrest, the property of a bankrupt pending of whatever kind, which are associated with the ing by construction the operation of the statute in his voluntary application and prevent its seizure on friends and scenes of more prosperous days? We go this respect, so as to confer a priority on this class execution or delivered in chancery to a receiver, on for placing the entire property of a woman under of suitors, distinguishing them from other parties the ground, that, until a deeree of bankruptcy, there her own disposal, and giving her husband no more possessing precisely equal equities. was no exclusive power over the property vested in [Cin. Chron. this court, and also that the state courts would be right in it than she has in his. controlled in their proceedings by the act of congress, | It will be recollected that judge Betts recently and would deny parties ony advantages or remedies, decided in the matter of Kasson, that the jewelry of which might contravens the spirit of that law. Ja bankrupt's wife, if belonging to her before her mar
In the absence of a clear and settled interpretation of the statute by the state tribunals giving the effect demanded in the present case, I am no way inclined to execute it by innovating up a the estau
Wife's paraphernalia. The following case was decided under the bankrupt law, with reference to the legal character of jewelry:
NILES' NATIONAL REGISTER-NOV. 5. 1842-THE BANKRUPT LAW.
manity prompts that it should be held sacred. It
riage, do not vest in the assignee, but may be held by her. On the other hand, the last number of the Law Reporter, (for May) contains the original opinion of" jule Story, in which he goes into the subject af length and rules, among other things, that Pie husband becomes entitled to all the personal property belonging to the wife at the time of her marriage. unless his marital right is excluded by some express or implied trust, and his creditors may take it in execution or satisfaction of their debts; so that, ordinarily, the wife's jewelry must pass to the creditors, in case of the bankruptcy of the husband.
This was a case certified from the district court
trouble and expense in recovering said property, or
A correspondent furnished us last week with a no- Upon the hearing in the district court, the follow-
STORY, J.-The question for the decision of this
In New York two important decisions have recently been made by judge Betts. The first in a ease where the petitioner had entered into an engagement with a house as clerk and general agent, at a salary of $1500 a year, and one third the net profits of the establishment, should any accrue. This the creditors claim to be property, and insist that it thould have been placed in the schedule. The court held otherwise, deciding that the prospective pro. ceeds of a man's labor cannot be claimed by a credi tor in bankruptcy. The other is where a petitioner owns half a family tomb in the marble cemetery, which the assignee has requested to have placed in his hands as the property of the bankrupt. The court held that a family burial place belongs rather to the dead than the living, and every feeling of hu
U. States Circuit Court-Boston.-Cows and Silver Spoons protected in Bankruptcy. In this court, on Saturday, judge Story made an interesting decision in relation to the amount of property which the assignee of a bankrupt may allow to him, under the law. The bankrupt in this case was Ziba Williams, and his assignee, being under the impression that he could allow him only actual necessaries, refused to permit him to retain the following (among other) articles, viz: one clock, a set of silver tea spoons, one silver table spoon, one silver watch, and one cow-the total value of which was $33.
P. W. Chandler. Esq., for the bankrupt, took exceptions to this allowance, and when the case came before judge Sprague he adjourned it into the circuit court, where judge Story gave a decision on Saturday, in which he held that the assignee was right as to the clock and the silver watch, and that they ought not to be allowed to the bankrupt. But regard to the silver spoons and the cow, the assignee was not bound to take them from the bankrupt, nor was he bound to allow them to him. He might He was to exercise a reasonable discretion, and he or might not, under the circumstances of the case. might permit the bankrupt to retain them, if he thought they were necessaries.
We understand that the assignee (W. G. Stearns, Esq.) under this decision, immediately determined to allow the bankrupt to retain the cow and the spoons.
United States Circuit Court..--On Saturday, judge Story gave decisions on several points in bankrupt cases, which had been referred to him from the disOn the petition of Jonathan H. Cheney, setting forth that he was imprisoned at the suit of a creditor but that since his arrest he has been declared a bankrupt, and asking whether he is lawfully held in jail, judge Story decided that this court has no jurisdiction in this case, as the proceedings and arrest under the state laws were prior to the declaration of bankruptcy under the United States law.
The petition of B. R. Grant set forth that he claimed the allowance of a certain sum of money which had been expended for the necessary support of his family; that his wife has a watch which he gave her some years ago, and other articles of jew-in elry given to her by other friends, but which the assignee claims as the property of his creditors; that his two sons each of them have a gold watch purchased as a keepsake with money presented to them by a friend that he contributed twenty-eight dollars each to the purchase of these watches, over and above the money presented by their friend, but that the assignee also claims these watches.
Judge Story decided that in the first point the sum claimed might be taken into consideration by the assignee in setting apart the $300 allowed a bankrupt by law to be retained out of his estate, or that it might, with the approval of the district judge, perhaps, be allowed as part of the necessary expenses incurred in protecting and taking care of the property before it was finally transferred to the assignee. With respect to the watch of his wife, as it was bought with his money, it formed a part of the personal estate, like any personal property which she might have had previous to her marriage, and, of course, if the creditors claimed it, they were entitled to it and must have it. But that gifts presented to her by her personal friends for her own ornament and use, were not his to dispose of, could not be attached by his creditors, and she could hold them. With respect to the watches of his sons, they were the property of the sons, but as the money with which they were bought came in part from him, his creditors had a pro rata interest in them, and if the creditors insisted, on proper notice being given, the interests of those creditors might be sold to the sons or to a third person. Neither of these points involved any great amount of property, and there was no doubt they could be satisfactorily settled without this reference
to the court, but they were so referred in order to establish principles by which assignees and bankrupts might be governed.
In another case, in which the right to dispose of a
farm without waiting for the further settlement of a bankrupt's estate was asked, judge Story decided that in bankrupt cases the court was a court of equity as well as a court of law, and had power as such to order, with the consent of parties interested, the sale of property for the benefit of the whole, or in the case of perishable property without such consent. In this case, as the sale before the season of planting should be over might make a great difference to the bankrupt and to all the creditors, he decided that order of notice might be published a sufficient time for all persons to come forward and object, previous to a certain day, and if no opposition should be made, or no good and sufficient reason be offered against it, the district judge might order a sale.-Boston Cou
15th. INFLUENCE OF THE BANKRUPT LAW ON THE
STATE INSOLVENT LAWS.
"Taking the benefit." There is an important difference in the operation of our state insolvent law, and that of the national bankrupt law, which has just gone into operation.
Those who avail themselves of the benefits of the state law, are free from arrest for the debts they may be owing at the time they declare their insolvency; but the property they may thereafter acquire by heirship, will be held liable for their old debts. Of course they are kept "under the harrow" till their old debts are paid.
touching the influence of the U. States bankrupt | law upon the insolvent law of this state, was made by the judges of the court of common pleas yester day. The sheriff being in doubt as to the operation of the general bankrupt law, recently gone into operation, upon the old insolvent law of the state, and how far he was justified in continuing to discharge prisoners from custody upon their filing their usual insolvent bond in the office of the prothonotary of the court of common pleas, and wishing to clear himself of all personal responsibily, in consultation with the U. States district attorney, took the necessary steps to have the question decided by the proper tribunal. That it might come before them in a tangible form, he refused to discharge an individual from custody who had, in conformance with the act of assembly for the relief of insolvent debtors, filed an insolvent bond in the office of the prothonotary of the court of common pleas, and sent him to prison. The prisoner was brought before the honorable judges of the court of common pleas yesterday upon a habeas corpus, before whom, sitting in bank, Messrs. Editors. Please lend me the use of your the question was fully argued-the opposing counsel columns for one moment. It is a fact that, in the assuming that the United States law does, upon con-case of Ogden vs. Saunders, before the supreme court, stitutional principles, supercede the law of a state. (12 Wheaton 213,) Judge Story assented to the judg The court decided that the prisoner was entitled to ment which was entered for the defendant in error, his discharge, he having previously given the bond the opinion of that court being that the powers girequired by the insolvent law of this state, to appear ven to the United States to pass bankrupt laws is not at the next insolvent court, to comply with the re- exclusive." quirements of said law. was, moreover, the opi- Now a communication appeared in the American, nion of the court that congress, in framing the gene- apparently the production of some very indiscreet ral bankrupt law, never contemplated the annul- person, calling attention to the mere "notice of an ment of the insolvent laws of the states, and that opinion recently pronounced by Judge Story," alleg The case of Ogden vs. Saunders, (12 Wheaton R. 2, such an operation of it in Pennsylvania would be ing that "Story J. was clearly of opinion, that, as soon 3, 264, 273 276, 278, 296, 311, 314,) fully recognised, fraught with the most serious consequences. It as the bankrupt act went into operation, it did ipso and has always been understood to confirm and settle would be extremely oppressive to the poor, and fucto suspend all action upor future cases arising unthe same principle. It seems to me, therefore, that those whose estates are completely exhausted, inas-der the state insolvent laws," and intimating that nothing remains, upon which an argument can be much as the proceedings under it are not only more Judge Taney and Judge Heath are "of the same opifounded, that the insolvent laws of Massachusetts are complicated and expensive, but relief could only be nion," and hazarding the assertion that nothing can not as to persons and cases, within the provision of offered at one place of sitting in the eastern and be more certain than that all the discharges granted the bankrupt act, completely suspended. Each sys-western judicial districts of the state, instead of in by the commissioners of insolvent debtors, under the tem is to act upon the same rights, and upon the same every county, as at present, so that insolvents would state insolvent system, since the 2d day of February, persons-creditors as well as debtors. Both cannot be obliged to travel from the most remote part of 1842-the day on which the bankrupt law took effect go on together without direct and positive collision; the state, to Philadelphia or Pittsburg, for relief, at aare void and worthless. and the moment, that the bankrupt act does or may ruinous and oppressive expense and delay. operate upon the person or the case, that moment it virtually supercedes all state legislation.
Indeed, I consider the whole matter in effect disposed of by the reasoning of the supreme court in the case of Sturgis vs. Crowninshield, (5 Wheaton R. 122.) Mr. Justice Washington and myself were of opinion in that case that the power to pass a bankrupt law was exclusively vested in congress by the constitution of the United States, and that no state could pass a bankrupt law, or an insolvent law, having the effect of a bankrupt law, where it discharged the debtor from the obligation of his prior contracts.* Mr. Justice Todd was absent from indisposition, and there fore did not sit in the cause. The other four members of the court (constituting the majority) concurred in the decision, which was pronounced by Mr. Chief Justice Marshall. But all the court were agreed, that when congress did pass a bankrupt act, it was supreme, and that the state laws must yield to it, and could no longer operate upon persons or cases within the purview of such act. The enactment of such an act suspended the state laws on the same subject, and created a visibility in the states to exercise powers of the like nature. The court went farther; and asserted that the bankrupt act of 1800, ch. xix, had that very operation, except so far as the sixty-first section of the act modified or allowed the exercise of the powers by the states.
I shall, therefore, direct it to be certified to the district court, that in this case, by law an injunction can be issued against the said Ayres, as prayed for in said petition of Eames.
The Charleston Courier in republishing the above decision remarks:-"Should this decision be well founded, all discharges from debts under state laws, since the passage of the bankrupt act, will be nugatory; and it may even be questionable whether the privilege of the prison bounds, which is an incident of most state insolvent laws, may not be seriously affect
ration or apply at the same time to the same persons; and where the state and national legislation upon the same subject, and the same persons, conie in conflict, the national laws must prevail, and suspend the operation o. the state laws. This, as far as I know has been the uniform doctrine maintained in all the courts of the United States.
Pennsylvania-insolvents and bankrupts. The judges of the court of common pleas have decided that the bankrupt law of the United States does not super cede the state laws on insolvency, but that both exist together, and applications be made for the benefit of either, voluntarily, at the choice of the debt
As we understand this decision, it is that a discharge from the insolvent laws of this state will exonerate from personal arrest in Pennsylvania, while a discharge under the bankrupt law, will exonerate throughout the whole union. For example, a man may be pressed in Philadelphia on a debt of a few hundred dollars, which bonding, he may pay in time, or not paying, get rid of, by taking the benefit of the state law; while he may nevertheless feel altogether indisposed to become a bankrupt in a general sense, and avail himself of the immunities of the national law. [Phila. Inq. Highly important decision. U. S. bankrupt law vs. the state insolvent laws. A highly important legal decision, says the Philadelphia Chronicle of Saturday,
Charity for the writer in the American may not Maryland-State insolvent system. We understand consider his remarks both "void and worthless; but that the commissioners of insolvent debtors for this "nothing can be more certain" than that three recity, believing that their offices are superceded by spectable judges in Maryland, Judges Archer, Purviance and Magruder-well informed lawyers-have the bankrupt law, have declined to receive any new applications for the benefit of the insolvent laws of unanimously decided, in the matter of a certain apthis state. The bankrupt law as we understand it, plication for the writ of habeas corpus, that the personabrogates entirely the insolvent laws of this as well al discharge of the commissioners of insolvent debtjudge Marshall, when the state insolvent laws were withstanding the 2d day of February had gone by. as every other state in the union, and the decision of ors entitled a party confined in jail to his liberty, notthe subject of investigation before the supreme court, is to this effect. We have not the decision at hand, Story, or Heath, entertain any opinion like that asI do not believe that those eminent judges, Taney, but our impressions are that the opinion goes to this cribed to them by the writer in the American. The extent. Such being the case, there may be found, in bankrupt law is bad enough, but not altogether as terthe practice under the bankrupt law, some inconve- rible as the writer in question may infer." TRUTH. New York-Bankrupt. Decisions in bankruptcy niences which congress may find it necessary to cor[Baltimore Clipper. cases are constantly occurring in New York, by which rect at its present session. Among these, we have open questions under the law are becoming settled. heard one that the court has no power to discharge in the American of Saturday, in which it was staWe noticed yesterday an article which appeared A debtor under arrest claimed a discharge on giving from arrest a person applying for the benefit of the bond to take the benefit of the insolvent law. The law, until the day of final hearing; and, it is supposed ted, that Chief Justice Taney and Judge Heath consheriff, being in doubt whether the bankrupt did not under this, that an insolvent debtor might be kept incurred in opinion with Judge Story, that the bankWe supercede the state act, refused to take bond. On a duress from the time of his application to the day rupt law annulled the state insolvent laws. writ of habeas corpus the question of the operation when he is declared a bankrupt. A liberal, if not a court of Maryland, was as to the constitutionality learn that the only question decided in the circuit of the former upon the latter was argued before all just construction of the law, may authorise the court, of the bankrupt law, which was determined afthe judges of common pleas, who after due delibera- as was the practice under the insolvent laws, to take tion gave their opinion that with regard to voluntary security for the personal appearance of the insolvent firmatively. In Baltimore county court the question bankrupts the bankrupt law did not take away the on the day fixed for his hearing, and this construc- Maryland were still in force, and, after an able arguwas directly made, whether the insolvent laws of right of discharge under the insolvent law. tion may be adopted by the courts, when the ques-ment by learned council, the court unanimously decided that they were annulled by the bankrupt law. Other difficulties have been suggested, but, under From this decision there has been no appeal; and of a wise administration of the law, these may be found course, until a different decision shall have been made to be only the imaginings of the exuberant fancy of by the superior court, the insolvent laws will continsome of our lawyers, and to have no other founda-ue to operate. It is a matter of great importance to [Baltimore Pat. insolvents to have the question authoritatively deterTo the editor of the Baltimore Patriot. Sir:-Al- mined; because it is possible that, after having been though there has been no decision in the circuit court released from their debts by the state law, they may of the United States for the district of Maryland, have to resort to the bankrupt law; by which they involving the important question whether the insol- would be greatly harrassed and have to incur consivent laws of the state have been abrogated by the derable additional expense. Great anxiety prevails passage of the bankrupt law, yet that enlightened on the subject, and existing doubts should be remov court, of which, it will be recollected, the chief jus-ed by taking a case up for decision. [Clipper. tice of the United States is the presiding judge, has We learn from the Westminister Carrolltonian, just adopted a rule, which is quite as significant of its that the judges of Carroll county court have declined opinion as if the question had been forinally decided to grant discharges to insolvent petitioners. They upon argument. have withheld their assent until the question is defollow-cided by a higher tribunal, whether the national bankrupt law does not supercede the state insolvent laws entirely. The importance of this question, not give sufficient appearance bail, he shall be commit-only to the people of that county, but to those of the ted to prison to remain until discharged by due course cision by the competent authority. whole state, should ensure it a prompt and final deof law; but under neither original, mesne, nor final process, shail any individual be kept imprisoned, who, under the insolvent law of the state, has for such demand, been released from imprisonment.
tion comes before them.
At April term, 1836, that court adopted the
*See Mr. Justice Washington's opened a Ogden vs. Saunders. [12 Wheaton R 263. 204) +Sturgis vs. Crowningshield, (4 Wheaton R 196.) tId. 9. 101, 102.
At the Aprli term, 1842, the following rule was adopted:
"That so much of the rule passed the 21st of April, 1836. as relates to individuals who have been released from imprisonment under the insolvent laws of the state of Maryland, be and the same is hereby restricted to the cases of persons discharged under said laws, prior to the second day of February, 1842, (the day when the bankrupt act went into operation) and so much of said rule as is inconsistent herewith, be and the same is hereby rescinded."
The effect of this decision is this: If a party is arrested, on process from the circuit court, and is unable to give bail, he must be imprisoned, and cannot be discharged from imprisonment, by applying for the benefit of the state insolvent laws, for no discharge under them will be respected by the Marshall Nor can he be discharged by applying for the benefit of the bankrupt law, until he has complied with all its requisitions, which will require a period of at least ninety days.
We understand that Frederick county court, ju 'ge Thomas Buchanan, presiding, decided, that a certifi cate of a party against whom a suit had been brought,