In re Jaycox & Green. Mr. Justice Nelson, lately the venerable and distinguished Justice of the Supreme Court of the United States, assigned to this Circuit, then in the Supreme Court of this State, says: "Whether the doctrine of these cases is well founded, and may be upheld upon established principles, or not, or whether the result was not materially influenced by the peculiar phraseology and powers of the charter of the Utica Insurance Co., in respect to which they arose, it is not necessary at present to examine. I am free to say, in either aspect I should have great difficulty in assenting to them." In Tracy v. Talmage, in the Court of Appeals of this State (14 N. Y., 162, 189), Mr. Justice Samuel L. Selden says: "These cases have never been overruled; and yet, I think I may say, they have generally been regarded with some suspicion as to their soundness. There is undoubtedly great difficulty in reconciling these cases with the settled rules in regard to illegal contracts." * * * Second. Those cases are distinguished from the present; and in a particular which has been referred to as constituting the possible ground upon which the decisions there made could be upheld, or, as I should better say, in the feature which was deemed to furnish the ground on which those cases proceeded, namely, that that company had a general power to lend money, and, therefore, though it received therefor a void security, it could reclaim the loan. Without assenting to the reasoning by which this result was reached, it is sufficient to say, that the premises are wanting in the present case. In Beach v. Fulton Bank (3 Wend., 573, 583), contemporaneously with some of those decisions, Chief Justice Savage states their ground as above indicated, and declares, that, as the Hudson Insurance Company had no such power, those cases do not apply. The charter of the People's Safe Deposit and Savings Institution declares in what that corporation may invest its funds. This is fully discussed and made clear in the opinion of the District Judge. It has no power to loan money on personal security; and the very ground on which the court In re Reiman and Friedlander. placed their decision in the Utica Insurance Company cases, therefore, fails. In accordance with this view, the Supreme Court of this State, in Life & Fire Ins. Co. v. Mechanic Fire Ins. Co. (7 Wend., 31), where the action was assumpsit, and the plaintiff claimed to recover for money lent, held, that, as the plaintiff had no power, by its charter, to loan money except on bond and mortgage, any other contract of loan was void, and could not be the foundation of an action; and, in the case of Gillet v. Phillips, in the Court of Appeals (13 N. Y., 114, 119), the court say, of a contract in violation of our banking acts: "The contract was not only unauthorized, but illegal. No action could be sustained upon it, if executory, in his favor, nor to set it aside, if executed. Nor could it become the foundation of an implied assumpsit in behalf of the offending party." The cases of Brady v. The Mayor (2 Bosw., 173, and 20 N. Y., 312), and Donovan v. The Mayor (33 N. Y., 291), by analogy, affirm the same doctrine. My conclusion is, that the appellants have established no debt against the bankrupts, and a judgment for the assignee must be entered. UNITED STATES CIRCUIT COURT-S. D. NEW YORK. The power of Congress over the subject of bankruptcies is not limited to those laws which were in force in Great Britain and the colonies, at the time of the Revolution. Congress has the power to define what, and how much, of the debtor's property shall be exempt from the claim of his creditors. A resolution of composition may provide for payment in installments, the postponed payments to be secured by indorsed notes. The debtor is not discharged under a composition until the whole amount of the notes given to secure the deferred installments, are paid. Where there is no fraud or concealment, the omission to place an asset in the statement is no ground for refusing to confirm it if the creditors are fully informed concerning it, and its value does not reasonably require an alteration of the terms of the composition. The testimony of the debtor given at the meeting, constitutes a part of his statement. In re MORRIS REIMAN and ALBERT FRIEDLANDER. THIS was a petition of review, seeking to set aside an In re Reiman and Friedlander. order of the District Court, confirming a composition claimed to have been made by the debtors with their creditors, in the manner directed by the Bankruptcy Act. On the 3d of August, 1874, a petition in bankruptcy was filed against the firm of M. Reiman & Co., composed of Morris Reiman and Albert Friedlander. An order to show cause why they should not be adjudged bankrupts was thereupon issued, returnable August 25th, 1874. But, prior to the return day of such order, a petition was filed by the debtors, praying that a meeting of their creditors might be called, to pass upon a proposition of composition, to be submitted in conformity with the provisions of Section 17 of the amendatory Bankruptcy Act of June 22d, 1874. After meetings of creditors duly held at various dates, resolutions of composition were confirmed by the District Court, on the 19th of December, 1874. Of this decree of confirmation A. T. Stewart & Co., creditors of Reiman & Co., sought a review in this court. The terms of the composition were as follows: "The said debtors propose to the creditors to pay thirty cents for every dollar in which the said debtors are indebted to said creditors, respectively, payable in three installments, the first in cash, and the last two to be payable, one in four months and one in eight months from the 1st day of September, 1874, and to be secured by notes of the said debtors, satisfactorily indorsed, dated September 1st, 1874, in full satisfaction and discharge of the several debts due and owing by said debtors to said creditors. The said notes to be indorsed by either Michael L. Doyle, of No. 267 Grand street, in the city of New York, or by Philip Gomprecht, of 944 Third avenue, or, in lieu of the said notes, the amount of the said compromise to be paid in cash, with a rebate of seven per cent. interest; and that such thirty per cent., to be paid or received, as aforesaid, be on each dollar of the indebtedness of the said debtors to said creditors, and be in full satisfaction and discharge of the several debts owing by said debtors to said creditors. The said ten per cent. in cash to be paid, and the said notes to be delivered, within ten days after the said resolution has been recorded, and the In re Reiman and Friedlander. said statement of the assets and debts has been filed." The objections raised by A. T. Stewart & Co. to the composition were 1st. That Section 17 of the amendments to the Bankruptcy Act, approved June 22d, 1874, relating to compositions, is unconstitutional. 2d. That the composition accepted is not in conformity with the section regulating compositions, in that it provides for a payment to creditors partly in notes. A. T. Stewart & Co. further sought to review the proceedings, for the reason that there had been omitted from the statement of assets filed as a basis for the proposed composition, certain real estate claimed by the appellants to belong to Morris Reiman, in the city of New Orleans, Louisiana, valued at about sixty-five thousand dollars. This real estate was purchased in 1866, in the name of the wife of Morris Reiman, one of the alleged bankrupts, with moneys designated, under the laws of Louisiana, as "community funds." In 1868, Morris Reiman attempted to convey and settle this property upon his wife, in consideration of his love and affection for her. There was also some property standing in the name of Morris Reiman, at Yazoo City, Mississippi, which he omitted to enumerate in his schedules. It was claimed that these omissions were fatal to the confirmation of the resolutions of compromise. Julien T. Davies, for the appellants. Samuel Boardman, for the debtors. HUNT, J.-It is contended by the appellants, that Section 17 of the Bankrupt Act of June 22d, 1874 (18 U. S. Stat. at Large, 182), is unconstitutional. The contention is, that the Constitution of the United States permits only the passage of a Bankrupt Act which shall require the surrender of the entire assets of a bankrupt, as a condition of his discharge from his debts. The section under consideration, it is contended, authorizes his discharge upon the surrender of a portion of his assets only. Power is given to Congress to establish "uniform laws on the subject of bankruptcies throughout the United States." In re Reiman and Friedlander. The subject of bankruptcies is here committed in full to Congress, with the single condition, that the laws in relation thereto shall be uniform throughout the United States. Whatever relates to the failure of traders to pay their debts, to the commission of certain acts, or the existence of certain defaults, which shall be evidence of their inability to pay their debts, to the surrender of their property, and to their discharge from their debts, may well be said to be within the subject of bankruptcies. The argument, that the subject of bankruptcies is to be interpreted and limited by the British and Colonial statutes, as they existed at the time of the separation of this country from Great Britain, is quite too narrow. No country can afford to be thus cut off from all possible improvement in its legislation. Whatever relates to the subject of bankruptcy is within the jurisdiction of Congress; and, to say that the law as existing at the time of the Revolution, or the adoption of the Constitution, shall furnish the rule and limitation of legislation, would take a large part of the subject out of their jurisdiction. While it is true that all proper bankrupt laws and insolvent laws are based upon the theory of a surrender of the bankrupt's property, none of them require such surrender to be entire and absolute. The rigid principle of right, in these and the similar case of property subject to execution, is modified by a principle of humanity. All civilized nations require that a debtor shall apply his property to the payment of his debts, but few, if any, of them strip him entirely. If he is married, or has a family dependent upon him for support, certain kinds or amounts of his property are exempt from such application. He is allowed by law to retain them for his own benefit and that of his family. Unless carried to an extent which indicates a fraudulent collusion between the legislator and the debtor, this exemption meets with the approval of all good men. What shall be the nature and the extent of such exemption must necessarily be within the discretion of the law-making power. If moderate and reasonable in its character and degree, it does not conflict with the principle, that the debtor's property |