Sanger v. Upton, Assignee.

to have it declared a bankrupt was filed, passed to the assignee. (Rev. Stat. U. S., Section 5044; Bump on Bankruptcy, 473, 478.) He was clothed with the power and duty to sue whenever suit was necessary. The statute in terms gave him the same right in any litigation he might institute which the bankrupt would have had "if the decree in bankruptcy had not been rendered and no assignment had been made." (Idem, Section 5047; Bump on Bank., 528.) The liability of the plaintiff in error, and the right and title of the company were legal in their character. If the company had sued it might have sued at law. The rights of the company passed to the assignee, and he also could enforce them by a legal remedy. The assignee was subrogated to all the rights, legal and equitable, of the bankrupt corporation. This suit was, therefore, well brought in the form adopted. (Hall v. U. S. Ins. Co., 5 Gill, 484.)

The assignee might have filed a bill in equity against all the delinquent shareholders jointly. (Ogilvie et al. v. Knox Ins. Co. et al., 22 How., 380.) But if the company is utterly insolvent, in any event, a separate action at law in each case is much to be preferred. It is cheaper, more speedy, and more effectual. If the contingency should occur that the assets realized exceed the liabilities to be met, the District and Circuit Courts will see that no wrong is done to those adversely concerned. It is not to be doubted that this power will be exercised upon all proper occasions.

Upon the trial a large mass of testimony was given by the plaintiff, consisting of a prospectus and the original charter of the company, certified copies of the papers in the office of the Secretary of the State, touching the amendment to the charter, the deed of the Register to the assignee, the petition of the assignee, and order of the District Court relative to further stock payments, and proof of the publication of the order and of the sending of a copy of the order, with a demand of payment, to the defendant by mail. The admission of all this evidence was excepted to. Further testimony was given tending to prove that the defendant bought and re

Sanger v. Upton, Assignee.

ceived from the company two stock certificates of five thousand dollars each, dated March 10, 1870, in the usual form, and in all respects complete, except that there was a blank for the name of the owner, which was not filled up.

And further: "That said defendant paid for said stock twenty per cent. of the par value of the same, paying part of said twenty per cent. in northwestern land scrip, and giving her notes for the balance of said twenty per cent., which notes were duly paid to said company, and that said stock stood in her name upon the books of said company, and that there was evidence introduced tending to show that she received a dividend from said company thereon.

"And that shortly after the fire of October 9, 1871, General Stewart, the president of the company, and brother of defendant, paid for her a call of twenty per cent. made upon said certificates of stock by the company, but that said defendant never authorized such payment, but repudiated the same, and that no more than forty per cent. had ever been paid on said stock.

"No evidence was introduced tending to show that said defendant ever subscribed for said certificates of stock or for any stock of said company, or that her name appeared on any list of stock-holders of said stock circulated by said company.

"No other express contract was shown to have been made between said company and defendant."

The court charged the jury, in effect, that if they believed the testimony, the defendant was liable. The charge was excepted to by the defendant. It was clearly correct. The only question was whether she owned the stock. No one else claimed it. The certificates were issued and delivered to her. They belonged to her. They were the muniment of her title. She could have filled the blanks with her name whenever she thought proper. She had paid to the company all that was then payable, and subsequently received a dividend. Her name was placed upon the stock list. These

Sanger v. Upton, Assignee.

facts were conclusive against her. She was estopped from denying her ownership. She could not assert her title if there were a profit, and deny it if there were a loss. The certificates showed the par of the stock and the amount to be paid. Upon receiving them the law implied an agreement on her part to respond to the balance whenever called upon in any lawful way to do so. No special express agreement, written or oral, was necessary. The former was as obligatory as the latter could have been. It would be a mockery of justice to permit such an objection to prevail. (Ellis v. Schomoeck and Thomas, 5 Bing., 521; Doubleday v. Musket et al., 7 Id., 110; Harvey et al. v. Kay, 9 Barn. & Cress., 356; Upton, Assignee, v. Tribilcock, 13 N. B. R., 171.)

Where there are defects in the organization of a corporation which might be fatal upon a writ of quo warranto, a stockholder who has participated in its acts as a corporation de facto is estopped to deny its rightful existence. (Eaton et al. v. Aspinwall, 19 N. Y., 119; Abbot v. Aspinwall, 26 Barb., 202.)

Where a party executes a deed poll reserving rent, and the grantee enters into possession, he is under the same liability to pay such rent as if the deed were an indenture inter partes, and he had executed it. The law implies a promise to pay which may be enforced by an action of indebitatus assumpsit. (Goodwin et al. v. Gilbert et al., 9 Mass., 510.) It has been held frequently in cases of this class, where the instrument was under seal and executed by only one of the parties, that the covenant would lie against the other. (Finley v. Simpson, 22 N. J., 311.)

We find no error in the record, and the judgment is affirmed.

United States v. Rob Roy and Cargo.

UNITED STATES CIRCUIT COURT-LOUISIANA.

A bond filed by a claimant to obtain a delivery of property to him, is not a debt created by fraud, although he subsequently endeavored to sustain his case by false testimony.

A bond to return property if the decision in a case requires it, is not a provable debt if the decision is not rendered until after the final dividend.

If there is no evidence when the final dividend was made, no claims can be deemed provable except those which are liquidated and fixed at the time of the adjudication of bankruptcy.

A discharge does not release a bankrupt from debts due to the United States.

UNITED STATES v. ROB ROY AND CARGO.

In this case a decree had been rendered in favor of the government upon the libel, and the court was called on to pronounce judgment against the claimant and his sureties upon the bond executed by them for the re-delivery of the property seized, to the United States. Upon this branch of the case several questions were raised, which were disposed of in the following opinion.

Messrs. A. B. Long, U. S. Attorney, and J. S. Whitaker, for the United States.

Mr. J. A. Campbell, for the respondents.

BRADLEY, J.-In this case a decree has been rendered. on the merits in favor of the United States, and judgment has been entered against the sureties for the several sums in which, by way of penalty, they were bound for the safe return by the claimant of the cotton which was delivered to him. The true amount due, and the true amount to be paid by each surety, will have to be ascertained by testimony as to the value of the cotton at the time it was bonded and at any time since. Having been taken out of the possession of the government, the latter is entitled to such amount ast could, at any time since the delivery, have been obtained for the same.

A question still remaining to be decided is, whether the

United States v. Rob Roy and Cargo.

claimant, A. S. Mansfield, is or is not discharged from liability on the bond, by reason of his having received a discharge in bankruptcy. He has pleaded such discharge, dated June 30, 1869, purporting to be a discharge from all debts due by him which existed June 1, 1868, on which day the petition for his adjudication as a bankrupt was filed. The solution of this question depends upon that of one of two others.

First. Is the claim itself such an one as would be affected by a discharge in bankruptcy?

Second. If it is, will a discharge in bankruptcy bind the United States?

I. Under the first head, it is claimed on the part of the government that this is a debt created by fraud, and therefore not entitled to the benefit of a discharge under the Bankrupt Act. The government seized the steamer Rob Roy and her cargo as liable to forfeiture for acts done during the war. These acts were in violation of the rules of war, as adopted by the United States. The title of the government rested on such unlawful acts. The claimant, when the property was seized, came into court and undertook to defend the suit, and on giving a bond, which was then satisfactory, the property was delivered to him. Now, the appearance of the claimant in court, and his bonding the property, are the transactions on which the present claim is based. They cannot be regarded as fraudulent. Every person is entitled to come into the courts and prosecute and defend his suits in the ordinary way. The government proved the unlawful acts the claimant failed to make good his defense. It is said that, in making his defense, the claimant used the evidence of false witnesses, and swore falsely himself. That, if true, was more than a fraud; it was a crime. But it is not a fraud by which this debt or obligation was created, and does not bring the case within that class of exceptions.

In the next place, it is insisted that the claim was not. provable in the proceedings in bankruptcy, and therefore was not subject to discharge.