Page images
PDF
EPUB

for the jury is to express their opinion, based upon the evidence. This they could do as well nay, better, in the absence of the supernumeraries.

But when ignorance has ceased to be the crucial test of qualification for jury service, and the concurrence of twelve minds is no longer deemed essential to an impartial and intelligent verdict, the principal defect in the system still remains. Whether there be six, eight, nine, or twelve jurymen sworn to try the case, who instead of being selected on account of their stolid indifference, or blind ignorance of what is going on about them, are chosen for their intelligence and public spirit, so long as the facts are submitted to them, as they are under the prevailing system, the verdict must remain, in a great measure, the result of guess-work, and not of mature deliberation and honest conviction.

in civil or criminal cases. The jury should not be called upon to declare, whether the accused is "guilty "or not guilty," whether the verdict should be for plaintiff or defendant. Each material fact in issue upon which there is the least conflict of evidence, should be so submitted that the jury would be compelled to find upon that fact separately, without necessarily considering or even knowing its influence upon the verdict. To these special findings, let the court, who is fitted for such a duty by education and experience, apply the law governing the case, and pronounce the verdict which follows as a legal sequence. From this application of the law, either party may appeal or have his writ of error, as from any other question decided by the court.

With the general adoption of the framed issues and special verdicts, instead of the present practice, the principal grounds of complaint against jury trials would be removed. The jury would act less under the influence of prejudice than now, because they would not be required to pronounce in favor of one party or the other. They would be able to act more intelligently, because they would be compelled to decide each question of fact in its order, without a thought as to the law governing the case. The special findings of the jury would

It is surprising that lawyers should grow impatient at the mistakes made by juries, when the difficulties under which they labor are so potent. They have not merely questions of fact to decide, as we are taught, but they are required to give a correct construction to declarations of law, in the form of written or oral instructions from the court, which are generally drawn up by the counsel on either side, and are often sufficiently verbose and tautological to puzzle the oldest law-show precisely how each fact in controversy was decided, yer." Questions of fact are all that go to the jury.!" Such is and cases rendered by the appellate court would less frequently the theory of jury trials, but what is the plain, unvarnished require a new trial before the jury. truth?

To master sufficient knowledge of legal science to comprehend the questions of law, upon which the jury are instructed, the judge has devoted the best years of his life to patient and unremitting study and labor. The jurymen have not studied law at all; yet they are expected "in one short lesson," while their minds are confused by conflicting statements of fact, to acquire a tolerable knowledge of this abstruse science. It is all very well to say that the court decides the questions of law, about which learned counsel disagree. It is probably true that the law is decided to the satisfaction of the court, but whether to the enlightenment of gentlemen of the jury, is quite another matter. The application of the law to the facts, which under the present system is a duty that devolves facts, which under the present system is a duty that devolves upon the jury, is scarcely less difficult than deciding the questions of law. Cases are constantly carried to the appellate courts, because the verdict is contrary to the instructions, and upon this the ablest jurists disagree. This duty is too complicated for those who have not enjoyed the benefits of legal training.

Take, for example, a few of the questions that are incident to an ordinary action on commercial paper-a branch of the law that is probably as well understood by the laity as another: The execution of the paper, its consideration, negotiability, dishonor, rate of interest, endorsement, guaranty, the statute of limitations, effect of partial payment, extension of time, fraud, etc., may all raise questions of law of the greatest importance. Can an experienced lawyer believe that the requisite knowledge of these questions can be imparted to the average jury, within the time usually allotted, to enable them to adjust the law to the evidence, and agree upon a just verdict? Experience says not.

The truth is, that a system should be devised which would not impose this difficult task upon the jury. They should have nothing to do with questions of law, or mixed questions, either

W. P. W.

[While publishing the views of our contributor, we do not necessarily agree with them. We think it doubtful whether going back to special verdicts will cure the difficulties complained of.—ED. C. L. J.]

Curiosities of the Law Reporters.

When Lord Eldon introduced his bill for restraining the liberty of the press, a member moved as an additional clause that all anonymous works should have the name of the author printed on the title page.

Christian quotes 1 Ld. Raym. 147, to the effect "that the court of Common Pleas, so late as the 5 W. & M., held that a

man might have a property in a negro boy, and might have an action of trover for him, because negroes are heathens.” 1 Bl. Com. 425, note.

In a case in the time of Elizabeth, the plaintiff for putting in a long replication, was fined ten pounds and imprisoned, and a hole to be made through the replication, and to go from bar to bar with it hung round his neck. Milward v. Welden, Tothill, 101.

Of the gratuities which Lord Bacon was charged with receiving, some were not gifts at all, but sums of money borrowed, and recoverable as debts. Three of these cases gave rise after Bacon's death to a curious question. Being claimed by the lender as debts due to them from the estate, the executors pleaded that they had been decided by the House of Lords to be bribes. Bacon's Works, vol. xiv., p. 264, and note, ed. Spedding.

In May, 1784, a bill to limit the privilege of franking was sent from the Parliament of Ireland for the royal approbation. It contained a clause that any member who, from illness or other cause, should be unable to write might authorize another to frank for him by a writing under his hand.

In a bill for pulling down the old Newgate, in Dublin, and

rebuilding it on the same spot, it was enacted that the prison- act of absolution set forth that it was granted by reason of ers should remain in the old jail till the new one was completed. | penitence, and the fact seeming to have been done through innocence of the law. Middleton v. Croft, Cunningham, p. 103, 3rd ed. Mr. Spedding in his edition of Lord Bacon's works, vol. 1x. pp. 53, 56, gives a charming account of Lady Hatton.

"If one be in execution, and if he has no goods, he s all live of the charity of others, and if others will give him nothing, let him die in the name of God." Mountague, Chief Justice, in Dive v. Maningham, 1 Plowd. 68, quoted in M'Lain v. Hayne, 3 Brevard, 296.

In a recent case, the Supreme Court of the United States animadvert upon the practice of introducing children as witnesses in an angry family quarrel, Mr. Justice Wayne quaintly saying that "it can not be done without its being considered as a forlorn effort of parental obliquity." Toby v. Leonards, 2 Wallace, 425, 438.

In the admirable judgment of Lord Denman in the case of O'Connell v. The Queen, 11 Clark & Finnelly, at p. 351, is this well-known passage: "If it is possible that such a practice as that which has taken place in the present instance should be allowed to pass without a remedy, trial by jury itself, instead of being a security to persons who are accused, will be a delusion, a mockery, and a snare." Mr. Justice Denman, one of the present judges of the Court of Queen's Bench, relates a curious circumstance. Walking down with his father from the house after the delivery of the judgment, and praising among other things, the celebrated words, "a mockery, a delusion, and a snare," "Ah," said Lord Denman, "I am sorry I used those words; they were not judicial.” Memoir of Lord Denman, vol. 11. p. 183, note.

"The common law system of special pleadings," said the late Mr. Justice Grier, "matured by the wisdom of ages, founded on principles of truth and sound reason, has been ruthlessly abolished in many of our states, who have rashly substituted in its place the suggestions of sciolists, who invent new codes and systems of pleadings to order. But this attempt to abolish all species and establish a single genus, is found to be beyond the power of the legislative omnipotence. Lord Mansfield, while confessing a wish for popularity, The result of these experiments, so far as they have come to added in words which can not be too often quoted: "But our knowledge, has been to destroy the certainty and sim- it is that popularity which follows, not that which is plicity of all pleadings, and introduce on the record an end-run after; it is that popularity which, sooner or later, less wrangle in writing, perplexing to the court, delaying and never fails to do justice to the pursuits of noble ends impeding the administration of justice." McFaul v. Ram- by noble means." The King v. Wilkes, 4 Burr. 2562. Mr. sey, 20 Howard, 523. And in a later case the same learned Justice Coleridge: "We have been warned of the danger of judge observed: It is no wrong or hardship to suitors who a pursuit after popularity-advice, no doubt, tendered in a come to the courts for a remedy, to be required to do it in respectful and friendly spirit-advice most useful where the mode established by the law. State legislatures may sub- needed; I trust that nothing we have said or done can fairly stitute, by codes, the whims of sciolists and inventors for the lay us open to the imputation of needing it. For myself, I am experience and wisdom of ages; but the success of these ex- afraid to quote a passage from the eloquent appeal of a great periments is not such as to allure the court to follow their predecessor of my Lord, lest any one should suppose me example. If any one should be curious on this subject, the weak enough to be thinking of a comparison with Lord Manscases of Randon v. Toby, 11 Howard, 517; of Bennett v. field; but I feel the distinction between the popular favor Butterworth, 11 Howard, 669; of McFaul v. Ramsey, 20 that follows an honest course and that which is followed Howard, 523, and Green v. Custard, 23 Howard, 484, may after." Judgment in Stockdale v. Hansard, 2 Per. & Dav. be consulted." Farni v. Tesson, 1 Black, 315. 218; 9 Ad. & El. 243.

As an illustration of the absurdities produced by the "codes," the case of Bennett v. Butterworth, above referred to by Mr. Justice Grier, is worthy of attention. In that case the court were unable to discover from the pleadings the nature of the action or of the remedy sought. It might with equal probability be called an action of debt or detinue, or replevin, or trover, trespass, or a bill in chancery. The jury and the court seem to have labored under the same perplexity. The jury gave a verdict for twelve hundred dollars and the the court rendered judgment for four negroes!

In a note to the great case of literary property, Miller v. Taylor, 4 Burr. 2418, the accomplished reporter says: a former account of this case I inserted a marginal note which was not only unnecessary and improper, but grossly erronéous and false in fact. I have never been able to recollect or discover what led me into such an egregious blunder. The only method that occurs to me of making compensation for it, is to endeavor to fix with some degree of accuracy and precision, by this present note," etc.

The master of the rolls, in a recent case, referring to the insidious manoeuverings of fraud, says: "Nobody has ever been able to define what fraud is, because it is so multifarious, so accommodative, that it adapts itself to various circumstances." Franks v. Weaver, 8 Law Times, 511.

A man married his grandfather's brother's wife, by the mother's side, and held lawful. Harrison v. Burwell, Vaugh. 206, 207.

Mr. Justice Littledale thus tersely commented on a passage in Lord Coke's Fourth Institute: "If the foundation fails, the superstructure can not stand, however celebrated the architect may be." Stockdale v. Hansard, 9 Ad. & El. 198. In the year 1598 Sir Edward Coke, then attorney-general, married the Lady Hatton, according to the book of Common Prayer, but without banns or license, and in a private house. Several great men were then present, as Lord Burleigh, Lord In a very recent case in Georgia, the reporter commences Chancellor Egerton, etc. They all by their proctor, submitted with the following line: "Montgomery, Judge, was provito the censure of the archbishop, who granted them an abso-dentially prevented from presiding in this case." Duncan v. lution from the excommunication they had incurred. The Stokes, 47 Georgia, 593 (1873).

F. F. HEARD.

Bankrupt Act - Exemptions out of Partnership sale on execution or other final process of any court, issued for

Assets.

IN RE HANDLIN & VENNY.

In the Circuit Court of the United States, Eastern District of
Arkansas, April Term, 1875.

Before Hon. JOHN F. DILLON, Circuit Judge.

the collection of any debt contracted after the adoption of the constitution." Article 12, section 1. This provision is self-executing. In re Hezekiah, 2 Dillon, 551.

The bankrupts were copartners, and were adjudged bankrupts as such. One of them had individual assets to the amount of $532.85, and the other to the amount of $150. The firm assets amounted to several thousand dollars, but not enough to pay all the firm debts. Each of the bankrupts claims out of the firm Under the bankrupt act (sections 14 and 36), and the constitution of the state of Ar- assets, a sum sufficient, with the individual property set apart to kansas of 1868 (art. 12, sec. 1), bankrupts who are co-partners are not entitled to separ-him, to give him an exemption of personal effects to the value of ate or individual exemptions out of the partnership effects, $2,000. This claim was sustained pro forma, by the district court, and the assignee contests its rightfulness.

Petition for review under section 2 of the bankrupt act.

Upon the best consideration I have been able to give to the sub

This case came before the court on a question as to the right of persons composing a bankrupt firm to claim individual exemp-ject, my conclusion is, that the claim of the bankrupts in this betions out of partnership effects.

The individual schedule of each of the partners discloses personal property of Handlin to the amount of $532 85, and of Venny to the amount of $150.

44

The partnership schedule discloses personal property sufficient to make up the sum of $2,000 claimed by each of the partners. This latter sum is the amount allowed to any resident" of the state of Arkansas as exempt from execution or other final process, by the exemption laws of the state, as they existed in the year 1871. Sec. 1, art 12 of the constitution of 1868.

Each of the partners claims as follows: Handlin $1,467 15, which, added to his $532 85, amounts to $2,000. Venny claims $1,850, which, added to his $150, amounts to $2,000.

Hubbard Stone, the assignee of said bankrupt estate, refused to allow the $1,467 15 and the $1,850 claimed, and on the 20th of February, 1875, set apart as exempt, and issued certificates as follows: To Handlin specified articles of personalty to the value of $532 85. To Venny the same kind of property amounting to $150, being the personal property shown by the schedules of each to be their individual property respectively.

To this action of the assignee the bankrupts excepted, and the matter was brought before the district court upon the statement of

facts herein set forth.

Whereupon, the action of the assignee, as aforesaid, was by the court disapproved and set aside, and the assignee was pro forma ordered to allow to each of the bankrupts, Handlin and Venny, the balance claimed by each of them, as above stated, out of the partnership effects. The order of the court was as follows: "The assignee is directed to allow to each of the bankrupts, out of the partnership effects, a sum which added to their respective individual effects will give to each an exemption of personal effects to the value of $2,000." The assignee excepted, and now brings the matter before the circuit court on a petition for review.

It was admitted that the bankrupts comprised all the members of the firm; that they were adjudged bankrupts on their own petition prior to the taking effect of the constitution of the State of 1874, and while section 1, article 12, of the constitution of 1868 was in force, and that neither of them had a homestead, or claimed a homestead exemption.

half can not be sustained. This opinion rests upon the language of section 14 and 36 of the bankrupt act, and of the constitutional provision above quoted, upon the general principles of the bankrupt law, and the law of partnership, and upon the weight of authority upon the subject.

Whatever property is exempted by section 14 of the bankrupt act, is excepted from the operation of the act, and the title to it does not vest in the assignee. This is not denied, and has frequently been decided.

Section 36 relates to the bankruptcy of partnerships, and contains the provision that when persons who are partners in trade are adjudged bankrupt, “ a warrant shall issue, upon which all the joint stock and property of the copartnership, and also all the separate estate of each of the partners shall be taken, excepting such parts thereof as are hereinbefore excepted." That is all of the firm property is to be seized on the warrant, and all of the individual property of the partners except such of the individual property as is exempted to the partners severally. And the further provision is that after deducting expenses and disbursements, "the net proceeds of the joint stock shall be appropriated to pay the creditors of the copartnership, and the net proceeds of the separate estate of each partner shall be appropriated to pay his separate creditors," etc.

Taken all together, this language does not contain anything to favor, but much to contravene, the notion that individual exemptions should be allowed out of the partnership estate. And the same observation applies to the language of the constitutional provision. This contemplates a selection by the debtor from his own property, and not from that in which others are interested as partners. But, conceding that the language of the bankrupt act and of the constitution of the state is not so clear to this end as to exclude doubt, the general principles of the law are against the existence of the exemption claimed. Where, as in this case, the partnership and all its members are declared bankrupt, the firm is treated as being dead, except to close up its affairs. There is no exemption to the firm as such; nor is it contended that there can be.

But each of the partners claims an individual exemption to the amount of $2,000 out of the firm property, and at the expense of

Dodge & Johnson, for the assignee. N. & 7. Erb, for the the firm creditors; and if the claim is valid it would equally be so bankrupts.

[merged small][ocr errors][merged small]

if there were six partners or sixteen instead of two. It is a claim not depending upon the amount of capital which the partner making the claim contributed to the firm, or upon the state of the accounts between him and his copartners. He may never have put a dollar of capital into the firm, or he may have drawn out all his capital and owe the firm, yet it is insisted that not only as against his copartners, but as against the creditors of the firm, he may, in default of not possessing individual estate, lay his hand upon $2,000 of the joint estate, and appropriate it as exempt. This I am sure, he could not do before bankruptcy without his copartners' consent, and after the bankruptcy, the copartner is incapable of giving any consent to affect rights fixed by that event.

The pretension set up in this case, whether considered with reference to the rights of copartners or the rights of the firm creditors. can not be maintained. The case may be different as to mere joint ownership where no partnership relation existed, but it is not necessary to consider this point.

of the bankrupt act, but as it was paid more than four months before the bankruptcy, it was held that the action was not maintainable. After that decision was made, the assignee brought a bill in equity to recover back this same sum of $1,436.02, on the ground that it was fraudulently paid by the bankrupt to BrookWhile the adjudged cases relating to the question under con- mire & Rankin. 2 Dillon, 151. On the merits, this suit was subsideration are not uniform, a careful examination of all of them sequently decided against Brookmire & Rankin (2 Dillon, 1c8), justifies me in saying that they are quite decisively against the and they paid the amount of the decree to the assignee. They proposition that individual exemptions can be allowed out of the now seek to prove the original indebtedness or cause of action, and partnership estate at the expense of the joint creditors. Pond v. the question is whether upon the facts found, and the law stated in Kimball, 101 Mass 105; Guptil v. McFee, 9 Kansas, 30-a well- the case as reported in 2 Dillon, 108, they are entitled to have considered case, following Pond v. Kimball, and disapproving their claim established so as to share in the dividends of KintzStewart v. Brown, 37 N. Y. 350; Burns v. Harris, 67 North Caro-ing's estate in bankruptcy. The facts as there found need not be lina, 140; Bonsall v. Comly, 44 Pa. St., 442, 447; In re Blodgett, 10 Bank. Reg. 145; In re Hafer, 1 Bank. Reg. 147; Amphlet v. Hibbard, Sup. Ct. Mich. 1874; In re Price, 6 Bank. Reg. 400; Wright v. Pratt, 31 Wis. 99. Contra-In re Young, 3 Bank. Reg. 440; In re Rupp, 4 Ib. 95; Stewart v. Brown, 37 N. Y. 350; Radcliffe v. Wood, 25 Barb. 52; In re McKercher, 8 Bank. Reg. 409. Reversed.

Composition Agreement-Right of Creditor who had Stipulated for a Secret Advantage to Prove his Original Debt in Bankruptcy.

here restated at length.

The question presented by this appeal has occasioned me much perplexity. The case is so peculiar as to make it difficult to ascertain the legal principles which should control its decision, and I determine it upon its own circumstances, and agreeably to what seems to me the substantial rights and equities of the parties, without undertaking to announce any rule of general or universal application.

Let us briefly recur to some of its leading features. And first, the original debt of Brookmire & Rankin against the bankrupt is confessedly just. It was for goods sold and delivered. On this debt

BROOKMIRE & RANKIN v. W. C. BEAN, ASSIGNEE, Brookmire & Rankin have been paid nothing. The amount they

ETC., OF CHAS. S. KINTZING.

received, they have been compelled to pay back, on the grounds stated in 2 Dillon, 108. It will be recollected that they had re

United States Circuit Court, Eastern District of Missouri, March fused to go into the compromise, and had commenced suit against

Term, 1875.

Before Hon. JOHN F. DILLON, Circuit Judge.

A creditor having demanded payment in full in advance as a condition of consenting to sign a composition agreement of the debtor to pay all his creditors seventy cents on the dollar, was held liable to repay the amount to the assignee in bankruptcy (2 Dillon, 108); subsequently, on paying back the amount to such assignee of the debtor, the creditor sought to prove his original debt in bankruptcy, the composition having failed: Held,

under the circumstances, that he was entitled to establish his debt and receive dividends thereon.

[ocr errors]

Kintzing in the state court. Laflin acting for Kintzing, went to Brookmire & Rankin and representing (according to the weight of testimony), that the money to pay the note had been raised by himself and Kintzing's friends, or by the latter, paid them the money on their delivering him the note with the endorsement: 'We authorize S. H. Laflin to sign for us. Brookmire & Rankin." They entered the note on their books as "sold" to S. H. Laflin. Under the authority thus given Laflin signed the name of Brookmire & Rankin to the compromise agreement to settle at 70 cents on the dollar. It is stated in the report (2 Dillon, 114), that "the evidence favors the view that the defendants (B. & R.) at first objected to making this endorsement, and finally did it without much reflection, and upon Laflin's assurance that it would be all right, and he would answer that the note should never come back or give them any further trouble. They did not seek Laflin or Kintzing, but were standing aloof from the proposed arrangement for a compromise, and pursuing [by suit in the state court], their own remedy against their debtor." It is further observed (2 Dillon, 114), that "the circumstances of the debtor were such that they could not obtain payment under a judgment against him, which would not be liable to be defeated by the bankrupt act" Tested by the subsequent decision of the supreme court, in The City Bank v. Wilson, 17 Wall. 473; 1 CENT. LAW JOUR. 40), this last observation is erroneous.

Appeal in bankruptcy from the district court. The firm of Brookmire & Rankin sought in the district court to establish a claim for $1,436.02 and interest, against the estate of Charles S. Kintzing, bankrupt, for merchandise sold and delivered, and alleging that the note given by Kintzing & Co. for that debt "was cancelled on the theory of its payment, which was an error." The assignee in bankruptcy resisted the claim. The parties stipulated below, "that the question for determination by the district court was whether upon the facts as found, and the 1 w as declared by the circuit court, in the case of Bean v. Brookmire, reported 2 Dillon, 108, Brookmire & Rankin have a provable claim against the estate of Kintzing, on account of the note referred to in that case, the decree rendered therein having been satisfied by Brookmire & Rankin." The district court rejected the claim, and Brookmire & Rankin appeal. In this court the appeal was The compromise finally miscarred, as all the creditors did not submitted upon the same stipulation. Before the following opin-unite in it, and all the other creditors were, in consequence, remition was pronounced, the appellants, with leave of court, dismissed ted to their original position, and to the right to claim 100 cents on their appeal with a view, as stated, to file a bill of review of the decree by which they were compelled to pay to the assignee the amount they had received from the bankrupt. 2 Dillon, 108. G. M. Stewart, for Brookmire & Rankin, appellants; Edmund T. Allen, for the assignee.

[merged small][ocr errors]

the dollar.

Now, why shall Brookmire & Rankin not be placed upon the same footing with the other creditors? As the compromise failed there is no outstanding covenant in force against them, whereby they have agreed to take less than the face of their demand or to' release it, and this material circumstance distinguishes it from the case of Mallalieu v. Hodgson, 16 Ad. & Ell. (N. S.) 689, so strongly relied on by the assignee. There the composition into which the plaintiff had entered, had been carried out, and the plaintiff "had received the composition, and yet was seeking to gain a further exclusive advantage to himself and in fraud of the creditors, by suing for the balance of his original debt after allow

ing for the composition and the value of the [secret] preference [Ib. p. 712]; and the court held that his release of the debt, made on entering into the composition, was binding upon him, and an answer to his claim to recover on the original demand. It was this release which defeated the recovery; but in the case before me there is no such release, and the composition fell through because all of the creditors did not come into the arrangement.

It is urged that the debt of Brookmire & Rankin is forfeited by their conduct in authorizing their names to be signed to the composition agreement. 2 Dillon, 108. That decision did not go upon the ground that any specific provision of the bankrupt act had been violated, but upon the general ground that Brookmire & Rankin had secured full payment as a condition of signing the composition articles, and had obtained it oppressively, so that the debtor could have recovered back the amount if he had not gone into bankruptcy, and this right devolved upon the assignee by by reason of the bankruptcy.

That decision rested largely upon Atkinson v. Denby, 6 H. & N 778; affirmed, 7 Ib. 934. Of course the act of one creditor stipulating for a secret advantage to himself is a fraud upon the other creditors, but in what manner, in the absence of bankruptcy, these other creditors could have taken advantage of the fraud, and to what extent they could have compelled Brookmire & Rankin to refund on a creditor's bill, are questions by no means easy of solution. The conclusion in 2 Dillon, 108, was supposed to be strengthened by the circumstance that the assignee in bankruptcy represented the rights of the creditors as well as the bankrupt, but the decision essentially rests upon the principle of Atkinson v Denby, and the cases which it follows. In the case last mentioned (Atkinson v. Denby), it is to be especially remarked that the compositon was paid, and paid to the defendant as well as to the other creditors; and the action was not to recover the whole amount paid, but only the £50 paid by the plaintiff in excess of the composition, and in excess of what the other creditors received. This is obviously a very different case from the one before the court.

[ocr errors]

The cases cited by the assignee's counsel, which I will not review in detail, undoubtedly establish this principle, viz: that a stipulation by a creditor for a secret advantage is altogether void; not only can he take no advantage from it, but is also to lose the benefit of the composition." Erle, J., 16 Ad & Ell. 689, supra; Howden v. Haigh, 11 Ad. & Ell. (O. S.) 1033; Frost v Gage, 1 Allen, 262; S. C. 3 Allen, 560 He loses all rights which depend upon the illegal or fraudulent agreement, and if in this case Brookmire & Rankin were seeking to enforce a promise or claim based upon, or arising out of the composition articles, it would logically result from the prior decision, and the principle of law in relation to the composition agreements established by the authorities that they could not succeed. But such is not their case. The composition failed and was not carried out, and, therefore, never became binding upon any of the creditors. They were remitted by reason of such failure to their former rights; and the present claim is based upon the original consideration, and not upon the composition deed. Unless it is forfeited or barred, it must be allowed.

puts all creditors upon an equality. If Brookmire & Rankin had been active in steps to procure full payment, and had positively designed to commit a fraud, I should have felt more reluctance in coming to the conclusion that they should be allowed to establish their debt in bankruptcy. They have done nothing which justly works a forfeiture of their original debt, and if there is any such principle in the law as that fraudulently or illegally entering into a composition agreement works a forfeiture of the original debt, when the composition fails, which I very much doubt, I think that the present case is one to which that principle should not be applied.

NOTE. The above opinion is of interest, as discussing the duties and obligations of creditors, who become parties to composition deeds. The recent amendments to the bankrupt law provide, in a very bungling and cumberhis creditors, under the supervision of the bankrupt court some manner, for the execution of compositions between the bankrupt and Hence the obligations of creditors, to the debtor, and to each other, which the law itself, independently of the bankrupt act, imposes upon the parties to a composition, becomed, at present, of more than speculative importance.

It would seem to a fair-minded man, an exceedingly unfair and improper, not to say dishonest proceeding, if one among several creditors, all of whom had agreed among themselves and with their debtor, to accept, in view of his misfortunes, a part only of their demands, should secretly, and as a condition of signing the agreement, exact an amount in addition to what he and the others had agreed to take. Such exaction might take from the debtor the little stipend which the other creditors had intended should remain to him for the support of a dependent family, or with which to begin life anew: or, in case the composition were, as usually compositions are, payable in installments, by crippling the present means of the debtor, render it impossible for him to comply with its terms. In either view the purpose of the honest creditors, who execute and carry out their part of the agreement in good faith, is thwarted. They fail to provide, as they had humanely intended, for the necessities of the debtor; or they fail to secure that portion of their claims, which, according to the composition, they were to receive. This result, moreover, is brought about by one who apparently joined with them in the negotiation, and who may ostensibly have been most urgent in his endeavors to relieve the unfortunate debtor. He has solemnly executed the composition agreement with one hand, and held his other in position to receive his price.

Viewed in the light of these considerations, one is hardly prepared to be told, that frauds in the execution of composition deeds are among the most numerous of any, of which we have record in the reports. Creditors are, as

a class, men of means, of education, of business habits, and most of them are merchants. It is not creditable to the merchants of Great Britain that for two

hundred years past the English reports are replete with decisions touching

such frauds. Every lawyer in this country, who has had much experience in such matters, knows that it is a difficult thing to persuade a merchant that it is any thing wrong to get all he can out of a debt, whether in fraud of a composition or not. Perhaps it is not too much to say, that eight out of every ten compositions with creditors, made in this country, are affected (and effected) by the fraud of some one or more of the creditors.

It is not the purpose of this note more than to hint at the history of this branch of the law. The cases, if collected, would make a large volume, and

a very useful one at this time.

The chancery courts at first undertook to relieve debtors who had been

thus oppressed by restraining suits at law against them upon notes or securities given in fraud of compositions, and by decreeing the cancellation of such notes and securities. In reply to the plea that the plaintiff in such equity causes, was a particeps criminis, and equity should not interfere, the courts said that he was in delicto, but not in pari delicto. Next the court at law al lowed the debtor to defend against suits brought by the exacting creditor upon his notes and securities, on the ground that such notes and securities, having been exacted in fraud of a composition, were invalid as against public policy. In the case of Howden v. Haigh (3 Perry &. Davison, 661; S. C. 11 Ad. & E 1,033, 1840), where the plaintiff, before signing a composition deed, by which the creditors of the defendant agreed to take the defendant's bills at long dates for their respective debts, stipulated, without their knowledge, for a bill of exchange to be endorsed to him by the defendant for a further sum, it was held that the whole agreement between the plaintiff and defendant was void, as being fraudulent upon the other creditors, and that plaintiff could not recover upon the defendant's bills for the amount of the composition money, even although he had received nothing on the bill indorsed to him by the de

It is urged in argument that to permit Brookmire & Rankin now to prove the claim, is inconsistent with their case in 2 Dillon, 108, in which they were held liable to pay back the money received on this same debt. But not so. To have allowed them to retain the full amount of their debt would have given them an unjust advantage over the other creditors, and as this advantage was unfairly obtained, the court held that they must pay back the money. If the compromise had been carried out, perhaps the court would have limited the recovery to the excess which they received over the other creditors. That suit compelled them to repay the money they had unfairly gained. This put the parties in statu quo. The fendant. In brief, the creditor forfeited his entire debt by the fraud, not debt of Brookmire & Rankin revived against the bankrupt, and it only that which he stipulated for in fraud of the composition, but that which may be established against his estate. The effect is equitable. Ithe stipulated for by its terms. In the case of Wells v. Girling (1819, 1 Brod

« PreviousContinue »