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Vol. IV.]

MAYBIN V. RAYMOND.

[No. 1.

specifically to the several prayers offered on each side, as they will be of little or no importance in the re-trial of the cause, we shall reverse the judgment appealed from, and award a new trial.

Judgment reversed, and new trial awarded.

CIRCUIT COURT OF THE UNITED STATES.-SOUTHERN DISTRICT OF MISSISSIPPI.

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1. After a bankrupt had been discharged, a large fund was recovered in a suit against the United States in the court of claims, by counsel employed by him before his bankruptcy, on a contract that they should carry on the suit to recover the same at their own costs and charges, and have and retain for their compensation one half the amount recovered. The fund so recovered being in possession of the bankrupt court, the bankrupt filed his petition, praying that the share of his said counsel in the fund might be paid to them, that a sufficient sum might be set apart to pay all debts proven against his estate, and also the costs and commissions of the bankruptcy, and that the residue might be paid over to himself; held, that such a petition was one in the ordinary course of a bankrupt proceeding, and was not a bill in equity, nor did the relief prayed for require the filing of a bill in equity; nor was a decree of the bankrupt court, directing the payment to said counsel of their share in the recovery, the allowance of a claim against the bankrupt estate. The proper method, therefore, to reverse a decree made on such a petition was not by appeal, but by petition, addressed to the supervisory jurisdiction of the circuit court.

2. The common law on the subject of champerty and maintenance has not been generally adopted in this country, the reasons on which the law was founded not existing here. Therefore, a contract, such as that mentioned in the first head-note, made by a party with his counsel is not an unlawful, but is a valid and binding contract.

3. Upon the facts stated in the first head-note, the attorneys who recovered the judgment were entitled to one half the amount recovered, notwithstanding the subsequent bankruptcy of the party with whom they contracted, and notwithstanding the recovery was subsequent to the bankruptcy.

4. A paper writing purporting to be the discharge of a bankrupt, without date, signed by the register without application therefor by the assignee, and which by inadvertence has found its way among the records of the court, does not put an end to the powers of the assignee, or terminate the bankruptcy proceedings; it is no part of the record, and may be ordered by the court to be stricken from the files.

5. The discharge of a bankrupt is not such an adjudication of the fact that he has surrendered all his property for the benefit of his creditors as to bar the right of his assignee to recover property discovered after the discharge, and which the bankrupt had failed to place upon his schedule.

6. Where an assignee in bankruptcy more than two years after his appointment is substituted for the bankrupt as plaintiff in a suit pending in the bankrupt's name, and recovers à sum of money in the suit, the bankrupt cannot claim from the assignee the money so recovered, on the ground that the cause of action in favor of the latter was barred at the time he was substituted as plaintiff in the suit.

7. Where authority was obtained from the bankrupt court upon the application of the assignee to make the contract mentioned in the first head-note for the prosecution of a claim due the bankrupt estate, the court being kept in ignorance of facts which, if

Vol. IV.]

MAYBIN V. RAYMOND.

[No. 1

known to it, would surely have induced it to withhold such authority, the contract is not binding in the court or on the bankrupt estate, especially when the attorneys with whom the contract was made knew that the assignee had not communicated such facts to the court.

ON the 3d of June, 1876, the district court of the United States for the Southern District of Mississippi, sitting in bankruptcy, made a decree, to revise certain portions of which these petitions were filed. This decree was made under the following circumstances:

Raymond, the assignee of Maybin, had recovered in the court of claims a judgment against the United States for $71,020, which sum had been drawn from the treasury of the United States, and at the date of the decree of the district court was in the registry of the court subject to distribution by its order. In anticipation of this state of fact, Maybin, the bankrupt, had filed on January 26, 1876, a petition in the district court in which he set forth that Messrs. Harris & Harris, a firm of solicitors in Vicksburg, were entitled to one half the amount so recovered from the United States, by reason of a contract entered into in 1866 with them by him before his bankruptcy, by which he agreed that in consideration of their prosecuting said claim and paying all expenses incident to such prosecution, they were to have and retain one half the amount they might recover from the United States. That Harris & Harris had associated with themselves in the contract Messrs. Bartley & Casey, solicitors in Washington city, and that by the united services of all his said counsel on May 25, 1875, a judgment was recovered in favor of petitioner and against the United States, in the court of claims, for $71,020.

His petition further states that in July, 1873, and more than three years after the discharge of the petitioner in the bankrupt court, John B. Raymond his assignee had procured himself to be substituted for the petitioner as plaintiff in the said suit in the court of claims; that but one debt had been proved against the estate of the petitioner, and that for the sum of $2,000 only; and that said assignee intended to collect said judgment and hold said money, and refused to recognize the compensation due to the said counsel of petitioner.

The petition prayed that the counsel of petitioner should be paid their said fees out of the fund when recovered, and that petitioner should be allowed to deposit in the registry of the court a sufficient sum to cover all claims against him and all costs and commissions of the assignee, and that the remainder of the proceeds of said judgment should be paid to petitioner.

After the filing of this petition and before a decree was made thereon, the judgment of the court of claims had been affirmed by the supreme court of the United States, and the amount of the judgment was drawn from the treasury of the United States and was in the custody of the bankrupt court.

Before the decree was made upon said petition other proofs of debt had been filed against the estate of said Maybin, in addition to said claim of $2,000, so that the debts filed against the said estate amounted to about $26,000. These debts however, it was claimed by Maybin, were not valid claims against his estate.

Raymond, the assignee of Maybin, filed an answer to this petition in

Vol. IV.]

MAYBIN v. RAYMOND.

[No. 1.

which, besides denying many of the averments of the petition, he alleged that Maybin had fraudulently neglected to place the said claim against the United States upon his bankrupt schedules. That in March, 1873, he discovered that the said Maybin was then prosecuting said claim in the court of claims, and thereupon he, the assignee, filed his petition in the district court setting forth that said claim had come to his knowledge, that it would be necessary to employ an attorney to prosecute the same, that he had no funds for that purpose, and that it had been customary for such claimants to employ an attorney at a compensation of one half the amount recovered, and praying for authority to make a contract with an attorney for the collection of said claim on those terms; that the authority was given, and he made a contract with Messrs. Adam & Speed, attorneys, dated March 22, 1873, by which he employed them to prosecute said claim, and agreed to pay them for their services one half the gross proceeds of said claim when recovered.

Adam & Speed, who had associated with themselves in the prosecution of this suit Mr. S. E. Jenner, of Washington city, filed on October 2, 1875 a proof of their claim against the bankrupt's estate, in which they claimed that there was due them and said Jenner from the bankrupt's estate the sum of $35,510, by reason of their services under the contract aforesaid, and that they held an attorney's lien upon the judgment for $71,020 which had been recovered in May, 1875, in the court of claims, in favor of said assignee.

After due notice to all the parties in interest, and the taking of much testimony on both sides, the petition of Maybin came on for hearing before the district judge sitting in bankruptcy on the 3d of June, 1876, and he made a decree.

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The decree found that there was on deposit in the Valley Bank of Vicksburg the proceeds of said suit in the court of claims, the sum of $71,020, subject to the order of the court in the cause, and directed its distribution as follows: To Raymond, the assignee, for his commissions on receiving and paying over said moneys, the sum of $810; to S. E. Jenner, or Adam & Speed, his associates, $579.46, being an amount paid by Jenner to Bartley & Casey, the attorneys for Maybin, and which sum was properly chargeable to the attorneys of said Maybin; to Harris & Harris, and Bartley & Casey their associates, $34,526.54; to Adam & Speed and S. E. Jenner, $17,552.%; and the court decreed that the remainder of the fund be held by said Valley Bank until the further order of the court.

Maybin, the bankrupt, has filed a petition to review this decree, in which his main ground of complaint is the allowance made to Adam & Speed and Jenner. And Raymond, the assignee, has also filed a petition of review in which he complains of so much of the decree as allows to Harris & Harris and Bartley & Casey the said sum of $34.526.54. The other facts necessary to an understanding of the controversy are stated in the opinion of the court.

The parties in interest were represented as follows: For Harris & Harris and Bartley & Casey appeared Messrs. W. B. Pittman, A. B. Pittman, T. W. Bartley & Joseph Casey; Mr. W. B. Pittman also appeared for Maybin.

Vol. IV.]

MAYBIN v. RAYMOND.

[No. 1.

Messrs. G. Gordon Adam & Dickey appeared for Adam & Speed and Jenner, and for Raymond, the assignee.

WOODS, Circuit Judge. The respondents to the supervisory petition of review filed by Raymond, the assignee, have entered a motion which raises a preliminary question that first requires the attention of the court. The motion is to dismiss the petition because this court is without jurisdiction to entertain the same, the decree sought to be reviewed being either a decree in equity or the allowance of the claim of creditors, and therefore not reviewable by supervisory petition.

I do not think this motion ought to prevail. The petition of Maybin was in the ordinary course of a bankrupt proceeding. Its main purpose was to secure to himself any surplus that might remain of his estate after paying all the claims upon the fund, and all debts due from him. It certainly was not necessary to present such a prayer by a regular bill in equity. The fund at the time of the decree was in the registry of the court, and Maybin's petition amounted simply to a motion to distribute the fund to those having claims against it and to pay him the residue. Nor does the decree appear to be the allowance of a claim in favor of Harris & Harris and Bartley & Casey. They were the owners by equitable assignment of one half the fund, if what they alleged about their contract with Maybin was true. They did not set up a debt due to them against the bankrupt estate, but a title to one half the fund. The decree that they be paid out of the fund was not the allowance of a claim against the estate from which, by the provisions of original section 8 of the bankrupt act (Rev. Stat. 4980) an appeal might be taken.

The assignee of a bankrupt is not the assignee of his creditor, nor of all the judgments, executions, liens, and mortgages outstanding against his property. He takes only the bankrupt's interest in the property; he has no right or title to the interest which others have therein, nor any control over it further than is expressly given by the bankrupt act as auxiliary to the preservation of the bankrupt's interest for the benefit of his general creditors." Goddard v. Weaver, 1 Woods, 259.

In the district court the petition of Maybin was treated both by the parties and the court as an informal petition in the course of bankrupt proceedings; and I am disposed to treat it in the same way in this court, and think it was not a bill in equity; nor was the decree of the court the allowance of a claim against the bankrupt's estate.

The motion to dismiss the revisory petition of Raymond, the assignee, is therefore overruled.

As to the merits of the revisory petition of Raymond, the questions are, what contract did Harris & Harris make with Maybin for the prosecution of his claim against the United States, and what were their rights under that contract?

In my judgment the proof is clear and conclusive that one or two years before Maybin filed his petition to be adjudicated a bankrupt he entered into a written contract with Harris & Harris, by which the latter agreed to prosecute said claim against the United States, and pay all costs and expenses of said prosecution, and for their said services they were to have one half the net proceeds of the claim, and the other half was to be paid to said Maybin; that Harris & Harris, by themselves and those whom

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MAYBIN U. RAYMOND.

[No. 1.

they associated with themselves, did prosecute said claim in the court of claims and in the supreme court of the United States, and did recover therein final judgment for $71,020, which amount is now in the registry of the district court.

Under this state of facts there can be no doubt of the right of Harris & Harris and their associates to one half the net proceeds of the fund, notwithstanding the fact that, during the pendency of the cause in the court of claims, Maybin had been adjudicated a bankrupt, and before the recovery of the judgment in that court Raymond, his assignee, had been made a party plaintiff to the suit. Harris & Harris and their colleagues were not only willing to prosecute the suit after the bankruptcy and after the assignee was made party, but actually did prosecute it to a successful final judgment and recovery of the money. These services were accepted by the assignee, and he now enjoys their fruits. When their services had been rendered according to their contract, and the money recovered, they had a title to one half the amount. When Raymond was appointed assignee the claim of Maybin vested in him, subject to the rights of Harris & Harris under their contract, which was in no way affected by the bankruptcy. As long as they were willing to perform their part of the contract they were entitled to insist upon their rights under it.

These rights of Harris & Harris and their associates were recognized not only by the district court but also the court of claims. The district court, in an order dated November 28, 1873, directed Raymond, as assignee, to prosecute said claim in the court of claims, and declared that all costs and expenses incurred by said bankrupt, including his counsel fees for the prosecution of said claim before the substitution of said assignee, should be paid out of the amount which might be paid into court to be thereafter determined by the court.

And in the order of the court of claims, made on February 23, 1874, by which S. E. Jenner was made attorney of record for said Raymond as assignee of Maybin, instead of Bartley & Casey, it was provided that Bartley & Casey should have and retain a lien upon the cause of action, and upon the papers and effects of the said Maybin, and upon any judgment which might be recovered in the case, to the amount of such contingent fees and costs as it was agreed by or on behalf of said Maybin that his original attorney should receive for professional services for prosecuting the case.

The order of the district court authorizes the assignee to prosecute the claim in the court of claims, and the order of the court of claims substituting the attorney of the assignee as attorney of record, both took care to preserve the rights of Maybin's attorneys under their original con

tract for fees.

It is objected that the contract made between Maybin and Harris & Harris is champertous, and therefore void.

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Champerty," says Blackstone, "is a species of maintenance, being a bargain with the plaintiff or defendant campum partire if they prevail at law. Whereupon the champertor is to carry on the party's suit at his own expense.'

The common law notions of champerty and maintenance have never

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