Page images
PDF
EPUB

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.

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. Bt; 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 of Joseph Casey; Mr. W. B. Pittman also appeared for Maybin.

Vol. IV.)

MAYBIN v. RAYMOND.

[No. 1.

on

Messrs. G. Gordon Adam f 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

Vol. IV.]

MAYBIN v. 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 Har. ris & 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, May bin 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 contract for fees.

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

“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

Vol. IV.]

MAYBIN v. RAYMOND.

[No. 1.

fully obtained in this country, because the reason upon which they were founded in England did not exist here.

In the case of Slywright and Page, 1 Leon. 167, it was said by the whole court of common pleas that the meaning of the statute of the 32 Hen. 8, concerning maintenance, was “to repress the practices of many who, when they thought they had title or right to any land, for the furtherance of their pretended right conveyed their interest in some part thereof to great persons, and with their countenance did oppress the possessors."

Blackstone speaks of the offence of champerty as “ perverting the process of law into an engine of oppression.”

The same reasons were given for the rule of the common law that a chose in action could not be assigned. “ Nothing,” says Coke, “ in action, entry, and reëntry can be granted over, for or under color thereof pretended titles might be granted to great men whereby right might be trodden down and the weak oppressed.” Co. Litt. 14 a.

It has been well remarked that feeble, partial, and corrupt must have been the administration of justice when such a reason could have force. Thallhimer v. Brinkerhoff, 3 Cow. 543.

The rule that a chose in action cannot be assigned has long since been exploded, because the reason upon which it rested has ceased to exist. And the ideas of the guilt of champerty and maintenance have measurably disappeared, and generally it is not now considered in this country a crime to aid the lawful suit of another with money and services, in consideration of a share in the recovery. Thallhimer v. Brinkerhoff, supra; Lyth v. State, 17 Ark. 608; Bayard v. Lane, 3 Harr. (Del.) 139.

Where the government is defendant, the grounds upon which the offence of champerty were supposed to rest cannot, in the nature of the case, exist. In such cases as the one under consideration, the government invites the suits of her citizens having lawful claims, and is in no danger of suffering injustice, no matter how great and influential those are who are aiding in their prosecution. The objection that the contract under consideration is champerty cannot therefore prevail.

It seems to me clear that the district court, in making the decree now under review, did right in directing the payment of the compensation of Harris & Harris and Bartley & Casey out of the fund. Maybin, when competent to contract, had agreed to pay them this compensation, and they had, without objection by the assignee, rendered the services and accomplished the object for which the allowance was made. Therefore, unless some obstacle appears in the consideration of other questions raised in the case, that part of the decree of the district court under consideration ought to be affirmed, and the petition of review filed by Raymond dismissed.

The questions referred to are made by the counsel for Maybin upon his petition to review so much of the decree of the district court as allowed Adam & Speed and Jenner the sum of $17,552.

The objections upon which the counsel for Maybin rely reach to the entire decree of the district court. They assert that the district court had no jurisdiction to make the decree. They claim this on several grounds : First. Because the proceeding in bankruptcy was completed and concluded before Raymond was authorized to prosecute the claim in the court of claims, and that the court had therefore no authority to make that order Vol. IV.)

MAYbiN v. RAYMOND.

(No. 1.

Court.

or any subsequent order in the bankruptcy. This view is based on the alleged fact that the bankrupt Maybín, having been discharged about the 25th of January, 1870, Raymond, his assignee, was subsequently, but soon after also discharged, and that this ended and closed the bankruptcy proceedings, and all proceedings thereafter in said bankruptcy were without jurisdiction, and void.

If the facts as claimed were borne out by the record, I should feel inclined to hold on this point with the attorneys for Maybin. But as I read the record, Raymond never was discharged as assignee. It is true a discharge written upon a printed blank, without date and signed by the register, is found among the files of the bankruptcy of Maybin, and doubtless this discharge was signed by the register soon after the date of the discharge of the bankrupt himself.

But it appears farther from the record that on April 10, 1873, Raymond filed a petition in the district court, in which he represented that he was embarrassed in the performance of his duty as assignee, by the said paper purporting to be his discharge as assignee; that said paper was signed without being applied for ; that the date was purposely omitted, and that it was inadvertently put by the register among the papers in the cause, when they were returned into court.

Upon this petition the court acted, and found that said discharge was inadvertently made and filed in said cause, and ordered it to be annulled.

The mere inadvertent filing of a discharge among the records of a cause does not paralyze a court and put an end to the case. A court at any time, on the truth being made to appear, would have the power to order such a paper to be stricken from the files.

"A court has power at a subsequent term to set right mere forms in its judgments, to correct misprisions of its clerks, and to correct any mere clerical errors so as to conform the record to the truth.” The Bank v. Labilat, 1 Woods, 13.

When therefore it was made to appear that the discharge of an assignee had inadvertently found its way among the files of the court, the court had power to order the paper to stand for naught, and the assignee to proceed in the discharge of his duties; and this the court did. The assignee was, therefore, in fact never discharged.

Second. It is further claimed, that the discharge of the bankrupt on January 25, 1870, was an adjudication that he had surrendered all his property for the benefit of his creditors, and that the assignee had no right, although he might afterwards discover property of the bankrupt which the bankrupt had failed to put upon his schedules, to bring it into the bankruptcy without first setting aside the discharge of the bankrupt; that this had never been done, and that the time within which it could be done had elapsed.

I do not think that the discharge of a bankrupt was intended to have the effect claimed.

Generally, a bankrupt may apply for his discharge at any time after the expiration of six months, and if no debts have been proved and no assets have come to the hands of the assignee, he may apply after the expiration of sixty days from the adjudication.

A discharge once granted can only be annulled on the ground of fraud.

« PreviousContinue »