Harding v. Crosby. WILLIAM A. HARDING vs. CHARLES P. CROSBY. IN EQUITY. An assignee in bankruptcy brought a suit in equity against the voluntary as signee of the bankrupt, to set aside a conveyance made by the bankrupt, within three months before the filing of the petition in bankruptcy, to the de fendant, in trust for the benefit of all the creditors of the assignor, without any preferences: Held, that, as the direct effect of the conveyance, if upheld, would be to keep the property away from the operation of the bankruptcy law and from distribution by the Courts and officers of the United States, and to give it and its administration to a trustee selected by the debtor, the plaintiff was entitled, under § 5,129 of the Revised Statutes, as amended by the Act of June 22d, 1874, (18 U. S. Stat. at Large, 390,) to the relief asked. The bankrupt is not a necessary party to such suit. (Before WHEELER, J., Southern District of New York, December 10th, 1879.) WHEELER, J. This cause has been heard on bill, answer, replication, proofs and argument. The bill is brought by the orator, as assignee in bankruptcy, to set aside a conveyance by the bankrupts of all their property to the defendant, in trust for the benefit of all their creditors, without any preferences, made within three months of the filing of the petition. The answer admits the conveyance but denies that it was made with a view to prevent their property from coming to their assignee in bankruptcy, or to prevent it from being distributed under the bankruptcy laws of the United States, or to hinder their operation. The answer is traversed. The principal question, is, whether such a conveyance is within the provisions of section 5,129 of the Revised Statutes of the United States, as amended by the Act of June 22d, 1874, (18 U. S. Stat. at Large, 390.) That section does not require that the assignment be fraudulent, to be avoided. If it did, this conveyance was out of the usual and ordinary course of Harding v. Crosby. business of the bankrupts, which would be prima facie evidence of fraud, according to the provisions of section 5,130. It is only necessary that it be made with a view to prevent the property from being distributed under the bankruptcy laws. The insolvency and contemplation of it being admitted, the direct effect of the conveyance, if upheld, would be to keep the property away from the operation of those laws, and from distribution by the Courts and officers of the United States, and to give it and its administration to a trustee selected by the debtors. They must be deemed to have intended these direct consequences of their act, and to have committed the act in view of the consequences. These considerations bring this case within the statute. Although, when the bankrupt law of 1867 first came to be construed, there were some decisions by eminent judges to the contrary of this, they have not been followed, and the current of the decisions has almost, if not quite, uniformly since then been in accordance with this. It would serve no useful purpose to name these cases here. There is, also, an objection because the bankrupts are not made parties to this bill. It is argued that they are necessary parties to a bill to enforce an assignment in trust, because there may be an excess, after payment of debts, in the hands of the trustee, belonging to the debtor, and that the same is true here, and that they are or may be interested to have the assignment upheld. Here, however, all the property of the bankrupts, subject to the exemptions, is vested in the assignee in bankruptcy, and there could not be any excess, after administration of the trust, belonging to the bankrupts personally. Hence, there is no occasion for joining the bankrupts. Let there be a decree setting aside the conveyance, and for delivery of the property, and for an account, according to prayer of the bill. the William B. Hornblower, for the plaintiff. Charles P. Crosby, for the defendant. Allen v. The Mayor, Aldermen, &c., of the City of New York. AARON H. ALLEN vs. THE MAYOR, ALDERMEN AND COMMONALTY OF THE CITY OF NEW YORK AND THE BOARD OF EDUCATION OF THE CITY OF NEW YORK. IN EQUITY. Seats embodying a patented invention were bought by the Board of Education of the city of New York for the use of the schools of the city, and were used in such schools, such Board being a corporation created by the State, having exclusive charge of such schools: Held, that the city, in its corporate capacity, was liable, in a suit in equity, for the infringement of the patent. The Board of Education is a proper party to the suit and is also liable for the infringement. (Before WHEELER, J., Southern District of New York, December 18th, 1879.) THIS was a suit in equity on re-issued letters patent, granted to the plaintiff for "improvements in seats for public buildings." Andrew J. Todd, for the plaintiff. Frederic H. Betts, for the defendants. WHEELER, J., (after sustaining the validity of the patent:) The proof in respect to infringement is to the effect, that seats embodying this invention were bought by the Board of Education of the city of New York for the use of the schools of the city, and have been in use in those schools under the direction of the Board of Education, and the Department of Public Instruction which has superseded the Board of Education. It is argued, that, upon this proof, the city is not liable in this suit, for two reasons-one is, because these instrumentalities having charge of the schools are corporations themselves, over which the city has no control; the other is, Allen v. The Mayor, Aldermen, &c., of the City of New York. that the use is under sovereign authority, delegated by the State of New York in its sovereign capacity, for which the city or the Board of Education, or the Department of Public Instruction, can no more be held liable to suit than the State itself. It is understood that the Board of Education was, and that the Department of Public Instruction is, a corporation under the laws of the State, recognized and treated as such by the Courts of the State, and having exclusive charge and control of the schools of the city, without whose action the city cannot be made liable for anything connected with the schools, and for whose contracts the city cannot be held liable otherwise than through proceedings against them. (Ham v. The Mayor, 70 N. Y., 459; Dannat v. The Mayor, 6 Hun, 88.) But still, the schools are the schools of the city, the Board of Education or Department of Public Instruction takes charge of them for the city, they are paid for with the money of the city, and whatever is saved in providing for them is to the advantage of the city. The corporation which that Department or Board constitutes is within that of the city, and is an instrumentality through which the educational interests of the city are cared for, the same as if done by officers having the same powers, except that the officers could have only a personal and official period of existence, while that of the corporation is, under the law, theoretically perpetual. One principal ground of a suit in equity for the infringement of a patent is, to compel an account of the gains or profits accrued to those proceeded against, by means of the infringement. Obviously, the proper party to proceed against is the one that has received the profits or to whom the gains have accrued. If any party has saved or made anything by this infringement it is the city, and the city seems clearly to be a proper party to account for these savings or profits. The Board and Department are proper parties, also, for they have been directly engaged in the infringement. It is argued, that the city, as such, could not stop the infringement nor control it, and, therefore, could not be guilty of any tort by which to acquire profits to account for. Probably, the city could not, Fox v. Blossom. independently of this Board or Department, stop the infringement; but that is on account of the mode in which the law requires the educational matters of the city to be attended to, and not because the city has any just right to advantages which the wrongful acts of its Board or Department may acquire. Officers might be able to do the same, but, if So, the city would not be shielded. That the acts constituting the infringement were committed in the exercise of authority derived from the State, cannot shield the defendants from liability. The grant of the exclusive right to this invention came from the sovereign power of the General Government, and the right is a species of property secured to the inventor by law. It is not subservient to public uses without just compensation ascertained and furnished, upon being taken in a regular and lawful mode, any more than other property of any kind is. It has not been taken by any regular proceeding, but only by mere wrong doing, which could, of itself, furnish no legal right. (Cammeyer v. Newton, 4 Otto, 225, 234.) Let a decree be entered, that the patent is valid and that the defendants have infringed, and for an account, according to the prayer of the bill. JOHN O. Fox vs. FREDERICK A. BLOSSOM. IN EQUITY. By the law of Connecticut, the right of a mortgagee of land to foreclose the mortgage or to sue to recover possession of the land, is barred, if the mortgagor has been permitted to remain in possession of the land for 15 years at least, without paying any part of the debt or recognizing the mortgage. A second mortgagee of the same land, out of possession, can bring a suit in equity against the first mortgagee, out of possession, and the mortgagor in |