Secombe v. Steele, 61 U.S. (20 How.) 94

David A. Secombe et al. v. Franklin Steele.

When a transcript of a record of another court was attached to the answer as an exhibit, and portions of it particularly referred to, and the record of the entire case pleaded, a decree, certified by the clerk, which had been executed by the parties, must be considered as part of the record, although it had not the signa ture of the judge. The signature of the judge is not the only evidence by which a decree can be authenticated.

Property was agreed to be sold, and the payment was to be made by a deposit of the price in one of two banks, in Boston, and a certificate delivered to the vend or. The vendee made the deposit in another bank, in Boston, and tendered the certificate to the vendor, within the time limited, and the vendor having re fused to receive it, he tendered the purchase-money and interest, and that being refused, he filed his bill for a specific performance, and paid the money into court. Held, under the circumstances, to be sufficient.

Creditors of the vendor, who recovered judgments and sold the property, pending a suit for a specific performance, in which the purchase-money had been paid into court, are not necessary parties to the suit, nor are the purchasers at the sheriff’s sale under such judgments. ; .

Under a statute of Minnesota, the court of chancery might divest the title of the defendant in the land, without requiring him to make a conveyance.

This case was brought up, by writ of error, from the Supreme Court of the Territory of Minnesota.

By stipulation of counsel, Secombe was made the represent ative of numerous other parties engaged in a common cause.

The chronological history of the case was this.

In the latter part of 1851, suits were pending between Steele and Arnold W. Taylor, with regard to their respective inter ests in a parcel of land near St. Anthony’s Falls, of which they were tenants in common. . , • f

On the 17th of January, 1852, Taylor executed his bond ot conveyance of the property to Steele, for the consideration o twenty-five thousand dollars, one thousand of which was o paid in cash, and the remaining twenty-four to be deposi e, the credit of Taylor, within sixty days, in the Merchants or Suffolk Bank, in Boston.

On the 19th of Jannaiy, 1852, this bond of conveyance was

recorded in the proper office, under the following provisions of the Minnesota Revised Statutes, chap. 47, p. 215:

“Sec. 1. All bonds, contracts, or agreements, concerning any interest in lands in this Territory, made in writing under seal, attested by one or more witnesses, and acknowledged before some person authorized by law to take acknowledgments of deeds, may be recorded in the office of the register of deeds of the county where the land lies.”

“ Sec. 3. Each and every bond, contract, or agreement, made and recorded according to the provisions of the first section of this chapter, shall be notice to, and take precedence of, any subsequent purchaser or purchasers, and shall operate as a lien upon the lands therein described, according to its import and meaning.”

One of the questions which arose in the case was with ref erence to the import and meaning of the bond.

It was alleged by Steele that, on the 17th of March, 1852, he tendered to the Suffolk Bank, and also to the Merchants’ Bank, in Boston, the sum of twenty-four thousand dollars, and requested a certificate of deposit therefor; but that each of the banks refused to receive the money. In consequence of such refusal, he deposited the money in the Bank of Commerce, at Boston, and received a certificate of deposit from that bank. On the Sth of May, 1852, he tendered this certificate to Tay lor, who refused to receive it or to execute a deed of convey ance.

On the 25th of May, 1852, Steele filed a bill in equity, (that iorm of proceeding not having been then abolished,) praying tor a specific performance of his contract with Taylor, and paid court the sum of $24,240. He also obtained an injunction prohibiting Taylor from selling or encumbering the property,« c. laylor answered the bill, and moved to dissolve the in junction, which motion was overruled, and the case stood for

hearing upon bill and answer in July, 1852.

unng the winter of 1852-’3, whilst the cause was pending .ov® described, Secombe and other creditors of Taylor w ai i. judgments against him, sued out executions which + ?P°.n property included in his bond to Steele, cl a th0 sheriff’s sale the plaintiffs in error became pur-

1^ M re2eivin£ deeds for their respective purchases.

+;0 ■> +a k ’ Secombe and the other purchasers petilor wh’°h .mitted as parties to defend the suit against Taytho fir 1Cil Potion was granted, and a certain time given for ™ filing of their answers.

Affidavits were filed on both sides, and on the 4th of May, 1853, the order was vacated, and the petitions dismissed.

From this order, Secombe took an appeal to the Supreme Court of the Territory.

On the same 4th of May, a decree was made by the court, whereby Taylor was ordered to execute conveyances to Steele, and the sum of $24,240, which had been deposited in court, was ordered to be paid to Taylor. This decree was founded on the consent of Steele and Taylor, filed in court.

Pending the above appeal, Steele instituted the suit now under the consideration of this court against Secombe and fif ty-three other persons, who claimed under the sheriff’s sales. It was an action at law, brought under a local statute, by way of petition. The plaintiff was in possession, and brought the suit against the persons who claimed an estate or interest in the property. The petition was constructed like a bill in chancery, and, after reciting the facts in the case, concluded thus: “ where fore the plaintiff demands judgment, determining the title to the said real estate so conveyed to him by the said Arnold W. Taylor to be in the plaintiff, and requiring the defendants, re spectively, to release their said adverse claims to estates or in terests therein to the plaintiff,” &c.

The defendants answered; the plaintiff demurred; the court sustained the demurrer, and gave the defendants leave to file an amended answer.

The amended answer introduced the record of the former suit; when the plaintiff moved to strike out all that part of the answer, and demurred to the residue. The court sustained the motion and demurrer, and gave judgment for the plaintiff, which on appeal was affirmed by the Supreme Court of the Territory.

A writ of error brought the case up to this court.

It was argued by Mr. Carlisle and Mr. Badger for the plain tiffs in error, and by Mr. Cushing and Mr. Gillet for the de fendants.

The points made by the counsel for the plaintiffs in error were the following:

I. That Taylor’s estate in the lands was the subject of exe cution; and that the same passed to the plaintiffi in error, in respective parcels, subject to whatever equity Steele mig establish in the then pending suit in equity. It was the leg estate which was seized and sold. But even if it were o wise, it was still the subject of execution. (Revised Statutes,

p. 363, sec. 91—p. 346, sec. 139—p. 361, secs. 76, 77; 2 Story’s Eq. Jur., secs. 1049-’50-’51.)

II. That the title thus acquired was “by operation of law,” or, in other words, by involuntary assignment; and therefore not even a decree thereafter passed against Taylor would have affected such title; his assigns, by operation of law, not being parties to the same. (Story Eq. Pl., sec. 342 and notes—sec. 351 and note; Sedgwick v. Cleaveland, 7 Paige, 290; Boring v. Lemmon, 5 H. and J., 225; Bennet v. Williams, 5 Ohio, 462; Deas v. Thom, 3 J. R., 543; Storm v. Davenport, 1 Sandf. C. R., 135.)

HI. That, by virtue of the title so acquired, the plaintiffs in error were subrogated to Taylor’s rights in respect of the pur chase-money, in the event of Steele’s equity upon the lands being established. Therefore, they had an “adverse claim, estate, or interest,” in the lands, which was to be “ determined ” in this suit. For the lands stood as security for the purchase-money, and they holding the legal titles could not be decreed to convey, or otherwise be divested of the same, without their consent, except on payment of the purchase-money. (Moyer v. Hinman, 17 Barb. S. C. Rep., 137, and cases cited by the court in that case; Tomlinson v. Blackburn et al., 2 Iredell’s Eq. Rep., p. 509, and cases then cited by the court.) . IV. In fact there was no decree even against Taylor. What ^ erroneously printed as part of the record, under title of ‘Copy of consent for decree,” and “Copy of decree,” never were part of the record, nor in this cause for any purpose. But * such decree, by consent, had been passed, it would have been, in effect, the mere act of the parties. It is for this rea son that no rehearing or appeal lies in such case. (Webb v. Webb, 3 Swan, 368; Lansing v. Alb. Ins. Co., Hopk., 102;

v‘ ^ee> Amb., 229; Harrison v. Ramsey, 2 Ves., 288; Belt’s Supp? 413.) J

"^regarding these principles, the court below so proceeded s to debar these plaintiffs in error from setting up any “ adverse estate, or title,” in these lands, whether by reason of dec Steele’s equity, or by way of holding the legal titles as a^a’ 7 l PurcBase-money; and this in a suit brought them “to determine such adverse claim, estate, or

\ ^nd while their appeal was pending from the decree and Steel^ Pe^xons xn the original suit between Taylor

am sPecial errors which have led to this result, and which

W V^igned, are as follows:

not r ®uPreme Court of Minnesota erred, in that it did everse the order of the District Court in this suit, grant-vol. xx. 7

ing the motion of the plaintiff, Steele, to strike out portions ' of the answer of Secombe, (by stipulation answering for all the defendants.)

a. The first, fourth, fifth, and eighth portions of the said answer, stricken out by the said order, were directly responsive to allegations contained in the plaintiff’s complaint, tendering material issues necessary to be decided in order to the “deter mining the adverse claim, estate, or interest,” of the defendants; for which purpose, only the action was authorized by statute, (ubi supra,) and even if not absolutely material, they were issues tendered by the plaintiff, and it was not for him to object that the defendants occupied the ground which he had opened.

b. The second portion of the said answer, so stricken out, tendered to the plaintiff a material issue. The action being “for the purpose of determining such adverse claim, estate, or interest,” it is difficult to perceive how the defendants could be denied the right to show that the land which they had pur chased was clear of the pretended equity of Steele. This por tion of the answer was equivalent to a plea of non-performance of the conditions of the bond, and whether such plea was true or false, in fact, was the very matter to be tried. But the court refused to allow any such issue to be made.

c. The sixth and seventh portions, so stricken out, alleged fraud and collusion between Steele and Taylor, to defraud and defeat the creditors of Taylor, and purchasers. at the sheriff’s sale; and were therefore proper to be inquired into, in law and fact, as at once impeaching the plaintiff’s alleged righty and fortifying the defendants’ titles.

2d. The said court erred, in that they did not reverse the order and judgment of the District Court sustaining the demur rer to the residue of the defendants’ answer.

a. The first special cause of demurrer assigned, is to the effect that the bond to convey, on conditions performed, U^ed such a title in Steele as absolutely precluded these plaintiffs in error from setting up any “adverse claim, estate, or title, in the land, whether as free of the pretended equity of Steele, or (conceding it) as security for the payment of the purchase money. This pretension is based upon the supposed effect or the recording of the bond. But it is evident that the record has no other effect than that of constructive notice of the con tents of the bond.

b. The second cause assigned is, that the answer assume that the title of Steele is founded upon the proceedings in equity; whereas, the demurrer asserts that it is wholly in e-pendent of that suit. This is shown to be erroneous, it principles hereinbefore asserted are correct. Although ©tee

alleged equity was founded on the bond, his right to the lands I upon which the plaintiffs in error held this 11 adverse claim, es tate, or interest,” was not determined, unless it was determined, in that suit And if they had such “adverse claim, estate, or interest/’ it is evident that there was never any adjudication thereon, since they were dismissed from that suit, and their appeal from that decree was still pending.

c. The third cause assigned is, that whereas the answer sets up that there was no decree as against Taylor, yet it appears from the “paper-book,” exhibited with the answer, that there was such a decree. But it will be observed that it is only certain specified papers which are referred to in the answer, and reference is made to the paper-book for true copies of these only. Besides, it has already been shown that this was only the form of a decred, not signed or enrolled; and that even if it had been signed or enrolled, it was by consent, and is only the act of the parties; and that it could not affect the “ adverse claim, estate, or interest,” of the plaintiffs in error, which was the subject-matter of this suit.

The counsel for the defendant in error maintained the fol lowing propositions:

1. The agreement between Steele and Taylor for the sale of the land was a bona fide and fair transaction, and is unim peached, and constituted a valid lien upon said land, and bteele s interest therein was unaffected by the purchase of Se combe and others.

That Steele performed the agreement on his part, and the title in him became complete upon the execution of the deeds to him by Taylor.

8. That Steele paid Taylor the full face of the agreement is not denied, but is admitted by the pleadings and proved by h eJe(lor^ attached to the defendants’ answer, and especially y their petitions to share in the money paid, into court by Steele for Taylor.

t 4- ^at the deeds from Taylor to Steele conform to the

nns of the agreement and the requirement of the decree.

tin ' ri er decree, the title was perfect without the execu

tion of the deeds.

shnw^ + headings in the equity case, and also in this suit,

form uP2n which a court of equity would compel a per-ance by Taylor of his agreement to convey to Steele.

dpfcnd a; &t the time of the sheriff’s sales, under which the

cnnl/i k® c a™’ Taylor had no estates in the land which he

ave transferred, the land belonging to Steele, and the

P se-money to Taylor, the claim of the latter upon the

land being that of security for the payment of the purchase-money. .A,

8. The^rtewers of the defendants present no material issua ble facwi/ yrp

9. That th^ns nothing before this court except the questioiraWisigg^&pon^e answers after being amended by the order of the cour^ the final judgment being upon the remain ing porous ofthe answer.

IQ^xPhat the decree in the suit between Steele and Taylor cannot be impeached collaterally, but only by direct procefeaings.

11. 'that the defendants had no right to intervene in the equity suit.

12. Ko appeal will lie from the motion to strike out portions of the defendants’ answers.

13. Every material fact to show the right of Steele to the land is admitted in this case, and no fact set up in the answers shows any right in the defendants.

14. From the admitted facts in this case, if Taylor had con veyed to the defendants, instead of to Steele, the latter, on the performance of the agreement now shown by him, could have compelled them to convey to him.

Mr. Justice CAMPBELL delivered the opinion of the court.

This cause comes before this court upon a writ of error to the Supreme Court of the Territory of Minnesota.

The defendant in this court (Steele) instituted.a suit in the District Court of Ramsey county, Minnesota Territory, against fifty-four defendants, to determine the validity of their “claim, “estate,” or “interest,” in certain real property at St. An thony’s Falls, in that county, of which he was possessed, and in which he claimed to have an estate in fee simple, under cer tain conveyances, which are appended to his complaint. Tins complaint shows that, in 1849, the plaintiff and Arnold AV. Taylor were tenants in common of a parcel of land which in cludes the property in dispute, and so occupied it until 1852. A portion was laid off into town lots, some of which were sold; expensive mills and other improvements were projected an partially completed on it; and controversies arose, and sui s were pending between them, when the parties, in January, 1852, came to an agreement of sale. By this agreement, laylor contracted to sell to the plaintiff his interest in the rea property unsold, and the money and securities taken tor lots sold, for the sum of twenty-five thousand dollars, and upo the condition that the plaintiff should acquit him ?.?.m payment of a certain demand, and assume his liabilities

certain contracts for labor and building materials. Of this sum, one thousand dollars were to be paid presently, and the remain der was to be paid in sixty days from the date, at the Mer chants’ or Suffolk Bank, at Boston, and a certificate of deposit furnished to Taylor at St. Anthony’s Falls; and in case of a default, the deposit of one thousand dollars was to be a forfeit. But if the payment was made in the manner stipulated, con veyances were to be executed by Taylor; and meanwhile he was to remain in the possession of the mill. The conveyances referred to in these articles were not executed until May, 1853, and purport to have been made in obedience to a decree of the District Court of Ramsey county, in a suit commenced by Steele against Taylor.

The complaint of Steele against the fifty-four defendants is, that they claimed an “estate,” “interest,” or “right,” in that property, have from time to time declared that they were owners thereof, and have executed conveyances for a portion, and offer to sell or dispose of other parts, contrary to the right of the plaintiff.

The object of the suit is, to relieve the title of the plaintiff from the mischief of these adverse claims; to quiet his posses sion by means of a decretal order requiring the defendants to release them, or, in case of their failure to do so, that the judg ment of the court may stand and be recorded in its stead. This proceeding is authorized by the revised statutes of Minnesota, ch. 74, sec. 1.

The twelve persons who are plaintiffs in this court, and were defendants in the District Court, appeared there, and severally claimed title to parcels of land included in the conveyances of it f°r plaintiff. Their claims respectively rest upon ne facts, that between November, 1852, and April, 1853, judg

ments were rendered against Taylor in the District Court, upon which executions issued, and levies and sales were made hose parcels, before May, 1853, in the regular course of Ju icial proceeding. At these sales the defendants were either purchasers or derive title from such persons. th» . .^dants aver that their title is paramount to that of plaintiff; for that the plaintiff is not entitled to any benefit 1852 articles of agreement executed by Taylor, in January, the nbl’ toen recorded, because he failed to comply with 1° by h^10U twenty-four thousand dollars as agreed

avo^ the recitals in the deeds, to the effect that they that i e3£ecuted under a decretal order of the court, they say locom IT 185$’ Plaintiff filed a bill in the District Court, pel laylor to a specific performance of the contract of

January preceding. That upon the bill the judge made an order for the payment of the twenty-four thousand dollars into court by Steele; and, upon the fulfilment of this fiat, that an injunction should issue to restrain Taylor from selling, con veying, or encumbering the property, or in anywise intermed dling with it. That an injunction and subpoena issued, and that Taylor appeared, answered, and unsuccessfully moved to dissolve the injunction, in July, 1852. That no other act was done by the plaintiff until April, 1853, when the rights of the defendants had attached by those purchases from the sheriff. That in March, 1853, the defendants applied to the District Court to be made defendants in the cause, which application was finally unsuccessful, and that the plaintiff and Taylor then fraudulently closed their controversy by a decree rendered by S

consent, under which the conveyances were made, and that their object was to defeat the claims of these defendants.

That, by this arrangement, the terms of the contract of Jan uary, 1852, were not adhered to, and that the twenty-four thousand dollars were not paid as stated in the deed.

It was a question in the District Court, as well as in this court, whether the decree and the agreement leading to it, that form a part of the record here, properly belong, to the case. The defendants in the District Court maintained, that it was pleaded by them. They are found in an exhibit to the answers—an exhibit which purports to be a transcript from a record in the Supreme Court of Minnesota, as furnished on an appeal from the District Court of Minnesota by the defendants, upon the decree disallowing their claim to be. made defendants. Portions of this transcript are referred to in the answers, as forming material papers in the chancery suit,, and the whole suit is referred to in the answers to support its allegations; and it is specifically set up and pleaded. We think, therefore, that the record of that suit, as it appears in the exhibit, must be taken as authentic, in deciding upon the sufficiency ot tne answer as a bar to the plaintiff’s complaint. The decree pur ports to have been made by the court;. it is formal, and dis poses of the cause, and is only defective in not having e signature of the judge. But it comes from the legal custo y, has been accepted by the parties, and acted on by them, an was certified to the Supreme Court of the Territory, as. a pap in the cause. We do not regard the signature of tneju ge indispensable to its authenticity. The statute ir®c. the signature must be considered as directory; and ot er dence to establish its verity as a record of the court may considered« •

In the District Court, the plaintiff moved to strike out por

tions of the answer, for insufficiency and on other grounds, and demurred to the residue. His motion and demurrer were sus tained, and a final decree rendered for the plaintiff. This, de cree was affirmed on appeal to the Supreme Court, and the defendants in that court prosecute their writ of error to this court.. The statutes of Minnesota prescribe: 11 That the court must in every stage of an action disregard any error or defect in the pleadings and proceedings which does not affect the substantial rights of the adverse party, and no judgment can be reversed or affected by reason of such error or defect.” The question to an appellate court in the present case is, do the answers of the defendants, as pleaded by them, disclose a valid claim to the property in dispute, so as to bar the petition of the plaintiff for relief? Ko objection is taken to the validity of the contract of January, 1852, between the parties, Steele and Taylor. The record of that contract is notice to subsequent purchasers; and Steele, by the statutes of the Territory, was entitled to have “precedence of” them, and “a lien upon the land, according to the import and meaning of the contract.” (Rev. Stat., ch. 47, sec. 3.)

It is not denied that the plaintiff paid one thousand dollars at tbe execution of the contract, nor that the twenty-four thou sand dollars were paid within sixty days into a bank at Bos ton a bank of solvency and credit—nor that a certificate of deposit within a reasonable time afterward was offered to laylor, at St. Anthony’s Falls; nor that, upon his refusal to take the latter, the money and interest were immediately ten dered to him; and, upon a farther refusal, that relief was sought rom a court of chancery, whose order for the payment of the money into court was promptly complied with. The precise comP^a^n^ are, that neither the Merchants’ nor

Bank was made the depository of the money; and a ^^“Catefrom one of them has never been tendered to Taylor, n that he has the right to rely upon the letter of his contract. - ©specification has been made of any injury or inconvenience ,e. him, as a consequence of the deposit having been tin i Bank of Commerce, rather than the banks mennc m the agreement. And the plaintiff avers, that the • { rea80a for the change was, the refusal of those banks to $ . a certificate of the kind mentioned. the n there is an express agreement for the payment of lamMi laSe'r^0U^ an(f the delivery of the conveyance of the will k Particular day, and at a particular place, the parties tract 6 and time will be of the essence of the con-sold h ln equity’ the estate bargained and agreed to be ecomes the property of the purchaser as soon as the

agreement is concluded. It will descend to his heirs at his death, or may be devised by him; while the purchase-money vests in the vendor, and forms a part of his personal estate. In the ordinary case of the purchase of an estate, the assign ment of a particular day or a specified place for the perfection of the title is considered as merely formal, the general object of the contract being the sale of an estate for a given sum, and the stipulation signifying that the purchase shall be completed promptly, and in a reasonable manner, regard being had to the circumstances of the case, and the nature of the title and prop erty. Time may be made of the essence of the contract by express stipulation, or it may become essential by considera tions arising from the nature of the property, or the character of the interest bargained. And the principle of the court of equity does not depend upon considerations collateral to the contract merely, nor on the conduct of the parties subsequently, sho wino that time was not of the essence of the contract in the particular case.

But it must affirmatively appear that the parties regarded time or place as an essential element in their agreement, or a court of equity will not so regard it. (Hiperall v. Knight, 1 Y. and C., 416.) In Parkin v. Thorald, (16 Beav., 59,) the master of the rolls said: “A contract is undoubtedly construed alike both in equity and at law; nay, more—a court of law is the proper tribunal for determining the construction of it. But courts of equity make a distinction in all cases between that which is matter of substance and that which is matter of form; and if it find that, by insisting on form, the substance will be defeated, it holds it to be inequitable to allow a person to insist on such form, and thereby defeat the substance. Eor instance, A has contracted to sell an estate to B, and to com plete the title by the 25th October; but no stipulation is introduced, that either party considers time of the essence oi the contract. A completes the title by the 26th; at law, the contract is at an end, and B may bring an action for the n0^~ performance of the contract, and obtain damages for the breac, but equity holds, that unless B can show that the delay o twenty-four hours really produced some injury to him, e is not to be permitted to bring this action or to avoid the per formance of the contract; not, certainly, on the groun a the 25th October was not a part of the contract, but on ground that it is unjust that B should escape the P®r^rD!an, of a contract which has been substantially performed by A, by reason of some omission in a formal but immatena po of it.” Upon a view of the chancery record, our conclusions are, that the plaintiff, in good faith, attempted a literal per

formance of his contract with Taylor; that the deposit of the money due, in a bank of solvency and credit, other than those named in the contract, did not inflict an injury upon Taylor, and the offer of its certificate of deposit, prima facie, was a sub stantial performance of its requirements. That his subsequent offer of the money and the interest that had accrued, and, on the refusal of Taylor to receive it, his prompt application to chancery, and payment, of the money into court, relieve the plaintiff from every imputation of laches or delay. The Dis trict Court expressed an opinion corresponding to this, in July, 1852, in denying the motion to dissolve the injunction, and this was a virtual decision of the cause in that court.

These transactions occurred before the judgments against Taylor, under which the land was afterwards sold, were ren dered by the District Court. The District Court had the par ties before it, and held the defendant (Taylor) under restraint, by injunction, and the purchase-money in its custody. It had been empowered by a statute of the Territory “to pass the title to real estate by a decree, without any other act to be done on the part of the defendant, when, in its judgment, it was the proper mode to carry its decree into effect.” (Rev. Stat., Minn., p. 466, sec. 33.) But, before the transfer to the plaintiff had been made, judgments were obtained and docketed against Taylor, which were “a lien upon all the real property7 of the debtor in the county owned by him at the date of the judgment, or after wards acquired.” The influence of these judgments, and of the levy of the executions upon the land described in the agree ment of January, 1852, and the sale under those executions, remains to be considered. The twelfth of the “Ordinances in Chancery” of Lord Bacon is, that no decree bindeth any that vn1 ^°na,^e conveyance from the defendant before bill exhibited, and is made no party, neither by bill nor the order; but where he comes in pendente lite, and while the suit is m full prosecution, and without any color of allowance or Y cou^’ there regularly the decree bindeth; but i there were, any intermission of the suit, or the court made acquainted with, the court is to give order upon the special a ter according to justice. The rule has been applied with eadmess to all cases of transfer during the progress of a cause, o withstanding the hardship of individual cases, from consid• . ion.8 °¿ Public policy and convenience. Suits would be

rminable, if the rights of the parties could be disturbed by

tinn^ Veyaa^8’ and a neccssity imposed for the introduc

to th° 0 j rparties upon the record. The apparent exception

e rU i ar^ses wben an event occurs which deprives the y on the record not only of his interest in the subject of

the suit, but also of his faculty to comply effectively with the decree of the court. In such a case, additional parties are necessary to enable the court to make an operative decree. The Court of Chancery ordinarily acts in personam; and, in cases like the present, perfects the title of the purchaser by requiring the vendor to execute a title conformably to the agreement. But, in cases of bankruptcy and insolvency, the bankrupt or insolvent is stripped of his rights of property and of his capacity to defend suits in which he is a party. In such cases the as signees are commonly made parties, (Dan’l Pr., 328;) but there are opposing authorities—Cleveland v. Boerun, (23 Barb., 201.) And it has been decided that a purchaser under an execution issued on a judgment rendered pendente lite, need not be made a party in such a case. (Scott v. Coleman, 5 Mon., 73.)

The statute we have cited from the code of Minnesota en larges the powers of the Court of Chancery of that Territory, and enables it to act in rem. It may pass the title without any act of the defendant. The bill, subpoena, and injunction, placed the property wholly under the control of the Court of Chan cery, and new parties were not requisite to enable the court to vest the title in the equitable claimant.

This principle is not peculiar to courts of chancery; but the maxim that “pendente lite nihil innovetur,” is applied in real and mixed actions by the common Jaw. (2 Dana, 25; 9 Cowen, 233.)

Was there a valid exercise of the jurisdiction of the court, and did the decree pass the title to the purchaser? Had the plaintiff any duty to perform, in regard to the application of the purchase-money, in the registry of the court ? Some author ities affirm that a purchaser of the legal title at a judicial sale immediately succeeds to the rights of the debtor, and that the equitable claimant under an executory contract becomes respon sible to him for the purchase-money remaining unpaid. (Mayer v. Hinman, 17 Barb., 137; 16 Serg. and R., 18.) Other author ities recognise the right of thé purchaser to the benefit of the contract from the time that the equitable claimant has. notice of the sale and conveyance by the sheriff. (Mayer v. Hinman, 3 Kiernon, 180; 2 Ired. Eq., 507; 4 Madd. R., 506, note;) while other well-considered cases deny that the purchaser, at the sheriff’s sale obtains a title which can be interposed to.impede the progress of the legal title to the purchaser by articles, or operates as a transfer of his debt for the unpaid purchase-money from his vendor to the claimant under the judgment. (Chinn v. Butts, 3 Dana Ky. R., 547; Lodge v. Lysely, 4 Simon, 70; Whitworth v. Gauvain, 3 Hare, 416; Scott v. Coleman, 5 Mon., 73.) The case reported in 3d Dana was a contest between two

Secombe et dl. v. Steele.

purchasers—one under an executory contract, and the other under a judgment against the vendor while a part of the pur chase-money remained unpaid. The holder of the sheriff’s title recovered in an ejectment; and the questions decided arose on a bill for relief filed by the defendant upon his elder equi table title. The court say, that “the purchase of the entire legal title, with notice of an outstanding equity, arising from a previous sale of the land by the same vendor to a stranger, does not per se transfer to the purchaser any right, legal or equitable, to any portion of the unpaid consideration remaining due to ’the vendor from the first buyer; and if there should be any extraneous ground for an equitable substitution, it should be asserted and shown by the purchaser before the stranger hold ing the prior equity had made full payment to the vendor. If there be such an equity, it is against the vendor, and not against the debtor; and, whether it exist or will ever be asserted, the debtor cannot be presumed to know.”

Without attempting to reconcile these cases, or to discover whether that is possible, it is evident that the present case does not fall within the limits of either of them. The right of the plaintiff to precedence over the judgment creditor, or the pur chaser under his execution, does not depend upon the exercise of the extraordinary jurisdiction of the Court of Chancery, and is not confined by the rules under which that court administers that jurisdiction. His priority is a legal right, reposing upon the legislative authority. Before the judgment creditor had established his debt, the plaintiff had acquired possession of the property, and had paid his money into court. His purchase-money was thus paid. If the purchasers from the sheriff acquired any title to that money by their purchase of the land, it is evident that it should have been asserted by a direct appeal to the court, and not by an adversary proceeding at law for the land. If a person pendente lite takes an assignment of the inter est of one of the parties to the suit, he may, if he pleases, make himself a party by bill, but he cannot by petition pray to be admitted as a party defendant; all that the court will do is to niake an order that the assignor shall not take the property out ot court without notice. (Dan’l Ch. Pr., 329; Wiswall v. Simpson, 14 How. 8. C. R., 52.)

We do not consider that the act of Taylor in consenting to a ecree, or the act of the plaintiff in accepting one, is evidence ° or of a conspiracy against the defendants in this suit. The decree was a consequence of the opinion of the ourt upon the cause as presented by the pleading, on the mo jo11 to dissolve the injunction; and so far as the equities of e parties are to be considered, the decree embodies them.

There is no other specification of fraud, and the general charges of fraud, unaccompanied by a statement of the facts constituting the fraud, have no effect or influence.

We are of opinion that there is no error in the record, and the judgment of the Supreme Court of Minnesota Territory is affirmed.

The Commercial Bank of Manchester, Complainant and

Appellant, v. Henry S. Buckner. t

The Circuit Court of the United States has no power to entertain an original bill brought by a creditor, who has come in and proved his debt against the bank rupt, for the purpose of annulling or vacating a discharge and certificate in bankruptcy, obtained in the District Court upon imputations of fraud, done in contemplation of bankruptcy by the bankrupt; or to give relief, either at law or in equity, in a suit brought by a creditor who had proved his debt under the commission, who had assented to the bankrupt’s discharge and certificate, and who had taken a dividend out of the bankrupt’s estate.

The District Court, which passed the decree in bankruptcy, can take cognizance of such a case.

Whether or not such a bill could be filed by a creditor who had not come in and proved his debt, and who was not a party to the decree in bankruptcy, is a ques tion which the court does not now decide.

Nor has the Circuit Court the power, under its general jurisdiction oyer frauds, to give relief either at law or in equity, in a suit brought by a creditor who had proved his debt under the commission, had assented to the bankrupt’s discharge and certificate, and had taken a dividend out of the bankrupt’s estate. A demurrer only admits facts which are well pleaded.

This was an appeal from the Circuit Court of the United States for the eastern district of Louisiana.

It was a bill filed by the bank upon the equity side of the Circuit Court, against Buckner, under the circumstances fully detailed in the opinion of the court.

It was argued by Mr. Day for the appellant, and by Mr. Benja min and Mr. Bayard for the appellee.

Mr. Day filed an elaborate printed argument, consisting of more than one hundred pages. . Of the several points of the case included in this argument, it is necessary to omit the dis cussion of the following propositions, viz: * ,.

1. Are the charges of fraud sufficient to invalidate the dis charge in bankruptcy? . ,

2. The equity side of the court has jurisdiction over the ca, upon the ground of its general jurisdiction over frauds.

3. Whether the case made by the bill is of such a nature and character as to give equity jurisdiction.

4. Nor does the fact that the fraud from which relief was

sought, is fraud in obtaining a judgment in discharge in bank ruptcy, at all militate or vest the chancellor of jurisdiction.

Mr. Day then sustained the right of the Circuit Court to interpose in this case, upon the ground that the discharge in bankruptcy should be treated as a nullity.

True, a court of equity does not presume to direct or control a court of law; but, it considers all the equities between the parties, and acts upon the person of the party seeking against good conscience to avail himself of an advantage which, under all the equitable circumstances of the case, it is against con science for him so to do, and restrains or deprives him of such advantage. (20 Conn. R., 556; 2 St. Eq., secs. 875, 194; 1 Atk., 630; 1 Sch. and Lef., 205-’6; 2 P. Wm., 424; 2 Ves. jun., 135; 3 P. W., 395.)

And so, even at law, (notwithstanding the general rule that no court, except an appellate one, has authority or power to set aside the judgment of another court of competent jurisdic tion, for error or irregularity,) where the main object, as in this case, is not to annul the judgment of another court, but simply to avoid the effect of such judgment when it is set up as a bar, by replying that it was obtained by fraud, the party has a right to show, in any court, that the judgment was ob tained by fraud and imposition, and thus indirectly to treat it as a nullity. (2 La. R., 139-’4O; 11 ib., 521; 25 Vt. R., 339; 2 Kernan’s R., 165, and auth. cited; 3 Cranch’s R., 300, 307-’8, 310-11; 3 Foster’s K. H. R., 535; 3 Sum., 604; Shedden v. Patrick, 28 Eng. L. and Eq. R., 56, and the numerous cases cited by counsel on page 60; 72 Eng. C. L., 513; 15 J. R., 121; n, 729-30; Don v. Lipman, 5 Clark and Finn. R., 1, 20, 21; St. Conf. L., sec. 603.)

For if such be not the law, then a party would be allowed to profit by his own fraud, “ a position altogether inadmissible.” (Per Thompson, C. J., in Borden v. Fitch, 15 J. R., 121.)

But, be this as.it may on general principles, yet, according to e express provisions of the bankrupt act, it is competent for any court to treat the discharge and certificate, when interposed as a barrier to prevent a recovery on a pre-existing demand, as m oV°id, whenever the fraud is shown. (5 U. S. Stat., R qao o ^re(^ 142; Mabry et al. v. Herndon, 8 Alab. p ’ «48, 864; 11 Humphrey’s R., 289; 3 Dess. R., 269-’7O; 3 Cranch R., 300, 307; 9 Ga? R, 9, 14,15; 15 Alab! R., 553-’4; K9fta i $$ $$$• See also Robt. Fraud. Conv.,

263; 3 Har. and J.. 13; 6ib.,82;

& Bin. R., 247.)

the dT^i v^^a^e8 everything into which it enters. It is like auly and noxious simoom of arid and desert climes. It

prostrates all before its contaminating touch, and leaves death only and destruction in its train. No act, however solemn, no agreement, however sacred, can resist its all-destroying power.

All acts into which fraud enters are nullities.

Neither a bona fide debt nor an actual advance of money will sustain a security infected with fraud. (Per Sandford, Chan cellor, 2 Sandf. Ch. R., 631.)

In the case of Downer v. Rowell, (25 Vt. R., 339,) the Su preme Court of Vermont, in construing the bankrupt act, says: “ The statute in effect declares, that in case the discharge and certificate were superinduced by fraud, they may be im peached on that ground, as being null and void.”

And if a judgment is null and void, it is the same thing as though it had never been rendered, and is “unavailable for any purpose,” (Per Thompson Ch. J., in Borden v. Fitch, 15 J. R., 140; 11 S. and Mar. R., 464; 11 La. R., 533; 11 Eng. Ch. R., 448—’9;) and may be collaterally disallowed and disregarded. (Slocum v. Wheeler, 1 Day’s Con. R., 429, 449; 6 How. Miss. R., 285; 8 Sm. and Mar. R., 519.)

Such being the law, then, there can be no ground for saying that the discharge and certificate should have been annulled by a direct action, instituted for that purpose, in the bankrupt court. (2 Kernan’s R., 166; 8 Alab. JR., 855, 864.)

Indeed, it has been held, by high authority, that the I (strict Court never had any jurisdiction to entertain such a proceed ing. (Mabry et al. v. Herndon, 8 Alab. R., 855.)

But if it could be shown, or was conceded, that the bank rupt act gave such jurisdiction to that court, yet, as the act has been unconditionally repealed, with no saving clause, in the repealing act, except for the purpose of finally completing and determining causes then pending, the District Court is without any jurisdiction for such a purpose. (4 Seld. R., 265 J For the law is well settled, that whenever a statute from which a court derives its jurisdiction is repealed, the jurisdiction of the court is gone, even as to suits then .pending, except so i&T as it is expressly saved by the repealing act, and that the original act conferring jurisdiction is to be regarded as though it had never existed. (Dwarris on Stat., 676; Millers Case, Wm. Blak. R., 451; 4 Yeates R., 394; 5Cranch,281; 350; 21 Pick., 373; 1 Hill, 324; 5 Blackf. R., 195; 15 Con. R., 242; 4 Humph. R., 427; 4 Seld. R., 265, 269.)

No action of nullity, then, was or could by any possibility be necessary to entitle the complainants to recover, either a law or in equity, on their original demands. . n««»*

for leave to impeach the discharge and certificate. Chief Jus tice Ruffin, in 8 Ired. R., 142, says it is the duty of the court “to hold a discharge obtained by fraud as ineffectual and void, whenever the fraud shall appear. The remedy of the creditor is not an application to the court of bankruptcy, upon the ground of fraud newly discovered, but by replying the fraud of the bankrupt to the plea of discharge, so as thereby to avoid the bar.” And the same doctrine is laid down by the Supreme Court of Alabama, in 8 Alab. R., 864.

In Sims v. Slocum, (3 Cranch, 300, 307,) Chief Justice Mar shall says: “When the person who has committed the fraud attempts to avail himself of the act, so as to discharge himself from a previously-existing obligation, or to acquire a benefit, the judgment thus obtained is declared void as to that pur pose.”

And in Mabry et al. v. Herndon, (8 Alab. R., 856-’7,) Chief Justice Collier, also, in an elaborate opinion, said: “Thus we

see, that although the statute contemplated a boon to the debtor,

viz: a release from indebtedness, it exacted, on his part, per

fect integrity in yielding up everything that was liable to his

debts. If this was not done, but something was wilfully with

held to which the creditors were entitled, the fact of conceal-

inent is denounced as a fraud; and upon its being made known,

the court was required to refuse its sanction to the bankrupt’s

discharge. And if the proceedings are formally consummated

by a final decree, and a certificate consequent thereupon, it is

C0]nP®lent for any court of judicature, upon the fraud being

treat the certificate as a nullity.” (See also

Mitf. Eq. PL, 239.) J k

The Supreme Court of Tennessee, in the case of Gupton v.

HpmPb; R., 289,) well says: “If the fraud appear n. 118 8U^ a&ainst his creditors, no decree of discharge a ma^e* v aPPear afterwards, its effect is to annul the discharge and certificate, as though they had wer been obtained.” 55V? & Powell v. Spence & Elliott, (15 Alab. R., “The 1 v ®upreme Court of Alabama very truly remarks: tiikp + bankrupt act does not intend, nor in any manner underl. ° a creditor who has a cause of action against a nW™? v« sueing him, although the bankrupt may have banl^6 i / —na^ certificate of discharge. It only gives the sued tv? defence against the cause of action when bank + • r e wb°ic scope of the act was to furnish the is RtiuU^ W1^ a ^^piete defence to suits brought against him, bar if +t°r j aPParent from the fact that the certificate is not a ’ the debt is of a fiduciary character, or if the discharge

be obtained by fraud. The act, therefore, only intends to arm the bankrupt with a perfect defence against all debts discharged by the certificate obtained in pursuance of the act. The cred itor may, however, sue on his demand; otherwise, he could not dispute the bonafid.es of the certificate, and the bankrupt must rely on his certificate in bar of the suit.”

Chancellor Desaussure, too, in Lowe v. Blake, (3 Dess., 269, 270,) in relation to an insolvent discharge, uses this strong and forcible language: “That in case there was any fraud or con cealment in obtaining this discharge, this court is not bound to give effect to the discharge obtained in. any other court. That it is essential to the jurisdiction of this court to detect fraud, and to prevent its having its intended effect; and even formal judgments at law cannot resist its all-searching power; and when the frauds on which they have been obtained are exposed, such judgments are decreed to be nullities. If the discharge was obtained by fraud or concealment, it was a mere nullity, like every other judgment or sentence of a court ob tained by fraud or surreptitiously.”

So in Card v. Walbridge and others, (18 Ohio, 411, 423,) which is a case directly in point, it being a bill to subject cer tain property to the payment of certain debts, and to have the certificate of bankruptcy declared void, as having been obtained in fraud of the law, the court, in sustaining the jurisdiction, says: “ The great question in the case is one of fraud, which has to be established before the complainant can proceed one step in his cause, and comes within the original powers of a court or

“The appropriate remedy,” (says Chancellor Walworth, Al cott v. Avery, 1 Barb. Ch. R., 347, 352,) “ of the complainant in this court, where he wishes to contest the validity of the detenu-ant’s discharge subsequent to the decree, and to obtain satis faction of the decree out of subsequently-acquired property, is to file a supplemental bill, stating the obtaining of the decree, the alleged or pretended discharge of the defendant, under t bankrupt act, subsequent to such decree, and the fraud or tn defendant which renders the alleged discharge invalid, and praying that the decree may be carried into full ^ct a a n the defendant and his property, notwithstanding his p discharge.” (See also 9 Ga. R., 9, 14.)

The counsel for the defendant thus stated the point on which the decision of the court turned: . . im-npach

1. The District Court has exclusive jurisdiction to ^P^ the decree of discharge in bankruptcy, or recall It may adjourn any point arising in any case in bankrup y

the Circuit Court, but the latter has no jurisdiction of an orig inal bill to annul or avoid the decree of the District Court, as prayed for in this suit, though the Circuit Court would, as well as a State court, have jurisdiction to inquire into the validity of the discharge if pleaded in bar and impeached for fraud, or its effect if a subsequent express promise of payment by the bankrupt were alleged.

The bankrupt proceedings are in the nature of proceedings in rem, and not subject to collateral inquiry in another than the court which decreed the discharge. (Bankrupt Law of 1841, secs. 4 and 6, 5 Stat., 444; Shawhan v. Wherrit, 7 How., 643; N; Am. Ins. Co. v. Graham, 5 Sandf., 197.)

Mr. Justice WAYNE delivered the opinion of the court.

The decision which we are about to give would not be satis factory, unless it shall be preceded by a statement of the facts of the case as they are disclosed by the pleadings. We shall adopt that which was given by the counsel who argued the cause, with but little alteration or addition.

The appellants allege, in their bill, that during the years 1841 and 1842, the defendant, Henry S. Buckner, together with M. B. Hamer, who died in April, 1842, and Frederick Stanton, were partners in trade, doing commercial business in New Or leans, under the firm of Buckner, Stanton, & Co., Buckner being the resident partner there; and in Natchez under the firm of Stanton, Buckner, & Co., Stanton conducting it; and at Yazoo city under the firm of M. B. Hamer & Co., Hamer being the resident partner at that place. The three firms were distinct and separate, and kept their books and accounts accord ingly. It is alleged that the three firms and the three members 01 them became hopelessly insolvent in the year 1841, and that they continued to transact business together until Hamer’s death; that after his death the two survivors carried on the business of the three firms until their bankruptcy. On the 1st July, 1842, Stanton filed his petition in the United States

^our^ f°r southern district of Mississippi, both indivi ually and as a member of the three firms, was decreed a ankrupt on the 8th November, 1842, and received his certifitV i g^8ckarge on the 21st February, 1843. On the 18th pU ?» Buckner made a similar application to the District tM-nk weW ^rkans, was decreed a bankrupt on the 5th Sep•, and received his certificate of discharge on the tV ^?eiuber, 1842. It is also said that their applications for 81a1 + 18pkarges iu bankruptcy were made by Buckner and n on in concert,, with a view to future business. appears at the time of these applications they were indebted vol. xx. 8

to the appellants in the sum of $49,020.14, besides interest, on twelve promissory notes and on one bill of exchange, all which had become due in January, 1842. Three of them were payable on or before the 6th January, 1839; three others on the 3d April, 1839; four on or before the 3d March, 1841; and the last in the month of January, 1842, six months before Buck ner filed his petition in bankruptcy. Buckner acknowledged the indebtment in his schedule filed with his petition in bank ruptcy. The complainants proved a portion of their claim in the bankruptcy proceedings of Stanton. It is admitted that they received a small dividend from the assets of the firm; but they aver they did so in ignorance of the frauds upon the bank rupt law, committed by Buckner and Stanton, of which they knew nothing until the year 1853, when they discovered the frauds. And they further allege that they would not have proved their claim, nor have received a dividend, if they had known the frauds; and they assert that the certificates of dis charge are null and void, by reason of the frauds.

It is. then stated in the bill that the three firms had existed before 1837, in which year they suspended payment, but that they never recovered from their embarrassments, though they had resumed business. It is again alleged that their affairs were hopeless in 1841, and that executions on judgments ob tained against Stanton as a member of the firm were m that year returned nulla bona. . .

That all the indebtment of the firms which made them insol vent was due prior to the 1st March, 1842, at which time the frauds began. That then, Buckner and Stanton had agree that they would take the benefit of the bankrupt law, and, m contemplation of doing so, committed the fraud stated in t e bill. „ p

Twelve different charges of fraud are specified, all ot tne being payments to preferred creditors, in fraud of the geneia creditors—contrary to the provisions of the act of the August, 1841. No charge of any other fraud is made, except a transfer of some property in New Orleans, upon the un e standing that Buckner was to have the right to redeem it on payment of the debt, and that the arrangement had se for him an ultimate profit, in fraud of creditors. say, that it was because of the fraud of Buckner an in concealing a knowledge of the facts from them, y were induced to believe the discharges valid; an so y not proceed to enforce their claims at law or in eqm y, they had found them out only within two years. what source they had made the diseoveiy they do not tinctly, though to support the charge they file an exhibit

notes discounted for Stanton, Buckner, & Co., by the Commer cial Bank of Natchez, which were applied to their credit, and a list of protested notes of Stanton, Buckner, & Co., taken up by them in May, 1842—two months before Stanton filed his petition in bankruptcy. Two letters from Stanton to Stephen Duncan—one of them dated at Natchez, on the 14th August, 1842, and the other on the 14th September, 1842—are made exhibits; both relate to the affairs of the firm, and to particular transactions of them, which the appellants allege were frauds committed by Stanton and Buckner, in giving preferences to certain creditors, in contemplation of bankruptcy. And they further declare, that since the bankruptcy of Stanton and Buck ner, the books of Stanton, Buckner, & Co., had, by some means, passed into the possession of Buckner; that if produced, the I fraudulent preferences which had been made would be shown, and that they would also disclose other fraudulent preferences made by Stanton for himself and the firm of Stanton, Buckner, & Co., in the spring and summer of 1842, in contemplation of bankruptcy.

The bill is closed with a prayer that the first decree of the District Court, discharging Buckner, should be declared void and of no validity, as far as the rights of the complainants, as set forth in the bill, could be affected by it, and that Buckner should be perpetually enjoined from setting it up against their rights; and that Buckner should be adjudged to pay them the I ‘Wual 8um due by him, with interest thereon; to which is added a prayer for general relief.

The defendant demurred to the bill, and, for causes of de murrer, says:

I. That the said complainants have not, by their said bill, made such a case as entitles this court to entertain jurisdiction ot this cause under the Constitution and laws of the United states.

II. That the said complainants have not, by the said bill, made such a case as entitles this court to entertain jurisdiction, th re^ef 5 the remedy of complainants, if any ey have, being at law, and not in equity. III. That the said complainants having, by their own show-

^»^ade proof of their claims, and received divi• xi8 thereon, in the bankruptcy proceedings which resulted

i e discharge of this defendant, are not permitted by law to

sou K.^lichty of said discharge in manner and form as

iudBvJ +8’ and having been parties and privies to the

wu • discharge in favor of this defendant, are forever uaed in law from contesting the validity and effect of

said judgment, on any such grounds as are alleged in said bill.

IV. That the said complainants have not, by the said bill, alleged any cause sufficient in law to authorize this court to set aside the decree of discharge in bankruptcy in favor of this defendant, rendered by the District Court of the United States, as set forth in said bill.

V. That the said complainants, by the allegations of said bill, show that the claims held by them, if they ever were due to them by this defendant, have become discharged by lapse of time, and barred by the statute of prescription and limita tion.

VI. That the said complainants, by the allegations of said bill, show such laches as by the principles and rules of equity deprives them of any right to claim relief or remedy in this court.

VII. That the said complainants have not, by the showing contained in their said bill, made out a case entitling them to relief either at law or in equity.

Wherefore this respondent demands the judgment of this honorable court, whether he shall be compelled to make any other or further answer to the said bill, or any of the. matters and things therein contained, and prays to be hence dismissed with his reasonable costs in this behalf sustained.

(Signed) Benjamin, Bradford, & Finney, Solicitors.

I certify that, in my opinion, the foregoing demurrer is well founded in point of law.

(Signed) J. T. Benjamin, of Counsel.

Henry S. Buckner, being duly sworn, deposes that the fore going demurrer is not interposed for delay.

(Signed) Henry S. Buckner.

Sworn to and subscribed before me, this 1st of October, 1855.

(Signed) J. W. Gurley, Commissioner.

The stating part of the bill of the complainants, their prayer for relief, and the demurrer of the defendant, suggest that our first point of inquiry in this case should be into the power o the Circuit Courts of the United States to entertain an origina bill, to annul or vacate a decree discharging a bankrupt, ei e in whole or in part, for any of those frauds upon the act o 1st August, 1841, which would prevent the bankrupt irom receiving a discharge. No such jurisdiction is given y act to the Circuit Courts. The jurisdiction of these courts

under the act exists in three cases: First, when a question has been adjourned into a Circuit by the District Court, under the 6th section of the act. Second, by appeal, as that is given, under the 4th section, to the bankrupt, when a majority of his creditors in number and value, who shall have proved their debts, shall file their written dissent from his discharge. Third, the jurisdiction given to the Circuit Courts by the 8th section, in suits by an assignee of the bankrupt, against any person claiming an adverse interest, or by such person against the assignee for property, or rights of property, transferable to or vested in the assignee under the act. If we cannot find such a jurisdiction in the Circuit Courts in the act of 1st August, 1841, it is in vain to look for it elsewhere, for the purposes for which this bill has been brought.

The inquiry then must be, if the Circuit Court has jurisdic tion, to annul the decree of the discharge given to the bankrupt by the District Court, for frauds upon that act, which would have prevented him from receiving a discharge and certificate. In other words, has not the District Court of the United States, in which the bankrupt’s discharge was given, and that court only, the power to inquire into frauds upon the act discovered after the bankrupt has received his discharge, with a view to annul it, and to give to his creditors, who have proved their debts, the benefit of the property he may have concealed, or the preferences he may have given, or transfers of property he may have made in contemplation of bankruptcy ? It seems to us that the jurisdiction given by the 6th section of the bankrupt act to the District Court is plenary and exclusive & PurPose* The words of the 6th section are: “ That the District Court, in every district, shall have jurisdiction in all matters and proceedings in bankruptcy arising under this act, and any other act which may hereafter be passed on the subject of bankruptcy; the said jurisdiction to be exercised summarily in the nature of summary proceedings or equity, and for this purpose the said District Court shall be deemed a ways open. . And the district judge may adjourn any point or question arising in any case of bankruptcy into the Circuit ourt tor the district, in his discretion, to be there heard and e ermmed, and for this purpose the Circuit Court of such is net shall be deemed always open. The jurisdiction hereby n erred on the District Court shall extend to all cases and anv rov^81es in bankruptcy arising between the bankrupt and

und °r cre^ors who shall claim any debt or demand

g. ,er bankruptcy; to all cases and controversies between

inoffi“ °P crec^ors and the assignee of the estate, whether

ce or removed; to all cases and controversies between such

assignee and the bankrupt; and to all acts, matters, and things, to be done under and in virtue of the bankruptcy, until the final dis tribution and settlement of the estate of the bankrupt, and the close of the proceedings in bankruptcy. And the said courts shall have full authority and jurisdiction to compel obedience to all orders and decrees passed by them in bankruptcy, by process of contempt, and other remedial process, to the same extent the Circuit Courts may here do in a suit pending therein in equity. And it shall be the duty of the District Court, in each district, from time to time, to prescribe suitable rules and regulations, and forms of proceedings, in all matters of bankruptcy; which rules and regulations and forms shall be subject to be altered, added to, revised, or annulled, by the Circuit Court of the same district, and other rules and regulations and forms be substituted therefor.”

Our reflections upon this section as a whole, and particularly upon that clause or sentence of it which extends the jurisdic tion of the court to all controversies between the bankrupt and a creditor, who shall claim any debt or demand under the bank ruptcy—to all cases between creditors and the assignee of the estate, whether the latter continues in office or has been re moved, and to all controversies between the assignee and the bankrupt—have brought us to the conclusion that it was meant to give jurisdiction to the District Court, either at the suit of the assignee or of the creditor, just in such a controversy as the complainants have made by their bill; with the power in the court, in a suit of either the assignee or the creditor, or both combined, to inquire into the fraudulent preferences alleged to have been given by the bankrupt in contemplation of bankruptcy; and when they shall have been satisfactorily proved, to revoke the decree of discharge which had been given to him, to prevent it thereafter from being pleaded as a bar to any suit which may be brought against him, for any de mand which was provable under the act. Or the assignee alone may sue the bankrupt and his accomplices in the Dis trict Court, for any preferences he may have given to creditors in contemplation of bankruptcy, to recover the amount of such preferences, as a part of the bankrupt’s estate for distribution among his creditors who have proved their debts under the act, and with the additional object of revoking the bankrupt s discharge by a decree of the court. In either suit for the latter purpose, the assignees and the creditors who have proved their debts under the act, may be the parties on the one side, and the bankrupt and those who conspired with him to commi the fraud upon the act, should be made parties on the o er. If it be intended only to recover the amounts of frauduien

preferences, as a part of the bankrupt’s estate, the assignee may sue the bankrupt and those who have received them, or the latter alone, giving to the bankrupt prior reasonable notice, specifying in writing the fraud or concealment which it is the object of the suit to investigate, so that he may be present at the trial to defend himself; or to petition the court to be made a party defendant to the suit, for the same purpose. And in such a case, the jurisdiction of the District Court should be exercised summarily, in the nature of summary proceedings in equity, such being the direction in the sixth section of the act, for all proceedings in bankruptcy under it.

These conclusions are verified into unquestionable certainty, by considering in connection other parts of the bankrupt bill.

By the third section of it, the. property of the bankrupt, of every kind whatever, from the time of his discharge, by mere operation of law, is deemed to be divested out of him, and be comes vested by force of the decree in the assignee who may be appointed for the benefit of such of the bankrupt’s creditors who have come in and proved their debts, for the purpose of becoming distributees .equally of the bankrupt’s estate, to the exclusion of all creditors who have not done so. Then, by the second section, the amount of preferences which may have been given in contemplation of bankruptcy, are declared to be a part of the bankrupt’s estate. It is the duty of the assignee to sue for them, and the bankrupt who has made them, when they have been proved, cannot be allowed a discharge under the pro visions of the act. And that this disability to receive a discharge was meant to apply prospectively to preferences which might e given, and retroactively to such as had been given in conemplation of bankruptcy, or to such preferences, whether given before the decree of discharge or after it, is manifest from e whole language of the fourth section, particularly that part w ich makes a bona fide surrender by the bankrupt of all his property and rights of property, for the benefit of his creditors, °i the prerequisites of his being discharged from all of his / a’ a. ^In1,68? that if the bankrupt’shall be guilty of any erf11 °r i 11 concealment of his property or rights of prop-preferred any of his creditors, contrary to the

.^e act’ or5 if he admits a false and fictitious char against • estate, that he shall not be entitled to such dis-no cwd? ^^e. Further, the 5th section declares, that other (‘1 °r Ori n r Person> coming in and proving his debt or nln\8, * be allowed to maintain any suit at law or in rmhAf shall be deemed thereby to have waived all ite^?Ct“ suit against such bankrupt; which, while es such a creditor from bringing a suit at law or in

equity in any other court for his original debt, which had been proved against the bankrupt, cannot be construed to mean that he could not resort to the District Court, which had been deceived into granting the discharge, for the purpose of in vestigating the frauds which may have been committed by the bankrupt before a discharge had been granted to him, but not discovered until afterwards; and for the further purpose of obtaining from the District Court an annulment of the discharge which had been obtained from it by perjury and fraud. In this we do not differ from the counsel of the complainants, for much bf his argument was intended to show that the creditors of a bankrupt are not without a remedy for frauds committed by him, but not discovered until after he had received his certifi cate of discharge. That was the case of Haxton v. Corse, (2 Bar. Ch., 507,) decided by Chancellor Walworth. The chan cellor’s language is, that he could not conclude, “notwithstand ing the general language contained in the fifth section of the act, that the creditors who come in and prove their debts shall not be allowed to maintain any suit at law or in equity there for, and that the law-makers did not intend that the proving of debts by creditors should be an absolute abandonment of all claim against the future acquisitions of their debtor, if his discharge was refused, or if it was void for any of the frauds specified in the act.” We admit the principle, that creditors so circumstanced have a remedy, but not that they may use it in any suit at law or in equity in the Circuit Court. The bankrupt law has given to the District Court a plenary and exclusive jurisdiction in all matters and proceedings in bank ruptcy. We say plenary and exclusive jurisdiction in the Dis trict Court. This court has said so in Shawhan et al. v. Wherritt, (7 How., 643.) Besides, on the authority of the same case, we say, as all the proceedings in all cases in bankruptcy are made matters of record by the thirteenth section, that a party to one of them cannot be permitted to impeach it collaterally m another suit in another court, brought by him there to recover from the bankrupt his original debt, whilst he continues to occupy his relation to the assignee and the bankrupt, under the discharge of the latter, as one of the creditor distributees of his estate. The District Court has by the act plenary and exclusive jurisdiction of the matter, and no other court can annul the decree of the bankrupt’s discharge, either partially, for the benefit of a particular creditor, or wholly, to deprive the bankrupt of its operation. , .

This we say, with direct reference to the parties in this sui, who were parties to the decree of the «bankrupt s discharge, who proved their debts, and who have taken a dividend rom

his estate. We do not mean to say anything of the. Circuit Court’s jurisdiction in a suit brought by a creditor who had not come in and proved his debt, and who is not a party to the decree in bankruptcy. These are points which will no doubt be well con sidered by counsel before a suit shall be brought; directly in connection with the power given to such a creditor to impeach the discharge, when the bankrupt shall plead it in bar of a suit. But the manner of bringing such a suit by such a creditor, how, when, or in what court, it should be brought, we shall not de cide until such a case shall be brought regularly here for adju dication.

We will now consider another point in the case, necessarily arising from the frame of the bill, which was argued by the counsel for the complainants, with some earnestness. It is, whether the Circuit Court had jurisdiction of the subject-matter of the bill, on account of the frauds alleged against the defendant.

The complainants, in their bill, state minutely the original indebtment of the bankrupt to them, particularize the fraudu lent preferences he had given to other creditors in contempla tion of bankruptcy, admit that they were parties to the bank rupt’s discharge, and had taken a dividend; and then they ask for the intervention of the Circuit Court in equity, to set aside the bankrupt’s discharge as to them, because it had jurisdiction in cases of fraud; and that it would adjudge, that the defend ants shall pay to them their original debt, with interest, on account of their ignorance of the frauds of which they qomplain, until within two years before they brought their bill. And for the same cause they say, that they had not brought their action at law upon their original cause of the defendant’s indebtment.

The Bill of the complainants, then, is a suit to recover from the defendant the debt which they had proved in bankruptcy. It has generally been thought, and has been frequently decided, judicially, that the fifth section of the bankrupt act was a bar to a suit where a party proves his claim and takes a dividend. In England, though such suits were attempted in the earlier ^hinmistration of her bankrupt laws, such an action would not e thought of now for a moment. The words of our statute h?6’/! n° Cre^or or other person, coming in and proving is debt or other claim, shall be allowed to maintain any suit a aw or in equity therefor, but shall be deemed thereby to have aived all right of action and suit against such bankrupt; and proceedings already commenced, and all unsatisfied judge^ts jready obtained thereon, shall be deemed to be surrenaered thereby.” How, then, can it be, that a creditor, comg in and proving his debt and receiving a dividend, can be

allowed to sue the bankrupt for it afterwards, either at law or in equity, when it is declared, in positive and unmistakable words, that if the creditor, before proving his debt, had com menced an action for it, or had obtained a judgment for it, he shall be deemed to have surrendered it, and to have waived all right of action and suit, either in law or in equity, against such bankrupt, for the debt which he has proved? It cannot be done; and the disability of such a creditor to sue the bankrupt is in perfect harmony with every other part of the statute of the 19th August, 1841, and with all the rights of creditors which are meant to be secured by it.

Moreover, the exclusion of such a creditor to sue the bank rupt, is sustained by all of the decisions in the courts of Eng land upon the statutes of bankruptcy.

Lord Hardwicke said, in ex parte Groome, 1 Atk., 119—when such a right was claimed by a creditor upon a similar provision in the statute of George II, chap. 30, sec. 7, (by no means so expressive as that just cited from the act of the 19th August, 1841)—“I think that the privilege of creditors to come in, and of bankrupts to be discharged from debts, is coextensive and commensurate, and very equitable, for it would otherwise make an irregularity among the creditors; for a creditor whose debt was due before the taking out of the commission shall, perhaps, have more than five shillings in the pound; and the creditor whose debt was not due till a second distribution shall come in and have as much as the other creditor, and likewise have a remedy open to him for the rest against the bankrupt.. Therefore a creditor shall not prove his debt, receive a dividend, and proceed afterwards in an action at jaw against the bankrupt. In such cases in England, the creditor is put to his election, whether he will come in and prove his debt,or pursue his remedy at law. With us, he has the same privilege. In ex parte Goodwin, 1 Atk., 152, Lord Hardwicke said: Ibis court will not suffer a petitioning creditor to arrest a bankrupt, and for this reason—because a commission of bankruptcy, is considered both as an action and an execution in the first in stance; and after the petitioning creditor had laid hold oi a of the bankrupt’s effects, it would be a great absurdity for e same person to be permitted to arrest him likewise. In regar to the creditor having made an election, his Lordship ru e., in ex parte Ward, 1 Atk., 153, that a petitioning creditor determines his election by taking out a commission, and cannot sue bankrupt at law, though for a debt distinct from what he Pr0J •

In ex parte Ward, 1 Atk., 153, it was also ruled that a^peti tioning creditor’s right of election does not exist after rupt has received his certificate; and when the ere i

The Commercial Bank of Manchester v. Buckner.

already proceeded at law, he is not at liberty to come in and prove his debt under the commission, without relinquishing his proceedings at law, unless by order of the great seal, for the purpose of giving his assent or dissent to the certificate. In Capon’s case, 1 Atk., 219, Lord Hardwicke declared, “it was by no means to be done that a creditor was to receive a pro portionable benefit under the commission, and still pursue the bankrupt’s person at lawand he would not permit the cred itor, in that case, who had proceeded at law after he had re ceived two dividends, to assent to or dissent from the bank rupt’s certificate, until he had refunded the dividends he had taken under the commission. In Lindsay’s case, 1 Atk., 220, he petitioned to be discharged from a commitment at the suit of his creditor, Henkle, who had proved his debt. The Lord Chancellor said the creditor must either waive his proof under the commission, or make his election to proceed under it; but, notwithstanding, if he elects to proceed at law, he may still assent or dissent to the certificate.

In Dorvillier’s case, his creditor had proved a debt for ¿£800 under the commission, and being the majority in value of all the creditors, had chosen himself assignee, as he had the right to do under the statute. He brought an action at law for the debt which he had proved against the bankrupt. The bank rupt petitioned that his creditor should make his election to proceed under the commission or to proceed at law. The Lord Chancellor doubted whether, by choosing himself assignee, was not making an election; but upon the creditor’s having elected to proceed at law, he discharged him as a creditor under the commission, but still allowed him to assent or dissent to the bankrupt’s certificate.

In Aylott v. Harford & Richards, bail of Lowe, 2 Blackstone’s Reports, 1317, the creditor had proved his debt under the com mission, and had voted in the choice for assignees, and had subsequently made an agreement with the bankrupt that he should keep open his hotel for business. The bankrupt abcre^or brought an action against the bail of the bankrupt, contending that, as Lowe had absconded, he had forfeited the protection of his commission, and that the bail was to follow the fate of his principal. De Grey, C. J., refused to fix the bail, and said, there are some instances in which the Court of Chancery permits a creditor to do certain acts, such as proving his debt and voting for assignees, without binding mm to come under the commission and renounce his legal remedy. But the plaintiff has gone much further, especially y the transaction of the 25th of August. He has made his election, has acquiesced under the commission, and he shall

not, on a subsequent unforeseen event, at the distance of twelve months, desert the commission, and come on .the bail by sur prise. (White ex parte, 2 Ves. Rep., 9; 2 Bro. C. C., 114.)

These citations, then, show how the comprehensive equity of Lord Hardwicke, upon an indefinite statute of George II, anticipated the more perfect legislation of 49 George III, c. 121, s. 14, and that of 6 George IV, c. 16, s. 59, upon the same subject.

The first provides, “that after the 29th June, 1809, it shall not be lawful for any creditor, who has or shall have brought any action or instituted any suit against any bankrupt in respect of any demand which arose prior to the bankruptcy, or which might have been proved as a debt under the commission, to prove a debt under such commission for any purpose whatever, or to have the claim of debt entered upon the proceedings under such commission, without relinquishing such action, a suit, and all benefit from the same; and that the proving or claiming a debt under a commission by any creditor shall be deemed an election by such creditor to take the benefit of such commission with respect to the debt so proved or claimed by him.” The statute of George IV is, “that no creditor who has brought an action or instituted a suit for a demand arising prior to the bankruptcy, or which might, have been proved, shall prove a debt or enter a claim for it, without relinquishing such action or suit, and all benefit from the same, the proving a debt or entering a claim to be deemed an election. Our statute is as comprehensive as either of those, and was taken from them, though not expressed in the same words. Indeed, the three are an embodiment of the decisions of the courts which were made from Lord Hardwicke’s time in the istration of the bankrupt law; and the construction of tne English statutes in their courts since has been m conformity with the earlier decisions. f

In Adames v. Bridge, (8 Bingh. Rep., 314,) in an action of debt upon a bond, in which a rule nm had been obtained to stay proceedings commenced in 1831, it appeared by an a vitthat the defendant had been a bankrupt in 1816, and that the plaintiff had elected to prove under the.commission sued out at that time. Tindall, C. J., ruled that paving proved under a commission of bankrupted in 1J1 to sue for the same debt after the passing of 6 George IV, c. ^Though that repeals 49 George III, c121, and makes.proof of a debt an election not to sue. The.Chirf.Justice.added the fallacy in the argument is in considering the election to prove as an incomplete act. It was a complete tinuanoe, and after such a lapse of time, the rule must be dis

charged with costs. In some of its features, that case is not unlike that which we have been considering.

Joseph ex parte (18 Ves., 340) establishes the same princi ple; also, Dickson, (1 Rose, 98;) Boslock’s case, (1 Dea. and Chit.,) the same. A like interpretation has been given to the fifth section of the act of 19th August, 1841, by Chief Justice Tenney, (in 31 Maine Rep., 192,) in the case of Humphrey and Small, and by Mr. Justice Hardy, in the case of Buckner & Stanton v. Calcote, (in 28 Miss., 390.) Both are able construc tions of the statute of the 19th August, 1841, from the statute itself, and they command our entire assent.

Our conclusions in this case are, that the Circuit Courts of the United States have not jurisdiction to annul or vacate the discharge and certificate in bankruptcy obtained in the District Court, upon imputations of fraud done in contemplation of bankruptcy by the bankrupt; or to give relief, either at law or in equity, in a suit brought by a creditor who had proved his debt under the commission, who had assented to the bank rupt’s discharge and certificate, and who has taken a dividend out of the bankrupt’s estate. These conclusions relieve the case of all difficulty, and make it unnecessary for us to discuss any of the other points which were made by counsel on either side in the argument.

We add a word more. It was frequently urged in the argu ment, by the counsel for the Complainants, that the demurrer of the defendant was a confession of the frauds alleged in the bill, and that therefore the Circuit Court had jurisdiction to give relief. d . Our view of that demurrer is different. It is only a confes sion of all facts well pleaded, but in this bill none were so; the power of the court to give relief, and of the complainants to ring a suit, either at law or in equity, for the original debt

Proved in bankruptcy, having been mistaken.

Ine dismission of the bill by the court below is affirmed.

Mr. Justice NELSON concurs in the result of the opinion of the court in this case.

James B. Teller and Thomas W. Swinney, Plaintiffs in &rror, v. Jonathan T. Patten and John J. Lane.

»Mrtwr^tion before the jury was, whether or not one of the defendants was larations n was ProPer for the court to exclude the dec-

ons made by the defendant in the absence of the plaintiffs.

It was also proper not to confine the attention of the jury to declarations made at one particular time in the presence of one of the plaintiffs, but to allow all sim ilar declarations to be given in evidence, so that the jury could judge of the entire question of the existence of the partnership.

This case was brought up, by writ of error, from the Cir cuit Court of the United States for the district of Indiana.

It was an action of assumpsit, brought by Patten and Lane, merchants of New York, against the plaintiffs in error, mer chants of Fort Wayne, Indiana. The only question in the court below was, whether or not Swinney was a. partner of Teller, the declaration counting upon four promissory notes signed by Thomas B. Teller & Co. Under the instructions of the court, a verdict was found for the plaintiffs. The sub stance of the bills of exception is stated in the opinion of the court.

The case was submitted on a printed argument by J/r. ford for the plaintiffs in error, and argued by Mr. 0. H. Smith for the defendants.

Mr. Justice McLEAN delivered the opinion of the court. This case is brought here by a writ of error from the Circuit Court for the district of Indiana. . .

It is an action of assumpsit on four promissory notes signed by Thomas B. Teller & Co. A verdict was rendered, and a judgment entered, for $2,719.40. ' ,

Certain rulings of the court on questions of evidence wnicn were made during the trial, and to which exceptions were taken, present the points for consideration. . .

Evidence was given to prove the partnership ot bwmney with Teller, which was denied, and which was the only con troverted fact in the case. Thomas P. Anderson, a wi ness, stated that in April, 1852, he introduced Swinney to divers mer chants in the city of New York, including the Pontiffs, as a person wishing to buy goods for Fort Wayne, as the fa ‘ law of Teller, and the capitalist of the concern, which was not denied by Swinney. Several other witnesses g^v® , conducing to prove that Swinney was a partner o -A had by his declarations and conduct at Fort Wayne ag occasions, in 1852 and 1853, held himself out to a partner of Teller, who was then ^g^8}^^^ chant, and that Swinney had suffered Teller to

It was further proved, by the book-keep er of that Swinney was in New York m June, 1854, P to the extension of the notes sued on, and in co

Patten and Lane, the plaintiffs, he admitted that he was a partner of Teller & Co., in the house at Fort Wayne. About the same time, two of the daughters of Swinney testified that their father stated, at the Astor House, in New York, to Pat ten, one of the plaintiffs, that he was not a partner of Teller.

The defendants then offered several depositions, conducing to prove that Swinney, on his way to New Y ork, with Solomon D. Bayless, to purchase goods, &c., and to whom he said that he was not to be a partner with Teller, who was his son-in-law, that he intended to purchase a small stock to start him in busi ness, but that he had no further interest or connection in the matter. The same statement was made by Swinney to several persons in New York. Witness introduced him to a number of merchants in that city, and to those persons he did not rep resent him as the partner of Teller. This was before Thomas P. Anderson arrived at the city. At none of these conversa tions does it appear that plaintiffs were present, or either of them. Other depositions were offered to prove that on the trial of one Michael Dougherty for larceny, at Fort Wayne, in January, 1853, Swinney and Teller were both witnesses, in the absence of the plaintiffs, and both swore that Swinney was not a partner of Teller’s. But the court, on objection being made, overruled the depositions, which showed the declarations of Swinney made to different individuals at different times, in the absence of the plaintiffs, and also the oaths made by Swin ney and Teller in the criminal case stated, as incompetent, but the evidence of the two daughters of Swinney was not overruled.

After the evidence was given, and the argument of counsel closed, the defendant’s counsel requested the court to charge the jury, if they believed from the evidence that in June, 1854, Swmney told Patten, in New York, that he was not, and never had been, a partner of Teller, the plaintiffs could not after wards deal with him so as to bind Swinney, unless proof were made of a new authority given to him. But the court refused to give the instruction prayed for, and said, if the jury were satisfied, from the evidence, that Swinney was actually a part ner with Teller in the establishment at Fort Wayne, his decarations to the contrary to Patten, in New York, could not relieve him from liability in this action. ♦k + ®Y,eP^on was taken to the instruction refused and to mat which was given.

he instruction given on the evidence before the jury was L°Pe.rj It was the province of the j ury to determine the weight . »e bef°re them. The instruction asked by the de ant would have restricted this right, as it would have