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at Large, p. 76, § 9. Had it been the intention of the lawmaker,
tu make the original jurisdiction of the District Courts exclusive
in all these matters in bankruptcy, to which it was extended in
the first section, some such explicit language as that above men-
tioned would undoubtedly have been used.

The lan;ruage of the Bankrupt Law of 1841, which prescribed



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IN BANKRUPTCY 657

the jurisdiction of the District Courts, is not substantially dif-
ferent from that in which the jurisdiction of that court is defined
in the present Bankrupt Law ; but the language used to confer
the jurisdiction on the Circuit Court, in the Bankrupt Law of
1841, is by no means as comprehensive and explicit as that of the
law of 1867. And yet it was decided, that " the jurisdiction of
the District Court, under that law, was not exclusivey^ but that
*'tho Circuit Courts had concurrent jurisdiction of any matter ^
arifdng under the Bankrupt Law^ when the subject-matter was
proper for a court of equity, and the parties such as the constitu-
tion and laws of the United States require:" Lucas v. Morris^
1 Paine's U. S. Circuit Court Rep. 396. It is reported to have
been held, McLean v. The Lafayette Bank^ 8 McLean's Rep.
185: "That, in all cases arising under the Bankrupt Law (of
1841), the Circuit Courts had concurrent jurisdiction with the
District Courts." And in the case of McLean v. Meline et al.j
8 McLean's Rep. 199, it was held, '^ that the Circuit Court had
jurisdiction in the case of a bill filed to set aside a conveyance
of effects made in contemplation of bankruptcy, to set aside the
transfer, direct the liens to be paid pro rata^ and the property
not levied upon to be distributed among the creditors of the
bankrupt." And in the recent work of Mr. Edwin James, on the
Bankrupt Law of the United States of 1867, the author, in his
notes, on page 12, says : —

** Within and for the district where proceedings in bankruptcy are pending, the
Circuit Courts have concurrent jurisdiction of all cases and questions in adminis-
trntion of bankruptcy under the act, as courts of equity ; and have concurrent juris-
diction in all cases at law and in equity, to which the assignees, as plaintiffs or
delcndanis, are parties, and in all matters concerning the estate and property of
the bankrupt, vested in or claimed by them. The Circuit Courts of the United
States have jurisdiction, under the Bankrupt Law, to set aside the transfer of pro-
perty by the bankrupt in fraud of the law, and in the same proceeding, to direct
that such property be distributed according to their legal rights among creditors
having valid liens thereon."

The argument ab inconvenienti has been urged against the
exercise of this jurisdiction by the Circuit Court. When the
language of a statute is sufficient to confer clearly the jurisdic-
tion, so that to deny it would render a part of the language used
unmeaning and superfluous, the argument drawn from inconve-
nience may prove want of wisdom in the lawmaker, but it cannoi
justify judicial legislation: Smith on Constitutional and Statu-

VoL. XVI.— 42



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658 JURISDICTION OF CIKCUIT AND DISTRICT COURTS.

tory Construction, p. 632 ; Broom's Legal Maxims 140 and caaei
cited. But is there any foundation in fact for this argument?
This original jurisdiction is limited to cases of involuntary bank-
ruptcy ; and the proportion of them, which will seek this juris-
diction in the first place, will not probably exceed the number of
cases in equity in the Circuit Court by creditors on account of
the frauds of debtors, if no bankrupt law existed. And with
the judicial aids provided by the Bankrupt Law for all cases in
bankruptcy, by means of assignees, registers, &c., the Circuit
Court could have no more difficulty in the adjustment of the
claims of creditors, and collecting and distributing assets, than in
the case of a creditor's bill, setting aside fraudulent transfers,
marshalling assets and distributing the same, &c. In cases of
involuntary bankruptcy the important contest in the litigation
occurs prior to the adjudication in bankruptcy. After the adju-
dication the Circuit Court need have no further trouble in dispos-
ing of the case than by its superintending jurisdiction in cases in
the District Court. But the District Court being constituted " a
court of bankruptcy," and a% such charged with all matters and
proceedings in adjusting the claims of creditors, and settling the
affairs of the bankrupt, a case in the Circuit Court, after the
adjudication in bankruptcy, could very properly, under the very
liberal provisions and ample authority in the law for regulating
the practice by rules of court, be sent to the District Court as
" the court of bankruptcy ^^^ for the balance of the proceedings.
No inconvenience to the Circuit Court was found in the exercise
of its concurrent jurisdiction, under the Bankrupt Law of 1841.
The utility and necessity of this jurisdiction of the Circuit
Court is certainly greater now than was the chancery jurisdiction
afforded to creditors prior to the Bankrupt Law. Lord Hard-
wrcKE is reported to have said : " The new laws relating to bank-
ruptcy have turned the edge of commissions of bankruptcy from
being as they were originally, remedial to the creditor and in the
nature of punishment to the bankrupt, whom they considered as
an offender, to be the accidental occasion of great frauds:"
Smith, Mont. Dig. 119; Hilliard on Bankruptcy, § 5. One
object of the chancery jurisdiction mentioned was to afford cre-
ditors in another state a jurisdiction supposed to be less liable to
be controlled by local influences than the court held exclusively by
tht> local district judges. The subtlety of overreaching debtorR,



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AUDENREID v, RANDALL. 659

and the multitude of insolvents who throng the ante-chambers and
portals of the primary and local authorities of the courts of bank-
ruptcy, create influences calculated to interfere with the due
administration of justice. While this is one of the usual and,
perhaps, unavoidable incidents of a system of bankruptcy, it i$
not fair to presume that Congress intended by the Bankrupt Law
to withdraw from the creditor the original jurisdiction of the tri-
bunal most 'likely to be above the reach of such influences, the
benefits of which he had by bill in equity before its enactment.
Such a conclusion should at least not be left to be drawn from
mere implication, but be founded upon express provision in the
law. T. W. B.



Cfircuit Court of the United State$j Maine Diatrictj April T.

1868.

LEWIS AUDENREID ET AL. v. JOHN F. RANDALL ET AL.

Where the consignee of the cargo of a yessel at sea, sells the cargo and deliven
the bill of lading, properlj indorsed, to the purchaser, the sale is valid and passes
the complete title to the goods.

Delivery of the bill of lading is, under the circumstances, a sufficient delivery
of the goods to take the case out of the operation of the Statute of Frauds.

If the purchaser afterwards refuse to accept the goods, vendor maj sell them and
recover the loss from the purchaser.

On the 1 6th of March, at Boston, A. sold to B. a cargo of coal then at sea, and
delivered to B., properlj indorsed, a bill of lading, dated March 13th, at Phila-
delphia, and also a bill of sale of the coal, dated also March 13th, though the evi-
dence showed that it was in fact made on the 16th, and was part of the transaction
at Boston on that day. Before the arrival of the coal, B. offered A. one dollar
a ton to take it off his hands, which A. refused. On the arrival of the coal, B.
refused to receive it, and claimed that the contract was within the Statute of Frauds
and void. Af^r some correspondence, A. sold the coal at public auction, and
brought suit for his loss in the transaction. Hddy that he was entitled to recover.

Clifford, J. — Special asiumpiit^ together with the common
counts as for goods sold and delivered, and for money had and
received. Substantial charge of the special counts is, that the
plaintiffs, at the request of the defendants, on the 16th day
of March 1865, bargained and sold to the defendants a certain
quantity of coal, called Broadtop coal, being the cargo of the brig
Russian, then on her voyage from Philadelphia to Portland, aA



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600 AUDENREID r. RANDALL.

per bill of lading of the 13th of the same month, amonntiiig
to two hundred and eighty-nine tons ; and that the defendants
subsequently, when the vessel arrived with the coal on board,
refused to receive the coal and pay for the same, as they had
agreed to do. Contract price of the coal was eleven dollars and
fifty cents per ton, and freight at six dollars and fifty cents per
ton. Plea was the general issue, but the parties, after the evi-
dence was introduced on both sides, withdrew the case from the
jury, by consent, and submitted the same to the court, under the
Act of Congress in such case made and provided. Most of the
material facts are without dispute, and they may be stated in a
very few words. Plaintiffs were merchants doing business in
Boston, and the defendants are citizens of Maine doing business
in Portland. Wanting to purchase coal, the defendants, on
the 16th day of March 1865, called on the plaintiffs at their
place of business, and inquired if they, the plaintiffs, had any
soft coal on the way from Philadelphia ; or, if not, whether they
would not ship them a cargo of such coal ; and being told that
the plaintiffs had just received a bill of lading for a shipment of
0uch a cargo bound to Portland, the defendants inquired if it was
for sale, and if so, at what price the plaintiffs would sell the coal.
Price asked was twelve dollars per ton for the coal, and the
freight, which was six dollars and fifty cents per ton ; but as
finally agreed, the price, including freight, was eighteen dollars.
Defendants agreed to purchase at that price, and the consignees
named in the bill of lading, A. C. Morse & Co., indorsed and
delivered to the defendants the bill of lading, which was intro-
duced in evidence by the plaintiffs. The bill of lading bears
date on the 18th day of March 1865, and appears to have
been duly executed at Philadelphia on that day, and the bill of
the coal given by the plaintiffs bears the same date, but the
proofs show that it was written and delivered at Boston at the
time the bill of lading was indorsed and delivered by the con-
signees, and that it was a part of that transaction. Payment
was to be made in cash, and the plaintiffs proved that they had a
right to draw for the amount at any time. Freights immediately
declined, and the agent of the plaintiffs, one of the consignees*
about a week alter the indorsement and delivery of the bill of
lading, being in Portland, where the defendants resided, they
requested him to sell the cargo to some other party, and offered



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AUDENREID v. BAJfDALL* 661

to give him one dollar per ton if he would take the coal off of
their hands. Reason assigned for the request by the defendants
was that they should make a loss if they took the coal, but the
agent of the plaintiffs declined to accept the proposition. Proofs
also show that the vessel arrived at Portland March 29th 1866,
with the coal on board in good condition, and that the master
notified the plaintiffs by telegraph of her arrival, and that the
defendants refused to receive the coal. On the last day of
March one of the defendants called at the plaintiffs' place of busi*
ness, and informed them, or one of the consignees, that the vessel
had arrived, and requested them to come to Portland and take
care of the coal or to sell it, and stated at the same time that if
the plaintiffs would do so they would bear a part of the loss, and
that they would make up the residue in other purchases of thee:
in the course of the year. Plaintiffs refused the proposition, am
the defendants informed them that they, the defendants, would
have nothing to do with the coal. Response of the plaintiffs to
that suggestion was, that the plaintiffs, if they, the defendants,
refused to receive the coal, would sell it on their account and
charge them the difference. They also wrote them to that effect
on the same day, in consequence of a telegram from the master
that the defendants still refused to receive the coal. Correspond-
ence between the parties was also introduced in evidence, but it
contains nothing in addition which is very material. Letter of
the plaintiffs to the defendants, dated March Slst of the same
year, shows that they received the telegram from the master, and
a letter from the defendants to the plaintiffs, dated the 1st day
of April following, shows that the defendants on that day enclosed
to the plaintiffs the bill of lading of the cargo and the bill of the
coal which they received at the time the contract was made*
Defendants refused to receive the coal, and thereupon the plain*
tiffs advertised and sold the coal at public auction.

Principal defence is that the contract was within the Statute of
Frauds and void. Contract was made in Massachusetts, and the
statute of that state provides that no contract for the sale of
goods, wares, or merchandise, for the price of fifty dollars or
more, shall be good or valid unless the purchaser accepts and
receives part of the goods so sold, or gives something in earnest
to bind the bargain, or in part payment, or unless some note or
memorandum in writing of the bargain is made and signed by the



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662 AUDBNBEID v. RANDALL.

party to be charged thereby, or by some person thereunto by
him lawfully authorized : Gen. Stat. 327.

Where the statute does not apply, it may be laid down as a
well-settled general principle that, if the parties have agreed, the
one to buy and the other to sell specific articles of personal pro-
perty, of which the price, weight, measure, and requisite fitness
are definitely prescribed, or if the terms of the contract provide
suitable means by which those qualities or conditions may be
ascertained, and the articles which are the subject of the negotia-
tion are in the state for which the parties contracted, the property
passes eo instantly by virtue of the contract of sale and without
delivery. Repeated decisions have affirmed the rule that when
the terms of the sale are agreed between the parties, and every-
thing the seller has to do with the goods is complete, the contract
of sale becomes absolute, as between the parties, without actual
payment of the price or delivery of the articles, and the property
and the risk of accident to the goods vest in the buyer, subject to
certain qualifications. He is entitled to the goods on payment
or tender of the price, and not otherwise, when nothing is said at
the sale as to the time of delivery or the time of payment. But
if the goods are sold upon credit, and the terms of the contract
are silent as to the time of delivery, the vendee is entitled to the
immediate possession, and the right of property vests at once in
the buyer, subject to the seller's right of stoppage in transitu^ if
exercised before the former actually obtains the possession:
Leonard et al. v. Davis et al.y 1 Black 483 ; Tome et al. v. Dubois
et al, 6 Wall. ; 2 Kent Com. (11th ed.) 658 ; JSinde v.
Whitehouse^ 7 East 571; Holmes v. Crane^ 2 Pick. 699;
D' Wolf v. Harris, 4 Mas. 515 ; Grosvenor v. Phillips, 2 Hill
147.

Executory contracts only are the subject of remark on the
present occasion, as it is clear that where the contract has been
in fact fully performed, the rights, duties, and obligations of the
parties resulting from such performance stand unaffected by the
statute : Stone v. Dennison, 13 Pick. 4 ; Browne on Stat, of F.,
§ 116, p. 118. Although it is true as between the parties that
the property vests in the buyer without delivery, when the bar-
gain is complete and everything is done by the seller which the
terms of the contract prescribed, yet it is equally true, as is per-
fectly well established, that as against every one except the



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AUDENKEID v, RANDALL. 663

vendor, a delivery of possession is necessary in every valid con-
veyance of personal property : Lanfear v. Sumner ^ 17 Mass. 110 ;
Caldwell V. Ball^ 1 Term 205. Actual delivery, however, is
often impracticable from the cumbrous nature of the article, and
sometimes impossible on account of its situation, or because not
present, as in the case of goods or ships at sea. Symbolical
delivery will in such cases be sufficient and equivalent in its legal
effect to actual delivery, without the actual manual occupation by
the purchaser : Leonard et al. v. Davis et al., 1 Black 482 ; 2
Kent Cora. (11th ed.) 611; Frostbury M. Co. v. N. E. Glass Co.,
9 Cush. 118.

Delivery of the key of the warehouse in which goods sold
are deposited, or transferring them on the books of the ware-
houseman or wharfinger to the name of the buyer, is in general
sufficient to transfer the property, under the terms of a proper
contract to that effect: Chaplin v. Rogers, 1 East 194 ; Dodsley
V. Varley, 12 A. & E. 632.

So the delivery of the receipt of the storekeeper for the goods,
being the documentary evidence of the title, has been held to be
a constructive delivery of the goods: Wilkestal v. Ferris, 5
Johns. 336. Timber, logs, or other lumber floating in the water,
are only in the constructive possession of the owner, and under
such circumstances, a symbolical delivery in case of sale is all
that can be expected, and is amply sufficient, as between the
parties, to pass the title : Ludwig v. Fallis^ 17 Me. 166 ; Boynton
V. Veazie, 24 Me. 288; Macomher v. Parker, 13 Pick. 175.
Mere words, however, even in the case of cumbrous articles, are
not sufficient to constitute a delivery and acceptance of goods
such as the statute requires. Superadded to the language of the
contract, there must be some act of the parties amounting to a
transfer of the possession and an acceptance thereof by the buyer,
as where the seller does some act by which he relinquishes hia
dominion over the property and puts it in the power of the buyer :
Shindler v. Houston, 1 Comst. 266. Examples put in that case
as illustrations are where the key of the warehouse was delivered
to the buyer, and where the bailee of the goods was desired to
deliver them according to the contract. Words only do not con-
stitute either an actual or symbolical delivery within the meaning
of the Statute of Frauds. Extent of the rule, as there laid down,
is that there must be some act of the parties superadded to tho



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664 AUDENRBED r. RANDALL.

language of the contract, which amounts to a transfer of the
possession of the goods ; but the court do not deny that a valid
delivery may be made symbolically in cases where an actual
delivery is impossible or impracticable. Undoubtedly a delivery
is necessary to give validity to a sale as against subsequent pur
chasers or judgment-creditors, but it cannot be admitted that iu
cases where an actual manual occupation of the articles is impos-
sible, as in case of goods or ships at sea, or in case of cumbrous
articles, no legal delivery can be made. Such a delivery is legal
and sufficient to pass the title, when made in the usual manner
and by the usual symbol, fitted to prevent fraud and give certainty
to the transaction. Valid sale of personal property, as against
subsequent purchasers and judgment-creditors, is sufficient to
take the case out of the operation of the Statute of Frauds, if it
appears that the title became absolute in the buyer, discharged of
all liens on the part of the seller. When goods are sold at sea,
the indorsement and the delivery of the bill of lading to the
buyer, and the acceptance of the same by him under the contract,
are the proper substitutes for an actual delivery and acceptance
of the goods, and have the effect to vest a perfect title in the
buyer, discharged of all right of stoppage in transitu on the part
of the seller and indorser of the bill of lading: Newsom v. Thorn-
ton, 6 East 41 ; Pratt v. Parkman, 24 Pick. 42. Right of
stoppage iw transitu was conceded to the seller in order to pre-
vent the injustice which would take place if, in consequence of
the vendee's insolvency while the price of the goods was yet
unpaid, they were to be seized and appropriated in satisfaction
of his other liabilities, to the prejudice of the rights of his unpaid
vendor. The vendor's right in respect to his price is not a mere
lien which he will forfeit if he parts with the possession, but
grows out of his original ownership and dominion. Such a right
attaches to goods sold on credit, where nothing is agreed on as
to the time of delivery. In that state of the case, the vendee is
immediately entitled to the possession, and the property and the
right of possession vest at once in him ; but his right of possession
is not absolute, because it is liable to be defeated if he becomes
insolvent before he obtains the absolute control of the goods:
Bloxam v. Sanders, 4 B. & C. 948 ; Tooke v. Hollingworth^ 5
Term 215 ; Lickbarrow v. Mason, 5 Term 683.

Goods may be stopped in transitu so long as the transit con^



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AUDENREID v. RANDALL. 665

tinues, whether by land or water, from the consignor to the
consigneo, and whether they are in the hands of the carrier,
warehouse-keeper, wharfinger, or any other middleman connected
with the transportation ; but the right of stoppage ceases when
the goods have reached their place of destination, and have come
to the actual or constructive possession of the consignee : Covell
V. Hitchcock, 23 Wend. 613 ; Mottram v. UeyeVy 1 Den. 487 :
Smith Mer. L. 683. Possession, actual or constructive, defeats
the right of stoppage in transitu, and the bill of lading becomes
functus officio as soon as the goods are landed and warehoused in
the name of the holder, as he then becomes possessed of the goods
themselves in the eye of the law, and derives his power, not from
the bill of lading, but from such possession. Nothing can be
more certain than the rule that, as between the consignor and
consignee on the one side, and third parties on the other, the
indorsement and delivery of the bill of lading by the consignee
of goods at sea, and the acceptance of the same by the buyer,
under a contract made in good faith, defeats the right of stoppage
in transitu by the consignor. Settled rule is, that in such cases,
where there has be^n a sale by the consignee which would give a
title to the vendee as against the consignor, independently of the
indorsement of the bill of lading, the efiect of the indorsement
will be to take away that right, even in cases where it would
otherwise exist : Churney v. Behrend^ 3 E. & B. 622 ; Pennel v.
Alexander^ 3 E. & B. 282. Regarded as consignees, therefore,
it is clear that the plaintiffs never had any right of stoppage in
transitu^ as the terms of the sale were absolute, and the indorse-
ment and delivery of the bill of lading by Morse & Co. were
absolute and unconditional. Suggestion may be made that Morse
& Co. were only agents of the plaintifis, and that the latter were
in fact the shippers and owners of the coal. Suppose that to be
so, and even suppose that they are not estopped to deny that the
bill of lading expresses their true relation to the goods ; still it
can make no difierence in this case, as the vessel had arrived,
and the master had notified the defendants that he was ready to
deliver the cargo, and the plaintifis two days afterwards affirmed
the sale, and insisted that the defendants were bound by the con
tract : Rowley v. Bigelow, 12 Pick. 307 ; Craven v. Ryder ^ 6
Taunt. 433. Bad faith is not imputed in this case, and the Su-
preme Court, speaking to the precise point under consideration,



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AUDENBEED v. RANDALL.

say that by the well-settled principles of commercial law, the
consignee in the bill of lading is constituted the authorized agent
of the owner, whoever he may be, to receive the goods, and by
his indorsement of the bill of lading to a bond fide purchaser for a
valuable consideration, without notice of any adverse intent, the
latter becomes as against all the world the owner of the goods.
It matters not whether the consignee in such a case be the buyer
of the goods, or the factor or agent of the owner. His transfer
in such a case is equally capable of divesting the property of the
owner and vesting it in the indorsee of the bill of lading : Conraa



Online LibraryAndrew PritchardThe American law register, Volume 7 → online text (page 70 of 93)