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his contingent liability ; but if he neglects so to do, and after the discharge, pays
the security debt when due, he has no remedy against the bankrupt. 1870.
Li/pecomb v. Grace (26 Ark. 231), VH, 607.

16. Proving a debt for goods sold and delivered, in bankruptcy proceedings,
bars an action on the debt previously commenced. 1872. Bennett v. CMdthumt
(109 Mass. 494), XII, 742.

• rv. Effect of BAmatuFTcr.

17. Dissolvoi partnctrship. The bankruptcy of a copartner dissolves the
copartnership and constitutes the assignee and the solvent partners tenants in
common, or joint owners of the partnership property. In a suit, respecting
the partnership property, the assignee and solvent partners must unite. 1871.
EaUey v. Norton (45 Miss. 708), VII, 745.



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BANKRUPTCY. 27

18. Does not abate action. An action at law does not abate by the bank-
rnptcj of the plaintiff, and if the assignee in bankruptcy be discharged, without
any interference by him with the suit, it may proceed in the name of the bank-
mpt, the presumption, in the absence of any proof to the contrary, being that
the action is proceeding for the benefit of the true owner, whoeyer he may be. •
1871. Conn&r v. Southern Exp. Co, (42 Ga. 87), V, 548.

19. Sale on azeoution after abjudication — sherlA Notice of an a^jadication
in bankruptcy does not justify a sheriff who has seized property under an execu-
tion from a State court in refusing to sell such property where it has not been
ordered into the bankruptcy court. 1869. Sharman v. HoweU (40 Ga. 257), II. 576.

20. Suit to enforce mechanics' lien. Under a statute creating a mechanics*
lien on a building as soon as the labor is performed, or the materials furnished
and used, the statement required by the statute may be filed and suit com-
menced in the State court to enforce the lien, after the commencement of pro-
ceedings to declare the owner of the building a bankrupt ; but the court will
order the suit to stand continued to await the result of the action of the bank-
rapt court. 1869. CUfton ▼. Foster (108 Mass. 288), IV, 589, and note, 548.

21. Attachment — effect of abjudication. The effect of an adjudication of
bankruptcy, is to bring all the bankrupt's assets at once into the custody of the
law and to prevent the subsequent attachment by one creditor for his own
benefit. 1869. WiUiame v, Merritt (108 Mass. 184), IV, 521.

22. D. was adjudged a bankrupt on his own petition in February, but no

meeting of his creditors was held or assignee appointed until March 10. On
March 9; the defendant, as deputy sheriff, attached certain property in a suit
against D. The plaintiff claims title thereto under a bill of sale from D. dated
in January, and sued for its conversion. The defendant alleged that the bill
of sale was given without consideration, and for the purpose of defrauding
D.'s creditors. Held, that the defendant could not justify under his writ, and
that the plaintiff could recover. lb.

23. The sheriff attached certain property of a debtor, on mesne process,

and delivered it to a receiptor. Afterward judgment was rendered in ihp suit,
execution was issued,' and the sheriff, having failed to obtain payment thereof
of the debtor, made demand of the property, of the receiptor, whereon to levy.
The receiptor refused to deliver the property ; and on the next day the debtor
filed his petition in bankruptcy. Held, that the proceedings in bankruptcy
were no defense to an action brought by the sheriff against the receiptor for
the amount of the execution. 1870. Parke v. Sheldon (86 Conn. 466), IV, 95.

24. Right of mamhal to seize property held on execution. A United
States marshal, by virtue of a wi^rrant in bankruptcy, took property of the
bankrupt from the custody of the State sheriff, who had seized it on execution
against the bankrupt, before the commencement of the proceedings in bank-
ruptcy. BJM, that the marshal was Uable for damages at the suit of the
sheriff. 1871. Jf<?tt»Mm v. .SMon (16 Minn. 426), X, 150.

See bTBOLYBinr Laws.



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28 BANKEUPTOY,

V. What passbs to assignsb.

26. When right of action does not pais to assignee. To the plea that the
plaintiff is a bankrupt, and that all his estate yested in his assignees, it is a

, good replication that the whole beneficial interest in the contract or demand
in suit was vested, hj prior assignment, in a third partj, for whose benefit the
suit is prosecuted. 1871. Bhoades y. BlackUion (106 Mass. 384), VIII, 8d2.

26. In an action for an alleged breach of contract, it appeared that the

plaintiff made the contract, in his own name, in the course of a business which
he was carrying od for L., and which he had previously transferred to L. as
security for a debt, with the agreement that L. should furnish all the capital,
and receive all the profits, except enough to support plaintiff and his family,
until the debt was paid, when the business and the profits should again
become plaintiff's. After the alleged breach by defendant, plaintiff became
bankrupt. HM, that plaintiff could maintain the action in his own name, and
that his right of action did not pass to his assignees in bankruptcy. lb,

27. An action of review is a chou in action within the meaning of the
United States bankrupt law, and, in virtue of an adjudication in bankruptcy,
vests in the assignee, who, alone, may prosecute or defend it in his own name-
1869. ZoOar v. Janvnn (49 N. H. 114), VI, 469. *

28. Vendor^i interest in contract to convey. A vendor who lias contracted
to sell his land, is in equity a trustee for the purchaser, but if he has not
received the whole of the purchase-money, he is not a mere naked trustee, and
upon becoming a bankrupt, his interest in the land will, by proper assignments,
pass to the assigliee in bankruptcy under the fourteenth section of the bank-
rupt act. 1871. Stoepson v. Eotue (65 N. C. 84), VI, 785.

29. To a bill for a specific performance of a contract to convey land, the

assignee of the vendor who has not received the whole of the purchase-money
and who has become bankrupt, must be made a party, lb.

30. Where a defendant to a bill for the specific performance of a contract

to convey land, alleges and relies upon his certificate of discharge as a bank-
rupt,* the fact of a proper assignment of his estate to his assignee will be pre
Bumed though it is not specifically alleged, where there is no allegation or
proof to^ the contrary, lb.

31. Bxempt property. Plaintiff, having two pairs of oxen, sold one pair to
L., who took them away on condition that they were to become his when he
paid for them. Held, that the pair remaining were the OTilypBir of oxen plain-
tiff then owned, and as such were exempt from attachment, and being so exempt,
would not pass to the assignee in bankruptcy of plaintiff. 1872. Wilkin$an v.
WaU (44 Vt. 508), VIII, 891.

32. Defendant, a constable, attached property of plaintiff by law exempt

from attachment, and subsequently surrendered it under protest to the assignee
in bankruptcy of plaintiff. Held, that the assignee, having no right to take
the property, defendant was liable to trover, lb.



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BANKRUPTCY, 29

VL Payicbnts to BAOTEBUPT— CJONVBYANCaaS.

33. Pa3rment to bankrupt, made after publication of notice of warrant in
Dankruptcy, as required by section 11 of the bankrupt act, although made in
good faith and without knowledge of the bankruptcy, is no protection against
the bankrupt's assignee. 1869. Stwena v. MeehanM Savings Bank (101
Mass. 189), m, 825.

34. Payment of deposits, by a bank, to a bankrupt at any time after the

filing of the petition, although made in good faith and without actual notice of
the proceedings in bankruptcy, will not discharge the bank from liability to
the assignees for the amount so paid ; but it must be proved that the deposits
were the property of the bankrupt at the time of filing the petition. 1870.
Maifi Y. The Manufaetur&rt^ NaHonal Bcmk (64 Penn. St. 74), III, 578.

36. OonTeyanoe in fraud of the aot : mortgage. A manufacturer of bricks '
gave a mortgage upon bricks to secure an existing debt and future advances.
The mortgaged property was subsequently sold and delivered wifh the permis-
sion of the mortgagees; and a new mortgage was given on other bricks
expressed to be in consideration of the release of the daim of the prior mort-
gage. The manufacturer was, at the time of giving the new mortgage, insolv-
ent in fact, although he did not file his petition in bankruptcy until a month
later. In an action by the assignees in bankruptcy to recover for the property
conveyed under this last mortgage, the Jury found an intention on the part of
the mortgagor to give a preference to the mortgagees, and also that the mort-
gagees had reasonable cause to believe the insolvenc^^ and such intention of
the mortgagor. HM, that the new mortgage must be regarded as a new secur-
ity, and not a mere substitution of securities, and that it was void as against
the assignees in bankruptcy, under the United States bankrupt act, section 85.

1869. .9bf6Mv.^iHM (102 Mass. 437), III, 475.

vn. Thb DisoHABea.

36. Lnpoaohing diaoharge: Jurisdiction : fraud. A discharge in bankruptcy
cannot be impeached in a State court for any cause which would have pre-
vented the granting of the discharge under the bankrupt act, or would have
been sufficient ground for annulling the discharge in the United States court
under that act. 1869. Cbr^ v. i2i^>^ (57 Me. 69), n. 19.

37. The authority to set aside and annul a discharge in bankruptcy, under

the act of 1867, rests exdnsively in the United States courts. lb,

38. A discharge in bankruptcy, obtained after the commencement of an

action on a promissory note provable as a debt under the bankrupt act, when
pleaded in bar of such action, may be attacked therein by showing that it was
obtained upon proceedings of which the plaintiff was fraudulently deprived of
notice. 1871. Batchdder v. Low (48 Vt. 662), V, 811.

39. The mere omission of the name of a creditor and his debt from the

schedule of creditors and indebtedness does not, in the absence of design or
fraud, affect the validity of a discharge in bankruptcy, as to such creditor.

1870. PoytM v.^Wd (7 Bush, Ky. 844), m, 816.



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30 BANKRUPTCY.

40. The omission of a petitioner in bankraptcj, under the act of 1867, to

include a creditor's claim in his sworn schedule of debts, or to see that the
creditor has notice of the proceedings, most be shown to be willful and fraudu-
lent in order to avoid the discharge. 1871. Bymonda v. Barnes (59 Me. 191),
VIU. 418.

41. A creditor who was fraudulentlj omitted from the schedule filed bj a

bankrupt in proceedings under the bankruptcy act, and who had no actual
knowledge of the proceedings until after a granting of a discharge to the
bankrupt, applied to the United States district court, under section 84 of the
act, to annul the discharge for that cause. HMt that he could not afterward
impeach the discharge in an action on his debt in a State court. 1871. Burpee
r. Sparhawk (108 Mass. Ill), XI, 820.

42. A certificate of discharge in bankruptcy, under the act of 1867, chapter

176, cannot be impeached in a State court, in an action upon a debt of a nature
to be barred bj a valid discharge, on account of the fraudulent conveyance of
property by the bankrupt. 1871. Way v. ffotoe (108 Mass. 602), XI, 886.

43. A disohaxge in bankruptoy releases the bankrupt from his liability as
surety on a guardian's bond, such a liability being a contingent liability within
the meaning of section 19 of the bankrupt law of 1867. 1871. Jones v. Knoa
(46 Ala. 58), VII, 583.

44. When discharge a bar. In an action on a judgment obtained in New
Hampshire, after the defendant had been adjudged a bankrupt, on a debt prov-
able in bankruptcy, a certificate of his subsequent discharge in bankruptcy is
no bar to the action in Massachusetts, there being no evidence of a different
law and practice in New Hampshire. 1869. Brat^ord v. Bice (102 Mass. 472),
III, 488.

46. — — - Where it appears that a discharge in bankruptcy has been obtained by
fraud, it is no bar to an action on a prior debt ; notwithstanding the discharge
has not been set aside in a regular proceeding for that purpose. 1869.
BeardeUy v. HaU (86 Conn. 270), IV, 74.

46. IMsoharge after Judgment will not stay appeal. After judgment in an
action and appeal taken by the defendant, he was adjudged a bankrupt by the
register in bankruptcy, and filed the adjudication in the appellate court. On
application for a stay of proceedings, held, that the judgment was final within
the contemplation of section 21 of the bankrupt act, and that the stay could
not be granted. 1870. JTarritt v. <7KcWd» (89 Cal. 559), n, 479.

47. A discharge in bankruptcy will not prevent a creditor from taking a

decree in rem against a fund upon which he obtained a lien, by trustee attach-
ment, more than four months prior to the commencement of the proceedings
in bankruptcy. 1871. >8SkHWard v. Xac*tf (48 Vt. 674), V, 808.

VIII. MlBGELLAKBOUB.

48. AttaohmAnt — computation of time. A debtor's property was attached
on March 8, at 7 o'clock p. m., and his petition in bankruptcy was filed July 8,
succeeding, at 8 o'clock p. M. HM that the maxim that in law there is no



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BANKS AND BANKING. 31

fraction of a day, did not apply, and that the attachment was dissolved under
section 14 of the bankrupt act, dissolving attachments made within four
months of the commencement of proceedings in bankruptcy. 1873. We^tbrook
ManvfaehiTvng Oo. v. Grant (60 Me. 88), XI, 181.

49. Limitation of suits by assignee. A, a bankrupt, brings a suit in his own
name against B, on the 19th day of September, 1870 ; on the 11th of March,
1872, A's assignee in bankruptcy, C, who was appointed on the 25th of Febru-
ary, 1869, is made party plaintiff in the suit commenced by A. JIM^ that
the right of action against B accrued to C, the assignee, at the time of his
appointment, and that the two years' limitation in the bankrupt act, of suits
by assignees, was a bar. C^d^tf v. jEb»m (69 N. C. 464), XU, 657.

60. Ziien of State for taxes. A sale of the land by the assignee of a bank-
rupt does not divest the lien of the State upon the land for taxes due on it,
even though sold by the assignee, free of incumbrance. 1872. fftokes v. State
(46 Qa. 412), XU, 688.

61. lien on funds paid into court: costs. Funds were paid into a State
court for J. S., and other persons obtained judgments for costs against him, and
execution was issued thereon, but returned unsatisfied. Ordered, that the
amount of the costs be deducted from the funds, notwithstanding J. S. had
been adjudged a bankrupt about the time the judgments for costs were obtained.
1872. Olerk^i Office v. The President, Directors and Oompany of the Bank qf
Cape Fear (66 N. C. 214), Vm, 606.

BANKS AND BANEINQ.

I. AUTHORITT OF 0FFI0SR8.
n. AB COLLBCTOB&

m. Chbcks.

IV. Certificatb of DBPOsrr.
Y. Certification of gheoxb.
YL National banks.
yn. Sayings BANKS.

L Authoritt of officers.
L Of oashier. A cashier has no authority to bind the bank by a discharge
of its debtors, without payment, or to release a surety by an agreement that
he should not be called upon to pay a note that he was liable on in ordinary
cases ; but if, knowing one to be a surety upon a note, he inform him that such
note is paid^ intending him to believe it, and the surety, relying upon that
statement, changes his position toward his principal by indorsing a new note or
giving up his securities, the bank will be estopped from denying that the note
is paid. 1871. Ooeheeho National Bank v. RaskeU (61 N. H. 116), XII, 67, and
note, 76.

2. ^^ In a suit against the cashier of a bank and his sureties, on their bond,
held, the admission of the cashier, that he had paid out large sums of money
without the consent of the directors, is admissible evidence. 1869. Atlas
Bank v. BrownOl (9 R. 1. 168), XI, 281.



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32 BANKS AND BANKING.

3. Where the cashier of a bank, for the acoommodation of the pajee or

prior indorser, indpnied his name upon a note, not belonging to the bank, as
"A. B., Cas." Held, that the indorsement was offidal, not personal, and soffi-
cient in form to bind the bank. 1870. EougMon v. The Fi/r9t National Bank
of Elkhom (26 Wis. 668), VU, 107.

4. A bill drawn payable to the order of the " cashier " of a bank la

payable to the bank, and no indorsement is necessary to give the bank tiUe.
1871. First National Bank Y.ffaU{44tf.Y.S96),lV,Q9S,

6. Violation of ohartetr by offioars. A banking corporation was instituted
under a statute which provided that no director or other officer of the bank
should borrow any money from the bank, under penalty of fine and imprison-
ment. The president of the bank, who was also a director borrowed a large
sum of money from the bank, and afterward made an assignment of his prop-
erty for the benefit of his creditors, and, on an appeal from an order allowing
the claim of the bank under the loan, held, that the contract arising from the
loan was enforceable, though prohibited by statute, and that the lien of the
bank on property in the hands of the assignee was good to the extent of the
loan. 1870. Lester y. Eowird Bank (HZ Ud.S5Q),lU, 211.

6. Payment to bank in its own bills. A bank cannot, by assignment of its
efiects, choses in action, etc., deprive the maker of a note due the bank of his
right to pay the same with the bills of the bank ; nor can the bank, by any
authority derived from the legislature, deprive the maker of such right of
payment of a note due the bank, in bills of the bank. 1878. Blount v. Wind-
let/ (68 N. C. 1), XU, 616.

II. Ab 0OLLBCTOB8.

7. Negligenoe of notary. Where a bank, having received promissory notes
for collection when due, employed a notary to present them and give notice to
the proper parties, hM, that it was liable for any negligence of the notary in
omitting to demand payment of the maker or to give notice of protest to the
indorsers. 1873. AyrauU v. The Paoifie Bank (47 N. Y. 570), VII, 489 and
n^,498.

8. Protest. Where a depositor of notes for collection told the officers of the
bank that he wanted them protested if not paid, hM, that in the term '* pro-
test," the depositor must be presumed to have included a demand of payment
in proper form, and at the proper time, and, in case of non-payment, due and
reasonable notice to the indorsers by the bank or some of its clerks or sa-
vants or other suitable person, lb,

9. When may recover moneys paid to principal by mistaksk The defend-
ant, located at New York, sent to plalntifT, located at Troy, for collection, a
note payable at a bank about thirty miles from Troy. The note was not paid,
and notice of non-payment, etc, was sent by mail to plaintiff and defendant.
Defendant received the notice, and collected the amount of the note from an
indorser. Plaintiff did not receive notice, and assuming the note to have been
paid, forwarded its amount to defendant, who at once paid back the indorser.
Subsequently, upon discovering that the note had not been paid, plaintiff
claimed the amount paid to defendant. Held, that the plaintiff was entitled to



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BANKS AND BANKING. . 33

recover the monej paid under a mistake of fact ; that the pajment back to the
indorser was not sufficient to excuse defendant, it having had, at the time of
plaintiff's making claim, means to secure itself against loss. 1871. Union
NaHonalBank v. Siaih NaHorud Bank (43 N. Y. 462), III, 718.

10. Uable for negUgenoe. Plaintiff, the indorsee of an instrument drawn
on a bank and directing it to " ninety days after date, paj to B or *order one
thousand dollars," delivered it to defendant, a bank, for collection. At the
expiration of the ninety days, de/endant presented said instrument for pay-
ment, and protested it for non-payment without allowing days of grace. In
an action against the bank for failing to have the instrument duly presented
and protested, the drawers being insolvent, held, that the instrument was a biU
of exchange and entitled to grace, and that the bank was liable for failing to
have it duly presented and protested and notice given to the indorsers. 1873.
Georgia National Bank v. ffendenon (46 Ga. 487), XII, 590.

IL liable for fraud of cashier. Where the cashier of a bank in the ordin-
ary business of receiving paper for collection commits a fraud on his bank in
not entering the paper received on the books, and in retaining it without col-
lection, protest or notice, the bank is responsible for any loss that may occur
in consequence. Pahquioque Bank v. Bethel Bank (86 Conn. 825), IV, 80.

III. Checks.

12, Right of holder. Notwithstanding the agreement which bankers make
with their customers to pay their checks to the amount standing to their credit,
a check-holder can take no benefit from this agreement, and a check does not
operate as a transfer or assignment of any part of the debt, or create a lien at
law or in equity upon the deposit. 1871. ^ina National Bank v. Fourth
National Bank (46 N . Y. 82), VII, 814.

13. A direction by a dank depositor to apply deposits to the payment of

checks or notes in a particular order, creates no trust in favor of holders ; and
a failure to comply with the direction is a breach for which the depositor alone
can sue. Jb.

14. A promise by the drawee to the drawer of a check, draft or bill of ex-
change to accept and pay the same does not make the drawee liable to an ac-
tion by a holder, unless the latter has taken the check, draft or bill of exchange
on the faith of such promise. 1871. Oarr v. National Security Bank (107
Maso. 45), IX, 6. and note, 9.

16. H. consigned twelve bales of cotton to defendant, commission mer-
chant, and drew a draft on him, which contained a memorandum at the foot
thereof that it was drawn " against twelve bales of cotton," procured the plain-
tifib to discount it, and notified the defendant of the consignment and the draft^
The defendant refused to accept the draft, and informed H. by letter that he did so
because he had not received the bill of lading of the cotton, but that he would
accept the draft on receipt of the bill. Two days later he received the bill,
and afterward plaintiff, who had seen his letter to H., presented the bill for ac-
ceptance, which was again refused. Upon a subsequent receipt of the cotton,
the defendant sold it and credited its proceeds to H., who was his debtor to a

6



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34 BANKS AND BANKING.

Urge amoani. HM, that plaintiff oonld not maintain an action against the
defendant, either upon his promiae to accept the draft, or for the proceed! of
the cotton. 1871. ExehanifS Bank of Bt. LauU ▼. Biee (107 Mass. 87), IX, 1.

16. The holder of a check, drawn by a third partj on a bank, cannot off-
set each check against his note held by the bank. There is no privitj of con-
tract between the holder of such a check and the bank, and a refusal to pay
the check wonld not give the holder a right of action against the bank. 1871.
due Y. Eendenan (23 La. An. 49), VUI, 590.

17. Where a bank receives from the payee a genuine check, drawn upon

itself by a customer, as a deposit, and credits the depositor witlyt as such, it
becomes at once the debtor of the depositor for the amount ; and a subsequent
return of the check to the depositor (even within an hour), as not good, be-
cause the drawer's account was overdrawn, will not relieve it from liability
for the amount. 1871. Oddid v. National €Uy Bank of New York (45 N.
Y. 785), VI, 160.

18. Presentment. The holder of a negotiable bank check, drawn the day
previous, presented it for payment, which was refused. On the same day he
transferred it for a valuable consideration to plaintiff, who took it in good faith
and without notice of the previous dishonor, and immediately on the same day
presented it to the drawee, whereupon payment was again refused. HM, that
plaintiff could recover of the drawer, a sufficient time after the check was
drawn not having elapsed, when plaintiff took it, to raise the presumption of
dishonor, although the drawer and drawee were residents of the same city.
1870. Himmdmann v. HotaUng (40 Cal. Ill), VI, 600.

19. When the drawer and drawee of a bank check reside in the same city

or town, the reasonable time ,for presumptive dishonor should not be fixed
within more restricted limits than the close of business hours of the day suc-



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