recognized the power of the State to appoint an | preference over a local creditor. we think it administrator and hold him responsible for the proper administration of the estate. If so, how can it reject the authority of the State to distribute the estate in accordance with a scale applicable to all creditors alike?

The

safe to say her bill would have been dismissed. The powers of courts of equity are not in issue in the present suit, nor is there any question presented about restraining or limiting them. The laws of Arkansas required an adminis There is no difference in principle on the trator to make final settlement of his adminispoint we are considering between the administration within three years from the date of tration and the insolvent laws of a State. In his letters. Gould, Dig. L. Ark., 139. the case of Bk. v. Horn, 17 How., 160. 15 L. administrator of Du Bose not only failed to ed., 71, this court held that, by the law of discharge this duty, but neglected even to conLouisiana, the estate of the insolvent vested in vert the assets of the estate into money, in the creditors, to be administered by the syndic, | order to pay debts. Gautier was not compelled as their trustee, and that an execution issued on to resort to the local Probate Court to secure a judgment obtained in the Circuit Court of the the performance of these obligations, but could, United States for the Eastern District of Louisi- had he chosen, have invoked the equity powers ana, after the cession had been accepted and the of the Circuit Court for the District of Arkan283*] syndic appointed by the creditors, sas, to obtain a suitable measure of redress. could not be levied on the property of the insol- This he could have obtained in less time than vent, although the suit was pending when the it has taken to conduct this litigation; but proceedings in insolvency were begun. The this measure of redress would only have placed property had been seized by the operation of him on an equality with other creditors, as the law of the State, and was being adminis- prescribed by the laws of Arkansas. It would tered for the benefit of creditors, and when the in no event have diverted the assets, so that bank obtained a judgment the insolvent had no his debt should have been satisfied to the excluinterest in the property subject to levy and sion of other creditors equally meritorious. sale. So, in this case the law vested the assets The judgment of the Supreme Court of Arkanof Du Bose' estate in a trustee to be adminis sas is affirmed. tered and sold for the benefit of creditors and distributees, and when the judgment was rendered against the administrator, the assets LUMAN JENNISON and Hiram Jenniso being held by him solely in his character as trustee, were no more subject to seizure and sale than they were when held by the trustee of an insolvent estate.

The point decided in Payne v. Hook, 7 Wall., 429. 19 L. ed. 261, relied upon by the plaintiff in error, does not touch the question at issue. The Circuit Court of the United States

for the District of Missouri, sitting as a court of chancery as an incident to its power to enforce trusts, took jurisdiction of a bill filed by Mrs. Payne to compel the administrator of her brother's estate to account and distribute the assets in his hands.

It was contended, as the complainant, were she a citizen of Missouri, could only obtain relief through the local Court of Probate; that she had no better right because of her citizenship in Virginia; but this court held that the equity jurisdiction conferred on the Federa. Courts is the same that the High Court of Chancery in England possesses; is subject to neither limitation nor restraint by state legislation, and that a bill stating a case for equitable relief, according to the received principles of equity, would be sustained, althoug.. court of the State, having general chancery powers, would not entertain it. The bill charged gross misconduct on the part of the administrator, and one of its main objects was to obtain relief against these fraudulent proceedings. This relief was granted, and the administrator compelled faithfully to carry out the trust reposed in him, and to pay to the complainant the distributive share of the estate of her brother, according to the laws of Missouri.

284*] *No greater rights in the estate were adjudged to her than were secured by the law of the State. and if she had been a creditor, instead of a distributee, and sought to obtain a

Plffs. in Err.,

v.

EDWARD H. LEONARD, Executor, and Cornelia Leonard, Exrx. of Frederick B. Leonard, Deceased, who was Surviving Partner of the Beldon Lumber Company.

(See S. C., 21 Wall., 302-310.) Trial by the court, what errors reviewablewhen vendor may re-enter for non-payment— notice to quit-sales of real estate by contract-rights of vendor and vendee-when title vests in vendee-when his interest ceases -surrender.

1. Where a cause is tried by the court without a jury and there are no exceptions to the rulings of the court on the trial, and the finding of facts is special, this court can only review the sufficiency of the facts found to support the judgment.

2. Where, in ordering judgment for plaintiff, certain propositions of law are announced by the judge, these are only important as they affect the question whether the facts found are sufficient to support the judgment.

other. who was to cut a certain quantity of logs 3. Where one agreed to sell timber lands to aneach year and pay a certain sum for each thousand feet so cut, and on payment in full of the contract Dfterwards executed a bill of sale of logs cut price was to receive a deed of the lands, and he and a mortgage thereon to secure advances and the mortgagees abandoned the lands, and the vendor entered into peaceable possession for non-payment of purchase money, and took possession of all the timber that had been cut and had not been removed, the vendor may recover of the mortgagees for logs which they afterwards seized and converted to their own use.

4. That the vendor took an agreement to convey certain swamp lands as security for the performance of the contract does not alter his rights. 5. The mortgagees were not tenants at will, nor entitled to three months' notice to quit.

NOTE.-Time, when of the essence of the contract-see note to Slater v. Emerson, 15 L. ed. U. S. 307.

6. On sales of real estate by contract, the title, remains in the vendor and the possession passes to the vendee, and an equitable interest vests in the vendee to the extent of the payments made by him. 7. When the contract price is fully paid, the entire title is equitably vested in the vendee and he may conpel a conveyance of the legal title by the vendor or his heirs or assigns. The vendor is a trustee of the legal title for the vendee to the extent of his payment.

8. Whatever puts an end to the equitable interest of the vendee, as notice, an agreement of the parties, a surrender or an abandonment, places the vendor where he was before the contract was made.

9. It does not alter the effect of a surrender or abandonment, that the contract contains no clause of re-entry, or that the vendor has sought to enforce payment of the amounts which became due to him before the surrender and abandonment.

[No. 106.]

Submitted Dec. 17, 1874. Decided Jan. 11, 1875.

cott, 15 Gray, 541; Pratt v. Ogden, 34 N. Y., 22. Messrs. Norris, Blair & Stone, for defendants in error:

1. The contract of Sep. 1, 1866, the Beldon Lumber Company with Cole, was executory; this is elementary.

(1808) Jackson v. Myers, 3 Johns., 388; (1808) Jackson v. Clark, 3 Johns., 424; (1816) Ives v. Ives, 13 Johns., 235; (1834) Atwood v. Cobb, 16 Pick., 227; (1851) Lafferty v. Whitesides, 1 Swan. (Tenn.), 123; (1857) Pritts v. Ritchey, 29 Pa., 71; (1863) Cole v. Gill, 14 La., 527.

2. No title passed by such executory contract, a corollary of the foregoing.

See, same authorities, also (1853) Burgett v. Bissell, 14 Barb., 640.

3. The license "to cut and remove" was good;

IN ERROR to the Circuit Court of the Unit (1) when wholly executed both cut and re

igan.

the Western District of Mich- moved-before (2) breach and entry for
breach, or, in other words, license revoked.
(1849) Dolittle v. Eddy, 7 Barb., 74; (1869)
Burnett v. Caldwell, 9 Wall., 290; 19 L. ed.,

The case is fully stated by the court.
Messrs. M. J. Simley and D. Darwin
Hughes, for plaintiffs in error:

The question of the materiality of time in these agreements, is a question of intention of the parties as expressed in the contract. Bing. Real Prop., 783; Shafer v. Niver, 9 Mich., 253. There is no proviso for re-entry for breach, and no agreements that a failure to pay shall put an end to the contract.

Payment is made a condition precedent to a conveyance, but not to possession, or to cutting and removing.

The plaintiff took the Ottawa land as collateral security for performance by Cole, showing a clear intention that no right of rescission remained.

Another rule is, that when payments are to be made in installments at specified times, the time for the first installment is material, and the time for the others is immaterial, if the first has been paid.

Bing. Real Prop., 793; Edgerton v. Peckham, 11 Paige, 358.

Plaintiff was a trespasser and ejectment would lie against him.

D'Arras v. Keyser, 26 Pa., 249. Clute v. Jones, 28 N. Y., 280, is a case at law holding time not material.

If plaintiff could rescind at all, it is on the terms of returning the Ottawa land and the purchase money received. This must be done even in cases of fraud.

Bowen v. Schuler, 41 Ill., 195; Wilbur v. Flood, 16 Mich., 40; Ayres v. Hewett, 19 Me., 281; Kimball v. Cunningham, 4 Mass., 504; Smith v. Doty, 24 Ill., 163; Buchenau v. Horney, 12 Ill., 336.

Cole was to have possession to cut the timber, whether he made default or not. But suppose this not to be so. Then Cole and defendants were tenants at will, and entitled to three months' notice to terminate the tenancy. Crane v. O'Reilly, 8 Mich., 315.

712.

4. This license was suspended; revoked by entry of vendor for breach.

(1827) Jackson v. Miller, 7 Cow., 747; (1830) Jackson v. Moncrief, 5 Wend., 26; (1853) Seabury v. Stewart, 22 Ala., 207; (1869) Warren v. Richmond, 53 Ill., 52; (1869) McHan v. Stansell, 39 Ga., 197; (1869) Burnett Caldwell, 9 Wall., 290, 19 L. ed., 712; (1870) Little v. Thurston, 58 Me., 86; Gibbs v. Sullens, 48 Mo., 237; Dolittle v. Eddy, 7 Barb., 74.

V.

5. No title passed to timber cut under license, but not removed before entry for breach. Pease v. Gibson, 6 Me., 81; Hutchins v. King, 1 Wall., 53; 17 L. ed., 544.

Mr. Justice Hunt delivered the opinion of the court:

Frederick B. Leonard, of whom the defendants in error are the executors, brought his action in the Circuit Court of the United States, claiming to recover from the Jennisons, the plaintiffs in error, $25,000, the alleged value of certain sawed lumber taken by them from his possession. The cause was submitted to the court for trial without the intervention of a jury; the taking of the lumber was proved and its value was found to be $17,133, which was afterwards reduced to $11,461, for which sum judgment was ordered for the plaintiff.

The trial was had before the court without the intervention of a jury by virtue of the Act of March 3, 1865, 13 Stat. at L., 501, and the record contains a special finding of facts.

Leonard and others, under the style of the Beldon Lumber Company, were the owners of certain lands in Michigan, respecting which a contract of September 1, 1866, was made with Edward Cole. In consideration of $27,000 to be paid to them, they agreed to sell and convey to Cole the lands described. Cole agreed to pay for them the sum of $27,000, as follows, viz.: It was a license coupled with an interest. $10,000, with interest, in one year; the same By cutting the timber and putting money sum in two years, with interest; the balance, and labor into it, the license became a contract. $7,000, with interest, at the end of three years. Fuhr v. Dean, 26 Mo., 116; Wood v. Manley, It was further agreed that for every thousand 11 Ad. & El., 34; Snowden v. Wilas, 19 Ind., feet of timber cut and removed, Cole should pay 10; Buck v. Pickwell, 27 Vt. 157; Bing. Real monthly the sum of $3; and he agreed to cut Prop., 111; Nettleton v. Sikes, 8 Met., 34; and remove at least three million feet every Claflin v. Carpenter, 4 Met., 582; Jones v. Wol-year. In the event that the monthly payments

88 U. S.

SUPREME COURT OF THE UNITED STATES.

OCT. TERM,

tion-fraudulent preference-judge's charge -measure of damages-confession of judg ment-issuing execution.

payment. When the supposed demise should | Fraudulent sales under Bankrupt Act-inten-
terminate there would be no reversion left to
the vendor that would be worth the taking.
Nor is there more foundation for the sugges-
tion that the Jennisons were tenants at will
and entitled to three months' notice to quit.
They did not wait for a notice to quit. With-
out regard to the order or effect of their going,
they went when they were ready, leaving Leon-
ard to take care of his own interest as well as
he was able.

This was one of the sales of real estate by
contract, so common in this country, in which
the title remains in the vendor and the posses-
sion passes to the vendee. The legal title re-
mains in the vendor, while an equitable inter-
est vests in the vendee to the extent of the pay-
ments made by him. As his payments increase,
his equitable interest increases, and when the
contract price is fully paid, the entire title
is equitably vested in him, and he may compel a
conveyance of the legal title by the vendor, his
heirs or his assigns. The vendor is a trustee
of the legal title for the vendee to the extent
of his payment. The result of this state of
things is quite unlike that of a conveyance
subject to a condition subsequent which is
broken, and when re-entry or a claim of title
for condition broken is necessary to enable
the vendor to restore to himself the title to the
estate. The legal title having, in that case,
passed out of him, some measures are neces-
sary to replace it. In the case of a contract
like that we are considering no legal title
passes. The interest of the vendee is equitable
merely, and whatever puts an end to the equit-
able interest-as notice, an agreement of the
parties, a surrender, an abandonment-places
the vendor where he was before the contract
was made.

310*] *No mode of terminating an equitable interest can be more perfect than a voluntary relinquishment, by the vendee, of all rights under the contract, and a voluntary surrender of the possession to the vendor. The finding of the court shows that this took place in relation to the premises in question, and that the surrender was accepted by the vendor.

We may safely say, then: first, that no importance is to be attributed to the circumstance that the contract contains no clause of re-entry or second, to the fact that the vendor has sought to enforce payment of the amounts which became due to him before the surrender and abandonment; and third, that there can be doubt about the intention of the parties in making the contract, that the payments and the cutting should proceed in the ratio specified; or fourth, that when the payments ceased it was intended, and is the law, that the cutting should also cease; or fifth, that by the facts appearing by the finding of the court the executors of Mr. Leonard are entitled to a judgment for the value of the lumber taken from his possession, with interest. Judgment is affirmed.

THE FIRST NATIONAL

cover back money or other property paid, conveyed,
1. Assignees of the bankrupt's estate may re
provisions of the Bankrupt Act.
sold, assigned or transferred, within four months
before the filing of the petition, contrary to the

2. Persons of sound mind and discretion must, in general, be understood to intend, in the ordinary transactions of life, that which is the necessary and unavoidable consequences of their acts.

3. It is immaterial under the Bankrupt Act whether the debtor gave the preference with or without solicitation from the creditor, if the evidence showed that he gave it when insolvent and in fraud of the Act, to the knowledge of the creditor.

ular item of evidence and there was much other 4. Where the court charged in regard to a particevidence given to prove the same issue, it would be an unreasonable construction of the charge to suppose that the court, in submitting that proposition to the jury, intended to exclude from their consideration all the other evidence in the case which was applicable to the same issue.

5. Where the assignee in bankruptcy sues to recover damages for property of the bankrupt seized creditor, the measure of damages is the value of and sold on execution against the bankrupt by a the property seized and sold.

6. Although the 35th section of the Bankrupt Act does not specify the giving of a warrant to confess judgment as a prohibited act, a recovery for such act can be had under that section.

7. The court below did not err in refusing to charge that the court would not take jurisdiction of a case where the claim had passed in rem judicatam, and the goods had been sold upon the execution issued upon the judgment.

8. Evidence that the entry of the judgment and the issuing of the execution were a surprise to the debtor was wholly immaterial.

[No. 17.]

Argued Dec. 17, 1874. Decided Jan. 11, 1875.

IN ERROR to the Circuit Court of the Unit
sylvania.
ed States for the Western District of Penn-

defendant in error as a bankrupt's assignee, to
Suit was brought in the court below by the
recover certain money alleged to have been
collected in opposition to the provisions of the
bankrupt law concerning preferences. Judg-
the defendant sued out this writ of error.
ment having been given in favor of plaintiff,
The case is stated by the court.

plaintiff in error:
Messrs. J. S. Black and James Veech, for

the debtor procured his personal property to be
The important question of fact was, whether
seized under the execution.

ment, but the court charged the jury in effect The plaintiff did not prove such procurethat he might recover without proving it.

worst injustice done to the defendant. Burns, But that was not the worst, or nearly the the debtor, was called by the plaintiff, but the plaintiff did not ask him whether he had himwhether he had denied or assented to it, or self procured the seizure of his goods, or whether he had given the judgment with the intent or expectation that should be followed by an execution and levy. When his testimony had gone as far as OF without touching this important point, the dethe plaintiff wished fendant proposed to prove affirmatively by the William being procured by him was a surprise upon same witness that the seizure, so far from him and wholly unexpected; that, as soon as he learned what use was going to be made of the warrants of attorney which he had given, 88 U. S.

BANK

CLARION, Plff. in Err.,

v.

JOSEPH B. JONES, Assignee of

542

Burns, Bankrupt.

(See S. C., 21 Wall., 325-342.)

he opposed the whole proceeding and endeav ored to have the judgment opened.

6. If the debtor opposed the levy; tried his utmost to prevent it; was wholly unwilling This evidence, so directly tending to clear up that his property should be taken by one credall doubts about the most material fact in is-itor while the others were left unpaid; if the sue, was objected to as irrelevant and incom- execution was sprung upon him by surprise, petent, and the objection was sustained as to and he fought the levy and sale until every exthe main part of the offer. The court ruled pedient of opposition was exhausted, it is unout so much of the evidence as would have reasonable to say that he fraudulently procured shown that there was no collusion or concert the seizure to be made, and equally unreasonbetween the debtor and the defendant and, con- able to allege that the Bank could have united sequently, no procurement of the seizure by the with him in a fraud which he never committed. debtor, but consented to receive proof of the 7. If Burns, the debtor, conspired with the acts which he did in opposition to it. It Pittsburgh creditors, to petition under the somewhat surprises us to find that, after this, Bankrupt Law, not in good faith, for the purthe court rejected all the evidence of the debt- pose of being discharged, but merely as a means or's acts in opposition to the execution and of defeating the rights of the Clarion Bank, levy. then the petition and the proceedings under it were a fraud upon this defendant, which takes away all title from the assignee to recover in this action, either for the use of the debtor or the creditors.

The Clarion Bank was convicted of a fraud upon the other creditors of Burns, in the face of the fact that those other creditors of Burns conspired to use the Bankrupt Law as a fraud upon the Bank.

The whole charge of the court, as well as all its rulings in the course of the trial, proceeded upon a misconception of the Bankrupt Law. We intend to maintain, if we can, the following propositions:

1. A creditor may take from his debtor one security for his debt as well as another; a judgment note as well as a promissory note; a single bill under seal as well as a bond; and in any case a proper use of the remedies which the law of the State puts into his hands, is no fraud upon the Bankrupt Law.

Messrs. Geo. Shiras, Jr., and Jas. K. Kerr, for defendant in error:

Three errors are assigned to the action of the court below. The first has to do with the definition of the term "insolvency." The definition adopted by the court was consistent with the terms of the statute, and is almost identical with the definition that received the ap proval of this court in Toof v. Martin, 13 Wall., 47, 20 L. ed. 482.

The same definition was given by Judge Dillon in the case of Wilson v. City Bank, 5 Bk. Reg., 274. The jury were told that a trader is insolvent, within the meaning of the Bankrupt Act, when he is unable to pay his debts, as they mature in the ordinary course of his business.

2. Where the creditor institutes proceedings for the recovery of his just debt in the state court, and obtains a judgment which is a lien upon the debtor's land, or takes out an execution, or issues an attachment, which is a lien The strictest definition of insolvency usually upon his personal property, the debtor cannot obtaining in commercial circles, was not apdevest such lien or defeat the legal rights of the plied below, as it well might have been. The creditor, by afterwards applying to the Bank- evidence disclosed that the bankrupt, Burns, rupt Law. All liens legally acquired for just was wholly without money with which to meet debts, at any time before the petition, are and his maturing obligations; that before confessought to be respected by the Bankrupt Lawing the judgment in favor of the defendant, and by the courts which administer it. And he had called a meeting of his creditors, and this is true even where the debtor was known to had endeavored to procure an extension, and be insolvent when the judgment was rendered, that the officers of the defendant Bank had or the security given on which it was obtained. knowledge of these facts before they obtained 3. The acceptance of a warrant of attorney and entered up the judgment. The business to confess judgment, by a creditor, from a debt-of Burns was that of a lumber merchant, and or known to be insolvent, is not in itself a fraud upon other creditors; nor is it made an offense against the Bankrupt Law. The 39th section simply declares it to be an act of bankruptcy on the part of the debtor, but does not enumerate the aceptance of it among the acts which a creditor is forbidden to do under the penalty of losing his debt.

4. The only legal ground of recovery that could exist in this case was, that the debtor procured the seizure of his personal property under the execution issued by the Bank in violation of the 35th section.

5. To justify a recovery under the 35th section, it was necessary to show that the debtor wilfully and actively engaged in getting the seizure made, with the fraudulent intent to pay the debt to the Bank out of property which ought to be devoted equally to all his creditors alike, and that the creditor, knowing or having good cause to believe him insolvent, took advantage of his fraud, and made himsef a party to it by accepting its fruits.

he also kept a large country store.

Error is likewise assigned to the action of the court in refusing to charge that a previous alleged understanding between Burns and the defendant, that the former would execute and deliver to the latter a judgment bond, if and whenever the Bank should become dissatisfied with the indorsers furnished by Burns, would remove the case from the category of the 35th section. The mere statement of the proposition seems its sufficient refutation. A statute forbidding an insolvent debtor to grant a preference, cannot be evaded by showing that an agreement subsisted between the debtor and his creditor, and that such preference should be given whenever the latter should deem his other securities insufficient.

The third and last assignment raises the question of the measure of damages.

The court treated the sheriff's return as merely prima facie evidence of such value, and permitted the plaintiff to show that the prop