Sidebilder
PDF
ePub

quired the signature, the contract, unsigned by the shipper, was ineffective to relieve the carrier from a liability stipulated against, it is true, but which was inoperative because not expressed in legal form. Such is, in substance, the situation here presented. Judgment affirmed.

port from the point of shipment to the ul- liability, a contract not signed by the ship-
timate destination of the cattle, of course it per, containing an exemption, would have
would not come under the control of the stat-been efficacious. But, as the statute re-
ute But as, on the contrary, the contract
contains an expression of such obligation,
limited by reference solely to subsequent con-
ditions inserted in the bill of lading, it is
plainly brought within the import of the
statute as interpreted by the Missouri court.
It would have been within the power of
the receivers of the Missouri, Kansas, &
Texas Railway to have stipulated that the
goods were received, to be transported by
them from Stoutsville to the termination
of the line of railway operated by the receiv-

Mr. Justice Harlan dissents.

บ.

LEA BROTHERS & COMPANY.

(See S. C. Reporter's ed. 590-599.)

ers and there to be delivered to a connecting GEORGE M. WEST COMPANY, Appt.,
carrier, who was to complete the transporta-
tion. If this had been done, the bill of lad.
ing would have had the plain import which
the statute requires; nothing would have
been left for construction, and the contract
would have conveyed its obvious significance
to the shipper who accepted it from the car-
rier. Because, instead of doing this, the car-
rier chose, in the body of the bill of lading, 1. deed of general assignment for the bene-

to stipulate that they were "to transport
for the second party the live stock described
below, and the parties in charge thereof as
hereinafter provided, namely: six cars said
to contain 95 head of cattle m, or 1. o. r. from
Stoutsville station, Missouri, to Chicago, Il-
linois, station, consigned to Brown Bros. &
Smith, care Union Stock Yards at Chicago,
Illinois, at the through rate of 1712c. per
hundred pounds, from Stoutsville, Missouri,
to Chicago, Illinois," thus carrying out the
limitation with respect to carriage, if any,
by reference to subsequent conditions, it can-
not be reasonably complained that the con-
tract is governed by the statute. The ancil-
lang agreement which was indorsed on the
bill of lading, it is to be noted, adds cogency
to this view, since it declares that during the
whole length of the transit the parties who
were to be in charge of the cattle should be
deemed employees of the receivers of the Mis-
souri, Kansas, & Texas Railway, the initial
carrier, and that they should have no right
to recover in the event of an injury or dam-
age sustained for which the receivers would
not be liable to their regular employees.
[590] *To assert that because there is a liability
arising from the application of the statute
to the bill of lading which would not result
from the bill of lading itself, therefore the
statute must necessarily have been held to
impose on the carrier a liability for an inter-
state shipment beyond its own line, is with-
out merit. True, if there had been no stat-
ute regulating the form of the bill of lad-
ing, and we were called upon to construe the
instrument, we might consider that the limi-
tations referred to in the contract restricted
the liability of the carrier to his own line.
This result, however, is rendered impossible
in view of the statute, not because from its
provisions a liability is imposed, but because
of the failure of the contract to conform to
the requisites of the statute. Such was the
exact condition in the Patterson Case, supra,
for it cannot be doubted that if in that case
there had been no statute requiring the sig-
nature of the shipper to a contract limiting

General assignment is act of bankruptcy— insufficient plea.

fit of creditors constitutes in itself an act of
bankruptcy which per se authorizes an adju-
dication of involutary bankruptcy under
3 of the act of Congress of 1898, entirely ir-
respective of actual insolvency.

2. A plea that the party against whom the
petition was filed "was not insolvent, as de
fined in the bankrupt act, at the time of the
filing of the petition against him," is not a
vaild plea in bar to a petition in bankruptcy
filed against a debtor who has made a gener-
al deed of assignment for the benefit of cred-
itors.

[No. 755.]

Submitted May 1, 1899. Decided May 22,

1899.

Circuit Court of Appeals for the Fourth Circuit desiring instructions from this court upon a question certified to it in a bankruptcy case brought by Lea Brothers & Company in the District Court of the United States for the Eastern District of Virginia against the George M. West Company for the purpose of having it adjudicated a bankrupt. Question answered in the nega

N CERTIFICATE from the United States

tive.

The facts are stated in the opinion.
Mr. W. W. Henry for appellant.
Messrs. J. H. Ralston and Emmett Sea-
ton for appellee.

*Mr. Justice White delivered the opinion[591] of the court:

The facts stated in the certificate of the circuit court of appeals are substantially as follows:

Lea Brothers & Company and two other firms filed, on December 18, 1898, a petition in the district court of the United States for the eastern district of Virginia, praying that an alleged debtor, the George M. West Company a corporation located in Richmond, Virginia, be adjudicated a bankrupt, because of the fact that it had, on the date of the filing of the petition, executed a deed of general assignment, conveying all its property and assets to Joseph V. Bidgood, trustee. The George M. West Company pleaded denying

hat at the time of the filing of said petition against it the corporation was insolvent, within the meaning of the bankrupt act, and averring that its property at a fair valuation was more than sufficient in amount to pay its debts. The prayer was that the petition be dismissed. The court rejected this plea, and adjudicated the West Company to be a bankrupt. The cause was referred to a referee in bankruptcy, and certain creditors secured in the deed of assignment, who had instituted proceedings in the law and equity court of the city of Richmond, under which that court had taken charge of the administration of the estate and trust under the deed of assignment, were enjoined from further prosecuting their proceedings, in the state court, under said deed of assignment. From this decree an appeal was allowed to the circuit court of appeals for the fourth circuit. On the hearing of said appeal the court, desiring instructions, certified the case to this court. The certificate recites the facts as above stated, and submits the following question: 2] "Whether or not a plea that the party against whom the petition was filed 'was not insolvent as defined in the bankrupt act at the time of the filing of the petition against him' is a valid plea in bar to a petition in bankruptcy filed against a debtor who has made a general deed of assignment for the benefit of his creditors."

The contentions of the parties are as follows: On behalf of the debtor it is argued that under the bankrupt act of 1898 two things must concur to authorize an adjudication of involuntary bankruptcy, first, insolvency in fact, and, second, the commission of an act of bankruptcy. From this proposition the conclusion is deduced that a debtor against whom a proceeding in involuntary bankruptcy is commenced is entitled, entirely irrespective of the particular act of bankruptcy alleged to have been committed, to tender, as a complete bar to the action, an issue of fact as to the existence of actual insolvency at the time when the petition for adjudication in involuntary bankruptcy was filed. On the other hand, for the creditors it is argued that whilst solvency is a bar to proceedings in bankruptcy predicated upon certain acts done by a debtor, that as to other acts of bankruptcy, among which is included a general assignment for. the benefit of creditors, solvency at the time of the filing of a petition for adjudication is not a bar, because the bankrupt act provides that such deed of general assignment shall, of itself alone, be adequate cause for an adjudication in involuntary bankruptcy, without reference to whether the debtor by whom the deed of general assignment was made was in fact solvent or insolvent.

A decision of these conflicting contentions involves a construction of section 3 of the act of 1898. 30 Stat. at L. 546. The full text of the section in question is printed in the margin.†

+Sec. 3. Acts of Bankruptcy.-a. Acts of bankruptcy by a person shall consist of his hav Ing (1) conveyed, transferred, concealed, or removed, or permitted to be concealed or removed, any part of his property with intent to hinder,

*It will be observed that the section is di-[593] vided into several paragraphs, denominated as a, b, c, d, and e. Paragraph a is as follows:

*"Sec. 3. Acts of Bankruptcy.-a. Acts of[594] bankruptcy by a person shall consist of his having (1) conveyed, transferred, concealed, or removed, or permitted to be concealed or removed, any part of his property with intent to hinder, delay, or defraud his creditors, or any of them; or (2) transferred, while insolvent, any portion of his property to one or more of his creditors with intent to prefer such creditors over his other creditors; or (3) suffered or permitted, while insolvent, any creditor to obtain a preference through legal proceedings, and not having at least five days before a sale or final disposition of any property affected by such preference vacated or discharged such preference; or (4) made a general assignment for the benefit of his creditors; or (5) admitted in writing his inability to pay his debts and his willingness to be adjudged a bankrupt on that ground."

It is patent on the face of this paragraph that it is divided into five different headings, which are designated numerically from 1 to 5. Now, the acts of bankruptcy embraced in divisions numbered 2 and 3 clearly contemplate, not only the commission of the acts provided against, but also cause the insolvency of the debtor to be an essential concomitant. On the contrary, as to the acts embraced in enumerations 1, 4, and 5, there is no express requirement that the acts should have been committed while insolvent. Considering alone the text of paragraph a, it results that the nonexistence of insolvency, at the time of the filing of a petition for adjudication in involuntary bankruptcy, because of the acts enumerated in 1, 4, or 5 (which embrace the making of a deed of general assignment) does not constitute a defense to the petition, unless provision to that effect be elsewhere found in the statute. This last consideration we shall hereafter notice.

The result arising from considering the paragraph in question would not be different[595] if it be granted, arguendo, that the text is ambiguous. For then the cardinal rule requiring that we look beneath the text for the purpose of ascertaining and enforcing the intent of the lawmaker would govern. Apply ing this rule to the enumerations contained in paragraph a, it follows that the making of a deed of general assignment, referred to in enumeration 4, constitutes in itself an act of bankruptcy, which per se authorizes an adjudication of involuntary bankruptcy entirely irrespective of insolvency. This is clearly demonstrated from considering the present law in the light afforded by previous legislation on the subject.

Under the English bankruptcy statutes (as well that of 1869 as those upon which our earlier acts were modeled), and our own bankruptcy statutes down to and including delay, or defraud his creditors, or any of them; or (2) transferred, while insolvent, any portion of his property to one or more of his creditors with intent to prefer such creditors over his other creditors; or (3) suffered or permitted,

ding assignments with "intent to delay, defraud, or hinder" creditors, and from the provision avoiding certain acts done to delay, defeat, or hinder the execution of the act. Rev. Stat. 5021, 11 4, 7. Now, when it is considered that the present law, although it only retained some of the provisions of the act of 1867, contains an express declaration that a deed of general assignment shall authorize the involuntary bankruptcy of the debtor making such a deed, all doubt as to the scope and intent of the law is removed. The conclusive result of a deed of general as

acts, as well as under the English bankrupt laws, and the significant import of the incorporation of the previous rule, by an express statement in the present statute have been lucidly expounded by Addison Brown, J. Re Gutwillig, 90 Fed. Rep. 475, 478.

the act of 1867, the making of a deed of gen- from a deed of that description, as a legal reeral assignment was deemed to be repugnantsult of the clause, in the act of 1867, forbidto the policy of the bankruptcy laws, and, as a necessary consequence, constituted an act of bankruptcy per se. This is shown by an examination of the decisions bearing upon the point, both English and American. In Globe Insurance Co. v. Cleveland Insurance Co. 14 Nat. Bankr. Reg. 311, 10 Fed. Cas. 488, the subject was ably reviewed and the authorities are there copiously collected. The decision in that case was expressly relied upon in Re Beisenthal, 14 Blatchf. 146, where it was held that a voluntary assignment, without preferences, valid under the laws of the state of New York, was void assignment under all our previous bankruptcy against an assignee in bankruptcy, and this latter case was approvingly referred to in Reed v. McIntyre, 98 U. S. 513 [25: 173]. So, also, in Boese v. King, 108 U. S. 379, 385 [27: 760, 763], it was held, citing (p. 387 [27: 763]) Reed v. McIntyre, that whatever might be the effect of a deed of general assignment for the benefit of creditors, when considered apart from the bankrupt act, such a deed was repugnant to the object of a bankruptcy statute, and therefore was in and of itself alone an act of bankruptcy. The foregoing decisions related to deeds of general assignment made during the operation of the bankrupt act of 1867 (14 Stat. at L. 536, chap. 176), or the amendments thereto of 1874 and 1876 (18 Stat. at L. 180, chap. 390; 19 Stat, at L. 102, chap. 234). Nei[596]ther, however, the act of 1867, nor the amendments to it, contained an express provision that a deed of general assign ment should be a conclusive act of bankruptcy. Such consequence was held to arise,

while insolvent, any creditor to obtain a pref-
erence through legal proceedings, and not hav-
ing, at least five days before a sale or final dis-
position of any property affected by such pref-
erence, vacated or discharged such preference;
or (4) made a general assignment for the benefit
of his creditors; or (5) admitted in writing his
inability to pay his debts and his willingness
to be adjudged a bankrupt on that ground.

b. A petition may be filed against a person who is insolvent, and who has committed an act of bankruptcy within four months after the commission of such act. Such time shall not expire until four months after (1) the date of the recording or registering of the transfer or assignment when the act consists in having made a transfer of any of his property with intent to hinder, delay, or defraud his creditors, or for the purpose of giving a preference as hereinbefore provided, or a general assignment for the benefit of his creditors, if by law such recording or registering is required or permitted, or, if it is not, from the date when the beneficiary takes notorious, exclusive, or continuous possession of the property unless the petitioning creditors shall have received actual notice of such transfer or assignment.

C. It shall be a complete defense to any proceedings in bankruptcy, Instituted under the first subdivision of this section, to allege and prove that the party proceeded against was not insolvent, as defined in this act, at the time of the filing the petition against him, and if solvency at such date is proved by the alleged bankrupt, the proceedings shall be dismissed, and, under said subdivision one, the burden of proving solvency shall be on the alleged bankrupt.

But it is argued that whatever may have been the rule in previous bankruptcy statutes, the present act, in other than the particular provision just considered, manifests a clear intention to depart from the previous rule, and hence makes insolvency an essential prerequisite in every case. To maintain this proposition reliance is placed upon paragraph c of section 3, which reads as follows:

"c. It shall be a complete defense to any proceedings in bankruptcy instituted under the first subdivision of this section to allege and prove that the party proceeded against was not insolvent as defined in this act at the time of the filing the petition against him, and if solvency at such date is proved

d. Whenever a person against whom a petition has been filed, as hereinbefore provided under the second and third subdivisions of this section, takes Issue with and denies the allegation of his insolvency, it shall be his duty to appear in court on the hearing, with his books, papers, and accounts, and submit to examination, and give testimony as to all matters tending to establish solvency or Insolvency, and, in case of his failure to so attend and submit to examination, the burden of proving his solvency shall rest upon him.

e.

Whenever a petition is filed by any person for the purpose of having another adjudged a bankrupt, and an application is made to take charge of and hold the property of the alleged bankrupt, or any part of the same, prior to the adjudication and pending a hearing on the petition, the petitioner or applicant shall file in the same court a bond with at least two good and sufficient sureties, who shall reside within the jurisdiction of said court, to be approved by the court or a judge thereof, in such sum as the court shall direct, conditioned for the payment, in case such petition is dismissed, to the respondent, his or her personal representative, all costs, counsel fees, expenses, and damages occasioned by such seizure, taking, and detention of the property of the alleged bankrupt.

If such petition be dismissed by the court, or withdrawn by the petitioner, the respondent, or respondents, shall be allowed all costs, counsel fees, expenses, and damages occasioned by such seizure, taking, or detention of such property. Counsel fees, costs, expenses, and damages, shall be fixed and allowed by the court, and paid by the obligors in such bonds.

y the alleged bankrupt the proceedings shall e dismissed, and under said subdivision one he burden of proving solvency shall be on he alleged bankrupt.'

be governed by the rule laid down in para-
graph c. The rule, however, laid down in
that paragraph would be then in irrecon-
cilable conflict with the provisions of para-
graph d, and it would be impossible to con-
strue the statute harmoniously without
eliminating some of its provisions.

The argument is that the words "under the
irst subdivision of this section" refer to all
he provisions of paragraph a, because that
aragraph, as a whole, is the first part of the Despite the plain meaning of the statute
ection, separately divided, and although as shown by the foregoing considerations, it
lesignated by the letter a, it is nevertheless is urged that the following provision con-
o be considered, as a whole, as subdivision tained in paragraph b of section 3 operates
1. But whether the words "first subdivision to render any and all acts of bankruptcy
of this section," if considered intrinsically
and apart from the context of the act, would
be held to refer to paragraph a as an entire-
ty or only to the first subdivision of that
paragraph, need not be considered. We are
concerned only with the meaning of the
words as used in the law we are interpreting.
Now, the context makes it plain that the
words relied on were only intended to relate
to the first numerical subdivision of para-
graph a. Thus, in the last sentence of para-
graph e the matter intended to be referred
to by the words "first subdivision of this sec-
tion," used in the prior sentences, is addition-
ally designated as follows: "and under said
subdivision one," etc., language which can-
not possibly be in reason construed as refer-
ring to the whole of paragraph a, but only to
subdivision 1 thereof.

insufficient, as the basis for proceedings in
involuntary bankruptcy, unless it be proved
that at the time the petition was filed the al-
leged bankrupt was insolvent. The provi-
sion is as follows: "A petition may be filed
against a person who is insolvent and who
has committed an act of bankruptcy within
four months after the commission of such
act." Necessarily if this claim is sound,
the burden in all cases would be upon the
petitioning creditors to allege and prove
such insolvency. The contention, however,
is clearly rebutted by the terms of para-
graph c, which provides as to one of the
classes of acts of bankruptcy, enumerated
in paragraph a, that the burden should be
on the debtor to allege and prove his sol-
vency. So, alsa paragraph d, conforming in
this respect to the requirements of para-
graph a, contemplates an issue as to the sec-
ond and third classes of acts of bankruptcy,
"d. Whenever a person against whom a merely with respect to the insolvency of
petition has been filed as hereinbefore provid- the debtor at the time of the commission of
ed under the second and third subdivisions
of this section takes issue with and denies the act of bankruptcy. Further, a petition
the allegations of his insolvency, it shall be in a proceeding in involuntary bankruptcy
his duty to appear in court on the hearing is defined in section 1 of the act of 1898,
with his books, papers, and accounts, and enumeration 20, to mean "a paper filed
submit to an examination, and give testi-
by creditors alleging the commis-
mony as to all matters tending to establish sion of an act of bankruptcy by a debtor
solvency or insolvency, and in case of his therein named."
failure to so attend and submit to examina-
tion the burden of proving his solvency shall
rest upon him."

This is besides more abundantly shown by paragraph d, which provides as follows:

*It follows that the mere statement in th [599] statute, by way of recital, that a petition may be filed "against a person who is insolThis manifestly only refers to enumera- vent and who has committed an act of banktions 2 and 3 found in paragraph a, which, ruptcy," was not designed to superadd a furit will be remembered, make it essential ther requirement to those contained in parathat the acts of bankruptcy recited should graph a of section 3, as to what should conhave been committed by the debtor while in- stitute acts of bankruptcy. This reasoning solvent. Indeed, if the contention advanced also answers the argument based on the fact were followed, it would render section 3 in that the rules in bankruptcy promulgated by many respects meaningless. Thus, if it this court provide in general terms for an were to be held that the words "first sub- allegation of insolvency in the petition and division of this section," used in paragraph a denial of such allegation in the answer. c, referred to the first division of the section These rules were but intended to execute the -that is, to paragraph a as a whole-it act, and not to add to its provisions by would follow that the words "second and making that which the statute treats in third subdivisions of this section," used in some cases as immaterial a material fact in paragraph d, would relate to the second and every case. Therefore, though the rules and 8]third divisions of the section-that is, to forms in bankruptcy provide for an issue as paragraphs b and c. But there is nothing to solvency in cases of involuntary bankin these latter paragraphs to which the ref- ruptcy, where by the statute such issue be erence in paragraph d could possibly apply, comes irrelevant, because the particular act and therefore, under the construction as-relied on, in a given case, conclusively imserted, paragraph d would have no significance whatever. To adopt the reasoning referred to would compel to a further untenable conclusion. If the reference in paragraph c to the "first subdivision of this section" relates to paragraph a in its entirety, then all the provisions in paragraph a would

ports a right to the adjudication in bank-
ruptcy if the act be established, the al-
legation of insolvency in the petition be-
comes superfluous, or if made need not be
traversed.

Our conclusion, then, is that, as a deed of
general assignment for the benefit of credi-

[blocks in formation]

(See S. C. Reporter's ed. 600-603.)

Several separate appeals, or writs of error, not allowed in same case, at same time, to separate courts.

The act of 1891 (26 Stat. at L. 826) does not authorize several separate appeals or writs of error, on the merits, in the same case and at the same time to two appellate courts: and therefore the writ of error in this court, which was taken while the case was pending in the circuit court of appeals, is dismissed.

This record discloses that there are pending two writs of error to the judgment of the circuit court-one in the United States circuit court of appeals for the seventh circuit, sued out on the 25th day of August, 1898, and one in this court, sued out on the 27th day of September of the same year. It also appears that the jurisdiction of the circuit court is not in question, but the contention is that that court erred in the exercise of its jurisdiction.

We are of the opinion that the act of 1891 writs of error were sued out, does not con(26 Stat. at L. 826), under which these template several separate appeals or writs of error, on the merits, in the same case and at the same time to two appellate courts, and that, therefore, the writ in this court, which was taken while the case was pending in the Submitted April 17, 1899. Decided May 22, circuit court of appeals, ought to be dis

IN

[No. 462.]

1899.

N ERROR to the Circuit Court of the United States for the Northern District of Illinois in an action brought by the Columbus Construction Company against the Crane Company. On motion to dismiss.

Dismissed.

See same case below, 46 U. S. App. 52, 73 Fed. Rep. 984, 20 C. C. A. 233.

Statement by Mr. Justice Shiras:

In May, 1891, the Columbus Construction Company, a corporation of the state of New Jersey, brought in the circuit court of the United States for the northern district of Illinois an action at law against the Crane Company, a corporation of the state of Illinois. The case was put at issue, and the trial resulted in a verdict and judgment in favor of the plaintiff in the sum of $48,000. This judgment was reversed by the circuit court of appeals upon a writ of error sued out by the defendant. 46 U. S. App. 52. Thereafter the case was again tried and resulted in a verdict and judgment in favor of the defendant, upon a plea of set-off, in the sum of $98,085.94, as of the date of March 2, 1898.

On the 25th day of August, 1898, a writ of error to reverse this judgment was sued out by the plaintiff from the circuit court of appeals of the seventh circuit, where the case is now pending.

On the 27th day of September, 1898, the plaintiff also sued out a writ of error from this court. On April 17, 1899, the defendant

missed.

Such a question was considered by this court in McLish v. Roff, 141 U. S. 661 [35: 893].

That was a case of a writ of error from this court to the United States court for the Indian territory, where a suit was pending and undecided, and the object of the writ was to get the opinion of this court on the question whether the lower court had jurisdiction of the suit. This court held that it was not competent for a party denying the jurisdiction of the trial court to bring that question here on a writ of error sued out before final judgment, and the writ was accordingly dismissed.

In the opinion, read by Mr. Justice Lamar, it was said:

"It is further argued, in support of the contention of the plaintiff in error, that if it should be held that a writ of error would not lie upon a question of jurisdiction until aft er final judgment, such ruling would lead to confusion and absurd consequences; that the question of jurisdiction would be certified to this court, while the case on its merits would be certified to the circuit court of appeals;[602] that the case would be before two separate appellate courts at one and the same time; and that the supreme court might dismiss the suit upon the question of jurisdiction while the circuit court of appeals might properly affirm the judgment of the lower court upon the merits.

"The fallacy which underlies this argument is the assumption that the act of 1891 contemplates several separate appeals in the

« ForrigeFortsett »