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action is brought to recover the balance of amounts paid and commissions.
The defendant requested the court to charge the jury that, if the parties did not intend and agree that the stocks were to be delivered, but the real intent was to speculate in the rise and fall of prices and pay differences, the contract was void. The court charged the jury that, if the defendant procured the plaintiffs to sell stocks for him for future delivery, and, recognizing his obligation to furnish the stocks, he directed the plaintiffs to purchase the stocks for him, or directed the other firm to purchase the stocks and report the purchase to plaintiffs for payment, and the plaintiffs did pay for the stock for him pursuant to his directions, they would be entitled to recover the amount so paid, but that, if there were not such transactions, and the plaintiffs did not actually pay out the money for him, they would not be entitled to recover, and the judge did not otherwise comply with the defendant's request. The defendant moves for a new trial because of these rulings, and because, as he alleges, the verdict is against the effect of the evidence.
It is not doubted that the defendant's request embodies a correct proposition of law. Still it is not understood to be the duty of the court to lay down every such proposition that may be requested pertaining to the subject of the trial, but only to properly submit the issue raised to the jury for determination. The plaintiffs claimed to recover for money paid for the defendant at his request, and for commissions upon the transactions. No question is specially made about the commissions. Even if the sale of the stocks short by the plaintiffs for the defendant, without selling them to any particular person for him, was as between him and the plaintiffs so far a wager upon the prices which the stocks would bear as to be illegal and not binding upon him to furnish the stocks, still he would have the right and might feel morally bound to furnish the stocks; and, if so, there would be nothing unlawful in his purchasing stocks to furnish, either himself or by others. If he should buy them on credit, he could not defend an action for the price on account of the purpose for which he wanted them; neither could he defend an action for the money paid if he procured others to buy and pay for them. The question raised in this case was whether the plaintiffs did actually pay the money for the defendant by his direction. This question was submitted to the jury with express instructions to return a verdict for the defendant if they did not so pay the money. The payment of the money was not connected with any adjustment of differences on a wagering contract, or other illegality, to taint it. And the verdict appears to rest upon warrantable evidence. The plaintiffs testified that they actually paid the money at defendant's direction. The defendant, while he testified that they were merely to adjust differences in the beginning, did not positively deny giving an order by telephone for the purchase of some of the stock. One of the plaintiffs on crossexamination did say that they were to adjust differences; but whether the differences were between amounts paid and received, or between present and future prices, was not explained. When called to the question as to whether there was or not any arrangement to merely adjust
the differences between present and future prices of stock treated as if sold, he distinctly denies that there was.
Upon this review of the trial it appears that the proper issue was submitted to the jury upon evidence sufficient to sustain the verdict found upon the responsibility of the jury.
Motion for new trial denied, and stay of proceedings vacated.
In re WINCHESTER.
(District Court, W. D. Pennsylvania. August 7, 1907.)
BANKRUPTCY-DISCHARGE-CONCEALMENT OF ASSETS.
A bankrupt cannot be refused a discharge on the ground of fraudulent concealment of assets because of his failure to state in his schedules, or to advise his trustee of the fact, that he had expended money in the improvement of property owned by his wife, where in a plenary suit by the trustee against the wife it was determined that the creditors had no lien upon or interest in the property because of such expenditure.
In Bankruptcy. On application for discharge.
EWING, District Judge. On July 12, 1902, Winchester filed a voluntary petition in bankruptcy, and in that same fall presented his petition for discharge, to which objections were filed by one C. Smalley, a creditor. The matter was referred to Joseph M. Force, referee, as special master, and on June 10, 1903, he filed his report, finding that the bankrupt was guilty of a fraudulent concealment of assets within the meaning of the act of Congress, and recommending that his application for discharge be refused. To this report exceptions were filed by the bankrupt, and the matter only came before the court for hearing the middle of last month during the session in Erie.
The act of fraudulent concealment which the special master finds the bankrupt to have been guilty of was his failure to enumerate in his schedules of assets and to advise the trustee of the fact that he had during the year preceding his petition in bankruptcy expended some $2,000, funds received by him from his father's estate, in the improvement of property of his wife. It seems that the bankrupt's father in the fall of 1900 conveyed to the bankrupt's wife a lot of ground on which was an old house, and died shortly thereafter. By his death the bankrupt inherited some $3,000 from his father's estate, and it was a portion of this fund which he expended in the spring and summer of 1901 in the improvement of his wife's property, pursuant, in fact, to a desire expressed by his father that he should thus make the house habitable and a comfortable home for his family. Under these circumstances, and the expenditure having been made so long prior to the proceeding in bankruptcy, it is a very serious question whether there really was any intent, fraudulent in fact or in law, on the part of the bankrupt to conceal assets from his creditors when he made no statement of this expenditure to the trustee or in his schedule of assets. Subsequent, however, to the report of the master, and by leave of this court, the trustee filed a bill in equity in the court of common pleas of Erie county against the bankrupt and his wife for the purpose of charging her property, for the benefit of the creditors of the bankrupt, with the amount of money he had expended in these improvements. That case was concluded by decree entered December 31, 1906, dismissing the bill, from which decree it does not appear that any appeal was taken.
In his finding and opinion the judge sitting in that case found that at the time these improvements were begun and up until July of that year (1901), when they were completed, the bankrupt's credit was good, although he was insolvent when they were finished; but all of the claims for work and materials used in said improvements have been paid, a portion thereof out of money borrowed by the bankrupt for that purpose, for some of which at least he gave satisfactory security. Among the security thus given was a judgment for $300, which constituted the first lien on the real estate inherited from his father and an additional piece purchased by the bankrupt himself, and a mortgage for $600, which constituted a second lien upon said real estate. And he further finds that, when said improvements were begun, said Winchester did not know what they would cost, that he contracted for the labor and materials and it was very improvident to spend so much on the old house, but that his wife, Mrs. Winchester, supposed him to be perfectly solvent and never conspired with him to defraud his creditors, had no thought that his improving her property would result in his insolvency, and that there is nothing to show bad faith on her part at any time, and concluded as matter of law that the bankrupt's general creditors have no lien upon the real estate of Mrs. Winchester by reason of his expenditures and improvement of her real estate, as there was no connivance on her part, and she had no knowledge of his failing circumstances when such improvements were made and consented to. In view of this plenary action before a court of competent jurisdiction, the record of which was introduced into this case upon the argument on the exceptions to the report of the special master, there seems to be no reason now for the conclusion arrived at by him upon the less complete and partial hearing had before him, but that the decree in the equity proceedings should control. That decree virtually determines that the bankrupt had no interest in the real estate of his wife subject to the claim of his creditors, and consequently in failing to disclose the expenditures he had made in making these improvements he cannot be guilty of a concealment of assets. This was the only objection urged against him found valid by the report of the master.
The exceptions to the report of the master are therefore sustained, the exceptions to the discharge overruled and dismissed, and the discharge granted.
SEESE'S ADM'X V. MONONGAHELA RIVER CONSOL. COAL &
(Circuit Court, W. D. Pennsylvania. August 3, 1907.)
SHIPPING-PROCEEDING FOR LIMITATION OF LIABILITY-EXCLUSIVE JURISDIC
TION OVER CLAIMS.
A court of admiralty in which proceedings are instituted by a vessel owner for limitation of liability has exclusive jurisdiction to settle in such proceedings all claims arising out of the matters on which they are based, and an order made therein restraining all persons having claims from prosecuting suits thereon elsewhere is a bar to a subsequent suit on a claim in another court, although brought by an administrator who had not at that time been appointed.
[Ed. Note.—For cases in point, see Cent. Dig. vol. 44, Shipping, 659.] At Law. On petition to dismiss for want of jurisdiction. P. M. Smith, for plaintiff. McIlvain, Murphy & Jones, for defendant.
EWING, District Judge. This action is instituted for the purpose of recovering damages for the death of James A. Seese, alleged to have been occasioned by the negligence of the defendant company, while the decedent was employed on the towboat Defender owned by the defendant company, the boiler of which exploded on January 3, 1905, within the jurisdiction of the District Court of the United States for the Southern District of West Virginia, and which explosion killed said Seese.
The defendant now petitions to have this action dismissed on the ground that on January 14, 1905, it instituted proceedings in the District Court of the United States for the Southern District of West Virginia under the provisions of the act of Congress of March 3, 1851, for limitation of liability by reason of said accident, which said proceedings were so prosecuted that said court ordered:
"That all and every person or persons who may have, or claim to have, suffered damage by reason of the blowing up and explosion of the boilers of the steamboat Defender on the 3d day of January 1905, and the personal representatives of all such persons, be restrained from prosecuting any suit or suits against the said Defender, or her freight, or against the Monongahela River Consolidated Coal & Coke Company, by reason of said explosion, except in these proceedings [and] that all and every person or persons who may have or claim to have suffered damage by reason of the blowing up or explosion of the boilers of the steamer Defender on the 3d day of January, 1905, and the personal representatives of such of them as were killed by said explosion, be restrained from prosecuting any suits or proceedings at law except herein against the steam towboat Defender, or her freight, or against the Monongahela River Consolidated Coal & Coke Company, by reason of said explosion."
To this petition the defendant attaches a certified copy of the record in the proceedings had in said District Court of West Virginia and the rule granted on the plaintiff to 'show cause why this action should not be dismissed. In answer to this rule the plaintiff has filed a general demurrer, and on the argument of the rule, while admitting that said statute had been decided to apply to accidents of this character, and that proceedings to avail of the limited liability under its provisions could be instituted before suit brought on any claim for damages, yet insisted that the statute was not intended to apply as against a dead man and could not be urged against an administrator who had not been appointed at the time the proceedings were instituted or completed, and also on the ground of their claim, as set forth in the statement filed in this case, of alleged knowledge and privity on the part of the defendant. An answer to the last point will be found in Re Whitelaw (D. C.) 71 Fed. 733, in which case it is distinctly declared that the court in which proceedings are instituted for the purpose of obtaining the benefit of the provisions of said act of 1851 is the court, and the only court, which can determine whether there is knowledge and privity on the part of the owners of the vessel; and the case of Providence & New York Steamboat Co. v. Hill Mfg. Co., 109 U. S. 578, 3 Sup. Ct. 379, 617, 27 L. Ed. 1038, which decides that the court in which such proceedings have been instituted under the provisions of the act of 1851 has exclusive jurisdiction of all claims for damages.
The fact that Seese's administratrix was not appointed until after the monition issued in the District Court of West Virginia, possiblv not until after the return day thereof, is not sufficient to give this court jurisdiction. Administration could have been had at any time after the death of Seese, and, if the fact that it were delayed until after orders and decrees were made in the court in which proceedings had been instituted under the act of 1851 would avail, there would be an incentive in every such case to delay administration until such date and thus avoid the effect of such proceeding. The intent of the act was to give the court in which such proceedings were instituted exclusive and inclusive jurisdiction to settle in that one proceeding all claims arising out of the accident upon which said proceedings were based. If any grace is to be allowed and exception made by reason of the fact that there was no personal representative of the deceased at the time the order was made in that court, application therefor should be made there.
The rule is made absolute, and the action is dismissed for want of jurisdiction.
In re SICKMAN & GLENN.
(District Court, W. D. Pennsylvania. August 2, 1907.)
BANKRUPTCY-ADMINISTRATION OF ESTATE — PARTNERSIIIP AND INDIVIDUAL
An individual purchased the business and property of a corporation, and assumed its debts, giving his notes for the same. Shortly thereafter he entered into a partnership which took over the property, and agreed as between the partners to assume and pay such debts. The partnership was subsequently adjudged bankrupt, having paid but a small part of the debts and its assets, consisting chiefly of the property acquired from the corporation. Held, that the claims of the creditors of the corporation