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    John L. Shawhan, Daniel Shawhan, George H. Perrin, Benjamin Beery, Catharine Snodgrass, and Isaac Miller, Appellants, v. Perry Wherritt, Assignee of the Bankrupt Estate of Benjamin Brandon.
    A decree of the District Court of the United States, sitting in bankruptcy, whereby a person proceeded against, in invitmn, was declared to be a bankrupt, is sufficient evidence, as against those who were not parties to the proceeding, to show that there was a debt due to the petitioning creditor; that the bankrupt was a merchant or trader within the meaning of the act; and that he had committed an act of bankruptcy.
    Thp first section of the bankrupt act declares that the making of any fraudulent conveyance, assignment, sale, gift, or other transfer of lands, tenements, goods, or chattels, is.the commission of an act of bankruptcy.
    No creditor can, by instituting proceedings in a State court, after the commission of an act of bankruptcy by his debtor, obtain a valid lien upon the property conveyed by such fraudulent deed, if he has notice of the commission of an act of bankruptcy by the debtor. It passes to the assignee of the bankrupt for the benefit of all the creditors.
    A lien thus acquired is not saved by the proviso of the second section of the bankrupt law. That proviso does not protect liens which are inconsistent with the second and fifth sections of the act, and these sections declare such a lien to be void.
    This was an appeal from the Circuit Court of the United States for the District of Kentucky.
    On the 6th of April, 1842, Benjamin Brandon executed the following deed: —
    “This indenture, made and entered into this 6th day of April, 1842, between Benjamin Brandon, of Harrison county and State of Kentucky, of the one part, and William A. Withers, of the county and State aforesaid, of the other part, wit-riesseth: That the said Benjamin Brandon, for and in consideration of one dollar, to him in hand paid, and for the further consideration hereinafter mentioned, hath given, granted, bargained, sold, released, conveyed, and confirmed, and by these presents do give, grant, bargain, sell, release, convey, and confirm unto the said William A. Withers, his successor or successors, for ever, all the estate, real, personal, and mixed, of whatever nature or kind it may consist, (except such property only as by law not subject to éxecution,) said estate hereby conveyed consisting of a tract of about 336 acres of land,- situated in the State and county aforesaid, and the. same tract on which said Brandon now resides, and on which is a steam-mill and distillery, the boundary of which land is more particularly designated in the several deeds which said Brandon holds for said land; also, five negroes, two wagons and teams, about 400 head of hogs, about 15,000 pieces of cooper’s stuff, all his stock of horses, cattle, and sheep, his -household and kitchen furniture and farming utensils, his debts and choses in action/ of every kind and description; it being the intention of'said Brandon, by this deed, to convey to the said Withers and his successors, for ever, all his estate, real, personal, and mixed, and choses in action, with the exceptions hereinbefore expressed, whether the same be particularly mentioned and set forth' in this instrument or not. To have and to hold all the estate, real, personal, and mixed, and choses in ..action, hereby conveyed to the said William A. Withers and bis successor or successors, for ever, in trust, for the following purposes, namely: To collect the debts and choses in action due, payable, or owing to said Brandon, and to sell the real ’ estate hereby conveyed, either all together or in lots, as said trustee may think most advisable, at public auction, to the highest bidder, on the following payments : namely, one third of the purchase-money to he paid -in hand, and the residue in one and two years; and the slaves and personal estate to be sold at public auction to the highest bidder, on a credit of twelve months; and after making to said trustee a just and reasonable compensation for his trouble and expenses - in executing this trust, to pay all the money which he may receive as trustee aforesaid, either by the collection of debts or choses in action, from the. proceeds of the ^ale of the trust estate, to all the creditors of said Brandon, ratably, proportionably to the amount of their respective debts or demands ; but should any one or more of the creditors of said Brandon become the purchaser or purchasers of any portion of the real or personal estate, or slaves, hereby conveyed, said trustee is authorized and empowered to accept the debt or debts due or owing by said -Brandon to such purchaser or purchasers, in payment for their respective purchases, so far as said debts may go ; and - in such cases, if any such should occur, only the residue of the price to be distributed pro rata, as aforesaid; and after the payment of all said Brandon’s debts, to pay the residue, if any, to said Brandon, his heirs and assignsand the title to the estate hereby conveyed ■He doth hereby warrant and defend to said Withers, and his successor or successors, for ever, in trust for the purposes aforesaid, against the claim or claims of him, the said .Benjamin Brandon, and against all other claims. Tn testimony of which, the said Benjamin Brandon hath hereunto subscribed his name and affixed his seal, this day and year first above written. Benjamin Brandon.”
    On the 3d of May, 1842, John L. Shawhan and others filed a bill in the Harrison Circuit Court of Kentucky, sitting as a court of equity. The bill recited, that the complainants were creditors of Brandon; that he had executed the deed above set forth, “ for the purpose of hindering, delaying, and defrauding the creditors of the said Brandon in the collection of their debts ”; that the trustee was about to sell and dispose of the property mentioned in the deed; and prayed for an injunction to stop him.
    On the same day an.injunction was issued, and served upon Brandon and Withers, the trustee.

      On the 21st of May, 1842, Brandon and Withers filed separate answers to the bill. ' Brandon admitted his indebtedness, and the execution of the deed of trust; averred that Shaw-han was present while the deed was preparing, and expressed himself satisfied with its provisions; denied most positively that he executed said deed either to hinder, delay, or defraud his creditors, but, on the contrary, in good faith, believing that general satisfaction would be given to them. The answer of Withers was to the same effect as that of Brandon.
    On the 25th of June, 1842, Withers and Brandon applied for-an order to change the venue. It was granted, and the record sent to the county of Bourbon.
    On the 24th of September, 1842, John Lail presented a petition to the United States'Kentucky District Court, sitting in bankruptcy. It alleged that, on the 6th of April preceding, .Brandon had made a fraudulent conveyance with intent to defraud his creditors; and that he had concealed himself to avoid being arrested. It then prayed that the court might declare the said Benjamin Brandon a bankrupt. With the petition were filed several exhibits, which it is not necessary to state particularly.
    On the same day- an order was passed, setting. down the hearing for the 4th of the ensuing November, and, in the mean time, enjoining the defendant and all others from removing or otherwise disposing of. the property of the defendant, or which, on the decree, the assignee might be entitled to reclaim and recover.
    On the (22d of October, 1842, the Bourbon County Court, before which ,the suit of Shawhan and others against Bran-' don and Withers was pending, passed a decree annulling and setting aside the deed of trust, as being, in point of law, fraudulent and void. The court enumerated many of the creditors, whose claims had been exhibited, and then ordered, that “ so much of the personal property, slaves, and real estate mentioned in said deed of trust as may be necessary for the purpose be sold to satisfy the - aforesaid debts.” Thomas B. Woodyard was appointed to make the sale, according to certain given directions.
    On the 22d of November; 1842, the District Court of. the United States passed the following order: —
    “ John Lail v. Benjamin Brandon,.
    “The prayer of the petitioner, that the defendant be declared a bankrupt, having been heard upon the allegations of the petition, and the proofs taken and filed, (the defendant having failed to answer,) and now having been fully considered:
    “ It is found and adjudged by. the court, that the said Benjamin Brandon, of Harrison county, being a retailer of merchandise, and indebted as in the petition mentioned, did, by making the deed of conveyance and assignment to William A. Withers, of all his property, real, personal, and mixed, and rights of property, subject to the payment of his debts by the laws of the State, bearing date the 6th day; of April, 1842, and on the 7th day of that month and year admitted to.record in the clerk’s office of the Harrison County Court, and in the • petition mentioned, whereof a copy is filed here, now adjudged a fraudulent conveyance and assignment; and by concealing himself to avoid being served with process, whereby a suit had been commenced against him, thereupon became and is a bankrupt.
    “ Perry Wherritt is appointed the assignee, and. required to execute bond in the penalty of $ 5,000, with two sufficient sureties.”
    Ón the 24th of November, 1842, Woodyard, the commissioner appointed by Bourbon County Court, proceeded to sell the personal property of Brandon.
    In May, 1843, the commissioner made his report to Bourbon County Court, whereupon another decree was passed, reciting that the former sale was insufficient to pay the debts, and directing that so much of the. land .comprised in the deed of trust as might be necessary for the purpose should be sold for the payment of the balance of the debts.
    On the 14th of July, 1843, the commissioner sold the land, in conformity with the above order, and John L. Shawhan became the purchaser. A writ of possession was issued in his favor, in April, 1844, which will be mentioned again in its proper place.
    On the 10th of August, 1843, Wherritt, as assignee of the estate of Benjamin Brandon, filed a bill in chancery, in the District Court of the United States for the District of Kentucky, against John L. Shawhan and the other parties named in the caption of this statement. The bill referred to the former proceedings of the court, declaring Brandon to be a bankrupt, and all the other facts in the case. It stated that the assignee had taken possession of the property of the. bankrupt, including the land; that Shawhan and others knew of the commission of the act of bankruptcy, but had. nevertheless obtained a decree of Bourbon County Court, under the authority of which they had sold the land to Shawhan, who was threatening to disturb the possession of the complainant, and by his threats and false claims of title was preventing the complainant from disposing of the land. It then prayed that Shawhan might be ordered to surrender up, to be cancelled, any pretended claim, and that all the parties might answer, &c.
    On the 18th of December, 1843,. John L. Shawhan, Daniel Shawhan, and Benjamin Berry ánswered separately. Shaw-han admited the execution, by Brandon, of the deed of April 6th, 1842, but denied that he had committed any acts of bankruptcy. ' It admitted also the proceedings by himself in the State court to set aside the deed as fraudulent, and the decree and sale as stated above ; but insisted that by said proceedings he had acquired a lien on the property, which could not be impaired by the proceedings in bankruptcy, and that the proceedings in the State court, having been commenced before those in bankruptcy, could not be affected by those of the District Court of the United States.
    It is not material to state the answers of the other defendants. To these answers there was a general replication.
    At the April term, 1844, the Bourbon County Court passed .a decree reciting the sale to Shawhan by the commissioner, Woodyard, and proceeding as follows, viz.: —
    “ It is therefore decreed and ordered, that the said purchases made by the said Shawhans be and the same are hereby confirmed ; that the amounts so decreed to said Shawhans be and the same’ are hereby extinguished and satisfied, by the aforesaid purchases made by them, except as to said balance of $ 149.34, which ivas decreed to the Shawhans above the amount of their purchases. That a writ of possession issue in favor of said John L. Shawhan, to put him into the possession of said tract of land mentioned in the complainant’s bill; that Thomas B.. Woodyard, the commissioner herein, convey all the right and title of the defendants, Brandon and William A. Withers, in and to sajd tract of land, to said John L. Shaw-han, by deed of special warranty, warranting the title of the same against the ‘clairns of the said Benjamin Brandon and William A. Withers, and all persons claiming by, through, or under them, but not against the claim or claims of any other person or persons whatever.”
    •The decree then, proceeded to regulate certain details.
    In June, 1844, the bill filed by Wherritt in the District Court of the United States carne on for hearing, when the complainant prayed that the defendants might be ordered to pay over the amount of sales of the personal property which had been sold under the authority of Bourbon County Court. A reference took place to a master in chancery, upon ‘ the coming in of whose reports the court passed the following final decree, on the 10th of June, 1844.
    “ This cause having been heard at this term, and argued by counsel, thereupon, on consideration thereof:
    “ It is adjudged by the court, that the complainant was invested with all the estate which was of said Brandon at the time he became a bankrupt, and that the defendants did not, by their after-commenced suit, and proceedings therein had, (with notice of his act of bankruptcy,) obtain á .right to have it thereby subjected exclusively, or first, to the satisfaction of their demands; and that the defendants, John L. Shawhan, Daniel Shawhari, George H. Perrin, Benjamin Berry, Catha-rine Snodgrass, and Isaac Miller, by the subsequent sales of the movable property, by them so caused, did become, on the demand of the complainant here made, and are each of them, liable for his, their, and her proper portion of the proceeds thereof, whereof they thus wrongfully obtained the benefit, and must • pay the same, together with the interest thereop,- to the com-. plainant, for the purpose of equal distribution required by the statute j and it is adjudged, that the sale of the land so after-wards caused by the defendants was wrongful, and assailed here by the complainant, was and is ineffectual, and did not invest the defendant, John L. Shawhan, the purchaser, with the right thereto, in opposition to the title which had previously passed by decree of bankruptcy of its holder so declared, and was vested in- the complainant as the assignee so appointed ; but the said Sháwhan, by the assertion of his pretended claims so founded, has and does injuriously embarrass the title of the complainant.;

      “ It is. therefore ordered, adjudged, and decreed, that the defendant, John L. Shawhan, do, on or before the first day of July next, execute to the complainant, as assignee of the bank-rapt estate of Benjamin Brandon, a deed of release of all right, title, and interest claimed by him, Shawhan, in and to the tract of land whereon the said Brandon resided, containing 350 acres, more or less, in the county of Harrison, in the bill and answers mentioned, with covenant of wárranty against all persons claiming by, through, or under him. .-
    . “ And it is adjudged and ordered, that said: Shawhan do, on. or before the said first day of July next, deliver to the complainant the possession of the said-land.”',
    The decree then went on to specify the amounts to bé paid, &c.
    From-this decree there was an appeal to the Circuit Court, of the United States for the District of Kentucky.;
    ..On the 22d of November, 1844, the Circuit Court affirmed, the.decree of. the District Court.
    The defendant appealed to-this court, and the cause came up on this appeal
    It was. argued by Mr. Trimble, for the appellants, ana Mr. Bibb, for the appellee.
    The appellants assigned the following causes of 'error.
    I. The Circuit Court erred in affirming the decree of the,District Court.,, and in decreeing costs against the appellants.

      II. The Circuit Court ought to have reversed the decree of the District Court, and dismissed the bill, on the following grounds, to wit: —
    1. The bill filed by the appellee in the District Court , is predicated entirely on the provisions of the English statutes, or the. former bankrupt law of the United States, passed in 1800.
    2. There is no equity in the bill -filed in the court below, when tested by the late bankrupt law of 1841.
    3. The bill alleges that the appellee is in ppssession of the tract of land in contest, arid prays the court to quit him and the possession, and protect him against the process of the State court; and the decree directs- John L. Shawhan to restore the possession.
    4. The decree assumes a fact which is contradicted by the record. John L. Shawhan, &c., commenced their suit in the State court several months before Brandon became a bankrupt, and not afterwards, as is stated in the decree.

      5. The principles assumed by the decree are expressly negatived by the bankrupt law of 1841, and can only be sustained by. adopting the provisions of the English statutes, or the bankrupt law of 1800.
    6. The decree directs the appellants to pay over to thé appellee the amount of the sales of the slaves and personal estate of Brandon, when, it appears from the record that the commissioner took notes for the purchase-money, and the áppellañts have not received either the notes or the money.
    7. The petitioner was not a creditor of Brandon when the petition'was filed.
    That portion of the argument of the counsel for the appellants, which related to the principal point decided by the court, was as follows, viz.: —
    By the decree of the District. Court, it . is said that the complainant in that court was invested with all the estate of Brandon at the time he became a bankrupt, and that the defendants did not, by a suit commenced afterwards, obtain a right to have it subjected to their demand, &c. If, by that expression, it was intended to say, that, by the decree in' bankruptcy, the assignee was invested with .all the estate of Brandon at the time he made the fraudulent deed of trust, the opinion of the court is in direct opposition to the plain and unequivocal words of the third section of the act. That section expressly declares that the estate of the bankrupt shall, -from the time of the decree, be deemed to be. divested out of the bankrupt, and by force of the decree be vested in the assignee. . That provision of the section must be abrogated, and other words .interpolated before the. opinion of the District Court can be sustained. It would be a strange perversion of that section, to ■ say that the decree should have relation to an act of bankruptcy, contrary to the express words of the section. If that section had barely said that, by the decree, the estate should be divested out of the bankrupt, and vested in the assignee, without reference to the time when the estate should be so divested, thére might have been some room left for construction. But such language has- not been used. ' On the contrary, the words employed have left no room for construction as to. the time when the property shall be divested out of the bankrupt, and Vested in the assignee. The same, section is equally explicit as to the power of the assignee to sell and dispose of the property of the bankrupt. It provides that the assignee shall have the same power to sell and dispose of the property which might be exercised by such bankrupt before or at the time, of the bankruptcy declared-. If, by the decree in bankruptcy, the property was divested out of the bankrupt from the time of making a fraudulent conveyance, he certainly could have .no' power to sell or dispose of his property at the timé of the bank-' ruptcy declared. If , Congress had intended that the decree in bankruptcy should have relation to an act of bankruptcy, .they would • have employed language indicating such an intention. They have not .done so, nor even left room for construction on that subject; but the most explicit language has been employed to prevent any such relation by construction.' Neither the English statutes, nor the former bankrupt- law of the United States, contain any provision similar to that in the third section of .the late bankrupt law.' The decisions in the English books, and the decisions of the American courts, founded on statutory provisions totally dissimilar, cannot, therefore, have .any influence on the question. The statute 13th Eliz>, ern-' powers the commissioners in bankruptcy to sell and convey all the lands, and tenements which the panKrupt nad at the fitne he became a bankrupt ,• and fúrther provides, that such conveyance shall be good against.the bankrupt, and all other persons claiming by, from, or under him by any act after committing the act of bankruptcy. 2 Bl. Com. 285; 2 Phil. Ev. 289.
    The statutes of James I. direct the commissioners to assign ever to the assignees the whole of the bankrupt’s estate, and makes void all acquisitions of property by, from, or under the bankrupt, at any time after' committing the act of bankruptcy. A few cases, only,- are excepted out of the general prohibition by the same statutes, and by the statute of 19th George II. 2 Bl. Com: 485, 486; 1- Wm. Bla. 68 ; 2 Wm. Bla. 829. The tenth section of the bankrupt law of the United States, passed in 1800, contains similar provisions. By the express provisions, therefore, of the English statutes, and of the bankrupt law of 1800, the assignment of the commissioners vested in the assignees the \vhole of the estate of the bankrupt which he had at the time when he committed the act ©f bankruptcy.. It has already been shown, that the late bankrupt law contains no such provision, but that- its provisions expressly negative any relation to an act of bankruptcy.

      Mr. Bibb’s argument upon the same point was as follows : —
    • III. The rights, titles, and authorities of the assignee, when appointed by the court, had relation to the act of bankruptcy committed on the 6th of April, 1842, specified .in 'the decree declaring the bankruptcy; and pverreached and avoided the lien claimed by the appellants as the result of their proceedings in the State court, so originated after and with full knowledge of the prior act of bankruptcy.
    Such relation is expressly enacted by- the second and third sections of the act of 1841. That the effect of such relation, so enacted by the statute, is to annul, all subsequent .acts by which the assets of the bankruptcy are attempted to be diverted from the general fund for distribution among the several creditors of the bankrupt, is a doctrine well settled by very many adjudged cases. These precedents may be arranged under four classes.
    1st Class. Transactions by and with a bankrupt preceding an act of bankruptcy, bjat in contemplation of bankruptcy, and for. the purpose of preferring a creditor contrary to the spirit of the bankrupt law, and therefore void. ' Of this class these examples will suffice: — Locke v. Winning, 3 Mass. Rep. 325, 326, 329; Harman v., Fishar, 1 Cowp. 117, 123; Rust v. Cooper, 2 Cowp. 629, 632, 633; Alder?on v: Temple, 4 Burr. 2238, 2239, 2241; Compton v. Bedford, 1 Wm. Bla. 362.
    2d Class. Transactions by a bankrupt in themselves acts of bankruptcy, and therefore void. Of this class these examples, out of many others, will suffice: — Worsely v. De Mattos, 1 Burr. 468, 476, 484; Wilson v. Day, 2 Burr. 827; Alderson v. Temple, 4 Burr. 2239,'; 2240; Devon v. Watts, and Hassells v. Simpson, 1 Doug. 86, 89, 92; Linton v. Bartlett., 3 Wilson, 47..
    3d Class. Transactions by and with a bankrupt after an act of bankruptcy committed, and before commission sued out, void because after an- act of bankruptcy. . Of this ,class these examplés will suffice: — Hussey v. Fidell, 3 Salk. 59 ; Dyson v. Glover, 3 Salk. 60; Xing v. Leith, 2 T. R. 141; Vernon v. Hall, 2 T. R. 648; Dias ». Freeman, 5 T. R. 197.

      4th Class. Efforts by process of law, afta an act of bank-, ruptcy, to abduct the property of the bankrupt from thé assets for distribution among the géneral creditors, avoided by the commission after taken out upon the previous act .of bankruptcy: Of this class these examples will suffice: — Sill v. Wors-wick, 1 H. Bla. 665; Cooper v. Chitty, 1 Burr. 20; Coppen-dall v. Bridgenr2 Burr. 817, 820; Smallcomb v. Cross, 1 Ld., Raym. 252; Rust v. Baker, 2 Strange, 996; Payne v. Teap, 1 Salk. 108; Smith v. Milles, 1 T. R. 475; Ward v. Macauléy, 4 T. R. 489; Buller’s N. P. 41, 42.
    Such must be the relation, to the time of the act of bankruptcy, and such the effect thereof, according to the enactments of the third, second, and fifth sections of the bankrupt law of 1841.
    I put the third section foremost,, because that section declares that the rights, titles, powers, and aüthorit- ,s of the as-signee shall relate, not only to the" time of the act of bankruptcy committed, but' even, to a time before , the bankruptcy. I refer to the second section for the purposes, first, to show that the .time of the decree passed is not the border and foremost faculty given to rights of the . assignee, (as has been argued for the appellants;) when appointed by the court iri consequence of the decree, but that the relation thereof to the act of bankrupt:-cy, upon which the decree is founded, is clearly avouched by the second section; secondly, as explanatory of the sense arid, propriety of the expression in the third section, “ before or.. at the time of his bankruptcy.”
    The celebrated maxim of the Rabbins is, “ In the law there is no such thing as first or last.” For in the law many things are set down, all taking effect, as the one law, at one and the same time. The sages of the law have beén used to collect the sense and meaning of the law by comparing one part with, another, and by viewing all the parts together as one whole, and not of one part only by itself, “ Nemo eriim aliquam par-tem recte intelligere possit, antequam totum iterum atque iterum per legerit.” Lincoln College’s Case, 3 Co. 59. b; Stradling v. Morgan, Plowd. 205 ; Co. Litt. 381. a.

    I do not cite the second section as that which directly invalidates the lien set up by the appellants, but only as explanatory of the third section. The nullity of the lien claimed by the appellants by process of law in the State court, commenced and carried on after the act of bankruptcy, results from the relation of the rights, titles, powers, and authorities of the as-signee to the time of Brandon’s bankruptcy, committed on the 6th day of April, enacted by the third section, and the system of equality among all the creditors of the bankrupt established by the fifth section. This equality among creditors, without preference or priority,' is the soul and spirit of the bankrupt law, to which the second and third sections are but handmaid's and auxiliaries.
    The English system of bapkruptcy having been in use long before, the system of bankruptcy was enacted in the United States, pur statutes have borrowed the general outlines and phrases from the English statutes and the adjudications thereon. In particular instances expressions are altered to make the principle less dubious, and to enlarge the reach and 'extent of the statute. It‘will therefore not be without utility, in conducing to a clear understanding of our statute of 1841, to run a parallel between that and the English statutes.
    By the English statute, the process against a bankrupt commenced by the petition of a creditor to the court, alleging the particular act of bankruptcy which the debtor had committed.So by ours. By the English statute and ours of 1800, the proper-court, upon the presentation of- a petition, appointed, as a matter of course, commissioners to hear and determine the matters of the petition against the debtor, and, if found true,. “to declare him or her a bankrupt.”. By our statute of 1841,. the petition is heard by the court, and, if true, the bankruptcy is declared by decree of the court. By the English system, and by our statute of 1800, the debtor, had notice of the time and place appointed by the commissioners to hear and deter- - mine the matters of the petition, but no notice was given generally to persons interested to show cause against the petition. By our statute of 1841, notice of the time assigned by the proper court for the hearing of the petition is given by a publication in one or more newspapers, at least twenty days before the hearing, “ and all persons interested may appear and show cause, if any. they have, why the prayer of the petitioner should not be granted.”
    By the English system, the commission of bankruptcy was liable to be superseded (if improvidently issued) by application to the Court of Chancery. Ex parte Gayther, 1 Atk. 144; Ex piarte Sydebotham, 1 Atk. 146; Ex parte Hylliard, 1 Atk. 147. By our statute of 1841, section first, the decrees declaring the bankruptcy, when passed by the proper court, and not reexamined upon the petition of the bankrupt within ten days for a trial by jury, “ shall be deemed final and conclusive.”
    By the English system, the creditors Appointed the assignees to manage the estate and affairs of the bankrupt. By our statute of 1841, the assignee is appointed by the court, with power of removal and new appointment, toties quoties.

    By the English statute, and ours of 1800, the commissioners made a formal deed of conveyance and assignment of the property and effects of the bankrupt to the assignee. By our statute of 1841, no deed of conveyance or assignment is made to the assignee appointed by the court, but by the third section the decree of the court is made to stand in the place, and to have the effect, of a formal deed of conveyance and assignment to the assignee, when thereafter appointed by the court.
    By the former statutes, the estate and title of the bankrupt were not divested out of him, nor vested in the assignees chosen by the creditors, until the formal deed of conveyance and assignment was executed by the commissioners to the assignees; although the power and authority of the bankrupt over his property was suspended by his act of bankruptcy. So is the law stated to be, in the cases of Cary v. Crisp, 1 Salk. 108; Brassey v. Dawson, 2 Strange, 981, 982; Buffer's N. P. 41.
    By the first part of the third section of the act of 1841, “ all the property and rights of property of every name and nature, and whether real, personal, or mixed, of every bankrupt,” “ who shall by the decree of "the proper court be declared to be a bankrupt within this act, shall, by mere operation of law, ipso facto, from the time of such decree, be deemed to be divested out of the bankrupt, without any other act, assignment, or other conveyance whatsoever; and the same shall be vested, by force, of the same decree, in such assignee as from time to time shall be appointed by the proper court for this purpose, which power of appointment and removal such court may exercise at its discretion,” &c. In this the allusion to the former mode of assignment by a formal decree of conveyance is clear, and the decree itself is made to have like effect.
    By the former statutes, when, the deed of conveyance and assignment was executed, the rights and titles to the property of the bankrupt were in the assignees choseh by the creditors, from the time of* the act of bankruptcy committed, by relation or retrospect, according to the numerous cases before cited.
    By the after part of the third section of the act of 1841, the like relation, or retrospect, to the time of the act of bankruptcy committed, is enacted as to the rights, title, and authorities of the assignee when appointed by the court.
    The words are, —“And the assignee so appointed shall be vested with all the rights, titles, powers, and authorities,’ to sell, manage, and dispose of the same, and to sue for and defend the same, subject to the orders and directions of such court, as fully, to all intents and purposes, as if the same were vested in or might be exercised by such bankrupt before or at the time of his bankruptcy declared as aforesaid.”
    The word “ before ” so used has reference to the provisions •of the second section, whereby acts done “ in contemplation of bankruptcy, and for the purpose of giving any creditor, in-dorser, surety, or other person, any preference or priority over the general creditors of such bankrupt,” &c., “shall be deemed utterly void, and a fraud upon this act.” Such acts so done before the act of bankruptcy, but being in contemplation of an act of bankrupcy afterwards committed, and contrary to the spirit of the bankrupt law, are declared void. Therefore, in the third section, the word “ before ” is introduced, in connection with the words “ or at the time of his bankruptcy,”' so as to make the relation of the title, powers, and authorities of the assignee émbrace fraudulent transactions by and with a bankrupt before the act of bankruptcy committed, as well as after the bankruptcy and before the appointment of the assignee.
    The decree declaring the bankruptcy divests the title, rights, and authorities of the bankrupt out of-him; the appointment and qualification of the assignee vests all the rights, titles,, authorities, and powers in the assignee by relation, as . fully as they were vested in the bankrupt himself “ before or at the ■ time of his bankruptcy.” . Moreover, this relation, so established by the word “ before,” extends to frauds and other injuries committed upon the property of the bankrupt, in invitum, before his act of bankruptcy (and before he contemplated bankruptcy), and to all other rights which the bankrupt himself might have asserted, if the misfortune of bankruptcy had not happened to him. . So that fraudulent contrivances before or after the act of bankruptcy are within the rights, titles, powers, and authorities of the assignee.
    If all the time between an act of bankruptcy committed and the decree pronounced upon the petition, after a notice (by publication of not less than twenty days), of the time assigned for the hearing, had been left as an hiatus, a chasm, not filled by the relation and retrospect of the title, rights, authorities, and. powers of the assignee in bankruptcy, when appointed by the court, andRhereby omitting all mesne acts contrary to the spirit of the bankrupt law, then, indeed, the statute would have been impotent to protect and secure the funds and assets of the bankruptcy, for that just equality and distribution among all the creditors, — to eveVy of the creditors bona, fide a portion, rate and rate like, according to the quantity of his debt, — which are the soul, essence, and spirit of a bankrupt law, and the end designed and enacted by the fifth section.
    Without such relation, the filing of the petition against a bankrupt, and the publication of the notice for the hearing, would have been a signal for acquiring priorities and preferences, by levy of executions, attachments, and every species of depredation upon the estate, property, and. effects of the bankruptcy; the statute would have been but a dead letter. For example, the, appellants claim the whole property of the bankrupt by process and decrees in chancery begun after the act of bankruptcy committed,, having knowledge thereof, and using the very fact and deed of trust, in itself a definite act of bankruptcy, as the foundation of their attachment.
    But the statute is not so lifeless, so powerless. The legislators who enacted the statute of 1841, using the lessons of former legislation, the wisdom of experience, and profiting by the examples of former times and the adjudications upon former statutes of bankruptcy in England and the United States, comprehended the truth, that the relation of the rights, titles, powers, and authorities of the assignee in bankruptcy to the previous time of the act of bankruptcy committed, (and even “before,”) was necessary and proper to the end proposed, and so enacted.

      {Mr. Bibb then commented at length upon the case of. Sill v. Worswick, 1 Hen. Bla. 665, 694, which he considered very strongly in point.)
   Mr. Justice GRIER

delivered the opinion of the court.

Perry Wherritt, as assignee of Benjamin'Brandon, a bankrupt, filed his bill in equity in. the District Court of the United States for- Kentucky, setting forth that, on regular, proceédings ip said court, Brandon was deemed and held to be a merchant and trader, within the bankrupt act, and found to have committed acts of bankruptcy by making á fraudulent transfer of his property, and by secreting himself to avoid the service of legal process, and was, therefore, decreed a bankrupt, on the 22d Of November, 1842; that the complainant was duly .appointed his assignee; that, on the 6th of April, 1842, Brandon had made a fraudulent deed of trust of' all his property to William A. Withers; that John L. Shawhan and others, the defendants and appellants, with a full knowledge of the acts of bankruptcy, filed their bill in chancery in the Harrison Circuit Court of Kentucky, against Brandon, Withers, and others, charging that the said deed of tjust was fraudulent and void ; that the court decreed that the defed was void, and ordered the property to be sold for the benefit of Shawhan and the other creditors who had joined in the bill; that, since the decree in bankruptcy, the State court had proceeded to sell the real and personal estate of said Brandon; that Shawhan had purchased a tract of land belonging to Brandon, of 350 acres, of which the complainant had possession, whereby he was prevented from disposing of said land for a fair price; and praying that Shawhan might he compelled to surrender and cancel his claim, and for all such equitable relief, general and special, as the merits of the case may require, &c.

The answer of Shawhan. admits the execution by Brandon of the deed of the 6th of April, 1842, but denies that he had committed any acts of bankruptcy. It admits, also, the proceedings by himself in the State court to set aside the deed as fraudulent, and the decree'and sale as stated in the bill. He insists that by said proceedings he had acquired a lien on the property, which could not be impaired by the proceedings in bankruptcy, and that the proceedings in the State, court, having been commenced, before those in bankruptcy, could not be affected by them, &c.

' On the hearing of this cause at June lerm, 1844, before the District Court, “ the complainant prayed as specific relief as to the mot able property which was of said Brandon at the time he became bankrupt, and which the defendants afterwards caused to be sold under the decree of the Bourbon Circuit Court,- that the defendants be adjudged to pay the amount of said sales ”; and the court referred it to a master to report the amount of the sales of personal property, and afterwards decreed, that the complainant was invested with all the estate which was of said Brandon at the time he became bankrupt, and that defendants did not, by’their after-commenced suit and proceedings therein had, (with .notice of his act of-bankruptcy,) obtain a right to haye it thereby subjected exclusively or first to the satisfaction of their demands; - and that the defendants, John L. Shawhan, &c., by the subsequent sales 'of the movable property by them so caused, did become, on_ the demand of the complainant here made, and are, each of them, liable for their proper portion. of the proceeds thereof, whereof they thus wrongfully obtained the benefit, and must pay the same, together with interest, to the complainant, for the purpose of equal distribution as required by the statute;. and that the sale of the land so afterwards caused by the defendants, was wrongful, and-assailed here by the complainant, was and is ineffectual, and did not invest the defendant, John L. Shawhan, the-purchaser, "with the right thereto, in opposition to the title which had previously passed by decree of bankruptcy of its holder so declared, and was vested in the assignee so appointed,” &c., &e. It was adjudged and decreed, also, that Shaw-han should release all his title in the land to the complainant, and the defendants severally pay over to the plaintiff the money received by each of them from the proceeds of the personal property.

From this decree the defendants appealed to the Circuit Court of the United States for the District of Kentucky, where the decree of the District Court was affirmed, and the defendants then prosecuted their appeal to this court.

Of the numerous objections to the decree taken on the argument, it will be necessary to notice but two, being those chiefly relied' on by the counsel for the appellants.

1. That the decree in bankruptcy wafe not evidence, as against the defendants, who were no parties to it, either that there was a debt due to the petitioning creditor, or that Brandon was a paerchant or trader within the meaning of the bankrupt act, or that he had committed an act of bankruptcy. It is a sufficient answer to this objection, —- 1st. That the thirteenth section of the bankrupt act declares, that “the proceedings in all cases of bankruptcy shall be deemed matters of record.” 2d. Both parties admit the deed made by Brandon, on the 6th of April,- was fraudulent, and the first section of the bankrupt act declares the execution of such a deed an act of bankruptcy. 3d. The record before us shows sufficiently that he was a merchant or trader, and therefore liable to be declared a bankrupt. The District Court had, therefore, plenary and ex-r elusive jurisdiction of the subject-matter. 4th. The public notice required by the act having been given, the creditors must be treated as having notice of the proceedings, and an 'opportunity to make their objections to them, and having neglected or refused so to do, they plight not to be allowed to impeach them collaterally, as they are, in the nature of a proceeding in rem, before a court of record having jurisdiction. 5th. Even if the record in the bankrupt court be not conclusive as against the defendants, it is at least prima.fade evidence that all facts necessary to sustain the decree were proved before the court; and lastly, the record of this case shows sufficient evidence to sustain the decree on all points. Besides, the third section of the act declares, that “all the property, &c., of every bankrupt, (except as hereinafter provided,) who shall by a decree of the proper court be declared to be a bankrupt within this act, shall, by mere operation of law, ipsó facto, from the time of such decree, be deemed to be divested out of such bankrupt, without any other act, assignment, or other conveyance whatsoever; and the same shall be vested by force of the same decree in such assignee,” &c. As the court had jurisdiction mf the subject-matter and person of the., bankrupt, the decree is thus made conclusive evidence of the title of the assignee.

The English cases can have no application to this question, as there all proceedings, in bankruptcy are before commissioners, under-a commission issued out of chancery, and the commissioners are not a court of record.

2d. The chief and important question involved in this case is whether the appellants, after an act of bankruptcy of which they had full knowledge, could, by proceeding in a State' court, obtain a valid lien, and seize the property of the bankrupt to the exclusion of his other creditors, or. whether such proceeding be not a fraud on the bankrupt law, and therefore void.

. The appellants in their answer deny their knowledge of the act of bankruptcy, and that the defendant was a.bankrupt before the decree. But this, seems rather a denial of the law than of the fact; for the bill filed by them in the State court alleged that the deed made by Brandon of all his property to a trustee, on the 6th of April, 1842, was fraudulent and void. The first section of the bankrupt act, in enumerating the acts for which a merchant or trader shall be liable to be declared a; bankrupt, by proceedings in invitum, mentions the making of “ any fraudulent conveyance, assignment, sale, gift, or other transfer of.his lands, tenements, goods, or chattels,” &c. ■ By their own showing,, therefore, they had knowledge of the fact of bankruptcy. The acts thus enumerated are usually termed acts of bankruptcy, and may be considered as tests of insolvency, showing conclusively the inability of the trader to pay his debts, or carry on his trade. The policy and aim of bankrupt laws are to compel an equal distribution of the' assets of the bankrupt among all his creditors. Hence, when a merchant or trader, by any of these tests of insolvency, has shown his inability to meet his engagements, one creditor cannot, by collusion with him, or by a race of diligence, obtain a preference to the injury of. others. . Such conduct is considered a fraud on the. act, whose aim is to divide the assets equally, ánd therefore equitably. To prevent these frauds, the English bankrupt laws give the title of the assignee a relation back to the act of bankruptcy, so as to avoid all' payments, sales, or contracts made after it. The second section-of our bankrupt act effects the same object, not by establishing the doctrine, of relation in direct terms, but. by declaring all such payments, transfers, &c.,. void, and a fraud on the act, and enabling the assignee to recover the money paid, or property transferred, for the use of the creditors. This section declares fraudulent and void, not only future payments, securities, conveyances. or' transfers of property, or agreements made or given by any bankrupt in contemplation of bankruptcy, and for the purpose of giving a preference or priority to one cre.d7 itor over another,” but that “ all other payments, securities,” &c., “to any person whatever, not being a bond fide cieditor or purchaser for a valuable consideration without notice, shall be deemed utterly void and a-fraud on this act ” ; and the as-signee is authorized to sue. for, and recover mid receive the same, as part of the assets of the bankruptcy.

It avoids, not only payments, securities, &c., made in collusion with a bankrupt in contemplation of bankruptcy, but thpse obtained by a creditor with notice; and it afterwards defines this ■ notice which is the test of fraud or want of bona jides in the creditor to be “ notice of a prior act of bankruptcy, or of the intention of the bankrupt to take the benefit of this act.” A creditor may always recover payment of his debt, or security for it, from his debtor, unless he has notice or knowledge that his debtor has committed an act of bankruptcy ; and then he is forbidden to receive payment of his debt, or to obtain any other priority or advantage over the other creditors of the bank- ■ rupt. And if notice- of this fact to the creditor makes a payment by the debtor void, it is obvious that a security or priority gained by suit in a State court after such notice could have no better claim to protection; for notice of the act of bankruptcy to the creditor is the test of the mala Jides which vitiates the transaction.

The last proviso of the second section, which saves all liens, mortgages, or other securities on property, which may be valid by the laws of the States respectively,” subjects' them, nevertheless, to this condition; that they shall not “ be inconsistent with the second and fifth sections of the act.” Liens or securities which would be otherwise valid by the State laws, being made void by the second section when obtained after notice of an act of bankruptcy, are, consequently, not saved by this proviso ; but .the property subject to them vests in the assignee discharged from such lien, and ,if the property has been sold under process from a State court, the creditor is liable to refund the money thus received to the assignee of the bankrupt. Having obtained this preference maid jide, in fraud of the bankrupt law, he cannot be suffered to retain the fruits of it to the injury of other creditors; otherwise, the whole policy and aim of the law would be-frustrated.

We are of opinion, therefore, that the lien obtained by Shaw-han upon the property of Brandon by his proceedings in the State court, after notice of the act of bankruptcy, was not saved or protected by the proviso to the second section of the act, and that he and the other appellants, who had appropriated the assets of the bankrupt to their own use, are liable to refund the same to the assignee in this suit; and that the decree of the Circuit Court of the United -States for. the District of Kentucky should be affirmed.

Order.

This cause came on to be heard on the transcript of- the . record of the Circuit Gourt of the United States for the District of Kentucky, and 'was argued by counsel. On consideration whereof, it is now here ordered and decreed by this court, that the decree of the said Circuit Court in this cause be and the same is hereby affirmed.with costs.


source: Caselaw Access Project

author: Mr. Chief Justice TANEY

license: Public Domain

text:
    William and Francis Sadler, Complainants, v. Thomas B. Hoover, Sylvanus Chambers, and Samuel H. Dinkins, Partners by the Style of Thomas B. Hoover and Company.
    Where an appeal from a Circuit Court, sitting in chancery, is brought up to this court upon a certificate of division in opinion, and the certificate states that the court was not able to agree in opinion, one of the judges being of opinion that a decree should be rendered for the complainants, and the other that a decree should be rendered for the defendants, this was not such a distinct statement of the point or points upon whjch the judges differed as would give this court jurisdiction.
    The appeal must, therefore,-be dismissed, for want of jurisdiction.
    This case came up, on a certificate of division, from- the Circuit Court of the United States for the Southern District of Mississippi.
    The following is the statement of facts agreed upon in the court belowby the counsel for the respective parties, and. sent up with the record.
    “ Wm. Sadlee and Fkancis Sadlee, 1 v. >In Chancery. Thomas B. Hoovee and others. )

      “ In the Circuit Court of the United States for the Southern District of Mississippi.
    “ The bill states that at May term, 1839, of the Circuit Court, the defendants, Thomas B. Hoover & Co., recovered judgment against them, and one Francis Ross, their surety, for ,f 3,501.84 debt, and $ 383.65 damages, with interest thereon from the 17th of May, 1839, and costs of suit; and at the same term, another judgment against them, and one W. D. Henry, as*their surety, for $ 7,881.66, with interest from the 17th of May, 1839, and costs of suit. That executions issued on said judgménts, and forthcoming bonds haye been given with one Robert Ridley, as security in each case, and that said bonds were returned forfeited to the November term, 1839, and executions about to issue thereon; that the instruments of writing on which these judgments are founded were given by complainants, in consideration of certain slaves sold by 'the firm of Thomas B. Hoover &• Co. to them, orí the 28th of October, 1836, and for which bills of sale were given; that complainants feel themselves greatly aggrieved by the conduct of Thomas B. Hoover & Co.; that they had an. understanding with Hoover, by which they might have been relieved from the contract, but which was not reduced to writing wi|h other, parts of the contract, and complainant^ have thus been deprived of its benefit, and will be'greatly injured if relief . is not afforded to them on the grounds hereafter stated.
    . “ The complainants allege that the said slaves were introduced into this State by the said Thomas B. Hoover, for himself and partners, but a few weeks previous to such sale, as merchandise, and for sale, without any certificate of character, and were sold without any record of certificate, contrary to the constitution and laws of the State of Mississippi; and that the causes of action, on which the said judgments, are rendered, were given in direct exchange for said slaves. That complainants have been advised that this court will, interfere to prevent the collection of these judgments if they will submit to act rightly, and not use the occasion^o act fraudulently and unjustly. On this principle of equity, complainants submit to a rescission of the contract, — offer to deliver up to defendants all the said negroes now alive, and to account' for the hire of them, including, also, their, increase, and to perform whatever they may be required by the. court.
    “ Complainants aver that they were prevented from making this defence at law, by advice of counsel, on account of decisions adverse to it previously made by this court and the Circuit. Courts of the State of Mississippi; and the current of decisions to this effect was not broken into until the decision of this court, at the late November term, (1839,) and until then complainants supposed they were not entitled to relief on this ground, and under this belief they entered into forthcoming bonds. That defendants, Hoover & Co., are unwilling to rescind said contract, and are about to enforce the collection of said judgments. The bill prays process, and a perpetual injunction against the judgments.
    “ On application to the district judge, he granted a fiat for an injunction on the 4th of January, 1840, and injunction, was issued accordingly.
    “ Previous to the May term, 1840, the defendants, Thomas B. Hoover, Samuel H. Dinkins, and Sylvanus Chambers, members of the firm of Thomas B. Hoover & Co., answered.
    “ Thomas B. Hoover, in his answer, admits that, as a member of said -firm, and on its behalf, a few weeks previous to the sale* he introduced into the State of Mississippi, as merchandise, and for saie, a number of slaves, without any certificate of character, or record of the same, and that he sold the slaves named in the bill to the complainants, and took their bill of exchange and note therefor, on which the said judgments were vendered. He denies, positively, any arrangement or understanding between him and complainants, by which they were tobe relieved from their contract; that although these slaves were introduced for sale, the defendant insists on the validity of the contract; that even regarding the contract as illegal, the complainants having failed to make, this defence on the trials at law, they are now precluded from availing themselves of this ground of relief in chancery; especially that complainants have given forthcoming bonds on which judgments have been rendered.
    “ As to complainants’ offer to rescind the contract and to restore the slaves, this defendant states, that,, on a dissolution of the partnership, he transferred the liabilities of complainants to his copartners; he has, therefore, no control of the judgments; that having made the contract of sale, he can state positively that no fraud or imposition of any kind was practised on complainants; that the contract was fair and honest on his part; that the negroes were, as he believes, sound and healthy, and were sold at the customary prices.

      “ Samuel H Dinkins, in his answer, admits that he was a member of the firm of Thomas B, Hoover & Co. He knows nothing personally of the sale of the slaves, and on this point refers to the answer of Thomas B. Hoover, the trading partner. He admits, however, that the slaves were sold to complainants; that, after litigation on the instruments given for them, judgments were rendered against complainants for the sums agreed to be given. He insists on the legality and validity of the. contract, and that the complainants, having failed to make this defence at law, cannot now avail .themselves of it as a ground of relief. He rejects the offer of the bill to rescind the contract,. as being manifestly unjust, since the great change. in' the valué of this property, and because the complainants do not offer to account for the Value of three slaves since dead.

      v Sylvanus Ghambers states in his answer, that, as to the introduction of the negroes into Mississippi, and their sale, he knows nothing personally. He insists on the validity of the contract, and that, whether originally legal or. not, complainants cannot now avail themselves of this ground for relief, having failed to set it up as a defence at law. He rejects, also, tike proposition to rescind the contract, for the reasons stated in the preceding answer, and insists that, as the contract was fairly entered into, without any toilful intent to violate the laws of Mississippi, should the court decree it to , be void, hé and his partners should, he compensated also for the value of the three dead slavés,- as there is no allegation of their unsoundness; and especially, ás he charges, that they died from the cruel.treatment of thé complainants.
    “• At May term, 1840, a motion was made, oh the part of defendants, to dissolve the injunction, which mojtion was after-wards overruled.,
    “ At the May term, 1844, the cause came to a hearing on bill, answers, and replication, before their Honors, Peter V. Daniel, ánd Samuel J. Gholson, judges. And the court not being able to agree in opinion,, oné of the said judges being of opinion that a decree should be rendered for the coipplainants, and the other that a decree-should , be “rendered for the defendants, it was ordered, at the request of counsel on both sides, that, this difference of opinion, be certified to the Supreme Court of the United States for their decision.
    “ The foregoing, is a conrect abstract of the material facts in. the above-stated cause.
    “Lea & Lea, Complainants' Sol.

    W.: R. Hiu, Defendants’ Sol.

      “ January 8, 1840.”
    The case was argued (in print) by Mr. Hill, for the. defendants, but the question of the jurisdiction of this court was npt raised, and it is deemed unnecessary to-insert the argument of the main point in the case..
   Mr. Chief Justice TANEY

delivered thé opinion of. the, court. This case comes before us on a certificate of division. But, upon inspecting the. record, it appears that the particular point or points upon which the justices of the Circuit Court differed in opinion are not distinctly stated; and the case must therefore bé dismissed for want of jurisdiction.

Order.

This cause came on to be. heard on the transcript of the record from the Circuit Court of the United States for the Southern District of Mississippi, and on the point and question on which the judges of the said Circuit. Court were opposed in opinion, and which was certified to this court for its opinion agreeably to the act of Congress in such case made and. provided, and was argued by counsel. And it- appearing to this court, upon an inspection of the said transcript that no point in the case, within the meaning of the act of Congress, has been certified to this court, jt is thereupon now here ordered and decreed by this court, that this cause be and the same is hereby dismissed, and that this cause be and the same is. hereby remanded to.the said Circuit Court, to be proceeded in according to law..


author: Mr. Justice M’LEAN

text:
    Frederick J. and Samuel W. Barnard and Henry Q. Hawley, Appellants, v. John Gibson.

    Where a decree in chancery refers th§ matters to a.master to ascertain the amount of damages, and in the mean time the bill is not dismissed, nor is there a decree for costs, the decree is not a final one, from which an appeal will lie to this court, although there is a perpetual injunction granted.-
    The amount of damage which mil'follow from restraining a party from using a machine held under a patent right is a proper consideration-to be addresser! to the' Circuit Court, but does not cónstitute a ground of appéal.
    This was an appeal from the Circuit Court of the United States for the Northern District of New York.
    Thé question being, whether or not the decree of the Circuit Court was final, the Reporter thinks it proper to insert the whole of that decree, together with the statement of facts, as he finds it prepared by Mr. Justice Nelson.

      Circuit Court, United States.

    John Gibson J v. > In Equity Frederick J. Barnard and othérs. )
    I. W. W. Woodworth conveyed to John Gibson the exclusive-right to the Woodworth planing-machine in and for the city and county of Albany, with the single exception of two fights in the town of Watervliét, in said county. With this exception, the whole right of the county was in Gibson.
    II.. The two machines, the right to use which was thus excepted, consisted, first, of a machine in use at the timé in said town by Rousseau and Easton, whidi had been erected under the first term of the patent, and the right to continue which they claimed during any extension of the grant; and, second, of a machine which Gibson had conveyed to Woqd-.worth, and by him to Rousseau and Easton.
    III. Woodworth, on the 19th of May, 1842, agreed with Rousseau and Easton to make an assignment to them by which they would , become vested more fully with the right of running the machine in the town of Watervliet, which they claimed under the first term of the patent; and also to assign to them the right. to use the other machine- which had been conveyed to him by Gibson, of even date with this agreement. In consideration of which, Rousseau and Easton paid • at the time $ 200 ; arid, in case the extension should be obtained, and assignment of the two machines, as above stipulated for, made, they would pay, in. addition, $ 2,000, in four equal annual in-stalments.
    IV. This agreement of the 19th of May, 1842, was modified by. an indorsement on the' same, signed by all .parties, 26th April, 1843, in which it was recited that Rousseau and Eas-. ton had, on that day, executed dnd delivered to Woodworth eight promissory notes, of $250 each, payable at different periods, the last one 1st July, 1846; in consideration thereof, the said-Woodworth agreed that, upon payment of said notes as they became due, he would make the assignments stipulated for in the said agreement referred to.
    V. On the 12th of August, 1844, Woodworth assigned all his interest in this contract with Rousseau and Easton in respect; to the two machines, and all right and title to the use of the same, to J. G. Wilson, by which he took the place of Woodworth.
    VI. On the 13th of. November, 1844, Gibson renounced and released ¿11 right or claim,, if any, to these two machines, to J. G. Wilson, this having been supposed necessary to enable Wilson to sue'Rousseau and Easton for breach of their contract, or for an infringement of the Woodworth patent and. extension by the use of the machines in the town of Watervliet, after refusing to fulfil their contract; Gibson claimed no right to the use of the two machines in said town, as he had already passed to Woodworth all the right which he ever had ih the same. The release was given for abundant caution, the better tp secure to Wilson the right which he had acquired by the assignment from Woodworth.
    VII. On the 5th of December, 1845, X G. Wilson granted tó F. J. Barnard & Son a license to constr ict and use two machines in the town of Watervliet, for which he was to receive $ 4,000; but it was then and there agreed, that, if the decision of the Supreme Court of the United States, in a case then pending between Wilson and Rousseau and Easton, should be against Wilson, so as to exelude him from the use of the said two machines in the said town, then he was to repay to' Barnard & Son $2,000, paid , to him on that day in part satisfaction of the purchase-money; but if the decision should be in favor of, Wilson, and Barnard & Son should be put in possession of the right to erect and use the two machines in said town, then they were to pay to Wilson a further sum of $ 2,000;
    TUT. Upon the foregoing state of facts, and upon the pleadings and proofs in the case, , it is quite clear, that, down to the time of the grant of Wilson to Barnard & Son, the 5th of December, 1845, Gibson, the complainant,.possessed the exclusive right and title to the planing-machine in and for the county of Albany, with the exception of the two rights in the town of Watervliet, namely, the right to use one claimed by Rousseau and Easton, under the first grant, and more effectually seemed to them by Woodworth,"and the one sold and assigned by Gibson to Woodworth, and by him to Rousseau and Eastón..
    And, further, that Wilson possessed no interest in any right to the use of the plahing-machiné in the town of Watervliet, except in the two so derived from Woodworth by. assignment of the 12th of August, 1844, and which had before been sold to Rousseau and Easton, and of which they were in the actual use and enjoyment. Wilson therefore could grant his interest, whatever it might be, in these two rights, and nothing more; and this was all that could pass to Barnard & Son under the grant of the 5th of December, 1845. The. terms of that agreement also establish, that it was the interest of Wilson in these, two rights which he intended to. sell,.and 'Barnard & Son to purchase.
    IX. The failure of Rousseau and Easton to fulfil their agreement of purchase with ^Voodworth, the interest in which belonged to Wilson, did not, of itself, operate to annul and cancel the contract’. It was a contract partly executed; $S 200 ■ of the purchase-money had been paid, and promissory notes given for the residue. The machines had been erected, and were in operation; and although a court of equity might have decreed the contract to be delivered up and cancelled upon terms, until then Rousseau and Easton must be deemed in the, lawful use and enjoyment of the two rights under the patent. And even assuming the contract to be annulled, and the parties remitted to their original rights, it is clear that' Wilson had power to grant but one. of the rights in said town of Wa-tervliet, as the other was secured to Rousseau and Easton, under the decision of the court in Wilson v. them.
    An injunction was accordingly issued.
    On the 11th of April, 1848, the Circuit Court of the United States for the Northern District of New York was in session at Utica, when the following decree was passed:—

      “ This cause having been brought on to be heard upon pleadings and -proofs, and Mr. Wm. H. Seward having been heard on the part of the plaintiff, and Mr. Marcus T. Reynolds on the part of the defendants, and due deliberation having • been had, it is ordered, adjudged, and decreed, that the defendants in this cause be, and they, are hereby, perpetually enjoined from any further constructing or using in any manner, and from selling or disposing in any manner, of the two planing-machines mentioned in said bill as erected by them in the town of Water* vliet, in the county of Albany, or either of said machines, which machines are machines for dressing boards and plank, by planing, tonguing, or grooving, or either, or. in some separate combination, constructed upon the principle and plan specified and described in the schedule annexed to letters patent issued to Win. W. Woodworth, administrator of William Woodworth, on the 8th day of July, 1845; which letters were a renewal upon a formal surrender for an imperfect specification of letters patent issued to Wm. Woodworth on the 27th day of December, 1828, and extended on the 16th day of November, 1842, to take effect on the 27th. day of December, 1842, and. again extended, by act of Congress on the 26th day of February, 1845, and from infringing upon or violating the said patent in any way whatsoever.
    “And it is further ordered, adjudged, and decreed, that it be referred to Julius Rhodes, Esq., of Albany, counsellor at law, as a master pro hac vice in this cause; with the usual powers of a master of this court, to ascertain and report the damages which the plaintiff has sustained, arising from the infringement of his rights by the defendants, by the use of the said two machines by them.
    “ And it is further ordered, that the report of the said master herein may be made, either to this court in term time, or to-one of the judges thereof at chambers in vacation ; and that either party may, on ten days’ notice to the other of time and place, apply, either to this court in term time, or to one of the judges thereof at chambers in vacation, for confirmation of such report. ' '
    “ And it is further ordered, that either party may -at anytime, on ten days’ notice of time and place to the other, apply to this court' in term time, or to one of the judges thereof in .vacation, for further directions in the premises.
    “ And the question of costs, and all other questions in this catase, are hereby reserved until the coming in of the said report.
    “ And the eomplainant shall either pay to the defendants, or set off against the damages to be awarded, the sum of two thousand dollars, which he offered in his bill to pay them, with interest from the 5th of December, 1845.”
    • An appeal from this decree brought the case up to this court.

      Mr. Seward moved to dismiss the appeal, upon the ground that the decree was not a final one, which motion was opposed by Mr. Taber.

      Mr. Seward stated the case, and then said that it was admitted that an appeal would not lie except from a final decree. The only question is, what is the distinction between final and interlocutory decrees. The same principle may be applied which, governs the construction of judgments at law; those are final which grant a remedy upon the whole matter, and dismiss a party from the court. ' But in equity there is some difficulty, owing to the different nature of the relief which is granted. A final decree in equity may be defined to be one which definitively adjudges the whole subject-matter; an interlocutory decree, one which disposes of some parts, and reserves others for future decision-. (2 Daniel, Ch. Pr., Part 2, pp. .631, 632, 635, 638, -641, London ed. of 1840.) The present decree is not final, when tested by the principles laid down by Daniel.
    1. It expressly reserves the question of costs. They do not depend upon any statute, but upon judicial discretion.
    2. It does hot determine the . amount of damages, but refers the subject to a master to ascertain and report.
    3. Even if the master decides, still the decree does not adjudge them to be according to the report.
    ■ 4. It does not settle any principles upon which damages can be computed ; whether they are for one machine or two, &c.
    5. It reserves a decision upon the rights of the respective parties. Thé complainant offered, in his, bill, to pay $2,000; the decree says he shall do so, but does not say whether it is an extinguishment of the claim, ,-or only a set-off.
    '6. The bill prays that the machines and their produce may be delivered to the plaintiff; but the decree is silent upon this point. 'I’he question is reserved. ■ It may be said that a perpetual injunction is decisive of the rights 'of the parties. But it is only an order, which the court may revoke at" any time. It cannot be pleaded in bar. We think the parties are still in court.

      7. The decree does not give all the. relief which is prayed for in the bill. Whatever is asked and not granted is left undecided, because the bill is not dismissed as to that.

      (Mr. Seward then commented on. 10 Wheat. 502; 11 Wheat., 429; 8 . Peters, 318; 9 Peters, 1; 6 Cranch, 51; 15 Peters, 287; 2 How. 62; 208, 209.) I — I cr* to o CC * O w <£> * o w to

      Mr. A. Taber, against the motion.
    1. The decree in question is a “ final decree,” upon a sound construction of the Judiciary Act of 1803, chap. 93, <§> 2. The fundamental purpose of this áct was to give an appeal, if required, where the amount in controversy was sufficient,, to the end that the substantial rights of parties should not be finally disposed of by Circuit Courts. Not so of the English statutes of limitations, authorities construing which have been cited on the other' side. Their leading object was, not to give or take away an appeal, but to restrict by a short limitation appeals taken pendente lite, allowing a longer one to those taken after the cause was ended. Wherefore, the words “ final decree,” in these English acts, are justly interpreted to mean one which is a finis of the causé, and in our act, one which is a finis of substantial, rights of the parties, which, unless immediately appealed from, would take away property from one and give it to another, or work irreparable mischief. (6 How. 202, 203, 206; 13 Peters, 15; 3 Cranch, 179; 2 Smith’s Chan. Prac.-187, 188.) .
    The decree in question would do both. - It was intended by the Circuit Court finally to adjudge and determine the patent rights in controversy. It takes them away from the defendants, and vests them in the complainant; and, by the perpetual injunction it directs, immediately renders worse than valueless, — an encumbrance upon the ground,-— the expensive erections of the defendants for their enjoyment.-
    For the costs of the. cause, no appeal would hereafter lie. (4 Russell, Ch. 180; 3 Peters, 307, 319 ; 2 How. 210, 237.) The other matters reserved are merely in execution of the decree already passed. Before these matters could have been adjusted, and an appeal prosecuted to effect, our patent rights would have expired by their own limitation, and nothing remain for the appellate offices of this court but a post mortem examination of our rights for the. vindication of abstract law.
    The perpetual injunction, the main relief prayed, is a final execution ; not the mere extension of a preliminary injunction, which latter has been repeatedly denied in this cause, and is wholly inapplicable to á contest between assignees under the same patent, which is, therefore, no more prima fade evidence for one party, than the other. (4 Burr. 2303, 2400 ; 1 Vernon, 120; lb. 275; 7 Ves. 1; 3 Meriv. 622;' 14 Ves. 130-132; Drewry on Injunctions, 223, § 5, 221, 3, 223, § -4; Éden on Injunctions, 207.),

      2. But if this is not a case for an appeal under the act above cited, it assuredly inust be one of “ all other cases,” provided for by the seventeenth section of the patent act of 1836, chap. 747. In patent .causes, evidently for the reasons above alluded to, there is no limitation of an appeal except the safe one, that “ the court shall deem it reasonable to allow the same.” If the act means this honorable court, this appeal has been allowed by it, by one of its justices at chambers. If, as is more prob- - able, the Circuit Court was intended (6 How. 458, and note, and 477), then Justice Nelson, being a quorum of that court (Laws of 1837, chap. 801, sect. 3), acted as such, judicially, in allowing it at chambers. (1 Brock. 380.) Or if error l>as occurred in the manner of taking this appeal, no statute rtestriction being in the way, it should be allowed, in furtherance of ' justice, to be amended now. (Laws of 1789, chap. 20, sect. 32; 16 Peters, 319; 7 Wend. 508.) And this, according to the last-cited case, would be properly done by simply denying this motion.
    3. If it be replied to the last point, that this is not a case arising under the patent law, but under the common law of contracts and assignments, then the Circuit Court never had jurisdiction, the cause being between residents of the same State, and an appeal lies at any time, to reverse its decision already made, and dismiss the cause. (2 How. 244 ; 3 ib. 693; 8 Peters, 148; 16 ib. 97; 3 Dallas, 19.)

       Mr. Chief Justice Taney did not sit in this cause, being indisposed at the time it was argued.

   Mr. Justice M’LEAN

delivered the opinion of the court.

This is an appeal fijom the decree, of the Circuit Court for. the Northern District of New York.

The parties claim conflicting interests as assignees of Wood-worth’s patented planing-machine. The cause was submitted to the circuit judge, who decreed, that the defendants below be perpetually enjoined from any further constructing or using in any manner , the two planing-machines, &c., and the . case was referred to a master to ascertain and report the damages whieh the plaintiff, has sustained, arising from the infringement of his rights by the defendants by the use of the said two machines. The report of the master to be made in term time, or to one of the judges at chambers in vacation, and on ten days’ notice either party to move for confirmation of the report, &c. The question of costs was reserved until ' the coming in of the report, &c.

A motion is made to dismiss this appeal, on the ground that the decrpe is hot final.

No point is better settled in this court, than that an appeal may be prosecuted only from á final decree. The cases are numerous where appeals have been dismissed, because the decree of the Circuit Court was not. final. It is supposed there was a departure from this uniform course of decision, at the last term, in the case of Forgay et al. v. Conrad, 6 How. 201.

In that case the court sáys, — “ The decree not only decides the title to the property in dispute, and annuls the deeds under which the defendants claim, biit also directs the property in dispute to be delivered to the .complainant, and awards execution And according to the last paragraph in the decree, the bill is retained merely for the purpose of adjusting the accounts referred to the master. In all other respects, the whole of the matters brought into controversy by the bill are finally disposed of as to all of the' defendants, and the bill as to them is no longer pending before the court.” “If these appellants, therefore, must wait until the accounts are reported by the master and confirmed by the court, they will be subjected to irreparable injury.”

The decree in that case would have been executed by a sale of the property, and. the proceeds distributed among the creditors of the bankrupt, and . lost to the appellants, before the minor matters of account referred to the master could be adjusted and acted on by.the court. The course of procedure in the’ Circuit Court was irregular, and the consequent injury to the defendants would have'been irreparable. Effect should not be given to its final orders by the Circuit Court, until the matters in controversy shall be so adjusted as to make the decree final. Any other co.urse of proceeding will, in many cases, make the remedy by an appeal of no value.

The decree in the case under consideration is not final, within the decisions of this court. The injunction prayed for was made perpetual, but there was a reference to a master to ascertain the . damáges by reason of the ’ infringement; the bill was not dismissed, nor was there a decree for costs. In several important particulars, this decree falls below the rule of decision in Forgay v. Conrad. The execution of the decree in that case would have inflicted on the defendant below an irreparable injury. The bill was dismissed, as to the principal matters in controversy, and there was a decree for costs.

It is. said that the decree in this case, by enjoining the defendants below from the use of. their machines, destroys their value and places the defendants in a remediless condition. That in the course of a few months their right to run the machines will expire, and that no reparation can be obtained for the suspension of a right by the act of the court. It is alleged, too, that many thousands of dollars have been invested in the machinery, which by such a procedure becomes useless.

The hardship stated is an unanswerable objection to the operation of the injunction, until all the matters shall-he finally adjusted. If the injunction has been inadvertently granted, the Circuit Court has power to suspend it or set it aside, until the report of the master shall be sanctioned. And unless the defendants below are in doubtful circumstances, and cannot' give bond to respond in. damages for the use of the machines, should the right of the plaintiff be finally established, we suppose that the injunction will be suspended. Such is a correct course of practice, as indicated by the decisions of this court,. and that is a,rulé of decision for the Circuit Court.

The appeal is dismissed.

Order.

. This cause came on to be heard on the transcript of the record from the Circuit Court of the United States for the Northern District of New York; and was argued ,by counsel. On consideration whereof, and it appearing to. the court here that the decree of the court below complained of is not a final decree within the meaning .of the act of Congress, it is thereupon now here ordered and decreed by this court, that this cause be and the same is hereby dismissed for the want of jurisdiction.


author: Mr. Justice McLEAN

text:
    The United States, Appellants, v. The Heirs of Louis Boisdore.

    The meaning of the forty-third rule of this court is,.that, if a judgment'or decree in -the court below be rendered more than thirty days before the commencement of the term ofthis court, and the record be not filed within the first six days of tie term, the appellee or defendant in error may docket the case, and move' for its dismissal as the rule prescribes. I

    But if the judgment or decree of the court below be rendered less than thirty days before .the commencement of the term of this court, the rule does not apply.
    This was an appeal from the District Court of the United States for the Southern District of Mississippi.

      Mr. F.endall moved to dismiss the appeal, upon' the grounds stated in the opinion of the court, which motion was opposed by Mr. Toucey (Attorney-General).

      Mr. Chief. Justice Taney did not sit in this cause.

   Mr. Justice McLEAN

delivered the opinion of the court.

This is an appeal from the decree of the District Court for - the Southern District of Mississippi.

The bill was filed against the United States, under the acts of June 17, 1844, and May 26, 1824, to. try the validity of the complainants’ claims to certain lands in Mississippi. At the November term of the District Cougt, 1847, a decree was entered in favor of the petitioners, and at the same term an appeal to the Supreme Court of the United States was granted by the District Court, on the application of the defendants. An appeal thus allowed requires no notice to the appellee. A motion is now made to dismiss this appeal, oh the following grounds-: —.

. 1. Because the appeal is not made to any specified term of the Supreme Court.

2. Because it is not made returnable to the term of the Supreme Court next following the décrée.

3. Because the record is not filed at the term of the Supreme Court next following the decree.

• Under the act of 1824,' the party against whom the decree is entered may' appeal within one year. On the 14th of March, 1848, a transcript of the record was made out, and it was filed in this court at the present term. Prom the time this decree was entered, to the commencement of the ensuing session of the Supreme Court, there were less than, thirty days. And under such circumstances it appears, by the forty-third rule, that the appellant was not required to file the transcript of the record in this court at the first term.

The rule provides, that, “ in all cases where a writ of error, or an appeal, shall be brought to this court from any judgment or decree rendered thirty days before the commencement of the term, it shall be the duty of the plaintiff in error or appellant,- as the case may be, to docket the cause and file the record with the clerk of this court within the first six days of the term.” If this be not done, the other party, on producing the proper certificate, may have the cause docketed and the appeal or writ of error dismissed.

The rule does not operate where a decree is entered less than thirty days before the term of this court, and consequently the cause is not liable to be docketed and dismissed. The appellants, under the circumstances of this case, are chargeable with no neglect for failing, to file the record with the clerk at the first term of the Supreme Court after the decree was entered. The motion to dismiss is overruled.

Order.

. On consideration of the motion to dismiss this cause, made by Mr. Fendall, on a prior day of the present term of this court, to wit, on Friday, the 2d instant, and of the arguments of counsel thereupon had, as well in support of as against the motion, it is .now here ordered by this court, that the said motion be and the same is hereby overruled.