Erwin v. United States

I. Tlie owner of captured cotton wlio can trace the proceeds of his property into tlie Treasury lias a proprietary interest in tliorn which, under an assignment in "bankruptcy, passed to tlie assignee. II. On the facts found in this case it is held that such interest, being- vested in the assignee, was not retransferred to the claimant (the bankrupt), by the alleged sale and transfer by the assignee. III. The Act February 5,1877, “for flio relief of liobert Erwin” (19Stat. L., 509), does not enlarge the rights of the claimant to the proceeds of his cotton in the Treasury.

ERWIN’S CASE.

On the Proofs. The Reporters’ statement of.the case: This case was argued at the December term, 1876, before three judges, who found the following facts, and ordered a rehearing on the questions of law: I. In December, 1864, the claimant owned and was possessed of the 283 bales of cotton described in the petition. It was captured ill tliat month by the military forces of the United States, and the proceeds thereof, paid into the Treasury, amount to $49,018 39. II. On the 31st December, 1868, the firm of Erwin & Hardee, of which the claimant was a member, presented their petition in bankruptcy to the district court for the southern district of Georgia. In the schedules of the individual property of the claimant, annexed to such petition, there was set forth as among-his assets “ claim on the United States Government for 382 bales of cotton, captured by General Sherman at Savannah in December, 1804.” On the 15th January, 1809, the firm of Erwin & Hardee were adjudged bankrupts, and on the 12th January, 1870, the claimant was adjudged to be discharged as a bankrupt. III. In March, 1872, there remained in the hands of the as-signee in bankruptcy, undisposed of, a number of assets, including the claim of the claimant against the United States for the proceeds of his captured cotton. Thereupon the following proceedings were had: “In the district court of the United States for the southern district of Georgia. “In the Matter oe Bobert Erwin and ) Charles S. Hardee, copartners under the > In bankruptcy. firm-name of Erwin & Hardee, bankrupts. ) “To the honorable John Erskine, judge of the'district court of the United States for said district: “ The petition of Bobert H. Footman respectfully showeth unto' your honor that he is the regularly appointed and qualified as-signee of Erwin & Hardee, bankrupts; that as such assignee he has in his possession a great many outstanding debts and demands due or belonging to the estate of said bankrupts, which cannot be collected and received by your petitioner without inconvenient delay; wherefore your petitioner prays an order of this honorable, court for leave to sell, under the direction of the register in charge of said matter, at public outcry, after giving reasonable notice thereof, by advertisment in one or more newspapers, the following notes, and accounts: “notes. “Henry Sgliober, note for twelve thousand dollars. “Do., “ “ same am’t, credited by sale of steamer, $ “ Glass & Wliitloclc, note for $3,398.90. “M. S. Glass, “ “- 2,500.01. “Do., “ “ 2,705.94. “Do., “ “ 2,710.98. “And any other notes uncollected. “All uncollected open accounts on the books and a claim of insurance in general-average case of steamer Amizon. “E. II. FOOTMAN, “ Assignee. “Dated at Savannah, Ga., 11th March, 1872. “Let this petition be referred to Eegister Beckett to take testimony on the subject-matter, & report at as early a day as pract’ble — say next Tuesday in April — when the court will determine whether the prayer of the assignee ought to be granted, or how otherwise. “March 20, 1872. “JOHN EBSKINE, Judge. “SotjtherN District oe Georgia, ss : “I certify that, in compliance with the order of the judge, I have examined the assignee & creditors of said bankrupt, and am of the opinion that the creditors generally deshe a speedy settlement of the estate. “I recommend that the petition of the assignee be granted and that he be authorized to dispose of the assets of the bankrupts at public outcry, after giving notice of the time and place of sale' to each creditor who has proved his debt and by publication in one or more newspapers at least -fifteen days before the sale. The sale to be made in separate lots. “ Given at Savannah, this 19th April, 1872. “ISAAC BECKETT, “Register. ■ “Petition of assignee granted as prayed for. “May 9, ’72. “JOHN EBSKINE, Judge. “In the district court of the United States for the southern district of Georgia. “In the Matter oe Erwin & Hardee, ) , bankrupts. jin Daniauptcj. “ Southern District oe Georgia, ss: “The application of B. IT. Footman, assignee, of Savannah, iii the county of Chatham, State of Georgia, haying- received the approval of the honorable John. Erskine, judge of said court, “It is ordered, that said assignee have leave to sell such notes, accounts, and other debts due said estate as in his judgment will be for the interest of the creditors of said bankrupts, said sale to be made at public auction, ux>on giving notice by mail to each creditor who has proved his claim, and by publication in one or more of the public journals of the city of Savannah at least fifteen (15) days before the time of sale. “Given at Savannah, on the 10th day of May, 1872. “ISAAC BECKETT, “Register in Banlirwptcy.” And on the 11th May, 1872, the following entry was made by the register in bankruptcy on his official docket: “At Savannah, May 11,1872, ordered sale of notes and accounts at the discretion of the assignee.” IY. Subsequent to the proceedings and orders set forth in the third finding, it was deemed by the assignee and creditors in bankruptcy that a sale of the assets at public auction would produce little more than a nominal amount, and no such sale was made. The assets remaining unsold, the claimant, on the 22d November, 1872, made to the assignee the following offers in muting: “ SAVANNAH, IFov’r 22(1, 1872. “ To Mr. E. H. Footman, “ Assignee for Bnvin & liar dee : “ Dear Sir : Having- been approached by several of the creditors of the late firm of Erwin & Ilardee, and been solicited by them to make an offer for the assets, I submit the following, to bo open for two weeks: $2,500 for the assets exclusive of the notes of Henry Schaben, or $3,000 including- these notes. “Tory truly, yours, “EOBT. ERWIN.” “ Savannah, Bee. 6th, 1872. The above proposition is extended until to-morrow, 2 p. m, « EOBT. ERWIN.” 'The assignee thereupon consulted and advised with all of the -creditors of the estate except one I. C. McBirney, who was not present, and all of them being of the opinion that the terms of-feretl by tbe claimant would constitute tbe most beneficial sale tbat could be effected, tbe assignee accepted tbe said oifer on tbe 7tli December, 1872, excepting’ therefrom tbe notes of Henry Sell aben, and received from tbe claimant tbe agreed sum of $2,500, and at tbe same time executed to bim tbe following instrument in writing: u SAVANNAH, Wi December, 1872. u Deceived from Mr. Bobt. Erwin twenty-five hundred dollars, being in full for all tbe remaining assets of tbe late firm of Erwin & Ilardee, bankrupts, except tbe notes of Henry Schaben. $2,500.00. « E. II. FOOTMAN, Assignee .” Subsequently tbe notes of Henry Schaben were in like manner, on tbe 31st March, 1873, sold to tbe claimant for $600, and thereafter all of tbe creditors, with knowledge of the facts and circumstances attending tbe sales, including tbe absent creditor, I. O. McBirney, accepted and received tbe final dividend of tbe estate derived from these sales; and tbe assignee’s report submitted to tbe meeting of creditors contained tbe following item: “ 1872, December 7th. By sales of all remaining assets, except notes of Henry Schaben, twenty-five hundred dollars ($2,500) f which report was received and confirmed,by tbe creditors, and on it tbe final dividend of tbe estate was awarded by tbe register.. V. The copy of tbe bankrupts’ schedules, prepared by the-register in bankruptcy for tbe use of tbe assignee, contained, as prepared, a sheet setting forth tbe asset or item of tbe claim against the United States for 382 bales of cotton set forth in tbe second finding. Tins' sheet was removed, by some person unknown, before tbe assignee acquired knowledge of tbe asset. Nor bad tbe assignee personal knowledge tbat such an asset existed at tbe time when he sold tbe remaining assets of tbe estate to tbe claimant, as before found, though .the existence of tbat asset was known to some of tbe creditors of tbe estate And at tbe request of tbe claimant tbe court found tbe following additional facts, to wit: VI. Tbat tbe assignee in bankruptcy, at the time be received from tbe claimant tbe sum. of twenty-five hundred dollars ($2,500) in payment of the amount agreed to be paid for tbe re: maining and uncollected assets -of the firm of Erwin & Hardee, as stated in tbe fourth finding', delivered and returned to tbe claimant u all of tbe books and papers representing tbe remaining assets of tbe firm of Erwin & Hardee and of tbe individual assets.” TIL Tbat upon tbe day and produce books of tbe said firm of Erwin & Hardee, so delivered and returned to tbe claimant by tbe said assignee, there was entered an account of tbe cotton embraced in tbe claimant's petition in tbe words and figures following, viz: (Written across the face in red ink:) These 283 bales, my individual property, have this day been removed by order of Gon’l “Sherman.” Cotton marked “AB” by the government. (S’g’d) ROBERT ERWIH. Return made to the government of the within 283 bales. (S’g’d) ROBERT ERWIH. VIII. Tbat tbe assignee in bankruptcy never made any comparison of tbe schedule of tbe assets of tbe bankrupts, as furnished him by tbe register in bankruptcy, with tbat filed in tbe office of tbe clerk of tbe United States district court for tbe southern district of Georgia, nor did tbe said assignee ever compare tlie schedule of the assets so furnished to him by tbe register in bankruptcy with tbe books of tbe said bankrupts which were delivered to him at tbe time be became tbe assignee of said bankrupts. IX. Tbat tbe assignee in bankruptcy did not, previous to tbe time be made sale to tbe claimant of tbe uncollected assets of the said bankrupts, as stated in the fourth finding, make any list or schedule of such assets, nor was any list or schedule of tbe assets so sold by tbe said asigmee to tbe claimant delivered to tbe claimant at tbe time of such sale. X. That, although, the said assignee in bankruptcy was informed that the claimant was prosecuting the claim against the United States stated and set forth in the petition filed herein in the year 1873 or 1874, it does not appear that either the said as-signee or the creditors of the said bankrupts ever made any objection to the claimant’s right to prosecute this suit in his own name and for his own benefit xpitil subsequent to the passage by Congress of the act for the claimant’s relief, which became a law on the 5th day of February, A. D. 1877, and is in the words and figures following, viz: “ That the Court of Claims may take jxmsdiction under the provisions of the act of March 12, 1863, entitled ‘An act to provide for the collection of abandoned property and for the prevention of frauds in insurrectionary districts within the United States,’ of the claims of Robert Erwin, of Savannah, Georgia, for property alleged to have been taken from him; which claims were, by accident or mistake of his agent or attorney, and without fault or neglect on his part, as is claimed, not filed within the time limited by said act.” This suit was commenced by the claimant in his own name for the recovery of the proceeds of the cotton. After the decision of the Supreme Court in Saycrafffs Case (22 Wall., 81), Congress, on the claimant’s application, passed the act “ for the relief of Robert Erwin.” The proceedings in the suit already commenced were then amended so as to make them conform to the provisions of this act. 1. No interest in the proceeds of the cotton passed to the assignee in bankruptcy. Section 5044, Revised Statutes, directs a conveyance to the assignee of all the bankrupt’s “ estate, real and personal,” and “ all his deeds, books and papers relating thereto.” Section 5046 provides for vesting in him all the bankrupts “ rights in equity, choses in action, patent rights and copyrights, debts due him, and rights of action.” The bankrupt had no right of property in the fund in the Treasury (Haycraft v. The United States, 22 Wall., 81; Lcmar v. Brown, 92 U. S., 194), and he had no right of action, because the time had expired within which the action could be brought. Assignees in bankruptcy take estates only in wMcli tlie bankrupt has a beneficial as well as legal interest. (Rhodes v. Blaclc-iston, 106 Mass., 334; Blin v. Pierce, 20 Vt., 25; Ontario Bcmlt v. Mumford, 2 Barb., Cli. 596; Synson v. Burton, 5 Ash., 492.) In this case the contingency upon which the Government might have lost its title passed without leaving any rights in the owner. [Haycraft’s Case, sup.) Chamberlain v. Stanton, 2 Wood, 164; Nichols v. Baton, 91 U. S., 720 ; Vanhorn v. JDorrcmce, 2 Dali., 304.) And, further, claims against the government are absolutely unassignable. (Gillis v. United States, 95 U. S., 407; Child v. Trist 21 Wall., 441.) 2. The xdaintiff was fully reinvested with such interest by virtue of the consummated contract of sale of December 7,1872, made to him by the assignee and creditors. Sales of this character are sustained by courts. (Alderman v. Chester, 34 Ga., 152; Matcher v. Cade, 55 Ga., 359.) The claimant raider the sale received the books and papers containing evidence of the claim, and has notoriously exercised acts of ownership over it, constituting adverse possession as against the whole world. (Bioing v. Bennet, 11 Peters, 53; Bllicot v. Pearle, 10 Peters, 442; Barclay v. Sowell, 6 Peters, 513; Boyal v. Sirle, 15 Ga., 545.) The statutes of the State of Georgia, in which State all these facts occtured, provide that “adverse possession of personal property within this State for four years shall give a like (good) title by prescription.” (Code of Ga., §2685.) This title is good in any State of the Union or in the District of Columbia. (Paschal v. Davis, 3 Kelly, 265; Brent v. Chapman, 5 Cranch, 358; Neioby v. Beall, 3 H. & Murnf., 57; Shelby v. Guy, 11 Wheat., 361; Wynn v. Lee, 5 Ga., 217; Pendenjast v. Boley, 8 Ga., 7; Worthy v. Jolmson, 10 Ga., 361.) The assignee’s title cannot be set up as a defense in this suit, since the assignee could not himself prevail upon it in an adverse action against the plaintiff. (Bigelow on Estoppel; see also Turn, Licit Oil Company v. Marbury, 19 Wall., 587; Mwmford v. Bliss, 12 B. Monr., 255.) At all events, neither he nor the creditors could be even heard without having first paid or tendered to Erwin his money, which they have divided among themselves. This sale complied with, payment and acceptance of the money impose silence upon tlie only persons entitled to deny Erwin’s ' rights in this case. This principle holds good irrespective of the nature of the property s61d. Bird v. Benton, 2 Dev., 79; Govern v. Freeman, ih. 472; Graces. Mercer, 10 B. Mom., 261.) Express or even tacit acquiescence of the owner in an unauthorized sale of chattels personal will preclude him from questioning the title of the vendee. (Cox v. Bucle, 3 Strob., 367 ; Thompson y. Blanchard, 4Comst., 303.; 2 Sm. & Oa., 660.) The assignee cannot come in now that the claimant has by his energy, money, and patience made the claim valuable. (Ttoin Lido Oil Company v. Marlmry, 19 Wall., 587.) 3. The act of Congress under which the claimant came into this court was passed for his-sole relief, and to enable him to-come in and prove his ownership and the amount of the proceeds. Such a construction will be put upon the act as will carry out the intention of the legislature. (Sedgwick on Stat. Law, 231; Vanhorn v. Bórrame, 2 Dali., 304.) The act of the legislature is not an empty form. This court will presume, and the fact is, that Congress had before it all the circumstances of this bankruptcy and the facts connected with the sale by the creditors and assignees to the plaintiff. The intention of the act was that the plaintiff, in the event of his proving his ownership of the cotton funds in the Treasury derived from its sale, should be paid the amount remaining in the Treasury. (Ogden v. Strong, 2 Paine, 584.) This private act was nothing more than a special re-enactment of the “Abandoned property Act” for the plaintiff’s, benefit, and an enabling act to permit him to redeem his property from the effect of a forfeiture and the bar created by the limitation on actions provided by law. The privileges granted by the act for his relief having been acquired after the filing of the petition and the adjudication of bankruptcy inure to the benefit of the plaintiff. After-acquired property belongs to the bankrupt. (In re Batterson, 1 B. B., 125; In re levy, Ih., 136; In re Rosenfield, Ih., 319; Bughy v. Bohinson, 19 Ala., 404; Bond v. Bennett, 9 Ca., 9; Mays -v. Bcmlcs, 64 Pa., 74; Kittredge v.. McLaughlin, 33 Me., 327; Milford v. Milford, 9 Yesey, 86; In re Kamhright, 2 B. B., 489; Blin v. Bierce, 20 Yt., 25.)