|ii|||iii|i||iliii|iiill THE LIBRARY OF THE UNIVERSITY OF CALIFORNIA LOS ANGELES SCHOOL OF LAW AMERICAN LAW AND PROCEDURE VOLUMES I TO XII PREPARED UNDER THE EDITORIAL SUPERVISION OF JAMES PAUKER HALL, A.B.,LL.B. Dean of Law School University of Chicago AND VOLUMES XIII AND XIV BY JAMES DeWITT ANDREWS, LL.D. FORMERLY OF THE LAW FACULTY NORTHWESTERN UNIVERSITY Author of "Andrews' American Law," Editor "Andrews* Stephens' Pleading," "Cooley's Blackstone," "Wilson's Works," etc. A Systematic, Non-Technical Treatment of American Law and Procedure, Written by Professors and Teachers in Law Schools, and by Legal Writers of Recognized Ability. PUBLISHED BY LA SALLE EXTENSION UNIVERSITY CHICAGO T .10 AMERICAN LAW AND PROCEDURE VOLUME X. PREPARED UNDER THE EDITORIAL SUPERVISION OF JAMES PARKER HALL, A.B., LL.B. Dean of the University of Chicago Law School INTERNATIONAL LAW BY ARNOLD BENNETT HALL A. B, (Franklin College), J. D. (University of Chicago) Assistant Professor, Political Science, University of Wisconsin DAMAGES BY ARTHUR MARTIN CATHCART A, B. (Leland Stanford Jr. University) Professor of Law, Leland Stanford Jr. University BANKRUPTCY BY FRANK WILLIAM HENICKSMAN A. B., A. M. (Indiana University), J. D. (University of Chicago) Late Lecturer in Law, University of Chicago JUDGMENTS BY JOHN ROMAIN ROOD LL. B. (University of Michigan) Professor of Law, University of Michigan ATTACHMENTS, GARNISHMENTS AND EXECUTIONS BY JOHN ROMAIN ROOD LL. B. (University of Michigan) Professor of Law, University of Michigan COPYRIGHT, 1910, 1911, 1912, 1913. BY LaSAlle extension university CONTENTS INTERNATIONAL LAW. CHAPTER I. Greneral Conceptions. § 1. Definition and scope of subject 1 § 2. Nature and sources of international law 2 § 3. History of international law 4 § 4. International law part of municipal law 5 § 5. Sovereign states are the persons in international law 6 § 6. Distinction between a government and a state T § 7. Part-sovereign states 8 § 8. Recognition of new states 9 § 9. Recognition of billigereney 10 § 10. Effects of changes of sovereignty 31 CHAPTER II. Independence and Equality of States. § 11. Right of existence and independence 14 § 12. Extra-territorial . 111. (2) B. & P. R. Co. V. First Baptist Church, lOS U. S. 317. (3) Ilobbs V. London & Southwestern Ry.. L. R. 10 Q. B. 111. (4) HamUu v. Great Northern Ry. Co., 1 II. & N. 408. COMPENSATORY DAMAGES 171 § 65. Mental suffering. The law is not well settled as to the conditions under which mental suffering will be compensated. Ordinarily this head of damage is not recognized in actions on contract, but actions for breach of promise of marriage constitute a well-recognized excep- tion (5). In actions of tort the recovery of damages for mental suffering depends largely upon the nature of the wrong by which it was caused. For mental suffering in the form of insult or injured feelings, compensation may be had in the case of a malicious tort, whether the right pri- marily involved relates to person or property (6). "When the tort is not wilful, recoveiy for insult would of course be out of place, and, in such case, recovery for mental suf- fering will usually be allowed only where a physical in- jury is inflicted upon the plaintiff (7). For mental an- guish or nervous shock, accompanying or flowing from actual physical injury, compensation will, as a rule be granted (8). Section 2. Estimation of Non-Pecuniary Damages. § 66. Discretion of jury. Where the rights violated are purely personal, as in the case of assault, libel, or false imprisonment, the damages are within the discre- tion of the jury, subject only to the limitation of what is reasonable. Where, however, pecuniary losses can be proved, with sufficient certainty, to have resulted as a legal consequence of such an injury, allowance therefor (5) Vanderpool v. Richardson, 52 Mich. 336. (6) Meagher v. DriscoH, 99 Mass. 281. (7) Wyman v. Leavitt, 71 Me. 227. (8) Chicago v. McLean, 133 111. 14S. 172 DAMAGES should be made. Examples of such losses are loss of time, loss of income, and expenses of nursing and medical at- tendance (9-10). §67. Aggravation and mitigation. In the chapter upon exemplary damages (§§ 16-21, above), we have seen that circumstances of aggravation may be given in evi- dence in actions for wilful torts, as a basis for the assess- ment of punitive damages. In like manner, circumstances of mitigation may be shown for the purpose of reducing the damages. Sometimes they are relied upon as tending to show that the actual damage is of limited extent, as where evidence of plaintiff's bad reputation is given in an action for libel or slander (11). More often they are introduced to counteract evidence in support of exemplary damages, as where evidence of jDrovocation is shown in an action of assault and battery. There is a question, whether bad motive on the part of plaintiff should ever have the effect of reducing his damages for actual damage proved; but it is settled that it should be considered when the question is as to exemplary damages. It would be unjust to punish the defendant for acting maliciously, if plaintiff's own malicious conduct were disregarded (12). Section 3. Computation of Pecuniaey Damages. § 68. In general. When the damage is pecuniary, the jury must act within limits imposed by the law's ideal of exact compensation. Such compensation ordinarily means the papnent of the monetary equivalent of that (9-10) riiillips V. London & S. W. R. Co., L. R. 4 Q. B. Div. 40G. (11) Sickra v. Sjuall, 87 Me. 493. U2) Cushmaa v. Waddell, 1 Baldw. 09. COMPENSATORY DAMAGES 173 which has been lost. The methods of ascertaining this equivalent will now be considered. § 69. Value as a measure of damages. The normal measure of damages for a contract broken, or for property lost, destroyed, or damaged is that of value. In the case of a contract this is measured by the advantage lost ; ac- cording to the purpose of the contract this loss may ap- pear in various ways, as a loss of wages, a loss of profits, or perhaps a loss of property, to preserve or protect which the contract was made. If plaintiff has lost wages, his measure of damages is the wages he has earned or might have earned in similar employment elsewhere (13). Usually the value of a contract is measured by profits lost. Granted that the requirements of Hadley v. Baxen- dale (§ 51, above) are satisfied, the only question is as to certainty of proof. If the contemplated profits were purely speculative, recovery would of course be denied. Where profits can be shown with certainty to have been lost, recovery may be had although exact measurement is impossible— however roughly they must be estimated, they are taken as representing the value of the con- tract (14). In some cases the profits lost are capable of being ascertained with exactness. The frequent occur- rence of certain classes of cases has resulted in the crystalization of a few rules of exactness that are ap- plicable to such cases. Thus the difference between the contract price and the market value, at the time and place of delivery, is the usual measure of damages for (13) Sutherland v. Wyer, 67 Me. 64. (14) Bagley v. Smith, 10 N. Y. 489. 174 DAMAGES the breach of a contract of sale (15). And the measure of damages for delay in carrying goods is the difference between the market value, at the time and place of de- livery as required by the contract, and the same value at the time of actual delivery (16). The difference in each case represents the value of the contract. § 70. Market price as a test of value. When the ques- tion is as to the value of property, whether as the subject of a contract of sale or carriage, or as the object of an injury, the market price is the usual standard. This is because the market price is ordinarily an accurate gauge. So much reliance is placed upon this standard that, in the absence of a market at the place of injury, resort will be had to the nearest available market in order to arrive at the actual value (17). If, however, the market price is demonstrably an unfair test, it will be rejected. This is clearly the case where the market price is a result of fraudulent manipulation; obviously it does not measure the true value ; the law makes an allowance for the effect of the disturbing factor (18). Sometimes there is a market price, but, owing to peculiar circumstances, that price does not represent the real value to the owner, nor fairly measure his loss. Thus the fact that there is a market for second-hand clothes did not prevent a plaintiff from recovering the value of a portmanteau of clothes, upon the basis of their usefulness and special value to (15) Johnson v. Allen, 78 Ala. 387. (16) Ward v. N. Y. Cent. R. Co.. 47 N. Y. 29. (17) Grand Tower Co. v. Phillips, 23 Wall. 471. (18) Kountz V. Kirkpa trick, 72 Ta. St. 376. COMPEN^SATORY DAMAGES 175 him (19). Sometimes the goods are not saleable at all, and yet their value to the owner may be considerable. In such case, a fixed standard is impossible; the jury must be given a discretion ^>pproaching that which it ex- ercises in a personal injury case, or the plaintiff will go without a remedy. The law does not put exactness before justice, and accordingly allows the jury to fix the damages upon the broad basis of what is reasonable under all the circumstances. Thus, where the question arose as to an oil portrait of the plaintiff's father, which was of value only to plaintiff, it was held that evidence as to the original cost, the practicability and expense of replacing it, and the fact that plaintiff had no other, was proper for the consideration of the jury (20). § 71. Higher intermediate value. What has heretofore been said in regard to value, as a test for determining the extent of plaintiff's loss, has been upon the assumption that the property involved was of normally stable value. Often, however, the value of property is subject to wide and frequent fluctuations. In such cases a serious problem is presented. The question most frequently arises where property is converted or appropriated by the defendant to his own use. The general rule for con- version makes the value of the property at the time of the conversion the test (21) ; but, where the property fluctu- ates in value, this may bear with hardship upon the plaintiff, who may have held the property in the expecta- tion of an increase in value. To insure full compensa- (19) Fairfax v. N. Y. Cent. & H. R. R. R., 73 X. T. 1G7. (20) Green v. B. & L. R., 12S Masb. 221. (21) Beede v. Lamprej-, 64 N. H. 510. 176 DAMAGES tion to the plaintiff, some courts allow tlie highest inter- mediate value, i. e., the highest market value of the article between the date of conversion and the date of trial (22) ; but this often works a hardship upon the defendant, for it is by no means certain that the plaintiff would have sold at the highest market price. Many other courts take a middle course, and hold that compensation in such cases is properly made by allowing the highest market value of the property, that is reached within such a time, after plaintiff has received notice of the conversion, as will afPord him a reasonable opportunity for replacing the property converted (23). Here will be seen an ap- plication of the doctrine of avoidable consequences. This middle ground represents the prevailing view, when the property is in the form of stocks (24). Where the prop- erty is of fluctuating character, but stocks are not in- volved, the alignment of the courts is very different, the weight of authority favoring the application of the gen- eral rule for ordinary cases of conversion (25). § 72. Deduction for benefits conferred: By defendant. Several questions arise with regard to the deduction to be made for benefits conferred upon the plaintiff. Where, after damage has been inflicted, the plaintiff has accepted reparation in whole or in part from the defendant, this must of course be considered as reducing the damages to the extent of the value of that which has been re- (22) Burks v. Hubbard, 69 Ala. 379. (23) Baker v. Drake, 53 N. Y. 211. (24) Gallgher v. Jones, 129 U. S. 193. (25) See cases cited, 13 Cyc. 171. COMPEXSATOKY DAMAGES 177 ceived (26). A common case is the return of property which has been tortiously taken. But a defendant cannot compel the plaintiff to accept reparation ; the unaccepted tender of property by way of reparation is of no effect (27). Sometimes, the very act which inflicts the damage also confers a benefit. In such a case the courts regard the net result as measuring the actual damage inflicted by the wrongful act. Thus, where the damage consisted in placing a large quantity of earth upon plain- tiff's land, the court declined to allow him what it would cost to remove the earth, but said that the actual damage sustained could be determined only by considering and allowing for such benefits as might have arisen from plac- ing the earth upon the land (28). So much for benefits conferred by the defendant. § 73. Same: By third party. Frequently the benefit is conferred by a third person. When the plaintiff ac- cepts a benefit from a third person, this benefit will not inure to the defendant by way of reducing his damages. In reliance upon this rule, decisions have been rendered which seem at first blush to involve hardship upon the de- fendant. Thus, it has been held that the recovery of a plaintiff, entitled to compensation for loss of time, will be unaffected by an employer's generosity in paying plaintiff his full salary during the period of idleness en- forced by defendant's wrong (29). It has also been held that a plaintiff, entitled to compensation for necessary (26) Torry v. Black, 58 N. Y. 1S5. (27) Carpenter v. Dresser, 72 Me. 377. (28) Mayo v. Springfield, 138 Mass. 70. (29) Elmer v. Fessenden, 154 Mass. 427. 178 DAMAGES nursing and medical attendance as a result of a personal injury, could recover their full value, notwithstanding the services of nursing were donated by a friend (30). In these cases, the benefit is looked upon as a gift to the plaintiff, the bestowal of which is immaterial as regards the defendant. Sometimes, the benefit is conferred by a third person acting under a contract with the plaintiff. In such case, as between plaintiff and defendant, the per- formance of the third person's undertaking is regarded simply as a contractual right of the plaintiff. Thus, a plaintiff recovers the full value of goods wrongfully taken by the defendant, although they have been subsequently destroyed by fire and the plaintiff has recovered their full value from an insurance company under a policy ex- ecuted by it in his favor (31). § 74. Interest. Since a plaintiff is entitled to compen- sation, as soon as his cause of action accrues, it might seem that, in all cases in which compensation is awarded, the damages should include interest down to the time of recovery, as compensation for the use of money which ought to have been paid as damages iromediately upon the infliction of the damage. When the damage is pe- cuniary, this principle appears to be recognized. In such cases interest is generally allowed, either as matter of right or as coming within the discretion of the jury. It is recoverable as of right upon judgments (32), upon all liquidated demands (33), and upon contracts which pro- (30) Brosnan v. Sweotsor, 127 lud. 1. (31) rorrott v. Slioaror, 17 IMic-h. 48. (32) Mfthnrin v. Bickford. N. II. 5G7. (33) Dodse v. Perkins, 9 Pick. 3n,S. COMPENSATOEY DAMAGES 179 vide for it expressly or impliedly. It is sometimes al- lowed under rules of damages applicable to particular classes of actions, as in those for breach of a contract of sale (34) or of carriage (35), and in actions for the con- version of property (36). In other cases of pecuniary damage, interest is not allowable as a matter of right, but the jury is permitted to consider interest as allowable within its discretion; such a case is an action for the neg- ligent destruction of property (37). In one case of un- doubted pecuniary damage, interest is never allowed in the absence of a valid agreement therefor ; as a matter of policy, the law guards against the dangers of compound interest, and will not allow interest as compensation for delay in the payment of interest due (38). When the damage is in its nature non-pecuniary, as in an action for personal injury, interest is never allowed (39) ; but the wide discretion of the jury, together with the practice of allowing prospective damages, doubtless amounts to a practical equivalent in most cases. § 75. Expenses of litigation. The plaintiff who is com- pelled to resort to litigation, in order to obtain a remedy for the wrong done by the defendant, necessarily incurs expense. This expense is very substantial pecuniary harm, and it is occasioned by the defendant. Is it an item of pecuniary damage for which an allowance is made? (34) Dana v. Fiedler, 12 N. Y. 40. (35) Houston, etc. R. Co. v. Jackson. 62 Tex. 209. (36) Andrews v. Dnrant. 18 N. Y. 496. (37) Richards v. Gas Co., 130 Pa. St. 37. (38) Henry v. Flagg, 13 Met. 64. (39) L. & N. R. Co. V. Wallace, 91 Tenn. 35. 180 DAMAGES It is a familiar rule that the unsuccessful litigant pays the costs of the action ; but such payment is not regarded as the pa}Tnent of damages for a wrong done. Costs are due from the innocent plaintiff, who has failed in an at- tempt to obtain a remedy by exercising his right to liti- gate, as well as from a defendant who has clearly vio- lated the plaintiff's right. They are a conditional incident to litigation, rather thaii an element of damages. In Amer- ica the costs do not include counsel fees. In the absence of express contract or statute, they are not recoverable either as costs or as damages in an ordinary case (40). They are allowed as an item of compensatory damages, when defendant's wrong has proximately caused plaintiff to engage in litigation with i third person (41). In some jurisdictions they may also be given in evidence as bear- ing upon the question of exemplary damages (42). But, as a general rule, neither costs nor counsel fees are deemed a proper basis for the assessment of damages. The reason may perhaps be found in the difficulty of de- termining whether or not litigation is a proximate con- sequence of defendant's wrong; perhaps also in public policy, which might well oppose the placing of too heavy penalties upon the unsuccessful litigant. Section 4. Limitations Imposed by Nature of Plaintiff's Interest. § 76. In general. Heretofore, we have assumed that the defendant 's wrongful act or omission has been a viola- (40) Day v. Woodworth, 13 How. 363. (41) Philpot V. Taylor, 75 111. 300. (42) Welch V. Durand, 36 Conn. 182. COMPENSATOEY DAMAGES 181 tion of the right of one person only ; but it often happens that his conduct has constituted a legal injury to two or more. In such case it is plain that each party is en- titled to full compensation for all the damage sustained by him. If defendant's negligence causes a train wreck and a score of passengers are injured, it is evident that the right of one passenger to recover full damages will be unaffected by defendant's duty to compensate the others. If in the same wreck each passenger 's baggage is destroyed, his right to full compensation for his property loss is none the less clear. If, however, a defendant's wrong-doing has resulted in damaging property in which more than one person has an interest, the operation of the principle, though none the less certain, is not so ob- vious. Of course, if the general ownership is simply divided among several persons, one having say a half interest, another a fourth, and so on, no difficulty arises ; this introduces but a simple matter of arithmetical com- putation. But interests in property are not confined to sharing the general ownership. The hirer, the lessee, the mortgagee, the mere possessor, all have an interest. How shall the owner of such a limited interest be compensated? In answering this question realty and personalty must be separately considered. § 77. Interests in realty. Various persons may have different interests in the same land. When such a tract is damaged, each person is entitled to compensation for his actual loss, as measured by the extent of his own in- terest. A hypothetical case will illustrate this: M, a widow, has a life interest in land which was the property 182 DAMAGES of her late liusband. Upon her death, his son and heir, X, "vrill come into full ownership. The two nnite in ex- ecuting a lease to K for a term of years. Defendant wi'ongf ully floods the land ; K 's growing crop is destroyed, much of the soil is carried away, and so much debris is deposited that much of the tract is rendered unfit for cultivation. In such a case M could recover for the loss in value of her life estate, which would be estimated upon the basis of its rental value, her exjoectation of life, and the probable expenses incident to her interest (43) ; X could recover for the depreciation in the value of his re- versionary interest (44) ; and K could recover an amount measured by the value of the crop destroyed, plus the loss in the value of his unexpired term (45). § 78. Interests in personalty. The law with regard to interests in personalty is less simple. Owing perhaps to considerations of j^olicy growing out of the movable character of personal proj^erty, possession thereof gives an owner's rights against a stranger. Against one who has no title or interest whatever, possession alone gives a right to full damages for personalty wrongfully taken; the damages paid, the possessor becomes a trustee of the proceeds for the benefit of the owner (46). Thus, where a chimney-sweep foimd a jewel and took it to a goldsmith, whose servant wrongfully removed the stones, the sweep recovered the full value of the stones from the smith (47). (43) Greer v. New York, 1 Abb. Pr. (N. S.) 200. (44) Dorsey v. Moore, 100 N. C. 41. (45) Grand Kapids Booming Co. v. Jarvis, 30 Mich. 808. (46) Lyle v. Barker, 5 Blnney, 457. (47) Armory v. Delamirie, 1 Stra. 505. COMPENSATOEY DAMAGES 183 Had the owner appeared later, lie could have looked to the sweep for compensation. In case the question arises between the general owner and one having a special in- terest, a different rule prevails. It would be absurd to allow either to recover the full value of the chattel from the other, and then treat him as a trustee of the proceeds to the extent of the other's interest. To simplify matters, the law measures the recovery of either by the extent of his interest. Thus, where plaintiff bought a drove of sheep on credit and left them with the vendor, who wrong- fully sold them, it was held that plaintiff's damages must be measured by his actual loss, which would be the dif- ference between the value of the sheep at the time of the wrongful sale and the price he had agreed to pay for them (48) . In such a case, his damages would be nominal, unless the value at the time of sale were substantially above the purchase price. (48) Chinery v. Viall, 5 M. & W. 288. Vol. X— 14 184 DAMAGES CHAPTER VI. DAMAGES IN CERTAIN IMPORTANT ACTIONS. § 79. Special rules applicable in certain actions. In most actions the measure of damages is simply the re- sultant of the operation of those rules of a general char- acter which are applicable to the facts of the particular case. In considering these general rules in the preceding chai^ters, we have necessarily dealt with their operation in various actions of both contract and tort. Some ac- tions, however, are of such frequent occurrence, or pre- sent such peculiar features, that the courts have come to recognize special rules for determining the measure of damages when these actions are being maintained. Some of the more important of these rules will now be con- sidered. Naturally some of the most important of them have to do with the sales of goods. Section 1. Actions Relating to Sales of Goods. § 80. Distinction between sales and contracts to sell. A sale of personalty occurs when, by agreement of the parties, title passes from the vendor to the vendee for a price in money. The completed sale leaves the vendee with all the vendor's fonner right of property in the thing sold. With the passage of title, the vendor's right to the agreed price becomes fixed ; a breach by the vendee SPECIAL EULES 185 ■will consist of a failure to pay. Wlien the title has passed, the vendor can do nothing farther by way of carrying out the sale ; but the article sold may not be all that he has warranted it to be, in which case he may be sued by the vendee for breach of warranty. When the title has not passed, the vendor still has the goods and is therefore not entitled to their price ; but he may be under a binding contract to sell and deliver the goods, at some time in the future, to a vendee who has agreed to accept and pay for them. A breach of such a contract by the vendor would consist in his failure to deliver in accord- ance with the terms of the contract; the vendee's breach, on the other hand, will consist in a failure to accept and pay for them. Each of these breaches presents its own problem. §81. Completed sale: Breach by vendee. The ven- dee 's failure to pay the agreed price is an obvious instance of non-payment of money and the measure of damages is simple ; the vendor will recover the amount due, together with interest during the delay. Frequently the purchaser leaves the goods in the hands of the seller after the title has passed. This, however, does not alter the measure of damages. But, in such a case, the vendor is allowed to dispose of the goods at the best price obtainable, and apply the proceeds upon the amount due him (1). § 82. Same: Breach of vendor's warranty. An arti- cle fails to correspond with the seller's warranty. How much should the purchaser recover? An actual case sup- (1) Sawyer v. Dean, 114 N. Y. 469. 186 DAMAGES plies tlie answer ( 2 ) . Plaintiff paid $90 for a horse, wliich was warranted to be sound but wliich actually bad a disease of tbe eyes. The trial court charged that the plaintiff was entitled to the difference between the price paid and the value of the horse with the defect. This was held to be error. Said the higher court: ''A warranty on the sale of a chattel is, in legal effect, a promise that the subject of the sale corresponds with the warranty in title, soundness, or other quality to which it relates. It naturally follows that, if the subject prove defective within the meaning of the warranty, the stipulation can be satisfied in no other way than by making it good. That cannot be done except by paying to the vendee such sum as, together with the cash value of the defective article, shall amount to what it would have been worth if the de- fect had not existed." But this difference does not in all cases mark the limit of recovery. Here, as elsewhere, the rule of Hadley v. Baxendale (§51) applies, and the vendee may recover for such consequential damages as the parties may fairly be deemed to have contemplated. Thus, where a cow was sold with a warranty that she was free from a certain infectious disease, and the seller knew that the buyer would place her with other cattle, and it ap- peared that she was at the time of the sale affected with the disease, it was held that the seller was liable upon his warranty for the loss of other cattle as a consequence of contracting the disease from the warranted cow (3). § 83. Contract to sell: Breach by vendee. When the (2) Cary v. Grinuau, 4 Hill, 02;"). (3) Smith V. Green, 1 C. P. D. 92. SPECIAL RULES 187 title has not passed, and the buyer's breach consists in a total failure to carry out the bargain, the seller is left with full title to the goods but has clearly lost whatever value the bargain had (4). Accordingly he recovers nominal damages, unless the actual value of the goods at the time and place of delivery is less than the contract price, in which case he recovers the difference as a fair measure of the advantage which he has lost. Thus, where a contract was made in New York for the delivery of glass in Antwerp, and the buyer refused to accept delivery, it was held error to instruct the jury that the measure of damages was the difference between the contract price and the market price in the city of New York, the higher court holding that the market price at Antwerp should govern (5). § 84. Same: Breach by vendor. For the vendor's failure to deliver goods, in accordance with his contract, the vendee's measure of damages is the converse of the vendor's in the case where the vendee fails to accept; in other words, upon the vendor 's non-delivery at the stipu- lated time, the vendee's damages are nominal, unless he can show that the value of the goods, at the time and place of delivery, exceeds the contract price, in which case he may recover the difference as representing the value of the bargain that he has lost. Thus, where defendant had agreed to deliver to plaintiff a quantity of iron in equal instalments in September, October, and November, but failed to deliver any part of it, the court held that the (4) For vendor's option to treat sale as complete upon tender, in some cases, see Sales, §§ lOS-9, in Volume III. (5) Cohen v. Piatt, G9 N. Y. 348. 188 DAMAGES measure of damages was the sum of the differences be- tween the contract and market prices of one-third of the total amount, upon the last day of each of the months specified (6) . But here, too, it should be remembered that the rule of Hadley v. Baxendale may be relied upon to give the purchaser special damages for the consequences of non-delivery, when a special use was contemplated by both parties (7). Section 2. Contracts Relating to Realty. § 85. Contracts of sale: Breach by vendee. A contract for the sale of land looks to a future conveyance of title by the vendor, and to an acceptance of that conveyance by the vendee. If the vendee receives the title, his ob- ligation to pay the agreed price is obvious and presents no special problem. If he refuses to accept the convey- ance, it is clear that he has broken his contract and that he must pay the vendor an adequate compensation for the loss of his bargain, but it is equally clear that he ought not to pay the contract price for the land ; to compel him to do that would leave the vendor with his land and its purchase price too. Accordingly, the same rule is ap- plied as in the case of personalty; the vendor recovers nominal damages only, unless he can show that the value of the land at the time for executing the conveyance was less than the agreed price, in which case he is entitled to the difference (8). § 86. Same: Breach by vendor. Upon the principles (0) Brown v. Mullor, L. n. 7 Ex. 319. (7) Booth V. Spuyten Duyvil Kolling Mill Co., GO N. Y. 487. (8) Old Colony R. II. Corporation v. Evans, 6 Gray, 25. SPECIAL EXILES 1B0 generally applicable to actions on contracts, it is plain that, where the vendor refuses to execute a conveyance, the vendee should recover the value of his bargain. We saw that where a vendor breaks his contract to deliver goods, the damages ordinarily recoverable by the vendee are nominal, unless he can show that the value of the goods at the time for delivery exceeded the contract price, in which case he may recover the difference. Some American courts apply a similar rule when the action is against the vendor for nonperformance of a contract to convey land (9). On principle, it seems hard to dis- tinguish between sales of realty and personalty in this respect ; but the settled English rule is to limit the ven- dee 's recovery to nominal damages and any part of the purchase price which he may have paid, in any case in which the vendor, whose conduct has bee!n free from fraud, is unable to make a good title (10). And this rule has been frequently acted upon in this country. Thus where defendant, the widowed mother of six children, agreed to sell for $800 land belonging to the children, which was worth $2000 and which she supposed she could obtain authority to convey, it was held error to award damages in the sum of $1200 for her refusal to con- vey, upon her failure to obtain the requisite court au- thority (11). The court said that the recovery should have been confined to the purchase-money paid ($25) and interest thereon. The general rule, and the exceptions recognized in this country where the rule itself prevails, (9) Hopkins v. Lee, 6 Wheat. 109. (10) Flureau v. Thornhill, 2 W. Bl. 1078. (11) Margraf v. Muir, 57 N. Y. 155. 190 DAMAGES are well expressed in the following extract from the opinion : ' ' The referee allowed the plaintiff as damages the dif- ference between the contract-price and the value of the land, thus placing him in the position he would have been if the contract had been performed. In this I think he erred. The general rule in this state, in the case of ex- ecutory contracts for the sale of land, is that, in case of breach by the vendor, the vendee can recover only nominal damages, unless he has paid part of the purchase money, in which case he can also recover such purchase money and interest. But to this rule there are some exceptions based upon the wrongful conduct of the vendor, as if he is guilty of fraud, or can convey but will not, either from perverseness or to secure a better bargain, or if he has covenanted to convey when he kn-ew he had no authority to convey; or where it is in his power to remedy a defect in his title and he refuses or neglects to do so, or when he refuses to incur such reasonable expenses as would enable him to fulfill his contrac-t. In all such cases, the vendor is liable to the vendee for the loss of the bargain, under rules analogous to those applied in the sale of personal property. Here no fraud was perpetrated on the vendee." § 87. Breach of covenant of seisin. A contract to con- vey is performed by executing a conveyance. The deed of conveyance usually contains covenants. These cove- nants are in the nature of contractual undertakings, but those usually contained in deeds differ radically from or- dinary contracts with respect to the measure of damages SPECIAL EULES 191 for their breach. For reasons partly historical and partly founded upon considerations of policy, the amount of the purchase money paid, and not the value of the bargain, is the measure of damages generally adojoted in actions brought upon such covenants. The rule applicable to the familiar covenant of seisin, and to its substantial equiva- lent, the covenant of right to convey, is an example. If, at the time of conveyance, the grantor has a good title to all he attempts to convey, neither of these covenants can ever be broken ; if, on the other hand, there is at that time a want of title to the whole or to a part of the land which his deed purports to convey, there is a breach at the moment of conveyance. When the title fails as to the whole, the purchaser recovers the consideration paid with interest; when there is a failure as to a part only, he recovers a ratable proportion of the purchase money and interest thereon (12). § 88. Breach of covenants of warranty and quiet en- joyment. The covenants of warranty and quiet enjoyment are similar in effect and subject to the same rule of damages. Neither is broken until there is an eviction by the grantor (or, in case of a lease, by the lessor), or by a third person under lawful claim of title (13). When such a breach occurs, the covenantee recovers, not the value of the property at the time of the eviction, but the amount of the purchase money paid, or, in case of partial eviction, a ratable proportion thereof (14). Interest is (12) Staats v. Ten Eyck's Ex'rs, 3 Caines, 111. (13) Tiffany, Real Property, sect. 398. (14) Rawle, Covenants for Title, sect. 1G4. Contra : Cecconl v. Rod- den, 147 Mass. 64. 192 DAMAGES also recoverable. And, where eviction is tlie result of an action at law, of which the covenantee has given the cove- nantor notice, the covenantee recovers his expenses in such action. From this statement of the rule, it will be correctly inferred that no allowance is made to the grantee for appreciation in value or improvements made by him, after the conveyance but before eviction (15). If the ap- preciation has been great, as where land bought for agri- cultural purposes has become valuable for city lots, or if the improvements have been exioensive, as where large office buildings have been erected, this rule may bear with great hardship upon the grantee. But it will be seen that here is an unavoidable choice of evils. To allow the value at the time of eviction would bear with equal hardship upon the grantor. § 89. Breach of covenant against encumbrances. The covenant against encumbrances, like the covenant of seisin, is broken at the time of conveyance, if ever. Where the encumbrance is of such a nature that an eviction can- not be prevented by the covenantee, the measure of damages will be based upon the consideration paid, as in the case of eviction under a covenant of seisin or of quiet enjoyment (16) ; but, where no eviction occurs, recovery will be based upon the principle of indemnity, subject to the limitation that it cannot exceed the consideration paid. Thus, where land conveyed with a covenant against encumbrances was burdened with a permanent right of way, which actually reduced its value $750, the covenantee (15) I'itchor v. Livingstou, 4 Johns. 1. (16) Stewart v. Drake, 9 N. J. L. 139. SPECIAL KULES 193 recovered that amount (17). Where the encumbrance is a mortgage, which secures an amount less than the price paid for the land, the covenantee may pay the mortgage and recover the amount paid from the covenantor; but where he has done nothing toward removing it he can recover nothing (18). When the incumbrance involves a permanent impairment of value, which cannot be con- trolled by the purchaser, as in the case of the right of way, the right to indemnity is fixed; but where the en- cumbrance may be removed by a reasonable effort on the part of the purchaser, as in the case of a mortgage for less than the amount which he paid for the land, the en- cumbrance is not regarded as permanent and he recovers the cost of removing it only in case he actually incurs the expense of removal. § 90. Effect of recital of consideration in deed. Since the purchase price is so often the measure of damages, in actions upon covenants in deeds, it becomes important to inquire whether the consideration may be shown to have been other than that recited in the deed. Of course the recital is prima facie evidence of the amount paid- in the absence of evidence to the contrary it controls. But, as between the immediate parties, the consideration clause is open to explanation by extraneous evidence. Thus, where the consideration recited in the deed was $1,800, the plaintiff was allowed to enhance his damages by show- ing that the actual consideration was $2,800 (19) ; on the (17) Mitchell v. Stanley, 44 Conn. 312. (18) Tufts V. Adams, 8 Pick. 547. (19) Belden v. Seymour, 8 Conn. 304. 194 DAMAGES other hand, where the consideration as recited was $900, the defendant was allowed to reduce the damages by showing that it was in fact only $100 (20). Naturally, a different rule prevails, when an action is brought by a remote grantee upon a covenant running with the land. He knows nothing of the transaction between the original parties except as it is expressed in the deed. Hence, it has been held that, in an action against the grantor by a remote grantee, the former could not reduce his damages by showing that the consideration actually received by him was less than the amount recited in his deed (21). Section 3. Certain Misceulaneous Contracts. § 91. Contract to loan money. "We have already seen that a contract to pay money takes a special rule. Al- though the person to whom money is due may sustain very substantial consequential damages as a result of its non-payment, he is nevertheless confined, by the rule of certainty, to a recovery of interest during the period of delay as his sole compensation for the inconvenience caused (22). He gets interest, because he has clearly lost the use of the money, and men ordinarily estimate the value of money's use in terms of interest. This principle has a singular result, when applied to a contract to loan money at some time in the future. When one who has agreed to loan money fails to provide it at the agreed time, it is plain that the would-be borrower will be de- prived of its use. Accordingly it would seem that in such (20) Morse v. Shattuck, 4 N. H. 220. (21) Orcenvault v. Davis, 4 Hill, 04.3. (22) Greene v. Goddard, 9 Met. 212. SPECIAL RULES 195 a case he should recover the interest, as representing the value of the use ; but, as he would have to pay the money- lender interest in case he obtained the money, it is plain that by not obtaining the loan he saves as much as the law will admit that he has lost. Accordingly, in the or- dinary case of refusal to loan in accordance with a con- tract, only nominal damages are recoverable (23). § 92. Contract to pay another's debt. A not uncom- mon type of contract is that in which one party agrees to pay a debt which the other party owes to a third person. If he does not pay as agreed, he obviously breaks his con- tract, and is therefore liable to the other contracting party (24). If the plaintiff in such an action has been compelled to pay the debt himself, it is plain that he has sustained actual damage to the extent of the amount paid. But suppose he has not paid when his action is brought ; it is plain that he may never pay, and consequently may never sustain actual damage from the breach, in the sense of actual pecuniary loss. Nevertheless he is al- lowed to recover the full sum, on the theory that such was the intention of the parties (25). § 93. Contracts of indemnity and insurance. The last subsection deals with a case in which one person has prac- tically agreed to step into another's shoes as debtor. It should be distingTiished from a contract of indemnity. One person may agree to reimburse another, in case the other is compelled to pay a sum of money in discharge (23) Goodeu v. Moses, 99 Ala. 230. (24) As to the third person's right, see the article on Contracts, §§ 92-100, in Volume I. (25) Furuas v. Durgiu, 119 Mass. 500. 196 DAMAGES of a liability. Or the law may treat him as though he had made such an agreement, as in the case of principal and surety. When the surety is compelled to pay, he is entitled to be fully indemnified by his principal. Accord- ingly, where he is compelled to pay by suit, which he has notified the principal to defend, he may recover his neces- sary costs (26). In the case of indemnity, actual loss is the test. Contracts of insurance against loss of property by fire or other casualty are essentially contracts of In- demnity. Until the loss occurs nothing is due; when it does occur, the contract requires that the insurer must pay whatever loss is sustained, up to the amount for which insurance is carried (27). Of course the policy or in- surance contract may expressly provide for the insurance of a limited interest, in which case the value of the in- terest will necessarily limit the recovery. However, the law permits one who is in possession of property to in- sure it for its full value, although his interest may be limited, and in the event of its loss or destruction, to re- cover the full value (28). It will be seen that this is a clear departure from the principle of indemnity. But it should not be supposed that the owner of a limited in- terest may permanently hold as his own the full amount thus recovered. He will, as a general rule, subject to ex- ceptions concerning which the courts are not agreed, hold the amount recovered, beyond indemnity for his indi- vidual loss, as a trustee for the owners of the other in- (26) Baker v. Martin, 3 Barb. 634. (27) Underbill v. Agawam M. F. I. Co., 6 Cusb. 440. (28) De Forest v. Fulton F. I. Co., 1 Hall, 84. SPECIAL RULES 197 terests (29). Different principles apply to life insurance contracts. The object of life insurance is not to indemnify the insured against a loss of property, but to provide for the payment of an agreed sum to the beneficiary upon the death of the insured. Upon the happening of that event the policy ripens into an obligation to pay a fixed sum of money, and is therefore subject to the ordinary measure of damages for the non-payment of money (30). §94. Contract to marry. The so-called ''breach of promise ' ' suits occupy an anomolous position. A promise to marry does not differ in its nature from any other con- tractual promise. An action for its breach is essentially an action for breach of contract. Nevertheless such an action is, for the purpose of estimating damages, treated very much as an action of tort. As in the case of non- pecuniary actions of tort, the damages rest in the sound discretion of the jury. In estimating the damages, the jury may consider the temporal loss to the woman whose expectations have been disappointed; the mental suffer- ing occasioned by the injury to her affections; and the humiliation and distress resulting from the defendant's refusal to carry out his promise (31). Exemplary damages are also recoverable ; in aggravation the plaintiff may show that the defendant has falsely accused her of misconduct with other men (32), that she has been seduced under promise of marriage, or that such seduction has (29) See the article on Insurance, §§ 145-48, In Volume VII. (30) Trenton M. L. & F. I. Co. v. Johnson, 24 N. J. L. 576. (31) Coolidge v. Neat, 129 Mass, 146. (32) Berry v. Da Costa, L. R. 1 C. P. 331. 198 DAMAGES been followed by tlie birth of a child (33). In mitigation, the defendant may show that the plaintiff was addicted to lewdness or profanity, or that she did not really care for him, but sought to obtain his money, or to spite his family (34). Section 4. Tortious Severance from the Realty. § 95. In general. A wrongfully enters B 's mine, breaks coal from its place in the vein, takes it to the mouth of the pit, and then transports it to market, where he sells it to C. Since the coal is B 's property he may recover it in specie wherever he can find and identify it ; but he may prefer to bring an action for damages, and, if the coal is not recoverable in specie, an action for damages will be his only available remedy. The facts stated give B a choice of actions against A, according as he relies upon the wrongful entry upon his land, or upon the taking or conversion of his personal property, as the gist of the action. The result is peculiar: A's labor has added value to the coal; B's actual damage is the same, what- ever form of action he adopts; the actions open to B's choice differ from each other in the rules of damages to which they are respectively subject. Shall the form of action determine the rule of damages; or shall the sub- stance govern; and, if the substance governs, shall A or B have the value of B's work? Different courts have made different answers. § 96. When action is for trespass on land. When the gist of the action is the wrongful entry upon the land, (83) Sherman v. Rnwson. 102 Mass. 395. (34) Miller v. Rosier, 31 Mich. 475. SPECIAL EULES 199 the taking and carrying away of the coal is regarded merely as aggravation of damages. In strictness the plaintiff recovers for the disturbance of his possession. He recovers for whatever damage is done to his land. If coal is taken, he should have the diminished value of his land. This would naturally include the value of the coal in place, and any consequential damage to the land occasioned by the process of removal, as, for instance, subsidence of the soil. So, if trees are taken, the diminished value of the land is the criterion. If they are shade trees, the damage would by no means be rep- resented by the value of the trees as timber, any more than damage for the removal of a growing crop would be measured by the forage value of the crop, after severance. When this form of action is chosen, the damage to the land, regardless of the subsequent history of the prop- erty severed, would seem the sound as well as the strict rule of damages (35) . All courts would allow the plaintiff to recover at least that much; but some would not stop there. § 97. When action is for trespass to personal property. However, the plaintiff may claim no damages for the injury to his soil. He may waive the trespass upon the land, and claim compensation for the taking and carry- ing away of his goods and chattels. In strictness, the coal is a part of the land until it is severed. At the com- pletion of the work of severance, it has for the first time become a chattel. The chattel still belongs to the owner of the soil. He now claims damages for its taking as a (35) Foote V. MerriU, 54 N. H. 490. Vel. X— 15 200 DAMAGES chattel. In strictness, its value at the moment of com- plete severance is the proper measure of damages in this form of action (36). And yet the courts are not agreed as to when the value should be estimated. ^ § ^8. ^ When action is for conversion of personal prop- erty. When the action is for the conversion of the coal as a chattel, it is obvious that no recovery may be had for consequential damage to the land as such, but a ques- tion will remain as to when the value of the coal should be estimated. Here, as in the case of trespass to per- sonalty, it is evident that in strictness the plaintiff should at least recover the value of the coal when it first became a chattel. On the other hand, a peculiarity of the tort of conversion is that there may be successive conversions of the same chattel by the same person. If, for instance, after A has taken B 's coal and transported it to market, B there demands it from A and A refuses to deliver it, there is perhaps a new conversion. In strictness, it seems difiSeult to deny B 's right to recover the full value at the time and place of the new conversion, if he makes that conversion the gist of an action of trover (37). On the other hand, if there is no evidence of a new conversion, the value of the coal at the time of the conversion, which was the instant it became a chattel, seems, on technical grounds, the true measure of damages in this form of action, as well as when the action is for trespass to per- sonalty (38). But here too the courts differ widely (3G) Gushing v. Longfellow, 2G Me. 300. (37) Moody v. Whitney, 38 Me. 177. (38) White V. Tawkey, 108 Ala. 270. 1 SPECIAL EULES 201 § 99. Prevailing tendency to disregard forms. It seems that where the plaintiff wishes compensation for the damage to his land as such, he must make the wrongful entry the basis of his action ; hut, when he seeks compen- sation for the loss of his chattels, whether they be min- erals or timber, he will find most courts disposed to dis- regard the limitations imposed by the mere form of action and to award damages upon broad principles of justice. The wrong-doer's motive is made an important factor. If he has acted under an innocent mistake of fact, the tendency is to give to him whatever value his own labor may have added to the property taken ; to require him, in ordinary cases, to pay the value of the coal in place, or of the timber as it stood, before his legally wrongful, but morally innocent, act in severing it from the realty. Thus in a leading case (39), where the defendant innocently went beyond his line in mining coal, and mined and car- ried away some of plaintiff's coal, it was held, in an action of trover, that the true measure of damages was the value of the coal in place and not as it lay in the pit after severance. After conceding that, if the form of action were to control, the value after severance should be adopted, the court rejected this criterion and said: ''We prefer the rule in Wood v. Moorehead (40), where Parke, B., decided, in a case of trover for taking coals, that if the defendant acted fairly and honestly, in the full be- lief of his right, then the measure of damages is the fair value of the coals, as if the coal-field had been purchased from the plaintiffs." This case illustrates a strong ten- (39) Forsyth v. Wells, 41 Pa. 291. (40) 3 Q. B. 440, n. 202 DAMAGES dency of the decisions; but it must be confessed that there is great divergence of authority. Even where the courts agree that substance and not form should control the measure of damages, they are not always agreed as to what substantial compensation involves. It need not be said that the same principles apply where timber has been severed, as in the case of minerals. Compare the article on Personal Property, §§ 23-28, in Volume IV of this work. Section 5. Death by Wrongful Act. § 100. In general. At common law the death of a human being put an end to all right of recovery for per- sonal injury sustained by him ; in other words, actions for personal injury did not survive the death of the injured. By the same law, death itself gives no right of action to anyone ; neither his personal representatives nor his im- mediate family may maintain a civil action therefor. Upon these doctrines of the common law, legislation has made great inroads. Under statutes in many states, ac- tions for personal injuries survive the death of the person injured. Such statutes present no new problem in damages; no new action is created, the old one simply survives ; compensation is allowed the estate for damage which the decedent himself sustained. But another and larger group of statutes have created a new cause of action ; everywhere in this country, as well as in England, the death of one person, as a proximate consequence of another's wrongful act, gives a right of action either to the personal representatives of the deceased or to speci- fied members of his family. More commonly the members SPECIAL RULES 203 of the immediate family, such as the parents, children, brothers, and sisters are the beneficiaries ; but the statutes vary as to the beneficiaries designated. Usually a definite sum, as $5000, is named as the limit of recovery, but some- times no limit is specified. \ATiere the amount is limited, those entitled must share in proportion to the losses which they have respectively suffered; where the amount is not limited, recovery is upon the basis of compensation for loss actually sustained. As a rule recovery is limited by these statutes to losses that are pecuniary. The special problem of damages presented is to ascertain what losses are deemed pecuniary, within the meaning of these acts. § 101. Basis of recovery: Pain and suffering of de- ceased. Under a statute providing for the survival of actions for personal injury, it is obvious that damages ought to be allowed for the pain and suffering of the de- ceased, upon the same principles that would have gov- erned his recovery had he lived to maintain the action himself. The cause of action remains the same; such a statute merely prevents the action from dying with the person. But, under a statute which gives a new action for pecuniary loss caused the family of deceased, it is equally obvious that the damage caused the deceased dur- ing his lifetime is quite immaterial upon the question of damages (41). And, unless the statute awards exemplary damages, which is usually not the case, it is equally im- material whether the death was caused wilfully or neg- ligently. (41) Dwyer v. C, St. P., M. & O. Ry. Co.. 84 Iowa, 479. 204 DAMAGES § 102. Same: Grief and loss of society. In a normal family the death of one of its members is felt least of all as a pecuniary loss, but this is the only loss which the statute attempts to compensate. In the language of one of the decisions : "It must be borne in mind that the re- covery allowable is in no sense a solatium for the grief of the living, occasioned by the death of a relative or friend, however dear. It is only for the pecuniary loss resulting to the living party entitled to sue, resulting from the death of the deceased, that the statute affords compensa- tion. This maj^ seem cold and mercenary, but it is un- questionably the law" (42). Upon this principle it was held reversible error for a trial court to admit in evidence a photogi-aph of the deceased (43). § 103. Same: Evidence of pecuniary damage. How- ever, it must not be supposed that the pecuniary loss need be shown with mathemiatical exactness. The mere pos- sibility of pecuniary loss will not be enough to ground the action, but a probability of loss is enough. Where the deceased had accumulated nothing during his life- time, it was held error to call the jury's attention to the possibility of his having accumulated property which the beneficiaries might have inherited (44) ; but, in an action brought by the aged and infirm father of the deceased, the fact that the deceased had five or six years before his death given the plaintitf money when the latter was out of work was held sufficient evidence of reasonable pecuniary (42) Pierce v. Conners, 20 Colo. 17S. (43) Smith v. Lehigh Valley R. Co., 177 N. Y. 379. (44) Wiest V. Electric Traction Co., 200 Pa. 148. SPECIAL RULES 205 expectation (45). And, it has been held by a court whicli refuses compensation for sorrow and mental anguish caused by death, that, in an action by the widow for the death of her husband, evidence of their kindly relations was admissible upon the question of pecuniary loss (46). As to the admissibility of evidence that the statutory beneficiaries have received money on policies of insurance upon the life of the deceased, or have inherited property from the deceased, authorities differ (47). §104. Same: Excessive verdicts. From an actual case of a typical character, something may be learned as to the measure of damages in this class of cases. The de- fendant railroad had caused the death of plaintiff 's father by its negligence. The court instructed the jury that their recovery must be limited to the sumi which the father, by his personal exertions, less his necessary per- sonal expenses and those of his wife during her life, would have added to his estate, and which would have descended to the plaintiffs as his heirs at law. Upon the trial it appeared that the deceased was at the time of his death about 68 years of age, that his expectancy of life was 91/^ years ; that he was then earning $2000 per year as a bank employe, conveyancer, and notary; that his annual expenses were about $1000. Under these instruc- tions and upon this evidence, the jury returned a verdict of $4000 in favor of plaintiffs. Approving the instruc- tions and conceding that, had he lived the full term of his expectancy, and remained able during all that time to (45) Hetherington v. Ry. Co., 9 Q. B. D. 160. (46) Beeson v. Mining Co., 57 Cal. 20. (47) S. A. & A. P. Ry. Co. v. Long, 87 Tex. 148. 206 DAMAGES engage in the work in which he was employed at the time of his death, his net earnings would have considerahly ex- ceeded the amount of the verdict, the court held that the sum awarded was nevertheless excessive (48). Said the court in part : **It cannot be fairly assumed, however, or expected, that, at his advanced age, he would have continued to labor during all the future years of his life. In considering this question, account should be taken of his liability to ill- ness, his incapability of further exertions by reason of age, and that he might, on account of his years, conclude to retire from active work ; that, in all probability, his age would soon incapacitate him from discharging his duties as an employe in the bank in which he was engaged ; that, if he did continue to earn money for a portion of his ex- pectancy of life, he would at least expend a part so earned for personal use during the remaining years. All these are contingencies which must be considered. Necessarily, the ascertainment of damages, dependent upon a variety of circumstances and future contingencies, is difficult of exact computation; but, nevertheless, they cannot be pre- sumed and arbitrarily given. Undoubtedly much latitude must be given a jury in cases of this character, but there must be some basis of facts upon which to predicate a finding of substantial pecuniary loss.** (48) D. & R. G. R. Co, V. Spencer, 27 Colo. 313. BANKRUPTCY BY FRANK WILLIAM HENICKSMAN, A. B., A. M. (Indiana University) J. D. (University of Cliicago) Late Lecturer in Law, University of Chicago. BANKRUPTCY. § 1. Outline. The purpose of the article on bankruptcy is to give a brief historical sketch of the origin of bank- ruptcy law, its development in England, its adoption, modification, and development in the United States, with some slight attention to the insolvency laws that have been adopted by the various states of the Union. Some attention will also be given, in passing, to the various early bankruptcy acts passed by Congress, but particular emphasis will be placed upon the most recent act, passed by Congress in 1898, as amended in 1903, and again in 1906. To deal with matters of court procedure in that Act would be of benefit only to a practicing attorney, and this feature will be left almost entirely untouched. A 208 BANKRUPTCY somewhat detailed examination, however, of the sub- stantive, as distinguished from mere procedural aspects of the Act, will be attempted. Two general classes of acts known as acts of bankruptcy will require attention. First, the law of fraudulent conveyances as developed at common law and under the statute of Elizabeth, and how that law has been engrafted upon the national Act to define certain acts of bankruptcy. Second, acts of bank- ruptcy that had no existence at common law, but were deemed by it to be inoffensive. These are the result of modern legislation. Other substantive features of the law to be examined are the following: Who may be a bankrupt, who may be petitioning creditors, the duties and powers of the trustee, what property passes to him, what are the sources of his title, what claims are provable, and the application for, opposition to, and effect of a dis- charge. In conclusion a brief statement will be made of some of the advantages of a national bankruptcy law as contrasted with separate laws on that subject in the various states. BANKRUPTCY 209 CHAPTER I. HISTORY OF BANKRUPTCY LEGISLATION. §2. Earliest traces of elements of bankruptcy law. Legal historians have pointed to the Jewish law of biblical times, which commanded creditors to release their debtors from all debts at the end of every seventh year, as fur- nishing the earliest trace of one of the essential elements of a modem code of bankruptcy. The Roman law of the time of Julius Caesar permitted a debtor to make what today would be deemed an assignment for the benefit of his creditors. By so doing he became entitled to a release, not as modem bankrupts do, from the unpaid portion of his debts, but from the payment of the severe penalty of capital punishment, imprisonment, or slavery. The as- signment and partial release features are elements of bankruptcy law. § 3. Increasing complexity of business demands bajik- ruptcy legislation. In the early times just mentioned, trading was limited. The chief occupations were those of farming and grazing. Under such simple social condi- tions a complete bankruptcy system was quite unneces- sary. The early and simple forms of relief to creditors, who were usually few in number, were adequate. The people who first made bankruptcy law a fixed part of their code were the English. But even in England the rural 210 BANKRUPTCY life and simplicity of business conditions prevailed to such an extent, even down far into the sixteenth century, that the creditor class considered the remedy of execu- tion and attachment adequate. Civilization advanced, wants increased, and manufacturers no longer waited for an order before they began work but manufactured in quantity with the expectation of future sale in season. Traders bought in quantity on credit in advance ; mer- chants did not confine their purchases and sales to a few persons, but bought from and sold to many everywhere. When failures came, and the diligent creditor with his execution ahead of others took all the debtor's property to satisfy his claim, the others saw the injustice, and relief was demanded. § 4. Earliest English bankruptcy law. The common law was inadequate to procure an equitable adjust- ment of the rights of creditors, where equality ap- pealed to men's reason. It was under such conditions that England in 1542 passed its first so-called bankruptcy law. Its chief features deserve mention. Only mer- chants and traders were amenable to it, and, doubtless, others were not clamoring for its burdens, for it was a law directed against fraudulent debtors. It provided for the seizure of a debtor's property and its pro rata distribu- tion among his creditors, but omitted entirely to give to him a release of any kind, even from imprisonment for debt. It was a law to punish fraudulent debtors, a quasi- criminal statute, and aimed to prevent debtors avoiding service of process by keeping to their homes or departing from the realm. BANKRUPTCY 211 § 5. Progress in bankruptcy legislation. While changes were made from time to time in the law just mentioned, they were not marked, and it was not until 1705, over 160 years after the first law was passed, that Parliament saw fit to give to the debtor some measure of attention, the benefits of such legislation having been for only the credi- tor theretofore. In that year a law was passed, known as Queen Anne's act, which, containing the elements of the prior law, also gave the debtor a release from the portion of his debts remaining unpaid after the distribution of his property. The delegates assembled in the Federal con- stitutional convention in 1787, evidently realizing the in- timate connection with and the importance to commerce of a system of bankruptcy laws, inserted in the Constitu- tion a provision giving Congress power, not only over commerce in general between the states, but power to make uniform laws on the subject of bankruptcies throughout the United States (1). This was the earliest expression on the subject given by the Union. § 6. Bankruptcy legislation in the United States. Such was the legislation in England and such the fundamental features of its law, when Congress in 1800 set about pro- viding its first uniform system of bankruptcy. It is little wonder, therefore, there being but incomplete systems in the states, that the English law became almost an exact model for the law of 1800, which remained in force only four years. Not until 1841 did Congress again exercise its power under the Constitution, but at this time it grappled with (1) U, S. Const, Art. I, sec. 8, § 4. 212 BANKKUPTCY the problem as would a body of iconoclasts and broke away from the narrower acts that had existed in the past. This law was not one to be invoked by the creditors only, but could be set in motion by the debtor himself, a feature which English legislation had not at that time formally recognized; and, furthermore, not only merchants and traders could set it in motion, but other persons as well. While it retained all the important features of bank- ruptcy legislation as it existed in England at the time of the adoption of the Constitution, it added to them the features mentioned, and for the first time gave what has been termed by authorities a modern bankruptcy law. Congress repealed the law in less than two years. In 1867 a third law was passed, which, owing to its be- ing the copy from which the law of 1898 was taken, will not be closely examined, but attention will be given to the latter law as it exists and is enforced today and, in its study, reference will be made where advisable to the law of 1867. Some few decisions of the courts based on that law will also be used, where similar questions are pre- sented for solution under the two statutes. § 7. State versus Federal bankruptcy laws. The Con- stitution gave Congress the power to pass bankruptcy laws. From the preceding statement it may be seen that it has exercised it at four different times, but long periods of time have elapsed between the repeal of one law and the passage of another. During these periods state bankruptcy laws are operative and in full force. Some states have what may be deemed modern bankruptcy laws BANKRUPTCY 213 (2) while others are only insolvent or poor debtors' acts and stand midway between the common law and a modem system in their operation and effect. When Congress passes an act it operates to suspend all state bankruptcy laws except as to subjects covered by state laws and not covered by the national Act, as will be more clearly illus- lustrated in the next chapter, §§ 10-14. By suspension is not meant a repeal but merely causing to be dormant, and when the Federal law is repealed such laws spring again into full force. They are effective then, not only to pun- ish acts done after the repeal but even before the repeal, which were not taken advantage of to institute proceed- ings under the national Act. (2) Rhode Island passed such a statute as late as May 26, 1908. See R. I. Laws, 1908, c. 1577. 214 BANKEUPTCY CHAPTER II. bankrupts and petitioning creditors. Section 1. Who May Be Bankrupt. § 8. Voluntary and involuntary bankrupts. As stated above, the earliest bankruptcy laws both in England and in the United States permitted only involuntary proceed- ings. By this is meant that a party could be a bankrupt only in the event that he did some act, designated by law, as a consequence of which the creditor or creditors in- jured could proceed against him, compel him to give up his property, submit to the conditions imposed, and ac- cept the benefits, if any, if not, then the burdens, of the bankruptcy law. Thus, involuntary proceedings are those which creditors take to force a debtor to become a bankrupt. When a debtor, however, found his circum- stances such as to make him desirous of going through bankruptcy on his own initiative, he could not do so. It suggested itself at once to shrewd debtors to induce friendly creditors to take the necessary proceedings. In the course of the development of the laws, the voluntary feature was annexed, whereby it became possible for a debtor to make application to a court of bankruptcy on his own motion, without the necessity of resorting to the collusive method mentioned, surrender his property, and be made a bankrupt. BANKEUPTCY 215 Tlie two methods of becoming a bankrupt exist in the law of 1898, but not all persons, treating corporations as artificial persons, are amenable to tlie law in involuntary proceedings, nor are all persons capable of instituting voluntary proceedings. The lines drawn by the law will now be examined. § 9. Who may be voluntary bankrupts? All natural persons may be voluntary bankrupts ( 1 ) . Farmers, wage earners, traders, private bankers, in fact, any natural person owing debts may be a voluntary bankrupt, entirely regardless of the amount of his debts, of the relation be- tween the amount of the debts and the value of his assets, or of the question whether he had any assets at all. A person having enough property to pay his debts in full, who desires to discontinue business, may file a petition in the Federal courts and have his property taken by an of- ficer of that court and the proceeds distributed among his creditors, thus relieving himself from the time, care, and expense of disposing of the assets and paying the debts. A debtor owing but a single debt may take volun- tary proceedings. The petitioner must, however, have had his principal place of business, resided, or had his domicile, for the preceding six months or the greater part thereof, within the territorial jurisdiction of the court wherein he files his petition (2). That form of business association known as a partner- (1) Sec. 4a. Note. — The references herein made to a section, as Sec. 4a, refer to the sections of the law of 1898 as amended in 1903 and 1906. A convenient pamphlet form of the law can be had by applying to Con- gressmen. (2) In re Plotke, 104 Fed. 964; Se«. 2 (1). Vol. X— 10 216 BANKRUPTCY ship may be a voluntary bankrupt (3). One of the part- ners may make the application and the partnership be adjudged a bankrupt, or both the partnership and all the individuals may join and be made bankrupts. Further- more, married women (where by the law they may own separate property and incur liabilities) and infants may be voluntary bankrupts. Even aliens may be voluntary bankrupts, if they have property in the court's jurisdic- tion. As to them the requirement of domicile, residence, or principal place of business, in the territorial jurisdic- tion of the court is dispensed with by the provision of the Act (4). § 10. Who may be involuntary bankrupts? As stated, all natural persons may be voluntary bankrupts. The law expressly provides that artificial persons cannot be voluntary bankrupts, and its constitutionality has been unsuccessfully attacked on the ground that the classifica- tion permitting natural persons to invoke the law and denying the artificial persons that right violated the uni- formity requirement of the Constitution (5). All natural persons owing debts amounting to one thousand dollars or over, except wage earners (i. e., those employed for wages, salary, or hire at a rate not exceeding one thou- sand five hundred dollars a year) and those engaged in farming or the tilling of the soil, may be involuntary bankrupts (6). Among the natural persons would be classed the business partnership or unincorporated com- (3) Sec. 5a. (4) Sec. 2 (1). (5) Leidlgh Carriage Co. v. Stengel, 95 Fed. 637. Decision by Taft, J. (6) Sec. la (27) ; sec. 4b. BANKRUPTCY 217 pany and those mentioned in the preceding subsection that may be voluntary bankrupts, except the wage earn- ers and farmers. A limited number of artificial persons, i. e., corporations, may be made involuntary bankrupts. Thus, those corporations engaged principally in manu- facturing, trading, printing, publishing, mining, or mer- cantile pursuits may be adjudged involuntary bankrupts, in case they owe at least one thousand dollars in debts (7). So the classification itself fixes a narrow limit upon the corporations that may be made involuntary bankrupts. § 11. Inclusion of corporations strictly construed. The act not only fixes a narrow limit upon what corporations may be involuntary bankrupts, but the courts have been illiberal in their construction of the law, and, instead of giving latitude to such a term as ''mercantile pursuits," so as to include all corporations engaged in any business for profit as distinguished from religious, eleemosynary, charitable, social, and fraternal corjDorations, they have narrowed it so that it is practically no broader than the term ' ' trading, ' ' which is given its ordinary signification of buying and selling articles of commerce for profit. Buying and selling real estate is not included, because it is not an article of commerce (8). § 12. Same: Examples. Thus, corporations engaged in a carrying and transportation business, such. as rail- roads, pipe lines for forwarding oil or water, and ear- (7) Sec-. 4b. (8) In re Kingston Realty Co., 160 Fed. 445. 218 BANKEUPTCY riers of electricity are not subject to the law (9). Again, those engaged in construction work, manufacturing arti- cles attached to the soil as distinguished from those that are freely moving articles of trade, such as corporations engaged in erecting concrete arches, constructing dams, bridges, and houses are, according to the interpretation given by the courts, not amenable to the law (10). This narrow interpretation given by the courts has led to agi- tation for provisions in the law permitting more corpora- tions to be made amenable. Amendments were proposed in Congress in 1908 and 1909, by which ''any monied business or commercial corporation," the language of the Act of 1867 (11), was sought to be substituted for the present provision, but which failed to become a law. Such a change would have the effect of nullifying many strained constructions of the Act, would simplify it to a considerable degree, rendering it at least easy to know what corporations are excluded from the terms of the Act, and would seem a desirable result to accomplish. By express language, state and national banks are ex- cepted from the operation of the law, the evident intent of the lawmakers being that the affairs of those institu- tions that fail should be left to be administered by the state and national banking laws. The jurisdictional requirements that the alleged bank- rupt have his domicile, residence, or principal place of (9) 111 re New York, etc. Water Co., OS Fed. 711 ; Re Hudson River Co.. 1(57 Fed. 980. (10) Hall Co. V. Friday, 158 Fed. 593; In re Kingston Co., IGO Fed. 445. (11) In re Qulmby Forwarding Co., 121 Fed. 139. BANKRUPTCY 219 business in the district wliere proceedings are instituted are the same for involuntary bankrupts as for voluntary (see § 9, above). § 13. State bankruptcy laws operative where Federal law does not apply. It is not to be understood that because certain persons both natural and artificial may not be made involuntary bankrupts by the Federal bankruptcy law, they cannot be made amenable to bankruptcy at all. Congress did not expressly make the law it passed an ex- clusive law on the subject of bankruptcies, thus suspend- ing all state laws and every portion of them, nor can an intention to have it so interpreted be gathered from the Act. Thus it follows that persons not amenable to the national law may nevertheless be made bankrupts under the state law, if one exists, with features admitting it, in the presence of the national law. It does not follow, however, merely because the state and the Federal law both cover the same field that a person may be amenable to the state law, for, wherever they do so overlap, the Federal Act is exclusive and controls. Illustrating this principle, it has been held that a farmer, who may not be adjudged an involuntary bankrupt under the Act, may nevertheless be forced into bankruptcy under a state law permitting it (12) ; that persons owing less than the amount fixed by the Federal law to make them amenable to it at the suit of creditors (13) ; or a corporation not amenable to it at all (14) may be adjudged involuntary (12) Old Town Bank of Baltimore v. McCormick, 96 Md. 341. (13) Shepardson's Appeal, 36 Conn. 23. (14) Herron Co. v. Superior Court, 136 Cal. 279. A mining corpo- ration was adjudicated an involuntary bankrupt, before the Act was amended so as to make a mining corporation amenable. 220 BANKEUPTCY bankrupts under a state law providing for it. The Fed- eral system suspends the state systems wherever they overlap; where they do not, they work in perfect har- mony and conjunction. § 14. Business in which corporation is engaged and not charter powers control. The law states that a corporation, if engaged principally in manufacturing, etc., may be forced into bankruptcy, and the question has frequently arisen whether the business for which it was incorporated would control or the business it actually carried on, and the courts have held that the latter controlled (15). Section 2. Petitioning Creditors. § 15. Explanation of term. Involuntary proceedings are those that are instituted by others against the debtor, and consequently a moving party or parties are required. Those that set in motion the machinery of the courts to bring about the bankruptcy of another are called peti- tioning creditors, because they join in a petition setting out facts sufficient to give the court jurisdiction and power to enter a decree of adjudication. Among these facts are the act of bankruptcy, and, if a corporation, the business in which it is principally engaged, the duration of the residence, domicile, or principal place of business of the alleged banknipt in the court's territorial juris- diction, the amount owed petitioning creditors, etc. § 16. Who may be petitioning creditors? It has been shown that in voluntary proceedings the debtor himself is the moving- party, and when seeking the jurisdiction of (15) In re Toutlue Surety Co., IIG Fed. 401. BANKRUPTCY 221 a bankruptcy court lie himself files a petition asking that he be adjudged a bankrupt. The proceeding is less sim- ple in involuntary cases, as the qualification of petitioning creditors, the number required, the commission of an act of bankruptcy by the alleged bankrupt, and similar ques- tions tend to complicate it. As a general rule all per- sons having provable claims against an alleged bankrupt may be petitioning creditors (16). Who have provable claims is fixed by the law and will be fully considered later (17). § 17. Number of petitioning creditors required. The law provides that, if there are twelve or more creditors having provable claims, then at least three creditors must join in the petition; and, furthermore, the aggregate of the claims of those creditors must be five hundred dollars or over. If, however, the alleged bankrupt has less than twelve creditors, one petitioning creditor whose claim amounts to five hundred dollars or more may file the peti- tion (18). The petitioning creditor or creditors through this petition present to the court the facts with reference to the alleged bankrupt, upon which they rely to compel him to surrender his property to the court to be admin- istered for the benefit of all the creditors. In order that he may be made a party to the proceeding, it is required that he be summoned to appear before the court to show why he should not be dealt with under the bankruptcy law. (16) Sec. 59b. (17) Sec. 63. See Chapter V, below. (18) Sec. 59b. 222 BANKRUPTCY § 18. Limitations upon rights of creditors to join in petition. The most obvious limitation upon the right of creditors to join in a petition is that pointed out by the law itself, which denies to the creditor the right to peti- tion in respect to any portion of his claim that is covered by securities held by him (19). This leads logically to the conclusion that creditors holding claims that are en- tirely secured cannot join in a petition, unless they give up their security and proceed as unsecured creditors (20). A secured creditor is not one holding a claim se- cured merely by the personal obligation of another, or even by property of the surety or guarantor whose per- sonal obligation secures it, but he is one who either holds property himself which belongs to the bankrupt which the latter has pledged, to secure the claim, or has recourse to the bankrupt's property in the hands of the debt- or's surety to whom it was pledged as security. The test of a secured creditor is whether his claim will either directly through himself or indirectly through some third person, who has become a surety or guarantor of the claim, draw or withdraw some specific portion of the debtor's property from the assets available to pay gen- eral creditors (21). Another limitation upon such right is that presented by a situation where creditors have assented to or joined in the execution of a deed of assignment for the benefit of the creditors. Such an assent, where the act of making the assignment is relied on in the petition against the al- (19) Sec. 59b. (20) Re Alexander, 1 Lowell, 470. (21) Sec. la (23). BANKEUPTCY 223 leged bankrupt as the act of bankruptcy, incapacitates the assenting creditors from joining in the petition. The law does not tolerate such inconsistent action on the part of creditors, and they cannot at one time give their approval to the execution of a deed of assignment, and at a later time attack the assignment and make it the basis of a proceeding to put the assignor into bankruptcy (22). (22) In re Romanow, 92 Fed. 510. 224 BANKRUPTCY CHAPTER III. ACTS OF BANKRUPTCY. § 19. Act of bankruptcy necessary for involuntary pro- ceedings. In the earliest English bankruptcy legislation, creditors could proceed against a debtor only in case he had \dolated some specific provision of a statute, and had, so to speak, committed a quasi-criminal offense. Such a requirement still persists. Under the present law credi- tors are required to show that the debtor, either of his own volition or from unavoidable circumstances, has af- firmatively perpetrated some act prohibited by it, or by inaction has left something undone which he should have done, before they can subject him to its provisions as to surrender of property, distribution of assets, and other features. To state the same thing more briefly, they are required to show that he has committed one or more of several so-called acts of bankruptcy (1). § 20. Act of bankruptcy not essential in voluntary pro- ceedings. Wliile it is necessary in involuntary proceed- ings for creditors to establish some act done by a debtor prohibited by the statute, this is not true in cases where a debtor seeks the jurisdiction of a bankruptcy court of his own motion. He may invoke that jurisdiction with no other motive than that of being relieved of the burden of (1) Sec. 3a. BANKRUPTCY 225 distributing his property at his own expense, rather than at the expense of his creditors. Thus, he may have suf- ficient property to meet all of his debts and desire to dis- continue business, but be reluctant to assume the task of selling his property and turning it into money for his creditors. He may cast this responsibility on them by surrendering it as stated, and in the end procure from the court a discharge from his liabilities without any act of bankruptcy. An examination of the various acts of bank- ruptcy follows. § 21. Fraudulent conveyances: Statute of Elizabeth. The foundation of the first act of bankruptcy, that of conveying property with intent to hinder, delay, and de- fraud creditors (2)— more commonly styled making a fraudulent conveyance— is historically traceable to a period of time antedating the earliest English bankruptcy legislation. Creditors had certain recognized rights in fraudulent conveyances at common law. But in the year 1570 the English Parliament passed an act with refer- ence to such conveyances. It is always referred to in bankruptcy and insolvency matters as the statute of Elizabeth. It made it a criminal offense knowingly to participate in a conveyance made by a debtor with an in- tent to defraud his creditors, and declared that such con- veyances should be void as to them; but protected pur- chasers of the property in any rights they acquired with- out knowledge of the fraud. This statute was largely declaratory of the coimnon law. Since its passage it is generally looked upon as the source of the rights of credi- (2) Sec. 3a (1). 226 BANKRUPTCY tors to defeat fraudulent conveyances. The creditor's remedy at common law and under this statute is simple. He realizes his claim out of his debtor's property by pro- ceeding against it by attachment or execution, as if the title or possession or both were still in the debtor. He seizes and sells it as if it were still the debtor's property. If it cannot be sold advantageously by reason of a cloud on the title created by the deed of conveyance, as often happens in the case of land, he may proceed in equity to remove the cloud. § 22. Same : In bankruptcy act. As this statute ex- isted before the settlement of the colonies, it is deemed a part of the common law of the states and regulates the rights of creditors in fraudulent conveyances even today, subject to certain modifications and developments. It was this historical, part common law and part statutory, conception of a fraudulent conveyance as developed in the various states that Congress intended to be applied in determining when a debtor has violated this section of the bankruptcy law (3). As there are numerous con- veyances which the common law pronounces fraudulent toward creditors— the machinations of debtors to cheat their creditors having assumed as many forms as human ingenuity could invent— and which are, therefore, con- sidered acts of bankruptcy, an examination of some of them to ascertain their peculiar characteristics and also the underlying principles of the common law and statute of Elizabeth is essential to a correct understanding of (3) Lansing Boiler Worlis v. Ryerson, 128 Fed. 701. BANKRUPTCY 227 what constitutes a violation of the section of the statute prohibiting such conveyances. § 23. Retention of possession by seller. It is a rule under the common law and statute of Elizabeth, that, if a debtor makes a transfer of chattels by bill of sale and re- mains in possession of them, with no circumstances tend- ing to explain his retention of possession, the transfer is a fraudulent conveyance. Thus, in an English case, where a debtor owed the plaintiff £22 for goods sold and the defendant £191 for money lent, he purported by bill of sale to transfer his entire household furniture and stock in trade to the defendant as security in payment of the debt, but remained in possession of the property; the court held that the conveyance was fraudulent and void as to the plaintiff, saying: '*If a man sells goods and still continues in possession as visible owner of them, such sale is fraudulent and void as to creditors, and the law has been always so held" (4). Other cases have taken a less strict view, holding on a similar set of facts, that the retention of possession was merely some evidence of an intent to execute a fraudulent conveyance, but might be rebutted (5). §24. Conveyances in consideration of support of grantor. Another form of conveyance which the courts have held fraudulent is that of a debtor transferring his property to another for the latter 's promise to support him during the remainder of his life. This is the rule even where the debtor has no actual intent to hinder his (4) Edwards v. Ilarben, 2 Term Reiiorts, 587. (5) Martiudale v. Booth, 3 B. & A. 498. 228 BANKEUPTCY creditors. Thus, in one case, a debtor wlio was seventy- two years old conveyed his house and lot to another for the latter 's agreement to support him the rest of his life. At the time of the conveyance the debtor supposed he had paid all his debts, but it transpired later that he had cer- tain creditors. The court held the conveyance was void as to those creditors (6). And this seems to be the rule even though there is every possibility of the debtor's liv- ing sufficiently long to make the property transferred in the conveyance only reasonably adequate compensation for the support promised. The underlying objection is the transformation of the property into a form upon which creditors cannot realize, although the promise to support received in return was adequate value for the property conveyed away. The rule in the various states is almost uniformly in accord with that illustrated by the instance given. But in England il seems a different rule prevails (7). § 25. Inadequacy of price. In the preceding subsection the debtor received what ordinarily would be deemed full compensation for the transfer, yet creditors may attack such a conveyance owing to the fact that the compensa- tion was inadequate in that it was unavailable to them. Some courts have held that a sale by a debtor of prop- erty for which he received an inadequate price is fraudu- lent and may be avoided. Thus, it was held that the con- veyance of land worth two thousand dollars for the con- sideration of one hundred dollars was fraudulent, as a (6) Egery v. Johnson, 70 Me. 25S. (7) In re Johnson. 20 Ch. Div. 389. BANKRUPTCY 229 matter of law, leaving no question of fact even to be de- cided by a jury (8). Upon such facts many courts would say that the jury should be permitted to say whether the conveyance was fraudulent, while others say that these are not even inferences from which a jury can reasonably find that the conveyance was intended to be fraudulent (9). It would seem that the rule ought to be that it is some evidence, which may be taken into consideration by the jury or court with other facts in determining whether the debtor intended to defraud his creditors. § 26. ConveyaJice upon secret trust. A conveyance of property by a debtor to another, with a secret under- standing between them that the latter is merely to hold it in trust for him for a time until financial troubles shall have passed, is void, and may be attacked by creditors who are prejudiced by it. The rule is the same where the conveyance is made to secure advances, but the deed of conveyance, which far exceeds in value the amount of the loan, is made absolute, with the secret understanding that it is to operate as a mortgage instead of making the deed in form a mortgage. Thus, a debtor conveyed land exceeding in value the sum of two thousand dollars ad- vanced to him as a loan. The deed purported to convey a title absolute. The intention of the parties was, in fact, that the title should be held merely as a security for the loan, and, when that was repaid, it should be reconveyed. It was held that the deed was void (10). In such a case, where there is no actual intent to defraud, but merely cir- (8) Scoggin V. Schloath, 15 Ore. 380. (9) Jaeger v. Kelly, 52 N. Y. 274. (10) Stratton v. Putney, 63 N. H. 577. 230 BANKEUPTCY cumstances from wMcli courts presume such an intent, the transferee may attach a lien to the land for the loan he made in good faith. § 27. Conveyances both to pay past debt and to defraud creditors. The law discourages a conveyance of property, part of which is to be applied in pajTuent of an honest debt and the balance to be held by the transferee in trust to prevent creditors from getting it. If the transferee knows and participates in the debtor's intent to defraud his creditors, the conveyance cannot stand to any amount against the creditors. They may set it aside without per- mitting the transferee to retain a lien on the property for the amount of his honest claim. A grantor of land was in- debted to another in the sum of eight thousand dollars. To iDay the latter he deeded him land which was worth much more than the amount of his claim. In order to make the transaction appear fair, the debtor and creditor jointly fabricated a fictitious debt for board and washing. The court held the conveyance was fraudulent as to cred- itors, and refused to permit a lien to be attached for the honest debt of eight thousand dollars, saying: ''The con- tention that the conveyance may be sustained to the ex- tent of the adequate and honest part of the consideration is fully answered by the authorities, which hold that when the deed is fraudulent against creditors it is wholly void and cannot stand to any extent as security or indem- nity" (11). § 28. Preferment of creditors. At common law del)tors were i)ernntted to prefer creditors if they desired. By (11) Baldwin v. Short, 125 N. Y. 553. BANKRUPTCY 231 giving a preference is meant the payment to one creditor of an honest debt without paying a like proportion to others. And a debtor could do this, if he did it with the actual intention of making payment merely, even though he intended not to pay others and even though the credi- tor paid knew this fact. In a certain case a husband had land, for which he had made payment, conveyed to his wife in satisfaction of a debt he owed her for money she had loaned him after their marriage. The court held the conveyance could not be attacked by creditors. It arrived at this conclusion although the debt to the wife was barred by the statute of limitations (12). From this case may be deduced the principle that at common law and under the statute of Elizabeth it was not a fraud upon creditors for a debtor to pay one of his creditors in full to the exclusion of others. §29. Exchanging non-exempt for exempt property. The universal rule in the various states allows a debtor, who owns non-exempt property, to exchange it for or in- vest it in exempt property, which creditors cannot take from him to satisfy their claims, without permitting the unpaid creditors to take any advantage of his action. A Nebraska farmer owned a farm worth sixty-one hundred dollars of which two thousand dollars were exempt from creditors and forty-one hundred not exempt. He sold this farm and invested all the money in a Kansas farm, all of which was exempt by the law of the latter state. A party who was a creditor while he owned the Nebraska farm sought to collect his claim out of the Kansas land. (12) French v. Motley, 63 Me. 326. Vol. X— 1 7 232 BANKRUPTCY The court held he could not do this, as the debtor had a right to transform his property from non-exempt to ex- empt property without giving the unpaid creditors any basis of complaint (13). § 30. Voluntary conveyances. A very common form of conveyance by debtors, which is attacked by creditors, is the so-called voluntary conveyance. By this is under- stood a transfer of valuable property without receiving compensation therefor, or, in short, as a gift. Convey- ances by husband to wife or parent to child, as a gift, with no intention or thought of hindering creditors are common, and whether or not such a conveyance can be successfully attacked by creditors depends upon the cir- cumstances of the case and the jurisdiction where it is made. There is a well known principle of the law of fraud- ulent conveyances embodied in the language that * ' A man should be just before he is generous." It has particular application to cases of voluntary conveyances made by debtors. § 31. Same: Conflicting views. A debtor may make a voluntary conveyance, and as a result leave himself with insufficient property in his possession to meet his honest debts. Such a conveyance as a gift is void and may be successfully set aside. If, however, he should make a voluntary transfer of property and have remain- ing sufficient property to meet all of his debts, even after the transfer, some jurisdictions hold that the creditors have no basis for an attack on the transaction and others hold that they have. Chancellor Kent of New York, in (13) First National Bank v. Glass, 79 Fed. 706. BANKRUPTCY 233 laying down tlie rule for that state, wliich is but a type of one class mentioned, said: **If tlie party be indebted at the time of the voluntary settlement it is presumed to be fraudulent in respect to such debts, and no circum- stance will permit those debts to be affected by the settle- ment or repel the legal presumption of fraud" (14). With no motive to defraud, the debtor's act is neverthe- less reprehensible in the eyes of the law, contrary to the principle that a man should be just before he is generous, and some courts hold such conveyances bad, entirely ir- respective of any actual intent to defraud and of the fact that he had sufficient property remaining to meet all of his just debts at the time of the conveyance. By far the greater number of states, however, take the opposite view, and hold that where the debtor has suf- ficient property remaining after making the gift to meet all of his debts— that is, is solvent— the creditors cannot have the conveyance set aside to be applied to pay their claims. In one case a father, owing seven thousand dollars in debts and owning property valued at ninety- one thousand dollars, made a gift to his daughter, on her marriage, of property valued at from six to ten thousand dollars. Ten years later some of the debts were still un- paid, the debtor then having no other property. The court held the deed could not be set aside (15). § 32. Proof of solvency. In connection with the latter rule, the relation between the amount of property and the amount of claims outstanding would depend largely upon (14) Reade v. Livingston, 3 Johnson's Ch. (N. Y.) 481. (15) Warren v. Moody, 122 U. S. 132. 234 BANKEUPTCY tlie property that is considered and tlie claims included in taking the estimate of the debts. Thus, land that is ex- empted (because it may be voluntarily used to pay debts), notes, accounts, and all forms of assets are to be counted in making up the value of the debtor's property. On the other hand, besides the ordinary debts which would concededly be considered, demands arising from tort, from breach of promise to marry, from a debtor's obligation as a surety on notes that have not become due and in the pajTuent of which the principal had not made default, from a guarantor's obligation that another will perform a certain contract which was not broken at the time of the conveyance and perhaps never will be, and liabilities on secured claims and others of similar con- tingent and uncertain character, are to be counted in de- termining the amount of indebtedness. This rule is ap- parently adopted because persons having claims of the character enumerated may attack a fraudulent convey- ance and have it set aside, they being among the persons whom the law seeks to protect against the frauds of those who are obligated to meet these claims. Inasmuch as per- sons having such contingent claims have a right to com- plain of a fraudulent conveyance, their claims are in- cluded in the estimate of the amount of indebtedness. This common law test of insolvency is veiy different from that laid down by the provisions of the Act (16), and is only to be applied when the trustee in bankruptcy seeks to set aside a fraudulent conveyance. It is much more drastic against the debtor, in that it permits the trus- /16) Sec la (15). BANKRUPTCY 235 tee or attacking party to add to the claims deemed provable under the Act many that are not provable, and thus to swell his indebtedness and increase the possibili- ties of an insolvent condition. Compare §§ 77-78 below. § 33. Future creditors may attack fraudulent convey- ances. The English Parliament in 1570 passed an act, al- ready referred to, with reference to fraudulent convey- ances, and fixed certain penalties for making them or par- ticipating in them. It is to this act (17) that the founda- tion of the laws of fraudulent conveyances is frequently erroneously referred, as it in fact existed even before the passage of this statute. However, it added certain features to the common law rules. Among these is the right it gave persons who were in no sense creditors at the time a fraudulent conveyance was executed to attack such a conveyance. It aimed to protect all creditors and "others,'* as stated in one part of the statute, and all "persons," as stated in another part. So it has been settled that if a party makes a convey- ance of his property, with the express intent to become indebted to another in the future and to defraud him of his claim by means of this trick, such creditor may defeat the transfer, although he was not a creditor and had not even a claim against the debtor at the time of the trans- fer. It has also been held, that, if a debtor were indebted to another when he conveyed property as a gift, and then subsequently incurred other debts, which were not paid, the future creditor could set aside the conveyance by merely showing that the debtor owed debts at the time of (17) 13 Elizabeth, c. 5. 236 BANKRUPTCY the conveyance. The theory of the decison rests upon a rule that where a voluntary conveyance is fraudulent as to present creditors it is fraudulent as to future credi- tors (18). § 34. How intent to defraud future creditors shown. To prove an actual intent— a state of mind— to defraud future creditors is, of course, difficult to do. As a conse- quence it may be inferred from the surrounding circum- stances. Thus, it has been held that the mere existence of a debt at the time a voluntary conveyance is made, leaving insufficient property to pay it, is sufficient proof to establish the intent to defraud, even though the exist- ing creditor had since been paid (19). And the fact that a debtor immediately entered into a hazardous business is considered strong evidence tending to prove such in- tent (20) but it is not conclusive proof. § 35. General assignments for benefit of creditors. A common device resorted to by a debtor in stringent cir- cumstances is to make a transfer of all his property to an- other as trustee, in trust to distribute it or its proceeds among all of the creditors. In the absence of statutory prohibition there is no objection to such an assignment. However, such an assignment cannot contain provisions that tend to delay the creditors. Thus, in a case where the deed of assignment provided that the assignee should in his discretion carry on the business for such time as he should think it for the best interests of the creditors and necessary for the purpose of preventing shrinkage or (18) Freeman v. Pope, 5 Ch. App. 538. (19) Marston v. Marston, 54 Me. 476. (20) Hagerman v. Buchanan, 45 N. J. E. 292. BANKEUPTCY 237 loss, the court held the conveyance was fraudulent, as the deed attempted to leave the question whether the debtor should have further indulgence with him instead of with the creditors, where it belonged (21). Making such a conveyance is an act of bankruptcy under that por- tion of the Act which prohibits fraudulent conveyances. A general assignment which has no features that are ob- jectionable under the common law is prohibited by an- other portion of the statute (22), and the act of making such a conveyance subjects the granloi to a bankruptcy proceeding in the Federal courts. This proceeding is not based on the ground that the debtor made a fraudulent conveyance, but on the ground that he made a convey- ance prohibited by the Act. § 36. Assignments with preferences. At common law an assignment wherein a debtor made provisions for paying some creditors a greater proportion of their claim than others was allowable. Preferences are entirely un- objectionable at common law. Such assignments are, however, in most states prohibited by statute, and are, as will be seen below, prohibited under the national bank- ruptcy law by making a preference an act of bankruptcy. By the law of some states, if a deed of assignment contains a clause providing for a preference to some creditor or creditors, the entire deed is void and of no effect and is treated as a fraudulent conveyance. Other states merely invalidate the clause giving the preference, and permit the creditor whom the debtor sought to prefer to receive (21) Gardner v. Commercial National Bank, 95 111. 298. (22) Sec. 3a (4). 238 BANKEUPTCY only Ms pro rata portion the same as other general creditors. § 37. Preferences. It has been stated above (§28) that a preference is the payment by a debtor of an honest debt, or a portion thereof, to one or more of his creditors with- out paying a like proportion to other creditors. It was also stated that this may be done at common law. This is not true under the Act (23). Either voluntarily giving, or involuntarily and unavoidably suffering and permit- tang (24) a preference to be acquired, constitutes an of- fense under the statute upon which a petition in bank- ruptcy can be based. § 38. How creditors may force debtor to commit an act of bankruptcy. It is in connection with the law of prefer- ences that creditors are given a means under the statute of forcing an insolvent debtor, who makes no move other- wise prohibited by the law upon which proceedings against him may be based, to commit an act of bank- ruptcy. This they accomplish by procuring a judgment against him, levying upon his property, and fixing a day for its sale. If he fails to vacate the levy within five days of the day set for the sale, he will have committed an act of bankruptcy (25). If, on the other hand, he pays the judgment and thus vacates it, being insolvent, he will have paid the judgment creditor in full, whereas no pay- ment has been made to other creditors, and will have vio- lated another part of the law (26). If he does not vacate (23) Sec. 3a (2) and (3). (24) Wilson v. Nelson, 183 U. S. 191. (25) Sec. 3a (3). (26) Sec. 3a (2). BANKEUPTCY 239 the lien he will be guilty of an act of bankruptcy, and he will not escape it if he does. Under such circumstances he can only avoid the preferential sections of the law by having a friend advance the money and release the claim for him without diminishing his assets. § 39. Statutory admissions by debtor. Under the last portion of the section defining acts of bankruptcy (27), that of admitting inability to pay debts and willingness to be adjudged a bankrupt on that ground, natural persons are, of course, included. It was at one time questioned whether a corporation could be adjudged a bankrupt on this ground, it being argued that to permit it would be tantamount to permitting a corporation to become a vol- untary bankrupt, which was expressly prohibited by the Act (28). This contention was, however, repudiated, and it is now well settled that a corporation, as well as a nat- ural person, may, by authority of its board of directors, make an admission in writing of its inability to pay its debts and its willingness to be adjudged a bankrupt on that ground, and may thereon be adjudged a bankrupt (29). It is also well settled that insolvency in such a pro- ceeding, as in a proceeding based on the debtor having made a voluntary assignment (30), is immaterial. These are the only portions under which solvency is immaterial. They tend to show that bankruptcy proceedings may take the form of merely distributing estates, a proceeding sim- ilar to that of proceedings in courts of probate where es- (27) Sec. 3a (5). (28) Sec, 4a. (29) Re Moench & Sons, 130 Fed. 685. (30) West Co. V. Lea, 174 U. S. 590. 240 BANKRUPTCY tates of deceased persons are administered, the only func- tion of sucli court being to distribute the assets. The bankruptcy court distributes the property, and, in addi- tion to what is done in a probate court, may grant a dis- charge from the unpaid portion of the debts. §40. Trial and adjudication: Voluntary cases. In voluntary bankruptcy cases where the debtor of his own volition petitions the court to be adjudicated a bankrupt, the order of adjudication is entered by the court as a matter of course. No issues are made up to be tried by court or jury. If the applicant is amenable to the law and the court has jurisdiction, no objection can be inter- posed by creditors or others which would prevent the entry of the order. If the petitioner is insolvent, his elec- tion to submit himself voluntarily rather than wait to have his creditors compel him to submit, as they have the power to do, is conclusive. If, on the other hand, he is not insolvent, and desires to discontinue business and to make a distribution of the proceeds of his property among his creditors, any balance remaining after they are paid to be paid to him, he is made his own judge as to the expediency and advisability of applying to the court for assistance in accomplishing this purpose. § 41. Same: Involuntary cases. In involuntary cases, on the other hand, creditors are endeavoring to coerce an unwilling and reluctant debtor to give up his property for the benefit of his creditors. The basis of their action rests upon some act which the debtor has done which is sufficient to make him amenable to the bankruptcy law, and it carries with it, as do all bankruptcy proceedings, a BANKRUPTCY 241 Blight tinge of disgrace. The debtor, to save his business and property as well as his honor, in many instances de- fends against the proceeding. His defense is set up by what is Imown as an answer. The case is then at issue and a hearing before a judge— or a jury, if a special re- quest is made for a jury (31)— is necessary to determine ihe issue presented by the petition and answer. The fol- lowing are some of the issues that may be passed upon at such a hearing. § 42. Same: Issues presented for determination. The debtor, commonly called the respondent, at such a hear- ing may claim that he is not engaged in a business or oc- cupation of such a character as to make him amenable to the Act, or that he does not owe sufficient debts to entitle the petitioners to proceed against him. He may deny that he committed the act of bankruptcy alleged in the petition. He may assert that the petitioning creditors or some of them have no claim against him ; or that their claims, or some of them, are not provable— a prerequisite to entitle them to be petitioning creditors; or that the amount of their claims is insufficient to sustain their ac- tion. He may show that he did not have his domicile, resi- dence, or his principal place of business in the territorial jurisdiction of the court for six months, or the greater part thereof, immediately preceding the filing of the peti- tion. If the issue or issues tried are decided for the peti- tioners, the court enters an order of adjudication; and from that time the bankrupt and his property are to be dealt with in accordance with the provisions of the statute. (31) Sec. 19. 242 BANKEUPTCY CHAPTEE IV. TRUSTEE AND PROPERTY. Section 1. The Trustee. § 43. Provisional officer: Receiver. After the filing of a petition, whether voluntary or involuntary, and be- fore an adjudication, or afterwards and before the elec- tion of a trustee, the bankruptcy court may appoint, at the instigation of a creditor, a receiver to conserve the property and guard the interests of creditors in the in- terim between his appointment and the election of a trus- tee. Were it not for some such provision, placing the property in the custody of the court by its receiver, es- tates would deteriorate, be wasted, or lost. Such a pro- visional officer is necessary to bridge the gap between the filing of the petition and the election of a trustee. His duties may extend further than a mere preservation of the property, as where perishable articles are found in the estate, or raw or unfinished materials in the course of manufacture exist at the time he takes possession. It is usual in such cases for the court to authorize him to sell the perishable property, and to continue the business suf- ficiently long to use up the raw material or to finish up any unfinished article of commerce (1). The receiver is en- (1) Sec. 2 (5). BANKRUPTCY 243 titled to compensation for such services whicli is usually regulated by the compensation given to a trustee. The receiver is put in possession of the property merely as a temporary officer. In many instances, where the court denies the application of the petitioning creditors and dismisses their petition, the receiver is the only officer who takes possession of the property. If the court re- fuses the petition, the receiver turns the property back to the alleged bankrupt and the case is ended. In other in- stances, he merely holds the property until the debtor offers a composition to his creditors, i. e., a certain per- centage of all claims outstanding. If this offer of settle- ment is accepted by the creditors, the property is turned back to the bankrupt. § 44. Election and qualification of trustee. The perma- nent court officer is the trustee. His position is only pos- sible in cases where there has been an adjudication. After the adjudication the creditors hold a meeting and elect a trustee. The persons entitled to vote are those who hold provable claims against the bankrupt (2). The majority in number and amount of creditors is necessary to elect. In case of a failure of the creditors to elect, it becomes the court's duty to appoint a trustee. A creditor, in order to be entitled to participate in the election, must show his qualification by a sworn statement of the nature and amount of his claim. This he does by presenting what is called a proof of claim. This same proof is subsequently made the basis for the payment of dividends. In case the creditor does not desire to or cannot attend personally, (2) Sec. 44a. 244 BANKEUPTCY he may antliorize any person to act as his attorney by giv- ing to such person a power of attorney. This attorney may do whatever the creditor might if he were present. Before the trustee enters upon the performance of his duties he is required to qualify for his office by entering into a bond to the United States, with sureties to be ap- proved by the court. The bond is conditioned for the faithful performance of the official duties (3). The credi- tors fix the amount of the bond, or, in case they fail to do so, the duty devolves upon the court (4). §45. Duties of trustee: To take possession of prop- erty. After the trustee has been elected and qualified by giving his bond, he is in a position to assume the duties of his office. It devolves upon him as trustee to take en- tire charge of the bankrupt's property, be its custodian, and care for it until sold. If a receiver has been ap- pointed in the proceeding, who is in charge of the prop- erty at the time of the trustee's qualification, he receives possession from him. If not and the bankrupt is still in control of the property, the trustee succeeds to his pos- session. A discussion of the different kinds of property that the trustee takes appears below (5). §46. Same: To set apart bankrupt's exemptions. The laws of the various states provide, either that certain specific property named or else property valued at a given amount shall be protected, at all events, from the claims of creditors. Such laws are known as exemption (3) Sec. 50b. (4) Sec. 50c. (5) See §§ 53-63, below. BANKEUPTCY 245 laws and the right thus to hold property is known as the right of exemption. The bankruptcy law observes the various state laws on this subject, where they are not in conflict with it (6). Title to exempt property does not pass to the trustee, as will be seen later (§64). If he takes possession of it where the statute makes certain specific property exempt, as the homestead, for example, it is his duty to deliver this back to the bankrupt. In states where the bankrupt may claim any property he has, valued at not to exceed a fixed amount, it is the trustee's duty to set apart for the bankrupt the property he chooses to take as his exemption (7). § 47. Same: To bring suit to recover property and assets. In the course of the administration of a bankrupt estate, it becomes a part of the trustee's work to make in- vestigation into the affairs of the bankrupt to ascertain what property he has concealed; what fraudulent con- veyances, preferences, and transfers, void against credi- tors by the laws of the state, he has made ; and what liens were affixed to his property by legal proceedings. A dis- cussion of the time limit required by the Act to make such interests available to the trustee, the nature of the inter- ests, and the sources of the trustee's title to them is given below (8). He is assisted in this undertaking by the court, which has power to compel the bankrupt to testify as to the present and past condition of his affairs, as to his dealings with his creditors and others, and as to the (6) Sec. 6a. (7) Sec. 47a (11). (8) See §§ 67-82. 246 BANKEUPTCY amount, kind, and wliereaboiits of his property (9). Other witnesses may also be subpoenaed to testify (10). In case he makes a discovery of interests of the character men- tioned, it devolves upon him to institute the proper legal proceedings, or to take whatever steps are necessary to realize on these interests. He is also the officer to collect any outstanding accounts receivable. § 48. Same: To reduce all property to money and pay dividends. The ultimate object of the entire proceeding for the creditors is to have the money, realized by the trustee from whatever source, distributed pro rata among them as dividends (11). To do this it is necessary for him to sell the property or assets, and to reduce to money any interests he has as trustee (12). This he is obliged to deposit in a bank or depository designated by the court (13), and he must account for all interest received on money deposited (14). § 49. Same: To keep accounts, make reports, and give information. In addition to the duty of collecting the property and assets, reducing them to money and dis- tributing it among creditors, the trustee is obliged, by the provisions of the Act, to keep accounts showing all money received and from what sources, and all amounts ex- pended and for what purposes (15) ; to furnish such in- formation concerning the estate as may be required by (0) Sec. 47a (9). (10) Sec. 41a. (11) Sec. 47a (9). (12) Sec. 47a (2). (13) Sec. 47a (3). (14) Sec. 47a (6). (15) Sec. 47a (6). BANKRUPTCY 247 parties in interest (16) ; to report to the court from time to time the condition of the estate and the amount of money on hand (17) ; and to make final reports and file final accounts (18). § 50. Compensation of trustee. The law fixes a scale of charges the trustee may make. It is based on the amount of money disbursed by him. Thus he receives not to exceed six per cent, on the first $500 or less; four per cent, on moneys in excess of $500 ; two per cent, on moneys in excess of $1500 and less than $10,000; and one per cent, on moneys in excess of $10,000 (19). In small es- tates the compensation is frequently very small and in no manner commensurate with the work done. In large estates, on the other hand, a very reasonable compensa- tion is provided. One of the serious defects of the Act of 1867 rested in its lax methods of compensating the oflficers of the court. Too much latitude was allowed the judges in awarding fees to assignees in bankruptcy. This Act has not met with severe criticism on this ground. The opportunities, however, for large fees for attorneys for the trustee still prevail and are at times abused. Section 2. Title and Property Passing to Trustee from Bankrupt. § 51. In general. In considering what property passes to the trustee, attention is again directed to the fact that natural persons, no matter in what business engaged nor (16) Sec. 47a (5). (17) Sec. 47a (9). (18) Sec. 47a (8). (19) Sec. 48a. Vol, X— 18 248 BANKRUPTCY what their occupations, may become banprupts; and that all natural persons, except wage earners or those en- gaged in farming or the tillage of the soil, and many artificial persons may be compelled to be bankrupts. With persons of so many occupations subject to the Act, the character of the property owned and thus involved in bankruptcy becomes as widely diversified as the prop- erty interests man cherishes. As bankruptcy proceedings are for the benefit of the creditors; as they, on the one hand, are primarily in- terested in having everything owned by the bankrupt, from which value can be realized, pass to the trustee; and as the bankrupt, on the other hand, is desirous of retaining as much of his property as is consonant with reason and the provisions of the law; conflicts have arisen over what property interests pass. Then the question as to when the title passes, whether at the time the petition is filed or at the time of the adjudication, has also arisen. The source of the trustee's title to the interests that pass, whether it is derived from the bankrupt, from the creditors, or from the express provisions of the law has been made of peculiar importance by certain decisions of the courts. In this Section the interests passing from the bankrupt, and the time at which they pass will be discussed. In the two following Sections rights derived by the trustee from other sources will be considered. § 52. Time and maimer of vesting title. Entirely apart from the kinds of property the trustee takes and the sources of his title is the manner in which title is vested BANKRUPTCY 249 in him and the time at which it vests. Under the act of 1867 it was necessaiy for the bankrupt, before the trustee acquired any title, to make a deed of conveyance of his property. Under the present Act the title to all the rights and interests the trustee takes, from whatever source, vests by operation of law (20) without any transfer by deed or other instrument, just as an heir at law takes title to lands of his ancestor. The title vests in him at the time of his appointment and qualification, but re- verts and dates back to the time of the adjudication. The quantum of property is determined and delimited by the date of the petition, and if, between that time and the adjudication, there has been an increase of such prop- erty, he takes the increment as a portion of the estate (21). But any property the bankrupt acquired after the filing of the petition, entirely independent of what he had be- fore, belongs to him. Thus, property earned by him after that time cannot be taken by the trustee. But property given to him by the will of one who died at 8 : 45 A. M. when the petition was not filed until 2 : 30 P. M. of the same day passes to the trustee (22). The line of cleavage between what property belongs to the bankrupt and what to the trustee is fixed by the date of filing the petition. Between this time and the time the title is vested in the trustee it remains in the bankrupt, and is thus in danger of being transferred by him, or of being wasted or lost. It is to prevent such transfer or loss during the interim (20) Sec. 70a. (21) In re Pearl, 4 Am. B. R. 578. (22) Re McKenna, 137 Fed. 611. 250 BANKKUPTCY that a receiver is put in possession of it as stated in § 43, above. § 53. DocTOnents. Section 70a is the important section of the Act defining the different interests that pass to the tmstee. The first subdivision of this section provides that the trustee shall be vested with the title of the bank- rupt to all documents relating to his property. The act defines "document" as any book, deed, or instrument in writing (23). The trustee is, therefore, vested by opera- tion of law not merely with the right to inspect the bank- rupt's books, but with their title. He also takes any and all deeds, promissory notes, bills of exchange, bonds, se- curities, checks, contracts, bank books, and all papers relating to his business (24). § 54. Patents, patent-rights, copyrights, and trade- marks. The trustee is vested with the title of all patents, patent rights, copyrights, and trademarks the bankrupt owned at the time the petition was filed (25). This does not entitle the trustee to the right to have mere applica- tions for patents on which no patent right has yet been issued. The applicant has no interest which can be called a patent right before its issuance, although he may have the title to an invention which in his belief is patent- able (26). § 55. Powers. The statute says the trustee shall be vested with all the powers which the bankrupt might have exercised for his own benefit, but not those which (23) Sec. la (13). (24) In re ITess, 136 Fed. 988. (25) Sec. 70a (2). (26) In re Dann, 129 Fed. 495. BANKRUPTCY 251 he miglit have exercised for some other person (27). No decison has defined what is meant by a power as used in the Act. The courts have said that it did not mean a power to realize on a liquor license (28), and that a husband's right in his wife's real estate is not a power (29). The powers recognized by the common law of which creditors could avail themselves were those that debtors might have exercised in their own favor by charging certain lands with liens, but which they exercised in favor of an- other without receiving any compensation. The property affected by a power exercised for the purpose of making a gift could be taken by creditors as a voluntary con- veyance to defraud them (30). If, however, the person entitled to exercise the power had never done so, creditors had no way to compel him to exercise it so that they could acquire the property affected by the exercise (31). It would seem, however, that by virtue of this provision of the Act, giving to the trustee all powers which the bank- rupt could exercise for his own benefit, the bankrupt could be compelled to exercise the power in favor of the trustee. § 56. Fraudulent conveyances. The act says that the trustee shall be vested with the title of the bankrupt to all property transferred by him in fraud of creditors (32). As stated in the discussion on fraudulent conveyances (§§ 62, 67-68, below), the bankrupt has no title to property he has conveyed in fraud of creditors as between himself (27) Sec. 70a (3). (28) Fisher v, Cushman, 103 Fed. 860, 867. (29) Hesseltine v. Prince, 95 Fed. 802. (30) Gilman v. Bell, 99 111. 144. (31) Holmes v. Cogbill, 7 Vesey, 498. (82) Sec. 70a (4), 252 BANKKUPTCY and his transferee. As to creditors, however, the title can be reacquired and sold to pay their claims. It is the title of the creditors, their right to revest the title in the bankrupt for the purpose of paying debts merely, that the trustee takes. A completer discussion of the source of the trustee 's title to property fraudulently transferred is given below (§§62, 67-68). § 57. Transferable and leviable property. By far the most comprehensive part of section 70a, the principal section defining what property the trustee takes, is the portion which gives to him the title to all the bankrupt's transferable and leviable property (33) ; the Act says, *' property which prior to the filing of the petition (the bankrupt) could by any means have transferred or which might have been levied upon and sold under judicial process against him." This includes almost everything which the bankrupt actually owned and from which the trustee could realize value for the benefit of the creditors. It is also thought to include property which he has made the subject of a transfer, voidable as against some per- sons, but which he no longer owned. As creditors may disregard a transfer made to defraud them, and, in law, consider the bankrupt as the owner, levy on such prop- erty, and sell it for their benefit, fraudulent conveyances are also thought to pass to the trustee by virtue of this provision. Although such property is no longer trans- ferable by the bankrupt, it may be levied on and sold by creditors under judicial process against him, but it was not the bankrupt's property at the time of the filing of (33) Sec. 70a (5). BANKRUPTCY 253 the petition and section 70a does not purport to give the trustee anything except what the bankrupt owned or to which he had title. The real source of the trustee's title to fraudulent conveyances will be more fully discussed later (§§67-68). § 58. Same: Illustrations. Under this provision all tangible property, whether real or personal, of which the bankrupt is in possession at the time of the filing of the petition, and also all that is in possession of an- other as trustee (34) or bailee for the bankrupt, whether scheduled or not, passes to the trustee in bankruptcy. The husband's marital interest in his wife's land, con- sisting of his right to use and enjoy it during their joint lives, regardless of the birth of issue, passes to the trus- tee (35). A dower interest of one spouse (dower being substituted for curtesy by the statutes of some states) in lands of the other, who is dead, passes to the trustee ; but the interest of either spouse before the other's death, being a mere possibility dependent upon whether the bankrupt spouse outlives the other, does not pass (36). From the foregoing illustrations it follows that lands the bankrupt has leased to another and from which he is collecting rent, and also lands which he holds under a lease from another, become the trustee's property. In the latter instance, the trustee may find the rent all paid, and, if not paid, past due, so that the landlord holds a provable claim. In either case he would be entitled to the lease as an asset free from any obligation to pay rent. (34) IB re Jersey Packing Co., 138 Fed. 625, 627. (35) In re Marquette, 103 Fed. 777 (stating common law rule). (36) In re Russell, 13 A. B. R. 24. 254 BANKRUPTCY Where, however, the rent has neither been paid nor ma- tured into a provable claim and its payment would be a burden upon the estate, he may elect to abandon his in- terest in the leased property (37), whereupon it again becomes the property of the bankrupt, who may be made to pay the rent coming due after bankruptcy and to per- form the contract of lease, although he has procured a discharge. See § 96, below. All such interests in land pass, because they are transferable by the bankrupt or because they might have been levied upon and sold under judicial process against him. § 59. Choses in action. It was stated above (§53) that the trustee was vested with the title to all promissory notes, bills of exchange, bonds, securities, checks, con- tracts, and bank books. He is not merely vested with the title to the document, but with the beneficial interest to be derived from its enforcement. He may realize upon all stocks, bonds, commercial paper, mortgages, and ac- counts collectible, including bank accounts. He also takes all merchandise and stock in trade. The foregoing are clear instances of property that passes under the trans- ferable and leviable provision, there being little question but that the interests are transferable by the bankrupt. It has been held that a bankrupt's seat in a stock exchange passes, although by the rules of the exchange the pur- chaser may be refused membership. The bankrupt has the power to surrender his interest in his membership to another, the latter taking it subject to the risk of pro- curing his election by the exchange. The courts take the (37) Watson v. Merrill, 136 Fed. 359. BANKEUPTCY 255 view that this membership, having value and being ca- pable of transfer by some means, belongs to the trus- tee (38). Another peculiar interest that the courts have held to be transferable by some means is the interest of the holder of a license to sell liquor, even though the transferee of such a privilege may be required to procure the assent of some official body before being entitled to exercise it (39). § 60. Life insurance policies. By the laws of many states life insurance policies are exempt from creditors, and under the Act this exemption is preserved to the bankrupt (40). In such policies exempt by state law, the trustee takes no interest. Furthermore he takes no interest in policies taken out on the life of the bankrupt, payable absolutely to another or assigned to another (41). Policies of life insurance may be made payable in all events to the bankrupt or his estate. Such policies, if they have value, pass to the trustee. They may be made payable to a third person, as wife, child, or relative ; and, if such third person die before the insured, then to be payable to the latter 's estate. If either the insured or the beneficiary becomes bankrupt, the trustee takes his interest (42). Likewise, if the policy is payable abso- lutely to a third person and he becomes bankrupt, the trustee takes the interest (43). Similarly, where a policy is made payable to the insured at the end of a fixed period (38) Page V. Edmunds, 187 IT. S. 596. (39) In re Becker, 98 Fed. 407. (40) Sec. 6a ; Holden v. Stratton, 198 U. S. 202. (41) In re Steele, 98 Fed. 78. (42) In re Welling, 113 Fed. 189. (43) In re Steele, 98 Fed. 78. 256 BANKRUPTCY of time, but, if insured should die before that time, then to some third person, the trustee takes the interest of the insured (44). It passes, of course, subject to the rights of the third person. Should the third person become bankrupt, his trustee would be entitled to his interest in the policy. But in such a case, where the insured has designated some third person beneficiary but has re- served the right to change the beneficiary at any time, he being capable at the time the petition was filed of transferring the beneficial interest to himself, the trustee takes the policy free from the interest of the beneficiary (45). The interests in life insurance policies always pass, even in the states that do not make them exempt, subject to the right of the insured bankrupt to pay the trustee the surrender value, if the policy has such a value, and thus redeem it from the creditors. This he is obligated to do within thirty days after the insurance company has stated to the trustee its cash surrender value (46). In states where such policies are exempt, such redemption is, of course, not necessary. § 61. Rights of action. The Act says that the trustee shall be vested with the title of the bankrupt to all rights of action arising upon contracts, or from the unlawful taking or detention of, or injury to, his property (47). As stated above (§59), the right to bring suit on commercial (44) In re Boardman, 103 Fed. 783. (45) Foxhever v. Order of Red Cross, 24 Ohio Circuit, 56 (not a bankruptcy case). (46) Sec. 70a (5). (47) Sec. 70a (6). BANKRUPTCY 257 paper, bonds, and open accounts passes to the trustee. This portion of the Act gives the trustee the right to sue upon contracts between the bankrupt and third persons when broken by the latter, by virtue of which breaches the bankrupt is entitled to damages. An instance arose where a coal mining company contracted to deliver to the bankrupt 5,000 tons of coal per month for a year. After deliveries became due, the company refused to carry out the contract, and the petition was filed after the time of the performance of the contract had expired. In such a case the trustee may sue the company for the damages. The sum to be recovered in such a case is not the fixed sum usual in cases of notes, bonds, or accounts, but con- sists of an unliquidated sum to be fixed by a jury or court, the amount depending upon general market conditions at the time the contract should have been performed. It has also been held that the trustee is vested with the right to sue for usurious interest. This was upon the ground, however, that the bankrupt could have transferred the right to sue to another by the law of the state where the usurious contract was made (48). It thus passed to the trustee rather under the leviable and transferable por- tion of section 70a than under this portion of it. An in- stance where a trustee was permitted to sue for injury to the bankrupt's property is given in a decision (49) where he maintained an action against the bankrupt's landlord for negligently allowing water to do injury to the premises the bankrupt had leased from him. The (48) First National Bank v. Lasater, 196 U. S. 115. (49) In re Becher Bros., 139 Fed. 366. 258 BANKEUPTCY damages the bankrupt could have recovered had the bank- ruptcy not intervened, the trustee has the right to recover. § 62. Source of trustee's title. The trustee, by the ex- press language of the Act, is vested with the bankrupt's title to all the interests so far discussed, which he takes under this section of the Act. This section (50) may even be construed to give to the trustee the bankrupt's title to property conveyed in fraud of creditors, as intimated in § 57, above. If the bankrupt had title to such property, no difficulty could be experienced. It seems the better view would be that section 70a purported to pass to the trustee only property the title to which was in the bank rupt at the time of the filing of the petition. This would appear to be the intent gathered from a reading of the entire section. It will be fully shown below (§§ 67-68) that it is not necessary to trace the trustee's title to fraudulent conveyances to the bankrupt as a source, but that the trustee's real source of title to such property, and to property that is the subject of a transfer void by the law of the state for failure to comply with its recording laws, is the bankrupt's creditors. As to any other property vested in the trustee by this section, he derives his title from the bankrupt. He takes it by reason of the fact that the bankrupt had it as his own, and as- serted or could assert a beneficial interest in it, whether in his possession or not, or whether the title was in him or anotlier for him. Such an actual title is clearly distin- guishable from the entire absence of title in the bankrupt occurring in fraudulent conveyances. In such convey- (50) Sec. 70a. BANKEUPTCY 259 ances lie neither has an actual title, nor is he in a position to assert any interest in them. Because of the entire absence in the bankrupt of any title or interest, it would seem this section could not be relied upon to transfer to the trustee any title to fraudulent conveyances, as it in terms only conveys the bankrupt's title. § 63. Property passes to trustee just as bankrupt held it. The general rule is that the trustee takes whatever interest the bankrupt had. Thus, if the latter 's land is subject to a mortgage, a vender's lien, or a tax or me- chanic's lien, the trustee takes it subject to that incum- brance. Furthermore, if the husband, seized of real es- tate, becomes bankrupt, the trustee takes the land sub- ject to the right of the wife to have dower in case the husband dies before she does (51); and, similarly, the husband keeps his right to curtesy in the land of the wife, when she becomes bankrupt and dies before he does. The rule is the same with reference to personal property. Thus, if a bankrupt makes his promissory note for five thousand dollars and delivers to the payee chattels in pledge to secure its payment, the trustee takes the chat- tels subject to the right of the pledgee to retain possession until the note has been paid (52), or to sell the chattels to make the amount thereof from the proceeds. If the proceeds realized on a sale of the property pledged ex- ceed his claim, the trustee is entitled to the excess. The general principle is well illustrated by a case where the bankrupt had purchased property at an execution sale. (51) In re McKenzie, 142 Fed. 383. (52) Yeatman v. Savings' Institution, 95 U. S. 764, 260 BANKEUPTCY By the state law, sales on execution were subject to re- demption for a fixed period after the sale, by the party whose property was sold or by the creditors who had an unsatisfied execution against him. The court held that the trustee of the execution purchaser took the property, sub- ject to the right of an execution creditor of the debtor whose property was involved to redeem from the sale (53). The rule here stated is, however, subject to the limita- tion hereafter to be discussed, that the trustee, in certain kinds of conveyances fraudulent as to creditors at com- mon law or under the Act, does not take subject to the lien of the transferees, and in such instances he does not take the property in the plight in which it was found at the time of the bankruptcy. From the preceding illustrations it appears that the trustee takes any title or interest, which he derives directly from the bankrupt, subject to any valid incumbrance, charge, or equity the latter has placed upon it, and holds it in the same plight and condition in which it was held by the bankrupt. § 64. Property not passing to trustee : Exemptions and expectancies. The most uniform exception to the rule that all property owned by the bankrupt passes to the trustee is that of property that is exempt (54). Again, mere expectancies do not pass to the trustee. Thus, a bank- rupt's son, who expects to be the heir of a parent owning valuable property, does not have any interest in his parent's property other than a possibility that when the (53) Pease v. Richie, 132 111. 647. (54) Lockwood v. Exchange Bank, 190 U. S. 294. BANKEUPTCY 261 parent dies he will get a part of it (55) . But such interest does not pass to the trustee. A bankrupt woman's chance of getting dower in her living husband's lands, in case she outlives him, does not pass. There is only a bare pos- sibility that she will ever get anything; she takes an in- terest only in case she outlives the husband. Interests of such a contingent character do not pass (56). §65. Same: Trust property. Property held in trust by the bankrupt for another, in which he has no beneficial interest, does not pass. Thus, a party bought property and transferred the title to another, he agreeing to hold it in trust for the purchaser's grandchildren. The trans- feree became bankrupt. For failure to reduce this agree- ment to writing the trust could not be enforced in favor of the grandchildren, and the trustee in bankruptcy claimed the property. The court held that he could not take it, as it was held in trust for the purchaser upon a failure of the trust in favor of the grandchildren (57). § 66. Same: After-acquired property. Property ac- quired by the bankrupt after filing a petition and before an adjudication belongs to the bankrupt, free from the claims of creditors existing when the petition was filed. So, property given to the bankrupt or inherited by him after the petition was filed, but before the adjudication, does not go to swell the assets of the trustee. And, again, property bought by him on credit after the proceedings are instituted does not pass to the trustee (58). It is not (55) Moth V. Frome, 1 Amb. 394. (56) In re Russell, 13 A. B. R. 24. (57) In re Davis, 7 A. B. R. 258. (58) In re Burka, 104 Fed. 326 (by way of argument). 262 BANKKUPTCY property which he could hy any means have transferred before the filing of the petition, nor is it such property as could have been taken at that time by any judicial process against him. Furthermore, the claim arising from such a purchase, having no existence at the time the petition was filed, is not provable, nor is it affected by the bank- rupt's subsequent discharge; only claims that are prov- able being dischargeable, as will be seen in Chapter VI, below. Section 3. Rights of Creditors Passing to Trustee. § 67. In general. The trustee becomes vested not only with the property the bankrupt had title to at the time the petition was filed, but he takes additional interests. Sec. 70a (4) purports to give to the trustee title to prop- erty the bankrupt had conveyed in fraud of creditors, and sec. 70a (5) to give him the property of the banl^rupt which might have been taken under judicial process issued against him. These provisions standing alone would give the trustee no interest in property conveyed by the bank- rupt in fraud of creditors, for the bankrupt retains no interest in such property. A debtor by making such a conveyance divests himself of all title, and, as between him and the transferee, the bankrupt's title is withdrawn as effectually as if the conveyance had been made in ab- solute good faith. If the trustee, therefore, were limited to the bankrupt's right in such property and he sought to reclaim it by virtue of sec. 70a (4) and (5) he would get nothing. § 68. Conveyances in fraud of creditors. Tlie Act is sufficiently extensive, however, to vest in him this right. BANKEUPTCY 263 He not only acquires tte right to set aside fraudulent conveyances made within four months before bankruptcy proceedings were instituted (59), but even those made at a more remote period, provided only that the right to set them aside is not barred by the statute of limitations (60) of the state where the transfers were made. The fact that the debtor has no title or interest in such property does not in any way affect the title and interest of the trustee therein. In the absence of bankruptcy proceed- ings, creditors may levy upon such property in the hands of the fraudulent transferee, and sell it to satisfy their claims. If it cannot be advantageously sold because of the cloud on the title caused by the fraudulent instrument of conveyance, they mr^y apply to a court of equity to remove such cloud (61). It is to the creditors' rights in fraudulent conveyances that the trustee succeeds (62), as well as to any title of the bankrupt. If this were not so, creditors would be prejudiced by bankruptcy proceed- ings rather than benefited (the latter being the object of the Act), because their hands would be tied by being sub- ject to injunction against bringing or continuing suits after bankruptcy, until a discharge has been granted, and thereafter subject to the plea of a discharge (63). If it can be shown by the trustee that the bankrupt gave away certain property, or made any other conveyance recognized as fraudulent against creditors by the state (59) Sec. 67e. (60) Sec. 70e. (61) Lumber Co. v. Thierault, 107 Wis. 627. (62) Bush V. Export Storage Co., 136 Fed. 918. (63) Sec. 11a. Vol. X— 10 2G4 BANKRUPTCY law (64), he acquires through the creditors the right to set aside such conveyances and to make the property con- veyed a part of the assets of the estate. § 69. Purchasers of property conveyed in fraud of cred- itors. The trustee is limited in his right to set aside fraudulent conveyances, very much as he is limited in the interest he takes by virtue of the title held by the bankrupt. It was seen above (§63) that the trustee takes the bankrupt's title to property, subject to any outstand- ing incumbrances, charges, or equities placed on it by the bankrupt. The first limitation is provided for in the Act, where it says that the trustee cannot set aside fraudulent conveyances as against those who have purchased the property from the transferee without notice or knowledge of the fraud (65). The second limitation is a result of judicial decision. The United States Supreme Court has laid down the doctrine that the trustee cannot reclaim a fraudulent conveyance, unless some creditor had, before the filing of the petition, actually seized the property which was the subject of the conveyance ; and other courts have held that it may be done then only to the extent of the judgment sought to be satisfied by the seizure. The discussion of the doctrine of this case appears below (§§73-74). § 70. Conveyances and liens not fraudulent but void as to creditors. By the laws of many states conveyances of property by a party, whether absolutely or merely by the creation of a lien as a security for a loan, are void as to (64) See §§21-31, above. (65) Sees. 67e and 70e. BANKEUPTCY 265 creditors, unless the instniment of conveyance has been recorded or the transferee has taken possession under it. Some statutes make such conveyances void as against creditors generally, interpreting the word ''creditors" to mean, however, only those who seize upon the property by attachment or execution or acquire a lien by judgment, before the instrument is recorded or possession taken under it. Others make them void merely as to subse- quent creditors. The Act provides that all conveyances of property, void as against the creditors by the laws of the state where situated, shall be void against them if the transferor is adjudicated a bankrupt (66). It also says that claims, which, for want of record, would not be valid liens as against the claims of creditors of the bankrupt, shall not be liens against his estate (67). § 71. Same: Illustrations. If a debtor convey land to another, and the latter fails to have the instrument of conveyance recorded or to take possession of the land, a judgment, attachment, or execution creditor may take the land to satisfy his claim, even against the transferee (68). Similarly, where a contractual vendor of chattels sells them to another, retaining title in himself until paid for by the vendee, if the state law requires such a contract to be recorded in order to protect the contractual vendor against the claims of the vendee's creditors, a failure to record subjects such property to the claims of the ven- dee's attachment or execution creditors. Sales under con- fee) Sec. e7e. (67) Sec. GTa. (68) First National Bank v. Staake, 202 U. S, 141, 266 BANKRUPTCY tracts of this character are known as ** conditional sales." See Sales in Volmne III of this work. If a chattel mort- gage is made and not recorded, where record is required to prevent the property being taken by creditors of the mortgagor, attachment and execution creditors may de- feat the interest of the mortgagee. §72. Same: Effect of act. It is this right which judg- ment, attachment, or execution creditors have by the laws of some states to take property that has been the subject of such an unrecorded conveyance, or a conveyance under which the transferee has not taken possession, to which the trustee in bankruptcy succeeds ; and he succeeds to it, not as a successor of the bankrupt, but as the successor of his creditors. The right is subject, however, as was the right to set aside fraudulent conveyances, to the limi- tation that, if the state law requires a judgment, attach- ment, or execution lien to defeat the interest of the trans- feree, the trustee cannot defeat such interest unless such a lien claimant existed when the petition was filed. The trustee, then, takes the rights that creditors had, if bank- ruptcy had not intervened, to realize upon conveyances fraudulent as to creditors at common law or under the statute of Elizabeth, conveyances void as to creditors for want of record, and also void for any other reason by the law of the state where made. § 73. York Manufacturing Co. v. Cassell. A leading case on the subject as to when a trustee is in a position to attack such unrecorded conveyances, and, on principle, even a conveyance in fraud of creditors, is that of York Manufacturing Co. v. Cassel (69). A vendor of machinery (69) 201 U. S. 344. BANKEUPTCY 267 sold it to a party imder a contract of conditional sale, wherein the vendor retained the right to remove and take back the property at the expiration of a fixed time, if it was not paid for. Such contracts by the law of the state (Ohio) were void as to creditors if not recorded. The vendee became bankrupt, before any creditor had levied on the machinery or put himself in a position to assert a lien against it. The trustee contended that the vendor could not hold the machinery against him, because the contract was void, not being recorded as required by law. The court held that, as no creditor had put himself in a position to avoid the transfer before bankruptcy inter- vened—had not, as it is said ' ' armed himself with process ' * —the trustee could assert only the interest of the bank- rupt, which was subject to the right of the vendor to re- move the machinery. § 74. Same : Results of this decision. Applying the prin- ciples the Supreme Court laid down in this case, it would seem necessary that creditors take all the steps essential to setting aside a fraudulent conveyance before bankruptcy intervened, in order to clothe the trustee with any right or power to do so. A deplorable consequence of this doctrine is to be noted. If no creditor, at the time bankruptcy proceedings begin, has procured a judgment against the debtor, had execution issued and returned unsatisfied (the ordinary prerequisite to be entitled to set aside a fraudulent conveyance), then the trustee cannot procure for creditors the advantage of setting aside a fraudulent conveyance. The creditors are prevented from bringing 268 BANKRUPTCY such suit, as the bankrupt may enjoin them (70). The result is that property which is the subject of a fraudu- lent conveyance is lost to creditors, merely because bank- ruptcy intervened. This result would seem contrary to the general spirit of the Act. In a similar way, if some creditor has not procured a judgment, attachment, or execution lien upon property conveyed without recording where it is required, creditors cannot increase the assets in the trustee's hands by the property in that condition; whereas, if bankruptcy had not intervened, they could take it to satisfy their claims. To add to what would seem a sufficiently deplorable re- sult, the courts have followed the logic of the doctrine to its limit, and have held that even where such a creditor had obtained a lien, only such part of the property can be taken by the trustee as will satisfy the claim on which the lien was procured (71). Section 4. Rights of Trustee Created by Law. § 75. Preferential transfers and legal liens. The trustee is vested with certain rights, which he neither derives as a direct successor to the bankrupt's interest, nor as a successor to the rights creditors are vested with in the absence of proceedings in bankruptcy. He is vested with these rights as a direct and immediate result of the law itself. The rights referred to are those of taking the property which was (a) the subject of a preferential transfer or payment (72), and (b) the subject of a lien (70) Sec. 11. (71) In re Economical Printing Co., 110 Fed. 514. (72) Sec. 60b. BANKRUPTCY 269 acquired through legal proceedings (73). A preference given by the voluntary act of the debtor or permitted by him was considered an innocent and harmless act at common law. To prevent the injustice resulting from such a practice is one of the chief objects of modern bank- ruptcy legislation. As the common law recognized no right in creditors to interfere with preferential transfers, the bankruptcy codes provide a new title for the trustee in order to make the prohibition against giving pref- erences effectual. Property subjected to liens, acquired by legal proceedings within four months of filing the peti- tion, is also freed from such liens by the operation of the bankruptcy law. Were this not the case the effect of pro- hibiting voluntary preferences would be lost, as eager creditors would invariably resort to the indirect method of getting what is in fact a preference, though not so called by the law, through the lien acquired in legal proceedings. In this connection it must be noted that liens acquired by legal proceedings may be dissolved in one of two ways : (1) If the lien claimant acquired his lien, or the pro- ceeds resulting from a sale of the property affected by it, with knowledge of the debtor's insolvency or reasonable cause to believe him so, it can be dissolved as a preference. (2) But even in a case where the claimant had no such knowledge or cause to believe the debtor was insolvent, the lien may still be dissolved, if it was acquired while the debtor was insolvent, without any further proof. § 76. Fundamental features of preferences. In oi'der that the bankruptcy law may be applied to property which (73) Sec. 67, c and f. 270 BANKEUPTCY it is asserted has been the subject of a preferential trans- fer, several things must concur. A conveyance of prop- erty or the payment of money must have been made, the result of which was a depletion of the debtor's estate and a giving to the preferred creditor an undue propor- tion of the property. It has been held that where a debtor gives a mortgage on certain property to secure the pay- ment of a pre-existing debt, in exchange for the release of a mortgage on other property, no preference can be established, as there has been a mere exchange of values with no reduction in the amount of the debtor's as- sets (74). By implication, then, there must be some loss to the creditors generally, a lessening of the assets to pay debts. The claim to satisfy or secure which the conveyance or payment is made must have been a pre-existing claim. For instance, to pay for property delivered or work done, concurrently with the receipt of the property or the doing of the work, is not giving a preference. A fair exchange of values can injure no one and is not a preference. And the payment of rent in advance is not giving a preference, as the right to occupy the premises is a valuable asset substituted for the conveyance (75). While these in- stances are explicable on the ground that there is an ex- change of values, the further element of a pre-existing debt is wanting, and they are therefore not preferences for that reason. If the obligation paid or secured by the debtor is not a (74) Sawyer v. Turpin, 91 U. S. 114. (75) lu re Lauge, 97 Fed. 197. BANKRUPTCY 271 provable claim, the nature of which will be examined in Chapter V, below, no preference arises. Thus, to pay a claim due another for a personal injury inflicted upon him is not giving a preference (76). Similarly, the pay- ment of a claim for libeling or slandering another would not create a preference. Furthermore, the debtor must have been insolvent, i. e., had less than sufficient property at a fair valuation to pay his debts when he made the alleged preferential transfer ; the conveyance must have been made within four months of the date of filing the petition; and the creditor pre- ferred must have known or had reasonable* cause to be- lieve the debtor intended to prefer him (77) . Unless these facts are shown a trustee will have failed to establish a preferential transfer. § 77. Insolvency. Under the general state insolvency and bankruptcy laws, as under the prior Federal acts, the term ''insolvency" meant an inability of the debtor to pay his debts as they became due, entirely regardless of the relation between the value of his property and the amount of his debts. In times of financial stringency even the wealthiest and most prosperous business men would be insolvent with such a test applied; the majority of business men must have found themselves insolvent at some time or other during the financial panics of 1893 and of 1907, had they been subjected i > such a test of insol- vency. It was this test of insolvency which was one of the grounds of attack upon the law of 1867 and which ul- timately caused its repeal. (76) In re Yates, 114 Fed. 365. (77) Sec. 60, a and b. 272 BANKRUPTCY Under the present Act a person shall be deemed in- solvent, whenever the aggregate of his property, exclusive of any that has been made the subject of a fraudulent conveyance, shall not, at a fair valuation, be sufficient in amount to pay his debts (78). In this connection it is worthy of note that this definition of insolvency differs also from that applied at common law, independent of insolvency or bankruptcy acts, in that it confines the courts, in making an estimate of the liabilities, to debts, which are none other under the Act than provable claims (79), while the common law test permitted them to add to the claims that are known as debts, many that were not recognized as such (§32, above). What claims are provable, will be treated in Chapter V, below. Suffice it to say at this place that contingent claims that can be counted at common law, and claims for torts, where the wrong cannot be waived and the claims presented as on contract, are not counted; but only such as are strictly provable claims under the Act. Such claims are not in- cluded because they are not provable (80), but, at common law they were included. § 78. Property included and ascertainment of value. From the express provision of the Act, the debtor is not to have the advantage of adding property he has fraudu- lently concealed or conveyed in order to maintain his solvency. This does not, however, exclude from the es- timate of the amount of his property any that he has con- veyed as a preference. By express decision of tlie courts (V«) Sec. la (15). (79) Sec. l;i (11). (SO) Coding v. Roscenthal, 180 Mass. 43; In re Yates, 114 Fed. 3G5. BANKRUPTCY 273 he may include property that is exempt (81), although in the end such property may not be taken by creditors to satisfy their claims. The Act makes no reference to exempt property when defining insolvency, and, because it may be voluntarily used to pay debts, it is to be included in determining solvency. In ascertaining the value of the property the Act says its fair value is to be taken, and under ordinary circum- stances this would mean the market value. In the case of a going concern, its value is as it existed at the time a preference was made or lien acquired by legal proceed- ings, and not its value as ascertained by a forced sale under an execution, or even after a levy was made, which would have a tendency to destroy its value (82). § 79. Debtor's intent to prefer. It was stated above (§ 76) that an essential element in establishing a prefer- ence was the necessity of showing that the party receiv- ing the alleged preference knew or had reasonable cause to believe it was intended by the debtor to give a prefer- ence (83). The question naturally arises, whether it is necessary for the trustee in an action to avoid a prefer- ence to show that the debtor had the actual intent to pre- fer, or whether it is sufficient merely to show that the claimant had reasonable cause to believe it was intended to give a preference. In a well considered case (84), where the trial judge instructed the jury that the trustee was bound to show the debtor 's intent, the reviewing court re- (81) In re Hines, 144 Fed. 142. (82) Chicago Title & Trust Co. v. Roebling's Sons Co., 170 Fed. 71. (83) Sec. 60 (b). (84) Benedict v. Deshel, 177 N. Y. 1. 274 BANKEUPTCY versed tlie decision of the trial court on the ground that the instruction was erroneous. Thus has been established a strong precedent for the view that the debtor's intent is immaterial, and such a view would seem to be correct from the plain language of the Act. § 80. Liens resulting from legal proceedings. Liens that follow the recovery of a judgment against a debtor are in strictness preferences (85) entered of record within four months of bankniptcy when the debtor is insolvent ; but, unless this acquisition was accompanied by the mental attitude of the claimant found to be requisite to set aside a preference, the i3roi3erty cannot be reached by the trustee on that theory. This Idnd of a lien acquired by legal pro- ceedings does not cover all classes of liens, and it is the property covered by liens acquired by legal proceedings that are not strictly preferences, that the trustee takes under this head. To illustrate, a creditor acquires a judg- ment more than four months before the filing of the peti- tion, and procures an execution lien on chattels, or an equitable lien resulting from a creditor's bill within four months before bankruptcy ; the property covered by such lien is not preferentially transferred, yet it is dissolved and the property passes to the trustee from the claim- ant (86). Insolvency at the time the lien attached is requisite as in ease of preferences, but knowledge of the debtor's insolvency, or reasonable cause to believe him in- solvent, is not essential as it was in the case of prefer- ences. (85) Sec. eOa. (86) Sec. 67b. BANKEUPTCY 275 § 81. Same: Additional illustrations. The same rule is applicable to attachments made upon property before procuring judgment. Such a lien is also dissolved by bankruptcy (87). If a judgment creditor procures a judgment lien on the debtor's land, such lien will be nulli- fied (88). Even a lien acquired by a garnishment pro- ceeding, wherein property or money of the debtor in the hands of third parties is subjected to a lien, is dis- solved (89). The Act is effective in nullifying the lien acquired by almost all receivership proceedings and by ordinary creditors' bills (90). § 82. Liens not resulting from legal proceedings. Not all liens acquired within four months, while the debtor is insolvent, can be dissolved by the trustee; either on the theory of preferences or on a theory of liens acquired by legal proceedings. Some of the liens that are not af- fected, as shown by decided cases, are a sub-contractor's lien (91), a livery-man's lien (92), a landlord's lien for rent (93), a material man's lien (94), and an artisan's lien ( 95 ) . Other similar liens which should not be affected for the same reason are innkeepers ' liens, carriers ' liens, and warehousemen's liens. These liens, not being acquired (87) Bear v. Chose, 90 Fed. 920. (88) In re Tupper, 163 Fed. 766 (by inference) . (89) Klipstein v. Allen Miles Co., 130 Fed. 385, 389-90 (semble). Con- tra : London Guaranty and Accident Co. v. Mossness, 108 111. App. 440. (90) Metcalf v. Barker, 187 U. S. 165. (91) In re Emslie, 102 Fed. 291. (92) In re Mero, 128 Fed. 630 (semble). (93) In re Mitchell, 116 Fed. 87, 98 (semble). (94) In re Emslie, 102 Fed. 291. (95) In re Lowensohn, 4 A. B. R. 79 (work done on garments by tailor for manufacturer). 276 BANKEUPTCY by legal proceedings, but by a possession of the prop- erty or by notice and recording of claims as acquired by statute, they are not affected by bankruptcy proceedings ; and the trustee cannot take the property free from such liens, as he can property to which liens have become at- tached by virtue of legal proceedings. As seen from the general nature of these liens, they are of such a character that as a rule the consideration, to secure which the lien is given, is advanced simultaneously with the acquisition of the lien, or practically so. They are thus exempt from the field of preferences, because there was a transfer for a present debt. BANKRUPTCY 277 CHAPTER V . ^ PROVABLE CLAIMS. § 83. Historical basis of provability. As stated at the outset, historically only traders and merchants could be- come bankrupts, and the early laws were passed for the protection and better security of these classes as against their debtors. The claims that were most commonly in- volved and presented for allowance against a bankrupt must have been those of the merchant and trading classes, consisting of fixed liabilities based on contracts or written documents, and the statement is ventured that instances were rare when claims arising from some injury or wrong not based upon contract were presented. § 84. Importance of subject. The subject of provable claims is of importance in three aspects : (a) If a party has a provable claim he may join in a petition to have a debtor adjudicated a bankrupt. Mention of this fact was made in connection with the subject of who may be petitioning creditors, and it was there stated that only those having provable claims could join in a petition (§ 16, above) . (b) The party having a provable claim may also cast a vote for a trustee in bankruptcy, as stated in con- nection with that subject (§44, above), (c) The pur- pose and object of giving to a claimant the two preceding rights, founded on the fact that he has a provable claim. 278 BANKRUPTCY is to give him a better protection of his claim, to give him a power, which, if exercised, will result in procuring the only thing for which the rights are given— a dividend from a fund realized by sale of the assets. So the third important aspect of a provable claim is to allow participa- tion in the proceeds of the estate. § 85. When claims must exist to be provable. Every bankruptcy law fixes some point of time separating claims into those that are provable and those that are not— those that may participate in the administration of the estate and in its fruits, and those that may not. The present law has fixed the date of filing the petition as the time of cleavage. All claims, if not otherwise contraven- ing provability, that arose and became fixed liabilities, absolutely owing, before the filing of the petition, are provable; claims not arising and becoming fixed liabili- ties, until after that, are not by the Act claims that are entitled to be proved. This was squarely decided in a case where an attorney performed legal services for a bankrupt, after the petition was filed and before the ad- judication, and the court held that his claim for services, because it arose after the filing of the petition, was not provable, although otherwise meeting the requirements of a provable claim (1). It is essential that the claim be a fixed liability before the petition is filed to be provable. § 86. Claims based on written documents. As a gen- eral rule, claims based upon and debts evidenced by formal documents are provable in bankruptcy. All claims of that character that are fixed liabilities absolutely (1) Re Burka, 104 Fed. 326. BANKRUPTCY 279 owing, even though not due to be paid until after the pro- ceedings were begun, are provable (2). The principle is well illustrated by an English case, which shows that the law is the same in that country. A party agreed by in- strument in writing that six months after his death his executors should pay the claimant three thousand pounds. Later the obligor became bankrupt. Upon the question arising whether the promise to pay could be proved, the court decided it could (3). Included in this class are claims on promissory notes, bills of exchange, checks, bonds, written contracts, deeds, covenants, judgments, and the like. If a bankrupt owes a thousand dollars on a note not due at the time he became bankrupt, such a claim not only may, but must be proved, if the holder ever ex- pects to realize anything from it. With certain excep- tions to be noted hereafter (§ 94, below), claims based on judgments that existed at the time the petition was filed are provable even though based upon a claim that could not have been proven had it not been merged in a judgment. § 87. Claims based on express or implied contracts. Another extensive class of provable claims is that based upon express or implied contracts (4). These claims, though based on contracts, as were many in the preceding class, are not based on written contracts but upon verbal or implied agreements. In this connection may be noticed three forms of contractual obligations that are provable : (2) Sec. 63a (1). (3) Barnett v. King [1891] 1 Ch. 4. (4) Sec. 63a (4). Vol. X— 20 280 BANKEUPTCY (a) Those based on express, verbal or oral agreements; (b) those based upon undertakings implied from the acts of the parties; and (c) those that are implied by law. § 88. Express verbal agreements. Any obligation to pay money for goods sold, money loaned, or labor per- formed, upon an express verbal agreement, if not objec- tionable on the ground that it is verbal and not written, and if owing at the time the petition is filed, is provable. A merchant agrees verbally to give a party a hundred dollars a month for clerking in his store. If after the work has been done the merchant becomes bankrupt, the clerk may prove his claim in the proceedings. A jobber sells a merchant goods on open account from time to time, on orders given him by the latter. The jobber's claim is provable. § 89. Undertakings implied from acts of parties. Claims that arise from implied contracts may be deemed to be of two forms. The first form is where the implied obligation arises from the acts of the parties showing their intentions. A merchant hires a man to unload a carload of flour for ten dollars. He does so and is paid. T(he next week the man sees another carload to be un- loaded ; he unloads it, to the knowledge of the owner, who did not expressly authorize him to do so but said nothing. In such a case the owner's action would be evidence of an implied agreement to pay the laborer; his claim is provable. § 90. Undertakings implied by law. Contracts implied by law is the second form. Such a contract is only raised where a party procures the property of another, through BANKKUPTCY 281 a wrong of such a character that he could be held liable, not on contract alone, but in an action of tort as well. Thus, a party steals another's horse and thereby adds to his property. If the thief becomes bankrupt, the claimant has two forms of remedy, one in tort, the other on the contract implied in law. See Quasi-Contracts, Chapter II, in Volume I. Claims having this dual aspect may be proved, although sounding in tort (5). A very similar case is where a jobber sells a retailer goods, on a fraudu- lent representation of the latter as to his financial stand- ing. The jobber may hold the retailer liable in an action of tort for deceit, or he may hold him liable on the con- tract for the goods. In such a case, where the claimant has two such claims and may waive the tort claim and proceed upon his contractual right, he has a provable claim (6) . A bankrupt may have received money or prop- erty from another by false representations or tricks of various kinds, other than the one just mentioned of mak- ing a false financial statement. Where the result of such fraud is the acquisition by the bankrupt of property or wealth which results in enriching him, the claimant may waive the tort claim and proceed upon his contractual claim, which is provable. Such a claim is discharged whether proved or not (7). § 91. Unliquidated claims. Unliquidated claims are those that have not been reduced to certainty as to the amount. The fact that a claim on a broken contract has (5) Crawford v. Burke. 195 U. S. 176. (6) Tindle v. Birkett, 205 U. S. 183. (7) Crawford v. Burke, note 5, above. 282 BANKRUPTCY not become fixed in amount does not prevent its being proved if it is otherwise provable. The amount of divi- dend to be paid on an unliquidated claim cannot be ascer- tained until it is reduced to a certainty. This process of reduction is in the hands of the court (8), which may authorize its liquidation in the court of bankruptcy, or order it to be liquidated in some other court. After liquidation, it participates in the dividends as other claims. § 92. Same: Illustrations. A merchant agrees to buy a carload of flour a week, for ten weeks, from a milling company ; he refuses to take the first five cars, and when the sixth and subsequent cars are deliverable he is a bankrupt. In such a case, the damages for the failure to accept the first five cars are not liquidated and can only be liquidated by trial, yet they are provable. Further- more, the damages for the failure to accept the remaining five cars after bankruptcy are provable (9). Similarly, if the milling company had on its part failed to perform, and had become bankrupt after the time for the perform- ance of a part of the contract had transpired, the pur- chaser would have a provable claim for the entire damages (10). It has been held by the courts that, where a party agreed to retain another in his employ for a cer- tain period, and, before the term expired, discharged him or made it impossible for him to continue, and then be- came bankrupt, the employee had a provable claim, even though the amount would have to be ascertained by trial, (8) Sec. 63b. (9) In re Saxton Furnace Co., 142 Fed. 203. (10) In re Manhattan Ice Co., 114 Fed. 400. BANKEUPTCY 283 and though the term did not expire until after the bank- ruptcy inter^^ened (11). A breach of a contract to marry gives rise to damages, the amount varjdng in different cases depending upon the nature of the circumstances. Yet, such a claim is provable, being a claim based on con- tract (12). § 93. Unprovable claims. To assist in delimiting the claims that are provable, it will be useful to notice some of the more important claims that are not provable. It should be here noted that, if not provable, as a rule the claim is not dischargeable— a compensation the claimant gets for being compelled to abstain from pro rating with other claimants. Since not discharged, the bankrupt may be sued upon them, and his property subsequently ac- quired may be taken to satisfy the claim (13). The sub- ject of dischargability of claims will be fully treated in the next chapter. § 94. Certain judgments unprovable. As stated (§86), judgments are generally provable. This is true even though the claim that is merged in the judgment is not a provable claim. Thus, a judgment for a wrong to another's person, such as a judgment for assault and battery, is provable; although the claim for the assault and battery was not provable before being reduced to judgment. But certain judgments are not provable. Among these are judgments, more accurately called de- crees, for alimony (14), or for the support of wife and (11) In re Silverman Bros., 101 Fed. 219. (12) In re Fife, 109 Fed. 880. (13) Coding v. Roscenthal, ISO Mass. 43. (14) Audubon v. Shufeldt, 181 U. S. 575. 284 BANKEUPTCY children, and judgments imposing fines (15) for criminal wrongs. Tlie reason for making such judgments excep- tions is not readily ascertainable, but that such exceptions exist is firmly decided. It would seem that they ought to be provable as any judgment, but such fact should have no effect on the question of discharge. § 95. Torts not resulting in unjust enrichment. A large class of claims recognized by the law is based upon wrongs to the person or property of another. Such wrongs do not, as a rule, result in enriching the wrong-doer ; and, as they do not and so are not capable of being reduced to the proper form, they cannot be proved. It is only where a wrong results in enriching the wrongdoer that the claimant may elect to pursue him as on contract. Such wrongs as slander, libel, assault and battery (16), wilful or negligent injury to the person, and wilful or negligent injury of property are not recognized in the law as having the dual aspect of a tort and a contract (quasi-contract), and so they are not provable. § 96. Contingent claims. When proceedings in bank- ruptcy are instituted, some claims are contingent, i. e., there is an uncertainty as to whether any fixed liability will ever arise on them. Thus, a claim for rent to accrue in the future on a written lease is not provable (17), be- cause of the contingent character of the claim, it not being absolutely owing at the time the petition was filed. If the landlord is evicted by some one wdth a better title, no (15) In re Moore, 111 Fed. 145. (1(J) In re Brinckmann, 103 Fed. G5. (17) Watson v. Merrill, 136 Fed. 359. BANKEUPTCY 285 rent will accrue; or, if the landlord ejects the tenant wrongfully, or reenters because the latter has broken some provison in the lease which was the basis for such renting, the landlord would have no claim against the tenant, and therefore no provable claim in bankruptcy. It is because the claim for future rent is thus deemed con- tingent in law, that courts do not permit it to be proved. On the other hand, however, any rent that has become absolutely owing by having become due before filing the petition is provable (18), and this is the rule even though the occupancy is to occur subsequent to the date the rent becomes due. As the claim for future rent is not prov- able, it is not discharged; and the bankrupt may be held liable for it out of his future acquisitions (19). Again, if a person sells stock in a corporation to another, guar- anteeing that it will draw a dividend of five per cent, within a year, and before the year ends the guarantor becomes bankrupt, the party guaranteed has no prov- able claim (20), as the question whether any duty to pay would ever become fixed was unknown at the date of bankruptcy. Tliese contingent claims, like the others mentioned, are not dischargeable, and the bankrupt's future property may be taker to satisfy them. §97. Same: Secondary liabilities upon commercial pape"**. The most noteworthy exception to the rule that contingent claims are not provable is the case of the holder of a note, upon which the bankrupt is guarantor or indorser. In either case he is only obliged to pay at the (18) In re Mitchell. 116 Fed. 87. (19) Coding v. Roscenthal, ISO Mass, 43. (20) Re Pettingill. 137 Fed. 133. 286 BANKRUPTCY maturity of the instrument if the party primarily liable does not pay ; and, as indorser, he is under no obligation to pay until after a demand of the maker on the date of maturity and notice to the indorser of this fact. With such a limitation upon the duty to pay, the claim of the holder is obviously contingent, yet the courts hold that such a claim is provable (21). But they have generally refused to recognize any contingent claim as provable, ex- cept the claim of the holder of a note against its guarantor or indorser who have become bankrupt. § 98. Claims to which "bankrupt h£is defense. Although a claim as asserted may be prima facie provable, it does not follow that it will be allowed. It has been seen that the trustee becomes the successor to any title to property the bankrupt had. In a similar way he becomes the suc- cessor to all the defenses the bankrupt had to protect that property. Any defense the bankrupt had to a provable claim may be asserted by the trustee— in fact it is his duty to assert it (22). Thus, the trustee is in duty bound to assert the defense that the claim should not be allowed because not in writing (23), if the statute of frauds re- quires a writing ; and, on pr iiciple, he ought to set up the defense that the claim was outlawed. In a very similar manner, a claim asserted on a contract should be defeated by a defense of a breach of the contract by the claimant, if such breach by him exists. Creditors may also object (21) Moch V. Market Street Bank, 107 Fed. 897. (22) In re Wooten, 118 Fed, 670. (23) Note 22. BANKRUPTCY 287 to the allowance of claims in order to protect their own (24). § 99. Priority of claims. Aside from the expenses of administration, which are made prior to all others, claims are entitled to priority in the following order (25) : (1) Taxes due to the United States, state, county, district, or municipality. (2) Wages due to workmen, clerks, or servants, which have been earned within three months be- fore bankruptcy, not to exceed three hundred dollars to each claimant. (3) Claimants who are given priority by the laws of the state where the proceedings are pending. (24) Sec. 57c; In re Lorillard, 107 Fed. 677 (where they did so). (25) Bees. 64, a and b. 288 BANKRUPTCY CHAPTER VI. DISCHARGE. Section 1. In General. § 100. Term explained. By a discharge in bankruptcy is meant the release of a bankrupt debtor from the further duty to pay the debt or obligation. If a bankrupt's estate pays no dividend and he procures a discharge, he owes no duty as a matter of law to pay any part of the claim. If his estate pays a dividend of fifty cents on the dollar and he procures a discharge, he ©wes no duty to pay the por- tion remaining unsatisfied. § 101. Questions involved. In considering the dis- charge of a bankrupt two distinct matters should be noted. First, assuming a bankrupt has procured a discharge, what debts and obligations are affected by it so that the debtor owes no further duty to pay, and what are not affected thereby! The determination of these questions rests upon the provisions of the law under which the discharge is procured. Second, upon what grounds may creditors prevent a bankrupt from procuring any dis- charge whatsoever? There are a number of these con- sidered below (§§ 112-20). These matters will be treated in this order. § 102. Historical statement. The earliest English bank- ruptcy law contained no provision concerning a discharge. BANKRUPTCY 289 The debtor was obliged to give up his property without receiving any benefit whatever from it ; he was burdened with debts, and hampered by his creditors, who took every dollar he acquired as fast as he acquired it to satisfy their claims. Under such a handicap the prospects were only slight of the bankrupt's ever again being an active and energetic factor in a commercial or a business way, but rather favorable toward his being a charge upon the com- munity in the course of time. The short sightedness of such a policy was realized in less than two centuries in England, and since then nearly all the bankruptcy systems have provisions for the discharge of a debtor. The early notion of having no discharge feature at all was sup- planted by the idea that it must be made a difficult matter to get a discharge. This characteristic was especially pro- nounced in the national act of 1867. § 103. Liberality of present Act toward discharges. The legislation of 1898, however, takes a more liberal view and one more consonant with political and social economy. Instead of many trifling causes for preventing a bankrupt's discharge, it contains comparatively few and those adapted to assist the trustee and creditors in fully discovering the assets. Thus, creditors may oppose a discharge on the ground that a bankrupt, for the pur- pose of concealing his financial condition, failed to keep books of account (1), or, at any time within four months before the filing of the petition, transferred, removed, destroyed, or concealed any of his property, for the pur- (1) Sec. 14b (2). 290 BANKRUPTCY pose of defrauding his creditors (2), or refused to obey any lawful order of tlie court of bankruptcy (3), etc. A fuller statement will be given in subsequent subsections. This liberality is prompted by tbe thought that it is better for the business community th.^i a debtor who has not been too dishonest be relieved from his burdens and permitted to go, unhampered and unfettered, with renewed ambi- tions, free to add his energies to the general progress, than to keep him a lifelong slave to his creditors. A greater social gain will result from again having him added to the self-supporting wealth-producing class, than to have him entirely absent therefrom, a possible charge upon the community, paying the penalty of having doue some trifling wrong, sufficient, however, under the unwise provisions of the law, to prevent his discharge. § 104. Who may apply for a discharge and when? Any person, natural or artificial, may apply for a discharge. Not even corporations (4) are excepted from the right to apply for and receive a discharge, if no reasons are shown by objecting creditors to cause the court to deny it, although under the act of 1867 a corporation could not procure a discharge. The application may be made at any time after one month subsequent to the adjudication, and within twelve months thereafter (5). The action of the court is procured by the bankrupt filing a petition, setting out that the bankrupt was duly adjudicated, that he had surrendered all of his property and complied with (2) Sec. 14b (4). (3) Sec. 14b (0). (4) In re Marshall Paper Co., 102 Fed. 872. (5) Sec. 14a. BANKRUPTCY 291 all the requirements of the law and of the orders of the court, and praying for a discharge of all his debts except those exempted by law. § 105. Nature of proceeding. As a matter of practice in bankruptcy, the bankrupt makes his application to the court for a discharge, while the court is in the act, through the trustee, of collecting the assets, settling the claims, selling the property, and paying the dividends. "With these administrative matters, however, the application for the hearing or the discharge has no necessary connec- tion. It is a unique and independent proceeding, in which the bankrupt challenges his creditors, who reside in the state or jurisdiction of the bankruptcy court or who have proved their claims in bankruptcy, to show by what are known as objections filed to his application why he should not be freed from further obligation to meet his debts. The evidence to sustain the objection is heard by the court, and it determines whether a discharge should be granted or not. If a discharge is granted, it is given in general terms, and states that debts that are by law excepted from the operation of the discharge are not affected. To determine whether or not a particular debt is excepted, an independent proceeding, based on the theory that the debt was not discharged, is necessary. In this action, the bankrupt is obliged to plead his bankruptcy and test the question of the dischargeability of the claim (6). Section 2. Debts Affected. § 106. Debts that are discharged. As a general rule all provable debts are discharged (7). To determine what (6) Hellman v. Goldstone, 161 Fed. 913. (7) Sec. 17a. 292 BANKRUPTCY debts are provable, a reference should be made to the statement of the law on that subject heretofore given (8). In general all claims constituting a fixed liability evi- denced by judgements or written instruments are dis- chargeable, as are all claims based on open accounts and on contracts expressed or implied (9). These are the most important provable claims, the only others mentioned by the Act being certain costs of court in litigation pending at the date of bankruptcy, of little importance. § 107. Debts not discharged. The converse of the rule just stated holds true also, i. e., debts that are not prov- able are not discharged. As has been stated (§§93-96), contingent claims, claims based on torts of such a char- acter that the tort cannot be waived and the claim asserted in contract, decrees for alimony, and judgments for fines and penalties are not provable, and as a consequence are not dischargeable. It does not follow, however, that all provable claims are discharged, for the law expressly provides that cer- tain claims shall not be discharged ; and, as a consequence, even if provable, they are not affected by the discharge. Thus, to mention a few of that class, liabilities for taxes, for obtaining property by false pretenses or false repre- sentations, or obligations created by an officer or fiduciary in embezzling or misappropriating property held in trust by him are not discharged (10). § 108. Same: Illustrations. In Katzenstein v. Reid (8) See Chapter V, above. (9) Sec. 03a. (10) Sec. 17a. BANKRUPTCY 293 (11) a merchant bought goods of a dealer upon a mis- representation as to his financial condition. After he had procured a discharge the vendor sued him. He pleaded his discharge. The court held that, his debt hav- ing arisen out of a transaction whereby he procured prop- erty by false representation, it was not discharged. This case also passed upon the question whether the fact that the defrauded party had proved his claim in the bank- ruptcy proceedings precluded him from making any claim after the discharge, based on the fraudulent transaction. The court said: **The statute does not condition the right of a creditor to sue and establish his claim against a discharged bankrupt on the fact that he did not prove up his claim before the referee and receive dividends ; but it declares that certain debts are not released by the dis- charge, and the doing of these things will not estop him from prosecuting his suit" (12). It has also been held that making proof of the claim with the bankruptcy court, based on the theory of a contractual claim, did not waive the right the defrauded creditor had to proceed in an action based upon the fraud despite the discharge (13). And the same rule has been laid down in cases where the discharge was granted under the law of 1867 (14). § 109. Provable claims discharged whether proved or not. Creditors at times, being ill advised, fail to prove their claims and to participate in the distribution of the proceeds, thinking that thereby they will not be prejudiced (11) 10 A. B. R. 746 (Tex.). (12) Ihid, 750. (13) Frey v. Torrey, 70 App. Div. 160; affirmed in 175 N. Y, 177. (14) McBean v. Fox, 1 111. App. 177. 294 BANKRUPTCY in their rights to make demand upon the bankrupt when he has acquired more projierty. This is only true at times when the national act is not in force and a discharge is sought under the state law. In such circumstances, if a creditor is a citizen of another state and does not prove his claim against the bankrupt, his claim is not affected. If he is a citizen of the state, however, and does not prove his claim, it is discharged anyway (15). The same holds true under the national Act as to citizens residing in the United States, and the test is not whether the debt was actually proved but whether it was susceptible of being proved (16). § 110. Revival of discharged debt. The nature of a dis- charge is such that it is merely effective for the purpose of defending against a suit based on a discharged claim. If the discharge is not interposed in such case, the judg- ment is valid and cannot be reversed. The advantage of a discharge may thus be waived by failure to plead it when sued upon the claim. It may also be waived by a new promise to pay, made in plain and unmistakable words, to which the creditor accedes (17). After such a promise, a suit may be maintained on the claim as if no discharge had been procured. Section- 3. Opposition to Discharge. § 111. Who may oppose a discharge? In the order of development after determining what claims are and what are not dischargeable, in case a discharge has been (15) Baldwin v. Hale, 1 Wall. 223. (10) Crawford v. Burke, 195 U. S. 176. (17) International Harvester Co. v. Lyman, 10 A. B. R. 450. BANKRUPTCY 295 granted it must be determined under what circumstances a discharge may be entirely denied the bankrupt. It was noted (18) that the last bankruptcy act made it an easy matter for creditors to oppose a discharge and succeed in depriving the bankrupt of it, despite the fact that he had gone through the process of surrendering his prop- erty. The present Act provides methods of depriving a bankrupt of a discharge also, but the ease with which to deny it does not appear so prominently as in the prior law. The law provides that parties in interest (19) may oppose an application for a discharge. This is done by filing specifications of objections, based upon the grounds the act gives for opposing a discharge (20). The ''parties in interest" referred to are creditors, quite obviously, those having provable and dischargeable claims. This is the rule, even though the creditor does not prove his claim and seek to participate in the dividends (21). On the other hand, one holding a claim that is not provable and therefore not dischargeable, cannot oppose the discharge (22) ; nor can the trustee, it would seem, as he is not interested in the question of the discharge but merely in the collection and distribution of the assets. § 112. Grounds of opposition. The grounds of opposi- tion are several and deserve separate treatment. In gen- eral the grounds are of such a character as to have a tendency to coerce the bankrupt to surrender his prop- (18) See § 102, above. (19) Sec. 14b. (20) Sec. 14b. (21) In re Bernberg, 121 Fed. 942. (22) In re Servis, 140 Fed. 242. Vol . X-2 1 296 BANKEUPTCY erty fully and completely to his creditors. Of such a nature are the portions of the law providing that the bankrupt shall not have a discharge, if he has concealed from his trustee property belonging to his estate ; made a false oath in any bankruptcy proceeding; destroyed, con- cealed, or failed to keep books of account from which his financial condition could be ascertained; transferred, re- moved, destroyed, or concealed property from his credi- tors at any time within four months of the bankruptcy with intent to hinder, delay, or defraud his creditors ; or refused to obey any lawful order of, or to answer any material question approved by the court (23). To impose a penalty for the violation of such provisions has a ten- dency to coerce the bankrupt to make a complete dis- closure of all his affairs after bankruptcy, and to keep and preserve complete accounts of them before. The basis of these grounds is readily discernible. But the basis of an opposition on the ground that the bankrupt procured property from a creditor upon a materially false statement in writing made at some remote time before, and that he had been granted a discharge in a voluntary proceeding within six years, are not so easily discernible ; although there seems good policy in denying a debtor the privilege of procuring a discharge too often. While this does not debar him from going into bankruptcy more fre- quently than once in six years and having his property distributed by the court, it does prevent his doing so with the expectation of procuring the usual benefit and favor of a discharge upon having done so. (23) Sec. 14b. BANKRUPTCY 297 § 113. Commission of offense punishable by Act. The Act has made it a criminal offense, punishable by im- prisonment for two years, for a person knowingly and fraudulently to conceal from his trustee, while a bank- rupt or after his discharge, any property belonging to his estate in bankruptcy, or to make a false oath or ac- count, in or in relation to any proceeding in bank- ruptcy (24). The Act says that parties in interest may also oppose a bankrupt's discharge on the ground that he has committed an offense punishable under its pro- visions (25). The only offenses for which a bankrupt is punishable are the offenses just mentioned, commonly known as concealing assets and making a false oath. § 114. Conceahnent of assets. The bankrupt can be deprived of a discharge on this ground, only in the event that it is shown by the evidence that he has knowingly and fraudulently concealed assets (26). The proceeding is analogous to a criminal one and an intent to conceal must be shown. The concealment must be from the trus- tee, either before or after a discharge. A concealment in a case where no trustee was appointed would not be a basis for opposition to a discharge (27). § 115. MaJdng false oaths. In order successfully to oppose a discharge on this ground the opponent must show, as in case of concealment of assets, that the bank- rupt knowingly and fraudulently made a false oath or ac- count. The false oath may consist of false testimony (24) Sec. 29b. (25) Sec. 14b. (26) In re Froeder. 150 Fed. 710. <27) In re Toothaker Bros., 128 Fed. 187. 298 BANKRUPTCY given on an examination made by the trustee to discover assets (28). And it would seem that false swearing in the hearing on the creditor's petition for an adjudication would be equally effective to bar a discharge. The false oath may be contained in the schedule of the bankrupt's assets, by either omitting to state truthfully all his prop- erty, or by making a false statement with reference to the debts he owes, or to whom owing, with the expectation of deriving some personal advantage. In a case where the bankrupt failed to schedule property from which he had realized substantial benefits as if he were the owner, but to which he claimed he had no title, the court held he made a false oath (29). § 116. Destroying, concealing, or failing to keep books of account. This basis of opposition is rather simple. The Act requires that the destruction, concealing, or failure to keep books of account must be done with the intent to conceal his financial condition (30). And in a case where it was shown that the bankrupt omitted to state in his books what his indebtedness was, but where the evidence did not show this omission was made intentionally, the court refused to bar a discharge (31). § 117. Fraudulent transfers made within four months of bankruptcy. A bankrupt's discharge may be denied, if it is shown that he has, at any time within four months preceding the filing of the petition, transferred, removed, destroyed or concealed, or permitted to be removed, de- (28) Wechsler v. U. S., 19 A. B. R. 1. (29) In re Gailey, 127 Fed. 538. (30) Sec. 14b (2). (31) In re Brice, 102 Fed. 114. BANKEUPTCY 299 stroyed, or concealed any of liis property with intent to hinder, delay, and defraud his creditors (32). This pro- vision was not added to the law until 1903, and as a con- sequence few decisions have arisen under it. This ground of opposition is the complement of the one permitting op- position on the ground that the bankrupt concealed prop- erty from his trustee. The former consists of conceal- ment before the bankruptcy, and the latter thereafter after a trustee has been appointed. The concealment un- der the former is sufficient if a mere concealment is shown; under the latter ground of opposition it must, however, be shown that the property is still recoverable. The mere fact of concealment from the trustee is iiisuf- ficient (33) ; it must be a concealment of property belong- ing to the estate. § 118. Procuring property on credit upon a false writ- ten statement. As stated above (34), it is not any easy matter to discern the basis of permitting a creditor, from whom the bankrupt procured property on credit by a ma- terially false statement in writing (35), to oppose a bank- rupt's getting any discharge whatever from his debts. It would seem sufficient to prevent his claim being dis- charged, without giving to him the power of preventing all others being discharged. The explanation of nearly all the other grounds of opposition rests upon the fact that such grounds of preventing a discharge will facili- tate the discovery of the truth with reference to the bank- (32) Sec. 14b (3). (33) Vernon v. Ullman, 17 A. B. R. 438. (34) § 112, above. (35) Sec. 14b (4). 300 BANKRUPTCY rupt's affairs and tend to swell the assets for creditors. It was at one time thought that the materially false state- ment must be made directly to the party who advanced property on credit. This narrow view has, however, been discarded, and it is now held that if a materially false statement concerning the bankrupt's financial condition was made to a commercial agency, which communicated its contents to another, who thereupon sold goods to the bankrupt, the party relying can oppose the discharge (36). § 119. Previous voluntary discharge within six years. The Act says that a discharge may be barred, if in voluntary proceedings the bankrupt has been granted a discharge within six years (37). This provision has no connection with involuntary cases. Creditors may file as many petitions as they can sustain, and, upon the success of each, if the bankrupt has not in any way placed himself in a position where a discharge may be barred by one of the recognized grounds, he can procure a discharge. If, however, he has procured a discharge in a voluntary case, and within six years seeks a discharge in an involuntary proceeding, the former discharge is a bar (38). On the other hand, a refusal to grant a discharge in a voluntary case, even though within six years, is no bar to a dis- charge in a voluntary proceeding. The statute mentions only cases where a discharge has been granted. § 120. Refusal to obey orders or answer questions of court. The Act makes it a basis for denying a discharge that a bankrupt, in the course of bankruptcy proceedings, (36) In re Pincus, 144 Fed, 621. (37) Sec. 14b (5). (38) In re Neeley, 134 Fed. 667. BANKRUPTCY 301 refused to obey any lawful order or to answer any ma- terial question approved by the court (39). NOTE. §121. Advantages to creditors o^ national law over diverse state laws. Manufacturers, bankers, insurance companies, wholesale houses of all kinds, in fact, nearly all commercial operators of importance, have, under the modern advantages of telegraph, telephone, and rapid transmission of the mails and articles of commerce, spread their business over the entire United States, or at least into one or more neighboring states. Under such conditions, with no Federal law in force but with as many state laws as there are different states, it is necessary that the operator be familiar with the insolvency or bank- ruptcy law of every state, its peculiarities, and the pos- sibilities under it, in order to safeguard his rights. Thus, if the state law where the debtor resides permits prefer- ences, it is not sufficient merely that the distant creditor know this fact, but it is essential that he be exceedingly diligent and vigilant in order to compete on fair terms with other creditors, nearer to the common debtor, and having readier access to him and to the courts to secure transfers from him and liens and attachments against him. The state laws permitting preferences and legal liens favor the diligent, permitting them to satisfy their claims in full to the exclusion of others. They foster a keen struggle between creditors to be the first to procure a lien (39) Sec. 14b (6). 302 BANKRUPTCY or preference, and tend toward inequality among cred- itors. The Federal law, on the other hand, which avoids preferences and legal liens procured within four months of bankruptcy, stands for equality among creditors and eliminates the struggle for an advantage by way of pref- erence or legal lien. Two obvious results are accomplished by the Federal Act. First, the work of the commercial credit man for large concerns is greatly simplified and made safer. The uniformity sought in such branches of the law as that of commercial paper, sales, and the like, which have been largely accomplished by the concerted action of many states adopting substantially the same code on the sub- ject, is accomplished in bankruptcy by one piece of legis- lation by Congress, the work of many legislatures done by one. This of itself would seem to be a justification for the retention at all times of a national bankruptcy act. If any features of such a law become objectionable, amend- ment should be resorted to and not repeal. Second, the spectacle of a few favored creditors ap- propriating a debtor's entire property to satisfy their claims, to the exclusion of the rest, is entirely eliminated by the salutary features of the last two Federal acts, pre- venting preferences and liens procured by legal proceed- ings, while the debtor is insolvent. While some states prohibit preferences, this is not the universal rule. Un- der the operation of the Federal law there can be no doubt, and the unseemly race of assignees, attachment, and execution creditors to be the first to seize the debtor's property is avoided, as well as the injustice to the less fortunate creditors. JUDGMENTS BY JOHN ROMAIN ROOD, LiL. B. (University of Michigan) Professor of Law, University of Michigan. JUDGMENTS. § 1. Outline. The principal points to be considered re- garding judgments are: (1) their nature, essentials, and kinds, including a survey of the elements of jurisdiction; (2) the record of the judgment; (3) vacating and amend- ing judgments ; and (4) the effect of judgments. These will be considered in the order named. Section 1. Nature, Essentials, and Kinds of Judgments. §2. Judgment defined. Many different definitions of a judgment have been given, some superior on one ac- count, some on another. Lord Coke said that a judgment is the very voice of law and right, signifying that it is the application of the wisdom of the law in disposition of the particular case. A more practical definition is that it is the final determination, by a court of competent juris- 304 JUDGMENTS diction, on the matter submitted to it by the complaint oi some person or persons; which is usually a complaint against other persons, but may be a mere request to pass upon matter without any opposing party, such as adjudi- cation of a salvage of shipwrecked goods at sea, that they are wreckage and that so much belongs to the salvors for saving them. In examining this definition it is necessary to notice that many orders are made by the court in the progress of every trial, which are not properly judgments ; of these examples are seen in such orders as that the case shall go over to the next term, that the plaintiff shall give security for costs ; and, in addition to these, are rulings, that this evidence is not competent and shall be excluded, and the like, which are not even considered as orders. The judgment, properly speaking, is the final disposition of the case, though not necessarily of the merits of the dis- pute. Judgment that the case be dismissed, because the plaintiff has failed to include certain persons as defend- ants who should be included, does not go to the merits of the question at all, and in no way prevents the immediate prosecution of a new suit against the proper parties, in- cluding all the parties to the present suit ; but it is in the strictest sense a judgment, because it puts an end to the particular suit. It has often happened that appeals have failed, because the appeal was taken before judgment given, the parties assuming that the direction that such a judgment be drawn up was itself a judgment, instead of an order for judgment. Such technical distinctions are not conducive to justice, nor to the respect for the courts which should be entertained by the people; and it is believed JUDGMENTS 305 that they are not strictly sound. For the judgment is not the entry which the clerk of the court makes, but the order which the court makes, of which the clerk's entry is only a memorandum. §3. Same: Illustrations. A few illustrations will make this clear. Suppose the clerk makes an entry that judgment was given, when the court had ordered nothing of the kind. Is that a judgment? It has been held that the court may rectify such errors, whenever they are dis- covered, even years afterwards ; but, if a judgment is in fact given by the court, and the judge later makes up his mind that he was wrong in the judgment he gave, that error cannot be corrected by him after the term at which the judgment was pronounced. Again, it is clear that no execution can be valid unless there is a judgment warrant- ing it ; and yet it has been held in several states that an execution, issued after the judgment is pronounced by the court, is not void, merely because the record of the judg- ment was not written up till after the execution was taken out and property seized under it. Again, if a judgment is rendered in vacation time, that is after the court has adjourned definitely to the next term, or without day, as it is called, that judgment is void according to all the authorities, and yet it is admitted by all that it is all right to make entry in vacation time of the judgments rendered in term time. Ordinarily, the official record is the only proper evidence to prove that a judgment has been given by the court, which is believed to have had as much as anything to do in creating the erroneous notion that the record entry is the judgment ; instead of the true 306 JUDGMENTS doctrine, that the judgment is the order made by the court, of which the clerk's record is the contemporaneous, official, historical memorial. Yet it has happened that judgments have come into question in later cases, and proof of them has been allowed by other evidence, upon showing some extraordinary accident which prevented the entry ever being made. Such was the case of a justice of the peace who heard the parties, and at the end of the hearing pro- nounced judgment upon the matter orally at once, but died a few days later, without having made any docket entry of his judgment (1). § 4. What is a court? As a judgment is a final deter- mination of a controversy by a court, it follows of neces- sity that the order is not a judgment unless the body pro- nouncing it was a court. A court has been defined as a place where justice is judicially administered; because in the old days the feudal barons assembled their followers in the open space in their castles to debate and decide dis- putes between any of these followers. But the word court involves more in its modern judicial meaning than the place where the meeting is held. In the legal sense, a court is a body of the government, duly constituted and assembled for the purpose of deciding such matters be- tween opposing parties as are brought before it and the law creating it enables it to decide. It is necessary that the body be created by the proper governmental authority. If it is constituted by the agreement of the parties sub- mitting the question for decision the determination it gives is not a judgment; it is at most only an award of (1) Ilickey v. Hinsdale, 8 Mich. 267. JUDGMENTS 307 arbitrators. If the body was created by rebels or insur- gents, and not by the legal government, its determination would not even be an award of arbitrators, unless the matter was submitted to it by consent of the parties, nor even then if what they expected was a judgment of a court; that is, unless their agreement included the crea- tion of the body to try the question, and not merely an agreement to submit the matter to a body supposed to be already legally created. If the body was created by the proper legislative authority as a court, but for some reason the statute was unconstitutional, it has been denied that the body assembled and acting under such an invalid law is not even a de facto court. If the body was created by the proper legislative authority by a valid law, it is not a court unless the legislative intent expressed by that law was that the body should be a court. If the legis- lature declares that the supervisors of the county shall be a body to pass on the bills due from the county and order their payment, it does not follow that the legisla- ture intended that the board of supervisors should he a court, nor that their determinations should be judg- ments. Matters are not brought before a board of super- visors as they are before a court, by issuing a summons, serving it on the opposite party, uniting on an issue, tak- ing testimony, and so forth. The bill is filed in an in- formal way. Often the board takes it up in the absence of the parties. They are entitled to no hearing nor argu- ment. The board need have no testimony, and may de- cide on their own information and opinions. Such a de- termination Is no judgment. If the legislative authority 308 JUDGMENTS declares by a valid law that such a body shall be a court to try such cases, there is no court in fact till the au- thorized body is organized and assembled. From this it follows: (1) that the legal business of the body must be judicial; (2) that the body is created by a valid law of a real government; (3) that it is properly organized and assembled, which includes officers, time, and place. § 5. Elements of jurisdiction: Compliauice with stat- utory requirements. Jurisdiction has been defined to be the power to hear and determine a matter submitted. 1. In order for a court to possess this power it is clear that the court must be duly and legally constituted and regularly assembled, as stated in the preceding subsec- tion. 2. Further, the question or case on which it as- sumes to act must be of the class in which the law of the court's creation empowers it to act; if it be a criminal prosecution, it is essential to jurisdiction that the law under which the court acts has empowered that court to sit in such cases; one court may be empowered to sit in probate of wills, and another to try for alleged crimes, and yet neither court be empowered to sit in a case which would be proper for the other to decide. 3. Another essential to jurisdiction is that the law de- fining the court's powers has enabled it to make such a judgment in a proper case, as it has attempted to make in the given case. A judgment by a justice of the peace that a man be hanged, for an offense of which he is charged before such justice, would ordinarily be absolutely void, and need not be appealed from; for in no case at all is the justice enabled to give such a judgment. His judg- JUDGMENTS 309 ment for a greater amount than the law enables him to render in any case would be likewise void, though the particular case justified such a judgment. But suppose that the law has authorized the justice to try cases in- volving less than $300, and in such a case a man claims a sum less than $300 against another, but gives no proof warranting any judgment at all. It is clear that the justice should not give the plaintiff judgment for any sum ; but it is equally clear that what amounts to proof of a case is the very question which the law has empowered the justice to decide, and which the case before him requires him to decide. Power to decide includes power to decide either way— to decide it the right way or the wrong way— to say which is the right way, and what the proper amount. If the justice errs on this, it is error only ; and the party aggrieved by this erroneous judgment must submit to it and abide by it, or appeal from it to some other court to have it corrected. § 6. Same: Submission of question to court. 4. Another element essential to jurisdiction is that a case shall have been brought before the court, and that the case on which the court assumes to pass is the case submitted to it for decision. The court cannot decide every possible question between contending parties, merely because it has been asked to pass on a particular question ; nor can it act of its own motion on any question, unless a question has been submitted to it for decision. Courts must be set in motion by complaint or petition, and cannot originate a case of their own motion ; but when the case is once before it, the court may dispose of it on motion, or of its own motion. 310 JUDGMENTS Suppose a man brings an action against his wife to settle title to land, the court could not decree a divorce between them in such an action, though the proof offered on the title to the land should show ample ground for a divorce ; for that is not the point submitted to the court for de- cision. The court can decide only what is submitted to it for decision ; but when the question arises as to what is submitted, we get into a much more difficult field. On this the general proposition is, that the pleadings need not be regular, need not show that the party is entitled to what he asks for, need not be so good but that the case would be dismissed because of the defect, if the point were properly raised; it is enough that it appears that the point decided was the point the party wanted decided, or was essential to the decision of that point. §7. Same: Judgments binding property. 5. To make a judgment binding on the title to any particular property, it is essential that the property be brought within the court's control. If it be land within the court's territory, sufficiently described in the papers in the case, no actual seizure of it is necessary to enable the court to give judg- ment binding on the title to it, unless the statutes under which the suit is prosecuted require that to be done ; and it is even a disputed point as to whether failure to observe the statutory requirements is not a mere irregularity, which can be taken advantage of only in a direct proceed- ing in the same court and action, or by appeal. But it is essential to jurisdiction of the thing, that the purpose of the action was expressly to fix the right to that property. If the property was at a place out of the court's territory. JUDGMENTS 311 no judgment it can render can bind tlie title to that prop- erty, though that may be the direct purpose of the action in which the judgment is rendered which is claimed to bind that property. Observe that what is here stated is that the title to the property is not determined thereby. If the court has the party before the court, it may order him to do something concerning property out of the state, and imprison him for contempt until he will obey the order. If he escapes without doing what he is ordered to do, the order does not affect the title to the property out of the state. This doctrine has been very much theorized upon in garnishment of debts to non-resident creditors or from non-resident debtors; and it has been claimed that the debt has locality, and is situated where it is payable, or where the debtor resides, or where the creditor to whom it is due resides. But this question has now been finally put at rest by the Supreme Court of the United States (la), which holds that one who owes an- other a debt may be charged as garnishee therefor, wher- ever he can be found and served with process, regardless of where he lives, where his creditor lives, or where the debt is payable ; and that, if he pays the debt on such a garnishment, that payment will be a good defense to any suit by his creditor for it in the same or any other state, provided the garnishee notified his creditor of the gar- nishment, so as to give him an opportunity to defend the garnishment. §8. Same: Personal judgments. 6. Another essential (la) Chicago, etc. Ry. v. Sturm, 174 U. S. 710; Harris v. Balk, 198 U. S. 215. Vol. X— 22 312 JUDGMENTS to jurisdiction in any case to render a judgment binding on any person as a personal charge, which is called a judg- ment in personam, is that the person to be so bound must have been duly brought into court, so as to give him an opportunity to defend, called his day in court, before such judgment is given against him. He may thus be brought before the court by his voluntary formal appearance in the court and submitting to its jurisdiction; or by mak- ing service on him in any manner which he may have ex- pressly or impliedly agreed and directed in advance shall be a sufficient service on him in such a case; or he may be brought within the court's jurisdiction, so as to enable the court to decide in personam against him, by formal service of the court's process on him in person at any place within the state, provided the law of the state au- thorizes such a service. But any statute of any state de- claring that a person residing out of the state may be served by publication of process in the state or personal service on him out of the state, and that such service shall authorize the court to proceed to judgment in personam against him the same as if he had been personally served in the state, would be in violation of the Fourteenth Amendment to the Constitution of the United States, which declares that no man shall be deprived of life, liberty, or property without due process of law (2). § 9. Same; Opportunity to be heard. 7. Since the pur- pose of service of process is to enable the party to make defense, it follows that a further element of jurisdiction is that an opportunity to be heard in defense shall have (2) Pennoyer v. Nefe, 95 U. S. 714. JUDGMENTS 313 been given the party before passing judgment upon him. For, if the court holds that the party summoned is one not entitled to standing in the court, and thereupon orders his appearance stricken out, and immediately enters judg- ment against him, that judgment is absolutely void and need not be appealed from. It must not be inferred from this statement that a judgment is void, merely because the party was not allowed to make his defense at so late a time, or not allowed to make the particular defense he wished to. The doctrine extends only to denial of all right to be heard at all. Beyond the points made above, there is a wide field in which no positive statements can safely be made, in which one court has held that a departure from the prescribed mode of procedure was fatal, and another court has held that it was only an irregularity. § 10. Summary of essentials of judgments. It has seemed necessary to give thus much attention to the vexa- tious subject of jurisdiction, in order to get a clear and complete conception of what a judgment is; and this brings us to the end of the first topic, the definition of a judgment; and we may now state the conclusion that a judgment is the sentence of the law pronounced by the court upon the matter contained in the record. From the foregoing review of our definition, we may discern the following essentials of a judgment: (1) If nothing be done, if there be no pronouncement, clearly there is no judgment. (2) If the pronouncement be not in the na- ture of a sentence, it is no judgment. (3) If pronounced by any body other than the court, it is no judgment. 314 JUDGMENTS (4) If upon matter that court is given no authority by law to hear and determine, it is no judgment. (5) If that court is not given authority by law to pronounce such a judgment in any case, it is no judgment. (6) If the matter pronounced upon be not before the court, it is no judgment. (7) It is not a judgment in personam unless the person pronounced against was before the court. § 11. Kinds of judgments. Judgments may be classi- fied from various points of view, according to the pur- pose intended to be served by the classification. The fol- lowing classifications are some of the most important: (1) As to their effect in disposing of the action, judg- ments are either interlocutory or final. As we have seen, only the final are really judgments. Final judgments are those which completely dispose of the particular action, though not necessarily of the controversy involved in it. (2) Judgments are either absolute or nisi, according as they are to have effect at all events, or only upon the happening or not happening of some specified event. (3) As to the place where rendered, judgments are either domestic or foreign. A domestic judgment is one ren- dered by a court of the same sovereignty. A foreign judgment is one rendered by any other court. (4) As to the state of the pleadings at the time the judgment was rendered, it is: (a) on an issue of law; (b) on an issue of fact; (c) when the pleadings raise no issue; or (d) on abandonment of the suit by the plaintiff. (5) As to the binding effect, the judgment is either valid or void ; and if valid is either in personam or in rem, and, if in rem, is either in rem generally or as to particular persons or JUDGMENTS 315 purposes. The difference in the binding effect of judg- ments in personam, and judgments in rem, either gen- erally or specially, will be explained more fully when we come to consider the effect of judgments. Section 2. Record of Judgment. § 12. Definition. The record in judicial proceedings is the written history of the proceedings and transactions of the court, kept as a perpetual memorial therof. § 13. Former English practice. In primitive times all the proceedings were oral in open court, the declaration, pleadings, judgment, everything; and the judge or his clerk took rough notes of the proceedings as they pro- gressed. These were finally amplified on parchment, and filed as a perpetual memorial. When the pleadings came to be made in writing on paper, this custom of copying them on parchment was continued. As soon as the ver- dict had been found and reported, the signature of the proper officer was obtained on a sheet of paper called a final judgment paper. This was called signing judgment. As soon as this was done, the successful party might make the record on parchment. This was called entering the judgment of record ; and when this parchment copy had been filed it was called the judgment roll. Leaving the roll in the treasury of the court was called filing the record. The clerk kept a book in which all these records were indexed. Making the entry in the index was called docketing the judgment. §14. Same: Example. The following, copied from 316 JUDGMENTS Wentworth's Pleading, will give some idea of the nature of these records : ENGLISH JUDGMENT BOLL. Pleas before our lord the king at Westminster of the Term of St. Michael, the twenty-sixth year of the reign of our sovereign lord George the Third, by the grace of God of Great Britain, France, and Ireland, king, defender of the faith, and so forth, in the year of Our Lord 1785.-- Roll, Stormont and Way. London, Be it remembered, that in the Term of the Holy Trinity last past, before our lord the king at Westminster, came Robert Hunter, by Giles Blake his attorney, and brought into the court of our said lord the king then there his certain bill against John Bermingham, being in the custody of the marshalsea of our said Lord the King, before the king himself, of a plea of trespass on the case, and there are certain pledges for the prosecution, to wit, John Doe and Richard Doe; which bill fol- lows in these words, to wit; London, to wit. Robert Hunter complains of John Bermingham— [here follows the bill in full except the signature, then the imparlance, plea, and continuance]. Afterwards, that is to say, on the day and at the place within men- tioned, before the Honorable Francis Buller esquire, the justice within mentioned, John Way gentleman being associated with him, according to the form of the statute in such case made and provided, came as well the within named Robert Hunter, as the within named John Bermingham, by their respective attorneys within mentioned, and the jurors of the jury within mentioned being called likewise came; who, being tried and sworn to speak the truth concerning the matters within contained, and after evidence being given to them of and upon the within contents, went from the bar of the court to discuss their verdict of and upon the premises, and after the said jury has discoursed and agreed among themselves they come back to the bar and say that the said John Bermingham did under- take and promise in manner and form as in the said declaration is com- plained against him; and they assess the damages of the said Robert Hunter on occasion of the premises mentioned in the sum of fifty-eight pounds three shillings and sixpence, over and above his costs and charges by him laid out in his suit in this behalf and for those costs and charges to forty shillings; Therefore it is considered that the said Robert Hunter recover against the said John Bermingham his damages aforesaid, by the jury aforesaid in manner and form assessed, and also four pounds and thirteen shillings for his costs and charges aforesaid to the said Robert by the court of our lord the king now here !m1 judged of increase, with his assent; which said damages in whole amount to sixty-four pounds sixteen shillings and sixpence, and the said John Bermingham is in mercy. JUDGMENTS 317 § 15. American practice: Formal record of judgment. The English practice is followed to a great extent in some states; but the entries are usually required to be made by the clerk of the court instead of by the attorney, in books instead of on loose sheets, and on paper instead of parchment. Probably no court in this country has its records kept in parchment. The statutes, court rules, and decisions of each state must be examined in order to learn the proper practice there ; but it may be worth while to make a few suggestions as to the practice generally. In New York the successful party must make a judgment roll for the clerk, by preparing exact copies of all the papers on file in the case and attaching them together, or by attaching the original papers together, and in either event adding a copy of the judgment as entered in the judgment book, and filing the whole with the clerk; or the clerk may at his option make up the record himself (2a). So, in Minnesota and the Dakotas, except that it is the duty of the clerk to make up the roll (3). So, in Wis- consin, unless the party shall furnish the roll to the clerk. In California the rule is the same, except that the clerk makes up the roll by attaching together the original sum- mons, proof of service, pleadings, a copy of the verdict, the bill of exceptions if any has been filed, and a copy of the judgment as entered in the judgment book (3a). In each of these states the statutes also require the clerk to enter the judgment at large in a book called the judgment book, and it is a copy of this entry that completes the (2a) Knapp v. Roche, 82 N. Y. 366. (3) Locke V. Hubbard, 9 S. Dak. 364. (3a) Cal. Code Civ. Proc. (1895), § 670. 318 JUDGMENTS judgment roll. In each of these states, also, the clerk is required to keep an index of judgments, usually called the judgment docket, or the judgment and execution docket, in which he enters the names of the parties to the judg- ment, its date and amount, and whatever is done toward executing or satisfying it. § 16. Same: Journal entries and files. In Illinois, Indiana, Iowa, and Ohio, the practice is more like the practice in Michigan, which more nearly resembles the primitive than the modern English practice (4). No for- mal record is made up at all, but the files in the case and the entries made by the clerk, in the journal of the pro- ceedings of the court while in session, stand in the place of the formal record. According to this practice, the files in the case are treated as a part of the record; and such action taken by the court in the case as does not appear from an inspection of the files, is shown by the journal. But in these states the clerk is required to keep an index or indexes, as in the other states, called a docket, and showing the names of the parties to each judgment, its amount, its date, and what has been done in the way of enforcing it or satisfying it. § 17. Same: Example. A fair idea of the character of the journal entries will be obtained by examining the following : JOURNAL ENTBIES IN MICHIGAN CIECTTIT COURT. Monday, May 7th, A. D. 1900. At a regular session of the Circuit Court for the county of Washtenaw, commenced and held at the court house in the city of Ann Arbor, on the (4) Jasper v. Schlessinger (per Moran, J.), 22 111. App. 637; Gal- braith v. Sidner, 28 Ind. 142; Campbell v. Ayres, 6 Iowa, 339; Brown v. Barngrover, 82 Iowa, 204 ; Emery v. Whitwell, 6 Mich. 474, 486. JUDGMENTS 319 seventh day of May in the year of our Lord one thousand nine hundred, 1900. Present, the Hon. E. D. Kinne, Circuit Judge. The court opened for business in due form at ten a. m. [Here follow several entries concerning criminal cases, then the fol- lowing.] Ella Glazier V. The City of Ypsilanti. In this cause, the parties being in court by their respective attorneys ready for trial, thereupon came a jury of twelve good and lawful men, to wit, Michael P. Alber, John Volz, Theodore Mohrbox, George Chap- man, George Greske, Robert Campbell, Burt Martin, Ray Buckalew, Frank Gilpeu, William Dolan, Gottlob Hutzel, and August Otto, who, being duly impaneled and sworn well and truly to try the issue between the parties, sat together and heard the allegations and proofs of the parties until the hour of adjournment, Whereupon the Court adjourned till tomorrow at nine a. m. [Signed] E. D, Kinne, Circuit Judge. Tuesday, May 8th, A. D. 1900. Court met pursuant to adjournment and opened for business in due form at nine a. m. Ella Glazier V. The City of Ypsilanti. The jury heretofore impaneled and sworn In this cause sat together and heard further proofs, the arguments of the attorneys for the respective parties and the charge of the court, and retired from the bar under the charge of Charles Dwyer, an officer of the court duly sworn for that pur- pose, to consider their verdict; and, after being absent for a time, re- turned into court, and say upon their oaths that the city of Ypsilanti is guilty in manner and form as the plaintiff has in her declaration in this cause complained against it; and they assess the damages of the said Ella Glazier on occasion of the premises, over and above her costs and charges by her about her suit in this behalf expended, at the sum of six hundred dollars ; therefore, on motion of A. J. Sawyer & Son, attorneys for said plaintiff, it is considered and adjudged by the court now here that Ella Glazier do recover against the said city of Ypsilanti the said sum of six hundred dollars, together with her costs and charges to be taxed, and that execution do issue therefor. [Here follow the entry in the next case and the other proceedings for the day, signed at the end by the judge as on the previous day.] 320 JUDGMENTS § 18. Same: Justice court records. What is above stated has reference only to records in the superior courts. Justices of the peace usually have what is called a docket in which they enter, under the caption of each case, in ledger form rather than in the form of a journal, a minute of whatever is done in the case, from the issuing of the original process to the return of satisfaction on the execution. §19. Entering and amending record. The record should be an accurate contemporaneous history of the pro- ceedings, showing all the essential facts. But failure of the clerk to make up the record during the term does not deprive him of power nor relieve him from the duty to make it up later. The court may, of its own motion, order the record made, even after years of neglect. When the entries have been made the clerk's powers cease. No man would be safe if the clerk could change the records to suit his convenience. If he learns that his version of the proceedings does not accord with the facts, he cannot rectify his error ; but the court may at any time order any part of the entries to be so changed as to accord with what was done. For this purpose, notice to the parties is not jurisdictional ; though it ought always to be given, to enable them to show any reason why the change should not be made ; and a party prejudiced by the omission may have the amending order vacated for that reason. The court should not rashly conclude that the entry is in- accurate; and many courts hold that no change can be made on the unsupported recollection of the judge and spectators, but only when the fact appears on the face of JUDGMENTS 321 some of the papers in the ease. This makes the clerk more powerful than the court. On the other hand, it is said that the trial court is the only judge of the compe- tency and sufficiency of the evidence to prove the fact. Yet, should not a court of review compel the correction of an indisputably erroneous statement in the record? The right to a day in court is nothing without the right to have the proceeding correctly recorded (5). § 20. Questions regarding essentials of record. What is a sufficient record is a question that may arise: (1) in the same proceeding; or, (2) in another proceeding, (a) in the same court, or (b) in some other court. If in the same court, though in another proceeding, want of record evidence of any essential facts can usually cause little trouble, provided you can convince the judge that these facts existed; for he may then order the objection re- moved on the spot, by amending the record so as to supply the defect (6). § 21. How far presumptions aid the record. But if the question arises in another court, the result is likely to be more serious. In suoh cases it is material to inquire whether the court in which the judgment was rendered was one of special and limited jurisdiction, or one of gen- eral jurisdiction ; and, if the latter, whether the particular proceeding came within its general powers, or was some extraordinary statutory proceeding, of which it had juris- (5) For authorities on the matters in this subsection see: Balch v. Shaw, 7 Cush. 282; Hughes v. Streeter, 24 111. 647; Commonwealth v. Magee, 8 Pa, St. 240. Justices of the peace have been held not to possess the power to change their records or add to them when once entered. King V. Bates, 80 Mich. 367, and cases cited. (6) Dewey v. Peeler, 161 Mass. 135. 322 JUDGMENTS diction by virtue of the statute. If tlie court was a su- perior court of general jurisdiction, and the proceeding in question was within the scope of its general powers, there is a presumption that all the facts existed to give it jurisdiction of the matter and of the parties, and such facts need not be shown by the record. But if what was done to obtain jurisdiction is stated in the record, there is no presumption that anything else was done, though essential to obtain jurisdiction (7). The rule is different with respect to courts of special and limited jurisdiction, and with courts of general jurisdiction acting under an extraordinary statutory authority. In such cases, accord- ing to most courts, there is no presumption of law in favor of their jurisdictions. The jurisdictional facts must then affirmatively appear from sufficient evidence or proper averments in the record, or the judgment will be deemed void (8). §22. What must always appear. But besides the above, all of the following must always appear : 1. That what is offered was really intended as a record by the court whose judgment it records. 2. Who were the parties in whose favor and the parties against whom the judgment was rendered. 3. That judgment was ren- dered, and what that judgment was ; if for damages, how much; if for property, what property. No particular form of words is ever necessary. It is well enough if the substance can be gathered from the record as a whole. It need not show the names of the jury, the form of the (7) Hahn v. Kelly, 34 Cal. 391, 405. (8) Galpin v. Page, 18 Wall. 350, 366. JUDGMENTS 323 action, or the e\adence on which the judgment was based ; and need not be signed by the judge, unless the statute requires it (9). §23. Conclusiveness of record: Early doctrine. ''The rolls," said Lord Coke, ''being the records or memorials of the judges of the courts of record, import in them such uncontrollable credit and verity, as they admit no aver- ment, plea, or proof to the contrary. . . . And the reason thereof is apparent; for otherwise there should never be any end of controversies, which should be in- convenient. . . . During the term wherein any ju- dicial act is done, the record remaineth in the breast of the judges of the court, and in their remembrance, and therefore the roll is alterable during that term, as the judges shall direct. But when the term is passed, then the record is in the roll, and admitteth no alteration, aver- ment, or proof to the contrary" (10). § 24. Same: Modem limitations. This doctrine is necessary that there may be an end of disputes. But when applied in its pristine rigor to all cases and under all conditions, it was too harsh and unreasonable to stand. It would be hard to say exactly how much of it remains. The modem decisions upon it are very numerous, and far from uniform; yet the following propositions may be stated as settled beyond dispute (11) : 1. Statements in the record may always be disputed in all proceedings instituted for the purpose of proving (9) 11 Ency. PI. & Tr. 925, flf. (10) Coke Lit, p. 2C0. See also, 3 Bl. Com. 407. (11) See Black, Judgments, §§ 288, 289, 335, 416-19 ; Michaels v. Stork, 52 Mich. 260. 324 JUDGMENTS the falsity of the record, to the end that it may be so amended as truly to state the facts, or that the proceed- ing may be declared void or limited in its effect, because some essential facts alleged did not exist. 2. Statements in the record may be disputed, and al- ways might be, in actions by the party injured against the officer making the false entry to recover the damages resulting from his wrongful act. 3. Strangers to the proceeding are not concluded by statements of fact made in the record so far as their in- terests are affected. But even against strangers the judg- ment record is competent and often the only competent evidence as to the facts occurring in court which the judg- ment should record, as, that judgment was rendered, and what that judgment was. 4. In actions on foreign judgments, the defendant may show that the judgment is void because some jurisdictional fact alleged in the record did not exist. § 25. Doctrine does not apply to inferior courts. Per- haps all has been said that can be stated with assurance. There is a fundamental distinction made in this connec- tion between superior courts and inferior courts. We have seen that there is a presumption in favor of the jurisdiction of superior courts, though the facts are not stated, and that there is no such presumption with regard to the jurisdiction of inferior courts. As to the latter, most courts hold that extrinsic evidence cannot be ad- mitted to prove that to have been done as to which the record is silent; but there are decisions the other way. Yet, if all jurisdictional facts are alleged, and it appears JUDGMENTS 325 from the record that those facts were tried and ju- dicially found, that finding cannot be collaterally con- tradicted (12). § 26. Records of superior domestic courts conclusive on collateral attack. When the records of the judgments of superior domestic courts do not state the existence of jurisdictional facts, nor state what was done to obtain jurisdiction, some courts hold that the existence of such facts may be denied and disproved collaterally to impeach the judgment; but the weight of authority seems to be the other way. There is perhaps but one state, New York, in which it is held that the record of the judgment of a superior court may be impeached collaterally by contra- dicting and disproving the statements in the record. This rule is generally enforced, though it be alleged that the record was fraudulently made up to appear as if juris- diction had been obtained (13). Section 3. Vacating, Amending, and Modifying Judgments. §27. Record and judgment distinguished. It seems superfluous to remark that under this head we are not discussing amendments of the record, a topic given con- siderable attention when we were speaking of the record. But amendments of the record and amendments of the judgment are often treated together in the most confusing manner by writers on this subject; and it is frequently (12) King V. Bates, 80 Mich. 3G7 (cases) ; Black on Judgments, §§ 282, 287. (13) Freeman on Judgments § 133 ; Hahn v. Kelly, 34 Cal. 391 ; Fer- guson V. Crawford, 70 N. Y. 253 ; Haven v. Owen, 121 Mich. 51. 326 JUDGMENTS impossible to tell from the reports of decisions whether the amendment under consideration was an amendment of the record or an amendment of the judgment. The judg- ment is the sentence of the law, the record its written history. The two are entirely distinct, and the rules con- cerning amendments of them are very different. There- fore, be it remembered that we are now concerned only with vacating and modifying the judgment. § 28. What courts may vacate, modify, and amend judg- ments. 1. Justices of the peace and similar inferior courts are generally held to possess no power to modify judg- ments they have rendered, except in so far as that power is conferred upon them by express statute. They cannot open their judgments, grant new trials, or even set aside verdicts rendered by their juries. 2. Only the court that rendered the judgment can modify or vacate it. The judge cannot do it during vaca- tion. A court to which it has been taken by transcript cannot overhaul it. The legislature cannot by statute vacate it, for that is judicial action. Courts of supervision and review may reverse or annul judgments of lower courts, on appeal, error, certiorari, and the like ; but that is an entirely different matter. 3. All superior courts of general jurisdiction possess the power to vacate, open, or modify their judgments on proper and seasonable application, unless forbidden by statute. This power was conceded at common law to all JUDGMENTS 327 the superior courts. It exists independently of any statute (14). §29. Such action during the term. Until the final judgment has been rendered the court may, on the appli- cation of anyone interested or even of its own motion, modify or undo anything it has done in the cause at the same or any previous term. Until the end of the term at which the final judgment is rendered, the judgment is said to be in the breast of the court, and the power above men- tioned continues unabated, though a new trial has already been denied and a bill of exceptions settled. Moreover, the term lasts till the first day of the succeeding term unless the court sooner adjourns sine die (15). § 30. Common law remedies after the term. But if the courts were permitted to keep causes within their power indefinitely, alternately changing from one side to the other, the remedy might be more intolerable than the wrong for which redress was sought. The interests of society demand that somewhere there should be an end of the controversy. Accordingly, the rule of the common law was that the cause passed beyond the power of the court with the ending of the term in which the final judg- ment was rendered, unless some proceeding to set aside the judgment had been commenced within that term and remained undisposed of. After that time the only re- course was by commencing a new action (16) : (1) of (14) For the matters in this subsection see 12 Ency. PI- & Pr. 738; Black on Judgments §§297, 298; Nelson v. Guffey, 131 Pa. St. 289; Kemp V. Cook, 18 Md. 130 ; Bronson v. Schulten, 104 U. S. 410. (15) Huber Mfg. Co. v. Sweny, 57 Ohio St. 169; Jansen v. Grimshaw, 125 111. 468 ; Jasper v. Schlessinger, 22 111. App. 637. (16) All of the following actions are discussed in 3 Bl. Com. 402-411. Vol. X— 23 328 JUDGMENTS attaint, for relief against a false verdict; (2) of deceit, for relief against fraud in real actions; (3) of error, to remove the cause to a court of review to correct errors of law appearing on the face of its record; (4) of error coram nobis if the cause was in the king's bench, of error coram vobis if in the common pleas, by which errors of fact affecting the validity of the proceeding (such as that the defendant was insane, an infant, feme covert, or died before judgment) might be brought to the attention of the court that rendered the judgment, which would there- upon give relief; (5) of audita querela, to have the benefit of matter in discharge arising after judgment, or exist- ing before and kept from the attention of the court by fraud of the other party; or, (6) by bill for review in chancery, by which the extraordinary powers of the chancery were invoked to obtain relief from an unjust judgment suffered by reason of excusable mistake of fact, accident, or fraud. § 31. Modem practice as to relief after the term. Such is the law to this day, except that in modem practice the relief obtained in all these numerous old actions is very generally granted on a simple motion in the court that rendered the judgment ; and some further relaxations, the limits of which are not always clearly defined, have been introduced by statutes and custom differing in each state. Section 4. Effect of Judgments. § 32. In general. Judgments have effect principally in two particulars: (1) in estopping; and, (2) in creating liens on property. The effect of judgments in creating liens is considered in the following article in this volume. JUDGMENTS 329 upon Attachment, Garnishment, and Execution, Chapter V, with the kindred liens created by those proceedings. The effect of judgments in creating estoppels we shall consider now. § 33. Why judgments estop. Res judicata (a thing adjudicated) is the name usually given to the branch of the law we are now discussing. The rule that a judgment shall estop is one of necessity. Any other rule would render all trials mere mockery, and all disputes endless. As soon as any judgment had been rendered, a new action might be commenced to try the questions again, or to determine whether the first decision was correct, and so on ad infinitum. The repose of society and the security of every individual require that what has been definitely determined by a competent tribunal shall be accepted as indisputable. Therefore, res judicata may render that white which was black, and that straight which was crooked. Being a rule of necessity, it must be very ancient ; but we find it first fully and formally stated in the Duchess of Kingston's Case (17). Concerning the propositions announced in the opinion in that case, a re- cent writer on the subject says : * ' For one hundred and nineteen years [since 1776] they have stood the test, and been copied with approval by every supreme court in the English-speaking world, and by every author who has treated upon the subject" (18). The following are the propositions referred to in the above comment: *'What has been said at the bar is cer- (17) 2 Smith's Leading Cases, 424. (18) Van Fleet's Former Adjudications, p. 4. 330 JUDGMENTS tainly true, as a general principle, that a transaction be- tween two parties, in judicial proceedings, ought not to be binding upon a third ; for it would be unjust to bind any person who could not be admitted to make a defense, or to examine witnesses, or to appeal from a judgment he might think erroneous. . . . From the variety of cases relative to judgments being given in evidence in civil suits, these two deductions seem to follow as gen- erally true : first, that the judgment of a court of concur- rent jurisdiction, directly upon the point, is as a plea, a bar, or as evidence, conclusive, between the same parties, upon the same matter, directly in question in another court ; secondly, that the judgment of a court of exclusive jurisdiction, directly upon the point, is, in like manner, conclusive upon the same matter, between the same parties, coming incidentally in question in another court, for a different purpose. But neither the judgment of a concurrent or exclusive jurisdiction is evidence of any matter which came collaterally in question, though within their jurisdiction, nor of any matter incidentally cogniz- able, nor of any matter to be inferred by argument from the judgment.'* § 34. Essentials of estoppel by judgment. There is an estoppel by judgment only: (1) (a) as to the cause of action and (b) the issues tried; (2) in a suit between the game parties, or to which they were privy, or in rem; and, (3) when the judgment is upon the merits, final, valid, and subsisting. There is no estoppel if any of these three requirements be wanting. Our consideration of this topic will therefore consist of a review of these three essentials, in the order named. JUDGMENTS 331 §35. What matters are res judicata. Two distinct kinds of questions are res judicata: (1) the cause of ac- tion sued on and the defenses to it, the defendant's counterclaims and the defenses to them; and, (2) all mat- ters directly in issue and necessarily decided, provided the court deciding would have had jurisdiction to decide them in the connection in which they were afterwards presented as res judicata. The distinction hetween these is thus stated by Mr. Justice Field: *' There is a differ- ence between the effect of the judgment as a bar or es- toppel against the prosecution of a second action upon the same claim or demand, and its effect as an estoppel in another action between the same parties upon a dif- ferent claim, or cause of action. In the former case, the judgment, if rendered upon the merits, constitutes an absolute bar to a subsequent action. It is a iinality as to the claim or demand in controversy, concluding parties and those in privity with them, not only as to every mat- ter which was offered and received to sustain or defeat the claim or demand, but as to any other admissible mat- ter which might have been offered for that purpose. . . . But where the second action between the same parties is upon a different claim or demand, the judgment in the prior action operates as an estoppel only as to those matters in issue or points controverted, upon the de- termination of which the finding or verdict was ren- dered." He then proceeds to say that in the latter class of cases, 'Hhe inquiry must always be as to the point actually litigated and determined in the original action. 332 JUDGMENTS not what might have been thus litigated and deter- mined" (19). We shall now consider these two classes of matters in the order above named. § 36. Causes of action and defenses which are barred. Whether contested or not, a final judgment on the merits, by a court having jurisdiction : (1) extinguishes the whole cause of action sued on, by declaring that it does not exist or by making it over into a judgment ; and, likewise, (2) extinguishes all counterclaims set up, by denying or allowing them; and, (3) extinguishes all defenses to all claims and counterclaims, by declaring that they do not exist or by making them into a judgment. Therefore, no demand set up by the plaintiff in his complaint, or by the defendant in his counterclaim, and prosecuted to judg- ment, and no defense to any claim or counterclaim, whether the defense was presented or not, can be taken into account in any other action between the same parties while that judgment stands. If the demand or counter- claim was denied, it cannot be considered again, because the judgment proves that it is unfounded. If it was al- lowed in part only, it cannot be considered again, because the judgment proves the remainder unfounded. As to the part allowed, or the whole if all was allowed, that cannot be considered again, because it has been made into a judg- ment in his favor, or allowed as a payment on the demand against him. He asked that this be done. If a farmer requests a miller to grind his wheat and accepts the ground product, he should not then ask for the return of (19) Cromwell v. County of Sac, 94 U. S. 351. JUDGMENTS 333 his wheat also, and it would do him no good if he did. The situation is much the same in the case under con- sideration. § 37. Application of doctrine of merger. The doctrine of merger has often been discussed by courts and text- writers in this connection. There can be merger only into something greater. The smaller cannot contain the larger. Applying these principles, it has been held in England that a debt on a bond was not extinguished by judgment being recovered thereon in a court not of record ; and that execution might issue on a judgment in the king's bench after judgment recovered thereon in the common pleas (20). In other words, it was held that the judgment extinguishes only what is inferior to itself. On the same theory, a few American courts have held a judg- ment not to be extinguished by another judgment being recovered thereon (21). But the majority of the Ameri- can courts hold that the new judgment destroys the old, though rendered by a court of another state (22). Yet, there can be no merger, for the two are equal. Some have said the original cause is extinguished, because allowing a new suit would encourage useless litigation, vexatious to the defendant and without benefit to the plaintiff. It is generally admitted that the plaintiff may sue on his judgment at once if not paid, and again on his new judg- ment, and so on as often and as many times as he wishes (20) Higgens's Case, 6 Coke Rep. 44b, 45a, b ; Preston v. Perton, Cro. Eliz. 817. (21) Mumford v. Stocker, 1 Cowen, 178. (22) Price v. First Nat. Bank, 62 Kan. 735 ; Gould v. Hayden, G3 Ind. 443. 334 JUDGMENTS (23). Mr. Freeman suggests that to allow a judgment to remain and be enforced by execution after another judgment had been recovered on it, might enable a vast amount of property to be seized, sold, and absorbed in costs, on one small demand, to the ruin of the defend- ant (24). Yet, where it is held that the creditor may have as many judgments as he will, it is agreed that he can have but one satisfaction. That the claim has passed in rem judicatam (become a thing adjudicated) furnishes a sufficient reason in every case where the cause of action or defense is held to be barred, and no other reason will always answer; which convinces one that the only true foundation in every case is res judicata. § 38. Only cause of action sued on and defenses to it are extinguished. Therefore: (1) other persons' causes of action are not extinguished; (2) the plaintiff's other causes of action are not extinguished ; and we may add a further qualification, (3) certain incidents of the plain- tiff's cause of action remain. Of these in their order. 1. The rights of other persons are not extinguished by the judgment. Their rights are not in issue, cannot be tried ; and it would not be just to cut them off without a trial. From this it necessarily follows that when the de- fendants are principal and surety they remain so as be- tween themselves after judgment as before (25) ; if they were tortfeasors, and therefore not entitled to contribu- (23) In a recent Texas case it was held that where no advantage can accrue to the creditor by the new suit and judgment the action is not maintainable. Stevens v. Stone, 94 Texas, 415. (24) Freeman on Judgments §216. (25) Fairchild v. Lynch, 99 N. Y. 359. JUDGMENTS 335 tion from each other, they are not entitled to contribution afterwards (26). So, where a person sues or is sued in two capacities, a recovery by or against him in one ca- pacity will not bar a recovery in the other (27). 2. The plaintiff's other causes of action are not ex- tinguished. To determine whether the cause of action sued on and the one on which judgment was formerly re- covered are the same, often involves the perplexing ques- tion of separable and inseparable causes of action. We cannot go into the question here, otherwise than to say that only one judgment can be recovered for the one cause of action. The plaintiff cannot split up his demand. If he sues and recovers for a part his right to the remainder is gone. But, on the othet hand, the plaintiff may have several causes of action against the same debtor, and suit and recovery upon one does not extinguish the right to sue and recover upon the others (28). Where a right of action is joint and several by the original agreement, or is made so by statute, suit and recovery of judgment against one does not bar the future action against the others. So, too, when a mortgage or a note of a third party is given as security for a debt, judgment against the third party on the note, or a decree foreclosing the mortgage, does not extinguish the debt (29). Likewise, taking judgment against a garnishee does not extinguish the principal judgment (30). (26) Percy v. Clary, 32 Md. 245. (27) Loftis V, Marshall, 134 Cal. 394. (28) Reilly v, Sicilian Asph. Pav. Co., 170 N. Y. 40. (29) Burnheimer v. Hart, 27 Iowa, 19. (30) Brice v. Carr, 13 Iowa, 599. 336 JUDGMENTS 8. Certain incidents of the plaintiff's original demand remain incidents of the judgment. In many cases courts will look behind the judgment to discover on what it is based, to the end that it may be correctly interpreted. For example, if the debt sued on was the purchase price of a homestead, the homestead would not be exempt from execution on the judgment, and generally the taking of judgment on a debt does not release the security for that debt (31). If judgment is recovered on that judgment, the lien and right of priority belonging to the old belongs to the new judgment (32). § 39. What matters aside from claims, counterclaims, and defenses are concluded. Having determined what causes of action, counterclaims, and defenses are barred by the judgment, we now ask: Upon what matters does the judgment conclude the parties in another action upon a different claim? The answer to this question is thus given by Judge Van Fleet in his recent treatise (33) on this subject: "From the numerous conflicting decisions, I have deduced what seems to me to be the correct prin- ciples, and give them for what they are worth. . . . "Among other things, it was said in the Duchess of Kingston's Case that the judgment of a court of con- current jurisdiction, 'directly upon the point,' was con- clusive upon the same matter directly in question in an- other court ; but that the judgment of no court was evi- dence of any matter which came 'collaterally in question.' (31) White V. Simpson, 107 Ala. 386; Ford v. Harrison, CO Ark. 205. (32) Springs v. Pharr, 131 N. C. 191. (33) Van Fleet's Former Adjudications, p. 27. JUDGMENTS 33f The principle involved in these two rules seems quite plain, nevertheless the cases differ in their application. Much of the difficulty arises, as it seems to me, from con- fusing the words, 'point,' 'matter,' and 'question,' with the word 'issue.' A suit may involve but a single issue, and yet the points, matters, and questions of law and fact, which tend to sustain its affirmative or negative, may be numerous. It is the affirmative or negative of this issue which the respective parties bend all their energies to sustain, and which is the matter 'directly' under con- sideration; while the evidence introduced, and the sub- sidiary questions of law and fact which they seek to es- tablish in order to determine the issue in controversy, are matters 'collaterally in question,' which do not become things adjudicated. For instance, in a contest over a will, in wliich the sole issue is soundness or unsoundness of mind, there may be a hundred matters of controversy, and the jury may be required to determine that many questions by answers to special interrogatories ; neverthe- less, all these questions are merely collateral, and cannot be used as evidence between the same parties in another cause." The pleadings, court's opinion, and even parol proof may be given in evidence to show what points were decided in the former trial (34). It was said in the Duchess of Kingston's Case that "neither the judgment of a concurrent nor exclusive juris- diction is evidence ... of any matter to be inferred by argument from the judgment. ' ' This statement means that the judgment is not evidence of any matter in issue, (34) Cromwell v. Sac County, 94 U. S. 351. 338 JUDGMENTS wticli probably was, but miglit or might not have been, the true ground of recovery (35). § 40. Parties bound by judgments: Judgments in rem and in personam. Having considered at some length the matters to which the estoppel relates, we come now to consider what persons are estopped. In this connection, it becomes important to distinguish between judgments in rem and judgments in personam, and between the cause of action and the issues decided, as already explained. Judgments in personam are those establishing or denying claims or obligations of persons. Judgments in rem are those fixing the status of things. The same judgment may be in rem and in personam. Thus, when a person contests the probate of a will and it is received for pro- bate, the judgment is in personam and in rem as to him, and it is in rem as to all who did not become parties to the proceedings. He is bound as to the issues decided, and also as to the cause of action. Those who did not become parties are bound only as to the cause of action. As to the matters decided, a judgment in rem concludes no one but those who became parties, and as to them it is a judgment in personam also. But as to the cause of action, which in such cases is always to fix the status of the thing, it binds everyone in the world if it be in rem generally; or if it be in rem as to certain persons, such as attachments without personal service or appearance, it binds them and their privies. With this much to dis- tinguish proceedings in rem, let us see who are bound by judgments in personam. (35) Kltson V. Farwell, 132 111. 327. JUDGMENTS 339 § 41. In what suits judgments bind parties and privies. 1. A judgment neither binds nor benefits strangers. Strangers are not bound, because they have had no day in court. A judgment never binds parties in their actions with strangers, because it would be unjust that anyone should bind another by a trial in which he himself was not exposed to the peril of being equally bound if the judgment had been the other way. 2. For the same reason, there is no estoppel between the parties themselves unless both are bound by the judg- ment, as the defendant would not be in cases of attach- ment without service or appearance. The estoppel must be mutual. 3. Parties to an action who were not adversaries are not bound to each other by the judgment therein. A judg- ment in favor of A, against B and C, is not res judicata between B and C, because their rights were not in issue and could not be tried. 4. A party is not estopped or benefited by an earlier judgment in which he sued the other party or was sued by him in a different capacity. 5. There is a difference of opinion as to whether judg- ments operate as res judicata in subsequent actions be- tween the same parties on one side and some of the parties on the other. But the majority of the courts favor apply- ing the estoppel. 6. A similar difference of opinion exists where new parties are added on either side. As to the cause of action, the party claiming it would seem to be estopped, because it is barred by or changed into the judgment, and 340 JUDGMENTS the strangers could not object. But as to the issues tried, the new party is not bound, and why should the opposite party be (36)? § 42. Who are parties. Judgments and decrees are con- clusive only between parties and privies thereto. Ac- cording to Greenleaf, ''those are held to be parties who have a right to control the proceedings, to make defense, to produce and cross-examine witnesses, and to appeal from the decision if appeal lies" (37). This statement may be agreed to, if it be understood that the persons mentioned have been brought into court by due service of process, have voluntarily entered appearance, or are actually present and participating in the proceedings, in person or by attorney. The record will usually show who the parties were ; but a party suing, sued, prosecut- ing, or defending, by a wrong name or -in the name of another, is as much estopped by the judgment as if he had been named in the record ; and parol evidence is com- petent to show his connection with the proceedings (38). But the person in whose name the action was brought is not bound by the judgment, if he had not the rights of control above mentioned. § 43. Who are privies. If a person is bound by a judg- ment, as a privy to one of the parties, it is because he has succeeded to some right, title, or interest of that party in the subject matter of the litigation, and not because (36) For the above propositions, see Freeman on Judgments, §§ 154, 156, 158-61 ; Leggott v. Great N. Ry. Co., 1 Q. B. Div. 509. (37) 1 Greenleaf on Evidence, § 535 ; Ruff v. Ruff, 85 Pa. St. 333, (38) Blaclv on Judgments §§537-541; Cromwell v. County of Sac, 94 U. S. 351. JUDGMENTS 311 there is privity of blood, law, or representation between them, although privity of the latter sort may also exist. It must also be remembered that privies are not, as such, estopped as to the issues tried, beyond controversies af- fecting their estate in the subject of the action or ac- quired from one of the parties after judgment in the former case. In order to create this relationship two requisites must exist. In the first place, the person who is to be thus connected with the judgment must be one who claims an interest in the subject affected, through or under one of the parties. In the second place, privies, in such sense that they are bound by the judgment, are those who acquired their interest in the subject matter after the commencement of the action; if their title or interest attached before that time, they are not bound unless made parties. He who takes title through a party while a suit is pending concerning the property, takes it subject to the judgment that may thereafter be rendered in that suit (39). But neither a party nor a privy is estopped by the judgment from setting up a title acquired from a stranger too late to be tried in the action (40). § 44. Judgment essential. A verdict does not estop. There must be judgment. Action may be maintained and judgment recovered, notwithstanding a prior verdict found in another action between the same parties on the same demand, whether that verdict sustained or denied the claim, and the issues tried are still open to dis- (39) Freeman on Judgments § 162. (40) Freeman on Judgments § 320. 342 JUDGMENTS pute (41). In England it is held that the creditor who has recovered judgment in another country may sue on the original demand or on the judgment at his option. But in Louisiana the original demand was held to be ex- tinguished by the judgment in a foreign country (42) ; and the rule is always applied in the United States as to judgments rendered in one of the states (43). Thus, when a debtor had some property in New Hampshire and some in New York, but not enough in either place to satisfy the whole claim, it was held, that, by suing and taking judgment in New York while his action was pend- ing in New Hampshire, the creditor barred the further prosecution of his original action in New Hampshire (44). In England and America, it is now settled that a foreign judgment sustaining or denying the claim is conclusive as to the validity and amount of the demand (45) ; and it should, therefore, be held to bar a new recovery on the original demand. The same reasons which make foreign judgments conclusive as to the cause of action make them conclusive as to the issues decided. § 45. Effect of special jurisdiction of court. If the court had not jurisdiction of the particular case before it, its judgment is of no effect for any purpose, as we have seen. But if the court had jurisdiction, a judgment of a justice of the peace, though rendered in another (41) Black on Judgments §682; Lehmann v. Farwell, 95 Wis. 185* Dougherty v. Lehigh Coal Co., 202 Pa. St. 635. (42) Jones v. Jamison, 15 La. Ann. 35. (43) Gray v. Richmond Co.. 167 N. Y. 348. (44) Child V. Eureka Powder Works, 45 N. Hamp. 547. (45) Hilton v. Guyot, 159 U. S. 113. JUDGMENTS 343 state (46), is as binding concerning the cause of action as the judgment of a court of last resort would be, and it matters not that it is erroneous. What has just been said has reference to the cause of action. The rule as to the effect of a judgment as an estoppel concerning the issues decided is different. In this respect there is a dis- tinction made, depending on the scope of the jurisdiction of the court rendering the judgment. In the Duchess of Kingston's Case (note 17, above) it is said to turn on the jurisdiction being exclusive or concurrent. As to this Judge Van Fleet says : ''But I do not think the exclusive- ness was of any moment. It seems to me that it was the completeness of the jurisdiction which gave conclusive force to the adjudication in other courts. In other words, if the jurisdiction had been concurrent in several courts, as frequently happens in America, the adjudication would have been none the less conclusive. If an issue is directly made in any court which has complete jurisdiction to de- termine it, the adjudication is conclusive in all other ju- dicial proceedings. . . . The correct principle in- volved, in my opinion, in the phrase 'court of concurrent jurisdiction,' was first fonnulated by a Britsh court sit- ting in India, as follows : *In order to make the decision of any court final and conclusive in another, it must be a decision of a court which would have had jurisdiction over the matter in the subsequent suit in which the first decision is given in evidence as conclusive.' . . . Thus, if the same instrument purports to convey a horse and a tract of land, and the purchaser, relying upon it (46) Ault V. Zehering, 38 Ind. 429. Vol. X— 2 4 344 JUDGMENTS as his sole evidence of title, replevies the horse before a justice of the peace, that officer must determine its validity. But his determination cannot be used as evi- dence in a contest over the real estate over which he had no jurisdiction" (47). § 46. Judgment must be final, on merits, and subsisting. The same reasons which require that the verdict should not, by itself, be regarded as conclusive, are equally ap- plicable to interlocutory judgments and decrees. More- over, the court that rendered them may modify them at any time, and they should not be more conclusive in other courts (48). Such orders do not bar another recovery for the same cause, and do not estop as to the issues de- cided (49). ' The estoppel of a judgment is confined to those matters actually decided. Therefore, a judgment for the defend- ant, because the court had no jurisdiction to hear his com- plaint or grant him relief, or because he has misconceived his action, or has not brought in the proper parties, or has not set the cause forth in proper form, or has sued prematurely, will not prevent his prosecuting a new action in a competent court, on a sufficient complaint, against the proper parties, for the same cause, after it has ma- tured. But as to the matters actually decided by such final judgment, the parties are as much bound as by any other judgment (50). (47) Van Fleet's Former Adjudication, 29, 30, 31. Compare: Hibsh- man v. Dulleban, 4 Watts (Ta.) 182. (48) Ducliess of Kingston's Case, 2 Smitli's Leading Cases, 424. (49) Black on Judgments § 509, G95. (50) Freeman on Judgments §§ 2G0-2G9. JUDGMENTS 345 If the judgment is set aside or in any way annulled, tlie cause of action on which it was rendered conies to life again, the same as if no judgment had ever been ren- dered (51). But no such effect is produced by merely staying the enforcement of it, or taking an appeal from it, or moving for a new trial (52). In most states the parties are held to be estopped as to the issues decided, though an appeal be pending. § 47. Judgment must be in personam. A judgment by which the defendant is not bound does not merge the cause of action. For example, if judgment be recovered in at- tachment without personal service, though the attached property is bound by the judgment, the defendant is not ; and, for any balance remaining unpaid by the proceeds of the attached property, the creditor may maintain an action on the original demand (53). Likewise, judgments ren- dered against all the debtors when only part of them are served, which is permitted by statute in several states, does not extinguish the demands sued on, for those not served are not bound by the judgment ; and afterward the creditor may sue the others or all on the original cause of action (54) . Yet, if only a part are sued when all might have been, the judgment against them extinguishes the cause of action, and the plaintiff cannot hold the others afterward (55). As to the issues tried, we have already (51) Goodrich v. Bodurtha, 6 Gray, 323; Fries v. Pa. Ry. Co., 98 Pa. St. 142. (52) Cloud V. Wiley, 29 Ark. 80; Young v. Brehe, 19 Nev. 379. (53) National Bank v. Peabody, 55 Vt. 492. (54) Mason v. Eldred, 6 Wall. 231. (55) Freeman on Judgments §§ 231, 232. 346 JUDGMENTS seen (§§40-41) that there is no estoppel in any action merely in rem, because the estoppel must be mutual, and, as those who do not become parties are not estopped, they cannot set up the estoppel against those who have become parties. § 48. Satisfaction of judgment and subsequent rights. These topics are treated in the next article, upon Attach- ment, Garnishment, and Execution, Chapter VI, in this volume. ATTACHMENTS, GARNISHMENTS AND EXECUTIONS BT JOHN ROMAIN ROOD, LiL. B. (University of Michigan) Professor of Law, University of Michigan. CHAPTER I. NATURE OF THE PROCESSES. § 1. What judgments need no execution. The judg- ment has been said to be the end of the law in regard to the controversy; and such it is, whenever it declares the existing status to be the just one. So, too, where the judgment or decree is self-executing, which is whenever the thing awarded is not capable of manual delivery. For example, a process to take an office from one man and give it to another would be a troublesome thing to exe- cute. The sheriff could hardly convince the one party that he had received or the other that he had been dis- robed of it. But in most cases the judgment woulc 348 ATTACHMENT, GAENISHMENT, EXECUTION amount to nothing if the law did not provide means of putting it into effect. § 2. Enforcement by coercion. Satisfaction of judg- ments and decrees may be enforced: (1) by coercing him against whom the judgment or decree is pronounced till he satisfies it; (2) by an officer putting the judgment into effect under the direction of the court. The coercion may consist of imprisoning the defendant, or seizing and hold- ing his property, or both. At one time, this means of en- forcement was available on every judgment at law, and was the only means of enforcing decrees of the court of chancery. Now, we have statutes rendering decrees en- forceable in any way that a similar judgment might be enforced; and corcion is not now available to enforce satisfaction of any judgment for the pajanent of money merely, except in certain cases specified in the statute, and usually is confined to judgments for torts, frauds, or misconduct in office. But this is the usual method of en- forcing the final orders at law in the extraordinary ac- tions—mandamus, procedendo, prohibition, habeas cor- pus, etc. (See Extraordinary Remedies in Vol. IX). At- tachment is the generic term applied to all writs designed to coerce obedience or punish for contempt; and this was the only sense in which the word was used by the courts, until the modern practice was introduced of seiz- ing property belonging to the defendant and holding it to furnish a fund for the satisfaction of a judgment yet to be rendered. § 3. Execution by officer under process of court. All the judgments in the ordinary actions at law which need ATTACHMEXT, GAEXISHMEXT, EXECUTION 349 putting into effect may be executed by the court's officer, without attempting to coerce the defendant to satisfy them. The judgments in these actions which may require execution are: (1) for a sum in money, as in assump-zlo; (2) for a specific chattel, as in replevin; (3) for a specific parcel of land, as in ejectment; (4) for any combination of these, as when in replevin judgment for defendant is given for costs in money, for the return of the specific chattel, and, if the chattel cannot be had, then for a speci- fied equivalent in money. The execution which may issue upon any judgment will depend upon the class to which the judgment belongs, for the execution must correspond to the judgment to be enforced. § 4. Execution is the act of putting something into effect. Every i^rocess issued with a view of putting a judgment into effect may properly be termed an execu- tion. Even attachment, garnishment, replevin, and other writs designed to provide in advance for the satisfaction of the judgment, are, in one sense, only anticipatory exe- cutions. All of these are sufficiently embraced in the defi- nition of an execution as the command of the law made by the court in writing, solemnly directing the judgment to be put into effect, and usually specifying the method of proceeding with greater or less certainty. The follow- ing are some of the principal writs partaking of the na- ture of an execution. § 5. Replevin, a common law action, demands mention here, because its original process is in effect an execution, commanding the officer to make immediate restitution to the plaintiff and at the same time to summon the defend- 350 ATTACHMENT, GARNISHMENT, EXECUTION ant to answer the plaintiff in court. Here we have the relief granted first, and the right to it tried afterward. This was the only common law action in which relief was given before judgment. § 6. Attachment, in its most comprehensive sense as a legal term, means: (1) the act of taking the body or ef- fects of any person into custody and so holding the same to abide the further orders of the court; or, (2) any pro- cess commanding such acts to be done. Any process commanding the taking of the body is called a capias. The most common attachment of this kind is the capias ad respondendum, commanding the officer to arrest and detain the defendant till he enters appearance in the ac- tion with bond to satisfy whatever judgment may be recovered therein. At the present time the most common attachment is the one commanding the officer to seize property of the defendant to a specified amount and hold it, the purpose being to order it sold when judg- ment is rendered, and to apply the proceeds in satisfac- tion of the judgment. § 7. Garnishment consists of notifying someone to re- tain something he has belonging to the defendant, to make disclosure before the court concerning it, and to dispose of it as the court shall direct. A person so sum- moned is called a garnishee. The proceeding has been likened to a subpoena to a witness, in that it is a summons to give testimony in an action between others upon being paid the mileage and fees of a witness. In another as- pect it has been seen to resemble an injunction against disposing of property, the disobedience of which is a ATTACHMENT, GARNISHMENT, EXECUTION 351 contempt of court for which the garnishee may he pun- ished (1). Again, it may be compared to an order ap- pointing a receiver ; for, when served, the property in his possession is in the custody of the law, and the garnishee is merely the hand of the court, even as a sheriff holding property under an attachment or an execution (2). The garnishing creditor discerns in it only an attachment or execution ancillary to his action or to enforce his judg- ment. He sees in the garnishee an officer of the court holding the property under his writ, for which he is seeking to compel the garnishee to account. But the garnishee sees in it an action against him by his credi- tor for the benefit of his creditor's creditor— ah action commenced by filing a sworn complaint (the garnish- ment affidavit), issuing and serving a summons to appear and defend, liable to be followed by a judgment for de- fault if he does not plead within the prescribed time, like- ly to result in issue being joined and trial demanded if he appears and denies the complaint, which action, de- spite his stoutest defense, may lead to a judgment against him, enforceable by seizing and selling any of his prop- erty not exempt from execution, as any other judgment would be. These partial resemblances remind us of Saxe 's Hindoo tale of the four blind men and the elephant, and show how unlike anything but itself garnishment is. Un- der some statutes, garnishments issue ancillary to an exe- cution; under others, ancillary to an attachment; under others, independently, as a form of attachment if before (1) Lilienthal v. Wallach, 37 Fed. Rep. 241. (2) Stiles V. Davis, 1 Black, 101. 352 ATTACHMENT, GAENISHMENT, EXECUTION judgment, as a form of execution if after judgment. The statutes of eacli state show in which of these forms they authorize the proceeding. § 8. Fieri facias (fi. fa.) is an execution commanding the sheriff, or other officer addressed, to seize and sell enough of the defendant's property to satisfy a judgment therein specified with the amount, and to bring the pro- ceeds into court. This is one of the oldest, and to this day one of the most common of all writs of execution. At the common law, only goods and chattels could be taken and sold under this writ (3) ; but in this country since 1732 (4), the fee or any other legal estate in lands may be seized and sold under a fieri facias against the owner. In some states, the land can be sold only in case there is a bid for it at the sale equal to a certain per cent of the value fixed by the appraisers at the time of the levy, and in others it can be levied on only in case sufficient chattels liable to execution cannot be found. § 9. Capias ad satisfaciendum (ca. sa.) is an execution commanding the officer to arrest and imprison the de- fendant till the judgment against him is satisfied. § 10. Levari facias was an execution allowed by the common law, to be issued by a superior or an inferior court, commanding the sheriff to seize the defendant's property and hold it till the judgment was satisfied. Un- der this writ the sheriff could seize all the defendant's goods, and take the rents and profits of his lands ; but he (3) Harbert's Case, 3 Coke lib. Blackstone says a term for years could be sold as a chattel under a fi. fa. at the common law. 3 Bl. Com. 417. (4) Statute 5 Geo. II, Cap. 7, § 4. ATTACHMENT, GARNISHMENT, EXECUTION 353 could not sell or apply the property to a satisfaction of the judgment, and the possession of the land itself could not be taken. This writ is very little used in America (5). § 11. Extendi faxjias was an execution allowed upon recognizances in certain cases. Under this writ the body, goods, and all the lands of the debtor could be taken (6). § 12. Elegit was an execution taking its name and origin from the statute of Westminister 2d, c. 18, 13 Edw. I (1285), which provides that when a debt is recovered or acknowledged in the king's court, or damages awarded, the creditor may elect to have a fieri facias or a writ commanding the sheriff to deliver to him all the chattels of the debtor and half of his land. Under this writ the chattels were appraised and delivered to the creditor as a payment on the debt, and the land was appraised and half of it delivered for such a term as would be necessary to get the balance of the judgment from the rent at the appraised value. The creditor so in possession was called the tenant hy elegit. Though no land could be found, the chattels could not be sold un- der this writ but must be appraised and delivered in pay- ment. This writ is still in use in some of the eastern states. § 13. Habere facias seisinam, or writ of seisin of a free- hold, and habere facias possessionem, or writ of posses- sion of a term, were executions by which the sheriff of the county where the land lay was commanded to put the (5) 3 Bl. Com. 417 ; Freeman on Executions § 6. (G) 3 Bl. Com. 420. 354 ATTACHMENT, GARNISHMENT, EXECUTION plaintiff' into actual seisin or possession of the land awarded by the judgment. § 14. Retomo habendo was an execution on a judgment in favor of the defendant in replevin, and by it the sheriff was commanded to return the replevied chattels. It is scarcely profitable to review the old writs further, since the general name execution covers all, and a writ appropriate to the judgment to be enforced will be issued in every case. ATTACHMENT, GARNISHMENT, EXECUTION 35a CHAPTER II. ISSUANCE OF PROCESS. § 15. Plan of treatment. Having reviewed briefly the nature of the processes by which judgments are enforced, we come now to consider the questions which arise in issuing the processes ; and we shall take them up in the order in which they would arise in the prosecution of the suit ; but the arrangement of the questions must be some- what arbitrary, because issuing the process is but one transaction, and such questions as are presented arise substantially at the same time. Attachments, garnish- ments and the numerous forms of execution may conven- iently be treated together, although there are some mat- ters peculiar to each, which will have to be specified from time to time as we proceed. But no one can fail soon to discover that most of the rules stated apply to all processes alike, and that to restate them as to each would be worse than useless repetition, for in that way the true scope of the rules would not be shown. The principal questioins which can arise in issuing processes to enforce judgment are the following: (1) when process is issued; (2) on what demands the proc- esses may be issued; (3) at what stage of the case the processes may be issued ; (4) the effect of the use of one process on the right to use another; (5) who may demand 356 ATTACHMENT, GAENISHMENT, EXECUTION and control the issuance of the processes; (6) against whom the processes may be issued; (7) what courts may issue the processes; (8) the form and essentials of the affidavits, writs, and other papers. Each of these ques- tions will be taken up in the order named. § 16. When process is issued. It is issuing the process that gives it life and effect. Writing, signing, and seal- ing it are only preliminary acts. It is so issued as to give it effect as an issued process only when it has been put into the custody of the officer who is to execute it (1). Indeed, it is not then issued, if it is accompanied by ord- ers not to execute till some later time (2). Section 1. Demands on Which Process May Issue. § 17. Executions. In England executions might issue on recognizances in certain cases; and in America we often find statutes providing, that, on certain bonds filed in judicial proceedings, executions may issue at once up- on breach of the condition of the bond. But the general rule is that execution can be issued only on a final, sub- sisting judgment (3). But, on the other hand, execution may be issued on any final, subsisting judgment, as a mat' ter of course, though not expressly awarded by the judg- ment, or even though some other means of getting satis- faction be specified (4). § 18. Attachments and garnishments: Limitations. Attachments and garnishments, because unknown to the common law, may be issued only in cases falling within (1) Gowan v. Fountain, 50 Minn. 264. (2) Smallcomb v. Cross, 1 L. Raym. 251. (3) Locke V. Hubbard, S. Dak. 364. (4) Roberts v. Connellee, 71 Tex. 11. ATTACHMENT, GAENISHMENT, EXECUTION 357 the terms of the statutes authorizing these proceedings. From this fact arise three important limitations upon the use of these processes: (1) as to the form of action in which they may be issued; (2) as to the character of the obligation to enforce which they may be issued; (3) as to the grounds or exigencies which most statutes require to exist before these processes, more particularly at- tachment, can be issued. Of these in the order named. § 19. Form of action. Wherever the code provides for but one form of action, and abolishes the old forms, this consideration is entirely eliminated. This is true in a majority of our states today. In the states where there are several forms of actions, it is important to observe that attachment and garnishment are available only in such as the statutes permit. § 20. Character of obligation. The most general lim- itation observed in the statutes is that they do not extend the use of these processes to actions brought to recover specific property. Such proceedings might be useful in such actions, when judgment is allowed for the value in case the property itself cannot be found, and to secure the costs in other cases, but otherwise they are not adapt- ed to the purpose of such actions. Next to this, the most general limitation is that the statutes do not make the processes available in actions to recover damages aris- ing from torts; but in a few states they are allowed in such actions generally, or for certain specified torts. The statutes in most states provide for attachments in cer- tain cases to secure debts not yet due. These provisions extend only to absolute present debts payable at a future 358 ATTACHMENT, GARNISHMENT, EXECUTION day. From what has been said it will be seen that the statutes generally extend the use of attachment and gar- nishment only to actions on contracts, judgments, and decrees. By interpretation, most courts have further limited the scope of the use of attachment, as distin- guished from garnishment, by holding that the debt sued for must be: (1) liquidated or capable of being liqui- dated by some standard known to the law or specified in the contract (5) ; and, (2) approximately ascertained when the action is commenced (6). But a few courts hold that uncertainty in the amount of the demand is no objection to allowing the use of attachment (7). § 21. Grounds or exigencies of issue. Some ground be- yond the fact of an unpaid demand must exist to authorize an attachment under most statutes ; but the statutes dif- fer from each other considerably in enumerating what shall be sufficient grounds. Yet, all the grounds usually specified indicate, in one way or another, that the plain- tiff would not be very likely to get satisfaction by prose- cuting an ordinary action; (1) because the defendant is removing from the state, is now a non-resident, or is a foreign corporation, for which reason he could seldom or never be found within reach of a summons, and, if served would not be likely to have property permanently within reach of execution sufficient to satisfy the judgment; (2) because his character is such that it is reasonable to sup- pose he would defy execution by putting all of his prop- erty beyond reach before judgment could be recovered; (5) Wilson V. Louis Cook Mfg. Co., 88 N. Car. 5. (6) Ilawes v. Clements, 64 Wis. 152. (7) See Wilson v. Louis Cook Mfg. Co., 88 N. Car. 5. ATTACHMENT, GAENISHMENT, EXECUTION 359 which dishonest character is shown: (a) by his having fraudulently incurred the obligation sued on; (b) by his having absconded or concealed himself to avoid the serv- ice of process upon him; or, (c) by his having assigned, concealed, or carried away his property, or a part of it, to get it beyond the reach of his creditors, or having threatened, prepared, or attempted to do so. The rules to be deduced from the decisions upon these statutory provisions fall naturally into two groups: (1) those which show what constitutes removing, non-resi- dence, fraudulently incurring the obligation, absconding, concealing, disposing of property to defraud, etc.; (2) those which apply alike to all the grounds for attach- ments. The matters coming within the first class are too numerous, minute, and local to be considered in so ele- mentary a treatise as this (8). § 22. Rules applicable to all grounds for attachment. The principal rules applicable to all the grounds alike may be roughly formulated as follows : 1. An attachment obtained on one ground cannot be sustained on another, though the other would have been an equally good ground for issuing it (9). 2. When an attachment is obtained on several grounds it is sustained by the existence of any of those grounds. 3. When an attachment is obtained on several grounds, and one of those grounds exists only as to part of the demands sued on, and the other grounds alleged exist (8) For these decisions see: Attachment, §§54-121, Vol. 5, Century Digest, 251-32G; Attachment, 3 Am. & Eng. Ency. L. (2d ed.) 195-206. (9) Botsford V. Simmons, 32 Mich. 357. Vol. X—P5 360 ATTACHMENT, GARNISHMENT, EXECUTION only as to the remainder, the attachment will be sustained as to all. 4. When the alleged grounds for attachment exist only as to a part of the demand sued on, the whole attach- ment will usually be dismissed; but this would not be done if the improper item was included by mistake, nor because more was claimed than proved to be due, provid- ed there was no fraud intended (10). 5. When there are several defendants, an attachment of the property of all cannot be sustained without an al- leged ground for attachment existing as to all; but it seems unnecessary that the same ground should exist as to all. For example, the attachment might be sus- tained as to one on the ground that he was a non-resident, as to the others on the ground that they had absconded (11). 6. The fact that a ground for attachment exists as to one, and not as to the others, will not enable the creditor to sue him alone unless the obligation is joint and several. But, according to the decisions in several courts, the property of that one may be attached in a suit against all (11). 7. Whatever be the ground for the attachment, it must be substantially made out. While the courts are inclined at the present time to construe the attachment statutes liberally to advance the remedy, they will not stretch the words of the statute to include cases which the legislature did not intend to include (12). (10) Meyer v. Evans, 27 Neb. 367. (11) Wiley V. Sledge, 8 Ga. 532. (12) Jackson v. Burke, 51 Tenn. (4 Heisk.) 610. i ATTACHMENT, GARNISHMENT, EXECUTION 3G1 Section 2. At What Stage of Case Process May Be Issued. § 23. Garnishments. Garnishments need not be sepa- rately considered; for where they are issued as attach- ments or ancillary to attachments they may be issued as early and as late as other attachments, and when they are issued as executions or ancillary to executions they may be issued as early and as late as other executions. § 24. Attachments. Attachments are usually allowed by the statutes to be issued at the commencement of the action, or at any time before judgment. For this pur- pose the action is commenced as soon as the declaration or complaint is filed and before the summons has been served or issued (13). After judgment there is no occa- sion for issuing an attachment, because every object it could serve would be as well served by issuing and levy- ing an execution ; but, if an attachment should be issued after judgment, it would be sustained as a special exe- cution, provided it contained the essentials of an execu- tion (14). In the absence of statute providing for re- viving attachments and garnishments upon death of the defendant, they are abated by his death before judg- ment, but not by his death after judgment (15). § 25. Executions: Before recording or while stayed. Executions issued before judgment is rendered are void, not voidable; and judgment subsequently rendered will not make them valid. Some statutes say that as soon as (13) Hargan v. Burch, 8 Iowa, 309. (14) Pracht v. Pister, 30 Kan. 568. (15) Drake on AttaduoAnt, § 422 : Hood op Garnishment, § 381. 362 ATTACHMENT, GARNISHMENT, EXECUTION the judgment is recorded, execution may issue ; and sev- eral courts have held that executions issued under such statutes before the record is made are absolutely void (16), unless the court orders the entry made nunc pro tunc; but, according to other decisions, they are only voidable, and generally the plaintiff is entitled to execu- tion as soon as he is entitled to payment, which is the moment the judgment is rendered. Reasoning by anal- ogy from the decisions on kindred questions, the better rule would seem to be that executions issued after judg- ment rendered, but before recording it, contrary to stat- ute, are only voidable, liable to be quashed on motion. For example, there is almost no dispute but that an exe- cution is merely irregular, and not void, by reason of being issued while execution is stayed by statute, agree- ment of the parties, or order of court (17). §26. Same: After judgment becomes dormant. At common law, execution should not issue more than a year and a day after the judgment was rendered, without first reviving the judgment by scire facias ; and now, though the time is considerably extended by statute, it is usually provided that after the specified time execution shall not issue without special order of the court upon hearing after notice to the defendant. Yet an execution issued after the year and a day at common law, or after the time specified in the statute, without scire facias or other appropriate proceeding, was never held to be void, but only liable to be set aside on the defendant's motion. He (16) Locke V. Hubbard, 9 S. Dak. 364. (17) Bacon v. Oropsey, 7 N. Y. 195. ATTACHMENT, GARXISHMENT, EXECUTION 363 could not attack it collaterally, and no one else could ob- ject at all (18). § 27. Same: After judgment outlawed. An execution issued on a judgment which is outlawed so that action could not be maintained on it, is generally held to be void, and the purchaser at the sale thereunder acquires no title (19). But when the execution was issued before the judgment was outlawed, and the sale was advertised and made afterwards, the title of the purchaser was held to be good (20). § 28. Same: After judgment satisfied. There is some conflict in the decisions, but the decided weight of author- ity is to the effect that an execution issued after the judgment is satisfied, or even a sale after the judgment is satisfied on an execution issued before, passes no title, even though the satisfaction had not been entered on the record, and the purchaser paid full value without notice (21). §29. Same: After death of a party. At common law, execution issued after the death of a sole plaintiff was irregular, unless he was only the nominal plaintiff, or the judgment had been sold during his life, or revived on scire facias after his death ; and a few courts have held such executions void. But the judgment did not have to be revived because of the death of one of several plain- tiffs ; and even the death of a sole plaintiff after execu- (18) Mariner v. Coon, 16 Wis, 465. (19) Freeman on Executions, § 27a. (20) Lundeman v. Hirtli, 96 Mich. 17. (21) Wills V. Chandler. 2 Fed. Rep. 273. 364 ATTACHMENT, GAENISHMENT, EXECUTION tion issued did not abate it (22). If tlie sole defendant dies before the lien attaches, the execution is generally held to be too late, but the writ is not abated by his death after the lien attaches (23) ; and the death of one of sev- eral defendants is generally held not to prevent issuing executions against all afterward, and levying them upon the property of the survivors without first reviving the judgment. Section 3. Effect of Use of One Process on Right to Another. § 30. Whether a levy is satisfaction. A creditor who has sued out any execution or attachment may omit to execute it, and, before it is returned or returnable, take out a capias (ad respondendum or ad satisfaciendum) and arrest the defendant thereon. But after the property has been taken under the other writ, he cannot have or use a capias till the other is com- pletely executed and returned (24). There are many de- cisions and text-books in which this doctrine is stated in round terms as applying to all forms of writs. It was once said that a mere levy is a satisfaction. That doc- trine was completely exploded by Judge Cowen in Green V. Burke (25), yet one often sees the statement that a levy is prima facie a satisfaction, which is equally false. All that is meant by these expressions is that the creditor will not be permitted to harass the debtor, after having levied on enough property to make his debt secure. De- cisions are abundant in which defenses to attachments, (22) Clerk v. Withers, 1 Salk. 322. (23) People v. Bradley, 17 111. 485. (24) Miller v. Parnell, 6 Taunton, 370. (25) 23 Wend. 490. ATTACHMENT, GAEXISHMENT, EXECUTION 365 on the ground that they were issued and levied while other property was held under other attachments for the same debt, have been denied. Again, there are plenty of decisions denying similar objections to levies under exe- cutions, while property was held under other executions on the same judgment. And it is admitted by all courts that the issuing and use of several similar executions on the same judgment, at the same time, may and should be allowed by the court wherever the ends of justice re- quire it. Though these were issued without special order by the court, the sales under them would probably not be held void, but only voidable. Yet there are some decisions holding sales absolutely void, when made after property had been seized under a previous writ, and released by plaintiff's orders without the consent of the defendant (26). §31. Second execution on attachment judgment. Whether there may be more than one execution issued on a judgment rendered in an attachment proceeding, in which the defendant was not personally served and did not appear, is a point on which opposing decisions have been rendered, in the absence of any statute direct- ing that such second execution may issue; and it is be- lieved that no such special statute will be found in any state. In an Illinois case (27), the supreme court of the state said that, by the return of the first execution un- satisfied, the attachment proceeding and the possession of the attached property were in effect abandoned; and that no further process could issue. (26) For full discussion see Green v. Burke, 23 Wend. 490. (27) Keeley Brewing Co. v. Carr, 19S 111. 492. 366 ATTACHMENT, GARNISHMENT, EXECUTION In a Minnesota case (28) it was also held that the sale on an alias execution issued in such a case passed no title, because by ordering the return of the first the plain- tiff had abandoned the proceeding, though the first was returned because the plaintiff thought that the election of a new sheriff had left his old writ unexecutable, but the court held that the new sheriff should have made the sale on the old writ, which is peculiar. But in a Montana case (29) it was held that the return of the attachment after levy, with an indorsement thereon that no property could be found other than that attached, and the subsequent issuance and levy of an execution, were not an abandonment of the attachment and the lien thereon, and that the attaching creditor might then main- tain a bill in equity to have an assignment of the attached property declared fraudulent and void. Section 4. Who May Demand and Control Process. § 32. Every person owning a claim. It is only justice that all men should be equal before the law. Every judg- ment creditor may have his judgment enforced by exe- cution, if the nature of the judgment warrants it. Any- one may employ attachment and garnishment to secure the payment of his claim, unless excluded by the plain terms of the statute or by his own acts. The United States, any state, a corporation, or an assignee of the de- mand, may employ attachment or garnishment, though it or he and the defendant are both non-residents, and the (28) Butler v. White, 25 Minu. 432. (29) Merchant's Bank v. Greenwood, 16 Mont. 395, 448. See also Van Camp v. Searle, 147 N. Y. 150, 1G2. ATTACHMEXT, GARNISHMENT, EXECUTION 367 non-residence of the defendant is the ground for the at- tachment (30). § 33. Only persons interested in claim. Tlie owner of the demand, and he only, has a right to have it enforced, and to control the means of enforcement (31). If he is absolute owner he has the sole right to control. If there are several part owners, the rights of all will be pro- tected, respect being given to the wish of the majority. If one has a paramount lien without owning the legal title, that will be protected. Thus, when an execution on A's judgment against B was levied by the sheriff on B's judgment against C, which the statute allowed, and there- after, with notice of the levy, C paid B, and B entered satisfaction on his judgment record— this did not defeat A's lien, but the court set aside the satisfaction and ord^ ered execution to be issued on B's judgment, so that the sheriff could collect it to satisfy A's judgment (32). Offi- cers of court have no lien on the judgment for the amount of their unpaid fees; and, therefore, the sheriff cannot proceed on the writ in his hands to collect his fees after the parties have settled (33), nor refuse to accept the plaintiff's bid at the sale because the plaintiff would not pay his fees. Those having this right to control will be protected by the court against its officers, the plaintiff of record, and all persons presuming to interfere. § 34. Writs issued on others' orders axe valid. Yet an (30) Attachment §§ 43-45, Century Digest. (31) Daugherty v. Moon, 59 Tex. 307. (32) Henry v. Tray nor, 42 Minn. 234. (33) Wills V. Chandler, 2 Fed. Rep. 273. 368 ATTACHMENT, GARNISHMENT, EXECUTION execution issued in the name of the judgment creditor without his consent is not void. It will protect an officer acting without notice of the want of authority to issue it, and will pass title to the purchaser (34). § 35. Remedies of persons injured. Nevertheless, the plaintiff may have the execution set aside even after sale to an innocent purchaser, unless the full price bid has been paid. If the clerk refuses to issue process on the owner's demand, or the sheriff refuses to obey his orders in executing it, he may sue for damages on the offend- ing officer's official bond, move the court to amerce him till he obeys, and in many cases have mandamus to him from the higher courts (35). § 36. Fonn of demand and proof of authority. The person thus entitled to control the processes may do so in person, in opposition to his attorney of record, or he may act through an agent, whether such agent is an at- torney or not. No particular form of demand is neces- sary; and failure to give proof of authority to command is no excuse to the officer for not acting, unless he de- manded such proof; but officers have a right to demand reasonable proof of authority, before obeying one as- suming to control (36). Section 5. Against "Whom Process May Issue. § 37. Parties only. Execution can be issued only against the parties cast in the judgment ; and attachment and garnishment can be directed only against the effects of the persons sued. The execution must conform to the (34) Sowles V. Harvey, 20 Ind. 217. (35) State v. Herod, 6 Blackf. (Ind.) 444. (36) Daugherty v. Moon, 59 Tex. 307. ATTACHMENT, GARNISHMENT, EXECUTION 369 judgment to be enforced. The insertion into it of the names of persons as defendants, who are not such, would protect an innocent officer in seizing their property, but would not pass title to the purchaser, though the persons so named as defendants were equally liable with the real defendants for the payment of the debt represented by the judgment (37). For the same reason, the garnishee cannot be charged for his liability to a stranger, who is co-debtor with the defendant on the debt sued for, nor for what the garnishee owes to the plaintiff. § 38. All defendants. Every party cast in judgment ia liable to execution. It matters not who he may be. If judgment may be recovered it may be enforced. Like- wise, the effects of every person sued may be taken by at- tachment and garnishment. This applies to persons un- der legal disability, infants, lunatics, spendthrifts, and married women (38). §39. Any person may be garnishee. The statutes usually provide that the plaintiff may have ''any per- son" summoned as garnishee. These terms are generally held to include natural persons, corporations, non-resi- dents, infants, lunatics, married women, and the plaintiff himself (39). Several courts have denied the plaintiff's right to charge a defendant as garnishee, on the ground that he gains no advantage thereby; but there is an ad- vantage where the same person is sued in one capacity, and summoned as garnishee in another, and such garnish- es?) Hamner v. Ballantyne, 13 Utah, 324. (3S) Dillon V. Burnham, 43 Kan. 77. (39) Wilder v. Eldridge, 17 Vt. 22G. 370 ATTACHMENT, GARNISHMENT, EXECUTION ments have been sustained in several cases (40). The statutes forbidding husband and wife to testify against each other embarrass attempts to charge one as the gar- nishee of the other. § 40. Limitations upon right to process. To the rules stated in the two preceding subsections, a limitation arises from the fact that the administration of public business cannot be diverted from its proper channels nor interrupted to advance the interests of any individual, and one department of the state cannot command and re- quire obedience of another, except as authority to do so is given it by law. For this reason, courts cannot audit and compel payment of claims against the state, nor en- force their judgments when the legislature requests them to audit such claims, nor require the other departments of the state to answer before them as garnishees. For the same reason, one court cannot interrupt the business of any other court by requiring its officers to answer as garnishee for property held by them as such officers, nor by seizing the property in their possession. The same reason forbids the seizure of any property used by any governmental agency— city, county, town, or public board —in the performance of its public trust , and is generally held to prevent requiring such agencies to respond as garnishees for property in their possession belonging to the defendant, or debts they may owe him. Public ser- vice corporations— transportation companies, water com- panies, etc.— are generally held to come within the reason of this limitation, in so far that the property used by (40) Brown v. Wiley, 107 Ga. 85. ATTACHMENT, GARNISHMENT, EXECUTION 371 them in the performance of their public trust cannot be seized on execution against them ; and where the perfor- mance of their public duties would be interrupted there- by they cannot be required to answer as garnishees in suits against other persons. Section 6. What Courts and Officers May Issue Process. § 41. Every court may enforce its judgments. It would be idle to adjudicate, if without power to enforce ; there- fore, authority to pronounce necessarily implies authority to execute (41). For example, a sale of land on an execu- tion issued by a county court not expressly authorized to issue executions was sustained in the following lan- guage: ''The act establishes a court of record, and in general terms confers upon it the powers and duties of a court of record. The power to issue executions is incident to such courts, unless denied, and no such denial is found in the act (42)." But a statute giving one court author- ity to issue a special process unknown to the common law does not impliedly authorize other courts to issue such processes. § 42. No court can issue process on judgments of other courts. Only the court in which the action is pending or which rendered the judgment can issue process to en- force it, unless the original record has been removed to some other court, or there is some statutory provision au- thorizing some other court to issue process to enforce it. Except in these cases, executions, attachments, and (41) Kentzler v. Chicago, M. & St. P. Ry. Co., 47 Wis. 641. (42) Bailey v. Winn, 101 Mo. 649, 659. 372 ATTACHMENT, GAENISHMENT, EXECUTION garnishments, issued from any other court would be void, and the sale thereunder would pass no title (43). Stat- utes providing that the filing of a transcript of a judg- ment of one court in the court of another county, or in another court in the same county, shall have the effect of creating a lien upon the defendant's property, or shall have some other effect, do not impliedly authorize the courts in which such transcripts are filed to issue exe- cutions thereon, and executions so issued are void (44). For the same reason, garnishments so issued would be void. § 43. When process from other courts is authorized. In cases of appeal, if the appeal has the effect of destroy- ing the judgment appealed from, as is usually the case where appeal is taken from the judgment of a justice of the peace, no process can afterward be issued on that judgment by any court, but the court above issues exe- cution on its own judgment when rendered. In other cases the judgment is not generally nullified by the appeal, and the court below issues the execution to enforce its judgment when it is affirmed, unless some statute gives the court above authority to do so, or unless the original record was sent up. Where statutes provide that exe- cution may issue from a court in which a transcript of the judgment of another has been filed, it is generally held that the judgment does not become a judgment of the court where the transcript is filed, except for the purposes specified in the statute. When the transcript is taken (43) Clarke v. Miller, 18 Barbour (N. Y.) 2C9. (44) Bostwick V. Benedict, 4 S. Dak. 414. ATTACHMENT, GARNISHMENT, EXECUTION 373 from a justice court, it is generally held that the justice who rendered the judgment thereby loses authority to enforce it, revive it, or do anything further concerning it (45) ; and it seems that the same rule might well be ap- plied where the transcript is taken from one superior court to another for the same purpose ; but there are sev- eral decisions holding in such cases that, after the tran- script has been sent, the court that rendered the judg- ment may set it aside, receive payment of it, issue an- other transcript to another county, or revive it on scire facias (46). § 44. Only by the proper officer. No process is valid unless issued by the officer authorized by law or by his direction; and in several cases process issued by the proper officer has been held absolutely void, because he thoughtlessly added to his signature some title in place of the name of his office, as when the clerk of the court was also justice of the peace and added that title instead of clerk (47). These decisions seem clearly wrong, on the ground that it is no worse than if he had not signed at all, a matter we shall presently consider (§§ 53-55). Offi- cers are not usually allowed to act in their own cases ; but it has been held that an attachment issued by a clerk in his own case, upon his presenting to himself his own affi- davit for the same, was valid, because no one else could issue the writ, and the issuance of it was not judicial, but purely ministerial and without discretion (48). The (45) Rahm v. Soper, 28 Kan. 529. (46) Nelson v. Guffey, 131 Pa. St 273. (47) Perry v. Whipple, 38 Vt 27a (48) Evans v. Etheridge, 96 N. a 42. 374 ATTACHMENT, GAKNISHMEXT, EXECUTION writ is generally held good thougli issued by a deputy not authorized by law or not duly appointed. Section 7. Form and Essentials of Papers. § 45. Attachment and garnishment affidavits: Want- ing or defective. Most of the statutes require an affidavit to certain matters to be filed before the attachment or garnishment shall be issued, and generally provide for the supplying of defects by amendment. If no affidavit is made, or only one so seriously defective that it cannot be amended, the attachment or garnishment must of course fall, when directly attacked for that reason by the defendant or garnishee ; and fully half of the courts have held that the want of a sufficient affidavit may be set up by the defendant or any other person to avoid the proceed- ing collaterally. Others hold attachment and garnish- ment proceedings not open to collateral attack for want of the statutory affidavit (49). § 46. What is a sufficient affidavit: By and before whom sworn to. If the statute does not provide by whom it shall be made, the affidavit can be made by any one act- ing for the creditor and possessing personal knowledge of the facts ; but if the statute requires it to be made by one, the affidavit of another will not do. So, too, the oath may be administered by any officer competent to admin- ister oaths generally, unless the statute otherwise pro- vides. § 47. When sworn to. It should be sworn to before the writ issues, and not so long before as to raise a presump- (49) Cooper V. Reynolds. 10 Wall. 308. ATTACHMENT, GARNISHMENT, EXECUTION 375 tion that the facts have since changed. One sworn to the day hefore was held bad in Michigan (50). § 48. Substance. The averments should be so positive that perjury could be assigned on them, and disjunctive forms of statement avoided; but, with these limitations, it is always safest to follow the words of the statute rather than to choose phrases which seem equivalent to them; for the court may entertain a different opinion on that matter, and the statute is the sole requirement. The affi- davit is not sufficient unless it shows every fact which the statute requires it to show; but, on the other hand, it is not defective because any other matter is not shown by it. For example, when the statute does not require these things, it need not show that it is made in behalf of the plaintiff, that suit has been commenced, how much is due, that anything is due, that the garnishee is a corporation, etc. (51). § 49. Accuracy and certainty. An allegation of one ground will not sustain an attachment or garnishment on another ; an allegation of one debt will not sustain an attachment on another; one cannot be charged as gar- nishee on an affidavit alleging indebtedness by another^ by him and others, or by him alone in another capacity. The affidavit must be sufficiently specific and accurate on these matters to identify the persons, obligations, etc.; but the same affidavit, containing all essential averments, will sustain an attachment and garnishment, or several garnishments. (50) Wilson V. Arnold, 5 Mich. 98. (51) Burnham v. Doolittle, 14 Neb. 214. Vol. X— 2 6 376 ATTACHMENT, GAENISHMENT, EXECUTION § 50. Form. The affidavit should be signed by the affiant, signed by the officer administering the oath; and, if made in a pending cause, it should be entitled in the court and cause. But errors in any of these respects are not generally held to be fatal if the essential facts appear from the papers as a whole or are othei-wise shown (52). JUSTICE COURT GARNISHMENT AFFIDAVIT IN MICHIGAN. State of Michigan, County of Washtenaw, ss. John Smith, agent for William Smith, being duly sworn, says that John Brown and William Brown are justly indebted to said Wm. Smith upon express and implied contract in the sum of ninety-four dollars, or there- abouts, and that for the recovery of said demand said John Smith has commenced suit before John Barnes, one of the justices of the peace in and for said county. And this deponent further says, that he has good reason to believe and does believe, that the Michigan Central Railroad Company, a corporation under the laws of Michigah, is indebted to said John Brown and William Brown, and to each of them, and has property, money, and effects in its possession belonging to said John Brown and William Brown, and to each of them. John Smith. Subscribed and sworn to before me this 11th day of October, A. D. 1901. John Barnes, Justice of the Peace. AFFIDAVIT FOB ATTACHMENT IN ILLINOIS ClBCmT COURT. State of Illinois, County of Cook, ss. John Smith, being duly sworn, says that John Brown and William Brown are justly indebted to William Smith in a sum exceeding twenty dollars, to wit, the sum of two hundred and twenty-five dollars, after allowing all just credits and set-offs; and that the said indebtedness is due for goods sold and delivered. And this deponent further says, that said John Brown and William Brown are not residents of this state, and that upon diligent inquiry affiant has not been able to ascertain the place of residence of them or either of them. John Smith. Subscribed and sworn to before me this 14th day of October, A. D. 1901. Julius Reitz, Notary Public. § 51. Attachment bonds. That the creditor shall file a bond before the writ issues is another requirement con- (52) Burnham v. Doolittle, 14 Neb. 214; Stout v. Folger, 34 Iowa, 71. ATTACHMENT, GARNISHMENT, EXECUTION 377 tained in most attachment statutes. This requirement is not usual in garnishment statutes, probably because garnishments do not interfere with the possession nor interrupt the use of the property as attachments do. The decisions upon the effect, in collateral attack, of the fail- ure to give a bond when required, or such a one as is re- quired, are as much in conflict as the decisions upon the kindred questions of affidavits wanting or defective (§ 45, above), and the reasons in both cases are the same. But the courts are agi-eed that failure to file a bond at the time, in the amount and terms, and executed by the per- sons required by the statute, is fatal on a direct attack by the debtor, unless the statute has provided a means of curing the defect. Even a deposit in court of the amount in money would not do (53). §52. Form and essentials of processes: Parts of process. The parts of judicial processes— original, mesne, and final— are: (1) the venue (State of Michigan, Wash- tenaw county, ss.), which shows where the subject-matter and proceeding is located; (2) the title as to the court (In the circuit court for Washtenaw county) , which shows what court is conducting the proceedings; (3) the title as to the cause, if issued in a cause already commenced (Ella Glazier v. City of Ypsilanti), which shows in what cause the process is issued; (4) the style (In the name of the People of the State of Michigan), which shows what authority gives the commands contained in the process; (5) the address (To the sheriff of Washtenaw county, Greeting) , which shows to whom the commands contained (53) Drake on Attachment § 115. 378 ATTACHMENT, GAENISHMENT, EXECUTION in the process are given ; (6) the body, which should con- tain an explicit statement of what is commanded to be done, when it is to be done, and how; (7) the teste (Wit- ness the Hon. E. D. Kinne, circuit judge, at the city of Ann Arbor, Washtenaw county, this 23d day of December, A. D. 1901), which once indicated the final approval of the process by the sovereign or his proper officer, together with the time and place when and where that approval was given; (8) the clerk's signature at the end (Jacob F. Schuh, clerk of said court, by John Clark, deputy) ; (9) the seal of the court, if it has a seal, impressed upon the process at the left of the clerk's signature, to prove that the process is genuine; and (10) indorsements such as are required by the statutes and court rules (e. g, A. J. Sawyer & Son, Ann Arbor, Mich., attorneys for plaintiff). § 53. What formal parts are essential. The venue and titles are usually omitted from many kinds of process, and probably the practice is not uniform as to giving or omitting them on any particular kind. Such matters can usually be settled in any state without much difficulty in any case, by consulting the forms used there. But a question of more serious character, and much harder to answer, is this : What is the effect of an omission of any part required by inveterate practice, the court rules, the statutes, or the constitution ? The difficulty in answering this question consists in the fact that no distinction, as to the importance of the various required parts, or be- tween the various kinds of processes, is agreed to; except that processes issued before judgment have to be passed upon by the court, and their validity or invalidity is made ATTACHMENT, GARNISHMENT, EXECUTION 379 res judicata by the judgment if the court had acquired jurisdiction. Almost any sort of proposition concerning almost any part of any process can be sustained by re- spectable authority, and refuted by authority equally re- spectable. §54. Same (continued). Some may lightly answer that that is a small matter, depending upon the local prac- tice. But is it a matter of practice merely? In direct at- tacks it may be conceded that substantial departures from prescribed form would be enough to avoid the pre- ceedings. But how about collateral attacks? For ex- ample, when we come to look at the decisions, we find execution sales held void on collateral attack, because the writ was not sealed, as required; and the next min- ute we find a decision holding that the omission is not even ground for quashing the writ on direct attack (54). Simi- lar illustrations might be given of almost any other part. One judge says: ''If you may omit this part, you may omit that ; if you may omit two parts, you may omit ten. And what is there left? Where will you draw the line, if not on the one side or on the other?" He puzzles us, and we cannot answer him. Another judge compares the process to a man, and asks if cutting off a foot would de- prive a descendant of Adam of his title to manhood. How much may be cut away and the man still live? Delighted with this judge's wit and his evident love of justice, we willingly follow him anywhere, perhaps too far. § 55. Same (continued) . In a recent treatise on this subject, the writer takes up separately the various parts (54) Sidwell v. Schumacher, 99 111. 426; Lowe v. Morris, 13 Ga. 147. 380 ATTACHMENT, GARNISHMENT, EXECUTION of the process, except the body; and, after citing and commenting on several decisions on both sides as to that particular part, concludes in each case that the process should not be held void, but voidable at most, for want of that part. However, this writer does not bother himself to answer the question above suggested, as to whether a writ would be valid which contained none of these parts but the body (55). Probably the majority of the deci- sions upon each of these points agree with the conclusions reached by this writer. They more nearly accomplish the ends of justice, and seem to be correct, on the prin- ciple that the law favors substance rather than form, and will not deny substantial rights because of the misprison of a public officer. § 56. Body of process: As a summons. Attachment and garnishment writs serve two objects, or consist of two parts, the command to summon and the command to at- tach; but executions need usually contain no summons. The summons should accurately specify who is to be summoned, and when and where he is to appear ; but mis- takes in the name, or omissions of it, may be cured by amendment, whenever the mistake is discovered or ob- jection made, and will not justify the party served in disregarding it. Statements of a past time or an im- proper time or place, and failure to state any time or place at all, are cured by appearance at the proper time and place without making objection ; but will often cause the writ to be abated on proper objection at the first op- portunity. The risk of its being valid is too great ever to (55) See Alderson on Judicial Writs, §§ 14-42. ATTACHMENT, GARNISHMENT, EXECUTION 381 justify disregarding it. The writ may be bad as a sum- mons and yet good as an attachment. § 57. Same: As an attachment. Naming the parties. The rules as to the essentials of the body of the execution are the same as those governing the attachment and gar- nishment writs in so far as these are merely attachments. In all of these cases the writ should clearly state in what action or on what judgment it is issued, whose property is to be taken, what kind of property, how much, and when return of the writ is due. Mistakes in the names, omis- sion of some, or additions of others, will not, according to most decisions, make the writ void ; but the facts may be shown by extrinsic evidence (56). Such mistakes will not even justify the officer in failing to execute it or ex- cuse the garnishee for paying over the property in his hands, provided the officer in the one case, and the gar- nishee in the other, really knew who was meant, whether he learned that from the writ or otherwise. For the sake of conforming to the judgment, the execution should is- sue in favor of all the plaintiffs and against all the de- fendants, although only one plaintiff is interested, and part of the defendants are dead, discharged in bankrupt- cy, or not liable for any other reason. §58. Same: What? How much? When return? Di- rection to take realty first, when the statute requires per- sonalty to be first taken, is not generally held to make the writ void, but only erroneous. A failure to state how much is to be taken has been held to be a failure to com- mand anything to be taken, justifying the officer in doing (56) DeLoach v. Robbins, 102 Ala. 288. 382 ATTACHMENT, GARNISHMENT, EXECUTION nothing, and giving him no authority to do anything. The writ is not void because it requires too much or too little to be taken, and the officer is not justified in disobey- ing it (57) A decisive majority of the courts hold that failure to state when the writ shall be returnable, or mak- ing it returnable at an improper time, do not make it void, nor excuse the officer in failing to execute it (58). FORMS. EXECUTION FROM UNITED STATES CIRCUIT COURT FOB DISTRICT OF CALIFORNIA. United States of America. The President of the United States of America, to the Marshal of the District of California, Greeting : You are hereby commanded that of the goods and chattels of John Brown in your district, you cause to be made the sum of five thousand four hundred and twenty dollars to satisfy a judgment lately rendered in the Circuit Court of the United States for the District of California, against John Brown for the damages which John Smith has sustained, as well by reason of his damages as for the costs and charges in and about that suit expended, whereof the said John Brown stands convicted as appears of record. And if sufficient goods and chattels of the said John Brown cannot be found in your district, that then you cause the amount of said judgment to be made of the real estate, land, and tenements whereof the said John Brown was seized when said judgment was rendered, May 7th, 1901, or at any time after- wards, in whose hands soever the same may be. And have you that money, together with this writ, with your doings thereon, before the judges of the said Circuit Court, at the courthouse thereof, in the city and county of San Francisco and District of California, on the 18th day of December, A. D. 1901, to satisfy the judgment so rendered as aforesaid. Witness, the Hon. Melville W. Fuller, Chief Justice of the Supreme Court of the United States of America, this 10th day of October, A. D. 1901, and of our independence 125. Attest my hand and the seal of said court, the day and year last above written. William Moore, Clerk. [Seal] by Joseph Frey, Deputy Clerk. JUSTICE COURT GARNISHMENT SUMMONS IN MICHIGAN. State of Michigan, County of Washtenaw, ss. To any constable of said county, greeting : In the name of the People of the State of Michigan, you are hereby commanded to summon the (57) DeLoach v. Bobbins, 102 Ala. 288 ; Bacon v. Cropsey, 7 N. Y. 195. (58) Freeman on Execution, § 44. ATTACHMENT, GARNISHMENT, EXECUTION 383 Michigan Central Railroad Company to appear before me, at my office, in the city of Ann Arbor, In said county, on the ISth day of October, A. D. 1901, at nine o'clock in the forenoon, to answer, under oath, all questions put to it touching its indebtedness to John Brown and William Brown, or either of them, and the propertj% money, and effects of the said John Brown and William Brown in its possession or control accord- ing to the allegations contained in the affidavit of John Smith duly made and filed in this suit. Hereof fail not, and have you then and there this precept. Given under my hand at the city of Ann Arbor, in said county, this 11th day of October, A. D. 1901. John Babnes, Justice of the Peace. ATTACHMENT AND GARNISHMENT SUMMONS IN ILLINOIS CIBCUIT COTJBT. The People of the State of Illinois, to the Sheriff of Cook County, Greeting : Whereas John Smith, as attorney for William Smith, hath complained that John Brown and William Brown are justly indebted to said William Smith in the amount of $225.00, and that the same is due for goods sold and delivered ; that the said John Brown and William Brown are not residents of this state nor is their place of residence known; and the said William Smith having given bonds and security according to law : We therefore command you that you attach so much of the estate, real and personal, of the said John Brown and William Brown to be found in your county, as shall be of value sufficient to satisfy the said debt and costs, according to the complaint, and such estate so attached in your hands to secure, or so to provide, that the same may be liable to further proceedings thereupon, according to law ; and that you summon John Brown and William Brown to appear and answer the complaint of the said William Smith, at a court to be holden at the court-house in the city of Chicago, in the county of Cook, upon the 14th day of November next ; and that you also summon the First National Bank of Chicago, and such other persons as you shall be requested by the said William Smith, as garnishees, to be and appear at the said court on the said 14th day of November next, then and there to answer to what may be objected against them. When and where you shall make known to the said court how you have executed this writ, and have you then and there this writ. Witness : John Young, clerk of the said court, October 14th, A. D. 1901. [Seal] John Young, Clerk. 384 ATTACHMENT, GARNISHMENT, EXECUTION CHAPTEE III. OENEUAL INCIDENTS AND BEQUISITES OF EXEOUTING PBOCESS. § 59. Plan of treatment. Having completed our survey of the questions that arise concerning the issuance of the processes to enforce judgments, we come now to consider the questions that arise concerning the execution of those processes. Among these we may mention: (1) the legis- lature's power to change the remedy; (2) the power of the court and judge to control the processes; (3) the offi- cer's rights and liabilities in executing the processes; (4) where the processes may run and be executed; (5) when the processes may be executed; (6) who may exe- cute the processes; (7) for what garnishees may be charged; (8) what may be taken under attachments and executions; (9) what constitutes a valid levy and serv- ice; (10) the nature of the lien acquired by attachments, garnishments, judgments, and executions; (11) how that lien may be lost or become subordinate; (12) how it may be foreclosed. This order of arrangement of the ques- tions is somewhat arbitrary, as was the arrangement of the questions arising concerning the issuance of the proc- ess. It is not possible to fix any exact order of sequence. But this arrangement brings up the questions as nearly in the order in which they would arise in practice as any ; ATTACHMENT, GARNISHMENT, EXECUTION 385 and we shall now take up each of these matters separately in the order named in this and the two chapters following. Section 1. Alteration and Control of Process. § 60. Power of legislature to change remedy. This and the following subsection have to do with both the issuing and the execution of the processes, and can be as well considered here as anywhere. The matter of procedure is entirely in the control of the legislature. It may make laws apply to pending proceedings, though the result be fatal to them. No vested right is acquired by reason of having commenced suit. No right to proceed in the par- ticular form is acquired by reason of that form existing when the contract was made (1). The legislature may take away the remedy entirely, or modify it at will as to all future transactions; and remedies for torts may be modified and destroyed after the tort is committed, and even after the claim has been reduced to judgment (2). The state legislature cannot impair any remedy existing at the time the contract is made, so as to prevent its use for the enforcement of the judgment recovered on such contract, unless an equivalent is given. This is because the United States Constitution forbids the states to pass any law impairing the obligation of contracts. See Con- stitutional Law, §§ 232-35, in Volume XII. §61. Judicial control of process. Every court has power, and is in duty bound, to recall its processes, set aside them and the proceedings of its officers under them, stay the proceedings, and otherwise control them, when- (1) Helneman v. Schloss, 83 Mich. 153. (2) Freeland v. Williams, 131 U. S. 405. 386 ATTACHMENT, GARNISHMEXT, EXECUTION ever sucli action is necessary to prevent abnse, oppression, or injustice. This power is entirely independent of stat- ute ; it exists from the necessity of the case. Notice to the party should be given, but is not jurisdictional. The de- termination may be made summarily without the inter- vention of a jury. Probably the powers of the judge dur- ing vacation are more restricted; but he certainly could stay all further action till the matter could be determined in open court, and, for this purpose, may act of his own motion without giving any notice to the parties (3). Section 2 Eights and Liabilities of Officer. § 62. Right to protection in general. An officer has three means of protecting himself from liability for acts done in obeying the commands contained in the process he is called upon to execute : (1) the shield of the process ; (2) recourse to the party whose process he serves; (3) the fact that his possession is the court's possession. Of these in the order named. § 63. Shield of the process. The officer is protected by process not absolutely void, whether regular or irregu- lar; and he cannot take advantage of irregularities, though appearing on its face, to excuse his failure to obey it (4). Void process, never as a sword but always as a shield, protects the officer in executing it if it is fair on its face, unless he knows that it is void. Whether the court is- suing it be of general or limited jurisdiction, he is not bound to look behind his writ (5). Indeed, there is con- (3) Commonwealth v. Magee, 8 Pa. St. 240. (4) People V. Dunning, 1 Wend. (N. Y.) 16. (5) Keniston v. Little, 30 N. H. 318. ATTACHMENT, GAENISHMENT, EXECUTION 387 siderable respectable authority and excellent reason for saying that he should not attempt to decide the truth of statements made to him concerning it, but may and should leave those matters to be determined by the court (6). Yet he is not bound to execute any void process; and, if it is void on its face, he will not be protected in doing so. The court above may not agree with the court below as to its jurisdiction in the premises ; but if the ma- terial facts appear, or are suggested, on the face of the process, the officer is bound at his peril, not merely to de- cide correctly all the questions of law presented, but to do what is impossible for other mortals— correctly fore- cast what will be the decision of the court of last resort upon them. If he refuses to proceed and the court finally holds the process vaild he is liable to the plaintiff. If he acts as commanded by the process, and the court finally holds it void, even on the ground that the law under which it issued is unconstitutional, he is liable to the defendant. See Torts, § 98, Volume II of this work. It has been said that in this particular the law says to the officer: **You are condemned if you do, and you are damned if you don't.'* His only safeguard is to demand indemnity in advance. If the process is fair on its face, and com- mands the officer to take any specific thing, he is pro- tected in doing it, no matter who owns it (7). But he is not justified in taking the property of one person, on a writ commanding him to take the property of another; nor in taking exempt property on a writ commanding (6) Abercrombie v. Chandler, 9 Ala. 625. (7) Buck V. Colbath, 3 Wall. 334. 388 ATTACHMENT, GARNISHMENT, EXECUTION iiim to take what is not exempt (8). These matters he must decide. If the process protects him at all, it shields him from liability for taking the person or property as commanded, and for breaking doors and going upon the property of the defendant or others when necessary to execute the command of the writ, except that he cannot break the outer door of the defendant's dwelling (9). § 64. Recourse to party whose writ is served. The officer may protect himself against loss of his fees, by in- sisting on receiving his pay in advance; but accepting the process without claiming the right waives it. Against liability for acting under a writ which may turn out to be void, or for taking property which may not be subject to the process, he may protect himself by refusing to act till a bond of indemnity is given him ; and, even after a levy without indemnity, if the creditor refuses or neglects on demand to indemnify him against new claimants, he is justified in yielding to them, or to a junior creditor who does indemnify (10). But failure to execute cannot be defended on the ground that indemnity was not given, if none was demanded, nor because the indemnity given was worthless, if he accepted it as sufficient. Without any indemnity being given or promised, the officer has recourse to the creditor for reimbursement for all loss suffered by him by reason of taking property which the creditor expressly directed him to take, unless the officer was certain that the property was not liable to the process ; in which case even an express promise to indem- (8) Lnmmon v. Feusier, 111 U. S. 17. (9) Burtou V. Wilkinson, 18 Vt. 186; Bailey v. Wright, 39 Mich. 96. (10) Smith V. Osgood, 46 N. H. 178. ATTACHMENT, GARNISHMENT, EXECUTION 389 nify would be void. A general direction to execute the process does not make the creditor liable for the trepasses of the officer in executing it, nor to indemnify the officer against liability therefor (11). Contracts to indemnify from liability for disobeying process are usually held to be void. But an action on such a bond was sustained in a recent case, in which attorneys advised the sheriff that the process was void, and the defendant induced him to accept the bond and wait, so that the validity of the proc- ess could be tried (12). § 65. Officer's possession is the court's. Whatever pro- tection the officer receives from this fact is merely inci- dental to the protection of the court's jurisdiction. Prop- erty seized under process thereby passes into the custody of the court issuing the process, and can be taken from the officer only on another process conomanding it and is- suing from the same court. Though the owner is a stranger to the process, he cannot recover it in any other way. Nevertheless, this fact does not prevent him from recovering the value of the property in an action against the officer in any court otherwise competent to entertain the suit (13). § 66. Property rights of officer. Unless some statute otherwise provides, delivery of process to an officer to be executed does not, before levy, yest in him any title to or interest in any property which the process enables or directs him to take. His right and intention to levy upon it give him no right of action against anyone who injures, (11) Nelson V. Cook, 17 111. 443. (12) Ray v. McDevItt, 126 Mich. 417. (13) Lammon v. Feusler, 111 U. S. 17. 390 ATTACHMENT, GAENISHMENT, EXECUTION destroys, or carries it away, even if done for the purpose of preventing a levy. The extent of his right is to seize it if he can get to it (14). But a levy gives him such a special interest in the chattels taken as to enable him to retake them in another state (15) ; or he may maintain replevin, case, trover, or trespass, as the facts and his interests may require, in his own name without adding his office, against his keeper if he fails to produce thwn on demand, against anyone who injures or takes them from him or his keeper, though he be a constable, and the taker a sheriff acting under a valid process (16). If the officer making the levy was a deputy he may sue in his own name, and the sheriff may also sue. Since the garnishee becomes a quasi-officer by virtue of the garnish- ment, he has similar rights against anyone who inter- feres with his possession or injures the property (17). A process fair on its face is not sufficient to sustain an action. The plaintiff must show a valid process and levy (18). § 67. Liability of officer in general. The officer is liable for his own wrongs, and for those of his deputies acting within the scope of their authority or in color of it. He is not liable for failure of himself or his deputy to do that which he could not have done by the exercise of due care and diligence, or which the law did not authorize him to do, or left in his discretion to do or not. But for (14) Mulheisen v. Lane, 82 111. 117. (15) Utley V. Smith, 7 Vt. 154. (16) Brewster v. Vale, 20 N. J. L. 56; Phelps v. Gilchrist, 30 N. H. 171 ; Maguire v. Bolen, 94 Wis. 48. (17) Erskine v. Staley, 38 Va. 406. (18) Hammer v. Ballantyne, 13 Utah, 324. ATTACHMENT, GARNISHMENT, EXECUTION 391 malfeasance and misfeasance he is not excused by the fact that he acted in good faith, was only a de facto offi- cer or was liable to a statutory penalty for the same act. For the wrong of the officer or his deputy, the person in- jured may sue the officer on his official bond, may sue him alone, or, for the deputy's misfeasance or malfeasance, may sue him alone; but for nonfeasance the deputy is liable only to his superior. The officer who commences executing a process must finish it, though his term of office expire in the meantime ; therefore, if an officer is re- elected, and during his second term becomes liable for the act or default of himself or deputy under a process received and partly executed during his first term, his bond for his first term is liable, and his bond for his sec- ond term is not (19). Only a person showing a direct duty to himself violated and a special injury proximately resulting therefrom can recover, and then only to the amount of the injury suffered. The persons to whom liability may thus be incurred are: (1) the plaintiffs in the process; (2) the defendants in the process; (3) strangers to the process. Of these in the order named. §68. Liability to plaintiff in process: Instances. 1. If process not absolutely void is presented to the officer to be executed, and he refuses or neglects to exe- cute it during the time allowed by law therefor, the plain- tiff may recover against him unless he shows a legal ex- cuse for his default. 2. So, if he disobeys any legal in- structions of the plaintiff in executing, whereby he fails (19) Colyer v. Hlgglns, 62 Ky. 6. 392 ATTACHMENT, GARNISHMENT, EXECUTION to take the property, incurs expense, fails to realize as much at the sale as otherwise might have been obtained, etc. (20). 3. So, if he is not reasonably diligent in searching for property, or in levying upon it, by reason of which the process cannot be so effectively executed; for example, if the defendant has died in the meantime, sold the property, encumbered it, or suffered a levy by another (21). 4. So, if he does not take enough, when enough could have been found by the exercise of reason- able diligence. 5. So, if he allows the defendant to es- cape after arrest on a capias, unless caused by the act of God or the public enemy. 6. So, if he suffers a loss of or m injury to the property attached which reasonable dili- gence could have prevented ; and, in the case of property taken under execution, several courts have held that he would be excused by nothing short of the act of God, pub- lic enemy, or inevitable accident (22). 7. So, if he ac- cepts an insufficient delivery bond from the opposite party, a claimant or other person, where the statute al- lows the recovery of the property on giving bond. 8. So, if he does not follow the law as to the manner of adver- tising and selling, or does not use due diligence to realize the best price. 9. So, if he makes a false return (23). 10. So, if he does not make return by the return day, though not specially ruled to do so (24). These are the cases in which liability is most frequently incurred; but he may become liable in other cases. (20) Morgan v. People, 59 111. 58. (21) Knox V. Webster, 18 Wis. 400. (22) Hartleib v. McLane, 44 Ta. St. 510. (23) Acton V. Knowles, 14 Oliio St. 18. (24) Burk V. Campbell, 15 Johns. (N. Y.) 456. ATTACHMENT, GARNISHMENT, EXECUTION 393 §69. Same: Measure of liability. Defenses. The measure of the officer's liability in any of these cases is the amount that could have been realized by proper care and diligence, and it is no defense that any part or the whole can still be realized (25). The burden is on the offi- cer to show that part or all and how much could not have been recovered. It is presumed that all might have been recovered. It is a good defense that the property pointed out was exempt or belonged to another. It is no defense that all the property pointed out by the plaintiff was levied on under his process, and that the remainder could not be found by the sheriff till pointed out by the junior creditor on whose writ it was sold (26). It is no defense that the deputy disobeyed the terms of his commission or the of- ficer's orders. It is no defense that the officer omitted the levy or released the property, in deference to a senior process in the hands of another officer (27). §70. Liability to defendants in process. An officer holding and executing valid process will become liable to an action by the defendants therein: (1) if the officer arrests or seizes beyond his territory; (2) on Sunday, after the return day, or, (3) contrary to the exemption laws; (4) if he breaks the outer door of the defendant's dwelling, or injures any other property by breaking into anything without demanding admission (28) ; (5) if he takes property from the defendant's person, for exam- ple, a watch or money in his pockets, or a pin on his tie, (25) Ledyard v. Jones, 7 N. Y. 550. (2G) Knox V. Webster, IS Wis. 406. (27) Payne v. Drewe, 4 East, 523. (28) Burton v. Wilkinson, 18 Vt. 186. 394 ATTACHMENT, GAENISHMENT, EXECUTION but not, it was held, for taking it out of liis hand; (6) if he perpetrates a fraud to accomplish a levy, as by decoy- ing the defendant into his territory, or arresting him on criminal process, or asking to see the watch in defend- ant's pocket and taking it when shown (29) ; (7) if he levies on other property after he has taken enough to satisfy the process beyond all question, or arrests with- out searching for goods when there is plenty of property to satisfy his writ, or takes realty when there is plenty of personalty which he should first take, or takes and sac- rifices very valuable property when enough other was of- fered that he could have sold without such sacrifice; (8) if he works or uses the property taken, or allows it to be lost or injured for want of due care; (9) or puts any un- necessary hardship on the defendant, by maltreating him while under arrest, or purposely making the levy in a violent, insulting, or oppressive way, for example, at night, or at the defendant's store during business hours with vexatious leisure so as to injure his business; (10) if he delivers up the property to a claimant or other per- son without taking a sufficient security; (11) if he pro- ceeds after receiving official notice or notice from the plaintiff that the process has been paid, stayed, super- seded, or enjoined, but a mere statement by the defendant that he has paid is not enough; (12) if he does not follow the law as to advertising and selling, or unnecessarily sacrifices the property at the sale, or continues selling after enough has been realized; (13) if he buys directly or indirectly at the sale, was interested in or a party to (29) Holker v. Hennessy, 141 Mo. 527. ATTACHMENT, GARNISHMENT, EXECUTION 395 the process, or was otherwise disqualified from acting (30) ; (14) if he fails to account for the surplus in any case, and for all if the writ is set aside while he holds the property or proceeds; or, (15) if he had no process or it was void. There are many other cases in which the of- ficer would become liable to the defendant in the process ; but those above mentioned occur most frequently. §71. Liability to strangers to process. The officer may become liable to strangers to the process by any unnec- essary interference with their persons or property (31). While the officer may enter the premises of strangers, or even break into their dwellings, after demanding admis- sion, to take the person or property of the defendant therein; he is liable to them if he attempts to store prop- erty on their premises, or stays longer than is necessary to get it away. Section 3. Place, Time, and Agents for Executing Process. § 72. Where process may be executed. Execution of process, beyond the limits of the territory to which the jurisdiction of the court or the officer's jurisdiction to act extends, amounts to nothing, though the process be ad- dressed to that territory. Where the statutes provide that a court of one county may issue its process to and have it executed in another county, upon certain things being done, there is considerable dispute as to whether process issued and executed in the other county can be (30) McMillan v. Rowe, 15 Neb. 520. (31) Lammon v. Feusier, 111 U. S. 17. 396 ATTACHMENT, GAENISHMENT, EXECUTION avoided collaterally, or only upon direct attack for fail- ure to comply with the statute (32), § 73. How early. If the officer presumes to execute the process before he receives it he is a mere trespasser. That he acted because he knew it had been made out and mailed to him, and that he afterwards received it and re- turned his action upon it, will not make the act valid nor excuse his trespass (33). But the moment he receives it with orders from the creditor to proceed he may exe- cute it. The debtor can demand no indulgence of him. The attachment or garnishment writ may be executed before the summons to the defendant is served or issued (34). § 74. How late. The diligence with which the officer must proceed to avoid liability has already been consid- ered (§ 68, above). The only remaining question under this head is the validity of delayed action. The attach- ment and garnishment statutes often require the defend- ant and garnishee to be served a certain number of days before the time for appearance mentioned in the process. In such cases, service less than that many days before the appointed time will usually be held bad on direct attack, and has been held void on collateral attack (35). When the writ expires, the officer's authority, except to complete acts begun, expires with it. A voluntary payment of money received by the officer from the debtor after the return day, if no levy has been made, is not held by him (32) Kontzler v. Chicago, M. & St. P. Ry. Co., 47 Wis. G41. (33) Wales v. Clark, 43 Conu. 183. (34) Ilargan v. Burch, 8 Iowa, 309. (35) Southern Bank v. McDonald, 4G Mo. 31. ATTACHMENT, GARNISHMENT, EXECUTION 397 in Lis official capacity. The creditor cannot compel him to account by summary process of attachment, nor by proceeding upon his bond, but only by assumpsit or simi- lar action. A levy after the return day is generally held to be absolutely void, though another levy had been made in season under the same process. The officer is a tres- passer, and the purchaser gets no title (36). A levy after the officer has indorsed his return and filed the process is void, though the return day has not yet arrived. But a mere indorsement of the return on the process does not prevent a subsequent levy before the return day, and a levy on the return day is good (37). If a levy is made in time, the further proceedings (advertising, selling, dis- posing of the proceeds, and making return) may be had after the return day and after the writ has been returned, though no new authority has been issued, and the officer's term has meanwhile expired (note 37, above). § 75. Who may execute process. Process can be exe- cuted only by an officer duly authorized to execute such processes generally, or especially deputized to serve that particular process. Execution of a process by an un- authorized individual is void, and the possession of the process is no protection to him. Execution of process by a de facto officer is not void as to innocent parties, but the officer himself is not protected by the writ (38). Proc- ess can be executed only by an officer who has it in his possession, and is acting within the territory of his juris- (36) Commonwealth v. Magee, 8 Pa. St. 240. (37) Eviius V. Barnes, 32 Tenn, (2 Swan.) 291. (38) Green v. Burke, 23 Wend. (N. Y.) 490. 398 ATTACHMENT, GARNISHMENT, EXECUTION diction (39). Execution of process by an officer inter- ested in it or party to it, or by one officer to whom it might be directed when it is directed to another (40), has been held absolutely void on collateral attack; but it seems that these matters should only be held to make the act voidable at most, and such is the opinion of several courts and text- writers of recognized ability (41). While property is held by an officer under one process, no other officer can take it. An officer who has levied upon prop- erty under one process may make a second levy under another process issuing from the same court (42), by sim- ply indorsing it on the writ, though the actual possession is held by his receiptor. Yet even he cannot take it under process from any other court, without statute expressly authorizing such action; for he is merely the court's servant, and he cannot serve two masters whose orders may be inconsistent. (39) Wales v. Clark, 43 Conn. 183. (40) Gordon v. Camp, 3 Pa. St. 349. (41) Terrill v. Aiichauer, 14 Ohio St. 80; Freeman on Executions §40; Alderson on Judicial Writs §§25, 98. (42) Hewe v. Moody, 67 Tex. 615. ATTACHMENT, GARNISHMENT, EXECUTION 399 CHAPTER IV. PROPERTY TAKEN, LEVY, AND SERVICE. § 76. Comparative scope of processes. Garnishment is not an appropriate process to arrest the person ; nor is a fieri facias, to take intangible things. Most, if not all, writs are similarly limited as to their scope; but the great body of rules in this connection apply alike to all processes. Wherever capias lies in attachment it lies in execution. Whatever property may be taken in execu- tion may be attached (1). Whatever cannot be taken un- der execution cannot be attached. In scope, garnishment differs from these principally in the fact above men- tioned, and the further fact that it is peculiarly adapted to impounding obligations to pay. Moreover, it is not usually desirable nor available against real property; but in a few states the garnishee may be charged for land in his possession (2). Otherwise, almost any property liable to attachment or execution is liable to garnishment. Section 1. Mattees Peculiae to Garnishment. § 77. Two grounds of liability. The statutes contem- plate two distinct classes of cases in which the garnishee may be charged: (1) when he has specific property in his (1) Handy v. Dobbin, 12 Johns. 220. (2) Webber v. Hayes, 117 Mich. 256. 400 ATTACHMENT, GARNISHMENT, EXECUTION possession belonging to the debtor, that is, when he is a bailee; (2) when he is indebted to the defendant (3). Of these in their order; but first, as to when the liability begins. § 78. Prom what time reckoned. The liability of the garnishee, whether as debtor or as bailee, depends upon the situation at the time fixed upon by the statute, which is usually the moment when the process is served on him. A very few statutes make it date from the time the officer receives the writ, and others allow his liability to be in- creased by anything occurring before he answers. The rule usually applicable is that no event subsequent to the date fixed upon can discharge him, if he was liable then ; make him liable, if he was not liable then; nor increase or diminish the amount of his liability (4). § 79. Garnishee as bailee. The garnishee can be charged as bailee only for property liable to sale under execution, for when charged as such he discharges him- self by delivering up the specific thing to the officer to be sold. It would be useless to charge a garnishee, if the thing could not be made available when surrendered. But, on the other hand, if the property is such that it could be sold under execution, that fact is pretty good evidence that the garnishee can be charged for it, unless it can be sold under execution only by virtue of some statute prescribing a specific procedure, in which case that procedure only can be followed. And a few statutes authorize garnishment only for property which cannot (3) Allen v. Hall, 5 Mete. 263. (4) Foster v. Singer, 09 Wis. 392; Webber v. Bolte, 51 Mich. 113. ATTACHMENT, GARNISHMEXT, EXECUTION 401 be levied on (5). The property for which the garnishee can be charged as bailee will be considered when we come to discuss the matters applicable to all processes (§§81, 90 below). All that need be added under the present head is that the garnishee can be charged as bailee only for property actually within the control of himself or his bailee, independent of the control of the defendant (6). § 80. Garnishee as debtor. The fact that a debt pres- ently owing is not payable till a future day, or till after demand, or is secured by mortgage or otherwise, or could be sued for only by the defendant and others jointly, is generally no defense to the garnishment (7). The gar- nishee can be charged as debtor only when he is proceeded against as debtor, and only on an unconditional liqui- dated obligation on contract or judgment, payable in money, not exempt under the statute from liability for debt, nor evidenced by any outstanding negotiable instru- ment, nor in suit or judgment in any other court (8). As a general rule, any defense which the garnishee could set up in a suit against him by his creditor is equally avail- able when his creditor's creditor seeks to charge him on the debt, and no other defenses are available (9). Section 2. Peoperty Subject to Process. § 81. General rule. The policy of the law is to make the judgments of the courts effective, and for this pur- (5) Brown v. Davis, 18 Vt 211. (6) First Nat. Banlt v. Davenport &c. Ry. Co., 45 Iowa, 120. (7) Moore v. Gilmore, 58 N. H. 529. (8) Lehmann v. Farwell, 95 Wis. 185; Jones v. Crews, 64 Ala. 303; Reynolds v. Haines, 83 Iowa, 342; Thompson v. Gainesville Nat. Bank, 66 Tex. 156 ; Scott v. Rohman, 43 Neb. 618. (9) Allen v. Hall, 5 Mete. 263. 402 ATTACHMENT, GARNISHMENT, EXECUTION pose the processes now being discussed have been pro- vided. In keeping with this policy, we should expect to find the courts willing that these processes should be used in any way that bids fair to accomplish that purpose, without producing a greater evil than that for which the judgment was given. And such is the law. The use of a capias to make judgments effective has been restricted by statute, because the public has become convinced that its unrestricted use is more productive of evil than of good. If it be alleged that any property is not liable to executions, attachments, and garnishments, a good rea- son should be given to support the assertion. Therefore, in the discussion of this subject, we shall start with the general rule that all property is liable to the processes, and shall limit the statment by such exceptions as we find supported by sufficient reasons. The principal of these reasons are: (1) that the judgment or process is limited so as not to extend to the things proposed to be taken; (2) that they are not property; (3) that the defendant has not a sufficient estate in them; (4) that they are ex- empt. Of these in their order. § 82. Judgment or process limited. All judgments and processes are limited as to persons, place, and property. As to persons, they are limited to the person against whom the judgment is rendered or the process issued. The property of strangers cannot be taken, though they be equally liable with the defendant for the payment of the demand sued on. As to place, they are limited to the property within the jurisdiction (10). In attachment (10) Lindley v. O'Reilly, 50 N. J. L. 636. ATTACHMENT, GARNISHMENT, EXECUTION 403 proceedings without personal service or appearance, the judgment is limited to the property attached ; but if the defendant has appeared generally, the execution may be both general and special (11). When the judgment is general, the property of the defendant within the juris- diction which can be taken is limited by the scope of the process, as above indicated (§76). If the process be against several, the officer may take their joint property, or, at his option, levy the full amount of the property of any one, disregarding the debtors' wishes as to selection, unless the process otherwise directs, or some statute se- cures these rights to defendants. § 83. Things not property. Many things contribute to our enjoyment of life which this branch of the law does not look upon in the light of property at all. The general rule in this connection is that nothing can be taken under process as property, unless the thing may be sold. Thus, intoxicating liquors where prohibited (12), burglars' tools, dies to counterfeit the public currency, or any other thing, the sale, manufacture, and possession of which is unlawful, are not property nor liable to seizure to satisfy debts. Again, the right to sue for a tort is not property. It cannot be sold separate from the thing upon which the tort was committed, and the wrong-doer cannot be charged as garnishee by reason of his liability for it (13). Again, any franchise granted by the public to an individ- ual, or license granted by one individual or corporation to another, as a seat on the stock exchange, is not prop- (11) Pennoyer v. Neff, 95 U. S. 714 ; Conn v. Caldwell, 6 111. 531. (12) Kiff V. Old Colony, &c. Ry. Co., 117 Mass. 591. (13) Lehmann v. Farwell, 95 Wis. 185k 404 ATTACHMENT, GARNISHMENT, EXECUTION erty, but a personal privilege. In the same connection, may be mentioned the right of an author to publish his manuscript or to withhold it, and the monopoly of au- thors and inventors secured to them by the patent and copyright laws (14). All of these have been held not liable to any legal process to enforce judgments; some- times, on the ground that they are not property, and sometimes on other grounds. But, in most of these cases, and it may extend to all yet, the courts have held that the advantages of these privileges may be made available for the satisfaction of judgments, by invoking the extraordinary jurisdiction of the equity courts (15). Again, notes, bonds, judgment records, title-deeds, and other evidences of title or indebtedness are not property in such a sense that they are liable to seizure and sale on any process to enforce judgments, unless there be a stat- ute making the seizure of the written evidence equivalent to the seizure of the things evidenced (16). Such statutes in regard to notes and bonds are not uncommon. § 84. Defendant's estate insufficient. A thing which is property may not be liable to the process, because the defendant has not a sufficient estate in it. At common law, nothing could be taken in which the defendant's es- tate was merely equitable, because the law courts did not recognize a merely equitable title, and the equity courts enforced their decrees by coercion. But statutes have been passed in most of the states making such estates li- (14) Dart v. Woodhouse, 40 Mich. 399; Stevens v. Gladding, 17 How. 447. (15) Aser v. Murray, 105 U. S. 126. (16) Freeman on Executions § 112. ATTACHMENT, GARNISHMENT, EXECUTION 405 able ; and the codes which have abolished the distinctions between law and equity have largely contributed to the same effect (17). Property in which the defendant has a vested legal estate is often held not liable, because other persons have estates in the same property which might be prejudiced by a seizure and sale. Under this head, may be mentioned future estates in chattels, which could be seized only by ousting the particular tenant ; property in which the defendant has only an undivided interest as joint tenant, tenant in common, or partner ; and cases in which his estate is subject to a mortgage, pledge, or lien to another. But in most states, if not in all, each of these estates is held liable to some of the processes without statute, or is made so liable by statute (18). What are called future contingent estates may also be mentioned under this head. They are not estates at all, but only possibilities of future acquisition, and for that reason are not liable to the processes (19). The sheriff cannot levy on a hope. The same reason exists, and the rule equally applies, to property for the purchase of which the defendant is negotiating, but title to which he has not yet acquired; and so, as to money sent to pay a debt owing to him, but not yet paid over (20). When, on the other hand, a creditor of the seller tries to get it, he is too late if the title has passed (21). (17) Freeman on Executions § 116. (18) Moore v. Gilmore, 16 Wash. 123; Smith v. Menominee Circuit Judge, 53 Mich. 560. (19) Ducker v. Burnham, 146 111. 9. (20) Buchanan v. Alexander, 4 How. 20. (21) Moore v. Davis, 57 Mich. 251. 406 ATTACHMENT, GAENISHMEXT, EXECUTION § 85. Things exempt: Grounds enumerated. A thing within the scope of the judgment and process, which is property, and in which the defendant has a sufficient es- tate, may he exempt on any of several grounds. The principal grounds of exemption are the following: (1) that a statute makes the thing exempt for the use of the defendant and his family, so that they may be self- supporting and honorable members of society rather than burdens upon it; (2) that the seizure and sale would practically destroy the thing, which is sometimes called an equitable exemption; (3) that the personal security of every individual and the public peace would be en- dangered by allowing such seizure; (4) that the thing is serving the public in its present use, and that service would or might be interrupted by a seizure; (5) that the thing is now in the possession of some other state agency, and could not be taken by this court or officer without an unwarranted violation of the authority and interruption of the business of the other. Of these in their order. § 86. Statutory exemptions. Statutes exist in every state, making certain property exempt from all processes to enforce judgments and decrees. These statutes are not uniform. The courts construe them very liberally in favor of the debtors ; for example, they are usually avail- able to non-residents unless restricted to residents, ex- tend to the proceeds while traceable and not put to some other use, and cannot be waived in advance by anything short of a pledge or mortgage. § 87. Equitable exemptions. Some property otherwise liable is exempt, on the ground that extreme hardship ATTACHMENT, GARNISHMENT, EXECUTION 407 would be inflicted on the defendant by the seizure and sale, without any commensurate gain to the creditor. For example, title deeds, bonds, and manuscripts are not property as such, but merely evidence of property; yet the material used to make the record has some value aai waste paper. The law will not allow them to be sacrificed for this pittance (§83, above). Again, growing crops would often be worth something in the immature state; but the law will not permit them to be so destroyed. So, of articles in course of manufacture which would be sub- stantially destroyed by interference with them; for ex- ample, hides in a tan-vat, dough in a bake-oven, and bricks, charcoal, and potters' wares, being fired. So, of property so perishable that it would spoil before it could be sold. Yet the greater part of these difficulties may be avoided. The court may order the perishable property sold on the spot. Statutes usually provide that filing a notice of levy on growing crops shall be equivalent to an actual seizure, and that the crops may be left to stand till they mature. The sheriff may stand by till the proc- ess of manufacture is complete and then levy; or, though he cannot be compelled to do it, he may levy at once and complete the process of manufacture himself, if he is willing to assume the risk of failure, in which case he is liable only for want of ordinary care (22). § 88. Peace and security exemptions. Property on the defendant's person is not liable, because the seizure of it is necessarily such an indignity to the wearer that a breach of the peace would be almost certain to follow. (22) Cheshire National Bank v. Jewett, 119 Mass. 241. Vol. X— 28 408 ATTACHMENT, GARNISHMENT, EXECUTION Moreover, the right to make such seizures would destroy the personal security of everyone, and open the door to numerous abuses (23). The same reasons are at the foundation of the rule that the officer shall not break into the defendant's dwelling to levy on his property (24). § 89. Public service exemptions. The property of in- dividuals and corporations which is being used in the public service— the cars on which the public is being car- ried, the water-works by which it is being supplied with water, even the coal being used to fire the engines that draw the cars or pump the water, or any other property being used in the public service— is exempt from seizure under any process as long as the service continues (25). The same reasons conspire with others, to be mentioned in the next subsection, to prevent the property of public corporations being taken (26) ; and it has even been held that the fees of public officers could not be taken by garn- ishing the individuals owing them, because the appro- priation of the fees to the payment of the debt might pre- vent the public from getting the service (27). Land was not liable under the feudal system; and the reason com- monly given is that the public defense and revenues de- pended on the tenure. But now real property is liable by statute in every state. § 90. Jurisdictional conflict exemptions. That the public business may be carried on with any success at all, (23) Holker v. Hennessey, 141 Mo. 527. (24) Bailey v. Wright, 39 Mich. 96. (25) Gardner v. Mobile & N. Ry. Co., 102 Ala. 635. (26) Klein v. New Orleans, 09 U. S. 149. (27) Sexton v. Brown, 72 Minn. 371. ATTACHMENT, GAEXISHMEXT, EXECUTION 409 it is necessary that no department of the state should in- terfere with the affairs of any other, except in the man- ner provided by law. Whenever any department of state takes possession of anything to do anything with it, no other department has any right to interfere, otherwise than for the purpose of supervising according to the au- thority given it. This fact prevents one constable from taking property out of the hands of another, even on a process from the same court (28) ; and, with greater rea- son, prevents any officer taking property from an officer of another court, and prevents every court from inter- fering with or attempting to command any person in carrying out the orders of any other court. Judgment debtors cannot be required to answer as garnishees in a court other than the one that rendered the judgment, be- cause that would be interfering with the power of the court to enforce its judgment (29). Property being ad- ministered by probate courts cannot be taken from their officers on processes issued from other courts; nor can these officers be required to answer as garnishees in any other court, because the doing of either of these things would be interupting the business and violating the jur- isdiction of the probate court (30). Even property that has been released on bond is still exempt (31). Section 3. Levy and Service. § 91. In general. Having ascertained what may be taken, we must next consider what must be done to take (28) Hewe v. Moody, 67 Tex. 615. (29) Scott V. Rohinan, 43 Neb. 618. (30) Hudson v. Saginaw Circuit Judge, 114 Mich. 116. (31) Hagan v. Lucas, 10 Peters, ^0. 410 ATTACHMENT, GARNISHMENT, EXECUTION it. What must be done depends upon the nature of the process in hand and the statutes affecting it. When at- tachments issue at the commencement of the action, the officer receives a process consisting of two parts ; or else the parts are wholly divided, and he receives two proc- esses. In either case, one is a command to summon the defendant ; the other, to attach his property. Where tlie attachment issues in a pending action no new summons is necessary. While the garnishment process does not consist of these two distinct parts, it equally serves a double purpose— as original process commencing an ac- tion against the garnishee, and as a command to him to hold the defendant's property. An execution contains no command to summon, for the defendant has already had his day in court. However, many statutes require that the debtor shall be notified that the attachment or execu- tion has been issued and levied, or that the garnishment has been issued and served. From what has been said it will be seen that the execution of the processes consists : (1) of levying on and disposing of the property of the de- fendant according to law and the command of the proc- ess; (2) of serving the original processes to commence the actions against the defendant and garnishee; and (3) of serving the defendant with notice of the execution, at- tachment, or garnishment, and of what has been done un- der it, where such notice is required by the statute. These three will now be considered in the order named ; but, under the first, only the essentials to perfect the levy will be considered, the further proceedings to sale being treated subsequently (§§ 118-22). ATTACHMENT, GARNISHMENT, EXECUTION 411 § 92. Levy on land. The modem statutes do not re- quire any actual entry to effect a levy on land, but provide as a substitute that the oflficer shall indorse a certificate of levy upon his process, and that notice of this shall be filed in some public office. Under these statutes the land must be described with the same certainty that is neces- sary to pass title by deed, and is not bound till the notice is filed as required (32). §93. Levy on chattels: Sufficiency. An actual levy is usually required in the case of chattels. To levy is to seize. The decisions are not entirely harmonious as to what constitutes a sufficient seizure; and probably much depends upon the manner in which the question arises, and the nature of the property seized. If the defendant has submitted to the levy, it is immaterial, so far as he is concerned, whether the officer ever saw or possessed the property (33). A doubtful act and declaration of levy by the officer would estop him in an action by the defendant against him for a wrongful levy, though insufficient in a contest between two officers as to which had made the first levy. What would be considered no seizure of a buggy might be a sufficient levy on a red-hot casting or a herd of wild horses (34). The test usually applied is to de^ (32) McGregor v. Brown, 5 Pick. 170. (33) Walker v. Shotwell, 21 Miss. 544. (34) Portis V. Parker, 8 Tex. 23 ; Long v. Hall, 97 N. Car. 286. A levy on corn in a crib by nailing it up, notifying the defendant and other spec- tators of the levy, and so leaving it without a guard, was sustained against a subsequent purchaser from the defendant. Richardson v. Rar- din, 88 111. 124. A levy on hay in a barn by posting notice thereof on the door without moving the hay or leaving anyone in charge was sustained. Merrill v. Sawyer, 8 Pick. 397. Contra : Bryant v. Osgood, 52 N. Hamp. 182. A levy on grain in a stack by going to it and forbidding the de- fendant to touch it was sustained. Gallagher v. Bishop, 15 Wis. 276. 412 ATTACHMENT, GARNISHMENT, EXECUTION termine whether the officer so interfered with the prop- erty that he would be liable to an action of trespass by the defendant but for the protection of the process ; and in this respect it is said that he must have touched the property or a part of it, or must have declared that he was levying on it, while he was so situated that he could see it and might have touched it if he had wished to do so (35). Therefore, an officer who goes to a building to levy on its contents, and, being unable to get in, pro- claims at the door that he levies on all the property in the building, has made no levy, though he guard all the doors and windows so that no one could get in or out without his knowledge. An assignment after his alleged levy or an actual levy by another officer would prevail. Secret levies are void as to third parties. The levy should be so open and notorious that every one may know of it. The effect of failure to retain possession after levy will be considered later (§114). § 94. Same: When no levy necessary. While the officer is in possession and control he cannot, in the na- ture of things, make a seizure ; and no new seizure is nec- essary in such cases. The very act of delivering the process to him to be levied on property in his possession, operates as a levy from the time of the delivery, with- out any act or intention on his part (36). Though the property be at the time in the actual possession of another person, acting as keeper for the officer, no new formal levy is necessary ; but not so, if the property has been re- turned to the defendant. (35) Green v. Burke, 23 Wend. (N. Y.) 490. (36) Field v. Macullar, 20 111. App. 392. ATTACHMENT, GARNISHMENT, EXECUTION 413 §95. Same: Order of seizure, inventory, appraise- ment, indorsement on process, etc. The statutes make numerous requirements of the officer in executing the processes; for example that he shall, at the time of re- ceiving them, write down the hour ; that he shall not take realty where there are plenty of chattels; that he shall make a written inventory of the property taken ; that he shall indorse on the writ a statement that he has made the levy, describing the property taken, etc. Though these things are to be done before or at about the time of making the levy, they are no part of it. Levies should not be held void because these requirements are dis- obeyed ; and in some cases should not be held even void- able, though they would usually be so (note 36, above). § 96. Effect of fraud or unlawful act. A levy otherwise valid should be held to be voidable, most courts say void, if it is accomplished by means of any fraud or unlawful act ; for no one should be permitted to take advantage of his own wrong, and no lawful thing can stand on an un- lawful foundation (37). § 97. Attachment and garnishment summonses. The essentials of valid service of summonses on garnishees and defendants in attachment differ in no respect from the essentials of service of any other original process. The one is necessary to get jurisdiction to render a judg- ment in personam against the defendant; the other, to render a similar judgment against the garnishee (38). Defects in the service which would not be fatal on other (37) Bailey v. Wright, 39 Mich. 96. (38) Compare Pennoyer v. Neff, 95 U. S. 714. 414 ATTACHMENT, GARNISHMENT, EXECUTION processes should not be held fatal in these cases; but there are decisions which make distinctions on the ground that these proceedings are statutory. Appearance by the defendant without service, or after defective service, waives the objection as to that; and appearance by the garnishee waives the defect in the service as a summons as to him— several courts say, as an attachment also. § 98. Notice of attachment, garnishment, or execution. The notice often required by statute to be given by the officer to the defendant, or to the person found in posses- sion, to inform him of the levy of the execution or attach- ment, or the service of the garnishment, must not be confounded with the summons spoken of in the preceding subsection. No such notice is necessary, unless the stat- ute requires it ; and failure to give it if required, or when or as required, would seem, on principle, to be a mere ir- regularity, rendering the levy or service liable to be quashed on proper application by one entitled to com- plain. But there is a prevalent disposition on the part of the courts, while acknowledging that this would be the only effect in case of executions, to consider this notice jurisdictional in cases of attachment and garnishment, apparently on the ground that these proceedings are statutory (39). (39) Freeman on Executions §§257, 262. ATTACHMENT, GARNISHMENT, EXECUTION 415 CHAPTER V. lien and fobeclosube (sale). Section 1. When Lien Begins. §99. At common law. When the statutes passed in the reign of Edward I first made lands liable to execution to satisfy judgments, the courts held that the land was liable on the judgment of a citizen from the time the judgment was rendered; on recognizances and statutes merchant and staple from the day the recog- nizance or statute was acknowledged ; and on the demand of the king from the day when the liability was incurred. These decisions did not depend upon any provisions of the statutes (1). The courts felt that a lien from these dates respectively was necessary, lest the defendant should defeat the judgment by conveying his property away. The same rule has been adopted by several of the American courts where the writ of elegit was used, and might with equal propriety be applied to the use of the fieri facias ; but it is not so applied in states where no lien is provided for by statute, and in most states a statutory lien is given (2). But the common law judges felt that too great mischief would result from holding the chattels liable to execution from the day the judginent was ren- (1) Massingill v. Downs, 7 How. 760. (2) Woods V. Mains, 1 G. Greene (Iowa) 275. 416 ATTACHMENT, GARNISHMENT, EXECUTION dered; and, therefore, they held that the plaintiff could have execution only of the chattels which the defendant had the day execution was sued out, or which he after- wards acquired, and not of those which he had sold be- tween the day on which the judgment was recovered and the day of execution sued (3). § 100. Under statute of frauds. In promulgating these rules, probably the judges were not thinking of judg- ments having effect before they were rendered, nor of executions dated back and withheld from the officer. But by a fiction of the common law, all judgments were pre- sumed to have been rendered on the first day of the term, and the lien upon lands dated from that time ; so that a bona fide purchaser might lose his property by the lien of a judgment rendered after his purchase. A practice also obtained of dating back executions to the first day of the last preceding term; and, worse than tliis, it be- came customary to take out executions for the purpose of obtaining security, or perhaps of protecting the debtor, without any intention of delivering them to the officer to be executed. By this means chattels were taken from persons who had purchased them for value without notice of the judgment, and perhaps a considerable time before it was rendered. These evils induced the provisions in the statute of frauds, 29 Charles II (1677) c. 3 §§ 13-16, that the officer signing the judgment record shall put down the exact day of doing so, that the judgment shall be a lien upon the land only from that time, and that no fieri facias or other execution shall bind the goods of the (3) Fleetwood's Case, 8 Coke 171 ; Green v. Johnson, 9 N. Car. 309. ATTACHMENT, GARNISHMENT, EXECUTION 417 defendant till it is delivered to the officer to be executed, and he was required to indorse thereon the time of re- ceiving it. In most American states the provisions of this statute with regard to liens upon land are sub- stantially embodied in their statutes ; and, in nearly half of the states, the provision with regard to chattels is also followed. § 101. Modem American rule. Ifoder the statute of frauds the defendant might sell his chattels for value to an innocent purchaser after the sheriff had received his writ, and before he had done anything to give notice of the lien; from which it will be seen that the statute did not entirely obviate the old evil. In the absence of any statute governing the matter, the supreme court of Iowa held that they could not adopt the old common law rule, which was so unjust that it had to be changed by statute, and that the commercial spirit of the age is so averse to secret liens that they could not recognize any claim by the creditor till the moment of levy (4). Similar con- siderations have induced the legislatures in a number of states, and the number is still increasing, to adopt the same rule, by which the lien of the execution before levy is entirely abolished. § 102. Attachments and garnishments. Attachment of property, except as a species of distress, was unknown to the common law; and, therefore, we have no old de- cisions as to when the lien of an attachment commences. The attachment statutes in Arkansas, Indiana, and Ken- tucky provide that the lien shall attach from the delivery (4) Reeves v. Sebern, 16 Iowa, 234. 418 ATTACHMENT, GARNISHMENT, EXECUTION of the writ; in Pennsylvania it relates to the teste, pro- vided that it shall be defeasible by any bona fide pur- chase before levy; and in Tennessee the attachment in chancery is made a lien from the filing of the bill. Some of the statutes expressly provide that the lien shall date from the levy; but the most of them contain no provision concerning it ; and where such is the case it has been uni- versally held that the attachment creates a lien from the time the goods are actually levied on, and not before (5), even by courts that had held in the absence of controlling statutes that an execution creates a lien from the time it is issued, or from the time the officer received it. So, also, garnishment is held to create a lien upon the prop- erty in the hands of the garnishee, from the date of the service of the writ upon him, and not before (6). Section 2. Nature of Lien. § 103. Against officer. For any breach of his duty, the officer is liable to the plaintiff in an action against him as an individual, in an action on his official bond, and by summary proceedings in the court and cause in which the wrong was committed. The nature of the creditor's right has already been sufficiently discussed in consider- ing his right to control the processes, and in speaking of the liability of the officer ; and what was then said need not be here repeated (§ 68, above). § 104. In property before levy. A judgment lien on land is superior to an execution lien on chattels, in that it is not cut off by a levy and sale under a junior judg^ (5) Pond V. Griffin, 1 Ala. 678; Taffts v. Manlove, 14 Gal. 47. (6) Fisher v. Hall, 44 Mich. 494. ATTACHMENT, GARNISHMENT, EXECUTION 419 ment. The creditor's lien on chattels before levy, where such a lien is allowed, is not an interest in any specific property of the debtor ; but merely a right to have it taken to satisfy the judgment. For example, the legislature may exempt the property by a law passed after the officer- receives the process; or the defendant may acquire the benefit of the statute by marrying during that time. Again, if the officer fails to levy before the return day the lien expires; and it is liable to be defeated before that time by a levy under a junior process from another court (7), but not by a prior levy by the same officer or his deputy under a junior process from the same court (8). Again, he cannot maintain a suit in equity to require third persons to deliver property to the sheriff to be levied on under his process, nor at law to recover damages for concealing or injuring property which he might have levied upon. His right to maintain an action against the defendant and others at law for a conspiracy to defraud him by keeping the property beyond his reach, or in equity to set aside a fraudulent conveyance have been denied on this ground; but no lien is necessary to maintain such actions, and they should be sustained. His right to have the property taken, if it can be found, is not defeated by a sale for value to an innocent pur- chaser (9), by the death of the defendant (10), by his becoming a bankrupt, nor by a removal of the property to another county and sale by the defendant to an inno- (7) Pulliam v. Osborne, 17 How. 471. (8) Kennon v. Ficklin, 6 B. Mon. 414. (9) Boucher v. Wiseman, Cro. Eliz. 440. (10) Parsons v. Gill, 1 L. Rayin. 695. 420 ATTACHMENT, GAENISHMENT, EXECUTION cent purchaser, or levy under the writ of another creditor there, provided the property is returned and levied be- fore the return day or a testatum fieri facias is issued to the other county and levy made thereunder. § 105. In property after levy. The levy does not divest the defendant of his title ; he may sell or mortgage as before (11). The judgment lien on land does not unite with the lien of the execution or levy. A person who buys land subject to the judgment lien, but before the lien of the execution attaches, gets title free from the claim of the creditor, if the judgment lien expires before the sheriff's sale, though it had not expired before the levy (12). Yet the judgment lien on land and the lien of a levy on chattels are very similar. The creditor who loses thereby may maintain an action on the case against anyone who injures the land on which he has a judgment lien or lien by levy ; a garnishing creditor may maintain a similar action against anyone who interferes with the defendant's property in the garnishee's possession (13) ; and an attaching or execution creditor may maintain a similar action for such injury whenever he has no other remedy. There are several decisions in which such ac- tions were dismissed, on the ground that the plaintiff's only remedy was against the officer, and only the officer acquired an interest by the levy; or on the ground that the creditor's remedy against the officer was exclusive, wherever he had a remedy against the officer; or on the ground that the plaintiff had not shown that there was (11 ) Bigelow V. Willson, 1 Pick. 485. (12) Wells V. Bower, 126 Ind. 115. (13) Erskine v. Staley, 38 Va. 406. ATTACHMENT, GARNISHMENT, EXECUTION 421 not sufficient other property to satisfy his claim. Prob- ably these courts would agree with the decisions holding that after purchasing at the sale he may sue in trover for a conversion before the sale (14). But there are other cases in which actions by the creditor at law and in equity have been sustained against third persons inter- fering with the property in the officer's possession, al- though the creditor had a right of action against the officer (15) ; and these last mentioned decisions seem correct. Of course, a creditor having a lien by levy could not maintain trespass, trover, or replevin against anyone for interference with the property, for he has no right of possession (16). If the creditor would rather have the property itself or its proceeds than look to the sheriff or third persons, he may have it retaken after the officer- has abandoned it, provided he can get it before it is en- cumbered or levied upon under another process. If the same officer has sold it under a junior process, he may have the proceeds paid over to him on motion to the court before they are paid out, or sue the junior creditor for them after they are paid (17) ; but he cannot take the property from the purchaser at the sale under the junior writ, for that would destroy the faith in sheriff's sales. (14) Baker v. Beers, 64 N. H. 102. (15) Field v. MacuUar, 20 111. App. 432 ; Rowland v. Willetts, 9 N. Y. 170. (16) Blake v. Shaw, 7 Mass. 505. (17) Richards v. Morris, 20 N. J. L. 136; Field & Macullar, 20 111. App. 432. 422 ATTACHMENT, GARNISHMENT, EXECUTION Section 3. Loss of Lien After Levy. § 106. By order of court. Independently of any statute, from the necessity of the case, every court has jurisdic- tion to quash any garnishment, attachment, execution, or other proceeding pending before it, either before or after the levy or service has been made (18) ; and no other court has any right to do so, except as a court of review. The power of the judge to quash writs and levies during vacation is very doubtful, to say the least, unless given by express statute, as it usually is with reference to attachments. Many statutes empower court commis- sioners or the court's clerk to quash attachments during vacation, when the judge is absent. § 107. Who may complain. The plaintiff certainly has standing to invoke the court's action to quash his process and levy, though he seldom asks the favor. The defend- ant is equally entitled, and is usually the party moving for such action. In the absence of statutory provision, strangers claiming to own tangible property levied upon are generally considered to have no standing to invoke any action in the proceedings, and as having a suflBcient remedy by replevin, trespass, and trover, for the property or its value. Statutes usually provide that any claimant may intervene, and, where such is not the case, persona interested in the property, as other creditors of the same debtor having liens upon it, will usually be admitted (19). But there are several courts in which the right has been denied. They say, ''Courts of justice are not open, like (IS) Commonwealth v. Magee, 8 Pa. St. 240. (10) Ilawes V. Clement, 64 Wis. 152. ATTACHMENT, GARNISHMENT, EXECUTION 423 tournaments, for errant knights to enter and tilt at pleasure" (20). § 108. Procedure. A bill in chancery for an injunction, and proceedings in a court of review on error, mandamus, certiorari, and prohibition, are not generally appropriate nor available, if there is a remedy in the court that issued the process. Proceedings by audita querela in the same court was the remedy formerly employed to obtain relief from unjust levies ; and this may still be used, no doubt, if not abolished by statute. But a simple motion, in the same court and cause, with reasonable notice to the other persons interested, is so much cheaper, easier to prose- cute, and more expeditious, that it is almost the only procedure now in use; except where a special procedure is provided for by statute, as to which the statutes of the state should be consulted. § 109. Grounds for quashing lien. The court may order the process or levy quashed or adjudge the lien subordinate: (1) because it is absolutely void, and this objection is available to anyone in any form of procedure ; (2) because the rights of other persons require it to be quashed or made subordinate, though it be not void. §110. Same: Available to defendants. The defendant may have the process or levy quashed because of any irregularity not amendable nor waived— for example, that the affidavit, bond, or process was too early or too late, not executed or improperly executed, or did not contain all of the essential parts; or because the facts alleged to obtain the attachment did not exist— for example, that (20) Porter v. West, 64 Miss. 548. Vol. X— 2 9 424 ATTACHMENT, GAENISHMENT, EXECUTION the defendant had absconded, was a non-resident, or fraudulently contracted the debt sued for ; or because the cause of action had been extinguished since the attach- ment was issued, or the judgment on which the execution issued had been satisfied, either before or after the process issued (21). Or, admitting that the preliminary require- ments were observed and that the process is regular, he may have the levy quashed because of any fraud or illegal act in effecting the levy, and for many irregularities ; or because the property is exempt. But he cannot object that the property belongs to another, and is being used to pay his debts; that is his good fortune. He will not be allowed to deny that he owes the debt for which the attachment issued, for that would require a trial of the merits of the action. He cannot urge that the judgment on which the execution issued is incorrect, for he has had one day in court on that question. § 111. Same: Available to claimants and garnishees. Claimants who intervene may have the process or levy quashed if it is absolutely void, or upon allegation and proof that it is being used as an instrument to defraud them as creditors of the same debtor. But they will not be permitted to litigate matters between themselves, show that the defendant does not owe the amount claimed of him by the plaintiffs, take advantage of any irregularities in the proceedings, nor show that the property attached does not belong to the defendant. The issue is whether the property belongs to them, not whether it belongs to the defendant. The court will protect any interest, legal (21) Wills V. Chandler, 2 Fed. Rep. 273. ATTACHMENT, GARNISHMENT, EXECUTION 425 or equitable, which they prove belongs to them. Wliile a garnishee may show that the jDroperty does not belong to the defendant, and may take advantage of jurisdic- tional defects in the principal action, he can object to no irregularities except those in the proceedings against himself. § 112. Abandonment of lien: By election of remedies. When a creditor has an election between several remedies without a right to pursue more than one, his choice of any one is an abandonment of any rights he might have under the others. Thus, when a man having a judgment lien on land sues out a capias and imprisons the defendant under it, and afterwards obtains recourse against the land by the release of the debtor, he takes it subject to all rights acquired during the interval (22). But when a creditor may proceed under several processes at the same time, his action under any one does not disparage his right to proceed subsequently under any other (23) ; and a levy on certain property by the officer, even at the direc- tion of the creditor, is not an abandonment of the lien, which the delivery of the writ to him created on any other property necessary to satisfy it. A subsequent levy on the other property during the life of the writ will over- reach all rights acquired after the lien commenced. §113. Same: By dropping proceedings. No doubt the lien should be, as it has often been, held to be abated by settlement and abandonment of proceedings without completing them, or by appropriating the property levied (22) Rockhill v. Hanna, 15 How. 189. (23) Spring v. Ayer, 23 Vt. 516. 426 ATTACHMENT, GAENISHMENT, EXECUTION on and abandoning without settlement (24). Eeturning the process, taking out another, and making a levy under it on other property have been held not to show an aban- donment ; and when the new levy is on the same property the whole proceedings under the second process may be treated as mere surplusage and the sale sustained as if made under the first. § 114. Same: By surrendering possession. If the officer or garnishee abandons without the plaintiff's knowledge or consent, he is entitled to have the property retaken, but the rights of innocent persons acquired dur- ing the interval will be protected. There are a great many cases in which it is stated in broad terms that the retention of possession is essential to the continuance of the lien ; but most of these are cases in which the rights of other persons have intervened, and the great majority of the cases hold that the lien is not lost by the officer's leaving the property in the possession of the defend- ant (25). § 115. Laches and abuse of process. Mere delay in prosecuting is not an abandonment ; but from it the court or jury may find an intention to abandon, and very slight delay has often been adjudged such an abuse of process as will entitle a junior creditor to priority. No delay by the officer without the plaintiff's authority or knowledge will have this effect; but an unreasonable delay will justify the jury in finding knowledge and sanction by the creditor. (24) Wilder v. Weatherhead, 32 Vt. 765; Allen v. Hall, 5 Met. 263. (25) Conn v. Caldwell, 6 111. 531. ATTACHMENT, GAENISHMENT, EXECUTION 427 § 116. Failure of action or judgment. The lien by gar- nisliment is abated by tlie death of the garnishee before judgment against him, or by the death of the defendant before judgment against him, unless the statute provides otherwise ; and the same is true of attaclnnent. But the lien of an execution levied is unaffected by the death of either party (§ 29, above). Cases are numerous in which the lien has been held to be abated by departures from the prescribed procedure, but this question has been suffi- ciently discussed already (§§45-50, and see §§121-22). A judgment and the lien of the execution thereon may be allowed to subsist while the judgment is opened to try a special defense ; and an appeal, motion for a new trial, and the like, would have no effect on the execution or lien. But if the judgment be absolutely set aside the founda- tion of the execution is gone, and it must fall; and with it, the Hen. So if the execution be set aside. Likewise, if judgment be given for the defendant in any action, all attachments and garnishments pending thereon must fall unless saved by a proper appeal (26). , § 117. Substitute bond. The cases are not agreed as to whether the lien of the levy is divested by the defendant giving a bond to obtain a release, replevin, appeal, new trial, injunction, or stay of proceedings; but it is sub- stantially agreed that no such effect would follow the giving of any bond by a claimant (27). Section 4, Foeeclosure of Lien. § 118. In attachment and garnishment. Tlie lien which the creditor acquires by an attachment levy can be fore- (26) Erickson v. Duluth Ry. Co., 105 Mich. 415. (27) Rocco V. Parczyk, 77 Tenn. 328. 428 ATTACHMENT, GARNISHMENT, EXECUTION closed only by prosecuting the action against the defend- ant to judgment, and having the property sold on an order to sell or execution issued on that judgment. We need not consider the steps required to obtain a judg- ment, since they are the same in such cases as in other actions. Likewise, the lien acquired on property by gar- nishment can be perfected only by prosecuting the prin- cipal action to judgment, if that has not already been done, and by prosecuting the garnishment to judgment against the garnishee. When the garnishee is charged as bailee, that is, for specific tangible property in his posses- sion, it is also necessary to take out execution, levy it on the property, and proceed to sale as in other cases; or, if the garnishee fails to produce the property on demand, to levy upon and sell any of his executionable property to an equal amount. But when the garnishee is charged as debtor, he may safely pay the money into court or to the plaintitf, as soon as the judgment is rendered and recorded against him, without waiting for execution to issue (28). § 119. Proceedings in garnishment from summons to judgment. The summons to the garnishee gives him a cer- tain time, named therein or in the statute, until which he is not liable to default for not answering. Under some statutes his answer is a mere formal pleading; but under most statutes the plaintiff is entitled to a personal ex- amination, on oral interrogatories, in open court, either in the first instance or upon an unsatisfactory answer being made. If the garnishee be a corporation, the (28) Barber v. Howd, 85 Mich. 221. ATTACHMENT, GAUNISIIMENT, EXECUTION 429 plaintiff is entitled to an answer by some agent having knowledge of the facts. If the plaintiff is satisfied with the answer, he may allow the cause to be continued till he is ready to take judgment, being careful not to entitle the garnishee to have it dismissed for laches (29). But if the garnishee has not confessed liability, the plaintiff must join issue on the answer or file a supplemental com- plaint, according to the practice, bring the issue to trial, and adduce such evidence as would prove liability in an action by the defendant against the garnishee; or the garnishee will be entitled to a discharge. The trial of this issue is conducted very much the same as other trials. § 120. Conduct of execution sales. The statutes usually specify with considerable particularity: (1) what notice of the sale shall be given— for how long, in what language and publication, where posted, who personally notified, etc.; (2) where and when the sale shall be held— on the premises, at the county seat, on a business day, between nine a. m. and six p. m., etc. ; (3) how the sale shall be con- ducted—personalty offered before realty, at auction, to the highest bidder, for cash, in parcels, within view of the property, after clearly pointing it out, etc.; (4) what the officer shall do after the sale— in disposing of the pro- ceeds, in giving evidence of title to the purchaser, in mak- ing report of his doings to the court, etc. Obviously it would be out of place to attempt a discussion of each of these requirements at length in an article of this kind. The requirements are quite different in different states, and the reader is referred to the statutes. To the statu- t29) See Webber v. Bolte, 51 Mich. 113. 430 ATTACHMENT, GARNISHMENT, EXECUTION tory requirements the courts have added others; for ex- ample, that the officer shall not directly or indirectly buy at the sale, that he must be otherwise competent as here- inbefore indicated, etc. § 121. Effect of defects. Without attempting to speak of each of the requirements in detail, it may be said, that, if the property is simply handed over to the creditor with- out a sale, or the garnishment is dropped on payment by the garnishee to the creditor, without the garnishment being carried to judgment, the title of the defendant is not divested, and the creditor acquires none of which he can avail himself even on collateral attack (30). On the other hand, it seems pretty clear that the proceedings are not liable to collateral attack because of any irregularities in them. If the officer has sold without the proper notice, at an improper time or place, en masse, on credit, or the like, he may be liable to an action by anyone injured who has not waived his right to sue ; and, on that ground, the sale would be set aside on a proper and seasonable ap- plication by anyone prejudiced by the default. But it is not liable to collateral attack (31). The sheriff's deed is not void because it misdescribes the judgment, or does not describe it at all. § 122. Officer's return. The purchaser's title does not depend on the officer making a true return or any return at all, nor on his accounting for the proceeds. The officer 's return is his report to the court of his doings under the process; and should be in writing, on the back of the (30) Allen v. Hall, 5 Mete. 2G3. (31) Cavanaugh v. Jakeway, 1 Walker's Ch. (Mich.) 344. ATTACHMENT, GARNISHMENT, EXECUTION 431 process or on some paper attached thereto, dated, and signed; and should state in detail just what the officer has done, and not merely that he has executed the process according to law. A return is never too late to be valid (32) ; but the officer is liable to amercement by the court, or an action for damages by the party injured, if he fails to return it on or before the return day (33). The return may be amended by the officer without con- sent of the court at any time before the officer surrenders possession of it; but afterwards, only on special order. (32) Smith v. Osgood, 46 N. H. 178. (33) Burk v. Campbell, 15 Johns. (N. Y.) 456. 432 ATTACHMENT, GARNISHMENT, EXECUTION CHAPTER VI. SATISFACTION AND SUBSEQUENT RIGHTS. SECTioisr 1. "What Constitutes a Satisfaction". § 123. Outline. What remains to be said regarding satisfaction of judgments may be considered under the following heads: (1) by use of the court's processes; (2) by setting off against other judgments; (3) by recovering another judgment ; (4) by lapse of time; (5) by payment. Of these in their order. § 124. By use of process. Any satisfaction of the judg- ment by use of the court's processes without actually realizing the amount is only conditional at most; and this question has been sufficiently considered already (§ 30). Conceding that arresting the defendant on ca. sa. and releasing him, or seizing his property on fi. fa. and releasing it, would operate as a satisfaction of the judg- ment (and there are several decisions denying the last part of the proposition), no such result would follow from surrendering priority in favor of a junior creditor (1). Though such action would release a surety, and would entitle a person having an intermediate lien to priority; even these results would not be produced by the court erroneously decreeing priority to the junior creditor, and the senior creditor acquiescing therein (2). (1) Bank of Pennsylvania v. Winger, 1 Rawle (Pa.) 295. (2) Hamilton v. Mooney, 84 N. Car. 12. ATTACHMEXT, GAENISHMENT, EXECUTION 433 § 125. By setting off against other judgments. In the absence of statutes touching the matter, courts have such power over their judgments that they can order one set off against another. When a person desires a judgment in his favor credited on a judgment against him, he must apply to the court in which the judgment stands against him, for no other court could enter satisfaction on it. In such cases, the court will order satisfaction entered upon condition that satisfaction to an equal amount be entered on the other judgment. The rules as to mutuality of parties are much the same as upon setting off other de- mands. § 126. By recovering another judgment. The judgment cannot be used after a judgment has been recovered on it. See Judgments, § 37, elsewhere in this volume. Re- covery of judgment against one of several persons jointly and severally liable does not satisfy a judgment pre- viously recovered against another of them. But satisfac- tion of one of such judgments, in whole or in part, whether it be the largest or the smallest, satisfies all in the same proportion. § 127. By lapse of time. At common law, no action could be maintained on a judgment over twenty years old without proving that it had not been paid; which might be shown by recent acknowledgements of it, pay- ments on it, etc. A lapse of less time would sustain a finding of payment. In this country, some states have adopted the common law rule by statute; while others have shortened the time, and required the acknowledge- ments to be in writing. 434 ATTACHMENT, GARNISHMENT, EXECUTION § 128. By payment: To whom. If the debtor is given no directions to the contrary by the owner of the judg- ment, it is satisfied to the amount paid by a payment to any of the joint creditors ; to the attorney who recovered the judgment (3) ; to an officer having process to collect the judgment not yet returnable, or on which a levy was made before the return day and remains undisposed of; or to the court's clerk while authorized by statute. And in all of these cases it does not matter that the money so paid is never accounted for to the owner of the judgment. But payment does not satisfy in the absence of express authority to receive it, when it is made to an officer who has no process on the judgment, or who has process past due on which no levy has been made, or whose process was issued on the order of the party making payment and without authority from the creditor (4) ; nor when made to the clerk, while execution is in the hands of the sheriff or before the judgment was rendered ; nor when made to anyone but the real owner of the judgment, if he has notified the debtor to pay no one else. For example, the real owner may recover notwithstanding payment to the nominal plaintiff; and a person having a lien on the judg- ment as attorney or otherwise (5), or to whom a part interest in the judgment has been assigned, may recover, notwithstanding a payment to the judgment creditor, pro- vided the debtor has been notified not to make such payment. (3) McCarver v. Nealey, 1 G. Greene (Towa) 360. (4) Osgood V. Brown, Freem. (Miss.) 392. (5) Andrews v. Morse, 12 Conn. 444. ATTACHMENT, GARNISHMENT, EXECUTION 435 § 129. Medium and amount. Neither the attorney (6) , the clerk of the court, nor the officer executing the process can receive anything other than money in payment, nor give satisfaction for more than the amount actually re- ceived, unless such action is specially authorized or after- wards ratified by the owner of the judgment. When these agents have received something other than money, either as payment or to be converted into money and applied, it has been held that in doing so they acted as agents for the debtors ; and that, if they convert into money but do not account for it, it is no payment, and the creditor is entitled to a new execution or to sue over. Of course, the creditor may bind himself by receiving anything in pay- ment which satisfies him; but the courts are not agreed as to whether he is bound by a satisfaction in full of an absolute judgment, in consideration of a payment in money of a part of it by the defendant. § 130. Whose payment satisfies. Assignment and sub- rogation. Payment of the amount of the judgment by a stranger, on executing an assignment of the judgment to the latter, does not satisfy it ; and the assignee is entitled to execution (7). When a stranger at the request of the debtor advances the amount to pay a judgment, with a mutual understanding that the judgment shall be kept alive for his benefit, he is entitled to have it enforced by execution, though no formal assignment was executed. So, when one who has purchased property subject to a judgment lien pays the creditor, with a like understand- (6) McCarver v. Nealey, 1 G. Greene (Iowa) 360. (7) Steele v. Thompson, 62 Ala. 323. 436 ATTACHMENT, GARNISHMENT, EXECUTION ing, to save the property. The same privileges have been accorded to sheriffs, who have had to pay the amount because they failed to collect it on executions given to them (8), to sureties who have paid (9), and even to one of the principal debtors, who has paid the full amount when the others should have paid in equal proportion. But, by the great weight of authority, the judgment is satisfied as soon as the creditor receives payment from the sheriff, or from one of the debtors, though he be only a surety and the payment be made under the guise of taking an assignment. This is because it would not be safe to make a man a judge of his own rights ; but each of these parties is entitled to redress, by action at law for money paid to the use of the real debtor, or by bill in equity for subrogation to the rights of the creditor (10). Section" 2. Eights After Satisfaction. § 131. Proof and entry of satisfaction. As a necessary incident of its power to administer justice, every court has jurisdiction to inquire whether its judgments have been satisfied, and to enter satisfaction on its records whenever a satisfaction in fact is found (11). The pro- cedure is to move that satisfaction be entered, give all persons interested notice of the motion, and support it by such proof as the facts afford (12). § 132. Appeal after satisfaction. The courts are not agreed as to whether an appeal may be maintained after (8) Heilig v. Lemley, 74 N. Car. 250. (9) Southeren v. Reed. 4 11. & J. (Md.) 307. (10) Bones v. Aiken, 35 Iowa, 534. (11) Bailey v. Hester, 101 N. Car. 538. (12) Abercrombie v. Chandler, 9 Ala. 625. ATTACHMENT, GARNISHMENT, EXECUTION 437 the judgment has been satisfied ; but the better view seems to be that an appeal lies in favor of a defendant, who has paid to avoid execution being issued, or in favor of a plaintiff, who has accepted payment of what was awarded him without taking it as payment in full. One who has attempted to enforce a judgment in his favor might with greater reason be held to be precluded from seeking to avoid it. § 133. Restitution on reversal. On reversal of the judg- ment after sale on execution under it, or after payment of the amount by the defendant to avoid execution, the defendant is entitled to be restored to his original posi- tion. He may without demand sue the plaintiff for the amount, or, at his option, for the specific property taken if the plaintiff purchased it at the sale. The courts are not agreed as to whether the amount which he can re- cover is the amount which the property brought at the sale, or its real value. § 134. Protection of third parties when judgment is reversed. A garnishee is protected by payment of the debt or delivery of the property on the judgment against him, although the defendant afterwards obtains a reversal of that judgment, or of the judgment in the main action (13). When a stranger to a judgment purchases property at a sale under execution thereon, his title is unaffected by the subsequent reversal of the judgment, though he knew that an appeal was pending or might i5e taken (14). This rule has been held to extend to one who was interested in (13) Troyer v. Schweizer, 15 Minn. 241. (14) Gould V. Sternberg, 128 111. 510. 438 ATTACHMENT, GAENISHMENT, EXECUTION the sale as a junior lien-holder, but not to the attorney for the creditor on whose judgment the sale was made. If this protection were not allowed, said Lord Coke : ' ' The vendee would lose his term and his money too, and there- upon great inconvenience would follow, that none would buy of the sheriff goods and chattels in such cases, and so execution of judgments (which is the life of the law) would not be done" (15). Some courts have thought that the purchaser should be equally protected when he pur- chases while the appeal is pending, though the purchaser at the sheriff's sale was the plaintiff or his attorney; but this is generally denied, because the reasons for the rule do not seem to require it (16). § 135. Vaxjating false satisfaction. The general powers of superior courts give them jurisdiction to set aside satisfactions entered on their judgments; and they will do so whenever justice requires it. But the clerks of these courts possess no such powers. Justices of the peace cannot vacate their judgments ; and by analogy of reason, would seem to lack power to vacate satisfactions entered on their judgments. The only remedy in such cases would seem to be to sue over on the judgment (17). Whether a court should vacate a satisfaction produced by a sale of the property of a stranger, or of exempt prop- erty, is disputed; but the majority of the courts favor setting aside the satisfaction and issuing a new execution in both of these cases, in favor of the plaintiff if he was the purchaser at the sale, for the use of the purchaser (15) Manning's Case, 8 Coke 94, 97. (16) Singly v. Warren, 18 Wash. 434. (17) Piper v. El wood, 4 Denio (N. Y.) 165. ATTACHMENT, GAENISHMENT, EXECUTION 439 if he was a strangor (18). A few courts have set aside satisfaction and issued new executions, because the prop- erty was encumbered for more than it was worth ; but it is generally held that the satisfaction cannot be set aside because the purchaser was mistaken as to the quality of the property or the value of the defendant's estate in it (19). And it is quite generally agreed that no action can be maintained by the purchaser against the sheriff or the plaintiff for the money paid, nor against the de- fendant for the loss from an excessive bid. There is no warranty at such sales. Caveat emptor applies. (18) Watson v. Reissig, 24 111. 282, (19) Poppleton v. Bryan, 36 Ore, 69. Vol. X— ,30 APPENDIX A. INTERNATIONAL LAW. § 1. How is public international law distinguished from private international law? § 2. What gives a rule of international law its binding character of law"? What are the sources of international law? § 3. What event in the seventeenth century marked the beginning of a new epoch in the history of international law? § 5. Is a colony of a nation a sovereign state? § '6. A state which is a monarchy is divided into two parts, one part remaining a monarchy and the other adopting a republican form of government. Is the identity of the former state lost ? § 7. What is the diiference between a state under the protectorate of another state and a state under suzerainty? § 8. What does a recognition of the independence of a revolting community before the revolting section has in fact achieved its in- dependence amount to? § 9. In what cases is recognition of belligerency by other states than the parent state allowed? § 10. What effect has the conquest of one state by another upon the treaties made by the conquered state? § 12. In what cases is one state permitted to enter upon terri- tory of a foreign independent state? By the Monroe Doctrine in 1823, the United States declared that it would not permit third parties to intervene in America to sub- due infant communities which had proved too strong for Spain. Could acts done by the United States under this policy be justified by the rules of international law? §13. What is meant by intervention"? § 15. When is intervention justified? § 16. In X country persons accused of crimes are not given the right to a trial by jury. Has another state a right to intervene to prevent this? § 17. Is intervention to preserve the balance of power justifiable? § 21. A government explorer of X country discovers an island and returns to his country. A year later Y country sends a delega- 440 APPENDIX A 441 tion to formally occupy the island. Ten years later a sailing vessel with only citizens of Z country on board is wrecked near the island and the crew and passengers establish their home on the island. What country has title to the island? § 24. How can the acquisition of territory by prescription be justified ? What is tho length of time required to give title by prescription? §25. What is title by accretion? § 27. X state cedes certain land on one side of a river to an- other state. Where is the boundary line? § 29. X country is under the protectorate of Y country. A citi- zen of Z country is wrongfully held a prisoner by X country. Is Y country bound to interfere? § 30. What is a sphere of influence? How is its size determined? §36. What is meant by "marginal seas"? § § 31-39. X and Y states are divided by a navigable river. A crime is committed on a public ship of Z state while navigating the river. Which state has jurisdiction to try the offender? §40. How is piracy punishable? By what form of punishment? §42. How may citizenship in the United States be acquired? § 43. Can a subject of Germany be held to military duty upon his return to Germany after becoming naturalized in the United States? §45. What military service may aliens be compelled to render? § 46. The sovereign of X state is travelling in Y state. The authorities of Y state are trying to capture an escaped convict. The sovereign of X state harbors the convict in his house. What remedy have the authorities of Y state? § 49. Who has jurisdiction over troops of one country passing through another? § § 50, 51. What is the distinction between public ships and mer- chant vessels in territorial waters of another state in regard to the jurisdiction ? §54. What is a political offense? §60. How is a diplomatic mission terminated? § 66. A treaty is signed by the agent of X state on Januaiy 12, 1892. It is ratified April 3, 1892. From what time did it take effect? § 68. X and Y states neither having a sea coast boundary agree by treaty not to maintain navies. Later X state acquires territory on the sea coast and is threatened with invasion by the fleet of Z 442 APPENDIX A country. X state then builds a navy. Is this a violation of its treaty with Y state? § § 77, 78. What is the difference between retorsion and reprisal ? §84. What is meant by "reasonable necessities of war"? §89. What determines the enemy character of persons? § 93. What are the reasons for not permitting a capturing army to destroy immovable public property? § 98. When is pr6perty upon the seas impressed with enemy character ? § 102. What laws are granted in territory under military occu- pation ? § 106 What requirements must be observed by a bombarding fleet before the bombardment is begun and while it is gong on? § 112. What are the different modes of termination of wart § 114. What is the principle of postliminium? §127. What is contraband of war? APPENDIX B DAMAGES. § 1. What is the difference between the forms of relief granted by law courts and courts of equity? How is legal judgment for damages enforced? § § 2, 3. White sees Green 's bull at large in Green 's garden, and it is apparent that if the bull is not driven out, it will cause damage to the garden amounting to $100. He goes over and succeeds in driving the bull back into its pasture and penning it up, but in do- ing so he breaks Green's clothes-line post which is worth $5. Green sues him for trespass. What damages can he recover, if any? A dealer has built i;p a large trade in oil. A large corporation opens a branch agency in competition with him, and sells its oil at a price below the actual cost of production, until it succeeds in divert- ing a large part of the dealer's trade. The dealer sues the corpora- tion, claiming as his damages the amount of profits which he shows he has lost through loss of sales of his oil. Can he recover? A retail grocer had been in the habit of making all of his pur- chases from the plaintiff Company, who were wholesale grocers. The retailer's employes, upon the order of their union, declared a strike, and during the continuance of the strike the plaintiff Company was damaged in the amount of $100 through loss of sales to the retailer. It sued the union for this amount. What decision? Jones owns an amusement park into which he invites the public, to witness a free base-ball game. Bearing a grudge against Brown, he refuses to the latter permission to enter; but Brown afterwards succeeds in entering while Jones' back is turned. Jones finds him in the grounds, ejects him, and sues him for trespass. Can he re- cover damages? § § 4-6. Jones suffers a legal injury without any damages. What can he recover? Dale writes and publishes defamatoi-y words about Hale. The words cause Hale no damage. Has Hale an action against Dale? What is meant by the measure of damages? § § 7, 8. Plaintiff contends that defendant negligently ran his 443 444 APPENDIX B automobile into defendant's automobile thereby injuring plaintiff. The court instructs the jury that if they find the defendant was neg- ligent they shall find him guilty and assess the damages at $200. Is there any objections to this instruction'? § 9. Upon what principle are excessive damages set aside by the court ? §10. Upon what principle does a court disturb a verdict for inadequate damages'? §§11-14. What is meant by nominal damages? Jones contracts with Clark to take care of his lawn for a year, Clark to pay five dollars a month. At the end of the second month, when Clark has paid ten dollars, Jones refuses to go on with the contract. Clark without any trouble or expense procures another man for four dollars a month to do the same work. Clark brings an action against Jones for breach of contract. What can he recover'? White, without permission, goes into Mason's yard and takes his lawn mower which he uses for a few hours. He then cleans and sharpens it and returns it in better condition than before. Mason brings an action for trespass and for the wrongful taking of his lawn mower. What can he recover"? § § 16-19. The action is for trespass for false imprisonment under a warrant plainly illegal. The court refuses to interfere with a verdict for $1,500 damages, though it appears that so far as actual injury is concerned $100 would have been enough. Is this proper? In an action for breach of contract the court instructs the jury that if they find the defendant guilty they shall award besides the actual damages, exemplary damages to the amount of $200. Is this insti-uction good"? § § 20, 21. The conductor of a train arrests a passenger in an illegal, wanton, and oppressive manner, the company not having in any way authorized or ratified the act. Is the company responsible in exemplary damages? A brakeman acting in the course of his employment uneeessarily makes a violent attack upon a passenger. Is this a proper case for a verdict for exemplai-y damages against the railroad'? A telegraph operator acting within the scope of his employment, but negligently or in bad faith, transmits a libellous message. Is the company responsible in exemplary damages? §22. What is the fundamental principle of the law of damages'? APPENDIX B 445 § 24. What is the difference between liquidated damages and a penalty? § § 25, 26. Gale sells Buck a newspaper establishment, with sub- Ecriijtion list and good-will for $3,500, Gale agreeing not to establish any newspaper within certain limits, and in case of breach to pay $3,000 as liquidated damages. Are the $3,000 liquidated damages or a plenalty? On May 1, 1890, Mack contracts with Johnson to sell him a share of stock, the market vaule of which is $150, on August 1, 1891 for $100. They agree that $50 shall be ''liquidated damages " for the non-performance of this contract. On August 1, 1891 Mack refuses to sell. At this time Johnson is able to buy stock in the market for $110. Johnson brings an action for the breach of con- tract and claims $50 as liquidated damages. What decision? § § 28-32. A railroad company wrongfully refuses to furnish a shipper with transportation for stove wood. May the measure of damages include profits which would have been made on a contract with a third person for the sale of the wood? In an action for personal injuries, a book canvasser, receiving for his services a certain percentage on sales, offers to testify to the amount of his annual sales for several years prior to the in- jury. Is the evidence admissible? In an action for personal injuries by a railway coupler and switch- man, receiving $1.50 per day, he is asked, as a witness, as to his pros- pects of promotion to better paid employment. He testifies that he thinks he would have been promoted; that there is "a system" by which ''if a man falls out you stand a chance of taking his place," and that yard conductors obtain a salary from $60 to $75 per month. Is the evidence of the chance of promotion admissible to be sub- mitted to the jury in connection with the wages of employees in the superior emj^loyment ? § § 33, 34. In an action for the price of a steamboat, the vendee claimes the right to deduct from the contract price the expense in- curred in remedying defects of construction and the loss of profit on trips that might have been made but for the defects. What de- cision ? § § 35-37. In an action for personal injuries may recovery be had for future pain and suffering if it is reasonably certain that such damages will necessarily result? The action is by the owner of land upon the surface against the lessee of coal seams below, for injury arising from a subsidence. 446 APPENDIX B The lessee had the right to make the excavation. The plaintiff has recovered before for a prior subsidence caused by the same ex- cavation. What decision? Williams contracts to deliver to Watkins 50,000 pairs of bicycle pedals, delivery to be made and paid for in installments. After de- livering 2,608 pairs Williams refuses to go on, and Watkins sues for breach. What damages can he recover? What damages can be recovered when the cause of action is for a nuisance? § 40. What relation must the defendant 's breach of duty bear to the plaintiff's damage in order to make the defendant liable? § § 42-49. A package owned by plaintiff is negligently destroyed by defendant. Is the defendant responsible for the loss of jewels con- tained in it, although he had no knowledge of the nature of the con- tents? A physical injury stimulates a pre-existing tendency to disease and causes an outbreak. Is the defendant responsible for the ensu- ing damage if the tendency was caused by plaintiff's voluntary in- temperance ? In an action by a railway company for maliciously causing the arrest of an engineer, while engaged in running plaintiff's train, will the damages include the delay of the train? § § 50-53. Defendant agrees to supply plaintiff, a butcher, with ice, knowing the plaintiff's object to be to keep meat fresh, but fails to do so, in consequence of which a considerable amount of meat is spoiled. Does the measure of damages include the value of the meat spoiled? French agrees to furnish a coal company with a locomotive engine to draw coal cars. French knows that it is for a track of unusual with, and that such engines are not to be hired, when wanted. He does not know that the possession of the engine would enable the company to mine more coal than without it. The company is able to transport coal by other means at a greater cost. What will be the measure of damages for breach of the agreement? Buck having contracted to sell and deliver to a railroad 400 tons of steel-capped rails, engages the defendant to supply the rails, the latter havings notice of the purpose intended. Buck has a patent for capping the rails, and there is no market price for such an article. Is Buck entitled, on breach, to the profits he would have realized? § § 54-56. Hale employs Gale to effect insurance upon his prop- erty, which Gale neglects to do. Hale knows of this and makes APPENDIX B 447 no attempt to get someone else to insure his property. Can Hale hold Gale for a loss by fire? §61. What is meant by non-pecuniary damage? § 70. In an action for non-delivery of oil sold, is it error to re- fuse evidence that at about the time of the delivery the principal oil dealers m'^.de a combination to create an artificial scarcity and an unnatural price? § 74. In what case will damages include interest ? § 81. In what cases involving* the sale of chattels can the ven- dor recover the contract price? § 90. Where the purchase price is the measure of damages, is the recital of consideration in the deed conclusive? § § 100-104. Parents sue for the death of a son, 30 years of age. He did not live in the same house with his parents but near them. He had been in the habit of visiting them and making pres- ents amounting to about $200 a year. What damages should the parents recover? APPENDIX C. BANKRUPTCY. § 4. What is the date of the first English bankruptcy law ? Who were amenable to it? § 5. In what respect was the English act of 1705 different from the first act? How is bankruptcy regulated in the United States? § 7. What effect has a Federal bankruptcy act upon state bank- ruptcy laws? § 8. What is the difference between a voluntary and an involun- tary bankrupt? § 9. What is necessary before a natm^al person may be a volun- tary bankrupt? § 10. A corporation is engaged principally in the business of buy- ing and selling real estate. All the stock in the corporation belongs to one man. Its debts amount to $1,000, Can it be made an in- voluntary bankrupt? Can a corporation organized for the purpose of acquiring and holding stock in mining corporations be made an involuntary bank- rupt if its debts amount to $1,000? Can a farmer who makes a profit of $2,000 a year and who owes $1,000, be made an involuntary bankrupt? Olsen is engaged in cutting grass and trimming lawns in the sum- mer time, and shoveling snow and attending to fires in the winter time. He has some regular customers who pay him by the month, and by others he is employed and paid by the job. His proceeds average $1,400 a year. Can he be made an involuntary bankrupt if his debts amount to $1,000? Two merchants are engaged in business in partnership. One has individual debts of $800, and the other has individual debts of $700. The partnership owes $500. Can the partnership be put into involun- tary bankruptcy? § 11. An Arizona corporation owning a reservoir and irrigation ditches sells water to farmers. If its debts amount to $1,000 can it be made an involuntary bankrupt? §§ 14, 15. The petition states that the corporation is chartered 448 APPENDIX C 449 as a printing company but does not state that the corporation actually engages in such business. Is the petition good? § 18. Has a creditor, who has received from the debtor an as- signment and bill of sale of his property with knowledge or reason- able cause to believe that the debtor was at that time insolvent, a right to join in the petition? § § 19, 20. What is meant by act of bankruptcy? When is an act of bankruptcy not necessary in order to permit a man to go into bankruptcy ? § § 21-27. Jones has debts amounting to $5,000. With the ex- ception of $7,000 in the bank, he has no property. He draws out this money and secretly purchases a piece of real estate, from Heckman. He has the deed made out as if the land were conveyed by Heckman to Loring and has this deed recorded. By a secret agree- ment between Jones and Loring, Jones is to get all the rents and profits from ;;he land. Has Jones committed an act of bankruptcy? Mack has debts amounting to $6,000. He has personal property worth $8,000. He sells this personal property for $2,000 to his sister-in-law who takes the goods, keeps them in her possession for two days and then delivers them back to Mack telling her friends that she is "going to let him borrow them for awhile." Has Mack committed an act of bankruptcy? § 30. When is it an act of bankruptcy for a debtor to give away property ? § 38. How may creditors force a debtor to commit an act of bankruptcy ? § 43. What are the duties of the receiver? Has he power to prosecute suits at law that have been commenced by the debtor? How long does a receiver stay in office? § § 44-50. Has the trustee of a bankrupt insurance company power to waive the performance of conditions by the insured? What are exemption laws? § § 51-66. What property of the bankrupt does not pass to the trustee ? § 68. What power has the trustee in regard to the sale of prop- erty which has been transferred by the bankrupt in fraud of cred- itors? § 79. Has a trustee the power to avoid a preference where the debtor had not the intent to prefer? § 82. An innkeeper gives lodging to Watson, Watson leaves without paying his bill and the innkeeper holds his trunk as security 450 APPENDIX C for the bill. Watson was insolvent when he applied for lodging but the innkeeper did not know this. A month later he is declared bank- rupt and the trustee claims a right to the trunk. The innkeeper con- tends that he has a right to have the bill paid in full before giving up the trunk. What decision? § 96. Fox has agreed with Locke not to cut down certain shade trees growing on his lot and to pay a penalty of $1000 if he should cut them down. Fox becomes insolvent. Has Locke a provable claim against him if Fox has not cut down any trees? § 98. Is the trustee allowed to set up against a claim the de- fenses which the debtor had? § 110. A person discharged in bankruptcy wrote to a creditor whose debt had been dischargd and said, *'I do not calculate that you will suffer any loss by me." Is this sufficient to revive the debt? Pending a suit, defendant pleaded an adjudication of bankruptcy, but subsequently withdrew the plea and confessed juc';2'ment. Is the judgment binding on him? § 119. When is one discharge in bankruptcy a bar to a subse- quent discharge? APPENDIX D. JUDGMENTS. § 2, 3. How is a judgment distinguished from a ruling 1 From an order 1 A judgment is given by a court and an entry made on the record. A few days later the record is destroyed by fire. Is the judgment valid? § 4. A statute provides that the board of health shall have power and it shall be its duty to receive and examine into the nature of complaints made by any of the inhabitants concerning nuisances and shall have power, after due notice and hearing, to order the sup- pression and removal of nuisances and conditions detrimental to health found to exist within the limits of its jurisdiction. Is this board of health a court? § § 5, 6. An action for killing plaintiff's horse is brought before a justice of the peace who has jurisdiction to hear cases involving $200 or less. Plaintiff and defendant both agree that the horse was worth $200 and the plaintiff asks for $^0 damages. In fact the horse was worth $300 and this amount is the correct measure of plaintiff's damage. Has the justice jurisdiction to hear the case? Would a judgment for $300 damages be valid? §7. White contracts with Green in Illinois to convey to him certain property in Kansas. At the time for performance White refuses to convey and Green brings an action against him in Illinois for specific performance. The court orders him to convey. What effect has this order upon the title to the property? § § 8, 9. Mack wished to sue Jackson for a breach of contract. Process was served on Jackson's brother who resided with him and who promised to deliver the process to Jackson but failed to do so. Judgment was entered against Jackson by default. Was the judgment binding? § 16. In Illinois what constitutes the formal record of the pro- ceedings of a suit? § 18. How are justice court records kept ? § 19. A judgment is rendered but the clerk neglects to record it. A year later, the judge, on his unsupported recollection, orders the record made. Is the judgment binding? 451 452 APPENDIX D § 22. The record of the judgment does not show the form of action. Is the judgment good? § 24. Jones brings an action of replevin against Wilkes for a horse. Judgment is entered for Wilkes, the record stating that he had title and right to possession. Is this record a good defense to an action b.y Jackson for the possession of the horse? § 27. What is the difference between amending a record and amending a judgment? § § 28-30. A judgment contains a clerical error in computation •which appears on the face of the record. What remedy has the in- jured party after the term? A judgment in favor of defendant and against plaintiff is procured by fraud and collusion between plaintiff's attorney and defendant. What remedy has plaintiff after th'e term? § § 35-41. In a civil action to establish dower, can the plea of res judicata be supported by the acquittal of the alleged husband on a trial for bigamy in having married the plaintiff in the suit for dower ? § 42. Is a corporation which, with knowledge that an attorney had filed a bill in its name, allows the suit to be prosecuted to final decree without objection, bound by the decree if the attorney was not employed by it? APPENDIX E. ATTACHMENTS, GARNISHMENTS, AND EXECUTIONS. § 1, How is a decree of divorce executed 1 § 2. What was the ancient method commonly used in enforcing judgments and decrees? §5. How does replevin differ from the other common law actions ? § 6. What is a capias ad respondendum f § 7. In a certain state, by statute, garnishments issue only as a form of execution after judgment, Jones brings an action against White for an alleged breach of contract. Can he garnish past due wages of White's in the hands of White's employer? § 8. What can be sold under a writ of fieri facias 1 § 10. What can be sold under a writ of levari facias? §12. How much of the debtor's land could be taken by the writ of elegit? § 14. What is the difference between a writ of habere facias Beisinam and habere facias possessionem? Which is the proper one, where the debtor is a life tenant? § 17. What is the general rule in regard to the issuance of executions ? § 19. In what states does the issuance of an execution not depend upon the form of the action? § 20. Defendant hired a barge from plaintiffs for a certain sum per day, with an agreement that, if it were not returned in as good condition as when hired, defendant was to pay the agreed value of the barge as upon a sale. The barge was returned in a worthless state. Will the plaintiff's claim support an attachment under a statute allowing the use of attachment in actions on conracts? § 22. Attachment was issued on the ground that defendant had disposed of and concealed property with intent to defraud creditors. On motion to dissolve the attachment defendant proves that the property alleged to have been secreted belonged to his wife. Plain- tiff then proved that defendant had not enough property subject to execution to satisfy plaintiff's demand which by statute is a ground for issuing an attachment. Will the attachment be dissolved? 453 454 APPENDIX E Would it have been otherwise if both grounds had been given by the plaintiff for the issuance of the attachment? A statute allows the issuance of an attachment on the ground that the defendant has not enough property to satisfy the demand. Plaintiff sues out an attachment to secure two demands and proves that the defendant has not enough property to satisfy both demands. On motion to dissolve the attachment defendant proves that one of the demands was not due. Will the attachment be dissolved? Attachments were issued against two defendants on debts for which they were jointly liable. One of the grounds of each attach- ment was that the defendant did not have property enough subject to execution to satisfy the debts. The defendants together owned enough property to satisfy any one of the debts. Can the attach- ment be sustained against either one of the defendants? An attachment was granted on the gi-ound that defendant had not enough property to satisfy plaintiff's demand. On a motion to dis- solve the attachment it was proved that the debt included money loaned to defendant by plaintiff's wife. Will the attachment be sustained as to the whole demand? § 24. February 12, 1901, the declaration is filed. February 15, an attachment is issued and February 23 the summons is served. Is the attachment good? Will an attachment issued after judgment be sustained? § 25. Judgment is confessed before the clerk in vacation and ex- ecution issued before the judgment is entered of record. Is the exe- cution valid? § 26. Judgment is rendered against defendant April 1, 1905. It is entered of record on April 15, 1905. April 5, 1906 execution is issued and the property sold. Jones, the purchaser at the execu- tion sale, brings ejectment against the defendant, who resists on the ground that the execution was void. What decision at common law? § 29. Watson as the guardian of Johnson, an infant, brings an action against defendant for a breach of contract. Judgment is ren- dered for plaintiff. After the death of Watson, execution is issued. Is the execution void? Suppose the judgment had been revived on scire facias after the death of Watson? § 33. Judgment is rendered against defendant. Farson, a third party, pays the debt due from defendant to plaintiff. May Farson take out an execution against defendant? APPENDIX E 455 § 34. Black buys property at an execution sale held under an execution issued in the name of the judgment creditor without his consent. Does Black get title to the property 1 § 37. Judg^nent in an action on a bond is taken against the surety. Execution is issued against the principal in the bond and his property sold. Does an innocent purchaser at the execution sale get good title? § 38. Judgment is rendered against Watkins, an infant, for breach of contract. The statute provides that infants shall not be liable on contracts except for necessaries. This was not a contract for necessaries. Execution is issued against defendant and his prop- erty sold. Does a purchaser at the sale get good title? §40. Can a court holding a debtor's property be a garnishee 9 May the property of a railroad be seized on execution? § 41. Where does a court get its power to issue execution ? § 43. In what cases can execution be issued on a judgment that has been appealed from? § 44. Is an execution issued by an officer who was the plaintiff in the suit, valid? § 45. A statute provides that before any attachment shall be executed, the plaintiff shall make and annex thereto an affidavit specifying the indebtedness, and another section prohibits the issu- ance of an attachment unless the amount stated in such affidavit exceeds $200. The amount of indebtedness was left blank in the af- fidavit and was filled up after the attachment was executed. May the attachment be attacked collaterally? § 47. Is an attachment on an affidavit sworn to ten days before the issuance of the writ, valid? § 48. A statute allows attachments on the ground that the debtor has absconded or concealed himself to defraud creditors. Can an attachment be sustained founded on a complaint in the affidavit that "defendant has privately removed himself out of the county, or so absconded and concealed himself that process cannot be served"? § 49. The affidavit alleges indebtedness by Jones, a member of the firm of Jones and Smith, to Walker. Can the firm be charged as garnishee ? § 51. Why is a bond usually required before the issuance of a writ of attachment and not in the case of garnishments? §52. What is the venue of a process? What should the body of the process contain? Vol. X— 3 1 456 APPENDIX E § 53. What effect has a judgment upon an invalid process issued before judgment? § § 54, 55. The clerk 's signature at the end of the process, as required by statute, is left off. "Will an execution sale under such a process be held void on direct attack? On collateral attack? § 63. A justice whose jurisdiction is limited to $100 issues a writ of attachment in an action to recover $153 on two notes, each providing tbat a justice should have jurisdiction to the amount of •^00. Will the writ protect an officer executing it? Will a process of attachment issued under an unconstitutional law protect the ofiScer executing it? A writ is made returnable to the municipal court at a term more 'ban 60 days after it was made, contrary to the provisions of a statute. Will a sheriff who attaches property under the writ be protected ? A statute authorizes the issue of an attachment where a resi- dent debtor secretly leaves the state with intent to defraud his cred- itors. The attachment stated that defendant, a resident of New York City, had absconded from the city with intent to defraud his cred- itors. Will a sheriff making a levy under this attachment be pro- tected? § 64. How can an officer protect himself if he is in doubt as to whether the process under which he is going to act will protect him or not? An officer innocently takes property belonging to Black under a process issued against Green. Black sues the officer and recovers damages. Has the officer recourse to the creditor for reimbursement if no bond of indemnity was given. Could he recover on an express promise to indemnify? § 56. An attachment is issued in X county, returnable to a court in Y county. The defendant appears in the court in X county which issued the writ and pleads to the merits. Is the attachment valid? § 57. A judgment was obtained in favor of plaintiff as adminis- trator. The execution under which the land was sold recited the judgment as in favor of the plaintiff in his private capacity. Did the purchaser at the sale acquire a good title? One of two joint plaintiffs dies after the judgment is rendered. No entry of his death is made in court. Should the execution be taken out in the names of both the plaintiffs? Is an execution against an administrator invalid if it does not show on its face whether it is to be satisfied out of the individual APPENDIX E 457 property of the defendant or out of the property of the deceased in his hands'? §60. A statute provides that a writ of attachment without a seal is of no validity. January 12, 1906, an attachment without a seal is issued to secure a deht not yet due. January 20, 1906, suit is commenced and judgment rendered for plaintiff on March 2, 1906. In April, 1906, the legislature passes an act providing that all at- tachments hereafter or heretofore issued without seals shall he valid if otherwise conforming to the law. Is the attachment issued Jan- uary 12, 1906, valid? § 62. What are the three means that an officer has of protect- ing himself? § 66. Does delivery of process to an officer give him a property right in the property which the process directs him to take? § 70. Can an action be maintained against an officer for using an automobile which he has seized under a writ of attachment? By whom? §74. A statute provides that a writ of attachment must be served at least four days before the time for appearance mentioned in the process. It is not served within this time and judgment is en- tered against defendant by default. The property is sold. Can the purchaser prevail in an action of ejectment against defendant ? § 80. Jones, a creditor of Ford, garnishes money in the hands of Latham, whose defense is that the money is due not to Ford individ- ually but to the firm of Ford and Smith. What decision? §83. Wilkes is suing Watson for damages for breach of con- tract. It is doubtful whether he will recover or not. Can Watson be charged as garnishee by a creditor of Wilkes? § 88. Why is property on the defendant 's person exempt from process ? § 92. How is a levy on land effected under modem statutes? § 98. What is the effect of failure to give statutory notice in the ease of executions? Attachments? Garnishments? § 101. In the absence of statute, what is the modern American rule in regard to the time when a creditor's lien on chattels begins? § 106. May a lien be lost by order of court after a levy has been made? §111. A claimant seeks to have the levy quashed by showing that the property attached does not belong to the defendant. Is this sufficient? 458 APPENDIX E § 118. Property is attached. Later a judgment is obtained against the defendant. What is necessary in order to realize on the property? § 122. Does a purchaser at an execution sale get good title if the officer does not account for the proceeds'? § 129. A creditor gets a judgment for $100. The defendant gives him a horse worth $70 and gets a receipt in full. Is the creditor entitled to an execution for $30? § 132. In what cases may an appeal be maintained after the judgment has been satisfied? LAW LIBRARY tXNIVEJlS^TY 01' CALIFORNIA i^OS AI^iGELES fAClLlTV 000 759 365 o