IN RE HUNT.
20 Vt. 244, which was for making a false return as constable; Hen,haw v. Miller, 17 How. 212, which was for a false representation as to credit; and Winhall v. Sawyer, 45 Vt. 466, which was for unlawfully transporting a pauper into a town to charge the town with her support. There are no cases which have .been cited or noticed that are really to the contrary. 'In Dana v. Lull, 21 Vt. 383, which was for neglect of a deputy-sheriff in not keeping property attached on a writ to respond to the execution, the deputy had the specific property in his hands which he was in duty bound to keep; and in Bellow8 v. Allen, 22 Vt. 108, which was for not paying over money by a deputysheriff collected on an execution, the deputy actually had the money in his hands and detained it. There was an acquisition by the deputy at the expense of the other party in each case. The cause of action does not appear to survive by the laws of Vermont, as now understood. Bill of revivor dismissed.
In re HUNT, etc., Bankrupt.
(District (Jourt, D. New Jer8eg. March 1, 188fJ.)
CONTRACTS-WAGERING CONTRACTs-RULE IN NEW JERSEY.
All contracts for speculation in stocks upon margins, where the broker and the customer do not contemplate or intend that the stock purchased or sold shall become or be treated as the stock of the customer, but the real transaction is the mere dealing in differences between prices,-that is, in the payment of future profits or losses, as the event may be,-are contracts of wager, ill New Jersey, because they depend upon a chance or casualty, and are void. Where a bankrupt has failed by reason of wagering contracts in stock speculations in another state, he will not be entitled to his discharge in New Jer· sey, where he resides.
BANKRUPTCy-DISCHARGE-GAMBLING IN STOCK IN ANOTHER STATE.
SAME-FAILURE TO KEEP PROPER BOOD OF ACCOUNT.
Where a merchant drew large sums of moneY' from his business, from time to time, to use in stock speculation, and put slIps of paper, with the amountr so withdrawn. in the money drawer. 8S mem<Yranda for his book·keeper, so that when he failed his cash-book showed a balance of thousands of dollars which did not exist. his discharge as a bankrupt will be refused, on the ground that he did not keep proper books of account.
On Specifications against Discharge.
ment, were from $150,000 to $200,000. He describes the manner of oonducting these operations in Philadelphia and New York, as follows:
"In Philadelphia, where buying or selling · puts' or ·calls,' or settling differences, is considered gaming, my transactions in stock were genuine purchases and sales. I would go to my broker, and would deposit a certain amount of money, which we would agree uponj hefuruishingthe balance. He would then go into the board of brokers, and buy the stocks I wantedj he holding the stocks as collateral for the amount of money advanced by him, to pay for the same. If the price of the stock went down, he would call on me to pay off part of my loan to protect him. In the sale of stock, that is, when I wanted to sell a stock short, I would go to him in like manner, give him a certain amount of money; he furnishing the difference required. He would then go and borrow the stock from some brokrr or institution, and take it, per my order, to the and sell it. When I got ready to cover that short sale, I would give him the order to buy it, which, after he did it, he would take the stock and deliver it again to the party he had borrowed it of, receiving back the amount of money that the parties held fur the return of the stock, and would deduct the amount he had loaned me, with interest and commissions; and the balance he would return to me, which would show my profit or loss, as the case might be, which in most cases would be a loss. In New York my stock operations were conducted upon the same general plan, with one exception, which was dealing ill 'puts' and' calls.' * * * On a few occasions there, after making my purchase or ::;ale of stocks, which were conducted the same as in Philadelphia, I would have my broker call on Mr. Russell Sage to buy a ·put' or · call,' as the case might require, to limit any loss I might make on the stock bought or sold."
The of purchasing, as thus described, is what is technically called a purchase on a margin. All contracts for speculations in stocks upon margins, when the broker and the customer do not contemplate or intend that the stock purchased or sold shall become or be treated as the stock of the customer;but the real transaction is the mere dealing in differences between prices,-that is, in the payment of future profits or losses, as the event may be-are contracts of wager in New Jersey, because they depend upon a chance or casu· alty. It was so held in a recent case (Flagg v. Baldwin, 38 N. J. Eq. 219) by the court of errors and appeals, and the court refused to enforce such a contract, although made in New York, where they are enforceable; holding that there was no rule of comity which required them to violate the public policy of the state on the subject of betting and gambling. I know that the bankrupt insists that he made a purchase of the stocks, and that their retention by the broker was simply collateral, to secure to him the repayment of the amount above the margin ad. vanced by him in the purchase. But was that the essence of the transaction? Was it practically anything more than a mode of ad· justing the differences between prices from time to time,-a device, in fact, to escape the peril of violating the laws against gaming? But if this is not so in regard to the buying and -selling of stocks, can he-a resident of New Jersey, and chiefly carrying on his business in Pennsylvania-be allowed to go into another jurisdiction, and deal
IN BE HUNT.
in "puts" and "calls," and escape the charge and penalty of gaming
because such dealings are valid and enforceable by the lex loci contractus, although reckoned gaming by the laws of the state of his residence, and of the state where his ordinary business was transacted? I do not, however, propose to rest the refusal ofa discharge upon this specification. . 2. In section 5110 of the Revised Statutes of the United States are 'set forth the grounds, upon the proof of any of which, a discharge must be refused. These provisions are 10 in number, and the seventh sp.ecification in the pending case is founded on the seventh subdivision of the section, to-wit, that the discharge cannot be granted "if the bankrupt, being a merchant or tradesman, has not at all times after March 2,1867, kept proper books of account." 'l'his is the only one of the provisions which does not involve a fraudulent intent. The discharge must be withheld, irrespective of the intent, if the bankrupt has failed in this respect. During the last six months before his insolvency, his cash-book did not reveal his real pecuniary condition. He tells us that he was at this period in the habit of drawing thousands of dollars from his oil-cloth business to use in his stockspeculations; that he would have no entry made upon any of his books of account of this withdrawal of capital, but would write upon a slip of , stating the amount paper, "Due from William R. Hunt," $ taken, and put it in his money drawer as a memorandum for his book. keeper to settle by. When he stopped business in December, 1877, these slips were gathered together, and aggregated $25,979. I do not regard such a Murse of proceeding as keeping proper books of account. They do not speak the truth. His cash·bookrevealed a balance of many thousands of dollars which did not exist, and which he had in fact lost in stock speculations. I do not say that he intended to deceive or defraud his creditors. Ris not necessary to llay that. I will rather accept his statement that he expected to return the money to his business, and that he hoped to have a "lucky streak" in his speculations which would enable him to do so. But the lucky streak did not come. His notes went to protest for lack of funds, . and when he succumbed his cash balanoe was nearly $26,000 less than his books of account showed. The discharge must be refused·
Surviving Copartner, etc., v. GOURDEN and another, Assignees, etc.
(District Oourt, 8. D. Gl!01'gia, E. D. November, 1885.)
BANKRUPTCy-DmcHARGE-SETTLEMENT WITH CREDITORS AND ApPOINTMJllHT OF TRUSTEE.
A settlement with their creditors by the members of a bankrupt tirm. under section 5103 of the Revised Statutes, where trustees are appointed by a vote of the creditors, is in lieu of the usual proceedings ill bankruptcy, and a discharge obtained thereby IS complete and tinal. .
SAME-POWER OF COURT TO ApPOINT ASSIGNEE.
Where the debts of the bankrupt tirm are settled with such trustees, the trustees have settled with the creditors, and have been themselves discharged, and the bankrupts are discharged, the bankrupts are entitled to a remaining surplus of their estate; and, in the absence of such representations of fraud or mistake as would vitiate the discharge, the district court has no authority to appoint an assignee to take possession of such surplus.
In Bankruptcy. W. W. Frazier and Jackson It Whatley, for plaintiff. Oeo. A. Mercer, for defendants.
It appears from the record in this case that Ketcham
& Hartridge, a banking firm of the city of Savannah, were indebted to S. Kaufman & Co., partners, in the city of New York. Ketcham & Hartridge were adjudged bankrupts, in this court, on June 17,1873, and have received their discharge. Gourden & Young were their assignees. After settling with the creditors of Ketcham & Hartridge it appeared that Gourden & Young had in their possession $2,095.02,
which was the percentage. of the assets of the bankruptcy belonging to the firm of S. Kaufman & Co. It also appears that Kaufman & Co. were adjudged bankruptfl in the district court of the United States for the Southern district of New York, and that trustees were appointed, under section 5103 of the Revised Statutes of the United States, to settle the indebtedness of the firm. The trustees of Kaufman & Co. performed their duty, and, depositing in the registry of the court in New York a gross sum for the several creditors, were discharged by the register from all further duty to the creditors. This was done on the third of May, 1874. On the sixth of October, 1875, the district court of the United States, Southern district of New York, the Honorable SA.MUEL BMTCHFORD, district judge, presiding, granted a discharge in bankruptcy to Charles H. Kaufman; having previously, on the eighteenth day of September of the same year, granted a discharge to Henry Mayer and Samuel Kaufman, copartners. No assignee had been appointed for Kaufman & Co. prior to their discharge; the action of the trustee, under section 5103 of the Revised Statutes, having been substituted in lieu of the usual proceedings in bankruptcy. In May, 1884, Gourden & Young, assignees of Ketcham & Hartridge, filed a petition in the district court here, in which they recited