DEVEREUX V. FLEMING.

177

DEVEREUX

v.

FLEMING.

(Circnit Court. D. South

August 3, 1891.)

P ARTNERSHIP-REC.l!'IVER-ACCOV:KTING. In an action between copartners for an accounting, in wJJich a receiver had been appointed, a proposition by defendant to take the assetll and give bond to secure creditors wHl be accepted, where it appears that a continuance of the business by the receiver would be unprofitable and expensive. that complainant had an interest in the profits only, and that such disposition of the assets would not harm and might benefit complainant.

In Equity. Bill by John H. Devereux, Jr., against Howard Fleming, copartners, for an injun<:."tion, a receiver, and an account. Edward 1'vlcCrady, Jr., for complainant. J. N. Nathans, for defendant. SIMONTON, J. The bill is filed by one partner against the other for' an injunction, a receiver, and an account. The copartnership was formed in Allgust, 1887, without written articles. The bminess was the purchase and sale of lime, cement, and building materials of this charactr. The place of business was Charlestoll. The complainant was iihe resident partner, and made the sales, having an interest in the profits only. The defendant resided elsewhere, and made the purchases. The business went on until May of this year. Defendant having become dissatisfied, as he alleged, for want of profit in the business, and its management by complamant, pu!Jlished notice of dissolution of the firm and took possession of its main office. Thereupon complainant filed his bill. Without any positive resistance on the part of defendant, Mr. E. W. Hughes was appointed receiver, and he has discharged the office with energy and ability. In his report now on file he shows the condition of the business when he took charge, 22<1 May, 1891. The entire value of the assets, including the open accounts, $8,115.90; liabilities as on the books, $30,530.15. Of these open accounts he has collected $1,. 080.6.5. The rest he thinks valueless. Beside the liabilities disclosed by the books is a claim against the firm for goods sold, $858.66, and a bill for storage of J. H. Devereux, the elder, $3,237, subject to a set-off of $1,119.63. During the two months (22d }1ay-21st July) the sales by the receiver aggregated $3,859.10. His disbursements were $1,296. Of these, however, $415.04 v:ere an extraordinary expense caused by the removal of the stock from the West Shore Terminal warehouse to another much less expensive. Thus far the sales have all been in due course of business. But the continuance of them will be at great disad vantage. It is not a going concern. The receiver cannot replenish his stock, and so aid the sale of materials, as, for example, lime aids the sale of cement. So in a short time the sales wiII decrease. leaving on band the unsalable stock which must be put up at auction. Meanwhile the current expenses go on, and to them are added the extraordinary expenses of a receivership. It is manifest, therefore, that the sooner this business ends the better. The only parties before the court are the copartners. But as v,47F.no.3-12

178

FEDERAL REPORTER,

vol. 47.

the existence of creditors creates an equity as between them, the court will take notice of and administer this equity. Indeed, the claims of creditors are first to be considered. Theile claims greatly exceed the value of the assets, under any conceivable circumstances. The defendant proposes to take the assets, and to enter into bond with surety for the payment of all outstanding creditors. The complainant has an interest in the profits only. The prospect of profit in this business is small. But, notwithstanding this, Ij)omplainant has an unquestionable liability to the creditors. He Inay have an equity 3 6ainst defendant on the final account. So the proposition of the defendant is without doubt the best, thing for creditors. It may be good for complainant, and certainly cannot harm him. It is accepted. The case came on to be heard on the pleadings, and on an affidavit of the defendant. Counsel having been heard thereon, and after due consideration thereof, it is ordered, adjudged, and decreed that the defendant do enter into bond, with surety to be approved ry the court, in the penal sum of $30,000, with the condition thereunder written that he pay and satisfy in full all creditors holding proper claims against the late firm of Fleming & Devereux, the bond to be 'in the name of the clerk of this court as obligee; that thereupon he be clothed with the right of possession and control of all the assets of every kind of the said fi·nn. It is further ordered that thereupon the receiver transfer to him all the stock of goods, wares, and merchandise of the said firm in his custody, possession, or control as receiver, and that he file his final account with the clerk of this court; that, after deducting from the cash in his hands such sum as may be a proper compensation to him as receiver, he pay the remainder of the said cash, and deliver the chases in action to the defendant. It is further ordered that the special master state the account as between com.plainant and defendant and their late firu, and report the same to this court.

BRAXTON

et al. v.

RICH

et al.

(Circuit tfourt,

p.

West Virginia.

September 2, 1891.)

1.

PUBLIC LANDS-GRA:li!T BY STATE-CONSTRUOTIVE POSSESSION.

A grant from the C',ommonwealth of Virginia for land not previously granted, conveyed to the grantee therein not only the title of the commonwealth therein, but the constructive possession of the land to the extent of its boundaries. A subsequent grant to another, covering a part of lands previously granted, did not vest in tbe grantee either the title or the constructive possession of such preViously granted lands.

2.

SAME-SUBSEQUENT GUANT OF SAME PREMISES.

ll.

SAME-LANDS FORFEITED TO STATE.

A traot of land forfeited to \Jle commonwealth of Virginia, or tbe title to which vested in that comm.onwealth by purchr..se at a sale t,hereof for the non-payment of the taxes thereon, situate in any of the counties now forming of the <ltate of West Virginia, and not disposed of prior to the formation of that state, became the property of that state on the 20th day of June, 1863, subject to redemption by the former owner within five from and after that date, as prOVided in the constitution and laws of the state; and, when not so redeemed, the land became the