iN,.. BE: .· SWENK.
affairs. It involves a withdrawal from the control arid management of the stockholders of the entire property of the corporation for a period of at least five years; itw'ill preclude for a like period the exercise annually by the stockholders of their judgment as to the particular character and method of conducting the business affairs of the corporation; and it denies to the stockholders any right of suggestion or disapproval of the conditions upon which a relinquishment of important corporate faculties may be conceded. ,Surely a power which will be attended with such consequences does not relate "to the ordinary business nor "to the orderly and prope;r admiuistration of the affairs," of the company, and hence cannot be exercised by the directors without express authority to them. But tho fact is conceded that the complainant represents a majority of the stock iS8uedby the corporation, and he has made known to us in his bilf that the proposed lease is repugnant to his judgment. We are therefore called upon to decide, not merely that it may be made by the directors without consulting their constituents, but against the protest of a majority of them. This we caunot do, but order that. a preliminary injunction be issued as prayed for..
In r6 SWENK, Bankrupt.
(Oircuit Oourt, W. D. PennsylfJania.
NQvcmber 16, 1881.)
In January, 1876, Thomas Swenk; gave to one Dougal a warrant to confess judgment against him, and on the thirteenth of March, 1877, a like warrant was given to one Baker, and ill pursuance of these warrantsjudgments'were confesscd and entered in April, 1877. Proceedings in bankruptcy were commenced on the seventeenth of May, 1877. By order of the district court the real estate of the bankrupt was sold discharged of liens, the proceeds of sale being substituted for the land as security for the liens upon it. The appellees applied to the court for, and obtained, an order directing the payment of their judgments out of the funds produced by the sale. The assignee opposed this application upon the ground that the judgments were fraudulent preferences linder thp. bankrupt act. Held, that an appeal will not lie to such order. The judgments being apparently valid, the only mode of contesting and avoiding them is by complaint in equity, and a decre(l which might be the subject of appeal to either the circuit or supreme court; that where the warrants upon which the judgments were confessed were executed and delivered more than two months before the petition in bankruptcy was tiled, it was beyond the power of the court to avoid the judgments on the ground of fraud.
Appeals by W. A. Heinen, assignee, from the orders of the district court directing the payment of judgments of Baker and Dougal, out of
the proceeds of the sale of the real estate of the bankrupt, upon which they were liens. John McCleery and Samuel Linn, for appellant. Joshua Cromley and J. O. Parsons, for appellees. Me KENNAN, C. J. It is urged by the counsel of the appellees that this c'ourt ought not to take cognizance of these cases, because the order of the dil!ltrict court is not subject to appeal, and I cannot say that the objection is without foree. By the order of the bankruptcy court the real estate of the bank· rupt was sold discharged of liens, and, of course, the proceeds of the sale were substituted for the land, as security for the liens upon it. The appellees held judgments against the bankrupt which were apparently liens upon the real estate sold, and therefore applied to the;court for an order directing the payment of their judgments out of the fund produced by the sale. The assignee opposed tbis application upon the ground that the judgments of the appellees were fraudulent preferences under the bankrupt act, but notwithstanding his objection the court made the orders prayed for; and it is from these orders that these appeals have been taken. Although the subject-matter of the objection is within the juris.fiction of the court, yet the method of asserting it was inappropriate and unwarranted. It had of the formal character of a suit in equity, by which alone the objection could be effectively urged. The judginellts were apparently valid, and the only mode of contesting this and of avoiding them isbya complaint in equity and a decree, might be the subject of appeal to either the circuit or the supreme cotj.rt From the result of ,any other form of proceeding or adjudication no appeal is provided by any clause of the bankrupt act. I might, therefore, decline to consider the merits of the contest, which have been very fully discussed by counsel. But I think the orders of the district court were properly made, even considering the grounds of objection set up by the assignee. In January, 1876, the bankrupt gave to Dougal a warrant to confess judgment against him, and on the thirteenth of March, 1877, a like warrant was given to Baker; and, in pursuance of these warrants, judgments were confessed and entered in April, 1877. The proceeding in bankmptcy was commenced on the seventeenth of May, 1877. Although, then, the judgments were entered within two months before the commencement of proceedings in bankruptcy, yet it has been held, and is now the well-settled law, that the warrants upon which the judgments were confessed must be given within the two months fixed by the bankrupt
KIRK V. LEWIS.
law to render such judgments questionable as fraudulent preferences. In both cases here the warrants were executed and delivered more than two months before the petition in bankruptcy was filed, and hence it was beyond the power of the court to avoid the judgments on the ground of constructive fraud. The court below, therefore, properly recognized the validity of the judgments of the appellees, and made the orders prayed for. . Appeals dismissed at costs of appellant.
(Oircuit Uourt, E. D. Louisiana. December, 1881.)
CONFISCATION ACT OF AucmsT
6, 1861. A sale under the confiscation act of congress, approved Augnst 6, (12 St. 319,) conveys to the purchaser the fee of the property, and not the lifeestate only of the owner thereof.
It seems, that a pardon does not remit forfeitures where the rights of third persons have intervened. Armstrong's Foundry, 6 Wall. 766, distinguished.
Plaintiff, on behalf of herself and her minor children, alleged that her late husband, R. W. Pasteur, and his brother, C. N. Pasteur, were, during- their the owners of certain real estate in New Orleans, known as the Virginia Press; that under proceedings takEm in virtue of the act of congress, approved August 6, 1861, entitled."An act to confiscate the property used for tional'Y purposes," on November 17, 1863, said property was seiZed by the Uriited States marshal, and sHbsequently condemned and sold. The bill too1\avers that by such procedure the estate of said R. W. and C. N. Pasteur was forfeited for and during.the term of their natural lives. Complainant then sets forth the death of her husband and his brothel'; her appointment as tutrix of their minor children; the possession of defendants of the property in question; and prays that the undivided half thereof formerly belonging to her husband be delivered up to her, and that there be an accounting for the fruits and revenues that have accumulated since the death of her husband. The defendants demurred on two grounds: (1) That proper parties had not been made; and (2) that the marshal's saie of the property, alleged in the libel, was a full and complete divestiture of title from R. W. Pasteur and his heirs, and not merely of his life-estate, as claimed by complainants.
W. B. Mills and R. Stuart Dennee, for complainants. John A. Oampbell and Tkos. L. Bayne, for defendants. BILLINGS, D. J. There have been seveml grounds urged in support of the demurrer. I shall consider but one: Did the respondents
*Reported by Joseph P. Hornor, Esq., of the New Orleans bar.