IN RE JACKsON.
tionof this. It affords relief fora surety when the creditor does not prove the claim by allowing the surety to prove it for subrogation, but nothing more. The relief is the same that the surety would have if the creditor should prove the claim, and get what could be had upon it voluntarily. The creditor has no right to anything more than payment, and the surety who has borne the }}u.rden is entitled to the benefit. These rights arise, not from the original contract of suretyship, but from the equities of the subsequent transactions. Miller v. Sawyer, :?I) Vt. 412. Subrogation of the surety to the rights of the creditor does not enlarge them. They extend only to such dividends as the creditor can have. Here, Hartshorn should pay the balance due between him and the bankrupt to the trustee, now, for administration; and the trustee should pay the dividends on the bankrupt's half of the note, when declared, to Hartshorn. One-half of bank claim to stand for benefit of Hartshorn. Hartshorn's claim merged in balance of $444.20 due the estate.
In re JACKSON et aI. . (District Court, D. Vermont.
BANKRUPTCy-Cor,J,ECTION OF ASSETS.
May 12, 1899.)
Where a debtor of the bankrupt gave him a promissory note made payable to the order of a certain bank, but the same had not been indorsed by the bank, and no notice of any assignment of it had been given to the maker, and the trustee in bankruptcy could not find the note, held, that the bank should be restrained from indorsing the note, and that the debtor should not be permitted to set up the note against payment to the trustee of his indebtedness to the estate.
In Bankruptcy. On report of referee in bankruptcy. George N. Dale, for trustee in bankruptcy. Elisha May and J. W. Erwin, for certain creditors. Porter Dale, for Dyer and Island Pond Nat. Bank. WHEELER, District Judge. The report of the referee on the petition of the trustee shows that creditors, undertaking to reach assets of the estate held in some alleged fiduciary capacity by trustee process in the state courts, have stipulated to discontinue their suits. Questions as to such liabilities of bankrupts relate to the dIscharge, and not to the assets, or the right of. the trustee to the assets, which this court seems to have jurisdiction to protect. 'rhe stipulations, if carried out, will avoid the necessity of any in· junction to restrain these suits. The report shows that Dyer gave Jackson a note dated October 27, 1898, payable to the order of the Island Pond National Bank three months or ninety days from date, on partnership account, which the trustee cannot find, the bank has not indorsed, and no notice of any assignment of which to Dyer appears, and that Dyer owes the bankrupt firm $87, if the note is disregarded. It would not become negotiable paper as to" others without indorsement bv the bank, nor could it be effective· ly assigned as a chose in action without notice to Dyer, and could not
94 F.lCDlllItAt. :RIlPPR'l'ER.
bein existence anywhere beforetbebankruptcy al!l avaUd claim. against ,Dyer but in the bands of ·Jackson" .norsince but in bis:bands, wbere it would belong. to the tru:stee,.oJ:'ln :tQe hands of the trustee, as an asset. of the estate. ,might be embar-. r,aSl1lpdif the, Qank!Jb9uld, it; , therefore-such indorsement, shq:nld.,be restrclj\\necJ, a,nd Dyerlilhould ,not then be permitted to setup "tbenotesQ, pnaccounted, ·for,against payment to the trustee of." wl;Lat is justly due from him to the estate. Theile, proceedings may remain, pendingfol'. ,out these suggestions. Ordel'ed accordingly·.
GOODIER v. BARNES etaL' (Circuit Oourt, N.
June 19, 1899.)
BANJmUPTCy-JURISDICTION OF CIRCUIT COURT-CITIZENSHIP.
Under Bankruptcy Act 1898, § 23, a circuit court of the United States has no' jurisdiction of a bUl In equity by a trustee In bankruptcy to set aside an alleged fraudulent conveyance of property by the bankrupt, when the bankall citizens of the same state. rupt, the trustee, and the
." , , ' ,
Clause c of section 23, providing that "the United States circuit courts shall have concurrent jurisdiction with the courts, of bankruptcy, within thelrl'espectlve territorial limits, of::the offenses enumerated in this act," enumerated" meaning the bas no appUcablllty to civil actions; crImes described In section 29. .: .
IJ:l Eqtrlty. ,Motion to dismiss the bill on the gl'Qund that this court has no jurisdiction of,th,e action, which,is by a trustee in bankruptcy to set aside an alleged fraudulent transfer by the bankrupt of his property. All tbe parties are of this state and reside in this district.
Fred. G. Fincke, for the' motion. Fred. H. Hazard, opposed.
COXE, District papeJ.'jilhave been submitted on this. motion except the briefs., The court understands .that no objection is made to tlle form ofJhe motiouand the sole questiQn which counsel desire the court to determipe is whether. or' not the circuit court has, jurisdiction ,e» the aetion.The court hali! been unable to find an authority sristaiDing the jq.risdicHon; nOne is cited. 'A persuasive argument, sustained: 'by recent decisions, can be advanced in fawr of thejUJ:isdic1joq of the district court in these cases, but this conclusion, if affirmed, will not aid the complainant. Although the authorities. are not il;1.:accord as to the proper constrllction of the present act, they all, apparently, .agree that prohibits the circuit from entertaining of of this characBurnett v. Mercantile 00.,91 Fed. 360; Mitchell v. McClure, Id. 621; In re Id. 366; Car1;erv. Hobbs, 92 Fed. 594; In re Abraham, '013 Fed. 767; Hicks v. Knost, INat.Bankr. News, 336, 94 Fed. 625.