In re Mayo

16 F. Cas. 1262, 4 Hughes 384

• Court: U.S. Circuit Court for the District of Eastern Virginia
• Decided: June 15, 1882
• Status: Published

Opinion

WAITE, Circuit Justice.

Upon the merits, I am entirely satisfied with the conclusion reached by the district judge. The defense relied on is not established by the evidence. The bond was conditioned as the order of the court required. The assignee had no authority to accept any other. As the order of the court was copied into the bond, the sureties are charged with knowledge of what the as-signee was required to get before he delivered the property. It is clear, therefore, that what the assignee may have said as to the legal effect of the obligation to be assumed by the sureties is wholly immaterial. There can be no doubt as to the meaning of the language used to express the obligation.

The evidence does not satisfy me that the assignee is chargeable with knowledge of the alleged agreement between Watts and Mayo tliat the bond was not to be delivered unless signed by Winston.. He, undoubtedly, did suppose Winston would become one of the sureties, but there is nothing to show that he understood that Watts was not to be bound unless Winston signed also. The understanding between Mayo and Watts is immaterial unless the assignee knew of it.

I think, also, that the district court had jurisdiction to proceed summarily as in bankruptcy to enforce the bond. The bond was taken by the bankrupt court in course •of the administration of the bankrupt’s estate. It was in the nature of a receiptor’s bond, or a stipulation in admiralty, and took the place of the things which were delivered to Mayo on the acceptance of the security. In this way the sureties voluntarily made themselves parties to the bankruptcy suit, and submitted to the summary process of the bankruptcy court. In bankruptcy the court administers on the estate. The assignee is an officer of the court, charged with certain duties. The court must administer the estate according to law, and its proceedings are subject to examination and review by the circuit court under its supervisory jurisdiction in bankruptcy matters. Every one who contracts with the court in the course of the administration submits himself to the summary process which the law has provided to bring about a prompt settlement of bankrupt estates. Those who contracted with the bankrupt stand in no such position. Everything which depends on what was done before the bankruptcy, or after-wards, not connected with the administration, must be treated as outside of the bankruptcy proceedings, and governed accordingly. But all contracts with the court sitting in bankruptcy are in effect part of the proceedings in the bankruptcy suit This is in .accordance with the ruling of Judge Bond in Rosenbaum v. Garnett [Case No. 12,053], from which I am not disposed to depart. The fact that, after the order of the court requiring the assignee to proceed with the collection of the bond, a suit on the common-law side of the court had been begun, did not prevent proceedings for the same purpose under the summary jurisdiction before .judgment actually rendered in the common-law suit. The power of the court to set aside the verdict in that suit, and grant a new trial, because the verdict was against the evidence, cannot be attacked collaterally. The new trial having been granted, the case atands as though no trial had ever been had, unless the order, for the new trial is set aside in some appropriate form of proceeding instituted for that purpose.

The sureties were not entitled to special notice of the sale of the property after it was -surrendered under the conditions of the bond, It was enough that the property was delivered up by the principal on demand, as he was bound to do, and that sufficient public notice of the sale was given. There is no allegation of fraud. It rested in the discretion of the court whether to submit the issues of fact to a trial by jury, or not. I think the court properly declined to allow a jury trial.

The judgment of the district court is affirmed, and an order may be prepared to that effect