Phelps v. McDonald

99 U.S. 298, 25 L. Ed. 473, 1878 U.S. LEXIS 1543
CourtSupreme Court of the United States
DecidedMay 18, 1879
Docket254
StatusPublished
Cited by112 cases

This text of 99 U.S. 298 (Phelps v. McDonald) is published on Counsel Stack Legal Research, covering Supreme Court of the United States primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Phelps v. McDonald, 99 U.S. 298, 25 L. Ed. 473, 1878 U.S. LEXIS 1543 (1879).

Opinions

Mr. Justice Swayne

delivered the opinion of the court.

; This is an appeal in equity from the Supreme Court of the District of Columbia. The case was ‘decided in that court upon a demurrer to the bill and amended bill of the complainant. The demurrer was sustained and the bills were dismissed. The complainant is the appellant, and the action of the court below is brought before us for review.

• The demurrer admits the facts' alleged. The question is only as to their sufficiency to entitle the appellant to the relief which he seeks.. Without reproducing the case in detail as it is in the record, we shall address ourselves.to the salient points which it presents for our consideration.

A chose in an action lies at- the foundation of the controversy. It is thus described by McDonald in the schedule of his assets 'filed with his petition in bankruptcy: “ Claim against General Osborne, of U. S. Army, and others, for burning, in January or February, 1865, from 1,000 to 2,000 bales of my cotton in Arkansas and Louisiana.”

The late bankrupt law provided that as soon as an assignee was appointed, the judge or register should convey to him “ all the estate, real and personal', of the bankrupt.” Rev. Stat., sect. 5044. And that there should vest in the assignee, among other things, all the bankrupt’s “ rights of action for property, real or personal, and for any cause of action which he had against any person arising from contract, or from the unlawful taking or detention or injury to ” his property.

[303]*303Comegys et al. v. Vasse (1 Pet. 195) has an important bear-' ing upon this case. It arose under the bankrupt law of April 4, 1800. 2 Stat. 19. The fifth and sixth sections authorized the commissioners to convey to the assignees “.all the real and personal estate, of every nature and description, to which the said bankrupt may be entitled, either in law or equity, in any manner whatsoever.”

Under this act Yasse was declared á bankrupt and received his certificate of discharge. He had been an underwriter, and as such received from those whom he had insured and indemnified assignments of their claims against France, Great Britain, and Spain. In his return of his effects to the commissioners, pursuant to the statute, he named the claims against France and England, but not the claim against Spain. The omission was supposed to have been honestly made, because there was then not the slightest .spes recuperando with respect to that country. The claim was regarded as hopelessly worthless.

More "than twenty years later, under a treaty between Spain and the United States, an award was made for its payment. There, as here, the money was demanded by the bankrupt and by his assignees, and the same lines of argument to which we have listened in this case were pursued by the counsel in that ease with consummate learning and ability. The judgment of the court was delivered by Mr. Justice Story. It sustained the demand in behalf of the creditors, and is exhaustive and conclusive.

It is needless for us in this case to go over the same field of ■discussion. A few remarks, however, grounded chiefly upon that authority will not be out of place. It will be observed that the claim against Spain, and the claim against the United States, here in question, rested upon the same foundation, and that each was surrounded by like circumstances.

There is no element of a donation in the payment ultimately made in such cases. Nations, no more than individuals, make gifts of money to foreign strangers. Nor is it material that the claim cannot be enforced by a suit under municipal law which authorizes such a ■ proceeding. In most instances the payment of the simplest debt of the sovereign depends wholly [304]*304upon his will and pleasure. The theory of the rule is that the government is always ready and willing to pay promptly whatever is due to the creditor.' It is but a’short time since our government could be sued, and it can be done now only under the special circumstances defined by the statute. It is enough that the right exists when the transfer is made, no matter how remote or uncertain the time of payment. The latter does not affect the former. Nor has an adverse decision any final effect. If fhe demand be just, and recognized as valid by the law of nations, the claimant, or his government, if the latter choose to do so, may still press it upon the attention of the alien government.

If the thing be assigned, the right to collect the proceeds adheres to it, and travels with it whithersoever the property may go. They are inseparable. Vested rights ad rem and in re — possibilities coupled with an interest and' claims growing out of property — pass to the assignee. The right to indemnity for the unjust capture or destruction of property, whether the wrong-doer be a government or an individual, is clearly within this category. Erwin v. United States, 97 U. S. 392. The register’s deed in this case bears date Feb. 12,1869. The title then became vested in the appellant. Thereupon he stood in the place of McDonald, and was clothed with all the rights which had belonged to the bankrupt before he became such. On the 25th of September, 1873, within less than five years after the assignment, an award was made by the mixed commission, .sitting under the treaty between the United States and Great Britain, for the payment of $187,190 in satisfaction of the claim.

In the light of these considerations, it would be sheer fatuity to deny the substantial character and value of the claim at the time of the transfer by the register’s deed.

But it is insisted that the alleged sale under the order of tire District Court divested the title of the assignee.

According to the bill, the order was to sell “ certain accounts, note's, judgments,” &c. The exhibit referred to as containing “ copies of the petition, order, and report of the sale ” is not in the record. Whether the order was broad enough to include the claim in question, and whether the report showed that ■ it. [305]*305was sold, are questions which, in the state of the record as- it is before us, we are unable to determine. Doubts in such cases are to be resolved against the pleader. But if the affirmative be conceded as to both these points, a fatal objection still remains. McDonald went into voluntary bankruptcy. His petition did not disclose that he was a British subject. We have given the description of the claim in the schedule filed with his petition. It was brief and vague, and gave no definite information. In a duplicate schedule filed with the register he pronounced it “ worthless.” In assigning to him exempted property, the register and assignee unite in saying, “ No other exemptions made, because there are no assets, except some old claims which upon their face called for. large amounts, and upon inquiry I find them totally or entirely worthless.” He failed to make. known that he bought the cotton under a permit from the Treasury Department, accompanied with an order from the President directing the officers of the army and navy to aid him in getting it beyond the lines of the insurgent territory, and that it was lost to him by reason of a sudden and unexpected change in the legislation of Congress, thus creating as strong an equity in'his favor against the United States as could well exist.

His memorial to the mixed commission was sworn to on the 25th of November, 187,1.

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Cite This Page — Counsel Stack

Bluebook (online)
99 U.S. 298, 25 L. Ed. 473, 1878 U.S. LEXIS 1543, Counsel Stack Legal Research, https://law.counselstack.com/opinion/phelps-v-mcdonald-scotus-1879.