664

. FEDERAL REPORTER,

voL 48.

the evidence, would have been the probable pecuniary benefit to the estate of the deceased from the 'COt1tinuance of bislife. This you are not expected to determine with accuracy, as that would be impossible; but you are to fix, to your best judgment in the light of the evidence, what the amount would probably have been. Reasonable in sucb a case. No arbitrary probability is all tbat can be rule can be· laid down. The elements which enter into the question of .the value of a life to the estate of the dece.ased are so various that the matter' 'must be left, under proper instructions from thR court, to the so;un4 of the jury. The purpose of the statute under which this suit is brought is compensation. .It is not the loss of the deceased, but the loss of the estate, which is to be estimated. The purpose of thestatuter'is'to make good to the heil'S OJ; representatives oLthe person killed.thatwhich they ·have probably lOst by his death. 'To ascertain this itris· of course necessary to take into view all the facts and circ.umstaIiceswhich bear upon the question what his accumulations would probnb.ly. ,have. been. Among. thp.questions proper to be considered in light\bf the evidence are the following: Had the decea..<red, previoustG :his death, saved his earnings? Had he contributed to his motherl.s:support? Washe a sjJber, industrious man, or was he habitually Was he economical, or was he a spendthrift? From all the faets 'amdcircumstll,nces, if he had lived, what sum,' if any, would he probably have acculnulated in thl:l course of an ordinary life-time,to. be left to his heirs?

MATTHEWS

v.

WESTPHAL

et al.

(CirouU. Court, D. Iowa. May, 1880.)

..1.

ReV'.'St.U;'l:!. SlSl28 providing that any-conveyance by a debtor in contemplation of Insolvency, and with Intent to prefer any creditor, shall be void If made . ,.within WQnths before the,filing of a petition ill bankruptcy, does not apply to . , a chattel mortgage made with such Intent before the four months, but, by agree;, ment, kept from record untUwithin that time.

L .,:

. PI" CREDITOR-CHATTEL MORTGAGB·

' . The giving of a chattel mortgage with'intent to create " when itladewithl,n the four'months. ' .

II.SAME,:, ,.

.'

a preference is Invalid

.

In Bankruptcy. On appeal from the decree of the district court. J. W. Shields, for plaintiff. Shira8"Van.Duzee Henderaon, for defendants.

«

MCCRARY, J. This is on appeal from the decree of the district court in a prooeeding in bankruptcy. The suit was brought by plaintiff, as. 8Bsigneeof one Jorgenson, a bankrupt, to set aside II. chattel mortgage executlldby the;bankrupt'to defendants, and to recover the value of theproperty conveyed thereby, upon the ground that the BRme was fraudu-

MATTHEWS V. WESTPIJAL.

665

lent, at common law, under the statutes of Iowa, and under the bankrupt act. The court below held as follows: (I) That the chattel mortgage was bona fide. and not fraudulent at common law or under the Iowa statutes. (2) That it gave defendants such a preference as is forbidden by the bankruptact to be given to any creditor within four months from the time of the filing of the petition in bankruptcy.. Rev. St. § 5128. 1 (3) That, said preference not having been given within said period of four months, the plaintiff could not recover. in affirming these rulings upon the first two I have no ositions. The conclusion upon the third was reached by the lewnefl district judge, as appears from his opinion, not without much The doubt grows out of the fact, which appears from the evidence, that the chattel,mortgage in question, though executed more than four mqnths, prior to the filing of the petition in bankruptcy, was, by between the parties, kept from the record until a late,rperiod"and 'Val!! filed for record within the four n100ths. It appears that this agreement not to record was made. to prevent the institutiorlQ( proceedings\ in, bankruptcy by other creditors of the mortgagor. Under, these stances, did the, four months begin to run from the execution of the chattel mortgage or from the recording of the same?' It was held by this court in Harris v'. Bank,A Dill. 133, that in a case where a deed oftru'st was kept off the .record.to prevent the knowledge thereof from tor,un coming to other creditors the four-months limitation did not until the filing of the instrument for record. This decision would be followed as settling the rule for this court were it not that certainrlecis.' ions of the supreme court are brought to my notice which. sel"m toestabUsh a different doctrine. This makes. it necessary to examine carefully these decisions, since, if the case of Harris v. Bank cannot' be' harmonized with them, it must of course yield to them as, the superior authority. The cases cited are Bernhisel v. Firman, 22 Wall. 170; Sawyer v. 91 U. S. 114. And it is insisted that the doctrine' of-these cases is supported 'by the case of Bean v. decided. by Mr. Justice MILLER in the circuit court for the eastern.districtof Missouri. :1 Dill. 24. In v.Firman this precise question did not hrise, but the court laid down the gelileral doctrine that, in order to bring a security for a d within the provisions of the bankrupt law, it is necesbt sary that all the prescribed 'conditions should concur. And it was said tha.t among these conditions "the cardinal one is that the security should be given by the bankrupt within the time specified," and with the view
'Rev. St. U. s. § 5128: "If any person, being insolvent, or in contemplation of insolvency. within four months before the filing of. the petition 1:>Y or against bim, with a view to give a preference to any creditor or person baving a claim against him, or who is under any liability for him, procures or su:trers any part. of his property to be attacbed, sequestered, or seized on executionj or. makes any payment, pledge, assignment, t,ransfer, or conveyance of any part of nis property; either directly or indirectly, absolutely or conditionally, the person receiving· Bucb payment, pledge, assignment, transfer, or conveyance,. or to be benefited thereby.,or by such a.ttachment, baVing reasonable cause to believe such person is ins<;ll vent, and attacbmeJ,lt, payment, pledge, assignment, or conveyance is mail!" in fralld of the provisions of this title, the same shall be void, and the as<lignee may reqdve'r'tlle property, or the value of 1t. from the person so receiving it, or 80 to be beneJlte&" ' '"

666'

FEDElt.U REl?ORTER.

vol. 48.

to'givlng'orie()r: more creditors a preference. The court further said: "It is'as;i:riUch the purpose'of the law to sustain all valid claims arising be-yond time specified, as it is to strike down the frauds within time which it denounces." The case chiefly relied upon by appellee if> 'furpin. The facts in that case were briefly as follows: The petition'. in bankruptcy was filed October 22, 1869. On the 15th of the preceding May the bankrupts had conveyed to Turpin the property in controversy by an instrument in form a bill of sale, but in substance a mOrtgage, io'lilecure a large debt. This instrument was not recorded, and it'wils. insisted that it was kept off the record and kept secret by agreefuentbetweentbe parties to it. On the 31st of July, 1869, the bankrU a mortgage to the same party on the same property, and to secure 'the same debt. It was nothing more than a change in the form of the security · and. therefore,! if the first was void, so was the last. The coun'said, speaking of the original bill of sale: bpen executed more than four months before the petition in bank. ruptcy i'ilulfiled. there is nothing in the case to show that it was invalid. Trile, itwftsnbt recorded, and it may be doubted whether it was admissible torec'ord.;"true,'no possession was taken under it by the vende,e; but for neither of these feallpns' was it thel611s operative between the parties. It might not have. been against attaching creditors. if there had heenany; but there were It was in the power of Turpin to put it on record nnyday. if tbe,recording acts apply to suchan instrument, and equally within his power: tdtak e possession of the property at any time before other rights against it had accrued. These powers were conferred by the instrument itself, imme· diately on its execution." Aria 'the cdtirt.further say: "It has. been argued, however, on behalf of the assignees, that the bill of COnsideration for the mortgage, because, sale of May 15tb was an as alleged;tbere was an agreement between Bacheller and Turpin that it shoUld not,lle vecorded, and should be kept seCl-et. If the fact were as alleged, Hds. not perceived that it\vould be of any lmportanol:l, for it Is undeniable the bill of, sale rested. on a valuable. consideration, to-wit. the debt of 127.889 due to NoveIU&Co.; and it is noL denied that it gave to Turpin to take possession of the property described in it. It was tliel'efore a valuable even if tberewas an Hjtreement not to record it; If it besliid' failure' to' put it on record' enabled the debtor to maintain a Cfl'dit which 'he onght not to have enjoyed, the answl:lr is that the bankt'upt acll was not inte'oded to prev!lntfalse credits,· Its purpose is ratable distribuU:Olh' dOl'S not justify t.be assertion that there was in fact billpf sale should not be recorded, or that possession sbould not be 'taken under it...
I . In Beandv.Broolcmire,Mr. Justice MILlER stated the rule bv which to '¢postrue the.fiNf l;!ectiOll()f the bankrupt act 8l:! follows: · . . "The acts mentioned in' are not such as were forbiddm by the .(,lQromon law the statlItes of the states. . Nor are they acts which, in their ess!lJltial ij'a,t\1,re, are immoral or dishonest. For a man who is insolvent, or approachi'ni!" Insolvency, to pay a just debt, is nut morally wrong, no)':! law in thIs country previous to the bankJ;Upt",cti by transferor assignment of property by an insolvent, may sometimes be unjust to the other creditors, it

ilA1'THEWS .,. WESTPHAL.

667

Wl\8 not forbidden by manY'Qf, the . ltels very certain that erence may consist with the highest oblIgations of morality, and under elf" cumstances which anyone can imagine it may, the dictate of ,the purest justice in reference to all concerned. The careful and diligent framers the bankrupt acLwere fully aw'are of all that has just been said; But they were' about to frame a system of laws, one main feature of whiehwas to, provide for the distribution of the property of an insolvent debtor among. his ctl'ditthey adopted wisely. as tbe generalandpervadiog, rw,e of distribution.eqnaJity among creditors, But they that .tbis principl,6 could not, without hardship, be made of universal applicatioh. When a cred-, itor h.adobtained by fair means a lien 011' any property of the bankrupt, that lien ought to be respected. If he had so obtained paylilet1t1 of the whole or a: part.ofbis debt, the payment 'ought to stand. These exceptions to geni.. eral rUle 'of distribution, were. I)owever, liable to be apWlt'd, and might be uStldtodefeat the purposes, of the bankrupt law. 'fhebankrupt, kl'l0w,:ing: he. must soon be belpless. would desire to pay or secure,favorite They, knOWing his inability to pay, and his liability to be called into a bank;': rupt court, would n<tturally desire to secure 'themselves at the expense ot other creditors. In this dlIemma, congress said we cannot prescribe any rule by which a ,preference wolild be beld to be morally right or wrong, and it would be fabll to the administration of the law. of distribution to permit sueha. question to be raised. We will therefore adopt a conventional rule to mine the validity of these preferences. In all cases where an insolvent paY!l or secures a creditor to the exclusion of others, and that creditor is aware that he is so when he receives it, he shall run the risk of the debtor's contino uance in business for four months. If the law which requires equal distribution is not call1'd into action for four months. the transaction, if otherwise honest, shall stand; but if by the debtor himself. or any of his creditors. that law is invoked within four months, the transaction shall not stand, but the money or property received by the party shall become a part of the common fund for distribution."

The doctrine of these cases is still further illustrated by the case of It is. I think, quite evident, from these authorities, that the supreme court does not regard the four-months limitation as an ordinary. statute of limitations, analogous to statutes regulating the time withinwhich actions shall be commenced. Counsel for appellant refers to the Case of Bailey v. Glover, 21 Wall. 842, where it is held that the second section of the bankrupt act, which requires that all suits by or against an assignee in bankruptcy shall be brought within two years after the cause of action .accrues, is a statute of limitations, and to be construed as other statutes of that class. But there is a clear distinction between that section and. the one now tinder consideration. The former fixed and limited the time within which suits could be brought, and was therefore clearly, a fltl1tute of limitations, pure and simple. The latter describes the acts which shall constitute a fraudulent preference, and has no relation t9 the .matter of limiting the time for bringing suits.. It is not a statute of limitations within ,the usual and ordinary meaning of those terms. In describing the acts which will amount to a preference, congress has seen fit, in this section, to make the time when the preference is given an element. It must be "within four months of the filing of the Pl;ltition by or against the bap)qupt; II No exception if> expressed, and r think it clear from

Clark v. Isdin, 21 Wall.. 360.

FEDERAL REPORTER ,. vol. ·48.

the rulings of the supreme court,above quoted, be implied... .. . . ' , .. Nothing is said about notice of the preference to other creditors or abQllt the recording oftheinstrument,. when there is one by which the preference is given. The preference may be by procuring or suffering an attachment or seizure ofthe debtor's property by payment, by pledge, by assignment, transfer"orconveyance, directly or indirectly, absolutely or 1.0 other creditors could be given by recording single instaQce of a. preference by means of .a conveyance absolQw,Qr conditional. ,If it be by paymentor by assignment or pledge itwillhMlllly be claimed .that an agreement not to make it public would prevent the running of. the four months. It would be very unjust to apply anifferellt rule to the creditor who receives a conveyance or mortgage. 'l'hese liild other'c!?nsiderationsseem to ha"e led congress to fix an or.iilthe language of Mr. Justice MILLER, they saw fit to "adopt a conventional rule to determine the validity of these preferences. n I am constrained; therefore, notwithstanding the force of Judge DILLON'S reasoning in Harris v. Bank, to concur in the opinion of disttibt judge. The decree of the district court dismissing the bill is .

In re Wo

TAl

Lr·.

(DI8trfct Oourt, N. D. California. Angust16,l888.)
, The'Cliinese restriction aoto! 1884, § 6, pro'vides that any Chinese person other than a entitled. by trlla1<.v to enter tbE\,United States. sMU hay') a oertificate of bis i!lsned by the Chinese. gover'nment, and vi/!M the diplomatic rel?reUnited States, <ltc" which:"sball be the'ilole evidence permiS!llble !lame to a right to entry .into on the pan.,of ,the perso1.1 t4e Vnired States." Held, tnat a person who fail/! to produce such a certi11catlii llBllnot establisb a rign\ tocnter 'by /my other evidence.
';.; J.

OF ENTRY-OERTIFIC.4.TE Oll' ,IDENTITY.

Petition,for Habeas C01j?U8 to relelisea Chinese person, who has been denied thei r,ioght''to'.enter the United states. Philip. Teare, for 'petitioner. '

JolvntB.Carey,U.S. Atty.· , andOharles L.Weller,Asst. U. S. Atty.
HOFFMAN,J. The petitioner claims the right to land in the United States on the'gtound that she is the wife of a Chinese actor, and therefore doesndtcotrie within the prohibition of the treaty and of the act of congress which forbids the coming into the United States of Chinese laborers. ' By the flixth section of the amended restriction act of 1884 it is prov:ided! in substance, that' "EveryOhlrteseperson other than a laborer, who may be entitled by said treaty or tbYs to come' within the United States, and who may be about to come to the United States, shall obtaIn the permission of and be identified as