a petition to the district court, sitting in bankruptcy, reciting the foregoing facts, and praying that the assignee be required to surrender the possession of the premises to them, and account for rents and profits received by him. To this petition the assignee demurred for want of jurisdiction in the district court to give the relief asked. No further steps seem to have been taken in that proceeding.

The present suit was commenced by the assignee in the circuit court on the sixteenth day of December, 1879. Its object is to obtain a decree requiring the surrender by the defendants of the title deed for these lands, and ordering their sale. The bill sets out, substantially, the same facts as those alleged in the petition filed by the assignee in the district court. The relief asked is based upon the following grounds: (1) That these lands were the property of the bankrupt at the time of the adjudication in bankruptcy. (2) That the deed of 1863 was never delivered by the grantor to the defendants, or to any of them, in the presence of the subscribing witnesses, nor "until he became so greatly involved that he feared his creditors could reach said lands." (3) That the deed was wholly voluntary. (4) That, if the defendants ever had a right to recover the lands from the assignee, their cause of action is barred by section 5057 of the Revised Statutes, which provides: "No suit, either at law or in equity, shall be maintainable in any court between an assignee in bankruptcy and a person claiming an adverse interest, touching any property or rights of property transferable to or vested in such assignee, unless brought within two years from the time when the cause of action accrued for or against such assignee. And this provision shall not in any case waive a right of action barred at the time when an assignee is appointed." (5) That the deed held by the defendants creates a cloud upon the title of the assignee, and interferes with his sale of the lands for an adequate price. The defendants in their answer resist the claim of the assignee upon the same grounds relied upon in the original proceeding in the district court. They, also, filed their cross-bill, seeking a decree for the surrender of the lands to them, and an accounting by the assignee in respect to the rents by him received. The circuit court, by its final decree, directed the surrender of the deed for cancellation, declared it to be null and void dismissed the cross-bill, and ordered the assignee, under the direction of the district court, sitting in bankruptcy, to sell the lands and distribute the proceeds.

R. F. Lyon and Thos. B. Gresham, for appellants. N. J. Hammond, for appellees.

Mr. Justice HARLAN, after stating the facts in the foregoing language, delivered the opinion of the court.

The lands conveyed by Barnes to his children having come to the possession of, and being claimed by, his assignee, and the title thereto being in dispute, the petition filed by the latter in the district court was authorized by section 5063 of the Revised Statutes. Under the pleadings in that suit,-all the parties therein having appeared, asserted their respective claims to the lands, and sought a determination of the dispute between them,-it was competent for the district court, sitting in bankruptcy, to have determined, at least, the question of title. Had that court adjudged that the lands belonged to the grantor in the deed of 1863 at the time he was adjudged a bankrupt, that judgment, until reversed or modified, would have been a bar to any new action by the defendants for the recovery of the property.

But we have seen that the assignee, after the expiration of several years, and without notice to the defendants, withdrew his cause from the district court, and instituted this suit in the circuit court, substantially for the same relief as that asked in his petition in the district court; using, upon the hearing of this suit, the evidence taken in his original suit. Evidently he supposed that, in a new suit in the circuit court, the limitation of two years pre

scribed by section 5057 of the Revised Statutes would defeat any claim to the lands which the defendants might assert. But that section, if applicable at all to such a case as this, is applicable to the plaintiff as well as to the defendants. If the assignee claims that the question of title could only be determined in a suit in equity in the circuit court, it might well be said that, not having himself instituted suit in the proper court against the holders of the legal title, within two years from the time the cause of action accrued to him, he could not maintain the present suit. But we are of opinion that the suit in the district court and the present suit, having substantially the same object, are to be regarded, for the purposes of the limitation prescribed by section 5057, as the same suit; the latter being, in effect, a continuation of the former. It results that the question between the assignee and the grantees in the deed of 1863, as to the title to the lands in dispute, was raised in apt time. During the whole period, from the commencement of the suit in the district court until the institution of the present suit, the defendants have asserted their ownership of these lands, denying that they constituted a part of the bankrupt's estate. They met the issue tendered by the assignee in the forum selected by himself. To permit him to abandon that forum without their knowledge or consent, and-in computing the time fixed for bringing actions, by or against assignees, touching property claimed adversely to him -to exclude the period between the institution of the suit in the district* court and the commencement of this suit, would make the statute an instrument of fraud. It cannot receive that construction.

Upon the merits of the case we have no serious difficulty. The evidence satisfies us that the conveyance of 1863 was not made with any intent to hinder or defraud the creditors of the grantor. The latter was, at that time, in such condition as to property that he could, without injustice to creditors, make a gift of these lands to his children. The transaction was in good faith. and was not a mere device to hinder and defraud creditors. The deed was promptly delivered by the grantor to one for all of the grantees. The possession of the lands by the father, at times subsequent to the execution and delivery of the deed, and his control of them apparently for his own benefit, is satisfactorily explained by witnesses. His possession, after the deed of 1863, was not intended to be, and was not in fact, adverse to his grantees. According to the weight of evidence, he held possession under and for his children. The only fact in the case which creates doubt on this point is that he improperly included these lands in his schedule of the real estate of which he was in possession when he filed his petition in bankruptcy. But that circumstance, even if not satisfactorily explained, cannot legally affect the rights of his grantees, and is only important as bearing somewhat on his credibility as a witness, testifying that he delivered the deed immediately upon its execution, and that his possession at a later period was for his children. Code Ga. 1867, (in force January 1, 1863,) §§ 1942, 2620; Clayton v. Brown, 17 Ga. 217, 222; Clayton v. Brown, 30 Ga. 491, 495; Weed v. Davis, 25 Ga. 684; Wallace v. Penfield, 106 U. S. 262, 1 Sup. Ct. Rep. 216; Jay v. Welchel, supreme court Georgia, April 4, 1887.

There is still another view of the case. If the grantor was insolvent when he made the conveyance of 1863, or if the lands so conveyed constituted more, in value, of his estate than he could rightfully withdraw from the reach of creditors and give to his children, in either case the assignee in bankruptcy,, there being no fraud on the part of the grantor, has no standing to impeach the conveyance. The deed was good as between the grantor and his children; and, in the absence of fraud, could not be questioned by the assignee, who took only such rights as the bankrupt had. Yeatman v. Savings Inst., 95 U. S. 764, 766; Stewart v. Platt, 101 U. S. 731, 738; Hauselt v. Harrison, 105 U. S. 401, 406; Rev. St. § 5046. It could only be avoided by creditors who were such at the date of the conveyance. Warren v. Moody, ante, 1063

*520

Upon the whole case, we are of opinion that the assignee in bankruptcy of Barnes has no valid claim to said lands, or any of them; and that the deed of 1863 was not void as between him and the grantees therein. The circuit court erred in declaring it to be void, and in ordering the sale of the lands, under the direction of the district court, as part of the bankrupt's estate. The decree is reversed, and the cause remanded, with directions to set aside the entire decree of November 25, 1882, and for such further proceedings as are consistent with this opinion.

(122 U. S. 528)

MCLEOD and another v. FOURTH NAT. Bank of ST. LOUIS.1
(May 27, 1887.)

FRAUD-WHAT CONSTITUTES-FALSE BILL OF LADING.

Cotton dealers in St. Louis, Missouri, had "cotton notes" for 192,385 pounds, deposited with a local bank as collateral security. In some way, without knowledge of the bank, they got a large part of the cotton from the warehouse, and took it to a "pickery," where it was so treated that the marks on the bales called for 276,850 pounds. When the bank discovered this, they had part of the cotton reweighed, and made the dealers put up further margins. The cotton was then sold by the dealers to parties in Scotland, and the bank let the dealers have the "notes' so as to enable them to get the cotton, and ship it. The dealers got the transpor tation company to take their word as to the weight, and a bill of lading was issued, contrary to custom, without reweighing. It called for 276,850 pounds. The bank knew nothing of all this. The brokers then negotiated the bill of lading and a draft on the parties in Scotland, and from the proceeds paid the bank, which had declined to take the draft. Held, in an action against the bank by the Scotch purchasers who accepted the draft, that it was not guilty of fraud, and was not liable. In Error to the Circuit Court of the United States for the Eastern District of Missouri.

F. N. Judson, for plaintiffs in error. G. A. Finkelnberg and Geo. A. Madill, for defendant in error.

MILLER, J. This is a writ of error to the circuit court of the United States for the Eastern district of Missouri. The plaintiffs in error were the plaintiffs in the original action, the gravamen of which was that the defendant, the Fourth National Bank of St. Louis, conspired with the firm of Norvell, Camfield & Co., who were dealers in cotton in that city, to obtain from the plaintiffs, McLeod & Reid, residing in the city of Glasgow, Scotland, the acceptance of a draft drawn by Norvell, Camfield & Co. upon said plaintiffs for £6,000, and that this draft was accompanied by a fraudulent bill of lading, on the strength of which plaintiffs accepted and were compelled to pay it. The bill of lading was for a certain number of bales of cotton, which were falsely represented to contain 276,850 pounds, whereas the aggregate weight of these bales, when reweighed at the place of delivery, was only 192,385 pounds. That this bill of lading was false, that it was gotten up by fraud, and that this fraud deceived the plaintiffs, there is no question; nor is there any doubt that the fraud was perpetrated by Norvell, Camfield & Co. The case was tried before a jury on the general issue, by which the bank denied all the allegations of fraud, and, in general, everything charged in the declaration. The court refused several requests to charge made by the plaintiffs with regard to the connection of the bank with this fraud, and in the end peremptorily instructed the jury that there was no evidence to support such an allegation of fraud on the part of the defendant, and that they must find for the bank.

This bill of exceptions, like so many others that we find in the records that have been sent up to us recently, is simply a stenographic report of all that took place at the trial, and we are expected to consider the whole of this evidence, and pick out such portions of it as may be pertinent to the issue, as if

'Affirming 20 Fed. Rep. 225.

addressed to us originally, and to ascertain whether there was any evidence which should have been left to the jury on the question of the participation of the defendant in the fraud.

The main facts in the case are substantially as follows:

Norvell, Camfield & Co. were dealers in cotton in St. Louis. They bought this commodity throughout the cotton region, brought it to that city, and then sold it in the markets of the eastern states and of Europe. To enable them to carry on their extensive business, they required large advances from the capitalists of St. Louis, and these were obtained mainly from its banks. The defendant bank, in this case, had so advanced them about $64,000, and in every instance, as such advances were made, the firm deposited with the bank what were known as "cotton notes." These were instruments made by warehouse company, whose business it was to receive and take care of cottor until it was sold, or its delivery demanded by the person who originally de posited it in the warehouse, or by some holder of the cotton notes. Each note represented a bale of cotton, and the following is the form of these instruments in general use in that business:

"[No. of bale.] Received in store of ent good order, of the above number and deliverable to bearer upon return of this charges; risk of fire excepted.

[Signed]

one bale of cotton, in apparfollowing marks, [marks, if any,] receipt and payment of warehouse

66

Secretary."

The cotton of Norvell, Camfield & Co., which is the subject of this controversy, was stored in the warehouse of the St. Louis Cotton Compress Company, and the notes therefor were in the hands of the bank, when Camfield, one of that firm, without obtaining the notes from the bank, or any orders from it, had a very large amount of this cotton transferred to a cotton "pickery," as it was called. There the bales were opened, the cotton picked, reas. sorted and repacked, and the tags with the numbers on them, which represented the cotton as it was originally delivered to the warehouse company, reattached to these readjusted bales. In doing this, the quantity of cotton in each bale was so much reduced that the difference was made, which we have already stated, between the amount which was called for by the bill of lading and the amount which was received in Glasgow.

By what means Camfield obtained the cotton from the warehouse without the production of the notes is not explained, nor is it very material in this case, as there is no evidence to show that the bank had anything to do with that transaction, but was informed of it after it was over, and the cotton returned to the warehouse. Upon being so informed, it took some steps to ascertain the amount of the loss it might incur by this multiplication of the bales out of this same cotton, had some 15 or 16 bales reweighed, and called upon Camfield to put up further margins, which he did.

During this time, or shortly afterwards, and while the matter remained in this condition, Mr. Norvell, who was in Europe, negotiated the sale of this cotton to the plaintiffs, and Mr. Camfield, his partner in St. Louis, forwarded, it to Glasgow by way of New York. In doing this, he forwarded it by railroad from St. Louis to the Atlantic coast, and took from the transportation company at St. Louis a bill of lading, describing the bales by their numbers and weights, which amounted to the aggregate number of pounds already stated. In order to obtain these bales for shipment from the warehouse company, Camfield had to produce the notes which were in the possession of the bank. Of course he could only do this by the bank intrusting him with the notes for the short time necessary to make the shipment and procure the bill of lading, when, having delivered up the notes to the warehouse company in order to get possession of the cotton for shipment, he was to return the bill of lading, which represented the cotton, to the bank.

In all cases of shipments of this character from St. Louis to the eastern

$532

states or Europe, the transportation company, on giving its bill of lading, requires a reweighing of the cotton upon delivery to it, and, upon that being done, the weights are marked upon the bales, or certified by the weigher in a schedule or statement. There are persons appointed for this special purpose of reweighing cotton for transhipment. It is upon the strength of this reweighing that the transportation company makes out its bill of lading. What was done in the present case was that Camfield induced the clerk, or other officer who made out this bill of lading, to accept his own statement of the weight of the bales, and to give his bill of lading accordingly, without ever having the cotton reweighed, or having any certificate of the reweigher thereto. The number of bales were all right, but in this way Camfield obtained from the transportation company a false bill of lading. Upon this Camfield, in the name of his firm, Norvell, Camfield & Co., drew his draft upon the plaintiffs at Glasgow, at 60 days, for a sum corresponding to the amount in the bill of lading, and to the contract price which Norvell had made with them in Europe. This draft the defendant bank declined to buy, and Norvell, who had returned to America, negotiated and sold it to Knoblauch & Lichtenstein, bankers in the city of New York, and the money, or so much of it as was necessary to pay its debt, was turned over to the defendant.

Of course the plaintiffs, who had accepted the draft on its presentation with the bill of lading, were bound to pay it at its maturity, although in the mean time they had discovered the discrepancy between the amount of the cotton actually shipped and that described in the bill of lading. The defendant bank never indorsed this bill of lading; it was never made payable to it. It never did anything to give it currency, or to make itself responsible for its accuracy, and it was no party to the bill of exchange. The whole case of the plaintiffs is that, having received the proceeds of the sale of this bill of lading from Knoblauch & Lichtenstein in discharge of the debt of Norvell, Camfield & Co. to the bank, it so acted in regard to the matter as to be a participant in the fraud which was practiced by that firm. The whole case then turns upon the truth of this allegation.

It is attempted to be supported principally upon the ground that Mr. Biebinger, who was the cashier of the bank, was aware of the change made in the quantity of cotton in the "pickery," where it was rebaled. But it does not appear that he, or any other officer of the bank, had any reason to suppose that the number of bales repacked at that establishment was very considerable. They had 15 or 16 of them weighed, and called upon Camfield to make good the deficiency, so far as they knew of it, which he did. This was all that concerned them. They were only acting for themselves. There was no obligation between them and anybody else at that time to disclose this matter, as there was nobody then interested in the property but the bank and the firm They might very well have supposed that whenever this cotton was sold by the firm, and was to be delivered, that the rule for reweighing would be complied with, and that the purchaser of the cotton, or of the bill of lading, or of the bill of exchange drawn on it, would have seen to his own security in that matter, and would have relied, as he had a right to do, upon the sufficiency of the process of reweighing for that protection.

It is very clear from the evidence, and it is undisputed, that this reweighing is the uniform and regular custom, and that it constitutes the evidence of the weight of the bales in the final sale by the cotton dealer of St. Louis to the purchaser in the eastern or European market. Is there any evidence to show that the bank was guilty of any fraud, or of any negligence which amounted to a fraud, or had any design to cheat anybody in this matter? When Camfield notified them that the cotton had been sold, and that he wanted to ship it, the use of the cotton notes, which they held as security for the amounts due to them, was necessarily to be intrusted to one of the owners, or to one of their agents, for the purpose of getting the cotton out of the ware