V.

gained the legal title, without notice of Harrison's HARRISON claim. Equity will not deprive them of this legal STEKRY title. 2 Eq. Cas. Abr. 85. Nor will equity protect an assignment of a chose in action except for a pre

cedent debt.

The assignees under the British commission must yield to the attaching creditors. If they have any right, it can only be from the date of the assignment, which was subsequent to the attachments. Doug. 170. Le Chevalier v. Lynch. 2 H. Bla. Hunter v. Potts. 1 H. Bla. 665. Sill v. Worswick. 1 East, 6. Smith v. Buchannan.

This case differs from that of the United States v. Hooe, 3 Cranch, 73. That was an assignment of real estate; this is only of a chose in action.

It does not appear when the acts of bankruptcy were committed. The commission against Bird & Savage issued on the 12th of June, 1803; that against Robert Bird on the 5th of December, 1803, and as the act of bankruptcy must be within six months before issuing the commission, it must have been subsequent to the 5th of June, 1803, long subsequent to the attachments.

There is no distinction between the rights of the British and the American attaching creditors. They all come in according to the dates of their attach

ments.

MARSHALL, Ch. J. lina create a lien from

Does the law of South Caro-
the time of the attachment

without power to release the attached effects?

Harper, for the assignees under the British and American commissions.

The attachment may be dissolved by bail; but if no bail is given, and judgment of condemnation be had, it relates back to the time of the attachment, in the same manner as a fieri facias lodged in the

V.

STERRY.

HARRISON hands of the sheriff, under the statute of frauds. Laws of South Carolina, p. 188. § 3. and 8. But the 31st section of the bankrupt law of the United States, vol. 5. p. 67. destroys all liens created by prior attachments. We admit that the bankrupt laws of England have no such effect in this country.

The case of the United States v. Fisher establishes the right of the United States to priority of payment. But the United States may waive their right by coming in as a creditor under the bankrupt law. They stand on the same ground with the attaching creditor at St. Kitts in the case from Douglass. If he had afterwards proved under the commission, it would have been a waiver of his priority under his attachment. So if a mortgage creditor would prove under the commission, he must relinquish his mortgage.

The United States have proved their debt under the commission, and voted in the choice of assignees. If in such a case an individual would be excluded, so will the United States, unless they can show that the agent had no authority. It is stated to have been done by the attorney of the United States for the district, who is the proper officer to prosecute for, and recover the debts due to, the United States, in the manner most for the interest of the United States, according to the best of his judgment. The United States are bound even by his mistakes.

The United States have elected to prove under the commission, and are bound by that election.

The commissioners of bankrupt cannot distribute but as the bankrupt law directs. They r.nnot pay the United States more than their dividend pro rata.

The debt from Bird, Savage & Bird was contracted in England, where they were bankers for the United States. Can the United States claim a preference against British subjects resident in England? Can they claim it in this country, under the commission here against British subjects?

Y.

STERRY.

As to the claim of Harrison. The instrument of HARRISON January 31, 1803, is not sufficient to transfer even the property of Robert Bird. It could not assign the joint effects, because that was an act which he had no right to do. He had no right to use the name of the firm for that purpose. It does not transfer his own indiv dual right, because it purports to transfer the joint estate in the joint name.

It is an act attempted to be done by the firm. One member of a firm may sell the goods and give a good receipt, because they are acts necessary in the regular course of business. But how far does this power extend? We must look, for an answer, into the law of merchants. It extends to the drawing and accepting bills, making notes, bills of parcels, receipts, bargain and sale of chattels in the course of the trade; but not to the assignment of the property of the firm for the purpose of obtaining more credits, because this is not necessary in the usual course of their business. It is an extraordinary act in which all the members concur. It is a case not foreseen, nor contemplated, and therefore not provided for, by the law merchant.

In England a copartner cannot bind the firm by a bond: not because there is any magic in a seal, but because it is not necessary in the regular course of business. So with regard to real estate; one partner alone cannot convey. A secret assignment of property is not a regular mercantile transaction; and if one partner were permitted to make it, it might be the instrument of deception, if not of legal fraud.

But such an assignment is void by the bankrupt law. It is a conveyance, on the eve of bankruptcy, to give a preference to a particular class of creditors. It does not appear by the record that this assignment to Harrison was not of the whole estate of the bankrupts, at least the whole in this country.

It cannot operate as the deed of Robert Bird,

V STERRY.

HARRISON because not executed in his own name, and as his deed. It cannot convey the joint interest of Bird, Savage & Bird, because, not executed in the name of the firm. And if it could, it is void under the bankrupt law.

As to the attaching creditors; the attachment, under the laws of South Carolina, did not change the property. It only gave a specific lien; but if it did change the property, still it is overruled by the express words of the 31st section of the bankrupt law.

The British creditors cannot give a priority by attachment in this country. They must come in. under the British commission of bankruptcy; for they as well as the bankrupts were subject to the British bankrupt laws. They were bound by the assignment in England, and must claim under it, if they can claim at all.

P. B. Key, for Harrison.

The assignment to Harrison is legal and valid. It was at least competent to convey Robert Bird's interest.

The instrument of January 31, 1803, was not an act of bankruptcy in itself. It was more than six months prior to the issuing of the commission. It was a disposition of the property for a valuable consideration, not in payment of antecedent debts, but to raise new funds for the benefit of all the other creditors. This was not an unjust preference. It was equivalent to an absolute sale. Robert Bird had the full control over the debts due to the firm in this country. He could release, or assign and transfer, or sell, and, à fortiori, he could mortgage or pledge them. These creditors have peculiar merit. They advanced funds upon the credit of this property. The other creditors did not. The funds raised upon this property have been applied for the benefit of the general estate which has suffered no diminution by this exchange of property.

V.

If the other creditors succeed in destroying this as- HARRISON signment to Harrison, they will have a double share, while these creditors will get nothing.

The priority claimed by the United States did not attach until the bankruptcy. The commission issued on the 5th of December, and the act of bankruptcy upon which it issued must have been committed within six months, next preceding, viz. after the 5th of June. But this assignment was long antecedent to that day. That the priority takes place when the event of insolvency happens, is to be inferred from the opinion of this court in the case of The United States v. Fisher, 2 Cranch, 385. 395.

Rodney, Attorney-General, for the United States.

The assignment to Harrison was made in contemplation of bankruptcy, and therefore void. It was made on the 31st of January, and on the 6th of February the commission issued in London, The situation of the house must be presumed to be known to all the partners. Peake's Cas. 200. Burrą 830. It was not made to secure previous debts; no sum is mentioned; the debts were unascertained. The possession was not delivered, nor even an assignment of the bill of lading.

If it was made to defeat the bankrupt lav, or even to secure a creditor, it is void. Burr. 467.474. Cowp. 117. 122. It is not necessary that it should have been of all the estate. An assignment even of one third is fraudulent, Cowp. 632. 3 Wils. 47. 4 Burr. 2239.

The assignees under a separate commission cannot recover the joint effects in their own name, but they may use the joint name. 1 Johns. 123. An assignment under a joint commission transfers the joint and separate property. 2 P. Wms. 500. Cox's note, ex parte Cooke.

STERRY.