nished to him, and also provides for amendments to the schedule, from time to time, under oath, by the debtor, all of which assumes that the regular schedule may not be altogether accurate. And they say that if the debtor has furnished a list which is accurate to the best of his knowledge and belief, it is in substance a conformity to his duty as prescribed by the statute, and it does not affect the regularity of the discharge.

It is contended, however, that in the case of voluntary bankruptcy the nature of the proceeding is that of an action brought by the debtor against his creditors, in which he is seeking a judgment of discharge in bankruptcy; and, upon general principles, it is said that a court has no jurisdiction to pronounce a judgment against any person who is not made a party to the proceeding by personal service of process in the shape of summons, or other process. There is a great deal of plausibility in the suggestion, and it is supported also by several cases which have been cited; but they are not decisions in any court of last resort.

There is another view, however, which may be urged with equal plausibility. The bankrupt law is established by Congress. The object of all bankrupt legislation is twofold; one object being to appropriate the assests of the debtor to the satisfaction of his debts, as far as they will go, and the other to discharge the debtor from any further liability for his existing debts; and these two things are not necessarily dependent upon each other. Congress, if they see fit, may make the discharge of the debtor to depend on his activity in giving notice to his creditors, and seeing that all his assets are applied to their claims; and, on the other hand, Congress may provide (because there is no particular form in which these bankrupt laws shall be constitutionally made), that the debtor shall be absolutely discharged at the moment when he surrenders his property, and the law may take upon itself the duty of notifying his creditors and distributing his assets. And, in truth, though this is, in a certain sense, a proceeding inter partes, it is also

a proceeding in rem. With reference to the assets, it is clearly in rem. And with reference to the other proceeding, its object is to determine the status of the debtor. In the first place, the court declares that the debtor is a bankrupt, and is no longer capable of managing his property, and it shall be taken away from him, and then, discharging him, says, that as to these debts, he is a free man henceforth, capable of contracting new debts and acquiring other property without being liable for his previous debts. And upon analogy, the jurisdiction of the court in such a case may exist without the presence, actual or constructive, in the court of any adversary party. Just as in a case in admiralty, or in cases in the probate court respecting testamentary capacity, or divorce cases, it would be competent for Congress to provide that a publication shall give full jurisdiction to a court to determine questions of personal status; in other words to proceed in rem; and that decision would be conclusive against all the world.

Although this view is not very well formulated in authorities, we find that, according to the weight of authority, the presence of the creditor in the bankrupt court is not essential to its jurisdiction, but that jurisdiction is obtained by the petition and publication. Several cases were cited, in which the court very emphatically held (the courts of Iowa and Massachusetts), under substantially the same provisions as are contained in the last bankrupt act, that the omission, accidentally or innocently, of the creditor's name did not affect the validity of a discharge. In the notes to Bump's Law and Practice of Bankruptcy there is quite a large collection of authorities to the same effect, which it is not necessary to go into in detail. One is the case of Hubbell vs. Cramp, 11 Paige Chancery Reports, 310, where Walworth, chancellor, says:

"The statute does not require absolute certainty in the petition, either as to the list of creditors or as to the inventory of the property of the bankrupt. But it requires that the bankrupt shall set forth both, according to the best of his knowledge and belief.

And as the presenting such a petition is necessary to give the court jurisdiction in the case, if it can afterwards be shown that the bankrupt intentionally or knowingly omitted the names of any of his creditors, or wilfully misstated the places of their residence, or the amount of their debts, I am not prepared to say that the discharge cannot be avoided on that account; although that may not be one of the frauds referred to in the fourth section of the bankrupt act, for which the discharge may be impeached.

"The answer in the present suit, however, shows the necessary facts to give the district court of the northern district of New York, jurisdiction of the case. For it states, among other things, that the defendant, Cramp, presented a petition to that court, in March, 1842, such petition setting forth, to the best of his knowledge and belief, a list of his creditors, their respective places of residence and the amount due to each, together with an accurate inventory of his property, &c., verified by his oath. And the fact that the names of the complainants who held a note upon which Cramp was only second endorser, were not inserted in the list of creditors, is not sufficient to induce a belief that his petition was false, as not containing a correct list of his creditors, according to the best of his knowledge and belief. The jurisdictional facts, being thus stated in the answer and sworn to, must be taken as true for the purposes of this application. That being the case, the act makes the discharge and certificate conclusive evidence in favor of the bankrupt, and a full and complete bar to all suits against him, unless the same is impeached for some fraud, or wilful concealment of his property or rights of property."

It is unnecessary to pursue the cases in detail. The weight of authority is decidedly in this direction, and we, therefore, sustain the demurrer to the plaintiff's replication.

{

SARAH MORROW vs. HENRY B. JAMES ET AL.

EQUITY. No. 7758.

Decided December 10, 1883.

The CHIEF JUSTICE and Justices HAGNER and Cox sitting.

A payment by a stockholder of a building association, of his dues to one of its officers not having authority to receive them does not discharge the stockholder if the officer so receiving the money fails to pay it over; nor can the association charge the loss against its asserts in its account with the stockholders so as to diminish the value of their shares.

THE CASE is stated in the opinion.

WM. HENRY BROWNE, for plaintiff, cited the following authorities:

Bray vs. Farwell, 81 N. Y., 608; Bowman vs. Close, 44 Iowa, 428; Burnes vs. Pennell, 2 H. L. C., 521; Logan vs. McNaugher, 88 Pa., 103; Ex parte Lawes, De G. M. & G., 421; Burnside vs. Dogrell, 3 Ex., 224; Rennie vs. Wynn, 4 Ex., 691; Chapler vs. Brunswick. Building Society, VI L. R., Q. B. Div., 710; Conway vs. Log Cabin Building Ass., 52 Md., 136; Bramah vs. Roberts, Bingham's New Cases (1836-7); Wyman vs. Hollowell Bank, 14 Mass., 58; Fay vs. Noble, 12 Cush., 17; In re County Life Assurance Co., L. R., 5 Ch., 288; 39 L. J. Ch., 471.

ELLIOT & ROBINSON, for defendant, cited:

Endlich on Building Ass., § 104; Ibid., §§ 517, 519; McGrath vs. Hamilton Building Ass., 44 Penn. St., 383.

Mr. Justice Cox delivered the opinion of the court. The case of Morrow vs. James and others, is an action brought by one stockholder in the Territorial Savings, Loan and Building Association of the District of Columbia, against the officers, in their character of officers, and as representatives of the other stockholders of the same association. case made by the bill is, that the treasurer of the association is the officer designated to receive payment of all the dues which the members have to contribute monthly, article six of the Constitution providing that, "Each stockholder, or trustee, for each and every share of

The

stock held by him in this association, shall pay into the treasury, in lawful money, at each and every stated meeting of this association on the second Friday of each month, the sum of one dollar;" and it is made the duty elsewhere of the treasurer to receive all moneys so paid in; that the complainant, as a stockholder of the association, regularly paid in her dues every month; that quite a number of the members of the association, instead of paying into the treasury, entrusted their dnes to the secretary of the association, a man named Seth A. Terry, to pay in on their account, and that Terry, instead of paying the money into the treasury, appropriated it to his own use; that in the settlement and winding up of the association, the officers proposed to charge this loss to the association and deduct it from the assets of the association, so that the distributive shares of the several members should be thereby reduced, including that of the complainant; whereas she maintains that this was not a loss by the association, but a loss of the individual members who paid their dues to the wrong person, who had no authority to receive them, and that the dues are to be considered as not having been yet paid by those membersnot lost by the association, but still a part of their assets, and to be charged against the members by whom they were payable, and that they ought not to be charged as a loss against the shares of this complainant in the assets of the concern. That is really the only question presented in the

case.

The answer does not deny any of the substantial averments of the bill, but it avers certain propositions which are really conclusions of law. They aver the fact to be, "that by reason of the heavy defalcation of the secretary of the asssciation (Terry), the assets of the association were so reduced that it became impracticable to divide among the shareholders more than forty per cent. of the value of their stock as it existed prior to the said defalcation; that said Terry was a member of said association and partner therein, and the complainant and all other shareholders or partners were equally bound to contribute to any losses sustained