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And in the 5th edition of the same work, page 420, it is said:

"What is a surrender.-Here the doctrines declared under the law of 1867 seem at least somewhat applicable. The phrasing of that statute undoubtedly colored some of the decisions under it. But, under wellrecognized principles of law, a surrender that is compulsory is not a surrender. The

he stoutly resisted, and from which he could not escape, is not such a surrender as the statute contemplates. To hold that it was would be against the spirit of the statute, which is to discourage preferences. Such a holding would manifestly encourage them, for if the transaction should be upheld the creditor would profit; if overthrown, he would lose nothing, and stand upon an equal footing with those over whom he had at-element of fraud is usually present, but may tempted to secure an illegal advantage, and whom he has, by litigation, delayed in the

collection of their claims."

The question, under the act of 1898, came before the United States district court for the northern district of Iowa, in the case of Re Keller, 109 Fed. 118, 6 Am. Bankr. of Re Keller, 109 Fed. 118, 6 Am. Bankr. Rep. 334, where the subject is discussed by Judge Shiras. Suinming up the matter, the learned judge said:

"It would certainly be wholly inequitable

to hold that a creditor who has received a preference from an insolvent debtor can refuse to account therefor, and, after causing the other creditors the delay, cost, and expense of litigation, after being defeated therein, can still prove up his claim, and take an equal share in the proceeds of the estate after depleting the same in the manner stated. Contesting the claim of the trustee, and paying back the preference in obedience to the process of the court, is not a surrender, within the meaning of clause g of § 57. Therefore there is this difference between a preferred creditor who surrenders the preference, and a preferred creditor from whom the preference is recovered by the trustee: The former, having voluntarily surrendered the preference received, is entitled to prove up his entire claim, and share with the other creditors. The latter, having refused to surrender, cannot prove the claim or share in the estate."

To the same effect is Re Owings, 109 Fed. 623, and in Re Greth, 112 Fed. 978, 7 Am. Bankr. Rep. 598, the cases are reviewed and the same conclusion reached.

be lacking; the test is Was the act a voluntary one? Each case turns on its own facts, and there is some conflict, but the weight of decision under the present law supports this view."

The only case decided under the act of 1898, which has come to my attention sustaining a contrary view, is Re Richard, 94 Fed. 633, 2 Am. Bankr. Rep. 506, in which it was decided that, notwithstanding the preference was set aside after a fruitless fight with the trustee, the creditor might prove his claim.

We are cited to Streeter v. Jefferson County Nat. Bank, 147 U. S. 36, 37 L. ed. 68, 13 Sup. Ct. Rep. 236, as sustaining the contrary view of the meaning of the term "surrender" as used in this act. The case was under the act of 1867. But in that case the contest was over a stock of goods, and the creditor-the bank had consented through its attorneys to the appointment of a special receiver, who was ordered to sell the goods and pay the proceeds into court. Of this feature of the case Mr. Justice Shiras, who delivered the opinion of the court, said (p. 45, L. ed. p. 71, Sup. Ct. Rep. p. 238):

"To sustain the contention that the bank did not surrender its preference, it is urged that the bank did not at once, on demand of the assignee, turn over the goods levied on, but litigated the matter with the assignee in both the district and the circuit courts, and that the proceeds of the executions were not relinquished until final judgment was entered against the bank.

"It was the opinion of the state court In Collier on Bankruptcy, 3d edition, that, as the sheriff, having custody of the page 319, that author says:

"The question what constitutes a surrender has received much discussion. It is admitted by all that if the assignee is compelled to bring an action to invalidate a transfer, and if he recovers and enters up judgment, no subsequent payment of that judgment by the preferred creditor, and no subsequent compliance by him with its terms can be considered a surrender. By his judgment the trustee has 'recovered' the property. In legal effect the transferee no longer has anything to surrender."

goods seized on execution, was, with the consent of the bank's attorneys, appointed special receiver, and was ordered to sell the goods and pay the proceeds into court to await the result of the litigation between the bank and the assignee in bankruptcy, and that as the proceeds were finally turned over to the assignee, and thus became subject to distribution as bankruptcy assets, the transaction amounted to a surrender under § 5084. In so holding we think the state court was right.”

We are also cited to the meaning of the

word "surrender" as given in the Standard | up to the bankrupt's estate, it is, in our Dictionary: view, too late to "surrender."

"1. To yield possession of to another upon compulsion or demand, or under pressure of a superior force; give up, especially to an enemy in warfare; as to surrender an army

or a fort."

This definition is given in support of the contention that a surrender may sometimes be made involuntarily. This is doubtless true, and obviously the term may have different meanings when used in different connections. It may be that an army may surrender a fort after a most vigorous contest, while there is still the choice between further resistance and yielding the fortress to an enemy; but the most liberal meaning of the term could hardly describe as a surrender the occupation which a victorious army has gained of a fort after it has ejected the enemy from its walls and is securely intrenched therein without leave of those who have been forcibly driven out.

The bankrupt law contemplates that a secured creditor who holds a security voidable under the law, and which he should put into the common fund as a condition of the right to participate with other unsecured creditors in the division of the estate, must make his choice while he has yet something to give for the privilege of being taken from the class of those who have a security which may be taken from them, and placed in a class, always favored in the bankrupt law, who shall share in the equal distribution of the bankrupt's estate, freed from fraudulent conveyances and voidable pref

erences.

The complete answer to the argument that one who has received a preference which he must give up before proof as a general creditor has the right to try out with the trustee the question of the validity of the preference, and then surrender, is that when the judgment of the law has taken the preference from him he has nothing left to surrender, and if then so disposed the creditor cannot surrender a thing which has been wrested from him by the strong hand of the law.

In this case the Ohio statutes, when read with the bankrupt law, distinctly avoid preferences, and the trustee, by bringing the action, diminished the estate and delayed its distribution. The creditor, before the litigation had his election as to the course he would pursue. While he had something to surrender he might give it up, prevent costs, delay, and litigation, and aid the speedy and equal distribution of the bankrupt's estate. After two judgments against him, and when he had absolutely nothing to give

1 think the construction here given comports with the purposes and carries into effect the design of the act as expressed by its terms. It is true that in the present case, mortgage in the court of common pleas, and after resisting the attack upon the $2,000 when the judgment had gone against the bank, it did not appeal, and its counsel in the circuit court disclaimed intention to insist upon the preference of the $2,000 mortgage, but even then refused consent to a decree against the mortgage; and in our opinion the time of election was before judgment in the court of original jurisdiction wherein the mortgage was contested and defeated. It is unnecessary to consider whether an election to surrender the preference can be made after issue joined and before judgment. In this case a trial was had upon the merits. The judgment rendered was vacated by the appeal, and in the appellate court, notwithstanding the quali fied disclaimer of counsel for the bank, a final judgment was rendered against the mortgage.

These considerations lead to the conclusion that the first and second questions should be answered in the negative.

The importance of the ruling just made is shown in its application, not only to the act of 1898 as it originally stood, but to the act as it now stands since the amendment of February 5, 1903, which only requires a surrender of preferences when the same are in violation of subdivision b of § 60, or void or voidable under § 67, subdivision e. The reasoning of the majority of the court permits the holder of a preference, no matter how fraudulent, to contest with the trustee when his preference is attacked, and, when convicted of fraud and an intention to defeat the purposes of the law, to "surrender" that which the law has declared he cannot hold, and prove his debt as a general creditor. To permit this seems to me to defeat the purpose of the act, and to encourage the very thing the surrender clause was intended to promote, a prompt and inexpensive distribution of the estate. The fraudulent transferee, although he has lost his suit, has taken no risk, and may still prove his claim on an equality with unpreferred creditors over whom he has sought an illegal advantage. I cannot agree with this construction, and therefore dissent from the judgment and reasoning of the majority of the court. I am permitted to state that Mr. Justice Harlan, Mr. Justice Brewer, and Mr. Justice Brown concur in this dissent.

(197 U. S. 419)

FREDERIC W. LINCOLN, Henry W. Pea- | from the plaintiffs in error and appellants body, John R. Bradlee, and Charles D. upon merchandise shipped by them from Barry, Trading as Copartners under the New York to Manila, and landed at the latFirm Name and Style of Henry W. Pea- ter port between April 11, 1899, the date body & Company, Plffs. in Err., when the ratifications of the treaty with Spain [30 Stat. at L. 1754] were exchanged, and October 25, 1901. The duties were levied under an order of the President dated July Lim- 12, 1898. The case of Peabody & Company

v.

UNITED STATES. (No. 149.)

WARNER, BARNES, & COMPANY, ited, Appt.,

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was decided on demurrer to the answer of the United States, which set up that during the time mentioned there existed an armed insurrection in the Philippine Islands, of such size as to call for military operations by the United States; that, although Manila was in our possession, it was held only by force of arms as a part of hostile territory, and that the President's order was a lawful exercise of the war power of the United States. The district court overruled the demurrer and dismissed the suit. (Not reported.) The case of Warner, Barnes, & Company was decided on a finding of facts by the court of claims, and that court also dismissed the petition. Ct. Cl.. These facts mainly concern the magnitude of the insurrection, and need not be stated.

It will be observed that the President's order relied upon was an order issued during the war with Spain, nine months before the treaty of peace was made. It was a measure taken with reference to that war alone, and not with reference to the insurrection of the native inhabitants of the Philippines, which did not happen until much later. Aguinaldo declared hostilities on February 4, 1899. The natural view would be that the order ex

Argued March 3, 1905. Decided April 3, pired by its own terms when the war with

1905.

IN
N ERROR to the District Court of the
United States for the Southern District
of New York to review a judgment dismiss-
ing a suit to recover duties exacted on im-
ports from New York to Manila after the
ratification of the treaty of peace with
Spain. Reversed. Also an—

A

PPEAL from the Court of Claims to review the dismissal of a petition which sought to recover other duties exacted under similar circumstances. Reversed.

The facts are stated in the opinion. Messrs. Paul Fuller, Frederic R. Coudert, Jr., and Henry M. Ward for plaintiffs in error and appellant.

Spain was at an end. The order directs that "upon the occupation of any forts and places in the Philippine Islands by the forces of the United States" the duties shall be levied and collected "as a military contribution." Of course, this was not a power in blank for any military occasion which might turn up in the future. It was a regulation for and during an existing war, referred to as definitely as if it had been named. See Dooley v. United States, 182 U. S. 222, 234, 235, 45 L. ed. 1074, 1082, 1083, 21 Sup. Ct. Rep. 762.

However this may be, we are of opinion that the cases before us are governed by the decision in Fourteen Diamond Rings v. United States (The Diamond Rings) 183 U. S. 176, 180, 181, 46 L. ed. 138, 142, 143, 22 Sup. Ct. Rep. 59. In that case it was decided that after the title passed to the United States there was nothing in the Philippine insurrection of sufficient gravity to give to the islands the character of forMr. Justice Holmes delivered the opin- eign countries within the meaning of a ion of the court:

Messrs. Hilary A. Herbert and Benjamin Micou for certain claimants having interests similar to those of appellant in No. 466. Solicitor General Hoyt for the United States.

tariff act. That means that there was no

These are suits to recover duties exacted' such "firm possession" by an organized hos*U. S. Comp. St. Supp. 1903, p. 242.

tile power as made Castine a foreign port in | De Lima v. Bidwell, 182 U. S. 1, 199, 200, the war of 1812. United States v. Rice, 4 45 L. ed. 1041, 1057, 1058, 21 Sup. Ct. Rep. Wheat. 246, 254, 4 L. ed. 562, 564. What- 743. ever sway the Philippine government may have had in Luzon, we suppose that probably at any time the United States could have sent a column of a few thousand men to any

Judgments reversed.

Petitioner,

v.

(197 U. S. 442)

UNITED STATES.

point on the island, as was stated by the H. HACKFELD & COMPANY, Limited, Secretary of War in his report in 1899, and as the United States was willing that the court of claims should find. In the language of the above-mentioned decision: "If those in insurrection against Spain continued in insurrection against the United States, the legal title and possession of the latter remained unaffected."

Apart from the question of the duration of the President's order, it plainly was an order intended to deal with imports from foreign countries only and Philippine ports not in the actual military control of the United States. But even had it been intended to have a wider scope, we do not perceive any ground on which it could have been extended to imports from the United States to Manila,-a port which was continuously in the possession as well as ownership of the United States from the time of the treaty with Spain. Manila was not like Nashville during the Civil War, a part of a state recognized as belligerent and as having impressed a hostile status upon its entire territory. Hamilton v. Dillin, 21 Wall. 73, 94-96, 22 L. ed. 528, 533, 534. The fact that there was an insurrection of natives not recognized as belligerents in another part of the island, or even just outside its walls, did not give the President power to impose

Agreed case-stipulation of ultimate factimmigration-shipowner's duty to detain and deport immigrants.

1.

A stipulation of the parties that the escape of immigrants who had been received on board a steamship for deportation to the port from whence they came could not have been reasonably anticipated by the master or of ficers, and did not occur by reason of any negligence or want of proper care upon their part, is as binding on the courts as the specific evidentiary facts set out in such stipulation.

2. Shipowners who have wrongfully brought aliens into the United States, and have received them back on board the vessel for deportation, are not made absolute insurers of the return of the immigrants to the port from whence they came, by the act of March 3, 1891, § 10 (26 Stat. at L. 1084, chap. 551, U. S. Comp. Stat. 1901, p. 1299), punishing as a misdemeanor the "neglect" to detain the persons so received, or to return them to that port; but nothing more is required than a faithful and careful effort to carry out the duty so imposed.*

[No. 164.]

duties on imports from a country no longer Argued March 6, 1905. Decided April 3,

foreign. See Dooley v. United States, 182 U. S. 222, 234, 45 L. ed. 1074, 1082, 21 Sup. Ct. Rep. 762.

We see no sufficient ground for saying that the collection of these duties has been ratified by Congress. The only act needing mention is that of July 1, 1902 (chap. 1369, § 2, 32 Stat. at L. 691, 692).1 That act ratifies the action of the President "heretofore taken by virtue of the authority vested in him as Commander-in-Chief of the Army and Navy, as set forth in his order of July 12th, 1898," etc., together with the subsequent amendments to that order. "And the actions of the authorities of the government of the Philippine Islands, taken in accordance with the provisions of said order and subsequent amendments, are hereby approved." Without considering how far the first part of the section extends, the approval of the action of the authorities is confined to those which were in accordance with the provision of the order, which, as we already already have intimated, the collection of these duties was not. See, further, 1 U. S. Comp. St. Supp. 1903, p. 242.

ON

1905.

WRIT of Certiorari to the United States Circuit Court of Appeals for the Ninth Circuit to review a judgment which affirmed a conviction in the District Court for the District of Hawaii of a neglect to return to the port from whence they came certain immigrants unlawfully brought into the United States. Reversed and remanded to the District Court, with instructions to discharge the petitioner.

See same case below, 60 C. C. A. 428, 125 Fed. 596.

Statement by Mr. Justice Day:

This case is here on writ of certiorari to the circuit court of appeals for the ninth circuit, to review a judgment of that court affirming a judgment of the district court for the district of Hawaii, in which the petitioner, Hackfeld & Company, was adjudged guilty of a violation of § 10 of the act of March 3, 1891 (26 Stat. at L. 1084, chap. 551, U. S. Comp. Stat. 1901, p. 1299), *Ed. Note.-For cases in point, see vol. 2, Cent. Dig. Aliens, § 114.

|

Mr. Maxwell Evarts for petitioner. Assistant Attorney General Robb for respondent.

and to pay a fine of $600, for neglecting to upon these stipulated facts a writ of error return to the port from whence they came, was taken to the circuit court of appeals Yokohama, Japan, two certain Japanese im- for the ninth circuit. In that court, without migrants unlawfully in the United States, passing upon the question whether the statin violation of the act of Congress. The ute justified conviction without proof of conviction was upon information filed and negligence, it was held that the judgment trial had to the court, a jury having been of conviction should be affirmed because the waived, and upon a stipulated finding of facts recited left room for the inference that facts, agreed upon by the attorney for the the petitioner was found guilty of negliUnited States and the petitioner. After gence in putting the Japanese in the room statements as to the corporate character of without taking the necessary precautions the defendant company, and that it was the against escape through the portholes. The agent of the steamship Korea, a vessel ply- stipulation that the escape did not occur by ing between the state of California and the reason of negligence or lack of proper care Empire of Japan, it is stipulated that the on the part of the officers of the vessel it vessel brought into the port of San Fran- was held did not bind the court, nor precisco, in the United States, two certain vent it from placing upon the facts stipuJapanese immigrants from Yokohama, Ja-lated the construction which, in its judg pan, on October 28, 1902; that on the follow-ment, they should properly receive. 60 C. ing day, October 29, 1902, the said Japanese C. A. 428, 125 Fed. 596. were denied admission into the United States by the board of special inquiry at the port of San Francisco, and the said board, being duly appointed and authorized in the premises, ordered the deportation of the said Japanese immigrants. That on the Mr. Justice Day, after making the fore7th day of November, 1902, the said Japa-going statement, delivered the opinion of nese were received on board the vessel Korea the court: for transportation to Japan. The stipulation then recites the following facts: "That on the 12th day of November, A. D. 1902, the said steamship Korea did arrive at the port of Honolulu, in the district and territory of Hawaii; that at the time of the arrival of said steamship Korea at said port of Honolulu the said immigrants were still on board of said vessel; that said Japanese immigrants, together with certain deported Chinese, were placed in a room on board said vessel and locked up by the steerage steward of said vessel; at 12 o'clock midnight of said 12th day of November, A. D. 1902, said Japanese were still on board said vessel in said room: that between that time and 5 o'clock on the morning of the 13th day of November, A. D. 1902, said Japanese had effected their escape; that the only method of egress was through portholes, which were nearly 25 feet above the water; that this method of escape could not have been reasonably anticipated by the master, or officers, or agents of said steamship Korea; that said escape did not occur by vis major, or inevitable accident; and that said escape did not occur by reason of any negligence or lack of proper care on the part of the officers of the vessel or said defendant.

The circuit court of appeals disposed of this case upon the view that the judgment of conviction would have been warranted upon the evidentiary facts stipulated, and that the stipulation, in so far as it stated that the escape of the immigrants could not have been reasonably anticipated by the master or officers of the steamship, and did not occur by reason of any negligence or want of proper care upon their part, was the statement of a mere conclusion not binding upon the court, and would not prevent it from rendering an independent judgment upon the facts stated. We cannot take this view of the case. It may be conceded that where the facts are all stated the court cannot be concluded by a stipulation of the parties as to the legal conclusions to be drawn therefrom, but we know no rule of public policy which will prevent the United States attorney from stipulating with the defendant in a case of this character as to the ultimate facts in the controversy. It is to be presumed that such an officer will do his duty to the government, and not stipulate away the rights of the prosecution. The question of negligence in a given case is not usually reduced to one of law, and, as is the case here, its presence or absence is the ultimate question to be decided between the parties. Ordinarily, the issue of negligence is one of fact to be determined by the jury. This proposition has been so often adjudicated in this court that it is only necessary to refer to the cases in passing. It has been From the conviction in the lower court held that, where there is no reasonable doubt

“That the said defendant made search for said escaped immigrants, but up to the present time have not apprehended the said immigrants, and said immigrants have not been returned to Japan."

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