United States v. Howland & Allen
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17 U.S. 108 (1819)
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U.S. Supreme Court
United States v. Howland & Allen, 17 U.S. 4 Wheat. 108 108 (1819)
United States v. Howland & Allen
17 U.S. (4 Wheat.) 108
The circuit court has jurisdiction, on a bill in equity filed by the United States against the debtor of their debtor, they claiming a priority under the Act of 1799, c. 128, s. 65, notwithstanding the local law of the state where the suit is brought allows a creditor to proceed against the debtor of his debtor by a peculiar process at law. The circuit courts of the union have chancery jurisdiction in every state; they have the same chancery powers, and the same rules of decision in all the states.
The United States is not entitled to priority over other creditors under the Act of 1799, c. 128, s. 65, upon the ground of the debtor having made an assignment for the benefit of creditors unless it is proved that the debtor has made an assignment of all his property.
Where the deed of assignment conveys only the property mentioned in the schedule annexed and the schedule does not purport to contain all the property of the party who made it, the onus probandi is thrown on the United States to show that the assignment embraced all the property of the debtor.
Upon a bill filed by the United States, proceeding as ordinary creditors against the debtor of their debtor for an account, &c., the original debtor to the United States ought to be made a party and the account taken between him and his debtor.
This was a bill in equity filed in the name of the United States in the court below, stating that several judgments had been obtained by the United States on duty bonds against Shoemaker & Travers, and Jacob Shoemaker, and their sureties, amounting to the sum of $5,292, which judgments were obtained in the District Court of Pennsylvania at the February term of 1808, and upon which executions
had issued which remained in the marshal's hands unsatisfied; that after the execution of the duty bonds, but before they were payable, to-wit, on 6 December, 1806, Shoemaker & Travers became insolvent within the true intent and meaning of the act "to regulate the collection of duties on imports and tonnage;" that on 1 February, 1808, goods, effects, money and credits of Shoemaker & Travers to the amount of $6,000 had come to the hands of Howland & Allen which, the bill alleged, they refused to subject to the executions of the United States; it prayed that they might be compelled to account for and deliver up these goods, &c., in satisfaction of the claim of the United States, and for an injunction in the meantime to restrain them from disposing of, paying away, or in any manner applying the goods, &c., aforesaid, to any other object. The injunction was accordingly, awarded.
An amendment to the bill stated that after the debts to the United States accrued by bond as aforesaid, and after Shoemaker & Travers had become insolvent, to-wit, on 6 December, 1806, they made a voluntary assignment by deed of all their property for the benefit of their creditors within the true intent and meaning of the act of Congress aforesaid, and an exemplified copy of the deed of assignment was annexed to the amended bill. The deed recited that the parties being justly indebted to divers persons, whose names are mentioned in a list thereto annexed, and unable at present to pay the said debts, they assign to trustees therein mentioned
all and singular the estate and effects contained in a schedule annexed, in trust to pay the debts due the enumerated creditors, and first that due to the United States. The schedule was entitled "Schedule of property assigned by Shoemaker & Travers, and Jacob Shoemaker, to the creditors of Shoemaker & Travers," and contained many items of property, and among others, the proceeds of the cargo of the brig Deborah, which vessel was then at sea and belonging to Howland & Allen but had been chartered by Shoemaker & Travers.
Howland & Allen by their answer admitted the receipt, on 1 January, 1807, of 4,000 Spanish dollars, the property of Shoemaker & Travers, and which the master of the Deborah had received in Guadeloupe for Shoemaker & Travers, but insisted on their right to apply it to an unliquidated debt of greater amount (composed of freight, demurrage, damages, &c., the particulars of which were detailed by the answer), due, as alleged, from Shoemaker & Travers to them, and applied, by an entry in their books, to the credit of Shoemaker & Travers at the time of the receipt of the money aforesaid. They insisted, therefore, on the right of retaining it. To this answer there was a general replication, and the depositions of several witnesses were taken.
The court below decreed that the said Shoemaker & Travers were and are indebted to the United States, and that they became insolvent and made an assignment as alleged in the bill, and that there was an outstanding unsettled demand existing in their favor at the time of their insolvency against the
defendants arising from the voyage of the brigantine Deborah, and which is still unsettled and unpaid, but the court was not satisfied that the defendants, being merely debtors to said insolvents, are by law liable to this process, and thereupon decreed that the said bill be dismissed. From this decree the present appeal was taken.