New Orleans Republican. [volume] (New Orleans, La) 1867-1878, 1870-03-25
WHOLE NUMBER 927.
that will not acknowledge less confidence
in that tribunal until compelled to do SO.
Very respectfully. ETC.,
CHARLES CASE, Receiver.


RECEIVERS OFFICE,
| First National Bank of New Orleans, J
New Orleans. La. March 2. H10 }
Messrs, Harvey. Jevons Ryley. Liverpool. Eng
land:
| GENrLEMEN-Yours of fifth instant, with
shorthand notes of decision in Thomson vs..
| Simpson, and copies of three letters of
Messrs. Sharpe Parker q Pritchard, is this
day to hand. Without taking much time
| for reflection, prefer to say at once that
the Judgment of the Vice Chancellor strikes
me as one that can not be sustained on prin-
| ciple or authority, and some of the grounds
taken by Thomson's counsel in argument
certainly are in the very teeth of the law
| and the facts.
For instance, see by the first letter of
Messrs. S. P. & P, that Mr.. Dickinson for
plaintiff ''laid great stress on the point that
| l. as Receiver, did not represent the general
body of creditors;" "that there was nobody
| filling such an office as that of bankrupts
assignee" What singular position. In
| this matter, who do contest for except the
general body Of creditors? Ifthe law gives
| q preference to a particular creditor, what
matters it to me? 1t is only because
| firmly believe that the creditors who have
| sued in your courts are entitled to no pref
erence, but should ehare pro rata with all,
that contest their claims.
True, I, alone, do not stand in the place
of a bankrupt's assignee, for 1 only collect
the assets and pay all collections, less ex-
penses, to the Controller, but the Controller
| does stand with me precisely in that posi-.
| ton He makes pro rata dividends to the
| creditors, and except as to the circulation Of
| the bank, can make no others (see section
! fifty of the currency act. In short, our
| currency act, in the instance of an insolvent
| bank. simply divides the ordinary duties OF
an assignee in bankruptcy between two
persons, viz: The Receiver and Controller.
| making it the business of the first to collect
| assets, and of the latter to pay the creditors,
adopting, as to payment, the principle;
always favored in equity, of making all
creditors share alike.
The Vice. Chancellor was also widely
wrong in the observation that "the question
| was entirely between the plaintiff and the
drawer Of the bills to whom he paid his
| money" The fact is, the drawer OF the
| bills (the First National Bank of New Or
| leans). ceased to exist upon my qualifca-
| ton and taking possession as Receiver, and
none but the general body of creditors have
since then had any interest in the funds in
| the bank of Liverpool, or the decision of
your court relative thereto.
Nor am less surprised at the stress laid
| upon the language of NJ. Forbes-even his
| belief being cited to sustain the ruling of
| the court-not his belief as to facts, but as
| to lchat ought to be done! Can the belief of
any agent of q corporation make law?
The Vice-Chancellor repudiates the idea
of all appropriation" which he says lis
| not accurate as applied to this case" but
relies on the assurance of Forbes to the
buyers of the bills that "a balance in the
| hands Of the Bank of Liverpool should be
applied to the payment OF the bills and that
| Bishop bought on the strength OF this as
suranCe."
Now, is it not sound principle that these
| bills, on their face, said legally, precisely
xyh hof ;c rlai o6 Mr. Enrh0a in uOrdaF p
Does not the drawer of any bill by the very
act of drawing say to the payee, "Sir, funds
shall be on hand to pay this bill at maturity,
this you may depend upons"
Did ever payee or an indOrsee of a bill
buy on any other theory? In connection
with this point l can not refrain from no.
| ticing another:
1t is true as general principle, as stated
by the Vice Chancellor, that ''a represents
ton made by one party for the purpose of
influencing the conduct OF the other, and
acted On by him, will, IN general, be suffI-
cient to entitle him to the assistance of this
Court (Chancery) for the purpose of realizing
such representations"
Ihave already noted that the representa-
tlOns of Forbes were no more IN words t6dH
is implied by lotU from the face of any bill of
exchange. | desire more especially to en-
force, that neither as Cashier. President, or
otherwise, as agent of the First National
Bank of New Orleans, could he go beyond
its corporate rights and powers to bind the
institution. What were those rights and
powers when these bills were drawn? The
bank could draw and sell exchange, but
could only incur such liability as drawer
or vendor as it's charter warranted. That
was liability to pay in full in case of non
acceptance or non-payment at maturity, If
then solvent, or, If insOlvent, and in the
hands Of Receiver. then to pay pro rata
through the Controller.
This was the charter of the corporation,
the law of the United States, and part OF
the contract of every one who in any way
became, or could be in any manner the
creditor Of this bank.
If the bank had not failed these bills
would haze been accepted and paid in full;
as it did fail, its charter said to the payees
of these bills, as 1t did when they were
bought. lyon can have your pro rata
share of the assets of the bank and no more.
You expected your bills to be paid when you
purchased them; 80 every depositor, when
he deposited his money, expected his
checks wonld be honored at sight; but all
acted on knowledge of the law, of which
none can plead ignorance, that IN case of
insolvency there could be and should be no
preference"
1t is from English decisions in chancery
that our courts have adopted the principle
that equity tolerates rather than favors
preferences directed by an insolvent debtor.
In many of the States such preferences
are prohibited by statutes, and our national
currency act adopts the principle that all
creditors shall be paid in full, if assets are
sufficient, or if not, suffer in proportion to
their claims.
I suppose this currency act was before the
Vice Chancellor, and hence am the more
| surprised at his decision.
Surely, l would never have risked q penny
| for costs if had not deemed it my duty to
| the general creditors (Thomson aod al, who
| have sued in your courts included), to IN
| sist upon the equitable division OF assets
provided for by the law which was the char
ter of this bank. and which Is my only
guide.
Believing that the decision can not be af-
| frmed in higher court L do not regret my
telegram in reply to yours, by cable, OF the
| 6fth instant, directing an appeal.
| NV action was Immediately reported to
| Hon. Fl. K. Hulburd, Controller, and, am
| glad to say, he approves the telegram sent.
The foregoing suggestions are, as it were,
| impromptu upon the first reading of your
letter and Enclosures. In making them, /
| do not forget the fact that these bills were
| contracts made in one country, to be exe-
| cuted. so far as the drawee was concerned,
| in foreign Jurisdiction. do not think that
| fact changes the rights of these special, or
Of the general creditors.
| On more mature reflection l may have
| something to add.
Very respectfully, your Obedient servant,
CHARLES CASE.
Receiver, etc.
| A petition has been presented to the Span.
| ish COrtes by deDutatiop representiner the