The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1879-12-03
THE COURTS.
Value of Notes Bought for Less
Than Their Face.
LAW, BUT NOT JUSTICE.
Discount on the Perquisites of
the Sheriff.

An important decision has been rendered by Judge
Choate in tina United States District Cour. in the
matter of Sidney +. Shelbourne bankrupt, which
involves some very interesting questions in regard
to promissory notes. The question in this case is
whether the holder of promissory note made by
the bankrupt is entitled to prove for the whole
amount of the note and interest only for the sum
he paid for the same with interest Mr.. Sheibourne
was adjudicated q bankrupt on his own petition.
which fled August %. 1878. The claimant.
Henry B. Todd. made proof upon promissory note
signed by the bankrupt. dated October 26, 1869.
whereby he promised pay. three after date.
to James Cummings, order, $4,000. for value re.
ceived. This note was made for the purpose OF
settling an account between Cummings. the payee,
the items Of the settlement. and no final agreement
was made between them as to the disposition OF
to the ss Claimant Todd for $500 In the same
month Todd brought an action in the supreme
Court OF New York and obtained judgment against
the bankrupt for the whole amount OF the note in
forest and costs. This Judgment was reversed Dy
the General Term and new trial ordered unless the
plaintiff Todd should consent to reduce the Judg.
ment to $1,000 and interest and the action is still
pending All of these proceedings were prior to the
fling Of the petition in bankruptcy. Judge Choate
takes up the trial of the suit in the State courts
'sThere is" he says, II think no doubt that &C
cording to the authoritative decisions of the Courts
of New York this creditor Todd, can recover
in the courts Of this State only the amount he paid
for the note and interest on the same from the time
of the purchase. Think therefore, both upon
authority that the rights of this creditor to
be determined by the local law. 1t was the purpose
of the bankrupt law to secure the ratabe distribu
ton of the bankrupts property among his creditors,
not to enlarge alter the rights Of the creditors
but simply ascertain them for the purpose Of this
distribution as they were at the time Of the bank
ruptcy. This creditors rights were then fixed and
certain. There was no court to which he could re-
sort which would give him more than the amount
he paid for the note and interest. This
Wow. drawn from the general purpose of
the bankrupt law. is confirmed by some
D
dispute as to the amount due creditor this court
may permit pending suit to go on to Judgment for
the purpose of determining the amount due AS
between citizens of the State, such suit must
60 in the State Court. This court could not au-
thorize suit in such case in federal court I'M
doubleday the Bankrupt Court may assume the de-
termination Of the question itself, but it would be
very singular result If in determining the amount
due to the creditor it should be found to fix larger
sum thar the creditor could recover in the court to
same purpose The decision of the Register reduc-
ing the claim to $1,000 and interest is affirmed. Mr..
James J. Thompson appeared for petitioner and Mr..
F. G. Salmon for opposing creditors.
FORTUNATE LOOPHOLE OF ESCAPE
In the Court Of General Sessions yesterday was
concluded . two days trial of prisoner who was
indicted for grand larceny from the person, which
resulted in the discharge of really guilty criminal
through ingenious bubble raised by his lawyer.
The evidence showed that Connecticut horse dealer
named Robert jeffrey, to this city and stopped
At the Bulls Head Hotel. where he formed the &C
Quaintance OF John F. Cavanagh. the prisoner. One
night while the prisoners company his gold
watch and chain were stolen from his person. Cav
anagh arrested admitted the preparation of the
offence, stated that he secreted the property in
. bin in stable and subsequently took
the officer to where he had hid it.
Mr.. William +. Howe, who defended Cavanagh,
cross-examined the complainant and Officer Hatton,
and elected from them that Cavanagh at first
strongly denied his guilt but the sergeant in COM
msnd said to him 1t would be better confess his
guilt and give up the watch. Upon this state OF
facts Mr.. Howe argued that the prisoners confess
sion illegally obtained, and the authority of
the People vs.. Phillips, decided by the Court of
Appeals and reported in the Add New York Re
ports. and host of other decisions, contended
that the confession was clearly inadmssble evil
dence, and that, notwithstanding the fact that the
police officer had been taken by the prisoner to
where the property was concealed. as the con-
fesson inadmissible\the Judge should direct
the jury to acqut the accused. Assistant District
Attorney Herring and Judge Gildersleeve strongly
reproved the police officials for their stupid action
in the premises. and Mr.. Howe's motion to take the
case from the jury was granted After Cavsnagh's
acquita he seemed dazed and could scarcely realize
how the jury found him not guilty after his con-
fession Of having committed the crime.