The Penn's Grove record., 1883-10-27
Recent Legal Decisions.

SAVINGS BANK - STOCKHOLDERS /
DEBT-LIEN on BANKS, a stock
holder in a savings bank, died, heavily
indebted to the corporation. The bank
went into liquidation and declared div
idend, but refused to pay the estate OF
s., claiming that it could apply the
amount of the dividend to his indebted
ness to it An action was brought to
recover the dividends and the plaintiff
had a verdict. From the judgment en-
tered upon his verdict the bank obtained
a writ of error to the Supreme Court of
Observation-Disclosures Bank of Eas-
ton, VS.. Shouse, administratrix-but
that Court affirmed the determination
below. Judge Gordon, in the opinion,
said: 1.-THE d~efendent's charter did
not give the bank a lien upon S.'sstock
for any debt he might WI it Neither
can we entertain the idea that the de-
PENDANT had a common law lien upon
SIS stock. Corporations are not the
creatures of the common law. Such II
thing as a common law corporation is
wholly unknown to the laws of Penn
sylvania, hence these artificial bodies
can have a common law rights, except
as such rights may become incidental to
the proper execution of the legislative
grants by which such bodies are created.
But when for a corporation a distinct
power or right is claimed, as in the
present case, such claim must have for
its foundation some statutory grant or
it has no validity. Besides, it has been
decided in this State that there is no
| such thing as a common law lien on
stocks in favor of a corpo ration for a
debt due it by a shareholder
BANKRUPTCY FRAUD DIT ONE
R-DIsCHARGED.-O of a
| firm of attorneys received money from
a client to invest, but converted it to
his W use. The tirm went into bank
ruptcy and obtained discharge. The eli
ent whose money hadlbeen taken by fraud
sued one of the other partners for the
amount, claiming that as this liability
rested in fraud it was not, under the
Bankruptcy act, barred by the dis
charge. The defendant contended thai
as to him, he not having participated
in the fraud, the liability was a simple
debt only, which the discharge released
] him from. In this case-Cooper VS..
Pritchard-the plaintiff recovered a
judgment, and the defendant carried it
tothe Court Of Appeal in England,
where it was affirmed. The Master OF
the Rolls, Brett, in his judgment said
"As this money was intrusted to the
firm through u of its members who
could receive it for the partnership,
the defendant was liable before the
Bankruptcy, and the question now Is
wether he is still SO. This turns upon
the construction of the Bankruptcy
act, by which IAN order of discharge
shall not release the bankrupt from any
debt or liability incurred by means OF
any fraud or breach of trust Unless
we can construe these words to mean
that the fraud must have been com
mitted by him. the defenda t, as a
bankrupt, the contention that this is a
a simple debt cannot be allowed. There
is nothing to justify us III altering the
words of the section, or putting in any
words which are not already there.n
Lord Justice Lindley added that the
debt was a debt of the Arm, incurred
by fraud, and he illustrated this in the
following way. ''Suppose in a firm Of
distillers or tobacconists n of the
partners, without the concurrence OF
knowledge of the other, in the curse
of the business of the firm, COMM
~offenses against the revenue laws
whereby penalties are incurred, the
debts SO arising would clearly be ex
cepted. The innocent partner could
not saysthat he had taken no part in
the offenses against the revenue laws,
and therefore was entitled to his dis
char ge. The language of the sec
ton ID general, and we ought not
to restrict it," Lord Justice Fry
also said 81 see no reason for limit
ing the plain words of the section.
This was a debt or liability clearly
Incurred by means of a fraud.
Whether it was incurred by means OF
a breach of trust it is not necessary to
decide