Court Opinion

ID: 6673597
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:14:11.551663+00
Date Added: 2024-06-11T16:00:37.393071
License: Public Domain

The opinion of the Court was delivered by
Moses, C. J.
The General Assembly, by Act of December 21st, 1857, (12 Stat., 612,) passed an Act by which it directed that its guaranty should be endorsed upon certain bonds of the Spartanburg and Union Railroad Company, and that “ as soon as any of the said bonds shall have been endorsed, and as they may be endorsed, they shall constitute a lien or mortgage upon the whole of the said railroad,” etc., and that." the State of South Carolina, upon the endorsement of the said bonds, and by virtue thereof, shall be invested with the said lien or mortgage without any deed from the said company to secure the payment of the said bonds and the interest thereon by the said company as the same shall become due.”
The bonds were issued by the company, maturing in 1879, bearing interest at the rate of seven per centum per annum, payable semi-annually, and attached to them were coupons for the interest. The bonds were endorsed with the guaranty of the State, and on their face expressed that they were issued pursuant to the provisions of the said Act. By the fourth Section of it the State reserved its right to enact all such laws as may be deemed necessary to protect its interest and to secure it against loss in consequence of the said endorsement, but in such manner as not to impair the just rights of the stockholders of the company.
*160By Act approved March 7th, 1871, (14 Stat., 612,).the General Assembly “required and authorized the Attorney General, immediately after the expiration of thirty days after its final passage, for and on its behalf, and in its name, to cause suit or other legal proceedings against each railroad company which has heretofore issued bonds with its guaranty endorsed and on which interest is now due and unpaid, unless within thirty days from its passage such company shall fully pay such interest, for the purpose of enforcing all interest due on the bonds of such railroad company and protecting and securing the State against loss or damage by reason of said guaranty; and to this end to enforce the rights of the State, by virtue of the statutory or other lien or mortgage held by the State, or held to secure the payment of said bonds, on all or any of the property, assets and effects of such company or companies.”
The third Section provides “ that if the property included in the statutory or other lien or mortgage held to secure the payment of the bond or bonds named in the first Section of the Act shall not realize enough upon any sale or sales of all the property, assets and effects under any judgment or decree in such suit or proceeding to pay the principal and interest of such bond or bonds, the deficiency shall, and is hereby, made a debt of the State, and shall be and is made payable as such.”
The Spartanburg and Union Railroad Company failed to pay the interest upon their bonds, and the action was commenced by the Attorney General under the said Act of 1871, in the name of the State, to protect the interests of the State, and to this end prayed a foreclosure of its statutory lien or mortgage. By an order in the cause the railroad and other property of the company were directed to be sold and the stockholders and creditors of the company and all persons claiming under them barred from and foreclosed of all right, title and equity of redemption. The property was sold and did not realize enough to meet the coupons past due proved before the Referees, much less the bonds also proved and established.
The Circuit Judge decreed that the coupons past due on the day of the sale of the mortgaged property he first paid, together with the interest thereon, calculated up to January 10th, 1872, out of the said proceeds of sale, and that the remainder of such proceeds be applied ratably to the payment of the bonds that have been proved.
*161Messrs. Thomas Branch & Co., and others in like interest, holders of bonds which they have proved, appeal from'the decree, because: “It should have adjudged that the proceeds of the sale of the said mortgaged property, after deducting the costs and disbursements incident to the proceedings in the said case, be paid and applied ratably to the bonds and coupons past due on the day of said sale, together with interest on said coupons to the said day of sale.”
The corporation is insolvent. Its whole property has been sold under a proceeding by the State to foreclose the statutory lien or mortgage which it held to secure it against the liability which it had assumed by the- guaranty or endorsement of the bonds. The proceeds of the sale are in the custody of the Court, to be distributed among such of the creditors of the company as have an equity through the guaranty of the State to the benefit of the said mortgage.
The question first presented for the determination of the Court is, whether the holders of the coupons past due are entitled to the proceeds of the sale to the entire exclusion of the bondholders?
It must be so regarded and considered, for the whole fund is not sufficient to meet the coupons due proved on the reference. Before discussing the legal principles involved in the proposition submitted on the part of the respondents, it is proper to inquire whether it can be sustained, as they contend, by anything either in the Act of December 21, 1857, “to afford aid in completing the Spartanburg and Union Railroad,” or that of March 7, 1871, “to protect the interest of the State whenever payment of any interest now due remains unpaid on bonds issued by any railroad company and whenever the guaranty of the State is endorsed.” It is claimed that by the provisions of the first Act the mortgage “was to secure the payment of the bonds and the interest thereon by the company as the same shall become due.” Such, however, would have.been the effect of the mortgage without the superadded words. Suppose the language of the Act had merely been to secure the payment of the bonds, — would it not necessarily have been held to include the interest as well as the principal ? And if the words “ as the same shall become due” had been entirely omitted, would the right of the State to foreclose upon the non-payment of the interest when “it became due” have been in any way impaired or affected ? .The lien was the security for^the guaranty of the bonds. They represented the *162debt as a whole, for which the State was liable, and its express reservation of right “ to enact all laws necessary to protect the interests of the State in consequence of its endorsement, but in such a manner as not to impair the just rights of the stockholders of the company,” left it free to exercise its power of foreclosure on any default in the payment of the debt which it had guaranteed. The words imply no priority of payment in favor of any holder, either of the bonds or the coupons. The mortgage'was to secure the whole debt endorsed by the State. The fund to be distributed is a common one, representing the property which was held not only to secure the interest but the principal of the bonds. The third Section of the Act provided that as soon as the guaranty of the State was endorsed on any of the bonds mentioned before, and as they may thereafter be endorsed, “ they shall constitute a lien or mortgage upon the whole of the said railroad, including, &.c.” The subsequent words, “as they became due,” were but a consequence resulting from the mortgage itself, which would have followed from the nature of the lien without any such expression. The construction of the respondents proceeds from a supposed distinction between the bonds and the interest, whereas the interest is as much included in a bond bearing interest.as the principal itself.
The words have no meaning unless they refer to the right of foreclosure through the liability to forfeiture on the non-payment either of the interest or principal as it may fall due. Nor is there anything in the Act of 1871, under which this foreclosure was enforced, to sustain the right claimed by the.respondents, even assuming that the State could by legislation subsequent to its contract,' through its guaranty, change its relation to the 'bondholder. The Act of 1871 does not restrict the action which it contemplates to the mere collection of the interest due on the bonds, but resorts to it “to enforce the rights of the State by virtue of the statutory or other lien or mortgage held by the State, or held to secure the payment of said bond or bonds, on all the property, assets or effects of such company or companies.” Section 3 looks to the event of a failure to realize on the sale of the property a sufficient amount to pay the principal and interest of. the bonds, and by Section 4 a •provision is made for such contingency. We fail to see in the terms of the contract which was created by the Act of 1857, or in that of 1871, which enforces the foreclosure, anything from which a right .to priority of payment can be even inferred in favor of the holders *163of the coupons past due. As was said in the argument, if the principle contended for can apply, then, “as between the coupons, if the fund is insufficient to pay all, those shall be preferred which first became due.”
What is there in a coupon which by its mere form and designation can change its qualities as the representative or evidence of the interest to become due and payable on the bond? The Act of the Legislature was complied with by the Comptroller General when he endorsed on the bonds of the company the guaranty of the State for the payment, both of their principal and interest, “according to the stipulations on their face.” The coupons were the issue of the company for their own convenience, and resorted to as an inducement to the more ready sale of their bonds in market from the negotiability and other properties of instruments of that character. The liability of the State was in no way affected by the form which the company might adopt to facilitate the collection and payment of the interest to be due upon its bonds, whether in the shape of a warrant or any other instrument denoting its intended purpose.
While coupons are recognized as choses in action, having many, of the incidents of commercial paper, transferable, when payable to bearer, from hand to hand, and bearing interest, because payable on a given day, yet, though detached from the bond, in contemplation of law they still remain a part of it and are protected by and subject to the covenants which it contains. Mr. Justice Nelson, in the City of Kenosha vs. Lawson, (9 Wall., 483,) said: “The coupon is not an independent instrument like a promissory note for a sum of money, but is given for interest thereafter .to become due upon the bond, which interest is parcel of the bond and partakes of its nature.” To the same effect said Mr. Justice Clifford in City of Lexington vs. Butler, (14 Wall., 296).
The mode in which the fund in Court is to be distributed not depending, then, on the mere form of the coupon as distinguishing it from what it really represents, the interest accruing on the bond, it is necessary to ascertain the nature of the assets to which the holders of the coupons past due assert a prior claim. It by no means follows, because the Court of Equity holds in its custody assets to be distributed by its order, that they necessarily are of that equitable character to which its rule of “'equality” must apply. Where, for instance, as is put by Mr. Spence, in the second volume of his treatise > *164p. 421, lands were assigned in trust for the payment of debts,'in the administration of the trust by the Court, judgments which affected land by their own strength and nature were directed to be paid according to their legal preference. But when the party has no lien which he can assert at law, and must resort to a Court of equity to obtain satisfaction of his demand out of assets in its control, the remedy he invokes is of that equitable character which binds him to all its requisitions and obligations,
“Equitable assets include all which are chargeable with the payment of debts or legacies in equity and which do not fall under the description of legal assets.. They are called equitable assets, because, in obtaining payment out of them, they can only be reached by the aid and instrumentality of a Court of equity.” — Story’s Eq. Juris'., § 552.
“Generally speaking, assets are equitable when, to obtain payment out of them, a creditor by bond or simple contract is obliged to go into a Court of equity.” — Ram. on Assets, 317.
“The distinction between legal and equitable assets refers to the remedies of the creditor and not to the nature of the property.”— See note to Adams Eq , 252.
The fund here to be distributed arises from a proceeding belonging exclusively to equity jurisdiction. The creditors who are contesting it would have had no status in a Court of law. The mortgage was held by the State and they were entitled to no relief through its foreclosure but by a resort to the equitable doctrine of subrogation, which entitles the creditor to the security which the guarantor took for his own protection. The State, the guarantor of all the bonds, delivers its security to the Court, and says: I hold this as a security for all the creditors interested in the debts of the Spartanburg and Union Railroad Company, created under the Act of 1857. Foreclose it and divide the proceeds among those for whose common benefit it was intended. What rule of law or principle of equity will prevent all who had a common interest from sharing in the common benefit? No case can be found where a different rule has been applied to creditors standing as those before us in relation to a fund of the nature of that now in contest. Suppose the bonds fell due at different periods and the mortgage had been executed by the company directly to the holders of them, and foreclosed in equity, — on what principle, when the lien was for the security of the whole debt represented by the bonds, could those *165whose bonds had matured claim the proceeds of the sale to the exclusion of those whose bonds were not yet due? The security was for the protection of every bond and the interest which was to accrue on it.
The rule for the administration of equitable assets is well understood. Mr. Story, in his work on equity jurisdiction, Section 554, says: “Equitable assets shall be distributed equally and pari passu among all the creditors, without any reference to the priority or dignity of the debts; for Courts of equity regard all debts in conscience as equal jure naturali, and equally entitled to be paid; and here they follow their own favorite maxim, that equality is equity — ' esquitas est quasi cequalitas. And if the fund falls short, all the creditors are required to abate in proportion.”
The respondents further insist that their claims are to be preferred because the interest of a debt is first payable, and that where a payment is made it must be so applied. We know no rule of law which requires or directs such preference. In the absence of any contract regulating the appropriation of partial payments, the creditor has a right to apply them at his pleasure where the debtor refrains from directions as to their disposition either by express words or by acts sufficient to denote his purpose, which may also be inferred from the attending circumstances.- It is always a question of intention, to be determined by the conduct of the parties, and is the result of voluntary acts already performed. It cannot apply where the payment has not been appropriated and the manner in which the appropriation is to be made is to be determined by the Court. Mr. Justice Btory, in delivering the'opinion of the Court in U. S. vs. Kirkpatrick, (9 Wheat, 737,) says: “The general doctrine is, that the debtor has a right if he pleases to make the appropriation of payments; if he omits it, the creditor may make it; if both omit it, the law will apply the payments according to its own notion of justice. It is certainly too late for either party to claim a right to make an appropriation after the controversy has arisen.”
Chancellor Johnson, in Jones vs. Kilgore, (2 Rich. Eq., 66,) says: “ There is no doubt that if no directions are given by the party making the payment, the right to make the application is with the party receiving. If neither has fixed the application, it devolves upon the Court, and will be made pro rata to the demands made by him who receives the money against him who paid it; or, if one of the *166demands be less secured than the others, the application will be made to it in the first instance.” With how much greater reason does this mode of appropriation by the Court apply where the fund is the proceeds of a security which was taken for the common benefit of all who invested in the bonds, invited to do so by the provisions of the Act which gave the security, which could not have been rendered available but through the aid and instrumentality of the Court? Any other rule would be inconsistent with the principles of equity or the dictates of justice.
In Stephens vs. Guernsey & Collier, (9 Paige, 356,) where a question arose as to the right, under the banking law of New York, to a preference of payment out of funds in the hands of the Comptroller by the holders of protested notes of an insolvent bank over the other creditors, whose notes had not been protested, Chancellor Walworth,, referring to certain decisions, said: “ These, therefore, are merely referred to for the purpose of showing the strength of the principle that equality among persons having a common right to payment out of a fund provided for the benefit of all is equity, and the length to which Courts of justice have gone to sustain that principle and to give it its full effect. The principle, therefore, ought not to be departed from in this case without clear evidence of an intention to give one creditor a payment over another.” And this language may well be applied to the case before us.
In our view, the proceeds of the sale must be distributed ratably between the bonds proved and the coupons due January 10, 1872, with interest thereon from said date, together with the coupons falling due after said day, — coupons of the latter class not, however, to bear such interest.
The executors of J. W. Patton appeal from the order of the Circuit Court of December 23, 1873, refusing the prayer of their petition, “ that the plaintiff may be required to amend the complaint by making them parties defendants, with leave to answer and object to any orders made in the said cause, and that, in the meantime, no further proceedings be had in the cause.” They found their application on the fact that before creditors .were called in by any notice, orders were made affecting their rights, which they were thus prevented from resisting, and from which they should be allowed to appeal. It cannot be disputed that the order of November 15, 1871, was, in some respects, erroneous, and to the prejudice of the rights of the creditors, and yet one of the largest among them *167was a party then before the Court and máde no resistance. The order, too, covered matters on which no hasty action was necessary. Payment of the fees of the counsel should not have been ordered out of the proceeds of the sale; and-much less those of counsel who had represented the company in other cases, having no connection with the one before the Court. The fees of- the counsel of the plaintiff in the cause were chargeable to the plaintiff, and the counsel in the other cases stood but as the creditors of the company, with no right to preference or priority. The proceeding on the part of the State involved no difficulty. Its right to foreclose its lien or mortgage could not have been successfully resisted in any Court having proper jurisdiction of the subject matter. So, too, there was error in the appointment of the Referees. Conceding to the gentlemen selected the high character to" which they are so well entitled, the one, the President of-the company, a party to the cause, and the other, of counsel for the plaintiff, they were disqualified by their relation to it to act as Referees.
The executors of Patton, however, are now precluded from interposing any objection. Their position 'as creditors called in by the order of the Court gave them the same latitude of defense in every particular to which the creditor (one of the defendants on the record) was entitled. No right of exception appeal or objection in any form were they prevented from asserting; but it should have been exercised .at the proper time. If they proposed to object, they should have filed a petition to the Court as soon as they had notice of the order, setting forth their claim, and asking, before they submitted it to the Referees, to be heard on their exceptions to such parts of the order as they desired to contest. Instead of this, they presented their claim to the Referees, offered testimony to establish it, cross:examined the witness who was introduced on the part of those who resisted it, and then, for the first time, asked that all proceedings should be stayed to allow them the opportunity of being heard by petition “as to their claim to be made parties to the cause without prejudice to their right to be heard in opposition to the orders already made in the cause.” They should not have silently stood by and allowed the order of which they afterwards complained to be executed and the fund, out of which the payment of the fees referred to was to be made, to the extent of their amount, to pass beyond the control of the Court.
*168The report of the testimony is singularly defective as to dates. The time at which the publication was made or the claim presented does not appear, nor is a single day named on which a reference was held. There is no excuse for such omissions. We are at liberty, though, to infer, as the order required the creditors to establish their claims as early as December 26, 1871, that it was published before that day. The order confirming the report on fees and directing their payment was not made until April 3, 1872. The claimants here must have had full knowledge of it and should have excepted in time to have secured its suspension.
Without stopping to inquire whether the said claimants, if they had a right to a trial by jury, as they contend, have not lost it by the course they-pursued, we will consider this ground of their appeal. It is a misconception to suppose that Section 290 of the Code of Procedure refers to an issue of the character of the one made on the claim of these creditors. It refers to the ordinary proceeding by “action on contract, (and with the assent of the Court in other actions,”) where an issueof fact is to be made up to be determined between the parties by the finding of a jury. It includes actions such as before its adoption were recognized as actions at common law. The distinction is clearly made by the Code, which provides for “trial by Referees” as well as “by the Court,” where the “trial by jury” is waived, in the mode pointed out by the said Section. It might be enough to say that the demand here was not on any contract sought by a plaintiff on the one hand against a contending defendant on the other. It was the case of a creditor standing in the relation of a defendant, claiming against his co-defendants a priority of payment out of a fund in Court through a lien on the property it represented.
A further and brief examination of other Sections of the Code will show that the mode pursued here has been in conformity with the long-settled course of the Court where assets were to be administered by it, and is in strict accord with the practice established by the Code. Section 276 directs that issues of fact in certain named actions must be tried by a jury, unless a jury trial is waived, as provided - in Section 290, or a reference ordered, as provided in Sections 294, 295. “Every other issue (by Section 277) is tria-ble by the Court, which, however, may order the whole issue, or any specific question of fact involved therein, to be tried by a jury, or may refer it, as provided in Sections 294, 295.” The said Sec*169tion 294 allows “a reference of all or any of the issues of fact or law upon the written consent of the parties;” while Section 295 empowers the Court, “where the, parties do not consent, upon the application of either, or of its own motion, to direct a reference in the following eases,” which it specifies; — and the character of the case before us brings it within the classes there named.
The said executors also claim that by virtue of a judgment recovered by their intestate against the company, and duly entered in the office of the Clerk .of the Court for Spartanburg in June, 1857, they are entitled to be paid the balance due upon it in preference to any of the holders of the bonds or'coupons. The Referees, in their conclusions of fact, find that the judgment was so recovered, but that John E. Patton signed “a release of lien for J. W. Patton without his authority; but that after notice of the conduct of his brother, touching said release, he acquiesced in the release of his lien arid approved thereof, by profit and advantage therefrom;” and find as a conclusion of law “that so far as the lien affected the property mortgaged by the Act of the Legislature, “it is released until the bonds and coupons secured by the statutory mortgage are paid.” The Circuit Judge overruled the exceptions to the report so finding^ and confirmed it. The executors appeal to this Court for a reversal of his order.
It is not our purpose in the judgment which we shall pronounce on this part of the case to notice separately each of the numerous grounds of exception on which the appellants rested in the Court below for the reversal of the findings of the Referees. Our conclusion will be reached by a consideration of the evidence as a whole, and the application of the legal principles which they involve. The declarations of the deceased to Mr. Young-will be discarded,' as we are not satisfied of his competency to testify to them.
The declarations to the family were clearly inadmissible; but as the counsel for the respondents, iri their argument, seemed to waive any objection to them, they may be regarded as properly in evidence.
The instrument executed by John ,E. Patton was not a release of the judgment, (giving significance to the word in its technical sense,) though it is so called by the Referees. It was a satisfaction of the judgment, destroying its validity as a lien, but recognizing the debt on which it was founded as one foi; which the company was still liable, and making, on valuable consideration, a new contract *170in regard to its payment, for which it substitutes another mode, and extended the time within which it was to be made. • The judgment could have been enforced at once, and the plaintiff had a right to say that it should be discharged only by a legal tender. The contract changed this by the stipulations that the plaintiff would accept endorsed bonds and assets — the endorsed bonds having reference to those which had been guaranteed by the State. The seal affixed against'his own name by J. E. Patton, we think, must be taken as that of the principal for whom he assumed to act. The place in which it appears is not conclusive of the design of the party in adding a seal. The execution of the instrument was on- behalf of the principal, intended to bind him, and on its face it expressed that in witness of the agreement thus made by the parties to it they were “to set their hands and affix their seals.” The L S after the name of J. E. Patton, who professed to act as attorney for J. W. Patton, must be accepted as the seal of the party on whose behalf he acted, and, whether it followed the name of the attorney or the principal, or preceded either, effect must be given to the act according to its apparent intention.1 J. E. Patton, in his individual right, was also a party to the instrument. On his own behalf he had already signed and sealed it, and placing the seal after his own name, when he undertook to represent another and sign for him, must be considered and taken as something done on behalf of such other which he conceived necessary to bind him.
The purpose to be accomplished by the instrument did not, however, require a seal, and could, therefore, be ratified by the principal by any writing, acts or words which would be sufficient to confirm a simple contract executed by an attorney. — See Story on Agency, § 49. If the purpose to be effected by the writing could only have been accomplished by a deed, then its execution by an agent must be ratified by the deed of the principal, if no previous power, by deed, authorized the act in his name. This was not a technical release which required a seal fo'r its validity. Satisfaction of the judgment could have been acknowledged by a receipt, and would have been sufficient to the end in view; and a contract even by parol would have bound the company for the payment of the debts held by the testator against it according to the stipulations which may have been agreed upon between them.
We are obliged to accept the testimony as reported by the Referees. Although some exceptions were taken to its omission of *171certain facts, averred to have been proved, and to error in the report of some of them, we have nothing before us by which it can be corrected. The proper course- for the appellants was to have moved the Circuit Court to recommit the report on the exceptions thus taken, that they might have the opportunity of showing wherein they were prejudiced by its statement of the évidence. No such application was made and we are not at liberty to go outside of the report.
We do not think that the authority of J. E. Patton for executing the instrument of January 14, 1858, can be properly inferred from any of his previous acts in regard to the business of his brother. They related generally to his railroad contracts and money received on account of them. They are not of the nature of the one by which he is now sought to be charged. His liability to whatever obligation was imposed on him has arisen from his own acts. Mr. Woodfin, one of his executors, proves that the deceased had knowledge of the intention of the company to apply to the Legislature for the aid which it obtained, and from his testimony we must infer that his testator had actual knowledge of the passage of the Act. J. E. Patton swore that a month or more passed after the meeting at which he signed the paper before he saw his brother— informed him of his having signed and of his assurance that he would receive bonds. He thus had notice of some act by his brother in regard to his judgment — expressed no dissent and made no inquiry into the character of the .agreement by which he had undertaken to bind him. Mrs. Henrietta K. Patton, another witness, goes further and testifies “that he heard of the release soon after its execution; he positively disapproved; said he would not have released himself; always said he'woiild not abide by it.” It is true that the recognition of the acts of an agent will not bind his principal unless made-with a knowledge, of the material facts in relation to it. But was it not the duty of J. W. Patton, on the notice of the release, to inquire into and ascertain the nature of the act, that he might know how and to what extent it affected his debt? Was it not due to the company that he should acquaint himself with its terms, so that, in the event of his dissent, it might not, in the meantime, be prejudiced by a performance on its part of any of the duties which it imposed on them ? According to the report of the Referees, the bonds were not issued when J. E. Patton *172informed his brother of his action! It was a gross neglect of his duty, both to the company and the Comptroller General, when he refrained, in a matter of so much interest to himself, from ascertaining the exact particulars of the act of his brother, that, if dissatisfied, the other parties to the contract might have early notice. In June, 1858, he accepted $5,000 of the said bonds in payment of his debt.
It is said that he purchased them. This could make no difference, for, if he did, the purchase money was at once allowed as a credit on his debt. But, according to the testimony of J. E. Patton, the deceased, in the Summer of 1858, had knowledge of the actual terms of the agreement and yet lived till December, 1861, without a word of protest or a single act done to remedy the wrong of which his executors now complain. In June, 1858, he had notice, through the bonds which he held, that the lien of his judgment was regarded as discharged; made no objection to it save to his own family and accepted a large railroad contract from the very company. How is this silence for so long a period to be explained except on the theory of his acquiescence in the act of his brother? With this array of testimony agqinst the executors on a question of fact, to be governed and determined almost exclusively by intention, we find no evidence of sufficient weight to counteract the conclusions in which the Circuit Judge and the Referees both agree, and must yield to the effect which they give it.
The appeal of the executors of William Kelly must be sustained. While the fund is in Court, no creditor who has failed to submit his claim within the period fixed by the order is debarred from making it. Payment of the demands of creditors is not regulated by the time at which they may be severally presented, where the fund has not been appropriated and passed' beyond the control of the jurisdiction which has power over its distribution.—Shubrick vs. Shubrick, 1 McC. Ch., 406; Ex parte Hanks, Dud. Eq., 231.
So much of the decree as directs (after provision for the compensation of the Referees and for the costs and expenses of the case) payment of the coupons past due on the day of sale, with the interest due thereon, out of the proceeds of the sale and applies the remainder ratably to the bonds proved, and also the order of 22d December, 1873, in regard to the claim of the executors of Kelly, are reversed. The motion on behalf of the executors of Patton is dismissed.
*173The case is remanded to the Circuit Coii'rt for the orders which may be necessary to give effect to the judgment of this Court according to the views herein set forth. .
Willard, A. J., and Wright, A. J., concurred.