the' common-law actlon referred to In the plea In bar, were lost prior below; that an order was made on ADr'iF22, 1897, to re-establish papers in tliis equity cause were re-established, but 'that the papers in the .common-law cause were not. The final'decree in this cause was signed on August 15, 1898. 'It recites that the cause 'was heard llud determined ','PRon the bill, demurter,answer, plea, depositions, and other d<Y.:uments on file;" The decree adjudged'the assignment said notes to be fraudulent and VOid., and the. salDe was set aside. The decree further proceeded to adjUdge "that have and recover'pfthe defendant the sum of $8,tl06.27 for the principal of the seven notes,with $4,593.37 as interest at 6 per cent. per annum, * * * making ip. the aggregate the sum of $13.099.64; and,)f the sum Is not paid within 3C1 days; execution should issue on complainant',8' demand, provided, however, that the delivery of all said notes to the clerk within 30 days shall be accepted' ill' full satisfaction of this decree." The'ttefendant corporation appealed, ,assigning for error, among other matters, with much particularity and detail, that' the demurrer and plea in bar should been snstaiIied, and that thereisrlo evidence to sustain the decree; also Wit '\hedecree is not in accordance "with the prayer of the bill, In the brief on behalf of appellant it is said: "The, scope and object of the prayer was for the ,recovery of the seven notes, or for the proceeds of the same if they had been · *. * >Ii A decree for a sum of money, without proof of the .;Vlllueoqhe past-due notes" and wheD, 'tJ.o part of the prayer was for the money "value ',of -thii' ;notes, unless they had ,been collected, was obviously erroneous:' .,'",::'} ( . , : " , " ';' t6! :the , ' '
"
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R:a. Tompkins and R. C. Alston, for appellant. ':M;F.Caldwell, for appellee. " Before PARDEE and McCORMICK,Circuit Judges, and PARLANGE,District Judge. PA;atANGE, District JUdge,.4fter stating the facts, delivered the opinion of the court. appellee conteflds that, as the demurrer and the plea were nled after the answer, they canl toolate, and should not be noticed. :But it is clear that the' consented that the demurrer and the plea might be filed and be passed upon, and he cann6t now be heard to object that they were improperly or unseasonably-filed. The trial judge evidently .was of opinion, and properly so,that the demurrer and th El , plea were b.efore the court by consent of parties, and in the decree he passed on the demurrer .and the plea, as well as on the merits. But there was no force in the demurrer. The bill made out a sufficient case to authorize a court of equity to take As tG the plea, whatever merit it may have had, the defendant failed to offer any proof in its support, and it was therefore proper to overrule it. The order disIllissing the law case, standitlgalone, did not substantiate the plea. 'The attempts to show by an affidavit made .after the trial of fhis cause the nature of the law action which was dismissed cannot, of course, avail the appellant. On the merits,we are of opinion that the decree of the lower c{)urt should be reversed, for the reason that the complainant t,oprove his case. Three different theories as to the facts. and.. Circumstances of this case are presented: The bill charges substantially that the notes were transferred by the bankin contetnpl'ation of bankruptcy and other'wise, in viollJ,tionof Rev. St. U, S. §5242, for a pre-existing debt of theb:mk. The answer avers, in thaJ the transfer was not to secure a pre-existing debt, but to secure the collection of drafts
REINHART V. AUGUSTA MIN. & INV. CO.
901
by the bank. The proof would make a case where the notes were put in the hands of the receiver of the Sheffield & Birmingham Coal, Iron & Railway Company for payment by him, and where, instead of paying the notes, he kept them without right or authority. Inspection of the testimony of the two witnesses, which con· stitutes the entire evidence for the complainant, shows that· he failed to prove the essentials of his bill of complaint. In Railroad Co. v. Bradleys, 10 Wall. 299, it was said: "It is hardly necessary to repeat the axioms in the equity law of procedure that the allegations and proofs must agree, that the· court can consider only what is put in issue by the pleadings, that averments without proofs and proofs without averments are alike unavailing, and that the decree must conform to the scope and object of the prayer, and cannot go beyond them."
The decree appealed from is reversed, and the cause is remanded to said circuit court, with instructions to dismiss the bill.
REINHAR'l' et a!. v. AUGUSTA MIN. & INV. CO. MANHATTAN TRUST CO. v. SAME. VAN VOLKENBURGH et a1. v. PROUT et a1. (Circuit Court of Appeals, Fifth Circuit. No. 734. 1. CORPORATIONS-RECEIVERS-FuND CHARGEABLE WITH EXPENSES.
May 31, 1899.)
n
A receiver was appointed for a mining corporation, upon a bill alleging insolvency of the corporation, and inability to earn its charges and operating expenses. By consent, he was to operate the mines, and was aU" thorized to borrow money, and was directed to pay all debts for labor and supplies incurred by the corporation within the six months preceding his appointment; payment to be made from earnings and income, or from money borrowed. Held, that the expenses of the receivership and the debts for labor and supplies were not payable alone out of the income and revenuesof the corporation, but they might be paid out of the corpus of the estate. SM,IE-MoRTGAGES-PRIORITY. , . The receivership was afterwards extended to a suit to foreclose a mortgage of the mining property, on motion of the trustee of the mortgage; lild a decree was passed, without objection, ordering a sale, and giving the Jebts for labor and supplies, and the expenses of the receivership, priority ?ver the mortgage. A decree of distribution was passed in accordance with the decree of foreclosure, and no appeal was taken therefrom, except by certain of the mortgage bondholders, who had caused the receiver to be appointed. Held, that the mortgage bonds were not entitled to priority over said expenses and debts, since the parties had agreed otherwise.
Appeal from the Circuit Court of the United States for the Northern District of Georgia. On October 12, 1892, Joseph W. Reinhart, Phillip Van Volkenburgh, and others, citizens of the state of New York, tiled their bill in equity in the circuit court of the United States for the Northern district of Georgia. The bill was brought for the complainants named in the bill, and such others as might thereafter be joined as complainants. The bill averred that the Augusta Mining & Investment Company, incorporated under the laws of the state of Virginia, owes the complainants certain promissory notes, due on demand, for motley loaned said corporation to enable it to carryon its business in Polk county, Ga.; that payment of the notes had been refused, the corporation alleging as a reason for the refusal lack of money to pay the notes, or any part of them; that, in