Steamer Saratoga vs. 438 Bales of Cotton.

of no value, where there was no market, with what face could they ask him, on the recovery of his property, to pay the expenses incurred by them in the running away with it? Their right to do so would be just as clear in that case as this.

I am satisfied from an inspection of this record, that the cotton of claimant was not seized in good faith by the treasury agents. It was an attempt but too common in those times to take the property of the citizen, under the pretext of seizing it as government property, in order that it might be bought at a price below its real value. The persons engaged in this enterprise failed. They cannot charge the expenses of their unlawful acts upon the owner of the property, nor can any one who pays such expenses, either with or without notice of their unjust and unlawful character, be allowed to recover them of the owner of the property.

This libel must be dismissed at the costs of libellant.

The court having rendered this decision, proctors for libellants stated, that the district court had rendered a decree in favor of libellants for $900 and costs of suit, that libellants only appealed from this decree, and the claimant not having appealed, the decree of the district court for $900 in favor of libellants must stand, and this court could not interfere with it.

WOODS, Circuit Judge. I think otherwise. When libellants appealed, the appeal opened the whole case. They cannot be allowed to claim the benefit of the decree below, and standing secure on that, try their fortunes in this court.

In admiralty cases an appeal suspends the decree altogether. It is not res adjudicata until the final sentence of the appellate court is pronounced. The Roarer, 1 Bl., C. C. 1; Yeaton v. The United States, 5 Cranch, 281. The cause in the appellate court is to be heard de novo as if

no decree had been passed.

We do not find these views opposed to the authorities cited by libellants. In fact, those authorities do not seem to touch the question at all.

Citizens' Bank vs. Ober.

The libel, therefore, must be dismissed at the costs of the libellant.

Decree accordingly.

CITIZENS' BANK VS. OBER.

1. A person who intends to bid at a cash sale of a bankrupt's estate, may agree, in case he becomes the purchaser, to sell to another person at a fixed price on terms of credit, when he has no notice that such second person has any purpose to bid at the sale, or has the means to make his bid good. Such an agreement will not avoid the sale. 2. A sale of a bankrupt's estate made to a solicitor of the assignee, retained generally in the bankruptcy, will be set aside as against public pol icy.

act.

This was a petition addressed to the supervisory jurisdiction of the circuit court, under the second section of the bankrupt Certain property of York & Hoover, the bankrupts, having been sold and the sale confirmed by the district court, sitting in bankruptcy, this petition was filed to reverse the decree confirming the sale.

Messrs. Wm. M. Randolph and H. M. Hyams, for petitioner. Mr. John A. Campbell, for Ober.

WOODS, Circuit Judge. It appears from the record that on the 16th day of February, 1869, two plantations called respectively, "White Hall" and "Home," the property of the bankrupts, were sold at public sale by the assignee to Albert G. Ober, of the firm of Ober, Atwater & Co., said firm being among the mortgage creditors of the bankrupts.

The motion to confirm the sale in the bankrupt court was resisted on the ground that the purchaser had used illegal and improper influences to deter other persons from bidding, and that the purchase was made by Ober for and in behalf of Norton, the assignee, and that Norton was in fact the purchaser.

Citizens' Bank vs. Ober.

The district court referred the question of the fairness and validity of the sale to a commissioner, who reported in favor of the fairness and bona fides of the sale.

The district court, after argument, confirmed the report of the commissioner, and it is to reverse this order that the present petition was filed.

The testimony taken by the commissioner establishes conclusively that the assignee was not a party directly or indi rectly to the purchase, nor interested therein in any manner or degree; that so far as he was concerned, the sale was conducted fairly and according to law; and the objection that he was interested in the purchase appears to have been abandoned. Relative to the averment that Ober, Atwater & Co. had used illegal and improper influences to deter other persons from bidding, the following facts are established: John S. Scott, about an hour previous to the sale, proposed to Ober, Atwater & Co. that in case they became the purchasers of the "Home" place, he and his friends, whom he represented, would buy the place of them for the price of $35,000, of which $20,000 was to be paid in cash, and the residue, $15,000, in October following the sale. Ober, Atwater & Co. gave Scott the impression that they would sell to him at the price and upon the terms named; but Scott did not inform them that he intended to bid at the sale, nor that he was prepared to pay cash for the property. Scott, who made this arrangement, was ready to bid $35,000 and had the means of his friends at his command to make his bid good. He testifies that he refrained from bidbing on account of the arrangement which he supposed he had made to purchase from Ober, Atwater & Co.

It is further shown that H. D. Stone, Esq., was the solicitor of the assignee of York & Hoover in the matter of their bankruptcy. That about an hour before the sale, Ober, Atwater & Co., at the suggestion of Stone, made to him the following proposition in writing, the handwriting of the body of the paper being Stone's:

NEW ORLEANS, LA., FEB. 16. H. D. STONE:- We will sell you White Hall plantation for VOL. I.-6

Citizens' Bank vs. Ober.

$20,000 at any time after we purchase it. But you shall not be obliged to take it till our mortgage thereon is judicially determined to be valid as a first mortgage; or you may have one-half of White Hall and Home place for $22,500 at any time, but you shall not be obliged to take it until it is judicially determined that we have a first mortgage upon both places. For value received, we agree to carry out the above proposition in good faith. OBER, ATWATER & Co.

Ober, of the firm of Ober, Atwater & Co., became the purchaser at the sale of both places; of the Home at the price of $19,800, and of White Hall at $22,000.

These are substantially the facts as shown by the evidence. In regard to the arrangement with Scott, standing alone, I cannot go the length to say that it is sufficient to avoid the sale. In my opinion it is permitted to a party who expects to bid at a sale, when the terms are cash on the day of sale for the whole amount of the purchase price, to agree with another party that in case he becomes the purchaser, he will sell the property to him at a named price on terms of credit. This is clearly so when the person proposing to purchase has no knowledge or notice that the party proposing to buy is prepared to pay cash, and is ready to bid, and able to make his bid good. The proposition for a credit for a part of the purchase money is a strong indication that the party making the proposition is not able to buy at the sale and pay cash, and may well be taken by the person to whom the proposition is made as an admission to that effect. Phippen v. Stickney, 3 Met., 384; Small v. Jones, 1 Watts & Serg., 128.

In regard to the proposition made to Stone, it is admitted by counsel for Ober, Atwater & Co., that the assignee could not purchase at his own sale, nor, under the bankrupt law and practice in England, could his solicitor, because, there, the solicitor of the assignee is chosen by the creditors. But, under our law and practice, it is claimed the rule is different, because here the assignee is allowed to choose his own solicitor, without regard to the wishes of the creditors. I do not see how the method, by which the solicitor is selected, can change the rule.

Citizens' Bank vs. Ober.

The assignee represents all the creditors. It is his duty so to admininister the estate as to produce the best dividends, and so to distribute it as that each creditor shall receive his just rights. To enable him to discharge these duties, the law allows him the assistance of counsel and authorizes payment to his counsel out of the assets of the estate. The solicitor is not the personal counsel of the assignee, but of the assignee as the representative of the creditors. His fees are paid, not by the assignee, but in effect by the creditors. His first duty is to the estate. It is therefore his duty, when he is retained generally in the bankruptcy, to assist the assignee in the interest of all the creditors to aid him in the collection and just and equitable distribution of the assets, and, if possible, to allow no creditor to obtain an unfair advantage over others. In re Mallory, 4 B. R., 38.

With these obligations resting upon him, it is difficult to see why the solicitor should be allowed to purchase at an assignee's sale when the assignee is not. When he becomes a purchaser his interest is to buy at as low a price as he can; his duty as solicitor to the assignee is so to advise his client that the prop erty sold may bring the highest price; so that if he is both purchaser and solicitor, his interest is in conflict with his duty.

Judicial and bankrupt sales ought to be protected by the application of such general rules as to insure the utmost fairness and good faith, and to remove far from those whose duty it is to conduct them or who are in any way officially connected with them, any temptation to fraudulent or unfair practices.

If the sale was made to Stone, either directly or indirectly, or if the arrangement made with him was for the purpose of suppressing bidding at the sale, and had that effect; in either case, I should not hesitate to set the sale aside as void.

It was not a direct sale to Stone. Was it an indirect one? It is not pretended that Ober, Atwater & Co. bid for Stone; they bid for themselves, expected to pay, and did pay their own money on their bid. They did not agree to let Stone have the property at what they bid for it. The arrangement was that he was to take it at a price fixed between them in advance, and