binding, and that the delivery of the bonds should be inoperative, unless the board of directors of the company, after being advised thereof, should approve, ratify, and confirm it. The other condition alleged was, that if forty of the bonds, making up, with the forty-five deposited with the defendant, the eightyfive called for by the contract, had been disposed of at St. Paul by the proper officer of the company who had them in charge, the contract should not be binding. Whether such conditions had been imposed was a question of fact properly submitted to the jury, with the instruction that, if they had been, the contract was not binding unless the company afterwards ratified and adopted it. It therefore became a material inquiry in one aspect of the case whether there had been such an adoption or ratification; and the defendant asked the court to instruct the jury that there had been no ratification by the railroad company, and especially that a certain resolution of the company, adopted May 13, 1859, and communicated to the defendant, was not a ratification. The court declined to give such instructions, and, we think, properly. We think the resolution referred to was a plain acknowledgment that the contract made by Mr. Rice with the defendant was binding upon the company, and, as it was communicated to the defendant, it was notice to him that the company acknowledged its obligation. In the resolution and its preamble there is nothing which denies that the contract to which it refers had been made, or asserts that no obligation had been assumed. On the contrary, all its language is appropriate to a contract perfected. It is an admission that the company had confirmed and accepted it. It speaks of the contract as made, not merely proposed, and asserts an impossibility to comply with its terms, not of an impossibility to enter into the engagement. It authorizes Newton to procure a surrender of the contract and a return of the bonds, which it states had been transferred to Coddington & Co. upon such terms as might be agreed upon. All this is plain recognition of the contract as a binding obligation, and an assertion of a wish to obtain a release from it. To say the least, it is inconsistent with any intent to treat the contract as imperfect and inoperative. In view of it, we think the court was justified in refusing to charge the jury as requested; and, if there was error in the mode in which the question of ratification was submitted, it was error of which the plaintiff cannot complain. It is unnecessary to notice the other assignment of error, in view of what we have said. Judgment affirmed. MCHENRY v. LA SOCIÉTÉ FRANÇAISE D'EPARGNES. 1. Mortgagees who prove their debt in the bankruptcy proceedings against the mortgagor become creditors of his general estate only for the balance of the debt after deducting the value of the mortgaged property, to be ascertained by agreement, sale, or in such other manner as the bankrupt court may direct. 2. Mortgagees may, pursuant to leave of that court, institute a suit against the bankrupt in another court for the foreclosure of his equity of redemption and the sale of the mortgaged premises. 8. An assignee in bankruptcy is not required to take measures for the sale of the mortgaged property of the bankrupt, unless its value exceeds the incumbrance. ERROR to the Supreme Court of the State of California. On the 18th of June, 1870, John McHenry, being indebted to a society known as La Société Française D'Épargnes in the sum of $14,000, made his promissory note for that amount, payable twelve months after date, and secured its payment by a mortgage on certain property in the city of San Francisco, in the execution of which his wife did not join. McHenry was, March 20, 1872, duly adjudicated a bankrupt in the District Court of the United States for the District of California, and on the 14th of June following the society proved its debt before the register. Aug. 15, 1872, proceedings in foreclosure were commenced by the society in the District Court of the nineteenth judicial district of the State of California against the assignee in bankruptcy, McHenry, his wife and other parties claiming interests in the property. The assignee made no defence. McHenry and wife demurred, and, among other grounds, set up the bankruptcy proceedings and the absence of leave of the bankrupt court to commence the suit. Oct. 4, 1872, application was made to the latter court for such leave; and, the assignee having so consented in open court, the order was granted, provided that in said action no judgment for any deficiency be taken against the bankrupt or his assignee. The cause was then, notwithstanding certain special defences of the wife, prosecuted to a decree, which made no provision for enforcing the payment of any sum that might remain due after the sale of the mortgaged premises. McHenry and wife appealed to the Supreme Court of the State, where the decree below was affirmed. The case was then brought here. Mr. Thomas J. Durant for the plaintiffs in error. MR. CHIEF JUSTICE WAITE delivered the opinion of the court. In Claflin v. Houseman, 93 U. S. 130, we decided that, under the law as it stood previous to the adoption of the Revised Statutes, the courts of the United States did not have exclusive jurisdiction of suits for the settlement of conflicting claims to property belonging to the estate of a bankrupt, and that an assignee in bankruptcy might sue in a State court to collect the assets. In Mays v. Fritton, 20 Wall. 414, we also held, that if an assignee in bankruptcy submitted himself to the jurisdiction of a State court in a suit affecting the estate which was pending when the proceedings in bankruptcy were commenced, he was bound by any judgment that might be rendered. And in Eyster v. Gaff, 91 U. S. 525, Mr. Justice Miller, speaking for the court, said: "The debtor of a bankrupt, or the man who contests the right to real or personal property with him, loses none of his rights by the bankruptcy of his adversary. The same courts remain open to him in such contests, and the statute has not divested those courts of jurisdiction in such actions. If it has for certain classes of actions conferred jurisdiction for the benefit of the assignee in the Circuit and District Courts of the United States, it is concurrent, and does not divest that of the State courts." The principles upon which those cases rest are decisive of this. The complainant, having a debt against the bankrupt secured by mortgage, proved the claim against the estate. This, under sect. 20 of the bankrupt law, 14 Stat. 526, Rev. Stat., sect. 5075, admitted the complainant as a creditor of the general estate only for the balance of the debt after deducting the value of the mortgaged property, to be ascertained by agreement, sale, or in such other manner as the bankrupt court might direct. The assignee is not required to take measures for the sale of mortgaged property, unless its value is greater than the. incumbrance. His duties relate chiefly to unsecured creditors, and he need not trouble himself about incumbered property, unless something may be realized out of it on their account, or unless it becomes necessary to do so in order to ascertain the rights of the secured creditor in the general estate. If he does. and it becomes necessary to adjust the liens before his sale, he may, under the ruling in Claflin v. Houseman, institute the necessary proceedings for that purpose in the courts of the United States, or of the State, as he chooses. If he does not, the secured creditor who wishes to make his security available must act; and, having obtained leave of the bankrupt court to bring his action for that purpose, he may proceed in the State court, if the assignee does not object, or in the courts of the United States, at his election. Here the necessary leave to sue was obtained before the decree was rendered, and the assignee, instead of objecting to the jurisdiction of the State court, consented to that mode of proceeding. The bankrupt and his wife alone objected; but as to them, as we held in Eyster v. Gaff, the jurisdiction of the State court was not divested by the proceedings in bankruptcy. CHOUTEAU v. UNITED STATES. A., having a claim against the government under his contract with the Navy Department for building the iron-clad steam-battery "Etlah," executed to B. a power of attorney authorizing him to sue for, recover, and receive all such sum or sums of money, debts, goods, wares, and other demands whatsoever, and especially payments that were or would be due on his contract for building the "Etlah," with full power in and about the premises; to have, use, and take all lawful means and ways in his name for the purposes aforesaid; and to make acquittances or other sufficient discharges for him and in his name, and generally to do all other acts necessary and lawful to be done in and about the premises. The contract fixed the amount to be paid for the battery, and provided for its completion and delivery within eight months from June 24, 1863. For every month that the delivery might be made earlier than the time fixed, the contractor should receive $4,500, and for every month later he should pay a like sum. It also provided that the department might, at any time during the progress of the work, make such alterations and additions to the plans and specifications as it might deem necessary and proper, the extra expense caused thereby to be paid at fair and reasonable rates, to be determined when the changes were directed to be made. The battery was finished for delivery in November, 1865, and the proper authorities of the department certified that the extra work and materials, rendered necessary in making the alterations and additions that were ordered, amounted to $116,111. A portion of that sum having previously been paid, a voucher, in favor of A., for $26,653.17, "being the full and final payment on all extras, and in full for all claims and demands for that work," was approved by the department April 24, 1866, and paid May 11 following to B., who, under his power of attorney, receipted it in full A.'s assignee, asserting that the extra work amounted to $172,273.55, brought suit in the Court of Claims to recover the excess over the amount paid, and $118,283.30 alleged to be due, irrespective of extras, on account of an increase in the price of labor and materials during the time that the completion of the vessel was delayed by reason of such alterations and additions. Held, 1. That the power of attorney authorized B. to accept payment of the voucher, which upon its face declared it was the last and full payment for the extra work, and that his acceptance bound A., and barréd a recovery for such work. 2. That the United States is not liable to A. for the increased cost of the labor and materials. APPEAL from the Court of Claims. On the ninth day of July, 1863, Charles W. McCord entered into a written contract for building at St. Louis an iron-clad steam-battery, which was built and delivered, and was called. the "Etlah." Complete specifications for its construction were part of the contract; and the United States agreed to pay for the battery the sum of $386,000. The contract also provided that the Navy Department might make alterations and additions to the plans and specifications at any time during the |
