that is, whether there must be actual fraud, or whether it is enough that there is implied or constructive fraud, or gross negligence, which may be equivalent to fraud."

Upon an elaborate review of the authorities, mainly its own previous decisions, and upon consideration of all the evidence, that court reached these conclusions:

1st, That the executor had committed a devastavit by selling the bonds at a discount, since the needs of the estate did not require it, and since they had not become his property by reason of any advances made by him, or otherwise.

2d, That Neal was not chargeable with actual fraud, but, in view of the circumstances attending his purchase, he had committed constructive fraud, which implicated him in the devastavit.

3d, That "fraud," in the thirty-third section of the bankrupt law of 1867, included both constructive and actual fraud, and consequently that Neal, although guilty of constructive fraud only, was equally liable with the executor who had wasted the estate and failed to account for the amount of the bonds assigned to Neal.

Whether Neal, according to the previous decisions of the Virginia courts, was guilty of constructive fraud, and, upon that ground, became liable to the distributées as a participant in the devastavit of the estate, it is not within our province, upon this appeal, to inquire. Our jurisdiction extends to the re-examination of the final decree, only so far as it involves the construction of the bankrupt law and the denial, by the State court, of rights claimed by the bankrupt under that law.

We concur in the view expressed by the State court, that Neal was not guilty of actual fraud. The evidence does not show that he entertained any purpose himself to commit a fraud, or to aid the executor in committing one. The fair inference from all the testimony is that he purchased the bonds in good faith, not doubting the power or the right of the executor to sell, and having no reason to believe that he meditated any wrong to those interested in the estate which he was administering. Indeed, it appears from the opinion of the State court, that, a few months prior to the purchase, a commissioner had reported a settlement of the executor's accounts, showing a

:

balance due the latter of $765.41. That settlement was of record.

But we do not concur in the construction which the State court gave to the thirty-third section of the bankrupt law of 1867. In reaching this conclusion, we have not been assisted by any express decisions upon the question before us.

The Bankrupt Act of 1841 exempted from discharge debts "created in consequence of a defalcation as a public officer, or as executor, administrator, guardian, or trustee, or while acting in any fiduciary capacity." The question arose under that act whether a factor who had sold the property of his principal, and had failed to pay over the proceeds, was a fiduciary debtor within the meaning of that clause. This court, in Chapman v. Forsyth et al., 2 How. 202, said: "If the act embrace such a debt, it will be difficult to limit its application. It must include all debts arising from agencies, and, indeed, all cases where the law implies an obligation from the trust reposed in the debtor. Such a construction would have left but few debts on which the law could operate. In almost all the commercial transactions of the country, confidence is reposed in the punctuality and integrity of the debtor; and a violation of these is, in a commercial sense, a disregard of a trust. But this is not the relation spoken of in the first section of the act.

"The cases enumerated, the defalcation of a public officer,' executor, administrator,' 'guardian,' or 'trustee,' are not cases of implied, but special, trusts; and the other fiduciary capacity' mentioned must mean the same class of trusts. The act speaks of technical trusts, and not those which the law implies from the contract. A factor is not, therefore, within the act."

A like process of reasoning may be properly employed in construing the corresponding section of the act of 1867. It is a familiar rule in the interpretation of written instruments and statutes that "a passage will be best interpreted by reference to that which precedes and follows it." So, also, "the meaning of a word may be ascertained by reference to the meaning of words associated with it." In Broom's Legal Maxims, p. 450, it is said: "It is a rule laid down by Lord Bacon, that copulatio verborum indicat acceptationem in eodem sensu, - the coupling of words together shows that they are to be under

..

stood in the same sense. And where the meaning of any particular word is doubtful or obscure, the intention of the party who has made use of it may frequently be ascertained and carried unto effect by looking at the adjoining words." The same author says (p. 455): "In the construction of statutes, likewise, the rule noscitur a sociis is very frequently applied; the meaning of a word, and, consequently. the intention of the legislature, being ascertained by reference to the cortext, and by considering whether the word in question and the surrounding words are, in fact, ejusdem generis, and referable to the same ubject-matter."

Applying these rules to this case, we remark, that, in the section of the law of 1867 which sets forth the classes of debts which are exempted from the operation of a discharge in bankruptcy, debts created by "fraud" arę associated directly with debts created by "embezzlement." Such association justifies, if it does not imperatively require, the conclusion that the "fraud" referred to in that section means positive fraud, or fraud in fact, involving moral turpitude or intentional wrong, as does embezzlement; and not implied fraud, or fraud in law, which may exist without the imputation of bad faith or immorality. Such a construction of the statute is consonant with equity, and consistent with the object and intention of Congress in enacting a general law by which the honest citizen may be relieved from the burden of hopeless insolvency. A different construction would be inconsistent with the liberal spirit which pervades the entire bankrupt system.

..

It results from what has been said that the debt or claim asserted against Neal was not "created by the fraud of the bankrupt," within the meaning of the thirty-third section of the law of 1867. His discharge in bankruptcy affords him complete protection. The court erred in adjudging otherwise.

The judgment of the Supreme Court of Appeals of Virginia will, therefore, be reversed, with directions to reverse the decree rendered against Neal in the Circuit Court for Pittsylvania County, and to remand the case to the last-named court, with an order requiring it to dismiss the original and cross-bill of Clark and Holland against Neal, with costs, and for other proper action in conformity to this opinion; and it is

So ordered. KELLY v. CALHOUN.

...

1. The formula prescribed by the laws of Tennessee for the acknowledgment of deeds is: "Personally appeared before me the within-named bargainor, with whom I am personally acquainted, and who acknowledged that he executed the within instrument for the purposes therein contained." Held, that a certificate of an officer taking the acknowledgment of the grantor in a deed of trust, in which the officer certifies that said grantor is "personally known" to him, is a compliance with the statute.

2. To be "personally acquainted with" and to "know personally" are, in such a certificate, equivalent phrases.

3. There is no statutory provision in Tennessee as to the execution or acknowledgment of deeds by a corporation. In such cases, its officer affixing its seal is the party executing the deed, within the meaning of the statutes requiring deeds to be acknowledged by the grantor.

APPEAL from the Circuit Court of the United States for the Western District of Tennessee.

The facts are stated in the opinion of the court

Mr. S. P. Walker for the appellants.

Mr. Josiah Patterson, contra.

MR. JUSTICE SWAYNE delivered the opinion of the court.

The appellees, Calhoun and Meyer, are the grantees in a deed of trust covering the Paducah and Memphis Railroad, which has its northern terminus at Paducah, Ky., and its southern at Memphis, Tenn. A corporation known as the Paducah and Memphis Railroad Company, and authorized to build the road, executed the deed of trust to secure the payment of certain liabilities therein described. The deed, bearing date the first day of February, 1872, was acknowledged the fifth of that month, and duly lodged for record in the proper office in Shelby County the 9th of March in the same year. The company made default in the payment of the interest on the bonds intended to be secured by the deed; and Calhoun and Meyer, the trustees, thereupon filed this bill to enforce its provisions. The Circuit Court placed the road pendente lite in the hands of a receiver.

After this was done, the appellants, Kelly and others, procured leave to intervene, and filed their joint petition. It sets forth the facts already stated, and that the petitioners severally recovered judgment against the company in the first Circuit Court of Shelby County, at the following dates: on the 9th of January; on the 27th of January; on the 25th of May, and on the 13th of October, in the year 1875; and on the 26th of January, and on the 3d of June, 1876. It further alleges that the certificate of the proof and acknowledgment of the deed of trust is fatally defective, and that their judgments are, therefore, the first lien upon the premises. They pray to be permitted to levy executions, that the premises may be sold under the order of the court, that the proceeds may be applied in payment of their several judgments, and for general relief. Leave was given to them to levy, but not to sell. They levied accordingly. The deed and certificate alleged to be defective are set out in full. Calhoun and Meyer demurred. The Circuit Court held the certificate good, sustained the demurrer, and dismissed the bill.

The deed was well executed. The testatum clause sets forth that the company had caused its corporate seal to be affixed, and the instrument to be signed by its president and secretary, which appear on its face to have been done. The sealing and delivery were attested by two subscribing witnesses. Angell & A. on Corp., sect. 225.

The attack is confined to the certificate of acknowledgment, which, less the caption and official signatures affixed, is as follows:

"Be it remembered, that on this fifth day of February, 1872, before me, Charles Nettleton, a commissioner, resident in the city of New York, duly commissioned and qualified by the executive authority and under the laws of the State of Tennessee to take acknowledgments of deeds, &c., to be used or recorded therein, personally appeared Ex. Norton, the president of the Paducalı and Memphis Railroad Company, and Henry L. Jones, the secretary of said company, who are personally known to me to be such; and who, being by me duly sworn, did depose and say that he, the said Ex. Norton, resided in the city, county, and State of New York; that he, the said Henry L. Jones, resided in Paducah, in the State of Kentucky; that he, the said Norton, was president of the said Paducah and Memphis Railroad Company; that he, the said Jones, was secretary of the said company; that they knew the corporate