Hobbs v. McLean

While the case was pending in the court of claims, to-wit, on August 31, 1878, Peck was on his own petition adjudicated a bankrupt in the district court of the United States for the district of Iowa, and Hobbs, the appellant in the present case, was appointed assignee. While the case was pending in this court, Peck, on December 2, 1879, died, and his widow, Helen A. Peck, was afterwards appointed his administratrix, and in January, 1880, was substituted in the place of her intestate as the plaintiff in the cause. The case still being in this court, and after Mrs. Peck had, as administratrix, been made party plaintiff, Hobbs, as assignee, moved the court to be substituted as plaintiff in her stead, which motion was denied. The cause having been remanded to the court of claims, Hobbs, the assignee in bankruptcy, moved that court to substitute him as plaintiff in place of the administratrix, which motion was, on May 10, 1880, granted, and the money recovered from the United States was, after deducting about $10,000 attorney's fees, paid over to Hobbs, the assignee.

McLean and Harmon, fearing that Hobbs would distribute the fund thus recovered among the general creditors of Peck, and believing that the fund belonged to them, filed in the circuit court for the Southern district of Iowa the bill in the present case, to which they made Hobbs, as assignee in bankruptcy of Peck, and John B. Sanborn and Charles King, lately partners as Sanborn & King, and Edward F. Brownell, defendants, and in which they set out in detail the facts above recited, set up their claim to the fund as surviving partners, and prayed that the balance found due them from the partnership on an accounting might be paid them out of the fund, so far as it should be sufficient to pay the same. The defendant Hobbs, as assignee, answered the bill, and the plaintiffs filed the general replication. Upon final hearing upon pleadings and proofs the circuit court adjudged and decreed as follows: After reciting the making of the partnership between the plaintiffs and Peck, and the performance by the partnership of the contract made by Peck with the United States, it found that, after charging to the partners all the moneys received by them respectively, it appeared that Peck had received more money than he had paid out in performing the contract, and that the plaintiffs had expended for the same purpose $41,032.31 more than they had received; that Hobbs, the assignee, had collected and received on the judgment against the United States recovered by Peck's administratrix $35,773.63; and it was therefore adjudged and decreed that said sum was the money and property of the plaintiffs, and that they recover it of the defendant, Hobbs, who was ordered to pay it to the plaintiffs, with interest on the investment thereof, and that the plaintiffs also recover of Hobbs, as assignee, their costs and disbursements in the suit, to be paid by him out of any money in his hands as assignee. The appeal of Hobbs, as assignee, brings this decree under review.

James Hagerman, Frank Hagerman, and John H. Craig, for appellant.

C. E. Flandrau and W. H. Sanborn, for appellee.

[Argument of Counsel from pages 571-573 intentionally omitted]

Mr. Charles E. Flandrau and Mr. Walter H. Sanborn for appellees.

WOODS, J.