Page:Federal Reporter, 1st Series, Volume 9.djvu/514

 IN EB SHAW. 499 �itors except apon some arrangement to take the assets for their indemnity. Under the ciroumBtances o£ the case the assent of the creditorB thereto is, I think, to be plainly inferred; and in wbat manner they af terwards dealt with the assets, whether f orming a Company or corporation either with or without Mr. Shaw, is imma- terial, Had Brown and Whiting individually been creditors, the case is therefore not essentially different from what an express arrangement between them and the other creditors would have been for them to advance the composition on the strength of the assets. Such an agreement is valid, although those making the advances thereby get paid in full ; and such agreements are not inf requent^ in the English practice. Bissell x. Jones, 19 L. T. (N. S.) 262; Ex parte Nicholsen, 22 L. T. (N. S.) 286. �But Whiting and Brown were not individually creditors of the bankrupts. They stand, therefore, as respects the creditors, in the same situation in which any other persons not creditors would have stood in regard to their right to treat with the bankrupts concerning an advance of money to enable them to pay the composition offered. The assets being fully released by the creditors to the bankrupts by force of the acceptance of the composition, the bankrupts are at per- fect liberty to deal with third persons in regard thereto in any way they see fit, and the creditors have no coucern in the matter if their composition be paid and no fraud practiced. AU were paid promptly in this case, and I see no legal ground, therefore, for interfering with the composition which was accepted and performed. Whether Whit- ing and Brown eventually made any profits by means of these large advances, which, with the mortgage on the machinery paid offby them, amounted to some $50,000, does not appear, and is immate- rial. It does not appear that their own companies have received even the 16 per cent, dividend. But that also is immaterial, as it is their own fault if not paid. The testimony is that during the first two years, notwithstanding their large outlays and the appraisal of the stock at $30,000, in forming the new corporation, the profits of the business were nothing. That they expected to make some profits may be assumed ; and that the advance which they consented to make was fixed at a per centage which they thought safe, and such as would leave a margin of profit to themselves, is also to be assumed. To fix that per centage was the very subject of arrangement with the creditors at the time of the composition. In accepting the per cent- age offered, the creditors bound themselves tpthe amount thus fixed ; and, aseverything, material is proved to have been known to some. ��� �