same relation to the property as does an assignee in bankruptcy or in insolvency. It adds:

"Where the goods of the lessee are remaining on the demised premises at or after the time when the rent becomes due, and the landlord seeks to exercise his right to distrain, and the only impediment to the exercise of that right is the possession of the court, by its receiver, it seems to be a settled rule of practice to order the receiver to pay the arrears of rent out of the proceeds of the property, or to permit the landlord to proceed with his distress, notwithstanding the possession of the receiver."

The text-writers and the decided cases all recognize that in Maryland a landlord who fails to exercise his right to distrain before insolvency proceedings are begun has no right to preferential payment. 2 Poe on Practice, § 810; Purnell on the Law of Insolvency in Maryland, § 127, p. 71; 2 Tiffany on Landlord & Tenant, § 1900, note 12; In re Gerson, 2 Am. Bankr. Rep. 175.

The industry of the learned counsel for the landlord has led him to examine the records of the chancery courts of first instance in Baltimore city and to show that it is their habitual practice, in cases where corporations are being wound up by receivers, to allow rent due and in arrear at the time of the appointment of a receiver to be paid as a preferred claim. For this practice, the distinction made by the Court of Appeals of the state between a receiver appointed by a court of chancery in the exercise of its ordinary jurisdiction and an assignee or trustee in insolvency is a sufficient explanation.

It may be that there is very little difference in effect between the winding up of an insolvent corporation by a chancery receiver and the winding up of an estate of an equally insolvent individual or corporation by a trustee in insolvency under the state law or a trustee in bankruptcy under the federal law. But the question is not what in the opinion of a federal judge the state law ought to be, but what it is. He may think that a distinction does not rest upon a real difference in principle, but if the distinction is well established in the state law so far as he is concerned that is the end of it. In so saying, I do not mean for one moment to intimate any opinion that the distinction taken by the courts of Maryland between the rights of a landlord to whom rent is due at the time of the appointment of a receiver and a landlord to whom rent is due at the time of the institution of proceedings in insolvency or bankruptcy is not well founded.

The counsel for the landlord calls attention to the fact that the Code of Maryland (sections 376 and 377 of article 23) provides that a bill may be filed by any creditor or stockholder against any corporation alleged to be insolvent, and if the allegations be sustained a receiver may be appointed and the corporation dissolved, and that: "Whenever any such corporation shall have been adjudged to be dissolved. * all its property and assets of every description shall be distributed to the creditors of said corporation in the same manner that the property and assets of an insolvent debtor are distributed under the provisions of article 47 of the Code of Public General Laws, but no discharge shall be granted to said corporation."

Article 47 is the insolvent act.

He has found several cases in which, where corporations have been decreed to be dissolved, the equity courts of first instance in Baltimore city have allowed priority to rent claims.

It does not appear that the question as to whether the receiver in such case is the ordinary chancery receiver or is an official with the rights and duties of an insolvent trustee had been considered by the court. Certainly the Court of Appeals of Maryland has not as yet passed on or approved such practice.

He also calls attention to the case decided in this court under Bankruptcy Act March 2, 1867, c. 176, 14 Stat. 517, and reported as In re Rose, 20 Fed. Cas. 1176. In that case Judge Giles held the landlord's claim for rent to be entitled to preferential payment. The opinion is a very short one and seems to have been given without consideration of the Maryland cases.

The petition will therefore be dismissed.

PRIMEAU v. GRANFIELD.

(Circuit Court, S. D. New York. March 15, 1910.)

1. CORPORATIONS (§ 117*)-SALE OF STOCK-RESCISSION FOR FRAUD-NECESSITY FOR RESTORATION.

Where the buyer of stocks had sold most of them, he would not be entitled to a rescission of his contract of purchase for misrepresentation of the seller, being incapable of tendering restoration of what he got.

[Ed. Note. For other cases, see Corporations, Cent. Dig. § 506; Dec. Dig. § 117.*]

2. CONTRACTS (§ 138*)-ILLEGAL CONTRACT.

Even a wrongdoer is not the prey of any spoliator who may outwit him, and while the law will enforce no part of a contract, the performance of any stipulation of which is forbidden, the parties do not become outlaws when they make such a contract, and their rights in equity as well as at law are the same as those of others in so far as they do not require the enforcement of any part of the contract.

[Ed. Note. For other cases, see Contracts, Cent. Dig. §§ 681-700; Dec. Dig. § 138.*]

3. EQUITY (8 65*)—RIGHT TO RELIEF-UNCONSCIONABLE TRANSACTIONS.

The iniquitous conduct which will bar a suitor in equity need not be directed against the defendant, but must be such that the prosecution of the suitor's rights will of itself involve the protection of wrongdoing. [Ed. Note.-For other cases, see Equity, Dec. Dig. § 65.*

He who comes into equity must come with clean hands, see note to Knapp v. S. Jarvis Adams Co., 70 C. C. A. 543.]

4. PRINCIPAL AND AGENT (§§ 23, 69*)-EXISTENCE OF RELATION-EVIDENCE. Evidence held to show that money sent by complainant to defendant, for purchase of mining stocks was sent to him as agent, and that he so acted, so that plaintiff was entitled to an accounting for secret profits obtained by defendant through buying the stocks himself and reselling them to complainant at an advanced price.

[Ed. Note. For other cases, see Principal and Agent, Cent. Dig. §§ 41, 130-145; Dec. Dig. §§ 23, 69.*]

*For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes

In Equity. Bill by Paul A. Primeau against Horace Granfield. Decree for complainant.

Charles J. Hughes, Jr., and Mark Hyman, for Primeau.

Edmund F. Richardson, Wm. H. Davis, and Frederick Lienau, for Granfield.

HAND, District Judge. This is a final hearing on a bill in equity for an accounting. The bill is voluminous, and there have been ample amendments, but the frame of it remains simple. It alleges that the complainant, Primeau, remitted from the East from time to time moneys to the defendant, Granfield, to be invested in shares of stock in mining companies and in mining claims, all in the state of Colorado. Granfield acted in the matters, according to the bill, as agent and fiduciary of Primeau, and professed to be buying the properties from third persons and to be paying to them the sums which Primeau sent him. In fact Granfield was the owner himself of all of them and the sums which he got from Primeau were much more than what he had paid for the properties. Because of his secret profits made upon these representations and the fiduciary relations which existed between the parties, Granfield, became bound to account to Primeau. The bill adds in certain cases charges of misrepresentations as to the character and value of the properties purchased. The answer concedes that the parties had dealings in mining shares and mining claims; that Primeau bought of Granfield; that the property Granfield in fact owned; and that he made profits in his sales. It takes issue upon the existence of any fiduciary relation between the two; alleges that Primeau perfectly understood that he was buying of the owner; that he dealt at arm's length; and that all the profits were the result of a legitimate gain in bargain and sale. It likewise denies any of the misrepresentations alleged.

The transactions extended over a period of about seven years, from 1894 to 1901, and comprised 10 separate corporations or claims, in a number of which there were several transactions. In all, the transactions covered by the briefs amount to 21, not including a claim for a general balance struck between the parties in the fall of 1899. The testimony was immensely voluminous, both oral and documentary, and there was an absolute conflict of testimony between the parties. To the solution of this conflict there are accessible many contemporaneous documents, consisting in the main of correspondence between the parties, during large parts of the period in question. Primeau at the outset of their relations was quite unacquainted with mines and mining. He is a man of no education, extremely illiterate, but shrewd, at least as a salesman of stock to Eastern customers on a small scale, and apparently of unbounded energy and little or no scrupulousness in the means by which he attains his purposes. Granfield was originally a salesman of books who drifted somewhat fortuitously into the business of speculating in mines at the time when Cripple Creek began to show that extraordinary richness as a gold producing territory which has since become so well-known. He is a man of decided mental power, expresses himself with vigor and pre

cision, and is in literacy and all intellectual attainments much Primeau's superior. Though he was unscrupulous in his business dealings, his testimony reads like that of a very capable and energetic man of affairs. I have no trouble in finding that he acquired an ascendancy over Primeau and that Primeau relied upon his judgment and information, when the purchases were made. Granfield's home is in Mt. Vernon in this state, but he early maintained regular connections in Denver and was repeatedly in Colorado for long periods of time. While Primeau also went to Colorado on several occasions the measure of his acquaintance with the district of Cripple Creek and with its speculations was not in the least comparable to Granfield's, and such personal acquaintance as he ever got was for the most part in the company of Granfield, and, I think I may fairly infer, under the supervision of Granfield. Those instances in which this was not the case, do not materially affect the fact that it was through Granfield that he got such information as he did ever get about the properties he was buying. I have been obliged to go into each of the transactions in detail to determine the relations of the parties, in view of the unsatisfactory character of the testimony of each, but there are some preliminary matters which must be determined before the details properly come up.

First, I have disregarded altogether the alleged misrepresentations of Granfield regarding the properties. This is not because I think he did not mean to defraud Primeau by false statements, because in several cases I think he did, even after all allowances are made for the natural exaggeration of expression and anticipation which the astounding discoveries thereabouts to a large extent excused. The reason for disregarding the statements is that Primeau has long since himself sold and so passed on to others most of the properties he bought. These he peddled about in the East and even in France to small investors generally, both personally and through the mediation of agents. While he retains some of the property he is, in no instance able to offer a restoration of what he got, and he cannot therefore make the tender necessary to a rescission of any of the contracts. His remedy for any fraud must be at law for damages, and I have therefore confined him to the theory of his bill; that is, that Granfield received the moneys in a fiduciary capacity and misappropriated a part of them. While the misrepresentations necessarily have an important weight incidentally in the relations of the parties, no relief can be granted by virtue of them.

Granfield's affirmative defenses are two: First, laches, which a most was no more that a delay of three years, until Primeau begar to collect testimony, and which I dismiss; and, second, Primeau's disqualification to come into a court of equity because of his own. inequitable conduct. The latter has some serious aspects, and, in view of the fact that it was nowhere pleaded, and-despite Granfield's efforts to show to the contrary-no where indicated in the trial, I should be obliged to allow the case to be reopened, if I thought that a prima facie case had been made out against the bill. The grounds for this defense are three: First, Primeau's fraudulent change of

180 F.-54

several letters; second, his suppression of a great number of letters; and, third, his iniquitous dealings with his customers.

Upon the first issue, there are four letters urged upon me, each of which bears evidence of some change, and each of which was put in evidence before any allegations were put in the bill of the transactions to which they refer. This satisfies me that they were never intended to be used in the suit for the purpose of supporting a fraudulent claim, and that if they were forged it was for a different purpose. Had they been changed for this suit, Primeau would have insisted on some claims being made which they would support. By far the most plausible explanation of them is that, if Primeau changed them at all, which I think most likely, he changed them for the purpose of showing to his customers that he had paid more for the properties than in fact he had. It was, for instance, most improbable that he should have thought he could have got from Granfield $10,000 by so simple a means as raising complainant's Exhibit 431. The same reasoning applies in regard to complainant's Exhibit 380. While this explanation is most discreditable to him, and fortifies the inferences regarding his dealings with his customers, it disposes of the contention that he was corruptly using in the cause forged documents. I do not believe this to be true, and so I need not consider whether or not I should follow Harton v. McKee (C. C.) 73 Fed. 558, if on the facts it was applicable.

In regard to the second defense, the suppression of documents, I should have thought nothing of it, but for Primeau's silly explanations. That he should not produce many of the very numerous letters which passed between them is not only not surprising, but is to be expected. Granfield also failed to produce a great many letters. In the case of Primeau especially, having no fixed place of business, being a man of extremely slovenly business habits, I am rather surprised that he can produce as many as he does. However, his attempts to explain their disappearance are childish, and I do not believe them. These attempts do not by any means indicate that he suppressed the letters, but only that he supposed he must show some excuse other than the truth. If his own letters to Granfield showed any diversity in the facts from those of Granfield's he produces, some suspicion might justly ensue, but they corroborate and serve to complete the extant letters of Granfield, and do not in any case that I can recall indicate that any of Granfield's lost letters were by their contents damaging to Primeau. The correspondence which is produced certainly bears every internal evidence of being selected indiscriminately. How that could be the case if there had been any intelligent suppression of damaging letters I cannot see. Granfield makes some effort to show that some of those which do not appear are especially significant, but he does not convince one. It is true that for a continuous period of some length all correspondence seems to have disappeared that had any consequence, but as to that period I have allowed nothing to Primeau. The utmost which Granfield can ask in any case, and even if Primeau had suppressed correspondence, is that he must suffer from the presumption of what they would have shown. I know of no