The Friendschaft.

this court, and to be admitted or rejected in the discretion of the court, as to his proprietary interest and connection with the house of trade in the enemy's country. On the production of the further proof, the proprietary interest of Mr. Moreira in one-third part of the goods was clearly proved, and also the fact of his personal domicil at Lisbon.

Hopkinson, for the claimant, relied upon this evidence, as sufficient to show, that the claimant was entitled to restitution of his share, on account of his personal domicil, notwithstanding his being a partner *in the house of trade established in the enemy's country.

[*106

D. B. Ogden and Wheaton, contrà, insisted, that the shipment being made by a house of trade, established in the enemy's country, for the account and risk of that house, the neutral domicil of one of the partners would not avail to save his share from condemnation as prize. The Nancy, claim of Mr. Coopman, cited in The Vigilantia, 1 Rob. 14, 15; The Susa, 2 Ibid. 255; The Indiana, cited in The Portland, 3 Ibid. 44. In the British tribunals, this principle is recognised by the highest authority known to the prize law, that of the Lords of Appeal, and if it be material (as it seems to have been intimated by this court, 9 Cranch 198), to distinguish whether the decision was pronounced before, or since our Independence, the onus is thrown upon the claimant, to show, that the case of Mr. Coopman, decided in 1798, was determined contrary to former practice or former precedents. It does, indeed, appear, that an erroneous notion had been adopted by some persons, that the domicil of the party was all that the prize court had a right to consider. But in Coopman's case, that notion was exploded by the Lords, and the true principle on which the cases from which it had been imbibed, were determined, was explained as applying to cases merely at the commencement of a war; whilst the rule, applicable to a neutral partner, entering into a house of trade in the enemy's country, during the war, or continuing that connection, after *a declaration of war, is developed, not as a new rule, then for the first time prescribed, but [*107 as the application of an anciently established principle. 1 Rob. 12, 14, 15.

February 25th, 1819. STORY, Justice, delivered the opinion of the court.— The shipment in this case was made by Moreira, Vieira & Machado, a house of trade established in London, on the account of the house, to Moreira, one of the partners in the house, who was a native of, and domiciled in, Lisbon, in the kingdom of Portugal; and the only question is, whether the share of Moreira in the shipment, is exempted from condemnation, by reason of his neutral domicil? It has been long since decided in the courts of admiralty, that the property of a house of trade, established in the enemy's country, is condemnable, as prize, whatever may be the domicil of the partners. The trade of such a house is deemed essentially a hostile trade, and the property engaged in it is, therefore, treated as enemy's property, notwithstanding the neutral domicil of any of the company. The rule, then, being inflexibly settled, we do not now feel at liberty to depart from it, whatever doubt might have been entertained, if the case were entirely new.

Decree affirmed, with costs.

*UNITED STATES v. HOWLAND and ALLEN.

Equity jurisdiction.-Priority of the United States.

The circuit court has jurisdiction, on a bill in equity, filed by the United States against the debtor of their debtor, they claiming a priority under the act of 1799, c. 128, § 65, notwithstanding the local law of the state where the suit is brought allows a creditor to proceed against the debtor of his debtor, by a peculiar process of law.

The circuit courts of the Union have chancery jurisdiction in every state; they have the same chancery powers, and the same rules of decision in all the states.

1

The United States are not entitled to priority over other creditors, under the act of 1799, c. 128, § 65, upon the ground of the debtor having made an assignment for the benefit of creditors, unless it is proved, that the debtor has made an assignment of all his property.

Where the deed of assignment conveys only the property mentioned in the schedule annexed, and the schedule does not purport to contain all the property of the party who made it, the onus probandi is thrown on the United States, to show that the assignment embraced all the property of the debtor.2.

Upon a bill filed by the United States, proceeding as ordinary creditors, against the debtor of their debtor, for an account, &c., the original debtor to the United States ought to be a party, and the account taken between him and his debtor.

APPEAL from the Circuit Court of Massachusetts. This was a bill in equity, filed in the name of the United States, in the court below, stating, that several judgments had been obtained by the United States on duty bonds, against Shoemaker & Travers, and Jacob Shoemaker, and their sure, ties, amounting to the sum of $5292; which judgments were obtained in the district court of Pennsylvania, at the February term of 1808, and upon which executions *had issued, which remained in the marshal's *109] hands unsatisfied; that after the execution of the duty bonds, but before they were payable, to wit, on the 6th of December 1806, Shoemaker & Travers became insolvent, within the true intent and meaning of the act "to regulate the collection of duties on imports and tonnage:" that on the first of February 1808, goods, effects, money and credits of Shoemaker & Travers, to the amount of $6000, had come to the hands of Howland & Allen, which, the bill alleged, they refused to subject to the executions of the United States; it prayed, that they might be compelled to account for, and deliver up, these goods, &c., in satisfaction of the claim of the United States, and for an injunction in the meantime to restrain them from disposing of, paying away, or in any manner applying the goods, &c., aforesaid, to any other object. The injunction was, accordingly, awarded.

An amendment to the bill stated, that after the debts to the United States accrued by bond as aforesaid, and after Shoemaker & Travers had become insolvent, to wit, on the 6th day of December 1806, they made a voluntary assignment by deed, of all their property, for the bedefit of their creditors, within the true intent and meaning of the act of congress aforesaid, and an exemplified copy of the deed of assignment was annexed to the amended bill. The deed recited, that the parties being justly indebted to divers persons, whose names are mentioned in a list thereto annexed, and unable at present to pay the said debts, they assign to trustees therein men

1 Dodge v. Woolsey, 18 How. 347; Barber v. Barber, 21 Id. 583; Payne v. Hook, 7 Wall. 425; Cropper v. Coburn, 2 Curt. 465; Mayer v. Foulkrod, 4 W. C. C. 349; Lawrence v.

Clarke, 2 McLean 568.

United States v. Langton, 5 Mason 280; United States v. Clark, 1 Paine 629.

United States v. Howland.

tioned, *all and singular, the estate and effects contained in a schedule annexed, in trust, to pay the debts due the enumerated creditors, and first, that due to the United States. The schedule was entitled "Schedule of property assigned by Shoemaker & Travers, and Jacob Shoemaker, to the creditors of Shoemaker & Travers," and contained many items of property, and among others, the proceeds of the cargo of the brig Deborah, which vessel was then at sea, and belonging to Howland & Allen, but had been chartered by Shoemaker & Travers.

Howland & Allen, by their answer, admitted the receipt, on the 1st of January 1807, of 4000 Spanish dollars, the property of Shoemaker & Travers, and which the master of the Deborah had received in Guadaloupe, for Shoemaker & Travers; but insisted on their right to apply it to an unliquidated debt of greater amount (composed of freight, demurrage, damages, &c., the particulars of which were detailed by the answer), due, as alleged, from Shoemaker & Travers to them, and applied, by an entry in their books, to the credit of Shoemaker & Travers, at the time of the receipt of the money aforesaid. They insisted, therefore, on the right of retaining it. To this answer, there was a general replication, and the depositions of several witnesses were taken.

The court below decreed, that the said Shoemaker & Travers were, and are, indebted to the United States, and that they became insolvent, and made an assignment as alleged in the bill, and that there was an outstanding unsettled demand existing in their favor, at the time of their insolvency, against the *defendants, arising from the voyage of the brigantine [*111 Deborah, and which is still unsettled and unpaid, but the court is not satisfied that the defendants, being merely debtors to said insolvents, are by law liable to this process, and thereupon, decree, that the said bill be dismissed. From this decree, the present appeal was taken.

February 4th. The Attorney-General, for the appellants, argued, 1. That the prior right of the United States attached to all the property of Shoemaker & Travers, on the 6th of December 1806, the time of their insolvency, and the date of the deed of assignment from them. It is immaterial, whether the priority of the. United States, in any case, be asserted under the act of 1797, c. 368, § 5, or under that of 1799, c. 128, § 65. The decisions, as to this point, under the one statute, are applicable to the other. It is insisted, that this is one of the cases specified by congress, in which the debts due to the United States are to be first satisfied; a case in which the debtor, not having sufficient property to pay all his debts, has made a voluntary assignment thereof, for the benefit of his creditors. This is the allegation of the bill, and it is supported by the deed itself. Although the granting clause does not literally express it to include all the property of the debtors, yet the clause, which gives the power to sell, by using the words "all the property of them, the said Shoemaker & Travers, and Jacob Shoemaker," clearly shows, that the assignment was intended to convey all their property. The very object of the deed, as set forth in the recital, *aids this [*112 construction.

2. If, then, the priority of the United States has attached, a court of equity is the proper forum in which it should be asserted. A trust exists, and an account is to be taken. The court of chancery is the only tribunal 4 WHEAT.-5

65

United States v. Howland.

that can enforce the trnst, and take the account, having also the power of calling all the parties before it. Nor are the chancery powers of the circuit court at all affected by the statute of Massachusetts of 1794, c. 64, giving a peculiar process, in the nature of a foreign attachment, by which the creditor may attach in the hands of the debtor of his debtor. The powers and practice of the circuit courts, in chancery cases, are not to be controlled by the local laws of the states where those courts sit. They are the same throughout the Union.

3. But even supposing that the United States have no priority in this case; they are, on the common footing of ordinary creditors, entitled to an account against Howland & Allen, and to the payment of any sum which, on a settlement of such account, may be found due from them to Shoemaker & Travers.

Jones, contrà, insisted, 1. That the act of congress only extended to exécutors and administrators, or to assignees, but not to the debtors of the debtors of the United States. A court of equity cannot have power to settle an account in this way, without some statutory provision to authorize the proceeding. The act of congress gives no such authority. Shoemaker & Travers are not made parties to the bill, and a decree between the United *113] States and the present *defendants, would not bind, in a suit between the defendants and Shoemaker & Travers. Nor is it too late, in the appellate court, to take advantage of the want of parties. Russell v. Clarke's Executors, 7 Cranch 98.

2. The cases are uniform, that in order to enable the priority of the United States to attach upon this ground, the assignment must be of all the debtor's property. United States v. Fisher, 2 Cranch 358; United States v. Hooe, 3 Ibid. 73. There is here no evidence, either in the deed or in the depositions, that this assignment embraced all the property of Shoemaker & Travers. The power to sell all the property cannot be construed to enlarge the granting clause, which merely refers to the property mentioned in the schedule annexed to the deed. The defendants claim a balance from Shoemaker & Travers, and the right to apply the money received to the liquidation of that balance. They had acquired a special lien upon the money for the payment of this balance, long before the alleged act of insolvency. The court has repeatedly determined, that if, before the right of preference to the United States has accrued, the debtor has made a bond fide conveyance of his estate, or has mortgaged it to secure a debt, the property is divested out of the debtor, and cannot be made liable to the claim of the United States. United States v. Fisher, 2 Cranch 390; United States v. Hooe, 3 Ibid. 90. The spirit of these decisions is, that any bond fide lien will be protected, and not merely an actual mortgage or hypothecation. All specific *114] liens are highly favored *by the law; such as that of a factor, who has advanced his money on the credit of the goods, or a ship-owner who, having let out his ship for their transportation, has a right to the same security. It is true, that the court has said, that the lien of a judgmentcreditor shall not be protected as against the prior right of the United States. But that is upon the ground that the judgment is a mere general lien, not affecting the jus disponendi of the owner of the property, nor vesting any specific interest in the creditor.

United States v. Howland.

February 17th, 1819. MARSHALL, Ch. J., delivered the opinion of the court. The bill in this case was filed by the United States in the circuit court of the district of Massachusetts, to recover from the defendants a sum of money in their hands, alleged to be the money of Jacob Shoemaker and Charles R. Travers, merchants and partners, who are stated to be insolvents, and to be indebted to the United States for duties.

sea.

It appears, that Shoemaker & Travers, on the 6th day of December 1806, executed an indenture, in which, reciting that they are justly indebted to divers persons, whose names are expressed in a list thereto annexed, and are unable at present to pay the said debts, they assign to trustees therein mentioned, all and singular the estate and effects contained in a schedule annexed, in trust, to pay the debt due to the enumerated creditors, and first that due to the United States. The schedule contains many items of property, and and among others the proceeds of the *cargo of the Deborah, then at [*115 The Deborah was the property of Howland & Allen; and on her coming into port, her master delivered to her owners a sum of money which he had received at Guadaloupe for Shoemaker & Travers, and which is in the schedule annexed to the deed of assignment already mentioned. At the hearing, the circuit court dismissed the bill, on the opinion, that it was not sustainable. From this decree, the United States have appealed to this court, and now insist, 1. That it is a case in which a court of equity has jurisdiction. 2. That the United States are entitled to priority, this being a case within the provisions of the act of congress.

On the first point, no difficulty would be found, had the proper parties been before the court. A trust exists, and an account would be proper, to ascertain the sum due from Howland & Allen to Shoemaker & Travers. The case, even independent of these circumstances, would be proper for a court of chancery, but for the act of Massachusetts, which allows a creditor to sue the debtor of his debtor. Still, the remedy in chancery, where all parties may be brought before the court, is more complete and adequate, as the sum actually due may be, there, in such cases, ascertained with more certainty and facility; and as the courts of the Union have a chancery jurisdiction in every state, and the judiciary act confers the same chancery powers on all, and gives the same rule of decision, its jurisdiction in Massa-` chusetts must be the same as in other states.

*This being a case of which a court of chancery may take juris[*116 diction, we are next to inquire, whether it is one in which the United States are entitled to priority. This depends on the fact, whether the deed of assignment executed by Shoemaker & Travers was a conveyance of all their property. The words of the deed, after reciting the motives which led to it, and the consideration, are "have granted, &c., and by these presents, do grant," "all and singular the estate and effects which is contained in the schedule hereunto annexed, marked A.” The caption of the schedule is, "schedule of property assigned by Shoemaker & Travers, and Jacob Shoemaker, to the creditors of Shoemaker & Travers." The deed, then, conveys only the property contained in the schedule, and the schedule does not purport to contain all the property of the parties who made it. In such a case, the presumption must be, that there is property not contained in the deed, unless the contrary appears. The onus probandi is thrown on the United States.