Page:Federal Reporter, 1st Series, Volume 1.djvu/177

IN RK STERLING, AHERNS & CO, 169 �to allow this account for the araount claimed, because they insist that, as for the transactions covered by the aceount, thô bankrupts received from the corporation its promissory notes, amounting to $1,716,000, which notes the corporation has not paid, and upon nearly all of which the bankrupts were liable as indorsera, and which have been proved as claims against the estate of said bankrupts. The trustees of the cor- poration should not be allowed to prove, for said amount claimed by them, beyond the amount of the dividends which has been paid on account of these notes out of the estate of the corporation. �Nearly all these promissory notes were indorsed by the bankrupts, and have been proved by the hol'ders against their estate. Some of them, however, they did not indorse, but sold without recourse ; and, as to others, they were pledged by the bankrupts as collateral security for loans made to them. �The trustees of the corporation, on the other hand, contend that as the bankrupts passed off for value, in one way or ànotber, all these notes, they operate as pnyment, and«so far as the account now to be adjusted between the corporation and the bankrupts is concerned they are to be treated as paid, because the bankrupts parted with them and got the proceeds of them, and the notes are now all out of their possession or control, in the hands of honafide holders for value. �These facts have given rise to complications of rights and liabilitiea not easily settled, and both paities being insolvent,. neither being able to perform their obligations or correct their mistakes, exact justice cannot be hoped for. All that remains possible is to endeavor to apply those rules and prin- ciples of law which have been established by decisions in similar cases. �One Sound and well established rule applicable to the set- tlement of insolvent estates is that the estate must never pay two dividends in respect of the same claim. Thi^ rule was- well illustrated and explained by the case cited in argument of the Oriental Bank v. The Europe n Bank, reported in 7 L. R. (Ghancery Appeals,) 99. In that case bills of exchange ��� �