Hyde v. Woods

Decision Date01 October 1876
Citation94 U.S. 523,24 L.Ed. 264
PartiesHYDE v. WOODS
CourtU.S. Supreme Court

ERROR to the Circuit Court of the United States for the District of California.

The facts are stated in the opinion of the court.

Mr. Edward B. Merrill for the plaintiff in error.

No counsel appeared for the defendant in error.

MR. JUSTICE MILLER delivered the opinion of the court.

The San Francisco Stock and Exchange Board is a voluntary association of business purposes, organized in 1862, in that city. The membership is elective, with certain provisions for a right to sell and assign the seat, subject to an election of the purchasing member by the board. This is generally done, unless special reasons appear to the contrary; and the result is, that, as the number of members is limited, the right to a seat at the board has a moneyed value. When a member fails to perform his contracts, or becomes insolvent, he can no longer be a member of the board, until he resumes payment; but his seat may be held for his benefit, or for that of his creditors, among the other members of the board.

Art. 15 of the constitution of the board provides that, 'in sales of seats for account of delinquent members, the proceeds shall be applied to the benefit of the members of this board exclusive of outside creditors, unless there shall be a balance after payment of the claims of members in full.'

Thomas W. Fenn, who became a member of this board Oct. 21, 1871, was declared a bankrupt Oct. 1, 1872, and plaintiff in error was appointed his assignee. On the twenty-fourth day of August preceding, Fenn became a delinquent, by failing to fulfil his contracts with members of the board, and thereupon made and delivered to defendants in error an assignment of his seat in said board, with authority to sell the same to the best advantage, and apply the proceeds of sale to the payment of all debts due from him to the members of said board. They did sell it for $10,000; the purchaser was duly elected and installed, and the money paid to creditors, who were members of the board, including $2,973.30 to defendants.

Upon these facts, found by the Circuit Court, sitting without a jury, the counsel for plaintiff asks a reversal of the judgment of that court in favor of defendants, on the ground that the assignment by Fenn to the defendants, and their receipt and disbursement of the $10,000, were preferences within the meaning of the bankrupt law, and that they are, therefore, liable to him as assignee for the amount received.

There can be no doubt that the incorporeal right which Fenn had to this seat when he became bankrupt was property, and the sum realized by the assignees from its sale proves that it was valuable property. Nor do we think there can be any reason to doubt that, if he had made no such assignment, it would have passed, subject to the rules of the stock board, to his assignee in bankruptcy, and that if there had been left in the hands of the defendants any balance after paying the debts due to the members of the board, that balance might have been recovered by the assignee.

It is very ingeniously argued by counsel for the assignee, that, being property of the bankrupt, he had no right to make the disposition of it which he did, by preferring his creditors who were members of the board to those who were not. The answer to this, so far as Fenn's assignment to defendants is concerned, is, that the part of it which gives this direction to the proceeds of the sale was wholly unnecessary and nugatory; for if the article of the association...

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119 cases
  • In re Drexel Burnham Lambert Group Inc.
    • United States
    • U.S. Bankruptcy Court — Southern District of New York
    • November 14, 1990
    ...of members' claims. Rather, the membership constituted property of the estate, limited by notions expressed in Hyde v. Woods, 94 U.S. 523, 24 L.Ed. 264 (1877). The Johnson Court understood Hyde to hold that a membership in the San Francisco Stock and Exchange Board, sale of which was subjec......
  • Terwilliger's Catering Plus, Inc., In re
    • United States
    • U.S. Court of Appeals — Sixth Circuit
    • August 13, 1990
    ...cases on which the state relies, cite two Supreme Court cases to support this assertion. In the first of these cases, Hyde v. Woods, 94 U.S. 523, 24 L.Ed. 264 (1877), the Court held that the San Francisco Stock and Exchange Board could enforce a membership rule allowing the exchange to sell......
  • Airadigm Communications, Inc. v. F.C.C.
    • United States
    • U.S. Bankruptcy Court — Western District of Wisconsin
    • October 27, 2006
    ...other rights conveyed by the licenses. It argues that under In re Braniff Airways, Inc., 700 F.2d 935 (5th Cir.1983) and Hyde v. Woods, 94 U.S. 523, 24 L.Ed. 264 (1876), the Bankruptcy Code defers to the FCC's designation of the payment conditions as part of the rights conveyed by the licen......
  • Henderson v. Henderson
    • United States
    • Alabama Supreme Court
    • May 24, 1923
    ... ... by his creditors. Such trusts have been long permitted in ... this country ( Nichols v. Eaton, 91 U.S. 716, 23 ... L.Ed. 254, 256, 257; Hyde v. Woods, 94 U.S. 523, 24 ... L.Ed. 264; Spindle v. Shreve, 111 U.S. 542, 4 S.Ct ... 522, 28 L.Ed. 512; Shelton v. King, 229 U.S. 90, 33 ... ...
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