Mason & Hamlin Organ Co. v. Bancroft. full amount of his debt in complete satisfaction, cannot be enforced; and, to extinguish the debt without payment in full, a release under seal is required. Ordinary composition deeds between a debtor and his creditors are only binding on those executing them. Here, however, the creditors generally,―proper notice, be it assumed, having been given,—are bound by the terms of the composition. It has the same effect upon those voting against it, or not appearing at all, as upon the prime movers; and the statutory minority are bound thereby, whether they accept the pro rata payment or not. As to the latter, are their debts, too, satisfied and extinguished, in the broad sense contended for, although they have opposed the entire arrangement and refused all pro rata payments? Evidently not. As against these creditors, the bankrupt could not plead a mere accord and satisfaction or an extinguishment of the debt. He would be bound specially to set forth the completed composition proceedings under the act, and to rely upon the effect to be given to them, quite as much as if he had been discharged by the court, and were compelled to set that fact up. The composition is really a mere substitute for the discharge. It is simply a part of the general bankruptcy scheme-permissible only where proceedings are actually pending, and subject to be rejected or set aside by the court. Again: provision is made in connection with the composition proceedings for determining the value of the debts of secured creditors, and it is declared that those who are fully secured are not entitled to vote upon the composition resolution without first relinquishing such security. If the construction contended for by the defendants be correct, the debt of a secured creditor is absolutely extinguished by the acceptance of the composition, and thus the provision with respect to the relinquishment of security must be surplusage. Congress evidently Clark v. Binninger. thought otherwise, and that, but for the provision in question, the secured creditor could have accepted his pro rata, and then proceeded to realize from the security the balance of his debt. Clearly, then, the word "satisfaction" in section 17 is not to be construed in the broad sense contended for, but as qualified by its surroundings, and the evident intent of the legislative body. The fair and reasonable construction of the provision in question is not that the debts are satisfied in the sense of absolute extinguishment for all purposes, but-in analogy to our State act as to compromises by partners and joint debtors-that the debtor himself is exonerated and released from all further liability thereon, while the remedy as to partners, indorsers and sureties is reserved and preserved. For these reasons, the court is of opinion that the defendants, as the bankrupts' sureties, were not released by the offer and acceptance of the compromise, nor by the receipt by the plaintiffs of their pro rata share thereof, although, as averred in the complaint, such receipt was "in full satisfaction of claims against principals." The demurrer must, therefore, be overruled with costs, but with leave to the defendants to answer over with twenty days, after payment of such costs. Ordered accordingly. No appeal was prosecuted. CLARK v. BINNINGER. N. Y. Superior Court; Special Term, December, 1876. ATTORNEY'S FEES.-ASSIGNEE IN BANKRUPTCY. Where, after receiver appointed in a State court, an assignee in bankruptcy of the parties takes control of the action, the court will Clark v. Binninger. nevertheless protect the right of the original attorney and counsel to compensation out of the fund. Motion for payment of counsel fees, &c., out of fund. Abraham B. Clark brought this action in 1869, against Abraham Binninger, his partner, for a dissolution of the partnership and an accounting; and had receivers appointed by this court. Creditors of the firm then took proceedings in bankruptcy against them, on which an assignee was appointed under the U. S. bankrupt law. The history of this litigation appears in 3 Bank. Reg. 385, 481, 487, 489, 491, 518, 524. The bankrupt court authorized the assignee to appear in the action in this court, in the name and stead of Clark (Id. 491, 524). He accordingly applied in April, 1870, to MONELL, J., for an order that the action be discontinued and the assets be delivered by the receivers to him, the assignee in bankruptcy. The learned justice held that assignee's title was subject to the liens previously acquired in the State court, which could not surrender the property until, under direction of the court, it should be applied to payment of the firm debts; when that should have been accomplished, and suitable provision made for the costs, expenses and fees of the parties and of the receiver, any balance remaining would be payable to the assignee in bankruptcy. In the mean time the assignee might take upon himself the conduct of the action. This case now came before the court for hearing upon the petition of George M. Titus, who originally acted as counsel, and subsequently as attorney and counsel, for the defendant, praying for an order of the court directing the payment to him by the receiver— heretofore appointed herein-or by the assignee in bankruptcy of the parties to this action, upon whom are devolved its conduct and control, of his reasonable costs and counsel fees incurred in the defense thereof. Clark v. Binninger. G. N. Titus, for defendant. Samuel Jones, for receiver. SANFORD, J.-[After stating facts:]-After a careful examination of the various orders and proceedings affecting the petitioner's claim, I feel constrained to overrule the exceptions to the referee's report, filed on behalf of the assignee in bankruptcy; and to hold that the petitioner is entitled to the relief for which he asks. The application seems to have been opposed by the receiver, mainly upon the ground of an insufficiency of funds; and by the assignee, on the ground that the court has no jurisdiction or authority to direct such payment. I think the receiver must be held responsible, notwithstanding the facts asserted in his opposing affida vit, for a sum sufficient to discharge the petitioner's claim; and I cannot regard the question of the authority of the court to make the order applied for as an open one, in view of the express provisions of the order of reference, and the opinion of the late Chief Justice MONELL, on the motion, decided June 8, 1870. The court has repeatedly refused applications on behalf of the assignee, tending to subject the cause and the fund in court to his control, without making suitable provision for the payment of the fees of the attorneys and counsel of the respective parties, and of the receiver. The power thus exercised is not derived from the provisions of the Code, with respect to allowances, but is inherent in the court as an element of its equitable jurisdiction. I have the less hesitation in granting the petitioner's application, inasmuch as there can be no doubt that an appeal will lie at the instance of either * See Downing v. Marshall, 37 N. Y. 380; Atty. Gen. v. Moore, 19 N. J. Eq. 503. Mutual Life Ins. Co. v. Cameron. the receiver or of the assignee; while if the application were denied, it is at least doubtful whether the claimant may not be remediless. The referee's fees should be paid from the fund. The amount reported in favor of the claimant, less the sum of $100 already paid to him by defendant, should then be paid; the order should direct the receiver to make such payment; but, if for any reason the claimant should not succeed in thus realizing the amount due him, the assignee should be directed to make good any deficiency. The form of the order may be settled upon notice. Proceedings on the part of the claimant to enforce payment under the order to be entered, may be stayed pending an appeal to the general term, if such an appeal be duly taken. MUTUAL LIFE INS. CO. v. CAMERON. N. Y. Supreme Court, First Department; Chambers, October, 1876. LEAVE TO PLEAD DISCHARGE.-LACHES.-LEAVE TO ANSWER. Where a defendant in foreclosure omitted to plead his discharge in bankruptcy, relying on the apparent impossibility of there being any considerable judgment for deficiency against him,-Held, that more than two years and a half afterward he might be allowed to plead it, when, by reason of intermediate modification of the judgment, he had been charged with a very large deficiency. Motion to open a judgment by default. This action was commenced in January, 1874, to foreclose certain mortgages on property in the city of New York. Donald Cameron was joined as a defendant, because he was one of the obligors upon one of the |