the original claimant cannot be purged by the transfer of the claim to an assignee or successor personally in good standing.1

$293. Assignees in Bankruptcy.

Assignees in bankruptcy are regarded as purchasers for value, having the legal title to a claim and the right to sue thereon in their own name to the exclusion of the assignor debtor.2 In the Ruty case 3 before the French-American commission of 1880, the effect of the local law of the United States was recognized as permitting the passage of an international claim from the claimants to the assignees in bankruptcy. In the Christern case, before the German-Venezuelan commission of 1903, it was held that the nationality of the assignee in bankruptcy, and not that of the insolvent debtors, governed the jurisdiction of the commission.4

5

The court of commissioners of Alabama claims held that claims of the first or the second class and particularly war-premium and exculpated cruiser claims passed to the assignee by an assignment in bankruptcy or insolvency or by a general assignment for the benefit of creditors. The Court of Claims, under the Abandoned or Captured Property Act, has held that an assignment passed legal title to the assignee in bankruptcy, who may sue on the claim in his own name.7 Under the provisions of the Act of 1891, making appropriations for French Spoliation awards, it has already been observed that in cases where the original sufferers were adjudicated bankrupts, awards were 1 Robinson (U. S.) v. Mexico, Act of March 3, 1849, Moore's Arb. 2389; Dimond (U. S.) v. Mexico, ibid. 2386; Young (U. S.) v. Mexico, ibid. 2753.

2 Christern and Co. (Germany) v. Venezuela, Feb. 13, 1903, Ralston, 597, 598; Parrott (U. S.) v. Mexico, March 3, 1849, Moore's Arb. 3009-3011 (assignor held divested of all title).

3 Ruty (France) v. U. S., Jan. 15, 1880, Boutwell's Rep. 108; Moore's Arb. 2401. 4 Ralston, 597. One of the insolvent debtors was a Dane, but as the assignee in bankruptcy was a German, the commission took jurisdiction. Inasmuch as the protocol did not give jurisdiction over claims "owned" by Germans, the award is open to question as in conflict with the rule that claims must be national in origin and continuously national in ownership.

'Moore's Arb. 4679, 4682. See cases in municipal courts cited in note 2, p. 4679. Erwin v. U. S., 13 Ct. Cl. 49, 97 U. S. 392.

7 Burke v. U. S., 13 Ct. Cl. 231; Person v. U. S., 8 Ct. Cl. 543. Probably the assignee could also sue in the name of his assignor, as in Morgan v. U. S., 14 Ct. Cl. 319. 8 26 Stat. L. 908.

to be made "on behalf of the next of kin instead of to assignees in bankruptcy." 1 It has also been noted that the inhibitions of the Act of 1853 against the assignment of claims against the United States does not apply to assignees in bankruptcy or insolvency.2 As between the bankrupt and the assignee in bankruptcy, the protocol, the rules of the commission, or the statute creating the commission usually provide who shall verify the petition.

§ 294. Receivers.

Receivers and liquidators of bankrupts have in international law practically the same legal position as assignees. Citizenship of the bankrupt and of the receiver or liquidator has been held a jurisdictional prerequisite by international tribunals.3 Disqualifications of the bankrupt, e. g., unneutral conduct, disloyalty or any other impairment of his right to claim, affect equally the right of the receiver. His right, as legal successor, to prosecute the claims of the bankrupt is fully admitted. He cannot, however, prosecute the international claims of individual creditors of the bankrupt, for after the receiver has been appointed, no individual credit of the total estate is the property of any one creditor. The receiver merely acts as administrator of the property of the bankrupt.6

BENEFICIAL OR EQUITABLE OWNERS

§ 295. Equitable American Interest Protected.

That the Department of State in its diplomatic support of claims 1 Supra, p. 639. To the effect that next of kin may prosecute claim, if assignees fail to do so, see Ship Jane, Buchanan v. U. S., 24 Ct. Cl. 74.

2 Supra, p. 640.

Chauncey (U. S.) v. Chile, May 24, 1897, No. 4, Report, 1901, p. 22; Brewer, Moller and Co. (Germany) v. Venezuela, Feb. 13, 1903, Ralston, 597; Baasch and Römer (Netherlands) v. Venezuela, Feb. 28, 1903, ibid. 906. But see Christern (Germany) v. Venezuela, Feb. 13, 1903, ibid. 598, where the liquidator's citizenship alone was held to govern.

♦ See, e. v., Accessory Transit Co. (U. S.) v. Costa Rica, July 2, 1860, Moore's Arb. 1558, 1560.

For a contrary decision of the Court of Claims, see Howes v. U. S., 24 Ct. Cl. 170; cf., however, Redfield v. U. S., 27 Ct. Cl. 393, and Borcherling v. U. S., 35 Ct. Cl. 311, 185 U. S. 223.

Bance (U. S.) v. Venezuela, Feb. 17, 1903, Ralston, 172; Morris' Rep. 383. See also The Alsop Claims (U. S.) v. Peru, Jan. 12, 1863, Moore's Arb. 1627.

looks to the citizenship of the real or equitable owner of the claim as distinguished from the nominal or ostensible owner appears from the sections on corporations, administrators and assignees. It is not possible to posit any definite rule, but it may be said that the equitable American interest in property abroad, whether on the part of creditors, mortgagees, stockholders or other persons with special or derivative rights, has often led the Department, in the exercise of its discretion, to use good offices for their protection, although the record title may have been vested in an alien. In the case of vessels flying a foreign flag, however, the strict rule is applied that the state of the flag is presumed to undertake the international protection of the vessel.

In the United States-Venezuelan commission of 1903, Umpire Barge held that the beneficial owner actually "owned" the claim and properly appeared as the claimant.1

The Court of Claims in its awards under the Abandoned or Captured Property Act 2 and under the French Spoliation Act 3 held that the record title was not conclusive, but that the equitable owner could establish his equitable ownership before the court.

§ 296. Creditors.

Those having a beneficial interest in a claim are frequently creditors, and the Department of State in the prosecution of claims takes account of the equitable interests of American creditors.

As a jurisdictional matter, the decisions of arbitral commissions have in some cases been against and in others in favor of the right of American creditors of an alien to claim as the real sufferers from violations of the property rights of their alien debtors. The SpanishAmerican commission under the treaty of 1871 held in several cases that injuries upon the property of a Spanish subject gave his American

1 Heny (U. S.) v. Venezuela, Feb. 17, 1903, Ralston, 14, 23. See also Alvarez (U. S.) v. Mexico, July 4, 1868, Moore's Arb. 1353, to the effect that the person who had the "right to the award" must be considered the "real claimant," and must be a citizen. See also Wiltz, Adm. (France), v. U. S., Jan. 15, 1880, ibid. 2246, and Texas Star v. U. S., Act of June 23, 1874, ibid. 2360, 2366.

2 Hall v. U. S., 11 Ct. Cl. 704; Cones v. U. S., 8 Ct. Cl. 421.

Van Wagenen v. U. S., 25 Ct. Cl. 110.

creditors no right to appear before the commission as claimants.1 It may well be that the American injury was considered too remote. In the Bance case before the American-Venezuelan commission of 1903, the American creditors of a bankrupt Venezuelan were not recognized as individual claimants when a receiver in bankruptcy representing all the creditors had been appointed.2

On the other hand, American intervenors in a claim, basing their right to a share in the award upon their position as creditors of the original claimant in the transaction out of which the claim arose, were protected as to their proportionate interest by the umpire of the American-Venezuelan commission in the Turini case, the original claimant having died and his administratrix appearing as the claimant of record. The repeated expressions of arbitral commissions, in cases where the original claimant had died, to the effect that the administrator and not the heir should appear as the party claimant, is often founded on the express ground that creditor beneficiaries of an award should be protected. In some cases, it has been expressly stated that the beneficiaries of an award, be they heirs or creditors, must prove their citizenship. It is evident that creditors' interests, where possible, have usually been protected.

4

5

Under the Indian Depredation Act of 1891, assignees and creditors of the claimant were held to have no rights. The intent of the French

1 Mora and Arango (U. S.) v. Spain, Feb. 12, 1871, Moore's Arb. 2336; Benner, ibid. 2335; Rodriguez, ibid. 2336.

2 Bance (U. S.) v. Venezuela, Feb. 17, 1903, Ralston, 172.

3 Turini (U. S.) v. Venezuela, ibid. 51, 62. In the Alsop claim against Chile, Dec. 1, 1909, Award July 5, 1911, it seems that American and even Chilean creditors were permitted to share in the award, the award being made without inquiry into the nationality of the ultimate recipients.

'Wiltz, Adm. (France), v. U. S., Jan. 15, 1880, Moore's Arb. 2244, 2248; Baynum (U. S.) v. Mexico, July 4, 1868, Moore's Arb. 1271; supra, p. 633.

Wulff (U. S.) v. Mexico, July 4, 1868, Moore's Arb. 1354; Wiltz (France) ". U. S., Jan. 15, 1880, ibid. 2246. See also Kane's notes on .. questions decided by... Commissioners under convention with France, July 4, 1831, Phila., 1836, p. 21. It seems that while equitable owners had to prove their citizenship, assignees for the benefit of creditors were excused from proving the citizenship of the creditors.

Labadie v. U. S., 32 Ct. Cl. 368. But see McKenzie v. U. S., 34 Ct. Cl. 278, 285, and dissenting opinion of Nott, J., 287.

Spoliation Acts was to benefit the next of kin of the original sufferers, and to exclude creditors, legatees and assignees.1

$297. Mortgagees.

Mortgagees are secured creditors in a special sense. A mortgage is in form a conveyance, vesting in the mortgagee upon its execution a conditional estate, which becomes absolute upon breach of the condition. The Department of State in the exercise of its discretion. has on several occasions exercised good offices on behalf of the equitable interest of American mortgagees of foreign-owned property. This has been particularly true of American bondholder-mortgagees of foreign railroads.

International commissions by weight of authority have shown a disinclination to allow American mortgagees to appear as claimants for damages arising out of injuries to the property of their debtor mortgagors. This conclusion may be defended on the ground that the mortgagee is too indirectly affected by such injury to authorize his appearance as a claimant. In the case of Rodriguez before the Spanish-American Claims Commission of 1871, the embargo of an estate which was mortgaged to the claimant, an American citizen, but of which he had neither the legal title nor possession, was held to afford no ground for a claim of damages.3 A similar result was reached by the British-American commission of 1871, on the claim of a British mortgagee of property destroyed by the United States army. On the other hand, this same commission allowed the claim of the mortgagee of a British vessel wrongfully captured by a United States cruiser during the Civil War, and subsequently condemned and sold.5

1 Blagge v. Balch, 162 U. S. 439, 31 Ct. Cl. 460; Van Wagenen, Adm., v. U. S., 31 Ct. Cl. 175, in which, however, it was said, as dictum, that under certain possible conditions, creditors, as beneficiaries under a deed of trust, may have a claim upon the recovery.

2 Hutchins v. King, 1 Wall. 53, 57.

3 Rodriguez (U. S.) v. Spain, Feb. 12, 1871, Moore's Arb. 2336.

'Bain (Gt. Brit.) v. U. S., No. 231, May 8, 1871, MSS. inserted in briefs of Spanish Treaty Claims Com. VI, 243–247.

'H. J. Barker, mortgagee, No. 432, and Overend, Gurney and Co., mortgagees, No. 433 (Gt. Brit.) v. U. S., May 8, 1871, Hale's Rep. 141-148. See also the Texas Star v. U. S., Act of June 23, 1874, Moore's Arb. 2360, 2366.