Where a promissory note, payable to a firm, was signed by one of the partners in the firm together with two other persons, and suit was brought upon it against these two other persons in the name of the payee partner upon the ground that the note was intended for his individual benefit and that the insertion of the name of the firm as payees was an error, it was clearly his duty to prove such error upon the trial.
If these two other persons were merely sureties (a fact for the jury), proof of such error would not make them liable beyond the terms of their contract unless they were privy to and agreed to the same. Neither a court of law nor equity will lend its aid to affect sureties beyond the plain and necessary import of their undertaking. This is the doctrine of this Court, of the state courts, and of England.
The payee partner having brought into the evidence the terms upon which the partnership was dissolved, by which it appeared to be his duty to collect the assets, pay the debts, and settle the concerns of the partnership, it was competent for the jury to judge whether the note was given provisionally and designed to abide the settlement of the affairs of the firm, and if so then it became necessary for the payee partner to prove the fulfillment of these duties before any right of action upon the note accrued to him.
The note being drawn by one of the partners payable to his own firm, this drawer partner was entitled to one-half of it, and the obligation of the sureties was diminished pro tanto.
Where the plaintiff excepted to the opinion of the court, which opinion was more adverse to the defendants than to the plaintiff, this Court will not, at the instance of the plaintiff, reverse the judgment, although there may have been error in the instructions, provided that error consisted in giving the plaintiff too much.
This case was formerly, in a preliminary stage of it, before this Court, and is reported in 36 U. S. 11 Pet. 25.
The facts of the case are sufficiently set forth in the opinion of the Court.
MR. JUSTICE DANIEL delivered the opinion of the Court.
The record in this cause being encumbered with matter deemed wholly irrelevant to the true points in controversy between the parties, much of this matter the Court will pass over, embracing within its view such portions of the record only as regularly present those points, and the rulings of the circuit court with respect to them. In this view, little else need be presented except the pleadings in the cause, the note on which this action is founded, the fact of a co-partnership between the plaintiff in error and James H. Ficklin, and the agreement comprising the terms on which the co-partnership was dissolved, these three last-mentioned documents being referred to in the pleadings and appealed to by the parties on both sides of this cause to sustain the positions on which they respectively rely, and lastly the instructions prayed by the parties and given by the circuit court.
This is, according to the peculiar proceedings in the State of Louisiana, an action at law, although, from the mode of proceeding by petition, from the introduction into that petition of various matters dehors the instrument set out as the immediate cause of action, and from the converting in one proceeding parties standing sui juris with those who sustain a representative character, it bears a striking resemblance to a suit in equity.
Smith, and Amos Webb, the defendant, whereby the drawers became bound to pay the whole of the said note, which note is annexed as a part of the petition.
"Your petitioner further shows that said obligation was erroneously made payable to McMicken & Ficklin, though in truth and in fact said note was dated and executed subsequent to the said dissolution of said firm and was made towards and in behalf and for the sole and individual benefit of your petitioner, the joint name or the name of the late firm being used and intended for your petitioner's sole benefit, said Ficklin being in no wise a party or interested therein except as one of the obligors."
"Your petitioner further shows that since the execution of the said note or obligation, the above-mentioned Jedediah Smith, one of the co-obligors thereof, died, leaving his wife, the said Mary Ann Smith, and two minor children, Catharine and Sarah, all of whom now own and possess all the property and estate by the said Jedediah Smith left at his decease."
"The mother in right of her community, and said minors as heirs, and the said Mary Ann Smith, the widow of said deceased, has since married one Ira Smith, the said defendant herein, by reason of which said several premises the said Mary Ann, Catharine, and Sarah have become obligated and bound, in solido, to pay your petitioner the whole amount of said note or obligation, together with interest, according to the tenor and effect thereof, which they refuse, though often and amicably demanded to pay."
"St. Francisville, Sept. 20, 1817"
"$4,866.93 1/2. On the first day of March, 1819, we or either of us promise to pay jointly or separately unto McMicken & Ficklin or order four thousand eight hundred and sixty-six dollars ninety-three and a half cents, being for value received, with ten percent interest after due until paid."
"Memorandum of an agreement, made and entered into this 8 September, 1817, between Charles McMicken, Jr., and James H. Ficklin, both of the Town of St. Francisville, lately trading under the firm of McMicken & Ficklin; that they have this day by mutual consent dissolved their co-partnership aforesaid, and that Charles McMicken, Jr., is put in full possession of all the books, notes, and accounts, and all other papers relating to the firm aforesaid, with full power to settle and collect all the dues and demands owing to the said firm, either at law or otherwise, by exchange or re-exchange of notes or accounts or any other mode he may think advantageous to the concern, and when in funds sufficient to pay off all debts that are due by the firm aforesaid, to pay the same, until full and final payment and settlements are made, and to employ at his discretion such person or persons as he shall think necessary for the completion of the business, and that James H. Ficklin take all the goods on hand at cost, with an advance of five percent on the whole amount, payable as follows, viz., three thousand by his draft on Flower & Finley, with their acceptance thereof, payable 1 March, 1818, and their acceptance in the same manner (or some good house in New Orleans in their stead) for any further sum to meet the one-half of the whole amount of goods, payable on 1 May, 1818, and for the remaining half he gives his joint note, with Amos Webb and Jedediah Smith, payable on 1 March, 1819; and by the noncompliance of James H. Ficklin in giving the aforesaid acceptances and note, this agreement to remain null and void so far as the sale of the goods to him, and all the sales of goods by him, for the period of thirty days, the time allowed him to comply with the foregoing, shall be carried to the joint benefit of the last firm."
"In witness whereof we hereunto subscribe our names, the day and date above written."
Several pleas were interposed by the defendants or respondents below to the demands in the petition. The Court deem it necessary to advert to such of these pleas only as are connected with the points comprised in the rulings of the judge at circuit.
to be used for the benefit of McMicken alone. They insist upon the contract as apparent on the face of the note, and call for strict proof of the allegations of the petitioner. They aver that it was well known that Webb and Smith signed the note as sureties -- that if there ever was any consideration for their obligation, it has failed, and that neither Ficklin as principal nor Webb and Smith as sureties were ever bound to pay this note.
4. They plead further and specially a want of consideration, averring that Ficklin, as partner, was entitled to one-half the stock; that he paid McMicken for one-half by drafts and acceptances, mentioned in the article of dissolution, which were paid; that the demand of McMicken for the note of Ficklin, Webb, and Smith for the other half was a fraudulent contrivance or an error or misconception of the parties, and could form no legal consideration for the note.
5. They further plead that the note was executed by Ficklin as principal and Webb and Smith as sureties to McMicken & Ficklin, of which firm Ficklin was a partner; that by the dissolution of the firm, one-half of Ficklin's responsibility was extinguished by confusion, and Webb and Smith became thereby by absolved pro tanto; that under the agreement for the dissolution, McMicken had received $10,000 more than was requisite to pay the debts of the firm, for which excess he was accountable by the above agreement, and that thereby the note, to which Webb and Smith were mere sureties, was paid.
They further plead that the note became due by its terms on 1 March, 1819; that Ficklin died in 1817, leaving a will and appointing executors; that his estate has been regularly represented by executors since his death, and that by the laches of McMicken, in not settling the affairs of the concern or suing on the note from 1819 to 1835, he is barred by his negligence and by lapse of time.
And lastly they insist that upon the dissolution of the firm of McMicken & Ficklin, McMicken had received all the books, notes, and claims due to the firm and bound himself to settle all the affairs of the concern out of these funds, so far as they should prove adequate; that Ficklin was to take the goods on hand, to pay McMicken for one-half of that stock in certain acceptances, and to execute his note, with Webb and Smith as sureties, for the remaining half in value, subject to a contingent responsibility upon the settlement of the concern by McMicken; that McMicken had not made such settlement according to the terms of the agreement of dissolution, and therefore had no right of action against the representatives of Ficklin or the respondents.
1st. That as plaintiff had alleged that there was error in making the note sued on, drawn in favor of and payable to McMicken & Ficklin, and that said note ought properly to have been made in favor of Charles McMicken only, plaintiff could not recover without proving such error and mistake, and if no such error or mistake was proved, the verdict of the jury ought to be in favor of defendants, for without such proof McMicken alone could not recover on a note drawn in favor of McMicken & Ficklin.
2d. That if the jury were satisfied that Webb and Smith were originally only sureties, and that whatever consideration there was for the note passed between McMicken as one party and Ficklin as the other party, in such case an express written contract on the part of sureties is to be strictly construed in their favor, and they could only be made liable on their contract in the form and manner in which they had entered into it, and no proof of any error or mistake as between the principal parties to the contract could make mere sureties liable beyond the terms of the contract unless they were privy to and agreed to the same, and if plaintiff could only recover against the principal party to the contract sued on by showing error or mistake in that contract, the verdict of the jury as regarded the sureties should be in their favor.
4th. That if the jury believed that the note sued on grew out of the settlement of the partnership affairs of McMicken & Ficklin and was given provisionally in relation thereto, and that McMicken had charged himself with the settlement of the partnership affairs, that then McMicken cannot recover on this note without a final liquidation and settlement of the partnership affairs, and that if under the circumstances aforesaid McMicken persists in submitting the suit on this note to the decision of the jury, its verdict ought to be for the defendant.
5th. That if the jury believed that the note sued on was given to attend on a settlement and liquidation of the partnership affairs of McMicken & Ficklin, and McMicken charged himself with the liquidation and settlement of the partnership affairs of McMicken & Ficklin, and that McMicken has received partnership assets sufficient to pay the debts of the partnership, in such case plaintiff McMicken ought not to recover, and the verdict of the jury ought to be for the defendants.
payable, and that the said house has long since been dissolved, and that the same Ficklin was principal debtor, and Amos Webb and Jedediah Smith were only sureties in the note sued on, that these facts created a confusion of the characters of creditor and debtor, and whenever such event happened, there was a payment of the note to the extent of the correlative characters of debtor and creditor, which in this case was one-half.
7th. That if the jury believed that the note sued on was given in pursuance of the terms of the dissolution of partnership between McMicken & Ficklin and under an implied agreement that if the debts due to the partnership were not sufficient to pay the debts due by the partnership, then Ficklin and his sureties were to make good and supply one-half of the deficiency, and that McMicken charged himself with the liquidation of the partnership affairs in 1817, and that McMicken had not rendered an account of such liquidation before bringing this suit, it was competent for the jury to say that there was such a laches, neglect, and default on his part as discharged the sureties.
1st. We can perceive no objection to the ruling of the court in this instruction; neither argument nor authority can be called for to sustain a position so elementary and so trite as that the allegation and proof must correspond. In this case, the petitioner alleges a separate and exclusive right in himself; the proof which he adduces discloses an equal right in another. He avers this discrepancy to be the result of error; he must certainly reconcile this contradiction or his claim is destroyed by conflict with itself.
2d. This second instruction we hold to be correct. Even as between principals, a court will not bind parties to conditions or obligations to which they have not bound themselves according to a fair interpretation of their contract. How far any written contract may be explained, as between parties confessedly principals, by evidence aliunde is a nice and difficult question, always approached with doubt and caution; but as against a surety, neither a court of law nor a court of equity will lend its aid to affect him beyond the plain and necessary import of his undertaking. Equity will not, as against him, assist in completing an imperfect or defective instrument, much less will it add a new term or condition to what he has stipulated. He must be permitted to remain in precisely the situation in which he has placed himself, and it is no justification or excuse with another, for attempting to change his situation, to allege or show that he would be benefited by such change. He is said to possess an interest in the letter of his contract.
That this is the doctrine in England we see in the cases of Nisbet v. Smith, 2 Bro.Ch. 579, Rees v. Berrington, 2 Ves.Jr. 540, and Boultbee v. Stubbs, 18 Ves. 20. It is the doctrine of this Court, so declared in the case of Miller v. Stewart, 9 Wheat. 680. It is probably the doctrine of all the states; vid. Croughton v. Duvall, 3 Call, 69; Hill v. Bull, 1 Gilmer, 149. If, then, Webb and Smith were mere sureties in the note declared on, the plaintiff could not, by setting up another contract as formed or as intended to be formed between himself and Ficklin, transfer the responsibility of these sureties to such contract differing in its terms from that which they had in fact executed.
4th and 5th, which should be numbered the 3d and 4th instructions. These two instructions are essentially the same. The petitioner, in his count or petition, sets out the fact of the dissolution of the firm of McMicken & Ficklin and refers to the agreement of dissolution as evidence of the conditions on which it took place and of the rights vested and the obligations imposed by that agreement. It is from this document that we gather the facts of the transfer of the goods on hand to Ficklin in consideration of the acceptances to be procured and of the note to be executed by him, with Webb and Smith as his sureties, and the further facts of McMicken's possession of all the books, notes, and accounts of the firm and of his obligation to collect the resources and to pay the debts and settle all the affairs of the concern so far as the means placed at his command were adequate for these ends. The above facts, disclosed by the petition and the agreement of dissolution, were certainly competent evidence for the consideration of the jury, and from which they might infer the purpose for which the note to McMicken & Ficklin was executed, the duty of McMicken to settle the partnership affairs and to pay the debts of the concern with the funds placed at his disposal, and if they should infer from these facts that the note executed to McMicken & Ficklin was given provisionally and designed to abide the settlement of the affairs of the firm, and that McMicken was bound by the agreement of dissolution to liquidate and settle the affairs of the firm, then the jury were bound to find that the fulfillment of these obligations on the part of McMicken should precede any right of action on the note, and that without proof of such fulfillment, they were equally bound to find for the defendants.
was entitled to one-half upon the dissolution of the firm, and that thereupon, pro tanto, the obligation of these sureties would cease, as Ficklin could have no right of action against himself to compel payment to himself.
7th. With regard to the instruction numbered 7, given on the prayer of the defendant, we deem it to be in substance the same with Nos. 3 and 4, which having been already examined and approved, it is unnecessary to review in detail the same questions in the last instruction.
There is also, though not designated by any number, what is denominated in the record an "additional charge" prayed by the defendants. This, upon examination, being found a mere general legal proposition in the language of the 2094th article of the Civil Code, and no immediate application or connection of which to the pleadings or testimony in this case being attempted nor being perceived by the Court, it is passed by as immaterial and unimportant.
On the part of the plaintiffs, there are instructions prayed, and designated on the record as No. 2 and No. 3; and in No. 2 by the irregular ordinal arrangement of 4th and 7th; in No. 3 in the arrangement of 1st, 2d, and 3d.
"That the defendants to this suit, having bound themselves in solido, cannot claim the right or oblige the plaintiff to discuss the property of Ficklin or his succession."
Civil Code, art. 3015, 3016. The court below very properly disposed of this prayer (as it might have disposed of what was called the additional charge prayed on behalf of the defendants) by justly remarking that its applicability to the cause was not perceived, as the defendants were not endeavoring to interfere with the property or affairs of Ficklin any farther than to assert the true import and character of their own contract with McMicken & Ficklin, which they had an unquestionable right to do.
This cause came on to be heard on the transcript of the record from the Circuit Court of the United States for the Eastern District of Louisiana and was argued by counsel. On consideration whereof it is now here ordered and adjudged by this Court that the judgment of the said circuit court in this cause be and the same is hereby affirmed with costs.
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§ 98-1 Compliance with other provisions; definitions; construal of provisions.
§ 98-2 Prohibited items or activities.
§ 98-3 Restricted use items or activities.
§ 98-6 Responsibility for cleanup.
§ 98-9 Notice to officials.
§ 98-11 Duties of declaration holder.
§ 98-12 Penalties for offenses; when effective.
Alcoholic beverages — See Ch. 61.
Handbills and posters — See Ch. 132.
Noise — See Ch. 148.
Parades — See Ch. 151.
Public property — See Ch. 178.
Special events — See Ch. 199A.
Temporary structures — See Ch. 216.


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Simulation supports are intermediary objects that help in anticipating the behavior of production systems are important in designs that involve Ergonomics Work Analysis (EWA) method and Future Activity Analysis (FAA) approach. The objective is to describe the process of transformation design of a productive situation using three areas of study: Ergonomics, Simulation and Plant Layout Design. The focus is on the application of intermediary objects during the design process. This article involves a reflective practice of a single case study in which the activity-centered ergonomics approach was employed in the design of productive situations. The described case took place at a plastic film roll manufacturing plant. In this work were used the computational techniques and tools for the design of productive situations: Computer Aided Design, Digital Human Modeling and Simulation, Discrete Event Simulation and Game Engine. The use of these intermediary objects potentially reduces the time spent on design, makes better use of investment resources, contributes to an understanding of current and future capacity, and provides ergonomic improvements of the work situation for future users. The integration of different intermediate objects at the perspective of ergonomics, like digital human simulation, discrete event simulation and game engine can contribute to simulate future work in the design process.
ergonomics, workspace design, simulation, intermediary objects.
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hereinafter referred to as the "Seller"
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Payments should be made in the Seller’s registered office, in net amounts, without any deductions on account of any discounts, receivables, taxes, charges, customs duties, etc., within 30 days of the date on which the payment becomes due and payable and receipt of the invoice.
Upon the lapse of the payment deadline delay occurs automatically, i.e. without any additional requests. From that moment interest for delay is charged to the Buyer, equal to 9 percentage points above the basic interest rate and lump-sum costs of EUR 40.00. It shall be without prejudice to the option to claim higher damages suffered as a result of the delay.
The Seller retains the ownership of the goods being delivered until full payment of all due amounts arising from agreement. It also applies to all future deliveries, even if the Seller does not expressly invoke that. The Seller has the right to keep the purchased item, if the Buyer’s behavior is contrary to the terms of the agreement.
Until ownership is transferred to the Buyer, the Buyer is obliged to handle the purchased item with due care. In particular, in case of goods of a significant value it is obliged to insure them sufficiently at its expense against theft, damage, fire and flooding for an amount equal to the reinstatement value. If any maintenance or service and inspection works is necessary, the Buyer is obliged to carry out such works at an appropriate time at its expense.
Further, it shall take all measures in order to ensure that the Seller’s ownership title is not threatened or revoked. Until ownership is transferred, the Buyer is obliged to immediately inform the Seller in writing of any seizure of the delivered item or any other actions of third parties. If a third party is not able to reimburse the Seller for any court or out of court proceeding costs pursuant to § 771 of the German Code of Civil Procedure, then the Buyer is liable for any losses suffered.
As part of proper operation of the business enterprise only and as long as the Buyer is not in delay, it has the right to further process the reserved goods, combine them with other things, mix them and further resell them.
If the purchased item is processed with other things not owned by the Seller, then upon processing the Seller acquires the co-ownership right to such new things in proportion that the objective value of the purchased thing bears to the other processed objects. The same applies to mixing. If mixing is carried out in such manner that the thing owned by the Buyer should be understood as the main thing, it is agreed that the Buyer will assign to the Seller proportionally the co-ownership right and that it will retain the exclusive ownership or co-ownership right so created. In order to secure such receivables from the Buyer, the Buyer shall assign to the Seller also the receivables accrued on its side towards any third parties as a result of combination of the reserved goods with the main thing. The Seller hereby accepts such assignment. Any other disposal of the reserved goods is not permissible. If the Buyer defers any payment of the purchase price payable by its recipient, then it is obliged to retain the ownership title to the reserved goods on the same conditions on which the Seller retained the ownership title in the relationship with the Buyer during the delivery of the reserved goods. Otherwise, the Buyer shall not have the rights to further resell the thing.
Tools and moulds, including accessories, shall remain the property of the Seller, also when the Buyer paid some of the costs of their production.
The Seller, at its expense, will ensure the storage and maintenance of tools and moulds in case any additional orders are places within 3 years of the last delivery. At the Buyer’s request and expense, the Seller will store and maintain tools and moulds for a maximum period of another 2 years. Any tools and moulds not used for 3 or 5 years will no longer be stored by the Seller.
The delivery deadline starts upon execution of the agreement (confirmation of order). Meeting of the delivery deadline also assumes timely and correct execution of obligations on the side of the Buyer. Exception non adimpleti contractus is stipulated.
by the period in which the Buyer is late with fulfillment of contractual obligations.
The delivery deadline shall also be extended in case of occurrence of an event of force majeure and any unpredictable obstacles which occur after the execution of the agreement and for which the Seller is not liable (in particular, also in the event of any breakdown, strike, lockout or disruption of traffic routes, epidemics, mobilization, war, riot, accidents), if such events affect the planned execution of services or delivery of goods; the deadline shall be extended by the duration of such events. It also applies to the situation in which such circumstances affect sub-suppliers or subcontractors. The Seller shall immediately notify the Buyer of the occurrence and cessation of such obstacles.
If the Buyer is late with acceptance or intentionally breaches any other obligations to cooperate, then the Seller has the right to demand compensation for the damage so inflicted, including any additional costs. It shall be without prejudice to any further claims.
This shall be without prejudice to any statutory claims and rights of the Buyer related to any delays in delivery on the side of the Seller.
Upon handover of the sold thing the risk of accidental loss or damage shall pass onto the Buyer.
If at the Buyer’s request goods are sent to any place other than the place of fulfillment of obligations (distance sales), then the risk of loss or damage of goods shall pass onto the Buyer upon delivery of the goods by the Seller to the freight forwarder, carrier or any other person or institution designated to carry out the shipment. At the Buyer’s request goods will be insured at its expense against damage, damage caused during transport and fire.
If the handover or – if shipment was agreed – shipment is delayed at the Buyer’s request or for any other reason not attributable to the Seller, then the risk shall pass onto the Buyer at the time initially scheduled as the handover or shipment date. From such moment delivered goods will be stored at the Buyer’s expense and risk.
The Seller customarily checks deliveries of goods and services prior to shipment. If the Buyer requests further inspections, then such inspections must be agreed separately, and their costs will be borne by the Buyer.
The Buyer is obliged to check deliveries of goods and services immediately after the receipt of goods and execution of services and to immediately report any defects to the Seller in writing. Otherwise, deliveries of goods and services will be deemed accepted.
The Seller is obliged to remove the defects reported in accordance with point 11.2 as soon as possible, subject to the option arising from point 12.2, and the Buyer is obliged to allow the Seller to do so.
The Buyer guarantee rights assume that it has correctly fulfilled the obligation to inspect and file a complaint, imposed upon it under § 377 of the German Commercial Code.
If at the time of transfer of risk, despite exercising due diligence, a defect still exists, then the Buyer is obliged to allow the Seller to remedy it within an appropriate period.
In case of justified complaints, the Seller has the right to repair the defect, at the Buyer’s option, through repair or delivery of substitute goods. If the defect may only be repaired, both through substitute delivery and repair, at incommensurably high costs, the Seller has the right to refuse to carry out a repair or reduce the purchase price.
In case of repair the reduction of the purchase price and rescission of the agreement by the Buyer is excluded.
Liability for carrying out a repair, in particular the transportation and infrastructure costs, does not rest with the Seller, if after the delivery the purchased thing was transported to a plan other than the recipient’s place of business or branch, unless such relocation conforms to the use of the thing consistent with its designation. It shall be without prejudice to any rights to pursue claims pursuant to §§ 445 a and 478 of the German Civil Code.
The rights to pursue claims pursuant to §§ 445 a and 478 of the German Civil Code shall only apply if the use by the ultimate buyer was justified and was limited only to the statutory scope, and was not contrary to the post-warranty services agreed with the Seller. They assume that obligations will be observed by the person having the right to pursue claims, in particular the obligation to file a complaint.
After the second ineffective attempt to repair the defect, the repair should be deemed unsuccessful if as a result thereof something else is being created other than what should arise from the type of thing or defect or other circumstances. If the repair was unsuccessful or the Seller refused to make it, then the Buyer may – notwithstanding any claims for damages – request, at its discretion, a reduction of the purchase price or rescind the agreement. In the event of any minor defects rescission from the agreement is excluded.
damages which occurred after the transfer of risk, e.g. as a result of normal wear and tear, improper storage or handling, improper maintenance, failure to observe the rules of use, overexploitation, inappropriate operating measures, chemical and electrical factors, assembly not carried out by the Seller, and other reasons not attributable to the Seller.
Any claims of the Buyer arising from physical defects of a thing shall expire after the lapse of 12 months after the effective delivery of the product to the Buyer. In case of used goods, the obligation to provide a warranty is excluded. In respect of any compensatory claims in case of negligence or willful noncompliance, and in case of any injury to life, body and health, consisting of any deliberate or intentional breach of the user’s obligation, the statutory limitation period shall apply.
If the right arising from §§ 438 sec. 1 no. 2 of the German Civil Code (Buildings and building appurtenances), 445 a and b of the German Civil Code (Right to pursue claims), 478 (Right to pursue claims in case of consumer sales) and 634 a sec. 1 no. 2 of the German Civil Code (Structural defects) unconditionally provides for longer deadlines, then such deadlines shall apply.
Claims under warranty shall expire earlier if the Buyer or a third party makes any alterations or repairs to the delivered goods and services or if the Buyer, in the event of occurrence of a defect, fails to immediately take all appropriate measures intended to minimize the damage and does not allow the Seller to remedy the defect.
In case of compensatory claims, § 13 shall apply (exclusion of further liability of the Seller, limitation of liability).
Compensatory claims and claims seeking reimbursement of expenses on the side of the Buyer (hereinafter referred to as compensatory claims), notwithstanding the legal basis thereof, in particular due to any breach of obligations, except for those arising from § 439 sec. 3 of the German Civil Code and inadmissible action, are excluded.
It shall not apply to the takeover of the guarantee or the risk of goods takeover.
It shall also not apply to the situation in which the Seller bears absolute liability, e.g. in accordance with the Product Liability Act, claims in case of negligence or willful noncompliance, and in case of any injury to life, body and health, as well as any breach of material contractual obligations, i.e. obligations the fulfillment of which enables the performance of the agreement and on the fulfillment of which the contractual party may always rely. Compensatory claims related to any breach of material contractual obligations is, however, limited predictable damages typical for a given agreement, if the Seller cannot be accused of any fragrant default or when it relates to liability for any injury to life, body and health. This shall not involve any change of the burden of proof to the detriment of the Buyer.
Compensation is excluded, except in case of indisputable mutual claims or claims confirmed by a legally valid court verdict, arising from the same contractual relationship.
The Buyer shall only be entitled to exercise the right to refuse to render the services or the retention right to the extent that its mutual claim is based on the same contractual relationship.
If the Seller is obliged to carry out deliveries of goods or services in accordance with the plans, drawings, models or patterns provided to it by the Buyer or in accordance with its other data, the Buyer shall assume responsibility for ensuring that no protective rights of third parties shall be breached as a result of production and delivery of such products or execution of such services.
The Buyer shall release the Seller from liability for all damages caused as a result of any breach of the protective rights of third parties due to the Buyer’s instructions.
The Buyer is not entitled to assign any of its claims against the Seller to any third parties without the Seller’s written consent.
Goslar is agreed to be the place of performance of the obligation and the court in Goslar shall have exclusive jurisdiction for all disputes.
Agreements between the Seller and the Buyer and any legal relationships between the parties are subject exclusively to the laws of the German Federal Republic, excluding the United Nations Convention on contracts for the international sale of goods.


COPYRIGHT MATERIAL OMITTED Wendy Reingold Reiss, Grant Thomas Stein, Jason Harold Watson, Alston & Bird, LLP, Atlanta, GA, for Appellant.
Stuart Fletcher Clayton, Jr., Gary D. Stokes, Lambreth, Cifelli, Stokes & Stout, P.A., Atlanta, GA, for Appellee.
Before BLACK, HULL and FARRIS* , Circuit Judges.
Andreini & Company appeals the bankruptcy court's grant of summary judgment, as affirmed by the district court, holding that Andreini was the initial transferee under 11 U.S.C. § 550 of a $310,422 wire transfer from Pony Express Delivery Services. As part of their insurance brokerage relationship, Pony Express wrote a check to Andreini's client trust account to cover insurance premiums owed to its insurance carriers. Andreini then paid these premiums with several checks from the trust account to the insurance carriers, but did so before the check written by Pony Express cleared its bank. Pony Express' check was returned twice for insufficient funds. Pony Express thereafter arranged a wire transfer to replace the check. We conclude that Andreini was not the initial transferee of the wire transfer, reverse, and remand to the district court.
* Andreini is a California insurance broker who arranges insurance coverage for its clients and bills them for the premiums due on these policies. Those payments are deposited in a client trust account, as required by California law. These client trust funds are then remitted to the insurance carriers as payment for Andreini's client's insurance policies, less a commission for its brokerage services. Pony Express contracted with Andreini for insurance brokerage services with respect to its workers compensation and cargo insurance needs.
From January through March of 2000 Andreini sent Pony Express several invoices for premiums due on its workers compensation insurance polices. The various premiums invoiced were due to the insurance carriers by May 18, 2000 and June 1, 2000. The total amount of the invoices was $310,422. On May 22, 2000 Andreini received from Pony Express a check for the full amount, which it deposited into its client trust account. The following day, Andreini issued several checks from its client trust account to Pony Express' insurance carriers in payment of the insurance premiums that were now either overdue or due in one week.1 Unbeknownst to Andreini, Pony Express was in serious financial difficulty and its check was returned for insufficient funds. Pony Express had never before given Andreini an insufficient funds check. On June 2, Andreini re-deposited the check, but it was again returned.
Andreini executives contacted Pony Express about the returned check and the deficiency created in the client trust account when the check bounced. To erase the deficiency, Pony Express' Director of Financial Reporting immediately authorized a wire transfer of the full amount of the check directly into Andreini's client trust account. On June 12, 2000 the $310,422 wire transfer was made.
Two days later, June 14, 2000, Pony Express filed a voluntary petition for bankruptcy under Chapter 11 of the Bankruptcy Code. As part of its bankruptcy petition, on May 31, 2002 Pony Express filed a complaint in the Northern District of Georgia Bankruptcy Court against Andreini (and other defendants not party to this appeal) seeking to recover several payments, including the wire transfer, as avoidable preferences under 11 U.S.C. § 547. Pony express claimed that, if avoidable under § 547, the wire transfer could be recovered from Andreini because Andreini was the initial transferee of the avoidable preference under 11 U.S.C. § 550. Pony Express moved for summary judgment before the bankruptcy court, which granted the motion on July 26, 2004, concluding that the wire transfer was an avoidable preference and that Andreini was the initial transferee. On appeal, the District Court for the Northern District of Georgia affirmed.
We review a grant of summary judgment de novo. See In re Optical Techs., Inc., 246 F.3d 1332, 1334-35 (11th Cir. 2001). Federal Rule of Civil Procedure 56 governing summary judgment applies in an adversary bankruptcy proceeding. Fed. R. Bankr.P. 7056. Under this familiar standard, the court must view the facts and make all reasonable inferences in favor of the nonmoving party. Loren v. Sasser, 309 F.3d 1296, 1301-02 (11th Cir. 2002).
Under 11 U.S.C. § 547 certain transfers of assets made by a bankrupt company in the 90 days prior to filing a Chapter 11 petition can be declared avoidable preferences. See 11 U.S.C. § 547. The bankruptcy court found that the wire transfer to Andreini's client trust account two days before Pony Express filed for bankruptcy was an avoidable preference, a finding that is not challenged. However, under 11 U.S.C. § 550, an avoidable transfer of assets can only be recovered from certain parties, including the "initial transferee." 11 U.S.C § 550(a) (1). Whether, as the bankruptcy court and district court concluded, Andreini was the initial transferee of the wire transfer is in dispute. To resolve this issue, the pivotal question is whether Andreini was a mere conduit for funds earmarked for payment of insurance premiums or whether a debt was created by Andreini's unintentional prepayment of insurance premiums such that it had legal control over funds transferred to satisfy the debt. The record indicates that the wire transfer was not repayment of a genuine debt but was intended simply as payment of insurance premiums and made to a trust account.
The term "initial transferee" is a term of art whose meaning in any given transaction is not always straightforward. See In re Int'l Admin. Servs., Inc., 408 F.3d 689, 705 (11th Cir. 2005). Most circuit courts to have considered the issue, including the Eleventh Circuit, have adopted a "control" or "conduit" test to determine whether the recipient of an avoidable transfer of assets is the initial transferee. See id.; see also Bonded Fin. Serv., Inc. v. European Am. Bank, 838 F.2d 890, 893 (7th Cir. 1988); In re Columbia Data Prods., Inc., 892 F.2d 26, 28 (4th Cir. 1989); In re Bullion Reserve of N. Am., 922 F.2d 544, 548-49 (9th Cir. 1991); In re Baker & Getty Fin. Servs., Inc., 974 F.2d 712, 722 (6th Cir. 1992); In re Coutee, 984 F.2d 138, 140-41 (5th Cir. 1993); In re First Sec. Mortgage Co., 33 F.3d 42, 44 (10th Cir. 1994); In re Finley, Kumble, Wagner, Heine, Underberg, Manley, Myerson & Casey, 130 F.3d 52, 58 (2d Cir. 1997). Under this test, a recipient of an avoidable transfer is an initial transferee only if they exercise legal control over the assets received, such that they have the right to use the assets for their own purposes, and not if they merely served as a conduit for assets that were under the actual control of the debtor-transferor or the real initial transferee. See Nordberg v. Societe Generale (In re Chase & Sanborn Corp.), 848 F.2d 1196, 1199-1200 (11th Cir. 1988); Nordberg v. Arab Banking Corp. (In re Chase & Sanborn Corp.), 904 F.2d 588, 599, 599 n. 26 (11th Cir. 1990); Bonded Fin. Serv., 838 F.2d at 893; In re Ogden, 314 F.3d 1190, 1202, 1204 (10th Cir. 2002).
This test takes on special significance where the recipients of avoidable transfers are agents or fiduciaries of the debtor-transferor, such as banks or, in this case, insurance brokers, who are duty-bound to take only limited actions with respect to the funds received. See, e.g., Societe Generale, 848 F.2d at 1200 (finding that debtor's bank was not an initial transferee); Ogden, 314 F.3d at 1202 (finding that an escrow agent was not an initial transferee); Bonded Fin. Serv., 838 F.2d at 893 (bank); In re Ala. State Fair Auth., 232 B.R. 252, 271-72 (N.D. Ala. 1999) (finding that an insurance broker was not an initial transferee). Often these fiduciaries or agents are not considered initial transferees because their legal control over the assets received is circumscribed by their legal duties to their clients. See Societe Generale, 848 F.2d at 1200 (contrasting, for the purposes of determining whether a bank was an initial transferee, a bank's receipt of funds for the sole purpose of depositing them in a customer's account with the receipt of funds earmarked for the payment of a debt owed to the bank); Ogden, 314 F.3d at 1202 (finding that an escrow agent was not an initial transferee where funds received were intended for a trust account); Bonded Fin. Serv., 838 F.2d at 893 (" [W]e think the minimum requirement of status as a `transferee' is dominion over the money or other asset, the right to put the money to one's own purposes. When A gives a check to B as agent for C, then C is the `initial transferee'; the agent may be disregarded."); Ala. State Fair Auth., 232 B.R. at 271-72 (finding that an insurance broker who held a debtor's assets in trust for payment to insurance companies was not an initial transferee). This can be true even where the transferred assets ultimately come under the agent's or fiduciary's full control through a subsequent transfer. See Bonded Fin. Serv., 838 F.2d at 893 (finding that a bank became a mediate, but not initial, transferee only after the debtor-transferor directed it to apply funds initially transferred to the debtor's account toward repayment of a loan from the bank).
However, even entities that have special legal relationships with the debtor-transferor can be initial transferees when they do, in fact, take legal control of an avoidable transfer; for example when they receive assets directly from the debtor-transferor as compensation for services or in payment of a genuine debt. See, e.g., Arab Banking, 904 F.2d at 599-600 (finding that a bank was the initial transferee of funds transferred for the express purpose of paying off loan principal owed to the bank). In these situations, the fiduciary or agent does exercise legal control over the transferred assets because they immediately become its own assets and are not simply held for its client's purposes. See id. Where a fiduciary, agent, or other entity with legal obligations to the debtor-transferor is the recipient of an avoidable transfer, the control test turns on the recipient's legal rights and obligations toward the transferred assets, not simply their legal relationship with the debtor-transferor or the ultimate use of the assets. To ascertain these rights and obligations, and decide whether such a recipient is an initial transferee under 11 U.S.C. § 550, courts must look at all the circumstances of the transaction that resulted in the avoidable transfer. See Societe Generale, 848 F.2d at 1199; Bonded Fin. Serv., 838 F.2d at 893.
The bankruptcy court and the district court concluded that Andreini was the initial transferee because the wire transfer was made to satisfy a debt Pony Express owed to Andreini. The courts reasoned as follows: Andreini paid the premiums due on Pony Express' insurance policies before the latter's check to Andreini had been honored. When that check was returned for insufficient funds, Andreini became a creditor to Pony Express in the amount of the premiums advanced. Since the subsequent wire transfer repaid funds Andreini had already advanced from its client trust account, the courts concluded that the wire transfer was not a payment of insurance premiums, assets over which Andreini would have had only limited legal control due to its fiduciary responsibilities as an insurance broker, but was the repayment of a debt, over which Andreini necessarily exercised legal control.
The courts rightly concluded that, under the control test, the initial transferee question turns on whether a debt existed for the purposes of 11 U.S.C. § 550. If Andreini became a creditor, it was the initial transferee since the wire transfer reimbursed it for its own expenses rather than transmitting money that Andreini was obligated to pass to a third party. In the language of the control test, Andreini would have had legal control over the assets and could use them for its own purposes. This interpretation has some initial appeal, but it does not stand up to closer inspection under the control test precedent of this and other circuits.
The control test "is a very flexible, pragmatic one; ... courts must look beyond the particular transfers in question to the entire circumstance of the transactions." Societe Generale, 848 F.2d at 1199 (internal quotation and citation omitted). The court must "step back and evaluate a transaction in its entirety to make sure that their conclusions are logical and equitable. This approach is consistent with the equitable concepts underlying bankruptcy law." Id. In Societe Generale this Court considered a situation where a bank honored a check drawn on the debtor's account in advance of receiving funds from the debtor sufficient to cover the draft, thus creating an overdraft in the debtor's account. See id. at 1197-98. Despite the facial appearance that this overdraft created a debt, the court found that no debt existed between the debtor and the bank for the purposes of 11 U.S.C. § 550. Id. at 1200-01. Looking at the relevant transaction as a whole, and not narrowly at the asset transfer that ultimately erased the overdraft, the court found that the transfer was effectively a deposit to the debtor's account from which the bank paid a check drawn on that account, despite the fact that the bank honored the check before receiving sufficient funds from the debtor. Id. at 1201. For simply receiving a deposit to a customer account, rather than receiving funds in payment of a genuine debt, the bank could not be considered the initial transferee. Id.
The Societe Generale court relied on several facts in reaching its decision. The bank honored the check (creating the overdraft) because it was certain the funds would arrive, based on routine communications with the bank from which the debtor's transfer was originating. Id. In addition, the bank did not charge the debtor any interest on the overdraft, only fees that reflected the actual costs incurred. Id. Together these facts indicated that the bank did not view itself as a creditor in the transaction. Id. The court also noted that the funds transferred by the debtor were "expressly earmarked" to be credited to the debtor's account, not to satisfy a debt owed to the bank. Id.; see also Arab Banking, 904 F.2d at 599 (finding the debtor's instructions with respect to transferred funds persuasive). Finally, the court considered it significant that the overdraft existed on paper for only two days before the transfer of funds balanced the debtor's account. Id.
In all critical respects Andreini is in the same position as the bank in Societe Generale. First, Andreini did not intend to become a creditor when it sent checks to the insurance carriers. It was Andreini's general policy to immediately pay insurance premiums that were due, without waiting for its clients' checks to clear, so that insurance coverage would not lapse. The deficiency created in the client trust account when Pony Express' check was returned for insufficient funds was, therefore, inadvertent. Second, as in Societe Generale, Andreini had every expectation that the actual funds the check was drawn upon would be immediately forthcoming; in its course of dealings with Pony Express all payments by check had been promptly honored and Andreini had no knowledge of Pony Express' financial difficulties at the time it paid its insurance premiums. Third, Andreini charged no interest, or even any additional fees, for its "loan" to Pony Express, even though the deficiency in the client trust account existed for a longer period of time than in Societe Generale.
The evidence also indicates that the purpose of the wire transfer was to replace the bad check and reimburse the client trust account with funds for payment of insurance premiums. Thus, as in Societe Generale, the avoidable transfer was "earmarked" not as payment of a debt, but as a deposit to a client account held in trust by the client's fiduciary. Finally, while the deficiency existed for longer than in Societe Generale, about three weeks instead of two days, the length of this period should not have dispositive significance. See Ogden, 314 F.3d at 1194, 1203-05 (finding that no debt was created and an escrow agent was not the initial transferee of funds transferred to replace those released four to six weeks earlier due to the debtor's fraud). More important to the control test, an inadvertent and temporary deficiency settled with a reasonably prompt wire transfer further indicates that Andreini was merely a conduit for Pony Express' insurance premiums. See Societe Generale, 848 F.2d at 1201.
In addition, the actual destination of the wire transfer is significant to determining whether a recipient has sufficient legal control over transferred funds. See Coutee, 984 F.2d at 141 (finding that a law firm was not an initial transferee where "the funds were deposited into the firm's trust account, as opposed to its business account, indicating that they were held merely in a fiduciary capacity."). At no time were the transferred funds under the unrestricted legal control of Andreini. The funds were wired directly to Andreini's client trust account over which its control was quite limited. Under California law the client account was a trust account with Andreini as fiduciary such that client funds could only be used for the client's purposes, such as paying insurance premiums. See Cal. Ins. Code §§ 1733-1734. While Andreini is permitted to commingle "such additional funds as [it] may deem prudent for the purpose of advancing premiums ... or for such contingencies as may arise in [its] business of receiving and transmitting premium ... funds," nothing in the record even suggests that Andreini actually commingled its own funds with the client trust account or advanced the premium payments out of such commingled funds.2 Id. The wire transfer directly into the trust account replaced client funds and not Andreini's own assets. As with all assets in this account Andreini was a fiduciary and had only limited legal control over the wire transfer. Without legal control to the extent that Andreini could put the assets to its own purposes, it is not the initial transferee. See Ogden, 314 F.3d at 1203-05 (finding that an escrow agent is not an initial transferee of funds even though the transfer to the escrow account was to replace funds that the debtor fraudulently induced the escrow agent into releasing); Finley, Kumble, 130 F.3d at 59 (" [W]e need only hold that a commercial entity that, in the ordinary course of its business, acts as a mere conduit for funds and performs that role consistent with its contractual undertaking in respect of the challenged transaction, is not an initial transferee within the meaning of § 550(a) (1)."); Societe Generale, 848 F.2d at 1200-01. This conclusion is consistent with the court's role of doing equity in bankruptcy proceedings. See Bonded Fin. Serv., 838 F.2d at 893 (noting, while finding that a bank was not an initial transferee, that it was "a financial intermediary" and "received no benefit" with respect to the avoidable transfer). Although preference actions are available in bankruptcy proceedings to ensure that favored creditors do not benefit at the expense of other creditors, Andreini is not in that position. The wire transferred funds were intended for, and have only benefitted, Pony Express' insurance carriers.
Based on this court's precedent and the facts in the record no genuine debt was created for the purposes of 11 U.S.C. § 550. Andreini did not exercise legal control over the wire transfer and is not the initial transferee under 11 U.S.C. § 550. We reverse and remand to the district court for further proceedings consistent with this opinion.
I agree with the bankruptcy court and district court that Andreini was the initial transferee of the Pony transferred funds under 11 U.S.C. § 550 because Andreini advanced Pony's premiums to the insurers more than three weeks before the transfer; Andreini advanced the premiums before waiting for Pony's check to clear, thereby extending credit to Pony; there were no premiums due to the insurers at the time of the transfer; Andreini no longer had any obligation to forward the transferred funds to the insurers and did not; and thus Andreini exercised control and dominion over the transferred funds when it used them to repay Pony's debt to Andreini. Further, in my view, Andreini is in a materially different position than the bank in Nordberg v. Societe Generale (In re Chase & Sanborn Corp.), 848 F.2d 1196 (11th Cir. 1988) because (1) three weeks passed between Andreini's premium payment and Pony's transfer, and the transaction was not "effectively simultaneous," and (2) Andreini did not "know with absolute certainty" that Pony was wiring money to cover the premiums at the time Andreini paid them; rather, Andreini automatically paid the premiums with no assurance of payment from Pony and had Pony's check returned for insufficient funds twice before being repaid three weeks later. See id. at 1201. Because I would affirm in this case, I respectfully dissent.


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Art. 6


A suit against a collector of internal revenue to recover money wrongfully collected as taxes is personal, notwithstanding the statutory provisions for preliminary appeal to the Commissioner, appearance by the district attorney, and payment by the United States in certain cases, and, since the United States is not privy to the judgment, a recovery of part in a suit for the whole against the collector, and satisfaction of the judgment by the United States, do not bar a suit against the United States for the remainder in the Court of Claims. P. 250 U. S. 36.
Claims already presented to the Commissioner under the Act of June 27, 1902, c. 1160, § 3, 32 Stat. 406, for taxes on contingent legacies erroneously collected under § 29 of the War Revenue Act of June 13, 1898, and satisfied in part only through a suit against the collector, need not be presented anew in order to obtain, as to the residue, the benefit of the Refunding Act of July 27, 1912, c. 256, 37 Stat. 240. P. 250 U. S. 38.
The Act of 1912, supra, created new rights; its only condition is that the claims shall have been presented not later than January 1, 1914, and the limitation on suit in the Court of Claims (Rev.Stats., 1069) does not begin before that date. P. 250 U. S. 38.
So held where the claim had been presented under the Act of 1902, supra, rejected, and in part satisfied through suing the collector, and suit for the residue was begun in the Court of Claims January 23, 1917, application for repayment having been made September 7, 1916, and rejected October 30. Id.
This is a claim under the Acts of June 27, 1902, c. 1160, § 3, 32 Stat. 406, and of July 27, 1912, c. 256, 37 Stat. 240, to have refunded a tax collected under the Act of June 13, 1898, c. 448, § 29, 30 Stat. 448, 464, 465, upon legacies to the wife and children of the testator Dean Sage. The petition was dismissed by the Court of Claims on demurrer. The testator died domiciled in New York on June 23, 1902, so that the debts of the estate were not ascertained and, as decided in McCoach v. Pratt, 236 U. S. 562, the legacies were not "absolutely vested in possession or enjoyment" before July 1, 1902, and therefore, by the terms of the Act of 1902, were not subject to the tax under the above-mentioned § 29. A tax of $63,940.88 was collected, however, in June, 1903. On August 24, 1903, an application to have it refunded on the ground that the legacies were not subject to taxation under § 29 was made to the Commissioner of Internal Revenue, but was denied in the following month. Two years later, the petitioners sued the Collector, and in May, 1912, got judgment for $30,275.49, with interest and costs, which was satisfied by the United States. McCoach v. Pratt, supra, and United States v. Jones, 236 U. S. 106, had not been decided at that time, and it was held that some of the interests were vested in enjoyment. Ward v. Sage, 185 F. 7. This suit is for the unrepaid residue and was begun on January 23, 1917. The government contends that the judgment and also the Act of July 27, 1912, c. 256, § 1, 37 Stat. 240, are bars to the present claim.
statutes modify the common law liability for money wrongfully collected by duress so far as to require a preliminary appeal to the Commissioner of Internal Revenue before bringing a suit. Rev.Stats. § 3226. It is true also that it is the duty of the district attorney to appear for the collector in such suits, Rev.Stats. 771; that the judgment is to be paid by the United States, and the collector is exempted from execution if a certificate is granted by the Court that there was probable cause for his act, Rev.Stats. § 989, and that there was a permanent appropriation for the refunding of taxes illegally collected. Rev.Stats. § 3689 (17). No doubt too, if it appeared in a suit against a collector who had acted with probable cause and had turned over his money to the United States that a part of the tax properly was due to the United States, unnecessary formalities might be omitted and the sum properly due might be retained. Of course, the United States in such a case could not require a second payment of that sum. Crocker v. Malley, 249 U. S. 223. But no one could contend that technically a judgment of a district court in a suit against a collector was a judgment against or in favor of the United States. It is hard to say that the United States is privy to such a judgment or that it would be bound by it if a suit were brought in the Court of Claims. The suit is personal, and its incidents, such as the nature of the defenses open and the allowance of interest, are different. It does not concern property in which the United States asserts an interest on its own behalf or as trustee, as in Minnesota v. Hitchcock, 185 U. S. 373, 185 U. S. 388. At the time the judgment is entered, the United States is a stranger. Subsequently the discretionary action of officials may, or it may not, give the United States a practical interest in the amount of the judgment as determining the amount of a claim against it, but the claim would arise from the subsequent official act, not from the judgment itself. United States v.
Frerichs, 124 U. S. 315. But perhaps it would be enough to say that, if the judgment otherwise were a bar, the bar would be removed by the subsequent enactment of the Act of July 27, 1912, c. 256, 37 Stat. 240, upon which, as well as the Act of 1902, this claim is based.
The Act of July 27, 1912, after providing in § 1 for the presentation of claims for taxes erroneously collected under the above-mentioned § 29, as stated in the preceding case of Coleman v. United States, ante, 250 U. S. 30, directs repayment in § 2 to "such claimants as have presented or shall hereafter so present their claims" and establish them. The claimants had presented their claim, and so had complied with the letter of the Act. But it is said that they filed it simply as a prerequisite to their suit against the collector, and that its effect was extinguished by the judgment in that suit. This argument reads into the words of the statute what is not there, and reads what was there out of the claim. The claim was presented to the Commissioner of Internal Revenue to get the money. The suit was only the undesired alternative in case the Commissioner rejected the claim. It plays no part in the question that we now are considering. Suppose that no suit had been brought; we can see no ground for denying that the claim would have been presented within the meaning of the Act. It did not have to be a claim under the act, as the statute in terms contemplated that it might have been presented before the statute was passed. But, if the presenting was sufficient before the suit was brought, it is sufficient now. The statute, of course, does not confine its act of justice to unrejected claims.
The Act of 1912 applied in terms to "all claims for the refunding of any internal tax alleged to have been erroneously or illegally assessed and collected" under the above mentioned § 29. The only condition was that it should have been presented not later than January 1, 1914. Until that time, no statute of limitations could begin to run.
After the Act was passed, an application was made on September 7, 1916, to the Secretary of the Treasury for repayment of the residue of the erroneously collected tax. It was rejected on October 30, 1916, on the mistaken ground that the judgment against the collector finished the matter. This suit was brought on January 23, 1917, and so was within the six years allowed by Rev.Stats. § 1069 for suits in the Court of Claims. The Act of 1912, like that of 1902, created rights where they had not existed before, United States v. Hvoslef, 237 U. S. 1, 237 U. S. 12-13, and the claimant's rights are not barred. See further James v. Hicks, 110 U. S. 272.


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[245 U.S. 597, 598] Messrs. George R. Nutter, James Butler Studley, and Louis D. Brandeis, all of Boston, Mass., and Francis B. James, of Washington, D. C., for petitioner.
This case comes to this Court by writ of certiorari upon a bill for instructions filed by the receivers of William S. Butler and Company, incorporated. The receivers were appointed upon the prayer of a creditor, assented to by the corporation, in a bill brought for continuing the business until the assets could be applied in satisfaction of the com- [245 U.S. 597, 599] pany's debts. Instructions are asked as to the amount to be paid to the petitioner, Wm. Filene's Sons Company, under a lease of the premises that William S. Butler & Co. occupied. The lease covered five parcels of land held by the petitioner, also as lessee, and ran for the terms, less one day, of the respective original leases, which expired at different dates, from December 30, 1917, to February 28, 1921. It provided for a reentry in case of a failure to perform any covenant, of bankruptcy, etc., or of a receiver being appointed and not discharged within ninety days. These proceedings were begun on November 7, 1912. On December 5, 1912, the receiver elected not to assume the lease and left the rent due December 1, unpaid; on December 9 the petitioner reentered in pursuance of leave granted by the Court, and on December 17 made demand upon the receiver for the sum that it alleges to be due. The receiver filed this petition for instructions on April 7, 1913. On September 30, 1913, the petitioner filed a formal claim, the time for proving claims not yet having expired.
The lease is made in consideration of the lessee's covenant to pay twenty thousand dollars a year until February 27, 1921 (the day before the longest of the original leases expired,) and of the other covenants therein contained by the lessee to be performed. The reddendum requires the payment as rental of all sums payable by the lessor under the leases to it at the times specified in their leases, 'together with a further sum of twenty thousand dollars yearly, payable in equal monthly instalments until February 27, 1921.' The lessor agrees, at the joint request of the lessee and the overlessors in all the original leases in force at the time, to cancel the overleases and abate the rent in respect of them upon payment of a sum equal to $20,000 a year for the residue of the term plus one day, 'less a discount at the rate of five per cent. per annum on payments so anticipated.' There is a proviso [245 U.S. 597, 600] for an abatement of rent and other payments in case of fire, the taking of part of the premises, etc., 'except said payment of twenty thousand dollars per year'; and there is a further stipulation that if the overlease of any part of the demised premises is terminated, the payment of twenty thousand d llars per year shall continue without any abatement. Finally it is agreed that upon a termination of the lease as provided for the lessee will pay to the lessor, upon demand, a sum equal to twenty thousand dollars per year and at the same rate for a fractional part of a year, for so much of the period up to February 27, 1921, as remains unexpired, with one day added (less the five per cent. discount, as aforesaid), and will further make one of three several payments at the election of the lessor, of which it is only necessary to mention the second. This was to pay to the lessor as damages, the difference between the rental value and the rent and other payments named in the lease for the residue of the term, deducting, however, such sum as has been paid for the same period under the clause requiring the payment of twenty thousand dollars a year.
The substance of the petitioner's claim as argued before us is for a sum equal to twenty thousand dollars a year in monthly payments from December 9, 1912, to February 28, 1921, less a discount at the rate of five per centum per annum on the payments anticipated, and for whatever sum may represent its damages estimated in the manner that we have just stated as stipulated in the lease. The Courts below were of opinion that the twenty thousand dollars were simply an addition to the rent, that the provisions for payment upon termination of the lease were an attempt to secure a preference by accelerating the instalments and also were in the nature of a penalty, that the analogy of bankruptcy applied, and that the claim for the above-mentioned items could not be allowed. The Circuit Court of Appeals seems to have considered also [245 U.S. 597, 601] that the filing of the bill had the same effect as a petition in bankruptcy in stopping claims that like this were not provable at that date. 230 Fed. 31, 144 C. C. A. 329.
We are driven to different conclusions. In the first place, whether a letter showing that the payment of $20,000 a year was a substitute for a bonus of $340,000 was admissible or not, United States v. Bethlehem Steel Co., 205 U.S. 105, 120 , 27 S. Sup. Ct. 450, we are of opinion that on the face of the lease and the figures it was dealt with as a separate item and as the inducing consideration for the sublease, the right to the whole of which was earned when the sublease was made. The summary of the clauses referring to it that we have given shows that the whole amount was to be paid in any event, whether the overleases were cancelled, or a part of the rent was abated, or the leases were terminated, as well as if they ran their full course. It is true that in the reddendum the words 'as rental' might be construed to embrace the later clause 'together with a further sum of $20,000,' but the sentence does not compel that construction and the dominant intent and obvious fact seems to us to override any argument upon that ground. See Cox v. Harper, [245 U.S. 597, 1910] 1 ch. 480. Rent issues from the land, is not due until the rent day, and is due in respect of the enjoyment of the premises let. The twenty thousand dollars a year was to be paid whether the premises were enjoyed or not, upon a personal covernant that created a present debt, with no contingency except those possibly and lawfully accelerating the time in which it was to be paid.
We perceive no ground that would justify the rejection of the petitioner's proof for the whole sum subject to the discount agreed. Certainly the fact that the termination of the lease happened after the filing of the bill has no such effect, although the sum was not presently payable until then. When a statutory system is administered the only [245 U.S. 597, 602] question for the Courts is what the statutes prescribe. But when the Courts without statute take possession of all the assets of a corporation under a bill like the present and so make it impossible to collect debts except from the Court's hands, they have no warrant for excluding creditors, or for introducing supposed equities other than those determined by the ontracts that the debtor was content to make and the creditors to accept. In order to make a distribution possible they must of necessity limit the time for the proof of claims. But they have no authority to give to the filing of the bill the effect of the filing of a petition in bankruptcy so as to exclude any previously made and lawful claim that matures within a reasonable time before distribution can be made. Pennsylvania Steel Co. v. New York City Ry. Co., 198 Fed. 721, 740, 741, 117 C. C. A. 503. Of course it does not matter that the claim was perfected by the petitioner's act, after a default in the rent. The receivers would not, and Butler & Company could not pay it, so that all agree that the petitioner's course was the prudent and only possible course to take, as it was the course that was contemplated by the covenant in the lease. Wilder v. McDonald, 63 Ohio St. 383, 397, 59 N. E. 106.
We agree with the petitioner that the discount on payments so anticipated should be a simple discount on the payments as they would fall due, that is, monthly, making the total according to the Master's report, $ 137,348.88.
The rest of the claim is for damages ultra the twenty thousand dollars a year-the difference between the rental value at the date of entry and the rent reserved, less the amount received under the twenty thousand dollar clause. This also was contracted for and we see no reason why it should not be paid. The contract was not that all the rent for the term should become presently due, it was not for rent at all, but was a personal covenant that liquidated the damages upon a footing that was familiar and fair. Mass. Rev. Laws, c. 163, 33; Woodbury v. Sparrell [245 U.S. 597, 603] Print, 187 Mass. 426, 428, 73 N. E. 547; International Trust Co. v. Weeks, 203 U.S. 364 , 27 Sup. Ct. 69; People v. St. Nicholas Bank, 151 N. Y. 592, 45 N. E. 1129; Woodland v. Wise, 112 Md. 35, 76 Atl. 502; Reading Iron Works-Sweatman's Appeal, 150 Pa. 369, 24 Atl. 617; McGraw v. Union Trust Co., 135 Mich. 609, 98 N. W. 390; Smith v. Goodman, 149 Ill. 75, 85, 86, 36 N. E. 621; Kalkhoff v. Nelson, 60 Minn. 284, 288, 62 N. W. 332; Ex parte Llynvi Coal & Iron Co. in Re Hide, L. R. 7 Ch. 28. The claim divides itself into two items: One from January 1, 1913, until April 1, 1913, when the whole premises were relet, put by the master at $39,829.80; the other from April 1, 1913, to the end of the term, put at $34,433.47. The other disputed item for expenses of reletting is disallowed.
Mr. Justice BRANDEIS having been of counsel took no part in the decision of this case.

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Personal data are those that contain information about the personal or material circumstances of a specific or identifiable natural person.
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The legal basis for the data processing is Art. 6 (1) lit. f of GDPR (General Data Protection Regulation).
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