In re Ghazal

LACOMBE, Circuit Judge. The sum in question was awarded to Ghazal by the Treasury Department on. May 6, 1908, as a reward for information given by him against smugglers, which information resulted in the discovery and confiscation by the United States government of certain smuggled property. The award was made under authority of Act June 22, 1874, c. 391, § 4, 18 Stat. 186 (U. S. Comp. St. 1901, p. 2019), which provides: “That whenever any officer of the customs or other person shall detect and seize goods, wares, or merchandise, in the act of being smuggled, or which have been smuggled, he shall be-entitled to such compensation therefor as the Secretary of the Treasury shall award not exceeding in amount one-half of the net proceeds, if any, resulting from such seizure, after deducting all duties, costs, and charges connected therewith: provided, that for the purpose of this act smuggling shall be construed to mean the act, with intent to defraud, of bringing into the United States, or with like intent, attempting to bring into the United States, dutiable articles without passing the same, or the-package containing the same, through the custom house, or submitting them to the officers of the revenue for examination. 'And whenever any person not an officer of the United States shall furnish to a district attorney, or to any chief, [811] officer of the customs, original information «oncoming any fraud upon the oustoins-revenne. peipetumed or contemplated, which Khali lead to the recovery of any duties withheld, or of any fine, penalty, or forfeiture incurred, whether by importers or their agents, or by any officer or person employed in the customs service, such compensation may, on such recovery) be paid to such person so furnishing information as shall tie just atul reasonable, not exceeding in any case the sum of five thousand dollars; which compensation shall be paid, under the direction of the Secret nry of the Treasury out of any money appropriated for that purpose.” It is clear that the statute makes the Secretary of the Treasury the sole judge as to whether there is an informer who is entitled to a share under this section. Until he acts the informer has merely an expectation of reward. Ramsey v. U. S., 14 Ct. Cl. 367. The trustee does not question the accuracy of this proposition. Section 3477, Rev. St. U. S. (U. S. Comp. St. 1901, p. 2320), provides : "All transfers and assignments made of any claim upon the United States or any part or share thereof, or interest 1 herein, whether absolute or conditional. and whatever may he the consideration therefor, and all powers of attorney, orders, or other authorities for receiving payment of any such claim, or any part or sitare thereof, shall be absolutely null and void, unless they are freely made and executed in the presence of at least two attesting witnesses, after the allowance of such a claim, the ascertainment of the amount due, and the issuing- of a warrant for the payment thereof, such transfers, assignment, and powers of attorney, must recite the warrant for payment, and must be acknowledged by the person making them, before an officer having authority to take acknowledgments of deeds, and shall be certified by the officer; and it must appear by the certificate ilmt the officer at the time of the acknowledgment, rend and fully explained the transfer, assignment or warrant of attorney to the person acknowledging the same.” It is therefore apparent that, before the allowance to him of the $428.93, Ghazal could not have transferred the same, because any such attempted transfer would be null and void, and certainly a hoped-for award, not yet made, could not have been levied upon and sold in judicial process against him. The relevant provision of the bankrupt act (Act July 1, 1898, c. 541, 30 Stat. 565 [U. S. Comp. St. 1901, p. 3451]) is: "Sec. TO. That the trustee * * shall * * * be vested by operation of Jaw with the title of the bankrupt as of the date he was adjudged a bankrupt- * * * to all * * * property which prior to the filing of the petition he could by any means have transform!, or which might have been levied upon and sold under judicial process against him.” The petition in bankruptcy was filed on April 2,9, 1908, but the award was not made by the Secretary of the Treasury until May 6, 1909. Under the provisions of statute above cited, therefore the trustee did not take title to this sum of $428.93. It is contended, and the District Judge reached the conclusion, that the bankrupt was estopped from insisting that title to this sum never passed to the trustee. Before petition was filed Ghazal had made assignments to some of his creditors of certain sums, out of moneys to be paid him by the government, all of which assignments were of course “null and void.” It was on the theory that these were preferential that proceedings in involuntary bankruptcy were instituted. .Ghazal at first disputed the allegation of the petition, but subsequently [812] withdrew his answer and consented to an adjudication. The proposition contended for is that: “When the bankrupt voluntarily receded irom his position and endeavored to accept what now appears to be the benefits of the bankruptcy statute in this case, in the way of applying for a discharge from his debts, and at the same time to keep out of the estate in bankruptcy the only property about which the creditors could have attempted to maintain their position * * * the bankrupt is estopped from insisting that upon the 29th of April he could not have transferred his claim against the United States.” We do not find, in the circumstance that he has not chosdn to oppose adjudication, sufficient ground for holding him to be- estopped from insisting that after-acquired property shall not go to the trustee. No injury has resulted therefrom, and no one has been misled thereby. Nor can we see that the circumstance that he had no property at the time of adjudication is any reason why he should be required to give up after-acquired property, which the bankrupt act did not' transfer to his trustee. The order is reversed. ’