Dissenting Opinion: Gray, J. same construction that had been given by the English judges to the statutes therein reënacted. Tucker v. Oxley, (1809) 5 Cranch, 34, 42; Scott v. Armstrong, (1892) 146 U. S. 493, 511. The bankrupt act of 1841, which is well known to have been drafted by Mr. Justice Story, omitted that section, and made no specific provision whatever as to the proof of secured debts; but simply provided that "all creditors coming in and proving their debts under such bankruptcy, in the manner hereinafter prescribed, the same being bona fide debts, shall be entitled to share in the bankrupt's property and effects, pro rata, without any priority or preference whatsoever, except only for debts due by such bankrupt to the United States, and for all debts due by him to persons who, by the laws of the United States, have a preference, in consequence of having paid moneys as his sureties, which shall be first paid out of the assets." Act of August 19, 1841, c. 9, § 5; 5 Stat. 444. Yet Mr. Justice Story, both in the Circuit Court and in this court, laid it down, as an undoubted rule, that a secured creditor could prove only for the rest of the debt, after deducting the value of the security given him by the bankrupt himself of his own property. In re Babcock, 3 Story, (1844) 393, 399, 400; In re Christy, (1845) 3 How. 292, 315. The omission by that eminent jurist, when framing the act of 1841, of all specific provisions on the subject as unnecessary, and his repeated judicial declarations, after he had been habitually administering that act for three or four years, recogniz ing that rule as still in force, compel the inference that a general enactment for the ratable distribution of the estate of an insolvent among all the creditors had the effect of preventing any individual creditor, while retaining collateral security on part of the estate, from proving for his whole debt. In 1864, Congress, in the first national bank act, after providing for the appointment of a receiver with power to convert the assets of any irsolvent national bank into money and pay it to the treasurer of the United States, subject to the order of the comptroller of the currency, further provided that "from time to time the comptroller, after full provision shall Dissenting Opinion: Gray, J. have been first made for refunding to the United States any such deficiency in redeeming the notes of such association as is mentioned in this act, shall make a ratable dividend of the money, so paid over to him by such receiver, on all such claims as may have been proved to his satisfaction or adjudicated in a court of competent jurisdiction." Act of June 3, 1864, c. 106, § 50; 13 Stat. 115. The words of this act, requiring "a ratable dividend" to be paid "on all claims" proved or adjudicated, are equivalent to the words of the last preceding bankrupt act, directing that "all creditors coming in and proving their debts" "shall be entitled to share" in the estate "pro rata, without any priority or preference whatsoever;" and, in view of the judicial construction which had been given to that act, may reasonably be considered as having been intended by Congress to have the same effect of preventing a creditor, secured on part of the estate, from proving his whole debt without relinquishing or applying the security, although neither act specifically so provided. If such was the rule under the national bank act of 1864, it could not be affected, as to national banks, by the express affirmance of the rule in the bankrupt act of 1867, or by the reënactment of the provisions of each of these two acts in the Revised Statutes. And the extension of the bankrupt act of 1867 to "moneyed business or commercial corporations and joint stock companies" increases the improbability that Congress intended banking associations to be governed by a different rule from that governing other private corporations, as well as natural persons, in regard to the effect which a creditor's holding collateral security should have upon the sum to be proved by him against an insolvent estate. Act of March 2, 1867, c. 176, §§ 20, 37; 14 Stat. 526, 535; Rev. Stat. §§ 5075, 5236. Reliance has been placed upon the remark of Mr. Justice Swayne in Lewis v. United States, 92 U. S. 618, 623, that "it is a settled principle in equity that a creditor holding collaterals is not bound to apply them before enforcing his direct remedies against the debtor." But he added, "This Dissenting Opinion: Gray, J. is admitted," so that it is evident that the point was not controverted by counsel, or much considered by the court. Nor was it necessary to the decision, which had nothing to do with the right of an individual creditor, holding security upon the separate property of the debtor, to prove against his estate in bankruptcy; but simply affirmed the right of the United States, holding a debt against an English partnership, to prove the whole amount of the debt against one of the partners, an American, in proceedings in bankruptcy here under the act of 1867, without surrendering or accounting for collateral security given to the United States by the partnership. The United States were not bound by the bankrupt acts, nor subject to the rule of a ratable distribution, but were entitled to preference over all other creditors. United States v. Fisher, 2 Cranch, 358; Harrison v. Sterry, 5 Cranch, 289; United States v. State Bank, 6 Pet. 29; United States v. Herron, 20 Wall. 251. And, even as to a private creditor, it has always been held that he is obliged to account for such securities only as he holds from the debtor against whose estate he seeks to prove; and that a creditor proving against the estate of a partnership is not bound to account for security given to him by one partner, nor a creditor proving against the estate of one partner to account for security given him by the partnership. Ex parte Peacock, (1825) 2 Glyn & Jameson, 27; In re Plummer, (1841) 1 Phil. Ch. 56; Rolfe v. Flower, (1866) L. R. 1 P. C. 27, 46; In re Babcock, 3 Story, 393, 400. To require a creditor, before proving against the estate of one partner, to surrender to the assignee of that estate security held from the partnership, would be to add to the separate estate property which should go to the estate of the partnership. The ground and the limits of the rule in bankruptcy were clearly stated by Lord Chancellor Lyndhurst in Plummer's case, above cited, in which a partnership creditor was allowed to prove a partnership debt against the separate estate of each. partner, without surrendering or realizing security held by him from the partnership. The Lord Chancellor said: "Now what are the principles applicable to cases of this kind? If VOL. CLXXIII-12 Dissenting Opinion: Gray, J. a creditor of a bankrupt holds a security on part of the bankrupt's estate, he is not entitled to prove his debt under the commission, without giving up or realizing his security. For the principle of the bankrupt laws is, that all creditors are to be put on an equal footing, and therefore, if a creditor chooses to prove under the commission, he must sell or surrender whatever property he holds belonging to the bankrupt; but if he has a security on the estate of a third person, that principle does not apply; he is in that case entitled to prove for the whole amount of his debt, and also to realize the security, provided he does not altogether receive more than twenty shillings in the pound. That is the ground on which the principle is established; it is unnecessary to cite authorities for it, as it is too olearly settled to be disputed; but I may mention Ex parte Bennet, 2 Atk. 527; Ex parte Parr, 1 Rose, 76; and Ex parte Goodman, 3 Maddock, 373; in which it has been laid down. The next point is this. In administration under bankruptcy, the joint estate and the separate estate are considered as distinct estates; and accordingly it has been held that a joint creditor, having a security upon the separate estate, is entitled to prove against the joint estate without giving up his security; on the ground that it is a different estate. That was the principle upon which Ex parte Peacock proceeded, and that case was decided first by Sir John Leach and afterwards by Lord Eldon, and has since been followed in Ex parte Bowden, 1 Deacon & Chitty, 135. Now this case is merely the converse of that, and the same principle applies to it." - 1 Phil. Ch. 59, 60. This court, under the existing national bank act, approving and following the example of the English courts under the statute of 13 Elizabeth, above cited, has allowed creditors to set off, against their claims on the estate, debts due from them to the debtor whose estate is in course of distribution, although the statute in question in either case contained no provision directing or permitting a set-off. Scott v. Armstrong, 146 U. S. 493, 511. In giving effect to a statute which simply directs an equal and ratable distribution of a debtor's estate among all creditors, without saying anything about either col Statement of the Case. lateral security or set-off, there would seem to be quite as inuch ground for requiring each creditor to account for his collateral security, for the benefit of all the creditors, as for allowing him the benefit of a set-off, to their detriment. For the reasons thus indicated, I cannot avoid the conclusion that, under every act of Congress directing the ratable distribution among all creditors of the estate of an insolvent person or corporation, and making no special provision as to secured creditors, an individual creditor, holding collateral security from the debtor on part of the estate in course of administration, is not entitled to a dividend upon the whole of his debt, without releasing the security or deducting its value; and that therefore the judgment of the Circuit Court of Appeals should be reversed. GREEN BAY AND MISSISSIPPI CANAL COMPANY v. PATTEN PAPER COMPANY. PETITIONS FOR REHEARING. No. 14. Distributed January 16, 1899. Decided February 20, 1899. The petitions for rehearing rest upon a misapprehension of the decision in this case, the purport of which was to preserve to the Canal Company the use of the surplus waters created by the dam and the canal; but, after they had flowed over the dam and through the sluices, and had found their way into the unimproved bed of the stream, the rights and disputes of the riparian owners must be determined by state courts. While the state courts may legitimately take cognizance of controversies between riparian owners concerning the use and apportionment of waters flowing in the non-navigable parts of the stream, they cannot interfere, by mandatory injunction or otherwise, with the control of the surplus water power incidentally created by the dam and canal now owned and operated by the United States. Two petitions were filled on the same day for a rehearing in this case, decided November 28, 1898, and reported 172 U. S. 58. The first was signed by Moses Hooper, Attorney, and George |