Case ID: yeates_3/html/0137-01.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Lessee of Michael Joy, Effingham Lawrence, John Field and Nathaniel Falconer against Philip Wager.
    A supposed bankrupt assigns by apt words in consideration of 5s., his estate to the commissioners, for the use of his creditors, claiming under the commission. The proceedings fail for want of a sufficient petitioning creditor. No interest vests by the assignment.
    Motion to set aside a nonsuit, in an ejectment for two lots of ground in the city of Philadelphia.
    The lessors of the plaintiff founded their claim under Christian Wirtz, who was seized of the premises in fee. Pie assigned all of his estate to Matthew Clarkson and others, commissioners named in a commission of bankrupt awarded against him, in consideration of 5s. in trust to collect the outstanding debts, sell his property real and personal, and apply the proceeds thereof to the payment of his debts rateably under the commission.
    The commissioners afterwards reciting the proceedings under the commission, grant and convey (as much as in them lay, and they lawfully may,) all his estate, real, personal and mixed, to the lessors of the plaintiff, elected as assignees by the creditors, in trust nevertheless, to and for the use, benefit and advantage of all the creditors of the said Christian Wirtz, who may come in duly and seek relief under the said commission. And the assignees covenanted, that they would act under the commission with diligence, and pay the several dividends to the creditors respectively, claiming and proving their debts under the commission.
    Previous to the issuing of the commission, on the 22d May 1787, Wirtz conveyed to Philip Wager and Hannah his wife, daughter of the said Wirtz, the two lots of ground in question, without any pecuniary consideration; and afterwards on the 30th June following, conveyed another lot of ground to Dr. Charles Moore for a valuable consideration, and without notice of any act of bankruptcy.
    Christian Wirtz and his son William Wirtz, were partners in trade, and on the 30th March 1787, the creditors executed a release to the said William of all their demands against him, in order to enable him to collect the outstanding debts due to the company, for the use of the creditors.
    On an ej ectment brought against Theophilus Cossart, the tenant of Dr. Moore, for the latter lot of ground, a verdict passed for the defendant, on the ground, that the debt of the petitioning creditor had not arisen on a contract subsequent to the passing of the bankrupt act on the 17th September 1785, and this court on argument refused to grant a new trial, in September term, 1791. 2 Dali. 126.
    *Effingham Lawrence brought a suit against Christian Wirtz, surviving partner, (his son William having died 1- 39 insolvent,) in the district court of Pennsylvania, to April term 1792, to which he pleaded in bar the aforesaid release to his son, and that he was a certificated bankrupt, upon which a judgment of nonpros, was entered.
    On the trial of the present cause, the plaintiff rested on the sufficiency of the deed from Christian Wirtz to the commissioners, and their conveyance to the assignees, independent of any bankruptcy; but the court being of a different opinion, a non-suit was taken, with leave to move to set it aside.
    In December term 1799, the motion was made and argued by Messrs. Lewis and E. Tilghman for the plaintiff, and Messrs. Rawle and M'Kean for the defendant.
    On the part of .the plaintiff, it was contended, that the act for regulation of bankruptcy, passed on the 17th September 1785, vested .the whole estate in the commissioners, without any assignment by the bankrupt. 2 Dali. Laws, 370, § 4. The present assignment was executed before the supplement passed on the 15th March 1787, which directs, that unless the bankrupt shall execute a conveyance of all his estate, real, personal and mixed, whatsoever and wheresoever, he shall not be entitled to a certificate of conformity. 2 Dali. Laws, 495, § 5. The assignment in this instance therefore, was merely voluntary on the part of Wirtz, and no law obliged him 'to make it. The act was deemed beneficial to him at the time, though under existing circumstances, he was falsely thought a bankrupt. The legal and equitable interest in the premises passed by his deed to the commissioners, in consideration of 5s. and apt words, “grant, bargain, sell,” are made use of for this purpose. Though the trust is declared to be for the use of the creditors, claiming under the commis-' sion, and thereby rendered impracticable, yet the court may properly construe it to enure for the benefit of all the creditors ; and there is no greater reason in establishing an unrecorded mortgage, than the present deed, against the party himself. A deed which cannot take effect either as a bargain and sale, release or feoffment, may operate as a covenant to stand seized, ut res magis valeat quam pereat. 2 Wils. 22. If sufficient appears in the instrument, to shew the intention of the party, it shall take effect, if by law it can, though not according to its proper form. No one shall dispute his solemn deed. Cowp. 600. What difference can be pointed out between that case and the present, except the mere possession ? Though a release be void as a common law conveyance, it being to convey a freehold to ^ -| ^commence in future, yet it shall have the effect.and operation of a covenant to stand seized to uses. 2 Wils. 75. When the intent is apparent to pass the land by one way or another, there it may be good either way. Shep. Touch. 82, 83. One shall not recover against his own covenant in ejectment. 4 Burr. 2208. Judges are commended for being astuti in inventing reasons and means to make acts according to the just intent of the parties, and to avoid wrong and injury, which by rigid rules might be wrought out of the act. Hob. 277-
    It is said, that only two adversary bankrupt cases have occurred in this state, and that this is one of them. Unless the deed is established, the creditors lose every thing. The proceedings under the commission of bankrupt have been adjudged invalid ; and if the creditors sue Wirtz, the release to his son as a co-partner defeats the suit, though made for very different purposes. The administering complete justice is the object of all laws and courts ; and if deeds cannot operate in one form, they shall operate in that which may effectuate the intention. The evident intent of this assignment was, that the moneys collected on the sales of the real and personal estate of Christain Wirtz, should go to the benefit of his honest creditors.
    The defendant’s counsel insisted, that the conveyance made to him was on the most valuable consideration, that of marriage ; and it was perfectly conscientious in him to retain the premises. The prosecution of the commission of bankrupt had been very hard and vigorous on Christian Wirtz, and he had been tricked into an acknowledgment of the debt on which the petition was founded. Owing to a radical defect in the proceedings, of there being no sufficient petitioning creditor, the proceedings under the petition were totally invalid, and could neither minister relief to Wirtz, nor his creditors. The commission and every step under it were mere nullities.
    The conveyance by Wirtz to the commissioners contemplated a valid commission of bankrupt. The monies to be collected on outstanding debts, and to arise on the sales of the property real and personal, are to be applied expressly to the payment of such of the creditors as khall in due time come in and claim under the commission. The deed of the commissioners to the lessors of the plaintiff recites the proceedings under the commission, and they convey what they lawfully may, for the use of the creditors, who are to be relieved under the commission. It is evident, therefore, that the intention of Wirtz.the grantor, cannot possibly be carried into execution, and no interest, legal or equitable, can vest under his deed. Here is no defect in *point of form, and it cannot be compared to the cases r* cited at the bar. Creditors may make an ill use of a ■- commission of bankrupt. It is said by Lord Mansfield, that one issued in a case, where the supposed bankrupt was fairly possessed of 30s. for every pound he was indebted to his creditors.
   The court declined giving an immediate decision on the argument, and continued the matter under advisement. They however recommended to the defendants’ counsel, that the release given to William Wirtz should be withdrawn, that the creditors might proceed to judgment against Christian Wirtz, and obtain a sale of the property, after which the validity of the sale to the defendant might undergo a legal discussion.

In the present term, the court being pressed for their opinion, and the defendant’s counsel urging their inability to withdraw the release of the deceased William Wirtz, the Chief Justice delivered the opinion of the court, that the rule to set aside the nonsuit should be discharged, as well, because the assignment was founded on a supposed bankruptcy, which failed for want of a sufficient petitioning creditor, as that the uses declared therein could not now be carried into execution. The use totally fails.