Case Name: John Harth vs. R. R. Gibbes
Court: South Carolina Court of Appeals
Jurisdiction: South Carolina
Decision Date: 1826-02
Citations: 4 McCord 8
Docket Number: 
Parties: John Harth vs. R. R. Gibbes.
Judges: 
Reporter: South Carolina Law Reports
Volume: 15
Pages: 8–12

Head Matter:
John Harth vs. R. R. Gibbes.
The assignees of an insolvent debtor taking the benefit of the insolvent debtors act, may be compelled on rule to account before the Court of Common Pleas ; and if the accounts are complicated, it may be refered to the Clerk to report'on them.
Liens existing before the assignment still have preference as to the proceeds of the property assigned, and are payable in their order. But an execution does not bind money, and the cash and proceeds of choses in action assigned, are payable rateablv among all the creditors, the expenses of the assignment and commissions first deducted,
This was a rule on Young and two other assignees, appointed by the Court, of the estate of R. R. Gibbes, to shew cause why they should not pay over certain monies in their hands to the holders of the oldest judgment against R. R. Gibbes. The assignees objected to the rule, that they could not be called on to account in this way, which objection the presiding judge (Bay J.) overruled, and ordered that the assignees should return what funds they had in hand. They afterwards produced their accounts shewing that they had received $1,284 06, and disbursed $140 22 ; that the amount of $1204 06 which they had received, consisted of $190 06 received for the sale of part of the property assigned; $594 of money which Gibbes had in hand and paid into court when he took the benefit of the act; and of $500 which had been paid to them on a bond, one of the choses in action assigned.
The presiding judge ordered the assignees to pay over to the oldest judgment, the proceeds of the property sold, and the money they x-eceived at Gibbes’ hands. From this oi’der the assignees appealed and shewed for cause — ■
That the Court has not jurisdiction of trusts, and that it could not call the trustees of an insolvent debtor to account by rule. That the sums disbursed should have been charged against the assets received, or against the proceeds of the property sold, and that the residue only of the proceeds of the property was applicable to the oldest judgment; and that the judgment or execution creditors had no lien on the money paid into Court by Gibbes when he took the benefit of the act.
Grimke contra.
The pfWer of entering up a judgment on an award goes on the principal and incident. So of all proceedings against the Sheriff and other officers of the Court. The assignees are the agents of the Court, and as such are liable to be called on to account. M’Willie vs. Hudson, 2 Const. Rep. Tread. 119.
When a power is given by statute every thing necessary to give it effect is implied. Warring vs. Catawba Co. 2 Bay 109. 6 Bac. tit. Statute B. 369.
Ca ) See Maks vs. Smith, 3 M‘Cord 52.

Opinion:
Curia per
Coúcock J.
In this case the Court concur in the opinion delivered by the presiding judge, that the assignees are answerable to the Court of Common Pleas for their conduct, and consequently subject to be called before the Court by rule, to shew in what manner they are proceeding. This responsibility seems to result as a matter of course from the appointment by that Court. They are the officers of the Court pro hac vice. The act throughout seems to justify this construction, for their compensation is to be fixed by the Court; and this would, seem to imply that there must be a knowledge of the Services performed. It is in analogy with the accountability of all other officers, as the Commissioners of Bankrupts to the Chancellor, arbitrators to the Court which appoints them, and Sheriffs and Clerks to their respective Courts. It is also certainly more convenient and less expensive than by application to the Court of Equity, which would often swallow up a large portion of the fund. It is apparent that cases may occur in which the examination of the accounts of the assignees would be attended with a great deal of trouble; but in such ca ses a reference may be made to the Clerk, and he required to report to the Court.
Having decided then that the assignees are accountable to this Court, the next question is, how shall the funds in their hands be distributed; and this is a question' of much greater difficulty. By 'Jhe first clause of the act,, the applicant is directed to assign to the creditor or creditors at whose suit such petitioner stands charged, or to such other person or persons as the said Court shall direct, and that the assignment so made as aforesaid " shall be in trust for the suitor or suitors and such other the creditors of the said petitioners as shall be willing to receive a dividend of his real estate, goods and effects, and shall within twelve months after the time of exhibiting the petition make their demands: and by such assignment the estate, interest and property of the lands, goods and effects, so assigned, shall be vested in the persons to whom such assignment is made, who may take possession of or sue for the same, in his or their own name or names, in like manner as assignees in commissions of bankruptcy can, or lawfully may do by the laws or statutes of Great Britain : And by the third section, it is enacted that the person or persons to whom the said assignments are made, shall be and are hereby declared to be trustees for all and singular the creditors of the said petitioner, who are willing to come in and receive their dividends, and who shall within twelve months after his discharge deliver unto the said trustees or any of them, an exact account upon oath of the several debts and demands to them owing, and that-said trustee or trustees, after having sold the said petitioner's lands and effects, and collected in the several debts due to him, which they are hereby required to do with the utmost expedition, shall thereout, first satisfy and discharge the said eosts of suit and other costs and fees aforesaid, and shall next deduct and retain in his or their own bands a reasonable compensation for bis or their trouble in executing the said trust, to be fixed and allowed by the Court by whom such person or persons were appointed trustee or trustees: and such trustee or trustees shall within one month thereafter divide the remaining balance of the said Estate among such of the creditors who deliver in the amount of their demands within the time aforesaid, according and in proportion to their several and respective debts."
By these provisions of the act it would appear as if the Legislature had intended, that the whole of a debtor's property should .be divided rateably and in proportion among all his creditors. But it has been repeatedly decided that where there is a lien on part of the insolvent's property, that must be discharged in the first place; and it is contended that the money ($500) paid by the defendant, Gibbes, into Court, at the time he took the benefit of the act, was bound by the executions, and consequently ought to be paid to them in their respective order of seniority. I have examined the authorities with attention, and they are very strong to support the position that money may be levied on by an execution, and even that bank bills have been considered as money for the purpose in the state of New-York. But if it is to follow (as it would seem unavoidably to do,) this doctrine, that money or bills must be considered as bound by the execution, the consequences which would result in practice are such as must necessarily induce us to dissent from the doctrine, for it would lead to endless litigation and perjuries. The property was eertainly bound by the executions; the proceeds thereof must, therefore be paid to the oldest execution creditor, and then the expenses and commissions deducted from the sum in their hands, and the balance divided amongst such of the creditors as delivered in the amount of their demands within twelve months after the discharge of the petitioner, in proportion to their several and respective debts; and that the sum of five per cent, be allowed the assignees for their trouble. The motion to reverse that part of the decision which makes the assignees answerable to the - Court of Common Pleas, is dismissed; and so much thereof .as orders the $500 to be paid to the oldest judgment creditor is reversed.
Motion refused.