Case Name: Peter B. Colgan, Appellant, v. Henry Finck, Respondent
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1913-11-12
Citations: 159 A.D. 57
Docket Number: 
Parties: Peter B. Colgan, Appellant, v. Henry Finck, Respondent.
Judges: 
Reporter: Appellate Division Reports
Volume: 159
Pages: 57–58

Head Matter:
Peter B. Colgan, Appellant, v. Henry Finck, Respondent.
Fourth Department,
November 12, 1913.
Bankruptcy—right of bankrupt to prosecute action after adjudication.
Where a plaintiff, after commencing an action, is adjudged a bankrupt and the cause of action is scheduled as an asset he may prosecute the action although the trustee in bankruptcy has not appeared or been substituted as a party.
Appeal by the plaintiff, Peter B. Colgan, from an order of the Supreme Court, made at the Chautauqua Trial Term as resettled, and as resettled entered in the office of the clerk of the county of Chautauqua on the 7th day of June, 1913, dismissing the complaint at the opening, and also from the judgment entered upon said dismissal in said clerk’s office on the 9th day of June, 1913, as amended on June 27, 1913.
Thomas H. Larkins, for the appellant.
John L. Hurlbert [Arthur C. Wade of counsel], for the respondent.

Opinion:
Robson, J.:
After this action was at issue plaintiff was adjudged a bankrupt on his own petition, and a trustee in bankruptcy duly appointed, who was still acting at the time the action was moved for trial by plaintiff's attorney. The trustee had not been substituted as a party, and did not appear either personally or by attorney on the trial nor in any manner in the action. The cause of action involved in the suit appears to have been listed and included in the schedules of the bankrupt in the bankruptcy proceedings as a part of his assets. These facts were apparently conceded at the opening of the case after a jury had been regularly impaneled; and thereupon the motion of the defendant that the court direct a dismissal of the complaint was granted. An order to that effect, and directing " judgment in accordance therewith, was thereafter entered. This order on plaintiff's application was thereafter resettled by the court and certain corrections in its recitals made. Judg ment was thereafter entered by defendant and this judgment was thereafter on plaintiff's application corrected and directed to be entered as corrected nunc pro tunc as of the date of entry of the original judgment; and defendant was thereby directed to pay ten dollars costs. From the order as resettled and the judgment as amended plaintiff appeals. No facts other than those above stated upon which dismissal of the complaint was directed appear. The dismissal of the complaint was unwarranted. (Code Civ. Proc. § 156, which is as follows: " In case of a transfer of interest, or devolution of liability, the action may be continued by or against the original party; unless the court directs the person, to whom the interest is transferred, or upon whom the liability is devolved, to be substituted in the action or joined with the original party as the case requires.") In view of this provision of the Code it seems to be clear that under the facts appearing in this action plaintiff was entitled to prosecute it.
In Hahlo v. Cole (112 App. Div. 636), Laughlin, J. (at p. 638) says: "An action by or against the bankrupt in the State court does not abate upon the adjudication in bankruptcy or appointment of a trustee, and in the absence of an application by the trustee for substitution it may be prosecuted or defended by the bankrupt." The statement was perhaps obiter in that case; but other authorities are to the like effect. (Lawson v. Town of Woodstock, 37 Hun, 352; Cuff v. Dorland, 7 Abb. N. C. 194; Burton v. Burton, 57 App. Div. 113.)
The judgment and order should be reversed and a new trial granted, with costs to appellant to abide event.
All concurred.
Judgment and order reversed and new trial granted, with costs to appellant to abide event.