Case Name: Stephen Cleverly vs. Charles McCullough
Court: South Carolina Court of Appeals
Jurisdiction: South Carolina
Decision Date: 1832-05
Citations: 6 Rich. 517
Docket Number: 
Parties: Stephen Cleverly vs. Charles McCullough.
Judges: O’Neall and Harper, JJ., concurred.
Reporter: South Carolina Law Reports
Volume: 40
Pages: 517–521

Head Matter:
Stephen Cleverly vs. Charles McCullough.
An assignment tinder tlie insolvent laws of this State neither abates, nor can it bo pleaded in bar to, an action commenced by the debtor before the assignment. The assignee may prosecute the action, but will be required to suggest the assignment on the record and enter into a written consent to pay the costs, if the action should fail.
Before Earle, J., at Fairfield, Spring ' Term, 1832.
The casé was reported for the Court of Appeals by his Honor as follows :
“This was an action of assumpsit for work and labor, under a special agreement. Plea, the general issue.
‘‘Before the plaintiff went into his case, the defendant’s counsel suggested, that the defendant would rely on one ground of defence, which was matter of law, and that it would save time to make the question on that ground before going into the evidence ; and it was' so agreed by the plaintiff’s counsel.
“ The ground relied on was this, that the plaintiff, after action brought, was arrested on sundry writs of capias ad respondendum, had rendered a schedule including the present cause of action, and that an assignment of his effects including this demand, had been made to certain of his creditors, who had given notice to the defendant not to pay over the money to the plaintiff. The writ was lodged June 26, 1828. Assignments were made July 26, 1828- — notice to defendant, same day. Declaration was filed, in the name of the insolvent, March 6, 1829-— plea as stated and issue. The questions raised'were, whether the assignment after suit brought, was an abatement of the action ; if not, whether it was a bar to the action on trial, and whether it should be pleaded specially, or might be given in evidence under the general issue. And if the Court should be of the latter opinion, then the plaintiff should be non-suited with leave to move the Court to set it aside.
“ I was of opinion that the assignment did not abate the action, but that it might be carried on by the assignee in the name of the insolvent; that the Court on application would, perhaps, have permitted the assignees to declare in their own names, or at least to indorse their names as the real plaintiffs ; that they might renounce the action by suing out a new writ in their own names, or adopt it by one of the modes suggested; that the defendant, by pleading the general issue after notice of the assignment, the legal effect of which he was bound to know, waived the objection, and if he intended to rely on the assignment, as a bar to the plaintiff’s right of recovery, he should have pleaded it specially, in bar to th& further maintenance of the suit. The assignees would then have been put on their guard, and must either have abandoned the action, or asked leave to become parties.
“ I therefore ruled, that the assignment, as a matter of defence arising after action brought, could not be given in evidence under the general issue in bar of plaintiff’s action.
“ The defendant’s counsel then suggested, that the effect of the decision was to enable the assignees, for their own benefit, to prosecute an action in the name of the insolvent person without hazard to themselves ; and on his motion I required security for the costs to be given before the further progress of the suit.”
■ Both parties appealed. The defendant on the grounds
1. That the assignment of the plaintiff’s demand under the prison bounds’ Act was a divesture of all his legal interest therein, and vested the same absolutely in the assignees.
2. That the defendant could legally avail himself, on the trial, of the fact of such assignment, under the plea of the general issue;
And the plaintiff on the ground, that, if the plaintiff can sustain the action in his own name, neither he, nor his assignees can be required to give security for costs, being resident citizens.
Gregg, for defendant.
Clarke,■ for plaintiff.

Opinion:
The opinion of the Court was delivered by
Johnson, J.
Our insolvent laws provide, that, upon the assignment of an insolvent estate,' the assignee may take possession of it and sue in his own name, in the same manner as the assignees of bankrupts may lawfully do, according to the laws of Great Britain.
That the bankruptcy of the plaintiff pending a suit, is a bar to the action, and may be pleaded whilst the defendant has day in Court, was adjudged in Kimiear vs. Tarrant, 15 East, 622. The principle upon which the case proceeds is, that the assignment divests the bankrupt of the property in the subject matter of the suit, and that is a legal bar which the Court cannot set aside: and that was a case in which the assignees came into Court to prosecute a suit commenced by the bankrupt in his name. But I confess I am much better satisfied with the equity of C. J. Wilmot's reasoning, Hewit vs. Mantell, 2 Wils. 374. " There was, he says, no foundation to say that the plaintiff's bankruptcy abates the suit. Courts of Law have interfered equitably in many cases of bankruptcy, and if upon the whole case they can see, that the assignees are entitled to recover, they will use their utmost sagacity and astutia to give them judgmentand there the assignees were permitted to prosecute a scire facias in the name of the bankrupt.
Instances are not wanting in our own Courts in which the technical rule has been departed from-in furtherance of the justice of the case. The case of Holstein vs. Taylor, decided during the present sitting, is an instance of it. There, in an action on a note, the defendant would have given in evidence a release from the plaintiff, but it appeared that the plaintiff had before sold the note to a third person, for whose benefit the suit was prosecuted, and that fact was known to defendant; and the Court refused to allow the release, because it was a fraud upon the real owner of the note.
The only argument in favor of the strict rule is, that possibly the defendant may wish to examine the plaintiff as a witness, which is thrown out in Kinnear vs. Tarrant, but on the other hand there is a certain loss' to the insolvent of the costs of the suit. We are not shackeled with any precedents of our own ; and the necessary delay to the assignees, and, above all, the probability that the statute of limitations will bar their action, dispose me to adopt the rule in Hewit vs. Mantell and to allow the assignees of an insolvent to prosecute a suit commenced by him before assignment at any stage of the proceedings. It is right however that the defendant should be secured in his costs? and in analogy to actions brought on bonds given to the Ordinary and Treasurer, the assignees will be required to suggest the assignment on the record and enter into a written consent to pay costs if they fail in their action.
The counsel for the plaintiff has not pressed his motion to rescind the order requiring the assignees to give security for costs, and it will therefore be permitted to stand as a substitute for their written consent.
O'Neall and Harper, JJ., concurred.
Motion dismissed.