Case Name: WICKERSHAM against NICHOLSON
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1826-04-15
Citations: 14 Serg. & Rawle 118
Docket Number: 
Parties: WICKERSHAM against NICHOLSON.
Judges: 
Reporter: Reports of cases adjudged in the Supreme Court of Pennsylvania (Sergeant & Rawle)
Volume: 14
Pages: 118–120

Head Matter:
[Philadelphia,
April 15, 1826.]
WICKERSHAM against NICHOLSON.
IN ERROR.
The property of an insolvent debtor passes to his trustee immediately on his assignment, and all the world is bound to take notice of it. Consequently, a payment to the debtor, the day after his assignment, by one who has not actual notice of it, is not valid.
Error to the Court of Common Pleas of Philadelphia county.
This aetion was originally commenced before an alderman by Thomas Wichersham, trustee of Peter Pollin, an insolvent debt- or, against Joseph I. Nicholson, the defendant in error, and removed to the Court of Common Pleas by appeal. A declaration in assumpsit containing several counts -was filed, to which the defendant pleaded non assumpsit and payment. It was afterwards agreed by the counsel on both sides, that a special verdict should be entered in favour of. the plaintiff for the sum of thirty-seVen dollars and forty-five cents, subject to the opinion of the court on the following facts:
Peter Pollin was discharged as an insolvent debtor on the lltfi of October, 1821, and made an assignment to the plaintiff and Elizabeth Finch, who were appointed his trustees. Elizabeth Finch not having given surety, and refusing to act, was afterwards removed, and the plaintiff appointed sole trustee. On the 12th of October, 1821, the defendant, who owed Pollin for boots and shoes the sum .of thirty-two dollars and fifty cents, paid him in full- and took his receipt. On the 14th of January, 1822, the plaintiff gave bond with surety, according to the act of assembly; and gave notice in the public papers of his appointment, calling upon all persons indebted to Pollin to make payment to him. Pollin had given notice of his application for the benefit of the acts, in two of the daily papers of the city of Philadelphia for upwards oi- fifteen days before his discharge.
Upon this case the Common Pleas gave judgment for the defendant, and the plaintiff took a writ of error.
Perkins, for the plaintiff in error,
cited the act of the 26th of March, 1814, sect. 4. Cooper v. Henderson, 6 Binn. 190. Stat. 1.3 El. c. 7, s. 2. 2 Mudd. Ch. 629, 630. Stat. 1 Jac. 1, c. 15, s. 14. Cowp. 569. 5 Serg. & Bawle, 397. 2 Yeates, 520. 1 Burr. 20. 5 Term Bep. 197. 2 Ball. 276. 4 Dali. 370. Sugd. Vend. 532.
Cheto, for the defendant in error,
cited, 1 Madd. Ch. 548. Beeves’ JDom. Bel. 31. 1 Phil. Ev. 306. 1 Gall. Bep. 425. 1 Com. Contr. 437. 2 Fonbl. 155. 16 Johns. 85. 8 Serg. & Bawle, 497. 9 Serg. 6 Bawle, 77.

Opinion:
The opinion of the court was delivered by
Duscan, J.
The only question is, whether payment to an insolvent debtor the day after his discharge and assignment, be good. The property of an insolvent debtor passes to the trustee immediately on the assignment, at the moment of assignment. Lessee of Willis v. Row, 3 Yeates, 520. In the assignment of bonds, payment before notice to the obligor, of the assignment by the obligee, is good. The assignment operates as a new contract between the obligor and assignee, commencing upon notice of the assignment. Bury, Assignee of Binkley, v. Hartman, 4 Serg. & Rawle, 176. Jones v. Witter, 13 Mass. Rep. 307. In bankruptcy, by Stat. 13 Eliz. c. 7, s. 1, 2, property in the bhnkrupt vested in the commissioners, from the time of an act- of bankruptcy committed; and payments made by a debtor to a bankrupt, after a secret act of bankruptcy, would, under the statute, have been void. The injustice of this relation was so apparent, that Parliament, By the Stat. 1 Jac. 1, c. 15, s. 14, made such payments, until notice of the act of bankruptcy, good; but still left payments, after commission issued, as-they stood under the statute. of Elisabeth. This difference between payments after act of bankruptcy committed, and after commission issued, has always prevailed. In Hitchcock et al. v. Sedgwick et al., 2 Vern. 162, it was decided, that every one was bound to take notice of a commission of bankruptcy when taken out; for that there was a difference where a man divested himself of his estate by his own act, and where it was taken out of him by act of parliament, whereunto all persons are supposed to be parties, and are concluded by it. In Collet v. De Gols and Ward, Cas. Temp. Talb. 69, the Lord Chancellor said, " A commission is a public act, of which all are bound to take notice, but an act of bankruptcy may be so secret as to be impossible to be known." The assignment may be well considered in the same light as a commission in bankruptcy, which is in the nature of an execution for all the creditors. Ex parte Stokes, 7 Ves., jr., 408.
No doubt the payment in this case was a payment made without actual notice; and it is a hardship on the defendant; but the mischief would be intolerable, if the insolvent debtor the day after his assignment could go round to his debtors, receive payment, and that payment be good unless individual notice was given to each of the debtors. This divestment of his debt was by positive law, and the assignment a notorious judicial act, of which all the world was bound to take notice. It is constructive legal notice, and as binding to every intent as actual notice to the individual.
Judgment reversed, and judgment entered for the plaintiff'.