Case Name: Willis H. Arnold vs. Benjamin S. Leonard
Court: High Court of Errors and Appeals of Mississippi
Jurisdiction: Mississippi
Decision Date: 1849-01
Citations: 12 S. & M. 258
Docket Number: 
Parties: Willis H. Arnold vs. Benjamin S. Leonard.
Judges: 
Reporter: Mississippi Reports
Volume: 20
Pages: 258–261

Head Matter:
Willis H. Arnold vs. Benjamin S. Leonard.
A certificated bankrupt who has made a surrender of his effects, including debts due to him, may purchase at his assignee in bankruptcy’s sale, or from the purchaser thereat, any of these effects or debts, and maintain an action therefor; though such a transaction may be suspicious, yet it cannot affect the bankrupt’s right to sue, unless upon proof of fraud in fact. (
In an action by the assignee of a purchaser at an assignee’s sale of a bankrupt’s effects, upon a note purchased at such sale, it is competent to prove the acts of the assignee in bankruptcy, without producing the record of his appointment; so far as the interest of the public, and the rights of third persons are concerned, proof that he acted as assignee, is sufficient.
Where a note is payable to bearer, no formal assignment is necessary, the title is transmitted from hand to hand, by mere delivery ; therefore, where a note payable to bearer, is sold by an assignee in bankruptcy, at a sale of the bankrupt’s effects, it is not necessary to vest the purchaser with title, for the assignee to assign the note formally to him ; a delivery is sufficient.
In error from the circuit court of Hancock county; Hon. Thomas A. Willis, judge.
Willis H. Arnold sued Benjamin S. Leonard on a note for one hundred dollars, payable to Arnold or bearer. The declaration was in the common form, and alleged the non-payment of the note of the plaintiff as the ground of suit. The defendant plead non-assumpsit; there was a trial and verdict for plaintiff, a new trial granted, and, upon the second trial, a verdict for the defendant.
On the last trial the defendant, after the plaintiff had read the note sued on, introduced in evidence the transcript of the proceedings in-bankruptcy of Arnold and of his discharge, since the maturity of the note sued on. The plaintiff then offered to read a written bill of sale, purporting to be from Fidelio S. Hunt, assignee in bankruptcy of said Arnold of divers effects of said Arnold, sold at public bankrupt’s sale by him to A. Q,. Breath ; and a written bill of sale of the same effects from Breath to Arnold, including the note sued on; and also offered to prove, by parol, that Hunt acted as such assignee, and made the sale as stated; but the court refused to allow any of the proof to be made, and the plaintiff excepted.
The court instructed the jury: 1. That Arnold, by the decree declaring him a bankrupt, was divested of all property or interest in the note sued on at the time, the decree, was rendered. 2. That the decree raised the presumption that the bankrupt was entitled to his discharge. 3. If the jury believed the plaintiff did not own the note, they must find for the defendant.
4. If, at the time of the decree, the plaintiff owned the note, by that decree he was divested of it, and unless he showed title in him since the decree, he could not recover.
On the part of the defendant, the court refused to instruct the jury : 1. That if the jury believed the plaintiff was in possession of the note at the time the suit was brought, it is prima facie evidence of ownership. 2. The record of Arnold’s proceedings in bankruptcy, and his discharge, are prima facie evidence that he acted honestly in procuring it. 3. That a note payable to A. or bearer does not require an indorsement to enable the holder to sue in his own name. 4. That the possession of the holder in this case is prima facie evidence that he is the lawful bearer.
5. If the jury believe that the note sued on was surrendered in bankruptcy, it did not require any assignment or indorsement of the assignee in bankruptcy to pass the title to a purchaser at the sale. 6. The bankrupt law did not require the assignee to sue and collect the notes of the bankrupts, which came to his hands as assignee.
The plaintiff sued out this writ of error.
John Henderson, for plaintiff in error.
1. 'The first instruction given for defendant was too broad. The decree of bankruptcy did not necessarily divest Arnold “ of all property or interest he had in the note sued on.” By the law he might retain $300 of his effects, and this note might be included in this exception, and such exception should have qualified the instruction.
2. The fourth instruction given for defendant is also too broad,, for the same reason as above, and is obscured by the introduction of an exception, of itself absurd. Whether Arnold was divested of his right to this note by his bankruptcy, could not depend on the subsequent fact whether Arnold might not have acquired a new title to the note after his bankruptcy.
3. The court’s refusal to give the charges sought for by plaintiff, Arnold, is manifest error. The rules of law implied in these instructions are palpable and self-evident.
4. The effort of this defence was to impress the minds of the jury that Arnold was in a fraudulent position before them in asserting title to a note, which he must have surrendered in bankruptcy. Whereas we contend, that whatever explanation the facts might require, or might authorize, yet as the defendant had offered Arnold’s certificate in evidence, this certificate was legal, prima facie evidence that it was honestly obtained. The bankrupt law only authorized its issuance, when the court awarding it were satisfied that the petitioner had made an honest'" exhibit and a clean breast. The charges sought, therefore, were proper, and should have been given.
5. An assignee under the bankrupt law is a ministerial office. His appointment, like that of a clerk, is made by the court. But his ministerial functions and duties is principally assigned by the law, as much so as that of sheriff or clerk. It can admit of no controversy, that one claiming title to property purchased at a sheriff’s, constable’s, or marshal’s sale is not bound to show the officer’s commission or appointment, but only that he acted as such officer. The policy of the bankrupt law could not intend a different rule as to purchases made at bankrupt sales. In fact, its policy is fully shown in regard to land titles made by the assignee, which the law expressly provides shall be full proof under the prescribed form of authentication, without requiring the purchaser to prove in fact the commission of the assignee. We cannot suppose there is any ground for a distinc tion in the rule of proof, whether the sale was by one assuming to act as assignee or sheriff. The proof we proposed should therefore have been received. 3 Stark. Ev. 392; 12 Wheat. 70; 5 Pick. 487 ; 9 Mass. 231; 5 lb. 170; 15 lb. 180; 7 Johns. R. 296; 1 Greenl. Ev. 158.
6. It is not possible if Breath, the purchaser, had sued this note, instead of assigning it to Arnold, that he would have been required to show Hunt’s commission. His assignee cannot be bound to a more stringent rule; and as the note is payable to bearer, it did not require an indorsement to transfer it, whether transferred by an assignee in bankruptcy, or any one else. Walk. (Miss.) R. 144, 145.

Opinion:
Mr. Justice Ciayton
delivered the opinion of the court.
This cause involves the question, whether a certificated bankrupt, who has made a surrender of his estate, including debts due to him, which have been sold according to law, can after-' wards acquire title to any of the debts so sold, and maintain an action thereon.
We see no reason to prevent this. When his assets were sold, if through the aid of others, or in any other manner, he was enabled to buy a portion of them, the transaction may be suspicious, but it cannot affect his right to sue unless upon proof of fraud in fact.
It was competent to prove the acts of the assignee in bankruptcy, without producing the record of his appointment. So far as the interests of the public, and the rights of third persons were concerned, proof that he acted as the assignee, was sufficient. Keyser v. McKissan, 2 Rawle, 140; Riddle v. County of Bedford, 7 Serg. & Rawle, 386.
IVhere a note is payable to bearer, no formal assignment is necessary, the title is transmitted from hand to hand by mere delivery.
The decision of the court below is opposed to these principles; the judgment is therefore reversed, and the cause remanded for a new trial. ,
Judgment reversed.