Court Opinion

ID: 6483221
Source: CourtListenerOpinion
Date Created: 2022-06-26 23:07:04.833488+00
Date Added: 2024-06-11T15:54:13.866314
License: Public Domain

Opinion op the Full Court, by
McCully,'J.
Referring for the statement of the substance of the bills and the points of demurrer to the decision of Mr. Justice Judd, from which appeal is taken to the Court in Banco, we have only to express our concurrence therein, with some further observations to the same effect.
The provision of Section 980, that “from the time any person entitled to the benefit of this law has declared himself a bankrupt, or from the filing of any petition by any creditor or creditors to have him declared a bankrupt, all civil suits depending against him shall be suspended,” is necessary to carry out the purposes of a bankruptcy statute, by the operation of which all the bankrupt’s property is in the custody of assignees to be applied rateably to the payment of the claims of all his creditors. His assignees may be sued and must pay rateably on judgment made against them, and therefore the bankrupt may not be sued by a creditor.
To apply this statute to a bill in Equity wherein the assignees charge their bankrupt with fraudulently holding certain real estate in the name of another person, and seek for discovery and relief from the several parties concerned, would be to make a *648literal application apart from and at variance with the true reason thereof, and without reason to support it.
Castle and Hatch, for plaintiffs.
A. S. Hartwell, for defendants.
Upon the facts averred there is real estate which belongs to the creditors’ fund, but which cannot be taken by the assignees. Who is to bring action for it ? Certainly no creditor, and no one but the assignees representing all the creditors. Who must be made parties ? Certainly must be included the person who is alleged to have placed the title in the name of a third person in fraud of his creditors. He is a necessary party so far as it is a bill of discovery, and he has an interest if the land is held for him in trust, as the bill claims, and for this reason too must be made a party.
The provision of Section 986, that the justice shall have power to examine the bankrupt under oath touching his estate, his property and rights of property, does not by any terms exclude the right to bring a bill in equity, nor is it the “ plain adequate and complete remedy at the common law ” which forbids resort to equity. This'is in part a bill for discovery against sundry parties, including the bankrupt. The examination pursuant to Section 986 could not afford the relief here prayed for, nor adjust the rights of all parties concerned. It is a provision which might in some cases accomplish a discovery which must without it have been sought by a bill, but a discovery only would not in the case at bar be sufficient for the business of the assignees.
In the argument before us a point was made which was not presented before the Justice, and therefore not covered by his decision, viz., that the bill is demurrable because it fails to aver that Thomas Spencer was insolvent in 1865, when he bought the land in the name of C. N. Spencer.
But the bill avers that the land was Thos. Spencer’s in the trust of C. N. Spencer till in 1870, when Thos. Spencer transferred the trust by a power irrevocable from C. N. Spencer to another trustee, viz., Thos. Spencer, Jr., and that at that date Thos. Spencer was insolvent, which is a sufficient averment for the purposes of the bill.
Demurrer overruled.