Court Opinion

ID: 8122900
Source: CourtListenerOpinion
Date Created: 2022-09-09 15:01:56.983007+00
Date Added: 2024-06-11T16:39:05.414751
License: Public Domain

Butler, D. J.
Important questions discussed by counsel, (respecting the effect of section 36 of the bankrupt act,) may be passed, in this case.
Where joint and separate assets are realized, and may be distributed to creditors of the respective estates, it cannot, of course, be doubted that the rule of “joint to joint, and separate to separate,” applies. In this case joint as well as separate assets were realized. More than $3,000, over the cost of realization, were received by the assignee. A part of this we think might have been distributed to creditors. If it had been, or the account had been closed with the sum in hand, it is not pretended that the joint creditors could share in the separate estates. Can it be that an expenditure of the money on their account, in a vain (though doubtless proper) endeavor to obtain more, changes the rule of distribution ? Such a view would seem unreasonable; and especially so in this case, where the money was expended in a fruitless effort to transfer to them the exclusive enjoyment of the very property now in controversy. Although defeated in this, the money was very profitably spent, for the joint creditors, if by such expenditure they have acquired a right to share this property. We do not think, however, they have.
But if this were otherwise the provision respecting costs and expenses, contained in 'the section, (36,) when applied here, leaves a similar balance of joint estate. The assignee is required to “keep separate accounts of the joint stock or property of the copartnership, and of the separate estate of each member thereof, and after deducting from the whole amount received by the assignee, the whole amount of expenses and disbursements, the net proceeds of the joint estate shall be apportioned to pay the creditors of the copartnership, and the net proceeds of the separate estate of each partner shall be appropriated to pay his separate creditors.” This requires an ascertainment of the net proceeds of each estate, by means of the deduction specified, — in other words, by apportioning the entire costs to the respective estates pro raft», — the only method whereby the provis*491ion can be carried out: Smith v. Smith, 13 N. B. R. 500. In a majority of cases such apportionment of costs is just and equitable. When applied here, as before remarked, a considerable balance of joint estate is left for distribution. That the percentage to creditors may be inconsiderable is unimportant. The register will therefore deduct the costs and expenses as herein indicated, distributing the balance of joint assets to joint creditors, and of separate assets to separate creditors.
It is proper to say that circuit Judge McKennan, who sat with the district judge, concurs in this opinion.