Court Opinion

ID: 6510844
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:22:13.155995+00
Date Added: 2024-06-11T15:54:52.442005
License: Public Domain

BRICKELL, C. J.
— A simple-contract creditor, without a lien it is the province of a court of equity to enforce, except in the particular cases for which the statutes provide, (within which the present case does not fall), cannot obtain the assistance of that court to compel the payment of his debt. The jurisdiction and remedies of courts of law are adequate, and there is no room for equitable intervention. The debt due from the Tuscaloosa Art and Scientific Asso*171eiation, or of the particular stockholders who may or not have made themselves answerable for it, to Walsh, Smith & Go., of which the appellant claims to be the assignee, is a pure legal demand, capable of enforcement by clear and adequate legal remedies ; and, of consequence, to support the present bill, there must be shown, in addition to the legal demand, some clear, controlling equity the appellant is entitled to enforce.
The equity is grounded upon the ownership of the shares of the stock of the association, which had been pledged to Walsh, Smith & Co., as security for the debt; a transfer of which to himself, on the books of the association, the intestate of the appellant had demanded, and which had been refused ; and an account of the corporate business, and the payment to him of whatever dividends or profits had accrued thereon. If the equity exists, it was derived from the sale and assignment to the intestate of' the appellant, made by the asignee in bankruptcy of Walsh, Smith & Co., more than two years after his appointment, and the execution to him of an assignment of all the property and effects of the bankrupts. Whatever may be the nature and character of the claim, and of the right now asserted, it had accrued, and was in all respects as fully a cause of action in the bankrupts, and in the assignee at the time of his appointment, as it was when the sale and assignment was made to the intestate, or when this bill was filed. The bankrupt law had this provision : “ No suit either at law or in equity, shall be maintainable in any court, between an assignee in bankruptcy and a person claiming an adverse interest, touching any property transferable to, or vested in. such assignee, unless brought within two years from the time when the cause of action accrued for or against s'uch assignee. And this provision shall not in any case revive a right of action barred at the time when an assignee is appointed.” — U. S. Rev. Stat. § 5057. The question of the demurrer is, whether the case made by the bill falls within the operation of this statute ; and if it does, are not the averments of fraud and concealment sufficient to avoid its bar.
The statute applies not only to suits in which the assignee is the real and beneficial actor, but also to suits upon causes of action derived from him, after the statutory bar is complete. — Pike v. Lowell, 32 Me. 245. He may not transfer any greater or other cause of action, than that which resides in him. And it is as applicable, by its very words, to suits in equity, as "to’suits in courts of law. It is said of it by the Supreme Court of the United States : “ This is a statute of *172limitation. It is precisely like other statutes of limitation, and applies to all judicial contests between the assignee and other persons, touching the property or rights of the bankrupt, transferable to, or vested in the assignee, where the interests are adverse, and have so existed for more than two 3ears from the time when the cause of action accrued, for or against the assignee.” — Bailey v. Glover, 21 Wall, 846. The statute applies to every cause of action existing when the assignment is executed to the assignee, and right and title to sue in respect to which is derived from it. The cause of action not being barred at the time of the assignment, it can not, under the operation of the statute, be barred in a shorter period than two years, though, applying the statute of' limitations of the State, a less period would perfect a bar. Nor can the period of limitation be extended more than two years, though a longer period must have elapsed under the statute of the State to operate a bar. It has no connection with State statutes of limitation, but is a separate, independent statute, enacted in the execution of the power conferred on the Congres “ to establish a uniform system of bankruptcy,” involving, of necessity, the power to prescribe its own limitation of actions touching the estates, rights, and credits, which are to be administered in its own tribunals, and through its own agencies. — Peeper v. Canner, 5 Bank. Reg. 252; Freelander v. Holloman, 9 Ib. 331.
It is argued that the scope and purpose of the bill i>s merely the enforcement of the pledge of the stock for the payment of the debt, and that to such a suit the statutes of limitation have never been applied, the right of enforcing the pledge continuing until the debt is paid, or until the lapse of time creates a presumption of payment. Statutes of limitation do not, generally, extinguish debts, though barring remedies to enforce them. Legal remedies may, however, be barred, without affecting the right in equity to enforce liens or charges, whether created by contract, or arising by operation of law. — Ang. Lim. § 73. And as to the rights of a paw,nor or pawnee, prescription, or statutes of limitation, do not run. — Story on Bailm. § 346. However true this_ doctrine may be, when applied to the ordinary statutes of limitation, it is forbidden by the terms of the statute we are considering, which operates not only on every character of suit which can be commenced by or against an assignee, but on all rights he can assert, or which can be asserted against him.
It is next insisted, that the case is withdrawn from the operation of the statute, because the bankrupts fraudulently con*173cealed the existence of the debt due them from the association, and the pledge of tbe stock for its payment, and there was no discovery or knowledge of these facts until the statutory bar was complete. There is no imputation of fraud or of concealment by the association, or by tbe parties from whom relief is now claimed, and no averment of any collusion between them or the association, and the bankrupts. Tbe fraud of the bankrupts, if it exists, cannot be visited on the parties now invoking the benefit of the statute, who claim no right under them, but whose claims are now, and were when tbe bankruptcy occurred, adverse and hostile to them. Tbe reason why courts of equity withdraw frauds concealed from the operation 'of' statutes of limitation, as stated by Lord Redesdale, in Hovenden v. Lord Annesley, Sch. & Lef. 634, is, that the statute ought not, in conscience, to run ; the conscience of the party being so affected, that he ought not to be allowed to avail himself of the length of time. It is tbe conscience of the party perpetrating and concealing tbe fraud, which is affected, and who is not suffered to invoke tbe protection of the statute. Parties not connected or colluding witb him — of themselves innocent, for whose protection statutes of limitation are intended, cannot be debarred of its benefits by the conduct of strangers, or of those to whom they bear hostile relations. If it be conceded that the bill discloses concealment and fraud by tbe bankrupts, which would prevent them from pleading the statute, it will not avail the appellant. Fraud is not imputed to the appellees, and it is tbeir fraud only which will avoid their reliance upon the statutory bar.
These were the conclusions of tbe Chancellor, and the decree must be affirmed.