Court Opinion

ID: 6313774
Source: CourtListenerOpinion
Date Created: 2022-02-18 20:19:48.653694+00
Date Added: 2024-06-11T08:59:10.552515
License: Public Domain

Tilghman C. J.
This is an action on two promissory notes, one dated 5th February 1803, for 1250 dollars drawn i>y Andrew Hadfeg &? Co., payable to the order of Peter Lohra ninety days after date, the other dated 9th February 1803, for 1250 dollars 50 cents, drawn by the same person, and payable to the order of the said Lohra, ninety days after date. They were both indorsed by Lohra, and by the defendant, who at the time of his indorsement, received full value from his indorsee. A commission of bankrupt under the law of the United States, was issued against the defendant the 7th April 1802, by virtue of which he was afterwards declared to be a bankrupt; but his certificate of discharge was not signed by the judge until the 4th March 1803. It is con*260tended oh the part of the defendant, that the notes being the property of his assignees, nothing passed by his indorsement, and therefore he is not responsible. In the mouth of a' man who received value for his indorsement, this to be sure is a most ungracious defence. It is material that the assignees have never claimed these notes, nor do they take any interest in this action. Every possible intendment should therefore be made in favour of the plaintiffs. Whether the bankrupt or his assignees are entitled^to property acquired by him after his bankruptcy, but before the signing of his certificate, is a point which has been fully argued. I incline to the opinion that the assignees are entitled to such property. It is enacted, in the 50th section of the act of congress, that “ if any estate real or personal, shall descend, ‘“revert to, or become vested in any person, after he or she “ shall be declared a bankrupt, and before he or she shall “obtain'a certificate signed-by the judge as aforesaid,. “ all such estate shall by virtue of this act be vested in the “ said commissioners, and shall be by them assigned ike.” The words are sufficiently comprehensive, and as comprehensive I think as- those of the English statute of 13 Eliz. c. 7. sec. 11, though somewhat different. But no property passes either under the statute or the act of congress, but such as the bankrupt has a beneficial interest in. Now what interest had the bankrupt in these notes at the moment before he indorsed them? As there is no evidence of his hay* ing applied any part of his estate, or paid any valuable Consideration whatever for them, I shal^s-uppose that they were drawn and indorsed for his accommodation, in order to enable him to raise money, in which case, neither he nor his assignees under the commision could have supported an action against the drawer or first indorser. This was decided in Arden v. Watkins, 3 East 317, where an uncertificated bankrupt drew a bill payable to himself, and endorsed it. It was held that the indorsee might maintain an action against the acceptor, because the bill did not vest in the assignees under the commission, no value having passed from the drawer to the acceptor. The case of Pinkerton v. Adams was cited from 2 Esp. Rep. 611, to shew that die indorsee of the bankrupt could not recover against the acceptor. But Lord Ellenborough, remarking on that case in Arden v. Watkins, says, that there “ the' bankrupt had a property in the *261xi bill before his bankruptcy.” If so it would clearly pass • under the commission. In this view of the case the law is with the plaintiff. But even if the property of the bill had-been vested in the assignees, I am not satisfied.-that the plaintiff’s action would have been barred. The defendant’s cóunsel have laboured to shew the property to be in the-assignees, taking for granted that if they succeeded, the plaintiffs’ action was gone. But they have cited no case which. comes up to their position. Justice is against it, and there-is a strong principle in their way. It is not necessary that-; the indorser should have such a property-in the note as would enable him to recover against the drawer. Every indorser stands as to his indorsee in the light ,o£ a new-drawer. He is liable although the note be forged, and so, would he be, I apprehend, if he had stolen it himself, by which he could acquire no legal property. It appears to me that a man who has received value for his endorsement, should be estopped from impeaching his own property. Whether the assignees under the commission might recover against the plaintiff in an action of trover for these notes, is another question. If they were accommodation notes, they could not. If they had been purchased by the bankrupt with money raised from his own estate and fraudulently concealed, perhaps they might; but that would not be at all inconsistent with the plaintiffs’ recovery in this action. I am therefore of opinion that judgment should be entered for the plaintiffs.