250 F. 641 | E.D. La. | 1918
(after statiug the facts as above). [1] The bankrupt contends that his rights in the suit are personal and nonassignable, and hence did not pass to the trustee at all. The trustee disputes this and contends that, as no notice of assignment was given the defendants in the suit until after Bonvillain was adjudicated a bankrupt and his trustee elected, the assignment is void and the cause of áction passed to the trustee as an,asset of the estate.
It is conceded that if the claim is not assignable it did not pass to the trustee; and there is no question that, under the law of Louisiana, notice to the debtor is necessary to complete the assignment of a chose in action as to third persons. Merrick’s Civil Code, arts. 2642-2643, and authorities cited.
On the first point the bankrupt relies upon the case of Caillouet v. American Sugar Refining Co. et al. (No. 14815 of the docket of this court) 250 Fed. 639, in which I had occasion to pass upon this identical question as an original proposition and held that the claim was not assignable.
The trustee vigorously disputes the soundness of that decision and cites the cases of the United Copper Securities Co. v. Amalgamated Copper Co., 232 Fed. 574, 146 C. C. A. 532, and Imperial Film Exchange v. General Film Co. (D. C.) 244 Fed. 985. Both are cases dealing with claims arising under the Sherman Law and'are undeniably to the contrary. In the first case cited the facts do not clearly appear and it is difficult to determine just how the damage arose. In the second case, the opinion of Judge Hough is lucid and persuasive, but it would seem that the plaintiff company was dissolved, and put entirely out of business by the conspiracy against it. As I took occasion to remark in the Caillouet Case, supra, some causes of action arising under the Sherman Law might be assignable and others not. It is quite probable that in the two cases relied on by the trustee there was actual damages to the property of the plaintiffs. If not, these cases seem to overlook the fact that the action is analogous to the common-law action of deceit whidh as a rule did not survive, the exception being where there was actual injury to property. If it could be considered. there was injury to Bonvillain’s property in this case, it was purely constructive.
It may be considered settled that whether an action ex delicto is assignable depends upon whether it is heritable, and vice versa. This is clearly pointed out by Judge Hough in his opinion in the Imperial Film Case, supra. The case of Henshaw v. Miller, 17 How. 211, 15 L. Ed. 222, was a suit to recover damages for fraudulently recommending to plaintiff by letter one Porter Robinson as a person worthy of confidence, whereby the plaintiff made a sale on credit with resulting loss. The court discusses the common law and finds right of action only where there is actual injury to personal property whereby that property has been rendered less beneficial to the executor, and held that the action did not survive the death of the wrongdoer. In the case of Tufts v. Matthews (C. C.) 10 Fed. 609, in a well-reasoned opinion by Judge Colt, it was held that the right of action for damages for a deceit is not assignable and does not pass to the assignee of the
In Murray v. Buell, 76 Wis. 657, 45 N. W. 667, 20 Am. St. Rep. 92, the court held mat a cause of action arising out of a conspiracy to monopolize the coal business of the city and to drive the plaintiff out of business, was not assignable at common law.
As between the bankrupt and the planting company, no notice to the debtor was necessary to complete the assignment. Having made a transfer of his rights for value, the bankrupt is estopped to deny their assignability. Prior to the amendment of 1910 to the Bankruptcy Act the trustee stood in the shoes of the bankrupt and took his property subject to' all claims, liens, and equities. Zartman, Trustee, v. First National Bank, 216 U. S. 134, 30 Sup. Ct. 368, 54 L. Ed. 418. The amendment of June 25, 1910 (c. 412, § 8, 36 Stat. 840), to section 47, Bankruptcy Act (Act July 1, 1898, c. 541, 30 Stat. 557 [Comp. St. 1916, § 9631]), materially changed the status of the trustee. By it he is given a lien on all property in the custody of the court, and as to all property not in the custody of the bankruptcy court he is to be “deemed vested with all the rights, remedies and powers of a judgment creditor holding an execution duly returned unsatisfied.”
In Rouisiana the rights of a person in a pending suit may be seized under execution by a judgment creditor (C. P. 647), and therefore the term “property” is broad enough to cover the cause of action in this case, conceding purely for the sake of argument that it vested in the trustee. But it was not surrendered by the bankrupt and could not be considered in the custody of the bankrupt court. Therefore no lien attached automatically in favor of the trustee by virtue of the adjudication. He had the rights of a judgment creditor, but that amounted to nothing unless he took steps to 'enforce them.
By section 11 C, Bankruptcy Act (Comp. St. 1916, § 9595):
“Tlie trustee may, witli the approval of the court, be permitted to prosecute as trustee 'any suit commenced by the bankrupt prior to the adjudication, with like force and effect as though it had been commenced by him.”
In order to reduce the cause of action to possession, it was only necessary for the trustee to intervene in the suit as he has done. There was no way he could issue execution on a hypothetical judgment. However, when the trustee intervened in the suit, notice of the as
There will be a judgment .awarding the fund to the planting company, subject to the agreement between the parties as to attorney’s fees for prosecuting the case.