Davis v. Sullivan

33 N.J. Eq. 569 | N.J. | 1881

The opinion of the court was delivered by

Beasley, C. J.

This is an application to admit a person as a defendant to a suit in chancery on the ground that he obtained an interest in the subject of litigation during the pendency of the proceedings. This petitioner became assignee in bankruptcy of one of the principal defendants in the suit, the object of the bill being to distribute a part of the property of such party among a certain class of credit- , ors, for whose benefit it had been put in trust. This decree of bankruptcy, which vested the property and rights of the bankrupt in his assignee, was taken between the entering of the decree pro confesso and the final decree against the bankrupt.

It is not pretended that the bankruptcy of this defendant operated as an abatement of this suit. It is true, that the general rule is that where an interest in the subject of the suit is obtained pendente lite by a stranger to such suit, through the force of general laws, such as assignments in bankruptcy and insolvent acts, such stranger must be joined as a party before the proceedings can be carried further. The distinction is between cases of voluntary alienation and cases of involuntary alienation; in the latter class of cases, the assignee must be made a party; in the former, he may or may not, at the pleasure of the complainant. Story’s Eq. Pl. § 342. In Eyster v. Gaff, 1 Otto 521, this distinction appears to have escaped attention, for in it all assignments pendente lite are put on a level, and on that broad ground it is settled than an assignee in bankruptcy, becoming such after the commencement of a suit, need not, of necessity, be joined as a party. In Cleveland v. Boerum, 24 N. Y. 613, a similar result is reached, but, as it seems to me, on far more scientific grounds, it being in that case held that, as by force of the law of the United States, an assignee in bankruptcy can carry on the suit in the name of the bankrupt, when it appears that he is aware of the pendency of a suit, his non-intervention in his own name raises an implication that he has elected to waive his defence and to let the proceedings go to judgment in the name of the bankrupt. At all events, it must be considered as settled that a suit is not abated or stayed by a defendant to such suit being decreed a bankrupt during its progress, and that the assignee in bankruptcy will be bound by the subsequent proceedings in such suit. This is the doctrine not only of the eases cited, but also of Esterbrook Co. v. Ahern, 4 Stew. Eq. 3.

But while the foregoing doctrine is admitted, it is insisted in the present case that this assignee has a right to be made a party to this proceeding by force of the forty-first section of the chancery act. That provision is to the effect that, on verified petitions, persons who have acquired an interest after the inception of a suit, may be let in as parties. In construing this enactment in Guest v. Hewitt, 12 C. E. Gr. 479, this court decided, in substance, that a petitioner under it must show that he would be advantaged by being made a party in respect to the matter touching which he seeks to intervene. In the reported case, there had been a final decree, and the chancellor had refused to admit the petitioner as a party, and that decision was sustained on appeal, for the reason that although the petitioner asked to be made a party so that he might have the final decree opened, he had laid no ground in his petition that could have justified such a course. And herein I find the defect of the present application. There are no sufficient grounds suggested or shown for opening the final decree in this case. We have seen that it is settled that the non-joinder of the petitioner as assignee in bankruptcy is not even an irregularity, and the fact that the trust in litigation was revoked, is of no force, as such fact was stated in the bill and its effect obviated by the statement of alleged contervailing equities. It does not seem to me that the case presented in this petition gives rise to even a colorable equity as against a result in a suit attained by the usual methods and in due course.

With respect to the suggestion, made here apparently for the first time, that this petitioner should have been admitted, so as to enable him to appeal, if he so desired, from the final decree, to this court, the conclusive answer is, that his petition assigns no such purpose. If he had suggested such a design, it is probable that his application would have been granted by the chancellor. Whether he could have sustained an appeal in the face of a final decree founded on a decree pro confesso, is a question not now before this court for decision.

The decree of the chancellor should be affirmed.

Decree unanimously affirmed.