Noonan v. Orton

| Wis. | Jan 15, 1874

Lyon, J.

The principal question, to be determined is, whether the bankrupt law of 1867 (14 Stats, at Large, 517) vests in the assignee in bankruptcy the plaintiff’s right of action stated in the complaint.

It is necessary, in the first place, to determine the character of the action. Notwithstanding the averments in the complaint of special damages and losses sustained "by the plaintiff in his "business, in consequence of the alleged malicious acts of the defendant, we think the action is, essentially, to recover damages for a personal injury, as distinguished from an injury to property. It is true that the effect of the wrong complained of was (as is alleged) to diminish the estate of the plaintiff, and render him less able to pay his debts. But the same results might follow any other personal injury. An assault and battery might disable a person for his business or labor for a long time or permanently, and subject him to heavy losses and expenses, and thus materially reduce his estate and his means with which to pay his debts. Yet it will not be claimed that an action to recover damages therefor would be an action, to recover for injuries to property. Notwithstanding those incidents affecting the property and estate of the injured party', it would still be an action for an injury to the person. A libel or a slander might deprive a man of employment, destroy his' credit, ruin his business, and greatly impair his estate ; yet an action therefor would be an action for a personal injury, the effect of the wrong on the estate of the injured party being merely incidental. So in this case. The personal injury is the gravamen of the action, and the effect of the alleged malicious acts of the defendant upon the- estate of the plaintiff is incidental merely. Such effect is an element to be considered-in assessing damages, but does not and cannot change the character of the action.

We are now to inquire whether the bankrupt law transfers a right of action of this nature to the assignee in bankruptcy. The 14th section of that law, after enacting that all of the estate, real and personal, of the bankrupt (except certain specific property) shall vest in the assignee, further provides as follows : “ All of the property conveyed by the bankrupt in fraud of his creditors; all rights in equity, choses in action, patents and patent rights and copyrights; all debts due him or any person for his use, and all liens and securities therefor; and all his rights of action for property or estate, real or personal, and for any cause of action which the bankrupt had against any person arising from contract, or from the unlawful taking or detention of or injury to the property of the bankrupt, and all his rights of redeeming such property or estate, with the like right, title, power and authority to sell, manage, dispose of, sue for and recover, or defend the same, as the bankrupt might or could have had if no assignment had been made, shall, in virtue of the adjudication of bankruptcy, and the appointment of his assignee, be at once vested in such assignee; and he may sue for and recover the said estate, debts and effects, and may prosecute and defend all suits at law or in equity, pending at the time of the adjudication of bankruptcy, in which such bankrupt is a party, in his own name, in the same manner and with the like effect as they might have been prosecuted or defended by such bankrupt. ” (p. 523.) There are some general words in the above provisions of the law, which, if not restricted by other words therein, are doubtless sufficiently comprehensive to include this cause of action ; for certainly it is a “ chose in action,” or a “ right of action.”

The law first names “ choses in action ” generally, as vesting in the assignee, and then proceeds to specify that “all his rights of action for property or estate, real or personal, and for any cause of action which the bankrupt had against any person arising from contract or from the unlavjful talcing or detention of or injury to the property of the bankrupt,” shall be so vested. We are of the opinion that the words last quoted qualify and limit the preceding general words, and hence, that the “ choses in action ” for torts which pass to the assignee, are rights of action for real or personal property, or for the unlawful taking or detention of property, or for injuries thereto, and not causes of action for merely personal injuries.

The provision that the assignee may prosecute and defend, in his own name, all suits to which the bankrupt is a party, is doubtless limited by the preceding provision which authorizes the assignee to sue for and recover “the estate, debts and effects ” of the bankrupt. He can only sue for the property or rights of action which passed to him by virtue of the adjudication and his appointment as assignee; and hence he can only prosecute in his own name actions of like character, in which the bankrupt is a party.

That there. are some rights of action which do not pass to the assignee, majr also be inferred from the provisions of sec. 16, which authorize the assignee to prosecute, in his own name, actions pending in the name of the bankrupt “ for the recovery of a debt or other thing which might or ought to pass to the assignee,” clearly implying that there are rights of action which do not pass to the assignee.

Furthermore, it is scarcely reasonable to suppose that congress intended to vest in the assignee a right of action which would be destroyed by the death of either party thereto. That this cause of action does not survive in favor of or against the representative of a deceased party, is very clear. At the common law, no action ex delicto, in which the appropriate plea was “not guilty,” so survived. The 'maxim actio personalis cum persona, was applicable to all actions of that class. But a very ancient statute — that of 4 Edw. III., c. 7, enacted about the year 1330 — gave a remedy to executors for a trespass to the personal estate of their testators, which remedy, by equitable construction, has been extended to administrators. 1 Chitty’s PL, 68. In this state the list of actions which survive is materially enlarged by statute. R. S., ch. 135, secs. 2, 6, 11 and 12. (Tay. Stats., 1572-4.) But in this list we fail to find enumerated actions for malicious prosecution or malicious abuse of legal process. . These remain as at the common law, and the death of a party thereto is the death of the action. Nettleton v. Dinehart, 5 Cush., 543.

Neither is this cause of action assignable, either at law or in equity, and we fail to find sufficient in the bankrupt law to satisfy us that congress intended to make it assignable. There is a singular absence of decisions on this subject by the courts of the United States. We are referred to but one case (In re Crockett et al., 2 Bankrupt Reg., 75); and that one fully sustains our construction of the law. The facts of that case, and the principles decided therein, will sufficiently appear from the following extract from the opinion of Judge Blatch-FORD. He says: “ The claim against Black Brothers & Co. is shown to be a claim in suit arising from the fact that Black Brothers & Co. recommended a certain person to the copartnership [that is, to the bankrupt firm] as worthy of trust, and that the copartnership, on such recommendation, entrusted merchandise to such person for sale, and he disposed of it and did not account for the proceeds. The suit is brought for fraudulently and deceitfully recommending the person as worthy of trust and confidence. Such a claim is not within the description in the 14th section of the act, of the assets which pass to the assignee in bankruptcy. It is not a debt, or a security for a debt, or a right in equity, or a chose in action, or a right of action for property. Nor is it a right of action for a cause of action arising from contract. It is an action of tort for the fraud and deceit, and not an action on a contract.” Surely if that cause of action did not pass to the assignee, this does not.

Our conclusion is, that the cause of action in this suit did not pass to the assignee, but remains in the • plaintiff, notwithstanding the adjudication in bankruptcy, and the appointment of such assignee.

But if such conclusion is wrong, we are yet unable to perceive why the action should abate, or the proceedings therein be stayed. The 16th section of the bankrupt act makes it the duty of the court, in a proper case, to admit the assignee to prosecute a pending action in his own name, if he requires it. This provision is understood to apply to suits pending in the state courts as well as to those pending in the federal courts. Bump on Bankruptcy, 343. We suppose that the assignee' may, if he choose, permit the action to proceed in the name of-tbe bankrupt. .The practice seems to be analogous to that prescribed by statute, where certain causes of action are transferred pendente lite. “ The action shall be continued in the name of the original party, or the court may allow the person to whom the transfer is made to be substituted in the action.” R. S., ch. 135, sec. 1. (Tay. Stats., 1572, § 1).

II. It is argued by the learned counsel for the defendant, that the facts stated in the supplemental answer show, or tend to show, that the defendant was justified in instituting the garnishee proceedings, and that the statements in the affidavits by which such proceedings were commenced, are true.

If this is a correct position, the matter stated in the supplemental answer is in bar. But it is not so pleaded. . A supplemental answer is the substitute for a plea puis darrein continuance under the old practice, and may be either in abatement or in bar. In this case it is evidently interposed as a plea in abatement only ; for the prayer that the proceedings be stayed, etc., is equivalent to a prayer for judgment if the court will proceed, etc., which is peculiar' to a plea in abatement. 1 Ohitty’s PL, 660.

But in any event, if the facts stated in the supplemental answer are material to the issue in this case (a point which we do not decide), we think the original answer is sufficiently broad to entitle the defendant to prove such facts on the trial, without the aid of the supplemental answer.

Upon the whole case, therefore, we are of the opinion that the demurrer to the supplemental answer was properly sustained.

By the Court. — Order "affirmed.