20 Ala. 753 | Ala. | 1852
Nearly thirteen years were allowed to pass between tbe time of giving this receipt by tbe defendant, Lee, and tbe period when be was called upon judicially to account
The receipt, which is made the foundation of this suit, was sold and transferred, as appears by the written assignment endorsed upon it, by the assignee in bankruptcy, on the 14th May, 1843, and this bill was not filed until the 18th of February, 1847. The first question, therefore, which arises upon the demurrer, is, can this suit be maintained after the lapse of two years from the discharge in bankruptcy ? To this I propose first addressing myself.
By the provisions of the bankrupt act of 19th August, 1841, the assignee was vested with all the rights, titles, powers, and authorities, to sell, manage, and dispose of the bankrupt’s property and rights of property, as fully, to all intents and .purposes, as if the same were vested in, or might have been exercised by the bankrupt, before or at the time of the bankruptcy.
Conceding that the right to dispose of this receipt vested in tile assignee, and that the sale not only passed the receipt, but all liability which the maker of it had incurred, either by reason of collateral undertakings to secure the demands mentioned in it, or by negligence or fraud, we think it clear, that he could by his sale transfer no greater interest than could Boss, Strong & Co. before their bankruptcy. He may sell ■“ as fully,” says the act, as if the same were vested in, or might, be exercised by the bankrupt, but he can do no more. The result is, that upon this hypothesis, he may by his sale transfer an equitable title to the chose ip ficción. — a right tq
We bad occasion recently to consider this question, in tbe case of Camack v. Bisqua, 18 Ala. Rep. 286, in which we arrived at tbe conclusion above attained; and a re-examination of that case has failed to satisfy us, that tbe principle asserted by it is incorrect.
Tbe legal right of action, if any exists, being in tbe as-signee, could be maintain an action, after tbe expiration of tbe two years named in tbe eighth section of tbe bankrupt act ? If be could not, and tbe legal title be barred, it is very clear that tbe title to equitable relief, dependent upon it, is also barred. Angel on Lim. 25; Hovenden v. Lord Annesley, 2 Sch. & Lefr. 329; 12 Peters’ Rep. 56.
Tbe eighth section of tbe bankrupt act provides, first, for conferring jurisdiction upon tbe Circuit Courts of tbe Union, concurrent with tbe District Courts in tbe same district, of all suits, both in law and in equity, which may be brought by tbe assignee of tbe bankrupt against any person or persons claiming an adverse interest, or by such person against such assignee, touching any property or rights of property of said bankrupt, transferrable to, or vested in such assignee; second, a limitation, not for tbe particular class of suits above mentioned only, but a general limitation, applicable to suits at law or in equity, in any case, and in any court whatsoever, in which such suits may be brought, either by or against tbe assignee, or by or against any person claiming an adverse' interest, touching tbe property or rights of property of tbe bankrupt. This limitation is, two years after tbe declaration and decree of bankruptcy, or after tbe cause of suit shall have first accrued. It is quite reasonable to suppose, that Congress designed to provide a short statute of limitation to litigation arising out of tbe administration of bankrupts’ estates. One object was, to speed tbe settlement of estates, all tbe proceedings in reference to which, tbe tenth section declares,
These statutes are various in the different states; whereas the law, as contemplated by the constitution, was designed to operate uniformly. This uniformity could not result, in the absence of a uniform limitation, as applicable to suits to recover the bankrupt’s effects.
Now, unless this limitation is found in the eighth section, above.referred to, the act contains none, except as applicable to cases where an adverse claim is set up to property or rights of property of the bankrupt. Perhaps it would be difficult to find a substantial reason for prescribing a limitation to suits for the recovery of specific property, which would not equally apply to suits for the recovery of money, or for a breach of duty. Upon the whole, I am of opinion, that the framers of the law very reasonably supposed, that the country might labor under much embarrassment, from the numerous suits and protracted litigation consequent upon the purchase, in many cases at a very trifling cost, of doubtful claims; and it was to meet this, and provide a general limitation, as applicable to suits, not only where property was claimed adversely, but in any and every case, and in every court, that this provision was inserted.
This conclusion is not only sustained by reason and a just and proper analysis of the act itself, but .by the former decisions of this court.
In Comegys v. McCord, 11 Ala. Rep. 932, which was an action of detinue for a receipt given to the bankrupt for notes, it does not appear what claim the defendant set up to the receipt, or whether it was adverse or otherwise. This inquiry was not deemed a matter of importance, and no point was made in the decision respecting it. The court, after referring to the latter part of the eighth section of the bankrupt
In Harris, Assignee, v. Collins & Cartright, 13 Ala. Rep. 388, we held the two years limitation, applied to an action of debt, upon a lease reserving rent to the bankrupt. See also Archer v. Duval, 1 Branch’s Rep. 219.
I am aware that a different construction has been placed upon this clause by the Supreme Court of Maine, in Carr v. Lord, 29 Maine, (16 Shep.) 21; but I feel satisfied that decision cannot be supported as a “correct exposition of the law upon this subject.”
A similar decision has been made in Pennsylvenia, (Union Canal Company v. Woodside, 1 Jones’ Rep. 176,) cited in 10 U. S. Dig. p. 62 § 10; but I have been unable to procure the volume containing it.
The equity of the bill in the case before us consists, not in the right which the complainant has to proceed against Lee for a breach of his obligation, as contained in the receipt, in failing to collect, or refusing to pay over, moneys upon the demands mentioned in said receipt; for this right could have been adequately asserted in the - common law court, and constitutes no ground for a resort to a court of equity. Standifer v. McWhorter, 1 Stew. Rep. 532; Bibb v. McKinley, 9
But the true ground, and the only one upon which the bill may be successfully defended, is, that Lee, having received and receipted for the demands of Boss, Strong & Co., agreed with that firm, through one of its members, to receive good notes and accounts on solvent individuals in the neighborhood, of value sufficient, when collected, fully to pay off and discharge said claims of B. S. & Co.; that Ivey, in conformity to said agreement, placed in Lee’s hands said notes and accounts, amounting to three thousand dollars, in trust to be collected and appropriated by said Lee to the payment of said claims to E. S. & Co., and that Lee refuses to account for these claims so received in trust. This agreement, creating a direct trust, coupled with the refusal of Lee to execute or carry it out, constitutes the gravamen of this bill.
When, however, we come critically to examine the record, it is quite apparent that no such agreement or trust is shown by the proof. The answers of both Lee and Ivey deny it, and there is not a witness who proves it.
John M. Ross, through whom it is alleged the agreement was made, states, that he was informed by Lee that he (Lee) had received claims from Ivey & Goodwin on different persons, sufficient to secure the amount of indebtedness of I. & G. to R. S. & Co.; but the other proof very clearly shows how these claims were deposited with Lee; and this witness states, that I. & G. had made an assignment, and proposed to their creditors to áccede to the conditions named in it by the 28th or 29th July, 1834; that on the 19th July, 1834, said witness went to Ivey & Goodwin, and proposed to them, “that he would leave his claims in the hands of Lee, and to whom they, the said I. & G., promised that if, on the termination of the assignment, (that is, the 29th July, 1834,) such assignment-should not be perfected, by the creditors of Ivey & Goodwin not agreeing to it, then the said I. & G. agreed to place .in the hands of said Lee good and solvent notes, and
The witness Goodwin, who was examined by the complainant, and who was a member of the firm of I. & G., says, he had ample means of knowing the situation of the firm, having access to all the books and papers of the same; and he testifies that the notes and accounts of said firm were turned over to Lee for the benefit of all the creditors, and that Lee was employed by the firm of I. & G. to obtain them a release from all their liabilities, by procuring the acceptance by the creditors of the compromise, as he calls it; that it was understood and agreed, that if no other creditors of the firm of I. & G. should come into the arrangement, than Eoss, Strong & Co., Jack F. Eoss, Turner & Lewis, Mott & Thompson, and John M. Mott, then these creditors should derive the whole benefit of the said arrangement. This witness attaches a schedule of the claims, so placed in the hands of Lee, for the benefit of the creditors of the firm, to his deposition. So that, according to the proof made by this witness, the contract under which Lee received the notes was totally different from that set out in the bill.
But it is unnecessary to set out in this opinion the proof made by the several witnesses, as it would render it too prolix. It is sufficient to state, that' after a most careful examination of the several depositions taken by complainant, we find no witness who proves the agreement set up in the bill. While on the other hand, as previously observed, the answers positively deny it, and the deposition of Brown, who states he was the clerk of Ivey & Goodwin during the whole time they were engaged in the mercantile business, and had a perfect knowledge of their transactions, goes directly to
The admission contained in the previous answer of Lee, that he held these claims for the sole and exclusive use of Eoss, Strong & Co., explained, as we have said in the statement, is not sufficient to warrant the relief prayed. Lee is but the trustee of the fund, and his admissions ought not to defeat the right of the other parties who are the beneficiaries. Besides, if he had made the admission in this suit, and the fact had been positively denied by his co-defendant, as it is, such answer could not be received in evidence against his co-defendant.
But the complainant’s own proof satisfies us that Lee was mistaken in his first answer, and this mistake should not in equity be visited with the consequences of an estoppel. Estop-pels are not favored in equity, and a court of chancery will never allow an innocent mistake of fact, which does not materially interfere with the rights of the opposing party, so to operate. The previous answer, in view of which this bill may have been filed, could well have been considered with reference to the cost; but it gives no title to relief, under the circumstances of this case.
. In any aspect in which the proof can be viewed, it is very clear, that to afford relief upon it, the complainant would recover upon a state of case different from that he makes by his allegations, or upon an agreement materially variant from that set up by him. We have seen this is not allowable. It follows, therefore, that the Chancellor did not err in refusing the relief prayed.
The Chief Justice fully concurs with me in both of the foregoing positions; but my other brethren, fully concurring in the last position, prefer to be considered as expressing no opinion as to the construction of the eighth section of the bankrupt act.
Let the decree of the Chancery Court be affirmed.