12 Ala. 661 | Ala. | 1847
The first question made in the argument, whether this deed is fraudulent in legal estimation, without proof of actual fraud, in consequence of the resulting trust secured to the grantors, in the event the creditors of the eighth class did not execute within ninety days a release to the Farmers, and accept the provision made for them in the deed, has been considered by this court at the present term, in the case of Grimshaw and Brown v. Walker, where it was held that precisely such a provision as this, did render a deed of trust fraudulent, and void. Referring, therefore, to that case, for an exposition of the principles which led us to that conclusion, we proceed to the consideration of the remaining question, which is one of novelty, and not free from difficulty. What did the defendants in error acquire, by their purchase from the assignee in bankruptcy, of the interest of the bankrupts, in this assignment?
The solution of this question, must depend upon the proper construction of the bankrupt law of the United States; and of the rights which the assignee acquired under it. The third section of the act declares, “ that all the property, and rights of property, of every name and nature, whether real, personal, or mixed, of every bankrupt, except as is hereinafter provided, who shall by a decree of the proper court be declared to be a bankrupt within this act, shall by mere operation of law, ipso facto, from the time of such decree, be deemed to be divested out of sueh bankrupt, without any other act, assignment, or other conveyance whatsoever, and the same shall be vested by force of the same decree, in such assignee, as shall from time to time be appointed by the court for this purpose; and the assignees so appointed, shall be vested with all the rights, titles, powers, and authorities, to sell, manage, and dispose of the same, and to sue for and defend the same, subject to the orders and directions of such court, as fully, to all intents and purposes, as the same were vested in, or might be exercised by the bankrupt before, or at the time of his bankruptcy, declared as aforesaid.”
The evident design of this clause of the law, was to invest
If this deed had been valid, the grantor would have had a clear right to any surplus which might have remained, after the discharge of the trust; but the deed being fraudulent and void, we are unable to comprehend how he could derive a title to it through the deed. It may be conceded, that as against the trustee, he could have recovered this surplus, no creditor asserting a right to it. But this is not such a right of property as the assignee succeeded to. The rights of property, in the mind of the framers of the bankrupt law, were those to which the bankrupt had either a legal, or an equitable title, which could be enforced in a court of justice; not mere possibilities, which were valuable or worthless, according as creditors enforced, or abstained from enforcing their rights to it. Again, how could such a claim be described in the schedule, which the bankrupt was required to give of his effects. It is described, as appears from the bill, as “ their interest in an assignment to Turner Reavis.” We have seen that they can assert no interest under this conveyance, as such. The bankrupt law required the assets to be distinctly pointed out, doubtless for the purpose of enabling the assignee to convert them into money, and the necessity for this is more apparent, from the mode generally adopted by the courts of the United States, of directing a sale of the bankrupt’s choses in action. It is surely contrary to the policy of that law, that under this obscure designation, of an unknown interest, a right should be acquired which cannot be derived from, or enforced under the assignment, but which depends upon the contingency, of no creditor of the bankrupt assert
But if this were not the correct interpretation of the bankrupt law, what did the complainants purchase of the assignee? —certainly nothing but the supposed resulting trust under the deed; and under this purchase they cannot assert a title to that which they did not buy.
The assignee, it is urged, is a trustee for the creditors. He is for such as come in under the commission, and prove their debts. As to all other creditors, and it appears from the record in this case there are such, his interest is adverse. No act of his, therefore, can conclude them, from obtaining payment of their debts, from property, which by the fraudulent conduct of the debtor, previous to his bankruptcy, had been separated from his estate. If it were conceded that the as-signee could do that, which the bankrupt himself could not do, invalidate the deed, and recover the property from the trustee, he could not, for the reasons already given, convey this right to another.
The question may be asked, what is to become of this money in the hands of the trustee, as the bankrupt’s right is gone by the bankruptcy, even if no creditor asserts a right to it. Does it belong to the creditors generally who assert a title to it, or only to those who refused to come in under the commission? We merely put these queries: as they have not been argued, it would be improper to answer them at this time.
We have been compelled to decide this case on principle,, and without reference to adjudged cases. If any exist, they have not been brought to our notice, nor have we been able-to find any. Our conclusion is, that the decree of the chancellor must be reversed, and the bill be dismissed.
