Ramsey v. Fellows

Foster, J. The plaintiffs’ right to prosecute this action is not defeated by the refusal of the assignee “ to appear or recognize the suit.” All property, rights of property, and choses in action, belonging to a bankrupt, and not by law exempt, pass by force of the decree of bankruptcy to the assignee, by operation of law, and become vested in him from the date of adjudication. U. S. Rev. St., s. 5046; Berry v. Gillis, 17 N. H. 9; Towle v. Rowe, 58 N. H. 394; Yorke v. Brown, 10 M. &. W. 78. But, though the legal title passes to the assignee, he is not bound to take possession of all the property, nor to attempt to enforce all the bankrupt’s claims. He is required to exe'rcise his best judgment and discretion in the interests of the creditors, but he is not called upon to engage in prosecutions or litigation which may seem to be of doubtful advantage to the creditors ; certainly not unless indemnified by them. Assignees of a bankrupt are not bound to take prop *609 erty o£ the bankrupt’s estate which will be a burden instead of a benefit to the creditors. It is said, “ They are, on that subject, regarded as being in a very different position from that of the executors of a deceased testator, as the former take the property by operation of law, while the latter claim title through their testator, and are bound to perform his obligations to the extent of his assets.” Robeson on Bankruptcy 822. Where the assignee elects not to take the property or the rights of the bankrupt and charge the estate with the burden of an uncertain litigation, the property remains in the bankrupt, and the right, whatever it is, survives in the bankrupt. Copeland v. Stephens, 1 B. & Ald. 594, 603; Fowler v. Down, 1 Bos. & Pull. 44, 47; Amory v. Lawrence, 3 Clif. 523, 535, 536. In Towle v. Davenport, 57 N. H. 149, the quaere was suggested, whether, in case the assignee refuses to adopt and prosecute a suit in relation to property or rights which vest in him, the bankrupt will be allowed further to prosecute the same; but in Towle v. Rowe, before cited, it was determined that the assignee was not bound to redeem a note and mortgage which had been pledged by the bankrupt, nor to bring or maintain a suit thereon ; that lie would not be warranted in redeeming a pledge at expense exceeding the value of the property redeemed, nor in prosecuting suits, the anticipated result of which would be a burden to the bankrupt estate; and that if the assignee does not choose to interfere, then the right remains in or is restored to the bankrupt, — for the bankrupt has the right against everybody but the assignee. In the present case, the assignee refusing to appear or recognize the suit, the plaintiffs may prosecute it for their own benefit. Motion denied. Bingham, J., did not sit: the others concurred.