[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 615 In my opinion, the two years' limitation by section 8 of the bankrupt act (Acts of Congress, 1841, 5 Stat. at Large, p. 446) is a bar to this action.
It is provided by section 8 that "no suit at law or in equity shall, in any case, be maintained by or against such assignee, or by or against any person claiming an adverse interest touching the property and rights of property aforesaid [the property of the bankrupt vested in the assignee by the decree], in any court whatsoever, unless the same shall be brought within two years after the declaration and decree of bankruptcy, or after the cause of suit shall have accrued." I think the interest or claim of the mortgagees touching the mortgaged property, under the mortgage, was adverse to the legal title and interest in the property vested in Waddell, the assignee, by the declarations and decrees of bankruptcy, within the meaning of this provision.
The mortgage was due, and was a charge or lien on the legal title or interest vested in the assignee by the decrees of bankruptcy; and, although possession under the mortgage before foreclosure and sale would not have been adverse to the mortgagors or those claiming under them, yet, I think, the interest of the mortgagees was an adverse interest touching the mortgaged property at the time of the making of the decrees of bankruptcy, within the meaning of the provision of the 8th section of the act above quoted.
I think the interest of the mortgagees may be said to have been an adverse interest touching the property to the extent of the amount due on the mortgage, for there was no right of redemption without paying, or offering to pay, the amount due on the mortgage.
The interest of the mortgagees was not only an adverse interest touching the property within the meaning of this provision, *Page 616 but, at the time of the vesting of the property in Waddell, the assignee, by the decrees of bankruptcy, this interest was in a most adverse or inimical position.
A suit to foreclose the equity of redemption, to which McKibben and Strong, the bankrupts, were parties, was then actually pending, and of this suit, Waddell, the assignee, had notice, for in the schedule annexed to the petition of McKibben it was not only stated that the property was subject to the mortgage, but also that a suit had been commenced to foreclose it.
The moment the legal title or interest passed to the assignee by the decrees, he had a right, by and under the order and direction of the court in bankruptcy (§ 11 of the act), to redeem. If there was any defence to the foreclosure suit, he had a right to defend by section 3 of the act.
It is plain from sections 8 and 10 that it was the intention of the act that all questions concerning the bankrupt's property should be speedily settled, so that the bankrupt's property could be sold and the proceeds distributed among his creditors.
If the interest of the mortgagees was an adverse interest touching the property within the meaning of section 8, at the time of making the decrees, then, by the very words of the section, no suit could be maintained against the person or persons claiming that interest, unless brought within two years after the declarations and decrees of bankruptcy.
I do not see why the assignee, by section 8, was not bound to apply to the court for direction to redeem, and, if he could not redeem without suit, for direction to bring a suit for that purpose, and to bring such suit within two years after the decrees.
If the limitation of two years commenced running upon the vesting of the legal estate in the assignee by the decrees, then the right to redeem by suit never passed to the plaintiff, for the suit was barred by the limitation before the legal estate passed from the assignee. The decrees were made on the 16th of June and 28th July, 1842. McKibben's interest was sold by the assignee to the plaintiff on the 25th November, 1844, and the deed therefor executed to him on the 24th November, 1845.
Strong's interest was sold by the assignee to Clute on *Page 617 the 4th and 10th days of March, 1844, (within two years after decree,) but the conveyances to Clute for the same were not made until the 5th and 18th March, 1846; and Clute conveyed to the plaintiff the 7th and 19th of March, 1846.
But suppose the two years' limitation commenced running at the date of the deeds under the Master's sale, (January 23d 1843,) on the ground that the cause of suit, within the meaning of section 8 of the act, then first accrued; even then the action was barred before the legal title or estate passed from Waddell, the assignee, by his conveyances. Waddell could not convey or assign a right of action which had been cut off by the act, and which, therefore, he had not himself.
I am inclined to think, also, that the plaintiff's right of action was barred by the ten years' limitation by statute. (2 R.S., pp. 301, 302, § 52; Code, § 97.) I think the ten years commenced running at least at the date of the foreclosure sale, which was on the 12th of January, 1843. This action was commenced on the 24th of January, 1853.
But I prefer to put my opinion in favor of an affirmance of the judgment of the Supreme Court upon the ground alone that the plaintiff's action was barred by the two years' limitation provided in the act of Congress. My conclusion is, that the judgment of the Supreme Court should be affirmed, with costs. DENIO, GOULD and ALLEN, Js., concurred that the two years' limitation was a bar to the action.
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