Home Insurance v. Hollis

Trippe, Judge. 1. It would be a rigid rule as to diligence which would hold that the assignee had lost his right to make this motion. It [660] is true he had been appointed assignee before the adjourned term; but that term did not continue longer than one day. The assignee had but a short time after his appointment to be informed of the condition of the bankrupt’s affairs. It does not appear that he knew of the settlement which had been made before the sitting of the adjourned term, or even that the suit had ever been commenced. He made the motion at the first regular term after his appointment, and was in time. 2. When the settlement was made all the parties to it knew of the bankruptcy of Hudson, and that his attorneys held the policy by the transfer as a security for their fee. The suit was in the name of Hudson. Before his adjudication as a bankrupt the attorneys could not, without special authority, have received anything in discharge of his claim but the full amount in cash : Code, section 409. After the adjudication all his rights vested in his assignee. The assignee may not have been appointed for some time, but his title to the bankrupt’s rights and property related back to the time of the adjudication. Hudson could not assign or settle them. It is true, the attorneys had the right to collect the $2,000 00 as a payment in part, or in full of the claim on the policy, if that amount was all that was due. But neither they or the bankupt jointly with them, could go further. If more was due and recoverable the assignee has a right to be heard as the representative of the creditors, for the purpose of collecting it. To do this it is necessary that he be made a party. He was no party to the settlement, nor to the case being entered settled on the docket. As a matter of right, he can move to vacate the entry — to reinstate the case, and to be made a party. Then all can be heard upon the merits of the settlement. That is not a question to be determined before he is a party; it is not a condition precedent on him to show that it was wrong, or not in full satisfaction of what was justly due, in order to have the case reinstated. If it were, then there would be two trials of exactly the same issue to be had. There is no necessity and no reason for this. Judgment affirmed.