Moors v. Albro

Gray, C. J. The bankrupt act provides that where three fourths in value of the creditors whose claims have been proved have resolved that it is for the interest of the general body of the creditors that the estate of the bankrupt shall be settled by trustees under the supervision and direction of a committee of the creditors, and the resolution has been confirmed by the court, “ the bankrupt, or, if an assignee has been appointed, the assignee, shall, under the direction of the court, and under oath, convey, transfer and deliver all the property and estate of the bankrupt to the trustees, who shall,'upon such conveyance and transfer, have and hold the same in the same manner, and with the same powers and rights, in all respects, as the bankrupt would have had or held the same if no proceedings in bankruptcy had been taken, or as the assignee in bankruptcy would have done, had such resolution not been passed.” U. S. Rev. Sts. § 5103. The conveyance to the trustees is to be made by the assignee if there is one, and by the bankrupt if no assignee has been appointed; and, whether it is made by the one or by the other, the trustees have all the powers and rights which either the bankrupt would have had if there had been no proceedings in bankruptcy, or an assignee in bankruptcy would have had if no such resolution had been passed. ' It was ingeniously argued by the plaintiff’s counsel, that this provision is to be construed distributively, giving the trustees [12] no more than the rights of the bankrupt, if the conveyance is made by the bankrupt, and the rights of an assignee, only where the conveyance is made by an assignee; and therefore that, the conveyance to the trustees in this case having been made by the bankrupt before the appointment of an assignee, the attachment made within four months of the commencement of the proceedings in bankruptcy is not dissolved by virtue of § 5044. But that argument is refuted by the subsequent clauses of § 5103, which not only declare that “ the winding up and settlement of any estate under the provisions of this section shall be deemed to be proceedings in bankruptcy,” but add that “ the trustees shall have all the rights and powers of assignees in bankruptcy,” and further provide for the examination of the bankrupt, and of any creditor or debtor of the estate, or any person known or suspected of having any of the estate in his possession, and for granting a "certificate of discharge to the bankrupt, as in other proceedings in bankruptcy. The purpose of the statute in allowing trustees to be chosen, instead of assignees, to administer the estate of the bankrupt, is to enlarge the discretionary powers of the. officers entrusted by the court with the winding up and settlement of the estate. See Foster v. Ames, 1 Lowell, 313; In re Cooke, 11 Bankr. Reg. 1. The whole tenor of the section is inconsistent with the theory that, whether the bankrupt or the assignee is the person to execute the formal conveyance, the estate to be administered by the trustees shall be less than it would be if administered by an assignee in the ordinary course. We are therefore of opinion that any attachment of property of the bankrupt, made within four months of the commencement of the proceedings in bankruptcy, is as effectually dissolved when a conveyance of the bankrupt’s estate is made by the bankrupt to trustees under § 5103, as when it is made by the register to assignees in bankruptcy under § 5044. This conclusion is supported by the decisions of Judge Shipman in the District Court of the United States for the District of Connecticut in the case of In re Williams, 2 Bankr. Reg. 229, 230, and of Judges Lowell and Knowles in the Circuit Court of the United States for the District of Rhode Island in the case of Weybossett Bank v. Border City Mills, May term 1879. [13] The deeds from the bankrupt to Dexter, Abbott & Company of lands in Bristol and in Middlesex, with contemporaneous, though unrecorded, agreements of defeasance, were, in equity at least, mortgages, as between the bankrupt and the grantees, leaving an equity of redemption in him. Campbell v. Dearborn, 109 Mass. 130. That equity of redemption, like other property and rights, legal or equitable, of the bankrupt, would pass to an assignee under §§ 5044, 5046, and therefore vested in the trustees in bankruptcy. The fact that the deeds to Dexter, Abbott & Co. were recorded, while the agreements of defeasance were not recorded, does not create any estoppel of which the attaching creditors can avail themselves. The deed of the land in Bristol, having been made before the attachment, would, taken by itself, show no title whatever in the debtor which could be attached. The deed of the land in Middlesex was made after the attachment, and neither the making and recording of that deed, nor the omission to record the agreement of defeasance, constituted any representation to the attaching creditors, or anything on which they had a right to rely, or appear to have relied, to their detriment. The result in each case is, that the plaintiff’s attachment is dissolved and he is not entitled to a special judgment; that the judgment for the defendant on his discharge in bankruptcy must be affirmed; and that the trustees, who had the same right as assignees in bankruptcy to intervene to protect the estate, are to have judgment for their costs. Doe v. Childress, 21 Wall. 642. Ray v. Wight, 119 Mass. 426. Seavey v. Beckler, 128 Mass. 471. Judgments accordingly.