Holbrook v. Brenner

Mr. Justice Waleek delivered the opinion of the Court. Plaintiff in error, on the trial in the court below, read in evidence a deed from Bostwick, as assignee of Campbell, a bankrupt, to Doolittle, dated the 17th of June, 1853, for the premises in controversy. Next, a deed from Jones, master in chancery, which was made under a decree rendered in the Tazewell Circuit Court, in favor of A. L. Merriman, and against the heirs of Doolittle and H. O. Merriman, conveying the premises to defendant Prettyman. He then offered to read a deed from Bostwick, as assignee of Campbell, to himself, dated October 18th, 1850, for the same premises. And in connection with the last deed, he offered a certified copy of the decree, declaring Campbell a bankrupt, and appointing Bostwick his assignee. Also, the fifty-first rule adopted by the court in bankruptcy. The deed, the copy of the order, and rule, were rejected, and not permitted to be read to the jury, and a verdict was returned in favor of the defendant, upon which a judgment was rendered. The first objection to the deed as evidence, was, that it was not, it is insisted, connected with a source of paramount title. On the contrary, it is urged that the evidence showed that the parties claimed title from Bostwick as a common source. In the action of ejectment it is held, that where both parties claim under the same right, the plaintiff is not required to trace his title back beyond the common source. Ferguson v. Miles, 3 Gilm. 365; McConnel v. Johnson, 2 Scam. 528; McClure v. Engelhardt, 17 Ill. 50. When it is found that the defendant has purchased by deed, and is in possession of the premises, it is frimafaeie evidence that he claims under that title. And if he and plaintiff claim from the tame source, it is not necessary for the latter to trace his title further in the first instance. When he exhibits a title from the same source, better than that of the defendant, it is sufficient to put him upon his defense. The defendant may, however, show that he claims under a different title, or, he may show a paramount, outstanding title, to defeat a recovery. In this case, it was sufficiently shown that both parties claimed from a common source, to authorize the reading of the deed in evidence, and the court erred in excluding it from the jury. It is, however, urged that the deed was inadmissible, because it was not shown that Bostwick entered into bond as assignee. That by the terms of the decree, he was only to become assignee, upon executing such a bond, in a penalty of a number of dollars not specified. By the fifteenth section of the bankrupt act,* it is declared, that a copy of the decree and appointment of the assignee, recited in the deed for lands of the bankrupt, sold and conveyed by the assignee, together with a certified copy of the order, shall be full and complete evidence of the bankruptcy and assignment, to validate the deed. “ And all deeds containing such recitals, and supported by such proof, shall be as effectual to pass the title of the bankrupt, of, in and to the lands therein mentioned and described, to the purchaser, as fully to all intents and purposes as if made by such bankrupt himself immediately before such order.” This provision was manifestly designed to dispense with all proof that the assignee had complied with the terms of the decree or the rules of the court, when the deed should come in question in a collateral proceeding. If he failed to act in obedience to the decree, or acted in violation of the rules of court, and the assignee or creditors made no exceptions to have the sale set aside, the deed would be conclusive, to pass the title of the bankrupt. This enactment has dispensed with proof that a bond was given, but makes the deed, in a collateral proceeding, conclusive evidence of that fact. It is also evidence that the sale was reported to, and approved by, the court. Also, that proper notices were given of the time, place and terms of the sale. Or, perhaps, more accurately stated, the sale is made valid whether these requirements have, or not, been observed. These views are in accordance with the decisions in the cases of Holbrook v. Correy, 25 Ill. 543, and Joy v. Bedell, 25 Ill. 537. The cases referred to by defendant in error, which hold that the assignee has no power to maintain an action to recover the assets of the bankrupt, until he has given bond, do not militate against the validity of this deed. The deed is made valid and effectual to pass the title by express enactment, whilst there is no authority conferred, to bring suit before bond is executed. The statute has not provided that he may sue, upon merely producing a copy of the decree appointing him assignee. The questions are distinct, depending upon different provisions of the law, and hence, different rules may prevail. Inasmuch as the decree in bankruptcy, and the appointment of the assignee, divested the bankrupt’s title out of him, and vested it in the assignee, there was no title in the bankrupt when the second decree was rendered. The former decree had left no interest in the bankrupt to this property, which could be affected by the latter decree. And as the sale of the premises by the assignee to plaintiff in error, transferred the title held by the assignee, to the purchaser, the subsequent sale to Doolittle could pass no title. But even if the latter decree of the court in bankruptcy had any binding effect upon any person, or upon anything, it was not on plaintiff in error, as he was not a party to that proceeding. Even if it purported to set aside the sale to plaintiff in error, it could have no such effect, unless he had been in court as a party to the proceeding. He is not concluded by that decree, in that or any other tribunal. It is again urged, that the assignee had no power to sell the premises, after the expiration of two years from the time of his appointment. The eighth section of the bankrupt act limits the period within which the assignee may sue to recover the assets of the bankrupt, to two years after the bankruptcy, or the cause of suit has accrued. The tenth section provides, that “ all proceedings in bankruptcy in each case, shall, if practicable, be finally adjusted, settled and brought to a close, by the court, within two years after the decree declaring the bankruptcy.” The first of these provisions, in terms, relates to the bringing of suits to recover assets. It in nowise relates to the sale of property. There does not seem to be the remotest connection between maintaining a suit and selling property. But it is contended that as the assignee could not recover these premises by an action, he could not transfer the right to maintain an action. The title was vested in him, and he, by the requirements of the law, was bound to sell it, and no time for its sale is prescribed. And where we find that the law has vested him with the title for a particular purpose, and has limited no period within which he shall carry out that purpose, we cannot infer that it shall be defeated, because the law has required the performance of other acts within a limited time. The property is vested in him for the benefit of creditors, and it cannot be that it was designed, that if from any cause it was not sold, they, without fault ■ or neglect on their part, should be deprived of their beneficial interest in the trust fund. It will hardly be contended that where real estate is vested in an assignee, reduced to his possession, but from any cause not sold until the expiration of two years, and after its sale an adverse possession was acquired, the purchaser could not maintain ejectment. And the doctrine contended for, would lead to this conclusion. The title was manifestly transferred to the assignee for the purpose of paying creditors, and the assignee was required to sell it for that purpose, and the doctrine contended for would be well calculated to defeat the design of the law. The provisions of the tenth section are not imperative, but are advisory. It provides that the entire business of the,bankrupt, if practicable, shall be closed up within two years. But it imposes no penalties and divests no titles to property if it • is not done. The very fact that it only requires the business to be closed, if practicable, implies that if it is not done, the assignee shall still proceed to close the business. And it would seem inevitably to follow, that if he had the title to property not sold, he might dispose of, and convey it, and thereby pass the title. When the law cast upon him the title, it made no provision for it to be divested, except by sale or the appointment of a successor. And the law could not have designed to offer him the property as a premium for neglecting his duty in making a sale, and if he cannot sell it after that period, it would become his, absolutely and unconditionally. Such could not have been the design of the lawmakers. We are therefore of the opinion that the assignee had the power to sell and convey the premises after the expiration of the two years, and that the purchaser acquired all the rights of the bankrupt. It was further insisted that the sale could only be made under the order of the court, and that no order was shown. It appears that the fifty-first rule of the court of bankruptcy requires the assignee to make sale, and to give notice of the time and place where it will be made. This rule of court was, for all purposes, an order of court, as fully as if it had been copied at large into the decree. When the assignee sold under this rule, he virtually sold under the order and direction of the court. JBut if this were not true, the provision of the fifteenth section of the act dispenses with the proof, when it makes the deed and copy of the order appointing the assignee, full and complete evidence to validate the deed. We are, for these reasons, of the opinion that the court below erred in rejecting the deeds offered by plaintiff in error as evidence, and the judgment is reversed, and the cause remanded. Judgment reversed. Footnotes [*] Act of Congress of August 19, 1841. 5 U. S. Stat. at Large, p. 448.