Oakey v. Gardiner

The judgment of the court was pronounced by Eustis, C. J.* On the 5th of September, 1842, in NewOrleáns, Henri/ S. Buchner applied for the benefit of the bankrupt act for his own debts; and, as a member of 'the firm of Buckner, Stanton § Co., of New Orleans, Stanton, Buckner & Co., of Natchez, M. B, Hamer & Co., of Yazoo City, was declared a bankrupt, and an assignee was appointed to his estate. The members of the firms wore Frederic Stanton, of Natchez, Henry S. Buckner, and M. B. Hamer, of Mississippi, who died previous to the bankruptcy. On the schedule filed by Buckner of the assets of the partnership of Buckner, Stanton Sf Co., was a claim against G. G. Skipwith, of the parish of Carroll, set down as amounting to S3,259 55, balance on note in the hands of Yerger, which, with several other claims, was purchased by the defendant, at the public sale of the bankrupt’s effects, in June, 3844. Stanton had, in November-, 1842, individually, andas a member of the firms before mentioned, been declared a bankrupt by the bankrupt court of Mississippi, and an assignee was appointed to his estate. After the sale of the claim to defendant, Stanton's assignee formally relinquished in his favor all right and interest in the assetts of Buckner, Stanton Co., purchased by him. On the discovery being made that this claim had passed into a judgment against Skipwith in the United States Circuit Court of Tennessee, by order of the bankrupt court of New Orleans, the assignee of Buckner executed a formal transfer of the judgment to the defendant, on the 25th March, 1845; all of which was notified to the debtor, Skipwith. Subsequently the aforesaid judgment was sold by Stanton's assignee in Mississippi to the plaintiff, at the sale of the bankrupt effects, under the description of “Judgment of M. B. Hamer & Co. against G. G. Skipwith,” giving its date, rimount, etc., and the court in which it was rendered. This judgment is lbe subject of controversy between the plaintiff and defendant in the present suit. The district judge decided in favor of the defendant, and the plaintiff lias appealed. We concur in the view of the district judge of the rights of the parties^ The debt we think belonged of right to the house of Buckner, Stanton & Co., of New Orleans, and was properly sold for the benefit of their creditors. The extent of the interest acquired by the purchaser it is unnecessary to examine. Any interest which Stanton had in it we think his assignee was competent to release, and in so doing he acted in discharge of his duty. The decree of the bankrupt court in New Orleans, ordering the formal transfer of the judgment to the defendant, was rendered contradictorily with the assignee, and evidence) it appears, was adduced in relation to the rights of the former, and the judgment, though in the name of M. B. Hamer & Co. was ordered to be transferred to the defendant under his purchase at the marshal’s sale of the effects of the bankrupt. Thus, as far as the power of that court under the bankrupt proceedings extended, the right to this judgment was vested in the defendant. Bankrupt Act, § 6. The assignee of Stanton, so far from having any interest in disturbing this purchase, acted, we think, discreetly, in releasing any interest he might have in it. The proceeds of the sale were to be applied under the bankrupt law to the extinguishment of the partnership debts, at the domicil of the partnership in New Orleans. Any interference with this disposition of the assetts of Buckner, Stanton Sf Co., to defeat or embarrass this application, would have been [1007] rather a burthen than a benefit to Stanton’s estate, and we think the assignee had an undoubted right to release the interest. Turner v. Richardson, 7 East, 339. Assignees of a bankrupt are not obliged to take property of a bankrupt which will be a charge to the creditors — an hereditas damnosa, or a litigious right, the sale of which will involve the estate in fruitless litigation and embarrass the rights of bona fide creditors, and which their interests require should be extinguished. The defendant having thus acquired the judgment, we think his rights could not be affected by the subsequent sale of it to the plaintiff. Judgment affirmed. Footnotes [*] Si.ideiJ/, ,T. did not sit in this caso, having boon of counsel.