Peery v. Carnes

Black, J. — The demands sued for, amounting to ■some $18,000, if they ever had any existence in point of fact, accrued on the fourth of June, 1878, and were subsisting claims at a subsequent date when plaintiff was .adjudged a bankrupt. The pleadings present a vast number of issues of fact as to which no questions of law .are preserved by the record and they need not be stated. The record recites that plaintiff offered evidence tending to prove the issues on his part and defendant ■did the like. Defendant read in widence a transcript of the record in the matter of bankruptcy of plaintiff. This is the only evidence preserved. The court, at the request of the defendant, gave an instruction to the effect that if plaintiff was adjudged a bankrupt, that an assignee was appointed, qualified and received a deed of assignment, and that the assignee has not been discharged, then the finding should be for the defendant ; and refused an instruction of the opposite ■effect. These were all the instructions asked or given .and thereupon plaintiff took a non-suit with leave, etc. From this transcript it appears plaintiff was declared a bankrupt on his own petition on the third of August, 1878. An assignee was appointed, who qualified .and received a deed of assignment in September following. Although the schedules disclose a number of creditors including debts to the amount of $17,000, upon which •defendant was bound as surety, yet none of the credi [656] tors proved up their demands. On the fifteenth of March, 1879, an order was made allowing the accounts of the register, clerk and assignee and a balance of $1.28 was ordered to be paid the bankrupt and on the same day the bankrupt received his ‘ discharge. Admissions contained in the pleadings, taken in connection with the transcript, further show that in 1880 certain creditors, at the instance of defendant, filed their petition to set aside the discharge on the ground that plaintiff had fraudulently withheld some $14,000 in money. This petition was dismissed in the same year with the consent of defendant. The demands here sued for were not scheduled or mentioned in any of the proceedings in bankruptcy. This suit was commenced in November, 1881. The assignee became entitled to the property of the bankrupt fraudulently conveyed, concealed or inadvertently omitted, as well as that scheduled and surrendered, and was the proper party to sue for and recover the same. He acquired the right and title thereto by virtue of the proceedings in bankruptcy and the deed of assignment. So long as the proceedings were pending he was the only proper party to sue ; and the creditors were bound’to assert their rights as creditors by and through the assignee. Glenny v. Langdon, 93 U. S. 20; Trimble v. Woodhead, 102 U. S. 647; Moyer v. Dewey, 103 U. S. 301. But the assignee is but a trustee for the creditors and bankrupt. The machinery of the law is designed to enable him to collect the assets, convert the assigned property into money and distribute the same among the creditors. His trust ceases when all this is done and the proceedings are brought to an end. Whatever there is in his hands after the debts are paid and his active duties are performed becomes the property of the bankrupt by operation of law, without any formal discharge of the assignee or re-transfer. Perry on Trusts (3 Ed.) secs. 351-2-3, 920; [657] Conner v The Southern Express Co., 42 Ga. 37; Page v. Waring, 76 N. Y. 463. ' Here no debts were ever proved up ; the balance of fees was ordered paid to the bankrupt; the petition to vacate the bankrupt’s discharge was dismissed, and no proceedings have been taken by the assignee or the creditors to assert any claim to the alleged demands sued for. As the record stands there is but one conclusion and that is that the assignee’s trust had ceased. The plaintiff may maintain this suit, and if defeated it must be upon facts other or additional to those hypothecated in the instructions. It also follows that the motion to strike out that part of the reply which sets up in substance that the assignee had no further duties to perform,. and that the debts were paid, should have been overruled. For these errors the judgment must be reversed and the cause remanded for new trial. While the record does furnish evidence that the demands now sued for, if such there are in fact, were fraudulently concealed by the bankrupt, and on the other hand that the alleged settlement of the parties about the petition to set aside the discharge was withdrawn, was really a scheme to defeat the ends of the bankrupt law, still the record does not furnish all the evidence, at least no questions of law are preserved in this respect, and we dismiss the consideration of the questions arising upon such evidence until they are presented in a tangible shape. Judgment on non-suit is reversed and cause remanded. The other judges concur.