Cleland v. Anderson

• Decision Date: 03 July 1903
• Citation: Cleland v. Anderson, 96 N.W. 212, 66 Neb. 273 (Neb. 1903)
• Parties: J. C. CLELAND ET AL. v. GEORGE F. ANDERSON ET AL
• Court: Nebraska Supreme Court

96 N.W. 212

66 Neb. 273

J. C. CLELAND ET AL. v. GEORGE F. ANDERSON ET AL

Supreme Court of Nebraska

July 3, 1903

POUND C. DUFFIE and KIRKPATRICK, CC., concur.

OPINION

POUND C.

The facts are stated at length in the former opinion.It may be desirable, however, to restate briefly the particular circumstances out of which the point argued upon this rehearing arises.Anderson had a cause of action for injury to his business, under section 11, chapter 91a, Compiled Statutes, against some seven joint tort-feasors.He brought an action against three of them.Pending the action he became bankrupt and listed his interest therein among his assets.In consequence, it was sold, along with his other property, and the purchaser made a settlement with the defendants.Afterwards, he brought the present action against the four other tort-feasors, who set up the settlement and satisfaction in bar.The question is whether the interest of the bankrupt in the pending action passed to the trustee and thence to the purchaser, so as to have enabled the latter to make a settlement.

Section 70^[+]of the national bankruptcy act, by which this question must be determined, is not entirely clear.While doubtless intended to cover everything of value which ought to be applied upon the claims of creditors, it does so in a somewhat clumsy and confused form which makes construction difficult.It provides that the trustee shall be vested with the title of the bankrupt to "all (1) documents relating to his property; (2) interests in patents, patent rights, copyrights, and trademarks; (3) powers which he might have exercised for his own benefit, but not those which he might have exercised for some other person; (4) property transferred by him in fraud of his creditors; (5) property which prior to the filing of the petition he could by any means have transferred or which might have been levied upon and sold under judicial process against him: Provided, That when any bankrupt shall have any insurance policy which has a cash surrender value payable to himself, his estate, or personal representatives he may, within thirty days after the cash surrender value has been ascertained and stated to the trustee by the company issuing the same, pay or secure to the trustee the sum so ascertained and stated, and continue to hold, own, and carry such policy free from the claims of the creditors participating in the distribution of his estate under the bankruptcy proceedings, otherwise the policy shall pass to the trustee as assets; and (6) rights of action arising upon contracts or from the unlawful taking or detention of, or injury to, his property."

We have no doubt that Anderson's right of action against Iddings Birge and Field, before suit brought, would not have passed, and that his cause of action against the defendants in the present action did not pass, to the trustee.Subdivision 6 clearly applies in each case; and, as the right of action did not arise upon contract nor from the unlawful taking or detention of, or injury to, the bankrupt's property, that subdivision leaves it in the bankrupt.But the question remains whether the interest of Anderson in the action pending against Iddings, Birge and Field, at the time he became a bankrupt, as distinguished from his right of action before he brought suit, comes within the purview of subdivision 5, or is likewise to be governed by said subdivision 6.Ordinarily, we should consider the one as standing upon the same ground as the other.The Code, however, makes a clear and important distinction between them; the...