Griffin v. Mut. Life Ins. Co. Of N.Y.

• Decision Date: 04 March 1904
• Citation: 119 Ga. 664,46 S.E. 870
• Parties: GRIFFIN . v. MUTUAL LIFE INS. CO. OF NEW YORK.
• Court: Georgia Supreme Court

46 S.E. 870

119 Ga. 664

GRIFFIN .

v.MUTUAL LIFE INS. CO. OF NEW YORK.

Supreme Court of Georgia.

March 4, 1904.

BANKRUPTCY—INTERVENTION BY TRUSTEE— PROSECUTION OF SUIT—ABATEMENT —RIGHTS OP DEBTOR.

1. A trustee in bankruptcy may, but need not, intervene as plaintiff in a suit brought by the bankrupt before the adjudication in bankruptcy.

¶ 1. See Bankruptcy, vol. 6, Cent. Dig. §§ 242, 534.

2. If no trustee is appointed, or if the bankrupt court does not consider it to the interest of the estate to permit the trustee to prosecute the suit previously brought by the bankrupt, the action does not thereby abate, nor is the bankrupt's debtor discharged from liability in the pending action.

3. The bankrupt may have an interest in the recovery as the source from which he may receive any homestead exemption to which he is entitled, and he also has the right to enlarge the estate for the benefit of his own creditors.

4. If the bankrupt ultimately recovers in such suit, and any question arises as to the right of the trustee to the money when paid, or of the defendant to be protected in paying it to the proper party, both may be secured by appropriate action being taken for that purpose at a later stage of the cause.

5. If the failure to elect or appoint a trustee in bankruptcy in any way injured the rights of creditors, it did not discharge the bankrupt's debtor, nor destroy the bankrupt's reversion in the chose in action after his creditors had lost or exhausted their rights thereto.

(Syllabus by the Court.)

Error from City Court of Atlanta; H. M. Reid, Judge.

Action by J. K. Griffin against the Mutual Life Insurance Company of New York. Judgment for defendant, and plaintiff brings error. Reversed.

On November 23, 1901, Griffin brought suit against the Mutual Life Insurance Company of New York for $244, alleged to be due as commissions on policies of insurance written by him as agent of the company. The defendant appeared and answered, and on June 19, 1903, amended its answer by alleging that on December 5, 1901, the plaintiff had been duly adjudicated a bankrupt, and moved to dismiss the suit on this ground. This issue was submitted to the judge without a jury; it being admitted that Griffin had been adjudicated a bankrupt on the day named, that no creditors were present at the creditors' meeting, that no trustee was appointed by the creditors or the referee, and that during the pendency of the suit the bankrupt was duly discharged. The court sustained the motion, and Griffin excepted.

Lowndes Calhoun, for plaintiff in error.

J. H. Gilbert, for defendant in error.

LAMAR, J. We infer from the briefs and argument that the defendant insisted in the court below that the title to the chose in action on which suit had been brought in the state court vested by operation of law in the trustee in bankruptcy, and that the suit should be dismissed because the company would not be protected in any payment it might make to the plaintiff, if thereafter sued for the same cause of action by the trustee. Under the bankrupt act of March 2, 1867, c. 176, 14 Stat. 517, it was held to be no defense to an action for a debt that the creditor had become a bankrupt. After title vested in the assignee, and he, with notice, permitted a pending suit to proceed in the name of the bankrupt, he was bound by any judgment that might be rendered. Under the act...