In re Gillespie

• Decision Date: 17 March 1883
• Citation: 15 F. 734
• Parties: In re GILLESPIE and others, Bankrupts.
• Court: U.S. District Court — Southern District of New York

15 F. 734

In re GILLESPIE and others, Bankrupts.

United States District Court, S.D. New York.

March 17, 1883

Ward &amp Jenks, for Hatch & Sons.

E. C Delavan and J. P. Lowery, for Redfield.

BROWN J.

The question involved in the rival claims to this dividend has been differently decided by high authorities. The claim for the dividend is not a claim strictly upon the note against the maker, but a claim for payment from the assignee of the bankrupt upon the proof of the bankrupt's notes made prior to assignment to either of the rival claimants. In this view I cannot distinguish it from the case Of Muir v Schenck, 3 Hill, 228, and Cooper v. Fynmore, 3 Russ. 60. And upon these authorities, Redfield being prior in time, would have the prior right. On the other hand the case last cited is certainly overruled in England by the lord chancellor in the carefully-considered cases of Dearle v. Hall and Loveridge v. Cooper, 3 Russ. 1, 57, 58; and the principle of these cases has been repeatedly adopted and approved by the supreme court, as shown by the cases of Judson v. Corcoran, 17 How. 612, 615; by MARSHALL, C.J., in Hopkirk v. Page, 2 Brock. 20, 41; in Spain v. Hamilton's Adm'r, 1 Wall. 604; and Nat. Bank v. Texas, 20 Wall. 72, 89.

In Judson v. Corcoran, supra, the court say:

'There may be cases in which a purchaser, by sustaining the character of a bona fide assignee, will be in a better situation than the person was of whom he bought; as, for instance, where the purchaser, who alone had made inquiry and given notice to the debtor, or to a trustee holding the fund, (as in this instance,) would be preferred over the prior purchaser who neglected to give notice of his assignment and warn others not to buy.'

In Loveridge v. Cooper, 3 Russ. 58, the lord chancellor says 'Where personal property is assigned, delivery is necessary to complete the transaction, not as between the vendor and the vendee but as to third persons, in order that they may not be deceived by apparent possession and ownership remaining in a person who, in fact, is not the owner. This doctrine is not confined to chattels in possession, but extends to choses in action, bonds, etc. In Ryall v. Rolles, 1 Ves.Sr. 348, it is expressly applied to bonds, simple contract debts, and other choses in action. In cases like the present, the act of giving the trustee notice, is, in a certain degree, taking possession of the fund; it is going as far...