Johnson v. Collier

• Decision Date: 09 January 1912
• Docket Number: No. 104,104
• Citation: 56 L.Ed. 306,32 S.Ct. 104,222 U.S. 538
• Parties: M. B. JOHNSON and William Chandler, Plffs. in Err., v. B. T. COLLIER
• Court: U.S. Supreme Court

222 U.S. 538

32 S.Ct. 104

56 L.Ed. 306

M. B. JOHNSON and William Chandler, Plffs. in Err.,

v B. T. COLLIER.

No. 104.

Argued December 14, 15, 1911.

Decided January 9, 1912.

M. B. Johnson, as executor, recovered judgment against B. T. Collier, in the city court of Gadsden, Alabama. Execution thereon was levied July 20, 1906, on certain personal property.

Under a provisions of the Alabama statute, Collier immediately filed with the sheriff a claim of exemption. On the same day he filed, in the proper district court of the United States, a voluntary petition in bankruptcy, including this property in his schedule of assets. Notwithstanding the claim of exemption, the sheriff sold the property at public outery on July 30, 1906.

Thereafter, on a date not shown by the record, Collier was adjudicated a bankrupt. On August 8, 1906, before a trustee was elected, he brought suit against both Johnson and the sheriff for damages, on the theory that the sale of the property after the filing of the claim of exemption made them trespassers ab initio. The defendants filed a plea, in which they set up the pendency of the bankruptcy proceedings, and alleged that Collier had no title to the cause of action, which was in gremio legis until the election of the trustee, and for that reason he could not maintain a suit for damages occasioned by the unlawful sale of property included in the schedule of assets. A demurrer to this plea was sustained. The jury found a verdict in favor of Collier, which the trial court refused to set aside. This ruling was affirmed, and the case is here on writ of error from that judgment of the supreme court of Alabama.

Mr. George D. Motley for plaintiffs in error.

Mr. Amos E. Goodhue for defendant in error.

Mr. Justice Lamar, after making the foregoing statement, delivered the opinion of the court:

The trustee, with the approval of the court, may prosecute any suit commenced by the bankrupt prior to the adjudication. (§ 11c.)¹ But the statute is otherwise silent as to the right of the bankrupt himself to begin a suit in the time which intervenes between the filing of the petition and the election of the trustee. There is a conflict in the conclusions reached in the few cases dealing with this question. Rand v. Sage, 94 Minn. 344, 102 N. W. 864; Rand v. Iowa C. R. Co., 186 N. Y. 58, 116 Am. St. Rep. 530, 78 N. E. 574, 9 A. & E. Ann. Cas. 542; Gordon v. Mechanics' & T. Ins. Co., 120 La. 444, 15 L.R.A.(N.S.) 827, 124 Am. St. Rep. 434, 45 So. 384, 14 A. & E. Ann. Cas. 886.

While for many purposes the filing of the petition operates in the nature of an attachment upon choses in action and other property of the bankrupt, yet his title is not thereby devested. He is still the owner, though holding in trust until the appointment and qualification of the trustee, who thereupon becomes 'vested by operation of law with the title of the bankrupt' as of the date of adjudication. (§ 70.)²

Until such election the bankrupt has title,—defeasible, but sufficient to authorize the institution and maintenance of a suit on any cause of action otherwise possessed by him. It is to the interest of all concerned that this should be so. There must always some time elapse between the filing of the petition and the meeting of the creditors. During that period it may frequently be important that action should...