McCan v. Conery

• Decision Date: 08 May 1882
• Citation: 12 F. 315
• Court: U.S. District Court — Eastern District of Louisiana
• Parties: McCAN, ASSIGNEE, v. E. CONERY & SON. [1]

12 F. 315

McCAN, ASSIGNEE, v. E. CONERY & SON. ^[1]

United States Circuit Court, E.D. Louisiana.

May 8, 1882

Joseph P. Hornor and W. S. Benedict, for complainant.

Charles B. Singleton, R. H. Browne, John H. Kennard, W. W. Howe, S S. Prentiss, and H. H. Walsh, for defendants.

PARDEE C.J.

This case is brought to this court on a writ of error to the district court taken by the defendants, who were condemned in that court in the sum of $2,500, with interest and costs. The petition was filed June 28, 1880, the plaintiff, McCan averring that he qualified as assignee in bankruptcy of one Montgomery on the fifth of April, 1876. The cause of action is stated to be against the defendants, Conery & Son, as sureties on the charter of the steam-boat Seminole, from Montgomery to one Mitchell and others, in 1875, the cause of action accruing to Montgomery in June of that year, and accruing to and vesting in the plaintiff assignee of the fifty of April, 1876. It is further stated in the petition that, prior to plaintiff's election as assignee of Montgomery certain creditors of Montgomery filed a bill of equity in the district court on their own behalf, and on behalf of all the creditors of Montgomery, for the preservation of the property of the bankrupt's estate and other reasons, against Montgomery and a pretended transferee, and against said charterers, and Coney & Son as sureties, praying, among other things, for a judgment against Conery & Son for $2,500, as sureties on the charter-party, the breach of which was set forth. Also that plaintiff, after his qualification as assignee of Montgomery, caused himself to be substituted as party plaintiff, in place of the complaining creditors, and thereafter prosecuted the said suit; that said Conery & Son appeared and defended the said suit, which, after various proceedings, was dismissed as to said Conery & Son. The record shows that the dismissal was on May 27, 1880, and was for want of equity, and without prejudice.

The defendants appeared to defend this case, and filed the plea of prescription of two years, under the bankrupt act of 1867, (Rev. St. Sec. 5057,) which provides that 'no suit, either at law or in equity, shall be maintainable in any court between an assignee in bankruptcy and a person claiming an adverse interest touching any property or rights of property transferable to or vested in such assignee, unless brought within two years from the time when such cause of action accrued for or against such assignee. ' This plea was tried before a jury, and under the charge of the court was overruled by verdict. To the charges and refusals to charge of the judge three several bills of exception were taken. The defendants then answered, denying liability as sureties, because of breach of warranty as to seaworthiness of the Seminole, and a failure to comply with a condition precedent as to the adjustment of loss or damages within the time stipulated in the contract of suretyship.

On the trial, verdict was rendered against Conery & Son for the full amount claimed, counsel taking nine other bills of exception to the charges and refusals to charge the jury. In this court the following are the errors assigned:

(1) That the court below erred in its rulings on the question of prescription or limitation of two years, as more fully set forth in the three bills of exception, pages 40, 51, of the transcript.

(2) That the court erred in its rulings on the trial upon the merits of the case, as set forth in the nine bills of exception respectively found at pages 73 to 116 of the transcript.

(3) That the court erred in refusing a new trial as set forth, etc.

The first and second bills of exception show that the judge, on the trial of the plea before the jury, refused to instruct the jury that in a suit brought by an assignee in bankruptcy against a person having an adverse interest touching any property transferable to or vested in such assignee, the limitation of two years provided in section 5057, Rev. St. is absolute, and with no exception but in cases of fraud. The third bill shows that the judge did not instruct the jury, on the trial of the plea of limitation of the action, as follows:

'If the jury find that an action for the recovery of the same thing which is here demanded was instituted by a creditor of P. C. Montgomery, and upon the appointment of the assignee (the plaintiff herein) he made himself a party plaintiff to that suit, which was diligently prosecuted in this court, and upon appeal in the circuit court of this district, as appears by the record, Nos. 10,830, and 9,093 on the dockets of the district and circuit courts of this district; and if they further find that by a final decision in the circuit court, rendered upon such appeal, said suit was dismissed on the ground that it was not an equity suit, and that this suit was instituted within two years from the rendition of such decree,-- then the jury will find for the plaintiff upon the exception.'

The question raised by these three bills of exception, and the assignment of errors thereon, is whether the pendency of a suit in chancery between the same parties on the same cause of action, which suits is afterwards dismissed for want of equity, interrupts or suspends the prescription or limitation provided by section 5057 of the Revised Statutes; so that an action at law may be maintained by the assignee within two years after the dismissal of such chancery suit, and more than two years after the cause of action accrued to the assignee. If yes, the judge's charge and refusals to charge were correct. If no, then the instructions given were erroneous, and the jury were misled thereby on the trial of the exception of limitation. The language of the statute makes no exception for any reason whatever. And this is explained and justified by the supreme court in the case of Bailey v. Glover, 21 Wall. 342.

The only exception that the courts have ever made, so far as I have been furnished with authorities, to the absolute terms of the statute, is on equitable principles in cases of concealed fraud..

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