Peery v. Carnes

• Decision Date: 31 October 1885
• Citation: 86 Mo. 652
• Parties: PEERY, Plaintiff in Error, v. CARNES.
• Court: Missouri Supreme Court

86 Mo. 652

PEERY, Plaintiff in Error,

v.CARNES.

Supreme Court of Missouri.

October Term, 1885.

Error to Grundy Circuit Court.--HON. G. D. BURGESS, Judge.

REVERSED.

A. W. Mullins for plaintiff in error.

(1) The circuit court erred in sustaining defendant's motion to strike out portions of plaintiff's replication. If none of plaintiff's indebtedness was proven up or allowed in the bankruptcy court, and if his indebtedness, on account of which he was adjudged a bankrupt, had been paid, it follows that there were no creditors to be paid by or through the assignee in bankruptcy, and, therefore, his trust relation with respect to said estate ceased and terminated, and the property, rights, claims and demands which had passed to the assignee, reverted and vested again, by operation of law, in the plaintiff. Page v. Waring, 76 N. Y. 463, 473; Perry on Trusts, (3 Ed.) secs. 351-2-3, 920; Charman v. Charman, 14 Vesey, 580, 584. (2) The court erred in giving the declaration of law asked by defendant and in refusing to declare the law as asked by the plaintiff. The pleadings on both sides allege and the evidence conclusively shows that no debts or claims were presented, proved up or allowed against plaintiff's estate whilst in bankruptcy. And the fact that the bankruptcy court ordered that the sum of $1.28 be paid back to the plaintiff, shows that the court found there were no debts to be paid and the functions of the assignee were at an end. No more formal order for the discharge of the assignee was required by the bankruptcy law than was made by the court in that case. R. S., U. S., sec. 5096, p. 988. By the discharge the bankrupt became, by operation of law, fully invested with the same rights and entitled to the same remedies as before his bankruptcy. Page v. Waring, 76 N. Y. 463; Perry on Trusts (3 Ed.) secs. 351, 352, 353, 920; Charman v. Charman, 14 Vesey, 580, 586; Conners v. Express Co., 52 Ga. 37; S. C., 5 Am. R. 543.

Shanklin, Low & McDougal, Stephen Peery and E. M. Harber for defendant in error.

(1) The court committed no error in declaring the law or in refusing to declare it as prayed by plaintiff. If the claims here sued for, alleged to have been created on the fourth day of June, 1878, were in existence on the third day of August, 1878, the time of the adjudication in bankruptcy, then they not only vested in the assignee, but the fact that they were withheld from the assignee, was and is a fraud upon the creditors of the bankrupt and they can only be recovered by the assignee or his successor, in case of his death, for the benefit of the creditors. Clark v. Clark, 17 How. (U. S.) 315. Although the bankrupt had been formally discharged from his debts, yet the property and rights of property vested in the assignee and were subject to the creditors of the bankrupt, and the fact that none of the creditors proved up their claims makes no difference. Clark v. Clark, supra; Glenny v. Langdon, 8 Otto (U. S.) 20; Trimble v. Woodhead, 12 Otto (U. S.) 647; Moyer v. Dewey, 13 Otto (U. S.) 301. Even though it should be admitted that after the formal discharge of the assignee, property of the bankrupt in his hands not required for the payment of the proven debts of the bankrupt, would revest, by operation of law, in the bankrupt, yet it is insisted: ( a) That there can be no such result until the assignee is discharged, and ( b) that property fraudulently conveyed by the bankrupt prior to the adjudication, or property or means, including rights in action, fraudulently concealed or withheld from the assignee at the time of the adjudication, would never, under any circumstances, revest in the bankrupt. Clark v. Clark, 17 How. (U. S.) 315; Glenning v. Langdon, 8 Otto (98 U. S.) 20; Trimble v. Woodhead, 12 Otto (102 U. S.) 647; Moyer v. Dewey, 13 Otto (103 U. S.) 201. (2) The subject matter of this suit, if it had any existence, unquestionably passed to the assignee by virtue of the assignment (R. S., U. S., section 5044), or by the adjudication and the appointment of the assignee. R. S., U. S. sec., 5046; U. S., R. S., sec. 5057. In this case, the subject matter of this suit, if it had any existence in fact, could be sued for and recovered only by the assignee, and even had the assignee been discharged, he would have held the assets as trustee for the bankrupt until actually surrendered. We submit, that while waiting for the time to elapse within which proceedings to set aside the discharge might be commenced, the two years within which the assignee might bring his action also elapsed, and that after two years no action can be maintained either by the trustee or cestui que trust. Meeks v. Olpherts, 10 Otto (110 U. S.) 564; Moyer v. Dewey, 13 Otto (103 U. S.) 301.

BLACK, J.

The demands sued for, amounting to some $18,000, if they ever had any existence in point of fact, accrued on the fourth of June, 1878, and were subsisting claims at a subsequent date when plaintiff was adjudged a bankrupt. The pleadings present a vast number of issues of fact as to which no questions of law are preserved by the record and they need not be stated.

The record recites that plaintiff offered evidence tending to prove the issues on his part and defendant did the like. Defendant read in evidence a transcript of the record in the matter of bankruptcy of plaintiff. This is the only evidence preserved. The court, at the request of the defendant, gave an instruction to the effect that if plaintiff was adjudged a bankrupt, that an assignee was appointed, qualified and received a deed of assignment, and that the assignee has not been...