Richards and Others, Assignees of Kean Bankrupt v. the Maryland Insurance Company

• Decision Date: 11 February 1814
• Citation: 12 U.S. 84,8 Cranch 84,3 L.Ed. 496
• Parties: RICHARDS AND OTHERS, ASSIGNEES OF M'KEAN, A BANKRUPT, v. THE MARYLAND INSURANCE COMPANY
• Court: U.S. Supreme Court

12 U.S. 84

8 Cranch 84

3 L.Ed. 496

RICHARDS AND OTHERS, ASSIGNEES OF M'KEAN, A BANKRUPT, v. THE MARYLAND INSURANCE COMPANY.

Feb. 11, 1814

Absent. WASHINGTON, J.

ERROR to the Circuit Court for the district of Maryland, in

an action of covenant on a policy of insurance under seal. The Defendants pleaded the Maryland statute of limitation of 12 years, 1715. ch. 23, § 6, which enacts, 'that no specialty whatsoever, shall be good and pleadable, or admitted in evidence against any person or persons of this province, after the principal debtor and creditor have been both dead 12 years, or the debt or thing in action above 12 years standing,' with a saving of 5 years in cases of infancy, &c.

The replication to this plea stated in substance the following facts, that the cause of action accrued on the 1st of May, 1797. That M'Kean was declared a bankrupt, and on the 19th of March, 1801, his estate was duly assigned to Thomas Allibone, who, on the 6th of October, 1806, instituted a suit on the policy and died on the 1st of August, 1809, whereby the suit was abated. That on the 11th of January, 1810, the Plaintiffs were, by the commissioners, appointed assignees in pursuance of the choice of the creditors regularly convened for that purpose, and brought the present action at the next term after the death of Allibone, the former assignee. To this replication there was a general demurrer.

The judgment of the Court below, upon the demurrer, was in favor of the Defendants; and the Plaintiffs brought their writ of error.

HARPER, for the Plaintiffs in error, made four points.

1. That an assignee, under the commission of bankruptcy, had no interest in the effects of the bankrupt which could vest in his executors or administrators, but was a mere trustee or agent of the commissioners.

2. That the commissioners had power, upon the death of an assignee, to appoint another in his stead, and so toties quoties.

3. That under the equity of the statute of limitations the Plaintiffs had a right to bring a fresh suit upon the abatement of the first.

4. That there was a good continuance of the suit by Journey's accounts.

1. The bankrupt law gave no estate to the assignee. He had no interest in the effects of the bankrupt; the object of the law was merely to appoint a curator of the estate, with an authority like that of an administrator. It was a mere personal agency which terminated by the death of the assignee. It was the intention of the law that this agent should have the confidence of the creditors; but that intention would be defeated if the executor or administrator of the assignee should become the agent. Vide Bankrupt law of the United States, vol. 5, p. 50, § 6, 7 and 8.

2. The commissioners, under the equity of the 6th and 8th sections, had power to appoint a new assignee or assignees in case of the death of the assignee for the time being. Their power was like that of the ordinary in granting letters of administration. No express authority is given to the ordinary to grant letters de bonis non, yet his authority to do it was never disputed. The intention of the bankrupt law was that there should always be an assignee until the estate should be settled. The general power to appoint, implies an authority to keep the office always full. The Plaintiffs, therefore, had power to maintain this action.

3. The act of limitations does not apply to this case. 2 Salk. 421. Cary and ux. v. Stephenson. The principle of that case was that the Plaintiffs had done all in their power, and, therefore, the statute of limitation was not a bar. To make the statute apply there must be negligence on the part of the Plaintiff, and injury to the Defendant by the delay. If an administrator commence the action within a year after the granting of letters of administration, the statute is no bar, unless it began to run in the life of the intereste. So in the case of an executor of an executor. Buller N. P. 150. Esp. N. P. 150. These cases all depend on the same general principle—the equity of the statute. If there be no negligence on the part of the Plaintiff and no injury to the Defendant, the case is within that equity.

4. This new action is a good continuation of the old suit by Journey's accounts. 6 Co. 10, Spencer's case. A new action by Journey's accounts may be had where the former action abates by the fault of the clerk, &c. but not if it be abated by his own default. The doctrine applies as well to personal as to real actions. 1 Ld. Ray. 283, Elstob v. Thorowgood. The principle of that case is that where the second Plaintiff derives his authority from the same scource as the first, he may have the action by Journey's account.

PINKNEY, contra.

The argument divides itseif into two parts.

1. The construction of the act of congress.

2. The effect of the act of limitations.

1. Under the bankrupt law the commissioners had no power to appoint a new assignee in case of the death of the first assignee. Their power in this respect was limited to the case of a removal of the assignee by the creditors. Much is said about the equity of the statute, but this Court is authorized jus dicere, non jus dare. The 6th section provides for the appointment of an assignee. The 7th authorizes the commissioners to appoint a temporary assignee without the consent of the creditors, and the 8th section provides for the removal of an assignee, and the appointment of another in his place. If the Court can extend the equity of the statute to the case of the death of an assignee, it must be by a very liberal construction.

By the 18th section the estate and effects of the bankrupt are to be conveyed to the assignee, his heirs, executors, administrators and assigns forever. The 50th section conveys the same idea. The estate descends to the heir of the assignee, clothed with the trust, and he has all the rights and is subject to all the responsibilities and duties of the original assignee.

But if the Court can, by equity, extend the power of the commissioners to the appointment of a new assignee in case of death, then, under the 9th section of the act, the new assignee might have been substituted for the old, and the action would not have abated by the death, but might have been prosecuted to judgment by the new assignee. So that if the suit was abated, it was through his negligence, or voluntary act; and no Plaintiff, who is in default, can have the benefit of the equity of the statute by Journey's accounts.

2. As to the Maryland statute of limitations. If differs from the English statute of 21 Jac. which contains no limitation of actions upon specialities, judgments or recognizances. The same rule of equitable construction, therefore, cannot apply to both. But even if the same rule of construction could be applied to the Maryland statute, yet it does not contain the same clause upon which the equity arises in England.

The object of the statute was to prevent injury to Defendants by the loss of evidence. If the statute once begins to run nothing will stop its course but an effectual suit. If a promise be made to a feme sole, and the day after the cause of action accrues, she marry, the statute continues to run notwithstanding the coverture, so in case of non compos, absence, &c. 4 Bac. Ab. 479, note. 1 Bac. Ab. 413.

But it is only the equity of the 4th section of the English statute that could have aided the Plaintiffs. That section allows a new action to be brought within a year, in three cases. 1. Where judgment has been reversed by writ of error. 2. Where judgment has been arrested; and, 3. Where an outlawry has been reversed. 4 Bac. Ab. 471, Gwillim's edition, § 4. The Courts have said that abatement is within the same reason, but they have not said that other representatives than those mentioned in the 4th section may bring a new action, (except in the case in lord Raymond, which has been over-ruled in that respect. 1 Ld. Ray. 284.)

The Maryland statute does not contain a section similar to the 4th section of the 21st James.

HARPER. But that section of the English statute has been always in use in Maryland in that respect, and is in daily practice in their Courts; and, therefore, and by force of the bill of rights and constitution of Maryland, has been adopted as part of the law of the land.

PINKNEY. The statute of James is not in force in Maryland in respect to those cases for which the statute of Maryland provides. This statute professes to provide a limitation for all artions, and to enumerate all cases in which exceptions should be made. With the English statute before them, and while exercised in selecting such parts of it as they thought proper, the legislature cannot be presumed to have been so negligent as to omit the 4th section if they intended to adopt it.

But if it be in force in Maryland, this Court will not push the equity of it farther than has been done in the Courts in England. They have never permitted such a representative, as these Plaintiffs are, to bring a new action, nor any one to bring a new action where the benefit of the former one has been lost by negligence or voluntary abandonment; which we say was the case here, for the action might certainly have been continued and maintained by either the executor of Allibone, or by the new assignees. In the case cited from 2 Salk. 421, Cary v. Stephenson, the cause of action arose after the death of the intestate and before the letters of administration were granted. For if the statute had begun to run in the life of the intestate, it would have continued to run although no administration had been granted.

The next case is Cawer v. James, or Carver v. James, or Karver v. James, as it is differently called in several books. Buller, N. P. 150. Esp. N. P. 150. Wille's Rep. 255. In that case the action was brought by the executor, and the equity of the 4th section of 21 Jac. extends only to the party himself, his heirs, executors and administrators, and not to any other...