Barstow v. Adams , 2 Day 70 ( 1805 )

By the Court,

The judgment was reversed,

Allen and Edmond, Mats, dissenting.

The objections to the plaintiffs’ recovery are, that an action of ejectment cannot be sustained by the assignees of a bankrupt; and that the commission was not warranted, by the debt of the petitioning creditor.

1. By the act to establish an uniform system of bankruptcy it is provided, that the commissioners shall take into their possession, “ all the estate, real and personal, of every “ nature and description, to which the bankrupt may be en- “ titled,” and that they shall assign it “ to such persons as “ the creditors shall choose” their assignees. This assignment by the commissioners, it is enacted, “ shall be good at “ law or in equity against the bankrupt and all persons claims “ ing- tinder him,” after he shall have committed the act of bankruptcy, upon which the petition issued, except as against bona fide purchasers for valuable consideration, and without notice. The 50th section of the bankrupt act provides, “ That if any estate real or personal shall de- “ scend, revert to, or become vested in any person, after he “ shall be declared a bankrupt, and before he or she shall ob- “ tain a certificate, signed by the judge as aforesaid, all such “ estate shall, by virtue of this act, be vested in the said “ commissioners, and shall be by them assigned and convey- “ ed to the assignee or assignees, in fee simple, or otherwise, “ in like manner as above directed with the estate of the said “ bankrupt, at the time of the bankruptcy,”

From the recited clauses of the bankrupt law, it is unquestionable, that after the execution of the deed of assignment, the bankrupt is entirely divested of his property, and the same is vested in his assignees. The expressions of the 50th section, in the most explicit manner, evince, that the whole estate is conveyed by the deed of the commissioners, and that there is no residuary interest in the bankrupt.

It results as a necessary legal consequence, that the assignees of a bankrupt may, and that they alone can, maintain ejectment. Theirs is the title ; to them the real estate of the bankrupt exclusively belongs ; and in the event of an ejectment, they are the persons dispossessed andinjuied.

By the English laws relative to bankruptcy, correspondent rights are given to the assignees of a bankrupt ; and in Westminster-Hall, it uniformly has been determined, that they may maintain actions of ejectment, ^(x)

2. The remaining objection to the plaintiffs’ recovery is, that the commission was not warranted, by the debt of the petitibning creditor.

The direct determination of this objection is both unnecessary and improper, as the validity of a commission may not collaterally be drawn in question. The act of the United States regarding bankruptcy, has designated the only way, in which this may be done, that is, by direct application to the judge who issued it.

In this view of the subject, it is useless to investigate, on what principle, the courts of Westminster-Hall, admit the invalidation of commissions of bankruptcy, by a collateral inquiry. ^(y) It probably would be found, that this practice originated from the slender authority formerly given to commissioners of bankrupt, and become settled, long before they were considered as possessing judiciary powers. But in this country, the act concerning bankruptcy came into existence, after long experience had ascertained the excellencies and defects of the English system ; and is not a servile copy of their laws, but a departure from them, in many particulars.

It is a first principle, that the act concerning bankruptcy should be uniform in its operation. By the 8th section of the constitution, Congress was empowered, to establish “ uniform laws on the subject of bankruptcies, throughout “ the United States and the title of the act evinces, that uniformity was an intended object of the law. To preserve J * this object, it was obviously requisite, that the proceedings under the bankrupt act, should be exclusively confined to the courts of the United States. In vain might uniformity of operation be expected, if the execution of the law had been confided to the uncommunicating judiciaries of the respective states. Hence the reason was cogent, for vesting the district judge with exclusive jurisdiction, under the bankrupt act.

In the construction of the law, this principle of iMffbrmity in the system of bankruptcy, must not be out of sight; for “ such construction ought to be put on a statute, as may “ best answer the intention the makers had in view.” ^(z)

By the 56th section of the act, it is provided, “ That in “ all cases where the assignees shall prosecute any debtor of “ the bankrupt, for any debt, duty, or demand, the com- “ mission, or a certified copy thereof, and the assignment “ of the commissioners of the bankrupt’s estate, shall be “ conclusive evidence, of the issuing of the commission, and “ of the person named therein being a trader and bankrupt, '• at the time mentioned therein,'”

This section renders it indisputably clear, that in suits brought by the assignees against any debtor of the bankrupt, the validity of the commission cannot be questioned. The commission itself is not only evidence, but taken in connexion with the deed of assignment by the commissioners, conclusive evidence, of its having legally issued, and that the person named therein is a bankrupt, ^(a)

It was contended, that this section of the law related merely to actions on contract, brought against the technical debtor ; but this is an exposition of it much too narrow, if the literal meaning of the statute were the genuine and only intendment of it, it would not be unreasonable, in furtherance of the intent of the legislature, collectible from the context, to assert, that by debtor is to be understood, any person against whoma demand exists in favour of the assignees of a bankrupt. This construction renders the word, by which the person sued is designated, co-extensive with the words denoting the subject matter of the suit spoken of in the same section, that is, “ debt, duty or demand;” but the restricted interpretation contended for, annihilates the word « demand,” and violates the well known rule,“ that a statute « ought to be so construed, that, if it can be prevented, no « clause, sentence, or word, shall be superfluous, void, or « insignificant.” ^(b) This construction is corroborated and justified, by its conformity to the spirit and manifest general intent of the act, and is indispensible for the preservation ©f that uniformity, which is an essential feature of the law.

But the restricted interpretation contended for, is pregnant with this manifest absurdity ; that the legislature has required of the assignee more proof, as against a trespasser, than would be necessary in a suit on contract: Or, to place the absurdity in a more glaring light, a trespasser ⅛ rewarded with a privilege, which is denied to the defendant in an action of assumpsit.

The 52d section of the act confirms the construction, which has already been given. It provides, that “ in case “ either the bankrupt or creditor shall think him or herself A aggrieved by the determination of the said judge or com- “ missioners, relative to any material fact in the commence- “ ment or progress of the said proceedings, or in the allow- « anee of the certificate aforesaid, it shall and may be law • M ful for either party to petition the said judge, setting forth “ such facts and the determination thereon, with the com-K plaint, of the party and a prayer for trial by a jury to determine the same ; and the said judge shall in his discretion “ make order thereon, and award a venire-facias to the mar- “ shall of the district, returnable within fifteen day s, before “ him, for the trial'of the facts mentioned in the said petition, “ notice whereof shall be given to the commissioners and “ creditors concerned in the same : at which time the said trial shall be had, unless on good cause shewn, the judge “ shall give further time, and judgment being entered on “ verdict of the jury, shall be final on the said facts, and the judge or commissioners shall proceed agreeably thereto.’'

This section designates the mode, in which all the proceedings, from the commencement to the termination of a bankruptcy, may be revised, and the facts relative to it, conclusively settled. It has made the verdict of a jury, ex die recto passing upon the complaint of bankrupt or creditor, final. A provision like this, is wisely calculated to preserve uniformity in the bankrupt system, and supersedes the necessity of any collateral inquiry relative to subjects, which may be better settled, by a direct investigation of them. It falls in entirely with the construction put on the 56th section, which, indeed, makes it a necessary provision.

Other sections in the act might be cited, to corroborate the exposition given, particularly the 3d ; but a further elucidation of the point is needless.

It has been said, that the 52d section of the act relates to the bankrupt and his creditors only, and that it may not without injustice be deemed to conclude those, who are not creditors, and who have not the right of trial, except in the course of the common law. The observation in this case, if it had force, would be inefficacious, as the defendants are, not merely trespassers, but creditors. The principle, however, implied in it, is as groundless, as it is inapplicable.

It is not true, even at common law, that the proceedings of every forum are inconclusive, unless as between the parties. ^(c) But a discussion of this subject, with its limitations and exceptions, would reflect little light on the present inquiry.

The sole objection to the construction given to the 52d section, rests upon the supposed justice of a legal provision for a trespasser, to contest the validity of the commission. Why should this provision have been made ? What interest can such a person have, in the settlement of this question ?

The act concerning bankruptcy was passed, not to privilege tort-feazers, but for the benefit of the bankrupt and his creditors- If they acquiesce in the commission, and the proceedings under it, is it matter of surprize, that the legislature should not have instituted a tribunal, for the investigation of this subject, in favour of trespassers !

On the whole, the construction put upon the act of bankruptcy, is founded in the highest convenience, and is necessary to preserve the symmetry and uniformity of the system. It deprives no person, who ought to possess the right, of review of the proceedings of the judge and commissioners, in the most unexceptionable mode, that is, by direct trial by jury. It prevents the collateral litigation of questions, equally unnecessary and vexatious. And it provides for the carrying into operation the bankrupt act, free from those impediments, which the policy of some jurisdictions might render fatal.

(x) 'Esp. Dig. 437. 2 H. Bla. 444, Smith v. Coffin.

(y) Doug.205. Cullen 412.

(z) 11 Rep.7 3.

(a) 1 ’Esft, Rep. 43.

(b) 1 Show. 108. Hard. 344.

(c) Atk. 151, Ex parte Wilson. 1 Salk. 290, Blackham's case. Bul.Ni. Pri. 245. ’Esp. Dig. 760. 4 Co. 29.