Smith v. Chandler , 69 Mass. 392 ( 1855 )

Dewey, J.

The production of the note, indorsed by the payee and her husband, makes a prima facie case for the plaintiff; but the note being payable on demand, and long since executed, and it being proved that the plaintiff received it with full knowledge of all circumstances, the plaintiff holds it subject to all the grounds of defence that may arise upon the facts stated in the report.

This note was in the hands of the payee, and constituted a debt against tne maker, at the time that Eli Robbins, the husband of the payee, was declared a bankrupt under the statute of the United States of 1841, and. his property transferred to an assignee. The first question is, whether it passed to the assignee as assets of the bankrupt, and was to be collected by the assignee as such assets. The note was executed long after the intermarriage of the payee with Eli Robbins. It was given in payment of other promissory notes, also made to her during coverture, which notes had their origin and consideration in a note given to her before her marriage, and which, it is conceded, was a debt in which her interest was such that she must have been joined in an action to recover it, and the right to which would have survived to her if her husband had deceased.

A distinction has been attempted to be maintained as to her rights in reference to the notes given in renewal after her man riage, and it has been urged that such notes at once became the property of the husband. No doubt, in some points, such distinction exists. It may be so as to his authority to indorse them in his name alone, or to sue alone, but not as to the right of survivorship, if he neglects to take any measures to reduce them to possession, intending to have them held for the use of the wife» For the general doctrine on this subject, we refer to Hayward v. Hayward, 20 Pick. 517.

It is not necessary, in the present case, to enter into a particular consideration of the question of right by survivorship that would have existed upon the facts of this case. The inquiry here is as to the rights of property in the living husband, at the time he was declared a bankrupt. Now it seems to us entirely clear that, at that time, the husband had the full right to reduce this note to possession, and make it available for his own purposes. All the notes of the wife, whether given before or after coverture, though given in her name, in the absence of an ante-nuptial contract, may be collected by the husband for. his own use during his life.

Is this right one that passes to an assignee in bankruptcy of the husband ? It is conceded that, by the adjudicated cases under the English bankrupt law, it does. Is it so under the bankrupt act of the United States of 1841 ?

We turn for analogy to our insolvent law. We find the doctrine to be well settled, that under the St. of 1838, c. 163, § 5, the right and interest of the husband in the choses in action of the wife do pass to his assignee, to be enforced by him, subject however to a reasonable provision for the wife. The language of the insolvent law is that “ all the property of the debtor, both real and personal,” shall vest in the assignee. The construction of this statute, and that it does transfer the choses in action of the wife, was directly settled in the case of Davis v. Newton, 6 Met. 537.

The language of the bankrupt act is this: “ All the property and rights of property, of every name and nature, and whether real, personal, or mixed, of every bankrupt,” “ shall by mere operation of law, ipso facto, be deemed to be devested out of such bankrupt,” and “ the assignee shall be vested with all the rights,” &c. of the bankrupt. This, we think, transfers to the assignee the right of the husband to reduce to possession the choses in action of the wife, where no provision exists for her holding her estate to her own separate use; and the assignee may collect the same, subject, as in the case of an assignee in insolvency, to such equitable provision for the wife as the court may deem just and proper. Such being the case, the right of action was vested in the assignee, and his title is paramount to that of one holding the note under a subsequent indorsement of the husband and wife.

It is then urged that this action may well be maintained, if now prosecuted with the consent and for the benefit of the assignee. But the facts fail to show any such authority or assent to the commencement of the present action. The knowledge of the existence of the note was concealed from the assignee for a ong time. The action was commenced adversely to his claim, though an arrangement has, pending the action, been made between the plaintiff and the assignee, that the avails of the judgment shall be hereafter applied under the direction of the judge of the district court. But in the mean time an action has in fact been instituted by the assignee against the defendant, in the district court. To that action the defendant is bound to answer, and the continuance of that action upon the docket of that court, though it may not be pleadable in abatement of this earlier action in this court, yet is a quite sufficient answer to the suggestion that this suit is prosecuted for the benefit of the assignee, and that, upon a recovery here by this plaintiff, the assignee will discontinue the suit in the district court. If the defendant is responsible anywhere, it is to the action of the assignee, and not to the present plaintiff.

Another difficulty would seem to exist to the maintenance of the present action. The plaintiff seeks to recover as indorsee of the note. The indorsement to him by the husband and wife was since 1847, long after the rights of the assignee had attached. By the bankruptcy of the husband, the note vested in the assignee, as an unnegotiated paper; and after the bankruptcy it was not legally competent for the husband and wife to indorse it so as to authorize an action in the name of the indorsee—certainly not to one who knew all the circum"dances of the case and the bankruptcy of the husband.

Plaintiff nonsuit.