Majority
Headnote
1. Limitation of Action — Assignee in Bankruptcy—U. S. Rev. Stat. § 5057. The limitation of section 5057 of the Revised Statutes of the United States—that JSTo 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 the cause of action accrued for or against such ■assignee” —is applicable only to suits growing out of disputes in respect of property of the bankrupt which came to the hands of the assignee, to which adverse claims existed while in the hands of the bankrupt and before assignment.This is an action of ejectment, brought in 1888 by the assignee.in bankruptcy of Anna R. Dwight, who was adjudged a bankrupt in 1878, to recover lands included in a way laid out by the bankrupt before her bankruptcy across lands in the city of Binghamton owned by her, which she had mapped and divided into lots abutting on the way twenty feet in width, extending from the west bank of
Upon the admissions and findings in the record, it must be taken as an established fact that the title to the way and to the land under the water of the river occupied by the abutments of the bridge on the west side of the Chenango river was in Anna M. Dwight at the time of the adjudication in bankruptcy, and passed to the assignee upon his appointment, and was not covered by the mortgage under which the lessor of the defendant acquired title to the lots abutting on the way, and that the defendant’s lessor wrongfully and without the consent of the plaintiff, who had acquired and then held a good title to the land embraced in the way, subject only to the easement of passage in favor of the owners of the lots abutting thereon for the ordinary purposes of travel, and to the land under water, entered upon the premises in question and appro
That section, which was incorporated into the revision of the United States statutes from the Bankrupt Act of March 2, 1867, chap. 176, § 2, in substantially the same words, is as
There can be no doubt that the limitation in section 5057 applies to all causes of action and property rights and all adverse claims to property of the bankrupt existing in favor of or against the bankrupt at the time of the adjudication in bankruptcy and the appointment of an assignee, and if the lessor of the defendant had entered upon and taken possession of the lands in question under claim of title adverse to the bankrupt, before the bankruptcy, it does not admit of question under the adjudications, that after the lapse of two years from the appointment of the assignee, before suit brought to enforce the bankrupt’s title, the right of entry would be barred. But there was no adverse claim to the land made by the lessor of the defendant, or any other person, until 1880, nearly two years subsequent to the vesting of the title in the assignee, and the question is whether the right of the assignee to assert his unquestioned title acquired from the bankrupt, against the defendant and its lessor, was cut off by the two years’ limitation in section 5057. The bankrupt had no cause of action, because the unlawful entry was subsequent to the vesting of the title in the assignee, and it accrued solely in favor of the assignee by reason of .the acts of the defendant and its lessor committed after the assignment.
The short limitation to actions by or against assignees in bankruptcy was not enacted for the first time in the Bankrupt Act of 1867. It had its origin in the 8th section of the Bankrupt Act of 1841 (5 U. S. Statutes at Large, 446). That section enacted that the Circuit Courts of the United States should have concurrent jurisdiction with the District Courts “ of all suits at law and in equity which may or shall be brought by any assignee of the bankrupt against any person . or persons claiming an adverse interest, or by any such person against such assignee touching any property or rights of
It is, however, insisted by the learned counsel for the respondent that the construction placed in the cases mentioned on the 8th section of the act of 1841 is not controlling in the construction of the 2nd section of the act of 1867, re-enacted in section 5057 of the revision, by reason of the difference in the language of the two provisions. It will be observed that the words “ of said bankrupt,” before the words “ transferable to and vested in such assignee,” in the 8th section of the act of 1841, are omitted in the statute of 1867. The omission is said to be significant of an intention by the act of 1867 to broaden the scope of the limitation in the former act, so as to extend it to any
It is claimed that the case of Banks v. Ogden (supra) tends to discredit the construction of the statute of 1841, given in the Oonant case. The question there arose between the
There are three decisions in the Circuit Courts of the United States which tend to support the contention of the respondent,
Subsequently to the decisions in the cases heretofore referred to, and subsequently also to the decision of the General Term in the case now before us, the case of Dushane, Assignee, etc., v. Beall, was argued and decided in the Supreme Court of the United States ( 161 U. S. 513 ). The controversy was between Beall, a judgment creditor of one Tinstman, and the assignee in bankruptcy of Tinstman, who became bankrupt in 1876, in respect to the rights of the respective parties to a sum awarded to Tinstman in a judgment obtained in the name of one Shaw against the Pittsburgh & Connellville R. R. Co., in 1887. The judgment was obtained in a suit brought by Shaw against the company in 1882 for the breach of a contract in relation to the working and maintaining of a telegraph line in which Tinstman was interested at the time of his bankruptcy, but which interest was not mentioned in his schedule of assets. Tinstman obtained his discharge in 1877. In 1885 he intervened in the Shaw suit which was then pending, and he was awarded by the judgment therein the sum of $947.43. After his discharge in 1877 he engaged in business and became indebted to Beall, who in Rovember, 1886, procured judgment against him for $730.54. June 9th, 1888 (after the recovery of the judgment in the Shaw suit), Beall garnisheed the Pittsburgh & Connellville R. R. Co. for the purpose of obtaining satisfaction of his judgment against Tinstman out of Tinstman’s share of the Shaw judgment. August 10th, 1888, McCullough, the original assignee in bankruptcy of
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The short limitation in the Bankrupt Act was doubtless intended to facilitate the settlement of bankrupt estates. If confined to disputes existing when the bankruptcy intervenes, the principal purpose of the statute will be attained, for the cases are comparatively infrequent of serious delays arising from controversies wholly originating after the bankruptcy, in respect to the property to which the bankrupt had an undisputed title at the time of the assignment.
We think the plaintiff was entitled upon the facts stated in the record to maintain his action, and the judgment below should, therefore, be reversed, and a new trial ordered.
All concur, except Gray, J., absent, and Martin, J., not sitting.
Judgment reversed.
Cases cited
- Dushane v. Beall 161 U. S. 513 p. 477, p. 487
- Phelps v. McDonald 99 U. S. 298 p. 477, p. 488
- Mahon v. New York Central Railroad 24 N. Y. 658 p. 477
- Williams v. New-York Central Railroad 16 N. Y. 97 p. 477, p. 480
- Smith v. McNamara 4 Lans. 169 p. 477
- Reed v. McCourt 41 N. Y. 435 p. 477
- Continental National Bank v. National Bank of the Commonwealth 50 N. Y. 575 p. 477
- Olcott v. Maclean 73 N. Y. 223 p. 477
- Winegar v. Fowler 82 N. Y. 315 p. 477
- Malloney v. Horan 49 N. Y. 111 p. 478
- Blair v. Wait 69 N. Y. 113 p. 478
- Smith v. City of Rochester 92 N. Y. 463 p. 478
- Stevens v. Hauser 39 N. Y. 302 p. 478, p. 481
- Bailey v. Glover 21 Wall. 342 p. 478, p. 485
- Gifford v. Helms 98 U. S. 248 p. 478, p. 481
- Esmond v. Apgar 76 N. Y. 359 p. 478, p. 484
- Wisner v. Brown 122 U. S. 214 p. 478
- Greene v. Taylor 132 U. S. 415 p. 478
- Jenkins v. International Bank 106 U. S. 571 p. 478, p. 481
- Brennan v. Willson 71 N. Y. 502 p. 478
- Newton v. Bronson 13 N. Y. 587 p. 478
- Hunt v. Burrel 5 Johns. 137 p. 478
- Crooke v. County of Kings 97 N. Y. 421 p. 478
- Uline v. New York Central & Hudson River Railroad 101 N. Y. 98 at 106 p. 480
- Banks v. Ogden 2 Wall. 57 p. 481
- Adams v. Crittenden 106 U. S. 576 p. 485