Thatcher v. Rockwell - 105 U.S. 467 (1881)
U.S. Supreme Court
Thatcher v. Rockwell, 105 U.S. 467 (1881)
Thatcher v. Rockwell
105 U.S. 467
After suit brought, proceedings were instituted wherein the plaintiff was duly adjudged to be a bankrupt and assignees were appointed. Held that his bankruptcy cannot be set up by the defendants to bar its further prosecution in his name if either the assignees expressly consent thereto, or the claim shed on was, four months before the proceedings, transferred, by him in good faith and for a valuable consideration to a party for whose use and benefit the suit was brought.
On the 10th of June, 1875, Rockwell, the defendant in error, brought an action of assumpsit against Thatcher & Standley, the plaintiffs in error, in a state court of Colorado. The declaration on which the trial was had contained the common counts only. The original pleas were the general issue, payment, and setoff, but on the 26th of March, 1877, a supplemental plea was filed to the effect that on the 26th of May, 1876, Rockwell had been adjudicated a bankrupt, and on the 14th of July, 1876, an assignee appointed, to whom the claim in suit passed under the operation of the bankrupt law; wherefore the defendants "prayed judgment it said plaintiff could longer have or maintain his action against them." To this plea a replication was filed confessing the bankruptcy and the appointment of an assignee, but averring that the claim in suit had been assigned to Kate Rockwell and L. C. Rockwell in November, 1875, and did not pass to the assignee. It was also averred that the suit was prosecuting for the use and benefit of the persons to whom the transfer had been made, and that the assignee in bankruptcy claimed no interest whatever therein. To the replication the defendants rejoined, denying the assignment to the Rockwells.
Upon this issue, among others, a trial was had, and at the conclusion of the testimony the defendants asked the court to instruct the jury,
"That if they believe from the evidence that the plaintiff, after the commencement of the suit, filed his petition in bankruptcy and was adjudged a bankrupt, and as assignee in bankruptcy was appointed, then the plaintiff
cannot recover in this action, for if he had any legal claim against the defendants at the time the assignee in bankruptcy was appointed, the same vested in the assignee in bankruptcy."
This instruction was refused and the court charged:
"That if the jury believe from the evidence that Watson B. Rockwell, previous to his bankruptcy, assigned the claim now in suit to his wife Kate and L. C. Rockwell, one-half to each, for a valuable consideration, that this suit is well maintained in W. B. Rockwell's name for their use and benefit, notwithstanding you may believe from the evidence that Rockwell was adjudged a bankrupt in May, A. D. 1876."
"That the defendants cannot avail themselves of the bankruptcy of the plaintiff if the jury believe from the evidence that the money claimed was assigned to the said Kate Rockwell and L. C. Rockwell four months before Rockwell's petition in bankruptcy was filed, and even if there had been no assignment of this claim, the defendants could not avail themselves of the bankruptcy if it appeared from the evidence that the assignee in bankruptcy expressly consented that the plaintiff might continue to prosecute the claim in his own name in this court."
Exceptions were taken in due form and incorporated into the record. The case is here on a writ of error to the supreme court of the state for the review of a judgment overruling these exceptions.