Dushane v. Beall - 161 U.S. 513 (1896)
U.S. Supreme Court
Dushane v. Beall, 161 U.S. 513 (1896)
Dushane v. Beall
Submitted March 2, 1896
Decided March 16, 1896
161 U.S. 513
The limitation of two years made by Rev. Stat. § 5057 to suits and actions between an assignee in bankruptcy and persons claiming an adverse interest touching any property or rights of property transferable to or vested in such assignee, is applicable only to suits growing out of disputes in respect of property and of rights 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.
Assignees in bankruptcy are not bound to accept property which, in their judgment, is of an onerous and unprofitable nature and would burden, instead of benefiting, the estate, and can elect whether they will accept or not after due consideration and within a reasonable time, while if their judgment is unwisely exercised, the bankruptcy court is open to compel a different course.
From the record in this case, the Court is constrained to the conclusion that the assignee should not have been held by the court below to have exercised the right of choice between prosecuting the claim and abandoning it, in the absence of any evidence whatever to justify the conclusion that he had knowledge, or sufficient means of knowledge, of its existence prior to August 10, 1888, and that therefore there was error in its judgment.
This was a garnishee proceeding in the Court of Common Pleas for Fayette County, Pennsylvania.
The record of that court shows the issue in favor of Alpheus Beall, on a judgment recovered by him against Abraham O. Tinstman, of an attachment execution, dated June 9, 1888, and service thereof accepted by the Pittsburgh & Connellsville Railroad Company, as garnishee, June 15, 1888.
August 10, 1888, McCullough, assignee in bankruptcy, appeared in the garnishment proceeding, and participated in the choice of arbitrators, who made an award September 25, 1888, in favor of Beall, from which award an appeal was taken. December 13, 1889, the case was continued
"on account of death of assignee of A. O. Tinstman, said case not to be again placed on trial list until after appointment and appearance of another assignee in bankruptcy."
April 23, 1890, "Edward
Campbell, Esq., appears for J. M. Dushane, assignee in bankruptcy of A. O. Tinstman." September 11, 1890, "Joshua M. Dushane, assignee of A. O. Tinstman, appears in court, and asks leave to be added to the record as defendant." Thereafter the case was submitted to the court for determination on a case stated, which embodied the following facts:
On the 5th of April, 1876, Abraham O. Tinstman was adjudicated a bankrupt in involuntary proceedings in bankruptcy, and, during the same month, Welty McCullough was appointed assignee, and took upon himself the duties thereof. The deed of the register in bankruptcy to the assignee conveyed the property which Tinstman possessed, was interested in, or entitled to, on the 5th day of April, but the schedule of assets filed by the assignee did not embrace the bankrupt's interest in a certain telegraph line hereinafter mentioned. Tinstman was duly discharged as a bankrupt January 3, 1877.
In 1882, James L. Shaw instituted an action against the Pittsburgh & Connellsville Railroad Company in the Court of Common Pleas for Fayette County, Pennsylvania, to recover damages for a breach of contract relative to the maintenance and working of a line of telegraph between Uniontown and Connellsville, and on October 2, 1885, Tinstman was made one of the "use plaintiffs” therein.
After his discharge, Tinstman engaged in business, and became indebted to Alpheus Beall in the sum of $730.54, for which a judgment was rendered against him November 24, 1886, in said court of common pleas.
Shaw recovered judgment against the railroad company for a considerable amount, covering damages from January 1, 1874, to September 1, 1887. Of these damages, the sum of $947.73 was Tinstman's share on account of an interest in the line of telegraph, which became his property "by subscription and payment therefor in the year 1865." McCullough died August 31, 1889. Joshua M. Dushane was appointed assignee in his place December 14, 1889, and intervened in this case, as such, September 11, 1890.
The court of common pleas ruled that the assignee had
lost any right to the fund by reason of delaying claim thereto for an unreasonable time, and also that the limitation of two years prescribed by section 5057 of the Revised Statutes of the United States applied, and entered judgment in favor of Beall, and against the railroad company, as garnishee, for $947.43, "the debt due by said garnishee to said Tinstman." The case was taken to the Supreme Court of Pennsylvania, which affirmed the judgment on the ground that the delay of the assignee was fatal to his claim. 149 Penn.St. 439. A writ of error from this Court was then sued out.