U.S. Supreme Court
JOY'S LESSEE v. COSSART, 2 U.S. 126 (1791)
2 U.S. 126 (Dall.)
Cossart, et al.
Supreme Court of Pennsylvania
September Term, 1791
Ejectment for a house, in the city of Philadelphia. The Lessors of the plaintiff were assignees, under a commission of bankruptcy issued against one Christian Wirtz, of whom Doctor Charles Moore, the landlord of Cossart, had purchased.
Upon the general issue, it was contended by the defendants, that the commission had issued irregularly, and was void, for the following reasons:
1st. The act of bankruptcy, alledged to have been committed by Wirtz, was a conveyance of a lot of ground, to one of his children, by deed, and without a valuable consideration. This, it was admitted, was fraudulent and void under the statute of 13 Eliz. but not an act of bankruptcy.
2nd. The debt of the petitioning creditor was not within the act for the regulation of bankruptcy, which was passed the 17th September, 1785; and which provides, that the debts of the petitioning creditor shall 'have arisen on a contract, or transaction, subsequent to the passing of the act.' 2 Vol. Dall. p. 369. Sect. 3. Now, the debt due to the petitioning creditor was on a running account, every item of which was prior to June, 1785, and which was thus indorsed: 'We do acknowledge the within account to be just and true, errors excepted; and also excepting all such remittances as we have already made, since rendering the same, and which had not then come to the hands of Joy and Hopkins; and we promise to pay the balance thereof, being L 3904 6 10 sterling, to Joy and Hopkins, in London, or their order or agents here, with interest at 5 per cent. June 3, 1788. (Signed) C. Wirtz. W. Wirtz.' This the defendant's counsel contended, was no extinguishment, or satisfaction of the original debt; and, therefore, not within the meaning of the act.
In answer to the first point, the plaintiff's counsel insisted, that every fraudulent conveyance by deed, was an act of bankruptcy. To the second point, it was answered, that the endorsement on the account was a real promissory note, which operated as a satisfaction of the original contract. But, at all events,
it was strongly urged, that it did not lie with third persons to enquire into, or dispute, the regularity of the proceedings under a commission of bankruptcy.
The Court charged the Jury, in favor of the defendants, on the two last points; but left it to them to determine, whether the first was, or was not, an act of bankruptcy; inclining to think that it was: And the plaintiffs were desired to move for a new trial, if they doubted the direction of the Court.
A verdict being found for the defendants, the motion was made and argued in July last, by Lewis, Tilghman, and A. Morris for the plaintiffs, and by Ingersoll, Serjeant and Rawle, for the defendants. At the present Term, the unanimous opinion of the Court was delivered to the following effect.
By the Court: After stating the preceeding transactions, and the several points made, the Court left it to the Jury, to determine on the first point, whether the deed made by Wirtz to one of his children, was, or was not, an act of bankruptcy: We are inclined to think it was.
As to the second point, we are of opinion, that this was not a sufficient debt to support the commission. No action of debt would lie upon this writing alone. It is no extinguishment, nor satisfaction. An Insimul computassent, indeed, would lie; but that is a derivative action, recurring to the original account, which is prior to passing the act of Assembly.
As to the third point made by defendants' counsel, we are satisfied, that it is competent to third persons, where their interest is affected, to take advantage of the irregularity of the proceedings. Besides the numerous cases cited in Pleasants versus Meng, 1 Dall. Rep. 380. and that case itself, fee 2 Burr. 932. Whether a creditor, who has received a dividend, can object to the commission, we will not say; but Doctor Moore, who never did receive a dividend, certainly may object to it.
Let the rule for a new trial be discharged.
Full Text of Opinion