Griffin v. Mutual Life Insurance

46 S.E. 870, 119 Ga. 664, 1904 Ga. LEXIS 324

• Court: Supreme Court of Georgia
• Decided: March 4, 1904
• Status: Published

Opinion

Lamar, J.

(after stating the foregoing facts.) We infer from the briefs and argument that the defendant insisted in the court' below that the title to the chose in action, on which suit had been brought in the State court, vested by operation of law in the trustee in bankruptcy, and that the suit should be dismissed, because the company would not be protected in any payment- -it might' - make to the plaintiff, if thereafter sued for the same cause of action by the trustee. Under the bankrupt act of 1868, it was held to be no defense to an action for a debt that the creditor had become a bankrupt. • After title vested in the assignee, and he with notice permitted a pending suit to proceed in the name of the bankrupt, he was bound by any judgment that might be rendered. Under the act of 1898, the trustee may intervene, but is not bound to do so; but on his failure to have himself substituted as plaintiff, the suit does not abate. It may still be prosecuted by the bankrupt. See Thatcher v. Rockwell, 105 U. S. 407; Reed v. Paul, 131 Mass. 129; Herring v. Downing, 146 Mass. 10; 30 Stats. at Large, 549, § 9 (2), (c). The case here is much stronger, for there is no trustee. The creditors and referee alike treated the recovery as so doubtful and contingent as not to warrant the appointment of a trustee to prosecute the pending suit. Non-action on their part did not release the insurance company of its liability. Although the plaintiff in the action had been adjudicated a bankrupt and discharged, he may have had an interest in the recovery as being the only source out-of which he could obtain any homestead exemption to which he was entitled. But irrespective of his own pecuniary interest, and assuming that the recovery, if any, would enure to the creditors, it was his right to have them receive as large a dividend as possible. While the two bankrupt acts are not identical, there is nothing in the present statute which makes inapplicable the former rulings of this court to the effect that the fact that a plaintiff in the State court had been adjudicated a bankrupt did not prevent him from proceeding in the pending suit for the benefit of whom it might ultimately concern, where the representative of the creditors did not intervene. Gilmore v. Bangs, 55 Ga. 403 (3). If in such cases there is a recovery, and any question arises as to the right of the trustee or creditors to the money, or as to the defendant’s being protected in paying it to the proper party, this may be secured by subsequent steps being then taken for that purpose. “ There need be no danger of paying the debt twice.” Southern Express Co. v. Connor, 49 Ga. 415. If the failure to elect a trustee has in any way injured the rights of creditors, it has not discharged the insurance company from the liability under which it may rest, nor has it destroyed the bankrupt’s reversion in the chose in action after his creditors have lost or exhausted their rights thereto.

Judgment reversed.

All the 'Justices concur, except Simmons, C. J., absent.