guided by the principles of law given you in this charge, work out your own conclusions and report the result, in the form of a verdict, to the court. Verdict for defendant.
In re McKINNEY, Bankrupt.
(District Oourt, W. D. Penru1lZvania. April, 1883.)
BANKRUPTCy-TRUST ESTATE-LAPSE OF TIME AS A BAR.
Mer!, lapse of time will not l""r a claim against a trust estate, and In fullUfe when the trust was created, so long as the estate is unadministered lind the trust subsists.
The statute of limitations is no bar to proof in hankruptcy if It llad not run against the claim at the commbncement of the proceedings in bankruptcy.
In Bankruptcy. Sur exceptions to the register's report upon the claim. of H. Oppenheimer. KnoiJJ et Ree(t, .for. exceptants. Levi Bird Duff, contra. ACHESON, J. The adjudication in bankruptcy was on October 21, 1872, upon a petition filed September 28, 1872. The bankrupt's note bears date September 25, 1872, and was due 60 days thereafter. The tender of proof upon the note was made December 29, 1879. The period of limitation under the Pennsylvania statute is six years. It thus appears that more than the statutory period had run after the adjudiction, and after the maturity of the note, before the proof of debt thereon was tendered. It is a Pennsylvania contract and the parties thereto reside in this state. Is the statute of limitations a bar to the proof? The exceptants contend tbat it is, and they rely upon tbe decision of Judge DEADY, in Nicholas v. Murray, 5 Sawy. 320, who beld that tbe statute of limitations of the state where the debtor is adjudged a bankrupt continues to run, after adjudication, creditors. But the contrary has been determined, and I think with better reason, by Judge HUGHES, in Re Eldridge, 12 N. B. R. 540, and by Judge BRADFORD, in Re Graves, 9 FED. REP. 816. The latter cases are in accord with the English rule that the. issuing ofa commission in bankruptcy creates a trust for creditors against which the statute of limitations does not run. Ex parte Ross, 4 Glyn
IN BE SCHNEIDEB.
& J. 46,330. A like rule has obtained in cases arising under the insolvent law and under voluntary assignments, and in the administration of the estates of decedents. Minot v. Thacker, 7 Mete. 348; WiUard v. Clarke, ld. 435; West v. Creditors, 1 La. Ann. 365; Heckert's Appeal, 24, Pa. St. 482 j McClintock's Appeal,. 29 Pat St. 360; McCandless' Appeal, 61 Po.. St. 9. The underlying principle of these decisions is that mere lapse of time will not bar claims. against the trust estate valid and in full life when the trust was created, so long as the estate is unadministered and the trust subsists. The principle is perfectly sound, and there is no good reason why it should not prevail in cases under the bankrupt law. The statute :0£ limitations; operating upon the remedy, bars an action at law, but it does not extinguish the debt, and is no obstacle to the creditor who seeks his share of the assets in the hands of the assignee, where such creditor' had a provable debt when the bankruptcy proceedings It iavery true that section 4984; Rev. St., prescribes that in the circuit court,upon an appeal, the contested claim must be declared on and tried as in an action at law. And if, as assumed by the exceptants, the statute of limitations would be a good plea in bar to the declaration in the circuit court, then undoubtedly it ought also to operate as a bar to the proof of debt. But the assnmption is unwarrantable, for tae purpose of the issue and trial in the circuit court is not to obtain a judgment against the debtor, or the assignee personally, but to determine whether the creditor has a provable debt, and the amount thereof. And now, April 4, 1883, the exceptions to the register's report are overruled, and the report is confirmed absolutely.
(District Court, E. D. New York. March 24, 1883.)
A former assignee of a bankrupt has not 11 prior claim for his compenqf\tion to that of a subsequent assignee in whose hands there are not sufficient funds to pay the charges of both. Semble, that in that case the amount should be divided pro rata between the two assignees. .
.Reported by R. D.