Cochrane v. Bridendolph

Bryan, J., delivered the opinion of the Court. Bridendolph and Richmond were permanent trustees in insolvency of Howell, who had been adjudicated an insolvent debtor. They sued Cochrane for money in his hands alleged to belong to the insolvent estate. The money was the proceeds of the sale of certain cattle which belonged to Howell, previously to the adjudication of insolvency ; but it was alleged by the defendant that he had become entitled to it by virtue of an agreement which is stated in the record with some variety of form.

We shall, however, consider it under the aspects most favorable to the defendant, so as to give him the advantage of every hypothesis which the case may legitimately authorize. In the second bill of exceptions, it is stated that the defendant offered to prove that at a meeting of Howell and his creditors and the trustees, ²⁸⁰ the creditors agreed for the sum of fifty per cent, of Howell’s indebtedness, paid in cash, and his real estate, that they would release the trustees and Howell, and that the agreement was to be in full of all claims against Howell, and a final settlement of all proceedings against him in the insolvent case, and that they knew that there was a surplus in the hands of the defendant, and agreed that he should retain it. By force of the statute these trustees were invested with the entire estate of the insolvent, subject, of course, to the legal exemptions ; they held it for the benefit of the creditors, among whom it was their duty to make distribution at the proper time, and in due proportions. But in the meantime, the creditors were not entitled to interfere with it in any way whatever.

The statute did not authorize them to make any composition with the insolvent, or to release him in 'any degree from the obligation which the law imposed upon him to surrender to the trustees all his property except that portion within the statutory exemptions. Nor had the trustees a right to make any bargain with the insolvent which should relieve him from his legal duty. The statute, in the most explicit terms, requires the insolvent to surrender his property to the trustees-, and makes it the duty of the Court to enforce the surrender by fine and imprisonment. Code of 1888, Article 47, section 30.

What, therefore, would be the significance of a contract made by the insolvent that he would do that which he was obliged to do ? and where would the trustees derive the authority to excuse him when he should do less ? If they could accept a part of his property in lieu of the whole, they could absolve him from obedience to the law. But it is maintained that the Insolvent Court had approved a contract on this subject between the trustees . and Howell. Without stopping to inquire into the limits of the’ Court’s power in this regard, we will see what ²⁸¹ action it took on this subject.

The trustees in insolvency filed their report in the Insolvent Court, in which they stated that Howell, having refused to deliver to them a large sum of money which he had in his possession, was committed to jail for contempt of Court, and the report then stated “that on the 22nd daj" of February, 1889, said Howell, through one J. William Shuck, agreed to turn over to your trustees a sum of money exceeding seven thousand dollars, it being fifty per cent, of his then ascertainable indebtedness, and provided your trustees would not