Seaton v. Hinneman

Day, J.

The court refused all the instructions, fifteen in number, asked by the plaintiffs, and instructed the jury as follows: “In this case it is shown that, the note in question being negotiable, the suit, under the law, was brought before the maturity of the note; and it being further shown, by uncontradicted evidence, that a petition in bankruptcy was filed against E. J. Bruce, the payee of the note in question, in the District Court of the United States, on the 15th day of March, 1876, and that said E. J. Bruce filed an answer to said petition, by his attorneys, Seaton & Spaan, the plaintiffs in this case, on the 25th day of March, 1876; and that said note was transferred by E. J. Bruce to plaintiffs, on the 1st or 2d day of April, 1876, and that said E. J. Bruce, under said proceedings, was adjudged a bankrupt; that the plaintiffs had notice of the filing of said petition before said 1st day of April. The court, in view of'the foregoing facts being established’by uncontradicted evidence, instructs the jury to find a verdict for the defendant.”

However correct, as abstract propositions, the instructions asked may have been, there was no error in refusing them, if the instruction above quoted was properly given.

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i promissory upon*instructlon' I. The note in question is negotiable and entitled to three days of grace. Code, § 2092. , It was executed February 1, 1876, and was payable sixty days after date. The last day of grace was April 4, 1876. The action was commenced April 1, 1876, before the note, according to its terms, matured, and hence could not be maintained when the action was brought. Whitney, Galloup, Bliss & Co. v. Bird, 11 Iowa, 407 . The plaintiffs insist, however, that the non-maturity of the note was not pleaded, and that it was, therefore, improper to instruct respecting it. The petition filed in the justice’s court showed upon its face that the action was brought before the note matured.

Section 2650 of the Code provides: “When any of the matters enumerated as grounds of demurrer do not appear on the face of the petition the objection may be taken by answer. If no such objection is taken it shall be deemed waived. If the facts stated by the petition do not entitle the plaintiff to any relief whatever, advantage may be taken of it by motion in arrest of judgment before judgment is entered.” This is a ease where the defect appears upon the face of the petition, and it is one, also, wherein the facts stated in the petition do not entitle the plaintiff to any relief. That the petition should have been held bad upon demurrer, if one had been interposed, there can be no doubt. Not only did the petition show upon its face that the plaintiffs were not entitled to maintain an action when the suit was commenced, but the proof introduced by the plaintiffs showed the same fact. It was competent, therefore, for the court to instruct the jury that, under the evidence submitted, the plaintiffs could not recover.

2. —: assignruptcy." II. The abstract does not purport to contain all the evidence. It does not show when the indorsement to plaintiffs was made. In the absence of any showing to the contrary we must presume that the proof showed that the indorsement was made not earlier than April 1,1876, as the court instructed, and hence after plaintiffs had knowl *398 edge of the commencement of proceedings in bankruptcy against their indorser Bruce. The petition in bankruptcy was filed March 15, 1876. The conveyance of the bankrupt’s effects to the assignee was executed November 11, 1878. This conveyance related back to the time of the filing of the petition in bankruptcy, arid from that date vested in the assignee all the property, both real and personal, of-the bankrupt. Revised Statutes of the United States, §§ 5029 and 5011. The plaintiffs had actual knowledge of the commencement of bankruptcy proceedings at the time of their purchase of the note, and they cannot be regarded as innocent purchasers. As against them the conveyance to the assignee passed the title in the note in question to the assignee. The plaintiffs have no title therein and can maintain no action thereon.

3. jmtisDiction.: federal court,. III. It is claimed by .appellants that the United States Courts have exclusive jurisdiction of all questions arising under the bankruptcy law, and that the matters . here insisted upon cannot he presented in a State court. We think, however, that the fact that bankruptcy proceedings have been instituted may be presented in a State court, by a debtor, for the purpose of showing that the plaintiff is not entitled to maintain an action, and that the right of action has become vested in the assignee in bankruptcy.

The judgment is

Affirmed.