Cary Robinson v. His Creditors, 1 Rob. 452

Martin, J. Lallande a creditor of the insolvent, who had filed an opposition to his discharge, having moved and obtained leave to discontinue his Erskine and Eichelberger, two of the other creditors, took a rule on the insolvent and Lallande, to show cause, why they, the said Erskine and Eichelberger, should not be allowed to intervene and continue Lallande’s opposition, and oppose the insolvent’s discharge on various grounds contained in a petition of intervention to be filed on the trial of the rule. The rule was discharged.

The applicants took a bill of exceptions to the opinion of the court, refusing them leave to file their petition of intervention, and have appealed. Lallande had filed his opposition on the ground of fraudulent practices on the part of the insolvent, whose conscience he had attempted to probe by interrogatories, and whose refusal to answer, fully established the charge. On the payment of his debt being secured to him by the insolvent , Lallande agreed to and actually did withdraw his opposition.

The appellants’ counsel contends that the consideration which induced Lallande to withdraw his opposition, is one which the law abhors, and that he obtained an illegal preference. Waith'vs. Harper, 3 Johns, 388. That the preference which the insolvent granted to Lallande, if given as alleged, is a new fraud against his other creditors. That the obligations given by a petitioning insolvent to one creditor, to withdraw his opposition, or not to oppose him, are contrary to legal policy, and a fraud upon the other creditors.

That they had a right to rely upon Lallande’s opposition, and he had no right to negotiate away their rights. Waite vs. Harper, 2 Johns, 388. Brice vs. Lee et al., 4 Ib., 410. Yeatman vs. Chatterton, 7 Ib., 296. Wiggin and Wiggin vs. Bush, 12 Ib., 307. Tuxbury vs. Miller, 19 Ib., 311. Baker vs. Matlock, 1 Ashmead, 57. Rogers vs. Kingston, 2 Bingham, 441. Jackson vs. Dawson, 4 Barn and Ald., 691. Wills vs. Girling, 5 Moody, 78.

The counsel has further contended, that the court erred in rejecting his petition of intervention offered at the trial of the rule, on the ground that it came too late, ten days having expired from the meeting of the creditors, the preference granted to Lallande by the insolvent being a new fraud on the part of the latter, long after the meeting of tie creditors, and such therefore as could not have been presented in the original opposition.

It appears to us that the court erred in permitting Lallande to discontinue his opposition, and refusing to' the appellants leave to continue it, and to file their petition of intervention. It is therefore ordered, that the judgment be reversed, and ours is that the judgment of the District Court ordering the discontinuance of the opposition of Lallande be set aside, and that the above rule, obtained against him and the insolvent,.be made absolute ; and that the case be remanded for further proceedings, with directions to the judge, to allow the filing of the appellants’ petition of intervention.

The costs to be paid by the appellee. This is a mistake. The petition offered to be filed by the attorney in fact of Erskine and Eichelberger, and rejected by the court, alleges that the payment of his debt was secured to Lallande by the insolvent; but there is no evidence whatever in the record, to establish the allegation. XteponTBii.