Meyer v. Fleming

In Meyer v. Fleming, 327 U.S. 161, 90 L. Ed. 595, 66 S. Ct. 382 (1946), the court confronted the issue whether litigation instituted by a creditor could be defeated on the ground that the creditor filed for bankruptcy. 327 U.S. at 165. The court first observed that, when a petition for bankruptcy is filed, title to the bankrupt debtor's claim vests in the trustee and the trustee may assume control of the litigation by intervening and obtaining any benefits recovered, or the trustee may start a new suit and cause the prior suit to be abated. See id. The court also noted that a trustee may simply let the suit that has already started run its course. See id. In a footnote, the court mentioned that if a suit is continued by the bankrupt, the trustee is concluded by the judgment. See id. n.8. The court was not, however, addressing the issue whether a trustee is bound by a judgment in a suit brought by the debtor and thus, the statement in the footnote is merely dicta. As authority for this statement, however, the Supreme Court cites to Eyster v. Gaff, 91 U.S. 521, 23 L. Ed. 403 (1875).