Exclusive measurements of the quasi-free $pn to pppi^0pi^-$ reaction have been performed by means of $pd$ collisions at $T_p$ = 1.2 GeV using the WASA detector setup at COSY. Total and differential cross sections have been obtained covering the energy region $sqrt s$ = (2.35 - 2.46) GeV, which includes the region of the ABC effect and its associated resonance structure. No ABC effect, {it i.e.} low-mass enhancement is found in the $pi^0pi^-$-invariant mass spectrum -- in agreement with the constraint from Bose statistics that the isovector pion pair can not be in relative s-wave. At the upper end of the covered energy region $t$-channel processes for Roper, $Delta(1600)$ and $DeltaDelta$ excitations provide a reasonable description of the data, but at low energies the measured cross sections are much larger than predicted by such processes. Adding a resonance amplitude for the resonance at $m$=~2.37 GeV with $Gamma$ =~70 MeV and $I(J^P)=~0(3^+)$ observed recently in $pn to dpi^0pi^0$ and $pn to dpi^+pi^-$ reactions leads to an agreement with the data also at low energies.