55 Vt. 8 | Vt. | 1883
The opinion of the court was delivered by
A discharge under our insolvent law does not bar a debt contracted before its passage, the creditor in no way becoming a party to the proceedings in insolvency. Bixby v. Woodward, Windham County, Feb. Term, 1882. Under the United States Bankrupt Act of 1841, it was held in this State that a judgment on a debt existing at the time of the adjudication of bankruptcy and provable under said act, obtained after adjudication and before certificate granted, was discharged by the certificate. Harrington v. McNaughton, 20 Vt. 292; Downer v. Rowell, 26 Vt. 397. In these cases the court looked behind the judgments, to see what they were founded on, and gave effect to the certificates accordingly, and in favor of the debtors. Clark v. Rowling, 3 N. Y. 216, is to precisely the same effect. It was there argued against the bankrupt that his discharge extended to such debts
although' he dissented in that case, admitted that for various purposes, courts might look behind judgments, to see what they were founded on, and instanced the case of a fraudulent conveyance by the debtor, and the passage of an insolvent or an exemption law after the contract was made on which the judgment was founded. See Monroe v. Upton, 50 N. Y. 593.
Massachusetts formerly held the same doctrine. Betts v. Bagley, 12 Pick. 572. But she has departed from it in recent cases. Sampson v. Clark, 2 Cush. 173 ; Bangs v. Watson, 9 Gray, 211; Pierce v. Eaton, 11 Gray, 398 ; Walcott v. Hodge, 15 Gray, 547 ; Bradford v. Rice, 102 Mass. 472. The decisions of the Federal Courts of Bankruptcy on this subject are in inextricable confusion, some holding that the theory that the debt is so merged in the judgment as to be extinguished has no applicability under the Bankrupt Act, and that it is not the judgment, but the debt as it existed on the day of the filing of the petition, that is provable Brown’s Case, 3 Bank. Reg. 145, and Vickery’s Case, Ib. 171; and others holding the contrary, that neither the debt nor the judgment is provable, that the debt is merged in the judgment,
Bump says, page 70, sixth edition, that one or the other might be proved, but that it was not settled which. The English doctrine is the same as that of this State. In Dinsdale v. Eames, 2 Brod. & B. 8, the defendant in an action on a bail-bond, becoming bankrupt between plea and verdict, and obtaining his certificate after judgment, was discharged from the damages and costs, on the ground that the debt was contracted before defendant’s bankruptcy, and might have been proved under the commission.
On the other hand there are instances of the application of this doctrine in favor of the creditor. Thus, in Wendell’s Case, 19 Johns. 153, a judgment obtained after the passage of the New York insolvent law of 1813, on a debt contracted before the act, was held not discharged by a certificate under the act. Chief Justice Spencer thought that to hold otherwise would be an evasion of Sturges v. Crowningshield, 4 Wheat. 122, that a state insolvent law cannot discharge a debt contracted before its passage. Wyman v. Mitchell, 1 Cow. 316, is another instance. It was debt on a judgment rendered by the Supreme Court of New York in August, 1816. Defendant pleaded his discharge under the New York insolvent act of 1813, granted on Dec. 30, 1817. Plaintiff replied that the judgment declared on was rendered on a judgment obtained in Maine in 1814, on certain notes there made to him by the defendant before the passage of said act. The court held that although the defendant’s original undertaking was so merged in the judgment that no suit could be maintained upon it, yet, that it was proper to inquire into the time and circumstances of the contract upon which the first judgment was founded, for the purpose of taking the case out of the operation of the defendant’s discharge. In Betts v. Bagley, Chief Justice Shaw fully adopts the doctrine of that case, and says that “ any other decision would carry the technical doctrine of merger to an inconvenient extent, and cause it to work injustice.” In Haggerty v. Amory, 7 Allen, 458, Judge Merrick says “ this is the universal rule.” In that
Now if we are to look behind the judgment for the purpose of giving the discharge effect, as this court did in Harrington v. McNaughton and Downer v. Rowell, why must we not look behind it for the purpose of defeating its effect ? Must not the rule “ work both ways ?” We see no distinction in principle between the two cases. No such distinction is made in Massachusetts, but both cases are there put on the same ground. Nor do we think that the very means adopted by a creditor to enforce his debt, valid as against the insolvent law, should be made the instrument of defeating it altogether. Besides, we think with Chief Justice Spencer, that to hold the certificate a bar in this case, would be to evade the decisions of the Supreme Court of the United States, and impair the obligation of the plaintiff’s original contract.
Judgment reversed, and judgment-for the plaintiff for the amount of the judgment declared on, with costs. The trustee adjudged chargeable according to disclosure.