103 A.D. 511 | N.Y. App. Div. | 1905
Lead Opinion
This motion was made by Louis Meryash and Albert London. They are not parties to the action, but are the owners of certain real estate which was formerly owned by the defendant James Gault. The judgment entered against James Gault in the action appears of record to be a lien upon the real property now owned by Meryash and London. The said judgment was entered" against the defendant Gault on the 12th day of January, 1897, and the moving affidavit shows that he was discharged in bankruptcy in the District Court of the United States for the southern district of Hew York, Hovember 8, 1899, for all debts and claims provable by the acts of Congress which existed against his estate on September 22, 1899, save such debts as are excepted from the operation of such discharge. The moving parties further show that the judgment aforesaid was obtained upon a cause of action for a breach of contract, and that thereafter and upon the 15th day of January, 1901, the said James Gault purchased the real property upon which the said judgment now appears to be a lien. Upon the 22d day of January, 1901, James Gault deeded the real property to his son, John Gault, and subsequently, by various mesne conveyances, it has been conveyed to Louis Meryash and Albert London. James Gault died on the 3d day of March, 1901. The moving affidavit, however, fails to show that the judgment in question was scheduled in the bankruptcy proceeding.
Proof of the foregoing facts is made by the son, John H. Gault. The learned court at Special Term granted the application and directed that the judgment be canceled of record. It is claimed that the order is improper for the reason that the application can
The purpose of this section was to provide for the discharge of a judgment which the bankrupt, by reason of his discharge in bankruptcy, becomes entitled to have removed from the records as an apparent lien. The intent of the section is in effect to provide a remedy for the removal of a cloud upon title to land. While the language of the section confers the right upon the bankrupt to move for the discharge, yet it is evident that the basis of the right is not personal, but is founded solely upon the discharge in bankruptcy. That is the instrument which creates the right to secure the discharge; and when the right secured thereby exists, I think the fair construction of the section is to confer upon any person, who has succeeded to the rights possessed by the bankrupt, authority to
The right to the discharge of the judgment depends upon the existence of two facts which the discharge in bankruptcy does not establish : First, that the judgment is one upon which the discharge can operate ; and, second, that it was properly scheduled in the liabilities of the bankrupt, or that the creditor had actual notice or knowledge of the proceeding. And these facts exist, if at all, quite independent of the personality of the bankrupt, and their operative force does not depend upon his continued existence, nor do they confer a right exclusively personal to him. They apply whenever the facts exist to which the Code provision is applicable. While the provision of the Code of Civil Procedure makes such a judgment invalid as a lien, yet it is not made so to appear until the essential facts are shown to exist. As extrinsic facts are required to be established, the judgment, although invalid, presumptively appears to be a judgment capable of enforcement. The existence of such a condition creates a cloud upon the title and would authorize the maintenance of an action in equity for its removal upon an averment of the facts showing that it was invalid. (Rumsey v. City of Buffalo, 97 N. Y. 114; Temple Grove Seminary v. Cramer, 98 id. 121.) It is evident that the provisions of the Code of Civil Procedure are not self-enforcing and, before they can be given operative effect, the extrinsic facts must be established. Until this condition is made to appear, the invalidity of the judgment is not apparent, and nothing would stand in the way of its presumptive existence as a valid lien.
We are, therefore, of the opinion that the moving parties, being the owners of the real property, have standing to make this motion.
It is further contended that, if this construction obtain, yet it devolved upon the bankrupt to show that the discharge in bankruptcy operated as a discharge of the particular debt. It does not appear from the moving papers that the judgment sought to be discharged was scheduled in the liabilities of the bankrupt, nor does it appear that the creditor had notice or knowledge of the proceedings in bankruptcy. By the provisions of subdivision 3 of section 17 of the Bankruptcy Law (30 U. S. Stat. at Large, 550, as
Van Brunt, P. J., O’Brien and Laughlin, JJ., concurred.
Concurrence Opinion
I concur in the result. I think that under section 1268 of the Code of Civil Procedure an application to cancel the lien of a judgment based upon the discharge in bankruptcy of the judgment debtor must be made by the bankrupt. This section gives the bankrupt a personal right to have the lien of a judgment, which but for the discharge would be a lien upon real estate, canceled, and there is no authority to cancel such a lien except on application of the bankrupt. I do not think, however, that this judgment ever wás a lien on the property described in the moving papers. The section provides that after his discharge a judgment against a bankrupt shall not be a lien on real property acquired by him subsequent to the discharge, and under this provision, the judgment in question was not a lien upon the real property of the moving parties. If the judgment was not a lien there was nothing for the court to do as it could not discharge a lien which did not exist.
Order reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs, with leave to renew on additional proof.