In re Brown

S.D. New York

In re Brown

4 F. Cas. 328, 5 Ben. 1, 3 Nat. Bank. Reg. 584, 1870 U.S. Dist. LEXIS 128

DecidedJanuary 21, 1870

StatusPublished

This text of 4 F. Cas. 328 (In re Brown) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

In re Brown, 4 F. Cas. 328, 5 Ben. 1, 3 Nat. Bank. Reg. 584, 1870 U.S. Dist. LEXIS 128 (S.D.N.Y. 1870).

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Opinion

BLATCHFORD, District Judge.

I do not concur in this view. I have examined the decision of the district court for the district of Connecticut, in the case of In re Williams [supra], and am compelled to dissent from it. The point ruled in it is, that where a judgment is recovered against a bankrupt after an adjudication of bankruptcy against him, on a debt which existed against him prior to such adjudication, the debt is so merged in the judgment that it cannot be proved in bankruptcy, and the judgment cannot be proved because it was not an existing debt at the time of the adjudication. The theory is, that the debt was so merged as to be extinguished, and that the judgment constitutes a new debt which takes date from the time of its recovery. There is no doubt of the correctness of this principle as respects proceedings in ordinary cases against the debtor or his property, but it has no applicability under the bankruptcy act The 19th section of the act [14 Stat. 525] declares that all debts due and payable from the bankrupt at the time of the adjudication of bankruptcy, and all debts then existing but not payable until a future day, may be proved against the estate of the bankrupt. If the debt in this case existed at the time of the adjudication it is provable, although the judgment is not provable, as such, because it did not then exist. The debt has never been paid or satisfied. This must be the proper construction under the act, or the provisions of section 21 of the act are nugatory. That section provides that where a suit is pending by a creditor against a bankrupt for a debt or claim, if the amount due the creditor, that is, the amount due the creditor on or for the debt or claim, is in dispute, the suit may, by leave of the bankruptcy court, proceed to judgment for the purpose of ascertaining the amount due, that is, the amount due on or for the debt or claim, and that such amount may be proved in bankruptcy. The judgment, as such, is not to be proved, but the amount of the debt or claim, as it stood at the time of the adjudication, is to be proved. If the fact of obtaining the judgment extinguishes the debt, the amount of the debt could not be proved. I think the clear intent of the act is that the recovery of a judgment after the adjudication, on a debt which existed at the time of the adjudication, shall not affect the provability of the debt. If it were otherwise, a great hardship would be worked in many cases. A creditor might, in ignorance of the adjudication, go on an'd obtain a judgment for his debt, and then find himself deprived of the power of proving either his debt or his [330]*330judgment. I think the debt in this case, if it existed at the time of the adjudication, is provable.

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BLATCHFORD, District Judge.

I do not concur in this view. I have examined the decision of the district court for the district of Connecticut, in the case of In re Williams [supra], and am compelled to dissent from it. The point ruled in it is, that where a judgment is recovered against a bankrupt after an adjudication of bankruptcy against him, on a debt which existed against him prior to such adjudication, the debt is so merged in the judgment that it cannot be proved in bankruptcy, and the judgment cannot be proved because it was not an existing debt at the time of the adjudication. The theory is, that the debt was so merged as to be extinguished, and that the judgment constitutes a new debt which takes date from the time of its recovery. There is no doubt of the correctness of this principle as respects proceedings in ordinary cases against the debtor or his property, but it has no applicability under the bankruptcy act The 19th section of the act [14 Stat. 525] declares that all debts due and payable from the bankrupt at the time of the adjudication of bankruptcy, and all debts then existing but not payable until a future day, may be proved against the estate of the bankrupt. If the debt in this case existed at the time of the adjudication it is provable, although the judgment is not provable, as such, because it did not then exist. The debt has never been paid or satisfied. This must be the proper construction under the act, or the provisions of section 21 of the act are nugatory. That section provides that where a suit is pending by a creditor against a bankrupt for a debt or claim, if the amount due the creditor, that is, the amount due the creditor on or for the debt or claim, is in dispute, the suit may, by leave of the bankruptcy court, proceed to judgment for the purpose of ascertaining the amount due, that is, the amount due on or for the debt or claim, and that such amount may be proved in bankruptcy. The judgment, as such, is not to be proved, but the amount of the debt or claim, as it stood at the time of the adjudication, is to be proved. If the fact of obtaining the judgment extinguishes the debt, the amount of the debt could not be proved. I think the clear intent of the act is that the recovery of a judgment after the adjudication, on a debt which existed at the time of the adjudication, shall not affect the provability of the debt. If it were otherwise, a great hardship would be worked in many cases. A creditor might, in ignorance of the adjudication, go on an'd obtain a judgment for his debt, and then find himself deprived of the power of proving either his debt or his [330]*330judgment. I think the debt in this case, if it existed at the time of the adjudication, is provable.

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Bluebook (online)

4 F. Cas. 328, 5 Ben. 1, 3 Nat. Bank. Reg. 584, 1870 U.S. Dist. LEXIS 128, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-brown-nysd-1870.