Morse v. City of Lowell

48 Mass. 152
CourtMassachusetts Supreme Judicial Court
DecidedOctober 15, 1843
StatusPublished
Cited by1 cases

This text of 48 Mass. 152 (Morse v. City of Lowell) is published on Counsel Stack Legal Research, covering Massachusetts Supreme Judicial Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Morse v. City of Lowell, 48 Mass. 152 (Mass. 1843).

Opinion

Shaw, C. J.

The plaintiff brings his action of trespass vi et armis against the defendant corporation, alleging an assault and false imprisonment; and the act relied on as an assault and false imprisonment was an arrest of the plaintiff on an execution issued on a judgment duly recovered by the defendants against the plaintiff, and a commitment thereon. This arrest occurred on the 24th of June 1843, on an alias execution tó obtain satisfaction of the balance of about $6000 due on a judgment recovered in the court of common pleas, April term 1842, for the sum of $10,000. The ground on which this arrest was alleged to be Illegal was, that the plaintiff, previ[153]*153ously thereto, had obtained his discharge under the bankrupt law of the United States, of which the defendants had notice, and by which, as it was insisted by the plaintiff, they were bound, though obtained after their judgment had been ren dered.

One question argued was, whether under these circumstances, an action of trespass vi et armis would lie, either against the officer or the judgment creditors. A question was also made, whether such action would lie against a corporation. But the decision of the court upon another part of the case has rendered it unnecessary to consider these questions further.

It appears that this judgment for $ 10,000 was recovered by the city of Lowell against the plaintiff, as collector of taxes, and upon an alleged defalcation, in that office, in rendering his accounts and making his payments. The plaintiff filed his petition in bankruptcy, in February 1842, and was then decreed a bankrupt. The 6th of September 1842 was assigned as the time for hearing his petition for his discharge. Previously to that time, viz. on the 22d of August 1842, the city filed and proved their claim against the plaintiff; and it appears, by the facts agreed, that their purpose in so doing was to enable them to oppose his petition for a discharge. They propov to oppose his discharge, on the ground that the debt due to them was a debt from him as a public officer and defaulter; and so, being a fiduciary debt, within the meaning of §§ 1 and 4 of the United States bankrupt law, he was not entitled to any discharge. A few days before the day assigned for hearing the plaintiff’s petition for a discharge in the district court, an opinion was pronounced by the judge of the circuit court, Mr. Justice Story, in another case, (Matter of Tebbetts, 5 Law Reporter, 259,) in which it was held, that the fact of owing a fiduciary debt, if the petitioner also owed other debts, did not prevent him from being decreed a bankrupt: That it was optional with a creditor, holding such a debt, to come in and prove it under the commission, and share the assets pari passu with other creditors; it not being inequitable, as against them, to take an equal dividend with them of the assets of the [154]*154common creditor: That if such fiduciary creditor did elect so to come in and prove a debt, and entitle himself to a dividend, he should be bound by the discharge decreed to the bankrupt, if he should obtain one ; but if such fiduciary creditor did not el:;ct so to come in and prove the debt, the discharge, though general in its terms, would not bar any remedy the creditor might have for such fiduciary debt.

This adjudication, emanating from such a source, seemed to be regarded by the city and their legal advisers as an authoritative declaration of the law, at least for this circuit. And as their object in proving their debt was not to take a dividend, but to oppose any discharge which would bar their debt; and as under the law thus decided this became wholly unnecessary, and would even defeat their object if the discharge was granted, by barring their remedy; it indicated the course which they ought to pursue. They therefore immediately petitioned the district court for leave to withdraw their claim and proof; and after notice, and cause shown, this petition was granted.

In this state of the case, two questions arise: 1. Whether the defendants would have been barred from further proceed jngs on their judgment and execution, if they had kept aloof and not proved their debt: 2. Whether, having once proved their debt, although afterwards permitted to withdraw their claim and proof, they are replaced in the same situation as it they had not proved it.

We can have no doubt that the debt due from the plaintiff to the defendants was a fiduciary debt, within the meaning of the bankrupt law. The first section of the bankrupt act extends to all persons “ owing debts which shall not have been created in consequence of a defalcation as a public officer, or an executor, administrator, guardian or trustee, or while acting in any other fiduciary capacity.” The plaintiff was a public officer, specially entrusted with the duty of collecting the revenues of the city, and is within the letter and spirit of the act. The court are of opinion, that by the true construction of the bankrupt law, a fiduciary creditor, if he does not choose to avail himself of the [155]*155proceedings under the commission, is not bound by the discharge. When the proceedings are instituted by the voluntary act of the bankrupt himself, they are uniformly regarded and treated, in the act, as done for the benefit of the bankrupt. The obvious, and perhaps the only benefit to him, is the discharge. But it is quite clear that,, to some extent, fiduciary debts are regarded as privileged ; and if the petitioner owes none but fiduciary debts, he cannot thus, by his voluntary act, commence these proceedings, and obtain his discharge. Now the only way in which this privilege can be upheld is, to allow to the fiduciary creditor the option either to come in and share with the other creditors in an equitable distribution of the assets, and enjoy the other privileges of creditors, which as against them he has a right to do, or to elect not to prove, and not to be barred of his remedy. But whatever we might have thought, had this been an original question, we think this construction is now sustained by a greatly preponderating weight of authority. [See post 430.]

2. But the more material question is, whether the defendants are barred in consequence of having proved their debt, although, before the petition for a discharge was acted upon, or any dividend made, they were permitted by the district court to withdraw their claim and proof.

The ground on which it is held, that if a fiduciary creditor prove his debt, he shall be barred by the discharge, is not any rule of positive law, but because it is unreasonable and manifestly inequitable, both as to other creditors and also to the debtor, that a party shall enjoy the privilege and benefits of a particular relation, without being affected with the burdens and disabilities incident to that relation. To apply this rule: We suppose the reason why a creditor is bound by the discharge, is because he takes his dividend and exercises all the rights of a creditor. But by the mere proof of his debt, which may be made at the first meeting, he does not necessarily obtain a dividend, or enjoy other advantages as a creditor.. We think, therefore, it is competent for the court which has the general jurisdiction over the subject, to decide, on his applica[156]*156tion, whether he shall have leave to renounce the relation of creditor, and stand on his original rights. This the court did do in the present case, and therefore we are of opinion that the defendants were placed in statu quo.

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Bluebook (online)
48 Mass. 152, Counsel Stack Legal Research, https://law.counselstack.com/opinion/morse-v-city-of-lowell-mass-1843.