Peterson v. Speer

29 Pa. 478
CourtSupreme Court of Pennsylvania
DecidedJuly 1, 1857
StatusPublished

This text of 29 Pa. 478 (Peterson v. Speer) is published on Counsel Stack Legal Research, covering Supreme Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Peterson v. Speer, 29 Pa. 478 (Pa. 1857).

Opinion

The opinion of the court was delivered by

Woodward, J.

This was a scire facias to revive a judgment which William Speer obtained on the 1st June, 1841, against the defendants below, now plaintiffs in error. H. Brunot having paid [485]*485the judgment and taken an assignment of it, the scire facias was sued out in the name of Speer to his use. The defendants pleaded 1. Payment, and 2. Their discharge under the Bankrupt Law of 19th August, 1841. What payments they had made were admitted and applied to the judgment, and on the trial no question was agitated under this plea.

To the plea of discharge under the bankrupt law, the plaintiff replied in substance perfraudem, that the defendants obtained their certificates by wilful concealment of their property and rights of property, contrary to the Act of Congress, and they gave, as required by the Act of Congress, the prior reasonable notice, specifying in writing the fraud and concealment.”

The question raised by the pleadings, and tried in the court below, was therefore a pure question of fact — fraud or no fraud in obtaining their discharge as bankrupts. The learned counsel for the plaintiffs in error seemed to think there was something peculiar about the question of fraud in this case, and insisted with great energy that it was not enough to make out fraudulent transfers of property by the defendants, but that under the pleadings nothing but a fraud contrary to the Act of Congress would suffice, and hence he argued that no applicant for the benefit of the bank-rupt law, after having been prostrated by misfortune, after having applied for relief under the provisions of the act, after having complied with its severe and rigid requirements, having surrendered his property for the benefit of his creditors, having finally obtained his discharge from all his debts, by the solemn decree of a court of exclusive jurisdiction, ample means having been afforded to his creditors to resist his progress at every step, and prevent his success, by the introduction of any legitimate sufficient proof, ought, years afterwards, to be deprived of the benefit of that discharge, and branded with fraud and infamy by the utter disregard, in the administration of justice, of the provisions of the very law under which it was granted. Such a course, he suggested, is a marked disrespect to the tribunal whose solemn judgment is defeated, a palpable violation of the law whose universal obligation is derived from the express provisions of the Constitution of the United States, and a grievous wrong and irreparable injury to the suitor whose rights are sacrificed.

These are grave suggestions, and if well founded they make an end of this case and of all others which involve similar questions * of fraud. It is worth while therefore to consider these views carefully, before entering into an examination of the bills of exception on the record.

The bankrupt law of 1841 was a constitutional enactment by the Congress of the United States. The power to establish uniform laws on the subject of bankruptcies throughout the United States, is expressly conferred on Congress by the federal constitu[486]*486tion; and although it is not exclusive in the terms of grant, it becomes so when it is exercised. Uniform laws throughout the United States, on any subject, must of course supersede state legislation on the same subject. The states may make bankrupt laws when the general government has none, but when Congress passes such an act, it becomes the supreme and exclusive as well as uniform law.

The Act of 1841 gave the federal courts exclusive jurisdiction in cases of bankruptcies, and provided, in the 4th section, that every bankrupt who should bona fide surrender all his property and rights of property, for the benefit of his creditors, and should comply with- all orders of the appropriate court, should be entitled to a full discharge from all his debts, to be decreed and allowed by the court which has declared him a bankrupt, and a certificate thereof granted to him by such court accordingly.

But after the decree of bankruptcy, and before such certificate should issue, notice was to be given to the creditors, as specifically prescribed, and if such bankrupt shall be “ guilty of any fraud or wilful concealment of his property or rights of property, or shall have preferred any of his creditors, contrary to the provisions of this act, ****** or shall, in the proceedings under this act, admit a false or fictitious debt against his estate, he shall not be entitled to any such discharge or certificate.”

Here it will be observed that the fraud which was to deprive the bankrupt of his certificate, even after the court had decreed him a bankrupt, was such as should be established to the satisfaction of the court having him in charge, after seventy days’ notice to his creditors; but if none was established in that court, the certificate was then to issue, and that was to be deemed, in all courts of justice, a full and complete discharge of all debts, contracts, and engagements of such bankrupt, and a full and complete bar to all suits brought in any court of judicature whatever; “ and the same shall he conclusive evidence of itself in favour of such bankrupt, unless the same shall be impeached for some fraud or wilful concealment by him of his property or rights of property as aforesaid, contrary to the provisions of this act, on prior reasonable notice, specifying in writing such fraud or concealment.”

These words, “ unless impeached for some fraud or wilful concealment as aforesaid,” clearly point to the frauds and concealments which may prevent the granting of the certificate after the decree, and. there the expression is, as we have seen, “ any fraud or wilful concealment of property or rights of property.”

Now, whilst it is true that the federal courts alone can grant the certificate of discharge, and that when granted all other courts are to give it conclusiv'e effect, unless so impeached, yet such other courts possess the same power to try the impeachment as the court decreeing the bankruptcy possessed to try the right to the certifi[487]*487cate. In the one court the bankrupt was not to obtain his certificate if convicted of fraud or concealment, in the other it was not to avail him. It is no reflection on the federal courts then, and no violation of the Act of Congress, for a state court to try an alleged fraud in obtaining a certificate of bankruptcy. Nay, it is agreeable to the very letter and spirit of the enactment. Congress have said it may be tried — the very fraud which might have been litigated in granting the certificate. They knew well that in the manner bankrupt cases are ordinarily driven through the courts, many fraudulent concealments might elude detection which time and subsequent circumstances would uncover. They meant to afford absolute protection in every court of judicature to the honest debtor, who had Iona fide surrendered his all to his creditors, but no immunity whatever to him who had practised fraud and concealment, not only to'the prejudice of his creditors, but to the dishonour of the laws and courts of his country.

What, then, is the peculiarity of the fraud alleged in this case ? None, except that it involves disloyalty to the government whose protection is invoked.

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Bluebook (online)
29 Pa. 478, Counsel Stack Legal Research, https://law.counselstack.com/opinion/peterson-v-speer-pa-1857.