Ray v. Wight

119 Mass. 426, 1876 Mass. LEXIS 49

• Court: Massachusetts Supreme Judicial Court
• Decided: January 10, 1876
• Status: Published

Opinion

Gray, C. J.

A creditor who has brought his action more than four months before the commencement of the proceedings in bankruptcy, and has made an attachment which is not dissolved by such proceedings, may doubtless, after the question of the bankrupt’s discharge has been determined by the United States court, have a special judgment against the property attached, even if a certificate of discharge has been granted to the bankrupt. Davenport v. Tilton, 10 Met. 320. Bates v. Tappan, 99 Mass. 376. Stockwell v. Silloway, 113 Mass. 382. Johnson v. Collins, 116 Mass. 392. Peck v. Jenness, 7 How. 612. Doe v. Childress, 21 Wall. 642, 646.

But the bankrupt act expressly provides that “no creditor whose debt is provable under this act shall be allowed to prosecute to final judgment any suit at law or in equity therefor against the bankrupt, until the question of the debtor’s discharge shall have been determined; and any such suit or proceedings shall upon the application of the bankrupt, be stayed to await the determination of the court in bankruptcy on the question of the discharge,” unless in case of unreasonable delay on the part of the bankrupt in endeavoring to obtain his certificate, or of proceeding, for the purpose of ascertaining the amount due, to a merely formal judgment, upon which no execution can issue. U. S. St. 1867, c. 176, § 21. U. S. Rev. Sts. § 5106.

The object of this provision is not only to protect the bankrupt, in case he obtains his certificate, from having the original cause of action against him merged in a judgment, the right of action upon which would not be barred by the discharge; Bradford v. Rice, 102 Mass. 472 ; but to prevent his being harassed by suits until the question of discharge is determined, and therefore extends to all cases, without regard to the question whether the debt would or would not be barred thereby; In re Rosenberg 3 Bened. 14; In re Ghirardelli, 1 Sawyer, 343; and also to enable the assignee, to whom all the rights of the bankrupt in the" property have passed, subject to the attachment, to come in, if he elects so to do, and assume the defence of the action. U. S. St. 1867, c. 176, § 14. U. S. Rev. Sts. § 5047. Doe v. Childress, 21 Wall. 642. Cleveland v. Boerum, 24 N. Y. 613.

If, indeed, neither the bankrupt nor the assignee moves for a stay of proceedings, the court may proceed to judgment. Dunbar v. Baker, 104 Mass. 211. Cutter v. Evans, 115 Mass. 27. Doe v. Childress, ubi supra. But the court should allow reasonable time for the assignee to come in if he sees fit; and, if either the bankrupt or the assignee seasonably interposes the objection, the proceedings must be stayed.

In Bosworth v. Pomeroy, 112 Mass. 293, the assignee had been admitted to defend the action, and it was agreed by all the parties that the case stood as if the bankrupt had received his discharge.

In the present case, it having been duly alleged by the bankrupts, and proved to the satisfaction of the court, that sufficient time had not elapsed for them to obtain their discharge, and that there had been no unreasonable delay on their part in endeavoring to obtain it, the action of the Superior Court, refusing a stay of proceedings and ordering judgment, was erroneous.

Exceptions sustained.