Stephenson v. Bird

53 So. 92, 168 Ala. 363, 1910 Ala. LEXIS 533

• Court: Supreme Court of Alabama
• Decided: June 2, 1910
• Status: Published

Opinion

ANDERSON, J.

The only question presented by this appeal involves the sufficiency of respondents’ special plea of discharge in bankruptcy as res judicata. The discharge of a debtor in bankruptcy in no way precludes the trustee from recovering property of the bankrupt’s estate which has been fraudulently transferred. In re Pierce (D. C.) 103 Fed. 64. The discharge is personal to the bankrupt, and does not release his fraudulent grantees from liability for the fraud committed by them.—Moyer v. Dewey, 103 U. S. 301, 26 L. Ed. 394. The plea, however, goes beyond the mere discharge, and attempts to invoke an estoppel or res judicata, upon the theory that the validity of the conveyance now assailed was litigated in the bankruptcy proceeding by objections interposed to a discharge because the defendant bad fraudulently transferred bis property.

In order for a judgment between tbe same parties to be res judicata, it must, among.other things, have been rendered by a court of competent jurisdiction, and must involve a question that could have been litigated in tbe former cause or proceeding. — 4 Mayfield’s Dig. p. 728, and authorities cited in section 124. Under and by virtue of paragraph 4 of section 14 of tbe bankruptcy act of 1898 (Act July 1, 1898, c. 541, 30 Stat. 550 [U. S. Comp. St. 1901, p. 3427]), as amended by Act Feb. 5, 1903, c. 487, § 4, 32 Stat. 797 (U. S. Comp. St. Sapp. 1909, p. 1310), tbe right given to oppose tbe discharge of tbe bankrupt as to fraudulent conveyances of bis property is only in tbe event tbe conveyance was made within four months'immediately preceding tbe filing of tbe petition in bankruptcy. It makes no provision for a contest of conveyances anterior to said four months, and tbe plea does not aver that said conveyances or transfers urged upon tbe objection to tbe bankrupt’s discharge were made, within four months immediately preceding tbe petition in bankruptcy. Neither does tbe bill show that tbe conveyances there assailed come within tbe influence of section 14, so as to be urged against tbe bankrupt’s discharge.

Tbe chancellor erred in bolding tbe respondents’ plea sufficient, and tbe decree of the chancery court is reversed, and one is here rendered declaring said plea insufficient.

Reversed and rendered.

Simpson, Mayfield, and Sayre, JJ., concur.