Youngman v. Salvage

130 N.W. 930, 21 N.D. 317, 1911 N.D. LEXIS 91
CourtNorth Dakota Supreme Court
DecidedMarch 13, 1911
StatusPublished
Cited by1 cases

This text of 130 N.W. 930 (Youngman v. Salvage) is published on Counsel Stack Legal Research, covering North Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Youngman v. Salvage, 130 N.W. 930, 21 N.D. 317, 1911 N.D. LEXIS 91 (N.D. 1911).

Opinion

Fisk, J.

The facts necessary to an understanding of the question-involved on this appeal are not in dispute, and briefly stated are as-follows:

In April, 1900, appellant duly recovered a judgment against respondent in a justice court of Cass county for the sum of $206.80, which judgment was thereafter, and on July 5, 1900, duly transcripted and docketed in the office of the clerk of the district court of such county,, where it still remains unsatisfied of record. In January, 1902,, respondent filed in the office of the clerk of the United States district'court in and for the district of North Dakota his petition in due form,, praying to be adjudged a bankrupt, and at the same time filed with such clerk in due form his schedule of assets and liabilities, and among-the liabilities thus scheduled was the judgment aforesaid. In due-time said court made its order and judgment that the petition of respondent praying for a discharge from his debts and liabilities be-denied, and such discharge as a bankrupt refused for reasons stated.

In May, 1906, respondent filed his second petition in such court, [319]*319praying to be adjudged a bankrupt, and also at such time filed his., schedule of assets and liabilities as required by law, including in such., schedule the judgment aforesaid. Appellant did not prove his said claim nor present the same in such second bankruptcy proceedings, nor-did he take any part therein whatsoever. Thereafter, and on July 30, 1906, the said district court of the United States in due form made-its order and judgment, wherein it adjudged that respondent be discharged from all debts and claims which were made provable by the. bankruptcy acts of the United States, existing at the date of filing such,, second petition in bankruptcy, excepting such debts as were by law-excepted from the operation of a discharge in bankruptcy.

Thereafter, and in the month of September, 1909, appellant caused, execution.to issue on such judgment, under which execution the sheriff-levied upon certain real property of respondent’s. Thereupon the district court of Cass county, on application of respondent, and on due-notice to appellant, made its order to the effect that the discharge im bankruptcy secured as aforesaid operated to discharge respondent from., liability on account of such judgment.

This appeal is from the order thus made, and the sole question for-determination is the correctness thereof.

Appellant’s contention, in brief, is that the right of the bankrupt to-be discharged from such debt was fully adjudicated in the first bankruptcy proceedings, and that the judgment therein denying such discharge is res judicata, and that appellant may, in this proceeding, urge-such former adjudication in bar of respondent’s claim that he was discharged from such debt by the adjudication in such second bankruptcy proceedings. In other words, it is his contention that the judgment, in question was, in legal operation, excepted from the discharge in. the second bankruptcy proceedings, although such debt is not included, within the debts expressly excepted from such discharge under the-provisions of § 17 of the bankruptcy act. (Act July 1, 1898, chap. 541, 30 Stat. at L. 550, U. S. Comp. Stat. 1901, p. 3428.)

Counsel for appellant concede that the form of discharge in the second bankruptcy proceedings is the one prescribed by the Supreme. Court of the United States, and that the debt represented by appellant’s, judgment is not expressly excepted under the provisions of the discharge, nor does it fall within the debts excepted from such discharge-under the provisions of § 17 of the bankruptcy act aforesaid. Counsel': [320]*320for appellant very properly assert that the right to a discharge and the effect of a discharge are wholly distinct propositions, and, as was held :by the.court in Re Marshall Paper Co. 43 C. C. A. 38, 102 Fed. 872: “The proper time and place for the determination of the effect of a discharge is when the same is pleaded or relied upon by the debtor as a defense to the enforcement of a particular claim. The issue upon the effect of a discharge cannot properly arise or be considered in determining the right to a discharge.” In other words, the power rests with the bankruptcy court to determine the right to a discharge, but the court whose jurisdiction is invoked for the collection and enforce-.ment of a debt claimed to have been discharged possesses the exclusive right to determine the effect of such discharge. This being true, it logically follows that the plea of former adjudication should have been interposed in the second proceedings in the bankruptcy court, that court have the sole jurisdiction to determine such question. Manifestly, the state court has no jurisdiction to determine the right to such discharge, and consequently cannot determine the question of former adjudication. Being restricted to the right to determine the effect of .•such discharge, the state court must look alone to the judgment of discharge in the bankruptcy court, and give effect thereto according to -the plain provisions of the bankruptcy act.

As before stated, the discharge is in the form prescribed by the -Supreme Court of the United States, and is as follows:

“Whereas, Frederick E. Salvage, of Wheatland, in said district, has been duly adjudged a bankrupt, under the acts of Congress relating to bankruptcy, and appears to have conformed to all the requirements of law in that behalf, it is therefore ordered by this court that said Frederick E. Salvage be discharged from all debts and claims which .are made provable by said acts against his estate, and which existed on the 9th day of May, 1909, on which day the petition for adjudication was filed by him; excepting such debts as are by law excepted from the operation of a discharge in bankruptcy.” The language of such order is very explicit and susceptible of but one meaning. It discharges respondent from all debts and claims which are provable by the bankruptcy acts against his estate, existing at the date the petition in bankruptcy was filed, and excepting only such debts as are by law excepted from the operation of a discharge in bankruptcy. That the debt represented by the judgment in question was provable in the [321]*321second bankruptcy proceedings is not controverted by appellant, nor is such fact open to question under the provisions of § 63-A-1, bankruptcy act. Being a provable claim, is it such a debt as is excepted by law from the operation of the discharge ? Section 17 of the bankruptcy act is clear and specific, and enumerates the only provable debts which are excepted from such discharge, as follows: Such as,

1. Are due as a tax. ...

2. Are liabilities for obtaining property by false representations, or wilful and malicious injuries to the person or property of another, or for alimony due or to become due, or for maintenance or support of a wife or child, or for seduction of an unmarried female, or for criminal conversation;

3. Have not been duly scheduled in time for proof and allowance, with the name of the creditor, if known to the bankrupt, unless such creditor had notice or actual knowledge of the proceedings in bankruptcy; or

4. - Were created by his fraud, embezzlement, misappropriations, or defalcations, while acting as an officer or in a fiduciary capacity.

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Bluebook (online)
130 N.W. 930, 21 N.D. 317, 1911 N.D. LEXIS 91, Counsel Stack Legal Research, https://law.counselstack.com/opinion/youngman-v-salvage-nd-1911.