West Philadelphia Bank v. Gerry

—It appears by the motion papers that in May, 1875, the petitioner was a member of the firm of Gerry, Tiltion & Colwell, and as such indebted to the plaintiff upon a promissory note of that date, made by the firm for the sum of $2,569.73. It was not paid and on the 10th of January, 1883, the plaintiff recovered judgment in the supreme court of this state, against him and the other members of the firm. It also appears that on the 3d of August, 1878, he, then being a resident of the state of Massachusetts, filed*in the proper court a petition that he be adjudged a bankrupt; that he was so adjudged, and thereafter so conformed to the requirement of the statutes of the United States relating to bankruptcy; that on the 30th day of March, 1883, an order was made by the district court of the United States sitting in bankruptcy, for the district of Massachusetts; that he be, “ forever discharged from all debts and claims which,” under those-statutes were provable against his estate and which existed on the 3d day of August, 1878, subject to certain exceptions, of which the debt in question was not one. In September, 1886, he applied to the proper court for an order discharging the above judgment of record as against him. The motion was opposed by the judgment-creditor, but granted by the court. The plaintiff appeals. We find no ground on which the appeal can succeed. The Code of Civil Procedure (section 1268), provides, at any time after two years have elapsed since a bankrupt was discharged from his debts pursuant to the act of congress relating to bankruptcy, he may upon proof of his discharge apply to ' the court in which a judgment was rendered against him, for an order directing the judgment to be canceled and dis

The appellant contends, First. That “the debtor was guilty of loches in not obtaining a stay from the United States court of the proceedings in the action in the state court.” If he could have done so, he was not bound to take that course, and his omission cannot deprive him of the benefit of the statute above quoted. We do not see that the doctrine of loches applies, but if it does it was for the supreme court to deal with it, and its decision cannot be reviewed. Medbury v. Swan ( 46 N. Y., 200 ), cited by the respondent, involved a favor depending upon the discretion of the supreme court, and its discretion being adverse to the bankrupt, was not the subject of review.

Second. That “a discharge in bankruptcy of a single member of a copartnership does not act as a discharge of copartnership debt if there are assets of the firm unless the firm is declared bankrupt.” It appears as a fact in the case that before the petition in bankruptcy was filed the firm had been dissolved, a general assignment without preferences made by it, with all its property with assignees who qualified and took charge of and distributed the property of the then late firm. Hot only then had the firm ceased to exist as between the parties, but there were no partnership assets, nor any power on its part to acquire any. It is true that the assignment did not release the obligation of the contract, but that was effectual" by bankruptcy if the debt was one provable against the bankrupt (sections 32, 34 of the bankrupt act of 1867; sections 5115, 5119, U. S. bankrupt act). That it was so provable requires no argument, for it is not one of the excepted classes, and save those, all debts and liabilities, claims and demands, present or future, certain or contingent, to which the bankrupt was subject, or which were due and payable from him at the date of the adjudication, may be proved against his estate (sec. 19, bankrupt act; sec. 5067, Rev. Stat. of U. S.). Moreover, if there were partnership effects, the interest of the bankrupt members vested in his assignee (sec. 14, bankrupt act; sec. 5044, 5046, U. S. Rev. Stat), as an asset. In re Beal, 2 Bankr. Reg., 178.

The precise point was also decided by Blatchford, J., in The Matter of Frear (1 Bankr. Reg., 201; S. C., 35 How. Pr., 249 ), who was a member of a then late copartnership, but filed his individual petition for a discharge from all his debts, and it was held that the debt in question, although a partnership debt, was provable whether there were assets of the copartnership or not. This view of the law is also consistent with the declaration in section 33 of

Third. That the moving party is not within the Code (§ 1268, supra), because “ the judgment was not included in his schedule in bankruptcy.” It appears, however, that the debt which constituted the cause of action was set forth, and the amount and date, etc., of the note upon which the judgment was recovered, and the name and address of the plaintiff herein, as a creditor by virtue of it. The cases already decided in this court (Clark v. Rowling, 3 N. Y., 216 ; Monroe v. Upton, 50 id., 593), if applicable, show that the judgment is for the purpose of the Code (supra), regarded as the old debt in a new form, and that a discharge of the cause of action, as described in the bankruptcy proceedings, discharged the judgment which is founded upon and represents it. But the respondent says the provisions of the Code (supra) were not enacted, until after the decisions in those cases. This is true, yet the relief formulated by it had long been effected by the uniform practice of the court. Baker v. Judges of Ulster, 4 Johns., 191 ; Baker v. Taylor, 1 Cow., 165 ; Alcott v. Avery, 1 Barb. Ch., 347 . The Code introduced no new law, but was in conformity with that practice and affirmatory of it. Its language is not open to doubt, but if it were the act is remedial, and should receive such construction as will advance its object.

In any view which can be taken of it, we think the decision of the court below was right, and its order, therefore, should be affirmed. ■

All concur.