p. 268FREDERICK A. SANDS, Receiver of the Columbian Insurance Company, Respondent, v . JOHN S. PERRY and Others, Appellants.Headnote
Discharge in larihruptcy — it does not authm'ize the moating, on a motion, of a judgment subsequently entered in a pending action.September 5, 1867, the defendant Perry filed a petition in bankruptcy and on April 28,1868, procured his final discharge therein. In this action, which was pending when the petition in bankruptcy was filed, the defendant having before that time appeared and answered therein, a final judgment was entered and docketed against him on March 25, 1871.
Meld, that as the judgment was entered after the defendant had procured his discharge in bankruptcy it imported absolute verity, and that a motion made by the defendant in 1885 to vacate it should he denied, hut without prejudice to any motion to be made by him to have the judgment opened and to be allowed to plead the discharge.
, Appeal from two orders made by the Special Term, óne denying •defendant’s motion to cancel the judgment entered against him, I and the other granting the plaintiff leave to issue execution thereon. ! •September 5, 1867, the defendant Perry filed his petition in bankruptcy in the United States District Court, this action then being pending. . He obtained his discharge in bankruptcy April 28, 1868, from all debts existing against him as of the date of filing the petition. Afterwards, and o.n March 25, 1871, judgment against him in this action was entered and docketed. Defendant had appeared and answered in the action before the filing of his petition, but thereafter allowed judgment to pass against him as upon default.
Hamilton Harris, for the appellants.
W. Frotlvmgham, for the respondent.
The authorities are decisive to the effect that a discharge in bankruptcy extinguishes all the debts of the bankrupt provable under the act existing at the date of the filing of his petition in bankruptcy, and any judgment that may be obtained upon any of such debts, if such judgment be entered before the date of the discharge in bankruptcy. (Clark v. Rowling, 3 N. Y., 216 ;
p. 269Monroe v.
Upton, 50 id., 593;
Arnold v. Oliver, 64 How., 452 .) In sucb cases tbe judgment is not regarded as a new debt, but simply tbe old debt in a new form
(Revere Copper Co. v. Dimock, 90 N. Y., 33 ), and tbe judgment debtor is entitled upon motion, to be made under section 1268 of tbe Code, at any time after two years have elapsed since bis discharge, to an order directing tbe judgment to be canceled and discharged of record. Tbe defendant in this case contends that be is entitled to tbe libe order although bis discharge in bankruptcy preceded tbe entry of judgment. Tbe authorities cited do not so bold, and tbe case cited from 90 New York seems to bold otherwise. Tbe judgment in that case was entered after tbe discharge. Tbe matters urged by tbe learned counsel for the defendant to distinguish that case from this do not touch tbe vital point, namely, that a judgment rendered after a discharge imports absolute verity. Therefore, tbe discharge in bankruptcy, or anything else in tbe form of evidence tending to show that no judgment should have been rendered, cannot now be beard. Sucb matters must be adduced upon tbe trial, and in order to avail himself of them tbe defendant must procure bis default and the judgment to be opened, and be allowed to defend.
It may be conceded that there is some difficulty in perceiving why upon principle a judgment rendered before tbe discharge-in bankruptcy upon a debt existing at tbe date of filing tbe petition is less an absolute verity than one rendered after tbe discharge upon tbe like debt, and why it is that that judgment can be canceled upon motion and need not be opened. It seems to be an exception to tbe general rule affirming tbe absolute verity of judgments. That a judgment rendered after a discharge in bankruptcy should not be admitted within tbe exception seems obvious enough. Sucb a judgment may rest upon facts affecting tbe debt, but arising after tbe discharge, as in tbe case of Dusenbury v. Hoyt ( 53 N. Y., 521 ), where a new promise to pay tbe discharged debt made after tbe discharge, was held to be good.
These views are in accord with those expressed by tbe learned judge at Special Term, and lead to an affirmance of tbe order denying tbe motion to cancel tbe judgment. But tbe notice of motion asked for sucb other relief as the court shall deem it proper to grant. Tbe order appealed from does not speak of any motion to
p. 270allow the judgment to be opened and a defense interposed. But the learned judge at Special Term intimates in his opinion that the laches of the defendant is fatal to such an application. We are not entirely clear that this is so. If upon a further hearing it should appear that the merits are on the side of the defendant, as the papers before us seem to indicate, a motion addressed to the favor of the court will no doubt be so decided as to prevent gross injustice.
We affirm both orders, with costs and disbursements, but without prejudice to a motion to open the judgment and allow the discharge in bankruptcy to be interposed, and without prejudice to such a stay of execution as shall give effect to any order the court may grant upon the hearing of such motion.
Learned, P. J., concurred.
Present — Learned, P. J., and Landon, J.
Orders affirmed, with ten dollars costs and printing disbursements in each, without prejudice to motion to open judgment, etc.