Dusenbury v. Hoyt — 36 N.Y. Super. Ct. 94

Majority

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BENJAMIN G. DUSENBURY, Plaintiff and Appellant, v. MARK HOYT, Defendant and Respondent.

Before Barbour, Ch. J., and Monell and Van Vorst, JJ.

Decided May 3, 1873.

Headnote

An action brought upon a note against a bankrupt, whose discharge in bankruptcy relieved and discharged him from the indebtedness upon the note, cannot be sustained by evidence on the part of plaintiff, that since the discharge in bankruptcy the defendant had promised, orally and in *■ writing, to pay the sum remaining unpaid on the note.

Mdd, That the action was founded upon the note itself, and not upon any new promise or undertaking subsequent to the discharge in bankruptcy, and therefore could not be maintained.

Appeal from a judgment entered upon a verdict ordered by the court in favor of defendant.

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The facts appear sufficiently from the opinion of the court.

The complaint in this action set up the making of a promissory note for $5,000 in November, 1865, and states that in May, 1867, $5,495.83 was due thereon, and the defendant then paid $3,000 upon it, and in April, 1871, the further sum of $100, leaving then unpaid upon the note the sum of $3,083.76. The answer admitted the making of the note, and the payment in May, 1867, but denied the alleged payment of $100 in 1871 upon the note, and set up as a further defence the fact that the defendant was, in September, 1868, duly discharged from all debts and claims against him by a decree of a United States court in a certain voluntary bankruptcy proceeding. There was no replication.

Upon the trial the defendant proved his discharge in bankruptcy, and rested. The plaintiff then offered evinence to prove that, subsequent to the decree in bankruptcy, the defendant had, both orally and in writing, promised to pay the sum remaining unpaid upon the note, which was excluded by the court upon the ground that the action was founded upon the note itself, and not upon any new promise or undertaking subsequent to the discharge in bankruptcy.

There being no farther evidence, the court directed a verdict for the defendant, and the plaintiff had judgment ; and the case comes here on the plaintiff’s exceptions to the charge and the exclusion of the evidence offered, as well as on an appeal from an order on the Judge’s minutes refusing a new trial.

D. M. Porter, for appellant.

Cephus Brainard, for respondent.

The judgment and order appealed from should be affirmed for the reasons

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stated in the able opinion pronounced by Judge Freedman upon denying the motion for a new trial. The action should have been brought upon the new promise, and cannot be maintained upon the note, which was annihilated as an obligation by the discharge in bankruptcy.

Monell and Van Yorst JJ., concurred.

The following opinion of Freedman, J., before whom the case was tried in the court below, is made (substantially) the opinion of the Court at General Term:

It seems to be well settled that different principles apply to cases of defences of the statute of limitations and discharge under the bankrupt act. The former statute operates upon the remedy merely, and does not extinguish the debt; a discharge in bankruptcy absolutely releases and extinguishes the debt.

Under the statute of limitations, where no statutory provision to the contrary intervenes, a new promise may be implied, but after a discharge it must be so express, clear, and unequivocal, as to show that the promisor intended absolutely to waive the protection of his discharge, and to rebind himself legally to pay the old debt (Depuy v. Swart, 3 Wend. 139 ; Lynburg n. Wightman, 5 Esp. 198; Horner v. Speed, 2 P. & H. (Va.) 616; Evans v. Carey, 29 Ala. 99 ; Fleming v. Haynes, 1 Stark. 370; Musklan v. St. John, 4 Tenn. 513 ; Beach v. Wood, 13 Price, 667; Cambridge v. Littlefield, 6 Cush. 213 , per Dewey, J.).

Thus, while in section 110 of the Hew York Code it is enacted that the effect of any payment of principal or interest shall not be altered by the provision ; that no acknowledgment or promise shall be sufficient evidence of a new or continuing contract, whereby to take the case out of the operation of the statute of limitation, unless the same be contained in some writing, signed by the party to be charged thereby. It has been held in cases which arose under the bankrupt law, that partial

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payments are not a new promise, nor the equivalent of a new promise (Stark v. Stimson, 3 Fost. 259 ; Viele v. Ogilvie, 2 Greene, 326 ).

And that payment of interest by the maker, on a note from which he had been discharged, did not revive the liability to pay the note (Cambridge, etc., v. Littlefield, 6 Cush. 210 ).

Upon the question, however, whether a new promise, after the discharge, creates a new and substantial cause of action, or operates merely as a waiver by the promisor of a defence with which the law has furnished him against an action on the old promise or demand, there is a marked conflict of authority. But, upon the principles decided in Depuy v. Swart ( 3 Wend. 125 ), and Stafford v. Bacon ( 1 Hill, 533 ), under the old practice of this State, and in Stearns v. Tappin ( 5 Duer, 294 , 299), under the Code, and the reasoning of Corson v. Osborn ( 10 B. Mon. 115 ), Field’s Case, (2 Rowle, 351), and Graham v. Hunt ( 8 B. Mon. 7 ), I feel constrained to hold that in every case the action must be founded upon the precise and positive new promise made after the discharge, and that the original debt is to be considered merely as the consideration that gives validity to the new promise.

From this it follows that, inasmuch as under the Code the plaintiff is required to set out the facts constituting his cause of action, and nothing else, the said new promise must be specially pleaded as the basis of the action.

This not having been done in the case now before me, the rulings made at the trial must be affirmed.

As to the admissibility and effect of defendant’s discharge, I need only point out that the Court of Appeals, in the Ocean National Bank v. Olcott ( 46 N. Y. 15 ), express ]y held that, pursuant to the provisions of the Bankrupt Act of 1867, the certificate is conclusive evidence, in favor of the bankrupt, of the fact and the

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regularity of the discharge, and that the same cannot "be questioned on the ground that it was improperly granted in any other mode, nor in any other court than prescribed in the act.

Motion for a new trial denied, with costs.