Lewis v. Roberts

• Decision Date: 16 March 1925
• Docket Number: No. 284,284
• Citation: 45 S.Ct. 357,37 A.L.R. 1440,267 U.S. 467,69 L.Ed. 739
• Parties: LEWIS v. ROBERTS
• Court: U.S. Supreme Court

267 U.S. 467

45 S.Ct. 357

69 L.Ed. 739

LEWIS

v ROBERTS.

No. 284.

Argued Jan. 29, 1925.

Decided March 16, 1925.

Messrs. Hugo L. Black and Claude D. Ritter, both of Birmingham, Ala., for petitioner.

Mr. William H. Sadler, Jr., of Birmingham, Ala., for respondent.

Mr. Justice SANFORD delivered the opinion of the Court.

The petitioner, Lewis, recovered a judgment against the Montevallo Mining Company for personal injuries caused by its negligence. The Company was thereafter adjudicated a bankrupt in the Northern District of Alabama. Lewis filed in the bankruptcy proceeding a proof of claim upon the judgment. The District Court confirmed an order of the referee disallowing this claim, upon the ground that a judgment founded upon a tort was not provable in bankruptcy. This decree was affirmed by the Circuit Court of Appeals. 294 F. 171. The writ of certiorari was then granted. 264 U. S. 578, 44 S. Ct. 335, 68 L. Ed. 858.

This decision is in conflict with an unbroken line of decisions in other Circuit Courts of Appeals and in the District Courts. In re New York Tunnel Co. (C. C. A.) 159 F. 688, 690, 86 C. C. A. 556; Moore v. Douglas, (C. C. A.) 230 F. 399, 401, 144 C. C. A. 541; In re Putnam (D C.) 193 F. 464, 468. And see In re Lorde (D. C) 144 F. 320; Ex parte Margiasso (D C.) 242 F. 990; In re Madigan (D. C.) 254 F. 221.

We think these prior decisions were correct.

Section 63a of the Bankruptcy Act,¹ entitled 'Debts Which May be Proved,' provides that:

'Debts of the bankrupt may be proved and allowed against his estate which are (1) a fixed liability, as evidence by a judgment * * * absolutely owing at the time of the filing of the petition. * * *'

Section 1(11), being Comp. St. § 9585 declares that the word 'debt' as used in the Act shall, unless inconsistent with the context, be construed to include 'any debt, demand, or claim provable in bankruptcy.'

It is clear that a judgment for tort is provable under the express provisions of section 63a(1). The language is broad and unqualified. It includes a 'fixed liability' evidenced by a judgment ex delicto as well as by a judgment ex contractu, and makes the one as well as the other a provable 'debt' There is nothing in the language or in the context which suggests its limitation to judgments founded on debts or warrants the reading in of such a limitation.

This conclusion is confirmed by a consideration of other provisions of the Act. By section 17 (30 Stat. 550) as originally enacted, it was provided that:

'A discharge in bankruptcy shall release a bankrupt from all of his provable debts, except such as * * * (2) are judgments in actions for frauds, or obtaining property by false pretenses or false representations, or for willful and malicious injuries to the person or property of another.'²

This express exception of certain judgments for torts from the 'provable debts' released by a discharge, plainly indicates that Congress understood that under section 63a judgments for torts were 'provable debts,' and is strongly persuasive as a construction of that section.

Furthermore, if a judgment for tort is not a provable claim in bankruptcy under section 63a, it could not, under section 1(11), be considered in determining whether one against whom an involuntary petition has been filed, is insolvent within the meaning of section 1(15) providing that:

'A person shall be deemed insolvent * * * whenever the aggregate of his property * * * shall not * * * be sufficient in amount to pay his debts.'

The result of this would be that a person having property in excess of his other debts could not be adjudged an involuntary bankrupt under section 3b of the Act (Comp. St. § 9587) although owing judgments for tort exceeding the amount of his property. Clearly Congress did not intend so anomalous a result.

The trustee contends, however, that despite the broad language of section 63a(1), the decision in Wetmore v. Markoe, 196 U. S. 68, 25 S. Ct. 172, 49 L. Ed. 390, 2 Ann. Cas. 265, necessarily leads to the conclusion that only judgments founded in debt are provable claims. It was there held that under section 17 of the Act the arrears of alimony previously awarded to the wife of the bankrupt for the support of herself and their minor children under a final...