Paxton v. Scott
| Citation | 92 N.W. 611,66 Neb. 385 |
| Decision Date | 19 November 1902 |
| Docket Number | 12,169 |
| Parties | WILLIAM A. PAXTON, EXECUTOR, v. JOHN A. SCOTT, TRUSTEE |
| Court | Supreme Court of Nebraska |
ERROR from the district court for Douglas county. Action in equity by trustee of voluntary bankrupt to set aside a fraudulent conveyance. Tried below before KEYSOR, J. Decree for plaintiff. Defendant Paxton brings error. Affirmed.
AFFIRMED.
Charles A. Baldwin and Frank T. Ranson, for plaintiff in error.
James W. Hamilton and Henry E. Maxwell, contra.
HASTINGS C. LOBINGIER and KIRKPATRICK, CC., concur.
Counsel for plaintiff in error in this case says the errors complained of are numerous, but that the questions as to the jurisdiction of the district court to hear and determine the issues presented and as to res judicata, underlie them all, and are vitally important. It is true that the same counsel later in his brief energetically assails the sufficiency of the evidence, but it seems clear that the most he can claim as to that is that the decree of the district court, ordering the insurance policies turned over to the bankrupt estate, is a decision upon conflicting evidence, and if the court had jurisdiction, and if the matter had not been determined by the bankrupt proceedings shown in the record, the decree will have to be sustained. This suit was instituted by the trustee of James Stephenson a voluntary bankrupt, to set aside conveyances of certain real estate in Omaha, and to obtain the surrender of four life insurance policies for the sum of $ 5,000 each, which had once been held by the bankrupt, and by him had been, prior to the passage of the present bankrupt law, turned over to his wife. The trial court dismissed the proceedings as to the land and held that the life insurance policies were justly a portion of the bankrupt estate, and should be surrendered to the trustee. Pending the action the wife died and it was revived against her executor and heirs. After the institution of this action, the bankrupt, Stephenson, made an application to the United States district court for his discharge in bankruptcy, which was opposed by the trustee on the ground of the pendency of these proceedings, and because of the fraud alleged in the transfer of the real estate in question and of the four insurance policies. The referee, to whom the objections were sent for determination, was instructed by the federal court to hear no evidence as to fraudulent acts committed before the taking effect of the present bankrupt law, July 1, 1898. The result was that no evidence could be presented, as all the alleged fraudulent acts took place in 1897, or earlier. The bankrupt received his discharge. It is now claimed that the discharge operated as a bar to these proceedings, and that the whole question of fraud is res judicata, and that the state court had no jurisdiction to proceed further after that decision.
We are not able to sustain this contention as to the effect of the discharge. A voluntary bankrupt may present his application for discharge within one month after he is adjudged a bankrupt, and must do so within twelve months. The hearing on this application will not ordinarily be stayed pending protracted litigation in other courts, it being the policy of the bankrupt law to secure the debtor's discharge as soon as consistent with justice. Lowell, Bankruptcy page 302, and cases cited; In re Crenshaw, 95 F. 632; In re Cornell, 97 F. 29. The effect of the discharge is personal to the bankrupt and it does not affect any lawful lien, charge or incumbrance existing on his property, but judgment may be especially entered thereon in rem. Lowell, Bankruptcy, page 314, citing Long v. Bullard, 117 U.S. 617, 6 S.Ct. 917, 29 L.Ed. 1004. The discharge of the...
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