A. Bellamy & Co v. Woodson

• Decision Date: 28 February 1848
• Docket Number: No. 20.,20.
• Citation: 4 Ga. 175
• Parties: A. Bellamy & Co., plaintiffs in error. vs. Alexander Woodson, defendant in error.
• Court: Georgia Supreme Court

4 Ga. 175

A. Bellamy & Co., plaintiffs in error. vs. Alexander Woodson, defendant in error.

No. 20.

Supreme Court of the State of Georgia

FEBRUARY TERM, 1848.

In Equity. Bill and demurrer. Tried before Judge Floyd in Pike Superior Court, August Term, 1847.

For the facts of the case and the errors assigned, see the opinion delivered by the Supreme Court.

Alford & Cunningham, for the plaintiffs in error.

Arnold, for the defendant in error.

J. Q. A. Alford, for the plaintiffs in error, contended—

1st. The bill shows that the debt upon which the plaintiff at law obtained judgment was contracted before the defendants at law became bankrupts, and was a debt proveable under the commission, and that the discharges and certificates were duly granted. By the Act of Congress in such cases, the bankrupts are fully and completely discharged from all such debts. Sect. 4, Act of Cong.

2nd. A certificate discharges a bankrupt from a debt accruing before the commission, though judgment thereon be not obtained until after the certificate is allowed. 2 Com. Dig. 146, in note referring to 1 Cowper, 25.

3rd. Bankrupt entitled to relief on payment of costs where he had obtained his discharge during the pendency of the suit, and afterwards suffered judgment by default to be entered against him for not pleading, on which execution was issued. Daw Reporter, August No. 1847, case of Lee vs. Phillips. 6 Hill's New York Reports, 246.

4th. If, in fact, another continuance had intervened between the certificate of bankruptcy and the plea of defendant as a pleapuis darrien continuance, the Courts in England and here have permitted the defendant to plead it, nunc pro tune, on payment of costs. Wood vs. Wood, 9 John Rep. 256. 1 Chitty\'s Plead. 637.

5th. By the demurrer the defendant in the bill admits the facts to be true as therein stated. The bill charges the continuances of the cause at law to have been unauthorized, and fraudulent, and in violation of the law and rules of practice. It was by those continuances that judgment was delayed until after the granting of the certificate. The judgment was therefore obtained against, and the complainants were entitled to relief. 1 Mad. Chan. 300. Fonb. Eq. top page 27, in note.

6th. A Court of Equity will grant relief when one party has taken an unconscientious advantage of another, though the circumstances do not amount to fraud in the contemplation of a Court of law. 2 Com. Dig. 613, referring to Lyons vs. Talmadge, 14 John Rep. 501.

7th. Equity interferes where a verdict has been obtained by fraud, or where a party at law has possessed himself improperly of something whereby he has an unconscientious advantage. 8 Com. Dig. 63.

8th. By the Judiciary Act of 1799, (Prince's Digest, 421,) no cause can be continued more than once at the instance of the same party, and, by the rules of Court, good cause must be shown for that one continuance. In the absence of defence there can be no good cause for continuing an action on a promissory note. The legal presumption, therefore, is, that in such a case judgment has been taken, consequently no negligence can be imputed to complainants.

9th. Complainants were deceived by the illegal act of the plaintiff at law, and therefore were, under the decision of the Court below, entitled to relief.

10th. Admitting that the certificate does not discharge a debt upon which judgment has been obtained after the certificate was granted, though such debt may have been proveable under the commission, complainants were still entitled to relief, because it appears they were deceived by the act of the adverse party or plaintiff at law, by his not taking a judgment at the proper time.

By the Court —Nisbet, J. delivering the opinion.

The complainants in the bill, who are the plaintiffs in error here, invoke the power of a Court of Chancery, to annul a judgment rendered against them by a Court of competent jurisdiction, and perpetually to enjoin an execution issued thereon. They made default at the first term of the suit upon which judgment was had—at the second, which was the judgment term, the plaintiff continued the cause—so also at the third term. At the fourth term no action was had in the cause, and at the fifth term the plaintiff took his judgment, there having been no plea or answer filed by the defendants at any time. Pending the action, and as much as one term anterior to the judgment, the defendants were discharged under the late Bankrupt Law of Congress. The bill charges that the plaintiff in the original action continued his cause fraudulently, with a view to obtain his judgment after the discharge—that the defendants having suffered a judgment by default, haviug at no time filed any defence, presumed that the judgment had been taken at the term at which regularly it might have been taken, and therefore they did not plead their discharge. There are no facts stated in the bill upon which the charge of fraud is predicated, but the continuances and postponement before detailed. Claiming, then, that by the wrongful and fraudulent act of the plaintiff, they were prevented from making what would have been an available defence, they come into Chancery seeking relief from the judgment, and the benefit of their discharge by the Bankrupt Court, under the Act of 1841. Such is the case the record discloses. The bill was demurred to and dismissed on the demurrer—the Court below holding that the complainants had a good defence at law, of which they were cognisant, and of which they might have availed themselves, but did not; and, therefore, there was no equity in the bill. To this ruling they except.

In the argument it was contended that it was not necessary that the complainants should have plead their discharge—that admitting that they could have plead it and did not, yet a Court of Chancery will give effect to it, against a debt which was proveable in bankruptcy, although not in judgment until after the discharge. That this defence is different from all others, in this, that it releases the bankrupt absolutely from all such debts; and that Courts of Common Law and of Equity are bound at all times to recognize and make it available. Although the pleadings do not seem to us to make this point, yet it is entitled to our consideration. Upon this point and upon the ground upon which the Court below sustained the demurrer, it is impossible for this Court to entertain a doubt.

First, then, we say, that the discharge of these defendants, as bankrupts, is declared by the Bankrupt Law of the United States "a full and complete discharge of all debts, contracts and other engagements of the bankrupt which are proveable under this Act, " in all Courts of Justice. And the discharge and certificate is made conclusive evidence in favor of the bankrupt, unless it is impeached for some fraud or wilful concealment by him of his property or rights of property, contrary to the provisions of the Act, on prior reasonable notice specifying in writing such fraud or concealment. Thus is the discharge, unless impeached, made an available defence, —and that too in all Courts, —and therefore as much a defence to a suit pending in the Inferior Court of Pike county, as in any other Court. I believe it has not been anywhere claimed that the State Courts, in a cause within their jurisdiction, have not jurisdiction of this defence. But the Act of Congress goes farther, and declares that the certificate and discharge "shall and may be pleaded as a full and complete bar to all suits brought in any Court of Judicature whatever." The right to plead, we therefore consider as put beyond all controversy. But it is not only the right of the bankrupt to plead, but it is his duty to plead his certificate in bar of all suits pending against him at the time it is...