Berry Clothing Co. v. Shopnick

• Decision Date: 12 June 1924
• Citation: 249 Mass. 459
• Parties: BERRY CLOTHING CO. v. HYMAN SHOPNICK.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

249 Mass. 459

BERRY CLOTHING CO. v. HYMAN SHOPNICK.

Supreme Judicial Court of Massachusetts, Suffolk.

June 12, 1924

January 8, 9, 1924.

Present: RUGG, C.

J., DE COURCY CROSBY, PIERCE, & WAIT, JJ.

Bond, To dissolve attachment. Surety. Bankruptcy, Discharge. Practice, Civil Exceptions.

In a suit upon a bond given to dissolve an attachment in an action of law, it appeared that the action was brought on a December 27 and was returnable on the following January 29; that the bond was delivered to the plaintiff on December 29; that on April 14 a petition in bankruptcy was filed against the defendants in the action in which the bond was given and that they were adjudicated bankrupts on April 28; that the plaintiff filed his proof of claim in bankruptcy "without prejudice to the rights in the original action"; that the original action was placed on a special list for trial in January of the year following its entry; that the defendants therein then filed a "Suggestion of the Bankruptcy of said Defendants" and a certified copy of the adjudication that in the middle of that month the defendants in the original action were defaulted and judgment was rendered against them on the declaration; that by agreement of the parties a stay of execution was granted until further order of the court; that discharges in bankruptcy were granted to the defendants in May following the judgment. A condition of the bond was the payment by the principals to the plaintiff of the amount, if any, that the plaintiff might "recover therein within thirty days after the final judgment in said action." Held, that

(1) The words of Section 11a of the national bankruptcy act did not require a peremptory stay of a pending action upon adjudication in bankruptcy of the defendant; but the State court had jurisdiction of such action and might proceed to judgment;

(2) The provisions of G.L.c. 223, Section 124, were superseded by the federal bankruptcy law;

(3) The bankrupts in the original action did not call to the attention of the court by correct practice the fact that they had been adjudicated bankrupts; but they should have filed an answer, or an amendment to the answer already filed, setting up the adjudication and praying for a continuance until they could procure their discharge and plead it in bar;

(4) The case was not within the terms of G.L.c. 235, Sections 24-26, permitting special judgments in specified cases;

(5) A ruling by a judge who, without a jury, heard the action upon the bond, to the effect in substance that the filing of the suggestion and certified copy of the adjudication by the defendants in the original action was enough to call to the attention of the court their claim of the protection to be afforded by their discharge in bankruptcy if and when granted under Section 17 of the act, went no farther than to show that no judgment ultimately could be entered which, so far as those defendants were concerned would not be barred by a discharge in bankruptcy thereafter granted and properly pleaded;

(6) The judgment against the defendants in the original action, entered more than three months before the discharges in bankruptcy were granted and not qualified by further action of the court, was "the final judgment" within the meaning of those words as used in the bond;

(7) The final character of the judgment was not affected by the later stay of execution;

(8) No question arose, on the record in this action against the surety on the bond, as to the protection afforded by the discharges to the bankrupts against any present liability on their part on the judgment;

(9) It not being argued that the rights of the plaintiff were affected by the proof of the claim "without prejudice" to its rights, the effect of such proof was not considered;

(10) The original action having gone to judgment rightly, a breach of the bond was shown which entitled the plaintiff to judgment.

CONTRACT upon a bond, given to dissolve an attachment in an action by the plaintiff against Samuel Hyman, Barnet Bluestein and Louis Shopnick as defendants, those defendants being principals in the bond and the defendant in this action and others being sureties. Writ in the Municipal Court of the City of Boston dated March 23, 1922.

On removal to the Superior Court, the action was heard by Weed, J., without a jury. Material evidence and questions of law raised by requests by the defendant for rulings are described in the opinion. The trial judge found for the plaintiff, ordered judgment for the plaintiff in the penal sum of the bond, $2,000, and ordered execution to issue in the sum of $1,941.40. The defendant alleged exceptions.

I. H. Fox, for the defendant. B. Levin, for the plaintiff.

RUGG, C.J. This is an action of contract to recover, from a surety on a bond given to dissolve an attachment, made in an action by the plaintiff against three defendants who were principals on the bond, the amount of the judgment recovered in the original action. The relevant facts are that the plaintiff brought the original action against three defendants doing business as copartners on a writ bearing date December 27, 1920, and returnable into court on January 29, 1921. There was delivered to the plaintiff on December 29, 1920 a bond to dissolve the attachment (on which the present action is brought) made in the original action signed by the three defendants therein as principals and by the defendant in the present action and two others as sureties. The original action was on an account annexed for goods sold. On April 14 1921, a petition in bankruptcy was filed against the defendant copartners and they were adjudicated bankrupts on April 28, 1921. The bankrupts duly filed their schedules and included the plaintiff among their creditors. The plaintiff filed its proof of claim in bankruptcy "without prejudice to" its rights in the original action. That original action was placed upon the special list for trial in January, 1922, whereupon the defendants filed a "Suggestion of the Bankruptcy of said Defendants" and a certified copy of the adjudication. On January 18 1922, the defendants in the original action were defaulted and judgment was rendered against them in favor of the plaintiff on its declaration on January 30, 1922. Thereafter, by agreement of parties, a stay of execution was granted until further order of the court. Discharges in bankruptcy were granted to two of the copartner defendants on May 23, 1922, and to the third on May 31, 1922. The condition of the bond to dissolve the attachment, on which the present action is brought, was that, if the principals "shall pay to the plaintiff in said action the amount, if any, that it may recover therein within thirty days after the final judgment in said action; and also shall pay to the plaintiff in said action within thirty days after the entry of any special judgment in said action, in accordance with chapter 177 of the Revised Laws of the Commonwealth of Massachusetts the sum, if any, for which said judgment shall be entered; and also if the above named sureties shall pay to the said plaintiff within thirty days after the entry of any special judgment in said action in accordance with section 25 of said chapter, the sum, if any, for which said judgment shall be entered; then the above-written obligation shall be null and void, otherwise it shall remain...