Bowen v. Eichel

• Decision Date: 28 June 1883
• Docket Number: 9092
• Citation: 91 Ind. 22
• Parties: Bowen et al. v. Eichel
• Court: Indiana Supreme Court

91 Ind. 22

Bowen et al. v. Eichel

No. 9092

Supreme Court of Indiana

June 28, 1883

Petition for a Rehearing Overruled Oct. 12th, 1883.

From the Superior Court of Vanderburg county.

Judgment reversed.

A Iglehart, J. E. Iglehart and E. Taylor, for appellants.

J. M Shackelford and R. D. Richardson, for appellee.

OPINION

Elliott, J.

It is alleged in the complaint of the appellee, that on the 4th day of March, 1878, the appellants instituted an action against him in the Superior Court of Vanderburg county, and on the 15th day of that month obtained judgment against him; that on the 11th day of the same month he was adjudged a bankrupt under the general law of the United States, and on the 13th day of August, 1878, obtained a discharge. The relief sought is an injunction restraining the collection of the judgment obtained by the appellants. A demurrer to this complaint was overruled and exception reserved. The answer of the appellants avers that there was due service of summons in the action instituted by them; that all the proceedings were regular; that they never filed any claim against the estate of the appellee, but relied entirely on their judgment.

The controlling question in this case is: Whether the appellee, having failed to defend the action instituted against him, is entitled to the benefit of the discharge awarded him in the bankruptcy proceedings?

There is much conflict in the cases, but we are inclined to think that the view that the defendant must interpose the proceedings in bankruptcy as a defence to the action prosecuted against him in the State court, is the only one that can be sustained on principle.

It is quite clear that the State courts have full jurisdiction, and, unless some barrier is interposed, may carry the cause to judgment, and if the defendant desires to change or impede the ordinary course of procedure, he must bring the proceedings in bankruptcy to the attention of the State court and secure a stay of proceedings. That he has a right to do this can not be seriously questioned. Blumenstiel Bankruptcy, 482. One who has a defence, and full opportunity to avail himself of it, must make it or he can not afterwards assail the judgment. If he neglects to make good the benefit of his day in court, he is guilty of such laches as renders his appeal for judicial aid unavailing. The question we have in hand was decided as we now decide it, in Steadman v. Lee, 61 Ga. 58. The court there said: "It will thus be seen that the bankrupt must make application in some way to have the proceedings stayed in the State court. This he did not do, so far as the record discloses, and his own laches has allowed this judgment of a court of competent jurisdiction to be rendered against him. We hold, therefore, that the judgment is good, and that his discharge being subsequent thereto, does not relieve him from its operation." In discussing this question Lowell, J., said: "The argument for the side which the defendant assumes in this case appears to me much stronger. Not only the technical doctrine of merger is involved, but the defendant has had his day in court and one opportunity to plead this defence; and I take it to be a rule of the highest importance that a defence which might have been made to the original cause of action can never be made to the judgment. Now the bankrupt act provides most carefully for a stay of suit until the defendant's discharge is passed upon; giving, by fair implication, a power to district courts even to enjoin actions in State courts, contrary to the general practice. All this is for the very purpose of enabling the bankrupt to plead his discharge. If he does not choose to avail himself of this right, what possible ground is there for saying that the judgment shall not bind him? Are we to enquire in each case why his plea was not set up or why it was overruled? It may be that the State court was of opinion that the discharge, if granted would be no bar. We can not impeach their decision collaterally. It may be that the bankrupt intended not to set up the discharge against this creditor. We can not authorize him to reconsider this determination; it may be that he was surprised." In Re Gallison, 5 Nat. Bank. Reg. 353.

In support of this opinion are cited Holbrook v Foss, 27 Me. 441; Fisher v. Foss, 30 Me. 459; Pike v. McDonald, 32 Me. 418; Sampson v. Clark, 2 Cush. 173; Woodbury v. Perkins, 5 Cush. 86; Faxon v. Baxter, 11 Cush. 35; Wolcott v. Hodge, 15 Gray 547. The question is thoroughly considered in the recent case...