Craig v. Seitz

• Decision Date: 17 November 1886
• Citation: 63 Mich. 727,30 N.W. 347
• Court: Michigan Supreme Court
• Parties: CRAIG v. SEITZ, impleaded, etc.

30 N.W. 347

63 Mich. 727

CRAIG v. SEITZ, impleaded, etc.

Supreme Court of Michigan

November 17, 1886

Error to Superior court of Detroit.

Assumpsit upon a judgment against the defendants, entered April 3 1879. The defendant John H. Seitz pleaded a discharge in bankruptcy. The plaintiff replied by offering evidence of a promise subsequent to the discharge. He testified as follows "Question. State whether since the twenty-ninth day of August, 1878, Mr. Seitz has made any promises to you with reference to payment of this debt? Answer. Yes, sir. Q. When? A. The last time was in November or December, 1883,--in the fall of 1883. Q. Where was that promise made? A. Here in Detroit. Q. Had he made prior promises? A. Yes, sir; every time I would see him. *** He told me that he had no money then, but he would pay it; that he always felt as though that claim should be paid." Thomas Craig, brother to the plaintiff, also testified as to the promise. His evidence was in the following terms: "Mr. Seitz told me that he always intended to pay my brother, and would pay it, but at the present time he hadn't any money. Question. Was anything said at the time with reference to the giving of a note? A. After talking the matter over he finally told me 'My brother Fred really ought to pay half of this. Now I haven't any money; cannot pay at the present time; but you had better go and try to get my brother to give a note for half the amount, payable in two years, or payable at such time as you and he may agree upon, and I will fix up balance.' We have not talked since that time." Judgment for plaintiff. Defendant assigns error.

E.T. Wood and F.G. Russell, for defendant, Seitz.

The discharge in bankruptcy is conclusive. Rev.St.U.S. � 5119; Benedict v. Smith, 48 Mich. 593; S.C. 12 N.W. 866. Plaintiff cannot, under his declaration, recover on a new promise, because the new promise cannot be a ground for recovery, where it is not made such by the declaration. Williamson v. Haskell, 50 Mich. 364; S.C. 15 N.W. 512; 1 Chit. (16th Ed.) 256, and note; Hollis v. Richardson, 13 Gray, 392. The new promise constitutes the cause of action. Fleming v. Lullman, 11 Mo.App. 104, 254; Fraley v. Kelly, 67 N.C. 81; In re Field's Estate, 2 Rawle, 357; Watkins v. Stevens, 4 Barb. 168; Stewart v. Reckless, 24 N.J.Law, 429. When there has been a new promise after the discharge, the bankrupt is liable as on a new contract. Henry v. Root, 33 N.Y. 537; Rood v. Jones, 1 Doug. 192. In Trueman v. Fenton, Cowp. 544, it is called a new undertaking and agreement. See, also, Stearns v. Tappin, 5 Duer, 295; Depuy v. Swart, 3 Wend. 139; Roberts v. Morgan, 2 Esp. 736. The new promise must be stated as the foundation of the action. Hopkins v. Ward, 67 Barb. 452. The discharge operated, not to suspend, but to annul, the validity of the judgment declared on. White v. Cushing, 30 Me. 269; Root v. Espy, 93 Ind. 511, 517. The bankrupt is liable upon the new promise alone, and the suit must be brought upon it. Carson v. Osborn, 10 B.Mon. 155; Graham v. Hunt, 8 B.Mon. 7; Bell v. Morrison, 1 Pet. 367; Gilmore v. Green, 14 Bush. 772.

The debt and judgment being barred by operation of the United States statute, in order to revive it, a new promise of no less certainty than would be required under How.St. �� 8713 and 8725, is necessary. Joy v. Thompson, 1 Doug. (Mich.) 373. A more distinct promise is required to deprive a bankrupt of the exemption secured by his certificate than is required to revive a debt barred by the statute of limitations. Savings Inst. v. Littlefield, 6 Cush. 210; Merriam v. Bayley, 1 Cush. 77; Riggs v. Roberts, 85 N.C. 155; Niblack v. Goodman, 67 Ind. 174.

The promise relied on is not sufficient to form a cause of action; it is only the expression of an intention to pay. Riggs v. Roberts, 85 N.C. 152; McDougall v. Page, 55 Vt. 187; Allen v. Ferguson, 18 Wall. 3; Gray v. McDowell, 6 Bush, 475 A conditional promise might possibly be inferred from the testimony. It must, however, be shown that the condition has been satisfied. Fleming v. Hayne, 1 Stark. 370; Scouton v. Eislord, 7 Johns. 36; Bush v. Barnard, 8 Johns. 318; 3 Pars.Cont. 66, and note. New promise, if conditional, must be alleged. Wait v. Morris, 6 Wend. 394; Allen v. Ferguson, 18 Wall. 3 Goldman v. Abrahams, 9 Daly, 223; Wakeman v. Sherman, 9 N.Y. 86. If the old debt be by note or specialty, a parol promise merely will not sustain an action on the note or specialty itself. Graham v. Hunt, 8 B.Mon. 7.

Dickinson, Thurber & Hosmer, for plaintiff.

The testimony is sufficient to authorize the jury to find a waiver and an express promise to pay. Pratt v. Russell, 7 Cush. 464; Bennett v. Everett, 3 R.I. 152; Underwood v. Eastman, 18 N.H. 582; Otis v. Gazlin, 31 Me. 567; Maxim v. Morse, 8 Mass. 127; Turner v. Chrisman, 20 Ohio, 333, Bump, Bankr. (10th Ed.) 762.

SHERWOOD J.

The plaintiff brought suit upon a judgment rendered on the third day of April, 1875, in the superior court of Detroit in favor of the plaintiff and against the defendants. Frederick L. Seitz was defaulted, and by reason thereof judgment went against him. John H. Seitz appeared, and pleaded the general issue, and gave notice thereunder that he would show that on the eleventh day of March, 1881, by the judgment of the district court of the United States for the Eastern district of Michigan, he was fully released and forever discharged from the judgment of the claimed indebtedness in a bankruptcy proceeding then and there had. The plaintiff on the trial did not seek to invalidate the bankruptcy proceeding in the district court, but relied upon a new promise of payment by John H. Seitz to entitle him to recover. The cause was tried before Judge CHIPMAN in the superior court of Detroit by jury, and the plaintiff was allowed to recover. Defendant John H. Seitz brings the case to this court for review, relying upon alleged errors of the court in receiving the testimony in the case, and in charging the jury for a reversal.

Frederick L. Seitz does not appear in the case in this court; an order of severance having been entered below as to him. The defendant John H. Seitz makes the following points against recovery by the plaintiff: "(1) That his discharge in bankruptcy, made on the eleventh day of April, 1881, released and discharged him from all debts existing on the twenty-ninth day of August, 1878, of which this was one; (2) that plaintiff, under his declaration, cannot recover on a new promise; (3) that no less certainty should be required to revive a debt extinguished by operation of the statute of bankruptcy than is required to revive a debt barred by the operation of statute of limitations; (4) the promise, as proven, is not sufficiently definite on which to base a cause of action; (5) the promise, if any was made, is conditional, and plaintiff must prove condition performed." His counsel also asked the court to charge the jury, "unless they found from the evidence that the defendant made a clear, distinct, and unequivocal promise in writing to pay the debt since his discharge in bankruptcy, the verdict as to him should be 'no cause of action.' " If the defendant's counsel are correct in the law stated in this request, then their objections to testimony were well taken.

The bankruptcy discharge is conclusive of non-liability, and unless something has occurred to remove its effect it is a perfect defense to the claim against John H. Seitz. Benedict v. Smith, 48 Mich. 593; S.C. 12 N.W. 866. An express promise to pay since the certificate of discharge was granted, is relied upon by the plaintiff. Whenever such promise may be resorted to, it is quite well settled that it must be an express one, or, if acknowledgment is relied upon it must be so far unqualified as to necessarily authorize the implication of the promise to pay, and no other. Allen v. Ferguson, 9 N.B.R. 481; S.C. 18 Wall. 1; Fraley v. Kelly, 67 N.C. 78; Linton v. Stanton, 4 La.Ann. 401; Branch Bank v. Boykin, 9 Ala. 320. In cases where the statute of limitations applies, the statute provides that when the action is founded upon contract, express or implied, such promise or acknowledgment must be in writing, and signed by the party to be charged thereby, in order to prevent the bar. How.St. � 8725. No such statute exists, however, in cases where the right of action is barred by a discharge in bankruptcy. These cases are left as at common law; and, while the effect of the discharge is to suspend the right of action, the debt remains, and the moral obligation to pay it forms a sufficient consideration for the promise to make such payment. This precise question, in case of a discharge in bankruptcy, I think has never been passed upon in this court. But it is well settled upon authority which must be regarded as decisive upon the question. Bennett v. Everett, 3 R.I. 152; Underwood v. Eastman, 18 N.H. 582; Otis v. Gazlin, 31 Me. 567; Maxim v. Morse, 8 Mass. 127; Turner v Chrisman, 20 Ohio, 332; Pratt v. Russell, 7 Cush. 464; Barron v. Benedict, 44 Vt. 518; Apperson v....