Gertrude Stone v. Everett H. Briggs

• Decision Date: 05 May 1942
• Citation: 26 A.2d 828,112 Vt. 410
• Parties: GERTRUDE STONE v. EVERETT H. BRIGGS
• Court: Vermont Supreme Court

26 A.2d 828

112 Vt. 410

GERTRUDE STONE v. EVERETT H. BRIGGS

Supreme Court of Vermont

May 5, 1942

February Term, 1942.

Bankruptcy.---1. Stay of Suit Pending Bankruptcy.---2. Certificate under P. L 2196 Must be Based on Findings of Fact.---3. Limited Judgments While Bankruptcy Pending.

1. Whether a suit pending in a state court will be stayed between time of defendant's adjudication in bankruptcy and action upon his discharge rests in discretion of trial court.

2. Under P. L. 2196 the certificate therein described may not issue except on the basis of facts found by the court; a stipulation of the parties may not take the place of such findings of fact.

3. Although under certain conditions and by proper procedure a limited judgment may be had prior to determination of principal's discharge to enable the creditor to proceed against the sureties, the procedure in the present case is not such as to warrant such action.

ACTION OF CONTRACT. Motion by defendant for stay of proceedings pending determination of discharge in bankruptcy granted with exceptions to the plaintiff. Cause passed to Supreme Court before final judgment. Addison Municipal Court, George S. Farr, Judge.

Judgment staying proceedings affirmed and cause remanded.

Ezra S. Dike for the plaintiff.

Wayne C. Bosworth for the defendant.

Present MOULTON, C. J., SHERBURNE, BUTTLES, STURTEVANT and JEFFORDS, JJ.

OPINION

BUTTLES

By writ dated Oct. 11, 1941, the plaintiff brought her action in contract in Addison Municipal Court against the defendant to recover on a judgment rendered by that court on April 9, 1940, against the defendant in favor of the plaintiff. The affidavit required by P. L. 2171 having been made and filed the writ issued against and was served upon the body of the defendant as a claimed absconding debtor. Upon service of the writ A. E. Briggs and Ruth Briggs became surety for the defendant by endorsing their names on the writ as bail in accordance with the provision of P. L. 2147. On Oct. 24, 1941, the parties entered into and filed with the court a stipulation which provided for payment by the defendant to the plaintiff of the sum therein named in semi-monthly installments. The stipulation then continued: "In case of default in making any payment, the creditor shall be entitled to judgment for such portion of said sum as has not been paid, with any costs not included in the above sum; and at the time of entry of such judgment the creditor shall be entitled to a certified execution."

Thereafter, on Dec. 5, 1941, the plaintiff moved for judgment on the stipulation on the ground that the defendant was in default in making the stipulated payments. Hearing on that motion was set for Dec. 10, 1941, and on that date the defendant filed a motion in which it was recited that the defendant had been adjudged a bankrupt on Nov. 28, 1941, by the United States District Court for the District of Connecticut, and that the debt upon which the plaintiff was seeking judgment was dischargeable in bankruptcy and had been listed in the defendant's schedules. Wherefore the defendant prayed that further proceedings in the pending action be stayed until the bankruptcy court should determine the question of the defendant's discharge in the pending bankruptcy proceedings. It was conceded by counsel for both parties that the defendant was in default in his payments under the stipulation and that he had been adjudicated a bankrupt but had not been discharged in bankruptcy. Defendant's motion for a stay was granted, an exception allowed, and the cause passed to this Court before final judgment under the provisions of P. L. 2072 and P. L. 1431. We do not consider the propriety of this procedure as no question is raised in regard thereto.

The federal bankruptcy act provides, U.S.C.A. 11, Sec. 29 a, that a suit founded upon a claim from which a discharge in bankruptcy would be a release, and which is pending against a person at the time of the filing of a petition against him, shall be stayed until after an adjudication or the dismissal of the petition. The same section further provides, in effect, that if such person is adjudicated a bankrupt such action may be further stayed until the question of his discharge is determined. The pleadings in the present case indicate that the claim upon which the action is founded is one dischargeable in bankruptcy, and there is nothing in the record before us indicating the contrary, unless it be the stipulation above referred to and hereinafter considered. There seems to be a question whether the above statutory provision lays down a rule for courts other than courts of bankruptcy, Connell et al. v. Walker, 291 U.S. 1, 54 S.Ct. 257, 258, 78 L.Ed. 613; but however that may be it is our rule that the question of granting a continuance is within the sound discretion of the trial court. Land Finance Corp. v. St. Johnsbury Wiring Co., 100 Vt. 328, 333, 137 A. 324; Massucco v. Tomassi, 78 Vt. 188, 195, 62 A. 57. The plaintiff does not question that this is so, but contends that in granting the motion for a stay the court abused its discretion and thereby prejudiced her rights.

A stay of proceedings in a state court does not operate as a bar to the action, but only as a suspension of proceedings until the question of the bankrupt's discharge shall have been determined by the United States Court sitting in bankruptcy. Hill v. Harding, 107 U.S. 631 27 L.Ed. 493, 2 S.Ct. 404, 406. Plaintiff contends that she was entitled to immediate judgment in accordance with the stipulation above referred to. The last clause of the stipulation necessarily implies that the judgment contemplated was one that would support a certified or close jail execution. By P. L. 2170 it is provided that "A person who is a resident of any of the United States shall not be arrested or imprisoned on mesne process issuing on a contract, express or implied, or on an execution issued on a judgment recovered in an action founded on such contract, except as...