Herrington v. Davitt

• Decision Date: 27 February 1917
• Parties: HERRINGTON v. DAVITT et al.
• Court: New York Court of Appeals Court of Appeals

220 N.Y. 162

115 N.E. 476

HERRINGTON

v.DAVITT et al.

Court of Appeals of New York.

Feb. 27, 1917.

Appeal from Supreme Court, Appellate Division, Third Department.

Action by Etta F. Herrington against Ida K. Davitt and others. From a judgment for plaintiff at the Trial Term, affirmed by the Appellate Division (165 App. Div. 942,149 N. Y. Supp. 1087), defendants appeal. Affirmed.

Thomas O'Connor, of Waterford, for appellants.

William W. Morrill, of Troy, for respondent.

COLLIN, J.

The action is upon a promissory note made by the defendants' testator. After the note was delivered the maker was adjudicated a bankrupt, under the federal act of 1898 (Act July 1, 1898, c. 541, 30 Stat. 544), and thereunder received his discharge. A composition was effected, under the provisions of the act, between the bankrupt and his creditors. The plaintiff duly accepted the offer of the composition and the 20 per centum of the face value of the note payable under it. The defendants' testator thereafter wrote to the plaintiff a letter as follows:

‘Troy, N. Y., Dec. 6, 1904.

‘My Dear Sister: Your letter received. Was somewhat surprised at its contents. In regard to your claim against me you will be paid every dollar of it with inst as soon as I sell the mill. If anything happens to me the farm is in my name and you will be paid. I have left orders to that effect. Tell Lester to see what balance there is due me on the books for wood and to pay it to you for inst money.

‘Yours truly,

A. W. Davitt.'

The claim mentioned in the letter was the note. The mill referred to in the letter was sold and conveyed by the testator in January, 1907. This action upon the note was commenced June 8, 1912. Upon the trial judgment in favor of the plaintiff for the unpaid balance payable by the terms of the note was ordered. The Appellate Division unanimously affirmed the consequent judgment.

[1] The action was properly brought upon the note. For the purpose of the remedy, the original debt might still be considered the cause of action. Dusenbury v. Hoyt, 53 N. Y. 521, 13 Am. Rep. 543. It might, had the plaintiff so elected, have been brought upon the new promise. It would be more accurate and consistent with the provisions of section 481 of the Code of Civil Procedure and the other sections regulating the pleadings in an action to allege the new promise as the real foundation of the action. The note was a debt provable in the bankruptcy proceedings. The legal obligation which it created or evidenced was, by virtue of the confirmation of the composition offer and the discharge in the proceedings, discharged by force of the statute, and the remedy of plaintiff existing at the time the discharge was granted to recover her debt by action barred. The right of action is given by a new and efficacious promise. The practice of bringing the action upon the original demand is, however, sanctioned by usage. The discharge in bankruptcy is, under such practice, regarded as a discharge of the debt sub modo only, and the new promise as a waiver of the bar to the recovery of the debt created by the discharge. The new promise with such other facts as are essential to constitute it a valid cause of action may, however, be alleged. See Wolffe v. Eberlein, 74 Ala. 99, 49 Am. Rep. 809; Taylor v. Hotchkiss, 81 App. Div. 470,80 N. Y. Supp. 1042, affirmed 179 N. Y. 546, 71 N. E. 1140;Scheper v. Briggs, 28 App. Div. 115,50 N. Y. Supp. 869.

[2] The appellants assert and argue that the letter of December 6, 1904, does not contain or constitute a promise or agreement to pay the sum unpaid. At its writing, a statute provided:

‘Every agreement, promise or undertaking is void, unless it or some note or memorandum thereof be in writing, and subscribed by the party to be charged therewith, or by his lawful agent, if such agreement, promise or undertaking; * * * 5. Is a subsequent or new promise to pay a debt discharged in bankruptcy. * * *’ Personal Property Law (Laws 1897, c. 417) § 21.

The statute has remained in force. Personal Property Law (Cons. Laws, c. 41) § 31. The debtor does not promise to pay the debt discharged in bankruptcy, unless there is a distinct and unequivocal expression by him, by a writing of the prescribed form, of a clear intention to bind himself to its payment. The acknowledgment of the existence of the debt by the payment of a part of it or of interest upon it or by express written words is not sufficient. For the purpose of creating anew the liability, the law does not imply a promise. The promise need not be made to the creditor, but it must with certainty refer to the debt. No particular form of words need be used. The promise is constituted by words which, in their natural import, express the present intention to obligate or undertake to pay. The payment may, however, depend upon a contingency or condition. If so dependent, it must be proved that the contingency has happened or the condition has been performed. Lawrence v. Harrington, 122 N. Y. 408, 25 N. E. 406;Nathan v. Leland, 193 Mass. 576, 79 N. E. 793;Elwell v. Cumner, 136 Mass. 102;Bigelow v. Norris, 139 Mass. 12, 29 N. E. 61;Kraus v. Torry, 146 Ala. 548, 40 South. 956;Meech v. Lamon, 103 Ind. 515, 3 N. E. 159,53 Am. Rep. 540;Scheper v. Briggs, 28 App. Div. 115,50 N. Y. Supp. 869. A promise made at any time after the adjudication, and, perhaps, after the filing of the petition, is actionable. Zavelo v. Reeves, 227 U. S. 625, 33 Sup. Ct. 365, 57 L. Ed. 676, Ann. Cas. 1914D, 664;Everett v. Judson, 228 U. S. 474, 33 Sup. Ct. 568, 57 L. Ed. 927, 46 L. R. A. (N. S.) 154.

[3] The letter of the defendant's testator constituted a distinct and unqualified promise to pay the debt. In effect and in truth it said to the plaintiff, I will pay you every dollar remaining unpaid upon the note, with interest, and will so pay you as soon as I sell the mill. He stated positively that he then undertook and obligated himself to pay. The construction of the words used by the debtors and the conclusions stated in the judicial decisions above cited adequately support such decision.

[4] The rule of law is well-nigh universal that such a promise made has an obligating and validating consideration in the moral obligation of the debtor to pay. The debt is not paid by the discharge in bankruptcy. It is due in conscience, although discharged in law, and this moral obligation, uniting with the subsequent promise to pay, creates a right of action. Dusenbury v. Hoyt, 53 N. Y. 521, 13 Am. Rep. 543. The appellant asserts that the rule does not obtain or have applicability where, as in the present case, there was a composition between the bankrupt and his creditors, assented to and accepted by the creditors seeking to enforce the unpaid debt. The clear weight of judicial opinion and correct reasoning declare such assertion erroneous.In Cohen v. Lachenmaier, 147 Wis. 649, 133 N. W. 1099, the facts, in the particular under consideration, were as are the facts here. The trial court awarded judgment for the balance unpaid on the note. The Supreme Court of Wisconsin in affirming the judgment said:

‘It is further contended that each promise, if made, is nudum pactum, because the plaintiff, as one of the creditors, joined with the...