Moch v. Market St Nat Bank
| Decision Date | 22 April 1901 |
| Docket Number | 12. |
| Citation | 107 F. 897 |
| Parties | MOCH v. MARKET ST. NAT. BANK. In re GERSON. |
| Court | U.S. Court of Appeals — Third Circuit |
Jos. L Greenwald, for appellant.
Julius Levi, for appellee.
Before ACHESON, DALLAS, and GRAY, Circuit Judges.
The question presented by this appeal is whether the liability of a bankrupt indorser of commercial paper, whose liability did not become absolute until after the filing of the petition in bankruptcy, may be proved against his estate after such liability has become fixed, and within the time limited for proving claims. By the first section of the bankrupt law,-- the act of July 1,1898,-- it is declared that the word 'debt,' as used in the act, shall include 'any debt, demand or claim provable in bankruptcy. ' Section 63 declares what debts of the bankrupt may be proved and allowed against his estate, and ranges the provable debts in five subdivisions, numbered from 1 to 5, inclusive. For present purposes we need quote only two of those subdivision namely:
'(1) A fixed liability, as evidenced by a judgment or an instrument in writing, absolutely owing at the time of the filing of the petition against him, whether payable or not with any interest thereon which would have been recoverable at that date or with a rebate of interest upon such as were not then payable and did not bear interest;' '(4) founded upon an open account, or upon a contract express or implied.'
Clearly the liability of an indorser is within the very words of this fourth subdivision. As was said by the supreme court in Martin v. Cole, 104 U.S. 30, 37, 26 L.Ed.647, the contract created by the indorsement of commercial paper is an 'express contract,' and 'its terms are certain fixed, and definite. ' The indorser's engagement is to pay a sum certain at a fixed date, to wit, the amount of the bill or note at its maturity, if it is not paid upon due presentment by the party primarily liable, upon due notice of its dishonor being given to the indorser. If it can be affirmed that such an unmatured liability is not a 'debt,' in a technical sense, certainly it is a 'demand' or 'claim,' and comes, it seems to us, within the scope of the fourth subdivision of section 63 of the act. The primary purpose of the bankrupt act was to relieve insolvent debtors from their pecuniary liabilities, and to secure ratable distribution of their estates among their creditors. It is not,...
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