Paxton v. Scott
| Decision Date | 19 November 1902 |
| Citation | 66 Neb. 385,92 N.W. 611 |
| Parties | PAXTON ET AL. v. SCOTT. |
| Court | Nebraska Supreme Court |
1. The question of fraud in conveyances made prior to July 1, 1898, could not be determined in a hearing on application by a bankrupt for his discharge in the bankrupt proceedings.
2. The discharge of a bankrupt is only personal to himself, and does not affect any lien, either by contract or by judicial proceedings, against property.
3. A judgment rendered on conflicting evidence will not be disturbed in this court unless clearly wrong.
Commissioners' opinion. Department No. 1. Error to district court, Douglas county; Keysor, Judge.
Action by John A. Scott, trustee in bankruptcy, against William A. Paxton and others. Judgment for plaintiff, and defendants bring error. Affirmed.Charles A. Baldwin and Frank T. Ransom, for plaintiffs in error.
Hamilton & Maxwell, for defendant in error.
The appellant in this case says that the errors complained of are numerous, but the questions as to the jurisdiction of the district court to hear and determine the issues presented and as to res judicata underlie them all, and are vitally important. It is true that the same counsel later, in his brief, energetically assails the sufficiency of the evidence, but it seems clear that the most he can claim as to that is that the decree of the district court ordering the insurance policies turned over to the bankrupt estate is a decision upon conflicting evidence, and, if the court had jurisdiction, and if the matter had not been determined by the bankrupt proceedings shown in the record, the decree will have to be sustained. This suit was instituted by the trustee of James Stephenson, a voluntary bankrupt, to set aside conveyances of certain real estate in Omaha, and to obtain the surrender of four life insurance policies for the sum of $5,000 each, which had once been held by the bankrupt, and by him had been, prior to the passage of the present bankrupt law, turned over to his wife. The trial court dismissed the proceedings as to the land, and held that the life insurance policies were justly a portion of the bankrupt estate, and should be surrendered to the trustee. Pending the action the wife died, and it was revived against her executor and heirs. After the institution of this action, the bankrupt, Stephenson, made an application to the United States district court for his discharge in bankruptcy, which was opposed by the trustee on the ground of the pendency of these proceedings, and because of the fraud alleged in the transfer of the real estate in question and of the four insurance policies. The referee to whom the objections were sent for determination was instructed by the federal court to hear no evidence as to fraudulent acts committed before the taking effect of the present bankrupt law, July 1, 1898. The result was that no evidence could be presented, as all the alleged fraudulent acts took place in 1897, or earlier. The bankrupt received his discharge. It is now claimed that the discharge operated as a bar to these proceedings, and that the whole question of fraud is res judicata, and that the state court had no jurisdiction to proceed further after that decision.
We are not able to sustain this contention as to the effect of the discharge. A voluntary bankrupt may present his application for discharge within one month after he is adjudged a bankrupt, and must do so within 12 months. The hearing on this application will not ordinarily be stayed pending protracted litigation in other courts, it being the policy of the bankrupt law to secure the debtor's discharge as soon as consistent with justice. Low. Bankr. p. 302, and cases cited; In re Crenshaw (D. C.) 95 Fed. 633;In re Cornell (D. C.) 97 Fed. 29. The effect of the discharge is personal to the bankrupt, and it does not effect any lawful lien, charge, or incumbrance existing on his property, but judgment may be specially entered thereon in rem. Low...
To continue reading
Request your trial