Star Braiding Co. v. Stienen Dyeing Co., Inc.

• Decision Date: 28 June 1921
• Docket Number: No. 5473.,5473.
• Citation: 114 A. 129
• Parties: STAR BRAIDING CO. v. STIENEN DYEING CO., Inc.
• Court: Rhode Island Supreme Court

114 A. 129

STAR BRAIDING CO.

v. STIENEN DYEING CO., Inc.

No. 5473.

Supreme Court of Rhode Island.

June 28, 1921.

Exceptions from Superior Court, Providence and Bristol Counties; John Doran. Judge.

Action by the Star Braiding Company against the Stienen Dyeing Company, Incorporated. Directed verdict for plaintiff, and defendant brings exceptions. Exceptions sustained, and case remitted.

Wilson, Churchill & Curtis, of Providence, for plaintiff.

Ernest P. B. Atwood, of Providence, for defendant.

SWEETLAND, C. J. This is an action of the case in assumpsit. The declaration alleges an indebtedness on book account and contains other common counts.

The case was tried before a justice of the superior court sitting with a jury. At the conclusion of the evidence said justice directed a verdict for the plaintiff in the sum of $647.56, the same being the full amount of its claim. The cause is before us upon the defendant's exception to this action of said justice and upon its exceptions to certain rulings of said Justice made in the course of the trial.

The defendant presented to said justice a certified copy of the records of the United States District Court for the Southern District of New York, from which it appeared that on November 24, 1920, a petition in bankruptcy was filed against the defendant in said District Court, that a temporary receiver of the defendant's assets was appointed, and that the bond required of such receiver had been approved and filed in said court. The defendant then moved in writing that said justice stay this action in the superior court under and by virtue of section 11 of the United States Bankruptcy Law. Section 11 of the National Bankruptcy Act of 1898 (U. S. Comp. St. § 9595) is as follows:

"A suit which is founded upon a claim from which a discharge 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; if such person is adjudged a bankrupt, such action may be further stayed until twelve months after the date of such adjudication, or, if within that time such person applies for a discharge, then until the question of such discharge is determined."

Said justice denied the motion for a stay and proceeded to try the case. To this ruling of the justice the defendant excepted and is insisting upon said exception before us.

The plaintiff seeks to support the action of said justice upon the authority of statements contained in the text of Collier on Bankruptcy (12th Ed.) vol. 1, p. 291, and in certain federal cases cited by the author in his footnotes to the effect that the power of the court to stay a suit against a bankrupt is discretionary. The stay to which the author and the cases cited by him have reference is not the stay sought by this defendant on its motion, but a stay after an adjudication of bankruptcy, or one in the nature of an injunction, issued by a federal court to restrain an action against a bankrupt in a state court, or a stay in an action begun against a bankrupt after the filing of a petition in bankruptcy against him. The power to grant such stays is discretionary, but none of them is within the provisions contained in the first part of section 11. Until after an adjudication or dismissal of the petition against an alleged bankrupt a suit which is founded upon a claim for which a discharge would be a release and which is pending against the alleged bankrupt at the time of filing such petition must be stayed. Of such nature is the plaintiff's claim, and such was the condition of his suit at the time of defendant's motion for a stay. The language of the Bankruptcy Act is peremptory. The action should have been stayed. In Collier on Bankruptcy (12th Ed.) vol. 1, p. 287, the...