Young v. Grau
| Decision Date | 19 January 1884 |
| Citation | 14 R.I. 340 |
| Parties | CHARLES F. YOUNG v. HERMAN GRAU. |
| Court | Rhode Island Supreme Court |
A sued B. on a judgment of the Superior Court of the State of New York. B. pleaded in bar a discharge in bankruptcy under the United States bankrupt act. A. replied precludi non, because the debt on which the judgment was given was " created by the fraud" of B. B. rejoined that the judgment record did not show the debt to be created by fraud, and that A. was thus estopped from showing it. To this rejoinder A demurred.
Held, that the demurrer should be sustained. A judgment debt is the contract debt in an adjudicated form hence if the latter was " created by the fraud" of the bankrupt, the former was also so " created."
After recovering judgment on a contract as valid, the judgment creditor cannot disaffirm the contract for fraud, but he can allege the fraud in reply to a pleaded discharge in bankruptcy.
A creditor may assert both debt and fraud if the fraud is asserted not to avoid the debt but to avoid the discharge of the debt.
EXCEPTIONS to the Court of Common Pleas.
This action, brought in the Court of Common Pleas, was debt on a judgment recovered in the Superior Court of the State of New York, for the county of New York. The defendant pleaded: 1. Nul tiel record; 2. Non debt; 3. A discharge in bankruptcy under the United States bankrupt act granted after the rendition of said judgment. The plaintiff replied tendering issue on the first plea, joining issue on the second, and as to the third alleging that the defendant had been guilty of fraud in contracting the debt whereon the said judgment was recovered. To the replication to the third plea the defendant rejoined that nothing in the record of the New York judgment disclosed any fraud, and that the original debt was merged in said judgment. To this rejoinder the plaintiff demurred. The presiding justice in the Court of Common Pleas overruled this demurrer and the plaintiff excepted.
A judgment obtained before the commencement of bankruptcy proceedings upon a debt which would not be barred by a certificate of discharge under such proceedings is not barred by the discharge.
W. W. & S. T. Douglas, for plaintiff.
Ballou & Jackson, for defendant.
This is an action of debt on judgment, to which the defendant pleads his discharge in bankruptcy. The plaintiff replies that the discharge is no bar because the debt on which the judgment was recovered was " created by the fraud" of the defendant. The defendant rejoins that it does not appear by the judgment record that the debt was created by fraud, and that the plaintiff is, therefore, estopped from setting it up. The plaintiff demurs.
The rejoinder by not denying admits that the debt was originally created by fraud, and the plaintiff contends that, this being admitted, the debt is within the saving clause of the bankrupt act which provides that " no debt created by the fraud or embezzlement of the bankrupt … shall be discharged by proceedings in bankruptcy; but the debt may be proved and the dividend thereon shall be a payment on account of such debt." Rev. Stat. U.S. § 5117. The defendant controverts this position. He contends that the debt as it originally existed has ceased to exist, being merged in the judgment, and that the plaintiff, therefore, cannot recur to its original form for the purpose of avoiding the discharge. He also contends that the plaintiff by recovering judgment on the debt, as a simple debt, without any allegation or suggestion on the record of its fraudulent character, waived the fraud and is now estopped from asserting it.
The first contention amounts to this, namely: that the debt was not created by the fraud of the defendant, because having passed into judgment it no longer exists in the form in which it was created by him. We do not think the argument is valid. It pushes the technical doctrine of merger beyond its proper sphere. The question is, what does the statute mean by " debt created by the fraud of the bankrupt?" Can we say that a judgment...
To continue reading
Request your trial
-
Fid. & Cas. Co. Of N.Y. v. Colombosky.
...Tp. v. Dunkle, 114 Ind. 262, 16 N.E. 593; Ames v. Moir, 130 Ill. 582, 593, 22 N.E. 535; Howland v. Carson, 28 Ohio St. 625, 629; Young v. Grau, 14 R.I. 340; Simpson v. Simpson, 80 N.C. 332, 334; Council v. Horton, 88 N.C. 222; and see State of Wisconsin v. Pelican Ins. Co. of New Orleans, s......
-
Levin v. Singer
...Indemnity Co. v. Caruso, 252 Minn. 435, 90 N.W.2d 302 (Minn.1958); Gregory v. Williams, 106 Kan. 819, 189 P. 932 (Kan.1920); Young v. Grau, 14 R.I. 340 (1884). It may be helpful to review the legislative history of the provisions of the Bankruptcy Act relating to the discharge of debts. The......
-
Fireman's Fund Indem. Co. v. Caruso
...96 N.E. 714; Stewart v. Emerson, 52 N.H. 301; Gehlen v. Patterson, 83 N.H. 328, 141 A. 914; Howland v. Carson, 28 Ohio St. 625; Young v. Grau, 14 R.I. 340; Simpson v. Simpson, 80 N.C. 332; Councill v. Horton, 88 N.C. ...
-
Gilchrist v. Cotton
...Cas. No. 10,817;In re Whitehouse, 4 N. B. R. 63, Fed. Cas. No. 17,564;Warner v. Cronkite, 13 N. B. R. 52, Fed. Cas. No. 17,180. In Young v. Grau, 14 R. I. 340, where the record did not disclose the character of the debt which was the foundation of the judgment sued on, and where it was cont......