Case ID: abbn-cas_5/html/0357-01.html
Source: Caselaw Access Project
Author: {"author": "Van Hoesen, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

MATTER OF FITZGERALD.
    
      N. Y. Common Pleas;
    
    
      Special Term, December, 1878.
    Arrest. — Bankruptcy.—Fourteen-Day Act. — Conflict of Laws.
    If it should appear that all the property which one arrested under an execution for debt had when arrested, had been taken away from him without his fault and against his will, his discharge, under 3 R. S. p. 25 (6th Ed.), commonly called the fourteen-day act, will not on that account be refused.
    But if he has voluntarily gone into bankruptcy under the United States law, and has assigned all his property to the assignee in bankruptcy, he cannot be discharged from arrest under the fourteen-day act.
    There is an irreconcilable conflict between the federal system of bankruptcy and the State insolvent laws, and the latter are obliged to yield.
    
      Motion for discharge from imprisonment under the “ 14 day ” act.
    Daniel H. Fitzgerald brought an action for libel in the New York supreme court, Onondaga county, against IT. K. & F. B. Thurber, which was tried there in May, 1875, and resulted in favor of the defendants, who obtained a judgment against the plaintiff for the costs of the suit, which amounted to $261.73.
    An execution having been issued in the city of New York on said judgment, against the person of Fitzgerald, he was arrested thereunder, August 21, 1878, and gave bail for the limits.
    On the 30th of the same month, he was adjudicated a bankrupt on his own petition, by the United States district court for the eastern district of New York, and an assignee was thereafter duly appointed and qualified.
    This application was made by him on November 8, 1878, for his discharge, under article 6, title 1, chapter 5, part 2, of the Revised Statutes (3 R. 8. 25, 6th Ed.).
    The aforesaid judgment-creditors opposed the application, because, having made an assignment to the assignee in bankruptcy of all the non-exempt property he had at the time of his arrest, he could not possibly comply with the law which required that in order to be discharged from arrest he should assign that very property for their exclusive benefit.
    
      Childs & Hull, for the motion,
    cited Matter of Jacobs, 12 Abb. Pr. N. S. 273; Shears v. Sollhinger, 10 Id. 287; Maas v. O’Brien, 14 Hun, 95, 98.
    
      Nelson Smith, opposed.
   Van Hoesen, J.

It is true, that if it should appear that without any fault on his part and against his will all the property which he had at the time of his arrest had been taken away from him, whilst imprisoned, the court would not refuse Mm a discharge. But he is in no such situation. His property was assigned by him of his own free will, with a view to his own personal advantage. It was assigned in a lawful manner, and in conformity with the bankruptcy act; but by his going into bankruptcy there was an election on his part to get the benefit of a discharge from his debts in bankruptcy, instead of a discharge from imprisonment in the action between himself and the Thurbers. Having made that election, he can only get such relief as the bankruptcy courts can afford him. He cannot put it out of his power to obey- the orders of the State court, and then ask that court to discharge him from imprisonment. It is his own act that has made it impossible for him to execute an assignment that will be any more than a nugatory formality. In Dieckerhoff v. Ahlborn (2 Abb. New Cas. 373), Ahlborn, an imprisoned judgment-debtor, who, after his arrest under an execution from a State court was adjudicated a bankrupt, found it necessary to obtain from the United States court an order annulling the adjudication of bankruptcy for the purpose of obtaining his discharge from imprisonment. The same course is open to Fitzgerald, though he is, of course, at liberty to continue his proceedings in bankruptcy, and to obtain such relief as a discharge in bankruptcy will afford him.

The case of Maas v. O’Brien (14 Hun, 95), goes far to support the position that the State court should not entertain such proceedings as these after an imprisoned debtor has resorted to the United States courts. There is an irreconcilable conflict between the federal system of bankruptcy and the State insolvent laws, and the latter are compelled to yield. When the federal courts lay their hands upon' the property of an insolvent, it is impossible for the State courts to carry the insolvent laws into execution. It'is folly for a'State court to attempt to execute a part of the provisions of the State statute after a United States court has taken under its exclusive control the insolvent’s estate, and thus prevented the carrying out of the provisions of the statute which are essential to the completeness of the system.

The views I have expressed are not novel. They are in full accord with the decision in the People ex rel. Galsten v. Brooks (40 How. Pr. 165).

The application for a discharge is denied.