Case ID: abb-pr-ns_7/html/0212-01.html
Source: Caselaw Access Project
Author: {"author": "Brady, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

THE WORLD COMPANY against BROOKS.
    
      New York Common Pleas ; Special Term,
    November, 1869.
    Discharge in Bankruptcy.—Stay oe Proceedings against Bankrupt.
    Under section 21 of the Bankrupt Law, a bankrupt who has omitted to apply for a stay of proceedings in an action against him, pending the question of his discharge, may nevertheless apply after judgment to have supplementary proceedings against him thereon stayed, on the ground that he has been discharged, if the plaintiff’s demand be one affected by the discharge.
    Motion to stay proceedings.
    The action in which these proceedings were taken was brought by The World Company, proprietors of a newspaper, against Edwin A. Brooks, a dealer in boots and shoes, to recover for advertising the business of defendant.
    Pending the action, the defendant filed a petition in bankruptcy, but did not apply for a stay of proceedings in the action. The plaintiffs’ claim was not proved in bankruptcy, but plaintiffs proceeded to judgment. After judgment had been recovered, the proceedings in bankruptcy were consummated by the granting of a discharge to the defendant.
    Plaintiffs now sought to examine the defendant as to his property, on proceedings supplementary to judgment, and the defendant moved to stay the proceedings. The plaintiffs allege in their affidavit in opposition to the motion to stay such examination, that after their judgment was obtained they found defendant in charge of his store with his own name still on the sign, but with the word “agent” added; that he then refused to disclose who was his principal; that subsequently, after receiving his discharge in bankruptcy, the word “agent” was removed, and the business was seemingly conducted the same as before he was sold out by the sheriff and entered a court of bankruptcy. On these facts the plaintiffs claimed the defendant to have been guilty of laches in not interposing his plea and applying for a stay during the pendency of the suit; and insisted that having thereby elected to give plaintiffs judgment, he cannot now interpose this decree to prevent an examination under that judgment.
   Brady, J.

Section 21 of the Bankrupt Law provides that “ no creditor, whose debt is provable under this act, shall be allowed to prosecute to final judgment any suit at law or in equity therefor against the bankrupt, until the question of the debtor’s discharge shall have been determined.”

The discharge which was granted the defendant affects the plaintiffs’ debt.

It is true that the section referred to contemplates an application by the debtor for a Stay under its provisions, unless the creditor proves his debt which operates as a stay, and that in strictness the defendant herein should have applied for such stay, but it was a matter of form of which the defendant himself cannot be supposed to have known. Ignorance of the law excuses not, it is true, but it bears upon the exercise of discretion, often with great force, when the mercy of the court is invited, and it will not in this case operate to the defendant’s prejudice, but in a limited sense.

The failure of the defendant to disclose his principal may not prejudice the plaintiffs. He has been named in the proceedings in bankruptcy, and the plaintiffs may pursue him and recover their debt.

Whether this be so or not, the defendant will be relieved, but only upon payment of the costs in this action which accrued subsequent to the filing of his petition, and $10 costs of this motion. I do not think the circumstances arrayed against the defendant warrant a refusal to relieve him.

Ordered accordingly. 
      
       The remainder of the provision, is as follows : “And any such suit or proceeding shall, upon the application of the bankrupt, be stayed to await the determination of the court in bankruptcy on the question of the discharge, provided, there be no unreasonable delay on the part of the bankrupt in endeavoring to obtain the discharge, and provided also, that if the amount due the creditor is in dispute, the suit, by leave of the court in bankruptcy, may proceed to judgment for the purpose of ascertaining the amount due, which amount may be proved in bankruptcy, but execution shall be stayed as aforesaid.”
      It was held in Matter of Rosenburg (1 Bened. D. Ct., 349, note), that this provision applies even to fiduciary and other debts which would not be affected by the discharge.