Case Name: Hunter C. White et al. vs Martin Murray el al.
Court: Supreme Court of Rhode Island
Jurisdiction: Rhode Island
Decision Date: 1897-04-19
Citations: 20 R.I. 40
Docket Number: 
Parties: Hunter C. White et al. vs Martin Murray el al.
Judges: Present : Stiness and Tillinghast, JJ.
Reporter: Rhode Island Reports
Volume: 20
Pages: 40–42

Head Matter:
Hunter C. White et al. vs Martin Murray el al.
PROVIDENCE
APRIL 19, 1897.
Present : Stiness and Tillinghast, JJ.
A resident creditor brought suit against B. and attached his personal éstate ; B. gave bond, with sureties, conditioned to pay any judgment that might be recovered against him in that suit, and such judgment was afterwards obtained ; B. filed his petition and was thereon adjudged insolvent, and afterwards secured a discharge ; before the adjudication of insolvency, the judgment being unpaid, the present plaintiffs brought suit on the bond and obtained j udgment in a District Court; after overruling the defend ants’ exceptions the Appellate Division, of the Supreme Court granted a stay of execution, and plaintiffs applied to have the stay taken off: —
Held, that the cause of action in the suit on the bond accrued upon the entry of judgment in the attachment suit, and hence it was a provable claim against B. and was covered by his discharge.
Held, further, that while the discharge could not be pleaded because the suit was ended, B. was none the less entitled to its benefit.
Held, further, that this did not affect the sureties, their liability having been fixed by the entry of judgment in the attachment suit.
Held., further, that section 52 of the Insolvency Act, cannot be construed to refer only to sureties for the original debt.
Held, further, that the discharge of B. did not operate to discharge the sureties after their liability had become fixed by the happening of the contingency of the bond.
Held, further, that the stay of execution should be taken off as against the sureties, but be continued perpetually as to B.
Debt on bond given to release an attachment.
Heard on plaintiffs’ motion to remove a stay of execution that had been ordered pending insolvency proceedings affecting the principal in the bond.

Opinion:
Stiness, J.
Upon the decision of the exceptions in this case, the plaintiffs moved to take off the stay of execution which had been entered, but the defendants oppose it. They say that the judgment obtained in the case, in which the attachment bond now in suit was given, was suffered to be entered by default by the insolvent within four months of the filing of the petition. This is true ; but it was a suit brought and judgment obtained before the proceedings in insolvency were commenced, and there is nothing to show that there was any knowledge on the part of the.plaintiffs in the prior suit,- or even on the part of the defendant, that Murray was not able to go on in business if he should be forced to pay their debt, and nothing to show that the judgment was suffered to be entered against Murray with the intent to hinder, delay or defraud his creditors. The judgment was entered October 1, 1896 ; execution issued October 3, and the petition in insolvency was filed October 5, 1896. It is claimed for the plaintiffs that, as this suit on the bond was not brought until November 17, 1896, it is not within the insolvency proceedings and is not affected by Murray's discharge. We think the cause of action accrued upon the entry of the judgment, and hence that this was a provable claim against Murray and so is covered by his discharge. Judgment having been entered in the suit, the discharge cannot be pleaded because the suit is at an end ; but the insolvent is none the less entitled to the benefit of it. This however does not affect the sureties, since the entry of the judgment against Murray fixed their liability under the bond, because that was the contingency upon which the liability depended.
Henry C. Curtis, for plaintiffs.
Hugh J. Carroll, for defendants.
But this suit being upon a bond in which . Murray was principal and the other defendants were sureties, the Insolvency Act provides for the exigency in section 52 : "The liability of a person who is a co-debtor with, or guarantor, or in any manner surety for a person who has been adjudged insolvent and thereafter been discharged, shall not be abridged or altered by such discharge."
The defendants claim that this refers only to sureties for the original debt. But this clearly is not so. They were sureties for the judgment, if any should be entered. The debt is merged in the judgment, and it is from the judgment that Murray is released by his discharge. This judgment existed before, and is discharged as to Murray by the insolvency proceedings against him. Hence the other defendants were his sureties within the provisions of the act. Carpenter v. Turrell, 100 Mass. 450. The discharge of Murray, however, does not operate to discharge the sureties after their liability has become fixed by the happening of the contingency of the bond. Claflin v. Cogan, 48 N. H. 411 ; Dyer v. Cleveland, 18 Vt. 241 ; Towle v. Robinson, 15 N. H. 408 ; Hall v. Howler, 6 Hill (N. Y.), 630 ; Garnett v. Roper, 10 Ala. 842. See also notes of decisions on corresponding provision of the U. S. Bankrupt Law in Bump on Bankruptcy § 5718, p. 726, 8 ed.
The plaintiffs being entitled to their execution against the sureties, their motion to take off the stay is granted as to them and a perpetual stay is ordered as to Murray.