Court Opinion

ID: 5228409
Source: CourtListenerOpinion
Date Created: 2022-01-06 16:50:27.102624+00
Date Added: 2024-06-11T08:27:37.657159
License: Public Domain

Scott,'J. (dissenting):
In- my opinion this judgment should be reversed. I am unable to distinguish the .case, in principle, from Phenix *502National Bank v. Waterbury (123 App. Div. 453; affd., 197 N. Y. 161). In that case the dissenting opinion in this court presented forcibly all of the arguments which are now urged in support of the present judgment, including those based upon the theory of a supposed £ £ anticipatory breach. ” It failed, however, to convince the majority of the court or any member of the Court of Appeals. The whole question is whether or not the plaintiff held a claim on February 1, 1910, the date of the filing of the petition in bankruptcy, which was provable in the bankruptcy proceedings, for “The date of filing the petition in bankruptcy is intended to mark the line of' separation between debts that are provable and those that are not provable against the bankrupt’s estate. Those that are not provable remain subsisting obligations of the bankrupt and he is- not released therefrom by his discharge.” (Colman Co. v. Withoft, 195 Fed. Rep. 250; Bankr. Act [30 U. S. Stat. at Large, 562], § 63, subd. a.) To be so provable the debt must be one which is absolutely owing by the bankrupt at the time of filing the petition. (Bankr. Act, § 63, subd. a.) It is clear that at the time the petition in bankruptcy was filed against these defendants they owed nothing to the plaintiff. He owed them $39,000, which, however, was not presently payable. They held his securities, and were entitled to hold them and even to rehypothecate them, and until his indebtedness was paid they owed him no duty to return the securities or to account to him for their value, nor could any such duty arise until he had paid or tendered payment of his debt which he was not bound to anticipate. Even if, under any circumstances, the petitioning of the defendants into bankruptcy had entitled the plaintiff to anticipate the date of the maturity of his debt to them, so as to establish an anticipatory breach by them of the duty to return his securities when the debt was paid, he was under no obligation so. to anticipate, but was entitled to wait until his indebtedness fell due in accordance with the terms of the note which evidenced it. It is only when the creditor so elects, that he may prove an indebtedness arising out of the anticipatory breach of a contract which by its terms extends beyond the date of the filing of the petition in bankruptcy. (Phenix National Bank v. Waterbury, supra; Ames v. Moir, 138 U. S. 306.)
*503The case at bar differs radically from the ordinary cases of stockbrokers who hold collateral for debts owing to them by their customers. Ordinarily in such cases there is no time obligation, but the debt is always due so that the creditor may demand payment at any time, and the debtor may likewise tender payment at any time. It is in such cases that it has been held that no tender and demand is necessary on the part of the debtor, but that his claim for the value of his securities over- the amount of his debt becomes due immediately upon the filing of the petition. (Matter of Swift, 112 Fed. Rep. 315.) Here the date for the payment' of the note was fixed; no obligation to pay before that date was imposed upon the debtor by reason of the filing of the petition, and no right to a return óf his securities arose until payment was made or tendered. It is said to be incongruous that a claim as for a conversion should be based upon a demand made at a time when, by reason of the defendants’ bankruptcy, it was impossible for them to comply. It makes little difference whether this action be called' an action for conversion or one for damages for the failure to fulfill the implied contract to return the securities upon the maturity and tender of the debt. In either case the obligation, whatever it be called, did not arise until the date on which the note became due and tender of the debt was made. It may be that the bankruptcy proceedings made defendants’ non-compliance with any demand that might be made upon them so certain that a demand was unnecessary, but at all events the tender and demand on the due date of the note served to transform what had been a lawful holding of the securities into an unlawful one, and established the plaintiff’s right to a return of his securities ás of that date. The important fact is that at the date of the filing of the petition there was no indebtedness, present or contingent, owing from the defendants to plaintiff, and, therefore, none which could have been proven in bankruptcy, or from which the defendants have been released by their discharge.
The judgment should be reversed, and, since the facts are undisputed and cannot be changed upon a new. trial, judgment should be ordered for plaintiff, with costs.
Judgment affirmed, with costs.