Court Opinion

ID: 7891536
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:49:29.294442+00
Date Added: 2024-06-11T16:31:56.030263
License: Public Domain

•Bartol, J.,
delivered the opinion of this court.
The judgment below in this case was rendered in favor of the defendant, upon ‘his demurrer to the plaintiff’s replication, and the question presented by the appeal, is the sufficiency of the replication; but before considering that question, it is necessary to pass upon the sufficiency of the plea. The effect of a demurrer being, to bring before the court all the pleadings, and to mount up to the first error, it is competent for the appellant to argue as he has done in this court, that the plea was defective and insufficient, and if sustained in that position, the judgment would be reversed, no matter how defective the replication may be.
The action is debt on a bond to the State, in the penal sum of two thousand dollars, conditioned upon the faithful performance, by George H. Buckey, (one of the obligors,) of the trust reposed in him by a decree of Baltimore county court, as a court of equity. The appellee, (defendant below,) is a coobligor on the bond as surety for George H. Buckey.
The bond, which is the cause of action, was executed on the 26th day of April 1847. On the 12th day of February 1851, the defendant petitioned for the benefit of the insolvent laws, and was duly and finally discharged by the order of Frederick county court on the 1st Monday of INovember 1851. These facts are formally and sufficiently stated in the plea, and are relied on in bar of the action. The appellant insists that notwithstanding the discharge of the defendant, he remains liable on the bond, and this action can be maintained, because the breach of the condition, by George H. Buckey, alleged in the nar., did not occur till the 7th day of May 1856, after the defendant’s discharge.
*431A majority of this court are of opinion that this objection to the plea cannot be supported.
By the 5th and 13th sections of the Act of 1805, ch. 110, the discharge of the debtor operates to release him from “all debts, covenants, contracts, promises and agreements, due from or owing or contracted by him, before His application This language is broad and sweeping enough to cover the bond sued on in this case. It was a debt contracted by the defendant on the day of its date; by its very terms the obligors acknowledge themselves to be (then) held and firmly bound to the State in the sum of two thousand dollars. On that obligation the defendant was'sued, and the judgment at law, if recovered, would be for that sum. It is true that under the statute of William 111., the defendant would be entitled to be released, on pajunent of such sum as the jury might assess, .as damages for the breach of the condition. Still, at law, the action is debt on the bond for the sum therein named. • Under the Act of 1805, the insolvent debtor is released, not merely from all debts due and owing at the time of this application, but from all debts before that time contracted. When was the debt of Henry Culler to the State contracted 1 It is evidenced only by the bond sued on, and was contracted when the bond was executed. The right to maintain a suit on such a bond, secured by our law to a party in interest, does not arise till the condition has been broken, but the legal debt of the obligor was contracted by the bond alone.
If this were a bond between individuals in a penal sum, conditioned for the payment of money by instalments, it could hardly be maintained, that the discharge of the obligor under the insolvent law, after the execution of the bond, and before the instalments became due, would not operate to release the insolvent from an action on the bond, although the obligee would have no right to maintain his suit before an instalment fell due.
The opinion of a majority of the court on this point is based on the construction of the Act of 1805, and-its supplements, *432ánd we have seen no authority which, in our opinion, conflicts with that construction.
The cases of Wharton vs. Callan, 2 Gill, 173, and Berry vs. McLean, 11 Md. Rep., 92, cited by the appellant, seems fo us to rest upon5 other and distinct grounds not applicable to this'. In both those cases the decisions went upon the ground, that the debt sued for was a new cause of action not existing at the'time of the insolvént’s application, and the rulings of the court were in conformity with l.he uniform course of decisions in England, under their bankrupt law. The writer of this opinion sat in the case of Berry vs. McLean, and, as will appear by the opinion of our late brother Eccleston, pronounced in that case, care was taken to state that the contract there sued on was riotunder seal, nor did it contain any penalty, ñor promise to pay any sum of money, &c. 11 Md. Rep., 100. It was likened to the case Of Wharton vs. Callan, and decided upon the same principles.
A majority of this court considering the plea in this case sufficient, we áre next to examine the replication, and we are of opinion that it was bad. It states, in substance, that the defendant wasnot, in fact, insolvent when he petitioned, but at the'sale of his land by the insolvent trustee, became the purchaser, and after the payment of the debts exhibited against him, there remained a large surplus, which went into his ¿ands' from the trustee. These facts do not in any manner impair the effect of the final discharge. In the absence of fraud to impeach the judgment of the insolvent court, (and this record presents no' question of fraud or mala Jides,) we Cannot deny the efficacy of the judgment when brought collaterally in question, provided the case was within the jurisdiction Of the insolvent court. And we think the appellant’s counsel is in error in supposing that the jurisdiction of those courts depends upon the fact of the petitioner being actually insolvent. Nof are the rights' of the’parties in this action affected by the fact, that there remained in the hands of the trustee a surplus, which, under the resulting trust to the insolvent, was paid to *433him. We do not, deem it necessary to express any opinion as to the rights of this plaintiff to pursue that surplus in another forum, and by another course of proceeding. It is clear, that he cannot claim because of the existence of such surplus in the hands of the trustee, to maintain an action at law against the insolvent, on a bond executed before his application, and from which he has been discharged under the statute.
(Decided June 26, 1862.)
We concur with the Circuit court in its decision on the demurrer, and we are also of opinion that the judgment ought to be affirmed.
Before the Act of 1834, ch. 293, a plea of discharge under the insolvent laws, was not a complete bar to the action; for though the plea might be confessed, the plaintiff would still be entitled to a qualified judgment, subject to the effect of the discharge. This grew ou't of the provisions of the Act of 18U5, and its supplements, which declared that certain property acquired by an insolvent after his discharge, in the manner prescribed by the Act, should still be liable, in the hands of the insolvent, to execution, to satisfy the debts of antecedent creditors. By the Act of 1834, ch. 293, such property is vested in the trustee, and not in the insolvent, and must be pursued in the insolvent court.. There is no reason, therefore,.why the praelice which before prevailed, of taking qualified judgments, should have been continued after the Act of 1834. In our opinion, the plea in this case was a bar to the action, and the judgment below properly entered for the defendant.

Judgment affirmed.