Court Opinion

ID: 3622501
Source: CourtListenerOpinion
Date Created: 2016-07-06 00:04:00.156253+00
Date Added: 2024-06-11T14:19:19.333953
License: Public Domain

[EDITORS' NOTE:  THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 278 
The first objection to the defendant's plea of his discharge in bankruptcy, is, that it does not state the facts necessary to give jurisdiction to the district court of the United States, for the southern district of New-York, to grant the discharge.
The first section of the bankrupt act of 1841, enables all persons whatsoever, residing in any state, district, or territory of the United States, owing debts which shall not have been created in consequence of any defalcation as a public officer, or as executor or administrator, guardian or trustee, or in any other fiduciary capacity, who shall, by petition, containing certain specified facts and statements, and verified as therein directed, to apply to the proper court for the benefit of that act. And the same section declares that all persons so applying shall be deemed bankrupts within the purview of the act, and may be so declared by a decree of such court. By the 7th section of *Page 279 
the act, the petition must be presented and the proceedings had in the district court of the United States within and for the district in which the applicant shall reside or have his place of business, at the time when the petition is filed.
The facts, therefore, to be stated distinctly in the plea, for the purpose of showing the jurisdiction of the district court to grant the discharge, are 1. The residence of the defendant, which must be stated for two purposes, to wit, first, to show that he is within the class of persons entitled to the benefit of the act, and next, to show that his application is made to the proper district or territorial court; 2d. That he owed debts, not created in consequence of a defalcation as a public officer, c. as above specified in the act; 3d. That he presented his petition to the district court of the district in which the defendant resided or had his place of business, and that his petition contained what the act required it should contain.
These facts are all distinctly and directly stated in the defendant's plea. They show that the court which granted the discharge, had jurisdiction of the case, and that it was set in motion by the presentation of the petition. Thenceforward the legal presumption is in favor of the regularity of the proceedings. And the plea goes on accordingly to aver, that upon the presentation of the petition to the court, such proceedings were thereupon had, that the defendant was afterwards, on the 4th of March, 1842, duly decreed to be a bankrupt, c. In this respect, the plea appears to have been drawn according to the principles laid down long ago, in our own courts, and often repeated. (1 John. 91; 7 id. 75; 10 id. 161; 1 Cowen,
319; 20 John. 288; 24 Wend. 364; 1 Denio, 331, 332; 5Hill, 350; 6 id. 607; 1 Comst. 505.)
The first section of the statute requires the bankrupt, in his petition, to declare himself unable to meet his debts and engagements; and the plea shows that this was done. The plea states also, directly and affirmatively, that the defendant was a bankrupt within the meaning of the act. It was unnecessary for him to state, in any other language, that he owed debts which he was unable to pay. The statute contains no such *Page 280 
definition of a bankrupt. The general averment that such proceedings were thereupon had, showed sufficiently that the court took the petition into consideration, and acted on it.
It was unnecessary to aver that notice was published to the creditors, or that objections were or were not made against the decree made by the court, or that twenty days had elapsed before the decree. Jurisdiction being shown, all the subsequent proceedings are presumed to have been regular.
The plaintiff further objects that the plea does not aver that the second petition (the petition for a discharge after the decree that the defendant was a bankrupt,) was presented to the court, but merely states that it was filed. The language of the plea in this particular, is the language of the 4th section of the act, and is therefore sufficient. The averment that such proceedings were had on filing the petition that the defendant was discharged by the court, shows that the petition was before the court, and was the ground of its action. A special averment that this debt was included in the schedule, was unnecessary. There is an averment that the petition set forth a list of the bankrupt's creditors, their respective places of residence, and the amount due to each. This was enough. It must be supposed to include the plaintiff's demand. Whether it did or not was not a fact on which the jurisdiction of the court depended.
The averment that the debt was provable under the act is also sufficient, although in speaking of the bond the plea does not expressly admit its validity or the existence of the debt. The plea says, if there was any debt it was provable under the act. The defendant was not bound to admit it for the purpose of making the discharge valid. It may have been stated in the list of his debts as a disputed claim to be contested by his assignee, and it was only necessary for the defendant to show that if it was a valid debt his discharge operated upon it.
Whether under the technical rules of pleading it was necessary to confess it, for the purpose of avoiding it by his discharge, is a different question. The averment is "that the said supposed writing obligatory, if any such were made, was made before the presenting of the petition first above set forth to be *Page 281 
declared a bankrupt," "and was provable under the act aforesaid,"c. Admitting the strict technical rule of pleading to require that the defendant in a plea of avoidance shall give color to the plaintiff by admitting a prima facie cause of action, which but for the matter of avoidance would have entitled him to maintain his suit, we think the technical rule has been sufficiently complied with in other parts of the plea in which the bond is referred to without the objectionable words "if any such were made." In the next paragraph but one of the plea, the defendant avers that the discharge previously set forth in the plea, is "a full and complete discharge of him the said defendant of and from all claim or liability to the plaintiff for or on account of the said supposed bond or writing obligatory in the declaration described and set forth." This clause in the plea contains a sufficient admission and gives sufficient color to satisfy the technical rule of pleading. One admission in the plea is enough. If the general issue were struck out, no doubt could be entertained that the defendant on the trial would hold the affirmative, and be put to his defence without proof of the bond.
But if on this point the case stood alone on that part of the plea which contains the words "if any such were made," I should hesitate in assenting to a reversal of the judgment for such an informality merely. In looking at the issue we find that the defendant's first plea was non est factum, which put the plaintiff to the proof of his bond on the trial; so that if the bond had been admitted in the special plea, the admission could not have helped him; nor could the insertion of the objectionable words, by excluding the admission, have been of the least disadvantage to him. They did not vary the proof which the plaintiff had to give to maintain the issue, or in any other respect affect the merits of the case. The defect was merely formal. It might have been amended in the court below, before or after judgment, (2 R.S. 424, §§ 1, 4,) and with or without costs, which in such cases are in the discretion of the court. This might have been done on the argument of the special demurrer, and a judgment for the defendant might thereupon have been rendered, in which there could have been no pretence of error: *Page 282 
and if the court was not justified in looking on the words objected to as mere surplusage, and rendering a judgment on that ground, I think they ought to have struck out the words by way of amendment, and thereupon rendered the same judgment which we find on the record. The judgment therefore is right, and ought not to be reversed here on the ground merely that the court neglected to make a formal amendment which might and ought to have been made.
The remaining point on the part of the plaintiff is that the bankrupt act, so far as it authorizes the discharge of a pre-existing debt on the voluntary application of the debtor, is unconstitutional. This point however was not argued. We are of opinion that this question ought now to be regarded as settled in favor of the validity of the act, by decisions in the United States courts, to which it properly belongs to bring it to a determination. One of the district courts, that in Missouri, adjudged the voluntary branch of this act to be unconstitutional; but on the coming of the question into the circuit court the decision was reversed, and the act declared to be valid. (1 How.U.S. Rep. 267, opinion of Mr. Justice Catron.) The question has never been brought directly before the supreme court of the United States, because there is no provision in the act authorizing that court to review the decisions of the circuit courts sitting in bankruptcy cases. But it is understood that the circuit courts have without exception affirmed the validity of the entire act. The supreme court of this state has passed directly upon the point in controversy, in the case of Kunzler
v. Kohaus, (5 Hill, 317,) two of the judges, Cowen and Nelson, upholding the validity of the act, against the opinion of Mr. Justice Bronson. In Massachusetts its constitutionality was affirmed, in the case of Thompson v. Alger, (12 Metc. 428.) I am not aware that it has been adjudged unconstitutional by the higher courts of any state in the Union, although a multitude of cases must have arisen in which that question may have been raised in nearly every state in the Union. The judgment should be affirmed. *Page 283 
GARDINER, HURLBUT, HARRIS, PRATT and TAYLOR Js. concurred.