Court Opinion

ID: 6278221
Source: CourtListenerOpinion
Date Created: 2022-02-18 16:07:36.049455+00
Date Added: 2024-06-11T09:00:07.739816
License: Public Domain

Opinion by
Rice, P. J.,
It is undisputed that the debt of Ushka to Hurwitz, represented by the judgment note of the former to the latter, and afterwards, by the judgment entered on it, was a provable debt in the Ushka bankruptcy proceedings.
It had no peculiar or special relation to, or connection with, the demand that was at the foundation of the judgment Ushka obtained against Hurwitz in the action or replevin, which entitled the latter to set it up as a payment or a credit, or in any other way to reduce that demand whensoever it might be asserted against him. *637Although it was not scheduled in time for proof and allowance in the bankruptcy proceedings, Hurwitz had knowledge - of the proceedings in time to prove it. Therefore it is not one of the exceptional classes of debts mentioned in sec. 17 of the National Bankruptcy Act, but falls under the general provision, “A discharge in bankruptcy shall release a bankrupt from all his provable debts.” As correctly stated by the learned judge below, judgments are set against each other not by force of the statute of defalcation but by the inherent powers of the courts, immemorially exercised; being almost the only equitable jurisdiction originally appertaining to them as courts of law. Being a discretionary power the justice and propriety of its exercise, must be determined by the facts and circumstances of each particular case. None of the authorities cited by appellant’s counsel go to the full extent that is required in order to hold that the judgment in favor of Hurwitz survived Ushka’s discharge in bankruptcy for purposes of set-off in the exercise of this equitable jurisdiction, and we agree with the learned judge below that the proposition is not sustainable on principle.
The order is affirmed at the costs of the appellant.