Court Opinion

ID: 3590714
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:39:24.755924+00
Date Added: 2024-06-11T13:58:55.806251
License: Public Domain

The 34th section of the bankrupt law declares that a discharge in bankruptcy releases the bankrupt from all debts provable under the act, and that it may be pleaded as a full and complete bar to all suits brought thereon.
The legal obligation of the bankrupt is by force of positive law discharged, and the remedy of the creditor existing at the time the discharge was granted to recover his debt by suit is barred. But the debt is not paid by the discharge. The moral obligation of the bankrupt to pay it remains. It is due in conscience, although discharged in law, and this moral obligation, uniting with a subsequent promise by the bankrupt to pay the debt, gives a right of action. It was held in Shippy v.Henderson (14 J.R., 178) that it was proper for the plaintiff, when the bankrupt had promised to pay the debt after his discharge, to bring his action upon the original demand, and to reply the new promise in avoidance of the discharge set out in the plea. The court, following the English authorities, said that the replication of the new promise was not a departure from the declaration, but supported it by removing the bar interposed by the plea, and that in point of pleading it was like the cases where the defence of infancy or the statute of limitations was relied upon. The case of Shippy v. Henderson was followed in subsequent cases, and the doctrine declared in it became, prior to the Code, the settled law. (McNair v. *Page 524 Gilbert, 3 Wend., 344; Wait v. Morris, 6 id., 394;Fitzgerald v. Alexander, 19 id., 402.)
The question whether the new promise is the real cause of action, and the discharged debt the consideration which supports it, or whether the new promise operates as a waiver by the bankrupt of the defence which the discharge gives him against the original demand, has occasioned much diversity of judicial opinion. The former view was held by MARCY, J., in Depuy v.Swart (3 Wend., 139), and is probably the one best supported by authority. But, after as before the decision in that case, the court held that the original demand might be treated as the cause of action, and, for the purpose of the remedy, the decree in bankruptcy was regarded as a discharge of the debt sub modo
only, and the new promise as a waiver of the bar to the recovery of the debt created by the discharge. We are of opinion that the rule of pleading, so well settled and so long established, should be adhered to. The original debt may still be considered the cause of action for the purpose of the remedy. The objection that, as no replication is now required, the pleadings will not disclose the new promise, is equally applicable where a new promise is relied upon to avoid the defence of infancy or the statute of limitations, and in these cases the plaintiff may now, as before the Code, declare upon the original demand. (Esselstyn v. Weeks, 12 N.Y,, 635.)
The offer of the plaintiff to prove an unconditional promise by the defendant, after his discharge, to pay the debt, was improperly overruled, and the judgment should, for this reason, be reversed, and a new trial ordered, with costs to abide the event.
All concur, except FOLGER, J., not voting.
Judgment reversed. *Page 525