Court Opinion

ID: 6408822
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:51:02.5068+00
Date Added: 2024-06-11T15:51:18.238730
License: Public Domain

Dewey, J.
The single inquiry in this case is this : Are the plaintiffs, by reason of proving their claim before the master in chancery, and receiving a dividend thereon from the assets of the insolvent, and also the payment of the costs that had arisen in the case before the proceedings in insolvency, estopped to deny the validity of the discharge, and to avoid the same, by showing such facts as would, under the provisions of our statutes, avoid it as to a creditor who had not proved his claim and received a dividend ? The statute provisions on this subject are very stringent. The St. of 1838, c. 163, § 10, declares that every certificate of discharge, granted to an insolvent debtor, shall be of no effect, if he shall have fraudulently concealed any part of his estate, or made any payment or conveyance with a view of giving a preference to any creditor, &c. And St. 1841, c. 124, § 3, provides that no certificate of discharge shall be granted, or, if granted, shall be of no effect, if the debtor shall have done certain acts therein enumerated. No exception is made, in either of these statutes, as to the case of a creditor who may have proved his claim and received a dividend. The provisions avoiding a discharge are general, declaring the discharge void, in general terms. It is,' therefore, necessarily void as to all creditors. The creditors of an insolvent may well prove their claims and receive their dividends, upon the assumption that the insolvent has, in all respects, truly conformed to the requisites of the laws; that he has concealed “ o effects, and made no conveyances for the purpose of giving preferences, nor in any way violated the principles of a full and equal distribution of his effects. Acting upon this assumption, the creditor may prove his claim and receive his dividend, without prejudice to his right to avoid the discharge *64of the insolvent, if future developments shall show the commission of those acts, or the neglect of those duties, on the part of the debtor, by reason of which his discharge is rendered invalid. It is no part of the duty of the creditor to assume, in advance, that the debtor has been guilty of fraudulent acts, in violation of the insolvent laws, and to regulate his conduct by such presumption. He may, therefore, prove his claim and receive a dividend, without compromitting his further right to enforce payment of the residue of his demand, if "the debtor has obtained his discharge under such circumstances as render it invalid in law.
The cases of Morse v. Lowell, 7 Met. 152, Fisher v. Currier, 7 Met. 424, and Gilbert v. Hebard, 8 Met. 129, cited by the defendant’s counsel, do not bear upon the point now under consideration. Those cases have reference only to the effect of voluntarily becoming a party to proceedings in insolvency, by proving debts and receiving dividends, in discharging a debtor who has received his discharge upon a full compliance with all the requisitions of law. They do not touch the further question, whether such proving of a debt and receiving a dividend will estop the creditor from showing the dischargé to be invalid in law, for those causes for which the statute declares it void.
The facts stated under the second head of the defence do not, in the opinion of the court, estop the plaintiff from showing the discharge, offered under the first specification, to be invalid in law, and of no effect.

New trial ordered.