Court Opinion

ID: 9652742
Source: CourtListenerOpinion
Date Created: 2023-08-23 17:31:17.208843+00
Date Added: 2024-06-11T18:12:53.830201
License: Public Domain

L. HAND, Circuit Judge
(cqncurring).
I agree that, as the law stands, we cannot hold that the revival by an insolvent of a debt barred by the statute of limitations is a fraudulent conveyance. That result follows from the curious but ancient notion that the debt is not discharged, but only the remedy barred; I suppose it would not follow where the statute of limitations reads otherwise. Ordinarily the consequences of that doctrine are just enough; there is no reason why a man should not revive a debt by promising to pay it after it is outlawed, because there is no reason why he should not make himself liable by a bare promise anyway. But the situation is wholly different when the debtor is insolvent, and when he should no longer meddle with his property except to protect his creditors. The excuse for applying it then is that he may always pay an “honest debt”, and so he may, when it is he who pays it; but, if he pays while he is insolvent, he dips his hand in his creditors’ pockets in favor of one who, whatever his phantom “rights”, has by his own conduct forfeited all power to share in the common pot. How such a revival differs from a voluntary gift I cannot understand; if there is to be a revival, it ought to be within the power of the other creditors alone. Indeed, the ghostly nature of the whole doctrine is betrayed by that exception under which the debt is not revived when the acknowledgment consists of a preferential payment. In re German-American Improvement Co., 2 Cir., 3 F.2d 572. Surely, the fact that the payment is unlawful and may be recovered, should not affect it, qua acknowledgment of the continued 'existence of the debt; it is that, and that alone which revives jt, and the unlawfulness of the payment cannot erase that fact.