Court Opinion

ID: 6575017
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:33:26.453111+00
Date Added: 2024-06-11T15:57:03.541335
License: Public Domain

The opinion of the court was delivered by
Bennett, J.
It has been argued that the plea in bar is bad. We think there may be some difficulty in sustaining it; but we are not inclined to pass upon it. It will be much easier for the defendant hereafter to make a plea free from objection, if occasion should call for it, than for the court to sustain the present one. Treating the plea as good, we see no reason why the replication is not a good answer to it, and the question is upon the rejoinder.
This the* counsel have criticised with some severity; claiming that the estoppel is not well pleaded in form; but we will pass over, in our opinion, that which is but matter of form, and dispose of, the case upon such grounds as may govern the cause in a future trial, if there should be one.
The fourth section of the Bankrupt Act provides, in express *339terms, for the conclusiveness of the discharge of the bankrupt, when duly granted, unless impeached for fraud, or the willful concealment of property. If the debts were proveable, the statute in effect declares, that in case the discharge and certificate' were super-induced- by fraud, they may be impeached on that ground, as being null and void. But this does not affect the question now before us. The effect which shall be given to the adjudication of the District Court, (that there was no fraud, which should debar the bankrupt from his discharge and certificate,) is still an open question.
I apprehend that the proceedings of the District Court, in cases of bankruptcy, are in the nature of a proceeding in rem, like a proceeding in the English courts to obtain an outlawry, and upon common principles would have been conclusive upon the creditors of the bankrupt, who might have appeared and proved their debts, and made their objections, although they neglected to do it upon proper notice.
The statute gives the right to impeach the certificate for fraud, and perhaps the same result would follow, if the statute had not in terms been express on this point. In cases free from fraud, no principle is more important to the welfare' of the community, than the one which prohibits matters that have once been solemnly decided, from being further drawn into controversy, and the principle should have every reasonable application. Downer saw fit to litigate the question of fraud before the District Court, on certain specific charges. The court had jurisdiction, and did adjudicate upon the matter charged, between the contending parties, and we think so far as the adjudication went, it must conclude the parties.
It may, and has been said, that the matter of fraud was gone into before the District Court, to prevent the bankrupt from obtaining his discharge, and for that purpose the adjudication may be conclusive, but not further.
"We apprehend that estoppels have ordinarily a collateral operation, out of, and beyond the immediate proceeding in which they are created; and though the statute, in terms, gives the right to impeach the certificate for fraud, yet where the .precise question of fraud has been passed upon by the District Court, it is consistent with the statute to give the adjudication the operation of an estoppel, where there is an attempt to impeach the certificate for the same precise fraud, and we think sound policy requires it.
*340But in the case before us there is an attempt in the replication to impeach the certificate for further and other instances of fraud, beyond what were specified in Downer’s objections, and passed upon by the District Court. We think the adjudication should not conclude the plaintiff, as to such specifications; but we confine the estoppel to such as the case shows were passed upon. Others stand as all would have stood, if no objections had been filed before the District Court. This, we think, is a fair construction of the statute. As the rejoinder is not an answer to the whole replication, the judgment of the County Court must be reversed.
Judgment reversed and a repleader awarded.