Court Opinion

ID: 8764353
Source: CourtListenerOpinion
Date Created: 2022-11-26 12:19:12.060082+00
Date Added: 2024-06-11T17:01:46.340040
License: Public Domain

TOULMIN, District Judge.
The claim is a judgment rendered by the circuit court of Mobile county, Ala., for damages for personal injuries caused by the alleged negligence of the bankrupt, by whom the claimant was employed at the time of the injury. The suit was brought under the employer’s liability statute (Code Ala. 1896, § 1749). It was commenced subsequent to the proceeding in bankruptcy and the adjudication of the defendant as a bankrupt. The referee held that the claim was not provable, and disallowed it. From this decision, the claimant appeals.
The only question presented is whether the claim is one provable against the bankrupt’s estate.
Section 63a of the Bankrupt Act (Act July 1, 1898, c. 541, 30 Stat. 562 [U. S. Comp. St. 1901, p. 3447]) provides that:
“Debts of the bankrupt may be proved and allowed against his estate which are * ⅜ * (4) founded upon an open account or upon a contract express or implied.”
The contention of the claimant is that his debt is founded upon an express or implied contract. The argument is that by the employment of the claimant by the defendant in the latter’s mill the employer’s liability statute became a part of the contract of employment; that the duties and liabilities which it prescribes became contractual duties and liabilities, or duties and liabilities springing out of the contract, and that, the claimant’s injury being caused by reason of a defect in the machinery used in the employer’s business, liability of the latter under the statute referred to constituted a debt founded upon a contract. The Supreme Court of Alabama, in the case of Alabama Great Southern R. R. v. Carroll, 97 Ala. 126, 137, 11 South. 803, 808, 18 L. R. A. 433, 38 Am. St. Rep. 163, in construing this statute, and where the same argument was made by the plaintiff in the case as is made here, said:
“Our conclusion is that the duties and liabilities incident to the relation between the plaintiff and defendant, which are involved in this case, are not imposed by, and do not rest in or spring from the contract between the parties. The only office of the contract, under section 2590 (1749) of the Code, *727is the establishment of a relation between them, that of master and servant; and it is upon that relation, that incident or consequence of the contract, and not upon the rights of the parties under the contract, that our statute operates. "The law is not concerned with the contractual stipulations except in so far as to determine from them that the relation upon which it is to operate exists.”
So, in this cabe,' the fact of the employment of the claimant was averred in the complaint, and doubtless proved on the trial, in order to determine therefrom that the relation upon which the said statute was to operate existed. The judgment which constitutes the claim in this case was not obtained in an action for the performance or fulfillment of a contract, or for the breach of a contract. No contract, express or implied, that the defendant would pay the claimant any amount of money, was involved in that action; but the action was one sounding in tort. It was an action for a negligent act of defendant, wherein the force of law gave damages. The debt claimed cannot, in my opinion, be said to be founded upon a contract, express or implied. It did not arise from or originate with the contract which created the relation of master and servant between the parties, but it arose from or originated with the negligent act of the master, and is founded upon such negligent act.
Judge Locke, in Re Morales (D. C.) 105 Fed. 761, said:
“The ancient rule and practice was that a breach of warranty, although based on a contract, was not an action for the performance or fulfillment of the contract, but was an action on the case sounding in tort.”
“A claim arising out of a tort must be reduced to judgment and be existing at the time the proceedings in bankruptcy are begun in order to be proved against a bankrupt’s estate.” Beers v. Haulin (D. C.) 99 Fed. 695. In re Hirschman, 4 Am. Bankr. Rep. 715, 104 Fed. 69.
The case of Crawford v. Burke is clearly distinguishable from the case under consideration. In that case, Crawford purchased, under the instructions of Burke, certain stocks and opened an account with him, charging him with commissions and crediting him with margins. Burke also advanced money to Crawford. Subsequently, and without the knowledge of Burke, Crawford sold the stocks, and thereby converted them to his own use. The court held that Burke could have sued Crawford in an action on contract for money advanced and for the value of the stock, or in an action of trover based upon the conversion. The point decided by the court was that his election to sue in tort did not deprive his debt of its provable character. The suit was where Burke sued Crawford after the latter’s discharge in bankruptcy. Crawford set up his discharge as a defense. The court below sustained the defense, holding that the case was one of fraud. The Supreme Court-reversed the case, holding that it was not a case of fraud as contemplated by the bankrupt* act, and that the discharge in bankruptcy was a defense. Crawford v. Burke, 195 U. S. 176, 25 Sup. Ct. 9, 49 L. Ed. 147. The claim in that case was founded on contract on Crawford’s part to pay over to Burke the money realized by the sale of the stock, and to repay the money advanced by him. Burke elected to sue Crawford in trover, instead of in assumpsit. The Supreme Court held his election did not deprive his debt of its provable *728character. It seems to me that that case and the case here are so manifestly unlike as to make it unnecessary to specifically suggest their distinguishing features.
My opinion is that the decision of the referee was correct, and it is affirmed.