Court Opinion

ID: 6228942
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:17:29.707914+00
Date Added: 2024-06-11T08:57:46.927399
License: Public Domain

The opinion of the court was delivered June 30, by
Chambers, J.
Lewis Stone, on the 16th November 1841, assigned to Miller, Bowman & Co.,- to whom he was indebted by book-account the sum of $564.67, a promissory note of Emanuel Rubens, dated January 1, 1841, at four months, for $581.28, on which $281.28 had been paid and credited, and also a book:account which Stone held against Levi Bumgardner for $289.55. The assignment of Stone on the back of the note is under seal, and contains the following covenant: “ And in case the same cannot be recovered of the within-named Emanuel Rubens, then I do promise and agree to pay the amount thereof, together with all charges thereon accruing unto said Miller, Bowman & Co.,” with a like covenant in the assignment of the book-account against Bumgardner. At the time of the assignment, Mr. Beardsley, attorney of Miller, Bowman & Co., gave to Stone a written agreement “that if any thing remains over and above, after discharging our account of $564.67, of October 27, 1840, interest after six months credit against Stone, and costs of collecting' the same, it shall be returned to said Stone.” At the time of making the said assignment, Stone represented to Mr. Beardsley that Rubens and Bumgardner were pedlars, and were in the West, but that they would return to Clinton county in the next spring and pay the note and account; and that he would let Mr. Beardsley know when they came in. Mr. Beardsley proposed to send the claims to Pittsburg, where they sometimes came to buy goods, but Stone assured-him it would do no good, as they were moving from place to place in the Western States; and that he would inform Mr. Beardsley when they should return to Clinton county. Mr. Beardsley, relying on these representations, frequently called on Stone in the spring and summer after the assignments, but never learned that Rubens or Bumgardner had come, or were within the reach of process, and there was no opportunity to collect any thing from them. On the 9th May 1842, Stone petitioned for the benefit of the bankrupt laws of the United States. On the 6th June 1842, he was decreed a bankrupt, and on the 22d November 1842 was discharged as a bankrupt of and from all debts, &c. This action is on the guaranty, to which Stone has put in the plea of bankruptcy, setting forth his discharge. The question arising on the facts stated is the effect of this discharge. The assignments by Stone to Miller, Bowman *456& Co. of the note of Rubens and account of Bumgardner, with the guaranty of Stone under seal, were not per.se an extinguishment or satisfaction of the original indebtedness of Stone. Whether a note or bond was accepted in satisfaction of the original claim is matter for the jury, and it is error in the court to decide it as matter of law: Jones v. Johnston, 3 W. & Ser. 276; Leas v. James, 10 Ser. & R. 307; 4 Watts 379, Wallace v. Foreman; Hart v. Bollar, 15 Ser. & R. 162. As the claims transferred were the indebtedness of others, accompanied with the guaranty of Stone under seal, and no agreement to receive the same in satisfaction of the original indebtedness of Stone, they are to be considered as collateral security for the original debt, and .which they exceeded; and in the agreement of the attorney of Miller, Bowman & Co., made at the time, which provided that if from those assignments any thing should remain over and above, after discharging Miller & Stone’s account of $564.67 and costs, it was to be returned to Stone, there is evidence that such assignments were intended as a concurrent or additional security; and where that appears, they are to be treated according to that intention: Wallace v. Foreman, 4 Watts 380.
What was the liability of Stone on his guaranty when he became bankrupt ? The assignment and guaranty had been given by him on 16th November 1841, and he assumed and was allowed to direct the measures to be taken by Miller, Bowman & Co., or their attorney, for the collection of the assigned claims. Stone induced forbearance by the' assurance that Rubens and Bumgardner, who were pedlars in the West, would return to Clinton county in the next spring and pay the note and account; that to send the claims to Pittsburg for collection would do no good; that they were moving from place to place, and that when Rubens and Bumgardner returned, he would inform Mr. Beardsley, the attorney of Miller, Bowman & Co. Mr. Beardsley called on Stone frequently in the spring and summer, but never learned that these debtors had come within the reach of process. No money was collected from them.
Miller, Bowman & Co. were under obligation to use reasonable diligence to collect these claims ; and it was for their advantage to do so, as creditors of Stone. Stone could not complain that they acted in conformity to his advice and suggestions. Clinton county was by him approved of ,as the place for collection, to which he gave assurance that these itinerant pedlars would return the next spring and pay the note and account. On such assurances and representations he restrained measures for pursuing these debtors elsewhere. After the delay and disappointment occasioned by the representations of Stone, and at his instance, as stated, he became liable to Miller, Bowman & Co. on his guaranty. He had obtained forbearance, and induced expectations by his assurances that were not realized; and by them lie waived any right he may have had *457to insist on' measures of collection by Miller, Bowman & Co. against Rubens and Bumgardner elsewhere. At the time he was an applicant for the benefit of the bankrupt laws, Stone treated this his liability as an existing debt, for in the schedule of his debts as stated, and which was prepared by Mr. Beardsley as his attorney, Miller, Bowman & Co. are returned as creditors on the book-account and note for $564.67. Stone having received his discharge and certificate as a bankrupt under the act, on the 22d November 1842, the question is as to the effect of this discharge under the law and the facts of this case. Was the claim of Miller, Bowman & Co. provable under the bankrupt act against Stone ? In the view which we have taken of the existing original indebtedness of Stone, as well as the liability arising on his guaranty of the assigned note and account, there can be no question but that his indebtedness to Miller, Bowman & Co. was provable. By the fourth section of the bankrupt law, it is provided “ that a discharge and certificate, when duly granted, shall in all courts of justice be deemed a full and complete discharge of all debts, contracts, or other engagements of such bankrupt which are provable under the act.” But if the liability of Stone at the time of the proceedings in bankruptcy had been conditional under his covenant of guaranty, and not fixed and determined by the vigilance of the creditor, or by the waiver of Stone the debtor, yet under the provisions of the bankrupt law and the authority of the adjudications giving it construction and effect, the clairñ on such covenant of guaranty would have been provable. By the fifth section of the act it is provided that “ all creditors whose debts are not due and payable until a future day, all annuitants, 'holders of bottomry and respondentia bonds, holders of policies of insurance, sureties, endorsers, bail, or other persons having uncertain or contingent demands against such bankrupt, shall be permitted to come in and prove such debts or claims under this act, and shall have a right, when their debts and claims become absoluté, to have the same allowed them.” Free as this section of the law is from obscurity, yet as to its construction and effect, there has been some contrariety of decision in the State judicial tribunals. In some, too much regard would seem to have been given to the decisions of the English courts under their bankrupt act, distinguishable; as it was from the bankrupt act of the United States, which was more general and comprehensive. Our statute not only provided for “ debts due at a future day, sureties, endorsers and bail,” but includes “all uncertain and contingent demands” as being provable. In this court, too narrow a construction was given to this act in the case of McMullin v. The Bank of Penn Township, 2 Barr 343, which was followed by that of Cake v. Lewis, 8 Barr 493. In the construction and application of this act to the facts of this case, the' learned judge in the court below was governed by the cases named as of conclusive authority and *458direction to him on the subject. But as the construction and effect of this bankrupt act is one of cognizance in the judicial tribunals of the United States, the question of the effect of a discharge under this act of a bankrupt against the claim of his surety who had paid after such discharge, came before the Supreme Court of the United States in the case of Mace v. Wells, 7 Howard 272, where it was decided that the bankrupt was discharged from his claim, which was provable under the act. As the State tribunals, in determining questions of federal cognizance, ought to adopt and be governed by the rule of construction and decision adjudicated in that tribunal of controlling authority, this court, in the cases of Fulwood v. Bushfield, and McKinney’s Administrators v. Same, 2 Harris 90, felt bound to depart from the construction of the act before adopted in the cases referred to in 2 and 8 Barr, and conformed to that of the Supreme Court of the United States in Mace v. Wells, as one that bound by its conclusion and adjudication this court on the question. In the case ofFulwood-y.Bushfield, Justice Bell, who delivered the opinion of the court, remarks, “Whether our adjudication can be sustained upon the difference between guarantors and sureties, strictly so called, it is unnecessary now to inquire, though for myself I may be permitted to say, I see no reason for establishing a diversity in this particular between the two species of undertaking.” In this opinion we entirely concur, and that the fifth section of the bankrupt act is comprehensive enough to embrace the liability of the undertaking of the guarantor, which, though “ uncertain and contingent,” was provable, and consequently that the bankrupt was discharged by his certificate from all future liability under the provisions of the law and the adjudications referred to.
It is the opinion of the court that the plaintiff in these actions was barred by the certificate of bankruptcy of the defendant. Judgment reversed, and judgment entered for defendant.