Wilson v. Capuro

By the Court, Rhodes, C. J.: This action was brought on a promissory note. The defendants, among other defenses, alleged that they, as partners, commenced proceedings in bankruptcy; that they were duly adjudged bankrupts; that the proceedings are still pending; and that the plaintiff appeared in those proceedings and proved the indebtedness of the defendants to him on the note in suit. The demurrer which was interposed to this defense, raises the only question in the case.

It is provided by section twenty-one of the Act of 1867, to establish a uniform system of bankruptcy throughout the United States (14 U. S. Stats. 526), “that no creditor proving his debt or claim shall be allowed to maintain any suit at law or in equity therefor against the bankrupt, but shall be deemed to have waived all right of action and suit 'against the bankrupt,” etc. It is clear, from this provision, that a creditor who has proved his debt in the bankruptcy proceedings, cannot maintain an action on the same demand against the bankrupt. His right of action in the State Court, as well as in the Federal Courts, is waived. The purposes of the Act would, in a great measure, be defeated were the creditor permitted to recover a judgment on his debt, after having proved it in the bankruptcy proceedings. It is the intent of the Act that the Fedéral tribunals shall have the exclusive control of the assets of the bankrupt, and shall distribute the proceeds among his creditors. A judgment in a State Court, on a debt which has been proved in the proceedings in bankruptcy, would be useless unless it gave the creditor some lien or priority that he otherwise would not possess, or enabled him to enforce • the payment of the judgment without regard to the proceedings in bankruptcy.' A discharge in bankruptcy would be no relief to the debtor, if the creditor, after participating. in those proceedings, were entitled to maintain an action on his debt.

[552]Uo question arises in the case, as to whether a creditor can maintain an action, when the debtor has unduly delayed in procuring his discharge, or when the discharge has been denied, or when he has been guilty of fraud in the proceedings in bankruptcy; for no facts of that character are alleged or proved.

Judgment affirmed.