Lowenberg v. Levine

De Haven, J. Action upon a money judgment recovered by plaintiff against defendant in a court of general jurisdiction in the territory of Montana wdiile plaintiff and defendant were residents of that territory, and upon a contract made and to be performed there.

Subsequently to the rendition of this judgment, the defendant filed in the superior court of the city and county of San Francisco his petition in insolvency, and such proceedings were thereafter had in the matter that upon August 14,-1888, the court duly made and entered its decree discharging plaintiff from all his debts and liabilities. At the date of this decree, and during the entire time of the pendency of these insolvency proceedings, both plaintiff and defendant were residents of this state. In his answer, the defendant pleads this decree in insolvency as a bar to this action. The case was submitted to the court below upon an agreed statement of facts showing the matters hereinbefore stated, and in addition thereto the following facts: “That in the schedule of indebtedness of defendant, Levine, filed with said petition in insolvency, was set forth, as required by law, a statement of the judgment rendered against him and in favor of the plaintiff, Lowenberg, by the district court of the third judicial district of the territory of Montana, in and for Lewis and Clarke County, as set forth in plain[218]tiff’s complaint; that said plaintiff, Lowenberg, never filed a verified or other statement of his claim and demand in said proceedings in involuntary insolvency, or in any other manner whatever participated in any of the proceedings connected therewith; but such failure to participate therein was due to no neglect, default, or omission on the part of the defendant, Levine.”

The court below gave judgment for the plaintiff, and the defendant appeals.

The only question presented in the record before us is, whether, in view of the facts as above stated, the decree discharging defendant from his debts and liabilities is a bar to this action. '

It is claimed by the appellant that as the parties hereto were resident citizens of this state at the time when the insolvency proceedings were begun, and until their completion, the decree therein discharging him from all his debts is conclusive upon the plaintiff and is a bar to this action, and that the binding force of such decree is in no wise affected by the fact that the judgment sued upon was recovered in the territory of Montana, and is based upon a contract made and to be performed there. In support of this proposition, counsel for appellant rely upon Felch v. Bughee, 48 Me. 9; 77 Am. Dec. 203; Hawley v. Hunt, 27 Iowa, 303; 1 Am. Rep. 273; Bedell v. Scranton, 54 Vt. 493; Marsh v. Putnam, 3 Gray, 551. These cases, however, with the exception of Marsh v. Putnam, 3 Gray, 551, are not in point, as in each of them, with the one exception stated, the only matter before the court for decision was as to the effect of a discharge in insolvency upon debts held by non-residents of the state in which the discharge was granted, the creditor not having proved his claim in the insolvency proceedings, nor otherwise participated therein; and it was with reference to this question that it was said in those cases that the binding effect of the discharge in insolvency then before the court depended upon the citizenship of the parties, and not upon the place of the contract. Thus in the case of Bedell v. Scranton, 54 Vt. 493, it is said: