CHAPTER X. PROMISE TO PAY DEBT DISCHARGED BY BANKRUPTCY. § 242. New Promise formerly valid in England. The law of England formerly was that a discharge in bankruptcy was not a release of the cause of action; and, therefore, if the debtor, after the time to which his discharge related, that is to say, after the proceedings in bankruptcy were begun, promised the creditor to pay the debt notwithstanding the discharge, the new promise revived the debt. In case of an absolute release such a new promise would of course be nudum pactum. § 243. By Present English Law, New Promise is nudum pactum. -This state of the law gave opportunity for preferences and frauds, because the new promise might be induced by some forbearance which the creditor might agree to exercise in the bankruptcy; and this is a fact very difficult to prove. Many of the statutes, in view of this danger, provided that any such promise should be void.2 Under the act of 1869, which contained no provision avoiding the new promise, the courts have held that it is, nevertheless, without consideration and void.3 These decisions overrule the earlier cases, without professing to do so, because they make a distinction when there is no substantial difference between the kind of discharge granted by the law of 1869 and that of the former acts. If, however, there is a new and valuable con 1 Lewis v. Chase, 1 P. Wms. 620; Twiss v. Massey, 1 Atk. 67; Ex parte Burton, 1 Atk. 255; Trueman v. Fenton, Cowp. 544; Brix v. Braham, 1 Bing. 281; Roberts v. Morgan, 2 Esp. 736; Birch v. Sharland, 1 T. R. 715. 27 Geo. IV., c. 57, § 61; 12 & 13 Vict., c. 106, § 204; 24 & 25 Vict., c. 134, § 164. 3 Jones v. Phelps, 20 W. R. 92; Heather v. Webb, 2 C. P. D. 1; Ex parte Barrow, 18 Ch. D. 464. sideration, such as an agreement to bankrupt, the promise will be valid. continue dealing with the But some of the statutes are broad enough to defeat even such a renewed contract.2 The modern rule is more consistent with principle than the former rule. The technical doctrine that the Statute of Limitations merely prohibited an action to be brought after a certain time is unphilosophical, and the supposed resemblance between the bar of that statute and that by a certificate in bankruptcy is misleading. A discharge in bankruptcy releases the debt for all purposes and in all places which the authority of the bankrupt law can reach, or in which it is respected, and there is no sound reason why within these limits it should not be as effectual as a release by deed. - § 244. In America New Promise valid if unequivocal. — The courts of this country follow the earlier English decisions, and hold that, in the absence of a regulation by the written law, such a promise may be supported by the consideration of the old debt. The promise must be distinct and unequivocal; a mere acknowledgment, whether by paying a part or otherwise, or a general declaration of an intention to pay every one, or the expression of a hope, or even an expectation of that sort, 1 Jakeman v. Cook, 4 Ex. D. 26; v. Kelly, 88 N. C. 227; Dyer v. Isham, Re Aylmer, 1 Manson, 391. 4 Ohio Circ. Ct. 429; Lanier v. Tolleson, 2 Evans v. Williams, 1 Cr. & M. 30; 20 S. C. 57; Moseley v. Coldwell, 3 Kidson v. Turner, 3 H. & N. 581. Maxim v. Morse, 8 Mass. 127; Shippey v. Henderson, 14 Johns. 178; Farmers v. Flint, 17 Vt. 508; Earnest v. Parke, 4 Rawle, 452; Dearing v. Moffitt, 6 Ala. 776; Corliss v. Shepherd, 28 Maine, 550; McWillie v. Kirkpatrick, 28 Miss. 802; Re Ekings, 4 N. J. L. J. 106 and note; Graham v. O'Hern, 24 Hun, 221; McDougall v. Page, 55 Vt. 187; Robinson v. Larabee, 58 Vt. 652; Murphy v. Crawford, 114 Pa. St. 496; Nelson v. Stewart, 54 Ala. 115; Underwood v. Eastman, 18 N. H. 582; Wiggin v. Hodgdon, 63 N. H. 39; Harris v. Peck, 1 R. I. 262; Yates v. Hollingsworth, 5 H. & J. 216; Horner v. Speed, 2 P. & H. 616; Fraley Bax. 208; Lanagin v. Nowland, 44 Ark. 84; Knapp v. Hoyt, 57 Ia. 591; St. John v. Stevenson, 90 Ill. 82; Ross v. Jordan, 62 Ga. 298; Craig v. Seitz, 63 Mich. 727; Carey v. Hess, 112 Ind. 398; Higgins v. Dale, 28 Minn. 126; Wislizenus v. O'Fallon, 91 Mo. 184; Griel v. Solomon, 2 So. Rep. 322 (Ala.); Webster v. Le Compte, 74 Md. 249. 4 Stark v. Stinson, 23 N. H. 259; Dyer v. Isham, 4 Ohio Cir. Ct. 429; Lawrence v. Harrington, 122 N. Y. 408; Wheeler v. Simmons, 60 Hun, 404; Jacobs v. Carpenter, 161 Mass. 16. "I will repay you when I return from L." Swan v. Lullman, 12 Mo. App. 583. See Reith v. Lullman, 11 Mo. App. 254. will not be enough. What will amount to a promise must often depend upon the whole conduct of the parties and the circumstances. The following expressions have been held to warrant a court or jury to find a promise: "I will pay;" "I will settle;" "I will see that you are no loser by me;" "She shall have her pay;" "Mr. S. will take an early opportunity to settle the account;" "I am able and willing to pay;" "Tell your wife I calculate to pay the whole note."2 A cognovit given after discharge in an action pending before, is valid.3 The question will be for the jury, unless it depends on the construction of a written paper. § 245. Conditional or Special Promises. If the promise is to pay when able, the plaintiff must prove the defendant's ability, and if he proves it, the action is maintained; and so of any other condition. It is said, too, that in these cases there must be evidence that the creditor has accepted the conditional promise; though it would seem that in the absence of dissent 6 1 Allen v. Ferguson, 18 Wallace, 1; Bartlett v. Peck, 5 La. Ann. 669; United Society v. Winkley, 7 Gray, 460; Mucklow v. St. George, 4 Taunt. 612; Brook v. Wood, 13 Price, 667; Roosevelt v. Mark, 6 Johns. Ch. 266; Brown v. Collier, 8 Humph. 510; Dearing v. Moffitt, 6 Ala. 776; Yoxtheimer v. Keyser, 11 Pa. St. 364; Stewart v. Reckless, 4 Zab. 427; Lynbuy v. Weightman, 5 Esp. 198; Randidge v. Lyman, 124 Mass. 361; Shockey v. Mills, 71 Ind. 288. Payments on a running account may be applied by the creditor in the usual mode, though this will pay some items of debt which have been discharged in bankruptcy, if the creditor was notified and did not know of the proceedings. Hill v. Robbins, 22 Mich. 475; Riggs v. Roberts, 85 N. C. 151; Shaw v. Burney, 86 N. C. 331; Brewer v. Boynton, 71 Mich. 254; Meech v. Lamon, 103 Ind. 515. "Stillwell v. Coope, 4 Denio, 225; Pratt v. Russell, 7 Cush. 462; Cook v. Shearman, 103 Mass. 21; Lobb v. Stanley, 5 Q. B. 574; Evans v. Carey, 29 Ala. 99; Harris v. Peck, 1 R. I. 262; 3 Sweenie v. Sharp, 4 Bing. 37. 4 Fitzgerald v. Alexander, 19 Wend. 402; Pratt v. Russell, 7 Cush. 462; Bennett v. Everett, 3 R. I. 152; St. John v. Stephenson, 19 N. B. R. 227 ; s. c. 90 Ill. 82. 5 Besford v. Saunders, 2 H. Bl. 116; Campbell v. Sewell, 1 Chitty R. 609; Scouton v. Eislord, 7 Johns. 36; Kingston v. Wharton, 2 S. & R. 208; Sherman v. Hobart, 26 Vt. 60; Bank of Mobile v. Boykin, 9 Ala. 320; Yates' Admr. v. Hollingsworth, 5 Har. & J. 216; Mason v. Hughart, 9 B. Mon. 480; Graham v. Hunt, 8 B. Mon. 7; Carson v. Osborn, 10 B. Mon. 155; La Tourrette v. Price, 28 Miss. 702; Randidge v. Lyman, 124 Mass. 361; Elwell v. Cumner, 136 Mass. 102. 6 Craig v. Brown, 3 Wash. C. C. 503, Fed. Cas. No. 3330; Samuel v. Cravens, 10 Ark. (5 Eng.) 380. his assent should be presumed. Promises to pay a debt in work, to give a note, to allow the amount in set-off, or even to pay by instalments without agreeing on the time for paying them, have been held not to revive the old debt; though such a promise may in some cases authorize an action sounding in damages.1 § 246. Whether it must be in Writing. At common law an oral promise will revive the debt; 2 but there are statutes in some of the States putting such a contract within the protection of the Statute of Frauds. It was held in many of the English cases that the new promise did not revive the right to arrest the person of the debtor on mesne process, under statutes which relieved the debtor's person from any action arising out of, or by reason of, the original debt. Generally speaking all rights to process would revive. § 247. Judgment on New Promise.-Though the promise should be void by statute, a judgment submitted to upon it will not be set aside, nor a voluntary payment be recoverable; 5 and if a new note or other security is given in part for the old debt and in part for the new, the creditor may recover the amount which represents the new debt. It § 248. New Promise revives the Debt for all Purposes. has sometimes been held that the action must be based on the new promise; but the better opinion is that an absolute promise to pay, or a conditional one which has become absolute, revives the debt, and that it may be declared on precisely as if it had never been barred, and the new promise may be replied 1 Porter v. Porter, 31 Maine, 169; Taylor v. Nixon, 4 Sneed, 352; Mucklow v. St. George, 4 Taunt. 612; Trustees v. Gilman, 55 Miss. 148; Bach v. Cohn, 3 La. Ann. 101. 2 Roberts v. Morgan, 2 Esp. 736; Barron v. Benedict, 44 Vt. 518; Henly v. Lanier, 75 N. C. 172. ib. 537; Ford v. Chilton, 2 Bl. 798; Peers v. Gadderer, 1 B. & C. 116. Sweenie v. Sharp, 4 Bing. 37; Denne v. Knott, 7 M. & W. 143; Philpot v. Aslett, 1 C. M. & R. 85. 30. 6 Evans v. Williams, 1 Cromp. & M. 7 Graham v. Hunt, 8 B. Mon. 7; 8 Spooner v. Russell, 30 Maine, 454; Carson v. Osborn, 10 B. Mon. 155; Pub. Sts. (Mass.) c. 78, § 3. ♦ Wilson v. Kemp, 3 M. & S. 595; Bailey v. Dillon, 2 Burr. 736; Couch v. Ash, 5 Cow. 265; Hubert v. Williams, Chabot v. Tucker, 39 Cal. 434; Murphy v. Crawford, 114 Penn. St. 496; Fraley v. Kelly, 88 N. C. 227. if the bar is pleaded, or may be given in evidence in answer to the discharge if set up otherwise. Any defence excepting the discharge in bankruptcy may be made to the new promise. which might have been made to the original claim. If the new promise was conditional, it is said that the reply should set out the condition and its performance; but this seems inconsistent with the authorities cited in the last note. The old debt revived by a new promise shares pro rata with new debts in a second bankruptcy though the new debts were contracted in obtaining all the new assets.3 § 249. New Promise must be after Proceedings are begun. The new promise may be made pending the proceedings in bankruptcy, and before as well as after the discharge is obtained; but if before or about that time, the transaction will be open to great suspicion of having been given to influence the proceedings. Indeed, the danger of oppression or collusion has been the motive for those statutes which make all such promises void, and perhaps the policy of those laws is the wiser policy. It was held in one case that a promise before the bankruptcy, that the debt should not be affected by a discharge, could be enforced after the discharge, on the ground that such a contract was collateral to the original debt, and not itself provable; but this judgment has not been followed, and under most modern statutes the premises would not be sound because collateral and contingent liabilities 1 Maxim v. Morse, 8 Mass. 127; Penn v. Bennet, 4 Camp. 205; Shippey v. Henderson, 14 Johns. 178; McNair v. Gilbert, 3 Wend. 344; Earle v. Oliver, 2 Ex. 71, per Parke, B.; Otis v. Gazlin, 31 Maine, 567; Way v. Sperry, 6 Cush. 238; Farmers v. Flint, 17 Vt. 508; Wakeman v. Sherman, 5 Seld. 85; Dusenbury v. Hoyt, 53 N. Y. 521; Turner v. Chrisman, 20 Ohio, 332. 2 Earle v. Oliver, 2 Ex. 71; Lerow v. Wilmarth, 7 Allen, 463. 3 Re Merriman's Est., 44 Conn. 587. 4 Roberts v. Morgan, 2 Esp. 736; Stilwell v. Coope, 4 Denio, 225; Earle v. Oliver, 2 Ex. 71; Corliss v. Shepherd, 28 Maine, 550; Kirkpatrick v. Tattersall, 13 M. & W. 766; Lerow v. Wilmarth, 7 Allen, 463; Otis v. Gazlin, 31 Maine, 567; Hornthal v. McRae, 67 N. C. 21; see article 9 Jur. part II. p. 481, criticising Kirkpatrick v. Tattersall, 13 M. & W. 766; Wiggin v. Hodgdon, 63 N. H. 39; Lanagin v. Nowland, 44 Ark. 81; Knapp v. Hoyt, 57 Iowa, 591; s. c. 42 Am. Rep. 59 and note; Graves v. McGuire, 79 Ky. 532, contra. Kingston v. Wharton, 2 S. & R. 208; Haines v. Stauffer, 13 Penn. St. 541. Reed v. Frederick, 8 Gray, 230. |