incidental to a debt which is released. So where a surety contests his liability by which interest and costs are recovered against him, though he can prove in the bankruptcy of his principal only the amount which the creditor could have proved,1 he has no remedy against his discharged principal for the excess.2 § 441. Alimony; Support of Children. The courts are disinclined to permit the discharge of a bankrupt to release him from obligations to support his wife and children though they may have been entered into before his bankruptcy, such as alimony, etc. It is held that such liabilities are incapable of valuation, because they may be varied by the courts from time to time, and that they are hardly like other debts. Accordingly, while it is held that covenants to convey property as security are discharged by the certificate, it is seriously doubted whether the rule applies to covenants in a marriage settlement to settle after-acquired property for the benefit of the wife. This doubt appears well founded, for the covenant is to do an act rather than to pay a debt. In some cases the duty is imposed by statute, and the breach is punishable by fine, and therefore not within the bankrupt law.5 § 442. Continuing Contract; Apportionment. If the bankrupt is a party to an unfinished contract which his assignees elect not to assume, or which does not pass to them, damages which accrue to the other party to the contract after the date to which the discharge relates are not barred unless there is some special provision for that purpose in the statute or the other has availed of some power to rescind. And for benefits (disapproving Maughan v. Vinesberg, L. R. 3 C. P. 318); Willett v. Pringle, 2 B. & P. N. R. 190; McKeown v. Gurney, 147 Mass. 192. 1 Supra, § 195. 2 Fisher v. Tifft, 127 Mass. 313. 3 Millen v. Whittenbury, 1 Camp. 428; Overseers of St. Martin's . Warren, 1 B. & A. 491; Davies v. Arnott, 3 Bing. 154; Mudge v. Rowan, L. R. 3 Ex. 85; Re Garrett, 2 Hughes, 235, Fed. Cas. No. 5252; Bancroft v. Mit chell, L. R. 2 Q. B. 549; Re Robinson, 27 Ch. D. 160; Linton v. Linton, 15 Q. B. D. 239; Newhouse v. Comm. 5 Whart. 82; Comm. ". Miller, 34 Leg. Int. 20. See supra, § 172. 4 See dicta in Collyer v. Isaacs, 19 Ch D. 342; Lyde v. Mynn, 4 Sim. 505; 1 Myl. & K. 683. 5 See cases supra, § 190. 6 Thomas v. Williams, 1 A. & E. 685; Hopkins v. Thomas, 7 C. B. N. s. 711. received or debts accruing after that date under a continuing contract the discharged bankrupt must pay.1 The most common example of this is rent accruing after the bankruptcy.2 If the assignee has not taken shares in a company, so that they remain the property of the bankrupt it has been held that "calls" or assessments made after the bankruptcy are not discharged.3 § 443. Form of Action; Election to Prove. Formerly the mere form of action might decide whether a discharge was a bar; for if the creditor's debt was of such a nature that he had an election to sue in tort and did so sue, the plea of discharge in bankruptcy was bad, though he might have waived the tort and proved in the bankruptcy. The injustice of this rule, which substituted form for substance, was pointed out by Judge Livingston in New York. But his decision was in advance of his time and was overruled. One reason, though an inadequate one, given for the old distinction was that debts contracted by fraud ought not to be barred, is now met by direct legislation which excepts all debts so contracted. The law at present is different. All claims which can be called debts under the statute are provable, including in many statutes, damages for the conversion of personal property, and are of course discharged. It is in vain now for the creditor to bring his action in tort after the debtor has procured his discharge. Accordingly it has been held that in an action for breaking and entering the plaintiff's close and converting his goods, the defendant may plead his discharge to all that part of the declaration which relates to the conversion. And so of all similar actions. An able judge has said in sustaining a plea of discharge to an action on the case for breach of warranty: "A 1 Stinemets v. Ainslie, 4 Denio, 573; Robinson v. Pesant, 53 N. Y. 419. 2 Supra, § 169. 3 Glenn v. Howard, 65 Md. 40. 4 Gulliver v. Drinkwater, 2 T. R. 261; Lloyd v. Peell, 3 B. & A. 407; Parker v. Norton, 6 T. R. 695. 5 Hatten v. Speyer, 1 Johns. 37. 6 Kennedy v. Strong, 14 Johns. 128, affirming 10 Johns. 289. 7 Parker v. Crole, 5 Bing. 63, per Best, C. J. 8 Brown . Treat, 1 Hill, 225; Campbell v. Perkins, 8 N. Y. 430; Merrill v. Schwartz, 68 Maine, 514; Hayes v. Nash, 129 Mass. 62. 9 Bickford . Barnard, 8 Allen, 314 contract cannot be converted into a tort by the mere use of vituperative language in the declaration." 1 Some statutes have required an election. Thus a statute of Massachusetts discharged debts for necessaries if they were proved,2 and the act of Congress of 1841 had a similar provision in case of fiduciary debts. This is unjust, because it puts a creditor who is intended to be favored in a position which may be unfavorable. The better rule is that they shall prove their debts and give credit for the dividends. When election to prove discharges the exempted debt, a withdrawal of proof by leave of court revives the exemption.* § 444. Personal Exemption of a Creditor. When a creditor's exemption is merely personal to him, as, if he is beyond the jurisdiction, or is omitted from the schedule (if that is made a statutory exemption), or if he was a creditor under an earlier bankruptcy in which the debtor was refused his discharge; in these and similar cases he loses his privilege by proving his debt, because he thereby takes the benefit of the proceedings, and must take the burden also.5 § 445. Bail Bonds and Recognizances. - Bail are not liable for the debt until default, and if in the meantime the debtor receives his discharge, they will be exonerated by the court in a summary mode without actual surrender of the principal, if the debt is one which will be discharged. After they are "fixed" the debt becomes their own, and they will remain liable like other sureties.7 § 446. Discharge is Personal. A discharge is personal to the bankrupt, and does not affect any lawful lien, charge, or incumbrance existing on his property, but judgment may be 1 Merrill r. Schwartz, 68 Maine, 514. 2 Pub. Sts. c. 157, § 84. Wall. 409; Gilbert v. Hebard, 8 Met. 129; Burpee v. Sparhawk, 108 Mass. 3 Talcott v. Harris, 93 N. Y. 567; 111; Murray v. Roberts, 150 Mass. 353. Rev. Sts. U. S. § 5117. 4 Morse v. Lowell, 7 Met. 152. 5 Clay v. Smith, 3 Pet. 411; Van Hook v. Whitlock, 7 Paige, 373, affirmed, 26 Wend. 43; Jones v. Horsey, 4 Md. 306; Journeay v. Gardner, 11 Cush 355; Gilman v. Lockwood, 4 6 Mannin v. Partridge, 14 East, 599; Boggs v. Teackle, 5 Binn. 332; Olcott v. Lilly, 4 Johns. 407; Cunningham v. Brown, 5 Cow. 289; Geikie v. Hewson, 4 M. & G. 618. 7 Champion v. Noyes, 2 Mass. 481; Beers v. Haughton, 9 Pet. 329. specially entered thereon in rem. If the debtor himself does not choose to plead his discharge, a third person cannot avail of it, as, for instance, a creditor attaching a debt due the bankrupt after his discharge cannot object to a set-off by the garnishee of a debt due before, and a first indorser cannot object that a second indorser was discharged and need not have paid the note. So, though judgment creditors have a right to dispute the consideration of earlier judgments, it is no sound objection that a judgment was rendered with the debtor's consent for a debt discharged in bankruptcy.3 So if a bill is pending against the bankrupt and others alleged to be fraudulent trustees for him, his discharge releases only him. The cases cited for this point are some of them wrongly decided because they overlooked the consideration that the assignee has the exclusive right to set aside frauds, but the bankrupt's discharge has nothing to do with the question. So the discharge does not relieve any one liable for a debt of the bankrupt as co-partner, surety, or otherwise. This is equally true whether expressed in the statute or not, and applies to a statutory composition.6 Executors, next-of-kin and heirs are the bankrupt, and may plead his discharge; it is waste in an administrator not to plead it.7 It was once intimated 8 and once decided that if a creditor signed an assent to the discharge, he would release the surety; but this is a mistake, for the reason that if the surety wishes to control the debt he should pay it and prove for himself. If 1 Long v. Bullard, 117 U. S. 617; see supra, "Secured Creditors"; Holyoke v. Adams, 59 N. Y. 233. 2 Bennett v. Caswell, 7 Gray, 153, 155 per Thomas, J.; Bowman v. Pope, 4 George (Miss.), 94. ning, L. R. 10 Q. B. 406; Ex parte Jacobs, L. R. 10 Ch. 211; Guild v. Butler, 122 Mass. 498; Moore v. Stanwood, 98 Ill. 605. 7 Upshur v. Briscoe, 138 U. S. 365; Parker v. Grant, 91 N. C. 338; Blair v. 3 Thal v. Larmon, 25 Fed. Rep. 290. Carter's Administrator, 78 Va. 621 (that 4 Phelps v. Curts, 80 Ill. 109. Supra, § 94. 6 Tooker v. Bennett, 3 Caines, 4; Shellington v. Howland, 53 N. Y. 371; Pratt v. Chase, 122 Mass. 262; Megrath r. Gray, L. R. 9 C. P. 216; Ellis v. Wilmot, L. R. 10 Ex. 10; Simpson v. Hen a purchaser from a bankrupt after his bankruptcy may set up the discharge against judgment creditors claiming a lien by discharge of the judgment). 8 Moore v. Paine, 12 Wend. 123. 9 Re McDonald, 14 N. B. R. 477, Fed. Cas. No. 8753. he fails to do this, the creditor has and ought to have full control. This also applies to a creditor assenting to a compo sition.1 We have seen that under the modern statutes sureties, indorsers, and other persons liable for the debt may prove against their principal, or oblige the creditor to prove.2 It follows that the contingent liability of the principal debtor to the surety is discharged, whether the debt was proved or not.3 It makes no difference that the parties have agreed that the whole benefit of the dividend shall be retained by the creditor, for the law treats the entire debt as single however the parties may apportion it. The case of Soutten v. Soutten though never expressly overruled is inconsistent with later decisions and is unsound. § 447. Joint Obligations of Discharged Debtor are Discharged. The rule which marshals the assets of a partnership, applying the separate property to the separate debts, and vice versa, does not affect the proof of debts, but only the mode of liquidation. Therefore, if one partner is bankrupt, the debts which he owes jointly with his partners are provable, and he will, of course, be released from their obligation, if he obtains his certificate. The fact that there happen to be or not to be joint assets to distribute or a surplus for joint creditors is immaterial. This has always been the law of England, as clearly as the converse rule that separate debts are discharged by joint proceedings, and is the foundation of many other rules, such as, that a 1 See cases in note 6, p. 315, and Browne v. Carr, 2 Russ. 600; 7 Bing. 508; 5 Moo. & Pay. 497; Sigourney v. Williams, 1 Gray, 623. 2 Supra, § 173. All the liabilities mentioned in that chapter as provable, are discharged, unless within some special exception, such as fraud in their inception, etc. 3 Earle v. Oliver, 2 Ex. 71; Rolfe v. Caslon, 2 H. Bl. 57; Conley v. Dunlop, 7 T. R. 565; Buckler v. Buttivant, 3 East, 72; Filbey v. Lawford, 3 M. &. G. 468; Jackson v. Magee, 3 Q. B. 48. 4 Earle v. Oliver, 2 Ex. 71. 6 Ex parte Yale, 3 P. Wms. 24 note. Re Simpson, 1 Atk. 137 per Ld. Hardwirke; Ex parte Young, Rose, 40; Grace v. Heyham, Fitzgibbon, 281; Thomson v. Harding, 3 C. B N. s. 254, per Willes, J.; Ex parte Hammond, L. R. 16 Eq. 614; Wickes v. Strahan, 2 Str. 1157; Twiss v. Massey, 1 Atk. 67; Deacon, Bankruptcy, 608; Robson, 7th ed. 657; Lindley, Partnership, 6th ed. 770. |