In re Van Buren
In re Van Buren
Opinion of the Court
This is a motion to stay proceedings in an action against the bankrupts after judgment and after the issue, but before the service, of an execution ¡against the person. The judgment was recovered since the filing of the petition in bankruptcy in an action commenced long prior thereto. On behalf of the creditors it is claimed that the service of the execution cannot be stayed in a case where the debt is not dischargeable, being one, as is alleged, created by the fraud of the bankrupts, and that in this case the debt was not discharge-able. The uniform ruling in this court has been, how'ever, that if final judgment has not been recovered before the filing of the petition in bankruptcy, proceedings at any stage of the action, before or after judgment, will be stayed if the claim is provable, whether dischargeable or not, and that under sections 5106, 5107. and 5117 of the Revised Statutes, while a party who has been arrested before a stay is applied for will not be released if the debt is not dischargeable, yet the only test upon an application for a stay of proceedings under section 5106 is whether the debt is provable. And in practice a stay is constantly granted after judgment. See In re Rosenberg [Case No. 12,054]; In re Schwartz [Id. 12,502], Indeed, in a very late case on this subject, which is cited and relied on by the learned counsel for the creditors (In re Alsberg [Id. 261]), the rule is thus stated by Judge Bradford, and apparently approved by Mr. Justice Story: “The result of the authorities is that when a debt is provable, all actions against the debtor pending proceedings in bankruptcy shall be stayed, including arrests, with the exception that if the bankrupt has been arrested on a debt not dischargeable he shall not be released from the arrest by the bankrupt court.” To the same effect seems to be the decision of the supreme court of Louisiana in Keeting v. Arthur, 27 La. Ann. 570. The only question, therefore, is whether the debt is provable. While claims for unliquidated damages for purely personal torts have been excluded from proof, great liberality of construction has been shown in interpreting the word “debts” in the bankrupt law of 1867 (Rev. St. § 5067 [14 Stat. 517]). It has been held that a claim of the United States for the value of goods forfeited by violation of the revenue laws is provable. In re Vetterlein [Case No. 16,929]. Claims for conversion of personal property are clearly provable, and are referred to as such in section 5067. Cole v. Roach. 10 N. B. R. 288. In Re Schwartz [supra], Judge Johnston says: “ Where a claim originated in a contract, although fraudulently induced, and is prosecuted in. an action sounding in tort, it continues to constitute a provable debt, even though the fraud must be proved to entitle the plaintiff to a recovery.” It is evident that the form of action provided by law for the recovery of the claim is not decisive, and has very little bearing on the question. Nor does the recovery of a judgment so merge the original cause of action as to preclude the bankrupt court from inquiring into its real character.
In - the present case the plaintiffs in the
Reference
- Full Case Name
- In re VAN BUREN
- Status
- Published