Grocers' National Bank v. Clark

By the court, Mullin, J. I shall examine but two of the questions raised by counsel on this motion. .These are, first: Whether the plaintiff by appearing before the county judge and opposing defendant’s discharge is estopped from disputing the validity of such discharge as applied to the claim for which the defendant was imprisoned ? and, second: Whether the discharge granted by the said judge applies to and discharges the defendant from imprisonment for the claim, on account of which the arrest and imprisonment were had? 1st. As to whether the plaintiff is estopped from disputing the application of the discharge to its claim. It is not denied but that the county judge acquired jurisdiction of the proceeding, nor but that the discharge granted operates to discharge the person of the plaintiff from imprisonment “ by reason of any debts arising on contracts previously made.” The question therefore is, whether the discharge applies to the arrest, upon the plaintiff’s claim. It does apply if the claim is a debt arising on contract, not otherwise. To give to the discharge an effect greater than is permitted by the statute, would be to extend the jurisdiction of the officer by consent, to a case not only not contemplated but impliedly excluded from it. It is the'right of the party affected to assail an act of a public officer for want of jurisdiction, and he does not preclude himself from so doing by any agreement not to raise the question, oven if founded on a sufficient consideration (Dudley agt. Mayhew, 3 Comst. 9). Appearing and participating in proceedings over which a court or officer has not jurisdiction, does not prevent a party from assailing them for want of it (Garcie agt. Sheldon, 3 Barb. 232). But there was no want of jurisdiction in the officer to do all that he has attempted to do. The difficulty, if there is [124] any, lies in claiming for the discharge a much larger operation than is intended to be given to it by the statute. The plaintiff has an undoubted right to object to the discharge of the defendant from arrest, upon or by reason of its claim, unless it is a claim arising on contract. This brings me to the second and the only question of importance arising on this motion. Does the discharge apply to the claim of the plaintiff? By the first section of article five above cited, it is provided that every insolvent debtor may present a petition to one of the officers named therein, praying that his estate may be assigned for the benefit of all his creditors, and that his person may be thereafter exempted from arrest or imprisonment by reason of any debts arising upon contracts previously made. After prescribing the mode of proceeding upon such petition, the tenth section provides, that upon the imprisoned debtor complying with the provisions of the act, the officer to whom the petition was presented shall grant a discharge, declaring, and its effect is, that the person of such insolvent shall forever thereafter be exempted from imprisonment by reason of any debt due at the time of his assigning his property in obedience to said statute, or contracted before that time though payable afterwards, and by reason of any liabilities incurred by him by making or indorsing any note or bill of exchange, or incurred by him in consequence of the payment by any party to such note or bill, of the whole or any part of the money secured thereby, whether such payment was made before or after such assignment. It will be seen by reference to the provisions of the tenth, section that it is debts arising on contract only that are discharged. Is the plaintiff’s claim a debt arising on contract ? The pleadings may not under the Code present the facts upon which the plaintiff’s right to recover rests. The plaintiff may under the present, as wellas under the former practice, waive a tort, and seek to recover upon an implied promise to pay the debt or perform the duty set forth in the complaint. In this, as well as in other cases which might be125 enumerated, the plaintiff may proceed for a cause of action different from that which the facts in the case if disclosed would-warrant. It follows that the form of the count does pot in all eases furnish the court the best evidence of the real nature of the plaintiff’s claim. The facts out of which it originated must be ascertained in order to comprehend the real ground of the action.- In this case the first cause of action set out in the complaint is in trover. The second is, what under the old practice would have been designated a count in case, to recover ■damages for the fraudulently certifying that the drawers of ■checks upon the plaintiffs’ bank had funds therein applicable to the payment thereof, whereas in truth and in fact the drawers had no funds in said bank, by means whereof a large sum of money was fraudulently abstracted from said bank. Unless these facts create the relation of debtor and creditor between the defendant and the plaintiff, the claim of the latter is not a debt arising on contract. It is impossible it seems to me that a fraudulent conversion of the plaintiff’s money can against the will of the plaintiff be construed into a contract by which the one agrees to receive and the other to pay the money thus fraudulently abstracted. It is true that plaintiff might waive the fraudulent conversion and sue the defendant for so much money had and received to its.use, and if it had done so the defendant might be entitled to his discharge, but it has not so done. Both causes of action are in tort and not on. contract. It has not waived the wrong and elected to treat the defendant as its debtor. It charges him with the fraud, and demands the damages which it has sustained by reason of it. The use of the words debt," “demand" ox “indebted" in the complaint does not determine the nature of the action; that can be ascertained only from the whole complaint, and not from particular words or phrases which may be contained in it. Treating the action as one in tort, it follows that the [126] discharge does not apply to the imprisonment of' the defendant upon the claim set forth in the complaint. It was held in Crouch agt. Gridley (6 Hill 250), that a. discharge in bankruptcy did not, affect the defendant’s liability for seduction, although the cause had been tried by referees, the amount of damages agreed upon, and a report-signed but not delivered before the discharge. The courts say there is no ground for saying that the discharge reaches-his (the defendant’s) liability for this tort, unless the plaintiffs’ demand had become a debt before the petition was-presented. Gases are cited by Bronson, J., to show that even if a verdict had been rendered the claim for the tort would not have been impaired. Kellogg agt, Schuyler (2 Denio 73), holds that a verdict in trespass recovered before proceedings in bankruptcy, is not-affected thereby. In Strong agt. White (9 Johns. R. 161), the defendant was charged in execution for damages and costs in an action for libel. He afterwards obtained a discharge under the insolvent act and was brought up on habeas corpus to be discharged. The court says an action for libel is not for a debt or on a contract express or implied within the meaning of the act of the insolvent act of 1811, chapter 123. In Spalding agt. The People (7 Hill 301), a fine imposed, for violating an injunction was held not to be affected by a discharge in bankruptcy. The case of Hodges agt. Chase (2. Wend. 248), is directly in point and conclusive of this motion. In that case the plaintiff in vacation obtained a verdict against the defendant. in trespass. After the verdict, but before judgment, the defendant obtained a discharge in proceedings to exempt his person from imprisonment, and a motion was thereupon made to so enter the judgment as to exempt the body of defendant from imprisonment. But Marcy, J., held that the verdict was not a debt at the time of granting the. discharge, and it did not therefore protect the defendant (See also Smith agt. Bennett, 17 Wend. 479; Kennedy agt. Strong, 10 J. R. 289; 14 Id. 128.) [127] In the following cases it was held that a discharge under the act providing for the discharge of the person of a debtor from imprisonment, applied to judgments in actions for torts as well as contracts. (The People agt. The Marine Court, 3 Cow. 366; Ex parte Thhyer, 4 Cow. 66; Hayden agt. Palmer, 24 Wend. 364; Luther agt. Deyo, 19 Id. 629, and cases cited in note.) In the cases last cited as well as in the cases referred to in the notes to it, judgment must have been recovered, as in all of them the defendants were in custody under a writ of ca. sa., which issued only to enforce a judgment. No case has been cited nor have I been able to find any in which it has been held that a discharge in bankruptcy or insolvency affects actions of tort, unle'ss judgments have been entered. The issues joined in this case have not been tried, and of course no judgment has been entered and the defendant is not within the principle of the cases last cited. I am, therefore, constrained to deny the motion to exonerate the bail, with $10 costs of the motion.