Hunter v. Lissner

Hill, C. J. J. J. Lissner sued R. B. Hunter on a promissory note for $50, in the justice’s court for the 26th district G. M. The defendant at the first term filed a plea under oath, asking that the suit be suspended and stayed, because of bankruptcy proceedings then pending against him, until his application for a discharge in bankruptcy, then pending in the Hnited States district court for the southern district of Georgia, should be passed upon and determined. This plea is fully set out in the first headnote. Counsel for plaintiff moved to strike this plea, on the ground that it did not have attached thereto certified copies of the proceedings in the bankruptcy court referred to in said plea. The court sustained this motion, dismissed the plea, and entered up judgment against the defendant. This judgment of the justice’s court was carried by certiorari to the superior court, and, upon a hearing of the same, the superior court dismissed the petition. This judgment is assigned as error. 1. The judgment of the justice’s court, striking and dismissing the plea, was error. If the plea was defective because certified copies of the bankruptcy proceedings were not attached, it could have beeii amended on’special demurrer thereto. But we do not think it was necessary to have certified copies of the bankruptcy proceedings attached to .or made a part of the plea. The plea set out fully section II of the bankrupt act of 1898, and was sufficient and appropriate pleading to put the State court on notice of the pendency of bankruptcy proceedings and to permit proof of the averments of.the plea. This proof would be the bankruptcy proceedings referred to in the plea, properly authenticated. Bankruptcy act, -1898, §21, subsec. d. The production of a certified [3] copy of the petition in bankruptcy or of the adjudication^ will be enough to establish the fact that such bankruptcy proceedings are pending. - And while the State court must be informed by proper pleading of the facts, we know of no law requiring that proof of the facts must be made a part of such pleading. United States District Judge Shiras in the well-considered case In Re Giester, 97 Fed. 322, states the following rule as applicable to section II of the act of 1898, and points out the course to be pursued in cases like that now under consideration. “The bankrupt who is the defendant in the State court should file in court a proper pleading setting forth the pendency of the proceedings in bankruptcy, and, based thereon, should ask a stay as provided for in sec. II; and upon being thus informed of the pendency of the proceedings in bankruptcy, it will be the duty of the State court to grant the stay prayed for.” In Boynton v. Ball, 121 U. S. 457, it is said: “The State court could not know or take judicial notice of the proceedings in bankruptcy, unless they were brought before it in some appropriate manner — the State court does not thereupon lose jurisdiction of the case, but the proceedings may, upon the application of the bankrupt, be stayed to await the determination of the court in bankruptcy on the question of his discharge.” The same rule is laid down by the Supreme Court of Georgia in Rutherford v. Rountree, 68 Ga. 722; Howell v. Glover, 65 Ga. 466; Cohen v. Duncan, 64 Ga. 341; Steadman v. Lee, 61 Ga. 58. The plea being sufficient to authorize the proof of the facts therein set forth, the State court should have sustained the plea, and, upon the proof of such facts, the law required that the suit be stayed to await the determination of the court in bankruptcy on the question of the discharge. If the bankrupt is discharged, the certificate of the discharge would be a bar to any further prosecution of the suit. If the application for discharge is denied, the stay is at an end, and the suit proceeds to judgment. The suit in the State court being for the collection of a debt from which a discharge would -be a release, there can be no doubt that the law required that the stay asked for should have been granted until the determination of the application for discharge. Bankrupt act, §11; In Re Giester, 97 Fed. 322; Hill v. Harding, 107 U. S. 631; Collier on Bankruptcy (4th ed.), 121, 123, 127. This result follows whether the suit in the State court was brought before, or [4] after, the filing of bankruptcy proceedings. Collier on Bankruptcy, 131; In Re Basch, 3 Am. Bank, Rep. 237. It is insisted that the judgment of the justice’s court striking the plea ¿nd dismissing the motion to stay was right, because at the time of the motion more than twelve months had elapsed since the adjudication. It does not appear when the adjudication was made, and we can not assume that it was as of the date of the filing of the petition in bankruptcy or immediately thereafter. This limitation of the continuance of the stay of suits “until twelve months after the date of such adjudication” applies to suits “pending against the person” of the bankrupt before or when the petition in bankruptcy is filed and the adjudication had. It can not reasonably apply to suits brought against the bankrupt after the petition and adjudication. Besides, the act provides that if within the twelve months after the adjudication the bankrupt makes an application for discharge, the suit shall be stayed until the question of such discharge is determined; and the allegation in this case is that an application for discharge was pending when the request to stay the suit was made ’to the justice’s court. The object of the bankrupt law is to have an exclusive administration of a bankrupt’s estate fairly and equally between all unsecured creditors. It does not permit the harassment of bankrupts, by suits for the collection of simple debts from which a discharge would be a release, until reasonable time has been given for the determination of the question of discharge. Especially is this true when the creditor has gone into the bankrupt court and proved his debt. In proper cases it allows suits for the purpose of liquidation. 2. Attack is made in this court on the verification by the magistrate of the allegations in the petition for certiorari. This verification is in the following language: “The facts set forth in the defendant’s petition for certiorari are substantially true and correct, in so far as came within the knowledge of respondent.” The criticism made is that it verifies the facts only “in so far as they came within the knowledge of respondent.” We are not able to see how he could be expected to verify facts that did not come within his knowledge. In our opinion, the verification is sufficient; and if the judge below dismissed the certiorari on the ground that it was not sufficient, this was error. Judgment reversed.