Loring v. Kendall

Shaw, C. J. The only question now brought before the court, the same having been reserved by consent, notwithstanding the ’efault, is, whether William Lawrence, one of the sureties on the bond in suit, is liable, or whether he has a good defence in i certificate of discharge under the Bankrupt Law of the United States of 1841. Some objections are taken to this discharge for want of jurisdiction of the court by which it was granted. It is contended, that it must appear that, the bankrupt resides in the district where he applies, and that it should be distinctly averred in the petition, that he resides in the District of Massachusetts. Here he is described as “ William Lawrence, of Bos — 312 — ton, in the county of Suffolk and State of Massachusetts; ” and we may judicially take notice, that this is within the District of Massachusetts. Besides; the act itself, § 6, gives the district court in each district authority to prescribe suitable rules, regulations and forms of proceeding; and in executing this duty, the court is enjoined to make them as simple and brief as practicable It is found that this petition was in the form prescribed by the court for this district. This objection is overruled. Another exception is, that the petitioner did not state that he owed debts, not created in consequence of defalcation as a public officer, or as executor, administrator, guardian or trustee, or acting in other fiduciary capacity; and therefore that there was not enough stated in the petition to bring the case within the statute, and give the district court jurisdiction. But we think this objection cannot prevail. Again alluding to the authority above cited, respecting rules, regulations and forms, and requiring them to be brief, and to the fact that this petition pursued the prescribed form, we may add, that by the petition itself, a list of the debts was made part of it, and by the list it appears, that the petitioner did owe a large amount of debts not fiduciary, and so on the whole petition enough was stated to bring the case within the bankrupt law. The bankrupt is bound to show on his schedule the nature of his debts, at least so far as to enable the court to take jurisdiction of them. Chapman v. Forsyth, 2 How. 209. We are then to consider whether this certificate is a bar to the debt or demand sued for in this action. The discharge is of all debts due on the 16th of March 1842, and the question is, whether it is a bar to this action on a probate bond of a date prior to such discharge. A probate bond, under the law of Massachusetts, is a security and obligation, of a peculiar character, given by an officer charged by law with a duty and trust of a various and miscellaneous character, usually given in a round sum, with condition to. perform the duties of such trust. This condition, though expressed ■ in few words, from its very generality embraces a great variety of acts, to continue for a series of years, in which a great variety — 313 — of persons may have interests, as creditors, legatees, distributees, annuitants, wards, minors, married women and others. It is given to the judge of probate, not in his personal, but in his official capacity, as trustee for all persons beneficially interested, and on his decease, it passes to his successors in office, not to his personal representatives. It is obviously, therefore, a continuing obligation, of which there may be various and successive breaches. When put in suit, it must be in the name of the judge of probate, one judgment is rendered for the entire penalty, and execution may be awarded according to circumstances, and upon particular breaches averred and proved, in favor of certain individuals, as judgment creditors, creditors whose debts have been allowed under a commission of insolvency and payment of a dividend decreed thereon, or distributees whose claims are ascertained by a probate decree of distribution, or in favor of the judge of probate himself, for the general benefit. In case these various awards of execution do not exhaust the whole penalty, the judgment for the residue stands as a security for any other breach, which may at any time afterwards occur, to be sued for by a scire facias, either for the benefit of a party entitled to claim in his own right, or by the judge of probate, as trustee for others. We have thus far spoken of the liability created by a probate bond, as it affects both the principal and sureties. The administrator himself may be subject to various suits, by action or scire facias ; but the only liability of the surety is on the bond, and the only cause of action upon that liability, is the action to be commenced and prosecuted in the name of the judge of probate. In order, therefore, to see whether Lawrence, the bankrupt, was discharged by his certificate, from his obligation as surety on this probate bond, we must see whether there was any debt or claim which might have been proved, under the commission of bankruptcy, against him. ' An administrator with the will annexed is to give a like bond with an executor; and the executor is to give bond, amongst other things, to render an account within one year. Rev. Sts. c. 63, § 8, and § 2, cl. 3. And in this case, the facts show that — 314 — no account was rendered by the administrator within one year and so, it is contended, there was a breach of the bond. If it were so, it might be answered, that such a breach would be merely formal, would furnish a claim for nominal damages only, and so would not be a debt provable against a surety in bankruptcy. But we think there is, upon the facts, a better answer, which is, that such breach was waived before any claim against the bankrupt’s estate could be made. The bond was given May 28th 1838, and the year expired May 28th 1839. The first and only account rendered by the administrator is dated March 1st 1841, and the account was allowed and passed at a probate court, on the 22d of March 1841. The actual allowance of this account, without exception, especially upon the certificate of its correctness, and a request for its allowance, by the parties in interest, was a waiver of the prior breach in not rendering an account within a year, and the judge of probate, or other person suing in his name, in a suit on the bond commenced after such waiver, could not have assigned such failure to account within the year, as a breach. The case then was that of a subsisting, outstanding, unbroken bond, on which the bankrupt stood as surety, conditioned for ■the performance of duties created by law, by an administrator having the means in his power to perform all those duties; for he could be no further liable than he had assets to meet such liability. It was therefore, in legal effect, a bond conditioned for the fidelity of an officer appointed by law, to discharge plain and well defined duties. Such an existing obligation, we think, can in no just sense be considered a debt, either in prcesenti or in futwro. It may, in case of any future breach, be the foundation of a debt; but any claim arising from it, in the nature of a debt, will arise from the breach, and not from the mere existence of the obligation. Nor can this come under the head of contingent claims, as expressed in the fifth section of the Bankrupt Act. This applies to the case of debts in prcesenti, and which will become payable by lapse of time only; and if it applies to contingent debts, — 315 — such as those of indorsers, sureties, bail, &c. it means that when their debts become absolute, such creditors shall have a right to prove, and have them allowed. This manifestly applies to all that class of contingent liabilities, where a possible or contingent liability exists at the time of the filing of the petition, and where such contingency happens, and the contingent liability becomes an absolute debt, as where an indorser or surety pays the debt of his principal, and thereby becomes his creditor, in season to enable such creditor to prove his debt, or before the time for offering proof has passed, and the settlement of the estate been closed, and the funds distributed. The case presupposes that payment by the surety has been made, and so the debt become absolute. The effect of the discharge is expressed more than once in the act, with some slight difference in the language used. The provision in § 4 is, that “ every bankrupt who shall currender all his property,” &c. “ shall be entitled to a full discharge from all his debts.” In another part of the same section it is declared, that “ such discharge and certificate, when duly granted, shall, in all courts of justice, be deemed a full and complete discharge of all debts, contracts and other engagements of such bankrupt, which are provable under this act.” Here, although the phraseology slightly varies, the effect is the same. It is true that the terms “ contracts and engagements ” are used, yet they are contracts and engagements provable, and therefore contracts and engagements upon which there is some debt, payable presently or hereafter, or some claim or demand for money, upon which the holder can come into competition with other creditors, and -justly claim, pari passu with them, an equal distribution of the effects of a common debtor. Taken therefore in connection with the other provisions, and the general purposes and tenor of the act, the discharge cannot extend to contracts upon which no claim can be now founded, and in regard to which there is no reason to presume that any demand for money will ever exist. The actual breach, upon which the condition of this bond afterwards became forfeited, took place ten years after, when the administrator, upon being cited, failed to appear and render — 316 — an account; and thereupon a cause of action accrued. To this, the court are of opinion, that the defendant Lawrence’s discharge in bankruptcy in 1842 is no bar. Thus far we have treated a probate bond as if it were a common law security, held by the judge of probate, which in case of a breach of conditiomhe might have an action upon, or prove in a proceeding under the jurisdiction of the United States courts. But we have very great doubts whether it could ever be so treated or used, in case there had been a clear, actual breach of the condition, and money due from the principal and sureties, whilst the bankrupt proceedings against the surety were open and in progress, but no judgment of forfeiture on the bond. We have already said that a probate bond is an obligation of a peculiar character. We may add, it is not only provided for by the statute, but its legal effect, the mode in which it is to be used and prosecuted, the rights of parties to be secured by it, are all regulated by the statute. It is filed in the probate office for the benefit of all persons interested; suits may be brought upon it by certain creditors and distributees, whose claims have been liquidated and ascertained by judicial decision, without application to the judge of probate. Rev. Sts. c. 70, §§ 3—6. In all other cases, application is to be made by a party interested, to the judge of probate, for leave to sue the bond; if granted, such applicant indorses the writ, and becomes personally liable for costs, if he fail in the suit. The suit must be brought originally in the supreme judicial court, and in the same county, in the probate court of which the bond is taken. Either, then, the bond before suit, or the judgment for the penalty rendered afterwards, stands open and accessible to all persons, for whose benefit the law directs it to be taken, and for whom it is to stand as a security. Each of such parties may have a writ of scire facias in his own name, to recover part of said penal sum to his own use. Such a bond, therefore, has very few of the characteristics of a writing obligatory at common law, either as to parties, legal operation, or remedies, the objects to be obtained, or the mode of obtaining them. After judgment in the tribunal, which alone has jurisdiction — 317 — of a probate bond, when the liability, both of principal and sureties, is ascertained and fixed by a judgment for the penalty; and certain individuals in their own right, or the judge of probate, as trustee for others, have acquired a right to claim particular amounts; we are not prepared to say that such claims might not, in case of the bankruptcy of the surety, or even of the principal, be laid before the commissioners, and proved; the evidence, in such case, being the judgment in a court of competent and exclusive jurisdiction, and the awards of execution under it. But until a judgment on the probate bond, there appear to be strong reasons why such a bond cannot be deemed a debt, which could be proved, and if so, the liability of the surety, for this reason also, is not barred by his certificate of discharge in bankruptcy.