Bates v. West

Catón, C. J. The only question which we propose to con sider is, whether the covenant of warranty, which was not broken till after the certificate in bankrupcy, was discharged by that certificate. Were this a new question, we should have no doubt how it should be decided. That statute declares that all “ uncertain or contingent demands against such bankrupt” shall be discharged by the certificate. No one who understands the broad meaning which the law gives to the word demand, can deny that it embraces all covenants of warranty, but in order to close the door against the argument of the inconvenience of proving up such demands as covenants which were not and might never be broken, Congress qualified it by the adjectives, uncertain and contingent. This covenant was both an uncertain and contingent demand, depending entirely upon the happening of a future event, which might never transpire. It comes precisely within the language of the Act of Congress, and admits of no argument in its support, and defies all argument against it. That the Act means what it says, is manifest from the fact that it enumerates several contingent and uncertain demands, evidently by way of example, to which are applicable, with equal force, all of the objections which are urged against this. Take for instance, holders of bottomry and respondentia bonds, and holders of policies of insurance. How can the holder of a policy of insurance prove up anything against the underwriter before a loss has happened, any more than the holder' of a warranty for quiet enjoyment, before he has been disturbed ? Others have attempted to explain how this was to be done under the law, and whether they have given the true mode or not, is a matter of perfect indifference now, as the question can never arise hereafter, and if it has ever been presented to any District Court heretofore in administering that law, we presume it was decided properly and satisfactorily. But this question has been most satisfactorily settled by repeated decisions of other courts. Substantially the same question was settled the other way in Wells v. Mace, 17 Vermont R. 503, but that decision was reversed by the Supreme Court of the United States, in 7th Howard R. 172. In Shelton v. Pease, 10 Missouri R. 473, this precise question was presented to the Supreme Court of Missouri, and it was held that the covenant was discharged by the certificate in bankruptcy. And after-wards in the case of Johnson v. Blowers, 5 Barb. R. 686, the identical question came before the Supreme Court of New York, and the same rule was adopted. The judgment of the Circuit Court must be reversed and the cause remanded. Judgment reversed.