Lackey v. Steere

Mr. Justice Scott delivered the opinion of the Court: The record in this case shows two distinct proceedings bathe circuit court. One is a motion to vacate the satisfaction of a judgment as to Ira Lackey, that had previously been rendered against him and one John M. Major, and the other is a scire facias to revive the same judgment as to Lackey. The circuit court vacated the satisfaction of the judgment, as it was asked to do by the motion, and revived it as to Lackey on the scire facias. The errors assigned call in question the correctness of both decisions, and as one is dependent upon the other, they will be considered together as presenting a single question. If it shall be ascertained the order vacating the satisfaction of the judgment was improper as against Lackey, it follows, as a matter of course, it was error to revive it as to him. As respects the facts, there exists no controversy. Pending a suit by Elisha B. Steere against John M. Major and Ira Lackey, on his own petition Major was adjudged a bankrupt in the United States District Court. Major did not ask for a stay of proceedings against himself, as he might have done under the Bankrupt act. The suit still progressed, and shortly after the filing of Major’s petition in bankruptcy, plaintiff obtained a judgment against both defendants. Subsequently the judgment creditor proved his claim against the estate of the bankrupt, but never received any dividend or money whatever •upon it. Later on, in August, 1819, Major was granted a discharge in bankruptcy. On the 14th day of December, 1882, execution was issued on the judgment against Major and Lackey, and real estate acquired by Major after his discharge in bankruptcy was levied upon and sold to the plaintiff in the execution, in full satisfaction of the judgment, interest and costs. Afterwards, Major filed a bill in chancery to set aside the sale of the property under the judgment, as a cloud upon his title, and a decree was rendered accordingly; but the satisfaction of the judgment as to Lackey still remained until it was set aside in this proceeding. It is said the judgment against Major, at the time the execution was issued, was an absolute nullity, on account of his previous discharge in bankruptcy, and that the sale on the execution was void for that reason, and being void as to Major, it is void as to Lackey also, and might be set aside on motion, as was done. This raises the direct question whether the judgment against Major, after his discharge, was a nullity. If so, the subsequent sale o'f his property under it would be void also. There can be no pretence the judgment was void as to Lackey, for the Bankrupt law provides, in express terms, “no -discharge shall release, discharge or affect any person liable for the same debt, or with the bankrupt, either as partner, joint •contractor, surety or otherwise.” (U. S. Eev. Stat. 1878, sec. 5118.) . But was the judgment a nullity as to Major after his ■discharge in bankruptcy? If it was not, it is plain the sale of his property thereunder was a satisfaction of the judgment, both as to him and Lackey. It must not be forgotten in the brief discussion that is to follow, thqt Lackey was not a party to the bill filed by Major to set aside the sale of his property under the execution issued on the judgment against them, and is in nowise affected by the decree rendered. His rights are precisely the same as if the bill had never been filed by Major, .and no decree rendered in favor of Major. That the judgment against Major, jointly with Lackey, notwithstanding his subsequent discharge in bankruptcy, was valid .as to him, as well as Lackey, not the slightest doubt is entertained. The court had jurisdiction of the subject matter, and of the persons of defendants, by service of process, and the judgment was valid and would remain in force, and might be -executed unless stayed or satisfied in some way known to the .law, by judgment or otherwise. Whether a judgment rendered by a State court is valid, under its laws, is not a Federal question, but whether its further execution might be stayed, after •discharge in bankruptcy, by force and operation of the Bankrupt law, may be, and no doubt is, a- Federal question. What the Supreme Court of the United States has decided as to the effect to be given to the discharge in bankruptcy after the .judgment, must therefore be regarded as controlling. It will be seen the Supreme Court, in Dimock v. Revere Copper Co. 117 U. S. 559, has held, in conformity with the State courts of Massachusetts, that a judgment rendered against the bankrupt, after his discharge, where he failed to plead such •discharge, was conclusive on the question of his indebtedness, and hence the judgment was valid. In Boynton v. Ball, recently decided in the Supreme Court of the United States, it was said the principle on which Dimock’s case was decided, was-that while the discharge in bankruptcy would have been a valid defence to the suit if pleaded at or before the time judgment ■■ was rendered in the Massachusetts court, it had, in that respect, no more sanctity or effect in relieving defendant of his debt to-plaintiff, than a payment or receipt or release, of which he-could only avail by plea, or otherwise bringing it to the attention of the court; but failing to do so, and showing no good-reason why he did not, it was held the judgment was conclusive, and for that reason plaintiff was permitted to revive the judgment against defendant, notwithstanding his previous discharge in bankruptcy. It will be seen the Dimock case is not sufficiently analogous in its facts with the one being considered, to be conclusive, one way or the other, upon the question whether the satisfaction of the judgment in this case can be set aside as to Lackey, and the judgment revived as to him. It does, however, support the view taken by the court, that the judgment against Major, notwithstanding Ms discharge in bankruptcy, was not a nullity, and the sequel will show that is an important point in the further consideration of the case. Neither is the case of Boynton v. Ball, supra, sufficiently analogous in its facts to be controlling authority on the principal question in the case being considered. In that case the judgment was rendered against Boynton prior to Ms discharge in bankruptcy, and hence he never had an opportunity to plead such discharge as a defenceto the action against him. The fact he failed to ask for a-stay of the proceedings against Mm, as he might have done under the Bankrupt law, was regarded as a matter of no consequence. As he pleaded Ms discharge at the first opportunity, and asked for a stay of execution against Mm, it was held he was entitled to relief. But that is not tMs case. Here, Major did not ask for a stay of execution on the judgment against, Mm, as he might have done under the rule declared in Boynton. v. Ball, but suffered execution to be issued, and Ms property io be sold in full satisfaction of the judgment, and costs against him and his co-debtor, Lackey. As has been seen, the judgment as to Major was valid, and it follows, as a matter of course, the execution and sale thereunder were valid, and operated as a full and complete satisfaction of the judgment, both as to Major and Lackey. It is apprehended it is too late, after the judgment against the bankrupt has been executed and his subsequently acquired property sold in satisfaction of the judgment, to ask for relief against such sale. He should have asked for a stay of execution of the judgment before the sale of his property, and failing to do that, and showing no good reason why he did not, the subsequent sale of his property must be regarded as regular and "valid. The case of Dimock v. Revere Copper Co. supra, is a ■strong authority in support of this view of the law. It would seem, therefore, to follow, as a matter of course, the satisfaction of the judgment, by the sale of Major’s property, was a satisfaction of the judgment as to Lackey, and there is no reason, in law or in equity, why the satisfaction should be set aside and the judgment revived as to him. Whether the sale of Major’s property was properly set aside on his bill, as to him, is a question not involved in the present discussion. As before remarked, Lackey was not a party to that suit, and had no opportunity to assert anything against the decree rendered in favor of Major, and is therefore not bound in any way by the decree. It is plain the sale of Major’s property, as was done, was in satisfaction of the judgment against Lackey, and that is a full defence to the present proceedings against him. The judgments of the Appellate and circuit courts will be .reversed, and the cause remanded to the circuit court. Judgment reversed.