Atkins v. Spear

Dewey, J.

The defendant relies upon a discharge under the insolvent laws of this Commonwealth, as a defence to the present action. This discharge is in form correct; and the demand of the plaintiffs was proveable under the proceedings in insolvency, and was such as would be barred by a discharge properly obtained. But it is contended that this discharge cannot avail the defendant, by reason of certain illegal and fraudulent acts of his, in relation to his property. Of these acts, the first and principal one brought to our notice is the conveyance of his property, on the 7th of November 1842, to certain persons, in trust for his creditors, but containing reservations, and securing a beneficial interest for himself. •

Much argument and many authorities were introduced to establish the position, that this conveyance was in fraud of the United States bankrupt law of 1841, § 2. But, in the view we take of the matter, that question is not important here, and cannot effect the decision of the case. The defendant has not, in his specification of matter in bar of this action, mentioned any proceedings in bankruptcy, nor relied upon any certificate of discharge under the bankrupt law. If this conveyance of his property was in violation of the provisions of the bankrupt law, the consequences of such violation would have attached to the defendant, if he had come under the operation of that law ; but until, either by his voluntary application for its benefits, or by proceedings at the instance of his creditors, he became amenable to the jurisdiction of the courts of the United States, as a bankrupt, no importance attaches to the question whether this conveyance might have been.in violation of the bankrupt law. Dodge v. Sheldon, 6 Hill, 9. Nor is it of any consequence to consider, whether this conveyance might have been avoided by an attachment and levy of execution by any of his creditors. Apparently, it might have been, upon the ground of a direct reservation of $200 of the conveyed property to his own use and benefit. But the inquiry here is of a different character ; and the only ground, upon which the validity of this discharge is to be considered, is in reference to the insolvent law of 1838 c. 163, and the acts supplementary thereto, in force at the time when this discharge was granted. The proceedings before the judge of probate were under those statutes; and if, by force and effect of those statutes, the discharge is valid, that is all that is necessary to be shown to maintain the defence.

The bankrupt law had been repealed, and no proceedings were had against the defendant under that law. Upon the repeal of that law, the insolvent law of Massachusetts was revived, and, with its revival, all the limitations and restrictions upon the right to a discharge revived, although the acts had occurred during its suspension. If, therefore, the alleged acts of the defendant are within the cases specified in the insolvent law of 1838, c. 163, or the supplementary acts, in force on the 6th of May 1843, as avoiding a discharge, then they will have the effect contended for by the plaintiffs, but not otherwise.

We have looked at these grounds of avoidance of the dis charge, as arising under these statutes, and are of opinion that they cannot avail the plaintiffs.

1. As to the conveyance or assignment of property, executed on the 7th of November 1842. This was not a conveyance creating a preference, or priority among creditors; for the property was to be applied to the payment of the debts pro rata. 2. The delivery of property and money to Souther, to induce him to become a party to the assignment, violated no duty prescribed by these statutes. 3. If the defendant’s omission to return, in his schedule of property, his interest in the property conveyed to the assignees on the 7th of November 1842, is a valid objection, it must be so under § 10 of Si. 1838, c. 163. . To render it availing under that statute, the concealment of this property, or omission to include it in the schedule, must have been a fraudulent concealment or omission; but no such case of fraud was proposed to be shown. 4. The payment of money to Gibson, one of his creditors, on the 26th of November 1842, was not, under the circumstances stated and relied upon, a payment by the defendant with a view of giving a preference, that should operate to vacate his discharge.

Upon the whole matter, the court are of opinion that the ruling of the court of common pleas was right; and judgment will be entered on the verdict for the defendant.