This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
A discharge in bankruptcy merely gives to the debtor an affirmative defense which he may waive, or of which he may avail himself at his election. The bankrupt himself may of course use his discharge as a defense. So may those claiming under him by succession, such as his widow.1 Other persons2 cannot compel the bankrupt to plead the discharge if he does not wish to, and cannot plead it to protect their own interests. If the bankrupt elects to avail himself of his discharge as a defense, he must plead his discharge in the action against him on the claim to which he seeks to interpose his discharge as a defense.3 If the bankrupt does not plead his discharge properly he waives the defense.4 If the debtor does not attempt to plead his discharge until after verdict, it is too late.5 Still more clearly is it too late if he waits till after final judgment and then attempts to avail himself of his discharge as a defense. So if the bankrupt does not plead his discharge in a foreclosure suit, but permits judgment to be taken therein, he cannot plead his discharge in a suit based upon the foreclosure decree to recover the balance due thereon.6 A judgment against a bankrupt after his discharge has been granted cannot be treated as a nullity. Thus, A and B were jointly liable. A obtained a discharge in bankruptcy. Subsequently the creditor obtained a judgment against A and B jointly, A not pleading his discharge in bankruptcy. Execution issued: A's property was levied on and sold and the judgment was satisfied on the record. Subsequently in a proceeding to which B was not a party such sale was set aside and the satisfaction was vacated. The creditor then attempted to enforce the judgment against B on the theory that the judgment against A was absolutely void and hence the satisfaction was a nullity; and the judgment against B was valid and in full force. This theory was held to be untenable, the judgment against A being valid, and the satisfaction preventing the enforcement of the judgment against B.7 The pleading need not show the jurisdiction of the court of bankruptcy as this may be presumed.8 Some courts hold that the answer pleading a discharge must show notice to the creditor in question as provided for by statute ;9 while other authorities hold that regularity in proceedings will be presumed, and it will accordingly be presumed that notice was given as required by law.10
8 In re Hale, 107 Fed. 432 (involuntary proceedings) ; In re Meyer, 98 Fed. 976; 39 C. C. A. 368; Strause v. Hooper, 105 Fed. 590; In re Barden, 101 Fed. 553.
1 Upshur v. Briscoe, 138 U. S. 365.
2 Bush v. Stanley, 122 111. 406; 13 M. E. 249.
3 Griffith v. Adams, 95 Md. 170;
52 Atl. 66; Lane v. Holcomb. 182 Mass. 360; 65 N. E. 794; Balk v. Harris, 130 N. C. 381; 41 S. E. 940.
4 Griffith v. Adams, 95 Md. 170; 52 Atl. 66.
5 Lane v. Holcomb, 182 Mass. 360; 65 N. E. 794.
6 Leisure v. Kneeland. 2 Wash. 537; 26 Am. St. Rep. 888; 27 Pac. 176.