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.
To constitute a provable debt, the debt in question must have been in existence when the proceedings in bankruptcy were instituted. A debt which comes into existence after a petition in bankruptcy is filed is not affected by such proceedings in bankruptcy,1 even though such debt arose subsequently out of a contract and the like, which was in existence when the proceedings in bankruptcy were begun.2 A discharge in bankruptcy does not protect a creditor against a judgment for costs rendered against the bankrupt after the adjudication in bankruptcy, even if such judgment is rendered in an action begun before such adjudication.3 A note given after proceedings in bankruptcy have been begun is treated as a debt then created, even if given for an antecedent debt which existed when proceedings in bankruptcy were begun. Such a note is therefore not barred by a discharge in bankruptcy.4 Such a note is analogous to a new promise.
judgment is rendered, the bankrupt should plead his discharge in bar; and his failure to plead it is a waiver of the defense.6 If a discharge is granted before judgment is rendered, but the discharge is not entered until after judgment is rendered, such discharge takes effect from the time it is granted and not from the time it is entered. It is therefore not a bar to such judgment.7 A liability for contribution on a judgment rendered after bankruptcy proceedings are begun, is said not to be a provable claim; and accordingly it is not barred by the discharge of the party from whom contribution can be exacted.8
If a judgment is rendered and the action is for a claim which was a provable debt while bankruptcy proceedings are pending, a discharge in bankruptcy subsequently rendered is a bar to the enforcement of such judgment 5 If a discharge is granted before
1 In re Burka, 104 Fed. 326; In re Both, 181 Fed. 667, 31 L. R. A. (N. S.) 270; Rice v. Murphy, 100 Me. 101, 82 Atl. 842; Hornthal v. McRae, 67 N. Car. 21.
See, Proof of Unmatured Claims in Bankruptcy, by Garrard Glenn, 10 Columbia Law Review, 700.
2 Colman Co. v. Withoft, 195 Fed. 260; Robinson v. Pesant, 53 N. Y. 419.
3 In re Marcus, 106 Fed. 907, 46 C. C. A. 116 [affirming, s. c, 104 Fed. 331].
4Lerow v. Wilmarth, 89 Maes. (7 All.) 463, 83 Am. Dec. 701.
5 United States. Boynton v. Ball, 121 U. S. 457, 30 L. ed. 985 [reversing, 105 111. 6271.
Kansas. Tefft v. Knox, 37 Kan. 37, 14 Pac. 441.
Kentucky. Pine Hill Coal Co. v. Harris, 86 Ky. 421, 6 S W. 24.
Maine. Gordon v. Texas Co., - Me. -, 109 Atl. 368.
Massachusetts. Huntington v. Saunders, 166 Mass. 92, 43 N. E. 1036.
Minnesota. Cavanaugb v. Fenley, 94 Minn. 505, 110 Am. St. Rep. 382, 103 N. W. 711.
New Jersey. Whyte v. McGovem, 51 N. J. L. 366, 17 Atl. 957.
Tennessee. Dick v. Powell, 32 Tenn. (2 Swan) 632; Locheimer v. Stewart, 91 Tenn. 386, 30 Am. St. Rep. 887, 19 S. W. 21.
Virginia. Blair v. Carter, 78 Va. 621.
West Virginia. Zumbro v. Stump, 38 W. Va. 325, 18 S. E. 443.
Reducing a partnership debt to judgment, after the commencement of bankruptcy proceedings, involving an individual partner, does not prevent such debt from being provable against the estate of such partner if credit is made for costs and interest after such bankruptcy proceedings began. Gordon v. Texas Co., - Me. -, 109 Atl. 368.
See Sec. 3135.
Contra, under a state insolvent law, on the theory that the debt is merged in the judgment and hence is not provable, while the judgment is not provable because rendered after bankruptcy proceedings were instituted. Emery, Appellant, 80 Me. 544, 50 Am. St. Rep. 440, 36 Atl. 092.
If the bankrupt has entered into a covenant of warranty, the question of the effect of a discharge upon his liability under such covenant depends on when such covenant is broken. If the covenant is broken before proceedings in bankruptcy are instituted the covenantor's liability thereon is barred by such discharge.9 If the covenant is not broken until after such proceedings are instituted, the covenantor's liability is not barred by such discharge.10 Liability on a bond, breach of which did not occur until two months after the petition in bankruptcy is filed, is not barred by a discharge in bankruptcy.11 A decree rendered against a stockholder based on his stock liability, in a suit to which he is not a party, makes his liability a provable debt; and such liability is barred by his discharge.12