Art. 7. Enforcement of Remedies in Actions for Torts.

Section 572 is only applicable in an action in which an order of arrest has been issued.

This case was affirmed by the General Term, in Fourth Department, September 20, 1877, as appears by memoranda in the Court of Appeals, affirming the General Term decision without opinion, 110 N. Y. 668, cited together with Redner v. Jewett, 54 St. Rep. 774, 25 N. Y. Supp. 273, in Kreiser v. Scofield, 10 Misc. Rep. 350, 31 N. Y. Supp. 23.

The section in question was intended to relieve from arrest, under orders of arrest, any cases in which the diligence required by statute was not used by the plaintiff in charging the defendant by execution. It has no application to executions, except in respect to such as may be issued where the defendant has been discharged pursuant to the provisions of such sections, and the word mandate" referred to in such sections is the order of arrest mentioned in the beginning thereof. Hedges v. Payne, 85 Hun, 377, 32 N. Y. Supp. 968, affirmed, on opinion below, in 146 N. Y. 397. An execution against a person, although not issued within three months after the entry of judgment, is not void under section 572, and in case it is so issued the defendant's remedy is by an application to the court for his discharge from imprisonment, or to be relieved from imprisonment under the mandate on which application plaintiff has the right to show a reasonable cause why the application should be granted. Steamship Richmond Hill Co. v. Seager, 31 App. Div. 288, 52 N. Y. Supp. 985; appeal dismissed in 159 N. Y. 574.

Section 572 of the Code providing that where defendant was discharged from arrest for failure to take out an execution, he shall not be arrested upon the execution issued on the judgment. does not apply to municipal courts. Rogow v. Clark, 40 Misc. Rep. 208, 81 N. Y. Supp. 682.

§ 2. Under section 111 of the Code. Under section 111 of the Code it is the duty of the sheriff, where a person has been held in custody for more than three months under an execution or other mandate against the person, to enforce the recovery of less than $500, or for a fine for contempt of court for nonpayment of alimony after the expiration of three months to discharge him from custody; and in case the amount for the payment of which the defendant is imprisoned is $500, or over, the imprisonment shall not continue for a longer period than six months.

Art. 7. Enforcement of Remedies in Actions for Torts.

Section 111, as amended in 1886, limiting the time of imprisonment, “upon any execution or other mandate against the person," refers only to the final process or mandate under an adjudication fixing the amount due. It does not include orders of arrest issued at the time of the commencement of the action or before any recovery. Levy v. Salomon, 105 N. Y. 539. effect, Matter of Shepard, 43 Hun, 287.

To same

In computing the term of six months to imprisonment by which section 111 is limited, under a commitment imposed for contempt of court in the nonpayment of alimony in a divorce case, the time during which the person against whom the process runs is out of jail in the custody of his counsel pending habeas corpus proceedings, is not to be included. Actual detention within the prison walls of a jail within six months is what this provision of the Code contemplates in case of a commitment for contempt of court. In such a case no merely constructive restraint can be taken into account. People ex rel. Clark v. Grant, 47 Hun, 604, affirmed in 111 N. Y. 584.

Section 111 does not, where a husband has served three months in prison under a commitment for contempt of court in failing to pay alimony pendente lite awarded against him, preclude the court from again committing him to prison upon his failure to pay alimony and counsel fees awarded against him by the final judgment entered in the action. Reese v. Reese, 46 App. Div. 156, 61 N. Y. Supp. 760.

§3. Discharge under sections 2188 to 2199, 2200 to 2218.-Very elaborate provision is made by the Code by two apparently distinct remedies, sections 2188 to 2218, inclusive, for the discharge of a person imprisoned on execution against the person. Article 2 of title 1 of the Code, including sections 2188 to 2199, is entitled "Exemption from Arrest or Discharge from Imprisonment of an Insolvent Debtor." Article 3 of the same title, sections 2200 to 2218, inclusive, is entitled "Discharge of an Imprisoned Judgment Debtor from Imprisonment."

It is said in Matter of Brady, 69 N. Y. 215, affirming 8 Hun, 437, that the sole object of the statute is the discharge of honest debtors, who make an honest and full surrender of all their property to their creditors. The scope of this provision is considered in In re Caamano, 8 Civ. Proc. 29, following Sudam v. Belknap, 20 Hun, 87, and citing and distinguishing In re Brady, 69 N. Y.

Art. 8. Effect of Discharge in Bankruptcy.

215, the latter case holding that a judgment debtor imprisoned on execution, who has disposed of his property with intent to defraud the creditor at whose suit he is imprisoned, is not entitled to his discharge under the provisions of the Revised Statutes in relation to voluntary assignments by debtors so imprisoned.

Section 2202 of the Code may well be considered in connection with section 111 heretofore referred to. The procedure, as under these provisions, together with forms and citations of authorities, is fully given in Fiero on Special Proceedings, 468 et seq.

ARTICLE VIII.

EFFECT OF DISCHARGE IN BANKRUPTCY.

PAGE.

SUBDIVISION 1. Provisions of State and Federal statutes... 248 2. Decisions under Bankruptcy Law of 1867.. 249 3. Decisions under present Bankruptcy Act.. 251

SUBDIVISION 1.

Provisions of State and Federal Statutes.

The Code of Civil Procedure, § 1268, provides that at any time after one year has elapsed since a bankrupt was discharged, he may apply to the court in which judgment was rendered against him for an order directing that the judgment be canceled and discharged of record.

The Bankruptcy Law of 1867 (R. S., § 5117) excepted from discharge only fraudulent debts and fiduciary debts. The present law, section 17, provides as follows:

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"§ 17. Debts not affected by a discharge.—A discharge in bankruptcy shall release a bankrupt from all of his provable debts, except such as (2) are liabilities for obtaining property by false pretenses or false representations or for willful and malicious injuries to the person or property of another, or for alimony due or to become due, or for maintenance or support of wife or child, or for seduction of an unmarried female, or for criminal conversation; * * or (4) were created by his

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fraud, embezzlement, misappropriation, or defalcation while acting as an officer or in any fiduciary capacity."

The section as it stands above was so amended in 1903, and the amendments are shown in italics.

Art. 8. Effect of Discharge in Bankruptcy.

This section, as originally passed, was, as to the portion above cited, previous to the amendment, as follows:

"A discharge in bankruptcy shall release a bankrupt from all of his provable debts, except such as

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(2) are judgments in actions for frauds, or obtaining property by false pretenses or false representations, or for willful and malicious injuries to the person or property of another; or (4) were created by his fraud, embezzlement, misappropriation, or defalcation while acting as an officer or in any fiduciary capacity." It is said in Collier on Bankruptcy (4th ed.), p. 191, that section 17, section 14, on "Discharges," and section 63, on "Provable Debts," should be read together. That author further says that it is immaterial under the present act whether the debt was proved in bankruptcy; if it could have been proved the debt would be discharged. But the present law contains no provision that the proving of the debt shall constitute a waiver of other remedies, and the creditor loses no remedy by proving the debt, and, unless a discharge is granted and pleaded, a subsequent suit can be maintained. (Citing authorities.)

This view is sustained by Frey v. Torrey, 70 App. Div. 166, holding that: "Proof in the bankruptcy proceedings of an indebtedness created by the fraud of the bankrupt does not constitute an election which will estop the creditor from subsequently bringing an action against the bankrupt to recover the indebtedness created." (Affirmed July 9, 1903 (175 N. Y.) on opinion below.) Collier (4th ed.), p. 194, construes the present provision of the statute as follows: "Under previous laws, liabilities for torts were not discharged unless in judgment, and this though liquidation was not essential to bring a debt within the excepted classes. It is surely still the law where the wrongs relied on are within the terms of subdivision of section 17 (see Hun v. Cary, 82 N. Y. 65). When, however, the tort grows out of or is the result of consent or a contract, on broad principles and irrespective of the amendment, it will, it is thought, even if not in judgment, be discharged."

SUBDIVISION 2.

Decisions under Bankruptcy Law of 1867.

In Sheldon v. Clews, 13 Abb. N. C. 41, it was held that the act of a bankrupt in receiving money for his customers' account, knowing his own insolvency, and failing to disclose the fact, with the

Art. 8. Effect of Discharge in Bankruptcy.

intent to defraud the customer, is an active, express fraud within the meaning of the Bankruptcy Act of 1867, and is not discharged by a discharge in bankruptcy.

So, if a buyer who is insolvent conceals his insolvency to obtain goods, intending not to pay for them, this is a fraud upon the seller, and the claim is not discharged in bankruptcy. Reed v. Martin, 4 Hun, 590; Thomas v. Snyder, 27 Hun, 665, 60 St. Rep. 415; Argyle v. Jacobs, 87 N. Y. 110, affirming 21 Hun, 114.

The term "fraud" as used in section 5117 means active, express fraud, and not any implied from an illegal or unjustifiable act. Hennequin v. Clews, 77 N. Y. 427; Bergan v. Patterson, 24 Hun, 250.

The liability of trustees of a savings bank for mismanagement of its funds is not affected by discharge in bankruptcy. Hun v. Carey, 82 N. Y. 65.

A discharge does not affect an action for damages for forcible expulsion of a party from his place of business although such party has a claim for damages for trespass or conversion of his property at the time of the expulsion. Newman v. Goddard, 20 Hun, 563. A discharge bars a claim for conversion which does not amount to a positive and intentional fraud. Rowe v. Guilleaume, 18 Hun,

556.

An unauthorized sale by a broker of stock purchased by him for a customer, although conversion, does not in itself constitute such a fraud as is contemplated by the Bankruptcy Act. Nor does the insolvency of the broker at the time of the conversion conclusively show fraudulent intent. Stratford v. Jones, 97 N. Y. 586.

An action for the conversion of securities pledged to a defendant as collateral security for a loan is barred by defendant's discharge in bankruptcy. Hennequin v. Clews, 77 N. Y. 427.

A conversion is not "fraud" within the meaning of that word as used in the provisions of the Bankruptcy Act. The fraud intended by the law is positive fraud, or fraud in fact, as distinguished from constructive fraud, founded upon some breach of duty.

In Bradner v. Strang, 89 N. Y. 299, at p. 306, Earl, J., says, that a claim for damages on account of fraud committed is not discharged by bankruptcy proceedings. That debts only are provable in bankruptcy, and, therefore, only can be discharged in bank