Opinion
4 Div. 269.
December 17, 1942. Rehearing Denied January 28, 1943.
Appeal from Circuit Court, Covington County; Robt. S. Reid, Judge.
Suit on a note under seal by the First National Bank of Dozier against Ara S. Henderson, as Administratrix of the estate of T. E. Henderson, deceased. From a judgment of nonsuit, plaintiff appeals.
Reversed and remanded.
Defendant's rejoinders 4 and 5 are as follows:
4. The claim, obligation or demand set up by plaintiff by way of replication to defendant's pleas 3, 4 and 5 is barred by the statute of nonclaim in this: That this defendant was appointed administratrix of the estate of T. E. Henderson, deceased, on to-wit, the 20th day of April, 1939, by the Judge of Probate of Covington County, Alabama, and letters of administration upon said estate were duly issued to her on said date out of said court; that the defendant then gave notice of her appointment as such administratrix within thirty days from the grant of said letters of administration to her, stating therein the name of the deceased, T. E. Henderson, the date on which letters were granted to her, that the same were granted by the Hon. H. J. Brodgen, Judge of the Probate Court of Covington County, Alabama, and in which said notice all persons having claims against the estate of the said T. E. Henderson, deceased, were notified to present the same within the time allowed by law, or that the same would be barred; that said notice was given in a newspaper published in Covington County, Alabama, by publication therein once a week for three successive weeks; that on the 25th day of April, 1939, plaintiff, the First National Bank of Dozier, filed a claim in the office of the Judge of Probate of Covington County, Alabama, copy of which is attached hereto, marked Exhibit "A" and made a part of this rejoinder; that no claim was filed by said bank (plaintiff in this cause) in the Probate Office of Covington County, Alabama, against the estate of T. E. Henderson, deceased, other than said claim, copy of which is attached hereto marked Exhibit "A"; that nowhere in said claim filed by plaintiff is it shown or averred that after the 24th day of February, 1934, (the date of filing petition on which said T. E. Henderson received his discharge in bankruptcy, as alleged in defendant's pleas 3, 4 and 5) the said T. E. Henderson made an express promise to pay the balance due on the note sued on in the original complaint in this cause and which note was the sole basis of the said claim filed by plaintiff, as aforesaid; that the promise to pay alleged in the replication as having been made by said T. E. Henderson, if such promise was made, is a new undertaking and agreement and a new cause of action, for which a claim was not filed by plaintiff in the office of the Judge of Probate of Covington County, Alabama, within the time and in the manner required by law and defendant avers that in view of this plea of the statute of nonclaim a recovery by plaintiff in this case can only be based on a claim filed by plaintiff against the estate of T. E. Henderson, deceased, in the office of the Judge of Probate of Covington County, Alabama, as aforesaid, and said claim cannot give support to any other cause of action.
Wherefore, defendant says that the claim, demand or obligation set up in plaintiff's replications, which is the only claim, demand, or obligation on which a recovery can be had in this cause, is barred by the statute of nonclaim because the same was not filed within the time and in the manner required by law.
5. Defendant further avers that no other claim of any character or description has been filed against the estate of the said T. E. Henderson to the date of this rejoinder, other than the claim, copy of which is attached hereto, marked Exhibit "A" and that a statement of the claim, demand or obligation set up by way of replications filed by plaintiff to defendant's pleas 3, 4 and 5, was not filed in the office of the Judge of Probate of Covington County, Alabama, within six months from the granting of letters of administration to this defendant on the estate of the said T. E. Henderson, deceased, as required by Section 5815, Code of Alabama 1923, as amended, or at any other time.
Wherefore, defendant says that said claim, demand or obligation set up in plaintiff's said replications is barred by the statute of nonclaim.
Murphy Cook and E. O. Baldwin, all of Andalusia, for appellant.
After a debtor has been adjudicated a bankrupt he by a new promise to pay the original debt, if clear, distinct and unequivocal, becomes liable therefor in an action at law, and the creditor may sue directly on the new promise or, at his election, on the original debt and reply the new promise to a plea setting up the discharge in bankruptcy. Torry v. Krauss, 149 Ala. 200, 43 So. 184; Kelly v. Dirago, 29 Ala. App. 391, 196 So. 751; Griel Bro. v. Solomon, 82 Ala. 85, 2 So. 322, 60 Am.Rep. 733. The remedy upon a debt and the legal, but not the moral, obligation to pay are at an end. The debt itself is not extinguished as a moral obligation and will support a valid new promise. Covington v. Robinson, 242 Ala. 337, 6 So.2d 421; 6 Am.Jur. 802, § 484. The creditor may proceed either on the original debt or on the new promise. 8 C.J.S. Bankruptcy, p. 1577, § 583. The same strictness of pleading is not requisite to the assertion of rights in the probate court as in the courts of general commonlaw jurisdiction. It is sufficient if the claim and affidavit show a substantial subsisting liability in favor of claimant against decedent, and asserted in general terms, although not with the particularity of pleading in the courts of common law. Flinn v. Shackleford, 42 Ala. 202.
W. H. Albritton and Powell, Albritton Albritton, all of Andalusia, for appellee.
The cause of action upon which alone appellant could recover was the new promise set up in replication to plea of discharge in bankruptcy. The old debt and cause of action were extinguished by operation of law and no longer exist. Wolffe v. Eberlein, 74 Ala. 99, 49 Am.Rep. 809; Griel v. Solomon, 82 Ala. 85, 2 So. 322, 60 Am.Rep. 733; J. B. Ellis Co. v. Mobile, J. K. C. R. Co., 166 Ala. 187, 51 So. 860; Covington Bros. Motor Co. v. Robinson, 239 Ala. 226, 194 So. 663; Alper v. Republic Inv. Co., 65 App.D.C. 209, 82 F.2d 619; Needham v. Matthewson, 81 Kan. 340, 105 P. 436, 26 L.R.A., N.S., 274, 135 Am.St.Rep. 374, 19 Ann.Cas. 146; 11 U.S.C.A. § 35; Bradford v. Spyker's Adm'r, 32 Ala. 134. A condition precedent to recovery on a presented claim is that it must be based on the claim as presented and cannot give support to any other cause of action. State ex rel. Paramount Publix Corporation v. Dist. Court of Seventh Judicial District of Montana, in and for Dawson County, 90 Mont. 281, 1 P.2d 335, 76 A.L.R. 1371, 1380; Code 1940, Tit. 61, § 211; Floyd v. Clayton, 67 Ala. 265; Roberts v. Grayson, 233 Ala. 658, 173 So. 38; Burns v. Burns, 228 Ala. 61, 152 So. 48; Smith v. Fellows, 58 Ala. 467; Rice-Stix Dry Goods Co. v. Monsour, 178 Miss. 621, 174 So. 63; Elliott v. Mosgrove, 162 Or. 507, 91 P.2d 852; Id., 162 Or. 507, 93 P.2d 1070; U.S. Fidelity Guaranty Co. v. Blanchard, 182 Miss. 179, 181 So. 134.
Assumpsit on note under seal, alleged to have been executed by T. E. Henderson, defendant's intestate, to the plaintiff on the 8th day of February, 1933.
The defendant filed among others, pleas 3, 4 and 5, setting up, in short, that defendant's intestate, the maker of said note, was on the 21st day of February, 1934, duly adjudicated a bankrupt under the Acts of Congress, by the District Court of the United States for the Northern Division of the Middle District of Alabama, and thereafter in June, 1936, was duly discharged from the obligation to pay all debts and claims existing on and prior to the date of said adjudication, among others, the debt or claim represented by the note sued on.
To said pleas the plaintiff filed its replications, the first of which avers, "That after the said T. E. Henderson made composition of his debts and was discharged from said debts he promised to pay the note or obligation sued on in this case." The other replications are in substance the same except they aver the promise to pay the balance due on his note was made by said Henderson after June 1, 1936.
To these replications the defendant filed three rejoinders, the second averring, "That the demand or obligation set up by way of replication in this cause and upon which judgment is sought against this Defendant is an entirely new and distinct obligation from the demand or obligation sued on in the original complaint and that said demand or obligation set up by way of the replications by Plaintiff in this cause was not presented against the Estate of this Defendant's intestate within six months after the grant of letters of administration. * * *."
The third is in substance the same as the above while the fourth is more in detail, and will appear in the statement of the reporter. Attached to said rejoinder as Exhibit "A" is the claim filed in the office of the Judge of Probate of the county in which the letters of administration were granted within the time prescribed by the statute [Code 1923, § 5815; Code 1940, T. 61, § 211], duly verified, and to which a copy of the note sued on is attached, and in the affidavit of verification it is stated, "the above and foregoing statement of the account and indebtedness due by said T. E. Henderson, deceased, to said The First National Bank of Dozier is true and correct as above stated after allowing all just credits, and that the same, as shown by said statement is due and unpaid." Paragraph five is treated as a part of rejoinder four.
The plaintiff demurred to said rejoinders, the court overruled the demurrer, and the plaintiff thereupon took a voluntary nonsuit, and appealed. Code 1940, T. 7, § 819.
The adjudication and discharge in bankruptcy discharges the obligation to pay and bars the remedy, but does not destroy the debt or supplant the moral obligation to pay. Zavelo v. Reeves, 227 U.S. 625, 33 S.Ct. 365, 57 L.Ed. 676, Ann.Cas. 1914D, 664, 29 A.B.R. 493.
In the cited case, the first to interpret and apply the Act of Congress of 1898, 11 U.S.C.A. § 1 et seq. by the court of last resort, it was said, "It is settled, however, that a discharge, while releasing the bankrupt from legal liability to pay a debt that was provable in the bankruptcy, leaves him under a moral obligation that is sufficient to support a new promise to pay the debt. And in reason, as well as by the greater weight of authority, the date of the new promise is immaterial. The theory is that the discharge destroys the remedy, but not the indebtedness." 227 U.S. 629, 33 S.Ct. 367, 57 L.Ed. 676, Ann.Cas. 1914D, 664, 29 A.B.R. 493.
The text in 6 Am.Jur. at p. 802, § 484, founded on Zavelo v. Reeves, supra, dealing with the nature of the release, states the rule thus: "A discharge in bankruptcy releases the bankrupt from the obligation of a debt, not in the sense that the debt is paid or satisfied, but only that there is afforded the debtor a complete legal defense to an action on the debt if he chooses to avail himself of it. The remedy upon the debt and the legal, but not the moral, obligation to pay are at an end. The debt itself is not extinguished or canceled, and it still has life to furnish consideration for any valid contract that may thereafter be entered into concerning it. * * *."
The text was cited with approval and followed in Covington et al. v. Robinson, 242 Ala. 337, 6 So.2d 421, 423.
The defense afforded the debtor by the discharge in bankruptcy may be waived, and is waived in a suit on the original obligation, if not pleaded by the debtor. Covington et al. v. Robinson, supra; 6 Am.Juris. p. 827, § 522.
An express promise to pay, supported by the original debt and the moral obligation on the part of the debtor to pay, referred to in the books as a "new promise" is a waiver of the defense afforded by the discharge and may be pleaded as such by the creditor in replication to a plea setting up the discharge in bankruptcy. Wolffe v. Eberlein, 74 Ala. 99, 49 Am.Rep. 809; Griel Bro. v. Solomon, 82 Ala. 85, 2 So. 322, 60 Am.Rep. 733; Torry v. Krauss, 149 Ala. 200, 43 So. 184.
8 C.J.S., Bankruptcy, p. 1570, § 583. "The bar of the discharge may be removed or waived, however, and the debt revived by a new promise, made after the bankruptcy of the debtor, in accord with the rules hereinafter set forth, no new consideration being necessary to support such new promise. Many cases approach the problem from the standpoint of consideration and hold that a discharge in bankruptcy does not extinguish the moral obligation of the debtor to pay, such moral obligation constituting a sufficient consideration for a new promise by the debtor to pay the debt as permits recovery thereon, if such promise has not been obtained by fraud, and is not otherwise void as illegal or contrary to public policy."
The "new promise" pleaded in the replications to defendant's pleas is not "an entirely new and distinct obligation from the demand or obligation sued on" as asserted in rejoinder 2, but is a dependent obligation tied in with the original debt and the moral obligation of the debtor to pay.
The bar of the statute of nonclaim is a complete defense, independent of the discharge in bankruptcy, and the failure or not to comply with the statute, Code 1940, T. 61, § 211, is no answer to the replications setting up a waiver of the defense afforded by said discharge. It does not confess and avoid the matter set up in the replication, nor does it support the plea, but sets up an independent defense. Brookside-Pratt Mining Co., v. Booth, 211 Ala. 268, 100 So. 240, 33 A.L.R. 417.
The rule is thus stated in the case cited: "A rule of good pleading long prevailing is that whatever the parties respectively allege in their subsequent pleadings must be referred to, fortify, and support, respectively, the complaint or declaration of the plaintiff and the plea of the defendant. The observance of this rule is imperative to prevent an entire change of the 'foundation of the action and of the defense' by 'successive stages of the pleadings' and thus defeat the primary object of pleading. That is to say, the replication must so answer the plea as to support the complaint, and the rejoinder must so answer the replication as to support the plea. * * * " 211 Ala. 269, 100 So. 241, 33 A.L.R. 417.
Some of the grounds of demurrer to the rejoinder were well taken and the court erred in overruling the demurrer.
The demurrer to the fourth rejoinder was well taken for another reason. The averments of said rejoinder and the copy of the verified claim filed with the Judge of Probate, attached thereto, was a substantial compliance with the statute, and was sufficient to put the administratrix on inquiry. Code 1940, T. 61, § 214; Roberts v. Grayson et al., 233 Ala. 658, 173 So. 38.
The authorities are agreed that for the purposes of the remedy, the original debt may be still considered the cause of action. Herrington v Davitt et al., Ex'rs, 220 N.Y. 162, 115 N.E. 476, 1 A.L.R. 1700. The statute of nonclaim requiring the filing of the claim with the probate judge of the county granting the letters of administration is a part of our procedural law.
The judgment of nonsuit is reversed and vacated and the cause is remanded to the circuit court for trial.
Reversed and remanded.
THOMAS, BOULDIN, FOSTER and LIVINGSTON, JJ., concur.
GARDNER, C. J., and LAWSON, dissent.
I am unable to agree. The case of Wolffe v. Eberlein, 74 Ala. 99, 49 Am.Rep. 809, contains a full discussion concerning the effect of a discharge in bankruptcy and is demonstrative of the fact that the difference of views bears relation more to the question of pleading than to substantive law. 8 C.J.S., Bankruptcy, § 583, p. 1577. And even as to this matter the Wolffe case points out that the rulings as to the feature of pleadings present "an anomaly in the law", and is only adhered to because "sanctioned by long practice rather than in principle." But we are not concerned with distinctions of that character. What is most impressive and reaches to the foundation of this litigation is the fact that in this case the new promise by the discharged bankrupt is the very basis of plaintiff's cause of action. The claim filed speaks only of the original debt, the note executed by the discharged bankrupt.
Plaintiff presumably knew that as administratrix of the estate the defendant was under solemn obligation to recognize the fact that the debtor had been relieved of the legal obligation to pay by the decree in the bankruptcy court, and could not be permitted in any manner to waive such discharge. With this knowledge the plaintiff filed a claim with no reference whatever or any indication that its claim was founded upon a new promise made by the decedent.
In the Wolffe case, supra, the court said: "That the new promise is the true and real foundation of the cause of action, and, strictly speaking, upon it alone can a recovery be had. Such is the settled doctrine of this court, and since the case of Bell v. Morrison, 1 Pet. 351, 7 L.Ed. 174, decided by Judge Story more than fifty years ago, it may be regarded as the recognized doctrine in this country."
It is my view the prevailing opinion in this case falls to give proper recognition to the purpose of our statute of nonclaims. It is settled by our decisions that though technical accuracy is not required, yet the statement must of itself, inform the personal representative on an inspection of it, of the nature, character, and amount of the liability it imports, and must distinguish it with reasonable certainty from all similar claims. Roberts v. Grayson, 233 Ala. 658, 173 So. 39; Floyd v. Clayton, 67 Ala. 265.
The real purpose of the statute was that the claim give to the personal representative such proper information that he may determine — assuming its validity — how far he can proceed safely in the administration of the estate as solvent. Bibb Falkner v. Mitchell, 58 Ala. 657, Metcalf v. Payne, 214 Ala. 81, 106 So. 496.
It would seem clear enough that the claim filed fails entirely to meet the letter or the spirit of the statute. It contains no hint of a new promise and nothing whatever to distinguish it in the slightest from other similar claims of which the bankrupt had been discharged. Knowing of the discharge of the bankrupt and without the slightest indication of any claim of a new promise which must be the foundation of this suit, I respectfully submit the personal representative had the perfect legal right to consider this debt as discharged with the others in reaching a determination as to the solvency of the estate. The claim filed withholds from the administratrix the only pertinent fact which might lead to a contrary conclusion, a fact upon which plaintiff must rely for recovery. And so far as the very foundation of his claim is concerned his statement tells the administratrix nothing.
Much more might be said with additional citation of authorities. But I forego further discussion. I am fully convinced that the trial court correctly ruled and of consequence respectfully dissent.
LAWSON, J. concurs in the foregoing views.