Lewis v. Roberts

¶7Mr. .Justice Sanford

¶8delivered the opinion of the Court.

¶9The petitioner, Lewis, recovered a judgment against the Montevallo Mining Company for personal injuries caused by its negligence.' The Company was thereafter adjudicated a bankrupt in the Northern District of Alabama. Lewis filed in- the bankruptcy proceeding a proof of claim upon the judgment. The District Court confirmed an order of the referee disallowing this claim, upon the ground that- a judgment founded upon a tort was not provable, in bankruptcy. This decree was affirmed by the Circuit Court of Appeals. 294 Fed. 171. The writ of certiorari was then granted. 264 U. S. 578.

¶10This decision is in conflict with an unbroken line of decisions in other Circuit Courts of Appeals and in the District. Courts. Re New York Tunnel Co. (C. C. A.), 159 Fed. 688, 690; Moore v. Douglas (C. C. A.), 230 Fed. 399, 401; Re Putnam (D. C.), 193 Fed. 464, 468. And see Re Lorde (D. C.), 144 Fed. 320; Ex parte Margiasso (D. C.), 242 Fed. 990; In re Madigan (D. C.), 254 Fed. 221.

¶11We think these prior decisions were correct.

¶12Section 63a of. the Bankruptcy Act,1 entitled' “ Debts which, may be Proved,”'provides-.that: “Debts of the bankrupt may be proved and allowed against his estate which are (l).a fixed liability, as evidenced by a judg*469ment . . . absolutely owing at the time of the filing of the petition. . . . ” Section 1, (11) declares that the word “ debt ” as used in the Act shall, unless inconsistent with the context, be construed to include “ any debt, demand, or claim provable in bankruptcy.”

¶13It is clear that a judgment for tort is provable under the express provisions of § 63a(l). The language is broad and unqualified. It includes “ a fixed liability ” evidenced by a judgment ex delicto as well as by a judgment ex contractu, and makes the one as well as the other a provable “ debt.” There is nothing in the language or in the context which suggests its limitation to judgments founded on debts or warrants the reading in of such a limitation.

¶14This conclusion is confirmed by a consideration of other provisions of the Act. By § 17, as originally enactéd, it-was provided that: “ A discharge in bankruptcy shall release a bankrupt from all his provable debts, except such as . . . .(2) are judgments in actions for fraud, or obtaining property by false pretenses or false representations, or for wilful and malicious injuries to the person or property of another.” 2 This express exception of certain judgments for torts from the “ provable debts ” released by a discharge, plainly indicates that Congress understood that under . § 63a judgments for torts were “ provable debts ”, and is strongly persuasive as a construction of that section.

¶15Furthermore, if a judgment for tort is not a provable claim in bankruptcy under § 63a, it could not, under § 1; (11), be considered in determining whether one against whom an involuntary petition has been filed, is insolvent within the meaning of-§ 1, (15), providing that *470“ a person shall be deemed insolvent . . . whenever the aggregate of his property . . . shall not. . . . be sufficient in amount to pay his debts.” The result of this would be that a person having property in excess of his other debts could not be adjudged an involuntary bankrupt under § 3b of the Act, although owing judgments for tort exceeding the amount of his property. Clearly Congress did not. intend so anomalous a result.

¶16The trustee contends, however, that despite the broad language of § 63a(l),'the decision in Wetmore v. Markoe, 196 U. S. 68, necessarily leads to the conclusion'that only judgments founded in debt are provable claims. It was there held that under § 17 of the Act the arrears of alimony previously awarded to the wife of the bankrupt for . the support of herself and their minor children under' a final decree of absolute divorce was not a provable debt which was. released by the bankrupt’s discharge. The ' ground of the decision was that the court could look into the proceedings to determine the nature of the liability which had been reduced .to judgment; that a decree awarding alimony was not in any just sense a debt which had been put into the form of a judgment, but rather the ' legal means of enforcing the obligation of the husband to support his wife and children which was imposed upon .him by the policy of the law; and that it' could not be presumed, in the absence of a direct enactment, that Congress Intended that the Bankruptcy Act should be made :an.instrument by which the wife and children should be deprived of the support which it Was the purpose of the .law',to enforce. • It is .clear that this decision rested on the péculiar and. exceptional nature of a decree for alimony. There was. no suggestion in the opinion that an ordináty claim ex delicto that had been previously, reduced :to judgment was.not a provable debt; and we think that its'.reasoning neither leads to nor warrants such a conclusion.

¶17*471Nor is there anything to support this conclusion in Schall v. Camors, 251 U. S. 239, which dealt solely with unliquidated claims arising in tort, hot previously reduced to judgment, and held* merely that such unliquidated' claims, not being included in. the enumeration of provable. debts under § 63a, could not be liquidated and proven under-the provisions of § 63b.

¶18The decrees of the District Court and of the Circuit Court of Appeal are reversed, and the cause ig remanded to the District Court for further proceedings in .accordance with, this opinion.

¶19Reversed and'remanded.