Rand v. King , 156 Mass. 515 ( 1892 )

Lathrop, J.

At the time of the first publication of the notice of issuing the warrant in the insolvency proceedings, the defendant was liable on his express contract to pay the promissory notes, which he had signed as joint maker with the plaintiff and one other person; but he was also liable, on an implied promise, to contribute to both or either of the other joint makers of the notes his proportion of any sum which they or either of them might pay in performance of the contract expressed in the notes. The latter promise was contingent upon such payment being made, and was clearly a contingent debt. Such a debt is, by the terms of the statute, provable against the debtor’s estate in insolvency, if the contingency happens before the making of the first dividend. “ If the debtor is liable for any debt in consequence of having made or indorsed a bill of exchange or promissory note before said first publication, or in consequence of the payment by any party to a bill or note of any part of the money secured thereby, or of the payment of any sum by a surety of the debtor in any contract, if the payment is made before the making of the first dividend, such debt may be proved and allowed as if it had been due and payable by the-debtor before the first publication.” Pub. Sts. c. 157, § 26.

The defendant has received a discharge, under § 80 of the same chapter, by which, in accordance with the terms of § 81, he is absolutely and wholly discharged from debts proved against his estate, and from all debts provable under this chapter.

It follows that, as the plaintiff’s claim was provable, the discharge was a bar, and the ruling of the court below to this effect was correct.

The fact that no dividend was ordered at the third meeting is immaterial. Although § 103 contemplates the ordering of a dividend at such a meeting, yet there are often cases, like the one before us, where this is inexpedient, because the assets are small, and suits are pending against the assignee. There is no reason why an honest insolvent, who has fulfilled all the requirements of the law, and has received his discharge, should not be protected from a contingent obligation to a joint maker of a promissory note made before the insolvency, as well as from his obligation to the holder of the note. The statute makes the “ making of the-first dividend,” and not the third meeting, the time before which the payment of a contingent debt becomes provable; and the debtor has a right to avail himself of the language which the Legislature has seen fit to use.

Exceptions overruled.