NOTES OF RECENT CASES
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NOTES OF THE MOST IMPORTANT RECENT CASES COMPILED BY THE EDITORS OF THE NATIONAL REPORTER SYSTEM AND ANNOTATED BY SPECIALISTS IN THE SEVERAL SUBJECTS
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BANKRUPTCY. (Debts Discharged.) Mass. — The question whether an assignment of wages to be earned in an existing employment, given before bankruptcy without fraud and upon sufficient consideration to secure a valid snbsisting debt and duly recorded, can be enforced after discharge in bankruptcy of the assignor as to wages earned in the course of the original employment, by a creditor who has not proved his debt in bankruptcy, was passed upon by the Supreme Court of Massachusetts in Citizens' Loan Association v. Boston & Maine Railroad, 82 N. E. Rep., 696. The court held that a debt is not extinguished by a discharge in bankruptcy, but only the remedy on the debt is thereby barred, and that an assign ment of future earnings which may accrue under an existing employment is valid, and the assignee obtains thereby a present right, perfect in itself, requiring no further action on his part, which may be enforced either at law or in equity, and being a lien preserved by Bankruptcy Act, July i, 1898, c. 541, § 67d, 30 Stat. 564 [U. S. Comp. St. 1901, p. 3450] is unaffected by the discharge in bankruptcy. The bankrupt having received a discharge was no longer personally liable and the question in the case relates solely to marshalling his assets, the determination of the validity of the liens on his estate and the method of enforcing them. We notice that the trustee representing the creditors did not appeal from the order of the referee allow ing the property exempted and therefore no ques tion arises as to allowing the bankrupt to hold the property thus allowed him. This referee fol lowed § 6 of the Act as interpreted by the Supreme Court in Holden v. Stratton, 198 U. S. 202, giving full effect to the state exemption law. Under the Act of 1867 the questions raised in this case would have been decided by the Bankrupt Court, but under the present Act of 1898, Congress wisely provided that the State Court should have equal jurisdiction with the Bankrupt Court although tne latter may have possession of the assets. Ques tions relating to titles to real estate belong pecu
liarly to local courts and their decisions, rendered by a full Bench, will command greater weight and give better satisfaction than those of a single judge of a United States District Court, however able and strong that judge may be. The courts in this case have given a construction to the bankrupt law, based on well recognized authorities, and find no difficulty in the fact that the note in suit was not due at the time of bringing action. They follow an unbroken line of authorities beginning with in re Garlington, 115 Fed. Rep. 999, under the pres ent Act and reaching back to the same rule under the Act of 1867. They further, add with force and logic, that the plaintiffs have by their voluntary action [the going into bankruptcy] " estopped yourselves from having the foreclosure postponed until the debt you owe me matures by the terms of the contract for the purpose of protecting you hi your equity of redemption, and have subordi nated it to the right the law gives me of being admitted as a creditor of your estate for the balance of my debt, after deducting what the property brings at foreclosure sale, which must necessarily be made during the pendency of the bankruptcy proceedings on your estate." Charles Hamlin. University of Maine, School of Law. This decision is in accord with an Illinois de cision on the same subject. Mallin v. Wenham, 209 Ill. 252, 70 N. £. 564. That decision squarely rests on the ground that the assignee had a lien on the future wages, which, under §67 (d) of the Bankruptcy Act, remained unaffected by the dis charge. The preponderance of authority, how ever, is to the effect that the discharge operates to release such an assignment. In re West;-8 Fed. 205; In re Home Discount Co., 147 Fed. 538; Leitch v. Northern Pacific Ry. Co., 95 Minn. 35, 103 If. W. 704. A well written note discussing this conflict of authorities and disapproving of the Massachusetts decision is to be found in a recent number of the Harvard Law Review (21 H. L. R. 275). Lee M. Friedman.
