Friend v. Talcott - 228 U.S. 27 (1913)
U.S. Supreme Court
Friend v. Talcott, 228 U.S. 27 (1913)
Friend v. Talcott
Argued January 30, 31, 1913
Decided April 7, 1913
228 U.S. 27
Under the Bankruptcy Act of 1898, as amended in 1903, a creditor is not bound to elect which remedy he will pursue against the bankrupt on a contract where the right to sue in tort also exists; nor does he waive his right to sue on the tort for balance of his claim by accepting his dividend under a composition. Crawford v. Burke, 195 U. S. 176.
Under the Bankruptcy Act of 1898, as amended in 1903, there are certain classes of creditors excluded from the act altogether and others who, although included therein, are excepted from the operation of the discharge. In this respect, the Act of 1898 differs from that of 1841, and follows that of 1867.
To constitute res judicata, there must be identity of cause between the two cases. That identity does not exist between the granting of a general discharge in bankruptcy and an action for the balance of a debt excepted by the act from the operation of the discharge.
A creditor, after unsuccessfully opposing a composition and a discharge in bankruptcy on the ground of fraud in creating the debt, accepted the dividend and then sued for the balance on the ground that the debt was excepted from the discharge. Held that there was no waiver of the right to sue on the tort by accepting the dividend, nor was the granting of the discharge res judicata of the claim for the balance of the debt.
179 F. 676 affirmed.
The facts, which involve the right of a claimant who has accepted a dividend under a composition to recover against the bankrupt after the discharge on the ground of deceit prior to the bankruptcy, are stated in the opinion.