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execution creditors. It has already been shown that the rights of debenture holders are superior to those of creditors of the company subsequently issuing

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DEBT.

BY THOMAS JOhnson MichIE.

L. GENERAL DEFINITIONS, 983.

II. TIME OF PAYMENT, 987.

III. CONTINGENT LIABILITIES, 987.

IV. LIABILITY FOR UNLIQUIDATED DAMAGES, 989. 1. For Breach of Contract, 989.

a. In General, 989.

b. Attachment, Garnishment, etc., 990.

c. Liability of Stockholders and Officers of Corporations, 990.
d. Liability on a Policy of Insurance, 991.

2. For Tort, 991.

a. In General, 991.

b. Attachment, Garnishment, etc., 993.

c. Liability of Stockholders and Officers of Corporations, 993.

d. Verdict and Judgment, 994.

V. OBLIGATIONS WHICH HAVE BEEN HELD TO BE OR NOT TO BE DEBTS. 995.

1. Taxes, 995

2. Fines and Penalties, 997

3. Costs, 997.

4. Miscellaneous Examples, 998.

VI. LEGAL TENDER, 1000.

VII. LIMITATION OF MUNICIPAL INDEBTEDNESS, 1002.

CROSS-REFERENCES.

See CLAIM, vol. 6, p. 97; CREDITOR, ante, p. 238; DUE; INDEBTEDNESS; LOAN; and see the titles ASSIGNMENTS FOR BENEFIT OF CREDITORS, vol. 3, p. 1; ATTACHMENT, vol. 3, pp. 189, 191; DEBTS OF DECEDENTS, post; GARNISHMENT; INSOLVENCY AND BANKRUPTCY; LIMITATION OF ACTIONS; MARSHALING ASSETS; NOVATION; PLEDGE AND COLLATERAL SECURITY; SET-OFF, RECOUPMENT, AND COUNTERCLAIM; SUBROGATION.

As to Mutual Debts, see MUTUAL, and see the title SET-OFF, RECOUPMENT, AND COUNTERCLAIM.

As to the Debt of Another, see the title LIMITATION OF ACTIONS.

As to Bona Fide Debts, see BONA FIDE, vol. 4, p. 615, and references there given. As to Debts Created by Fraud, see the titles FRAUD; INSOLVENCY AND BANKRUPTCY.

As to Community Debts, see the title COMMUNITY PROPERTY, vol. 6, p. 293. As to Individual Debts, see INDIVIDUALS.

As to Book Debts, see BOOK, vol. 4, pp. 704, 705, and see the title DOCUMENTARY EVIDENCE.

As to Absconding Debtor, see ABSCONDING DEBTOR, vol. 1, p. 201, and the title ATTACHMENT, vol. 3, p. 199.

As to the Action of Debt, see the title DEBT, 5 ENCYC. OF PLEADING AND PRACTICE, p. 89.

As the relation of debtor and creditor depends upon the existence of a debt, reference should always be had to the title CREDITOR, ante, p. 238.

I. GENERAL DEFINITIONS. In common parlance the word "debt" is sometimes used to denote any kind of a just demand, and has been differently defined, owing to the subject-matter of the statutes in which it has been used; and while ordinarily it imports a sum of money arising upon a contract, express or implied, in its more general sense it means that which one person is bound to pay or to perform to another.1

1. Barber v. East Dallas, 83 Tex. 150, citing 5 AM. AND ENG. ENCYC. OF LAW, 175. See also El Paso Nat. Bank v. Fuchs, 89 Tex. 197; Cole v. Aune, 40 Minn. 80.

Blackstone defines debt to be a sum of money due by certain and express agreement." 3 Bl. Com. 54. Yet the same author, in treating of the implied original contract to submit to the rules of the community whereof we are members, says that, whatever the laws order any one to pay, that becomes instantly a debt which he hath beforehand contracted to discharge. 3 Bl. Com. 158, quoted in Dryden v. Kellogg, 2 Mo. App. 94; Equitable L. Ins. Co. v. Board of Equalization, 74 Iowa 181; Hyatt v. Vanneck, 82 Md. 465; McElfresh v. Kirkendall, 36 Iowa 226; Bowen v. Hoxie, 137 Mass. 527; Davenport v. Kleinschmidt, 6 Mont. 502; Matter of Denny, 2 Hill (N. Y.) 223; Wing v. Slater, 19 R. I. 597.

In Rodman v. Munson, 13 Barb. (N. Y.) 77, it is said: "Sir William Blackstone defines a debt to be a contract whereby a certain sum of money is mutually acquired and lost; any contract, in short, whereby a determinate sum of money becomes due to a person, and is not paid, but remains in action merely, is a contract of debt.' (2 Black. Com. 464.) To constitute a debt there must be a contract, either express or implied; but it is not indispensable that the liability created by the contract should extend so far as to subject the person of the debtor, or all his property, to be seized upon the final process of the courts issued to coerce its payment and satisfaction." Affirmed, Newell v. People, 7 N. Y. 9.

Bouvier's Definition. So Bouvier defines a debt to be" a sum of money, due by certain and express agreement." Bouv. Law Dict., quoted in Milliken v. Sloat, I Nev. 589; Burnham v. Milwaukee, (Wis. 1897) 73 N. W. Rep. 1019; Parker v. Savage, 6 Lea (Tenn.) 408; Haas v. Misner, I Idaho 177; Davenport v. Kleinschmidt, 6 Mont. 502. And in an enlarged sense, he says that the term denotes any kind of just demand. Bouv. Law Dict., quoted in Equitable L. Ins. Co. v. Board of Equalization, 74 Iowa 181. He further says: "Debts arise or are proved by matter of record, as judgment debts; by bonds or specialties; and by simple contracts, where the quantity is fixed and specified, and does not depend on any future valuation to settle it." Bouv. Law Dict., quoted in Milliken v. Sloat, I Nev. 589.

Anderson's Definition. In legal acceptation the word 'debt" signifies a liquidated demand; a sum of money due by certain and express agreement; a sum of money due by contract. Finch v. Armstrong, 9 S. Dak. 255, quoting Anderson's Law Dict.

Rapalje and Lawrence's Definition of debt is as follows: "In the strict sense of the word, a debt exists when a certain sum of money is

owing from one person, the debtor, to another, the creditor. Hence debt is properly opposed (1) to unliquidated damages; (2) to liability, when used in the sense of an inchoate or contingent debt; and (3) to certain obligations not enforceable by ordinary process. Debts denote not only the obligation of the debtor to pay, but also the rights of the creditor to receive and enforce payment." Quoted in Davenport v. Kleinschmidt, 6 Mont. 502. See also State v. Hawes, 112 Ind. 326; Shane v. Francis, 30 Ind. 92.

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Burrill's and Coke's Definitions. In New Jersey Ins. Co. v. Meeker, 37 N. J. L. 301, it is said: "The word debt,' says Burrill, in his Law Dictionary, 'is of large import, including not only debts of record or judgment, and debts by specialty, but also obligations arising under simple contract, to a very wide extent, and in its popular sense includes all that is due to a man under any form of obligation or promise.' And Sir Edward Coke, in commenting on the word debitum, in the statute of Merton, c. 5, says: Debitum signifieth not only debt, for which an action of debt doth lie, but here in this ancient act of parliament it signifieth_generally any duty to be yielded or paid.' The same extent of meaning is ascribed to this term by Chief Justice Tilghman, in Frazer v. Tunis, i Binn. (Pa.) 254; and the judgment in the recent case of Bide v. Harrison, L. R. 17 Eq. 76, is to the same effect, it being there held that a bequest of 'all and every sum or sums of money due to me at my decease' included damages recovered in an action by the executor for a breach of covenant committed in the lifetime of the testator." See also Milliken v. Sloat, 1 Nev. 590.

Jacob's Definition. -In Appeal Tax Ct. v. Rice, 50 Md. 316, it is said: "In common parlance a debt is a sum of money due from one person to another; and in its legal acceptation the term means a sum of money due by certain and express agreement, as by bond for a determinate sum, a bill, or note, a special bargain, or rent reserved on a lease, where the quantity is fixed and specific, and does not depend on any subsequent valuation to determine it. I Jac. Law Dict. 197, 198."

It has also been said by Jacob that, whatever the laws order any one to pay, that becomes instantly a debt which he hath beforehand contracted to discharge. Matter of Denny, 2 Hill (N. Y.) 220.

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Definition of Century Dictionary. Debt " is defined by the Century Dictionary as that which is due from one person to another, whether money, goods, or services. State v. Georgia Co., 112 N. Car. 37.

Webster's Definition. - A debt has been defined as that which is due from one person to another, whether money, goods, or services; that which one person is bound to pay to an

Debt Distinguished from Demand. In ordinary legal usage the words "debt" and "demand" are of kindred meaning, but the latter word is a term of much.

other, or to perform for his benefit; that for which payment is liable to be exacted; due; obligation; liability. Webster's Dictionary, quoted in Cook v. Bartholomew, 60 Conn. 26; Equitable L. Ins. Co. v. Board of Equalization, 74 lowa 178; Dubuque v. Illinois Cent. R. Co., 39 Iowa 63.

For Other Definitions of the term, see:

United States. Thompson v. Riggs, 6 D. C. 109; Fisher v. Consequa, 2 Wash. (U. S.)

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oned without a mittimus. This would comprehend all actions of debt in a proper and technical sense; of course it would comprehend the claim in the action under consideration. But this, I apprehend, is too narrow a construction. The true meaning is such as to include all actions by attachment, by which any debt or damage is sought to be recovered, and which, by legal process, may be reduced into debt or damage." Palmer v. Allen, 5 Day (Conn.) 193. (See the title SET-OFF, RECOUPMENT, AND COUNTERCLAIM.) A statute allowed discounts and set-offs when a suit was brought for a debt due by judgment, bond, bill, or otherwise. The court said: "The word debt' in this statute is used in a general sense to denote any sort of promise or obligation to pay money, such as open accounts, notes, bills, bonds, judgments, and the like." Duncan v. Magette, 25 Tex. 256.

Same-Set-offs. - Allen v. Dickson, Minor (Ala.)

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Brooke v. Philadelphia, 162 Pa. St. 128; Fisher v. Consequa, 2 Browne (Pa.) 35, appendix.

Rhode Island. Wing v. Slater, 19 R. I. 597. Utah. - Anthony v. Savage, 3 Utah 277. Virginia. — Whiteacre v. Rector, 29 Gratt. (Va.) 714, 26 Am. Rep. 420.

Action of Debt. A debt is a sum of money due by express agreement, either in writing or by parol, where the quantity is fixed and does not depend on future calculation. The nonpayment or nonperformance is an injury for which an action of debt may be brought. Respublica v. Le Caze, 1 Yeates (Pa.) 70. And to the same effect see U. S. v. Colt, Pet. (C. C.) 146. See also ENCYC. OF PL. AND PR., title DEBT, vol. 5, p. 894.

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Same-Debt and Damages. Where, in an action of debt upon a single bill, verdict was rendered for a certain sum as damages, instead of" debt and damages," it was held that the error was merely clerical, and did not affect the validity of the verdict. Downs v. Ladd, 4 How. (Miss.) 40.

Debt or Assumpsit. The term "debt " has been held to include any demand for which the action of debt or assumpsit would lie. Dowling v. Stewart, 4 Ill. 193.

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Broad Meaning. — The word debts in an insolvent statute was contended by counsel not to be understood in its strict technical sense, but to be understood in its popular meaning, as extending to all legal demands actually due, and which may be ascertained without the intervention of a jury," and this construction was apparently admitted by the court to be correct in Atlas Bank v. Nahant Bank, 3 Met. (Mass.) 582.

As used in a statute prohibiting the imprisonment of a person for debts without a mittimus the court in construing the word "debts,' said that the word "still remains to be satisfied with a fair and reasonable construction.

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* * Suppose the language to be, that in an action for debt no person shall be impris

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Consideration. (See also the title CONSIDERA-TION, vol. 6, p. 667.)—" It is essential to the idea of a debt that an obligation must have arisen out of a contract, express or implied, in favor of some one occupying the relation of creditor, which entitles the latter to receive a sum of money, which obligation, by possibility, might or ought to be enforced against another. The mere delivery of a piece of paper which imports an obligation to pay money, but which is in fact no evidence of an actual existing debt, does not constitute the contracting of a debt. Where, therefore, as is the case here, paper purporting to be the obligation of a township has been issued without any consideration whatever, nothing having been given or received therefor, the holder of such paper, whether he be the payee named therein or an assignee, has no right of action under the Act of 1883, because the trustee has not, in any legal or equitable sense, contracted a debt. Such paper creates no obligation against any one; it is void." v. Hawes, 112 Ind. 326.

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In Pettibone v. Toledo, etc., R. Co., 148 Mass. 411, it is said. The word debt,' even in its broadest signification, implies that the consideration of the obligation of the debtor has been executed on the part of the creditor, and the payment of the debt discharges the obligation. The execution of the agreement described in the bill did not make the defendants debtors of the railroad company. The obligations created by the agreement were executory on both sides, and were mutual."

Moral Obligation- Wills. — A will provided that whereas the testatrix's brother was indebted individually to the estate of her husband, such individual indebtedness should be paid for him out of her estate, so that he might be wholly released from the same. It was held that this provision extended to the indebtedness which her brother was not legally liable but morally bound to pay. The court said: The words debt "and indebtedness' are not always used in the same sense; that is, they do not always import a legal obligation on the part of one to pay another something due him. They often imply a mere moral or

more comprehensive signification than the former. The term "debt" imports a sum of money owing upon a contract, express or implied; while the term "demand" embraces rightful claims, whether founded upon a contract, a tort, or a superior right of property.1

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equitable obligation, as well as a strictly legal one. Scott v. Neeves, 77 Wis. 310. But generally the term applies only to legally enforceable debts. State v. Hawes, 112 Ind. 323; Cooke v. Saratoga Springs, 23 Hun (N. Y.) 55. Same Statute of Limitations. (See also the title LIMITATION OF ACTIONS.) — Obligations barred by the statute are not debts. Bevers v. Park, 88 N. Car. 459; People v. Halsey, 53 Barb. (N. Y.) 554. affirmed 37 N. Y. 344; Roosevelt v. Mark, 6 Johns. Čh. (N. Y.) 266; Burke v. Jones, 2 Ves. & B. 275; Peck v. Botsford, 7 Conn. 172, 18 Am. Dec. 92; Rogers v. Rogers, 3 Wend. (N. Y.) 517, 20 Am. Dec. 716; Smith . Porter, I Binn. (Pa.) 209. And see the title WILLS.

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Right of Creditor. Debt denotes not only the obligation of the debtor to pay, but the right of the creditor to receive and enforce payment. Burnham v. Milwaukee, (Wis. 1897) 73 N. W. Rep. 1019; Monroe County v. Harrell, 147 Ind. 500. But in Baltimore v. Gill, 31 Md. 390, it is said: "A debt is money due upon a contract, without reference to the question of the remedy for its collection. It is not essential to the creation of a debt that the borrower should be liable to be sued therefor. No suit can be maintained against the state by one of its citizens, and yet debts are created by the state which it is bound in good faith to pay."

Choses in Action. (See also CHOSES IN ACTION, vol. 6, p. 2.) A debt is a chose in action. Webb v. Edwards, 46 Ala. 29.

Funded Debt. (See also FUNDED Debt.) — A funded debt is a debt for the payment of the principal or interest, for which some fund has been appropriated. Ketchum v. Buffalo, 14 N. Y. 356.

Floating Debt. (See also FLOATING DEBT.) — In People v. Wood, 71 N. Y. 374, it is said: "By the term floating debt is meant that mass of lawful and valid claims against the corporation, for the payment of which there is no money in the corporate treasury specifically designed, nor any taxation or other means of providing money to pay, particularly provided."

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Public Debt. (See the title MUNICIPAL SECURITIES.) In Morgan v. Cree, 46 Vt. 786, 14 Am. Rep. 640, it is said: The terms' public debt and public securities,' used in legislation, are terms generally applied to national or state obligations and dues, and would rarely if ever be construed to include town debts or obligations; nor would the term 'public revenue ordinarily be applied to funds arising from town taxes."

Liquidated Debt. (See also the title LIQUIDATED DAMAGES.) In Bartee v. Andrews, 18 Ga. 410, it is said: "A debt is liquidated when it is rendered certain what is due, and how much is due: cum certum est an et quantum debeatur. That, certainly, need not be contemporaneous with the agreement out of which it results."

Labor Debt. - See LABOR; and see Matter of

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Debt Duty. (See also DUTY.) — A debt is a legal liability to pay a specific sum of money; a duty is a legal obligation to perform some act. Allen v. Dickson, Minor (Ala.) 120.

Debt and Claim. In Stokes v. Mason, 10 R. I. 261, "debt" as used in a bankruptcy statute was held equivalent to " claim." And see also Berson v. Ewing, 84 Cal. 89; Baltzer v. State, 104 N. Car. 275. The terms, however, are not synonymous. See CLAIM, Vol. 6, pp. 97, 100, and compare the definitions there given with the definitions of debt" given above. And see infra, For Tort.

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Correlative of Credit. (See also CREDIT, ante, p. 230.) The terms credit" and debts are used as correlative. Libby v. Hopkins, 104 U. S. 309.

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Debts and Credits. -" Debts" in an assignment for the benefit of creditors was held to mean credits. The court said: "The direction to pay the debts' of the creditors of the assignor is in equivocal terms. The debts of a person may be such as are due to him, although the more usual signification is those owing by him. It is not a palpable violation of the literal meaning of the words to apply them to the debts due to the persons designated, and we are therefore authorized to look to the scope of the entire instrument for their interpretation. The manifest design is to pay the debts to the creditors, and that must control the construction of the doubtful phrase." Pine v. Rikert, 21 Barb. (N. Y.) 475.

1. U. S. Rolling Stock Co. v. Clark, 95 Ala.. 323; Matter of Denny, 2 Hill (N. Y.) 220; Cable v. McCune, 26 Mo. 382, 72 Am. Dec. 214; Heacock v. Sherman, 14 Wend. (N. Y.) 58; Hibbard v. Clark, 56 N. H. 155, 22 Am. Rep. 432; Drews v. Coles, 2 Tyrw. 510. See infra, For Tort; and see the title DEMAND.

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Debt and Demand. - The words" any debt or demand are sufficiently comprehensive to include every species of action, whether founded on contract or tort. White v. Hunt, 6 N. J. L. 415. See infra, For Tort. A Weekly Sum Ordered to Be Paid by the overseers of a parish for the maintenance of an

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