in accordance with chapter 177 of the Revised Laws of the commonwealth of Massachusetts the sum, if any, for which said judg ment shall be entered; and also if the above named sureties shall pay to the said plaintiff within thirty days after the entry of any special judgment in said action in accordance with section 25 of said chapter, the sum, if any, for which said judgment shall be entered; then the above-written obligation shall be null and void, otherwise it shall remain in full force and virtue." The cause of action in the original action was founded upon a claim from which a discharge in bankruptcy would be a release. The Bankruptcy Act of July 1, 1898, c. 541, § 63a (4); 30 U. S. Stats. at Large 562 (U. S. Comp. St. § 9647). The original action was pending when the petition in bankruptcy was filed against the defendants therein. It was in fact stayed until after they were adjudicated to be bankrupts, but was thereafter put upon the list for trial and went to judgment within twelve months after the adjudication and before the granting of the discharges. It is provided in the Bankruptcy Act: Section 11a. "A suit which is founded upon a claim from which a discharge would be a release, and which is pending against a person at the time of the filing of a petition against him, shall be stayed until after an adjudication or the dismissal of the petition; if such person is adjudged a bankrupt, such action may be further stayed until twelve months after the date of such adjudication, or, if within that time such person applies for a discharge, then until the question of such discharge is determined." U. S. Comp. St. 9595. The words of this section do not require a peremptory stay of a pending action after adjudication in bankruptcy. The state court has jurisdiction of such action and may proceed to judgment. As pointed out in Boynton v. Ball, 121 U. S. 457, 467, 7 Sup. Ct. 981, 30 L. Ed. 985, substantial reasons may make it desirable to proceed to trial and to judgment in such a case. It was decided in Rosenthal v. Nove, 175 Mass. 559, 56 N. E. 884, 78 Am. St. Rep. 512, with reference to section 11a, the court in which is pending a suit against a bankrupt is not after the adjudication bound to stay proceedings further therein until the termination of the bankruptcy proceeding, although it may do 80 and to such extent as justice may require. The action is not barred and the court has power to proceed to judgment. There are numerous decisions to the same effect. Feigenspan v. McDonnell, 201 Mass. 341, 346, 87 N. E. 624; Rogers v. Abbot, 206 Mass. 270, 274, 92 N. E. 472, 138 Am. St. Rep. 394; Parker v. Murphy (Mass. Sup. Jud. Ct.), 31 Am. B. R. 646, 215 Mass. 73, 74, 102 N. E. 85; Smith v. Miller, 226 Mass. 187, 188, 115 N. E. 243. That this must be the law is plain from section 63a (5) of the Bankruptcy Act (U. S. Comp. St. § 9647), to the effect that among the debts provable against the estate of a bankrupt are those "founded upon provable debts reduced to judgments after the filing of the petition and before the consideration of the bankrupt's application for a discharge. * * 99 The provisions of G. L., c. 223, § 124, requiring peremptory stay, are confined in terms to proceedings in insolvency under the laws of this commonwealth. These laws are superseded by the federal bankruptcy law. Commonwealth v. Nickerson, 236 Mass. 281, 292, 128 N. E. 273, 10 A. L. R. 1568; Parmenter Manuf. Co. v. Hamilton, 172 Mass. 178, 51 N. E. 529, 70 Am. St. Rep. 258. They are not pertinent to proceedings in bankruptcy or to the effect of bankruptcy on bonds given to dissolve attachments. The bankrupts in the original action did not by correct practice call to the attention of the court the fact that they had been adjudicated bankrupts. They ought to have filed an answer or amendment to the answer already filed setting up the adjudication and praying for continuance until they could procure their discharge and plead it in bar. They did nothing of that kind. Under our practice it "is settled that a suggestion of insolvency or bankruptcy is not enough." Dunbar v. Baker, 104 Mass. 211; Holland v. Martin, 123 Mass. 278; Dalton-Ingersoll Co. v. Fiske, 175 Mass. 15, 22, 55 N. E. 468; Gray v. Chase, 184 Mass. 444, 451, 68 N. E. 676. It is clear under these decisions that the original case properly went to judgment on January 30, 1922. The fact that the rulings of the trial judge were too favorable to the defendant on this point does not require the sustaining of exceptions to other requests for rulings which the whole record shows ought not to have been granted. If the rulings of the trial judge, to the effect in substance that the filing of the suggestion and certified copy of the adjudication by the defendants was enough to call to the attention of the court their claim of the protection to be afforded by their discharge in bankruptcy if and when granted under section 17 of the Act (U. S. Comp. St. § 9601), be assumed to be the law of the case (Commonwealth v. Coughlin, 182 Mass. 558, 563, 66 N. E. 207), no error is shown. The original action rightly proceeded to judgment after the adjudication and before the discharge. The case is not within the terms of our statutes permitting special judgments in specified cases. G. L., c. 235, §§ 24, 25, 26. These rulings of the trial court rightly go no further than to show that no judgment ultimately could be entered which would not be barred by a discharge in bankruptcy thereafter granted and properly pleaded. The defendants were defaulted in the original action and the case went to judgment more than three months before the discharges in bankruptcy were granted. That judgment, unless and until qualified by some further action of the court, was "a final judgment" within the meaning of those words in the bond to dissolve an attachment. It was a judginent sufficient to form a sound basis for an action against the sureties on the bond. Cases like Barry v. New York Holding & Construction Co. (Mass. Sup. Jud. Ct.), 48 Am. B. R. 134, 226 Mass. 14, 114 N. E. 953, and id., 229 Mass. 308, 118 N. E. 639, and authorities there collected, have no pertinency to the facts here disclosed. The final character of the judgment is not affected by the later stay of execution granted by the court until its further order on agreement of parties. For aught that appears, that may have been after the breach of the bond. No question arises on this record as to protection of the discharges granted to the bankrupts against any present liability on their part on that judgment. The case at bar is quite distinguishable from Herschman v. Justices of Municipal Court, 220 Mass. 137, 107 N. E. 543. Even if it be assumed that the point is open, it has not been argued that the plaintiff's rights are affected by its filing a proof of claim" without prejudice " to its rights. Therefore that question need not be considered. Since the original case went to judgment rightly, it follows 36-N. 8. VOL. IV. This is settled by that there has been a breach of the bond. Exceptions overruled. IN THE MATTER OF PATTERSON-MACDONALD SHIPBUILDING U. S. Circuit Court of Appeals, Ninth Circuit, October, 1923. Nos. 3970, 4012. SET-OFF AND COUNTERCLAIM-PRACTICE AND EVIDENCE-BANKRUPTCY COURT Where a foreign government presents a claim to a trustee in bankruptcy, arising out of contract and prays for its liquidation, and upon such liquidation it is found that the claimant is indebted to the bankrupt, a court of bankruptcy is without power to render a judgment against the foreign government for the ascertained balance. (See Collier, 13th Ed., p. 1617; Am. B. R. Digest, § 811.) Appeal from and petition to revise an order of the District Court of the United States for the Northern Division of the Western District of Washington. Affirmed. See also 49 Am. B. R. 370, 376 and ante, this volume, pages 95, 135, 195, 199. Before HUNT and RUDKIN, Circuit Judges, and BOURQUIN, District Judge. Ira Bronson, J. S. Robinson and H. B. Jones, for appellants and petitioner. Corwin S. Shank, H. C. Belt, and Glenn J. Fairbrook, for appellee and respondent. 293 Fed. 192. RUDKIN, Circuit Judge: The question presented by the record before us is this: If a foreign government presents a claim to a trustee in bankruptcy arising out of contract and prays for its liquidation and upon such liquidation it is found that the claimant is indebted to the bankrupt, may the court of bankruptcy render judgment against the foreign government for the ascertained balance? The court below answered this question in the negative, basing its decision upon the ground that the proceeding before the special master to liquidate the claim was not a plenary suit, and that the bankruptcy court was therefore without jurisdiction to enter judgment in favor of the trustee and against the third party claimant. Having reached this conclusion, the court found. it unnecessary to determine whether it could in any event render judgment against a foreign government. We are of the opinion that the judgment of the court below must be affirmed, but we prefer to rest our decision on the want of power in the court below to enter judgment against a foreign state. "It is an established principle of jurisprudence in all civilized nations that the sovereign cannot be sued in its own courts, or in any other, without its consent and permission; but it may, if it thinks proper, waive this privilege, and permit itself to be made a defendant in a suit by individuals or by another state. And as this permission is altogether voluntary on the part of the sovereignty, it follows that it may prescribe the terms and conditions on which it consents to be sued, and the manner in which he suit shall be conducted, and may withdraw its consent whenever it may suppose that justice to the public required it." Beers v. State of Arkansas, 20 How. 527, 529, 15 L. Ed. 991. "While a sovereign state may bring and maintain a suit as any other suitor, it cannot be sued in its own or a foreign court, unless it has signified its consent thereto, either by statute or by some other unequivocal means; and on this ground the weight of authority denies any right of set-off or counterclaim against the state except as granted by statute. In some jurisdictions, however, a more liberal rule is applied, and when the state voluntarily places itself in the position of a suitor, whether in its own courts or in those of a sister state, it will be held to have laid aside its sovereignty, and to have taken on the garb of an ordinary suitor, so far as concerns all proper matters of adjudication growing out of the cause of action sued on, and the defendant is entitled to plead and prove any and all matters properly defensive except limitations. He may interpose a counterclaim or set-off as defen sive merely, and reduce or extinguish the claim of the state against him." (Italic supplied.) 24 R. C. L. p. 811. |