Supreme Court Corner

By M. Jonathan Hayes, Certified Bankruptcy Specialist, Northridge, CA

Williams v. U.S. Fidelity & Guaranty Company,  236 U.S. 549 (1915)

Issue:  Is the debtor’s liability to a surety which has posted a bond on his behalf, a “debt” under the code at the time and therefore discharged?

Holding:    Yes.

Justice James C. McReynolds:

The debtor, a building contractor, obtained a construction completion bond from U.S. Fidelity.  When the debtor failed to complete the project, the owner completed it . . .

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