138 Mo. App. 264 | Mo. Ct. App. | 1909
— This suit is on a check for $2,000 drawn by defendant on a bank in St. Joseph, dated December 29, 1906, and protested for non-payment January 10, 1907. Plaintiff claims to be the assignee of the check which was made payable to the order of Punk Bros., a partnership doing business in Spokane, Washington. In the answer, defendant denies that plaintiff is the owner of the check and pleads that the check is unsupported by a valuable consideration. In the reply, plaintiff alleges that after this suit was begun, defendant filed a petition in bankruptcy in the United States District Court for the Western District of Missouri, and was adjudged a bankrupt; that he scheduled the check in suit as a liability; that plaintiff presented the check for allowance as a demand against the estate ; that the same was adjudicated as a valid demand, and that afterward, defendant’s petition for a discharge was heard and denied. It is alleged these facts estop defendant “from denying said debt or any part thereof.” A jury was waived and, after hearing the evidence, the court found the issues for plaintiff and rendered judgment in his favor for the full amount of the check with interest from the day on which the suit was commenced. Defendant appealed.
Material facts disclosed by the evidence are as follows: Defendant, who lives in St. Joseph, went to Spokane, Washington, for the purpose of purchasing a stock of merchandise owned by Punk Brothers. He made certain false representations to plaintiff, a man of financial responsibility, who lived in Spokane and who represented as salesman certain eastern manufacturers and wholesale merchants. Relying on these
This suit was brought March 6, 1907. Defendant filed his petition in voluntary bankruptcy May 3, 1907. The schedule of debts filed by him was as follows:
*269 “Unsecured creditors: O. B. Funk and I. M.
Funk, Spokane, Wash., contract dated 29, Dec., 1906; check dated December 29, 1906, payable to order of Funk Bros., given in part purchase of a stock of goods owned by Funk Bros, and located at Spokane, Wash.........................$2,000.00
Spencer E. Carr claims to be assignee of check given Funk Bros. .............. 2,000.00
Hirsch Bros. Dry Goods Co. merchandise purchased by petitioner above described ... 49.59
Sol. Hirsch, St. Joseph, Mo., for money loaned on May 7, 1907 .................... 20.00
$2,069.59”
Defendant was adjudged a bankrupt May 4th. He then filed a motion to abate the present suit and the court on the hearing of the motion continued the cause generally and it was not reinstated on the docket until the bankruptcy proceedings were closed. When the petition in bankruptcy was filed, it was referred by the clerk of the district court to the referee who immediately issued notice for a meeting of creditors. No creditors appearing at the meeting, a trustee was appointed by^ the referee. The bankrupt had no assets not exempt from execution. Plaintiff filed his demand in due form’ and it was allowed by the referee June 14, 1907. The record of the referee shows facts thus stated by counsel for defendant at the trial: “There was notice given that the first meeting of creditors would be held on May 18th. This record recites that on that day no creditors appeared and no adjournment of the meeting, of course, was had to any other time. That was the end of that meeting. The record further shows that on the 14th day of June, 1907, this claim was allowed by the referee, which shows that there was no meeting of
“Defendant introduced in evidence section 2 of General Order 12 of the General Orders in Bankruptcy, promulgated by the Supreme Court of the United States in pursuance to an act of Congress creating bankrupt courts and authorizing these proceedings; also General Order 23 of said General Orders in Bankruptcy, which said Section 2 of said General Order 12 is as follows:
“2. The time when and place where the referee shall act upon the matters arising under the special cases referred to them shall be fixed by special order of the judge or by the referee, and at such times and places the referees may perform the duties which they are empowered by this act to perform.
“Said General Order No. 23 is as follows: In all orders made by a referee it shall be recited, according as the fact may be, that notice was given and the manner thereof, or that the order was made by consent, or that no adverse interests were represented at the hearing, Or that the order was made after hearing adverse interests.”
At the conclusion of the evidence, the court refused to give the following declaration of law asked by defend
Plaintiff, in the discharge of his obligation as surety of defendant, was compelled to perform defendant’s contract at a loss to himself. Under the principle of subrogation, he was entitled to succeed to all the rights and remedies possessed by the obligee against the principal obligor in order that he might obtain such reimbursement for his loss as such securities would afford. Doubtless, it was in recognition of this right that Funk Brothers assigned the check to plaintiff, but we do not deem it necessary to decide whether the check, either in the hands of Funk Brothers or of plaintiff, was supported by a sufficient consideration or would serve as the basis of a cause of action for the reason that defendant is estopped from raising the issue of no consideration by his conduct in the bankruptcy court and by the adjudication of that issue in that tribunal.
There can be no question about the fact that defendant voluntarily went into bankruptcy for no other purpose than to obtain a discharge from the very obligation now in suit. He made the solemn admission of record that the check evidenced a valid indebtedness— was supported by a sufficient consideration. He stood by without objection and saw plaintiff present th.e check and procure its allowance as a demand against the estate. That allowance was an adjudication by a court of competent jurisdiction of the fact that the indebtedhess existed, that the check was not without a consideration. Defendant argues that since the allowance was not made at a creditor’s meeting, nor on notice to defendant, the. adjudication must be regarded as a void judgment. But this is not so. By the filing of the
Further, it is insisted by defendant that if tbe allowance must be treated as an adjudication of all the issues properly before tbe court for its determination, then tbe cause of action on tbe check became merged into tbe judgment and, consequently, no action can be maintained on tbe check. Proving a debt against a bankrupt estate does not operate as an absolute but as a conditional extinguishment of tbe debt. “Tbe discharge of tbe debtor in bankruptcy does not satisfy the debt but merely releases tbe debtor of bis legal obligation to pay.” [Bank v. Richards, 119 Mo. App. 18.] And tbe creditor is remitted to bis former rights and remedies. But tbe restoration of tbe right to enforce tbe debt does not impair tbe force of its allowance against tbe estate of tbe bankrupt as an adjudication of tbe issues over which tbe bankruptcy court bad jurisdiction at tbe time. Such issues are finally closed by tbe allowance, are res adjudicate, and neither party has tbe right to reopen them in subsequent litigation where, as in tbe present case, tbe parties, subject-matter and demand are tbe same as were in tbe bankruptcy proceeding. .
We find no error in tbe record. Tbe judgment is affirmed.