Custard v. Wigderson

130 Wis. 412 | Wis. | 1907

Kerwin, J.

The errors complained of on this appeal may he classified under two heads: Eirst, whether the court erred in directing a verdict for plaintiff; and, second, whether the bankruptcy proceedings constituted a defense to the notes in suit.

1. There is a sharp conflict in the evidence as to whether or not the appellant promised, after the bankruptcy proceedings, to pay the notes, the respondent and his attorney testifying that such promise was made. The appellant flatly denies such promise. So whether or not a promise was made to pay the notes, as contended by plaintiff, was clearly a question for the jury. It is therefore obvious that the court below must have directed a verdict upon the ground that the alleged bankruptcy proceedings constituted no defense. This seems clear from a remark of the trial judge appearing in the rec-. ord. It is very clear that, if the bankruptcy proceedings were a defense, the court erred in directing a verdict for the plaintiff upon the conflicting testimony. This brings us to a consideration of the question of the effect of the bankruptcy proceedings, and whether error was committed in holding that such proceedings constituted no defense.

Tbe appellant set up in bis answer tbe order of discharge in bankruptcy, and, after plaintiff bad closed bis case, put sucb order in evidence; also offered in evidence tbe petition and schedule of creditors, which included tbe name “A. Castard,” together with residence Waupaca, Wisconsin, amount $200, contracted at Waupaca, Wisconsin, consideration money borrowed, note given dated 1897. Tbe appellant .also offered to prove that tbe “A. Castard” mentioned in tbe schedule was intended to be tbe plaintiff, and scheduled as a creditor, and that tbe spelling of tbe name “Castard” instead of “Custard,” in the schedule, was a clerical error. On rebuttal plaintiff put in evidence a certified copy of appellant’s petition in bankruptcy proceedings, for tbe purpose of showing that sucb petition failed to state residence or domicile for six months preceding tbe filing of petition, and also failed to state occupation; also offered in evidence certified copy of verification to said petition, for tbe purpose of showing that tbe verification was taken before appellant’s attorney in tbe bankruptcy proceedings; also offered in evidence certified copy of schedule of creditors, for tbe purpose of showing that the- schedule was not properly verified, and that tbe name A. Custard, plaintiff, does not appear, and that the amount of indebtedness, or date of same, is not given; also offered certified copy of entire record in bankruptcy proceedings, except tbe order of discharge.

Tbe respondent attacks tbe bankruptcy proceedings substantially upon tbe following grounds: (1) That tbe petition In bankruptcy is so jurisdictionally defective that no valid discharge could be granted; (2) that tbe indebtedness of appellant to respondent was never scheduled; (3) that no notice that appellant bad been adjudged a bankrupt and of tbe first meeting of creditors was given by tbe referee or clerk; .(4) that no copy of petition asking for discharge of appellant, and tbe order based thereon, were sent to or received by respondent; (5) that appellant signed and swore to bis petition 'before bis attorney in bankruptcy.

It does not appear from the record that the appellant was not a resident and domiciled in the district where the discharge in bankruptcy was granted; but it is contended that the petition is defective in failing to properly state the residence and domicile of the appellant and in not being properly verified. We think, however, that these questions cannot be reviewed here. The decree of discharge is in due form, and whether the proceedings in the bankruptcy court upon which this decree is based are regular or not cannot be questioned collaterally. The decree is made by the Bankrupt Act itself evidence of the regularity of the proceedings and the jurisdiction of the court to render the decree. Ch. 4, sec. 21, subd. “f,” of the Bankrupt Act of 1898 [Act July 1, 1898, ch. 541, 30 U. S. Stats. at Large, 552; U. S. Comp. Stat. 1901, p. 3431] provides, in effect, that a certified copy of the order granting a discharge shall be evidence of the jurisdiction of the court, the regularity of the proceedings, and the fact that the order was made. The order of discharge, therefore, having been put in evidence, was proof of the appellant’s discharge jn bankruptcy, and cannot be impeached collaterally. This provision of the Bankrupt Act, making the order of discharge evidence of the jurisdiction of the court and the regularity of the proceedings, was obviously intended to dispense with proof of antecedent steps in the proceedings. The decisions under the Bankruptcy Act of 1867 [Act March 2, 1867, ch. 176, 14 U. S. Stats. at Large, 517] are not entirely uniform on the question of collateral attack, although the weight of authority appeal's to be that a discharge was not subject to attack collaterally under the act. Collier, Bankr. (5th ed.) 192; Brandenburg, Bankr. (3d ed.) § 398, and cases cited in note. So, too, it has been held that, where provision is made in the bankruptcy court for setting aside the decree of discharge, this proceeding is exclusive. Brandenburg, Bankr. (3d ed.) § 397, and cases cited; Collier, Bankr. (5th ed.) 192, 193. This court has held that a discharge in bankruptcy cannot be attacked collaterally. Thomas v. Jones, 39 Wis. 124. In the case before ns it is clear that tbe order of discharge is not open to attack. Brandenburg, Bankr. (3d ed.) § 398; Collier, Bankr. (5th ed.) 192, 193; 1 Black, Judgm. § 248; In re Shaffer, 104 Fed. 982; Commercial Bank v. Buckner, 20 How. 108; Michaels v. Post, 21 Wall. 398; Black v. Blazo, 117 Mass. 17; Rayl v. Lapham, 15 N. B. R. 508; Howland v. Carson, 16 N. B. R. 372; Thomas v. Jones, supra; Osborn v. Dobrinz, 85 Wis. 252, 55 N. W. 403.

2. But, while the order of discharge cannot be attacked, a more serious question arises as to whether the debt of the respondent sued upon was discharged by the bankruptcy proceedings. Under the bankruptcy law of 1867 this court held, in harmony with the general current of authority,.that a debt was discharged even though not scheduled. Thomas v. Jones, supra; Osborn v. Dobrinz, supra. But it will be seen that under the act of 1867 debts not scheduled Avcrc not excepted from the operation of discharge, while under the Bankruptcy Act of 1898 they are. Sec. 17 of the Bankruptcy Act of 1898 provides that a discharge in bankruptcy “shall release a bankrupt from all of his provable debts, except such as . . . have not been duly scheduled. . . .” This provision is a marked departure from former bankruptcy acts, and decisions under such acts, to the effect that scheduling was not necessary in order to bring the debt within the order of discharge. The words of the present act, however, are plain and unambiguous, and there can be no doubt that they mean what they say; and, if so, unless the debt is duly scheduled in time for proof and allowance, or the creditor had notice or actual knowledge of the proceedings in bankruptcy, it is not affected by the discharge. The evidence shows that the respondent had no notice or actual knoAvledge of the bankruptcy proceedings, and therefore, if the debt was not duly scheduled, it is not affected by the bankruptcy proceedings. Sec. 17, Bankr. Act 1898; Collier, Bankr. (5th ed.) 214. So far as tbe courts have spoken upon the subject since the Bankruptcy Act of 1898, they hold that extreme exactness must be used in scheduling the creditors by name in the bankruptcy proceedings. Collier, Bankr. (5th ed.) 214; Brandenburg, Bankr. (3d ed.) § 216, and note; Liesum v. Kraus, 35 Misc. 376, 71 N. Y. Supp. 1022; Columbia Bank v. Birkett, 174 N. Y. 112, 66 N. E. 652, 9 Am. B. R. 481; Birkett v. Columbia Bank, 195 U. S. 345, 25 Sup. Ct. 38; In re Mackey, 1 Am. B. R. 593, 596; Westheimer v. Howard, 93 N. Y. Supp. 518, 14 Am. B. R. 547; Haack v. Theise, 99 N. Y. Supp. 905, 16 Am. B. R. 699. An examination of the foregoing cases will show that courts have held to a strict rule in requiring debts to be duly scheduled in accordance with the provisions of the act.

In Liesum v. Kraus, supra, the creditor’s name was George liesum and was scheduled “George Liesman,” and it was held that the debt was not discharged because the name was not properly entered in the schedule. In Haack v. Theise, supra, the name of the creditor J ames Ha,ack was scheduled “ James Haack and wife,” and ditto marks were used to indicate residence, and the court held that the debt was not duly scheduled. The court said:

“These features of the present act, when contrasted with the provisions of preceding acts, indicate a legislative intent that greater strictness shall prevail in notifying the creditor of the various proceedings in bankruptcy.”

In Columbia Bank v. Birkett, 174 N. Y. 112, 66 N. E. 652, 9 Am. B. R. 481 (affirmed in 195 U. S. 345, 25 Sup. Ct. 38), the court said:

“In my opinion there are features in the present bankruptcy ’act which differentiate it from preceding acts, and which indicate a legislative intent that greater strictness shall prevail in notifying the creditor of the various proceedings in bankruptcy.”

Subd. 8, sec. 7, of the Bankruptcy Act of 1898 [Act July 1, 1898, ch. 541, 30 U. S. Stats. at Large, 548; U. S. Comp. Stat. 1901, p. 3425] provides that the schedule shall contain a list of the bankrupt’s creditors, “showing their residences, if known, if unknown, that fact to be stated, the amounts due each of them, the consideration thereof, the security held by them, if any. . . .” Under the strict rule which prevails respecting the scheduling of debts by the bankrupt, we think it clear that the debt of A. Custard was not duly scheduled,, within the meaning of the Bankruptcy Act, by the appearance of the name “A. Castard” in the schedule. Therefore, since A. Gustará, respondent, had no notice or actual knowledge of the bankruptcy proceedings, the debt sued upon was not discharged, and the judgment of the court below, therefore, must be affirmed.

By the Oourt. — Judgment affirmed.