116 F. 442 | U.S. Circuit Court for the District of Western Missouri | 1902
This controversy grows out of the following state of facts, substantially: The plaintiff corporation was doing business in the city of Chicago, 111., in 1897 and 1898, which
The defendant having scheduled the claim sued on and given notice thereof to the creditor, as by the bankrupt act provided, and having pendente lite received his discharge in bankruptcy, it is conceded by counsel for plaintiff that the discharge constitutes a complete bar to the action, unless the claim was created by the defendant’s fraud, within the meaning of section 17, cl. 4, of the present bankrupt act. This term, “fraud,” as employed in the bankrupt act of 1867, received a definite construction by the supreme court of the United States in Neal v. Clark, 95 U. S. 704, 24 L. Ed. 586. Mr. Justice Field, speaking for the court, said:
“The fraud referred to in that section means positive fraud, or fraud in fact, involving moral turpitude or intentional wrong, as does embezzlement, and not implied fraud, or fraud in law, which may exist without the imputation of had faith or immorality. Such a construction of the statute is consonant with equity and consistent with the object and intention of congress in enacting a general law by which the honest citizen may be relieved from the burden of hopeless insolvency. A different construction would be*444 inconsistent with the liberal spirit which pervades the entire bankrupt system.”
As the term “fraud” is expressed in the same connection with the term “embezzlement” in the act of July i, 1898, it must receive the same construction as given in the act of 1867. Bracken v. Milner (C. C.) 104 Fed. 522, and cases cited. There is no foundation, on' the evidence in this case, to warrant the court in finding that the claim sued on originated in fraud in fact, involving moral turpitude or intentional wrong. The debt had its origin through the mistake of the plaintiff in his stated accounting with the defendant, and in overpaying the defendant, which overpayment the defendant failed to return when advised thereof. The defendant did not obtain the money, through any misrepresentation, falsehood, trick, or deceit. It was-voluntarily paid to the defendant, unsolicited and uninvited by him. The liability of the defendant, therefore, did not arise ex delicto; and the proper form of action for its recovery is simply an action for money had and received to the plaintiff’s use, arising on the implied promise-which the law makes in such cases. The fact that the defendant, when restitution was demanded, denied liability, against the great weight of evidence, could not convert the wrongful detention of the money into an original positive fraud, essential in the creation of a debt to avoid, the effect of a discharge in bankruptcy.
It results that the plaintiff cannot recover.