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KREITLEIN v. FERGER

June 1, 1915

KREITLEIN
v.
FERGER



ERROR TO THE APPELLATE COURT OF THE STATE OF INDIANA

White, McKenna, Holmes, Day, Hughes, Van Devanter, Lamar, Pitney, McReynolds

Author: Lamar

[ 238 U.S. Page 24]

 MR. JUSTICE LAMAR delivered the opinion of the court.

In 1897 Ferger brought suit against Kreitlein in an Indiana court. The pleadings in that case are not set out in the record and the nature of the suit does not appear except as it may be inferred from the special findings

[ 238 U.S. Page 25]

     of the jury, copied in this record, which show that 'when Kreitlein purchased the flour in November, 1895, he was insolvent. He made no false representations as to his financial condition . . . the plaintiff understood that the sale was for cash.' These answers, and the fact that the judgment was for "$300 damages" indicate that that suit was in the nature of an action of trover for the recovery of flour. This judgment rendered November 23, 1897, was not paid; and in 1907, ten years later, Ferger brought the present suit against Kreitlein on that judgment, alleging that it "was not for any debt growing out of or founded upon a contract express or implied." The defendant filed a plea that in 1905 he had received his discharge in bankruptcy.

At the trial the plaintiff introduced the judgment of 1897; testified that it had not been paid, and that 'until lately he did not know that Kreitlein had gone through bankruptcy, having had no notice of it.' The defendant then introduced a certified copy of his discharge, dated November 11, 1905. He also offered a copy of the record in the bankruptcy proceedings, including the "Schedule of Creditors," in which appeared an entry showing a debt in 1895 of $271.85, for merchandise, to C. Ferger, Indianapolis.

The plaintiff objected to the admission of this record "for the reason that the testimony shows that he [Ferger] has not had any notice of this bankruptcy proceeding . . . and for the further reason that this is an action on a judgment. The schedule shows that it is on an account. The records show that this was reduced to a judgment in 1897 and this schedule was not filed until 1905." The objection was overruled and the record admitted. No further evidence was offered and thereupon the court entered judgment for the plaintiff. That judgment having been affirmed by the Appellate Court of Indiana, the case was brought here by Kreitlein who insists

[ 238 U.S. Page 26]

     that by the Federal law he was relieved from liability on the pre-existing judgment.

1. Under the provisions of § 30 of the Bankruptcy Act this court has prescribed the form [59] of the "Order of Discharge" which, among other things, contains a recital that the bankrupt has been discharged from all provable debts existing at the date of the filing of the petition, "excepting such as are by law excepted from the operation of a discharge in bankruptcy." Section 21f further declares that a certified copy of such order "shall be evidence of the jurisdiction of the court, the regularity of the proceedings, and of the fact that the order was made." This provision of § 21f was made in contemplation of the fact that the Bankrupt might thereafter be sued on debts existing at the date of the filing of the petition in bankruptcy; and was intended to relieve him of the necessity of introducing a copy of the entire proceedings so that he might obtain the benefit of his discharge by the mere production of a certified copy of the order.

There are only a few cases dealing with the subject but they almost uniformly hold that where the bankrupt is sued on a debt existing at the time of filing the petition, the introduction of the order makes out a prima facie defense, the burden being then cast upon the plaintiff to show that, because of the nature of the claim, failure to give notice or other statutory reason, the debt sued on was by law excepted from the operation of the discharge. Roden Co. v. Leslie, 169 Alabama, 579; Tompkins v. Williams, 206 N.Y. 744, affirming the opinion in 137 App. Div. 521; Van Norman v. Young, 228 Illinois, 425; Beck v. Crum, 127 Georgia, 94; Laffoon v. Kerner, 138 N. Car. 281. Compare Hancock v. Farnum, 176 U.S. 640. There were some decisions to the contrary under the Act of 1841. Among them was Sorden v. Gatewood, 1 Indiana, 107, which held that when the bankrupt was sued on a valid claim he was obliged to show that the plaintiff's debt was

[ 238 U.S. Page 27]

     among those which had in law and in fact been discharged. It was probably because of this decision of the state court that the defendant Kreitlein felt compelled to offer the schedule in order to show that Ferger was one of the creditors listed in the bankruptcy proceedings. The issue now is whether the prima facie defense made out by the production of the certified copy of the Order was disproved by the introduction of the bankruptcy record. That question can best be answered by considering the various reasons the defendant in error advances in support of his contention that the discharge of 1905 did not operate to relieve Kreitlein from the debt now represented by the judgment of 1897.

2. On the part of Ferger it is said that this suit is on a judgment for $300 rendered in an action not "founded upon a contract express or implied" -- and it seems to have been claimed that the judgment was not a provable debt within the meaning of § 63 (a. 4), of the Bankruptcy Act. But the special finding of the jury in that case showed that in purchasing the flour Kreitlein had not made any fraudulent concealment or misrepresentation as to his financial condition. Besides the judgment was a provable debt even though rendered in a suit where the creditor had elected to bring an action in trover, as for a fraudulent conversion, instead of assumpsit for a balance due on open account. Crawford v. Burke, 195 U.S. 176, 193.

3. Ferger next insists that there is a want of identity between the debt sued on and that said to have been discharged. This contention is based upon the fact that the schedule lists an 'account for merchandise for $271 in 1895 in favor of C. Ferger,' while the present suit is on a 'judgment for $300 damages rendered in favor of Charles Ferger in 1897.' The difference between the two amounts is probably explained by the fact that there had been an accrual of two years' interest before the judgment was rendered. Besides the books of the debtor and of the

[ 238 U.S. Page 28]

     creditor may not have exactly agreed and in the absence of fraud and injury such discrepancy would not invalidate the schedule or vitiate the effect of the discharge. Nor would the bankrupt be deprived of the benefit of the order because the debt was described as an 'account for merchandise' rather than as a judgment into which the liability for the flour had been merged. See Matteson v. Dewar, 146 Ill. App. 523, where it was held not to be a fatal defect for the Bankrupt to schedule the debt as an "account" even though a note had been given in settlement.

The prima facie effect of the order, to relieve the bankrupt from liability on all debts prior to 1905, was not defeated because there may have been a difference between the account and the judgment. The burden of showing that there was such difference was upon the creditor and in this case there was not only no evidence tending to sustain such a contention, but the two claims seem to have been treated as identical in the trial court, for there the objection to the admission of the Schedule was based on the contention that it referred to an account "which had been reduced to a judgment in 1897."

4. Another question -- and the one on which the Appellate Court based its decision, -- was whether the Schedule, listing the creditor as C. Ferger, Indianapolis -- using an initial and omitting the street number of his residence -- met the requirements of § 7 (8), making it "the duty of bankrupts to prepare, make oath to, and file . . . a list of his creditors showing their residences if known, if unknown that fact to be stated."

While this only involves a determination of what is a sufficient designation of a person's name and residence, yet it is one of those apparently simple questions which has been the occasion of an immense amount of controversy. The difficulty grows out of the impossibility of applying a general and uniform rule where there are so many varying

[ 238 U.S. Page 29]

     methods by which men's names and residences are designated. Some men have a well-known and constantly used Christian name; others are addressed by an abbreviation for the Christian name; others by initials for the Christian name; others are known by nickname. Some men use one name in business and another among their acquaintances. Some men, while personally ...


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