Hanan v. Long

Thomas, J.: The. question is whether a judgment against a debtor discharged in bankruptcy was properly canceled. The judgment entered in 1901 is for the recovery of money, and rests upon a complaint for breach of contract to pay $2,500 in cash, also a sum equal to a sum to the credit of a named company on a fixed date, also the collected net profits of such company, also the balance of accounts receivable by such company less outstanding debts. There is no allegation of wrongful withhold [328] ing unless it be found in the recital, “ it being also agreed that the defendant should act as agent for the plaintiffs in collecting the said outstanding accounts with power and authority to the defendant, as plaintiffs’ agents, to pay out of any cash on hand as collected, such outstanding debts as existed on the 1st day of October, 1902.” It is clear that the pleading does not sound in tort. (Matter of Benoit, 124 App. Div. 142; affd., 194 N. Y. 549.) The total alleged to have been paid was $4,000, and the amount unpaid was stated at $2,497 and interest. On August 19, 1907, the defendant filed a petition in bankruptcy, and on November 30, 1907, was granted a discharge from all debts and claims provable against his estate and existing at the date of the petition, “excepting such debts as are by law excepted from the operation of a discharge in bankruptcy.” It appears by the schedules in bankruptcy that the judgment was the only indebtedness. The judgment creditors filed objection to the bankrupt’s discharge, specifying that they had an unsatisfied claim against him “in an action for fraud and for willful and malicious injury to their property.” Tb this-the bankrupt demurred and the special master sustained the demurrer, saying that “Under the Bankruptcy Act, Sec. 17,* a discharge would not be a bar to that judgment, and in consequence of that fact the objecting creditor herein is not such a party in interest as permits him to file specifications objecting to the discharge of the bankrupt. In re Servís, 15 Am. B. Rep. 271,” and the report was confirmed. If the specification was true, there was no occasion to oppose the discharge, as it did not affect the claim, as such claim is excepted from the discharge. But whether it was true was a matter for determination elsewhere. Such was the practice in Tinker v. Colwell (193 U. S. 473), and such is the rule (Matter of Marshall Paper Co., 102 Fed. Rep. 872). The Federal court determined nothing. The occasion for examining the matter has now arisen. The inquiry is whether the judgment roll shows that the judgment is based on a claim not dischargeable in bankruptcy and so falling within the exception in the certificate of discharge. (Matter of Benoit, supra, 144; Burnham v. Pidcock, 58 App. Div. 273, 276.) So we turn to the record and find an agreement alleged in the [329] complaint, a breach of it, not of duty growing out of a fiduciary relation, and it also appears in the present record that there was a trial by jury and a balance found due. The order should be affirmed, with ten dollars costs and. disbursements. Jenks, P. J., Hirschberg, Carr and Woodward, JJ., concurred. Order affirmed, with ten dollars costs and disbursements. Footnotes [*] See 30 U. S. Stat. at Large, 550, § 17, as amd. by 32 id. 798, § 5. — [Rep.