Fider v. Mannheim

CANTY, J. This is an action on a promissory note. The answer pleads a discharge in bankruptcy. On the trial the court ordered a dismissal [310] of the action, and plaintiff appeals from an order denying a new trial. In 1895, defendant executed the note to the Homestead Building & Loan Association for $130. In October, 1898, the association transferred the note to plaintiff, and it being due, he demanded payment of the same from defendant. A few days after-wards, to-wit, on October 13, 1898, defendant was on his own petition adjudged a bankrupt by the United States district court in and for the district of Minnesota. About this time defendant paid plaintiff four dollars on the note. Defendant listed his debt in the bankruptcy proceedings as being held and owned by the loan association, and notice was given to it of the application for a discharge; but plaintiff was never listed as a creditor and no notice was given to him in the bankruptcy proceedings. Defendant was, by the judgment of that court entered on May 9, 1899, discharged from all his provable debts, and this discharge is pleaded in bar in the answer herein. Section 17 of the bankruptcy law of 1898 (30 Stat. [U. S.] c. 541) provides: “A discharge in bankruptcy shall release a bankrupt from all of his provable debts except such as * * * (3) have not been duly scheduled in time for proof and allowance, with the name of the creditor, if known to the bankrupt, unless such creditor had notice or actual knowledge of the proceedings in bankruptcy.” If it were not for the provision of the statute, the judgment of discharge would be conclusive on plaintiff whether he ‘had notice or not. See In re Archenbrown, Fed. Cas. No. 504; Lamb v. Brown, Fed. Cas. No. 8,011; Brown v. Covenant, 86 Mo. 51. The evidence is conclusive that before defendant filed his petition in bankruptcy he knew that plaintiff was the owner and holder of the note. But in our opinion the evidence is also conclusive that early in November, 1898, plaintiff knew that defendant had gone into bankruptcy and had not then been discharged. Plaintiff admitted repeatedly in his own testimony given on the trial that he was informed of the fact early in November by defendant and others. The evidence is conclusive that plaintiff had such knowledge. He also had ample time thereafter in which to prove his claim if he desired to do so and have it allowed, as the judgment of [311] discharge was not entered until the following May. Then the trial court did not err in ordering a dismissal. Order affirmed.