King v. Harry, Civ. A. No. 718-53.

• Citation: 131 F. Supp. 252
• Decision Date: 11 February 1955
• Docket Number: Civ. A. No. 718-53.
• Parties: James M. KING, Plaintiff, v. Wade L. HARRY, Defendant.
• Court: U.S. District Court — District of Columbia

131 F. Supp. 252

James M. KING, Plaintiff, v. Wade L. HARRY, Defendant.

Civ. A. No. 718-53.

United States District Court District of Columbia.

February 11, 1955.

Paul J. Kasloff, Washington, D. C., for plaintiff.

Milton Conn, Washington, D. C., for defendant.

YOUNGDAHL, District Judge.

Plaintiff seeks to recover on a judgment obtained in Maryland, April 10, 1950, in an automobile negligence action in the sum of $13,000, with interest and costs. Defendant admits the Maryland judgment but avers that since it was properly scheduled in his bankruptcy petition of August 1, 1950, in the District of Columbia, as to which he received a discharge on November 7, 1950, he no longer is indebted to the plaintiff.

This case involves application of Section 7, sub. a(8), which places upon the bankrupt the duty of preparing and filing schedules of his assets, the names of his creditors and their correct residences, and Section 17, sub. a(3) of the National Bankruptcy Act which excepts from the operation of a discharge all provable debts which have not been properly scheduled.¹

Plaintiff listed his address as Clinton, Maryland, on his declaration (complaint) in the Maryland suit, but here maintains that he testified during the course of the Maryland trial that his address had been changed and, in fact, was 1100 W Street, S. E., Washington, D. C.; that he testified as to this changed address in open court in the presence of defendant and his then attorney.

In his petition for bankruptcy in the District of Columbia, defendant listed plaintiff's address as Clinton, Maryland, to which address the Referee in Bankruptcy sent timely notices. While notice of the bankruptcy proceeding was never received by plaintiff, no notice sent to plaintiff at the Clinton, Maryland, address was returned to the Referee for want of a better address. Until defendant asserted the bankruptcy discharge as a defense to enforcement of the Maryland judgment in the present case, plaintiff had no actual knowledge of the bankruptcy proceedings. Plaintiff contends that his debt was not duly scheduled in the bankruptcy proceeding by reason of the incorrect address; that the bankrupt having failed to exercise proper care and diligence in specifying the correct address in his schedules, the debt on the Maryland judgment has not been discharged.

Defendant contends, to the contrary, that the debt was duly scheduled and therefore discharged since defendant had the right to, and did, rely upon the address plaintiff had placed upon the official record of the Maryland suit; that plaintiff is estopped from claiming the debt was not duly scheduled, since the address of Clinton, Maryland was incorrect at the time the Maryland action was instituted, plaintiff having already moved to the District of Columbia without leaving a forwarding address; that there being no assertion of fraud or dishonesty by defendant, but at the very most neglect, the Court should, in line with the policy of the Bankruptcy Act to enable a bankrupt to get a fresh start, discharge the debt growing out of the Maryland judgment.

There was a conflict in the testimony as to whether plaintiff testified about his changed address during the Maryland trial. The Court is satisfied, and finds, that plaintiff did so testify; that it was done in the presence of defendant and his then lawyer; that defendant, disregarding this testimony, listed plaintiff's address in the bankruptcy schedule as it appeared on the face of the Maryland declaration; that plaintiff had no notice or actual knowledge of the bankruptcy proceeding.

A discharge in bankruptcy is a privilege. It is not a one-way street. The bankrupt has certain obligations to fulfill and his creditors, already losers, are at least entitled to notice before their property is taken, in the absence of some good and sufficient explanation to the contrary. Lundy v. Skinner, 1935, 220 Iowa 831, 263 N.W. 520, Tyrrel v. Hammerstein, 1900, 33 Misc. 505, 67 N.Y.S. 717, 719. For this reason, and for the reason that the sections of the Act requiring correct scheduling are for the benefit of the creditors and not the debtor, a bankrupt must exercise great care to schedule his assets and names and addresses of . . . his creditors properly. Van Denburgh v. Goodfellow, 1941, 19 Cal.2d 217, 120 P.2d 20, McGehee v. Brookins, Tex.Civ.App., 1940, 140 S.W.2d 963, ...