Atlanta Skirt Mfg. Co v. Jacobs

• Decision Date: 28 September 1910
• Docket Number: (No. 2,015.)
• Citation: 68 S.E. 1077,8 Ga.App. 299
• Parties: ATLANTA SKIRT MFG. CO. v. JACOBS.
• Court: Georgia Court of Appeals

68 S.E. 1077

8 Ga.App. 299

ATLANTA SKIRT MFG. CO.

v.JACOBS.

(No. 2, 015.)

Court of Appeals of Georgia.

Sept. 28. 1910.

(Syllabus by the Court.)

1. Bankruptcy (§ 420^*)—Discharge—Liabilities Discharged.

A discharge in bankruptcy does not release a bankrupt from liability for obtaining property by false pretenses or false representations.

[Ed. Note.—For other cases, see Bankruptcy, Dec. Dig. § 426.*]

2. Bankruptcy (§ 437*)—Obtaining Goods in View of Insolvency—Evidence.

It was for the jury to determine whether the circumstances adduced, even though they were slight, were sufficient to carry conviction of the existence of fraud perpetrated by false pretenses, and it was error to direct a verdict.

[Ed. Note.—For other cases, see Bankruptcy, Dec. Dig. § 437.*]

3. Sales (§ 43*) — Fraudulent Representations.

A false representation may consist in the purchasing of goods with no present purpose of paying for them, and in contemplation of a fraudulent insolvency.

[Ed. Note.—For other cases, see Sales, Cent. Dig. §§ 86-92, 97-100; Dec. Dig. § 43.*]

Error from Superior Court, Fulton County; J. T. Pendleton, Judge.

Action by the Atlanta Skirt Manufacturing Company against M. B. Jacobs. There was a directed verdict for defendant, and plaintiff brings error. Reversed.

Horton Bros. & Burress, for plaintiff in error.

Mayson & Johnson and W. D. Ellis, Jr., for defendant in error.

RUSSELL, J. The Atlanta Skirt Manufacturing Company sued Jacobs in a jus, tice's court on three promissory notes, and by consent of all parties the cases were appealed to the superior court and consolidated. Jacobs' defense to the notes was his discharge in bankruptcy. To avoid this discharge the plaintiff relied on section 17 of the bankruptcy law (Act July 1, 1898, c. 541, 30 Stat. 550 [U. S. Comp. St. 1901, p. 3428]) as amended in 1903 (Act Feb. 5, 1903, c. 487, § 5, 32 Stat. 798 [U. S. Comp. St. Supp. 1909, p. 1310]), which provides as follows: "A discharge in bankruptcy shall release a bankrupt from all of his provable debts, except such as * * * are liabilities for obtaining property by false pretenses or false representations." In support of this avoidance the plaintiff proved that for several years prior to the bankruptcy, and prior to the giving of the notes, Jacobs had been running an account with it, and had from time to time given his notes for balances due. Some of the notes involved in this suit were given about 30 days before the failure, which was involuntary. It was estimated by the plaintiff and his witnesses that at that time the stock of goods in the defendant's shop was only about one-fifth as valuable as it was 30 days before, when some of the goods represented by the notes were purchased. The schedule in bankruptcy showed liabilities of $15,634.35, and assets aggregating approximately $13,000. It was admitted that the notes were properly scheduled. Jacobs made no positive representation or statement as to his condition at the time he purchased the goods from the plaintiff. The goods were sold by the latter on the faith of past dealing, and on the confidence based on the appearance of prosperity indicated by the large size of the stock. There were, however, other circumstances from which it could be...