Donnell v. England

• Decision Date: 21 February 1940
• Docket Number: 35807
• Parties: Jesse F. Donnell v. R. S. England, Appellant
• Court: Missouri Supreme Court

137 S.W.2d 471

345 Mo. 726

Jesse F. Donnell v. R. S. England, Appellant

No. 35807

Supreme Court of Missouri

February 21, 1940

Appeal from Jefferson Circuit Court; Hon. E. M. Dearing Judge.

Affirmed.

Terry Terry & Terry for appellant.

(1) A discharge in bankruptcy is an in rem judgment conclusive as to the status of the bankrupt and frees him from future liability, as to all dischargeable obligations in effect prior to his adjudication in bankruptcy. 8 C. J. S., Bankruptcy, pp. 1490, 1507, 1571, 1572; Flemming v. Lullman, 11 Mo.App. 106; U.S.C. A., Title 2, sec. 35, p. 206. (2) In order to revive the liability on a debt discharged in bankruptcy or to create a new enforceable obligation there must be a clear, distinct and unequivocal recognition and renewal of the debt as a binding obligation, anything short thereof being insufficient and a mere acknowledgment of the discharged debt or the expression of hope, desire, expectation, or intention to pay or revive the same is not sufficient. Monroe v. Herrington, 110 Mo.App. 512; Cochrane v. Cott, 156 Mo.App. 667; Flemming v. Lullman, 11 Mo.App. 106; Interstate Paper Co. v. Gresham, 116 S.W.2d 232. (3) In order to maintain suit on a note from which the defendant has been discharged in bankruptcy, action can only be maintained upon the new promise. The original cause of action, being discharged by the certificate in bankruptcy, is gone, although a new promise is, therefore, the cause of action and the only cause of action, and where it is oral and made more than five years before suit was brought, it is barred by the express terms of our statute. If it be written, and more than ten years before suit is brought, it is barred by the express terms of our Statute of Limitations. Fleming v. Lullman, 11 Mo.App. 108; Secs. 861, 862, 883, R. S. 1929. (4) Part payment does not take a debt out of the statute unless made under such circumstances as to warrant the inference that the debtor thereby recognized the debt and signified his willingness to pay it. The payments must be made by or with the consent of the payor, and if credits are entered by the holder, without the knowledge or consent or at his direction, they are ineffective to check the running of the statute. Eubank v. Eubank, 29 E. W. (2d) 214; Crow v. Crow, 124 Mo.App. 129; Regan v. Williams, 185 Mo. 631; Interstate Paper Co. v. Gresham, 116 S.W.2d 232; Philips v. Mahan, 52 Mo. 199; 37 C. J., Limitations of Actions, pp. 1147, 1148. (5) When a Statute of Limitations has run against the note at the time of the credit of a payment shown by the endorsement and it is clear that the note was barred by the statute unless it was saved by that credit, the burden is upon the plaintiff to prove the fact of resuscitating payment by evidence aliunde the endorsement, which standing alone, is no evidence of that fact as it takes too much the nature of a self-serving act of the payee. Brown v. Carson, 132 Mo.App. 376; 8 C. J. S., Bankruptcy, pp. 1571, 1572; 37 C. J., Limitations of Actions, pp. 1147, 1148; Interstate Paper Co. v. Gresham, 116 S.W.2d 232. (6) It was within the power of the jury to affix the amount of recovery and it is erroneous for the trial court to fix the amount of interest creditable or to be recovered, and an instruction in accordance therewith is erroneous. Meffert v. Lawson, 315 Mo. 1097; Sec. 973, R. S. 1929; Bank v. McCallister, 246 S.W. 609; Bank v. Stamper, 250 S.W. 961; Hackett v. Dennison, 19 S.W.2d 544. (7) An instruction which comments on the evidence and amounts to a directed verdict is erroneous. Hackett v. Dennison, 19 S.W.2d 544; Milling Co. v. Lowery, 248 S.W. 625.

Jeffries, Simpson & Plummer for respondent.

(1) A discharge in bankruptcy is personal to the bankrupt, and may be waived by him. 7 Remington on Bankruptcy (5 Ed.), sec. 3499; Diamant v. Stein, 116 S.W.2d 273; Chitwood v. Jones, 56 S.W.2d 147. (a) The defense of discharge in bankruptcy is waived if not pleaded. Chitwood v. Jones, 56 S.W.2d 147; Blackman v. McAdams, 131 Mo.App. 408, 111 S.W. 599; Farmers & Merchants Bank v. Richards, 119 Mo.App. 18, 95 S.W. 290; Traders Natl. Bank v. Hermer, 202 Mo.App. 402, 218 S.W. 937. (2) A debt discharged by bankruptcy may be revived by a new promise to pay. No particular form of words need be used. The promise is constituted by words which, in their natural import, express the present intention to obligate or undertake to pay. 75 A. L. R., p. 580, Annotation entitled "What amounts to promise to pay which will avoid effect of discharge in bankruptcy." (a) The new promise need not be in writing. Farmers & Merchants Bank v. Richards, 119 Mo.App. 18, 95 S.W. 290; Reith v. Lullman, 11 Mo.App. 254; Wislizenus v. O'Fallon, 91 Mo. 184, 3 S.W. 837; Swan v. Lullman, 12 Mo.App. 584; 75 A. L. R. 601; 7 Remington on Bankruptcy, sec. 3503. (3) A debt discharged by bankruptcy, although unenforceable, constitutes the existence of a liability sufficient to form a consideration for a new promise to pay the discharged debt. The cause of action is the new promise reviving the old debt. Chitwood v. Jones, 56 S.W.2d 147; Boone County Milling & Elevator Co. v. Lowery, 248 S.W. 623; Zavelo v. Reeves, 57 L.Ed. 676, 227 U.S. 625; 8 C. J. S., p. 1491; 40 A. L. R., p. 1446; 7 Remington on Bankruptcy, sec. 3500. (4) Part payment of a debt against the enforcement of which the Statute of Limitations has run, revives the debt. Gardner v. Early, 78 Mo.App. 346; Elsea v. Pryor, 87 Mo.App. 161; Mo. Interstate Paper Co. v. Gresham, 116 S.W.2d 232; Koyl v. Lay, 194 Mo.App. 291, 187 S.W. 279; Weir v. Carter's Estate, 224 S.W. 147. (5) The verdict of the jury, based on conflicting evidence that a new promise was made reviving the debt, the enforcement of which was barred by the Statute of Limitations, and which was discharged by bankruptcy, is conclusive upon the appellate court. Diamant v. Stein, 116 S.W.2d 273; Genta v. Ross, 37 S.W.2d 972, 225 Mo.App. 673; Reugsegger v. C. G. W. Ry. Co., 29 S.W.2d 221, 225 Mo.App. 211; Poindexter v. Ellison, 34 S.W.2d 554; Amer. Packing Co. v. Milwaukee Mechanics' Ins. Co., 35 S.W.2d 956; Jackson v. Mo. Pac. Ry. Co., 42 S.W.2d 936, 226 Mo.App. 29. (6) Instruction 1, given at the request of the respondent, covering the whole case, was correct. (a) The instruction did not amount to a comment on the evidence. Fowler v. M., K. & T. Ry. Co., 84 S.W.2d 206, 229 Mo.App. 561; Nance v. Landsdell, 73 S.W.2d 348. (b) The instruction did not fix the amount of interest which the jury must find, but allowed the jury to compute same. (7) Instruction 2, given at the request of the respondent, was correct. (a) It correctly stated the amount of interest to be allowed as par of the credit dated December 21, 1932, and allowed the jury to calculate the other interest involved. Home Trust Co. v. Josephson, 95 S.W.2d 1156, 339 Mo. 170; State ex rel. Witte Hardware Co. v. McElhinnel, 100 S.W.2d 26, 231 Mo.App. 860. (8) The instruction requested by the appellant, marked "Refused Instruction 1," was properly refused.

OPINION

Tipton, J.

On January 1, 1914, the appellant, R. S. England, executed and delivered his note in the sum of $ 8878.73, due one year after date, to respondent, Jesse F. Donnell. On February 18, 1937, the respondent recovered a judgment on this note in that sum against the appellant in the Circuit Court of Jefferson County, Missouri. From this judgment the appellant has duly appealed.

The appellant admitted the execution of the note, but relied upon the defense that on September 2, 1919, he was adjudicated a bankrupt, and was discharged on February 20, 1920, from all debts listed in his schedule, among which was the note sued on herein. He also relied upon the Statutes of Limitation.

The respondent admitted the bankruptcy of appellant, but sought to avoid this defense by showing that the appellant promised on several different occasions to pay this note after his discharge in the bankruptcy proceeding. "The discharge of the debtor in bankruptcy does not satisfy the debt, but merely releases the debtor of his legal obligation to pay. The moral obligation to pay remains, and furnishes a sufficient consideration in law for the new promise to pay. This promise, to be enforceable, 'must be an express, positive and unconditional promise.'" [Farmers & Merchants Bank of Vandalia v. Richards, 119 Mo.App. 18, l. c. 22, 95 S.W. 290.] The promise may be oral or written and the action is not on the note but on the new promise, the discharged debt being the consideration therefor. [Fleming v. Lullman, 11 Mo.App. 104.]

In regard to the promise to pay this note, the respondent testified that appellant said: "He said he was going to go through bankruptcy to keep from paying this lawyer, and he said, 'I will pay you every cent I owe you.' Following this conversation I received a card from the Referee in Bankruptcy. When I got that card I had a conversation with Mr. England. He said, 'Pay no attention to that card, I will pay you every cent.' Following along about March, 1920, he said he had been discharged in bankruptcy and he said I want you to understand I will pay you every cent I owe you. I told him that was all right; I thought he would." Again, in February, 1921, the appellant said to respondent, "I am going to pay every cent I owe you on that old note. I will pay you right away." A similar conversation took place December 1, 1932, and as late as January 17, 1936, the appellant told respondent, "Doctor, there is no use in getting mad about this thing, I will pay you all of that note."

In the case of Reith v. Lullman, 11 Mo.App. 254, the Court of Appeals held that the statement, "Tell Harry (meaning the plaintiff) to come down and I will pay him," was an unconditional promise to pay the plaintiff. [See also Farmers &...