Goldman v. Adlman
| Decision Date | 13 September 1935 |
| Citation | 291 Mass. 492,197 N.E. 632 |
| Parties | GOLDMAN v. ADLMAN et al. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Suit in equity by Max Goldman against Joseph M. Adlman and others. From a final decree for the plaintiff, defendants appeal.
Decree reversed, and bill dismissed.
Appeal from Superior Court, Suffolk County; Weed Judge.
A. G Gould and H. Shapiro, both of Boston, for plaintiff.
B Goldman and S. H. Kalish, both of Boston, for defendants.
The plaintiff seeks by this suit in equity to enjoin the enforcement of a judgment and execution obtained by the defendant, Adlman, hereafter called the defendant, against the plaintiff on the ground that the defendant's claim is barred by the plaintiff's discharge in bankruptcy. Badger v. Jordan Marsh Co., 256 Mass. 153, 152 N.E 92. The defendant pleaded (1) res judicata and (2) lack of notice or knowledge of the plaintiff's bankruptcy whereby that discharge was prevented from being operative as to his claim. At the trial all material facts well pleaded in the bill and answer were admitted to be true except those relating to the defendant's knowledge of proceedings in bankruptcy against the plaintiff. Certain oral evidence was introduced and is reported at the request of the defendant. A final decree was entered granting an injunction. The appeal of the defendant brings the case here.
The trial judge filed a report of material facts found by him. Those relating to res judicata are these in substance: In 1924 Adlman began action on a written guaranty against Goldman which in June, 1932, resulted in a judgment in favor of Adlman for a considerable sum and the issuance of an execution thereon. It is the enforcement of that judgment and execution which Goldman seeks to enjoin. On March 19, 1931, an involuntary petition in bankruptcy was filed against Goldman and on April 1, 1931, he was adjudicated a bankrupt. He filed schedules in bankruptcy on April 7, 1931, but failed to list Adlman as a creditor. It is admitted that Adlman knew of the bankruptcy proceedings on November 15, 1931, but there is dispute whether he received notice thereof within six months of the adjudication so that the later discharge in bankruptcy would be operative as to his claim under the Bankruptcy Act of July 1, 1898, as amended, 30 U.S. Sts. at Large, 550, c. 541, § 17, 42 U.S. Sts. at Large, 354, c. 22 (11 USCA § 35); and 30 U.S. Sts. at Large, 561, c. 541, § 57n, 44 U.S. Sts. at Large, 666, c. 406, § 13 (11 USCA § 93(n). It is not denied that the debt due to Adlman was of a nature provable in bankruptcy and to be barred by a discharge in bankruptcy. No question is raised as to the validity of the judgment of June, 1932. Berry Clothing Co. v. Shopnick, 249 Mass. 459, 463, 144 N.E. 392. The notice which the plaintiff now asserts was effectual for this purpose was a letter sent by the plaintiff's attorney to the attorney for the defendant on March 26, 1931. A dividend was paid to the creditors of Goldman on November 9, 1931, and a discharge in bankruptcy was granted him on July 19, 1933.
No question is raised that the discharge in bankruptcy would bar an action on the judgment of June, 1932, although not entered until long after the adjudication, if the debt had been scheduled or the judgment creditor had within six months of the adjudication notice or actual knowledge of the proceedings in bankruptcy. In August, 1932, Adlman brought supplementary proceedings on the judgment of June, 1932, in the Municipal Court of the City of Boston but they were subsequently dismissed for want of prosecution and are not now of consequence. Later second supplementary proceedings were brought by Adlman in the same court on that judgment. In that case Goldman filed a certificate of his discharge in bankruptcy and made a motion to dismiss the proceeding by reason thereof. The issue was thus raised whether the discharge in bankruptcy was a bar to the debt due to Adlman on the judgment and to the supplementary proceedings for its collection. In order to determine that issue the parties submitted the case to the Municipal Court upon agreed facts. It was therein stated that ‘ On November 15, 1931, the judgment creditor and his counsel first received notice of said bankruptcy proceedings.’ The case was heard and briefs were filed. On November 22, 1933, the motion to dismiss was denied. Later the court found that Goldman had ability to pay and made order that he pay $2 weekly. Goldman filed no appeal from this order and took no other steps to correct errors of law in the decision but he did not comply with it. The trial judge states in his report that so far as appeared before him ‘ no evidence was offered in said supplementary proceedings and it was disposed of upon said agreed facts.’
The contention of the defendant is that the issue whether he had notice or actual knowledge of the bankruptcy proceedings so that his claim is barred by the discharge of the plaintiff in bankruptcy was considered by the court in the supplementary proceedings and that the order of the court in that case settled that issue in the defendant's favor.
It is not open to dispute that a decision on its merits by a court of competent jurisdiction determines conclusively between the parties every issue which in fact was or which in law might have been litigated. Franklin v. North Weymouth Cooperative Bank, 283 Mass. 275, 280, 186 N.E. 641. The specific contention of the plaintiff is that the Municipal Court in supplementary proceedings did not have jurisdiction to adjudicate the validity of the plaintiff's discharge in bankruptcy as a bar to the defendant's claim. That contention is based upon a statement in Badger v. Jordan Marsh Co., 256 Mass. 153, 156, 157, 152 N.E. 92, 93, to the effect that the Municipal Court of the City of Boston has no authority ‘ to stay temporarily or perpetually the executions which issued on its judgments.’ That statement was made before the enactment of St. 1927, c. 334, § 2, now embodied in G. L. (Ter. Ed.) c. 224, §§ 14-30, which provide for supplementary proceedings such as are here involved. That statement cannot be stretched to govern the facts here disclosed with respect to procedure established by a statute not then in existence. Vigeant v. Postal Telegraph Cable Co., 260 Mass. 335, 343, 157 N.E. 651, 53 A.L.R. 867.Sinclair v. United States, 279 U.S. 749, 767, 49 S.Ct. 471, 73 L.Ed. 938, 63 A.L.R. 1258. The question presented must be decided on its merits and is not precluded by the Badger Case.
The design of the statute as to supplementary procedure is Giarruso v. Payson, 272 Mass. 417, 420, 172 N.E 610, 611; McDermott v. Justices of the Municipal Court of the City of Boston, 287 Mass. 563, 192 N.E. 18; B. F. Huntley Furniture Co. v. Parker (Mass.) 196 N.E. 925. In any event inability on the part of a court to grant complete injunctive relief to a judgment debtor is not inconsistent with a power to determine issues and exercise jurisdiction to afford a less extensive relief in proceedings rightly before it. Courts commonly refrain from aiding in the enforcement of a judgment where there exists an appropriate defence. F. H. Hill Co. v. Doe, 286 Mass. 187, 188, 189, 189 N.E. 583; DiRuscio v. Popoli, 269 Mass. 482, 169 N.E. 548. ...
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