Harrington & Goodman v. Herman

• Decision Date: 24 February 1903
• Citation: 72 S.W. 546,172 Mo. 344
• Court: Missouri Supreme Court
• Parties: HARRINGTON & GOODMAN v. HERMAN.

72 S.W. 546

172 Mo. 344

HARRINGTON & GOODMAN v. HERMAN.

Supreme Court of Missouri, Division No. 2.

February 24, 1903.

BANKRUPTCY—DISCHARGE—SALE — FRAUD OF BUYER—JUDGMENT FOR PURCHASE PRICE OF GOODS—BUYER AND SELLER—FIDUCIARY RELATION.

1. Bankr. Act 1898, § 17 [U. S. Comp. St. 1901, p. 3428], provides that a discharge shall release all provable debts, except "judgments in actions for fraud or obtaining property by false pretenses or false representations." A judgment recited that plaintiff's cause of action was founded "upon a written instrument, to wit, an account." In the suit, which was for the price of goods, a writ of attachment had been issued; one of the grounds therefor being that the debt sued for was fraudulently contracted. Held, that the judgment creditor could not go behind the judgment, and prove that the sale of the goods was induced by the fraud of the judgment debtor, to avoid the effect of the debtor's discharge in bankruptcy.

2. Bankr. Act 1898, § 17 [U. S. Comp. St. 1901, p. 3428], provides that a discharge shall release a bankrupt from all provable debts, except such as were created by his fraud, embezzlement, misappropriation, or defalcation while acting as an officer or in any fiduciary capacity. Held, that no fiduciary capacity existed between a buyer and seller of merchandise, which would prevent a discharge in bankruptcy releasing the purchaser from a judgment for the price of the goods, though the sale had been induced by his fraudulent representations.

Appeal from circuit court, Greene county; Jas. T. Neville, Judge.

Action by Harrington & Goodman against D. H. Herman. Judgment for defendant, and plaintiffs appeal. Affirmed.

This cause was tried by the circuit court of Greene county, Mo., the result of which was a judgment for defendant, from which judgment plaintiffs, in due time and form, have prosecuted their appeal.

This is an ordinary proceeding to revive a judgment heretofore rendered in favor of the plaintiffs and against the defendant. The respondent, as a defense thereto, pleads a discharge in bankruptcy. The appellants, by way of replication, plead that defendant's discharge in bankruptcy is no bar to the revival of their judgment against the defendant; alleging that the judgment was for goods sold to the defendant, and obtained by defendant from the plaintiffs by false pretense and false representations. The court treated respondent's discharge as a complete release of all his indebtedness, of every character whatsoever, and rendered judgment against the plaintiffs for costs, and discharging the respondent from the obligations of the judgment. From this judgment, and after an unsuccessful motion for new trial, the plaintiffs appealed to this court.

In order to fully understand the disputed questions in this case, it would be well to examine the pleadings, and see precisely what is in issue. The petition to revive the judgment is as follows: "Harrington & Goodman, a firm composed of Samuel Goodman, Wm. E. Goodman, and Jos. Goodman, Plaintiffs, v. Daniel H. Herman, Defendant. In the Circuit Court of Greene County, Missouri, May Term, 1899. Come the above-named plaintiffs, Harrington & Goodman, a firm composed of Samuel Goodman, William E. Goodman, and Joseph Goodman, and represent to this honorable court that on the 2d day of February, 1891, plaintiffs recovered in this court a judgment against Daniel H. Herman, the above-named defendant, said judgment being founded upon the sale by plaintiffs of merchandise to the firm of Herman Bros., of which the above-named defendant, D. H. Herman, was a member, amounting at said time to seven thousand one hundred and twenty-nine dollars, and therefore the said plaintiffs recovered against said Daniel H. Herman a judgment for said amount, with interest thereon at the rate of six per cent. per annum from said February 2, 1891, to this date, and for costs of said suit, which said judgment was duly entered upon the records of this court, in Judgment Record 38, at page 259; that no part of said judgment has been paid, and the whole amount thereof is due and unpaid; that no part of the costs of said suit has ever been paid by said defendant; and that the lien of said judgment on the lands and tenements of said Daniel H. Herman has expired. Wherefore plaintiffs pray that said judgment thereof be revived against the said Daniel H. Herman, and that the lien be revived against the lands and tenements of said Daniel H. Herman, and that a writ of scire facias issue to the said Daniel H. Herman, his tenants, and the occupants of his lands, commanding him and them to appear before this court at the next term thereof to show cause, if any he has, why this judgment, in form as rendered aforesaid, and the lien thereof on the real estate of the said Daniel H. Herman, be not revived, and for such other and further relief as may be proper. Heffernan & Heffernan, Attorneys for Plaintiffs." Defendant files answer to this petition as follows: "Harrington & Goodman, Plaintiffs, v. Daniel H. Herman, Defendant. In the Circuit Court of Greene County, Missouri, May Term, 1899. Comes now the defendant in the cause above entitled, and, for answer to plaintiffs' amended petition, denies each and every allegation in said petition contained, and so, having answered, prays to be discharged, with costs. And for another and further answer to petition of plaintiffs, defendant said that heretofore, to wit, on the 22d day of November, 1898, he filed a petition in the District Court of the United States for the Southern Division of the Western District of Missouri, to be adjudged a bankrupt; that thereafter, in the course of said bankruptcy proceedings, the plaintiffs in this case, as well as the other creditors of this defendant, proved up their judgments before the said court and the referee in bankruptcy, George S. Rathbun, against the defendant and against his estate; that afterwards, in due course in said proceedings, the petition of this defendant to be adjudged a bankrupt, and discharged as such, came on to be heard before the judge of said court, and on such hearing the plaintiffs in this case, as well as certain other creditors of the defendant, filed objections to the defendant being adjudged a bankrupt, and discharged as such; that said objections were heard in due course in said United States District Court, and were on the 10th day of April, 1899, by said court, overruled, and thereupon, on the said day, this defendant was adjudged a bankrupt, and judgment was entered finally discharging him as such bankrupt. That by the force and effect of said judgment the defendant was discharged and relieved from further liability on the account of the alleged indebtedness of the plaintiffs against him, and is no longer responsible therefor. Wherefore, having so fully answered, defendant prays to be discharged, with costs R. L. Goode, Attorney for Defendant." The replication of plaintiffs was in the nature of a confession and avoidance of the new matter alleged as a defense to the action. It is admitted that the defendant was discharged, as alleged, in the bankrupt proceedings, from all debts against his estate, under said bankrupt act, but it is averred that the debt evidenced by the judgment sought to be revived is excepted by law from such discharge, for the reason it is alleged that the merchandise purchased by the defendant, for which plaintiffs recovered judgment against the defendant, was by the defendant, D. H. Herman, obtained and procured from the plaintiffs by false pretenses and false representations. The replication of plaintiffs fully sets forth the manner of obtaining the merchandise, and avers in detail in what the fraud in securing the goods consisted. As to the original suit, in which the judgment was recovered for merchandise sold defendant by plaintiffs, a writ of attachment was issued in aid of the suit. One of the grounds in the affidavit which was filed in procuring the attachment was "that the debt sued for was fraudulently contracted for on the part of the defendant." A plea in abatement was filed by defendant, which put in issue the grounds alleged in the affidavit for attachment. This plea was withdrawn, and the attachment was sustained.

Heffernan & Heffernan, for appellants. W. D. Tatlow, for respondent.

FOX, J. (after stating the facts).

It will be observed that in this controversy there is but one issue, and that is sharply presented by the pleadings in this cause. Plaintiffs offered in evidence the judgment obtained against the defendant, which is sought to be revived; also the affidavit in attachment, and the judgment in case of McNally v. Herman, Record No. 38, page 265; also the affidavit in attachment and judgment in case of Lippincott, Johnson & Co. v. Herman—to all of which testimony defendant objected as irrelevant, incompetent, and immaterial. This evidence was admitted subject to objection. This was the prima facie showing as made by plaintiffs. "Defendant offered in evidence certified copy of discharge of D. H. Herman from bankruptcy, together with the objections and exceptions thereto, to which plaintiffs objected because said discharge is not a discharge in a case of the character that is sought to be revived, because the United States court failed and refused to consider the objections made by Harrington & Goodman; stating at the time that it wasn't a proper defense to his discharge, and that, if the facts were true as stated, it would have to be brought up in a different way. (Objections overruled, to which plaintiffs then and there duly excepted at the time)"— which discharge in bankruptcy is as follows: "Discharge of Bankrupt. District Court of the United States, Southern Division of the Western District of Missouri. Whereas, Daniel H. Herman, of Springfield, in Greene county, and state of Missouri, in said district, has been duly adjudged a bankrupt under the acts of Congress relating to bankruptcy, and...