In re Stenger

• Decision Date: 12 August 1922
• Docket Number: 5353.
• Citation: 283 F. 419
• Parties: In re STENGER.
• Court: U.S. District Court — Eastern District of Michigan

283 F. 419

In re STENGER.

No. 5353.

United States District Court, E.D. Michigan, Southern Division.

August 12, 1922

Yerkes Simons & Goddard, of Detroit, Mich., for bankrupt.

Sanders & Wanamaker, of Detroit, Mich., for respondent creditor.

TUTTLE District Judge.

This is a petition by the bankrupt asking this court to stay certain proceedings pending against him in a state court at the time of the filing of his voluntary petition in bankruptcy in this cause.

It is alleged by petitioner that on November 21, 1921, a judgment was rendered against him in the sum of $812.33 in the circuit court for the county of Wayne (the state court just referred to) in an action theretofore brought against him in said court by one of his creditors, the Farmers' Fire Insurance Company, a Pennsylvania corporation, in an action of trespass on the case. The declaration in said action alleged that said bankrupt (the defendant in said action) being the duly authorized agent of said insurance company (the plaintiff in said action), had solicited and procured certain contracts of insurance with various persons, under which certain insurance policies had been issued by said insurance company to said persons; that said bankrupt had, as such agent, collected the sum of $1,086.82, being the amount of the premiums on said policies; that there was due to said bankrupt as commissions on said policies $264.89, and for postage the further sum of $4.60, leaving a balance due to said plaintiff insurance company amounting to $812.33; that a reasonable time had elapsed for the payment of said money to said plaintiff, but that said defendant, although often requested so to do, had failed to pay or to account for said sums of money collected as said premiums and had taken and converted the same to his own use and benefit.

The petition of the bankrupt now pending alleges that an execution has been issued on said judgment against the body of said petitioner (the bankrupt), and that said execution is in the hands of the sheriff of said county, who threatens to arrest and confine petitioner thereunder; that if said insurance company, through said sheriff, be allowed to proceed in said action as indicated, injury will be done to said petitioner, as he is unable to pay said judgment, and said insurance company will not grant him further time for such payment; that the only means of support for petitioner and his family is his salary as a wage-earner, and that if confined in jail through said body execution he will be unable to support his said family. Petitioner prays that further proceedings in the said action, and particularly the service of the said body execution, may be stayed for the time prescribed in the Bankruptcy Act, and that said insurance company and the said sheriff be restrained from any further proceedings in said action, and from serving or enforcing the said body execution until the further order of this court.

Petitioner invokes and relies upon section 11a of the Bankruptcy Act (Comp. St. Sec. 9595), providing as follows:

'A suit which is founded upon a claim from which a discharge would be a release, and which is pending against a person at the time of the filing of a petition against him, shall be stayed until after an adjudication or the dismissal of the petition; if such person is adjudged a bankrupt, such action may be further stayed until twelve months after the date of such adjudication, or, if within that time such person applies for a discharge, then until the question of such discharge is determined.'

It will be noted that it is only an action founded upon a 'claim from which a discharge would be a release' that may be stayed under the section of the statute just quoted. Is an action founded upon a liability for a conversion by a person to his own use, of money coming into his hands as the agent of another, a claim dischargeable in bankruptcy? The controlling s...