McGehee v. Brookins, 2022.

• Decision Date: 10 May 1940
• Docket Number: No. 2022.,2022.
• Citation: 140 S.W.2d 963
• Parties: McGEHEE et al. v. BROOKINS et al.
• Court: Texas Court of Appeals

Page 963

140 S.W.2d 963

McGEHEE et al. v. BROOKINS et al.

No. 2022.

Court of Civil Appeals of Texas. Eastland.

May 10, 1940.

Rehearing Denied June 7, 1940.

Appeal from District Court, Howard County; Cecil C. Collings, Judge.

Suit by Mrs. William B. Brookins and husband against Ernestine McGehee and husband to foreclose an alleged judgment lien against land. From a judgment for plaintiffs notwithstanding a verdict for defendants, defendants appeal.

Affirmed.

D. M. Oldham, Jr., of Abilene, and Thomas & Thomas, of Big Spring, for appellants.

Coffee & Coffee, of Big Spring, for appellees.

FUNDERBURK, Justice.

This suit was brought by Mrs. William B. Brookins, joined by her husband, William B. Brookins, against Mrs. Ernestine McGehee and her husband, Albert McGehee, to foreclose an alleged judgment lien upon land in Howard County. The judgment, the basis of said lien, was for the sum of $982.18 recovered by Mrs. Brookins in Dallas County on June 19, 1933 in her then name of Dona Jarman against said Ernestine McGehee in her then name of Ernestine Chalk, a feme sole. (Plaintiff, among other things, prayed that "said indebtedness * * * be established"; but no facts were alleged showing any necessity of re-establishing by a new judgment the indebtedness already established by the former judgment.)

The defendants, among other things, pleaded in defense (1) fraud in the procurement of the original judgment; (2) payment of the debt, of which said judgment awarded recovery; (3) discharge in bankruptcy proceedings.

In a jury trial the verdict was for the defendants. However, upon motion of plaintiffs for judgment, notwithstanding the verdict, judgment was rendered for plaintiffs as prayed. From that judgment the defendants have appealed.

For brevity we shall refer to Mrs. William B. Brookins as plaintiff, and to Mrs. Ernestine McGehee as defendant.

The questions for decision are so presented as to make it proper to consider first, whether the judgment debt in question was duly scheduled in the bankruptcy proceedings. If a provable debt is duly scheduled by a bankrupt, it is unimportant whether the creditor receives actual notice of the bankruptcy proceedings. The law is "A discharge in bankruptcy shall release a bankrupt from all of his provable debts, except such as * * * (third) have not been duly scheduled in time for proof and allowance, with the name of the creditor, if known to the bankrupt, unless such creditor had notice or actual knowledge of the proceedings in bankruptcy." 11 U.S.C.A. ch. 3, § 35. The debt in defendant's schedule was listed thus: "Mrs. Dona Jarman, Dallas, Texas, (Operating S. M. U. Shop, Dallas, Texas) ............$892.18."

It was shown conclusively that when the schedule was filed the name of plaintiff was Dona Brookins and that her residence was in Chicago. At the time the judgment was recovered plaintiff's name was Dona Jarman; she operated a business under the name of "S. M. U. Style Shoppe" in Dallas, Texas, and resided at the Adolphus Hotel, in Dallas, Texas.

According to what seems to us to be the weight of authority a due scheduling of provable debts by a bankrupt includes (1) the correct name of the creditor, if known, and (2) the residence of the creditor, if known, and if not known, a statement to that effect.

It is believed that Freeman v. Hawkins, 77 Tex. 498, 14 S.W. 364, 19 Am.St.Rep. 769, as authority, compels the conclusion that the schedule here involved did not state the correct name of the creditor. For authority that the name of the creditor must be correctly stated in the schedule and the misnomer will be ground for holding that the debt was not "duly" scheduled, though the variance is comparatively unimportant, see cases annotated in U.S.C.A. Title 11, § 35, note 147, p. 193.

As to the other of said two essentials to the due listing of debts, the requirement is that the residence of the creditor be given, if known to the bankrupt, or if not known, that it be so stated. 11 U.S.C.A. ch. 3, § 25, subd. 8. The bankrupt is under duty to use reasonable diligence to ascertain the residence of the creditor, and if thereby he acquires knowledge of such residence he must state it correctly, and if he fails to ascertain such residence, to state that the residence is unknown. It is believed to be implicit in a schedule, which fails to state that the creditor's residence is unknown, that the bankrupt (after reasonably diligent inquiry, if necessary) knows such residence and has truly stated same.

In the schedule filed by the defendant, not only the name and residence of the creditor was incorrectly stated, but the name under which plaintiff formerly operated a business, and which was known to the defendant, was incorrectly stated; it being "S. M. U. Style Shoppe", but stated to be "S. M. U. Shop." It is our conclusion that the debt was shown to be not duly scheduled.

Not having been duly scheduled, it was not discharged by the order discharging the bankrupt, unless plaintiff was given notice or had actual knowledge of the bankruptcy proceedings. There was, in our opinion, no evidence whatever that plaintiff was given notice of the bankruptcy proceedings, and it is only material to inquire whether she acquired actual knowledge thereof.

In the absence of any evidence showing whether or not the debt was duly scheduled, it would have, upon evidence of the order of discharge alone, been presumed that it was duly scheduled and therefore discharged. However, it being established that the debt was not duly scheduled, the burden was upon defendant to show that plaintiff had actual knowledge of the bankruptcy proceedings. State of Texas v. National Bank of Cleburne, 116 Tex. 214, 288 S.W. 435; Hill v. Smith, 260 U.S. 592, 43 S.Ct. 219, 67 L.Ed. 419.

There was no evidence of such notice, unless it consisted of notice to Garland Woodward, an attorney, imputed by law to the plaintiff. The jury found that Garland Woodward, on or about January 1, 1936, acting as an attorney, had the judgment for collection and was acting as attorney in the employ of Mrs. Dona Jarman. It was also found that said attorney was acting in the employ of some other person or persons, other than Mrs. Dona Jarman.

It was agreed that the petition in bankruptcy was filed December 28, 1935, and the order of discharge was made August 3, 1936. On April 12, 1935, E. Taylor Armstrong, of the firm of Storey, Sanders & Sherrill, of Dallas, Texas, wrote to Garland Woodward, an attorney at Big Spring, advising that "Our client, Mrs. William Brookins, formerly Mrs. Dona Jarman, is the owner and holder of a valid judgment in the...