Strauch v. Flynn
| Decision Date | 02 July 1909 |
| Parties | STRAUCH v. FLYNN. |
| Court | Minnesota Supreme Court |
OPINION TEXT STARTS HERE
Appeal from Municipal Court of St. Paul; John W. Finehout, Judge.
Action by H. E. Strauch against Michael S. Flynn. From an order striking out certain allegations in the reply, plaintiff appeals. Affirmed.
An allegation in a reply of a cause of action in deceit for fraudulently inducing plaintiff to lend defendant money on a pormissory note is inconsistent with a complaint to recover a money judgment on that note.
The fact that the answer set up a discharge of defendant in bankruptcy after the execution of the note and before the commencement of the suit does not render such a reply proper. John C. Mangan, for appellant.
D. E. Dwyer, for respondent.
The complaint of plaintiff and appellant set forth the terms of a promissory note executed to plaintiff by defendant and respondent, its nonpayment, and prayed a money judgment in the amount of the note, with interest. Defendant's answer alleged his discharge in bankruptcy after the execution of this note and before this action was begun. Plaintiff's reply stated that the note sued on was a liability for obtaining property by false pretenses and representations, that defendant wholly failed to schedule the note sued on, and that therefore it was excepted by section 17 of the bankruptcy act (Act July 1, 1898, c. 541, 30 Stat. 550 [U. S. Comp. St. 1901, p. 3428]) from the effect of the discharge. The court, on defendant's motion, struck out the allegations in the reply as to fraud. Plaintiff appealed.
It will here be assumed that plaintiff's reply was correct as to form. Bankr. Act March 2, 1867, c. 176, § 33, 14 Stat. 533 (Rev. St. U. S. § 5117) excepted from the discharge by the decree in bankruptcy ‘a debt created by fraud.’ See Crawford v. Burke, 195 U. S. 176-189, 25 Sup. Ct. 9, 49 L. Ed. 147. The act of 1898 (U. S. Comp. St. 1901, p. 3428) excepted ‘judgments in an action for fraud.’ Loveland on Bankruptcy (3d Ed.) 838; Goodman v. Herman, 172 Mo. 344, 72 S. W. 546,60 L. R. A. 885;Barnes Cycle Co. v. Haines, 69 N. J. Law, 651, 61 Atl. 515;In re Rhutassel (D. C.) 96 Fed. 597, 599;Morse & Rogers v. Kaufman, 100 Va. 218, 40 S. E. 916. The amendment of 1903 (Act Feb. 5, 1903, c. 487, § 5, 32 Stat. 798 [U. S. Comp. St. Supp. 1907, p. 1026]) to that act, being section 17, excepted ‘all liabilities for obtaining money by false pretenses or false representations.’ That section applies to the facts in this case.
If plaintiff had sued on the fraud-that is, to recover damages for deceit-a plea of discharge by the decree in bankruptcy would not have availed defendant. He saw fit, however, in the complaint which he actually served, to waive the fraud and to sue on the contract as valid and existing. If no answer had been interposed thereto, and judgment had been duly entered, that judgment would have barred another action by plaintiff against defendant for damages in deceit. The new matter in the reply was obviously inconsistent with the theory plaintiff adopted in his complaint. It asserted fraud in obtaining the contract. It was inherently repugnant to the complaint, which sought recovery on the contract. The trial court therefore, properly struck it out. Common-law principles of pleading necessitated its order. The statutes of this state incorporate the common law. Section 4134, Rev. Lews 1905, provides in part: ‘If the answer contain new matter not demurred to, the plaintiff shall reply thereto, denying the averment controverted by him, or averring that he has not knowledge or information thereof sufficient to form a belief, or alleging any new matter, not inconsistent with the complaint, constituting a defense thereto.’ That the case arose out of the bankruptcy act does not change the rules of pleading. Plaintiff was bound by his allegations in his complaint on the contract.
The authorities to which plaintiff has referred us justify no change in this reasoning or conclusion. A number of them involved different proceedings. Thus in Goodman v. Herman, 172 Mo. 344, 72 S. W. 546,60 L. R. A. 885, the proceeding was to revive a judgment. So in Johnson v. Joslyn, 45 Wash. 310, 88 Pac. 324, it was held that a judgment on a note alleged to have been obtained by fraud was a debt proceeding under the bankruptcy act. So in Lee v. Tarplin, 194 Mass. 47, 79 N. E. 786 it was said: ‘The original liability [on a judgment] was for obtaining property under false pretenses.’ In a number of other cases the action itself was in deceit. Thus in Rowell v. Ricker, 79 Vt. 552, 66 Atl. 569, the declaration presented a case...
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