Turner v. Hudson

• Decision Date: 28 June 1909
• Citation: 75 A. 45,105 Me. 476
• Parties: TURNER v. HUDSON.
• Court: Maine Supreme Court

75 A. 45

105 Me. 476

TURNER

v. HUDSON.

Supreme Judicial Court of Maine.

June 28, 1909.

Exceptions and Appeal from Supreme Judicial Court, Piscataquis County, in Equity.

Bill by Alma Turner against Micajah Hudson. Decree of dismissal, and plaintiff excepts and appeals. Exceptions overruled, and appeal dismissed.

Bill in equity, brought in the Supreme Judicial Court, Piscataquis county. The bill of exceptions states the case as follows:

"This is a bill in equity, brought by the plaintiff against the defendant, wherein it is alleged that the said defendant did conceal from his creditors, and did withhold from his schedule of assets, in bankruptcy, property of great value which in equity belonged to his said creditors, and did after his discharge by the court of bankruptcy take to himself said withheld and concealed property, to the damage of said plaintiff, who was and is a creditor of said defendant, in fraud of said plaintiff; and in said bill said plaintiff asks for relief from said court, and that said defendant account to her as such creditor for said property so withheld and concealed by him."

The defendant demurred to the bill, the demurrer was sustained, and the plaintiff excepted and appealed.

Argued before WHITEHOUSE, SAVAGE, PEABODY, SPEAR, and KING, JJ.

J. S. Williams, for plaintiff.

Hudson & Hudson, for defendant.

SAVAGE, J. Bill in equity. The defendant demurred. The justice of the first instance sustained the demurrer and dismissed the bill, with costs. The plaintiff both excepted and appealed. Either would have been sufficient. It was not necessary to do both.

The plaintiff in her bill charges, in substance, that on August 29, 1904, she was a creditor of the defendant; that he on that day filed his voluntary petition in bankruptcy in the proper federal court, with the required schedules of assets and liabilities, under oath, which schedules purported to contain a true and correct inventory of his property, and a full and true statement of his debts, and was adjudicated a bankrupt; that the plaintiff was named in the schedules as an unsecured creditor, and that she seasonably made proof of her debt; that subsequently the defendant offered a composition to his creditors, under the terms of the bankruptcy act, which was duly accepted by the requisite creditors in number and amount, and was confirmed by the bankruptcy court; that the plaintiff accepted the terms of the composition and received the percentage, and that she did so under the full and reasonable belief that the defendant's schedules of assets contained an accurate inventory of his property, relying upon, and being thereto induced by, the defendant's representations, statements, and inventory under oath as aforesaid; that the defendant, with the intent to cheat and defraud the plaintiff of the same, knowingly withheld, concealed, and omitted from said schedules a large amount of money and property, which was his own, and not exempt, to secure the same for his own use and behoof, and which he has since taken and appropriated to his own use; that she was ignorant of the facts so charged as to fraud until a brief time before she filed her bill; and that she is willing to return the percentage received.

Upon these allegations, which for the present must be assumed to be true, the plaintiff claims that a trust has arisen in her favor in the property so fraudulently omitted from the bankruptcy schedules, and asks that the property may be applied in payment of her debt.

Several grounds of demurrer are suggested in argument, but we shall have occasion to notice only one. The plaintiff seeks to establish a trust for the payment of her claim —a trust growing out of a fraud by which the acceptance was procured. If the claim might be tenable under any circumstances, concerning which we express no opinion, it could only be upon the theory that her claim against her debtor is enforceable in some way, at law or in equity. If she has no enforceable claim against the debtor, she has none against his property, for the latter is founded upon the former. The alleged trust vanishes.

The bill shows a composition in bankruptcy accepted and confirmed. Section 14c of the bankruptcy act of 1898 (Act July 1, 1898, c. 541, 30 Stat. 550 [U. S. Comp. St. 1901, p. 3428]) provides that the confirmation of a composition shall discharge the bankrupt from his debts, with exceptions not material in this case. The confirmation works a discharge by operation of law. In re Merriman, Fed. Cas. No. 9,479. Therefore the defendant was discharged from his debt to the plaintiff. While such a discharge remains in force, it cannot be set aside or annulled by a state court. It is conclusive. Corey v. Ripley, 57 Me. 69, 2 Am. Rep. 19; Symonds v. Barnes, 59 Me. 191, 8 Am. Rep. 418; Bailey v. Corruthers, 71 Me. 172. It must be attacked for...