Morris v. Drubin

ASHBURN, J.

Judgment having been rendered against appellant Drubin for $17,734.66 plus interest and costs in favor of Richard Morris, as administrator of estate of Russell Smith, deceased, Drubin went into voluntary bankruptcy. He listed Morris as his only creditor, Morris proved a claim on the judgment, made no objection to a discharge and Drubin was duly given his discharge in bankruptcy. After a year had

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elapsed he moved the superior court to cancel and discharge the judgment pursuant to section 675b, Code of Civil Procedure,

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on the ground that the debt had been discharged through bankruptcy. The motion was denied and Drubin appeals from that order.

The controlling question upon this appeal is whether the judgment was based upon a wilful and malicious conversion of certain bonds and hence not dischargeable through bankruptcy. (11 U.S.C.A. § 35.)

The complaint upon which the judgment was rendered consisted of one common count for money had and received; the answer contained only denials. The findings dispose of the formal issues

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money had and received and then deal with the underlying facts. They show that Russell Smith was the owner of United States Government bonds of face value of $17,500 (apparently bearer bonds). They were in the possession of one George Duncan. Shortly prior to August 3, 1948, Samuel Small inquired on behalf of Duncan whether Drubin would arrange to cash the bonds and deliver $14,000 to Duncan out of the proceeds. Drubin agreed to do so and Small put him in contact with Duncan. About August 3rd Drubin received the bonds from Duncan and placed them for sale in his own name through a bank. The bonds were thereafter sold by the bank on August 3, 1948, for $17,734.66 and the proceeds received by Drubin. He then delivered $14,000 to Duncan and $1,000 to Small, keeping $2,734.66 for himself. All these things were done without the knowledge, consent or authority of Smith, the owner of the bonds.

Paragraph IX of the findings says: “That neither the defendant, E. Shepard Drubin, nor the defendant, Samuel Small, was a bona fide purchaser or a holder in any other capacity of said bonds in good faith or for value.” Duncan