Santa Rosa Bank v. White

SMITH, C.

This is a suit on a promissory note of the appellant and the other defendants, for the sum of $3,675.53, with interest, etc. The plaintiff had judgment, from which and from an order denying the appellant defendant’s motion for a new trial the appeal is taken.

The defense is a discharge of the defendant in bankruptcy, under the act of July 1, 1898, (30 U. S. Stats. 544; U. S. Comp. Stats. 1901, p. 3418). The effect of this was to “release” the defendant, “from all of his provable debts,” with the exceptions named in section 17 of the act; which, so far as

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material, reads as follows: “A discharge in bankruptcy shall release a bankrupt from all of his provable debts, except such as . . . 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.”

It was held by the court, in effect, that the debt sued on comes within the exception stated. The contrary is claimed by the appellant; for the reason, among others, that it appears from the evidence that the plaintiff’s debt was not known to him when he prepared his schedules, or until after his discharge;- which was more than a year after the adjudication of bankruptcy. The only evidence on this point is the defendant’s own testimony. But his explanation of the matter is not unreasonable; and as there is no finding on the point, it must be assumed that the court regarded the question as immaterial; which, indeed, is the ground now taken by respondent’s counsel. It will be assumed, therefore, that the fact is as stated by appellant in his testimony. The question involved is therefore purely one of construction, arid may be thus stated:. Does the exception cited include all debts not scheduled, whether known or unknown to the bankrupt, or only such as were known to him?

The question is not without difficulty, but the grammatical structure of the provision seems to require the former construction ; and we see nothing in the terms of the provision or in the other provisions of the act—whether considered in themselves or in connection with the former law—to indicate a different intention. (Sutherland on Statutory Construction, sec. 267; Broom’s Legal Maxims, 652.) Under the former •law the omission óf a debt from the schedule, whether intentionally or otherwise, did not affect the validity of the discharge (Rev. Stats., sec. 5119); and the effect of the new provision is simply to establish a different rule. In the only cases involving this provision we have been able to find, the question now presented was not involved, nor do they seem to throw any light upon it.