TINDLE
v.
BIRKETT
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In this action for damages based on alleged fraudulent representations made in the sale of goods, the Supreme Court affirmed that the plaintiffs' claims were discharged in the defendant's bankruptcy proceedings. The Court held that debts arising from fraud are provable debts under the Bankruptcy Act of 1898 and therefore dischargeable unless they fall within specific statutory exceptions, none of which applied to the plaintiffs' claims in this case.
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Mr. Chief Justice Fuller delivered the opinion of the court.
This was an action brought in 1899 to recover damages claimed to have been sustained in consequence of specified false and fraudulent representations made by the firm of which the defendant was survivor, by reason whereof plaintiffs alleged they were deceived into selling goods to defendant’s firm, which they otherwise would not have done. The complaint contained three counts, setting up separate items of damages, namely, $349.30, $230.83 and $321.73 for goods sold, and judgment was demanded for the aggregate with interest on each item.
One of the defenses was that plaintiffs’ claims were barred by a discharge in bankruptcy of defendant’s firm, to which plaintiffs replied that they were not such as could be discharged in. bankruptcy proceedings.
The New York Court of Appeals held that, according to the rulings of this court in Crawford v. Burke, 195 U. S. 176, the alleged indebtedness to plaintiffs was covered by the discharge, and directed plaintiffs’ complaint to be dismissed. Tindle v. Birkett, 183 N. Y. 267.
This writ of error was then prosecuted, and plaintiffs’ counsel contends that their debts were not provable debts and therefore not-discharged, and that Crawford v. Burke might well be modified in view of certain suggestions deemed to be novel.
Sections 17 and 63a of the bankruptcy act of 1898 read as follows:
“Sec. 17. A discharge in bankruptcy shall-release a bankrupt from all of his provable debts, except such as . . . (2) are judgments in actions for frauds, or obtaining property by false pretenses or false representations, or for willful and malicious injuries to the person or property of another; . . . or (4) were created by his fraud, embezzlement, misappropriation, or defalcation while acting as an officer or in any fiduciary capacity.”
“Sec. 63.- Debts which may be proved:
“(a) Debts„of the bankrupt may be’proved and allowed against his estate which are (1) a fixed liability, as evidenced by a judgment or an instrument in writing, absolutely owing at the time of the 'filing of the petition against him, whether then payable or'not . . . ; (4) founded upon an open account, or upon a contract express or implied; and (5) founded upon provable debts reduced to judgments after the filing of the petition and before the consideration of the bankrupt’s application for a discharge, . .a"
Counsel admit that the claims in -question were all liquidated. By their nature and amount as well as by the form of the complaint they stand upon the contracts originally made. Whiteside v. Brawley, 152 Massachusetts, 133, 134.
Crawford v. Burke was an action in trover instituted in the Circuit Court of Cook County, Illinois, by Burke against Crawford and Valentine, plaintiffs in error, to recover damages for the willful and fraudulent conversion of the interests of the plaintiff in certain shares of stock. There were ten counts in .the declaration, five charging fraudulent conversion •of that stock, and five, the obtaining of money from plaintiff in the way of margins by means of false and fraudulent representations. Defendants pleaded their discharge in bankruptcy, but were found guilty on all the counts, and judgment was entered against them, which was affirmed by the Appellate .Court and by the Supreme Court of Illinois. This court held that plaintiff’s claim was “ provable under the bankruptcy act,” that is, was “susceptible of being proved,” and that it might have been proved under section 63a as “founded upon an open account or upon a contract express or implied,” if plaintiff had. chosen to waive the tort and take his place with the other creditors of the estate. And that the woids, in the fourth subdivision of section 17, “while acting as an officer, or in any fiduciary capacity,” extended to “fraud, embezzlement, misappropriation” as well as “defalcation.”
That case completely determines this as the New York Court of Appeals correctly held.
Judgment affirmed.
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Cited By (16 total)
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Brown v. O'Keefe, 300 U.S. 598 (U.S. 1937)…f membership between shareholder and bank. Ibid. A liability upon quasi-contract is one upon an “implied contract,” and so provable in bankruptcy (Bankruptcy Act § 63 (4); 11 U. S. C. § 103 (4) ; Crawford v. Burke, 195 U. S. 176; Tindle v. Birkett, 205 U. S. 183; Davis v. Aetna Acceptance Co., 293 U. S. 328, 331), if the other conditions of allowance are found to be fulfilled. Finally argument is possible that the discharge is ineffective against the creditors of the bank for the reason that only a single…
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Davis v. Aetna Acceptance Co., 293 U.S. 328 (U.S. 1934)…, § 63 (1); 11 U. S. C. § 103a. If its grievance was the sale, it might have proved “ upon a contract, express or implied,” § 63 (4), waiving the tort and standing upon the implied assumpsit. Crawford v. Burke, 195 U. S. 176, 193; Tindle v. Birkett, 205 U. S. 183. What it did is not decisive. Crawford v. Burke, supra; Tindle v. Birkett, supra. Enough that a method of proof had been provided to be used at its election. The debt being provable, the next inquiry must be whether the liability back of it is with…
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Schall v. Camors, 251 U.S. 239 (U.S. 1920)…f the tort, the tort-feasor obtains something of value for which an' equivalent price, •ought to be paid, even if the tort as such be forgiven, there may be a provable claim quad ex contractu. Crawford v Burke, 195 U. S. 176, 187; Tindle v. Birkett, 205 U. S. 183, 186; Clarke v. Rogers, 183 Fed. Rep. 518, 521-522; affd. 228 U. S. 534, 543. Of course, §§ 63 and11 < are to be read together. . The reference in the latter section to “provable debts,”, defined in the former, would-be sufficient to show tins. See…1 / 2
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- Crawford v. Burke, 195 U.S. 176 (U.S. 1904)