Loomis v. Wallblom

69 L.R.A. 771, 102 N.W. 1114, 94 Minn. 392, 1905 Minn. LEXIS 435
Supreme Court of Minnesota·Decided April 7, 1905·No. Nos. 14,094—(191)·Published·Cited by 5 cases

Opinion

JAGGARD, J.

On November 27, 1893, defendants, partners doing business as Wallblom & Thorsell, executed a deed of assignment under the state insolvency law, both as individuals and as partners, of all their unexempt property, which was filed in the district court of Ramsey county. The National Wall Paper Company filed and proved its claim in the assignment matter, but did not file a release, and received no dividend. In March, 1895, it brought an action against Charles Wallblom and John Thorsell, as copartners doing business as Wallblom & Thorsell, in the district court of Ramsey county, alleging in its complaint the sale of goods of the value of $254.77, and default in payment. There was no allegation that the goods were sold to the firm or purchased for partnership purposes. Default was made, and judgment entered on April 9, 1895, against “Charles Wallblom and John Thorsell, as copartners doing business as Wallblom & Thorsell, and each of them.” On August 4, 1898, Charles Wallblom filed his individual petition in bankruptcy, and was on August 5 adjudged a bankrupt. The claim of the National Wall Paper Company was listed as follows: “National Wall Paper Co., Chicago, Ill. $254.77. Consideration, goods bought.” On December 19, 1898, Charles Wallblom was discharged from all his debts. This plaintiff, as assignee of said judgment, thereafter brought this action to renew the judgment hereinbefore set forth. Defendant Wallblom answered, setting up his discharge in bankruptcy as a defense. The reply does not deny actual notice of the bankruptcy proceedings on the part of the National Wall Paper Company, but denies that notice was given to the partnership creditors. It does not appear that defendant John Thorsell was served or appeared'in the proceeding. Upon the trial it was admitted that copartnership of Wallblom & Thorsell ceased to do business in 1893, and that the partnership was dissolved so far as it could be done by the acts of the partners. The debt here sued upon was not paid or discharged. The court found that notice had been given to all creditors whose claims were scheduled, and ordered judgment in favor of Wallblom upon the merits. From an order denying plaintiff’s motion for a new trial, this appeal was duly taken.

Plaintiff’s assignments of error involve the determination of this question, namely: Did the court err in holding as a proposition of law [394] that the individual discharge in bankruptcy of Wallblom released him from the claim here sued upon?

1. The answer to that question depends, in the first place, upon a construction of the bankruptcy act. The certificate of discharge recited that the bankrupt had conformed to all the requirements of law in that behalf. The court thereby decreed that the bankrupt be

Forever discharged from all debts and claims which by said act are made provable against his estate, and which existed on the 4th day of August, 1898, on which day the petition for adjudication was filed by him, excepting such debts, if any, as are by said act excepted from the operation of a discharge in bankruptcy.

There is no claim that the discharge was invalid by reason of any of the things mentioned in chapter 3, §§ 14 and 15, of the bankruptcy act of July 1, 1898, c. 541, 30 St. 550 [U. S. Comp. St. 1901, 3427, 3428]. The discharge did not purport to forever release the bankrupt from all his debts and liabilities, but only from all such “debts and claims” as were by said bankruptcy act “made provable against his estate.” That the debt was one which might have been proved in bankruptcy proceedings against the estate of the individual partner is evident from the whole tenor of the law, and especially from c. 1, § 1, 30 St. 544 [U. S. Comp. St. 1901, 3418], chapter 3, §§ 4, 5, of that law, 30 St. 547 [U. S. Comp. St. 1901, 3423, 3424], See also section 16, 30 St. 550 [U. S. Comp. St. 1901, 3428]. Indeed, subdivision “g” of said section 5 expressly provides that

The court may permit the proof of the claim of the partnership estate against the individual estates and vice versa and may marshal the assets of the partnership estate and individual estates so as to prevent preferences and secure the equitable distribution of the property of the several estates.

The history and present status of this case differentiate it from any authority to which our attention has been called, or which a careful search has enabled us to find. Collier, Bankr. (5th Ed.) § 5a, p. 74. The partnership ceased to do business, and had been dissolvéd so far as the parties could dissolve it, in 1893. Moreover, in that year, by [395] general assignment under the state insolvency law, the partners convejred all their unexempt individual and firm assets to an assignee. The plaintiff has not made it appear that any such firm assets now exist. This court will not presume that they do. This case therefore does not involve any question of marshaling assets, nor of the right of the plaintiff against the firm assets or the other partner. Defendant Wallblom alone appears to have been served with summons in this action. The question here presented to this court affects the judgment against him alone. It is also to be borne in mind that this is not an objection to the entry of a decree of discharge, but only to the right of plaintiff to renew or extend this judgment.

'The entry of the judgment materially affected the nature of the claim on which it was based, so far as these proceedings are concerned. It might be that in certain contingencies this court would examine that judgment for the purpose of ascertaining what the original contract was. Such a proposition is, however, academical in this case. When the judgment was entered it became a lien on any unexempt real estate within the county where the judgment was docketed which belonged to the defendant and respondent Wallblom, and the creditor became entitled to appropriate new rights and remedies against him in consequence. So far as this case involves that judgment, the original cause of action was merged therein. In McKittrick v. Cahoon, 89 Minn. 383, 95 N. W. 223, this court held that where, by an order in bastardy proceedings, the putative father of a natural child was required to pay a monthly stipend for its support, and upon refusal a final money judgment was obtained for the total amount due, the rights of the person entitled to recover under the order of filiation were merged in the judgment, and the debt evidenced thereby was not excepted from the operation of the bankruptcy act of 1898, § 17, although the claim on which the judgment was based, standing by itself, would not have been discharged.

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Loomis v. Wallblom, 69 L.R.A. 771, 102 N.W. 1114, 94 Minn. 392, 1905 Minn. LEXIS 435 (Mich. 1905).

69 L.R.A. 771 (Loomis v. Wallblom) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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