Wade v. Clark

2 N.W. 1039, 52 Iowa 158

• Court: Supreme Court of Iowa
• Decided: October 24, 1879
• Status: Published

Opinion

Adams, J.

i. bankrupt- or:discharge: dohts created in fiduciary capacity. I. The plaintiff relies upon section 33 of the Bankrupt Act to avoid the effect of the discharge. That section is in these words; “No debt created by fraud "" * w v- ^ or while acting in a fiduciary character shall be discharged by the proceedings in

bankruptcy.” It is contended, however, by the defendant that the debt is discharged notwithstanding the provision above quoted. ITis claim is based upon the fact that judgment was taken upon the debt.

That this would have the effect to merge the original cause of action no one would deny; that such merger would prevent all inquiry into the original cause of action seems to have been held substantially in Ridge v. Breck, 10 Cush., 43; Bangs v. Watson, 9 Gray, 211; Wolcot v. Hodges, 15 Gray, 547; Coleman v. Davis, 45 Geo., 489. The latter case arose under the act in question. The federal courts, however, sitting m bankruptcy appear to have given a different construction to the act, bolding that the merger of the original cause of action would not have the effect to bring the debt within the operation of the discharge. In re Patterson, 1 National Bankrupt Reg., 307; In re Whitehouse, 4 N. B. R., 63; Warner v. Cronkite, 13 N. B. R., 52; Flanagan v. Pearson, 14 N. B. R., 37; In re Seymour, 1 Benedict, 348; In re Robinson, 6 Blatchford, 253. The same rule was held in state courts in Howland v. Carson, 28 Ohio St., 625; Homer v. Spelman, 78 Ill., 207; Reid v. Martin, 11 Sup. Ct. R. N. Y., 590. Such appears to us to be the correct rule. The debt in question was not, we think, within the meaning of the statute, created when the judgment was rendered. The most that can be said is that that particular form of the debt was then created. In our opinion the debt, within the meaning of the statute, was created while the defendant was acting in.afiduciary character, and is, therefore, not discharged.

2 practiceuuom'stLute of limitations. II. The judgment sued on was rendered February 18,1858. This action was commenced February 7, 1878. It was commenced in the name of Susan B. Wade and David Waldo, executors of the estate of Jonathan B. Olarlc, in whose favor the judgment sued on was rendered. February 3, 1879, which was more than twenty years after- the judgment was rendered, the plaintiff Waldo withdrew from the case, and the plaintiff Susan B. Wade filed an amended petition, setting up that she was the sole heir at law of Jonathan B. Clark, and as such was the owner of the judgment, and prayed judgment thereon against defendant in her own right.

The defendant insists that the withdrawal of Waldo as plaintiff, and the filing of an amended petition by Susan B. Wade, whereby she ceased to appear in a representative capacity and appeared in her own right, were equivalent to the commencement of a new action, and that the action, therefore, should be regarded as barred.

To this we think it sufficient to say that if the change made by the amendment was equivalent to commencing a new action the amendment should not have been allowed. It was, however, allowed, and that, too, without any objection by the defendant so far as the record shows. Under the circumstances we must treat the action as the same brought by the plaintiff and Waldo as executors. For this reason, if for no other, the action cannot be considered as barred.

The judgment of the court below is

Affirmed.