Summary
In Slacum, the defendant induced the plaintiff into purchasing a note the defendant had signed by falsely stating that his wife had also signed the note; in fact, she had not.
Summary of this case from Aqua Acceptance, LLC v. The Pelican Grp. ConsultingOpinion
[No. 21, October Term, 1932.]
Decided November 30th, 1932.
Discharge in Bankruptcy — Debt Not Affected — Deceit — Action on Case — Election of Remedies.
Since the Bankruptcy Act excepts from the debts from which a bankrupt may be discharged "liabilities for obtaining property by false pretenses or false representations," a discharge in bankruptcy is no defense to an action of trespass on the case for deceit in representing that a note purchased by plaintiff at defendant's request was signed by defendant's wife, when in fact her name was written thereon by defendant without authority from her. p. 352
Where defendant induced plaintiff to purchase from another a note signed by defendant, by falsely stating that defendant's wife had also signed it, whereas in fact her name was written thereon by defendant without authority, plaintiff had the choice whether to sue defendant in trespass on the case for deceit or, waiving the tort, to sue him in assumpsit on the note. pp. 352, 353
In trespass on the case for deceit in misrepresenting the genuineness of a signature on a note sold to plaintiff, neither a plea that "defendant never promised as alleged," nor a plea of discharge in bankruptcy, was appropriate. p. 353
Decided November 30th, 1932.
Appeal from the Circuit Court for Dorchester County (PATTISON, C.J., BAILEY and DUER, JJ.).
Action by the Eastern Shore Trust Company against Lonie Slacum. From a judgment for plaintiff, defendant appeals. Affirmed.
The cause was argued before BOND, C.J., ADKINS, OFFUTT, PARKE, and SLOAN, JJ.
William N. Andrews, for the appellant.
Henry Henry, submitting on brief, for the appellee.
The appellee, the Eastern Shore Trust Company, sued the appellant, Lonie Slacum, for the balance on a promissory note purporting to have been signed by the appellant and his wife, Elizabeth C. Slacum. It is alleged that the note was dated December 20th, 1926, payable four months after date, and was purchased by the appellee from another bank at the request of the appellant, who represented it to be the note of himself and his wife. The declaration further charges: "That the name of Elizabeth C. Slacum on said note is not the signature of Elizabeth C. Slacum and was not placed on said note by the said Elizabeth C. Slacum or by any person acting under her direction or authority, but that the said name was fraudulently and wrongfully written on said note by the defendant, and that the plaintiff had no knowledge of said facts until long after the purchase of the note aforesaid."
The defendant filed two pleas: The first "that he never promised as alleged"; the second, that the defendant had filed a voluntary petition in bankruptcy on which he was adjudged a bankrupt; that on May 2d 1930, he was discharged as a bankrupt debtor "from the debt or claim alleged in the declaration and that the alleged claim accrued before the filing of his petition in bankruptcy."
The plaintiff demurred to both pleas and the demurrers were both sustained. The defendant then pleaded the general issue short. The parties went to trial before the court sitting as a jury, and the judgment being for the plaintiff, the defendant appealed.
The only question on the appeal is the ruling on the demurrer. The appellant contends that his discharge in bankruptcy relieves him of the obligation, while the appellee contends that the debt of the appellant was based on his fraudulent representation that his wife signed the note, and that but for this the appellee would not have purchased the note, and that, under section 17 of the Bankruptcy Act of the United States (11 U.S.C.A., sec. 35), the obligation of the appellant is a debt "not affected by a discharge," the second clause of the section excepting, from the debts for which a bankrupt may be discharged, "liabilities for obtaining property by false pretenses or false representations." "As to the character of the pretenses or representations intended by the statute it may be said that a representation as to a fact made knowingly, falsely, and fraudulently for the purpose of obtaining money or property from another and by means of which such money or property is obtained, is a legal fraud within the statute." Black on Bankruptcy, sec. 744.
The theory of the appellant is that the appropriate remedy of the appellee would be in assumpsit. The appellee could have sued in assumpsit ( Poe's Pleading, sec. 121; 1 Chitty's Pleading (16th Am. Ed.), *1112), but it had its choice either so to sue on the promissory note or in trespass on the case for deceit, and it chose to do the latter. Daniels' Negotiable Instruments, sec. 1372 B; Poe's Pleading, secs. 198-201; Brantly on Contracts (2nd Ed.), sec. 184. "Where a contractual relationship exists between persons and at the same time a duty is imposed by or arises out of the circumstances surrounding or attending the transaction, the breach of such duty is a tort and the injured party may have his remedy by an action on the case, or he may waive the tort and sue for the breach of the contract." 26 R.C.L. 986; Weaver v. Shriver, 79 Md. 530, 543, 30 A. 189. If the tort has once been waived, the defendant cannot afterwards be treated as a wrongdoer. Lythgoe v. Vernon, 5 Hurl. N. 180; Hanna v. Pegg, 1 Blackf. (Ind.) 181.
It appearing that the facts recited in the declaration, if true, entitled the appellee to sue in trespass on the case, neither the general issue plea to an action on a simple contract (Code, art. 75, sec. 28, subsec. 41), nor the plea of bankruptcy, would be appropriate, and the demurrer to both pleas was properly sustained.
Judgment affirmed, with costs.