Opinion
April, 1905.
Wilbur F. Earp, for appellants.
I. Robert Spear, for respondent.
The action was for goods sold and delivered; the defense, a discharge in bankruptcy. To meet this the plaintiffs showed that before and since the bankruptcy they were all nonresidents, residing in the city of Cincinnati, in the State of Ohio; that the schedule stated the plaintiffs' claim as follows: "F. Westheimer Sons, 317 Main Street, New York City, Liquors, 134.27;" and they thereupon offered in evidence a deposition in which the following questions, among others, were put to one of them: "Did you at any time between August 22d 1901, and November 4th, 1901, receive any notice that the said defendant Michael D. Howard had filed a petition in bankruptcy? When and through whom did you first learn of said defendant's bankruptcy proceedings? Did your firm between August 22d 1901, and November 4th, 1901, or at any time, receive any written or printed notice of the petition of the defendant in bankruptcy or of any meeting of his creditors, or of his application for discharge in bankruptcy?"
These questions were excluded, when they should have been admitted, and as they go to the very gist of the case the exclusion constitutes reversible error.
The Bankruptcy Law (§ 7, subd. 8) requires the bankrupt to prepare, verify and file a schedule of his property containing "a list of his creditors, showing their residences, if known, if unknown that fact to be stated." Other provisions contemplate various notices to creditors of successive steps in the proceeding. Section 17 declares that "a discharge in bankruptcy shall release a bankrupt from all his provable debts except such as * * * (3) 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."
In Columbia Bank v. Birkett, 174 N.Y. 112; 9 Am. B.R. 481; affirmed, 195 U.S. 345, 12 Am. B.R. 691, Gray, J., says: "In my opinion there are features in the present Bankruptcy Act, which differentiate it from preceding acts and which indicate a legislative intent that greater strictness shall prevail in notifying the creditor of the various proceedings in bankruptcy." If by the default of the bankrupt no notice reaches the creditor and no actual knowledge on his part is shown the debt is not discharged. The schedule of debts which the bankrupt files furnishes the basis for the notices sent by the referee or the court and "thus, the bankrupt appears to be made responsible for the correctness of the list of his creditors." Id. 116.
In the case at bar the schedule gives the address 317 Main street, New York city. There is no presumption that notices so addressed reached them at 317 Main street, Cincinnati, O. The questions excluded by the justice were competent to show, first, that no notice reached the plaintiffs, and secondly, that they had no actual knowledge of the proceedings. The judgment should be reversed.
SCOTT and GREENBAUM, JJ., concur.
Judgment reversed and new trial ordered, with costs to appellants to abide event.