Case Name: Brown & Welsman, v. Lewis Rebb
Court: South Carolina Court of Appeals
Jurisdiction: South Carolina
Decision Date: 1847-02
Citations: 1 Strob. 296
Docket Number: 
Parties: Brown & Welsman, v. Lewis Rebb.
Judges: 
Reporter: South Carolina Law Reports
Volume: 32
Pages: 296–299

Head Matter:
Brown & Welsman, v. Lewis Rebb.
Whatever cause may be assigned as impeaching the certificate of one discharged under the late “Bankrupt Act of the United States,” the question for the jury is not whether there has been “wilful design,” but whether there has been fraud.
There may be motives, inducing the applicant, “by wilful design,” to make an omission in his schedule, that are not the offspring oí fraud', and while the one is regarded as sufficient to withhold his discharge and certificate, the other is necessary to annul and vacate the same
Tried before Mr. Justice Butler, at Charleston, May Term, 1843.
Action of debt on judgment.
It appeared that the judgment had been recovered before defendant applied for the benefit of the bankrupt act. After he had filed his petition, and a short time before he had obtained bis certificate, to wit, in April, 1843, (the certificate having been obtained in April, 1843, see case reported in 1 Richardson’s Reports.) the defendant was reminded of the debt by Charles W. Crouch, for whose accommodation it had been contracted.
Charles IV. Crouch, was sworn as a witness, and said, that having observed the defendant’s name in the newspapers, as an applicant for the benefit of the bankrupt act, and knowing that this debt was still unpaid, he felt anxious to give the defendant such information as might be useful. The witness said to him in December, have you included this debt in your schedule? The defendant expressed surprise that the debt bad not been paid—and said that, under the impression that it had been paid, he had not inserted the same in his schedule. Afterwards, either in May, 1843, or in the fall of the same year, the witness again spoke to the defendant on the same subject; when the defendant said, that lie had left the matter of his proceedings under the bankrupt law to his solicitor, R. W. Seymour, but said nothing more to him.
R. W. Seymour, being sworn, said, that he was employed by the defendant to draw up his petition and schedule. In drawing up the schedule, the defendant, in the first instance, commenced to give a list of his judgment debts from memory —the witness said that would not do, you must get a written list from the clerk’s office; a written list was produced, and the schedule was made in conformi ty to it. The, witness never hoard of this debt before, or after the schedule was made out, but said, that his client could have had no design to leave out this, or any other debt; and he was satisfied, from his instructions, that it was his bona fule purpose to render in a full schedule, in conformity with the law under which, he was acting.
Upon the above evidence the case went to the jury, on the issue made by the pleading, whether the defendant had wilfully omitted to insert the debt of the plaintiffs in his schedule.
The presiding Judge left the question to the jury, to say, whether the omission resulted from inadvertence, or wilful design.
Ills impression was, that the defendant had no design to prejudice the plaintiffs, nor to do any act that was inconsistent with the requirements of the bankrupt law; and that the omission to insert this debt in bis schedule, resulted wholly from forgetfulness or inadvertence.
The jury found a verdict for the plaintiffs.
The defendant appealed and moved for a new trial.
1st. Because liis Honor should have instructed the jury, that to enable the plaintiffs to recover, the omission of plaintiffs’ name, in the defendant’s schedule, must have been omitted with a fraudulent design, and from improper motives.
2d. Because his Honor should have farther instructed the jury, that the words, “wilful omission,” used in the bankrupt act, means fraudulent omission.
3d. Because the verdict of the jury was without evidence.
Ivunuardt, for the motion.
The omission in the schedule must arise from a fraudulent design; Owen on Bankruptcy, section 4, (53d of the act found in the appendix;) also, section 224 of the same author; and the case of Burnside v. Brightam, 8 Metcalf’s Rep., 75. To invalidate the certificate, it is necessary to prove the wilful and fraudulent omission of this debt in the schedule; Brown & Welsman, v. Rebb, 1 Rich., 375. Circumstances, such as advertizing by the bankrupt, the residence of the party omitted, in the city, &c., prove no wilful or fraudulent design. Again, any creditor can come in and prove his debt; Owen on Bankruptcy, 161. The plaintiffs do not attempt to show that they were ignorant of defendant’s application in Bankruptcy, nor are they damnified. The simple omission proves nothing.
Magkath, contra.
The jury have dec'ded the fact, that Rebb did wilfully omit the names of Brown & Welsman, and the presumption is, that the omission was wilful; Burnside v. Bright-man, 8 Metcalf’s Rep., 75.

Opinion:
Withees J.
delivered the opinion of the Court.
The question between the parties in this case arose upon the allegation by the plaintiff, that the defendant had wilfully omitted in his schedule the debt due by him to them, upon his application for the benefit of the late bankrupt act of the United States. The defendant pleaded his discharge and certificate in bar, and the presiding Judge described the issue to the jury to be, whether the omission complained of proceeded from "inadvertence or wilful design."
We suppose that would have been the proper mode of presenting the true inquiry, when the question was, whether he should receive his discharge and certificate; but having received them, from the proper tribunal, this must (in the language of the bankrupt act,) be regarded "as a full and complete bar to all suits brought in any Courts of judicature whatever, and the same shall be conclusive evidence of itself in favor of said bankrupt, unless the same shall be impeached for some fraud or wilful concealment by him of his property or rights of property, upon reasonable notice specifying in writing such fraud or concealment." Whatever cause, therefore, may be assigned as impeaching the certificate, the question for the jury is not merely whether there has been "wilful design," but whether there has been fraud. These are not always and necessarily convertible terms, for there may be sundry motives leading to an omission by wilful design, that are not the offspring of fraud; and while the one is regarded as quite sufficient to withhold from the party his discharge and certificate, the other is necessary to annul and vacate the same. Nor is it difficult to conceive of illustrations that exemplify the difference between the mere wilful omission to include in a schedule the name of a creditor, and a fraudulent omission to do the same thing. An applicant might believe, that upon a full and complete settlement of mutual dealings, nothing was fairly owing; or might honestly believe, however erroneously, that there had been an oppressive and heavy hand laid upon him by a creditor; there might be an understanding between them, leading even a defendant in execution to believe that his judgment creditor would not enforce his lien or advantage, and so forth.
At any rate, while we do not mean to cramp the jury in their inferences of corrupt and improper purposes, from the proof of a wilful omission in this cause, or of other circumstances that may aid their judgment, we think that they should be instructed to inquire whether there was fraud.
The motion for a new trial is granted.