Court Opinion

ID: 6988088
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:19:59.133318+00
Date Added: 2024-06-11T16:09:31.658120
License: Public Domain

McAllister, J. The replication of the plaintiff below, in avoidance of the defendant’s plea of a discharge in bankruptcy, avers, under the provision of section thirty-three of the bankrupt act of 1887, that the debt sued on was created by the fraud of the defendant, as charged in the declaration. That section provides that “ no debt created by the fraud or embezzlement of the bankrupt, or by defalcation as a public officer, or while acting in a fiduciary capacity shall be discharged under this act.” In Neal v. Clark, 95 U. S. 704, the Federal Supreme Court gave a construction to that provision, and held that the word “ fraud,” as therein used, meant positive fraud, or fraud in fact, involving moral turpitude or intentional wrong, and not-implied fraud, or fraud in law, which may exist without the imputation of bad faith or immorality. Under that construction the court below clearly eyred in refusing the instruction asked by the defendant’s counsel, and giving the one which the court gave in the place of it. By tiie one asked and refused, the court was requested to direct the jury that the defendant’s discharge in bankruptcy was a complete defense to the action, unless the jury believed from the evidence, that the defendant knowingly and fraudulently made false representations concerning the gas bonds in question, he knowing them to be false when he made them. The one given in its stead, reads: “ The jury are instructed that the discharge in bankruptcy is a perfect defense in this case, unless the jury shall find from the evidence that the defendant, Allen, made false representations concerning the gas bonds in question in this case, or having reason to believe them to be false, when he made them.” It need only be said that the requirements of that instruction are far short of what is required by the above provision, as construed by the Supreme Court, in order to avoid the effect of the discharge in bankruptcy. Audit was error to refuse the one asked, and to give that one in its place. The question of a misjoinder of counts in the declaratipn has been elaborately argued by counsel for Allen, plaintiff in error, but we find they liavenot assigned it for error. For the reason given the judgment of the court below will be reversed and the cause remanded. ¡Reversed and remanded.