FINNELL et al. v. ARMOURA.

No. 2210. Decided June 16, 1911 (117 Pac. 49).

1. BANKRUPTCY-DISCHARGE IN BANKRUPTCY-CLAIMS DISCHARGED. A creditor, whose claim was scheduled in a petition in bankruptcy under debtor's right name, and provable, had a suit pending in justice's court against the debtor, under a wrong name, by reason of the action of the justice. There was nothing to show that the creditor had dealt with the debtor under the wrong name. Held, that the claim of the creditor was properly scheduled, and a discharge in bankruptcy released the debtor, under Bankr. Act, July 1, 1898, c. 541, section 17, 30 Stat. 550 (U. S. Comp. St. 1901, p. 3428), from liability thereon. (Page 320.)

2. PAYMENT VOLUNTARY PAYMENT. Where a judgment debtor, who had obtained a discharge in bankruptcy releasing him from liability on the judgment, delivered to an officer threatening to levy on the entire business of the debtor to satisfy the judg ment a check, on the undersigned that it should be deposited with the clerk of the court to be returned to the debtor on his establishing his claim that the liability was discharged, the delivery of the check was not a voluntary payment, and the debtor could recover the check. (Page 323.)

APPEAL from District Court, Third District; Hon. M. L. Ritchie, Judge.

Proceedings by Frank Armoura, alias Frank Arima, to quash an execution issued against him on a judgment recovered against him by C. V. Finnell and another, as Finnell & Hutchins.

Judgment quashing the execution. Judgment creditors appeal.

AFFIRMED.

E. A. Walton for appellants.

H. A. Smith for respondent.

FRICK, C. J.

This was a summary proceeding instituted in the foregoing action, and based upon a motion to quash an execution which, it is alleged, was issued or based upon a judgment which, for the reasons hereinafter stated, was and is unenforceable against the respondent.

The undisputed facts, briefly stated, are: That on the 5th day of February, 1907, respondent, under his name of Frank Arima, filed his petition in the United States District Court in which, after setting forth the necessary facts, he prayed to be adjudged a bankrupt and discharged as such. In connection with said petition, he duly filed the schedules, oaths, and summary required by the bankruptcy act. In such schedules he set forth the fact that, among others, he was indebted to appellants upon an open account, which he scheduled in the following words: "One due C. V. Finnell and L. J. Hutchings, doing business as Finnell & Hutchings, a partnership, of Bingham, Utah, contracted during years 1904 and 1905, being an open account for meat and merchandise sold and delivered to bankrupt, of the full value of $128.30, action having been commenced on this account in the justice's court of Murray City, Utah;" that on the 9th day of February, 1907, the United States District Court duly entered an order adjudging respondent a bankrupt; that the action referred to in the statement just quoted from was pending in said justice's court when respondent was adjudged a bankrupt; that thereafter, on the 3d day of June, 1907, and after all of the provisions of the bankruptcy act had been fully complied with, said United States District Court duly entered an order discharging respondent from all debts provable under the bankruptcy act, and excepted from said discharge only such as are excepted in said act; that the respondent was not indebted to appellants otherwise than on said open account and in the amount aforesaid; that, notwithstanding said bankruptcy proceedings, and after respondent had been adjudicated a bankrupt as aforesaid, appellants nevertheless proceeded with the action pending in the justice's court aforesaid, and on the 19th day of March, 1907, a

judgment was entered in said action against the respondent; that respondent in said action was sued by the name of Frank Armoura and judgment was entered against him by said name, although his true name is Frank Arima; that a transcript of said judgment was thereafter duly filed in the office of the district court clerk in Salt Lake County, and that, prior to the 4th day of July, 1910, an execution was duly issued by said clerk on said judgment; that on and prior to the 4th day of July, 1910, the respondent owned and was conducting a small business at Wandemere, Salt Lake County, from which he derived some profit; that on the 4th day of July aforesaid, which was one of the best business days in the year for said business, respondent during said day had received from said business the sum of $120; that on said day, while the respondent was conducting his said business, and while his receipts were increasing, one C. L. Schettler, a deputy sheriff of Salt Lake County, who had the execution aforesaid in his hands for service, demanded payment of the judgment so obtained in said justice's court of Murray City as aforesaid, which, with interest and costs, amounted to the sum of $212.05, from the respondent; that said deputy sheriff, at the time he made demand for payment as aforesaid, informed respondent that he, said deputy, had said execution in his possession, and that, unless payment of said judgment were made immediately by respondent, he (the said deputy) would close up and take possession of respondent's business; that respondent then informed said deputy sheriff that he (the respondent) had ob tained the benefit of the bankruptcy act, and that he "had been discharged in bankruptcy from said indebtedness;" that it was then agreed between said deputy sheriff and respondent, in order to prevent said deputy from taking possession of said business, respondent would give, and he did give, said deputy a check for the amount of said judgment, with the understanding, however, that said check was to be deposited with the clerk of the district court of Salt Lake County, and in case respondent established his claim that he was not indebted on said judgment because of his discharge as a bankrupt, as aforesaid, he was to have his check returned to him.

The deputy sheriff took the check with that understanding, deposited the same in the clerk's office, and the respondent commenced this proceeding to quash the execution attempted to be enforced as aforesaid. The deputy sheriff, in referring to respondent's claim that the execution was unjustly issued, and that he had been discharged as a bankrupt, said: "I told him I didn't know anything about that; I either had to get the money or levy on his place; so he gave me a check.

I told him I would turn it into court. He said 'I will establish my claim (the discharge in bankruptcy).' I said, 'You can do that.'" Respondent in this connection testified: "He (the deputy sheriff) told me if I don't pay it he is going to levy on my place, attach my things. That time I was doing good business. Fourth of July I got the best day in the season. I was busy; was afraid he was going to attach if I didn't pay;, levy on my place." It also was made to appear that appellants, under the name of Finnell & Hutchings, were doing business at Bingham, Salt Lake County, when respondent filed his petition in bankruptcy. Upon cross-examination, appellants' counsel sought to show that respondent was known by more than one name, and in this connection he was asked about his other name, Armoura, and how he spelled it. Respondent answered: "That is not my name, but the court put my name Frank Armoura; but my true name is Frank Arima." By this the witness meant that in the case pending in the justice's court of Murray City "the court" had given him, or that he was sued by, the name of Frank Armoura, instead of Frank Arima.

Appellants offered no evidence, and nothing is made to appear from which it can be inferred that respondent's name other was not Arima, or that he was ever known by any name, or that appellants knew and dealt with him as Armoura, the name by which he was sued. It also appears that the check was cashed, and that the proceeds thereof were deposited, instead of the check, with the clerk of the district court. Upon substantially the foregoing facts, the court made conclusions of law and directed judgment that the execution be quashed, and

that the money on deposit with the clerk, as aforesaid, be returned to respondent.

But two questions are presented for review: (1) Did the order entered by the United States District Court, discharg ing respondent as a bankrupt debtor, include the claim in question; and (2) if it did so, was the payment made by respondent voluntary, so that he may not recover it back?

With regard to the first proposition, section 17 of the bankruptcy act of July 1, 1898, c. 541, 30 Stat. 550 (U. S. Comp. St. 1901, p. 3428), so far as material here, provides:

"A discharge in bankruptcy shall release a bankrupt from all provable debts except such as (3) have not been duly scheduled in time for proof and allowance, with the name of the 1 creditor if known to the bankrupt unless such creditor had notice or actual knowledge of the proceedings in bankruptcy."

If, therefore, the claim in question was duly scheduled as provided by that portion of section seventeen just quoted, or if not so scheduled the creditor nevertheless had notice or actual knowledge of the pendency of the bankruptcy proceedings, so that he might have proved his claim, then the discharge is complete. This precise question was before the Supreme Court of Kansas, in the case of Zimmerman v. Ketchum, 66 Kan. 98, 71 Pac. 264, 11 Am. Bankr. Rep. 190, where it was held that if the claim was properly scheduled then the bankrupt was entitled to be discharged, where, as in this case, it appeared that the claim was one which was provable under the bankruptcy act. In the case of Claster v. Soble, 22 Pa. Super. Ct. 631, 10 Am. Bankr. Rep. 446, it was held that in case a claim is reduced to judgment, as was done in the case at bar, after the bankruptcy proceedings had been commenced, and although the claim was not scheduled, yet, if the creditor has actual knowledge of the pendency of the bankruptcy proceedings in time to file and prove his claim, the bankrupt is nevertheless discharged from all liability on such judgment. The court, in referring to the provisions of section seventeen of the bankruptcy act, a portion of which we have quoted, says: "It is very clear from this provision the plaintiffs hav ing admitted that they had knowledge of the proceedings in