In re Bregard
In re Bregard
Opinion of the Court
The petitioner was duly adjudged an insolvent debtor on October 16, 1886, and following the adjudication the usual statutory orders were made and entered. In May following, B. McKenzie, one of the creditors, and respondent herein, filed an opposition to the petitioner’s application for a discharge, in which he alleged that the petitioner had failed to include in his schedules several head of horses and of cattle, a double wagon, and a pre-emption claim to 160 acres of land, all of said property being valued at about $5,500; that he had included in his schedule three false and fictitious debts, viz., $66.60, $1,040, and $135.39, in which amount he claimed to be indebted to one Shuey; that he had included in his schedule of assets a certain amount of hay, and a three-eighths interest in certain barley and wheat, which did not belong to him.
After a trial of the issues the court found that the petitioner was not the owner of the horses, cattle, lumber, or pre-emption claim referred to in the opposition, but that he had included in his schedule the false and fictitious debts above referred to. The court further found that at the time of filing his petition he was not the owner of the hay, or of the three-eighths interest in the barley and wheat. Upon these findings the court concluded that the petitioner was not entitled to a discharge, and an order was entered denying his application.
We cannot understand how the learned judge of the court below could have arrived at this conclusion upon the evidence. McKenzie rented a ranch in Contra Costa County for the cropping season 1885-86, and entered into an agreement with the petitioner, by the terms of
Whether we accept the statement of McKenzie that he was to pay all the debts out of the proceeds of the crop, or the statement of the petitioner that there was no understanding to the effect that McKenzie should be responsible to Shuey for all goods bought on their joint account, the fact remains that McKenzie had no authority to mortgage petitioner’s interest in the crop. Until the crop was harvested and sold, the petitioner had as much interest therein as McKenzie, and he had the right to insist upon the crop being sold to the best possible advantage. He had the further right,-—-indeed, it was his duty, — upon petitioning to be adjudged an insolvent debtor, to have all the property in which he was interested put in his schedule and divided among all his creditors. There is nothing in the record to indicate that he acted in bad faith, or with any fraudulent purpose, in putting the debts above referred to in his schedule. They were not “false or fictitious debts,” within the meaning of section 48 of the insolvent act. There is nothing to show even that he knew McKenzie had attempted to pay the debts of the partnership, and certainly nothing to show that he knew he had attempted to pay his, the petitioner’s, individual debts by a transfer of the grain. The petitioner knew that he was responsible to Shuey, not only for his own individual debts, but for the entire partnership debt, and the evidence shows, we think, clearly that he believed he was entitled to hold his three-eighths interest in the property, and have it devoted to part payment of paying the claims of all of his creditors. Doubtless, McKenzie
Unless we can say that the insolvent debtor must, at his peril, interpret accurately his relations with third persons, and to all property claimed by him, and can be held responsible for all errors in relation thereto, though acting in good faith and upon the advice of competent counsel, the petitioner herein is entitled to his discharge.
We think, upon the undisputed evidence in the case, that the petitioner is entitled to a discharge.
Judgment reversed, with directions to the court below to enter an order as prayed for in the application for a discharge.
Fox, J., and Beatty, C. J., concurred.
Reference
- Full Case Name
- In re L. L. BREGARD, an Insolvent Debtor
- Status
- Published
- Syllabus
- Insolvency — Errors in Schedule oe-' Property and Debts — Right of Insolvent to Discharge. —An insolvent who has acted in good faith, and upon the advice of counsel, in including certain property and a list of debts in his schedule, which are objected to by a creditor, who opposes his discharge, on the ground that the insolvent was not the owner of such property, and that such debts are false and fictitious, is entitled to his discharge, even though the schedule was in fact erroneous. Id.—What Schedule oe Insolvent should-Contain — Partnership Assets and Liabilities— “ False and Fictitious ” Debts. —It is the ■ duty of an insolvent debtor to include in his schedule all the property in which he is interested, including his interest in partnership assets, and all the debts for which he is personally liable, including his debts as a partner, and even if his copartner has attempted to pay the partnership debts by a transfer of partnership assets without the knowledge of the insolvent, such debts included in tlife list are not “ false and fictitious debts, ” within the meaning of section 48 of the insolvent act. Farming Partnership — Mortgage oe Crop by One Joint Owner. —One joint owner of a crop raised by a farming partnership--cannot mortgage the other joint owner’s interest in the crop. Id. —Rights oe Joint Owners oe Crop. — Until such crop is harvested and sold, one joint owner has as much interest in the crop as the other, and has the right to insist upon its being sold to the best possible advantage.