Sleepy Eye Milling Co. v. Walsh

This litigation originated in a justice court, and in all the courts the parties have stood related as they stand here. In the justice court plaintiff sued out an attachment, but the attached property was restored to defendant upon bond given by him. Upon the rendition of judgment sustaining plaintiff’s claim and attachment, defendant appealed'to the court of common pleas. Pending this appeal he filed.his petition in voluntary bankruptcy and was discharged. Thereupon, he applied for and obtained leave to'file a supplemental answer setting up this fact. Plaintiff replying'to this supplemental -answer alleges that its claim was not scheduled by the defendant in his bankruptcy proceeding, and that no notice of the pendency of that proceeding- had ever been served upon it; but upon this point it is practically conceded that at the time of filing this reply the bankruptcy proceeding was still pending and open to the presentation of plaintiff’s claim. This, of course, is sufficient.

Plaintiff’s reply to the supplemental answer alleges further that if defendant is permitted to maintain his defense of discharge in bankruptcy, plaintiff’s claim, though just, cannot be put into judgment for the purpose of recourse to the liability of the sureties on the appeal bond. In argument it is urged that a similar' inequitable result will follow as to the security upon the bond for the release of the attachment. If judgment goes against plaintiff by reason of this defense the condition of neither bond is broken, and unless defendant is estopped to interpose the defense of discharge in bankruptcy, we see no escape from the reasoning and conclusion of the court in Merritt v. Pritchard, 17 Dec. 257 (4 N. S. 471), wherein Farrell v. Finch, 40 Ohio St. 337, and Hill v. Harding, 130 U. S. 699 [9 Sup. Ct. Rep. 725; 32 L. Ed. 1083], seem to us to.be properly distinguished.

It would have been entirely proper under the circumstances for the court to have refused leave to the defendant to file the *148supplementary answer, but the record does not disclose any objection made or exception reserved to the granting of such leave in this case. Holyoke v. Adams, 59 N. Y. 233. The reply does not sufficiently allege any estoppel; but inasmuch as the facts in regard to the attachment, filing of bond for release, the filing of bond for appeal, filing of a voluntary petition in bankruptcy, the discharge in bankruptcy, and the attempt by supplemental answer to set up the discharge of defendant are and were all disclosed upon the record, and inasmuch as it is thus plainly inequitable to permit defendant, under these circumstances, to have and maintain this defense and thereby deprive plaintiff of its recourse against the sureties on the attachment and appeal bonds, we think the court below should have so applied the doctrine of estoppel as to prevent the interposition of this defense. State v. Smith, 44 Ohio St. 348, 361 [7 N. E. Rep. 447]. The want of express allegation of such estoppel does not prevent it from being available when the facts are all on the face of the record. Castalia Trout Club Co. v. Sporting Club, 8 Circ. Dec. 693 (8 R. 194), affirmed, no op., Castalia Sporting Club v. Trout Club Co. 56 Ohio St. 749. Section 17 of the bankruptcy law should be construed with Sec. 16 thereof, so as to prevent, if possible, any discharge of a bankrupt’s sureties.

Without this defense we cannot say that the court would have rendered judgment for the defendant. If, upon retrial, judgment should be rendered against him, he can and no doubt will have his proper remedy against the enforcement of such judgment against him. Because, however, the judgment as rendered'is contrary to law, it is reversed and the cause remanded.