On appeal from the Supreme Court, whose opinion is reported in 133 N.J.L. 550.
For the appellant, Joseph C. Cassini.
For the respondent, Allan L. Tumarkin.
The opinion of the court was delivered by
HEHER, J. The question here is whether respondent's judgment debt was "duly scheduled" within the intendment of section 17 of the Federal Bankruptcy Act (11 U.S.C.A., § 35), and thus comes within the operation of the discharge in bankruptcy granted to the judgment debtor.
The judgment was founded on an assigned claim of the National Furniture Co. of Newark against the judgment
debtor for merchandise sold and delivered. The bankrupt listed the debt in the schedules annexed to the petition in bankruptcy as owing to "Nation (sic) Furniture Co., Springfield Avenue, Newark, N.J.," and its nature as a "judgment $300.00;" and a notice of the first meeting of the bankrupt's creditors addressed by the referee in bankruptcy to the particular creditor as thus designated, at 73 Springfield Avenue, Newark, N.J., was returned by the postal authorities endorsed "not found." Thereafter, and three days prior to the day fixed for the creditors' first meeting, the schedules were amended by an order of the referee, on an ex parte application made by the bankrupt, to include "the following facts: The Continental Purchasing Company, a corporation of New Jersey, a judgment Jan. 4, 1936, not disputed Atty for Plt, Herbert I. Levine, 17 William St. Newark, N.J. vs. Anthony Norelli, trading as Essex Rod & Gun Club $229.65." The judgment creditor was not given notice of the amendment, or of the pendency of the bankruptcy proceeding; it did not learn of the bankruptcy until nearly two years after the bankrupt's discharge.
The Supreme Court found that the bankrupt "had knowledge that the original claim had been assigned" to the judgment creditor, and "had been so informed by the creditor's office manager," presumably prior to the filing of the petition in bankruptcy, and that, even though notice of the proceeding was in fact given to Levine, he was not the judgment creditor's attorney at the time, and such notice is therefore not imputable to the creditor. But the Essex Common Pleas ruled in favor of appellant, without opinion or specific findings of fact; and appellant now invokes the rule that, on an appeal at law, the reviewing tribunal is obliged to assume factual findings consistent with the judgment, if there be evidence to sustain them -- citing, among others, the cases of Stammelman v. Interstate Co., 111 N.J.L. 122; Miller v. Newark Hardware Co., 112 Id. 300; Brody v. Goldman, 117 Id. 97. In a word, it is said that there was evidence reasonably tending to show that the bankrupt did not have knowledge of the assignment of the obligation at the time of the filing of his petition; that Levine "was the attorney"
of the judgment creditor, "so far as the claim in question was concerned;" and that the Supreme Court weighed the evidence and reached different factual conclusions in disregard of its appellate function to remedy errors in matter of law only.
It is the rule that findings of fact on conflicting evidence, or on uncontradicted evidence reasonably susceptible of divergent inferences, are conclusive on error. The principle is ignored by counsel for respondent in his argument that the bankrupt's original omission of the judgment creditor from the schedules was intentional, for that issue was resolved adversely to respondent by the fact-finding tribunal. But, for reasons presently to be stated, the application of the rule does not call for a reversal of the judgment of the Supreme Court.
Section 7 of the Bankruptcy Act, as amended by chapter 575 of the Public Laws of 1938 (11 U.S.C.A., § 25), lays upon the bankrupt the peremptory duty of filing, under oath, "a list of all his creditors, including all persons asserting contingent, unliquidated, or disputed claims, showing their residence, if known, or if unknown that fact to be stated * * *;" and, by force of section 17 of the act, as amended by the same chapter of the laws of 1938, non-compliance with this direction renders the discharge inoperative as to the affected creditor who did not have timely "notice or actual knowledge" of the bankruptcy proceeding. Vide Birkett v. Columbia Bank, 195 U.S. 345; 25 S. Ct. 38; 49 L. Ed. 231; Kreitlein v. Ferger, 238 U.S. 21; 35 S. Ct. 685; 59 L. Ed. 1184; Miller v. Guasti, 226 U.S. 170; 33 S. Ct. 49; 57 L. Ed. 173. The Bankruptcy Act has a two-fold design, i.e., the relief of the honest debtor and a just and equitable distribution of his property and estate among his creditors; and the aim of the cited provision of the statute is to afford to the bankrupt's creditors notice of the proceeding in time for proof and ...