This action was commenced on the 24th of March, 1899, to recover the value of certain goods, wares and merchandise sold and delivered hy the plaintiff's to the defendant, of the value of $443.83. The complaint alleges that the defendant purchased the said goods from the plaintiffs and procured the delivery of the same to them with intent to cheat and defraud the plaintiffs out of the value thereof, and with intent not to pay for the same; that prior to the purchase of these goods the defendants, for the purpose of establishing credit with the subscribers of an agency known as Wood’s Dry Goods Commercial Agency, stated to the said agency that their financial condition of January 2, 1896, was that they had a surplus of assets over liabilities of over $77,000; that said agency communicated and delivered to the plaintiffs the said statement, and that, believing the same to be true, the plaintiffs sold and delivered to the defendants the goods, wares and merchandise in the complaint alleged; that the said statement was false and untrue, and was known to the defendants to be false and untrue at the time it was made, and was so made for the purpose of cheating and defrauding the plaintiffs and other merchants who were subscribers to the said agency; and the complaint demands judgment against the defendants for the sum of $543.83. The defendants, answering the complaint, admitted the sale and delivery of the goods, but denied the fraud.
Subsequent to the commencement of the action, and on the 19th day of September, 1899, the defendant respondent was adjudicated a bankrupt by the United States District Court, and on the 27th day of November, 1900, a discharge in bankruptcy was granted. On the 25th day of January, 1902, this action came on for trial. Upon the trial, after the case was opened and the examination of the plaintiffs’ witnesses commenced, counsel for the defendants stated in open court that if the plaintiffs would withdraw from their complaint all allegations of fraud against the defendants the defendants would consent to judgment. Counsel for the plaintiffs agreed to withdraw, and did in open court withdraw from the complaint, all allegations of fraud against the defendants, and thereupon counsel for the defendants consented to judgment against the defendants
The motion is based upon section 1268 of the. Code of Civil Procedure. That section is as follows : “ At any time after one year has elapsed, since a bankrupt was discharged from his debts, pursuant to the acts of Congress relating to bankruptcy, he may apply, upon proof of his discharge, to the court in which a judgment was rendered against him * * * for an order, directing the judgment to be cancelled and discharged of record. If it appears upon the hearing that he has been discharged from the payment of that judgment or the debt upon which such judgment was recovered, an order must be made directing said judgment be* cancelled and discharged of record.” In Monroe v. Upton (50 N. Y. 593) it was held that the fact that the judgment did not exist on the day upon which the.petition was filed did not prevent the court from vacating a judgment obtained before the discharge was granted if the debt upon which the judgment was recovered was in existence at that time; that for such a purpose as this the debt was not merged so as to be extinguished. ( West Philadelphia Bank v. Gerry, 106 N. Y. 467.)
In this case, when the action came on for trial, plaintiff had a cause of-action based on fraud which, if' established, would not have been affected by the discharge. When this -cause of action was sought to be enforced defendant stipulated to allow a judgment against her for the amount claimed-if plaintiff would withdraw the allegations of fraud in the complaint, and a judgment was thereupon entered. The right of the plaintiff to that judgment, was
It follows, therefore, that the order appealed from must be reversed, with ten dollars costs and disbursements, and the motion denied, with ten dollars costs.
Van Brunt, P. J., and Laughlin, J., concurred; Patterson and Hatch, JJ., concurred on the ground that the entry of, judgment by consent, upon the withdrawal of the charges of fraud, established an indebtedness not affected by the previous discharge of the defendant in bankruptcy.
Order reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs. ■
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Bic.