
    JAMES E. LYON, Plaintiff and Respondent, v. THOMAS M. ISETT et al., Defendants and Appellants.
    I. Supplemental Pleadings.
    1. By whom allowed.
    
    By the court only; not by the ref wee before whom the cause may be on trial.
    3. When allowed.
    
    Always when the sufficiency of the pleading is matter of doubt. a. Thus a bankrupt discharge permitted to be pleaded to a complaint containing, among other allegations, averments belonging exclusively to an action of tort.
    II. Bankrupt Discharge.—Complaint.
    1. Form of complaint containing averments belonging exclusively to an action of tort, to which a supplemental answer, setting up a discharge in bankruptcy, was permitted to be filed.
    
      Before Jones, McCunn and Freedman, JJ.
    
      Decided December 30, 1871.
    Appeal 'from an order at special term denying defendant’s motion to be permitted to plead, by supplemental answer, their discharge in bankruptcy obtained since joinder of issue in the action.
    The complaint was as follows :
    “ James E. Lyon, the plaintiff, complains of Thomas M. Isett, John Kerr, and Watson B: Farr, defendants, who were at the times hereinafter mentioned caxrying on the business of bankers and brokers at the city and county aforesaid, under the firm name and style of Isett, Kerr & Co., and shows to this court that on or about September 1, 1866, the defendants became the brokers of the plaintiff, at the city aforesaid, and then and there undertook and promised to do and perform the business of the plaintiff in a faithful and proper manner.
    “ And plaintiff alleges that between the said September 1,1866, and July 1, 1867, he was lawfully possessed of thirty United States coupon bonds, commonly called ten-forty bonds, each of the denomination of one thousand dollars, and twenty-eight thousand one hundred and seventy-five -shares of the capital stock of the Consolidated Gregory Company, a corporation duly organized, of the par value of fifty dollars per share, and being so possessed thereof did, between said dates, place and deposit the same in the hands of defendants as plaintiff’s said brokers, at the city aforesaid ; and the said defendants have not delivered said bonds and stock to the said plaintiff, or any part or portion thereof, though often requested so to do.
    “And defendants did heretofore, to wit, on July 1, 1867, being in possession, as aforesaid, of said bonds and stocks, unlawfully and fraudulently convert and dispose of the same to their own use, to the plaintiff’s damage of one hundred and seventy-five thousand dollars.
    Wherefore, the plaintiff demands that the defendants be adjudged to pay to the plaintiff the sum of one hundred and seventy-five thousand dollars damages, with interest thereon from July 1, 1867, as compensation for the said wrongful acts, besides the costs of this action.”
    At the time of the motion the trial of the action was pending before a referee.
    The motion was denied on the ground that the suit being in tort for the wrongful conversion of the property in the complaint mentioned, no recovery can be had therein, except in tort, and therefore said discharge • would not, in any event, be a bar or properly pleaded as a defense herein.
    From the order denying the motion, the defendant appealed to the general term.
    
      Messrs. Peabody & Baker, attorney, for appellant, and Charles A. Peabody, of counsel,
    
      urged: First. It may be said, and probably will be, that the discharges are not applicable, as discharges from the claims sought to be enforced in this suit. The answers to this objection are several. 1. This is not the place to try that question. There is a suit pending, in which a recovery may be had against the defendants. Whether the discharge sought to be pleaded herein will bar or discharge that cause of action, is a question not to be considered here further than perhaps to see that it may by possibility have that effect. 2. If the discharge should not bar the plaintiff’s action, it would be harmless, and it should be allowed to be pleaded, and the question of its effect .discussed and decided on the trial of the action on the merits. The effect of matter pleaded as defense, its sufficiency or insufficiency is to be determined after it is pleaded and on the record. This is one of the issues in the cause to be tried. 3. It is only properly tried in the suit, and after it is pleaded. It is only in this manner that a decision on the subject can be reviewed on appeal to the courts of review. The decision made in this manner is embraced in the final judgment, is subject to review like other questions embraced in the final judgments. '4. The sufficiency of the matter pleaded may be tried by demurrer, like that embraced in any other answer. Demurrer lies to such a plea, like any other (Goddart v. Brown, 15 Abb. 191; Guild v. Parsons, 16 How. 389). This shows that the sufficiency is not to be tried on a motion.
    
      Second. It is submitted that by the terms of the bankrupt act, all debts “ except those created by fraud or embezzlement,” or by the defalcation as a public officer, or while acting in a fiduciary character, ” are barred by the discharge in bankruptcy. United States Bankrupt Act, §§ 33 and, 34. The claim in this suit is not embraced in either of these classes. It is plain that this claim comes within section 34, which says, that the discharge shall “release the bankrupt from all debts, claims, liabilities and demands, which were or might have been proved against his estate” (except those above mentioned); for the claim in this suit certainly might have been proved, and in point of fact was proved against his estate (§§ 33, 34).
    
      Third. Whether the discharge will be a bar to the recovery depends on what the recovery would have been, but for the discharge—what the judgment would otherwise have been for, and that can only be determined in the result of the trial. It must be allowed to be pleaded in order to try the question whether it is properly a bar or not.
    
      Fourth. The form of the pleadings does not determine whether the discharge would be effectual in the case. Nothing is more common than a departure on the trial from the issues embraced in the pleadings. 1. The complaint in this case, it is true, alleges a tort, but nearly all the facts alleged would be equally applicable to a recovery on contract. Forms of action are abolished, and the nature of the action and recovery depend on the facts proved or admitted. 2. Plaintiff in this action seeks to recover the value of certain securities belonging to him, He alleges they have been wrongfully sold and converted by the defendants. Suppose it should turn out that his case is sustained by the evidence in all respects except the tortious character of the sale? All the averments of the plaintiff in other respects being proved, is it certain, from a mere inspection of the pleadings (for that is all there is before the court), that the plaintiff could in no event recover a part of the value of the securities or the sum received for them? This certainly would depend on the manner in which the trial is conducted, and cannot be determined by a mere inspection of the complaint. 3. In a case like this, if the sale was not tortious, or being sb, was afterwards adopted by the owner and the tort waived, but the proceeds had not been paid over or accounted for, how can any one, not prophetically inspired, foretell that in the mode of conducting the trial, things will not take such a turn that a recovery may be had of some part of the proceeds or value of the securities as on contract express or implied ? 4. If such a recovery be possible, this defense by supplemental answer must be allowed, or else irremediable inj ury will be done. Connaughty v. Nichols, 42 N. Y. 83, was an action of tort for conversion in the nature of trover. The facts were proved except the tortious conversion, which was not proved. The plaintiff was allowed to recover the amount as on contract—implied. The provision of the Code and the decisions on them were cited and carefully examined (Wright v. Hooker, 10 N. Y. 51; Olcott v. Carroll, 39 N. Y. 436 ; Emery v. Pease,- 20 N. Y. 62 ; Butterworth v. O’Brien, 24 How. 440 ; Goff v. Edjertqn, 18 AM. 381; Hall v. Hall, 38 How. 97). The summons was for relief, and not on contract, but all was overlooked as being unimportant. So ih Gordon v. Hostetter, 37 N. Y. 99, which was trover. The court (Poetes, J.) say, “If we had arrived at a different conclusion on this point (the question of tortious conversion) we should hold the verdict good as for moneys had and received.” The court of appeals have long acted on the rule that the course of the trial permitted by the parties overrides the pleadings entirely, and that recovery might be had outside of them and almost without regard to them. 5. This case was partly tried when the discharge was obtained. It was not possible therefore to shape the trial with reference to this defense. Who can tell that it had not already taken such a course that a recovery in contract would be proper whatever the pleadings may have been. The supplemental answer is a substitute for the plea of jpuis darrein ■ continuance, and any defense which could have been pleaded puis darrein should be allowed to set up by supplement answer (Drought v. Curtis, 8 How. Pr. 56; Morell v. Gavelli, 16 Abb. 269. It is almost a matter of course to allow a supplemental answer to be filed at any time before the trial. In most of the cases it seems to be considered quite so' (Bate v. Fellows, 4 Bosw. 639 ; Hoyt v. Sheldon, 4 Abb. 59 ; Radley v. Houghtaling, 4 How. 251; Madisonavenue Baptist Church v. Baptist Church in Oliver-street, 2 Robt. 642 ; Stewart v. Isidor, 5 Abb, Pr. N. S. 69). The plea puis darrein, for which the supplemental answer is a substitute, was a matter of course, and could not be rejected (Sandford v. Sinclair, 3 Den. 269 ; 2 Wil. 138). And this, even after the jury are called (Brown v. Beardsley, 3 Cai. 172). It is a matter of course to allow a defendant discharged in bankruptcy to put in that defense, unless complainant will stipulate to take no personal decree against him or his subsequently acquired property, or will consent to dismiss his bill with costs (Scott v. Grant, 10 Paige, 485). A discharge must be pleaded if the party have opportunity, and if neglects to so the court will not afterward relieve him on motion (Price v. Peters, 15 Abb. 197).
    
      Eldridge & Johnson, for respondents.
   By the Court.—Freedman, J.

A supplemental pleading can be allowed only by the court, on motion. It should not be allowed at the trial (Garner v. Hannah, 6 Duer, 262). Consequently, section 272 of the Code, which confers upon referees the same power to allow amendments to any pleadings, and to the summons, as the court possesses upon the trial, does not apply to this case.

The cases and the manner in which a supplemental answer is to be allowed are prescribed by section 177 of the Code, and the practice is, upon a case being made within the terms of that section, to grant the order almost as a matter of course. If the sufficiency of the proposed answer is a matter of doubt, the court will not prejudge the matter on such motion, but permitted the defense to be made upon such terms as are deemed just (Hoyt v. Sheldon, 4 Abb. 59; S. C., 6 Duer, 661; Palmer Murray, 18 How. 545 ; Morell v. Garelly, 16 Abb. 269; Stewart v. Isidor, 5 Abb. N. S. 69).

The defendants Kerr and Farr were not only regular in their application, but, it seems to* me, made out a sufficient case within the terms of section 177 (as amended in 1866) and the principle established by authorities above cited.

The complaint, it is true, alleges a conversion in general terms;' but it also sets forth sufficient facts upon which, when proved, plaintiff may fall back and recover as upon contract. This precise point has been determined by the court of appeals in Conaughty v. Nichols, 42 N. Y. 83. The effect and applicability of the discharge in bankruptcy will depend, therefore, rather upon the proof at the trial, than upon the form of the complaint.

The order appealed from should be reversed and the defendants Kerr and Farr severally permitted, upon payment of ten dollars, to plead, by way of supplemental answer, their respective discharges. Such permission should also be conditioned to be without prejudice to the proceedings already had before the referee.  