Shulman, Goetter & Weil v. Graves
Shulman, Goetter & Weil v. Graves
Opinion of the Court
The act of Congress declares : “The provisions of a composition, accepted by such resolution, in pursuance of this section, shall be binding on all the creditors whose names and addresses, and the amounts of the debts due to whom, are shown in the statement of the debtor produced at the meeting at which the resolution shall have been passed, but shall not affect or prejudice the rights of any other creditors.” A former clause renders it the duty of the bankrupt to produce to the meeting of creditors, at which the resolution of composition is adopted, “a statement showing the whole of his assets and debts, and the names and addresses of the creditors to whom such debts respectively are due; and it is further provided, that the resolution of composition, when approved by the court, shall be operative, if passed by a majority in number and three-fourths in value of the creditors assembled at such meeting, and confirmed by the signatures of the debtor and two-thirds in number and one-half in value of all the creditors.
A discharge in bankruptcy, granted by a court of compe-
The court in bankruptcy having acquired jurisdiction, resolutions' and proceedings in composition may be pleaded in bar of the right of a creditor to maintain a suit on a demand within their operation. The regularity of the proceedings is as incapable of impeachment collaterally, as would have been a discharge granted by the court, if the discharge had not been rendered unnecessary and improper by the intervention of the composition. — In re Bechet, 12 B. R. 241; Smith v. Eagle, 14 B. R. 241; Blumenstiel’s Law and Practice in Bankruptcy, 461. The regularity of the proceedings may not be impeached, and may be unimpeachable : the mode of procedure pointed out may be strictly pursued; and yet there may be creditors on whom the proceedings do not operate — creditors not bound or affected by the composition, whose rights are preserved unimpaired, by the terms of the statute. As to such creditors, the jurisdiction of other courts is not affected. They are not required to resort to the bankrupt court, to annul or vacate the composition. If the composition is pleaded against them, the court will inquire whether they are of the class on whom it is binding, or whether they are of the class not affected by it. The inquiry will not be, whether the composition is tainted with fraud— whether the proceedings leading to it were regular: but, whether it is binding on the particular creditor. Such inquiry, like an inquiry as to the jurisdiction of a court rendering a judgment relied on as a bar, must be made by any court in which the composition is pleaded. — Ex parte Paper Staining Co., 8 Ch. App. 595.
_ As a plea of discharge in bankruptcy must show the jurisdiction of the court granting it, a plea of composition should also show that it is binding on the party against whom it is pleaded. Binding only on creditors who were shown by the
The omission of the name and demand of a creditor from the schedules of a bankrupt, if inadvertent, is not ground for impeaching the discharge. If fraudulent, it may be ground for its vacation in the bankrupt court, but would not be available collaterally. The case is different with a composition, which the statute limits in operation to creditors whose names and addresses, and the amounts of whose debts, are shown in the statement produced by the bankrupt to the meeting of creditors accepting it.
Let the judgment be affirmed.
Reference
- Status
- Published