In re Wheeler
In re Wheeler
Opinion of the Court
The bankrupt act of 1867 [14 Stat. 517], as amended July 27, 1868 [15 Stat. 227], and July 14, 1870 [16 Stat. 276], furnishes the provisions which constitute section 5112 of the Revised Statutes, which reads as follows: “In all proceedings in bankruptcy commenced after the •first day of January, 1869, no discharge shall be granted to a debtor whose assets shall not be equal to fifty per centum of the claims proved against his estate, upon which he shall be liable as the principal debtor, unless the assent in writing of a majority in number and value of his creditors, to whom he shall have become liable as principal debtor, and who shall have proved their claims, is filed in the case, at or before the time of the hearing of the application for discharge; but this provision shall not apply to those debts from which the bankrupt seeks a discharge, which were contracted prior to the 1st of January, 1869.” There is here no distinction made between voluntary or involuntary cases. In all proceedings in bankruptcy the discharge of the bankrupt is made to depend upon the payment of fifty per cent., or, failing that, upon the assent of a certain proportion in number and value of his creditors, who have proved their claims and to whom he is bound as principal. A restriction is placed upon the creditors; it is only those whose claims accrued after January 1, 1869, whose assent is indispensable; none whose debts were contracted prior to that date are to be taken into the account. Their assent is not necessary, and they are not to be counted for the purpose of determining whether the requisite number and value have assented. The provision does not apply to them. The amendment of 1874 [18 Stat. 178] makes important changes in this provision as to discharges. It declares that in compulsory or involuntary bankruptcy, no provision of the law as it then stands, requiring the payment of any proportion of the debts of the bankrupt or the assent of any portion of his creditors, as a condition of discharge from his debts, shall apply. But the involuntary bankrupt may, if otherwise entitled, be discharged by the court in the same manner, and with the same effect, as if he had paid the required per cent., or as if the requisite number and value of creditors had assented. It changes the terms of discharge in voluntary eases, by reducing the required payment to thirty per cent. And it declares expressly that “the provision in section 33 of said act of March 2, 1867, requiring fifty per centum of said assets, is hereby repealed.” The amendment concludes with a repeal of all acts and parts, or acts inconsistent with that act, June 22, 1874 [18 Stat. 178]. The effect of this repeal, so far as the involuntary class of bankruptcy proceedings is concerned, is clear enough. Indeed, without words of repeal, the substitution of new provisions covering the whole ground of the former legislation on that subject, would operate as a repeal by implication. The effect of the express repealing language is confined to the repeal of so much of section 33 (now section 5112, Rev. St.) as requires fifty per cent. Nor will it be easy to show any inconsistency between the last clause of section 5112 by which the creditors whose debts were contracted before the 1st of January, 1869, are excluded from the provisions for payment and assent, and any of the provisions of the amendment. That clause of exclusion stands unrepealed, and is in full force to-day. It follows, therefore, that a bankrupt who finds himself unable to pay thirty per cent, on the debts proved against him, is not required to obtain the assent of those creditors who became such before January 1, 1869. The assent of those of later date is alone necessary. To apply these views to the case in hand. The bankrupts, Edward E. Wheeler and James D. Riggs, having applied for discharges, and being unable to show a sufficiency of assets, as required by the act, are attempting the alternative of getting relief by means of the assent of creditors. If they are restricted to the assent of creditors whose claims originated after 1869, the re
Reference
- Full Case Name
- In re WHEELER
- Status
- Published