In re Ekings
In re Ekings
Opinion of the Court
Various specifications are filed against the discharge of the bankrupt, but when explained they all seem to revolve around the methods resorted to, and the expedients adopted by his attorney to procure the requisite one-fourth of his creditors in number, and one-third in value, to consent to the discharge. The application for the discharge was filed June 17, 1879, and the order upon the creditors to show cause why the same should not be granted was returnable on the twenty-second of July following. On the day before the return of the same, to-wit, on the twenty-first of July, four new proofs of claim- were made and filed with the register: (1) One by John G. G. Robertson, who had already put in a proof for upwards of $1,200, and who now proved an additional claim for $300, consisting of two promissory notes and a check, which had been procured without consideration from some faithless creditors, who had not deemed them worth the expense of proving; (2) one by Joseph Parker, the father-in-law of the bankrupt, and who paid one Thomas Beverage $25
It was conceded upon the argument that all these creditors made their proofs before the hearing, on the application for discharge, for the sole purpose of aiding the bankrupt in obtaining his discharge by filing consents thereto'.
Two questions are presented — First, whether proofs of debt, filed with the register after the application of the bankrupt for his discharge, are to be counted, under the provisions of section 9 of the amendment of June 22, 1874, in ascertaining the assent of one-third in number of creditors and one-fourth in value; second, whether the testimony shows that the bankrupt has violated the eighth clause of section 5110 of the Revised Statutes, which prohibits a discharge “if the bankrupt, or any person in his behalf, has procured the assent of any creditor, or influenced the action of any creditor, at any stage of the proceedings, by any pecuniary consideration or obligation. ”
1. The original section of the bankrupt act, (section 5112 of the Revised Statutes,) to which the ninth section of the amendment of June 22, 1874, was a supplement, required that the assent in writing of a majority in number and value of the creditors should be filed in the case at or before the time of hearing of the application for discharge. All proofs of debt, therefore, that were "made before the time of hearing, could bo used as foundations for assents filed at the hearing. The supplement is less exacting, and was passed to facilitate the opportunities for a discharge. It does not require the assent to be in writing, nor to be filed anywhere, nor at any specified time. It simply reduces the required number
2. The next question is whether the bankrupt, or any person in his behalf, has influenced the action of any of the creditors named in the specifications by any pecuniary consideration or obligation. They have, doubtless, been greatly influenced in their conduct by the bankrupt and his attorney. They have been persuaded to surrender securities, and to purchase debts and claims against the estate which otherwise would not have been proved, in order that they might sign the consent to the bankrupt’s discharge. They have been induced' to perform these acts — one, at least, by family connections and relationships, and others by their feelings of friendship for the bankrupt. When done from such motives only they are allowable. The law does not find fault with the bankrupt for asking his friends and relatives to aid him in obtaining his discharge, nor does it prohibit them, on such •solicitation, from proving honest debts against the estate, when there is no expectation of a dividend, for the purpose of ■enabling them to sign the necessary consent thereto. To make such acts unlawful they must be the result of pecuniary .consideration or obligation.
What evidence is there that any of the creditors have been thus influenced ? The nearest to it that I can discover is the case of Kobertson, one of the creditors, who had proved a
I will dismiss from consideration the promise secondly above stated, where the bankrupt acknowledged the debt for borrowed money, and said “he would see it right.” I think such an expression is too vague to revive a debt which has been discharged. The supreme court, in Allen v. Ferguson, 18 Wall. 3, held that the promise by which a discharged debt is revived must be clear and distinct. In that case, after the debtor had applied for the benefit of the bankrupt act, and while the proceedings were still pending, he wrote to one of his creditors: “I3e satisfied,- all wall be right. I intend to pay all my just debts, if money can be made out of hired labor.” And in a postscript he added: “All will be
■ The other promise of the bankrupt is unequivocal, although 'conditional. The creditor was asked: Question 270. “Did he ' (the 'bankrupt) say how he would manifest his gratitude for ' it ?” (i. e., for proving the debt and giving the consent.) Answer. “By paying me all he ever owed me when he got able.” Such a condititional promise has always been held to be binding when proof is made of the ability of the bankrupt to pay. Freeman v. Fenton, Cow. 544; Besforcl v. Sanders, 2 H. Black. 116; Fleming v. Hayne, 1 Star. 370; Scon-ton v- Eislord, 7 John. 36; Maxim v. Morse, 8 Mass. 127; Corliss r. Sheppard, 28 Me. 550; Kingston v. Wharton, 2 S. & B. 208; James on Bank. 146.
Kingston v. Wharton, supra, was quite like the case under consideration. The plaintiff in the suit was an indorser upon the note of the bankrupt. On the twenty-ninth of December, 1800, the debtor wrote to him asking him to take up the note at maturity, and declaring, “The moment I am able to relieve you, I will.” The note fell due February 13, 1801, was protested and paid by the plaintiff. A commission of bankruptcy was issued against the defendant March 16, 1801, under which he was declared a bankrupt, and on the twenty-sixth of May, following, he obtained his discharge. The action was founded upon a 'promise to pay when the debtor should be able. The letter was treated by the court as a promise made by the debtor to induce the creditor not to oppose his discharge, and such promise was held to be good. The debt, notwithstanding -the discharge, remained due in conscience, The moral obligation to pay still existed, and was a sufficient consideration to support the promise. Stress was laid upon the fact that in England it required an act of parliament (5 Geo. II, c. 30, § 11,) to avoid a promise by the bankrupt to pay a debt which otherwise would have been discharged
The case under consideration, therefore, must bo decided, according to the principle of the common law, which declares that the moral obligation to pay the debt is a sufficient consideration to support a parol promise. May v. Sperry, 6 Cush. 240.
Under the evidence and the law, the bankrupt is not entitled to his discharge, and the same is refused.
Reference
- Full Case Name
- In re Ekings, Bankrupt
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- Published