In re Adams
In re Adams
Opinion of the Court
In the course of the proceeding in this cause before me, at the chambers of this court, the following question arose in relation to the way and manner in which application should be made for an order requiting the bankrupt to appear before this court under section 26 of the bankrupt act. The question is pertinent to the proceedings, and its decision will settle the practice in this and other judicial districts. The petitioner has been duly adjudicated a bankrupt. Henry N. Morgan, of the late firm of Shook & Morgan, has duly proved his claim against the estate. T. D. & G. R. Pelton, as attorneys for Henry N. Morgan, apply, under section 26 of the bankrupt act, verbally for an order compelling the attendance of the bankrupt at the chambers of this court before me, and also for the usual subpoena requiring the petitioner to appear at the same time and place to be. examined as a witness in these proceedings under section 26 of the bankrupt act. The creditor having duly proven his claim has a standing in court, and both the order and subpoena when applied for in due form should be granted upon proper cause shown. This proceeding in bankruptcy is a suit in the district court of the United States, and must be governed by the rules and practice of the United States and state courts, by the bankrupt law, the general orders, and the rules, orders and regulations in bankruptcy. Since the act of congress July 16th, 1862, it is generally the practice of the Upited States circuit and district courts, to follow the rules of the respective state courts in regard to form and manner of practice, as well as all questions of evidence and examination of witnesses. There is much diversity of opinion among the registers, as well as the legal profession, as to the way and manner of applying for an order and subpoena for the examination of the bankrupt; some claim that a mere verbal request to the register is a full compliance with section 26 of the bankrupt act; others say that a petition duly verified is sufficient, while the more experienced lawyers, those most familiar with the practice in the United States courts, and the late court of chancery of this state, are of the opinion that the application should be in the nature of a motion, founded upon an affidavit giving some good and sufficient reason why the order should be granted and subpoena issued, setting forth grounds for the application similar to those set forth in the petition and affidavits hi special proceedings under the statutes of this state, and that such an application is properly termed “an ex parte motion for an order.”
After a full and careful examination of the practice of the courts and in similar statutory proceedings in this state, the United States and in England. I fully concur with the latter view, and am of the opinion that the verbal application of the creditor, unsupported by either a duly verified petition, or affidavit showing sufficient cause for the granting of the order, is insufficient, and does not entitle the creditor to the order asked for. The counsel for the creditor then asked to have the question certified to your honor, which I herewith set forth, and the reasons and authorities upon which I have formed my opinion are most respectfully submitted to your honor. The theory of the law is that when the petitioner files his petition, &c.. he, by the operation of the law, surrenders into court his effects, and also virtually his person, thereby giving the court jurisdiction of both. It is absolutely necessary to the proper administration of the bankrupt law 'that the court should have the jurisdiction of the person of the petitioner so far as is necessary to the proper administration of the law; such jurisdiction is merely nominal. As soon as an adjudication of bankruptcy is had, the bankrupt is at liberty to commence business on his own account, and if he afterwards obtains his discharge, all his earnings or profits since such adjudication are his. No restraint whatever is placed on the bankrupt, but until he is discharged he is at all times subject to the order of the court.
Upon the proper application of a creditor who has proved his claim, a chamber order is issued, requiring the bankrupt to appear on a certain day, also a subpoena requiring the bankrupt to appear and to be examined as a witness; both of these “process" are issued by the court, signed by its clerk under
Section 3: “Any party in any suit or proceeding, as aforesaid, shall be required, to entitle him to examine the adverse party as a witness in any suit or proceeding, to summon such adverse party to attend the trial or hearing in such suit or proceeding, to give testimony therein in the same manner as the attendance of witnesses in ordinary cases.”
In 1849, the Code of Procedure was enacted. By section 292, a judgment debtor could be examined in the same manner as any other witness, by that act.
Section 27 of insolvent laws of this state, commonly called the “Two Third Act,” provides, “that the insolvent may be examined on oath at the instance of any creditor, touching his estate or debts, or any matter stated in his schedule.” Section 26 of the bankrupt act, is as follows: “The court may, on the application of the assignee in bankruptcy, or of any creditor or withouc any application, at all times require the bankrupt, upon reasonable notice to attend and submit to an examination, on oath, upon all matters relating to the disposal or condition of his property, to his trade and dealings with others, and his accounts concerning the same, to all debts due to or claimed from him, and to all other matters concerning his property and estate, and the due settlement thereof, according to law.”
It is plain to be seen that section 26 of the bankrupt law, was compiled from the legislative enactments of this state, of 1818,. 1820, 1835, 1847, from section 27 of the insolvent laws, from section 292 and other sections of the Code, from section 4 of the act of congress of 1841, Gen. St. Mass. c. 118, § 66, and of 12 & 13 Yict. c. 106, § 17. Consequently, the same rules as to the bringing of the parties to an action or proceeding into court, in order to procure his or their testimony, which has heretofore been adopted, should now be followed by ths court, in order to bring the bankrupt before it for his examination as a witness, at the instance of a creditor. The words of section 26 of.the act, are as follows: “The court may,” &c., (not must,) thus leaving the granting or refusing of the order in the sound discretion of the court. [Blanchard v. Young,] 11 Cush. 341. Such discretion should be carefully exercised. The granting of such orders is not by any means “as a matter of course;” but only to be done in a proper case, on application of a creditor, and when good cause is shown why such order should be granted. Cause should be shown in the same manner as would be required upon the granting of any chamber order in any judicial proceedings in court.
I hold that such an order should be granted upon the creditor showing any of the facts set forth in section 26 of the act. The application of the creditor, under section 26 of the bankrupt act, for an order requiring the bankrupt to attend and submit to an examination under oath, upon all matters, &c., is analogous and similar to the proceedings authorized by section 22 of the act of voluntary assignments known as the two-third act, and other laws of the state of New York; also similar to the' proceedings allowed by sections 292, 388, 369, 390 and including 397. By this proceeding, the creditor seeks to obtain facts sufficient by the examination of the bankrupt to enable him (the creditor) to prepare the specification, as authorized by section 44 of the bankrupt act, to oppose the petitioner’s discharge in bankruptcy, and also to discover property and effects of the petitioner, which the petitioner owns, but which he has not set forth in his schedules of assets attached to his petition. The register has jurisdiction of the cause and also of the person of the bankrupt, and has the authority to grant the order in this ease, the same as the district judge would have; and in granting the order must be governed by the rules and practice of this court, and by the practice of the courts of record of this state. In granting these orders an apparent necessity for the examination of the bankrupt should be shown, (2 Story, Eq. Jur. §§ 1497, 962; [Nieury v. O’Hara,] 1 Barb. 484; [Moore v. McIntosh,] 18 Wend. 529) similar to the practice under section 292 of the Code. The creditor applying should
The order becomes an im'perative mandate, and must be obeyed unless set aside on motion or stayed by order of the court. Disobedience to such an order is a contempt of the court, “and for neglect or refusal to obey such order, the court may issue a warrant directed to the marshal, commanding him to arrest the person disobeying such order, and bring him forthwith before the court,” such bankrupt may then be committed and punished as for a contempt of court. The commitment and punishment are in the nature of criminal proceedings, (Tayl. Bankr. 80,) and when a court commits a party for contempt, their adjudication upon the matter is a conviction — operates the same as, and is in effect, a judgment, and the warrant for their commitment becomes by operation of law an execution. The command contained in the warrant, the marshal must execute. With the execution of the warrant for commitment, the power of the court ceases, it has become an offence against the United States. The president alone, can by article 2. § 2, subd. 1, of the constitution of the United States, pardon or reprieve the person convicted of the contempt. — See opinion of Blatchford, J., in the case of Goodyear v. Mullee, [Case No. 5,578,] district court, southern district of New York; also, Ex parte Kearney, 7 Wheat. [20 U. S.] 38, 43: also, 3 Op. Attys. Gen. 622. I consider it absolutely necessary that the rules and practice of this court in regard to the manner of issuing orders for the examination of bankrupts and witnesses therein, should be clearly set forth; and, in order to do so, I have carefully examined the bankrupt act, the general orders, and the rules and orders, and general regulations in bankruptcy, the rules and practice of this court upon the granting of any chamber order in any judicial proceedings; also, the practice of the state courts in special proceedings, and in special cases, such as habeas corpus, cer-tiorari, mandamus and prohibition in prn-ceedings as for contempt to enforce civil remedies, and also in other proceedings com' menced by the issuing of either a writ, warrant, or process of the court, which by law are required to be issued, and find that they I now and for years have been founded upon “papers” such as a petition, or complaint duly verified, or upon affidavit.
If an order or process of the court is founded upon a complaint, petition or affidavit, such complaint, petition or affidavit should be duly verified as an order or proceeding in a cause founded upon an affidavit, petition or complaint not verified would be void, and may be treated as a nullity. [Laimbeer v. Allen,] 2 Sandf. 648. See the forms of petitions and affidavits in the c.curts of England and in the United States. Gray, Pr. (N. Y.) 106, 518; 2 Bouv. Law Dict. 260; 1 Burrill, Pr. 45, 453; [Jackson v. Stiles,] 3 Caines, 128; [Haff v. Spicer,] Id. 190; [Jackson v. Virgil,] 3 Johns. 540; [Field v. Goodman,] 3 Wend. 310; [People v. Stryker,] 24 Barb. 649; [Laimbeer v. Allen,] 2 Sandf. 648; 2 Rev. St. p. 569, § 25.
The direction or requirement by the court that the petitioner “do attend and be examined,” &c., is “an order,” by the law of the state of New York. Code, § 401. By the uniform practice of all the courts in this state, such “ex parte applications” or “non-enuraerated motions,” are only granted upon duly verified affidavits or petitions, wMeh affidavits or petitions, as well as the order, become part of the proceedings in the cause, and are usually served with the order. It is the practice of the United States district courts to follow the rules of the state courts, when there is no rule of the district court upon the subject. The same proceedings should be had as are now authorized in the courts in respect to the manner of compelling the attendance of witnesses on examination before an examiner or commissioner of any of the courts of the United States, or before a judge at chambers of a witness, de bene esse, or upon the examination of a debtor under the state law in supplementary proceedings under section 292, Code. To obtain an order for the examination in any of the cases
I have regarded this decision as a special term decision that an affidavit setting forth facts sufficient to found such an order, &c., upon, was the proper way of pro eediug. and have 'followed it accordingly. First, i hold that the creditor of the bankrupt in this, in order to avail himself of the provisions of section 26 of the act, must apply to the register (court] upon affidavit, or petition duly verified, showing some good and sufficient reason why the order should be granted, also summons issued, and that a mere verbal request is not sufficient, not being in accordance with the rules and practice of this court. Second. That upon such reason being shown, the register (court) should, as a matter of course, grant the order &c.
John Fitch, Register.
The creditor in the present case, to obtain an order according to form number forty-five, for the examination of the bankrupt under section 26 of the act, must apply for such order by petition or affidavit duly verified, and show-good cause for the granting of the order.
Reference
- Full Case Name
- In re ADAMS
- Status
- Published