In re Scull
Opinion of the Court
This is a petition in involuntary bankruptcy, filed on the 4th of June, 1874. The order to show cause was returnable on the 13th of June, and was duly personally served on the alleged bankrupt on the 5th of June. On the-return day, proof of service was filed, but the alleged bankrupt did not appear, and, at the request of the petitioning creditors, the matter ivas adjourned from time to time until after the approval of the amendatory act of' June 22, 1874, no adjudication being directed to be entered, and, of course, no order of adjudication being entered. The petitioning creditors now ask for the entry of an order of adjudication, as on a default for want of appearance. The papers are in due form under the statute as it stood prior to its amendment by the act of 1874, and, but for the-provisions of the latter act, the right to an adjudication would be clear.
The provision of that act in respect to all ¡ cases commenced since the 1st of December, j 1S73, and prior to the passage of the act of I 1874, as well as those commenced after such passage, is (section 12) that the debtor is to be adjudged a bankrupt on the petition of one or more of his creditors, who shall constitute one-fourth at least in number of his creditors, and the aggregate of whose debts provable under the act amounts to at least one-third of the debts so provable. It is suggested that this does not require that the petition shall show that the petitioning creditors constitute the prescribed number and amount; that it is for the debtor to come in, in the first instance and assert that the petitioning creditors do not constitute the prescribed number and amount; and that, if he does not, there need be no inquiry into the matter. I cannot concur in this view, for several reasons.
(1.) The reasonable construction of the provision that the petition is to be the petition of one or more of the creditors, Who shall constitute a given proportion, in number, of creditors, and whose provable debts shall constitute a given proportion, in amount, of provable debts, is, that the petition shall not only show that the petitioners are creditors, and how, and' to what amount severally, but shall also show that they constitute a body who have a right to invoke relief which can be given only to those who do constitute such body. Such construction was given to the 39th section as it formerly read, of which this 12th section is an amendment; and the forms of petition prescribed by the supreme court required that the petition should contain, on its face, affirmative allegations of the existence of all the facts which were necessary prerequisites to the right to ask for an adjudication — such as, the residence or carrying on of business by the debtor in the proper district, for the requisite period of time; the owing by him of debts exceeding $300; the provability of the petitioner’s demand; the fact that the petitioner’s demand exceeded $250, and its nature and character; and particulars showing the commission of some act of bankruptcy specified in the statute. The petition must, undoubtedly, be such as to show, on its face, a proper case, on comparing it with the statute, for entering an adjudication, if there be no appearance to it by the debtor. It cannot do this unless it shows, on its face, that the petitioners constitute the prescribed number and amount.
(2.) In addition to this, the provision is, that, “if such allegation as to the number or amount of petitioning creditors be denied by the debtor, by a statement in writing to that effect,” the court shall require him to filé a list of his creditors, &c. It is suggested that this provision is satisfied by calling on the debtor to assert that the petitioning creditors do not constitute the requisite number and amount. But the statute says, that “such allegation” is to be “denied” by the debtor. The use of the phrase “such allegation” clearly implies that the allegation to be denied is one made by the petitioning creditor, and one made in the petition; and it is an allegation “as to the number or amount of petitioning creditors” that is to be denied. A denial implies a contradiction of an assertion. The assertion must precede the denial.
It is suggested that, inasmuch as the debtor was in default on the 13th of June, and the petitioning creditors were then entitled to have an adjudication, and the debtor has not appeared, the adjudication ought now to be made. The petition contains no allegation that the petitioning creditors constitute the prescribed number and amount. The debtor has not been adjudged bankrupt, and the provisions of the act of 1S74 apply, therefore, to this case, it having been commenced since the 1st of December, 1873. But, the statute
As, in the present case, the petition does not state that the petitioners constitute the requisite number and amount of creditors, it must be held that it appears that the requisite number and amount of creditors have not petitioned. As the case was commenced before June 22, 1874, an order will be entered herein by the clerk, if the petitioning creditors desire, granting twenty days from the formal entry of such order, as the time within which the petition may be amended so as to show a compliance with the requirement of the statute as to the number and amount of petitioning creditors, and providing that, at the expiration of that time, or when such amendment shall be filed, if before the expiration of that time, the clerk shall present to the court all papers which shall have been filed herein, including those filed with a view to such amendment of the petition, to the end that the matter in bankruptcy may proceed, or the proceedings may be dismissed, as the case may be.
The only act of bankruptcy alleged in the petition is, that the debtor, being insolvent, suffered his property to be taken on legal process, with the intent to give a preference to a creditor, and to defeat the operation of the act. This was an act of bankruptcy when the petition was filed. By the act of 1S74 it is no longer made an act of bankruptcy. The debtor, being insolvent, must “procure” his property to be taken on legal process, with the intent to give a preference, or to defeat or delay the operation of the act; and all the provisions of the section of the act of 1874 which specify what are acts of bankruptcy on which a person can be adjudged an involuntary bankrupt, are by it made applicable to the present case, commenced since December 1, 1S73. Therefore, if the present petition is to be proceeded with at all, it must, in respect to the matters alleged in it as constituting the act of bankruptcy set forth, be amended by averring that the debtor “procured” his property to be taken. An amendment vo that effect will be allowed to be made
The provisions of the statute have been carefully considered in the above observations, because the number of the petitions in involuntary bankruptcy filed in this district, between December 1, 1S73, and June 22, 1874, was 346. Of this number, 98 were discontinued, and in 11S others adjudications have been entered. This leaves 130 in which no adjudication has been entered, and which come under the provisions of the act of 1874. In all of these 130, which are in the same situation as the present case of Isaac Scull, and in all of. them in which the petition was filed before June 22, 1874, and no order of adjudication was formally filed and entered before June 22, 1874, the clerk will enter a like order, if either party desires it
[From 10 N. B. R. 165.]
[From 10 N. B. R. 165.]
Reference
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- In re SCULL
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