Hoffman v. Haight

14 D.C. 21
CourtDistrict of Columbia Court of Appeals
DecidedDecember 3, 1883
DocketNo. 23,529
StatusPublished

This text of 14 D.C. 21 (Hoffman v. Haight) is published on Counsel Stack Legal Research, covering District of Columbia Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hoffman v. Haight, 14 D.C. 21 (D.C. 1883).

Opinion

Mr. Justice Cox

delivered the opinion of the court.

The plaintiff sued on a promissory note for the sum of three thousand dollars, to recover an alleged balance of $1,913.15, unpaid, with interest at ten per cent, per annum from February 24th, 18’79. The defendant pleaded a discharge in bankruptcy, and the plaintiff replied “ that the indebtedness sued on was not named or contained in the defendant’s statement or schedule of debts filed with his petition in bankruptcy, and that no notice whatever of the filing of said petition, or of the subsequent proceedings thereon, was served on this plaintiff, either by mail or personally ; and that this plaintiff did not, in fact, have notice thereof until the filing herein of the defendant's plea.”

To this replication the defendant demurred, on the grounds: First. That the notice required by law of the bankruptcy of a debtor is by letter sent to each creditor by mail, personal service, and by publication; Second. That when a bankrupt, without fraud, files a list of his creditors, with the names, places of residence, and amount due each, and appends an oath that it is a true schedule of his creditors and debts, it is conclusive upon all his creditors; and, Third. That creditors not named in that schedule are presumed to be notified by the publication.

The question really intended to be met by this demurrer, [22]*22although it is not presented in as condensed a form as it might be, but was made in argument, is, whether the omission of a creditor’s name in the schedule, innocently or accidentally, but not fraudulently, makes the discharge a nullity towards that creditor. I may notice, very briefly, two or three provisions of the bankrupt act. Section eleven of the act of March 2, 1861, says, that “ the said schedule must contain a full and true statement of all his debts, exhibiting, as far as possible, to whom each debt is due, the place of residence of each creditor, if known to the debtor, and, if not known, the fact that it is not known; also the sum due to each creditor; the nature of each debt or demand,” &c. And the same section further provides that, “upon the filing of such petition, schedule and inventory, the judge or register shall forthwith, if he is satisfied that the debts due from the petitioner exceed three hundred dollars, issue a warrant to be signed by such judge or register, directed to the marshal of said district, authorizing him forthwith, as messenger, to publish notices in such newspapers as the warrant specifies; to serve written or printed notice, by mail or personally, on all creditors upon the schedule filed with the debtor’s petition, or whose names may be given to him, in addition, by the debtor, and to give such personal or other notice to any persons concerned, as the warrant specifies.”

Then, every bankrupt is to be “ at liberty, from time to time, upon oath, to amend and correct his schedule of creditors and property, so that the same shall conform to the facts.”

Sections 32 and 33 provide, that if it shall appear to the court “that the bankrupt has in all things conformed to his duty under this act, and that he is entitled under the provisions thereof to receive a discharge,” the court will grant him free discharge from all his debts, except in case of fraud.

Section 34 provides that “a discharge duly granted under this act shall, with the exceptions aforesaid, release the bankrupt from all debts, claims, liabilities and demands, which were or might have been proved against his estate in bankruptcy,” &c.

[23]*23A discharge, duly granted, is to have this effect. It is admitted that the claim in the present case could have been proved against the estate in bankruptcy, so that if the certificate is duly granted, it is a discharge from that debt.

It is claimed, however, that if any creditor's name is omitted from the schedule, the discharge is not duly granted,, as to him. Now, that depends upon the question whether the bankrupt, in such a case, has conformed to his duty under the act. If he has fraudulently omitted the names of any creditors in the schedule, he has not conformed to his duty, and is not entitled to receive a certificate of discharge, and perhaps in that case the discharge may be said not to be duly granted. Another question may arise here which it is unnecessary to more than allude to, and that is, whether that creditor is not confined to proceedings in the bankrupt court, because in section 34 it is provided, that “ the certificate shall be conclusive evidence, in favor of such bankrupt of the fact and the regularity of such discharge; always provided, that any creditor or creditors of said bankrupt, whose debt was proved or provable against the estate in bankruptcy, who shall see fit to contest the validity of said discharge, on the ground that it was fraudulently obtained, may, at any time within two years after the date thereof, apply to the court which granted it, to set aside and annul the same.”

Passing by that question, however, we come to the question whether the bankrupt may be said to have conformed to his duty under the act, if he innocently or ■ accidentally omits the name of any creditor on the schedule. Now, according to the weight of authority, we are satisfied that the accidental and innocent omission of the creditor's name from the schedule does not affect the regularity of the proceedings. It is not a breach of the bankrupt's duty so as to affect the question whether his discharge is duly granted or not. The authorities say that the act does not contemplate an absolutely accurate schedule of creditors, because it directs the marshal to send notices to those who are named in the schedule, and to such others as may be aftenoards fur-[24]*24wished to him, and also provides for amendments to the schedule, from time to time, under oath, by the debtor, all of which assumes that the regular schedule may not be altogether accurate. And they say that if the debtor has furnished a list which is accurate to the best of his knowledge and belief, it is in substance a conformity to his duty as prescribed by the statute, and it does not affect the regularity of the discharge.

It is contended, however, that in the case of voluntary bankruptcy the nature of the proceeding is that of an action brought by the debtor against his creditors, in which he is seeking a judgment' of discharge in bankruptcy ; and, upon general principles, it is said that a court has no jurisdiction to pronounce a judgment against any person who is not made a party to the proceeding by personal service of process in the shape of summons, or other process. There is a great deal of plausibility in the suggestion, and it is supported also by several cases which have been cited; but they are not decisions in any court of last resort.

There is another view, however, which may he urged with equal plausibility. The bankrupt law is established by Congress. The object of all bankrupt legislation is twofold; one object being to appropriate the assests of the debtor to the satisfaction of his debts, as far as they will go, and the other to discharge the debtor from any further liability for his existing debts; and these two things are not necessarily dependent upon each other.

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14 D.C. 21, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hoffman-v-haight-dc-1883.