In re Cohen

32 F. Supp. 203, 1940 U.S. Dist. LEXIS 3323
CourtDistrict Court, D. New Jersey
DecidedMarch 26, 1940
StatusPublished

This text of 32 F. Supp. 203 (In re Cohen) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Cohen, 32 F. Supp. 203, 1940 U.S. Dist. LEXIS 3323 (D.N.J. 1940).

Opinion

FORMAN, District Judge.

David Cohen was adjudged a bankrupt on his voluntary petition on August 23, [204]*2041937. He was granted his discharge in bankruptcy on January 7, 1938. In the schedule supporting his petition he listed, among others, as a creditor the Firemen’s Fund Indemnity Company in the following language: “Firemen’s Fund Indemnity Company — Judgment procured December 16, 1935; $40,000, and costs of $54.52.”

No address was given for this creditor. Consequently, no notice of the bankruptcy was sent to it, and it filed no claim. The estate of the bankrupt had no assets.

About eleven months after his discharge in bankruptcy, on or about December 6, 1938, he was served with a notice to appear before a Supreme Court Commissioner of the State of New Jersey to meet a motion made by the Firemen’s Fund Indemnity Company arising out of the judgment described above. He caused an investigation to be made concerning the listing of this judgment creditor in his bankruptcy schedule and found that no address had been given. This was his first intimation of this omission.

On October 17, 1939, he presented a petition to this court in which he made application to* have his discharge vacated and for leave to amend his schedule by inserting the address of the Firemen’s Fund Indemnity Company, so that if it had no notice theretofore it may now be given notice of the bankruptcy proceedings. Based on his petition an order was made directing the Firemen’s Fund Indemnity Company to show cause why such application should not be granted.

The Firemen’s Fund Indemnity Company appeared and resisted the application. It. alleged that the petitioner had or should have had ample notice of its address and charged that he abstained from including its address in the schedule with the express hope of preventing the respondent" from learning of his bankruptcy and in the further hope that his discharge in bankruptcy would operate to discourage the respondent from a prosecution of its judgment. It showed that no notice was sent to it' by the clerk of the court in the bankruptcy proceedings and that it only learned of the same in January of 1939, when it sought to compel the petitioner to answer discovery proceedings upon its judgment, and at that time the petitioner asserted his discharge in bankruptcy. The respondent also charged that petitioner was in laches because he made no step toward opening the bankruptcy proceedings until October, 1939. It further . charged that because of alleged fraudulent misrepresentations whereby the petitioner induced respondent to become surety for him upon a bond, petitioner would in no event be entitled to a discharge as against it. Nothing is put forth by the respondent to indicate that it has been prejudiced by the delay so that it would be precluded from making formal proof of its allegations.

An affidavit was filed by counsel who represented the petitioner in his bankruptcy proceedings in which he avers that the failure to add the address of the respondent in the bankruptcy schedule was' not intentional upon his part or that of his client.

Thát this court has power to set aside its decree of discharge has been settled by a case in this circuit called to our attention by the petitioner, entitled, Fourteenth Ave. Security Loan Association v. Squire, 3 Cir., 96 F.2d 799 (decided June 3, 1938), wherein the court said — “The appellee contends that though no express provision of the Bankruptcy Act authorizes the setting aside of a bankrupt’s discharge, section 15 of the act, 11 U.S.C.A. § 33, dealing solely with the revocation of a discharge for cause, none the less a court of bankruptcy, being a court of equity, possesses general equitable powers to amend, alter, or set aside its decrees in conformity with the ends of justice; Westall v. Avery, 4 Cir., 171 F. 626; Collier on Bankruptcy, 13th Ed., Vol. 1, p. 39; Ex parte Steele, D.C., 162 F. 694; In re Waugh, 9 Cir., 133 F. 281; and that in vacating the discharge and permitting the scheduling of the appellant’s claim, the District Court has not abused its discretion, since the appellant is simply put upon a parity with the other creditors of the bankrupt estate, the estate being devoid of assets. So far as these .parts of the decree are concerned, we are of the opinion that the court below possessed power to set aside its decree of discharge and has not abused its discretion in doing so.” 96 F.2d 799, 800.

But in that case the court continues its discussion of any' further power of the district court in the following language:

■ “But another consideration presents itself. Section. 14a of the Bankruptcy Act, as amended, 11 U.S.C.A. § 32(a), provides:
“‘Any.person may, after the expiration of one month and within the next-twelve months -subsequent to being adjudged a bankrupt, file an application for a discharge in the court of bankruptcy in which the-[205]*205proceedings are pending; if it shall be made to appear to the judge that the bankrupt was unavoidably prevented from filing it within such time, it may be filed within but not after the expiration of the next six months.’
“It follows from the terms of the statute quoted that unless the bankrupt makes application for his discharge prior to the expiration of the twelve-month period following his adjudication, the court has neither power nor discretion to entertain an application for discharge, saving only when the bankrupt is unavoidably prevented from making his application within twelve months, a circumstance not apparent in the case at bar. In re Vasques, D.C., 50 F.2d 271; In re Schaefer, 9 Cir., 80 F.2d 387; In re Lansley, 2 Cir., 15 F.2d 471; Holmes v. Davidson, 9 Cir., 84 F.2d 111; In re Knauer, D.C., 133 F. 805. In the case at bar a petition for discharge was filed by the appellee within twelve months of his adjudication, and though that petition is of record in these proceedings, none the less whether it be revived by the subsequent motion of the appellee or a new petition for discharge be filed by him as authorized by the order of the court, such motion or petition must be held to be 'an application for a discharge’ within the terms of the statute filed out of the time prescribed by the statute.-
“We are of the opinion that the District Court had no power to make that portion of its decree of April 26, 1937, permitting the bankrupt to file a new petition for discharge after the expiration of the period prescribed by the statute.” 96 F.2d 799, 800 (Italics supplied.)

Of course, it may be said in the present issue before this court that there is now no application for leave to file a new petition for discharge. But action toward that result is inevitable under whatever form it may take, and how can it be accomplished in view of the quoted language above italicized?

Attention must be focused on the chronology of the case before the court. The petitioner was adjudicated a bankrupt on August 23, 1937.

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Related

Holmes v. Davidson
84 F.2d 111 (Ninth Circuit, 1936)
In re Lansley
15 F.2d 471 (Second Circuit, 1926)
In re Vasques
50 F.2d 271 (W.D. New York, 1931)
In re Schaefer
80 F.2d 387 (Ninth Circuit, 1935)
Fourteenth Ave. Security Loan Ass'n v. Squire
96 F.2d 799 (Third Circuit, 1938)
In re Scheffler
21 F. Supp. 569 (D. New Jersey, 1937)
In re Waugh
133 F. 281 (Ninth Circuit, 1904)
In re Knauer
133 F. 805 (N.D. Iowa, 1904)
Ex parte Steele
162 F. 694 (N.D. Alabama, 1908)
Westall v. Avery
171 F. 626 (Fourth Circuit, 1909)

Cite This Page — Counsel Stack

Bluebook (online)
32 F. Supp. 203, 1940 U.S. Dist. LEXIS 3323, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-cohen-njd-1940.