In re Mills

17 F. Cas. 393, 7 Ben. 452

Opinions

BLATCHFORD, District Judge.

The 27th section of the act provides that the second meeting of creditors, which is the one held in this case, shall be, “a general meeting of the creditors, of which due notice shall be given.” The order for the second meeting of the creditors, prescribed by form No. 28, directs that the assignee shall give notice <5f the meeting, “by sending written or printed notices by mail, post paid, of the time and place of said meeting, to all known creditors of said bankrupt,” and shall also publish notice of the time and place of said meeting. The notice to be given by mail is not confined to a notice to be sent to all creditors who have proved their debts. Notices must be sent by mail to all known creditors. Creditors who have proved- their debts are not all the creditors who are known creditors. Many creditors refrain from proving tlreir debts until they learn that there is to be a dividend, and that information ordinarily comes when notice of a second meeting comes. The claim of Welsh Brothers, at the' amount of ?21,-024.4G, is set forth in the bankrupt’s schedules. They are, therefore, known creditors, and entitled to notice of the second meeting, to be given to them by mail, in order that they may prove their debt. Such notice would naturally be notice to them that there was to be a dividend. I understand the certificate of the register to import that no notice has been sent to them by mail, of the time and place of the second meeting. Because of this defect the second meeting is irregular, and it must be adjourned until the defect can be remedied by sending notice to them, and giving them a sufficient time and proper opportunity to prove their debt.

In accordance with this decision, the adjourned second meeting was held, of which due notice was sent to Welsh Brothers, who, however, did not prove their claim. The creditors thereupon, at the adjourned meeting, voted a dividend of seventy-five per cent, on the debts proved. The assignee objected to. this distribution of the assets, claiming that it was not competent, at the second meeting to pay a larger percentage than the fund in hand would- be sufficient to pay on all thé debts, whether proven or not.

The register overruled the objection, holding that, under the 27th and 2Sth ■ sections, of the bankruptcy act, the whole fund in the hands of the assignee should be distributed at the second meeting, less such sum as should be retained for expenses and contingencies, unless good cause were shown to the contrary, and that here no such cause was shown. On request of the assignee, the question was certified to the court.