In re Seabury

21 F. Cas. 900
District Court, D. New Jersey·Decided July 1, 1874·Published

Opinion

NIXON, District Judge.

The case is briefly this: A voluntary petition in bankruptcy was filed by James M. Seabury, Jr., October 8, 1873, upon which he was adjudged a bankrupt on October 18th. On the 6th day of January following, a petition for his final discharge was presented to the court, on which the usual order was made that his creditors should show cause, before the court, on the 3d day of February, why the prayer of his petition should not be granted. On the return day of the order it appeared that the bankrupt’s oath of conformity had not been taken, that the- register had filed no certificate, that the assignee had not made return that there were no assets. As these were all essential prerequisites to the discharge, the last being a jurisdictional fact enabling the bankrupt to make his application for a discharge before six months, and after sixty days from the date of the adjudication, the case was continued on application of the counsel of the bankrupt, to February 17th. On that day, the papers being still wanting, another adjournment was had until February 24th, on a like application, and a peremptory rule was taken on the assignee, to make and file his report on or before that date, certifying whether any assets of the bankrupt had come into his hands for distribution. The oath of conformity, the register’s certificate of conformity, and the assignee’s return to the rule of no assets, were all filed on the 24th. The case had been placed on the calendar for that day, and when called, and be[901]*901fore any motion had been made, the clerk presented to the conrt a letter from Judge Buchanan, stating that he desired to oppose the discharge as counsel for opposing creditors, that he was confined to his bed by sickness, and asking for a postponement until he was able to attend the hearing. The reasons being deemed sufficient, an adjournment was ordered by the court, and, in consequence of the continuing illness of counsel of the opposing creditors, the hearing was postponed from time to time to March 31, when Mr. Buchanan being in court, and the case called, the counsel for the bankrupt made the usual motion for the bankrupt’s discharge, limiting his application, however, to the debts contracted prior to January 1, 1869. The counsel for the opposing creditors interposed a verbal objection to the jurisdiction of the court, and moved to dismiss the proceedings on the ground that the court had refused the discharge of the bankrupt in previous proceedings upon specifications filed under the 29th section of the act, and going to the merits of the case, and that there was no authority conferred on the court by the bankrupt law, on any new proceedings, to grant a discharge. The motion was opposed by the counsel of the bankrupt, alleging that the court could take no notice of any motion in the case made by Mr. Buchanan, because, 1st, no appearance had been entered in behalf of any opposing creditor; 2d, no entry had been made upon the clerk’s docket of any opposition to the discharge; and, 3d, no specifications had been filed against the discharge, and that it was too late for the court to authorize these necessary affirmative things to be done. The counsel for the bankrupt expressing a desire for time to submit his views on the questions presented, and the counsel on behalf of the opposing creditors acceding thereto, the court directed the clerk to enter an adjournment of all proceedings for two weeks. On the adjourned day the parties were heard upon these questions alone, and, as the court desired time for consideration, another ordo1 was made continuing the proceedings until to-day.

I have given attention to the case because \ it involves matter of correct practice under the act [of 1807, 14 Stat. 517], and the general orders in bankruptcy, and 1 am quite satisfied that the counsel for the bankrupt is right in his three propositions. There should be an appearance, an entry of the same on the clerk’s docket, and specifications put on file, within the prescribed time. The 24th general order requires that the creditor opposing the application of the bankrupt for his discharge, shall enter his appearance in opposition thereto on the day when the creditors are summoned to show cause. The 3d general order specifies how this appearance is effected. So far as the attorney and coun-sellor is concerned, it may be verbally or in writing. But it is not completed until the I clerk enters his name and place of business ■ ! I ■ upon the docket, with the date of the entry. Until this is done the creditor has no standing in court, and cannot be heard in opposition to the discharge. When it is done within the time required by the law, then, under the 24th rule, he has ten days only in which to file his specifications against the discharge, unless the time shall be enlarged by order of the court. And the position of the counsel in behalf of the opposing creditors, that it is not necessary to file any specifications in opposition to the discharge, except those enumerated in the 29th section of the act, is not maintainable. All grounds against the discharge, to be relied upon by opposing creditors — except those that appear upon the face of the proceedings, which the court is bound to notice even where no creditors oppose— must be assigned in writing as specifications. In short, the act clearly contemplates a suit arising in the course of the bankruptcy proceedings in which there should be an appearance entered and specifications filed which make up the issues to be tried; and nothing can be produced in evidence on the trial except such matters as are included in and tend to prove the issues made.

The only remaining question is, whether it is now too late for the opposing creditors to cause an entry of their appearance in the clerk’s docket, and to file their specifications. The 29th general order, above referred to, prescribes that the creditors shall file their appearance on the day on which they are required to show cause against the discharge. Has that day, in legal contemplation, passed? I think not. Very early in the bankruptcy practice the question was taised, whether the 29th section of the act and the 24th general order required the opposing creditors to enter their appearance on the return day of the rule to show cause, or, in ease of an adjournment, whether they should be permitted to wait until the adjourned day, before entering such appearance. An examination of the cases of In re Mawson [Case No. 9,320], In re Thompsun [Id. 13,935], In re Tallman |Id. 13,740], and In re Seckendorf [Id. 12,600], will reveal the gradual steps by which the practice was es-tabhshed, and in which there has been no interruption, that the rights of the creditors upon the adjourned day are the same, in all respects, as upon ihe return day. In this ease the return day was February 3d. If the needful papers had been on file, the bankrupt would then have been entitled to his motion for his discharge, and it would have devolved upon opposing creditors to have appeared and to cause an entry of their opposition to be made in the docket of the clerk. But no motion was made or could be in the absence of material certificates and affidavits, and adjournments from week to week were ordered, either on the application of the bankrupt or on behalf of the creditors, until March 31st. Then the counsel of both parties were in court, as they had been on the first return day, and the motion was made for the discharge. The [902]*902time had now arrived for the creditors .to take affirmative action, and their counsel interposed the above stated verbal plea to the jurisdiction of the court.

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In re Seabury, 21 F. Cas. 900 (D.N.J. 1874).

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