In re Svenson

23 F. Cas. 480, 9 Biss. 69

• Court: U.S. Circuit Court for the Northern District of Illnois
• Decided: July 15, 1879
• Status: Published

Opinion

HARLAN, Circuit Justice.

The power of the district court over the subject of the bankrupt’s discharge was not exhausted on May 4, 1878. It is true that upon the showing then made a discharge could not have been granted. But there was no order or judgment, at that time, denying the application for discharge. The question of discharge was not judicially determined upon that application. The subsequent action of the court allowing the bankrupt to withdraw his first petition for discharge, and to file a new one. was not in violation of any provision of the bankrupt law [of 1SG7 (14 Stat. 517)]. The whole question of discharge was within the control of the bankruptcy court until “the final disposition of the cause.”

It appears that after the bankrupt obtained leave to file a second petition for discharge, he employed an attorney who prepared proofs of eight claims against his estate, and the consents of such creditors to his discharge. He paid the notary his services for taking the proofs, and the register his fees for filing same. He bore the entire expense connected with the proofs of those claims, for the sole purpose of obtaining the consent of creditors to his discharge. The statute makes it a ground of objection to a discharge, “If the bankrupt, or any person in his behalf, has procured the assent of any creditor to the discharge, or influenced the action of any creditor at any stage of the proceedings by any pecuniary consideration or obligation.” ltev. St. § 5110. The present case is not covered by that statute. Certainly the bankrupt could rightfully ask the assent of creditors to his discharge. If they are unwilling to incur the expense of proving their claims, either because of their worthless character, or for other (to them) satisfactory reasons, the bankrupt, in order to obtain the benefit of their formal assent to his discharge, could bear the expenses of such proofs, without necessarily affecting his right to a discharge. In such case, it cannot be fairly said that the assent of creditors was procured, or their action influenced, by “any pecuniary consideration or obligation.” The statute evidently refers to cases when tht creditor receives himself some pecuniary or other substantial profit or benefit from the bankrupt, or from some one acting in his behalf, as the result or fruit of his action in the bankruptcy proceedings.

For these reasons, the court is of opinion that the action of the district court was right. The petition for review is overruled, and it will be so certified to the court below.