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§ 654. Reopening estates in bankruptcy. The bankruptcy courts have jurisdiction to "close estates, whenever it appears

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attachment or otherwise which arose within four months prior to the proceeding and which would have been dissolved by an adjudication of bankruptcy, Re Lilienthal,' C. C. A., 256 Fed. 819; but not other liens, the holders of which did not share in the composition. fields Syndicate v. Am. Improvement Co., 256 Fed. 979; Cobb v. First Nat. Bank, 263 Fed. 1000. It discharges debts which were not filed and proved within the statutory time. Re Maytag-Mason Motor Co., 223 Fed. 684; Cobb v. First Nat. Bank, 263 Fed. 1000; supra, § 646. It has been held that a creditor whose claim is not dischargeable is entitled to share in the benefits of the composition without prejudice to subsequent proceedings by him to collect his claim. Re Alpert, 237 Fed. 295. Unscheduled creditors, who had no notice of the bankruptcy proceedings, are not barred by the composition, Re Lockwood, 104 Fed. 794. But they have no right to share therein, unless they present their claims before it has been confirmed, Re Abrams & Rubins, 173 Fed. 430; nor even, it has been held, unless they present these before the referee has made a rule nisi why the order of confirmation should not be entered, Re Ennis, 183 Fed. 859. It has been said that the only remedy in such a case is to set aside the confirmation for fraud. Re Abrams & Rubins, 173 Fed. 430. It does not operate to extend the time for filing claims beyond one year after adjudication, nor has the court authority to allow claims filed after

expiration of that time. Re Bickmore Shoe Co., 263 Fed. 926. The composition does not prevent a liquidating trustee to whom the assets are thus transferred from maintaining a suit under a State statute to set aside a preferential transfer by the bankrupt, Kobre Assets Corp. v. Baker, 178 App. Div. (N. Y.) 62. It does not deprive the referee of jurisdiction to pass on the accounts of the trustee and to direct that he be discharged and the estate closed, U. S. v. Sondheim, 188 Fed. 378. Otherwise the approval of the composition ordinarily terminates the jurisdiction of the Court of Bankruptcy over the property, Re Frischknecht, C. C. A., 223 Fed. 417; Re Hollins, C. C. A., 229 Fed. 349; Re Hollins, C. C. A., 238 Fed. 787; see Re Kligerman, 253 Fed. 778; and also, it has been held, over any trustee thereby appointed to collect and distribute the assets, Guaranty Trust Co. v. McCabe, C. C. A., 250 Fed. 699. Unless otherwise therein provided, it vests the title to the assets in the bankrupt free of all claims of creditors except those which would not be barred by a regular discharge in bankruptcy. Cumberland Glass Mfg. Co. v. De Witt, 237 U. S. 447; Re Rider, 96 Fed. 808, 809, per Coxe, J.; Re McNeil Corp. 249 Fed. 765, 767. It has been held that where notes given by a trustee in bankruptcy pursuant to an order confirming a composition with creditors are not paid, the original debt revives. Am. Woolen Co. v. Friedman, 97 Misc. (N. Y.) 593.

that they have been fully administered, by approving the final accounts and discharging the trustees,1 and reopen them whenever it appears they were closed before being fully administered.'' 2 There is no statutory limitation of the time within which a bankrupt 's estate that has been closed may be reopened,3 but such an application may be denied for laches. An estate may be reopened after a trustee has been discharged, in order

§ 654. 1 The estate is not closed by the discharge of the bankrupt, Re Margolies, C. C. A., 266 Fed. 203; although the time for revoking the discharge and for indicting him for the concealment of assets has not expired, Re Levy, 261 Fed. 432; and he may be subsequently compelled to deliver to the trustee property which he has fraudulently concealed. Ibid. It has been held that when there has been no final meeting of creditors, the estate is not closed although the referee has declared its closing. Re Levy, 261 Fed. 432. The closing of the estate does not transfer to the bankrupt the title to unadministered assets which have not been duly rejected' by the trustee. Re Lighthall, 221 Fed. 791; Supra, § 643.

230 St. at L. 544, § 2, subd. 8. The motion to re-open is addressed to the sound discretion of the court. Re Graff, C. C. A., 250 Fed. 997. It has been said that creditors alone can make such an application, Ibid; and not creditors who have not proved their claims, Re Paine, 127 Fed. 246; Re Meyer, 181 Fed. 904. See supra, § 646; nor, the trustee who has been discharged. Ibid. It has been held that no creditors who have failed to prove their debts can share in the newly discovered assets. Ibid. An estate was re-opened upon the petition of a purchaser of land

from the trustee when the sale had not been legally perfected. Re Minners, 253 Fed. 360. There must be a reasonable prospect of realizing assets which are unadministered and evidence that the creditors or other parties in interest would be thereby benefited. Re Graff, C. C. A., 250 Fed. 997. A case may be re-opened because of the discovery of assets which the bankrupt had fraudulently concealed. Re Paine, 127 Fed. 246. The court cannot open the estate for the sole purpose of permitting the bankrupt to amend his schedules by adding the names of other creditors, when the administration of the estate has been completed. Re Sayer, 210 Fed. 397.

3 Re Paine, 127 Fed. 246; Traub v. Marshall Field & Co., C. C. A., 182 Fed. 622.

4 Vary v. Jackson, C. C. A., 164 Fed. 840, seven years. For a case where a delay of two years was held to be no laches, see Traub v. Marshall Field & Co., C. C. A., 182 Fed. 622. After the expiration of the two years statutory limitation, the court may refuse to re-open the estate in order to enable the trustee to attack a sale by the bankrupt for fraud which he might have discovered during such time. Scharff, 231 U. S. 517. §§ 181, 643.

Kinder v. See supra,

that a new trustee may be appointed to receive a preference." The effect of the reopening is not to reinstate the trustee; but a new trustee must be appointed.

§ 655. Discharge of bankrupts. "(a) Any person 1 may, after the expiration of one month and within the next twelve months subsequent to being adjudged a bankrupt,2 file an application for a discharge in the court of bankruptcy in which the proceedings 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. "There shall be thirty days' notice of all

5 Re B. Feinberg & Sons, 187 Fed. 283.

6 Re Rochester Sanitarium & Baths Co., C. C. A., 222 Fed. 22; Re Graff, C. C. A., 250 Fed. 997; Re Minners, 253 Fed. 360.

§ 655. 1 A corporation may receive a discharge in bankruptcy. Re Hargadine-McKittrick Dry Goods Co., 239 Fed. 155. It has been held, that where a partnership has been adjudicated a bankrupt, the partners may obtain a discharge from their individual indebtedness although there has been no adjudication against them individually. Armstrong v. Norris, C. C. A., 247 Fed. 253. See supra § 618.

2 It has been held that the bankrupt may file the application any time within thirteen months after the adjudication. Re Walters, 209 Fed. 133; Re Daly, 224 Fed. 263; Re Jacobs, C. C. A., 241 Fed. 620. Contra, Re Holmes, 165 Fed. 225. As to the mode of computation, see Re De Lewandowski, 243 Fed. 787, supra, § 608. The court has no power to set aside an adjudication, entered upon a default in involuntary proceedings, and to make another order to the same effect in order to extend the bankrupt's time

to apply for a discharge. Re Morse, 168 Fed. 157. After eighteen months from the adjudication in bankruptcy have expired, no extension can be granted. Re Snell, 244 Fed. 613. Nor can any order be made nunc pro tunc granting the extension, unless an application for the same was made and orally granted within that period. Re Wolff, 100 Fed. 430; Re Taunton, 216 Fed. 987. Contra, Daly, 224 Fed. 263. See Re Anderson, 134 Fed. 319; International Harvester Co. of America v. Carlson, C. C. A., 3 30 St. at L. 544, § 14, as amended 36 St. at L. 838, 841; Re Wheeler, 5 Fed. 299; Re Wolff, 100 Fed. 430; Re Levenstein, 180 Fed. 957; Lindeke v. Converse, C. C. A., 198 Fed. 618; Re Agnew, 225 Fed. 650. The filing of the petition without the leave of the court, after the expiration of a year and within the succeeding six months, is insufficient. Re Knauer, 133 Fed. 805. See Re Daly, 244 Fed. 263. The lack of sufficient means by a bankrupt to pay an attorney, when accompanied by sickness of himself and his family was held to be an unavoidable prevention. Re Casey, 195 Fed. 322. So was the illness of his at

applications for the discharge of the bankrupts given to creditors

torney. Re Waller, C. C. A., 249 Fed. 187. But not the fact that his business was in such a condition that he did not have the time to file the application; Re Daly, 205 Fed. 1002; nor that he was in contempt of court for disobedience to an order with which he afterwards complied after its modification, Re Geasberg, C. C. A., 197 Fed. 896; nor because if the application had been filed within the year, it would necessarily have been denied because of his previous discharge in voluntary proceedings within six years, Re Vaine, 186 Fed. 535; Re Chase, 186 Fed. 408; nor that no trustee was appointed within a year after the adjudication. Hinman v. Barrett, 244 Fed. 621. It is not the duty of the referee to notify the bankrupt when the time expires for filing the petition for discharge, Re Knauer, 133 Fed. 805, and the statutory period of limitations cannot be enlarged because the referee misled the bankrupt's attorney by incorrect information in that respect. Ibid. The extension, if granted within the eighteen months, cannot be attacked collaterally but only by a motion to set the order aside. Re Agnew, 225 Fed. 650. Where the petition for the discharge was filed more than a year, but less than eighteen months, after the adjudication; it was held that it could not be impeached collaterally, since it must be presumed that an extension of time had been granted by the court. Re Haynes & Sons, 122 Fed. 560. But where the petition was filed after the expiration of eighteen months; it was held that a discharge granted thereupon was void and could be attacked collat

erally. Re Fahy, 116 Fed. 239. Cf. Re Wagner, 139 Fed. 87. The creditor may be estopped by laches from moving to set aside an order of extension, Re Casey, 195 Fed. 322; or by filing objections to the discharge. Re Churchill, 197 Fed. 111. It has been held that the question whether a bankrupt was unavoidably prevented from applying for a discharge within the year should be raised within the next six months. Re Chase, 186 Fed. 408. Re Maier, 256 Fed. 60. The order extending the time cannot be reviewed upon the hearing of objections to the discharge. Re Casey, 195 Fed. 322. A petition was treated as filed on the day when it was offered to the clerk, although it was subsequently taken away by the attorney because of an errone

ous

statement by the former in accordance with instructions by the judge as to the practice. Re Swain, 243 Fed. 781. So where the application was filed with the referee, instead of the clerk, but was with the other proceedings before the former filed with the latter within a year after the adjudication, no objection having previously been made. Re Taylor, 188 Fed. 479. It seems that creditors are not entitled to notice of the application for an extension of time. Re Churchill, 197 Fed. 111; Re Fritz, 173 Fed. 560. The petition for an extension because the bankrupt was unavoidably prevented from applying within the year is not evidence of the facts therein alleged and must be sustained by proof, although not formally traversed. Re Glickman & Pisnoff, 164 Fed. 209. The insufficiency of the evidence to establish

by mail to their respective addresses as they appear in the schedule or as afterwards filed with the papers in the case by the creditors, unless they waive notice in writing."4"(b) The judge shall hear the application for a discharge, and such proofs and pleas as may be made in opposition thereto by the trustee or other parties in interest, at such time as will give the trustee or parties in interest a reasonable opportunity to be fully heard, and investigate the merits of the application and discharge the applicant unless he has (1) committed an offense punishable by imprisonment as herein provided; or (2) with intent to conceal his financial condition, destroyed, concealed, or failed to keep books of account or records from which such condition might be ascertained; or (3) obtained money or property on credit upon a materially false statement in writing, made by him to any person for the purpose of obtaining credit from such purpose; or (4) at any time subsequent to the first day of the four months

the unavoidable prevention does not deprive the court of jurisdiction to grant the application for an extension. Ibid.

430 St. at L. 544, 561, § 58, as amended 36 St. at L. 838, 841. Re Blaesser, 230 Fed. 528; Re Lengfeldt, 253 Fed. 458. This notice should be a copy of an order of the court in fixing the date in accordance with Form 57. Re Hockman, 205 Fed. 330. But see S. D. N. Y. Rule 7. The order cannot be made by the referee. Ibid. Where one of the petitioners in an involuntary proceeding fails to give such notice to the creditors, it is incumbent upon the bankrupt so to do. Re Wollowitz, C. C. A., 192 Fed. 105. It seems that notice of the application should be given by publication, as well as sent by mail, to the creditors. Hanover Nat. Bank V. Moyses, 186 U. S. 181, 191, 192, 46 L. ed. 1113, 1120, 1121; Remington on Bankruptcy, § 2432. See Re Sykes, 106 Fed. 669. As to what is proper proof of service of notice Fed. Prac. Vol. III-84

to the creditors, see Re Downing, 199 Fed. 329. When a creditor has died, notice should be given to his executor or administrator or if there is none such his widow and next of kin if the record shows who they are; but need not be served upon his own creditors who might possibly take out letters of administration. Re Blaesser, 230 Fed. 328. Failure to serve written notice upon the receiver of the property of the creditor when the. former's name and address were disclosed by the proofs, and that of the latter was not in the schedules, was held to be no ground for setting aside the order for a discharge, where the notice was duly served by publication and there was no proof of fraud. Re Fritz, 173 Fed. 560. A discharge was not denied because, in a voluntary proceeding by Max Elkind and Boris Schwartz, the advertisement of notice of the first meeting of creditors described them as "Max Elkurd and Boris Schwartz."' Re Elkind, C. C. A., 175 Fed. 64.

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