Freshman v. Atkins

• Decision Date: 16 November 1925
• Docket Number: No. 41,41
• Citation: 70 L.Ed. 193,46 S.Ct. 41,269 U.S. 121
• Parties: FRESHMAN v. ATKINS
• Court: U.S. Supreme Court

269 U.S. 121

46 S.Ct. 41

70 L.Ed. 193

FRESHMAN

v ATKINS.

No. 41.

Argued Oct. 14, 1925.

Decided Nov. 16, 1925.

Messrs. Paul Carrington and Joseph Manson McCormick, both of Dallas, Tex., for petitioner.

Mr. Justice SUTHERLAND delivered the opinion of the Court.

On November 1, 1915, the petitioner filed in the federal District Court for the Northern District of Texas a voluntary petition in bankruptcy. Within the statutory time he applied for his discharge, which was contested. The referee, to whom it had been referred as special master, having died after a hearing, his successor as referee reviewed the record and recommended that the discharge be denied. The referee's report was filed with the clerk, but not acted upon by the court, nor was the matter ever brought to the court's attention by the petitioner or any other interested party. On November 11, 1922, a second voluntary petition was filed by the bankrupt. The creditors listed in the first petition were, together with others, included in the second. In February, 1923, the petitioner filed an application for a discharge under the second proceeding. The referee recommended that the discharge be granted. The court, upon its own initiative, took judicial notice of the pendency of the former application and denied the second, in respect of the creditors included in the first petition, granted it as to the additional creditors, and, upon an inspection of the record, denied, by a separate order, the discharge sought under the original proceeding. 290 F. 609. The order denying in part the second application was affirmed on appeal by the Circuit Court of Appeals. 294 F. 867. A motion was made in the District Court for a rehearing of the question of discharge under the original proceeding, but what, if any, action has been taken respecting it, does not appear.

The opinions of the two courts do not proceed upon precisely similar grounds, but they reach the same conclusion, which is, in effect, that the pendency of the first application precluded a consideration of the second in respect of the same debts. In this conclusion we concur. A proceeding in bankruptcy has for one of its objects the discharge of the bankrupt from his debts. In voluntary proceedings, as both of these were, that is the primary object. Denial of a discharge from the debts provable, or failure to apply for it within the statutory time, bars an application under a second proceeding for discharge from the same debts. Kuntz v. Young, 131 F. 719, 65 C. C. A. 477; In re Bacon, 193 F. 34, 113 C. C. A. 358; In re Fiegenbaum, 121 F. 69, 57 C. C. A. 409; In re Springer (D. C.) 199 F. 294; In re Loughran, 218 F. 619, 134 C. C. A. 377; In re Cooper (D. C.) 236 F. 298; In re Warnock (D. C.) 239 F. 779; Armstrong v. Norris, 247 F. 253, 159 C. C. A. 347; In re Schwartz (D. C.) 248 F. 841; Horner v. Hamner, 249 F. 134, 161 C. C. A. 186, L. R. A. 1918E, 465; Monk v. Horn (C. C. A.) 262 F. 121. A proceeding in bankruptcy has the characteristics of a suit, and since the denial of a discharge, or failure to apply for it, in a former proceeding, is available as a bar, by analogy the pendency of a prior application for discharge is available in abatement as in the nature of a prior suit pending, in accordance with the general rule that the law will not tolerate two suits at the same time for the same cause.

Here there was no plea or objection by any interested party, and it is argued that this is a necessary prerequisite to a consideration of the matter-that the court may not refuse a discharge ex mero motu. That such is the rule where the action of the court is based upon one or more of the acts of the bankrupt which operate to preclude a discharge may be conceded. But the objection that the issue is already pending, as that it has been adjudged, goes to the right of the bankrupt to maintain the later...