In re Coburn

• Court: U.S. District Court — District of Massachusetts
• Citation: In re Coburn, 126 F. 218 (D. Mass. 1903)
• Decision Date: 03 December 1903
• Docket Number: 7,916.
• Parties: In re COBURN et al.

126 F. 218

In re COBURN et al.

No. 7,916.

United States District Court, D. Massachusetts.

December 3, 1903

Morse & Friedman, for petitioning creditors.

Chas K. Cobb, for common-law assignee.

Lowell District Judge.

The original involuntary petition filed by one creditor alleged that the number of creditors was less than 12. The act of bankruptcy alleged was a general assignment. The respondent in his answer set out that the number of creditors was more than 12, and he subjoined in proper form a list of 32. One undoubted creditor has since joined in the petition; two others have filed appearances, and have at some time sought to join, but the efficacy of their joinder is contested by the respondent. Between the filing of the petition and the hearing, 13 of the 32 creditors named assented to the voluntary assignment. Since the filing of the petition and before the hearing-- for the most part before the answer-- some 13 other creditors had assigned their claims to employes and friends of Bartlett, the voluntary assignee. Bartlett procured the purchase and assignment of these claims. In one of two cases his action may have been tantamount to payment. The assignees expected Bartlett to reimburse them in case of loss, and by his conduct he became morally, though perhaps not legally, bound to do so. several questions are presented:

First were there less than 12 creditors within the meaning of the Bankruptcy Act July 1, 1898, c. 541, Sec. 59, cls 'b' and 'd,' 30 Stat. 561, 562 (U.S. Comp. St. 1901, p. 3445)? Counsel for the respondent contended that the number of creditors within the purview of the statute should be reckoned as of the date of the petition. If any other date be taken, he pointed out that neither petitioner nor respondent can tell how his case stands. If the reckoning be made as of the date of the hearing, 1 of 11 creditors at the time of the petition may have split his one claim into several before the hearing, thus defeating the petition. The splitting may have been in good faith; it may even have been involuntary. On the other hand, 2 of 12 creditors at the time of the petition may have united their claims into one before the hearing, thus enabling the petitioner to succeed where he would otherwise have failed. A debt incurred since the filing of the petition cannot ordinarily be proved (see section 63, c. 541, Bankr. Act July 1, 1898, 30 Stat. 562, 563 (U.S. Comp. St., 1901, p. 3445), and Form 32, 89 F. xliii, 32 C.C.A. lxviii), and therefore cannot be the basis of a petition in bankruptcy. Tender of payment to a petitioning creditor does not defeat the petition. Lowell, Sec. 54. If a debt incurred since the petition cannot be proved, and if a petition based upon a debt cannot be defeated by payment of the debt, it is analogous to fix the number of creditors as of the date of the petition. This is also to follow the analogy of other legal proceedings. In most respects, the validity of a plaintiff's case is determined as of the date of bringing suit. There are exceptions to this rule, but they seem inapplicable here.

If the number of creditors be reckoned as of the date of the petition, the subsequent acts of the creditors and of the voluntary assignee need not be considered. Even where creditors were led not to join in the petition by the inducement of the respondent himself, it has...