In re Jacobs

• Decision Date: 08 May 1917
• Docket Number: 2935
• Citation: 241 F. 620
• Parties: In re JACOBS et al.
• Court: U.S. Court of Appeals — Sixth Circuit

241 F. 620

In re JACOBS et al.

No. 2935

United States Court of Appeals, Sixth Circuit.

May 8, 1917

Harry Hess, of Cincinnati, Ohio, for petitioners.

D. T Hackett, of Cincinnati, Ohio, for respondent.

Before WARRINGTON, KNAPPEN, and DENISON, Circuit Judges.

WARRINGTON Circuit Judge.

An order was entered in the court below setting aside and declaring null and void a discharge in bankruptcy; and it is sought here to have the proceedings resulting in such order revised in matter of law. The petitioners, as partners in a mercantile business, filed their voluntary petition in bankruptcy March 21, 1913, and were adjudicated bankrupts on the same day. The bankrupts, April 1, 1914, filed a petition for a full discharge from all debts provable against their estate, except such as were exempted by law. An order was made on that day fixing the hearing for May 25, 1914 directing publication to be made notifying the creditors to appear and show cause why the petition should not be granted and directing the clerk to mail to all known creditors copies of the petition and order, addressed to them at their places of residence. It is not claimed that the order was not complied with, save in a single respect which will presently be considered. On the date so fixed for the hearing an order was entered, reciting that the petitioners 'appear to have conformed to all the requirements of law in that behalf,' and directing that petitioners 'be discharged from all debts and claims which are made provable by said acts (of Congress) against their estates, and which existed on the 21st day of March, A.D. 1913.'

Later on June 23, 1915, William Hymore, claiming to be a creditor of the bankrupts, moved to set aside the discharge in bankruptcy on the grounds (1) that 'petitioners were not entitled to a discharge,' and (2) that the court had 'no jurisdiction to grant said discharge at the time same was ordered. ' An affidavit of counsel for Hymore was offered in support of the motion, stating in effect that Hymore appears as a creditor on Schedule A (3), that his address as there given, as the bankrupts knew, was erroneous, that the creditor did not receive the notice, and that the record of the court below 'fails to show that any application had previously been made' by the bankrupts, or that 'an extension of time thereunder was duly granted in accordance with the Bankruptcy Act, although more than one year had elapsed since the adjudication in bankruptcy and the filing of the petition for discharge.'

It is claimed for petitioners that both grounds of the motion to revoke, when considered with the supporting affidavit, were intended to charge that the order granting the discharge was obtained through fraud of the bankrupts, and that in view of section 15a of the Bankruptcy Act (Comp. St. 1916, Sec. 9599) the court below was without jurisdiction to entertain the motion, since it was filed more than one year after the discharge was granted. This theory of fraud, however, is met by a practical disclaimer made on behalf of the creditor; and it is evident that the learned trial judge did not believe that any question of fraud was involved, for his opinion is based solely on the ground that the petition for a discharge was not seasonably filed. Since, as we have seen, the discharge was granted May 25, 1914, while the motion to revoke was not filed for more than one year thereafter, June 23, 1915, it is to be inferred that the court entertained the motion to revoke upon the theory that the discharge had been improvidently granted. If, then, we assume that the application to revoke the discharge could under the circumstances of this case be made more than a year after the discharge was granted, still, in case it was properly granted, the order annulling it should be reversed, and the discharge given its rightful force and effect.

The question whether in point of time the petition for discharge was filed too late must depend upon the true meaning of section 14a. The section provides:

'Any person may, after the expiration of one month and within the next twelve months subsequent to being adjudged a bankrupt, 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.'

Any attempt to apply this language to the present facts is attended with difficulty. The petitioners filed their application for a discharge 12 months and 10 days after they were adjudged bankrupts. The question therefore arises whether the intent of the statute was to create a period of 11 months, or one of 12 months, within which an application for a discharge might be filed as a matter of right. It is certain that according to the terms of the act the application could not be filed at any time within the first month succeeding the adjudication; it is equally certain that the filing period is not in express words limited to 11 months; the only period distinctly named is 12 months. Unless, then, the words associated with those thus far alluded to require the first and nonfiling month to be subtracted from the 12 months explicitly mentioned, it would seem that the open filing period was designed to comprise 12 months. Such associated words may be conveniently shown: 'Any person may' file his application 'after the expiration of one month and within the next twelve months subsequent' to the adjudication. The qualifying words-- 'the next'-- may be given their natural meaning and effect by referring them to a period (12 months) commencing with the expiration of the first month 'subsequent' to the adjudication; indeed, this would appear to be a more reasonable use and interpretation of the qualifying words than to treat them as intended to include the first month. According to this construction every word of the sentence is given full effect, while to include the first month would render the qualifying words unnecessary, if not meaningless. This is true, also, as applied to the last sentence of section 14a, where, subject to a showing of unavoidable delay, the judge may permit the application to be filed 'within but not after the expiration of the next six months'; the 'next six months' period begins to run of course with the close of the 12 months period, whether that period is to be treated as commencing with the adjudication or at the end of 1 month thereafter. It must follow, we think, that the application for the discharge was seasonably filed.

This construction is in accord with the opinion of Judge Bourquin in Re Walters, 209 F. 133, 134 (D.C.) and that of Judge Ray in Re Daly, 224 F. 263, 265 (D.C.); it is not however in harmony with the opinion of Judge Reed in Re Knauer, 133 F. 805 (D.C.),...