In re Lane

Decision Date26 December 1902
Docket Number5,191.
Citation125 F. 772
PartiesIn re LANE.
CourtU.S. District Court — District of Massachusetts

Eaton McKnight & Carver, for creditor.

Joslin & Mendum, for bankrupt.

LOWELL District Judge.

The petitioner in this case failed, by inadvertence, to prove his claim within a year of the adjudication. The debt was not on the bankrupt's schedule, but its omission by the bankrupt was made in good faith, and under the circumstances was almost unavoidable. The bankrupt offered a composition, which was duly accepted, and he made a sufficient deposit. Some of the creditors have failed to claim their dividends, and the petitioning creditor now seeks, against the objection of the bankrupt, to prove his claim, which is in its nature preferred, and to obtain payment thereof from the surplus left in the hands of this court. No objection has been made by other creditors. By the terms of the act proof is barred provided the bankrupt has standing in court to raise an objection.

In Re Morton, 118 F. 908, this court said, 'The purpose of the bankrupt act is the equal and equitable distribution of the bankrupt's property among his creditors, and the consequent discharge of the bankrupt from his obligations;' and again, 'The bankrupt's property belongs to his creditors, and not be himself. ' It may be doubted, therefore, if the bankrupt can object to the proof and allowance of a just claim to share in an ordinary distribution in bankruptcy, though the claim is not proved within a year. In the case of an ordinary distribution section 57n (Act July 1, 1898, c. 541, 30 Stat. 561 (U.S. Comp. St. 1901, p. 3444) may be intended to protect only the other creditors.

But the question here presented is not that raised by an attempt to prove in ordinary bankruptcy proceedings, after the expiration of the year, as against the sole objection of the bankrupt. The case of composition is in some respects exceptional. It is a proceeding voluntary on both sides, by which the debtor of his own motion offers to pay his creditors a certain percentage of their claims in exchange for a release from his liabilities. The amount offered may be less or more than would be realized through distribution in bankruptcy by the trustee. The creditors may accept this offer or they may refuse it. For the purposes of the composition all the creditors are treated as a class, and the will of the majority is enforced upon the minority, provided the decision of the majority is approved by the court. Except for this coercion of the minority, the intervention of the court of bankruptcy would...

To continue reading

Request your trial
32 cases
  • In re Kornbluth
    • United States
    • U.S. Court of Appeals — Second Circuit
    • May 8, 1933
    ...has been filed, are in some respects outside of bankruptcy proceedings "proper," seems to have started with the decision of In re Lane (D. C.) 125 F. 772. Undoubtedly there are substantial differences between termination of bankruptcy proceedings after confirmation of an offer of compositio......
  • Myers v. International Trust Co, 122
    • United States
    • U.S. Supreme Court
    • February 21, 1927
    ...get what they 'bargained for,' and no more. And see, In re Coe (C. C. A.) 186 F. 745, 747; In re Adler (D. C.) 103 F. 444, 446; In re Lane (D. C.) 125 F. 772, 773. Here the partnership, being proceeded against as a distinct legal entity, Meek v. Centre County Banking Co., 268 U. S. 426, 431......
  • Burton Coal Co. v. Franklin Coal Co.
    • United States
    • U.S. Court of Appeals — Eighth Circuit
    • November 9, 1933
    ...of such a surplus is not made under the provisions of the Bankrupt Act, and therefore no provision of that act is applicable. In re Lane (D. C.) 125 F. 772; In re Atlantic Construction Co. (D. C.) 228 F. 571; and Nassau Smelting & Refining Works, Ltd., v. Brightwood Bronze Foundry Co., 265 ......
  • Louisville Joint Stock Land Bank v. Radford
    • United States
    • U.S. Court of Appeals — Sixth Circuit
    • February 11, 1935
    ...retains possession and title to his property. Of course, with respect to consenting creditors, it is a matter of agreement, In re Lane (D. C.) 125 F. 772, 773; Cumberland Glass Mfg. Co. v. DeWitt, 237 U. S. 447, 452, 35 S. Ct. 636, 59 L. Ed. 1042, yet it is coercion as to nonassenting credi......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT