In re Rider
| Decision Date | 06 October 1899 |
| Citation | 96 F. 808 |
| Parties | In re RIDER. |
| Court | U.S. District Court — Northern District of New York |
Isaac S. Signor and Thomas A. Kirby, for bankrupt.
Frank J. Hone, for objecting creditors.
COXE District Judge (after stating the facts as above).
The effect of a composition is to supersede the bankruptcy proceedings and reinvest the bankrupt with all his property free from the claims of creditors. As an abstract proposition, considered for a moment apart from the provisions of the statute, it is entirely clear that a condition so plainly in derogation of common-law rights should not be permitted, unless it is reasonably certain that the creditors approve and that they will fare at least as well as they would were the estate administered in the usual course. It would be manifestly unfair and opposed to the basic principle of our institutions to permit a minority to dictate terms to a majority and compel them, in invitum, to take what the bankrupt chooses to offer, or nothing. Indeed it has been considered a somewhat dangerous exercise of legislative power to compel even a minority to surrender all claim upon the debtor's estate at the dictation of the majority. Certainly no previous law has permitted a minority to force a compromise. Always the safeguard of a majority against favoritism and fraud has been preserved. The amendment of 1874 to the law of 1867 provides that 'such resolution shall, to be operative, have been passed by a majority in number and three-fourths in value of the creditors of the debtor assembled at such meeting, and shall be confirmed by the signatures thereto of the debtor and two-thirds in number and one-half in value of all the creditors of the debtor.' 18 Stat. 183, c. 390, Sec. 17. A law which compels a creditor, against his will, to accept in discharge of his debt just what the debtor sees fit to offer, should be strictly construed. Loveland, Bankr p. 549; In re Shields, Fed. Cas. No. 12,784.
The present law should be construed in the light of similar prior enactments and any doubt should be resolved against those who seek to deprive creditors of the right to have the debtor's property applied to the payment of his debts. Nothing short of an absolutely plain and unambiguous provision will convince the court that congress intended for the first time, it is thought, in the history of bankruptcy legislation to vest such unusual and dictatorial powers with a minority of the creditors. It may be assumed that the language of section 12 is not as perspicuous as could be desired, but, read as a whole, the intention of congress seems plain to permit a compromise only when sanctioned by a majority in number and amount of the creditors whose claims have been allowed, after due notice to them of the bankrupt's proposition. If the construction contended for by the bankrupt be accepted it will lead to most inequitable results. Take, for illustration, a case where there are thirty creditors and only three have proved their...
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In re Elmira Steel Co.
...... their interest be construed strictly, and, as so construed,. closely followed. This was said of composition proceedings. and their effect upon creditors; but the doctrine is equally. applicable to involuntary proceedings for an adjudication and. its effect upon creditors. In re Rider, 3. Am.Bankr.R. 178, 96 F. 808. Counsel for the Philadelphia. creditors argue that the provision of section 18, under which. creditors may appear and answer, is permissive, and not. mandatory. But this overlooks the fact that the permissive. character of the language is with reference to the ......
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...against his will, to accept in discharge of his debt just what the debtor sees fit to offer, should be strictly construed.’ In re Rider (D. C.) 96 F. 808, 809, 810. See In re Kinnane Co. (D. C.) 221 F. 762, 766;In re Goldstein (D. C.) 213 F. 115, 116. Under the Bankruptcy Act of 1874 (18 St......
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Int'l Trust Co. v. Myers
...against his will, to accept in discharge of his debt just what the debtor sees fit to offer, should be strictly construed." In re Rider, 96 F. 808, 809, 810. See In re Kinnane Co. 221 F. 762, 766; In re Goldstein, F. 115, 116. Under the bankruptcy act of 1874, it was decided by this court t......