Messer v. Storer

• Decision Date: 21 November 1887
• Citation: 11 A. 275,79 Me. 512
• Parties: MESSER and another v. STORER and others.
• Court: Maine Supreme Court

11 A. 275

79 Me. 512

MESSER and another

v. STORER and others.¹

Supreme Judicial Court of Maine.

November 21, 1887.

From supreme judicial court, Cumberland county.

Bill in equity brought by certain creditors against insolvent debtors, who had received their discharge under a composition agreement, praying that the discharge be annulled and the debtors be required to submit to a full examination in the court of insolvency. Heard on bill, answer, and proof.

Holmes & Payson, for plaintiffs. Wm. L. Putnam, for defendants.

LIBBEY, J. This is a bill in equity brought to set aside and annul the discharges granted to the defendants, who were insolvent debtors, as copartners and in their individual capacity, by the court of insolvency. Two grounds are relied upon in support of the bill: First, that the court of insolvency denied the petitioners, on their application therefor, the right to examine the insolvent debtors upon all matters relating to their insolvency as provided in section 42, c. 70, Rev. St.; second, that the respondents committed acts in fraud of the insolvency statute which renders their discharges invalid.

The first ground involves the construction of the insolvency act in cases of composition. The insolvent debtors produced, at a meeting of the creditors, the affidavit required by section 62, c. 70, and at the same time produced an agreement signed by a majority in number of their creditors, each of whose debts exceed $50, and by creditors holding three-fourths of all their indebtedness, as required by said section; and the affidavit and agreement were duly filed in the court of insolvency. The debtors had been decreed insolvent, but their estate remained in the hands of the messenger, no proceedings for the choice and appointment of an assignee having been had. After these proceedings were had the plaintiffs in this bill, who were not parties to said agreement, claimed the right to examine the debtors generally upon all matters relating to their insolvency under said section 42. This claim of right was denied them by the judge of the court of insolvency, but they were permitted to examine them upon all matters embraced in the issue whether the "agreement was signed by said proportion of the creditors of the debtors, and that they had paid or secured to all the creditors whose names appeared in the schedules annexed to their affidavit, the percentage named in said composition agreement, and according to the terms thereof." The contention on the part of the plaintiffs is that the judge of the court of insolvency, having denied them their right of general examination, had no power to proceed and discharge the debtors; and that, as they had no right of appeal from his decree, they have the right to maintain this bill, and have the discharges annulled; and this raises directly, for the first time in this court, the question whether, after composition papers are filed in the court, a creditor has the right to examine the debtor generally as to his insolvency as claimed here.

Upon a careful examination of all the provisions of chapter 70 of the Revised Statutes relating to insolvency, we are of opinion that he has not such right, and that the ruling of the judge of the court of insolvency complained of is correct. Sections 1 to 61, inclusive, of said chapter define the jurisdiction of the court of insolvency, and prescribe and regulate the proceedings in insolvency, where the estate of the insolvent debtor is settled and distributed by the court of insolvency. Section 42, before referred to, gives to the creditor the right of general examination of the debtor upon all matters relating to his insolvency before a certificate of discharge shall be granted him. This relates to cases settled in insolvency. Section 62 gives to the debtors, and the requisite number of creditors, after the decree of insolvency has been made, by an agreement of composition for a discharge of their debts, the right to take the case out of the general provisions for the settlement of the estate in insolvency, and when that is accomplished, the debtor is entitled to his discharge, and his estate is to be restored to him upon the payment of...