Plymouth Cordage Co. v. Smith
Decision Date | 13 February 1907 |
Citation | 90 P. 418,18 Okla. 249,1907 OK 25 |
Parties | PLYMOUTH CORDAGE CO. et al. v. SMITH. |
Court | Oklahoma Supreme Court |
Rehearing Denied June 4, 1907.
Syllabus by the Court.
In a contested proceeding in involuntary bankruptcy, property exempt from execution should be included in determining the issue of the solvency of the respondent.
A person is deemed to be insolvent, within the provisions of section 1, subd. 15, of the bankruptcy act (Act Cong. July 1 1898, c. 541, 30 Stat. 544 [U. S. Comp St. 1901, p. 3419] whenever the aggregate of his property, exclusive of any property which he may have conveyed, transferred, concealed or removed, or permitted to be concealed, or removed, with intent to defraud, hinder, or delay his creditors, shall not at a fair valuation, be sufficient in amount to pay his debts.
An instruction which charges the jury that "a fair valuation of the notes and accounts is the net sum that in your judgment, from all the evidence before you, could have been, with reasonable diligence, realized from the collection of such notes and accounts, within a reasonable time after October 31, 1901, and not the amounts as shown by their face, unless their face value was in fact their fair value," is a correct rule by which to determine the fair valuation of this class of personal property.
Error from District Court, Kingfisher County; before Justice Jno. H. Burford.
Proceedings by the Plymouth Cordage Company and others to have J. A. Smith adjudged a bankrupt. Judgment for defendant, and plaintiffs bring error. Affirmed.
This was a proceeding commenced in the district court of Kingfisher county by the Plymouth Cordage Company, and other petitioning creditors of James A. Smith, to have him adjudged a bankrupt. The petition was filed and the proceeding commenced on October 31, 1901. It is alleged in the petition that the respondent, within four months prior to the 31st day of October, 1901, committed certain acts of bankruptcy, and they ask that he be declared a bankrupt, that his property be placed in the hands of a trustee, and the proceeds distributed pro rata to all his creditors according to their several demands. The specific acts of bankruptcy alleged in the petition are as follows: To each of these alleged acts of bankruptcy, the respondent Smith entered a specific denial, and also specifically alleged that at the time of the alleged acts of bankruptcy, and on the 31st day of October, 1901, he was solvent. Upon the issues thus joined, the cause was submitted to the jury, and a verdict returned in favor of the defendant, and against the petitioning creditors, and judgment was entered accordingly. Motion for a new trial was filed within time, considered by the court, and overruled, exception saved, and the case is brought here for review.
Samuel Feller, P. S. Nagle, W. A. McCartney, Blake, Blake & Low, and Karnes, New & Krauthoff, for plaintiffs in error.
J. C. Robberts, M. J. Kane, and W. W. Noffsinger, for defendant in error.
The first error assigned and argued is that the court erred in holding that the respondent was entitled to include all his real and personal property, which was exempt under the laws of Oklahoma, in determining his solvency or insolvency. It is contended by the learned counsel for plaintiff in error, at great length, and with much earnestness, that exempt property under the laws of Oklahoma should not be included as a part of the assets in determining the solvency or insolvency of the respondent, on the ground that the title to exempt property does not pass to the trustee, and cannot be subjected to the payment of the just debts of the creditors, and is not subject to be administered by the court as a part of the estate of the bankrupt. Upon principle, there is a great deal of force to this argument, and, no doubt, would appeal very strongly to the legislative branch of our national government; but, unfortunately for the contention of counsel, the statute, in our opinion, does not warrant such a construction being placed upon it. It is clear, explicit, and free from doubt or ambiguity. Act Cong. July 1, 1898, c. 541, § 1, subd. 15, 30 Stat. 544 [U. S. Comp. St. 1901, p. 3419], defines an insolvent person as follows: "A person shall be deemed insolvent within the provisions of this act whenever the aggregate of his property, exclusive of any property which he may have conveyed, transferred, concealed, or removed, or permitted to be concealed, or removed, with intent to defraud, hinder, or delay his creditors, shall not, at a fair valuation, be sufficient in amount to pay his debts." It will thus be seen that Congress has given us a clear definition of a person who shall be deemed insolvent, and in clear terms excludes any property "which he may have conveyed, transferred, concealed, or removed, or permitted to be concealed or removed, with intent to defraud, hinder, or delay his creditors." This is the only exception within the statute, and the doctrine of "expressio unius, exclusio alterius" applies with peculiar force in construing this provision of this act. Congress has clearly defined its object, and the wisdom of the law must be remitted to that branch of our government, and it is the duty of the courts to construe the law as found upon the statute books, where it is clear and free from doubt and ambiguity.
In Plymouth Cordage Co. v. Smith, 194 U.S. 311, 24 S.Ct 725, 48 L.Ed. 992, Chief Justice Fuller, speaking for the court, in determining the question whether or not the Circuit Court of Appeals had jurisdiction in bankruptcy matters to superintend or review questions of law in the district courts of Oklahoma, uses the following language: "We think the law should be taken as it is written, and perceive no adequate reason for concluding that the real intention of Congress is not expressed in the language used." We think that this language is applicable to the question here under consideration. In Duncan v. Landis, 106 F. 839, 45 C. C. A. 666, 5 Am. Bankr. Rep. 649, 673, Judge Gray, speaking for the United States Circuit Court of Appeals of the Third Circuit, with reference to the interpretation to be placed upon this definition, in the course of the opinion says: "This is a statutory definition of insolvency, and differs somewhat from the ordinary and popular definition, and must be strictly adhered to." It was also held, in the case of In re Baumann (D. C.) 96 F. 946, that property exempt from execution under state laws is included in assets on the trial of a contested petition in involuntary insolvency upon the question of the respondent's solvency or insolvency. Brandenburg, in his excellent work on Bankruptcy ([2d Ed.] p. 53, § 3), says: ...
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