Shulman, Goetter & Weil v. Graves

BRICKELL, C. J. The act of Congress declares : “The provisions of a composition, accepted by such resolution, in pursuance of this section, shall be binding on all the creditors whose names and addresses, and the amounts of the debts due to whom, are shown in the statement of the debtor produced at the meeting at which the resolution shall have been passed, but shall not affect or prejudice the rights of any other creditors.” A former clause renders it the duty of the bankrupt to produce to the meeting of creditors, at which the resolution of composition is adopted, “a statement showing the whole of his assets and debts, and the names and addresses of the creditors to whom such debts respectively are due; and it is further provided, that the resolution of composition, when approved by the court, shall be operative, if passed by a majority in number and three-fourths in value of the creditors assembled at such meeting, and confirmed by the signatures of the debtor and two-thirds in number and one-half in value of all the creditors. A discharge in bankruptcy, granted by a court of compe405 tent jurisdiction, like judgments and decrees operating in •personam, cannot be collaterally impeached for mere defects or irregularities in the proceedings. — Morrison v. Woolson, 29 N. H. 510; Lathrop v. Stuart, 5 McLean, 167; Richards v. Nixon, 20 Penn. 19. The act of Congress makes the certificate conclusive evidence, in favor of the bankrupt, of the fact and regularity of the discharge. A discharge, obtained under the bankrupt law of 1841, could be impeached for fraud in any court before which it was pleaded. — Mabry v. Herndon, 8 Ala. 848. But, under the bankrupt law of 1867, the discharge could be impeached, for any cause which would have prevented it from being granted, only in the court in which the adjudication was had, and within two years after the date thereof. — Oates v. Parrish, 47 Ala. 157; Milhouse v. Aicardi, 51 Ala. 594. The court in bankruptcy having acquired jurisdiction, resolutions' and proceedings in composition may be pleaded in bar of the right of a creditor to maintain a suit on a demand within their operation. The regularity of the proceedings is as incapable of impeachment collaterally, as would have been a discharge granted by the court, if the discharge had not been rendered unnecessary and improper by the intervention of the composition. — In re Bechet, 12 B. R. 241; Smith v. Eagle, 14 B. R. 241; Blumenstiel’s Law and Practice in Bankruptcy, 461. The regularity of the proceedings may not be impeached, and may be unimpeachable : the mode of procedure pointed out may be strictly pursued; and yet there may be creditors on whom the proceedings do not operate — creditors not bound or affected by the composition, whose rights are preserved unimpaired, by the terms of the statute. As to such creditors, the jurisdiction of other courts is not affected. They are not required to resort to the bankrupt court, to annul or vacate the composition. If the composition is pleaded against them, the court will inquire whether they are of the class on whom it is binding, or whether they are of the class not affected by it. The inquiry will not be, whether the composition is tainted with fraud— whether the proceedings leading to it were regular: but, whether it is binding on the particular creditor. Such inquiry, like an inquiry as to the jurisdiction of a court rendering a judgment relied on as a bar, must be made by any court in which the composition is pleaded. — Ex parte Paper Staining Co., 8 Ch. App. 595. _ As a plea of discharge in bankruptcy must show the jurisdiction of the court granting it, a plea of composition should also show that it is binding on the party against whom it is pleaded. Binding only on creditors who were shown by the [406] statement of the bankrupt, produced at the meeting of creditors passing the resolution of composition, the plea must aver that such statement included the name and debt of the plaintiff. This is as essential to the efficacy of the composition, as is jurisdiction to the efficacy of a discharge. Intendments are not made to support pleadings, when assailed by demurrer. The pleader is presumed to state the case as strongly for himself, as the facts will authorize. The omission to state a material fact justifies the court, in pronouncing judgment, in assuming the fact does not exist. The plea, not showing that plaintiff’s claim was included in the statement produced to the meeting of creditors, did not show the composition was binding on him, and the demurrer to it was properly sustained. The omission of the name and demand of a creditor from the schedules of a bankrupt, if inadvertent, is not ground for impeaching the discharge. If fraudulent, it may be ground for its vacation in the bankrupt court, but would not be available collaterally. The case is different with a composition, which the statute limits in operation to creditors whose names and addresses, and the amounts of whose debts, are shown in the statement produced by the bankrupt to the meeting of creditors accepting it. Let the judgment be affirmed.