Licklider v. Brown

WADDILL, Circuit Judge. This is an appeal from a decree of the United States District Court for the Northern District of West Virginia, of the 17th of September, 1925, denying to the petitioner the right to file a petition for discharge in bankruptcy, for the reason that the application was not made in time. The facts in the case are comparatively simple: On the 5th of January, 1923, the petitioner, Licklider, was duly adjudged a bankrupt. On the 18th of January, 1923, Swift & Co., Inc., a creditor of the bankrupt, filed its petition in said court, praying that the adjudication be vacated, that the petition in bankruptcy be dismissed, and that the bankruptcy proceeding be held in abeyance until the question of the jurisdiction of the court to grant the same was finally determined. On said 18th of January, 1923, the questions arising upon the petition to vacate the adjudication and respondent’s motion to dismiss the same were referred to the referee, with instructions to ascertain and report upon the facts in the ease. The referee made his report to the court, and on February 12, 1925, an order was entered dismissing the petition of Swift & Co. Swift & Co. thereupon, on February 26, 1925, filed its petition in this court, the Circuit Court of Appeals for the Fourth Circuit, to superintend and revise the action of the District Court in dismissing its petition, and to reverse the same. The appeal was duly heard, and on the 15th of June, 1925, this court affirmed the order of dismissal of the petition asking for the vacating of the bankrupt’s adjudication. On the 5th of September, 1925, the petition of appellant, asking that his discharge be granted him, was filed, and on the 17th of September, 1925, the District Court declined to allow the petition to be filed, because the same was not presented within 18 months from the date of the original adjudication in bankruptcy. It is from this order that the appeal under consideration was taken. 'The District Court filed an opinion,, not published, supporting its decree, from which it will appear that the judge’s view of the law was that under the Bankruptcy Act of 1898 (section 14a [Comp. St. § 9598]), which is as follows: “Any person may, after the expiration of one month and within the next twelve months subsequent to being adjudged a bankrupt, file an application for a discharge in the court of bankruptcy in which the proceedings are pending; if it shall be made to appear to the judge that the bankrupt was unavoidably prevented from filing it within such time, it may be filed within but not after the expiration of the next six months,” —the petition came too late, that the right to a discharge after 18 months was jurisdictional, and that the court, after that period, was without authority to entertain the petition therefor, or to grant the same; because petition was not presented within the period prescribed by the statute. This conclusion was undoubtedly correct, having regard to an ordinary bankruptcy ease. The petition for a discharge must be presented at least within 19 months subsequent to the date of the bankrupt’s adjudication, and after that the court is not authorized to entertain the same. This provision of the Bankruptcy Act, however, must be read in the light of section 1, subdivision 2, of the Act of 1898, and of the correct interpretation to be placed upon the word “adjudication,” as used in said section. Section 1, subdivision 2, is plain and unambiguous : “ ‘Adjudication’ shall mean the date of the entry of a decree that the defend [568] ant, in a bankruptcy proceeding, is a bankrupt, or if such decree is appealed from, then the date when such decree is finally confirmed.” Bankruptcy Act, § 1, subd. 2 (Comp. St. § 9585); Collier on Bankruptcy (13th Ed.) § 1, p. 1; Black on Bankruptcy (4th Ed.) § 589. The petition for discharge, the subject of this appeal, was manifestly not filed within the time prescribed, tested by the date of the original adjudication appealed from, but in ample time after the final confirmation of the order of adjudication by this court upon such appeal. Upon the action thus taken by this court on the 15th of June, 1925, and only thereby, was the right of the appellant herein to his discharge in bankruptcy finally adjudicated, and his right to file his application for discharge should be determined as of that date. Collier on Bankruptcy (13th Ed.) § 1, pp. 1, 14, 15; Black on Bankruptcy (4th Ed.) §§ 589, 1114; In re Lee (D. C. Pa.) 171 F. 266 22 Am. Bankr. R. 820; In re Malkan (D. C.) 265 F. 867, 45 Am. Bankr. R. 86; Moore Bros. v. Cowan, 173 Ala. 536, 55 So. 903, 26 Am. Bankr. R. 902, 907. The statutes in question, when the two provisions recited are read together, make entirely plain the right of the appellant to file his petition for a discharge. The two federal cases given sustain the view we have taken. The first-named cases, In re Lee, supra, and In re Malkan, supra, it is true, relate to the time within which a claim against a bankrupt’s estate should be filed; but the court solved that question in the light of the time the bankrupt’s discharge became final, and supported its finding, allowing the filing of the claims, with the reason that we have given. In the ease of Moore Bros. v. Cowan, supra, an Alabama decision, although it turned upon the effect of the dismissal of the appeal in the instant case, the court expressly passes upon the meaning of the section under consideration, as follows: “This brings us to a consideration of subdivision 2 of section 1 of the Bankruptcy Act of 1898, and which reads as follows: [Quoting provision defining adjudication given above.] We take this to mean that, if there is no appeal from the decree adjudicating the defendant a bankrupt, it dates from the rendition of same, and if there is an appeal, and it is finally confirmed, the adjudication shall date from the confirmation. * * * » The decree of the District Court will be reversed, with costs to the appellant. Reversed.