New Orleans Republican. [volume] (New Orleans, La) 1867-1878, 1870-12-06
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BANKRUPTCY.

A ser;ous misunderstanding seems to OBJ
tain that by the recent amendment 10 INC
bankrupt act, the liabilities contracted
after January l. 1869, enjoy an undue pref
erence over those contracted prior to that
date. Such is not the case. To puDnsn
long judicial decisions to this effect, now
ever, serve the general reader less than
plain statement. The only difference De-
tween the creditor, whose claim antedates
January, 1869, and the creditor, whose
claim ensues January, 1869. Is that inc
Halter is invested with consent ~ the
bankrupt's discharge, IN case the assets sur
rendered are Not equivalent to fifty per- cent
Of such of the liabilities, contracted dfte7'
January, 1869, as are duly verified or
proved. Should the assets, however, equal
such proved claims-that is. on Liabilities
after January, l569-the creditors holding
them are disarmed of their option as to the
bankrupt's discharge. But this right OF
consent, afforded those who became cred
itors aftertJanuary, 1869. secures them no
advantage, in which earlier creditors may
not equally share. If the assets suffice IN
measure to cover fifty per cent of the proved
claims of the former class, the legal pro-
vision is answered, but the proved claims
of the latter class command a proportionate
dividend upon this very fifty per cent.
That the claims of the former class should
exhaust everything, to the prejudice OF all
others, would be an injustice never cOntem-
plated by Congress.
And should the assets fall short of fifty per
cent of the proved claims arising after
January, 1869, and the creditors holding
such claims should thersupon refuse the
bankrupt discharge, the earlier creditors.
whose claims are proven, are no less en-
titled to whatever equal rate the assets
warrant. while the ban krupt is not estOpped
from discharge from all liabilities con-
tracted before January, 1869.
1t will therefore be seen that whether the
power Of consents granted to one class of
creditors be put in exercise or by reason Of
ample assets to meet fifty per cent of after
January, 1869, claims. be suspended. the
other class on the other side Of January,
1869, is in no wise prejudiced in the distri-
button
1t may be proper to add in this connec-
ton that creditor. who holds a>preferred
claim, arising since January, 1869, can not
participate in the refusal or consent to
discharge. unless he relinquishes his secur-
ity, and in common with others, files his de-
position in proof.
And also, that the renewal after january,
1869. of an obligation made prior to JAN
uary, 1869, does not bring the obligation
within the compass Of the fifty per cent
provision. The law RENTS the claim back
to the date of the original consideration.
1t will lie observed that stress is laid upon
'.prored claims" The distribution of a
bankrupts effects is not determined by the
list of creditors names and the amounts set
there against upon his schedule. The cred
itor must put himself before the court in
bankruptcy by deposing to his claim and
filing the evidences thereof. Then and then
only is he an affirmative party. and can
participate in the meetings of creditors as
to the administration Of the estate, etc.
at any stage of the cause. 80 much
the better for the bankrupt, who, in such
contingency, if possessed OF no assets what
ever. is impeded from discharge by no
proofsOf claims, for he can readily pay fifty
per cent of nothing.
1t may not be amss to state, by way of
conclusion, that the apprehension enter
tanned by many as to the amount of deposit
upon filing petition in bankruptcy, is
quite needless. That the officers of the
court in bankruptcy should be reasonably
requited is quite patent, but if there be
assets. TO which they may look for eventual
compensation, the full amount Of the GUS
tOmary initial deposit will not be exacted.
Nor will such a disbursement from the
estate of bankrupt impair his chances for
discharge, inasmuch as the assets must,
before needful OUTLAWS i'll costs. simply be
commensurate nth, not pay fifty per cent of
the proved debts contracted after January,
1859 j. X. G. PITKIN,