Year: 1874

What the American Law Means Accord
ing 30 Judge Blatchford.


New York Journal Of Commerce.


There has gone abroad a greatly mis-
taken Interpretation Of Judge Batch
ford's recent decision regarding the per
cent. of a debtors obligation which
must be paid in order to entitle him to
discharge. We find the decision
broadly stated to be 90 that when the
assets of a bankrupt do not reach fifty
per cent. of claims proved against the
estate, he cannot have a discharge un-
less with the assent of a majority of the
number and value of his creditors, in
accordance with the law of 1868, a pro-
vision which, in the opinion of the court,
has not been modified by subsequent
legislation" What was in fact decided
was something very different, though
important to undischarged involuntary
bankrupts in whose cases proceedings
were begun after January 1, 1859. To
such cases the fifty per cent. clause WAS
applied prospectively, by the act of July
27, 1868, and the question is whether
the repeal of that clause by act of 1874
releases from the operation pending
cases. Judge Blatchford declares that
it does not. AS interpreted in the above
quotation the decision would fatty con-
tradict the language of the amendatory
act, which declares (sectiOn 81 that &c in
cases of involuntary or compulsory bank
ruptcy the provisions of said act (the
original bankruptcy act of March 2,
1860, and any amendments thereof, or
of any supplement thereto, requiring
the payment of any proportion of the
debts of the bankrupt, or the assent of
~,f hfc 0ra1Tfnru oE
difion of his discharge from his debts,
shall not apply; but he may, if other
wise entitled thereto, be discharged by
the court in the came manner and with
the same effect as if he had paid such
per cent. of his debts, or If the required
proportion of his creditors had assented
thereto"


Judge Blatchford rules that congress
meant. in the first part Of this quota
tion, cases of involuntary or compulsory
bankruptcy which may hereafter be
commenced, and that no relief was in
tended for debtors already adjudicated
bankrupt, but remaining undischarged
for want of ability to pay fifty per cent,
or to obtain the assent Of 8 majority IN
number and value of their creditors. It
may be so. Although it appears TO us
no violence would be dsne to the Ian
guage of the amendment by a more
liberal Interpretation, yet the district
courts appear thus far to have held uni
formly that except where the amenda
tory act Is expressly given retroactive
effect, its oreration is confined to cases
which have not yet reached the point of
adjudication. Where an order of adjU-
dication had in fact been made by the
Judge, but not formally entered, Judge
I, u
TO let IN the amendatOry act, and IN such
a case required the petition to be amend
ed so as to allege suspension of payment
of commercial paper for forty days, in
stead of the fourteen which was enough
to alIege when the proceedings were be-
gun. None OF the other decisions which
have fallen under our notice hinge upon
quite so fine q point of time as this.
Judgments have been rendered, how
ever, limiting the express Retrospective
provisions of the act of 1874, one of
which, regulating the number of credi-
tors to be Joined in q petition, it Is en-
acted without qualification shall apply
to all cases begun since December l,
1873. The circuit court for the eastern
district of Missouri, in re Obear, and in
re Thomas, reversing the order OF the
district court, restricts this general pro-
vision as follows Without entering
upon the inquiry as to the competency
of congress to annul by mere Legislative
declaration prior adiudicatiOns of bank
ruptcy, regularly made, in pursuance of
laws in force at the time, under the con-
veyance and acts Hereunder, I eu of
the opinion that congress did not intend
by the amendatOry act to overturn or
disturb adiudieations then already made
and in force" In another case, arising
in Michigan, the adjudication was made
in April of the present year, and tie pc
titioning creditors, sUppOsing 1t neces-
sary to amend their petition In accord
ance with the amendatory act of June,
sought leave of the court to do so. The
court, however, decided that amendment
was necessary, saying The decree OF
adjudication having been rendered prior
to the approval of the emendatOry act,
it will stand as the decree of the court.
1t is not in the power of the Legislative
department OF the government to so far
interfere with the judicial department
rs to vacate the judgments and DEGREES
of the latter" The United States dis
trict court for the western district of
Wisconsin also says '' 1t is not neces-
sary to amend the petition when there
has been an adjudication before the
amended act took effect. An adjudica-
ton removes the cases beyond the do
main of legislative control" (In re
Raffauf, 6 Legal News, 341.) The east
ern district court of Wisconsin has like
wise decided that the amendment max
ing it necessary in order to avoid sales
alleged to be in fraud of the act that the
buyer must know, and not merely have
'' reasonable cause to believe, " that they
are fraudulent, is not available in cases
begun before the 1st of December, 1873.
Under these decisions accordingly.
there is room for the enactment of a sort
of general amnesty to relieve debtors
who remain undischarged while other
debtors of the same class, under the
later act, go free of their obligations.
There is no justice IN maintaining this