Document: 383 U.S. 392 86 S.Ct. 852 15 L.Ed.2d 827 Warren W. PERRY, Petitioner,v.COMMERCE LOAN COMPANY. No. 694.—October Term, 1965. Argued Jan. 26, 1966. Decided March 7, Rehearing Denied May 2, See 384 934, 1441. Robert J. Harris, Cincinnati, Ohio, for petitioner. R. Howard Smith, Newport, Ky., respondent. Mr. Justice CLARK delivered the opinion of Court. 1 Perry, a furnace operator employed by Moore Lead Company, filed petition in District Court under Chapter XIII Bankruptcy Act, 52 Stat. 930 (1938), as amended, 11 U.S.C. §§ 1001 1086,1 requesting confirmation his plan an extension time within which to pay debts out future wages. In he proposed $1,412 28 equal monthly installments $60 from wages $265 month. On hearing plan, however, it appeared that Perry had previously straight bankruptcy and obtained discharge therein 1959, six years filing this proceeding. motion respondent, Commerce Loan referee dismissed on ground previous was bar thereto provisions § 14(c) (5) Act.2 review upheld dismissal. The Appeals affirmed. 340 F.2d 588. We granted certiorari, 382 889, 187, 148, view conflict point among courts appeals.3 conclude confirmations wage-earner plans way extensions are not affected 14(c)(5), and, therefore, reverse judgment below. I. 2 Although statutory relief financially distressed wage earner been available some extent early Act 1867, 14 517, Congress found its study prior 1938 revision laws there were no effective complete repayment earner's suited problems. H.R.Rep.No.1409, 75th Cong., 1st Sess., 53 (1937). For example, compositions 12 1898 30 549, earner, but afforded unsatisfactory. Section proceedings, primarily adaptable use business entities, disproportionately expensive small sums ordinarily involved cases; they lacked flexibility;and did provide jurisdiction court subsequent confirmation. Other similar disadvantages. Faced with inadequate federal often little protection creditors state law, only course usually open wage-earning debtor bankruptcy. such everyone lost receiving mere fraction their claims, bearing thereafter stigma having adjudged bankrupt. designing remedy dilemma facing seeking repay, rather than avoid, obligations, settled upon extension-of-time procedures XIII. chapter gave—and intended give—to reasonable opportunity arrange installment payments be made earnings. clearly encourage earners full, go into or composition, offering two inducements: (1) avoidance adjudication attendant stigma; at same time, (2) temporary freedom during garnishments, attachments other harassment creditors. 52—55. 3 History demonstrates fulfilling purposes intended. records Administrative Office United States Courts show over past 20 more 20% all proceedings have XIII, overwhelming majority these being plans.4 Since many who do proceed because unemployed (and consequently earnings arrangements), inextricably large indebtedness, simply unaware existence alternative bankruptcy, figure is even significant. Moreover, money annually returned plans, current rate well $26,000,000. As assets distribution represent settlements debtors would otherwise unable effect obtain. Note, Wage Earner Plan A Superior Alternative Straight Bankruptcy, 9 Utah L.Rev. 730 (1965); Allgood, Operation Earners' Northern Alabama, Rutgers 578 (1960). 4 light proven advantages has re-expressed legislative purpose amendments adopted since original enactment. report House Representatives expresses words: 5 '(C)hapter provides highly desirable method dealing financial difficulties individuals. It creates equitable feasible honest conscientious off them discharged power change amount maturity without affecting aggregate makes particularly applicable present-day problems generated heavy buying.' H.R.Rep.No.193, 86th (1959). And similarly, Senate states: 6 'We think can doubt * procedure meet mature, period works involvement pays full good him.' S.Rep.No.179, (1959), U.S.Code Cong. & Admin. News p. 1446. 7 underlying policy mind we turn consideration problem posed here, i.e., whether barred years. II. 8 requires if 'the guilty any acts failed perform duties bankrupt *.' 656(a) (3). III commands shall unless satisfied 'within date discharge, composition arrangement confirmed 14(c)(5). 'discharge' issue after compliance 660, c. 1060. If expiration three completed accordance may, notice hearing, liabilities dischargeable provided debtor's failure make 'was due circumstances could justly held accountable.' 661, 1061. finally, 602, XIII5 declares Chapters I through VII insofar inconsistent apply thereunder. should note outset present application file straight, voluntary action Court, nor 'a composition.' He debts, secured unsecured, sought time—28 months—in Ordinarily, obtain benefits need meets approval creditors, 652, 1052, court; whereupon becomes binding, 657, 1057, appointed trustee commences collecting disbursing periodic plan. Extension differ materially arrangements XI XII, contemplate partial payment debts. Indeed, required will paid though formal one. 660. 10 considerations outlined above, believe six-year 14(c)(5) plans. enacted 35 adoption 32 797 (1903), when corresponding existed Act. unmistakable provision prevent creation class habitual bankrupts—debtors might repeatedly escape obligations frequently chose going repeated H.R.Rep.No.1698, 57th (1902); re Thompson, D.C., 51 F.Supp. 12, 13 (1943). But hatch debtors, which, resorting usual sense, may claims creditors.' To ruling both illogical head-on collision congressional announced design XIII.6 Even literal reading suggested hesitation construing give clear said v. American Trucking Assns., 310 534, 543, 60 1059, 1063, 84 L.Ed. 1345 (1940): 'There is, course, persuasive evidence statute words legislature undertook expression wishes. Often sufficient themselves determine legislation. cases followed plain meaning. When meaning led absurd futile results, looked beyond act. Frequently, produce results merely unreasonable one 'plainly variance legislation whole' purpose, words.' apparent case. 656(a)(3) does not, face, confirm eligible Rather, language section speaks, ambiguously, 'guilty' unfulfilled duties. There duty hardly act word, reference strained indeed. fact, history lends support 1903, forerunners subdivisions (3) (6) originally added 14(c), stated: This amendment also four additional grounds refusing bankruptcy: Obtaining property credit false statements; making fraudulent transfer property; denied years, (4) refused obey lawful orders answer material questions approved court. No person discharged, order ought quite benefit oftener once years.' H.R.Rep.No. 1698, (1902). (Italics added.) construed set apart criminal reprehensible nature consider something so far place interpretation 'guilty acts.' suffices find ambiguity impel recourse purposes, while identical part 1898, restriction what now 366(3), 911, 766(3) 472(3), 923, 872(3), indication enactment extensions. seem absence indicates inclusion oversight,7 least bears wage-earners' oversight cured further buttress our conclusion. That directs VII, include incorporated 'insofar chapter.' rationale 14(c)(5)—the prevention recurrent debts—is aims fall squarely exception 602. 16 claimed, 686(5) 1086(5), contrary result. not. provision, setting chapter, thereunder 'shall amendatory Act.' must remembered extension-plan novel law However, bankruptcies old books. Congress, believe, certain, concerned, affect new. consistent cases. Rather exemption bar, given where received before—but after—the new gave expansive retroactively prospectively. 17 emphasize construction preclude general real true restrictions phrasing appear XI, 472(3). those chapters, represents wholly different scheme extensions, restrictive pari materia. Sections 366(3) 472(3) neither impart receive meaningful effect. Nor imply immunity compositions. unlike extension, closely akin partially paid. Jensen, Cir., 200 58 (1952), cert. denied, 345 926, 73 785, 97 1357 (1953), see Goldberg, 454, 80 A.L.R. 399 (1931). logical effect, abuse 18 argued completely avoid possibility adjusting 660 While applies impact involved. latter case formality. claimed 661 presents somewhat troublesome objection. noted allow release if, comply accountable. serious section. First, experience shown almost envision problem, likely arise. Second, adequate 661. Objecting raise seeks relief. request would, constitute attempt transpose grant tantamount composition. operative situation. this, certain abused, reason alone destroy beneficial enactment.8 19 foregoing reasons, petitioner's confirmed. Reversed remanded. 21 HARLAN, dissenting. 22 result reached desirable, my cannot attained proper limits judicial function. 23 establishes mature. Two types available: percentage recoverable. Referring type 656 1056 (1964 ed.), plan' 'been ascertain 32(c) provides, things, undisputed petitioner here question another applied plainly seems him obtaining well. 24 process undertaken straightforward me unavailing. Court's major argument built word 656(a)(3). already denies unlawful morally it, hence 25 presupposes intentionally used discriminating distinguish catalogued fact matter 930—938, took model form act, specifically subd. d, 550, compositions.1 phrase appropriate bars predecessor offenses punishable imprisonment concealment. 14, b, 550. amended b 797, never changed, obviously remained several chapters shorthand referring back items granting discharge. Thus, deals arrangements, exact duplicate containing phraseology. ed.). contains provision. 872(3) earners, uses language. These parallel derive framed 1898. 26 parallelism indubitably demonstrate things: first, devise terminology means subtle distinction between contained enumerated; second, thing 366, 472, 656. excludes impossible sort interpretative sleight hand save accepted refer bar. 58; Collier, 9.19, 310—311 (14th ed 1964); Kennedy, Hospitality Repeaters Under 68 Com.L.J. 117, 119—120 (1963). XII. supra, 9.07, 1146. appears concede compositions, somehow transformed 27 short, 'reprehensible' aspects basis history, applications sections concededly generally. Because ramifications, harm administration XII arrangements. advances conclusion virtue 14(c). rests essentially 602 1002 designed relief, people reason. 29 likewise withstand analysis. sure get Nobody suggest 'inconsistent' withhold engage fraud cuts down number take advantage establish whom available; before us limitation; citation conclusory only, positive contribution My read literally applicant reinforced 1086(5) entirety 'confirmation decided remove discharges September 22, 1938, question. 33.05, 477. Such perfectly understandable. Before amendment, availed favorable subsequently. hand, difficult understand why permit second opportunity, am frank say perceive explanation 31 short arguments reaches. supportable judgment, sides. context follows: very advantageous debtor, burden courts. constraint delayed collecting, precluded garnishing, obtains 1061 therefore limit availability kind Furthermore, certainly arguable encourages procedure. With prior-discharge eliminated, eschew decide instead waiting few months until again 'gets tough' venture overcoming countervailing ones relied heretofore espoused others,2 up seemingly yield intent. What contrasting policies, wherein presently written. 33 affirm Appeals. All Code citations herein 1964 edition. 850 32(c)(5): '(c) (in bankruptcy) proceeding title commenced 32(c)(5). Compare Schlageter, 319 821 (C.A.3d Cir.1963), Co., 588, Edins Helzberg's Diamond Shops, Inc., 315 223 (C.A.10th Mahaley, 187 229 (D.C.S.D.Cal.1960). Mayorga, 355 89 (C.A.9th Cir.1966). Compositions insignificant operation most necessary approval. latest published statistics 95% funds Courts, Tables Statistics, Table F (1964) (by computation). 1002: 'The 1—7 shall, undoubtedly affects functioning reports 'pronounced drop filings' districts Sixth Circuit holding Perry. Memorandum Committee Administration Judicial Conference States, Report Use (June 1965). example drafting oversights relating deleted confirmed, repealed National clarify interrelationship 656(a)(3), clarification accord H.R. 20, 89th Sess. (1965). Conference, submitted views approving bill. Letter Director Chairman Judiciary, (September 29, Proceedings 22—23, judge best interests creditors; 8, ante, 404; 117

Category: 7