Court Opinion

ID: 8764744
Source: CourtListenerOpinion
Date Created: 2022-11-26 12:20:41.68879+00
Date Added: 2024-06-11T17:01:47.757650
License: Public Domain

CHATFIEED., District Judge.
One of the petitioning creditors, Hyman Ensler, filed specifications in opposition to the bankrupt’s application for discharge upon the 17th day of December, 1906, consisting of six allegations upon information and belief, and a seventh allegation, which charged directly that the bankrupt had made a false oath in relation to certain books of account or records, from which his true financial condition might be ascertained. These specifications were verified according to the form of verification provided by the laws of the state of New York for a complaint in an action in the state court. Subsequently, by leave of this court (see In re Nathanson [D. C.] 152 Fed. 585), the petitioning creditor was allowed to file amended specifications, and these amended specifications contain six allegations, of which none is stated to be alleged upon information and belief. The verification of the amended specifications was in the same form as the verification of the original specifications, and is as follows:
“United States of America, Eastern District of New York, County of Kings — ss:
“Hyman Ensler, being duly sworn, deposes and says that he is the credit- or above named, that he has read the foregoing proposed amended specifications, and that the same are true of his own knowledge, except as to the matters therein stated to be alleged on information and belief and as to those matters he believes it to be true. Hyman Ensler.
“Sworn to before me this 23d day of February, 1907.
“Charles Beebaring, Notary Public, N. Y. Co.
“Certificate filed in Kings Co.”
The bankrupt made a motion before the special commissioner to whom the objections had been referred to dismiss these amended specifications. The special commissioner reports that the motion should be granted.
The first ground of objection which is sustained by the special commissioner is that the objecting creditor has not shown that he has complied with form 58, as prescribed by the Supreme Court. The amended specifications contain the following:
“Hyman Ensler, being interested as a creditor in the estate of Jacob Nathan-son, a bankrupt, does hereby oppose,” etc.
Section 14b, Bankr. Act July 1, 1898, c. 541, 30 Stat. 550 [U. S Comp. St. 1901, p. 3427], provides that a discharge may be opposed by “parties in interest.” Section 30 of the act conferred upon the Supreme Court the power to prescribe all necessary rules, forms and orders. Under this power form 58 was promulgated, as follows:
“-, of-, in the county of-and state of-, a party interested in the estate of said bankrupt, do hereby oppose,” etc.
*649And this form must be complied with by a creditor desiring to oppose an application for a discharge.
The special commissioner, relying upon the cases of In re Chandler, 138 Fed. 637, 71 C. C. A. 87, and In re Servis (D. C.) 140 Fed. 222, states in the report:
“That before any notice of proper and legal specifications can be taken by the special commissioner, it must appear (a) that he is a creditor whose claim has been allowed in these bankruptcy proceedings; (b) that his claim is of such a nature that should such a discharge be granted the same will affect his claim.”
In the Chandler' Case the petition was held defective, in that the specifications did not show that the creditor had a claim which existed at the time of the bankruptcy proceedings, or which was provable in the proceeding. In the Servís Case the claim was one which could not be discharged in bankruptcy. It would therefore seem that these two cases are not conclusive, and the premise, that the creditor must be one whose claim has been allowed in the bankruptcy proceedings, it would seem, is broader than the statute. The creditor who has not proved his claim cannot share in any distribution, but, if he has a claim discharge-able in bankruptcy, and provable in the pending proceeding, he may oppose the discharge. In re Kuffler, 153 Fed. 667; In re Ray, Fed. Cas. No. 11,589; In re Shepard, Fed. Cas. No. 12,753; In re Chandler, 138 Fed. 637, 71 C. C. A. 87; In re Walker (D. C.) 96 Fed. 550. It is difficult to see how the requirements of the statute, as above set forth, can be met by an allegation, “-, a party interested in the estate of said-, bankrupt,” if it is not met by the allegation, “Hyman Ensler being interested as a creditor in the estate of the said Jacob Nathanson, a bankrupt.” The word “party” may mean “person,” or “party to the proceeding.” The record of the bankruptcy proceeding shows whether Hyman Ensler is a party to the proceeding, and the record can be used upon this motion for that or any material purpose. If he is a creditor having a debt which is not provable, or which the discharge in bankruptcy would not affect, that would seem to be a matter for an affirmative motion to expunge the claim, or to strike out the specifications, rather than to object to their form.
As to the second ground on which the special commissioner has decided that the specifications are insufficient, his action was based upon the decision in the Matter of Glass (D. C.) 119 Fed. 509, which holds that verification of specifications of objection should be in the form of a verification to a creditor’s petition. No. 3, Supreme Court Forms. Form 58 does not provide for a verification, and no other form contains an analogous verification, except 129, which provides for the specifications of objections to a composition. The form of verification there prescribed is:
“I, -, the objecting creditor mentioned and described in the foregoing specification of objection, do hereby make solemn oath that the statements of fact contained therein are true, according to the best of my knowledge, information, and belief.”
The use of this form is approved by Collier in his work on Bankruptcy (4th Ed., p. 639), and this form is approved in the Matter of Milgraum and Ost (D. C.) 129 Fed. 827.
*650The verification used by the creditor in the present proceeding, while not following exactly the language of either of the forms above referred to, was taken before an officer competent to take the oath, viz., a notary public, duly appointed, and states- that the matters alleged are true of deponent’s own knowledge, except as to the matters therein stated to be alleged upon information and belief, and that as to these matters the deponent believes the statements to be true. As a matter of fact, there are no statements upon information and belief, and this makes the verification one based upon a statement of actual knowledge, and is therefore, so far as its reliability is concerned, equivalent to the verification under form 3. While not approving the use of a. state form, and thus causing confusion and variation in pleadings, it seems that the verification to the specifications herein was sufficient to overcome the objections, and that the creditors should be allowed to reverify the pleadings in the exact language provided by the Supreme Court form No. 3.
As to the third ground stated by the special commissioner, sustaining the objection to the second and subsequent amended specifications, it would seem that the case of E. H. Godshalk Co. v. Sterling, 129 Fed. 580, 64 C. C. A. 148, is controlling, and that specification 2 is sufficient.
As to the other specifications, the decision of Judge Coxe, in the Matter of Goodale (D. C.) 109 Fed. 783, that “the facts relied upon to prove falsity” should be stated, does not mean that evidence must be set forth. The situation is similar to that in preparing an indictment upon a charge of perjury, where it must be plainly set forth upon what true statement of facts the charge of falsehood is based. This would require a statement in specification 3, setting forth whether the falsehood related to the existence of books, or to the witness’ statement that he last saw them in November, or that they were on his desk, or that they consisted of one book.. The specifications are too indefinite, unless the creditor intends to charge that there were no books, and, if so, that should be alleged as the truth and facts of the situation.
As to specification 4, likewise, the creditor should specify that the bankrupt did keep a ledger, if that is the issue to be raised.
Specification 5. The creditor should likewise state that the bankrupt did keep a book of expense, if that is the fact upon which the charge of falsity is based.
Specification 6. The specification should state that the bankrupt kept not even one book, if that is the particular in which the testimony is alleged to be untrue.
The amended specifications, therefore, from 2 to 6, should be made more definite and certain before the bankrupt is called upon to answer them; but, inasmuch as allegations of perjury have always been the •source of great confusion and argument, and inasmuch as attorneys •can hardly be held to the knowledge of criminal pleading expected from the prosecuting officers of the government, it seems to the court that the creditors should be allowed to make their specifications definite iby further amendment of paragraphs 3, 4, 5, and 6.
The motion to confirm the report of the special commissioner will therefore be denied, and an order may be entered allowing the creditor *651to further amend his specifications in the manner indicated, and the amended specifications will thereupon be referred to the special commissioner for hearing.