Court Opinion

ID: 8636815
Source: CourtListenerOpinion
Date Created: 2022-11-24 19:46:36.216879+00
Date Added: 2024-06-11T16:55:57.383969
License: Public Domain

BLATCHFORD, District Judge.
On the above state of facts, it is insisted on the part of the bankrupt, that however obnoxious the assignment by the bankrupt to Wescott may be to the provisions of the bankruptcy act, the creditors who take these objections are estopped from questioning the assignment, or' urging the objections, by reason of the fact that those creditors, while enjoying the free election of ratifying or repudiating the assignment, have chosen to ratify it. I think this point is well taken. On the general principles of equity jurisprudence, it is very clear that these objecting creditors would never be allowed, under these circumstances, to come into a court of equity, and impeach the voluntary assignment, either by a direct proceeding to set it aside or in any other way. They stand in the same light towards that assignment as if they had been parties to it on its face. If they themselves had been the voluntary assignees, executing the instrument of assignment, as Wescott did, they would not be allowed, as creditors, to attack it as fraudulent and void as against the bankruptcy act. “Ex turpi causa non oritur actio.” Yet their position is no different from what it would have been if they had been assignees under the assignment as well as creditors. They became parties to it by the paper they signed, and the effect of their signature to that paper, followed by the transfer from Wescott to Raymond, was the same, as regarded their relations to the assignment, as if their consent to the original execution of the assignment had been written thereon simultaneously with such execution. “Omnis rati-habitio retrotrahitur et mandato aequipara-tur.” They would not have been allowed, *761after that, to urge the making of the assignment to Wescott as a ground for declaring the assignor an involuntary bankrupt. Perry v. Langley [Case No. 11,006] U. S. Dist. Ct. S. D. Ohio.
There is nothing in the fact that the creditors in question are opposing the discharge of the bankrupt on the grounds urged, which should induce the court to refrain from applying the principle of equity law to which I have referred. The question of withholding a discharge for any of the reasons specified in section 29, when the bankrupt has taken the oath required by that section, and it appears that he has conformed to the.modal requirements of the act, is one wherein the creditors are the attacking party. If they enter no appearance and file no specifications, as required by general order No. 24, setting up, as required by form No. 53, some one or more of the causes specified in section 29 of the act as grounds for not granting a discharge, they are regarded as not opposing the discharge, and as assenting to it, and the grounds for refusing a discharge, specified in section 29, are regarded as not existing in respect to the particular bankrupt. So, also, the provision of section 34, that a creditor, in order to attack a discharge after it is granted, by showing that it ought to be avoided for some ground specified in section 29, must show, in addition, that he had no knowledge, until after the granting of the discharge, of the existence of the avoiding act or fact, clearly expresses the view of the law to be, that the creditor who has knowledge, before the discharge, of the existence of an act or fact which would prevent a discharge, may waive his right to enforce such act or fact, simply by his silence, when he might have spoken. If so, certainly, a for-tiori, he may waive such right by affirmative acquiescence and ratification, such as these creditors have deliberately manifested in this case. The provisions of the 1st and 2d sections of the act and its whole scope show that the proceedings under it, in the bankrupt case proper, are regarded as proceedings in equity, and are to be governed by the rules and analogies of equity jurisprudence. It follows, that these objecting creditors are estopped from urging these objections, and, as no other objection is seriously urged by them and no other creditor opposes, a discharge will be granted, when a certificate of conformity is furnished by the register.