Court Opinion

ID: 7197179
Source: CourtListenerOpinion
Date Created: 2022-07-24 17:03:52.73168+00
Date Added: 2024-06-11T16:16:23.233718
License: Public Domain

The opinion of the court was delivered by
Nicholas, C. J.
The case before us exhibits forcibly the indefinite and unsatisfactory provisions of our law on the subject of *694respite. Art. 3092 of the Civil Code, while recognizing the right of creditors to make opposition to the homologation of the proceedings of the meeting of creditors, does not specify what the character of the objections to be made should be, nor what judgment should be rendered in the event of their being sustained. The District Court under the evidence reached the conclusion that the estimate placed by Drew upon his assets was too large and that a comparison of their real value with the amount of his liabilities disclosed the fact that he was not only “unable to satisfy his debts at the moment” (C. C. 3084), but that he was actually “insolvent” — that is, “he was in the situation of a debtor who found himself in the impossibility of doing so.” C. C. 3556, No. XI. Starting with this premise and acting upon the declaration made in several decisions of this court that in respite proceedings solvency was presumed while proceedings in matters of voluntary or involuntary surrenders were based upon the very reverse theory, the court evidently deduced the consequence that a judgment decreeing a respite in a case where insolvency had been affirmatively shown was utterly inconsistent with the doctrine upon which the whole matter rested. That therefore the court would not be justified in decreeing the respite “ even though a majority of creditors in number and amount ” should declare in favor of such a judgment (C. C. 3086), when there were opposing creditors resisting on the ground of insolvency. When the court reached this conclusion, it went further — it decided that not only was a respite not permissible, but that the logical outcome of the situation was, that the applicant should be ordered to make a surrender of his property and judgment was rendered accordingly.
Philips vs. Creditors, 36 An. 909, presented features in all essential respects similar to those of the present case. There, as here, the applicant received in favor of his application the vote requisite for obtaining a respite; there, as here, there were opposing creditors resisting, on the ground of the absence of “a true and exact schedule sworn to,” and there, as here, the District Court refused the respite, and forced the applicant into a surrender. This Court affirmed the judgment, in so far as it refused the respite, but reversed it in so far as it forced a cession. In the opinion rendered, we said: “ The question remains whether the portion of the judgment enforcing the cession and appointing a provisional syndic should be sustained. The Code, Art. 3098, provides: ‘ when the *695creditors refuse a respite, the cession of property ensues, and the proceedings continue as if the cession had been offered in the first instance.’ ”
“This is the only warrant for continuing the proceedings as in case of cession. The law grants to a majority of creditors the option of either granting the respite or of refusing it, and therefore gaining the advantage of a cession of property. They have not availed themselves of the last alternative. They have not refused the respite, and therefore, under the express terms of the law, the condition upon which the cession ensues has not arisen. The respite is denied, not by reason of the refusal of the creditors to grant it, but by reason of defect in the proceedings having the effect to invalidate it. By ordering the matter to proceed as in case of cession, we should act without warrant of law, and, moreover, the defective schedule would be as grave an obstacle to the validity of the proceedings as a voluntary surrender or cession as it is to the respite proceeding.”' (Burden vs. Creditors, 20 An. 1384.)
The decree of the District Court as it stands is a decree for a “ forced surrender,” inasmuch as the applicant made no offer to make a cession. This judgment was made in the face of a vote of the applicant’s creditors according a respite, and therefore necessarily (for the present, at least) a vote in direct opposition to a forced surrender. The court, in our opinion, was without warrant to issue the decree it did at the instance of the opposing creditors. The circumstances and conditions under which a forced surrender can be ordered are specially provided for by law. Had the present proceedings originated with judgment creditors who had issued executions which had been returned “ nulla bona,” and had, at their instance, a meeting of the creditors of the debtor been ordered by the court, as provided for in Sec. 1781 of the Revised Statutes, “to determine whether the surrender of his property shall be made to his creditors,” the forced surrender would have been refused “if a majority of the creditors in number and amount opposed the surrender” (see the provisos to the section). The court was in error in holding that it was authorized at the instance of the opposing creditors at the time and in manner and form as their application was made to decree a cession of property. Upon an examination of the record and of the allegations of Drew’s petition, which he verified by his oath, we find that he did not deposit, as required *696by the law, in the office of the clerk of the District Court, a true and exact schedule, sworn to by him, of all Ms movable and immovable property.” The averment of his petition which he swore to was this: “ Petitioner herewith presents with this petition-a ‘ sworn ’ list of ‘ his creditors ’ and ‘ list,’ as below, of his debts and assets.” In point of fact, the list of assets was not sworn to and the assets therein mentioned were, in the opinion of the District Court, overvalued. We are not able to say that its conclusions on the subject of the assets of the applicant were incorrect.
For the reasons herein assigned it is hereby ordered, adjudged and decreed that the judgment appealed from be and the same is hereby annulled, avoided and reversed, and it is now ordered, adjudged and decreed that the application of E. C. Drew for a respite be and the same is dismissed, costs of the District Court to be borne by Drew, the applicant; costs of appeal to be paid by the opponents, appellees.