Court Opinion

ID: 6410040
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:51:59.580919+00
Date Added: 2024-06-11T15:51:20.516317
License: Public Domain

Thomas, J.
The questions raised by the report are upon rhe validity of the defendant’s discharge in insolvency.
1. The first objection to the certificate of discharge is, that it contains no statement that the fiduciary debts of the insolvent are exempted from its operation, under the St. of 1844, c. 178, § 3. It does not appear that any fiduciary debts were proved against the estate, or in fact existed. The statute requires that the certificate shall contain a statement of the debts created by the debtor’s defalcation as a public officer, executor, administrator, guardian, receiver, trustee, or assignee of an insolvent estate so exempted from such discharge. Without such debts it would be difficult to make such statement. The law does not require the recital of the provisions of the statute in the certificate.
2. The second objection goes not to the form of the certificate, but to the validity of the discharge itself, on the ground that the insolvent debtor failed to furnish such schedule of his creditors to the messenger as the law requires. St. 1838, 163, §§ 6, 7; St. 1848, c. 104, § 8. A schedule was filed at the adjournment of the first meeting, and after the choice of the assignee. The messenger also received from the debtor, within three days after the date of the warrant, a list, containing the names of about twenty creditors, the messenger would not swear there were not forty. On applying to the debtor he gave him verbally the residence of the creditors, but the list furnished did not give the residence of the creditors nor the nature or amount of their debts, nor the consideration or security for the same. The jury found that the omission of the debtor was not fraudulent or wilful. Although the law requires a schedule of creditors to be delivered to the *446messenger, it permits the insolvent to amend it and correct any mistakes therein at the second meeting. It is at the second meeting also that the schedule is to be sworn to, the oath being that it is in all respects just and true, according to his best knowledge and belief. St. of 1838, c. 163, § 7.
No precise rule can be given to determine what constitutes a schedule within the provisions of the statutes; but it is clear, from the provisions last cited, that absolute accuracy is not required. The power to amend, and the form of the oath, both show this. Nor would absolute accuracy be practically attainable. The residence of creditors is constantly changing, and what is more, human memory is imperfect, and especially so at times of distress and embarrassment. Though the point is not free from difficulty, yet a list having been given to the messenger, though imperfect, and the jury having found that the omissions were not fraudulent or wilful, we think there was not such a failure to comply with the statute as avoids the discharge. The case of Burnside v. Brigham, 8 Met. 75, determined under a similar provision of the bankrupt law of the United States, is perhaps a stronger case than ffiis, inasmuch as the plaintiff in that suit was a creditor, whose name was omitted from the schedule, and failed to receive notice, in consequence of such omission. Yet this court held that to avoid the discharge, the plaintiff must show the omission was wilful and fraudulent.
3. The third objection to the discharge is, that the debtor, within three months before filing his petition, being insolvent, and having reasonable and sufficient ground to believe himself insolvent, borrowed $1,000, and as part of the same transaction secured the same by a mortgage of personal property. This objection is founded upon the St. 1844, c. 178, § 8, which is as follows : “ No discharge of any debtor under this act and the aforementioned acts, or any of them, shall be granted or valid, if the debtor hereafter, when insolvent, shall, within one year next before filing of the petition, by or against him, pay or secure, either directly or indirectly, in whole or in part, any borrowed money or preexisting debt, or any liability of his or for him, if the creditor proves that at *447the time of making said payment, or giving said security, the debtor had reasonable and sufficient cause to believe himself insolvent.” There can be little doubt, we think, as to the construction of this section, whether we look to the purpose to be accomplished or the language used.
The evident object of the statute is, to prevent preferences among creditors; to secure, when a debtor has not enough to pay his debts in full, an equal distribution of what he has. It forbids, therefore, the payment of one creditor, because it prevents such equal distribution; such is not the effect of a sale of property, for an adequate .consideration, or the borrowing of money and giving security therefor, in good faith and with no intent to defraud. These acts do not diminish the fund to be distributed, or create inequality.
The language of the statute is, “no discharge shall be granted or valid, &c. if the debtor, &c. shall pay or secure, either directly or indirectly, in whole or in part, any borrowed money or preexisting debt, or any liability of his or for him.” Upon the familiar rule of noscitwr a sociis, there would seem to be no reasonable doubt of the meaning of the words “ borrowed money,” and that this has reference to past transactions. The language is inapplicable to a transaction where the acts of borrowing and securing are simultaneous. The word “ payment ” of course refers to money borrowed before, and not at the time of payment.
4. The last objection to the discharge is, that it was granted within six months after the date of the assignment. Since the hearing of this case at nisi prius this court has decided that under the St. 1848, c. 304, § 9, a discharge may well be granted, though six months have not elapsed. See Journeay v. Gardner, ante, 355.