Court Opinion

ID: 8637828
Source: CourtListenerOpinion
Date Created: 2022-11-24 19:48:11.862577+00
Date Added: 2024-06-11T16:55:59.386148
License: Public Domain

BLODGETT. District Judge.
The bankrupts now apply for a discharge, and the question is, are they entitled to a discharge on the facts as they appear on the record? No written consent of the creditors or any part of them to such discharge is filed.
By the provisions of the bankrupt act as originally passed, no person who was adjudged bankrupt after one year from the time the act took effect, was entitled to his discharge, unless his assets were sufficient to pay fifty cents on the dollar of his proved debts. But by the amendment of the 27th of July, 1868, the change between the original act and the law as it now stands amended. is noteworthy, and seems clearly to indicate that the discharge is not contingent upon the amount of dividend actually realized by the creditors if the fair value of the assets turned over to the assignee was equal to fifty cents on the dollar of the claims proved against him.
The assets must be equal to fifty cents on the dollar of the debts proved. This will not admit of a fictitious or exaggerated valuation of his assets by the bankrupt in his schedule or inventory; while on the contrary, if the assets are, at a fair and just estimate and valuation, equal to fifty per cent, of the debts proved, the bankrupt is not to be denied his discharge by reason of any sacrifice made by the assignee or creditors to convert the assets into cash, or because of the absorption of so large a proportion of the proceeds by expenses as to prevent .he payment of fifty cents on the dollar.
In this case the assets taken by the marshal, at their fair cash valuation, amount to more that fifty cents on the dollar of the proved debts. And there is no objection interposed to the discharge on the ground that the assets were overvalued; but, on the contrary, the proof taken shows that the goods were worth all they were scheduled at. and that they were sold within a very few days after the proceedings were commenced, at the instance of a majority of the creditors, and against the protest of the bankrupts; so that if there was any loss on the goods, it was fairly chargeable to the creditors. Undoubtedly any creditor might resist the application for discharge on the ground that the assets surrendered did not bear the required proportion to the debts, and upon the issue thus made, proof óf the actual value of the assets could be heard by the court.
But where no such objections are made, and the record shows assets equal in value to fifty per cent, of the debts proved, I think the discharge should issue, if no cause is shown to the contrary; and as no such cause is shown in this case, the discharges will be issued to the bankrupts respectively, on their taking the required oaths and otherwise complying with the rules provided for granting discharges.