Court Opinion

ID: 6879433
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:12:28.992249+00
Date Added: 2024-06-11T16:05:33.501991
License: Public Domain

CLARK, Circuit Judge
(concurring).
I think, too, that this bankrupt should still have an opportunity to seek his discharge, though in reaching this conclusion I have been more influenced by the trend of judicial and legislative thinking than have my brethren. Perhaps the stern logic of In re Taylor, 2 Cir., 22 F.2d 499, pressed to its end, may suggest a different result, but I do not believe we are longer justified in following that case as a beacon. As early at least as In re MacLauchlan, 2 Cir., 9 F.2d 534, it was recognized that we applied a harsher rule than had found favor elsewhere ; and although we were followed perforce by the district courts below, In re Ruane, D.C., 35 F.2d 187; In re Goldstein, D.C., 40 F.2d 539; In re Malta, D.C., 58 F.2d 771, and occasionally elsewhere, In re Balzer, D.C., 12 F.2d 94; In re Adams, D.C., 12 F.Supp. 755, on the whole the rule either invoked criticism or was not applied. Several cases therefore hold that the bankrupt shall not be denied the very objective for which he instituted the proceedings because of the mistake or inadvertence of his lawyer discovered, within the additional six months granted by § 14 sub. a. In re Churchill, D.C., 197 F. 111; In re Swain, D.C., 243 F. 781; In re Waller, 7 Cir., 249 F. 187; In re Ewing, D.C., 8 F.Supp. 285; Burbank Lumber Co. v. Church, 9 Cir., 69 F.2d 896. Cf. In re Jacobs, 6 Cir,, 241 F. 620; In re Whittaker, D.C., 57 F.2d 345 ; Schmelz Liquidating Corp. v. Williams, 4 Cir., 86 F. 2d 167. And In re Schaefer, 9 Cir., 80 F.2d 387, was only a moderate approval of our view at most; for the court referred to the disagreement and held merely that it’would not disturb the exercise of discretion below to the effect that miscounting of the months was no excuse.
With this background, Congress enacted the Chandler Act, which in § 14, sub. a, as amended, makes the adjudication an automatic application for discharge. The committee reporting the bill through Congressman Chandler stated specifically that the new provision “removes the troublesome and often harsh limitation of time within which the bankrupt may make” his application; it continued with a criticism of the “very serious hardship” which had made the bankrupt lose the benefit of the entire proceeding itself through some oversight on his part or on that of his counsel. H. R. Rep. No. 1409, 75th Cong., 1st Sess. (1937) p. 28. Legislative disapproval of the stern-rule was therefore very clear. And since the adoption of the Chandler Act, except in this Circuit, judicial opinion seems to be-unanimous in finding freedom from its. harshness through application of the new procedure. The case of In re Farrow, D. C., 28 F.Supp. 9, noted with approval in 53 Harv.L.Rev. 132, goes farther than is here necessary, for it allows application even beyond eighteen months after adjudication. The new procedure was also applied in In re Holder, D.C., 29 F.Supp. 331, and In re Pontello, D.C., 29 F.Supp. 332 (contra in In re Cederbaum, D.C., 27 F.Supp. 1014),, and it is said to be made applicable by general rule in the district courts in Northern Illinois and Minnesota. Glenn, Discharge,. 14 J. Nat’l Ass’n of Referees in Bankruptcy 23, 25.
Here we have not so much an old statute read in the light of a later one as a rule of decision, originally debatable, now pretty thoroughly repudiated. In the short time *497remaining for its operation, in order to prevent unfairness in the very few cases where it will still apply we ought to limit it to hold that a bankrupt is no longer fatally prejudiced in securing his discharge by mistake or even ignorance of his counsel— ignorance which would be the deeper, the more the literature of the subject and the decisions elsewhere were known. The words of former § 14, sub. a, alone would permit such holding, once we forget our legal ideas of an attorney as alter ego of the client and think of the practicalities of the situation. And as to bankruptcies adjudicated within the twelve months prior to the effective date of the Chandler Act (September 22, 1938), the procedure of that Act should apply, for that is surely a “practicable” course under § 6, sub. b.
I concur in the reversal herein.