Court Opinion

ID: 9301234
Source: CourtListenerOpinion
Date Created: 2022-12-02 17:07:36.838033+00
Date Added: 2024-06-11T17:13:41.629171
License: Public Domain

DILLON, Circuit Judge.
The only question that need be considered is whether a petition for adjudication in bankruptcy can be sustained, in which the only act of bankruptcy alleged is the failure to pay a specified piece of commercial paper, where the original default in payment occurred and had continued more than six months and forty days before the proceedings in bankruptcy were commenced. The decisions on this point are conflicting. The ruling of the district court in this case is in conflict with the opinion of two very able and learned circuit judges. Baldwin v. Wilder [Case *79No. 806], Emmons, J.; In re Raynor [Id. 11,597], Woodruff, J. It is sustained by the decision in Mendenhall v. Carter [Id. 9,426], I have considered the reasoning of the judges in these cases, and the arguments of the counsel in the present case, and am ■of opinion that the judgment of the district court, on the point here involved, is correct
Assuming that an act of bankruptcy can be predicated of the failure to pay one piece of commercial paper, without valid and sufficient reasons for such failure, I think the "stopping,” under the facts of this case, was an act which ripened into a definite and complete act of bankruptcy after the lapse of forty days from the day of the original default, and that creditors are barred from making that act the sole basis of an adjudication in bankruptcy unless the petition therefor “is brought within six months after such act of bankruptcy shall have been committed,” that is, within six months after the act of bankruptcy became consummate, which was at the end of six months and forty days from the day of the original default. I concur in the main with the reasoning of Dick, J., in the case last cited, and refer to his opinion as a clear, and, to my mind, very satisfactory exposition of the subject. After the lapse of the period above named, it accords with the obvious purpose of the short six months’ limitation in section 39, and with the analogies furnished by the other specified acts of bankruptcy, to hold that the petitioning creditors, under the facts appearing in the record, are precluded from making this default the ground of an adjudication, and are confined to their ordinary remedies. The order of the district court is affirmed.