122 Mass. 498 | Mass. | 1877
By the existing acts of Congress upon the subject of bankruptcy, a bankrupt’s estate may be settled, and the bankrupt discharged, in either of three ways :
First. The estate may be administered in the ordinary manner by assignees appointed for the purpose, and a certificate of discharge be granted by the court, with the assent, in some cases, of a certain proportion of the creditors who have proved their claims. Any person liable as surety for the bankrupt may, upon paying the debt, even after the commencement of proceedings in bankruptcy, prove the debt, or stand in the place of the creditor if he has proved it; or, the debt not having been paid by him nor proved by the creditor, may prove it in the name of the creditor or otherwise. U. S. Rev. Sts. § 5070. Mace v. Wells, 7 How. 272. Hunt v. Taylor, 108 Mass. 508. But the surety’s liability to the creditor is not affected by any certificate of discharge granted to the principal. U. S. Rev. Sts. § 5118. Flagg v. Tyler, 6 Mass. 33.
Second. The estate may be wound up and settled by trustees nominated by the creditors, upon a resolution passed at a meeting for the purpose by three fourths in value of the creditors whose claims have been proved, and confirmed by the court, and upon the signing and filing, by such proportion of the creditors, ef a consent in writing that the estate shall be so settled; in
Third. The creditors, at a meeting ordered by the court, either before or after an adjudication of bankruptcy, may resolve that a composition proposed by the debtor shall be accept,ed in satisfaction of the debts due them from him. Such resolution, to be operative, must be passed by a majority in number of the creditors whose debts exceed fifty dollars in value, and by a majority in value of all the creditors, and must be confirmed by the signatures of the debtor, and of two thirds in number and one half in value of all his creditors. The debtor is required to attend at the meeting to answer inquiries, and to produce a statement of his assets and debts and of the names and addresses of his creditors. The resolution, with this statement, is to be presented to the court; and if the court, after notice and hearing, is satisfied that the resolution has been duly passed and is for the best interest of all concerned, the resolution is to be recorded and the statement filed, and the provisions of the composition shall be binding on all the creditors whose debts, names and addresses are shown on the statement, and may be enforced by the court on motion and reasonable notice, and regulated by rule of court, or may be set aside by the court for any sufficient cause, and proceedings in bankruptcy had according to law. U. S. St. June 22, 1874, § 17. This section, providing for a composition under the supervision of the court, is taken from and substantially follows § 126 of the English bankrupt act of 1869, St. 32 & 33 Vict. c. 71. See Ex parte Jewett, 2 Lowell, 393; Re Whipple, 2 Lowell, 404.
It has been determined in England, by decisions of high authority and upon most satisfactory reasons, that a creditor, by participating in either of the three forms of proceeding, whether by assenting to a certificate of discharge, or by-consenting to a
The proceedings for a composition under the statute, depending for their validity and operation, not upon the act of the particular creditor, but upon the resolution passed by the requisite majority of all the creditors, binding alike on those who do and on those who do not concur therein, (if their debts are included in the statement filed by the debtor,) and finally confirmed and established by the court upon a consideration of the general benefit of all concerned, differ wholly in nature and effect from a voluntary composition deed, which binds only those who execute it. Oakeley v. Pasheller, 4 Cl. & Fin. 207; S. C. 10 Bligh N. R. 548. Bailey v. Edwards, 4 B. & S. 761. Bateson v. Gosling, L. R. 7 C. P. 9. Oriental Financial Corporation v. Overend, L. R. 7 Ch. 142. Cragoe v. Jones, L. R. 8 Ex. 81. Gifford v. Allen, 3 Met. 255. Phœnix Cotton Manuf. Co. v. Fuller, 3 Allen, 441.
Assuming, therefore, that th's defendant, having signed the note for the accommodation of the indorsers, was to be considered as a surety for them, and that the plaintiff, after acquiring Knowledge of that fact, stood as if he had known it when he took the note, yet no defence is shown to this action.
Exceptions sustained.
