129 Mass. 1 | Mass. | 1880
By the act of Congress of June 22, 1874, § 17, in any case of bankruptcy pending, whether an adjudication in bankruptcy has been had or not, the creditors of the alleged bankrupt may, at a meeting called under the direction of the court, resolve that a composition proposed by the debtor shall be accepted in satisfaction of their debts. “ And such resolution shall, to be operative, have been passed by a majority in number and three fourths in value of the creditors of the debtor assembled at such meeting, either in person or by proxy, and shall be confirmed by the signatures thereto of the debtor and two thirds in number and one half in value of all the creditors of the debtor.” The debtor “ shall produce to the meeting a statement showing the whole of his assets and debts, and the names and addresses of the creditors to whom such debts respectively are due. Such resolution, together with the statement of the debtor as to his assets and debts, shall be presented to the court; and the court shall,” upon notice to all the creditors, and upon hearing, “inquire whether such resolution has been passed in the manner directed by this section; and, if satisfied that it has been so passed, it shall, subject to the provisions hereinafter contained, and upon being satisfied that the same is for the best interest of all concerned, cause such resolution to be recorded and statement
The grounds upon which it was contended by the plaintiff, and ruled by the court below, that the composition was not operative were, first, that the defendants did not confirm by their signatures the resolution for a composition; and, second, that no sufficient tender was made by the defendants to the plaintiff. We are of opinion that neither of these grounds is tenable.
It is not clear that the act of Congress requires that the resolution of composition, in order to be operative, shall be confirmed by the signatures of debtor and creditors. The words “ to be operative,” by strict grammatical construction, qualify only the words “ shall have been passed by a majority,” &c., and not the subsequent words “ and shall be confirmed by the signatures,” &c. But if they must be considered as applying to the signing, as well as to the passage, of the resolution of composition, they clearly relate only to something necessary to be done before the resolution is presented to the court sitting in bankruptcy for its approval, and of which that court must inquire and be satisfied in determining whether the resolution shall be recorded. In re Scott, 15 Bankr. Reg. 73. And where, as in' this case, the resolution of composition has been signed by the requisite majority of creditors, and the debtors’ assent to its terms has been manifested by their signatures to the petition by which the proceedings for a composition were initiated, and the court has adjudged that the resolution has been duly passed and has ordered it to be recorded, it is not open to a creditor, who would otherwise be bound by it, to impeach its operation collaterally by action on his original debt.
It was contended at the argument, (though the point does not appear to have been made or passed upon at the trial,) that the resolution of composition was of no validity, because no statement of assets and debts was filed. But the register certified to
A composition under the U. S. St. of 1874 takes effect, not from the mere contract of the parties, but from the judgment of the court in bankruptcy. Guild v. Butler, 122 Mass. 493. Mudge v. Wilmot, 124 Mass. 493. There is nothing in the terms of the statute, or in the nature of the proceeding, which requires the debtor to make a tender, in the strict sense of the word, to every creditor, of the amount due him under the composition. It would be unreasonable to require the debtor, in order to avail himself of the benefit of the composition judicially established, to seek out every creditor at his residence or place of business, perhaps in a distant state, and there make a formal tender of the amount due. It is sufficient that such notice of the debtor’s readiness to pay that amount be given to each creditor as may enable him to demand it at a reasonable place, and at the time when it is payable by the terms of the composition.
This view is in accordance with the opinions expressed by English judges in cases arising under the statutes from which Congress borrowed these provisions. In Hazard v. Mare, 6 H. & N. 434, 444, Chief Baron Pollock, delivering the judgment of the Court of Exchequer, is reported to have said, “We incline to think that a formal tender might not be required, if a reasonable” (possibly a misprint for “seasonable”) “effort to pay were made.” In Ex parte Hemmingway, 26 L. T. (N. S.) 298, (overruled, on another point only; In re Hatton, L. R. 7 Ch. 723, 725,)
In the case before us, the creditors were to be paid, in thirty days after the recording of the composition, ten per cent of their debts in money, with the election of receiving instead notes of the debtors for twelve and a half per cent thereof. Within fourteen days, the debtors gave notice to the plaintiff that they were ready to pay the amount due at their own place of business in Boston, the city in which the court was held. The plaintiff never demanded payment of the money, nor gave any notice of an election to take the notes. It was the fault of the plaintiff, and not of the defendants, that the composition has not been carried out. Exceptions sustained.
