23 F. 583 | U.S. Circuit Court for the District of Southern New York | 1882
The bankrupt having applied for his discharge, it was denied by the district court, because his application was not made within one year from the date of the adjudication of bankruptcy. Specifications opposing the discharge had been filed by creditors, including, among other grounds of objection, that the bankrupt had not kept proper books of account, and proofs were taken upon the issue; but these proofs were not considered by the court, it having been held that the application was too late. Subsequently, by the act of July 26, 1876, (19 St. at Large, 102,) the section of the bankrupt act (section 5108, Bev. St.) requiring the application for discharge to be made within a year, having been amended so that it could be made “at any time after the expiration of sixty days, and before the final disposition of the cause,” the bankrupt made a second application for discharge in the same proceeding. The discharge was opposed by the same creditors, upon the same specifications, .together with additional grounds of opposition. The district court denied the discharge, because the bankrupt had hot kept proper books of account. 12 Fed. Bep. 69. The proofs taken upon the first application were used by the opposing creditors upon the second application, and it was by these proofs alone that it was made to appear that proper books of account had not been kept by the bankrupt. The learned district judge held that, the issue being the same, the parties the same, and the proceeding for a discharge being in the same bankruptcy, the proofs taken upon the former application were competent. It is how urged by the bankrupt that this conclusion was erroneous.
Treating both applications as in substance one proceeding, there is no reason why the depositions used on the first occasion should not be competent upon the second. Unless the second application is to be deemed a rehearing of the original application, the bankrupt is finally precluded from obtaining his discharge. Upon a rehearing, the proofs originally taken are always admissible. Daniell, Ch. Pr. c. 32, § 2.
But I am constrained to hold that the order denying the discharge made upon the first application is a fatal obstacle in the way of any discharge. The order was, in effect, a final adjudication adverse to the right of the bankrupt to a discharge. So long as it remains in force, it is conclusive between the bankrupt and his creditors. It matters not that it was termed an order instead of a decree. Dwight v. St. John, 25 N. Y. 203. It was a decision upon the merits of the controversy, because it proceeded upon the ground that the bankrupt had not complied with a condition of the bankrupt act .which was vital and imperative, if not jurisdictional. Re Wilmott, 2 N. B. R.
The subsequent amendment of the bankrupt act did not impair or affect the controlling force of the previous adjudication. Assuming, what may well be controverted, that the amendment may be given such retroactive effect as to authorize an application for a discharge in a pending proceeding, although the year from the date of the adjudication of bankruptcy had expired, it certainly cannot operate retroactively to overthrow a prior judgment. A retrospective construction to a statute is never favored; neither will it be inferred that congress intended to exorcise a doubtful power. It is, at least, doubtful whether the act would bo within the legislative competency, if intended'to effect such a result. State of Pennsylvania v. Wheeling Bridge, 18 How. 421.
The order of the district court is affirmed.
