148 F. 325 | S.D.N.Y. | 1906
In January, 1904, the bankrupt offered to the creditors a composition “at 20 per cent. * * * to be paid
He now alleges as the substantial ground of his motion that the bankrupt falsely represented the proposed indorsers as “both solvent and responsible,” although they were at the time known to him to be insolvent. It is too late for an application of this kind. Section 13 of the bankruptcy act' (Act July 1, 1898, c. 541, 30 Stat. 550 [U. S. Comp. St. 1901, p. 3427]) distinctly confines the power to set aside compositions to a period of six months. A composition in bankruptcy duly perfected undoubtedly has .the effect of a discharge (In re Merriam, Ted. Cas. No. 9,479, 18 N. B. R. 411); but just as a right to a discharge is distinct from the effect thereof (In re Dresser & Co., 13 Am. Bankr. Rep. at page 637, and cases cited), so the right to a composition must be distinct from the effect of a composition. The lapse of tjme is a sufficient reason for sustaining the bankrupt’s right to his composition ; but the effect of an unfulfilled composition agreement is an entirely different matter. One may have a right to a discharge in bankruptcy, yet the discharge will not be a bar against many debts. This bankrupt has.a right to maintain the existence of his composition, but the effect thereof may well depend upon proof of its fulfillment. The mere fact that in some other forum, or in a future proceeding, the failure of the bankrupt to pay the notes given in composition may be held to have revived the original debt (In re Hurst, Fed. Cas. No. 6,925, 13 N. B. R. 455), or the fact that if such holding were made this court would refuse to interfere by injunction (In re Negley [D. C.] 20 Fed. 499), affords no ground for setting aside the composition, and would have furnished no ground for so doing had the application been made within six months. A bankrupt may by his acts de
The motion is denied