119 F. 509 | W.D. Tenn. | 1902
It is admitted by counsel that the specifications are not in proper form, and leave is asked to amend them'. Objection is made that there is nothing by which to amend, the specifications being so entirely defective. There was an old doctrine that amendments could be made only where a good cause of action was defectively stated; but in modern practice, and especially under our liberal federal statutes of amendment, an entirely new cause of. action may be stated in a pleading by way of amendment; and there are some very radical and startling rulings to that effect. Some decisions are against this, particularly where the bar of the statute of limitations is involved, or some like effect is the result of allowing the substitution of a new ground of action. Still the modern-rule is that of great liberality in quite all cases, and it seems to me-that, if the bankrupt has been guilty of any of the offenses for which, his discharge may be opposed, the most liberal rule of amendment of the specifications should prevail, and that he should not be allowed to escape by the failure of the creditors to properly plead the grounds of opposition. The ordinary discretion of the court will-protect the bankrupt against any injustice in the application of this-liberality of amendment. His privilege of discharge from his debts is purely a matter of statutory grace, and not of any common right at all; and he should expect always to be denied a discharge unless-he complies strictly with the conditions entitling him to that indulgence by refraining from any wrongdoing denounced by the statute-as a bar to a discharge.
Here the specifications indicate that, if the facts be properly pleaded, there may be a bar. Not certainly so, and it may in the end turn out to be only a fraud upon creditors not made a ground for-opposing the discharge; but it may be otherwise, and the averments
Important questions of practice are made about the verifications of the specifications, which are conceded also to be defective; but it is complained that we have no rules of practice in this district regulating these details, and in this and other cases the necessity for verification of the specifications in opposition to discharge has been denied. One of the learned counsel for creditors insisted in the beginning that they do not require verification, and that they might be signed by counsel, and filed without it; but that, if they do require verification, he would not undertake, as an attorney, to verify them. He pointed to the fact, however, that .orms Nos. 57 and 58 and general orders 31 and 32 do not prescribe any form of verification, while other forms do append it wherever it is required. But this is only a fortuitous circumstance, I' think, and quite indeterminate. These forms naturally are fashioned on those under the act of 1867, which required verification only in those matters where it was specifically provided by that act, or where the supreme court, exercising its statutory power to make the rules of practice and forms, chose to demand it. I have gone over those forms, and compared them with the forms under the existing act. Generally, each verification appended to the old forms was required in terms by the statute of 1867, though sometimes this was not so, as in form No. 40, for the removal of an assignee, which prescribes verification without any direction of the statute (Bump, Bankr. [9th Ed.] 924); while form No. 52 of the act of 1898 exacts none for the removal of a trustee (Eoveland, Bankr. 770). The precept for verification does not appear to have been uniformly guided by the statute in either set of these forms. However this may be, the command of the statute of 1898 is imperative that “all pleadings setting up matters of fact shall be verified by oath.” Section 18c. The omission of the supreme court, therefore, to prescribe a verification for a petition for discharge on form No. 57 of 1898, or for the specifications in opposition thereto on form No. 58, cannot override this plain command of the statute, if either of them be a “pleading,” and “sets up matters of fact.” Under the act of 1867, there being no such requirement, a verification might be, and often was, pretermitted in contracting the forms of 1867. And it is apparent that the draftsman of the new forms of 1898 factitiously followed the forms of 1867 in the omission of a verification without noticing this distinction between the two statutes. Thus he made forms No. 57 and No. 58 of 1898 conform, in respect of this absence of a verification, to forms No. 51 and No. 53 of 1867. Bump, Bankr. (9th Ed.) 930, 932. But in the one case the statute permitted the omission, and in the other it does not. Therefore it does not appear that in prescribing these forms the supreme court in 1898 has deliberately ruled that the specifications in opposition to a discharge are not “a pleading,” and do not require a verification, under section 18c. That the specifications do “set up matters of fact” is beyond dispute, and that they have the form and substance of “a pleading” is equally clear; which being so, the omission of a verification from the new forms is a mere inexactness of compliance with the statute by the
It having been suggested that section 18c occurs in a section mostly, if not exclusively, devoted to procedure on an involuntary petition, it is insisted that its direction in respect of the verification of pleadings should be confined to involuntary cases. But this argument, and the rule of statutory construction on which it is based, are without force when applied to such an obviously patchwork structure as the whole statute shows itself to be. Besides, it is not in fact a section entirely concerning involuntary cases, and is under a subtitle of very much larger scope,—“Courts and Procedure Therein.” Again, neither the statute, the general orders, nor the forms make any distinction whatever between an application for discharge by a voluntary and one by an involuntary bankrupt. Nor do they suggest any distinction in the specifications in opposition thereto. Hence we are left confronted with the question whether they are “pleadings” in the sense of section 18c. This happens to be a voluntary case, but, if it were an involuntary case, precisely the same question would arise as to the verification being required by that section. Evidently it applies equally to both if it applies at all. There is a very narrow and technical sense in which the word “pleading” is confined both in law and equity practice to such formal written documents as the “declaration” or “bill,” the “demurrer,” the “plea” or “answer,” a “disclaimer,” and the like; but that is hardly the sense of this statute. Bouv. Diet, word “Pleadings.” It has seemingly rather the broader meaning there given of “stating in logical and legal form the facts which constitute the plaintiff’s cause of action or the defendant’s ground of defense; it is the formal mode of alleging that on the record which constitutes the support or the defense of the party in evidence.” Bouv. Diet. “Pleading in Civil Practice,” citing 3 Term R. 159; Doug. 278; Com. Dig. “Pleader”; Bac. Abr. “Pleas and Pleading”; Cent.' Diet, word “Pleading”; 1 Enc. PI. & Prac. 654, citing and quoting Snelling v. Darrell, 17 Ga. 141, where the restricted and more general meanings are each aptly disclosed in relation to statutes authorizing amendments.
It is not necessary to go into any nice discriminations of the practice in law or equity as to whether or when “a petition” can or does become “a pleading,” or when it is only a kind of extraneous statement for an outside purpose, and is dehors the technical record of the “pleadings.” The bankruptcy practice is, in respect of this, sui generis. It is all done by “petition.” It has no other formal statements except these and their concomitants, and in that relation the word “pleadings” of section 18c must mean “petitions,” and can refer to nothing else but those statements which come within the definition above quoted of a civil pleading, and the ordinary understanding of the meaning of that word. Bouv. Diet. “Petition”; 16 Enc. PI. & Prac. 500, 511; 1 Enc. PI. & Prac. 655, 656. The bankrupt’s “application for discharge” under section 14 is nothing more nor less than a “petition,” and is so called in form No. 57. On the analogies of equity practice as to “petitions,” those which are based wholly on the record, already made, and do not set up any extraneous
While the petition for discharge is founded on the original petition in bankruptcy, voluntary or involuntary, and the record built upon that foundation, it is, after all, quite an independent proceeding, as are the specifications in answer to it. This is apparent from the statute, the general orders, the forms, and the entire procedure relating to the discharge and opposition to it. For this reason, also, it comes within the motive of the law for demanding the.verification of pleadings under oath, in civil practice, which charge fraud and the like against the respondent, and likewise pleading under oath in answer to such a charge. That gúaranty of good faith is the general principle at the bottom of-such requirements, either under code practice or the general law in pleadings where the exaction is made. For example,
In the very beginning there was a rule made by this court that attorneys should not be allowed to verify by oath the pleadings and proceedings in bankruptcy practice. The foregoing authorities show conclusively that such is the general rule in all courts, unless it has been changed by statute, and there is no act of congress permitting it. Where there is no statute, the practice in equity—and it is the same in bankruptcy—is that, when a party had to sign the pleading (as, for instance, an answer in chancery), or when a party had to verify the pleading, the signing or verification had to be done personally, and could not be done by attorney, both as to natural persons and as to corporations. In extraordinary circumstances—as that the party was beyond seas, or was mentally or physically incapacitated, or where the facts were peculiarly within the knowledge of the attorney, or the like—the court could make a special order that the signature and oath might be made by an agent or attorney; but always the previous order must be had, and the form of verification and signature must set out the special facts as a reason for the departure from ordinary practice; and this rule was very strict. The reason for it is plain,—that the adversary party shall have the responsible person bound by his own act, so that he should not be able to repudiate it, and put the other to the proof of an express or implied authority in the attorney, who might have neither, and, in the absence of a statutory authority, would have neither, except where the preliminary order of the court before mentioned had provided against that absence of authority. If the adversary party should challenge by a suit for malicious prosecution or otherwise that which had been done, it would be unjust, obviously, that he should be confronted with this interjection of outside and conveniently available defenses arising out of a denial of the attorney’s authority. It is a very convenient and easy-going practice to allow attorneys to swear for their clients, saves time often, and expense, is one to which attorneys may readily resort, and is tempting, in fact, for these reasons; particularly if the swearing for one’s client may be done upon “information and belief” as of course. But it is none the less a loose and unwise practice, condemned by the courts quite generally, even where it has been authorized by statute. In Johnson v. Murray, 12 Lea, 109, 116, Chancellor Cooper uses these apt words: ■
“The difficulties in this ease, it may he added, have grown out of the loose practice, which ought never to be sanctioned, of permitting an answer to be filed without the signature of parties. The practice is equally objectionable of permitting petitions to be filed, signed, and sworn to by agents and solicitors, instead of by the parties themselves. The chancellor must have allowed the first petition, purporting to be by May and wife, to be withdrawn because it was not authenticated by, and therefore not binding on, them. But for this very reason neither petition ought to have been received.”
The precise form required for the verification of any pleading is not, by the general law and practice, uniformly settled, is often doubtful, and difficult to frame, and presents some interesting conflict of opinion. Let us examine a little closely some of the varieties of form found in the verifications prescribed in these bankruptcy forms of 1898. A simple jurat, “Sworn to and subscribed before me,” is often prescribed, as in that for a denial of bankruptcy,—form No. 6, for example. That prescribed for a debtor’s petition (form No. 1) and a partnership petition (form No. 2) is a very common form of verification, but one that has been judicially criticised as defective, at least when it is appended to a paper that does not in its very text definitely point out that which is stated of the party’s own knowledge and that which is stated only upon his information, while that of the creditors’ petition (form 3) is a positive affirmation on oath
The familiar form for the verification of a bill in equity when that is required in practice is by an appended affidavit the wording of which is suited to the fact that the text of the bill itself states distinctly that averment which is made of the pleader’s own knowledge and that which is made upon his information. But not one of these bankruptcy forms does this, as will be seen by inspecting them. Yet the debtor’s voluntary petition has prescribed for its verification the common form of an affidavit to a bill,—a form of oath which is discredited by the authorities when the pleading does not in its text make discrimination between statements of one’s own knowledge and of one’s information from others. 22 Enc. Pl. & Prac. 1021, 1022, citing Stirlen v. Neustadt, 50 Ill. App. 378, where it is said that under such a verification it can only be known' “by probing the mind of the pleader,” which statement is given on self-knowledge and which on information only. See, also, Fost. Fed. Prac. (3d Ed.) § 87, note 10. On the other hand, the creditor’s involuntary petition has its verification in the absolute form of a plea in equity, namely, “that the statements subscribed by them are true.” An analysis of the petition filed by creditors and a comparison of it with the debtor’s own petition and the partnership petition show that the two latter state facts that naturally are within the petitioner’s own knowledge; while the other states some facts that naturally are within self-knowledge, such as those relating to the nature of the creditors’ claims, and oth
Now, then, when a nicely discriminating and sensitive conscience comes to scrutinize these oaths which it is to take, it is very natural that one with such a conscience should hesitate to swear that charges made on the information of others “are true.” Naturally, one would prefer to swear that one “believes them to be true.” But it may be that the pleading to which he is swearing does not, in its text, discriminate between actual knowledge and information. If it be specifications in opposition to a discharge, it would be very difficult to so frame it as to meet the wants of the tender conscience, and put it in that shape. Practically it cannot be done, if technically it would be good. Neither can the affidavit of verification itself be any more practically so framed. By order of the supreme court a petitioning creditor must swear that facts that he states in his petition (form 3) on the information of others “are true,” and why should he not make the same oath when he comes to specify his grounds opposing the discharge, albeit the knowledge come from others? In the very nature of the case it is to be implied that the oath is upon information, or, at least, it may be the one way or the other; and he is entitled to salve his conscience with the palliating implication. He must so salve it in the creditors’ petition; and at any bar, in a trial for perjury, say, his oath would be so understood, especially where it was compulsory; and let us hope that it would be so understood in any court of conscience and at the bar of the Almighty, when He shall come to judge all of us in mercy and in truth. Psalms, lxxxix. 14.
I sincerely sympathize with the sensitiveness of litigants on this subject, as the law has always done in framing these forms of verification by oath; and would be inclined to be satisfied that the statute would be met by that form of oath which the supreme court appends to the debtor’s petition (form No. 1) and to the partnership petition (form No. 2), notwithstanding the sensible objection to it set forth by the courts in Illinois and elsewhere. The statute 'might not be as completely satisfied by those verifications, but sufficiently, nevertheless, as it is by the form appended to the creditors’ petition, (form No. 3), also by that court. But for the sake of precedent and uniformity of practice, if nothing else, until the supreme court itself shall prescribe the form of verification for the specifications in opposition to a discharge (form 58), I feel constrained to adopt in this
The result here is:
1. The specifications opposing a petition for discharge (form No. 58) must be signed by the opposing creditor as indicated in the form itself, and not alone by the attorney or counsel, and must be sworn to by him.
2. If there be more than, one creditor joined in the specifications, all must so sign it, and all must swear to it. '
3. The verification must be in the form prescribed by the creditor’s petition (form No. 3), to wit:
“Do hereby make solemn oath that the statements contained in the foregoing specification of grounds of opposition to the bankrupt’s discharge subscribed by me (or them) are true.”
4. If the opposing creditor be a corporation, the signature to the specifications must be in form prescribed by the supreme court under the bankruptcy statute of 1867 for the petition of a corporation (form No. 3, Bump, Bankr. [9th Ed.] 894), to wit:
“In witness whereof, I have hereunto subscribed my name as president (or other officer or agent) of said corporation, and affixed the seal of the same, this-day of-A. D.
“[Seal of the Corporation.]
(Signature of the Officer.)’’
5. The oath of verification prescribed for other creditors as above set out must be made by the officer of the corporation, mutatis mutandis.
6. When the opposing creditor is a partnership, the signature of the firm name by one of the partners authorized to sign the firm name will be sufficient; as also the verification by him alone or another partner, if the facts be known to him and not the partner signing the pleading, the form of the oath stating the fact as it may be.
7. The attorneys or solicitors or other agents will not be allowed to take the oath to the verification, and the already existing rule of this prohibition as to all verifications in bankruptcy proceedings will be enforced, unless there be a previous, order of the court allowing the oath to be taken by an attorney for reasons appearing in the order and on the face of the oath itself.
Ordered accordingly.