257 F. 362 | D. Nev. | 1918
Numerous witnesses were examined, and from- the testimony it is quite evident that Pyatt began bankruptcy proceedings, hoping thereby to prevent his former wife from collecting alimony. In fact, on the 30ih day of October there was filed in the bankruptcy matter a petition in which he asked that Mrs. Pyatt and her attorneys be enjoined and restrained from taking any steps to have him punished for contempt, in that he had failed to pay installments of alimony, as directed by the state court. That court, when it ordered him to pay alimony, was acting within its authority. If for any reason the order was erroneous, the error was one to be corrected in that court, or in the Supreme Court of Nevada. This court has no appellate or revisory jurisdiction in such cases. It is powerless to prevent the state from punishing Pyatt for refusing to obey such an order, or to relieve him from his obligation to pay installments, of alimony. Alimony due or to become due is not a debt dischargeable in bankruptcy. Collier on Bankruptcy. p. 438.
On the hearing of the motion the testimony of the witnesses tended to show that the bankrupt’s assets exceeded his liabilities. The bankrupt’s schedule, however, shows assets, including exemptions, amounting to $2,397.70, and liabilities amounting to $6,702.49, and names 20 creditors. Under section 4 of the Bankruptcy Act (Act July 1, 1898, c. 541, 30 Stat. 547 [Comp. St. § 9588]), any person, except a municipal, railroad, insurance, or banking corporation, is entitled to the benefit of the act as a voluntary bankrupt.
I am aware in the Carleton Case, supra, Judge Rowell states that in the District Court of Massachusetts, in an unreported case, it was held that a creditor may have an adjudication set aside, if the whole proceeding is a fraud on the act, and an abuse of process. Neither the facts nor the reasoning in that case are disclosed, so it is impossible to say how the rule was applied, or what embarrassment to a particulai
If an insolvent person owing more than one debt files a voluntary petition after his property has been attached by one of his creditors, the latter undoubtedly is embarrassed, for otherwise he might have collected his claim in full; still it would be impossible to regard the proceeding as a fraud on the act. An unworthy motive for the exercise of a legal right is not sufficient to extinguish the right.
While I am satisfied that his purpose in invoking the assistance of this court was to stay proceedings in the state court, if possible, and thus thwart his former wife in her attempt to collect alimony, I cannot overlook the fact that Pyatt has numerous creditors whose interests must be considered. These creditors are represented by the attorneys for the trustee, who strenuously object to a dismissal. If the motion is granted, undoubtedly the creditors will straightway file an involuntary petition; and, inasmuch as Pyatt has been guilty of an act of bankruptcy, I am at a loss to see bow an adjudication can ultimately be avoided. To dismiss these proceedings is simply to invite involuntary proceedings, without any particular advantage to Mrs. Pyatt.
The motion to dismiss will therefore be denied.