The second section of that act declares that “ all future payments, securities, conveyances or transfers of property, o. agreements made or given by any bankrupt, in contemplatior of bankruptcy, and for the purpose of giving any creditor, indorser, surety, or other person, any preference or priority over the general creditors of such bankrupt, and all other payments, securities, conveyances or transfers of property, or agreements made or given by such bankrupt, in contemplation of bankruptcy, to any person or persons whatever, not being a bona fide creditor, or purchaser for a valuable consideration, without notice, shall be deemed utterly void, and a fraud upon this act; and the assignee under the bankruptcy shall be entitled to claim, sue for, recover and receive the same as part of the assets of the bankruptcy; and the person making such unlawful preferences and payments shall receive no discharge under the provisions of this act.” “ And in case it shall be made to appear to the court, that the bankrupt, his application being voluntary, has, subsequent to
The fourth section (after providing for the granting of a discharge and certificate to bankrupts who shall bona fide surrender their property, obey the orders of court, and otherwise conform to all the other requisitions of the act) contains the following clause : “ If any such bankrupt shall be guilty of any fraud or wilful concealment of his property or rights of property, or shall have preferred any of his creditors, contrary to the provisions of this act, or shall wilfully omit or refuse to comply with any orders or directions of such court, or to conform to any other requisites of this act, or shall, in the proceedings under this act, admit a false or fictitious debt against his estate, he shall not be entitled to any such discharge or certificate.” A further provision in the same section is, that “ such discharge and certificate, when duly granted, shall, in all courts of justice, be deemed a full and complete discharge of all debts, contracts and other engagements of such bankrupt, which are provable under this act, and shall be and may be pleaded as a full and complete bar to all suits brought in any court of judicature whatever, and the same shall be conclusive evidence, of itself, in favor of such bankrupt, unless the same shall be impeached for some fraud or wilful concealment by him of his property or rights of property, as aforesaid, on prior reasonable notice specifying in writing such fraud or concealment.”
In the latter of these clauses, the only enumerated causes for impeaching a discharge are fraud and wilful concealment of property by the bankrupt ; though, in'the former clause, not only fraud and concealment of property by him, but also a preference given by him to any creditor, a wilful omission by him to comply with any orders of the court, or to conform
We are of opinion that the word “ fraud ” is used in the same sense in both clauses of the fourth section, and that it means something more than the acts which are mentioned in connection with it. In the latter clause, “ fraud or wilful concealment of property” are the only terms used. Yet concealment of property is a fraud. In the former clause, “ fraud ” is united with all the enumerated causes for withholding a discharge, most of which, if not all, are frauds. The word “fraud” must therefore have a meaning which reaches and operates beyond all those enumerated causes. Otherwise, it is superfluous. And our opinion is, that the word, in both clauses, means, at least, all conduct of the bankrupt which is a fraud upon the bankrupt act, whether declared
Under the English bankrupt laws, the payment of money or giving security to a creditor, to induce him to sign a bankrupt’s certificate, vitiates the discharge, on the ground of fraud. Robson v. Calze, 1 Doug. 228; Holland v. Palmer, 1 Bos. & Pul. 95; 1 Cooke Bank. Law, (8th ed.,) 470. We have seen no case, in which a discharge has been avoided in England, on the ground of the payment of money to a creditor to induce him to withdraw his opposition to a certificate ; yet a bond given to a creditor, to induce him to withdraw a petition which he had preferred to the chancellor against the allowance of the certificate, has been decided to be void. Sumner v. Brady, 1 H. B. 647. See also Esp. Bank. Law, 316.
We have no occasion to express an opinion on the question, whether a payment by a bankrupt to a creditor, for such purpose, would avoid a discharge, under the United States bankrupt act, if it should not be shown that there was sufficient cause for a successful opposition. In Chamberlain v. Griggs, 3 Denio, 9, it was decided, in effect, that this would not, of itself, be such a fraud as would avoid a discharge pleaded in bar of an action against the bankrupt for an antecedent debt. The question, in that case, arose on a demurrer to a replication
We have seen the case of Fox v. Paine, 10 Alab. 523, where it was held that “ the mere fact, that another creditor has been induced to withdraw his opposition, is not by itself a fraud on the act.” If this was all that was intended to be decided we have no occasion to express any opinion concerning the decision. It would conform to the doctrine already referred to in 3 Denio, 9. But if, as it would seem from the opinion given, it was held and meant to be decided, that a bankrupt’s discharge cannot be avoided by showing that he induced a creditor, by paying money to him, to withdraw an opposition, which would have prevented the discharge, if it had not been withdrawn, we cannot, for the reasons already given, concur in such decision. Judgment on the verdict.
Forbes, J., did not sit in this case.
