Page images
PDF
EPUB

2. The proper compensation for a committee of creditors should be limited to such an amount as would afford a reasonable compensation for the services required and rendered to a person of ordinary standing and ability, competent for such duties and services, and should not be based upon the usages or rates of profit which prevail in any branch of commercial or other business, nor upon the special qualifications or standing of the person who may happen to perform the services. In re Treat, 10 N. B. R. 310.

COMPOSITION.

1. There is nothing in the mere words of the amendatory act to require any other or different statement, at a meeting for composition, than is required in bankruptcy, and the most obvious course would be to make it as much like that schedule as might be. In re Haskell, 11 N. B. R. 164.、

[ocr errors]

2. It is not the meaning of the section on composition that no debtor can compound with his creditors, who would not be able to obtain his discharge in bankruptcy. The law leaves it to the creditors, subject to the discretion of the court to accept or reject. — Ibid.

3. When a debtor has had a meeting of his creditors, duly called and held, and has had his proposition for a settlement duly considered and passed upon, he should abide by the decision then had, and not be permitted to annoy his ereditors by requiring their attendance at further meetings. But if it clearly appears that the object of the meeting failed, by reason of the failure to properly instruct the attorneys representing the dissenting creditors, another meeting will be called for the purpose of again considering and acting upon the debtor's offer for a composition. - In re McDowell, 10 N. B. R. 459.

4. Where a resolution for composition had been confirmed by the court, in case of a voluntary bankrupt, and adjudication had, the court will not discontinue the proceedings upon petition of the debtor, without reasonable notice to all the creditors, and a hearing of them, and an approval by the court of the propriety of such discontinuance. - In re McKeon, 11 N. B. R. 182.

5. To permit the property of a bankrupt whose resolution for composition has been confirmed to be surrendered to him is to add to or vary the provisions of the composition, which, under § 17, cannot be done otherwise than by a resolution passed in the manner, and under the circumstances provided for passing the original resolution, and presented to the court in the same manner, and proceeded with in the same way. - Ibid.

[ocr errors]

6. The new provision of § 17 of Act of 1874 was designed, where applicable, to apply to cases where there had been an adjudication, and not to cases where there had been no adjudication. Ibid.

[ocr errors]

See PROPOSITION.

CONFESSION OF JUDGMENT.

1. Confession of judgment may be made for money contingently to become due. Cook v. Waters, 9 N. B. R. 155.

2. When judgment is taken for want of an answer, it amounts to a proposition to confess judgment, and an implied acceptance of the same, with consent that the creditor may docket the judgment, and thereby acquire a lien upon the debtor's estate, which is in effect a transfer of so much of the debtor's prop

erty to the creditor, and is therefore void under the act.

9 N. B. R. 342.

See PREFERENCE, 11.

Catlin v. Hoffman,

CONTEMPT.

C., a member of the firm of H. & C., attorneys at law, with the knowledge of the pendency of proceedings in bankruptcy, commenced an action as party plaintiff in the Supreme Court of the State of New York, against the bankrupt corporation, obtained judgment, and sought by notice of motion to obtain the appointment of a receiver of the property of the bankrupt. Before hearing of the application, an injunction was obtained in the United States District Court, restraining C. and his attorneys from further proceeding with his application. The injunction was served upon both H. & C., upon the same day the application for a receiver was made by C. in person, and upon which a receiver was appointed. H. had no personal charge of the action brought by C., and, upon service of the injunction upon him, took steps at once to inform C. thereof. C. was not served with the injunction till he was upon his feet before the justice of the Supreme Court engaged in making his application for a receiver. When so informed he stated to the justice that he was enjoined from further proceeding, and that he took no further action, except to hand up to the justice his motion papers, with a draft order for the appointment of a receiver wished for.

On proceedings for contempt, it was held, that H. was not guilty, but that a clear case of deliberate contempt was made out against C. Reference to register to ascertain amount of expense and loss occasioned by violation of injunction. In re Southside R. R. Co., 10 N. B. R. 274.

CONTRACT.

Where a contract is terminated solely on account of the default of the purchaser, the seller having been ready to perform on his part, an action does not lie by the purchaser, or by his assignee in bankruptcy, to recover back payments made by him previous to his default. — Kanè v. Jenkinson, 10 N. B. R. 316. See INTEREST, 1.

CONSTITUTIONALITY. See EXEMPTIOn, 2.

[ocr errors]

CONSTRUCTION. See DISCHARGE.

CONVERSION.

A claim for damages for the conversion of personal property is provable under the act, and a discharge from the Bankrupt Court would release the bankrupt from such claim, and be a bar to any judgment in the state court therefor. Cole v. Roach, 10 N. B. R. 288.

COPARTNERSHIP.

The dissolution of copartnership can have no effect upon the rights of creditors then existing, nor upon those who subsequently became such, if the partners continued to treat each other in point of fact, and to act as partners in their business transactions. They would be liable to be proceeded against in bankruptcy as if no dissolution had been had. In re McFarland, 10 N. B. R. 381.

[ocr errors]

CORPORATION.

1. When a petition in bankruptcy is filed against a corporation, it is not necessary, in order to authorize counsel to appear and admit the acts of bankruptcy charged, that the corporators or shareholders should previously, by a vote, authorize that act, or direct it to be done. — Leiter v. Payson, 9 N. B. R. 205. 2. The provision of the act, that no creditor proving his claim, can maintain any suit therefor at law or equity against the bankrupt, does not inhibit the right of action against a stockholder for his liability as such, for a debt of the bankrupt corporation. — Allen v. Ward, 10 N. B. R. 285.

[ocr errors]

3. Filing papers by an insurance company to increase its capital in the office of the auditor, receiving subscriptions for and selling its capital stock under such assumed increase, receiving part payment thereon, and incurring large liabilities upon policies of insurance issued by it bearing upon their face evidence of such increase of its capital stock, are sufficient to constitute the company a corporation de facto, so that neither it nor its stockholders can object that it is not a corporation de jure; and a party voluntarily taking stock in such a company is not in a position, when sued for the balance due for such stock for the benefit of creditors of such company, to deny the authority of the company to issue such stock, and transact business lawfully. — Upton v. Hansbrough, 10 N. B. R. 368.

4. Where by the charter of an insurance company it was required to take certain kinds of securities for the stock, to a certain named amount, that provision is simply to require a certain amount of cash or secured capital before it commenced business, and does not prohibit the company from disposing of its other stock without the balance being secured in that way. Ibid.

[ocr errors]

5. Where papers having color of compliance with the statute have been filed with the proper state officers, and meet their approval, but are in fact so defective as to be incapable of supporting the corporation as against the state, they are, as against a subscriber to its capital, held sufficient to constitute a corporation de facto, if supported by proof of user. - Ibid.

6. It is too late for stockholders, after the company has become insolvent, and the investment found to be unprofitable, to avoid their liability on the ground that fraudulent statements were made to induce them to take the stock. — Ibid.

7. The directors of a corporation, or a majority of them, to act, must meet together as a board; and that fact, together with their conclusion, must appear from the record of the official business" of the corporation, kept by a secretary; and a mortgage executed by any officers of the company without a vote therefor would create no lien, and an assignee must treat it as void. In re St. Helen's Mill Co., 10 N. B. R. 414.

8. A corporation can execute a deed no otherwise than under its corporate seal. - Ibid.

9. Where parties assuming to act as a corporation, under a corporate name, but not legally incorporated, a party who deals with it may treat it as a copartnership, and hold the members thereof personally liable for all acts done within the scope of the partnership. - - In re Mendenhall, 9 N. B. R. 497.

10. An account of assets and debts should be taken, in order that it may be known what, if any, calls should be made; for the bill by creditors cannot reach beyond the satisfaction of their demands. - Myers v. Seeley, 10 N. B. R. 411.

11. A stockholder with full knowledge of all the facts, who remains silent for nearly a year after the adjudication in bankruptcy of the corporation, will not then be heard to impeach its correctness. - In re Baltimore County Dairy Asso

ciation, 11 N. B. R. 253.

12. Proceedings in bankruptcy are not an exclusive method of winding up insolvent corporations or companies. -Chandler v. Siddle, 10 N. B. R. 236.

See ASSESSMENT, 2; CAPITAL STOCK; COUNSEL, 4; ESTOPPEL; INTEREST, 1; JURISDICTION, 21; RAILROAD; SERVICE; REMEDY; STOCK, 1, 2.

COSTS.

1. Where, in the course of bankruptcy, proceedings are instituted mainly, if not entirely, for the benefit of secured creditors, they should defray the expense of the proceedings. - Freelander v. Holloman, 9 N. B. R. 331.

2. Wherever it appears that attachment proceedings were not instituted with a view of obtaining a preference, but were merely auxiliary to bankruptcy proceedings in view, and so for the benefit of all the creditors, the costs and expenses of such attachment proceedings will be allowed. In re Ward, 9 N. B. R. 349.

[ocr errors]

3. The expense of creditors attending the first meeting of creditors will not be allowed as preferred, nor the sheriff's bill for attempt to arrest the debtor, because there was no showing of its necessity, or that it resulted in any benefit to the estate. Ibid.

4. When costs will be allowed on petition against a firm for the act of one partner. - In re Redmond, 9 N. B. R. 408.

[ocr errors]

5. An assignee in bankruptcy, being the trustee of an express trust, is not liable personally for costs in a state court under the code, although the trust fund is under the jurisdiction of another court. Reade v. Alerhouse, 10 N. B. R. 277.

See LIEN, 1; Action, 2.

COUNSEL.

1. Counsel for the bankrupt will be justified in withholding, upon examination, the disclosure only of such information in relation to the affairs of the bankrupt as was imparted to him by the bankrupt, in the capacity of counsel for the bankrupt, and of such information in relation to the affairs of the bankrupt as was imparted to him by persons to whom he was as counsel for the bankrupt, referred by the bankrupt, with a view to his obtaining such information as such counsel. In re Aspinwall, 10 N. B. R. 448.

[ocr errors]

2. But he must disclose what affairs were the subject of conversation, not the conversation. — Ibid.

3. Privilege of counsel will not extend to refusing to answer whether the indebtedness of the bankrupt to a certain named creditor was spoken of, or of the inability of the bankrupt to meet his obligations to such creditor, or who it was with whom he first had a conversation concerning the claim of a creditor, or whether a certain paper shown him is one that ever passed under his observation, or whether the witness drew, or directed to be drawn, a certain deed from the bankrupt, or a certain declaration of trust, or whether the witness at a cer

[ocr errors]

tain date received any checks drawn to bankrupt's order, or as to what disposition was made of any such checks. — Ibid.

4. In case of involuntary proceedings against a corporation, it is to be inferred, unless there is some restriction in the law, that the usual course will be adopted, and matters proceed as in ordinary cases where legal measures are instituted against corporations; that is, that they will have the power to appear by counsel, be subject to the rules of pleading known and sanctioned by the court, and that there will be the usual confidence existing between counsel and client in such cases, and that counsel will not do any act not authorized by the corporation. — Leiter v. Payson, 9 N. B. R. 205.

[ocr errors]

See CORPORATIONS, 1; FEES, 2.

CROSS BILL.

New parties and new subject-matter cannot be introduced into a cause by cross bill, when they are foreign to and not necessarily connected with the matter of the original bill. — Sutherland v. Lake Superior Ship Canal, &c., 9 N. B. R. 298.

DEBT.

1. The term "debts provable under the act " means debts unconditionally provable, without any release or other preliminary action, either by the court or the assignee. In re Frost, 11 N. B. R. 69.

2. A debt which "might have been proved" against a bankrupt estate in bankruptcy comes clearly within the category of " debts, claims, liabilities, and demands" to which a discharge is declared to be a release, by § 34, although the creditor had no opportunity to prove it, by reason of omission of his name from the schedule, and no notice of proceedings. — In re Archenbrown, 11 N. B. R. 149. 3. Although a petition avers that a certain amount of debts is secured, it is not to be taken to mean fully secured. - In re California Pacific R. R. Co., 11 N. B. R. 193.

4. A debt due petitioning creditors, though secured, is provable within the meaning of § 39. — Ibid.

5. Where a wife allows a husband to use the income of her property from year to year, it is presumed to be used for the family, and does not constitute a debt provable in bankruptcy against the husband's estate; but it is otherwise as to the principal. - In re Jones, 9 N. B. R. 556.

6. Rent to accrue in the future after the bankruptcy, and after the surrender of the premises by the assignee, cannot be proved or allowed as a debt against the bankrupt estate, nor can there be any lien upon the assets of the bankrupt for any such claim. — Bailey v. Loeb, 11 N. B. R. 271.

See BANKRUPT ACT; DISCHARGE, 13; HUSBAND AND WIFE.

DECREE.

1. A decree valid at the time of being rendered, under the existing laws, cannot be vacated or reversed by the legislative power of government. — In re Pickering, 10 N. B. R. 208.

2. It is not in the power of the legislative department of the government to

« PreviousContinue »