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tended in this indirect way, in derogation of the exclusive right of the chief executive to pardon offenders or to remit fines imposed upon them, to relieve criminals from penalties incurred for criminal acts. It seems to me that to rule otherwise would make the bankrupt court the means of frustrating proper efforts to enforce criminal statutes enacted for the public welfare. Congress, in my opinion, never so contemplated or intended. Judgments such as the one proved in this case may possibly appear to come within the letter of the statute; but nevertheless, as neither state nor national government is mentioned in the act in this connection, I am persuaded that its operations cannot properly be held to embrace judgments imposed in executing the public criminal laws. End. Interp. St. § 161; Black, Interp. St. pp. 119, 120, and cases cited. While in its broadest interpretation this general principle might be considered as applying only to the sovereignty which enacted the statute, still, in our dual form of government, and in view of the considerations already suggested and of an obvious public policy, I think it is clear that the operation of the principle must be so extended as also to exclude the states of the Union, when congress enacts the legislation, and that it should be held in the case before us that congress did not mean to include within the operations of the bankrupt act fines imposed in executing the criminal laws of a state because it did not expressly legislate to the effect that such fines were dischargeable. I know this is a view different from that taken by the venerable judge of the district court of West Virginia in the case of In re Alderson, 98 Fed. 588, 3 Am. Bankr. R. 544; but, with all due respect to that learned and most experienced judge, I cannot yield the convictions which I have expressed. The provisions of the bankrupt act have reference alone to civil liabilities, as demands between debtor and creditor, as such, and not to punishments inflicted pro bono publico for crimes committed. The use of the word "debts" in sections 17 and 63 seems to make this construction inevitable. Any other construction would seem to be improper, and might trench, as already indicated, upon the exclusive constitutional right of the chief magistrate, state or national, to remit fines and grant pardons. With the exceptions. mentioned in section 17, any "debt" which is provable is made dischargeable. As a judgment like the one in question does not come within any one of the exceptions, it will be discharged, if provable. As I do not think it can be discharged, the test upon which its provability depends is not met. If these principles are sound, their operation will control in regard to the judgments of federal courts as well as to the judgments of state courts in criminal cases.

It may possibly be that the fine in this case has been replevied, in which event, if the sureties have paid it, or if they do pay it before the distribution of the assets in this case, a civil liability may, and doubtless would, be thereby created between the sureties and the bankrupt, which would be provable by the sureties alone, and they might be entitled to their pro rata share of the assets. This should be looked into, and, if the fact exist, provision should be made accordingly, but otherwise the ruling of the referee is approved and confirmed.

In re MCCARTY.

(District Court, N. D. Illinois. October 26, 1901.)

BANKRUPTCY-ISSUES ON APPLICATION FOR DISCHARGE.

The right of a bankrupt to a discharge and its effect are wholly distinct questions, and the latter question cannot properly arise or be considered by the court of bankruptcy on an application for a discharge.

In Bankruptcy. On objections to report of referee on application for discharge.

George B. Foster, for objector.

H. S. Miller, for bankrupt.

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HUMPHREY, District Judge. McCarty was adjudged a bankrupt April 23, 1901. The only liability scheduled and the only claim proven is a judgment recovered by William Sheehy against the bankrupt at the March term, 1896, of the circuit court of Peoria county for the loss of the services occasioned by the seduction of the daughter of the said William Sheehy by the said bankrupt, the same being an action of trespass on the case; judgment, interest, and costs amounting to the sum of $3,400. The bankrupt petitioned for his discharge May 13, 1901, and the referee reported May 28, 1901, that he was entitled to his discharge. The objector, William Sheehy, on the 1st day of June, 1901, filed his objections to the discharge, his contention being that the bankrupt is not entitled to be discharged from the debt in question under the second clause of section 17 of the bankrupt law, which provides that a discharge in bankruptcy shall release a bankrupt from all his debts except such as are judgments in actions for willful and malicious injury to the person or property of another; and the objector contends that the injury complained of was willfully and maliciously committed against the person of him, the objector. When a bankrupt files his application for discharge, the only facts pleadable in opposition thereto are the causes mentioned in section 14 of the act. Unless the bankrupt has committed some one of the offenses described therein, the court must discharge him. Section 17 of the bankrupt law reaches further, but it does not control this case. The right to a discharge and the effect of a discharge are entirely distinct propositions. Section 14 fixes the right to a discharge. Section 17 goes to the effect of a discharge. The question before the court is as to the right of the bankrupt to his discharge. The other question-the effect of such discharge if, in the future, it shall be pleaded in bar of the collection of the judgment in question-will arise in the proper tribunal where such collection is sought to be enforced. In re Marshall Paper Co., 43 C. C. A. 38, 102 Fed. 872.

The exceptions to the report of the referee are not sustained. The report is approved, and the discharge will be granted.

In re MUTUAL MERCANTILE AGENCY.

(District Court, S. D. New York. October 22, 1901.)

1. BANKRUPTCY-CORPORATIONS-MERCANTILE AGENCY.

A corporation organized to “establish, maintain and conduct a general mercantile agency," and whose business was gathering information and printing and publishing a book of ratings with respect to the standing of merchants, which it loaned to its subscribers, comes within the provisions of Bankr. Act 1898, § 4b, and may be adjudged an involuntary bankrupt.1

2. SAME-ACTS OF BANKRUPTCY-WRITTEN ADMISSION BY CORPORATION.

A written admission, signed by the president of a corporation by order of its board of directors, that the corporation is unable to pay its debts, and is willing to be adjudged a bankrupt on that ground, is sufficient to constitute an act of bankruptcy, under Bankr. Act 1898, § 3a, cl. 5, which will authorize its adjudication as an involuntary bankrupt.

8. SAME-INVOluntary PETITION-TIME FOR APPEARANCE BY OPPOSING CREDIT

ORS.

Bankr. Act 1898, 59f, which provides that creditors other than the original petitioners may at any time enter their appearance and join in the petition, or file an answer and be heard in opposition, does not authorize a creditor to appear and file an answer to an involuntary petition raising new issues after the time fixed for pleading to the petition by section 18b has expired, where such time has not been extended, and the petition has been heard on the issues as then made up.

In Bankruptcy. Hearing on involuntary petition.
Dill & Baldwin, for petitioning creditors.

J. Quintus Cohen, for opposing creditor.

George Edwin Joseph, for receiver.

ADAMS, District Judge. Three creditors of the Mutual Mercantile Agency filed a petition alleging it to be a corporation organized under the laws of the state of New Jersey, engaged principally in publishing, printing, and mercantile pursuits; that, being insolvent, it committed an act of bankruptcy, in that it admitted in writing, over the signature of its president, and by order of the board of directors, its inability to pay its debts, and its willingness to be adjudged a bankrupt on that ground. A creditor duly answered the petition, and, without denying the facts alleged in the petition, alleged that the corporation was not one falling within the terms of the act, and asked for a dismissal of the petition. The action was brought to trial on the 3d day of October, 1901, upon this issue. At the opening of the case a motion was then made by the creditor to dismiss the petition on the ground that it did not state facts sufficient, under the statute, to have the defendant declared a bankrupt. Decision upon this motion was reserved. The charter was then introduced in evidence, by which it appeared that the company was incorporated in April, 1899, to conduct a general mercantile agency. It provides as follows:

"To establish, maintain and conduct a general mercantile agency, to carry on every branch of business usually transacted in connection therewith, including the obtaining and acquiring by purchase or in any other lawful

1 What persons are subject to bankruptcy law, see note to Mattoon Nat. Bank of Mattoon v. First Nat. Bank of Mattoon, 42 C. Ɑ. A. 4.

manner information, statistics, facts and circumstances of, relating to, or affecting the business, capital, debt, solvency, credit, responsibility and commercial condition and standing of any and all individuals, firms, associations and corporations engaged in or connected with any business, occupation, industry or employment in any part of the civilized world, and particularly in and throughout the United States, and Canada, and to dispose of, sell, loan, pledge, hire and use in any and all lawful ways the information, statistics, facts and circumstances so obtained and acquired; also to establish, maintain and conduct a general collection business for the recovery, enforcement and collection of accounts, bills, debts, dues, demands and obligations and claims of all kinds; also to establish and conduct a general business of making and issuing contracts to secure the faithful performance of any mercantile or commercial contract or agreement, and for the prompt payment of any debt or obligation due by, under or arising from or out of any mercantile or commercial transaction; also to acquire by purchase or otherwise and/ to establish, maintain and conduct a general printing, publishing, bookbinding and advertising business, and to prepare and distribute newspapers, books, pamphlets, directories, catalogues, reports, ratings, digests, lists and other printed matter of interest or use to merchants, traders, bankers and lawyers."

The charter further provided:

"(3) The board of directors, and when the board is not in session the executive committee, in addition to the powers and authorities by statute, and by the by-laws expressly conferred upon them, are hereby empowered to exercise all such powers and to do all such acts and things as may be exercised or done by the corporation, but subject, nevertheless, to the provisions of the statute, of the charter, and to any regulations that may from time to time be made by the stockholders: provided, that no regulations so made shall invalidate any provisions of this charter, or any prior acts of the directors or the executive committee which would have been valid if such regulations had not been made."

Testimony was then given tending to show that the business of the company was gathering information and printing and publishing a book of ratings with respect to the standing of merchants in the United States and elsewhere. This information was furnished to subscribers throughout the country by means of the books which it loaned to the subscribers. No testimony was offered in behalf of the objecting creditor. At the close of the case a motion was made to dismiss the petition upon its allegations and the evidence.

The corporation seems to be one falling within the description of section 4b of the act. The admission of the bankruptcy of the corporation by the directors is apparently within their authority. It seems to be well established that the acts of directors in such particulars are sufficient to establish bankruptcy. In re Marine Machine & Conveyor Co. (D. C.) 91 Fed. 630; In re T. L. Kelly Dry Goods Co. (D. C.) 102 Fed. 747; In re Rollins Gold & Silver Min. Co., Id. 985; In re Peter Paul Book Co. (D. C.) 104 Fed. 786, 788.

It is said, however, on behalf of the objecting creditor, that the laws of New Jersey (Laws 1896, p. 298, art. 7, § 64) preclude the directors from legally assenting to an adjudication of bankruptcy. I do not find that such is the case. The section in question would doubtless prevent the directors from making a valid transfer of the property of an insolvent corporation, or one in contemplation of insolvency, but would not prevent them from admitting, for the benefit of the creditors generally, that the corporation is unable to

pay its debts, and its willingness to be adjudged a bankrupt on that ground under the federal law.

The trial was completed on the 3d day of October, and decision was reserved. On the 5th day of October the attorney for the objecting creditor filed an answer on behalf of another creditor, raising entirely new issues in the action. The petitioning creditors moved to strike out this answer on the ground that the time within which the objecting creditor could file an answer under section 18, subd. "b," of the bankruptcy act, expired on the 7th day of September, 1901, and that no further time had been allowed by the court. The objecting creditor relied upon the provision of section 59, subd. "f," providing that creditors other than the original petitioners may at any time enter their appearance and join in the petition, or file an answer and be heard in opposition to the prayer of the petition. I do not think it was intended by such provision to permit creditors to come in one by one, and each have an opportunity to contest the questions incident to an involuntary adjudication. This case is governed by section 18, subd. “b.”

Motion to strike out granted, and adjudication ordered.

In re RONK.

(District Court, D. Indiana. October 23, 1901.)
No. 914.

BANKRUPTCY-LIENS-MORTGAGE EXECUTED PURSUANT TO PRIOR AGREEMENT. A chattel mortgage executed by an insolvent within four months prior to his bankruptcy to secure in part a past loan is not rendered a valid lien as to such past consideration because of an agreement to execute it when the loan was made, when it would otherwise be voidable as a preference under Bankr. Act 1898; and especially where, by the laws of the state, if the mortgage had been executed at the time the loan was made, but not recorded until the time it was actually executed, it would have been void as to other creditors.

In Bankruptcy.

Harvey, Pickens, Cox & Kahn, for creditors.
Crane & Anderson, for Mary A. Ronk.

BAKER, District Judge. This is a petition to review the order of the referee adjudging a chattel mortgage executed when the bankrupt was insolvent, and within four months of the adjudication, to be a valid and preferential lien over the claims of other creditors. The mortgage secures two notes,-one of $750 and one of $350,— with interest; each bearing date November 14, 1900, and falling due in one year thereafter. The bankrupt is a householder, and entitled to an exemption of $600 under the statutes of the state. His entire estate above his exemption does not exceed the sum of $800, so that, if the mortgage is a valid preferential lien, other creditors of the bankrupt equally meritorious will receive nothing. The mortgagee is the mother of the bankrupt, who, with his wife, lives in the same house

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