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It has been held that the discharge in bankruptcy of a firm from firm debts does not relieve the individual members of the firm from liability for firm debts, where no individual adjudication was had.18 The discharge of a corporation will not release its directors or stockholders from any liability that they may have incurred.14 A limited judgment for that purpose was allowed against the corporation; but otherwise a corporation is entitled to as complete a discharge as an individual.15

§ 658. Revocation of discharge. "The judge may, upon the application of parties in interest who have not been guilty of

trustee of an implied trust, Chapman v. Forsyth, 2 Howard, 202, 11 L. ed. 236; Noblet v. Hammond, 129 U. S. 65, 32 L. ed. 621; Fleitas v. Richardson, 147 U. S. 550, 37 L. ed. 276 (the liability of a husband for his wife's paraphernal property under the law of Louisiana); Re Harper, 133 Fed. 970, affirmed as Harper v. Rankin, C. C. A., 141 Fed. 626; Mulock v. Byrnes, 129 N. Y. 23; Reeves v. McCracken, 69 N. J. L. 203, 13 Am. B. R. 680; or of a pledgee who has converted the proceeds of collateral, given him as security for his debt, Hennequin v. Clews, 111 U. S. 676, 28 L. ed. 565; Palmer v. Hussey, 119 U. S. 96, 30 L. ed. 362; Re Adler, C. C. A., 144 Fed. 659; but not, it has been held, the mutual obligations of partners; Re Walker, 176 Fed. 455; Haggerty v. Badkin, (N. J. Ch.) 66 Atl. Rep. 420; Re Toklas Bros., 201 Fed. 377; unless the conversion was wilful, McIntyre v. Kavanaugh, 242 U. S. 138. As to its effect upon community debts, see Gibbons v. Horton Tr. & Sav. Bank, 229 Fed. 424.

13 Re Neyland & McKeithen, 184 Fed. 144.

14 Re Marshall Paper Co., C. C. A., 102 Fed. 872.

15 Ibid.

§ 658. 1 It has been held that a creditor who has not proved his claim, and whose time to prove this has expired, may apply for the revocation of a discharge; Re Bimberg, 121 Fed. 942; Re Chandler, C. C. A., 138 Fed. 637; but, that the assignee of a claim assigned after the discharge of a subsequent creditor, cannot. Re Chandler, C. C. A., 138 Fed. 637. See supra, § 653, 655. It seems that, in a proper case, the bankrupt himself may move for the vacation of the decree discharging him. Re Hawk, C. C. A., 114 Fed. 916; Re Shaffer, 4 Am. B. R. 728; Remington on Bankruptcy, § 2812; but leave was denied him when he applied for the purpose of amending his schedules, so as to include an omitted creditor without notice after the expiration of the time for proving the latter's claim. Re Hawk, C. C. A., 114 Fed. 916. It has been said that the court may, of its own motion, vacate the discharge within the statutory time. Re Bimberg, 121 Fed. 942. It has been held that the trustee of the bankrupt cannot make a motion to reopen the estate. Re Paine, 127 Fed. 246. That a creditor whose claim was not barred by the discharge cannot obtain the revocation. Re Chandler, C. C. A., 138 Fed. 637.

undue laches, filed at any time within one year after a discharge shall have been granted, revoke it upon a trial if it shall be made to appear that it was obtained through the fraud of the bankrupt, and that the knowledge of the fraud has come to the petitioners since the granting of the discharge, and that the actual facts did not warrant the discharge."4 Where creditors because of a mistake failed to file within the statutory time speci

2 The fraud must be connected with the procurement of the discharge and not previous conduct which if duly interposed by objection would have prevented the discharge. Re Weintrob, 263 Fed. 904. It must be actual fraud involving moral turpitude or intentional wrongs and not merely acts from which fraud is inferred by the law. Re Cuthbertson, 202 Fed. 266. A misstatement through a mistake in law made under the advice of counsel is not such a fraud. Ibid. A discharge may be revoked because of the subsequent discovery of articles fraudulently concealed by the bankrupt. Re Hoover, 105 Fed. 354; because of the withdrawal without notice, for a consideration, of objections filed by certain creditors, upon whose opposition the others relied. Re Meyers, 100 Fed. 775; and because he intentionally gave an erroneous address of a creditor in order to obtain the discharge without the latter's knowledge. Re Dietz, 97 Fed. 563. But see Re Adams, 242 Fed. 335. An order of discharge may be amended at any time before the proceedings are closed, so as to discharge the bankrupt from his debts as a member of a firm, as well as from his individual liabilities. Re Diamond, C. C. A., 149 Fed. .407. The petition for the revocation of a discharge must state specifically that the discharge was obtained through the fraud of

the bankrupt. Re Hoover, 105 Fed. 354. It must set forth grounds which, if sustained, would result in the denial of the discharge. Re Wright, 177 Fed. 578; Re Downing, 199 Fed. 329. See Gage v. Penfield, C. C. A., 249 Fed. 961.

Re

3 It should show that knowledge of the fraud was first obtained by the applicant since the discharge was granted. Re Roosa, 119 Fed. 542; Gage v. Penfield, C. C. A., 249 Fed. 961; but where such an allegation appeared in an affidavit annexed to the creditor's petition, an amendment was allowed. Hoover, 105 Fed. 354; Re Oleson, 110 Fed. 796; Re Upson, 124 Fed. 980. The petition should also make a substantial showing of facts to prove the absence of undue laches. Re Oliver, 133 Fed. 832. Leave was refused to amend the petition by adding a new objection after the expiration of a year from the discharge. Re Wright, 177 Fed. 578. See Re Weintrob, 263 Fed. 904. A delay of ten months, Re Mauzy, 163 Fed. 900; and of eight months, Re Downing, 199 Fed. 329, were held to constitute such laches. It has been held that notice of the fraud to the trustee, previous to the discharge is notice to all the creditors. Re Oleson, 110 Fed. 796. But see supra, § 653.

430 St. at L. 544, 550, § 15. "Re Hansen, 107 Fed. 252.

fications against the discharge, the discharge was vacated although it did not appear that the bankrupt was guilty of any fraud.5 Where, through mistake, certain debts had been omitted from the schedules, a motion was granted when made by the bankrupts to set aside the discharge and to permit them to amend their schedules by including both the creditors' claim and their counterclaim.6 The hearing upon an application for the revocation of a discharge must be before the judge; but he may refer it to the referee as special master, to report the evidence and facts with his opinion.7

§ 659. Costs and fees. The Courts of Bankruptcy have power "to tax costs wherever they are allowed by law, and render judgments therefor against the unsuccessful party, or the successful party for cause, or in part against each of the parties, and against estates in proceedings in bankruptcy."1 When a petition in involuntary bankruptcy is "dismissed by the court or withdrawn by the petitioner, the respondent or respondents shall be allowed all costs, counsel fees, expenses, and damages occasioned by such seizure, taking or detention of such property. Counsel fees, costs, expenses, and damages shall be fixed and allowed by the court, and paid by the obligors in such bond."2 "In cases of

5 Re Appelgate, 235 Fed. 271. But see Re Groves, 244 Fed. 197. 6 Re McKee, 165 Fed. 269.

7 Re Oliver, 133 Fed. 832. Where no proceedings were taken before the referee after his request for a deposit to cover the costs of the hearing, the petition was dismissed at the cost of the petitioners for want of prosecution. Re Meyers, 100 Fed. 775.

§ 659. 130 St. at L. 544, 546, $2; Re Carolina Cooperage Co., 96 Fed. 604. See supra, § 409. The power thus granted is not restricted by General Order XXXIV, quoted infra. Petition of Kurtz Brass Bed Co., 250 Fed. 116. In a proper case the costs may be divided. Re Liberty Doll Co., 242 Fed. 695. Re Ward, 203 Fed. 769; King Hardware Co. v. J. G. Christopher Co.,

C. C. A., 222 Fed. 225. See Re H. B. Hollins & Co, 225 Fed 619. Where the bankrupt is penniless, the court will not tax against him the costs of a successful opposition to his discharge. Re Kyte, 189 Fed. 531. No costs were awarded to the alleged bankrupts when petitions in an involuntary bankruptcy were dismissed for want of jurisdiction, in the case of an individual because he had not resided a sufficient length of time in the district. Re Williams, 120 Fed. 34, and in the case of a corporation because it was not a member of the class subject to bankruptcy. Re Philadelphia & Lewes Transp. Co., 127 Fed. 896. 2 30 St. at L. 544, 547, § 3; Re Ward, 203 Fed. 769. Where after dismissal the bankrupt was obliged to sue to recover the expenses caused

involuntary bankruptcy, when the debtor resists an adjudication, and the court, after hearing, adjudges the debtor a bankrupt, the petitioning creditor shall recover, and be paid out of the estate, the same costs that are allowed to a party recovering in a suit in equity; and if the petition is dismissed, the debtor shall recover like costs against the petitioner." 8 The expense of determin

by the seizure, he was allowed to include therein his counsel fees in such proceedings, Re Weissbord, 241 Fed. 516; but not the expenses incurred in procuring the dismissal; nor any damages in excess of the amount named in the bond. Ibid. When there is no seizure, taking or detention of property there is no liability upon the bond except for the usual costs, unless the petitioners acted without probable cause and maliciously, and in such a case the remedy is a suit in the nature of a suit for malicious prosecution. Re Mochs & Rechnitzer, 174 Fed. 165; Re National Carbon Co., C. A. A., 241 Fed. 330. Where no seizure has been made and no bond given no costs, counsel fees or damages will be awarded upon the dissolution for want of jurisdiction of an injunction against the payment of money. Re Williams, 120 Fed. 34, supra, §§ 297, 298. Where the petition is dismissed the costs and expenses of the receivership may be charged againt the petitioners, Beach v. Macon Grocery Co., C. C. A., 125 Fed. 513; Re Lacov, C. C. A., 142 Fed. 960; Re Weissbord, 241 Fed. 516; supra, § 634. But see Re Veler, C. C. A., 249 Fed. 633; Re Independent Machine & Tool Corp., C. C. A., 251 Fed. 484. Where the receiver had by his services largely increased the estate, the expenses of the administration, including a reasonable allowance to the receiver and his counsel, were

'charged to the fund. Re Wentworth Lunch Co., 25 Am. B. R. 612; decided by Stanley W. Dexter, Special Master. The courts have refused to include in the costs taxed against the petitioner's compensation for the trustee and the latter's counsel. Re National Carbon Co., C. C. A., 241 Fed. 330. A judgment of dismissal with specified costs to the bankrupt does not prevent him from subsequently proceeding upon the bond to recover other expenses. Re McKenzie, 219 Fed. 630. By D. N. J. Bankruptcy Rule 16 upon the dismissal the compensation of a special master may be taxed against the petitioning creditors. Re Ward, 203 Fed. 769. When the respondent has not been deprived of the possession of his property, no counsel fees are allowed. Re Morris, 115 Fed. 591; not even it was held when the appointment of the receiver prevented the alleged bankrupt from redeeming property held by a sheriff. Re J. Ito Terusaki, 238 Fed. 934. It has been held that the bankrupt must file his bill of costs with the clerk and give to the petitioning creditors, notice of taxation, together with the amount of his bill. Re Haeseler-Kohlhoff Carbon Co., 135 Fed. 867.

3 General Order XXXIV, held that the costs of contesting claims before the election of a trustee, which were incurred in an attempt to control the election, are not chargeable to the estate. Re Mer

ing the title to, and of protecting the property subject to a lien may, in a proper case, be charged against the proceeds thereof.4 The cases in which costs can be charged against property, which is exempt, have been previously considered. "The actual and necessary expenses incurred by officers in the administration

cantile Co., 95 Fed. 123; Re Worth, 130 Fed. 927; Re Fletcher, 10 Am. B. R. 398, by Referee Miller. A creditor cannot be allowed his counsel fees upon the re-examination of a claim, which is again allowed; but when he resided at a distance, his reasonable traveling and hotel expenses were allowed him. Re George Watkinson & Co., 130 Fed. 218. Claimants to property in the possession of the trustee, when successful, are not allowed their costs and expenses, unless it appears that the defense made by the trustee was captious or unwarranted. Re Stewart, 178 Fed. 463. A stranger to the proceeding who successfully defeats a summary application against him cannot have his expenses and counsel fees paid out of the estate. Re Reiswig, 255 Fed. 390. Costs of summary applications cannot be taxed personally against parties who do not appear. Havens & Geddes Co. v. Pierek, C. C. A., 120 Fed. 244. Where a reclamation proceeding was dismissed, the trustee was allowed to tax, as part of the costs, the charges and expenses of the preservation of the property during its pendency. Re Schocket, 177 Fed. 583.

4 Re Goldville Mfg. Co., 123 Fed. 579. See Re Gaskill, 130 Fed. 235; Re Erie Lumber Co., 150 Fed. 817, 825. Ordinarily the expense of determining the title to a fund or other property impressed with different equities, some of which are superior to others, in the hands of

the trustee including the compensation of accountants should be charged against the general estate. In case this is insufficient against the least favored claimants. If the amount due the latter is insufficient, against those holding the superior equities. But no item of expense should be charged against any person whose rights were determined without any need of resorting thereto. Re J. C. Wilson & Co., 252 Fed. 631. But see Re J. F. Pierson, Jr., Co., 225 Fed. 889; Re Tietje, 263 Fed. 917. The general expenses of the proceedings should not be charged against lienors who establish their claims. The Bethulia, 200 Fed. 877; Re Cutler & John, 228 Fed. 771; Re Russell Falls Co., 249 Fed. 260, aff'd Keefe v. Worchester Tr. Co., C. C. A., 253 Fed. 536; certiorari denied, 249 U. S. 602, 39 Sup. Ct. 259, 63 L. ed. 797. A deposit for the purposes of a composition may, even if the composition is not consummated, in a proper case be used for the expenses of the bankruptcy proceeding, Re Miller, 243 Fed. 242; or such parts thereof as resulted from the unsuccessful attempt to make the composition. Re Wiener, 215 Fed. 278; supra, § 653. Where the bankrupt transacted business in a district where he did not reside in the name of another who also became bankrupt the expense of the administration of both estates was charged against the property therein. Re Offrich, 260 Fed. 682. 5 Supra, $650.

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