NATIONAL BANKRUPTCY REGISTER.

William H. Corner v. E. G. Miller et al.

409

decide otherwise upon the plain and express language of the provision now, for the first time, inserted in a bankrupt law of the United States? But it does not seem at all necessary to assume the right in congress, by means of a bankrupt law, to impair the obligation of contracts in this case. No doubt can exist that the United States, or any one of the states, can pass laws to alter or take away the remedy for the enforcement of a contract, although such remedy be a vested right, it being only necessary that a remedy should be given, though not in fact so good as the one taken away. Brown v. Kinzie, 1 Howard, 316.

Under our insolvent laws, act of 1805, chapter 110, section 5, fieri facias must have been actually and bona fide levied before the application of the insolvent to create a lien upon the property in the hands of the trustee, while by the law of the state, never once claimed to have been repealed by this statute, fieri facias was a lien upon personal property so soon as it came to the hands of the sheriff or other officer. 5 Gill, 178; 6 Harr. & John. 264, 455; 7 Ib. 460.

Here, then, a lien arising out of final process was divested, and no pretence was set up of its being at variance with the Constitution of the state or of the United States, by the eminent counsel engaged in the case of Alexander v. Ghiselin.

Chancellor Bland says that the acts of assembly, in relation to attachments against non-residents in this state, "were always considered as laws regulating process for the more effectual recovery of debts, or as providing a special auxiliary remedy for the recovery of debts. See 3 Bland, 119, and cases cited.

Although afterwards there was a departure from the theory of our attachment laws, yet the change did not create a lien other or greater than that subsisting under former laws, but simply continued to the creditor "the lien which, by the settlement of the attachment, he had on the property attached. 3 Gill, 325. No doubt the general assembly could have taken away the attachment process and the lien dependent upon it, but it chose rather to extend it. In either case they

In re William D. Miller.

had full power over it, and if, by a repeal of its provisions, vested rights, or what are called liens, existing by the levy of mesne process, had been destroyed, it could not be complained that the law had " impaired the obligation of a contract," but that it had only altered the nature of the remedy.

It follows, then, very clearly, that the conditional lien acquired by the levy of an attachment or of its being laid in the hands of a garnishee, may be divested by the operation of a general bankrupt or a local insolvent law, if the language of the act be sufficiently clear to indicate that purpose.

Such being the conclusion of the court, an order will be signed overruling the demurrer to the motion, and for such further determination of the matter as may be necessary in conformity with the foregoing opinion.

*U. S. DISTRICT COURT, W. D. PENNSYLVANIA.

105

When the petitioning creditor, the bankrupt, and all the creditors who have proved their debts, desire the court to dismiss the proceedings before the choice of an assignee, an order will be made by the court directing that the proceedings be dismissed, and allowing the messenger to deliver up to the bankrupt the property seized, upon the payment of costs.

In re WILLIAM D. MILLER.

THIS being the day to which the first meeting of creditors was adjourned, at the request of said creditors, and also the day fixed for hearing the creditors, upon their petition praying for the discontinuance of the proceedings in this matter, which said petition was referred to me by special order of said district court, "with power to investigate the facts and to report upon the law and expediency of such discontinuance. And further, that said register call a meeting of the creditors," &c. And further, that said register report as soon as may be thereafter the action of said meeting to this court, and as to the power of the court to order such discontinuance. I sat, at the time and place above mentioned, for the purpose of performing the duties so assigned to me.

In re William D. Miller.

All the creditors of said bankrupt named in the schedule was notified of the time and place of this meeting, under the order of the court, by publication in the Erie Daily Republican, copies of which, containing the notice, were sent to each of the creditors, as well as to those who had proved their debts.

Nineteen out of fifty-four of the creditors have proved their debts, amounting in all to the sum of $9,030.95. All of these were present at this meeting, or duly represented by their attorneys, except the " Akron Stove Company," whose claim, as proved, is only twenty-five dollars. All the remaining twelve who have proved their debts, amounting to $9,005.95, vote in favor of dismissing the proceedings in bankruptcy, in compliance with the prayer of the petition. The claims of the creditors who have not proved their debts amount to about twenty thousand dollars.

In view of the facts that the petitioning creditor, D. J. Crowell, the bankrupt, and all the creditors who have proved their debts (with the single exception above mentioned), desire the court to dismiss the proceedings, the register is of the opinion that it is expedient and proper that it should be done, provided it is lawful to do so. On this point the following is respectfully submitted to the honorable judge of the district

court:

OPINION OF THE REGISTER.

William D. Miller was duly adjudged a bankrupt on the 18th day of October, 1867, on petition of D. J. Crowell, one of his creditors. Twenty-four of his creditors petition the court to dismiss and supersede the whole proceedings. No assignee has yet been chosen. The bankrupt and the petitioning creditor, and all the other creditors who have proved their debts (save one who did not appear nor make any opposition, and whose debt only amounts to twenty-five dollars), join in asking the court to grant the prayer of the petition.

Has the judge of the district court the power to do so?

In re William D. Miller.

Two learned attorneys appeared before the register, in support of the affirmative of this proposition, but they furnish no authority or law bearing on the point, and base their arguments upon the general power of common law courts to dismiss proceedings upon the application of the parties.

The proceedings in bankruptcy are sui generis, and in absence of any express enactment, it is proper to look to the general scope and spirit of the act of congress creating the jurisdiction. I am not aware that the question under consideration has been determined or even discussed in proceedings under the act of March 2, 1867.

In coming to the conclusion I have arrived at, I give much weight to the action of the creditors who have proved their debts, at the meeting above referred to. At that meeting they decided that, in their opinion, it was best for all concerned that the proceedings should be discontinued — nemo contradicente.

The act gives large powers in the premises to these meetings of creditors. When presided over by the register it calls them "courts of bankruptcy." Sections 11, 12. It authorizes a majority in number and value of such creditors to elect assignees (section 13), to remove an assignee by a similar vote (section 18), to determine the amount of dividends (section 27). Three fourths in value of them may supersede the proceedings by arrangement, and commit the whole estate of the bankrupt to trustees, who shall settle the estate under their direction (section 43), in which event the whole matter is taken out of the hands of the court, except as its aid is invoked by the creditors.

The creditors who do not prove their debts are not allowed to have a voice in any of the proceedings, or to participate in the funds.

The policy of the act is to have the estate disposed of in such manner as the proving creditors shall determine is for

*

their interest. In the present case they have deter106 mined that their interests will be best promoted by allowing the bankrupt to resume the possession of his

In re William D. Miller.

estate, and to continue business. The register is of the opinion that the court has power to grant their request. There are some decisions under the bankrupt laws that have a bearing upon this point. In Cullen's Bankrupt Laws, 440, it is said, "The only case in which any express provision by statute has been made for superseding a commission is that of a petitioning creditor compounding his debts with the bankrupt; but the lord chancellor has always exercised a discretion of this kind whenever the ends of justice required, either for the sake of the creditors or of the bankrupt himself, that a commission should not be suffered to proceed."

Hilliard on Bankruptcy, 2d edition, 406, " A district judge derives the power to supersede a commission of bankruptcy from the bankrupt law, by construction and implication.' Morris's Estate, Crabbe, 70, cited Hilliard on Bankruptcy, 407. "A supersedeas lawfully ordered places the bankrupt and his estate in the same situation they would have been in if the commission had never existed." lb. 407.

For the foregoing reasons the register is of the opinion that it is both expedient, and legal, that a decree be entered by the court, directing the whole proceedings in this matter to be dismissed, vacated, and annulled; and that the marshal, as messenger, be directed to render up to the said William D. Miller, all property in his possession by virtue of the warrant of seizure, upon the payment by the said William D. Miller, of all costs of the proceedings.

SAMUEL E. WOODRUFF,

Register in Bankruptcy.

MCCANDLESS, J. The decision of the register is affirmed.

January 28, 1868.