Baldwin et al. v. Wilder et al.

paper within a period of fourteen days, although such suspen sion or stoppage was not fraudulent."

"The provision," he says, "embraces two cases: the one of an original, fraudulent stoppage, in which proceedings may be instituted at once, and the other of a suspension of payment, not fraudulent, and not per se an act of bankruptcy, but which, if continued for more than fourteen days, becomes an act of bankruptcy by its continuance." He applies the same rule to a petition where there was an averment of fraud in the petition. In re Weikert et al. 3 N. B. R. 5; see also in re Cowles, 1 N. B. R. 42. In re Thompson et al. 3 N. B. R. 45, DRUMMOND, J., uses language which has been literally adopted by the amendment of July, eighteen hundred and seventy. Similar rulings are made in re Schoo, 3 N. B. R. 52, and Doan v. Compton, 2 N. B. R. 182. In re Noyes, LONGYEAR, J., in his charge, adopted and applied the doctrin.

I think the opinion of SHIPMAN, J., may be added to these. In re Ballard et al. 2 N. B. R. 84. Certainly he does not, as the respondents' counsel suppose, rule the other way.

A contrary construction makes the law read substantially as follows: If the merchant fraudulently suspends at all, if but for one hour, he shall be adjudged a bankrupt and the same consequence-no more, no less-shall issue if he continue this fraudulent suspension for fourteen days. All in reference to the fourteen days suspension is thus stricken. from the law. Were it necessary to sustain this petition. we should reject this latter construction of the original act, and say a fourteen days' suspension was sufficient without fraud.

A less number of judgments, with varying and somewhat contradictory reasons, decided that the petition must in all cases contain an averment that the stoppage was fraudu lent. In re Leeds, 1 N. B. R. 138; Gillies v. Cone et at. 2 N. B. R. 10; in re Davis, 3 N. B. R. 89; in re Lowenstein, 2 N. B. R. 99; in re Dibblee et al. 2 N. B. R. 186.

Baldwin et al. v. Wilder et al.

But these same judgments, and others by the learned judge, hold that suspension by a solvent debtor is fraudulent; that the like act by an insolvent who neglects himself to go into bankruptcy is also fraudulent; and when it is added. that he also holds that the omission to pay a single note at maturity is evidence of insolvency, it is not perceived that the least difference exists between the practical results of his judgments and those which simply affirm that suspension of fourteen days is per se sufficient. Substantially the same criticism may be made in reference to the decision by FIELD, J., in re Jersey Window Glass Co. 1 N. B. R. 113. Indeed, they who hold that the fourteen days' suspension is insufficient without fraud, create such severe tests in reference to its existence, that practically mere suspension becomes sufficient. We prefer the more direct and less technical mode of arriving at the same result, which gives all the clauses of section thirty-nine a rational meaning.

It was to terminate this apparent conflict, and enact in plain language the construction which had made the fourteen days' suspension an act of bankruptcy per se, that the amendment was passed. It is in the very words of several judgments declaring how the former clause should judicially be read. It provides that if the merchant, &c., has fraudulently stopped payment, "or has stopped or suspended and not resumed payment of his commercial paper within a period of fourteen days he shall be adjudged a bankrupt.' Looking to the reading of the original enactments, its literal adoption by an amendment, and the canons of interpretation which nearly all tribunals which administer the statute have to it, as a remedial and benificent law whose spirit of equality should be extended by liberal constructions, I think no such exception to the operation of this clause should be set up by judicial implication. A suspension of payment should not be excluded because it had commenced before its passage. 2 N. B. R. 123; 3 N. B. R. 86; 2 Abb. 243.

I know of no precedent for giving a purely remedial statute a wholly prospective operation, unless there is some

In re Dupee.

thing in its language or nature that imperatively demands it. The general rule is quite the other way.

It seems to us, however, that this case requires no retrospective application of the amendment. The suspension continued for months after it was adopted. It is none the less a suspension afterwards, because there was also one before.

Must a creditor commence proceedings within six months from the first suspension of commercial paper? Would not the petition be sustained by showing that the debtor had fraudulently suspended within six months, even though it commenced beyond that time? Is the suspension an indivisible act that once committed is not continuing? The law is full of analogies to the contrary. Every fourteen days' suspension, no matter how often repeated or how long continued, are but successive acts of bankruptcy, and the suspension by the respondents in this case, after the amendment, we must hold to be within it.

Decree below dismissing petition reversed and ordered that an adjudication of bankruptcy be entered.

DON M. DICKINSON, for creditors.

HAUS, for debtors.-December, 1871.

EGGLESTON & KLEIN

UNITED STATES DISTRICT COURT-MASSACHUSETTS.

The district court sitting in bankruptcy has a right to recall a final decree granting a discharge to a bankrupt upon application made during the term of court at which the decree was passed.

It seems that the court has the power to do this after the term has ended. This power will be exercised in a case in which counsel opposing the discharge was prevented by a sudden and overpowering accident from being present at the hearing, if it shall be made to appear that the opposing creditors were in fact prevented by the accident from presenting their case, and if they believe they had, and have, a good case upon the merits, showing fraud in the bankrupt.

In re J. E. DUPEE.

In this case the firm of Stephen, Hill & Stevens, creditors of the bankrupt, filed specifications of objection to his dis

.

In re Dupee.

charge and a day was set, by notice of the debtor, agreed to by the creditors, for a hearing before the court, neither party having asked for a jury. On the day appointed, the debtor attended, and just before the adjournment of the court asked for his discharge, and made proof of the notice and agreement. The creditors not appearing, the order was passed and the discharge was issued in due form. Soon after, and within the same term, the creditors filed a petition setting forth. that they were contesting and intending to contest the discharge, and that their counsel was unavoidably prevented from being present or from informing them in order that they might obtain a postponement. They therefore prayed that the order might be rescinded and the discharge recalled. The debtor appeared and opposed the motion.

W. W. WARREN, for petitioners; G. A. SOMERBY and W. N. MASON, for debtor.

LOWELL, J.-There is nothing in the bankrupt act which bears directly upon the case, excepting section thirty-four, authorising the court to set aside a discharge for certain causes and for certain circumstances, one of which is that the creditor asking for such reversal, had no knowledge of the facts before the discharge was granted, a circumstance which these petitioners cannot truly allege. They therefore invoke the power which they say every court has to vary or annul its decree when justice requires it.

This power is denied by the bankrupt. No decisions. were referred to by either party, excepting those in the southern district of New York, in which the court had re-heard a case after refusing a discharge. The power of the court does not seem to have been brought in question in those cases; nor does it appear very clearly that any final decree had been made in them before the re-hearing. In this case a final decree was rendered under section thirtytwo, and a certificate thereof was given, and the case in bankruptcy closed. This would seem to be the termination

In re Dupee.

of the jurisdiction which by section one is to last until the close of the proceedings in bankruptcy. Still, I think the court must have the same inherent power as all other courts to recall its own decrees, or to vary or annul them as justice may require. All the courts claim and exercise this power when it is the only remedy for the party aggrieved. It has been admitted, in criminal as well as in civil cases, that the court may vary its judgment and impose a different sentence at any time during the same term. Com. v. Weymouth, 2 Allen, 144, and cases cited.

In admiralty, the time and mode of opening a final decree in a defaulted action are regulated by a general rule of the supreme court; but this is not understood to take away the right to re-hear cases not falling within the rule. 2 Conk. Adm. 360.

It is generally conceded that the judgments of a court of common law may be reversed, altered or amended during the term; and the modern cases put no such limit upon the power but assert the right of any court to amend its decrees in its discretion, at any time. No matter how closely in the opinion of judges the exercise of this right ought to be confined, the discretion appears to be admitted. Stickney v. Davis, 17 Pick. 169; Janvrin v. Smith, 1 Sprague, 13; Northwestern Insurance Co. v. Hopkins, 14 A. L. Reg. 44; the Monarch, 1 W. Rol. 21; the Fortuna, 4 Rob. 278; Chase v. Scales, 10 M. & W. 488; the New England, 3 Sumner, 506; the Martha, B. & H. 171.

The power of the court appears to me to be clear, and whether it is limited to the term is immaterial in this case. It was admitted that a sudden and overpowering accident prevented the attendance of the creditors' counsel at the hearing, and this seems to me to present a case where if injustice has been done, and there is no other remedy, the court ought to reverse its own decree. It does not appear to be a case for the supervisory power of the circuit court, because this court has committed no error, and I do not see that there is any other remedy than the one now asked for.