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IN RE KNEPPER

November 15, 1935

In re KNEPPER


The opinion of the court was delivered by: COOPER

COOPER, District Judge.

Consolidated Gas Company of New York, a creditor of the bankrupt, obtained an order to show cause why "an order should not be made re-opening the above entitled proceedings and vacating the discharge of the bankrupt therein and why such other and further relief should not be granted as may be just in the premises."

The bankrupt filed his voluntary petition with schedules in this court on June 6, 1934, and was adjudicated the same day. The petition alleged: "That he has resided (or has resided or has had his domicile) for the greater part of six months immediately preceding the filing of this petition at 1852 Eastern Parkway, Schenectady, N.Y."

 The matter was referred to the referee in Schenectady. The schedules list Consolidated Gas Company as a creditor having two separate claims, and give its address as 4 Irving Place, New York City.

 Notice of the first meeting of creditors was sent to all scheduled creditors according to the affidavit made by the secretary of the referee, including Consolidated Gas Company at the above-stated address. Such notice was sent in an official postfree envelope having this statement in the upper left-hand corner:

 "U.S. District Court,

 "Office of Referee in Bankruptcy,

 "Schenectady, Saratoga, Warren & Washington Counties,

 "214 State Street,

 "Schenectady, N.Y."

 The schedules show heavy liablilities and no assets save $200 of wearing apparel, claimed to be exempted, and life insurance policies having a cash surrender value of $6,237, payable to a daughter-in-law, which were said to be subject to loans and claimed to be exempt.

 The Consolidated Gas Company has filed no claim.

 Petition for discharge was filed July 9, 1934, and notice of application for discharge made returnable September 1, 1934.

 The secretary of the referee makes affidavit that she mailed notice of the application to all creditors in the same kind of official post-free envelope, including the Consolidated Gas Company at No. 4 Irving Place, New York City, N.Y.

 No objections to discharge were filed, and the discharge was duly granted.

 After one year from the date of the discharge the bankrupt moved in the New York Supreme Court to have the Consolidated Gas Company judgment discharged of record.

 Thereupon, the Consolidated Gas Company made this application.

 The pending application is made upon the verified petition of the judgment creditor, the affidavits of Henry H. Harwood, counsel for the petitioning gas company, Henry H. Keegan, an investigator of New York City, William H. Jackson, an investigator of Schenectady, and Charles W. Eckel, an election commissioner of the county of Schenectady. Later there was submitted the affidavit of Henry H. Boden, file clerk in the law department of the gas company.

 All these affidavits go to support the contention that the residence of the bankrupt was New York City and not Schenectady, except that of Boden, which states: "That all notices received by the Consolidated Gas Company concerning bankruptcy proceedings instituted by creditors (debtors) of said company are filed under his supervision and control of the Law Department of said Company. That your deponent has personally searched the bankruptcy files of said Company and that no notice in the matter of the petition of Herman Knepper to be adjudged a bankrupt is in the said file."

 The opposing affidavits are those of the bankrupt, his sisted, Satie Felson, and his nephew Martin, who all say that he resided at 852 Eastern Parkway, Schenectady, N.Y., and the affidavit of Irving L. Lees, who was attorney for the bankrupt in the motion in the New York Supreme Court to have the gas company judgment discharged of record.

 Lees states that in the Supreme Court proceedings of October 1, 1935, Henry A. Harwood "did not deny that notice of the bankruptcy proceedings had been obtained by the Consolidated Gas Company and went on to specifically state that they had received it, but that in all probability it had been misplaced, lost or overlooked," and that when the affiant and said Harwood left the court after the adjourned day October 15, 1935, "said attorney for the Consolidated Gas Company (Harwood) again reiterated the statement that the notice of the bankruptcy had been received by the Consolidated Gas Company."

 If this application to reopen the bankruptcy proceedings is controlled by section 15 of the Bankruptcy Law (11 U.S.C.A. § 33), it must be denied.

 That section is as follows: "§ 33. The judge may, upon the application of parties in interest who have not been guilty of 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 graud 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."

 The application was not made within a year; there is no allegation that the discharge was obtained by fraud; nor that the actual facts did not warrant a discharge.

 The question whether or not there was undue laches depends largely upon whether or not the creditor received notice of the first meeting of creditors or of the application for discharge. This is discussed in another connection later herein.

 There is a plain inference from the moving affidavits that the bankrupt was guilty of graud in filing his petition in bankruptcy in the Northern District in which Schenectady is located instead of New York were it is claimed he resided, but the fraud interded in section 15 above is probably fraud in obtaining the discharge. In re Hoover (D.C.) 105 F. 354, 5 A.B.R. 247; In re Weintrob (D.C.) 263 F. 904, reversed on other grounds in John B. Ellison & Sons v. Weintrob (C.C.A.) 272 F. 466.

 It is not, however, necessary to determine that question. Even if fraud were charged, the one-year provision of section 15 is an unsurmountable bar in obtaining the discharge, and ...


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