2. BANKRUPTCY 410-DISCHARGE-EXTENSION OF TIME FOR FILING APPLICATION.

The right of a bankrupt to apply for a discharge is in no way affected by the progress of the settlement of his estate, and the fact that no trustee was appointed within a year after adjudication does not entitle him to an extension of time for filing his application on the ground that he was "unavoidably prevented" from filing it within that time.

In Bankruptcy. In the matter of C. Edward Snell, bankrupt. On application for extension of time to file application for discharge. Denied.

This is an application by the bankrupt for an order extending the time in which to file his application for a discharge, more than 18 months from the date of adjudication having expired, but the application for such extension being made within 19 months of the adju dication.

Harry J. Mosher, of New Berlin, N. Y., for petitioner.

RAY, District Judge. [1] The above-named bankrupt, C. Edward Snell, was duly adjudged a bankrupt on the 12th day of January, 1916. This application for an order extending the time in which a petition for a discharge may be filed to August 12, 1917, or 19 months from the date of adjudication, was presented August 6, 1917, or 18 months and 25 days after adjudication. The petition is dated July 10, 1917, but was verified by the bankrupt July 30, 1917, and presented to the court 7 days later.

There is no claim that the neglect to file at an earlier day was caused by any failure of the mails or neglect of any post office employé or any neglect of any officer of the court. Does the application come too late? Bankruptcy Act, § 14, subd. "a," provides that:

"Any person may, after the expiration of one month and within the next twelve months subsequent to being adjudged a bankrupt, file an application for a discharge in the court of bankruptcy in which the proceedings are pending; if it shall be made to appear to the judge that the bankrupt was unavoidably prevented from filing it within such time, it may be filed within but not after the expiration of the next six months."

The bankrupt contends that under this provision of the Bankruptcy Act he could not file his application for a discharge until the expiration of one month from his adjudication, and that he had 12 months after the expiration of such one month, or 13 months from his adjudication, in which to file his application for a discharge, and that in case he was unavoidably prevented from filing it, as he claims he was, within such 13 months "(such time)," then the court may permit such application for a discharge to be filed within the next 6 months, that is, within 19 months from the adjudication. This construction. disregards the plain wording of the law, viz. "and within the next twelve months subsequent to being adjudged a bankrupt, file an application for a discharge," etc. He may not file his application within one month of the adjudication, but may within the 12 months next subsequent to or following the adjudication, not the 12 months next following or subsequent to the expiration of the month following ad

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judication, and during which month he cannot file his application for a discharge. This is the construction placed on this subdivision of section 14 of the Bankruptcy Act by most of the text-books and nearly all the decisions on the subject. Collier on Bankruptcy (10th Ed.) 317,

says:

"The application should be filed after one month and within 12 months subsequent to the adjudication."

Black on Bankruptcy says:

"As to the limitation of 12 months, this gives the bankrupt a year and a day from the date of adjudication, and no longer, unless the time is extended by the judge for cause shown as above stated."

He also says, citing several cases:

"And the limitation of the statute is imperative, and not merely directory. If the 12 months have expired without the filing of an application (saving in the case where the bankrupt was unavoidably prevented from acting in time), it is not within the discretion or authority of the court to entertain the application or to grant a discharge, but its jurisdiction and authority in this particular are at an end."

In 3 Remington on Bankruptcy, 2280, § 2423, the author says:

"The bankrupt may file his petition for a discharge at any time after the expiration of a month and before the expiration of a year from the adjudication of bankruptcy."

This author also says (volume 3, § 2427):

"The bankruptcy court has no jurisdiction to grant a discharge on a petition filed after the expiration of 18 months from the date of adjudication. A discharge granted on a petition for a discharge filed thereafter is null and Void."

He cites In re Knauer, 13 Am. Bankr. R. 503 (D. C.) 133 Fed. 805; In re Wagner, 15 Am. Bankr. R. 101 (D. C.) 139 Fed. 87; In re Von Borries, 21 Am. Bankr. R. 849 (D. C.) 168 Fed. 718; In re Loughran, 32 Am. Bankr. R. 330 (D. C.) 215 Fed. 271; Bacon v. Buffalo Cold Storage Co., 27 Am. Bankr. R. 736, 193 Fed. 34, 113 C. C. A. 358; In re Richter, 27 Am. Bankr. R. 215 (D. C.) 190 Fed. 905. He also cites, contra, In re Walters (Otto E.), 31 Am. Bankr. R. 565 (D. C.) 209 Fed. 132.

Loveland on Bankruptcy, vol. 2 (4th Ed.) p. 1295, § 712, says, citing In re Knauer (D. C.) 133 Fed. 805, 13 Am. Bankr. R. 503, In re Lewin (D. C.) 135 Fed. 252, 14 Am. Bankr. R. 358, In re Anderson (D. C.) 134 Fed. 319, 14 Am, Bankr. R. 221, In re Fritz (D. C.) 173 Fed. 560, 23 Am. Bankr. R. 84, and In re Wolff (D. C.) 100 Fed. 430, 4 Am. Bankr. R. 74:

"A petition filed more than 12 months and less than 18 months after the adjudication will not be heard unless leave to file it has been granted by the court after hearing the reasons for delay ex parte and without notice to creditors, and this leave will not be granted by a nunc pro tunc entry more than 18 months after the adjudication."

The text-writers do not discuss the question on its merits, but simply state the decisions cited by them as the law. The statements

in these text-books are little more, if anything more, than a digest of the cases bearing on the subject.

If the true construction of the words "subsequent to being adjudged a bankrupt" in the law is that they were placed there solely to prevent the filing of a petition for a discharge before adjudication, which adjudication follows a voluntary petition as matter of course, then the words "within the next twelve months" would clearly refer to the words "after the expiration of one month," and the true reading would be "any person, subsequent to being adjudged a bankrupt may, after the expiration of one month and within the next twelve months, file an application." etc. As the section is written in the statute it is, I think, quite clear that the Congress intended that the bankrupt should be debarred from filing his petition for a discharge for one month after his adjudication as a bankrupt, giving that time for his creditors to make inquiry and examine the bankrupt and witnesses prior to the filing of an application for a discharge. Then comes the fixing of the time, limitation of time, within which the application for discharge must be filed, and then the right to an extension of time by order of the court in case he (the bankrupt) is unavoidably prevented from filing his application within the 12 months next succeeding the adjudi

cation.

[2] This has been the generally adopted and accepted construction of the statute. For some years I have steadily adhered to this construction and have repeatedly refused to depart therefrom, and have held that applications for a discharge not filed prior to the expiration of the 12 months succeeding the adjudication come too late, and that applications for an extension of time in which to file an application for a discharge must come to the court or judge within the 18 months succeeding adjudication, or be on their way in time to reach the court within such period and delayed in reaching the judge by the act or acts of some person or persons other than the bankrupt or his attorneys or agents or some unavoidable accident. Here the only excuse offered by the bankrupt for not filing his application in time is that the referee failed to notify him or his attorney of his decision as to the necessity of appointing a trustee, which appointment the referee finally decided not to make. But delay by the court or referee in conducting the bankruptcy proceedings proper or in deciding questions relating to the due administration of the estate arising therein affords no excuse for not filing the application for a discharge within the time fixed by statute. The decision or determination of such questions in no way affect the right of a bankrupt to file his application for a discharge. Says Loveland, vol. 2, p. 1296 (4th Ed.):

"It will be observed that the time within which an application [for a discharge] may be made is not dependent at all upon the progress made in the administration of the estate. Assets may or may not have come into the hands of the trustee. The estate may have been wholly or partly distributed. It is immaterial whether any dividend has been declared or not."

So it is wholly immaterial whether or not a trustee has been appointed. If the bankrupt has not been guilty of any of the acts or omissions barring a discharge, he is entitled to file his application for a discharge

and have it granted after the expiration of one month from his adjudication, no matter what the condition of the proceedings as to the administration of the estate may be.

The application for an extension of time in which to file the petition for a discharge must be denied on both grounds.

So ordered.

SIMON BORG & CO. et al. v. NEW ORLEANS CITY R. CO. et al.

(District Court, E. D. Louisiana. August 2, 1917.)

"THREE-FOURTHS OF ALL STOCKHOLDERS." The provision of La. Act No. 100 of 1898, requiring a vote of "threefourths of all the stockholders" of each corporation to effect a consolidation, means three-fourths of the number of shares and not of the holders, where by their charters each share of stock is entitled to one vote. 2. CORPORATIONS 194-STOCKHOLDERS' MEETINGS LEGALITY OF ACTION.

Stockholders of a corporation who were present and voted at a stockholders' meeting cannot attack the validity of the action taken, on the ground that the officers who called the meeting were not legally qualified. 3. STREET RAILROADS 51-CONSOLIDATION-REVIEW BY COURTS.

A consolidation of street railway companies, effected by the vote of a large majority of the stock, held not so inequitable on its face as to warrant intervention by a court of equity, at suit of minority stockholders, before its effect on their interests can be known.

4. EQUITY 38 RETENTION OF JURISDICTION FOR FUTURE RELIEF,

In a suit by minority stockholders to enjoin the carrying out of a plan for consolidation of the corporation with others, where injunction is denied on the ground that the consolidation has been lawfully approved by a majority of the stockholders, the court may properly retain jurisdiction to grant any equitable relief to which complainants may appear to be entitled after the effect of the consolidation is known.

In Equity. Suit by Simon Borg & Co. and others against New Orleans City Railroad Company and others. Decree for defendants.

Lazarus, Michel & Lazarus and David Sessler, all of New Orleans, La., for plaintiffs.

Howe, Fenner, Spencer & Cocke and McCloskey & Benedict, all of New Orleans, La., for defendants.

FOSTER, District Judge. In this matter the pleadings are too voluminous to be concisely stated. The case is this: The New Orleans Railway & Light Company (hereafter called the Railway Company) is a holding company, owning nearly all the stock, say from 97 to 100 per cent., of the following named corporations, to wit, the New Orleans City Railroad Company (hereafter called the City Company), the Orleans Railroad Company, the New Orleans & Carrollton Railroad, Light & Power Company, the New Orleans & Pontchartrain Railroad Company, the St. Charles Street Railroad Company, and the Jefferson & Pontchartrain Railway Company. These companies constitute together the street railway system of the city of New Orleans.

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J

The Railway Company also owns nearly all the stock of the New Orleans Lighting Company and the New Orleans Gas Light Company. All of these companies maintain their corporate existence and the legal ownership of their franchises and physical property. The Railway Company itself owns a few miles of track, mainly extensions of the franchises of the other companies. The Railway Company operates the property of the City Company by virtue of a lease entered into on March 31, 1902, which runs to December 31, 1955, approximately the date of the expiration of the City Company's franchises. The plaintiffs and interveners together own 650 shares of the common stock of the City Company and 8 shares of its preferred stock, less than 1 per cent. The Railway Company owns over 97 per cent., the balance being held by some 36 individual stockholders.

On May 22, 1916, the meetings of stockholders of the said street railroads were held, and a plan of consolidation under the provisions of Act 100 of the General Assembly of Louisiana of July 12, 1898, was agreed to. At the meeting of the City Company plaintiffs appeared through counsel, and protested against the adoption of the plan without avail, and thereafter the bill was filed.

The bill prays that the consolidation agreement be held null and void, and for an injunction to prevent its execution. By a supplemental bill the cancellation of the lease from the City Company to the Railway Company and the appointment of a receiver to take charge of and operate the property is asked. By a second supplemental bill the prayer for the annulment of the lease is abandoned, but a receiver to superintend the lease is asked for. The interveners join with the plaintiffs and ask the same relief.

There are two main questions to be considered: First, is the consolidation illegal under the law of Louisiana? Second, is the proposed exchange of stock so inequitable as to warrant the interference of a court of equity?

[1] On the first question, it is contended on behalf of plaintiffs that, under the provisions of Act 100 of 1898, the consolidation was required to be approved by a three-fourths majority of the stockholders, and this means that the vote is to be counted per capita, regardless of the number of shares held by each stockholder; and, further, if the vote could be by shares, under the provisions of the law of Louisiana (section 7 J., Act 267 of 1914), the Railway Company could not legally vote more than 10 per cent. of the stock held by it, and therefore the consolidation was not approved by a three-fourths majority of the stockholders counted either way. There is no doubt that three-fourths of the stockholders, per capita, did not vote in favor of the consolidation.

Act 100 of 1898, par. 2, § 1, reads:

And that no such consolidation shall be consummated or completed until it and the terms and conditions thereof shall have been approved by three-fourths of all the stockholders of each of such consolidated companies.

There are other acts, to wit, Act 39 of 1877, Act 38 of 1882, and Act 259 of 1916, amending Act 100 of 1898, all dealing with public