c. The confirmation of a composition shall discharge the bankrupt from his debts, other than those agreed to be paid by the terms of the composition and those not affected by a discharge.

Congress has endeavored throughout this act to provide that estates shall be settled as quickly as possible 1 and has accordingly enacted that no debtor under any circumstances shall be granted a discharge if he fails to apply for it within eighteen months.

Section 14 differs from many laws relating to discharges by not requiring the assent of creditors. It is also peculiar in the fact that there is nothing in the act which refuses a discharge to corporations which were formerly excepted from such provisions.3

It would seem extremely doubtful whether a corporation can be granted a discharge. A discharge is granted to a bankrupt so that he may not be harassed all his life by his old creditors without power to retrieve his standing. It is supposed that a debtor who is freed from his old debts may start afresh and become a valuable member of society. There is no such reason for freeing a corporation from its liabilities. It appears from a consideration of the disqualifications as expressed in § 14 that Congress intended only natural persons to be subject to a discharge.

The petition for a discharge must state briefly the proceedings in the case and the acts of the bankrupt done under the orders of the court or imposed on him by the act. The form prescribed seems hardly to comply with the terms of this rule, but it may be taken as the expression of the Supreme Court as to what is necessary under it.

Notice of the hearing on the discharge is to be published and the creditors are to be given notice by mail.

They are

entitled to ten days' notice. In this instance, the notice is given by the clerk.2

The judge only is to pass on the application for a discharge, but he may refer it to the referee to report on the facts relating to the whole matter or any specified part of it. The judge will not consider the evidence, but will refer it to the referee to report on.4 5 We have already seen that it is the better practice in case of compositions to set a day on which the creditors may appear and a further day for the hearing. The rule is the same with regard to discharges. The creditors must file specifications of their reasons for opposing the discharge within ten days after the day set for appearance.

There was a conflict of authority under the late law whether a creditor who had not proved his debt was entitled to be heard in opposition to the bankrupt's discharge. The phrase "parties in interest" in this section and sections 13 and 15 would include such a creditor if he had a provable debt which would be affected by the discharge, because his right of action against the debtor would be destroyed by the discharge. Such a creditor would be entitled to notice of the hearing (§ 58 a (2)), as the word "creditor" means any one owning a provable claim (§ 1 (9). The expression seems broad enough to cover any one whose rights would be in any way affected by the discharge.

The acts which prevent a discharge being granted are much fewer than under the last law. They are (1) offences punishable by imprisonment and (2) fraudulent destruction or concealment of books, or fraudulent neglect to keep them, if done in contemplation of bankruptcy. The offences above referred to are the concealment of property from the trustee and making a false oath in relation to a bankruptcy proceeding (§ 29 b (1) and (2)).

The last disqualification was contained in Revised Statutes,

1 Act of 1898, § 58

2 Form 57.

8 Rule XII. (3).

4 Re Wolfstein, 1 N. B. N. 202.

5 Supra, § 474.

6 Rule XXXII
7 Ib.

8 Supra, § 462.

§ 5110,1 and the concealing of property was a reason for refusing a discharge also. The Act of 1867 provided that the destruction or falsification of books with intent to defraud creditors should be a disqualification,2 and also the neglect by a merchant or tradesman to keep proper books.3

The property must have been concealed knowingly and fraudulently (§ 29 b (1)). Concealing includes secreting (§ 1 (22)), and it would therefore seem that this offence would be committed if the property were secreted by hiding the legal title by fraudulent transfers.4

It is to be noted that the debtor is not refused a discharge unless the concealment has taken place after he is a bankrupt, which means after he has filed a petition or a petition has been filed against him (§ 1 (4)), so that decisions under the last law as to concealment which took place before bankruptcy are not in point.

It is a concealment of property to leave out of the schedule property which has been conveyed in fraud of creditors. The act of concealment will be committed at the time he omits the property from his schedule. In the case of an involuntary bankrupt this will be after he has been adjudged a bankrupt, but a voluntary bankrupt must file the schedule with his petition (§ 7 a (8)). The latter would not seem to come within the terms of § 29 b (1).

A false oath may have been given by a bankrupt at any time during the proceedings; for instance, in relation to the schedule. This is the same disqualification as that provided by Revised Statutes, § 5110, which enumerated the occasions on which if a false oath was taken it would be a bar. The oath must be wilfully and knowingly false."

The neglect to keep books mentioned in § 14 b (2) is a different thing from the failure of a merchant to keep proper

1 Formerly § 29 of the Act of 1867, 14 Stats. 531.

2 Ib.

3 § 29, 14 Stats. 531, R. S. § 5110. 4 Supra, § 35.

5 Re Rathbone, 1 N. B. R. 536, Fed. Cas. No. 11,583; Re Hill, 1 N. B. R. 431, Fed. Cas. No. 6483.

6 Formerly § 29 of the Act of 1867, 14 Stats. 531.

7 Re Beardsley, 1 N. B. R. 304. Fed. Cas. No. 1183; Re Wyatt, 2 N. B. R. 288, Fed. Cas. No. 18,106; De Martin v. De Martin, 85 Cal. 76.

books of account, which was formerly a reason for refusing a discharge. Here the gravamen of the offence consists in the fraudulent intent. It would seem also that it would be necessary to prove that the act was done in contemplation of a proceeding under the bankrupt act. The word bankruptcy means more than insolvency. The other two grounds for disqualification relate, as we have seen, to acts done after the person was bankrupt, and consist not of a fraud on the creditors so much as a fraud on the administration of the act. This offence should be given a similar construction. This disqualification relates to all persons and not merely tradesmen. The questions which arose under the last act as to who were tradesmen 3 do not therefore arise now.

A mutilation or falsification of books with fraudulent intent will defeat a discharge (§ 1 (22)).

Though the assent of creditors is not necessary, it seems that any payment or security given to a creditor in order to enable the bankrupt to get a discharge would invalidate it. This might be done by bribing a creditor to conceal some wrongful act of the bankrupt known to him, such as the commission of an offence.

It is not a sufficient reason for opposing a discharge that the bankrupt owed debts created by fraud, because such debts are not affected by the discharge.5

A creditor who opposes a discharge or a composition must file a specification in writing of the grounds of his opposition.6 The specification must be explicit, so as to give the bankrupt the opportunity to meet the case presented against his discharge. It may be amended. The form is prescribed by the Supreme Court. The burden of proof lies on the creditors.10

Form 59 prescribes the terms of the order of discharge when one is granted to a bankrupt.

It has been ruled in some districts that a discharge will be refused a voluntary debtor applying in forma pauperis, if he can not pay the costs of the court officers.1

If the objections to a discharge are frivolous and vexatious, the objecting creditor may be required to pay costs.2

§ 478. Act of 1898. SEC. 15. DISCHARGES, WHEN REVOKED. -a. 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 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.

It was generally held under Revised Statutes, § 5120,3 that a discharge could be revoked not only on the ground that the debtor had fraudulently obtained it, but because he had been guilty of some act which would have prevented a discharge.4 The phraseology of the present section is different, and it seems, especially in view of the closing words of the section, that the only ground for revoking a discharge is that it was obtained through the fraud of the bankrupt. The application must be brought within a year.

Even though the discharge has been fraudulently obtained it cannot be revoked unless the bankrupt has done an act which would prevent a discharge. This fact shows that the fraud intended by this section means a fraud by which some of the disqualifications for a discharge are concealed.

1 See 1 N. B. N. 48, 132. But see Re Langdon, Fowler & Co., 1 N. B. N. 232. 2 Re Wolpert, 1 N. B. N. 238.

8 Act of 1867, § 34, 14 Stats. 533. 4 Supra, § 425.