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138 F. 637

In re Chandler

Seventh Circuit Court of Appeals

Decided April 11, 1905.)

Seventh Circuit Court of Appeals · decided 1905-04-11

Petition for Revision of Proceedings of the District Court of the United States for the Northern District of Illinois. In Bankruptcy. Petition to review and revise in matter of law. On October 27, 1902, the bankrupt was discharged from his debts by the court below. On October 23, 1903, a petition was filed by William H. Rhodes, John Gray, and Edward G. Pauling to revoke the discharge upon certain grounds therein stated.

2 counsel of record

Relies on In re Chandler

Good law ✅— No negative treatment on recordhow we know

Opinion by J. Otis Humphrey · Decided 1905-04-11

How this case has been cited

Cited by 25 later decisions — most recently June 2014 · most notably Stanley v. Vahlsing (1987), In re Servis (1905)

8 federal appellate · 12 district ·

70190519101920193019401950196019701980199020002010decided

Later decisions citing this case, by decade. The current decade is in progress, and our corpus holds fewer opinions from the most recent years, so the latest bars are undercounted — not a real decline.

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¶1Bankruptcy — Petition foe Revocation of Discharge — Sufficiency.

¶2An averment in a petition for revocation of the discharge of a bankrupt merely that petitioners are “creditors” of the bankrupt is insufficient to show that they are “parties in interest,” entitled to object to the discharge or to file such petition under Bankr. Act July 1, 1898, c. 541, § 14b, 30 Stat. 550, as amended by Act Feb. 5, 1903, c. 487, 32 Stat. 797 [ü. S. Comp. St. Supp. 1903, p. 411]. The petition must show that they had provable debts which were affected by the discharge.

¶3[Ed. Note. — For cases in point, see vol. 6, Cent. Dig. Bankruptcy, § 709.]

¶4Petition for Revision of Proceedings of the District Court of the United States for the Northern District of Illinois.

¶5In Bankruptcy. Petition to review and revise in matter of law.

¶6See 135 Fed. 893.

¶7On October 27, 1902, the bankrupt was discharged from his debts by the court below. On October 23, 1903, a petition was filed by William H. Rhodes, John Gray, and Edward G. Pauling to revoke the discharge upon certain grounds therein stated. The only allegation in the petition with respect to the character of the petitioners is “that they are creditors of Frank R. Chandler, who has heretofore been adjudicated a bankrupt.” To the petition a demurrer was interposed, and sustained by the District Court, and the petition dismissed. The proceeding here is to review and revise that ruling of the District Court.

¶8Frank H. Culver, for petitioners.

¶9George Burry, for respondent.

¶10Before JENKINS and BAKER, Circuit Judges, and HUMPHREY*, District Judge.

¶11HUMPHREY, District Judge.

¶12Section 14b of the bankruptcy act of July 1, 1898, c. 541, 30 Stat. 550, as amended by Act Feb. 5, 1903, c. 487, 32 Stat. 797 [U. S. Comp. St. Supp. 1903, p. 411], provides that objections to discharge of bankrupts may be made by “parties in interest.” The averment in the petition that the objectors are creditors is not such a statement as shows to the court *638that the petitioners are “parties in interest,” within the meaning of the law. The petition does not make such a showing that the court can say that the rights of the petitioners were affected by the discharge. No facts are averred which would justify the legal conclusion that the petitioners are “parties in interest.” It is not averred that they were creditors at the time of the bankruptcy. The character of their debt is not shown. It is not averred that their debt was provable in bankruptcy or was proved in the proceedings. The debt or debts they represent, from all that appears from the petition, may have been created since the discharge, or they may have become purchasers of the debts which were discharged, without right to attack the discharge. We are of opinion that the petition should have shown that the petitioners had at the time provable debts against the bankrupt, which were affected by the discharge of the bankrupt. Otherwise they are not “parties in interest,” within the meaning of the statute.

¶13A somewhat analogous case may be found in the statute for the removal of causes from the state to the federal court. The statute provided for the removal of a suit in which there shall be a controversy between citizens of different states, and it was ruled by the ultimate tribunal that, in order to confer jurisdiction upon the federal court, the petition filed in the state court must not only show that the parties at the time of filing the petition had a diverse citizenship, but that such diverse citizenship existed at the time of the commencement of the suit; that such objection to the jurisdiction is available at any stage of the cause, and might be raised by the party filing the faulty petition. So, here, it may well be that the petitioners are creditors of the bankrupt; but it may also well be that they were not creditors at the time of the discharge, and in no way entitled to contest that discharge. Allegations of such facts are necessary to a good petition, and their omission is fatal. This conclusion renders it unnecessary to consider the other questions arising upon the record and discussed at the bar.

¶14The decree is affirmed.

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