U.S. Supreme Court
Birkett v. Columbia Bank, 195 U.S. 345 (1904)
Birkett v. Columbia Bank
Argued October 28, 1904
Decided November 28, 1904
195 U.S. 345
Actual knowledge of the proceedings contemplated by section 17 of the Bankruptcy Act is a knowledge in time to avail a creditor of the benefits of the law and to give him an equal opportunity with other creditors, and not a knowledge that may come so late as to deprive him of participation in the administration of the affairs of the estate or to deprive him of dividends.
This is an action on a promissory note for $750. The defense is discharge in bankruptcy. The making of the note chanroblesvirtualawlibrary
was admitted, and the only question presented is the effect of the discharge.
The facts as found by the court are: plaintiff in error and one Calvin Russell, who died before the commencement of this action, were partners, doing business under the name of Russell & Birkett, and in that name made and delivered to the Manhattan Railway Advertising Company a promissory note for $750. The latter company indorsed the note to defendant in error, of which Russell & Birkett had knowledge before its maturity. On the April 13, 1899, the firm of Russell & Birkett and plaintiff in error, upon their own petition, were adjudicated bankrupts in the United States District Court for the Northern District of New York, and were discharged September 12, 1899. The claim of defendant in error was not scheduled, either as a debt of the firm or of plaintiff in error, in time for proof and allowance with the name of the defendant in error, though defendant in error was known, at the time of filing the schedules, to be the owner and holder thereof by plaintiff in error, and that defendant in error had no notice or actual knowledge or other knowledge of the proceedings in bankruptcy prior to the discharge of the bankrupts. No notice of the proceedings in bankruptcy was at any time given to defendant in error by or by the direction of the bankrupts or either of them. It was decided that the claim of defendant in error was not barred by the discharge in bankruptcy, and judgment was directed for defendant in error. chanroblesvirtualawlibrary