In re Lansley

MANTON, Circuit Judge.

William J. Lansley was adjudicated a bankrupt on May 15, 1924. Under section 14 of the Bankruptcy Aet (Comp. St. § 9598) he had one year within which to apply for his discharge. During this period he was examined as to his assets under section 21a of the Bankruptcy Act (Comp. St. § 9605). On May 17, 1925, he petitioned for an extension of his time to apply for his discharge. The reasons advanced for his being unavoidably prevented from having applied for his discharge theretofore are stated to be that “he was unavoidably prevented from filing an application for a discharge within twelve months after such application for the following reasons: He was without sufficient funds to pay the expenses of such proceeding and the counsel fees incident thereto, it appearing that the trustee or some of the creditors intend to oppose the application; he also has been out of the jurisdiction almost continuously since the adjudication, except during such times as the attorney for the trustee desired to examine him concerning his property; such absence being tor the purpose of attempting to secure employment, which efforts up to the present time have been without success; and finally, he is informed that the attorney for the trustee desires to continue the examination of your petitioner under and pursuant to the provisions of the Bankruptcy Aet; that such examinations have been had from time to time over the period of the entire year since the adjudication and are still pending; that he desired to file such application and secure a discharge.”

They are insufficient on their face and do not support the order entered thereon. The statute permits an adjournment of the time only when it is made to appear to the judge before whom the application comes that the bankrupt was unavoidably prevented from filing his application within such time. See section 14 of the Bankruptcy Act. The excuse that he was without sufficient funds to pay for the expense of such proceedings and the counsel fees incident thereto is based upon no pleaded facts to establish such a conclusion. Such an excuse, as stated, is insufficient, for the reason, which we recognize in Re MacLauchlan (C. C. A.) 9 F.(2d) 534 , “that drafting and filing a petition for discharge is a simple, short, and inexpensive affair.” Indeed, it appears in this record that the bankrupt advanced $200 to his attorney for services in this proceeding, $1,000 in the litigation in Delaware, and $500 for the litigation in New Jersey, all arising out of his present bankruptcy. The reason stated, that he was without the jurisdiction of the court almost continuously since the adjudication, is answered by the fact that he alleges he was within the jurisdiction many times, owing to his being examined in the bankruptcy proceedings. This excuse is insufficient in law. In re Balzer (D. C.) 12 F.(2d) 94 . Assuming he was without the jurisdiction of the court, he might have signed his petition without the state, and have presented it within the statutory period. The reason advanced that the attorney for the trustee desired to continue his examination from time to time over the entire year does not appear to have been a prevention.

The court has power under section 15 of the Bankruptcy Aet (Comp. St. § 9599) to revoke discharges within one year after they are granted, but apart from such statutory power it has the inherent power to vindicate its own rights and to protect against deception and fraud. In re Louisville Nat. Banking Co., 158 F. 403 , 85 C. C. A. 513 ; In re Applegate (D. C.) 235 F. 271 ; In re Goldenberg & Halbert (D. C.) 286 F. 292 ; In re Bimberg (D. C.) 121 F. 942 . The order of June 15th was improvidently granted, and it follows that the order of August 28, 1925, falls with it and must be vacated, unless the *473 petitioners were guilty of laches on this motion.

But there were no laches. The discharge was granted August 28, 1925. The attorney for the petitioners, by affidavit, states that he did not learn of it until the end of September, 1925. The bankrupt was without the jurisdiction of the court and could not be found. On January 25, 1926, the proceeding to set aside the discharge was started by the service of an order to show cause upon the bankrupt’s attorneys. It was objected that the bankrupt was not personally served. He was located in Florida and substituted service, both personal and by registered mail, was then made, while he so remained.

.Such delay, under these circumstances, does not amount to laches, which would require us to deny the present application.

Orders reversed.