in accordance with the form submitted, and place the notices in franked envelopes furnished by the clerk. These envelopes containing the notice and addressed to the respective creditors were then sent by the bankrupt's attorney to the Clerk of the Court who mailed them under his franking privilege. About the time the undersigned Referee took office on January 1, 1942 this practice was changed and the Referee now makes an order fixing the time within which objections could be filed, prepares and mails the notices to creditors himself.'
Bankruptcy Act Sec. 58, sub. c, 11 U.S.C.A. 94, sub. c, as amended by the Chandler Act reads as follows: 'All notices shall be given by the referee unless otherwise ordered by the judge. Any notice required by this title may be waived in writing by any person entitled thereto.'
I find no modification of this rule by the Court in this case, nor do I find any waivers of the notice. Under the statute the clear duty of giving all notices was on the Referee and no one else unless otherwise ordered by the Court. That the then Referee and the then Clerk conceived some other method of sending out notices and attempted to enforce the same by their orders or directives, it seems to me to be entirely aside from the point. It was the Referee's job and he had no right nor authority under the law to side-step it or to attempt to delegate it to another. The bankrupt cannot be said to be at fault in failing to comply with an order that was in direct contradiction of the statute.
Prior to the amendment of Section 2, subdivision a(8) of the Bankruptcy Act of 1938, 11 U.S.C.A. § 11, sub. a(8), the provision for reopening reads ' * * * and reopen them (estates) whenever it appears they were closed before being fully administered;'. The clause now reads ' * * * and reopen estates for cause shown;'. As stated by the Court in Re Simmer, D.C.S.D. Cal., 63 F.Supp. 488, 490, 'The effect of the change is to give greater power to the bankruptcy court in reopening estates.'
In speaking of the provision of the Chandler Act making the adjudication an automatic application for discharge, in a concurring opinion in Cohen v. Keller, 2 Cir., 108 F.2d 495, 496, Judge Clark said: ' * * * The committee reporting the bill through Congressman Chandler stated specifically that the new provision 'removes the troublesome and often harsh limitation of time within which the bankrupt may make' his application; it continued with a criticism of the 'very serious hardship' which had made the bankrupt lose the benefit of the entire proceeding itself through some oversight on his part or on that of his counsel. H.R. Rep. No. 1409, 75th Cong., 1st Sess. (1937) p. 28.'
In Re Farrow, D.C.S.D. Cal., 28 F.Supp. 9, referring to the same section of the Act, the court said:
' * * * The effect of the change is thus stated in Moore's Bankruptcy Manual, 1939, Sec. 14.01, page 55: '(a) Subdivision (a) confers a new privilege upon persons other than corporations. The adjudication operates as an application for a discharge. Thus in all non-corporate cases the provision protects the bankrupt from oversight in applying for a discharge and tends to prevent intentional delay by a fraudulent bankrupt until the creditors have lost interest and are less likely to oppose a discharge. The provision for a waiver avoids the necessity of a formal hearing where the bankrupt does not desire a discharge.'
' * * * A discharge, which releases the bankrupt of his debts, and bars action on them, is a legal right to be denied only if the bankrupt is guilty of one of the acts, which the Bankruptcy Act makes ground for denial. * * * Provisions for discharge are interpreted liberally in favor of the bankrupt.'
The Chandler Act did nothing to impair this legal right of the bankrupt, on the contrary it did a lot for him in relieving him of the burden of formally requesting a discharge with the consequent loss of its beneficent effects if he failed to make timely application therefor. At the moment of his adjudication, his application for discharge was of record.
In view of the complete failure of the Referee to follow the express provisions of the Act in the matter of sending out notices to creditors, I find ample good cause for the reopening of this estate. The matter will have to be referred again to the Referee for a determination on the merits, namely, should bankrupt's application for discharge be granted?
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