Zavelo v. Reeves,
227 U.S. 625 (1913)

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U.S. Supreme Court

Zavelo v. Reeves, 227 U.S. 625 (1913)

Zavelo v. Reeves

No. 299

Argued January 7, 1913

Decided February 24, 1913

227 U.S. 625


In the absence of any proof to that effect in the record, a promise by the bankrupt made between the petition and the discharge to pay the balance of his provable debt to one of his creditors who advanced money to enable him to effect a composition without obtaining any undue preference over the other creditors will not be regarded as an act of extortion or attempted extortion in violation of § 29b 5 of the Bankruptcy Act, prohibiting acting or forbearing to act in bankruptcy proceedings.

A discharge, while releasing the bankrupt from legal liability to pay a provable debt, leaves him under a moral obligation that is sufficient to support a new promise to pay it.

The theory of bankruptcy is that the discharge does not destroy the debt, but does destroy the remedy.

Page 227 U. S. 626

As a general rule, the discharge, when granted, relates back to the inception of the proceeding, and the bankrupt becomes a free man as to new transactions as of the date of the transfer of his property to the trustee.

This Court, by promulgating General Orders and Form in Bankruptcy, construed § 63a 4 as confining the discharge to provable debts existing on the day of the petition and having it relate back thereto.

Under the Bankruptcy Act of 1898, an express promise to pay a provable debt is good although made after the petition and before the discharge.

Obligations created after the filing of the petition and before the discharge are not provable under § 63, and therefore are not included in the discharge.

As § 12 of the Bankruptcy At requires that money for effecting the composition be deposited before the application to authorize it, it contemplates that the bankrupt may acquire such money by use of his credit.

171 Ala. 401 affirmed.

The facts, which involve the validity of an express promise by the bankrupt to pay a provable debt made after the petition and before the discharge, are stated in the opinion.

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