Professional service of an attorney and counselor at law are not
property within the meaning of par. 2, § 17 of the Bankruptcy Act
of 1898, as amended in 1903, excepting liabilities for obtaining
property by false pretenses from the general release of the
discharge in bankruptcy.
In view of the well known purpose of the Bankruptcy Act,
exceptions to the operation of a discharge thereunder should be
confined to those plainly expressed.
196 F. 359 affirmed.
The facts, which involve the construction of the Bankruptcy Act
and the effect of a discharge in bankruptcy, are stated in the
MR. JUSTICE McREYNOLDS delivered the opinion of the Court.
The question for determination is whether the professional
services of an attorney and counselor at law are property within
the meaning of Par. 2, § 17, of the Bankrupt Act (30 Stat. 544,
550), as amended in 1903 (32 Stat. 797, 798), which excepts from
the general release of a discharge "liabilities for obtaining
property by false pretenses or false representations." The
essential facts, in the words of the circuit court of appeals, are
these (196 F. 360):
Page 236 U. S. 559
"On June 28, 1906, the defendant, Harry K. Thaw, was indicted
for murder committed in the City of New York. Briefly stated, the
complaint alleges that, in order to secure the services of the
plaintiff as chief counsel, the defendant represented that he was
the owner of an interest of at least $500,000 in the estate of his
father, and had an annual income of $30,000 in his own right. That,
relying upon these and other representations, the plaintiff
consented to act as counsel for the defendant, and performed
services for him in that capacity which were worth the sum of
$60,000 over and above all payments. The complaint charges that all
of these representations were false and made with fraudulent
intent. The defendant, among other defenses, pleaded in a
supplementary answer his discharge in bankruptcy by the District
Court of Pennsylvania, dated December 29, 1910. To this the
plaintiff demurs, insisting that the discharge is insufficient in
law, the plaintiff's cause of action being liabilities for
obtaining property by false representations."
The trial court, following Gleason v. Thaw,
185 F. 345,
overruled the demurrer and dismissed the complaint; the appellate
court, upon the same authority, affirmed the judgment (196 F.
Gleason v. Thaw, supra,
came before the Circuit Court
of Appeals for the Third Circuit upon a petition to review the
final order of the district court staying an action brought by
Gleason on the same indebtedness here involved, and presented the
identical question of law now before us. The court answered it in
the negative, and among other things, in an opinion by Judge Gray,
"The very ingenious and forceful argument presented to this
court by the petitioner for review is founded mainly upon the
"the right to command services of the value of $80,000 is
property; the services also are property; the test is value, not
degree of intangibility. . . . "
Page 236 U. S. 560
"That the word 'property' is nomen generalissimum,
asserted by the petitioner, is not to be denied, but no more is it
to be denied that its meaning may be restricted not only by the
application of the maxim noscitur a sociis,
but by the
purpose for which it is used, or by its evident use as a word of
art, or by its use in a technical sense. The very generality of the
word requires restriction. . . . There are, however, well
considered decisions of the highest authority, in which, from the
viewpoint of the particular case, personal rights and liberties are
to be included within the meaning of the word 'property.' . . .
Such cases, however, are far from saying that services actually
rendered under a supposed contract are themselves property which
have been taken fraudulently from the possession of the one who has
rendered the service within the meaning of that word as used in the
section of the Bankruptcy Act now under consideration."
The accurate delimitation of the concept "property" would afford
a theme especially apposite for amplificative philosophic
disquisition, but the bankrupt law is a prosy thing, intended for
ready application to the everyday affairs of practical business,
and when construing its terms, we are constrained by their usual
acceptation in that field of endeavor. The word "property," without
restriction, occurs more than seventy times in the Act. Not once
does it plainly refer to professional services, and, except in very
few instances, to include them within its intendment would produce
a patent absurdity. Reference to the following provisions will
suffice to indicate the sense of the word therein. Section 1(15)
declares one shall be deemed insolvent
"whenever the aggregate of his property, exclusive of any
property which he may have conveyed, transferred, concealed, or
removed, . . . shall not, at a fair valuation, be sufficient in
amount to pay his debts."
Section 3a provides that
"acts of bankruptcy by a person
Page 236 U. S. 561
shall consist of his having (1) conveyed, transferred,
concealed, or removed, or permitted to be concealed or removed, any
part of his property with intent to hinder . . . or (2)
transferred, while insolvent, any portion of his property to one or
more of his creditors with intent to prefer,"
etc. Section 50 provides, in respect of trustees' bonds,
"(d) the court shall require evidence as to the actual value of
the property of sureties; . . . (f) the actual value of the
property of the sureties, over and above their liabilities and
exemptions, on each bond, shall equal at least the amount of such
And § 60d
brings the two things into sharp contrast
"If a debtor shall, directly or indirectly, in contemplation of
the filing of a petition by or against him, pay money or transfer
property to an attorney and counselor at law, solicitor in equity,
or proctor in admiralty for services to be rendered, the
transaction shall be reexamined by the court on petition of the
Congress, we think, never intended that property in the
paragraph under consideration should include professional services.
At most, it denotes something subject to ownership, transfer, or
exclusive possession and enjoyment, which may be brought within the
dominion and control of a court through some recognized process.
This is certainly the full extent of the word's meaning as employed
in ordinary speech and business, and the same significance attaches
to it in many carefully prepared writings. The constitutions of
many states provide that all property shall be taxed, but it has
never been supposed that this applies to professional services.
We do not overlook, nor do we intend to qualify, what this Court
has said in other cases. Our sole present concern is with the
interpretation of a particular statute; the scope and purpose of
constitutional limitations are in no way involved -- they depend
upon considerations of a wholly different character.
Page 236 U. S. 562
In view of the well known purposes of the Bankrupt Law,
exceptions to the operation of a discharge thereunder should be
confined to those plainly expressed, and while much might be said
in favor of extending these to liabilities incurred for services
obtained by fraud, the language of the act does not go so far.
The court below reached a proper conclusion, and its judgment