In re Watrous , 29 F. Cas. 419 ( 1876 )

BROWN, District Judge.

By Rev. St. § 507S, proof of debt “shall be made by the claimant testifying of his own knowledge, unless he is absent from the United States, or prevented by some other good cause from testifying, in which case the demand may be verified by the attorney or authorized agent of the claimant, testifying to the best of his knowledge, information, and belief, and setting forth his means of knowledge.” General order 34 provides that when the deposition is made by an agent, the reason the deposition is not made by the claimant in person must be stated. The section above referred to evidently contemplates that the claimant in deposing to the debt must testify “of his own knowledge,” and, upon general principles of law, the existence of a debt must be proved by some one having personal knowledge of the fact. In this case, as it appears that the creditor has no personal knowledge of the debt in question, the deposition of her attorney would be necessary, at least to supplement her own; but if the creditor is absolutely ignorant of the existence of the debt, and the agent has personal knowledge of all the facts necessary to make proof of it, I see no reason to require the deposition of the principal. Better “cause from testifying,” within the language of the section, can hardly be imagined than entire ignorance of the matters required to be sworn to. I assume, in this connection, that the attorney is able to swear to the present existence of the debt, either from recent admissions of the bankrupt, or otherwise, and to negative the idea that payment has been made. I agree with the register, that there must be proof of a continuing indebtedness at the date of the bankruptcy, and of its amount.

It is not perceived that a rule, which will relieve a large class of creditors from the necessity of making oath in person, as required by the statute, is any objection to such ruling, if it conduces to the convenience of business, and does not invite the commission of frauds. By section 50S3, “when a claim is presented for proof before the election of an assignee, and the register entertains doubt of its validity, or the right of the creditor to prove it, and is of opinion that such validity or right ought to be investigated by the as-signee, he may postpone the proof of the claim until the assignee is chosen.” By section 50S1, “the cotut may, on application -of the assignee, or of any creditor, or of the bankrupt, or without any application, examine upon oath the bankrupt, or’ any -person tendering. or who has made proof of a claim, * * * and reject all claims not duly proved, or where the proof shows the claim to be founded in fraud, illegality, or mistake.” These provisions are deemed adequate to protect the estate against the proof of fraudulent claims.

The authorities upon this point are not numerous, but I find none which conflicts with the position here taken. In the Case of Whyte [Case No. 17,606], it was held that the fact ’ that the agent was better acquainted with the facts than his principal, did not render' his deposition alone admissible as prtfof. No reason was given in that case for proof of debt by the agent, except the fact that the creditor was absent in the state of Ohio, and the agent had a power of attorney from his principal, authorizing him to transact any business on his behalf. It will readily be seen that the ruling in that case does not control the one at bar, as it appeared that the principal had knowledge of the facts necessary to be set forth in the deposition. In the case of Me-Kinsey v. Harding [Id. 8,866], the assignees moved to strike out certain proofs made by' an attorney, because he did not show any reason why the creditor could not have made the deposition in person; that the attorney did not testify to the best of his knowledge, information, or belief, nor did he set forth his means of knowledge as to said claims. The court held that the informality in the proof objected to did not avail, for the reason that the witness had sworn positively of his own knowledge. This case goes much further than we are required to hold in the one under consideration; and I should hesitate to follow it, if the question were directly presented. In the case of In re Barnes [Id. 1,012], the learned judge for the district of Massachusetts, in speaking of causes from testifying, observes: ' “If an attorney be acquainted with the facts of his own knowledge, it has been held that he may testify without proving the creditor is absent, etc.; but I am speaking of one who proposes to depose only upon information and belief. The law requires the oath of some person having knowledge, and the creditor himself is presumed to have it; and, unless he is absent, or in some way prevented from testifying, no one can do so for him, unless it be a person having actual knowledge.”

Under the English bankrupt law (general rule 6S), “the affidavit may be made by the principal, or by any agent, or any clerk, or other person in his employment; but if the affidavit is made by an agent or clerk, it shall state that he is authorized by the creditor to make the affidavit, and that it is within his own knowledge that the debt was incurred for the consideration stated, and that to the best of his knowledge and belief the debt still remains unpaid and unsatisfied.” Although, of course, this rule has no direct bearing upon the administration of our own bankruptcy system, it may be entitled to some weight in determining the correctness or propriety of a proposed practice. If the register is satisfied from an inspection of the deposition that the agent has personal knowledge of the contracting of the debt, and its continued existence at the date of the bankruptcy proceedings, and that the creditor has no knowledge of these facts, and can only swear to them on information and belief, and there are no suspicious circumstances connected with the claim, I think he ought to receive and file the deposition.