Keppel v. Tiffin Savings Bank

Citations

• 197 U.S. 356
• 25 S. Ct. 443
• 49 L. Ed. 790
• 1905 U.S. LEXIS 1185

Syllabus

<p>The word “surrender,” as generally defined, may. denote either compelled or voluntary action. In § 57g of the Bankruptcy Act of 1898, providing that the claims of creditors who have received preferences shall not be allowed unless such creditors shall surrender their preferences, it '« unqualified and generic and hence embraces both meanings.</p> <p>A penalty is not to be readily implied and a person subjected thereto unless the words of the statute plainly impose it, and courts will not construe the provision so as to cause the word “surrender,” as used in § 57g of the Bankruptcy Act, to embrace only voluntary action and thus read into the statute a qualification conflicting with equality of creditors and also creating a penalty not expressly or by implication found in the statute. Such a construction would create a penalty by judicial action alone and would also necessitate judicial legislation in order to define the character and degree of compulsion essential to prevent the surrender in fact from being a surrender within the meaning of the section. The creditor of a bankrupt, who has received a merely voidable preference, and who has in good faith-retained such preference until deprived thereof by the judgment of a court upon a suit of the trustee, can thereafter prove the debt so voidably preferred.</p>