' I1S014 3B/ ^nxmW Caui ^rlynol Ktbraty KF1524.B8T""""""'"""-"'"'^ ^MiniImII^,?,!,S,?,f?'''"P'«'y ^Including the Nat 3 1924 019 293 863 The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924019293863 THE LAW OF BANKRUPTCY INCLirDINCt THE NATIOML BANKRUPTCY LAW OF 1898, THE EULES, FORMS AND ORDERS OF THE UNITED STATES SUPREME COURT, THE STATE EXEMPTION LAWS, THE ACT OF 1867, ETC., ETQ, ILLUSTILA.TED BY THE BANKRUPTCY DECISIONS UNDER THE ACT OF 1867. p^P^,^ BY EDWIN C^BRANDENBURG, LL.M., Eduob of " The Sdpplbmbnt to thb Uhitko States Eetised Statutes," " Thb OpnnoHS OF tke Attobiiijy Gsnebal," abs obk of the Betisebs of Boutieb's Law Dictionabt, etc., etc.; ih charoe of Bank- BOPfTCY MATTBBS in THE DbFABTHENT OF JUSTICE, AND "MviMmKn. OF THE BAB OF THB UNITEO States Supreme Coubt and the distbict of colcubu. CHICAGO; CALLAGHAN AND COMPANY. 1898. ' , ( ( CopyniGHT, 1898, BY K C. BRANDEKBUEG. STATE J0T3BNAL PRINTINO COMPAHT, PBINTEBS and STBRBOTYPaBS, UisTBOs, ■Via, PEEFAOE. The numerous requests from judges, lawyers and business men for authoritative construction of the various provisions of the recent Federal Bankruptcy Law, which have been referred to the author for disposition in the exercise of his official function, and the obvious necessity for a comprehen- sive and complete treatise on the, subject of Bankruptcy, have actuated him in the preparation of this work. Believing the demand of the legal profession of to-day to be for cases rather than comments, the author has care- fully avoided criticisms and comments except where clearly justified by authoritative decisions. In considering the pro- visions of the Federal Bankruptcy Act of 1898, great care has been observed in giving references to co-ordinate prin- ciples and analogous provisions of the present Federal Bank- ruptcy Law and that of 1867, to avoid the labor and necessity of frequent cross-references. "With that end in view, under every section and subdivision of the law of 1898, the author has placed analogous provisions of the law of 1867 and the decisions of all the courts based thereon. It is believed the decisions of the courts upon questions arising under the general Bankruptcy Law of 1867 will be persuasive, if not controlling, in the disposition of questions arising under the many parallel provisions of the law of 1898. For that reason all the decisions of all the courts, in controversies under the law of 1867, have been specially and IV PEBFAOE. carefully digested for this -work, resort being had to the de- cisions themselves rather than to text-books and digests of others, as is frequently done. The interesting and valuable results attending this course, as found throughout this work, attest its importance and, in a measure, compensate for the laborious task. The author takes this opportunity of publicly expressing his thanks to George H. Gorman, Esq., for the preparation of the exemption laws of the various states, and to acknowl- edge his obligation to Irving TJ. Townsend, Esq., Edward F. Colladay, Esq., and "W. Spencer Armstrong, Esq., of the "Washington bar, for valuable assistance rendered. Because of the great labor incident to digesting the bank- ruptcy cases, and the short time afforded in which to place in the hands of the public a work containing the rules, orders and forms of the Supreme Court of the United States before the rules themselves should become operative, some errors and omissions will doubtless be found, for which the author asks the indulgence of the critic. E. 0. B. WASmNGTON, D. C, December, 189& OONTEI^rTS. TITLE L Page, Bmtebjtptcts in GENEBAIi ..•••(••I TITLE n. The National Bankruptct Law .....* 11 Ch. 1. Sec 1. Definitions 11 Ch. 2. Sec. 3. Creation of courts of bankruptcy and their juria- diction .l? Ch. 3. Bankrupts 88 Sec. 8. Acts of bankruptcy ..•••• 83 4 Who may become bankrupts . • • • 49 6. Partners 65 6. Exemptions of bankrupt . . • . ; . . 76 7. Duties of bankrupts . . .... 85 8. Death or insanity of bankrupts .... 93 9. Protection and detention of bankrupts ... 95 10. Extradition of bankrupts ..... 93 11. Suits by and against bankrupts .... 99 12. Compositions, when confirmed .... 114 13. Compositions, when set aside .... 123 14. Discharges, when granted ..... 124 15. Discharges, when revoked ..... 145 16. Co-debtors of bankrupts ..... 148 17. Debts not affected by a discharge ... 149 Ch. 4> Courts and procedure therein . . . -• • . 156 SEa 18. Process, pleadings and adjudications ... 156 19. Jury trials 171 20. Oaths, affirmations ...... 174 21. Evidence 175 23. Eeference of cases after adjudication . . . 191 28. Jmrisdiction of United States and State courts • 193 34 Jurisdiction of appellate courts .... 203 25. Appeals and writs of error 205 36. Arbitration of controversies ..... 210 27. Compromises 211 38. Designation of newspapers ..... 211 29. Offenses 213 VI CONTENTS. TlTLZ Et, Ch. 4 — continued. SEa 30. Rules, forms and orders . . 31. Computation of time ... 32. Transfer of cases .... CJh. 6. Officers, their duties and compensation SEa 33. Creation of two offices . 34 Appointment, removal and districts of 35. QuaHflcation of referees 36. Oaths of office of referees . . 37. Number of referees ... 38. Jurisdiction of referees . . 39. Duties of referees .... 40. Compensation of referees . . 41. Contempts before referees . . 43. Records of referees . . . 43. Referee's absence or disability 44. Appointment of trustees . . 45. Qualifications of trustees . . 46. Death or removal of trustees . 47. Duties of trustees .... 48. Compensation of trustees . . 49. Accounts and papers of trustees . 50. Bonds of referees and trustees 51. Duties of clerks .... 53. Compensation of cleriis and marshals 53. Duties of attorney-general . 54. Statistics of bankruptcy proceedings Ch. 6. Creditors Sec. 55. Meetings of creditors . . . Voters at meetings of creditors , Proof and allowance of claims . Notice to creditors Who may file and dismiss petitions Preferred creditors ... referees 56. 57. 53. 59. 60. Ch. 7. Estates Sec. G1. Depositories for money 63. Expenses of administering estates 63. Debts which may be proved . 6i Debts which have priority . . 65. Declaration and payment of dividends 66. Unclaimed dividends . 67. Liens .... 68. Set-offs and counter-claims 69. Possession of property . 70. Title to property . Time when act takes effect Proceedings under State Insolvency Laws Page. 216 217 218 219 219 219 230 221 231 231 226 231 233 235 237 237 240 241 243 253 253 254 256 258 259 259 260 260 267 271 305 310 334 348 348 343 351 363 373 377 877 405 411 413 458 458 CONTENTS. VU TITLE m. Page. The National BANKEtrPTor Law of 1867 and Amendments . 461 TITLE IV The National Bankeuptct Law of 1898 , . . • • 617 TITLE V. State Exemption Laws . . . . ..•.,'• 649 TITLE VL General Ordees in Bankruptcy ..•••• 691 Forms in Bankruptoy ...•••••• 604 TABLE OF OASES OITED. Beferencea are to pages. Abbe, In re, 74, 133, 81L Abel, Jr., et aL v. Thomer, 343. Able & Buckman, Ass., In re, 827. Adams, In re, 178, 334, 363. Adams v. Meyers, 113, 288. Adler, Ex parte, 81. Aiken v. Edrington, Sr., et aL, 79, 847, 351, 416, 433. Alabama & Chattanooga B. B, Co. V. Jones, 55, 159, 320. Albreoht, In re, 149. Alden, In re, 437. Alden v. BalLroad Co., 199. Alderdioe, Ass., v. Bank, 185, 837, 343. Aldred, In re, 899. Alexander, In re, 35, 863, 44a AUen V. Massey, 36, 247. Allen & Co. v. Ferguson, 152. Allen & Co. V. Montgomery et al., 31, 37, 102, 382, 416. Allen et aL, In re, 133. AUen V. Ward, 103, 106, 380. Allen V. Whittemore, Ass., 435. Alsberg, In re, 85, 96. Alston V. Eobinett, 189, 147, 300. American Plate Glass & Fire In- siirance Co., In re, 384 American Waterproof Cloth Co., In re, 339. Ames, Ex parte, 339, 331, 346, 355, 388. Amsink et aL t. Bean, Ass., 57, 58, 61, 68, 64i 73. Anderson, In re, 285, 800, 417. .Andrews, Ass., v. Dole et aL, 110. Andrews & Jones, In re, 31. Angier, In re, 95, 430. AnketeU, In re, 54, 138. Ansonia Brass & Copper Co. v. New Lamp Chimney Co., 198, 280. Ansonia Brass & Copper Ca v. Pratt, Ass., 113, 417. AntisdeL In re, 138, 131, 132, 133, 138, 308, 399. Antrims v. KeUy et aL, 37, 328. Appleton V. Bowles et aL, 303, 346. Appleton V. Stevers, Ass., 880. Appold, In re, 866, 883, 416. Arohenbrown, In re, 31, 81, 91, 105, 181, 187, 151, 169, 808, 339. Arledge, In re, 897, 436. Armstrong, In re, 13, 404. Armstrong v. Eickey Bros., 202, 341, 884 Arnold, In re, 399, 861. Ashley, In re, 417. AspinwaU, In re, 186. Asten et aL, In re, 364 Atkinson, In re, 39. Atkinson v. Kellogg, 61, 68, 64, 374 Atlantic Mutual Life Insurance Ca, In re, 29, 46, 171. Attomey-GeneraL Opinion of, 456. Atwood, Ass., et aL t. Kittel et aL, 452, Angenstein, In re, 146, 308. August et aL, In re, 131, 45& TABLE OF OASES CITED. Augustine, Ass., v. MoFarland, 104. Austin et aL, In re, S21. Austin V. Markham, 141, 15i8i Austin V. O'Reilly, Ass., eta, 850, 368. Avery, Ass., t. Haokley, Ex'x, 330. Avery v. Johann, In re, 814, 387. Avery, Ass., eta v. Eyerson et aL, 440. B. Babbitt v. Burgess, 185, 204, 433, 455. Babbitt v. Walbrun & Co., 35, 184, 403, 456. Bachman, In re, 450. Bailey, Ass., v. Coinings, 80. Bailey, Ass., v. Loeb & Bro., 363, 391. Bailey, Ass., v. Nicholas et aL, 276. Bailey, Ass., v. Weir, 113. Bailey, John W., In re, 175. Bailey, In re, 24 Baker, In re, 186, 335, 34A, 882. Bakewell, In re, 274 Baloh, Ex parte, 355. Baldwin, In re, 393. Baldwin v. Hale, 7, 9, 10. Ballou, In re, 193. Baltimore County Dairy Assooisr tion. In re, 171. Bamberg et aL v. Stern, 97. Bank of Columbia v. Overstreet et aL, 880. Bank of Madison, In re, 871, 426, 431. Bank of North Carolina, In re, 290, 375. Bank of North Carolina v. Dewey, 356. Barber v. Sterling, 151. Barbour et aL v. Priest, Ass., 348. Barker v. Smith et aL, 86, 87, 837, 379, 440. Barman et aL, In re, 833, 43a Barnard et aL, Ass., v. Norwich Ss Worcester B. B. Co. et aL, 401, 416, 433. Barnes' AppeaL 369, 392. Barnes, Asa, v. XTnited States, 303, 372. Barnes v. Moore, 92, 151. Barnewall & Gaynor, Ass., v. Jones, Dunn & Crawford, 6i, 169, 446. Barrett, In re, 241, 268. Barron et aL v. Morris, Ass., 383. Barrow, In re, 21, 27, 199, 43& Barry v. Barry, 209. Bartenbaoh, In re, 95, 393, 870, 394 440. Bartholomew, Ass., v. "West et aL, 80, 81, 85. Bartlett, Ass., v. EusseU, 884. Bartusch, In re, 226, 363. Bashford, In re, 131. Bashore et aL v. Bhoads et aL, 410. Bass, In re, 78. Bassett et aL v. Baird, 278. Batohelder, In re, 826, 829L Batchelder v. Low, 151. Batohelder v. Putnam, 35, 881. Battey, In re, 93. Bayly et aL, In re, 117. Baxter et aL, In re, 71, 317, 250, 874 287, 350, 359, 429. Beal, In re, 428. Beale, In re, 137. Beall V. Harrell et aL, 44& Beals et aL, In re, 24 Bean v. Brookmire, 114 Bean v. Brookmire & Eankin, 116, 120, 446. Bean, Ass., v. Lailin, 454 Bear & Steinberg, In re, 430, 441. Beardsley, In re, 89, 135, 484 Beattie v. Gardner et aL, 85, 108, 838. Beckerford, In re, 80. Becket, In re, 132, 144, 26a Beebe v. Pyle, 90, 93, 115. Beecher, Ass., v. Qark et aL, 40a TABLE OF OASES CITED. XI Beede, In re, 81. Beers v. Place et al,, 417, 449. Beeson et aL v. Howard, 141, 166. Beiler, In re, 323. Belcher, In re, 33. Belden, In re, 101, 133, 139. Belden & Cooker, In re, 179. Belden, Ass., v. Smith et aL, 378, 436. Bellls et aL, In re, 138, 183, 186. Benham, In re, 173. Benjamin v. Hart, 208. Bennett et aL, In re, 40, 59, 83, 423. Bennington v. Lowenstein et aL, 380. Benson, In re, 430. Bemhisel v. Firraan, Ass., 333. Berryman v. Allen, 35, 339, 400. Betton V. Valentine, 6. Betts, In re, 84. • Biddle's Appeal, 430. Bidwell, In re, 74 141. Biesenthal et aL, In re, 418, 424. Bigelow et aL, In re, 69, 285, 300, 301, 356, 393, 409. Bill, Ass., V. Beckwith, 173, 196. Bingham v. Claflin, 197. Bingham v. Richmond & Gills, 396. Bininger & Clark, In re, 14. Bjornstad, In re, 84. Black et aL, In re, 11, 14* 41, 336, 344, 399, 417. Black V. Blaze, 200. Black V. McClelland, 287. Black & Secor, In re, 384 BlackweU v. Clay well et aL, 75, 441. Blair et aL, In re, 160. BlaisdelL In re, 236, 250. Blake, In re, 186. Blake v. Alabama & Chattanooga R. R Co., 303. Blake v. Valentine Co., 421, 458. Blandin, In re, 285. Blasdel v. Fowle et aL, 143, 396. Blau V. Broofcmire et aL, 163. Bledsoe, In re, 443. Bloch et aL, In re, 117, 118, 370. Blodgett & Sanford, In re, 30, 84, 243. Bloss, In re, 194, 195, 279, 281, 317. Blue Ridge Railroad Co., In re, 439. Blum V. Ellis, 200, 373, 385. Blumenthal, In re, 56, 90, 135, 137, 139. Bogert et aL, In re, 225, 340, 390. Bolton, In re, 271, 281. Bond, In re, 224 BonesteeL In re, 180, 196, 445. Booth, In re, 433. Booth V. Meyer et aL, 75, 102, 106, 433. Booth V. Brooks, Neely & Co., 341, 343, 404 Boothroyd, In re, 81. Boothroyd et aL, In re, 85, 397. Borst, In re, 97, 139, 274 Boston H. & E. R. R. Co., In re, 21, 103, 165, 169, 218, 313, 331. Bostwick, Ass., v. Foster, 447. Bound, In re, 136. Bousfield & Poole Mfg. Co., In re, 300, 390, 297, 326, 333, 443. Boutelle, In re, 128, 281. Bowie, In re, 22, 104 Bowman v. Harding, 384 Bowne & Ten Eyck, In re, 285, 293, 391. Boyd, In re, 109, 185, 418, 431, Boyle V. Zacharie, 10. Bracken v. Johnston, 104 Brady v. Otis et aL, 403. Braley v. Boomer et aL, 139, 386. Brand, In re, 379, 364 Brandon National Bank v. Hatch, 96, 143. Brandt, In re, 129, 178, 180. Brashear v. West, 9. Bratton v. Anderson, 103. Bray, In re, 330. Breck et aL, In re, 3321. xu TABLE OF CASES CITED. Breok & Schermerhorn, In re, 391, 350, 351, 366, 426. Brent, In re, 128, 340. Brett V. Carter, 332. Brick, In re, 74, 88. Bridgman, In re, 199, 250, 281, 375, 377. Briggs, In re, 412. Brightman et aL, In re, 135, 134. Brinker et aL, In re, 246. Brinkman, In re, 104, 106, 443. Brisco, In re, 130, 269, 381. Bristol, Ass., v. Sanford, 111, 303, 374. Britton v. Payen et aL, 837. Brock V. Hoppook, 184. Brock V. TerreU, 328. Brockway, In re, 136, 137, 177. Brodhead, In re, 398. Broich et aL, In re, 280, 283, 388, 316, 317, 343, 355, 435. Bromley & Co., In re, 179, 181. Bromley v. Goodrich, et aL, 197, 201, 403. Bromley, Ass., v. Smith et aL, 381, 416. Brooke, Ass., v. McCraken, 383. Brookmire & Rankin v. Bean, Ass., 120, 385, 339. Broome, In re, 448. Brown, In re, 45, 81, 146, 358, 361, 367. Brown et aL v. Broach et aL, 139, 154 Brown v. Gibbons, 198, 390. Bruce, In re, 433. Brunquest, Wm., In re, 283, 37& Bryan, Ass., Ex parte, 442. Bryan v. Sims, 444. Bryce et aL, In re, 117, 134 Buchanan, In re, 167, 171, 333. Buchanan et aL y. Smith, 341, Buchstein, In re, 146, 147, 207. Buck V. Winters, Ass., 236. Buckhouse v. Gough, 73. Bucknam v. Dunn et aL, 21, 32, 275, 438. Bucknam, Ass., v, Goss, 342. Buckner v. Jewell et aL, 172, 850, 366. Buckner v. Street, 357. Bucyrus Machine Co., In re, 69. Bugbee, In re, 377, 391, 399, 374 419. Bunster, In re, 135. Burbank v. Bigelow et aL, Ass., Ill, 193. Burdick, Ass., eta v. Jackson et aL, 389, 433. Burfee v. First Nat. Bank of Janes- viUe, 341. Burgess, In re, 133, 137, 340. Burk, In re, 24 128, 133, 281. Burkholder et aL v. Stump, 33, 350. Burhngame, Ass., etc. v. Parce et aL, 197, 346. Burr V. Hopkias, Ass., 298. BurriU, Ass., v. Lawry, 60, 400. Burt & Towne, In re, 392. Burton et aL, In re, 63, 323. _ Buse, In re, 393. Bush, In re, 131, 331. Bush, Appellant, v. Crawford, Ass., 68, 355. Bush V. Lester et aL, 77, 83, 381, 393. Bushey, In re, 339, 309. Butler, In re, 391, 850, 366, 368, 883, 435. Butterfield, In re, 135, 166. Byrd, Ass., v. Harold et aL, 36, 82, 415, 431. Byrne, In re, 65, 66, 73, 139, 399. California Pacific R. E. Ca, In re, 15, 34, 55, 131, 160, 315. Camden Rolling Mill, In re, 334 Cameron v. Canieo & Co., 23, 62. Campbell et aL, Ex parte, 181, 183, 196, 339, 339, 269, 307, 370, 452. TABLE OF CASES CITED. XIU Campbell, Ass., v. Waits et al., 888, 402, 404 Caiiby, Ass., v. McLear, 177, 179, 303, 354 Capelle, Ass., v. Trinity M. E. Church of Chester, 358, 485. Capital Publishing Co., In re, 54, 160, 316. Cardwell v. Insurance Co., 291. Carow, In re, 21, 25, 230, 415, 42a Carpenter, In re, 88, 235. Carr v. Phillips, 48, 412. Carrier & Baum, In re, 146, 17L Carson, In re, 229, 308. Castle, Ass., v. Lee, 344 CatUn, Ass., v. Foster, In re, 408. Catlin V. Hoffman, 40, 385, 343, 384, 402, 404 Cavan et aL, In re, 116, 117. Central Bank, In re, 201. Chamberlain, In re, 302, 315, 368. Chamberlain & Chamberlain, In re, 271, 297. Chandler, In re, 12, 54, 357. Chandler, Receiver, v. Siddle, 8, 458. Chappel, In re, 159. Cheney et aL, In re, 261. Christley, In re, 268. Christman v. Haynes, 345. Citizens' Bank v. Ober, 251, 488, 443. Citizens' Nat. Bank v. Cass et aL, 59, 136, 311, 323. Citizens' Savings Bank, In re, 7, 194, 458. City Bank, etc., In re, 406. City of Harrisburg v. Sherlock, 407, 431. Claflin V. Houseman, Ass., 197, 303. Clairmont, In re, 240, 241. Clancy, In re, 385. ; Clapp & Co., In re, 123, 264 Clark, In re, 125, 181, 339, 350. Clark et aL, In re, 183, 181, 226, 230, 340. Clark & Bininger, In re, 64, 109, 195, 276, 290, 294, 455. Clark, Ass., v. Foss et aL, 456. Clark, Ass., v. Iselin, 37, 38, 42, 333, 836, 344, 378, 401. Clark et aL v. WUson et aL, 350. Classin v. Sohoeneman, 153. Clay V. Smith, 10. Clemens, In re, 53. Clews et aL, In re, 379. Clifton et aL v. Foster et aL, In re, 105. Clinton et aL v. Mayo, 88, 183, 399, 317. Clough, In re, 93, 275. Coan & Ten Broeke Carriage Mfg. Co., In re, 283, 371, 898. Cogdell, Ass., V. Esnim, 113. Cohn, In re, 33, 350. Coit V. Robinson et aL, 130. Coles V. Roach, 155. Colie V. Jamison, 457. Collateral Security Bank v. Fow- ler, Trustee, 108, 109. Collier, Taylor & Co., In re, 66, 73. ColUns, In re, 53, 433. Collins & Ferrington, Ass., v. Bell et aL, 408. Colm, In re, 392. Coknan, In re, 353. Columbia Metal Works, In re, 37, 441. Colwell, In re, 850. Comstock & Co., In re, 11, 31, 187, 359, 397. Comstock V. Wheeler, 336. Condict, In re, 135. Cone, Ass., v. Puroell, 303. ConneU, Jr., In re, 90, 136. Conner v. Southern Express Co., 110, 377. Conover et aL v. Dumahaut et aL, 133, 457. Cook V. Rogers, 9. Cook et aL v. Rogers, etc., 459. Cook et aL v. Tullis, 37, 330. Cook V. Waters et aL, 31, 110, 167, 301, 419, 445, 446. XIV TABLE OF OASES CITED. Cooke, Jay & Co., In re, 70, 73, 181. Cookingham et aL v. Morgan et aL, 288, 328. Cooper, In re, 443. Corey et aL v. Perry et aL, 74 130. Corey v. Eipley, 147, 200. Corner v. Miller et aL, 380. Corn Exchange Bank, In re, 302. ComwaU, In re, 287, 317. Cornwell, In re, 37, 313, 859, 360, 402. Corwin, In re, 147. Cote, In re, 137. Coulter, In re, 38a Court et aL, In re, 61. Cowles, In re, 35, 54. Cox, Ass., V. Wilder et aL, 81, 94 Coxe V. Hale, 32, 42, 113, 810, 313, 337, 351. Cozart, In re, 878. Craft, In re, 41, 160. Cragin v. Carmichael, 447, 448. Cragin, Ass., v. Thompson, 43. Craig, In re, 181, 183. Cram, In re, 293, 296. Cramer, In re, 298, 354 Crane & Co., In re, 189, 236. Crane, Ass., v. Morrison et aL, 67, 451. Crawford, In re, 285, 305, 355. Creditors v. Cozzens & Hall, 29.' Creditors v. Williams, 129, 184, 268. Crockett, In re, 58. Croft, In re, 336. Croft Brothers, In re, 43, U, 85, 136. Crompton et aL v. Conkling, Jr., et aL, 74, 153. Cromwell, In re, 316. Cross, In re, 125. Crossette et aL, In re, 281, 817. Croughwell, In re, 418. Crump, Ass., v. Chapman, 163, 403. Cummlng v. Clegg, 83, 390. Cunningham, In re, 418. Cunningham v. Cady, 188, 228, 278. Curran v. Munger, 344. Currier, In re, 297, 298, 815. Cutter, Ass., etc. v. Dingee, 106, 201. Cutter et aL v. Evans, 104 28a D. Daggett, In re, 59. Dambman v. White et al, 110, 111, 162, 190, 197, 449. Daniels, In re, 287. Darby, In re, 251. Darby t. Boatmen's Sav. Insb, 40, 888, 453. Darby's Trustees v. Lucas, 343. Darsey v. Mumpford, 80, 150, 281- Davenport, In re, 82, 350. Davidson, In re, 194 297. Davis, In re, 100, 197. Davis, Ass., et aL, In re, 390. Davis V. Anderson, 190, 281, 282, 888, 415, 443. Davis V. Assignee, etc., 439. Davis et aL v. Railroad Ca et aL, 891, 442. Dean, In re, 143, 180, 224 441. Deane, In re, 188, 224 Deane & Garrett, In re, 36, 403. Deckert, In re, 10. De Ford, In re, 228. Deford et aL v. Hewlett, 142, 199. De Forrest, In re, 3. Deighton v. Kelsey et aL, 153. Denny v. Bennett, 7, 9, 10. Derby, In re, 52, 159, 170, 28a Detert, In re, 81. Devoe, In re, 96, 196. Devore, In re, 32, 198, 438. Dewey, In re, 243. Dewey v. Kelton, Ass., 389, 898. Dewey et aL v. Moyer et aL, 140, 143, 146, 152, 153, 191. Dey, In re, 378. Dibble, In re, 41, 826, 334 Dibblee, In re, 211. TABLE OF CASES CITED. XV Dickerson v. Spaulding et aL, Ass., 203, 380. Dickinson, In re, 225, 261. Dickinson v. Adams, 86. DiUard, In re, 170, 394' Dingee v. Becker, 140, 278. Doan Y. Compton et aL, 331. Dodge et aL, In re, 249, 427. Dole, In re, 143, 143. 147, 179, 180, 183, 235, 235. Dole V. Harlow, 413. Dolson et aL v. Kerr, 9. Donahue et aL, la re, 259. Donaldson, Ass., v. FarweU et aL, 418, 457. Doody, In re, 131. Doty, In re, 305. Dow et aL, In re, 67, 184 205, 332, 408, 416. Downing, In re, 66. Doyle, In re, 136, 340. Dresser, In re, 89, 234 Dreyer, In re, 135. Dreyfus, Ex parte, 274 408L Driggs, Ass., v. EusseU, In re, 453. Drisco, In re, 135, 136, 311. Drisko, In re, 311. Drummond, In re, 35. Duerson, In re, 10, 78, 81. Duffield et aL, Ass., v. Horton etaL, 380, 433. Duncan, In re, 818. Duncan et aL, In re, 60, 170. Dundore v. Coats & Broa, 31. Dunkerson & Co., In re, 67, 386. Dunkle et aL, In re, 185. Dunkle & Dreisbaoh, In re, 68, 346, 355. Dnnn, In re, 201. Dupee, In re, 146. Durant, Ass., t. Insurance Co., 78, 434 Duryea, In re, 106. Dusenbury v. Hoyet, 153. Dutcber, Ass., v. Marine Nat. Bank of New York et aL, 251, 416, 428. Dutcher v. "Wright, Ass., 110, 217, 246, 337, 342, 404 Dyke & Marr, In re, 370, 374 E. Earle, In re, 187. Eastman v. Hibbard, 153. Ebersole & MoCarty v. Adams, eta, 459. Ecfort & Petring v. Greely, 13, 39, 40. Eoker v. McAllister, 173, 215, 313, 340, 361, 404 Edith, In re, 394 Edmondson v. Hyde, 397, 431. Edwards, In re, 79. Edwards v. Kearsey, 9. Eidom, In re, 31, 135. Elder, In re, 278. Eldred, In re, 37. Eldridge, In re, 32, 439. Eldridge & Co., In re, 92, 277, 305, 813, 860, 416, 421. Elfelt V. Snow, 106, 120, 134 Ellerhorst et aL, In re, 890. EUerhorst & Co., In re, 386, 874 Elliott, In re, 131. ElHott Felting MiUs, In re, 355. Ellis, In re, 84 880. Emery et aL v. Canal National Bank, 71, 373. Emison, In re, 389. Emver, Ass., v. Van Giessen et aL, 457. Erben, In re, 83. Erwin v. United States, 481. Ess & Clarendon, In re, 58, 59. Estes & Carter, In re, 73, Ettinger, In re, 88, 431. Evans, In re, 355. ' Evans et aL v. GaUantine, 163. Everett, In re, 10. Everitt, In re, 8, 80, 107. Ewing et aL, In re, 131. Exchange Nat. Bank of Columbus V. Harris, Ass., 346. Eyster v, Gafle et aL, 106. XVI TABLE OF OASES CITED. Falkner, In re, 61, 369. Fallon, In re, 290, 318. Faneway, In re, 283, 42a Farish, In re, 79. Farmer et aL, In re, 73, 185. Farmer v. Taylor et aL, 78. Farrar v. "Walker, Ass., et aL, 438. Farrell, In re, 135. Farrin v. Crawford et aL, 35, 44^ 326. Fay, In re, 187. Feinberg, In re, 187. Fendley, In re, 22, 196. Fenton, Ass., v. Collerd, 301. Ferguson v. Peckham, 890, 430. Fernald v. Gay, 7. Fen-y, In re, 90. Field, Ass., v. Baker, 330. Fillingin v. Thornton, 165, 196. Findlay, In re, 166. Finn, In re, 340. Fireman's Insurance Co., In re, 373, 291. First Nat. Bank of Clarion v. Jones, Ass., 14, 185, 334, 345. First Nat. Bank of Troy v. Cooper et aL, 308, 349, 293. Fisher v. Henderson et aL, 338, 399. Fitch V. McGie, 334 Flanagan, In re, 310, 317. Flanagan v. Pearson, 104, 106, 151, 178. Flannagans, Ex parte, 383. Fogarty & Gerrity, In re, 23. Foot et aL, In re, 68, 283, 331. Ford et aL, In re, 325, 273, 356, 409. Foreman, Ass., v. Bigelow, 114. Forsaith, Ass., v. Merritt, 64, 451. Forsyth & Murtha, In re, 31, 68, 296, 344, 345, 855. Fortune, In re, 274 Foster, In re, 36, 340, 346, 87a Foster, Ass., v. Ames, 441. Foster, Ass., v. Hackley, 111, 327. Foster v. Estate of Rhodes, 430l Foster & Pratt, In re, 23. Fourth Nat. Bank of Chicago v. Bank, 870, 402, 416, 427. Fowler, Ass., v. Dillon et aL, 100. Fox V. Eckstein, 38. Fox et aL v. Gardner, 346, 447. Francis & Buchanan, In re, 56. Frank, In re, 268, 269, 290. Frear, In re, 74, 134, 360. Fredenburg, In re, 187, 230, 263. Frederick, In re, 487. Freelander & Gerson v. HoUoman et aL, 33, 114 Freeman, In re, 89, 135. Freeman et aL, Trustees, v. Fort et aL, 454 Friedberg, In re, 137. Friedlob, In re, 273. Frisbie, In re, 180, 316. Frisbie & McHugh, In re, 33L FrizeUe, In re, 180. Frizelle, S. F., In re, 281. Frost, In re, 314, 317, 363, Frost & WestfaU, In re, 69, 355. Frostman et aL t. Hicks et aL, 104, 143. Fuller, In re, 194, 381. Funkenstein, In re, 170. G. Gage et aL v. Gage, 170. Gainey, In re, 351. GuUagher et aL, In re, 455. Gallison et aL, In re, 131, 153, 387. Gardner v. Cook, Ass., 369, 393. Garnett, Ass., Ex parte, 197. Garrett, In re, 84, 105, 153. Garrison, In re, 54, 186. Gates, Ass., v. American et aL, 448. Gattman & Co. v. Honea, Ass., 88, 184, 843, 401, 40a Gay, In re, 188, 840. G«bhardt. In re, 17a TABLE OF OASES OITBD. XVU Gibson, Ass., v. Dobie et aL, 396. Gibson et aL v. Lewis, 285. Gies, In re, 285, 367. Gififord et aL v. Helms et al, 437. Gilbert, In re, 183, 395. Gilbert v. Priest, 197, 203. Gilman v. Lockwood, 10. Glaser, In re, 96. Glenny v. Langdon et aL, 113, 347. Globe Insurance Co. v. Cleveland Insurance Co., 43, 434 Goddard v. Weaver, 103, 384 Goedde & Co., In re, 66. Gold Mountain Mining Co., In re, 383. Goldschmidt, In re, 44 Golson et aL v. Neihoflf et aL, 334 345. Goodall V. Tuttle, 10, 194 202. Goodfellow, In re, 54 169. Goodman, In re, 52. Goodrich v. Wilson, 181, 182, 197, 203, 847. Goodridge, In re, 184 Goodwin v. Sharkey, 97, 103, 425. Goodwin et aL v. Sharkey et aL, 337. Gorden v. Ogden, 209. Gorham, In re, 56, 61, 75, 311. Goss V. Cofan, 435. Grady et aL, Ass., v. Hawthorne, In re, 75. Graham, Ass., v. Stark et aL, In re, 342, 396. Granger & Sabin, In re, 288, 433. Grant, In re, 243. Graves, In re, 433. Graves et aL v. Winters et aL, 53. Gray v. RoUo, 384 409. Greeg v. Wilson, 380. Green, In re, 295. Green Pond R E. Co., In re, 199. Grefe, In re, 128. Gregg, In re, 827, 330, 349. Griffen, In re. 183. Griffin, In re, 84 383. Griffith, In re, 416. Griffith et aL, In re, 60, 63, 170. Griffiths, In re, 389, 433. GrinneU & Co., In re, 279, 300, 371, 388, 391, 437. Griswold v. Pratt, 8. Grover & Baker v. Clinton, 97, 151. Grow, Ass., V. BaUard et aL, 40, 343. Guild V. Butler, 144 148, 153. Gunike, In re, 94 Gunther et aL v. Greenfield, In re^ 110. Gumey, In re, 36, 397, 44& H. Haake, In re, 82, 83, 39L Haas, In re, 239. Haas, Ass., v. O'Brien, 397. Haas & Samson, In re, 343, 367. Haber v. Klauberg et aL, 104 - Hadley, In re, 160, 166, 319. Hafer et aL, In re, 84 349, 387, 449. Hagan, In re, 290, 375. Hale, In re, 98, 444 Haley, In re, 274 HaU, In re, 79, 159, 213, 310. Hall V. Allen, 305. Hall V. Beiss et al., 402. Hall V. ScoveL 437. Hall, Ass., etc. v. Wager & Falea, 14 39, 340, 344 HaU, Ass., etc. V. Waterbury, 112L HaUiburton v. Carter, 140, 151, 154 Hamburger & Frankel, In re, 350, 366. Hamilton, Ass., v. Bank, 457. Hamilton v. Bryant, 155. Hamlin et aL, In re, 61, 63, 130. Hamlin, Ex parte, 123, 124 308, 444 Hammond v. Coolidge, In le, 37, 138, 404 HandeU, Richard, In re, 367. Handlin et aL, In re, 85. xvm TABLE OF CASES CITED. Hanibel et aL, In re, 41, 159, 161, 166, 188. Eanna, In re, 300. Hansbright, In re, 369. Hansen, In re, 135. Hapgood, In re, 433. Harbaugh et aL, In re, 60, 810, 311. Harden, In re, 153, 359. Hardy et al. v. Bininger et aL, 161. Hardy et aL v. Clark & Bininger, 336. Harmanson, Ass., v. Bain et aL, 53, 54, 196, 410, 437. Harrell v. Beall, Ass., 456. Harris et aL, Ex parte, 377. Harrison v. McLaren, 13. HarteL In re, 393. HartbilL In re, 35, 413. Hartbom, In re, 367. Hartough et aL, In re, 59, 318. Harvey, Ass., v. Crane, 339, 343,378. Haskell, In re, 93, 115, 333. HaslieU, Ass., etc. v. IngaUs, 336. HaskiU v. Frye, Ass., 447. Hatcb V. Seely, 379, 381. Hatcher, In re, 169. Hatje, In re, 171, 181, 387, 357. Hauck, In re, 341. Haugbey, Ass., v. Albin, 41, 334 Havens, In re, 340. Havens v. Bank, 300. Hawkeye Smelting Co., In re, 45, 47, 164 Hawkins et aL, In re, 9, 44. Hawkins, Ass., v. Bank, 379. Hawkins v. Learned, 8. Hawortb v. Travis et aL, 80, 83, 383. Hay et aL, In re, 83. Hayden, In re, 39, 433. Hayes v. Dickinson, 416, 433. Hayes v. Ford, 141, 143, 153. Haynes, In re, 98, 339, 363, 375, 377. Hazleton, In re, 96. Heard v. Arnold et aL, 151. Heard v. Jones, 377, 379. Heath & Hughes, In re, 143, 179. Heffron, In re, 333, 334 Heirschberg, In re, 861, 867. Heller, In re, 90. Henkelman, Jackson & Phelps ▼• Smith, Ass., 837, 419. Henry, In re, 63, 369. Henry et aL, In re, 59, 91, 131. Henry v. Lanier, 78. Herdic, In re, 134 137. Herman et aL, In re, 133, 134 Hermann et aL, In re, 371. Herndon v. Howard, 109. Herpich, In re, 835. Herrick, In re, 90, 146. Herrick et aL, In re, 71, 804 374 Herrick & Herrick, In re, 69. Herrman et aL, In re, 375. Herrman & Herrman, In re, 275. Hersey v. EUiott, 416, 437. Hertzog, In re, 93, 313, 360. Hester, In re, 430. Hewett, Ex'r, v. Norton, Ass., 105, 113. Hewitt et aL v. Nortbup et aL, 333. Heyette, In re, 167. Heyl V. Lephen, 308. Hicks et aL, In re, 335, 343, 250, 355. High & Hibbard, In re, 33. Hill, In re, 135. Hinds et aL, In re, 73. Hinsdale, In re, 133. Hirsch, In re, 107. Hiscook, Ass., etc. v. Jaycox & Green, 73, 95, 183, 378. Hitchings, In re, 437, 441. Hoagland, In re, 348, 350, 351, 86a Hobbs, Ex parte, 423. Hodges, In re, 183. Holden v. Sherwood, 104 Holland, In re, 399. Holland, Jr., In re, 195, 413. Holland v. Martin, 151, 863. Holleman v. Dewey, Ass., 356k Holmes et aL, In re, 183. TABLE OF 0ASB3 CITED. yiT Holmes, Ex parte, 370. Holt, In re, 180. Holyoke v. Adams, 149, 153. Holyoke et aL v. Adams et al, 140, 164, 165. Home, The, 118, 148, 393. Home Insurance Co. v. HoUis, Ass., 109, 455. Hook, In re, 377, 38& Hoole, In re, 304 Hoover, Ass., eta v. Wise et aL, 335. Hopkins, In re, 170. Hopkins v. Carpenter et al, In re, 31, 57, 165. Hosie, In re, 284 Hoskins v. Wall, 80. Hotchkiss V. , 197. Houghton, In re, 134, 160, 331. Ho\iseberger, In re, 419. Howard et aL, In re, 68, 383. Howard, Cole & Co., In re, 373. Howard Nat. Bank, Ex parte, 118, 406, 407. Howes V. Macy, In re, 415. Howland, In re, 53. Howland v. Carson, 147, 151, 384 Hoyt, In re, 143, 377. Hubbel et aL, In re, 350. Hubert v. Horter, 104 Hudgins v. Lane & Smithson, 56, 64^ 68, 74 141, 439. Hudson, Ass., v. Adams, 381. Hudson T. Bingham, 139. Hudson, Ass., v. Schwab et aL, 195. HufnageL In re, 103, 350, 366, 886, 415. Hughes, In re, 349. Hughes et aL, In re, 85, 369, 387. Hull, In re, 417. Humble v. Carson, 155, 385. Hummitsh, In re, 89, 135. Hunt, In re, 36, 38, 78, 335, 338, 300, 415. Hunt et aL, In re, 398i o Hunt V. Holmes et aL, 118, 408, 410. Hunt, TUlinghast & Co. v. Pooke & Steere, 56, 59, 93, 313. Hunter, In re, 309. Hurst, In re, 117, 133, 144. Hurst V. Teft, Ass., 113, 391, 433. Hussman, In re, 89, 136. Hutchings et aL v. Muzzy Iron Works, 431. Hyde v. Bancroft & Steiner, 29. Hyde, Ass., v. Cohen et aL, 400, 447. Hyde v. Corrigan, 345. Hyde, Ass., v. Woods et al, 438. Hyman, In re, 336, 361. Hyman et aL, In re, 117, 133. Hymes, In re, 91. Hyslop V. Happock, 33, 158. Independent Insurance Co., In re, 33, 101, 314, 415, 458. Indianapolis, Cincinnati & Lafay- ette E. R. Co., In re, 33, 334 Irons & Coon, In re, 31, 381. Irving, In re, 67, 355. Irving et aL, In re, 104 Irving V. Hughes, 100, 195. Isaacs & Cohn, In re, 68, 359. Isett V. Stixart, 159, 197, 201. Isidor & BlumenthaL In re, 139, 180. Ives et aL, In re, 133, 350, 366. Ives et aL v. Tregent, 443. Jack, In re, 171. Jackson et aL, In re, 78, 335, 330, 239, 343, 373. Jackson, Ass., v. McCuUoch et al, 13, 43, 111. Jackson v. Miller, 377, 419. Jacobs, In re, 131, 340. James, In re, 350, 375, 377. XX TABLE or CASES CITED. James, Adm'x, v. Atlantic-Delaine Co. et aL, 44, 57, 148, 287. Jaycox et al., In re, 304 Jaycox and Green, In re, 30, 376, 378, 290, 395, 303, 856. Jaycox V. Green, In re, 335. Jelsh & Dvmnebacke, In re, 45, 56, 173, 177, 183. Jenkins, Ass., v. Armour et aL,347, 450. Jenkins, Ass., t. Mayer, In re, 333. Jenks, In re, 291, 370. Jenks V. Opp, 140, 187. Jennys v. Bryan, 31, 33. Jerome et aL, Ass., v. McCarter, 106, 431. Jersey City Window Glass Co., In re, 160. Jervis v. Smith, 356. Jewett, In re, 65, 66, 74 Jewett & Co., In re, 57. Jewett et al.. In re, 57. Jewett, Ex parte, 115, 166, 316. Jobbins v. Montague, 31, 168, 194 Johann, In re, 22, 37, 38, 393, 399, 403. Johnson v. Bishop, 197, 449, Johnson v. Collins, 386. Johnson, Ass., et aL v. Hehnstaeder et aL, 163. Johnson, Ass., v. May et aL, 81, 430. Johnson v. Eogers et aL, 349, 385, 398, 418. Johnson v. Worden, 311. Johnston, In re, 187. Jonas, In re, 322. Jones, In re, 133, 142, 161, 179, 235, 339, 363, 375, 378, 308, 313, 340, 357, 435. Jones et aL, In re, 331, 399. Jones, Ass., v. Clifton, 43, 398, 430, 453. Jones et aL v. Coker et aL, 140. Jones & Hoyt, In re, 340. Jones et aL v. Knox, 140, 149. Jones V. Leach, 103, 415. Jones V. Miller, Ass., 248. Jordan, In re, 10, 77, 107, 381, S42, 449. Jordan & Blake, In re, 71, 357. Jordan, Ass., v. Downey, 109, 163, 167, 197. Joslyn, In re, 369. Judson, In re, 181. Judson V. Kelty, 38. K Kahley, In re, 37, 67, 43& Kaiser et aL v. Richardson, 380. ICane, Ass., v. Jenkinson, 456. Kane, Ass., v. Rice, 378. Kanouse "v. Martin, 209. Kansas City Stone & Marble Mfg; Co., In re, 343, 436. Karr v. Whittaker et aL, 94 32L Kassard v. Kroner, 8. Kasson, In re, 43, 44, 397. Kaufman et aL, In re, 376. Keach, In re, 54 Kean et aL, In re, 77, 79, 143. Keating v. Keefer, 400, 453. Keefer, In re, 38, 134 135, 401. Keenan v. Shannon et aL, 107, 194 Kehr et aL v. Smith, Ass., 399. Keiler, In re, 119, 270, 314 Keller et aL, In re, 31, 159, 161, 163, 165, 174 195, 303. Keime v. Graff et aL, 151. Keller et aL, In re, 116, 119, 130, 235, 269. KeUey, In re, 311. Kellogg, Ass., V. RusseU et aL, 400. KeUy V. Strange, In re, 94 430, 440. Kemmerer v. Tool, 111, 197. Kennedy et aL, In re, 30, 317. Kenyon & Fenton, In re, 54 160, 336. Kerosene Oil Co., In re, 106. Kerr, In re, 337. TABLE OF CASES CITED. ZM Kerr & Eoach, In re, 11, 79. Kidder, Ass., v. Harriban, 202, 445. Kimball, In re, 95. Kimball et aL, In re, 44. King, In re, 41, 284, 336, 371, 893, 426. King V. Loudan, Ass., 106, 380. Kingon, In re, 251. Kingsbury et aL, In re, 13, 39, 297, 342. Kingsley, In re, 93, 154, 179, 183, 305, 359. Kinkead, In re, 52, 57, 6a Kintrig, In re, 170. Kinzie v. Winston, 434. Kirkland, Chase & Co., In re, 372. Kitsinger et aL, In re, 108, 284, 303, 375. Knapp et aL v. Anderson et aL, 141, 153. Knickerbocker Ins. Ca v. Corn- stock, 41, 205, 331. Knight, In re, 66, 202. Knight V. Cheny, 111, 445. Koch, In re, 224, 280, 385. Kohlsaat et aL, In re, 117, 118, 122, 195. Kohlsaat v. Hoguet et aL, 325. Kreuger et aL, In re, 70, 451. Krogman, In re, 196, 388, 379, 445. Kunzler v. Kohaus, 2, 6. Kurth, In re, 868. Lachemeyer, In re, 105, 354 Lacy, In re, 370, 394 Lacy, Downs & Co., In re, 168, 323. Lains, In re, 367. Lake, In re, 404 456. Lake et aL, Ex parte, 74 287. Lake Superior Ship Canal, Railroad & Iron Co., In re, 239, 268, 374, 375, 386. Lamb, Ass., v. Lamb, 348. Lambert, In re, 348. Lammer, In re, 82. JLane, In re, 336, 867. Lane & Co., In re, 73. Lang, In re, 317. Langley, In re, 43, 398, 403, 458b Langley v. Perry, 44 Lanier, In re, 178, 324 Lansing v. Manton, 25, 49, 413. Lathrop et aL, In re, 68, 187, 234, 286. Lathrop, Luddington & Co., In re, 184 Latting v. Fassman et aL, 108. Laurie, Blood & Hammond, In re, 249, 854 426. Lavender v, GosneU et aL, 8, 143, 198, 459. Lawrence et aL, In re, 43, 46, 323, 383. Lawrence, Asa., v. Graves, 188, Lawson, In re, 82, 251, 382. Lazear t. Porter, Ass., 94 440, Leach v. Greene, 200, 431. Leachman, In re, 183. Leavenworth Savings Bank, In re, 316. Lee, In re, 298, 299. Lee V. Savings Institution, In re^ 388. Leeds, In re, 41, 43, Leighton, In re, 23. Leighton v. Harwood, 198, Leipziger, In re, 122. Leiter et aL v. Payson, 167, 319L Leland et aL, In re, 297, 298. Leland, In re, 61, 63, 64 93, 141, 318» 314 439. Lenihan v. Haman et aL, 444 Lenihan v. Hanson, 443. Lenke v. Booth, 151. Levin, In re, 128. L^vy, In re, 148, 154 281. Lewis, In re, 63, 71, 187, 333. Lewis et aL, In re, 13, 116, 335, 329. XXll TABLE OF CASES CITED. Lewis, Trustee, v. TTnited States, 70, 148, IH 278, 302, 364 Libby v. Hopkins, 406. Lightner, Ass., v. Bank, 453. Linforth et aL, In re, 113, 434 Linn et aL v. Smith, 315, 363. Lissberger, In re, 119, 270, 294, 375. Litchfield, In re, 12, 93, 393. Little, In re, 24 161, 265. Little, Ass., V. Alexander, 186, 335, 345. Littlefield, In re, 133, 13a "• Lloyd, In re, 73, 283, 315, 358. Lloyd, Ass., v. Hoc Sue et aL, 420. Lloyd, Ass., etc. v. Strobridge, 341, 401. Locke, In re, 333. Lookett V. Hoge, 251, 397. Loder, In re, 230, 240. Loder et aL, In re, 233. Long, In re, 71, 89, 130. Long & Co., In re, 358. Long, Ass., V. Conner, 417. Longfellow, In re, 455. Longis V. Creditors, 10. Longstreth v. Pennook et aL, 368, 391, 435. Lord, In re, 42, 181, 234, 334 Lothrop V. Drake et aL, 111, 164 384 Louohheim Bros. v. Henzey, 42. Loudon, Ass., v. National Bank, 341, 343. Lowe & Richards, In re, 69, 73. Lowenstein, In re, 125, 259. Lucius Hart Mfg. Co., The, In re, 351, 36& Lukins v. Aird, 36, 400. Lumpkin et aL v. Eaton, 80. Lyon, In re, 434 Lytle & Co., In re, 117, 144 196. M. McBrien, In re, 178, 181, 224 McCabe, Ass., v. Winship, 407. McClellan, In re, 437. MoConnell, In re, 276, 368, 39L McDonald, In re, 129, 148. McDonald, Ass., v. Moore et aL, 43, 290, 350, 419, 424 McDonough, White, Ass., v. Eaf- ferty. In re, 341, 342. McDowell et aL, In re, 264 McEwen & Sons, In re, 66, 73. McFarland & Co., In re, 56, 318. McFarland v. Goodman et aL, 81. McGehee et aL v. Hentz et aL, 101. McG-ilton et aL, In re, 439. MoGrath & Hunt, In re, 388, 366. MoGready v. Harris, 431. McHenry et aL v. La Societe Fiaz> caise, 198, 380. Mclntire, In re, 135, 147. McKay & Adams, In re, 435. McKay & Aldus, In re, 355, 388L McKay v. Funk, 101, 105. McKeon, In re, 122. MoKercher et aL, In re, 84 Mackey, In re, 138. McKibben, In re, 36, 98, 188, 191. McKinsey et aL v. Harding, 301, 873. McLean et aL, In re, 66, 73, 358. McLean et aL v. CadwaJader, 248, 433, 455. MoMiUan v. McNeill, 9. McNab & Hamlin Mfg. Ca, In re^ 117. McNair, In re, 183, 189, 237. McNat, etc. Mfg. Co., In re, 308. McNaughton, In re, 167. McVey, In re, 134 135. Magie, In re, 24 Major, In re, 443. MaUory, In re, 30, 33, 100, 107, 243. Maltbie v. Hotchkiss, 7, 459. M. & M. Nat. Bank of Pittsburg v. Brady's Bend Iron Ca, 4ia Manheim, In re, 197. Mann, In re, 316. Mansfield, In re, 147. Many et aL, In re, 386, 437. March, Ass., v. Heaton et aL, 442. TABLE OF OASES CITED, xxm Marionneaux, jtn re, 147, 177. Marks, In re, 198, 413. Markson et aL v. Heaiiey4 27, 100, 101, 195. Markson & Spaulding v. Heaney, 23, 415, 416. Marrett, Ass., v. Atterbtiry, 374 Marsh et aL, In Te, 137. Marsh et al. v. Armstrong, 49, 198, 404, 413. Marshall v. Knox et aL, 101. Marter, In re, 44, 397, 403, 434 445. Martin, In re, 84. Martin v. Berry, 7, 10. Martin v. Toof et aL, 13, 39, 184, 338, 344, 345. Marvin, Ass., v. Chainbers, 433. Mason et aL v. Warthen et aL, 75, 105, 198. Mass. Brick Co., In re, 363. Massey et aL v. AUen, 455. Masterson, In re, 431. Mathers et aL, In re, 381. Mathews et aL, In re, 116, 369. Matot et aL, In re, 59, 60, 170, 315. Maurer v. Frantz, 163, 337. Mawson, In re, 130, 179, 363. Maxwell v. Faxton, 103, 169, 170. Maxwell v. McCnne et aL, 300. May & Co., In re, 67. May et aL, In re, 73. May V. Breed, 3. May V. Harper & Atherton, 161. May & Merwin, In re, 387, 366. Maybin, In re, 151, 374 288, 390, 313, 313, 360, 373. Maybin v. Raymond, Ass., 89, 110, 347, 292, 455. Mayer v. HeUman, 8. Mayor et aL v. Walker et aL, 149, 151. Mays et aL v. Fritton, 344 Mays V. The N. Nat Bank, 435. Mead, Ass., v. Bank, 67. Mead t, Thompson, 205. Meador et aL v. Everett, Asa, 438. Meador et aL v. Sharpe, 15L Mebane, In re, 488. Medburg v. Swan, 140. Meekins v. Creditors, 8. Meeks v. Whatley, 388, 43& Meliok, In re, 70. Melvin et aL, In re, 84 Mempner, In re, 88. Mendelsohn, In re, 43, 91, 171, 294 333. MendenhaU, In re, 57, 183, 335, 831. Mercer, In re, 319. Merchants' Ins. Co., In re, 12, 65, 101, 203, 336, 458, 459. Merchants' Nat. Bank of Cincin- nati V. Cook et aL, Trustees, 14 329, 342. Merchants' Nat. Bank of Hastings V. Truax, 13. Merchants' Nat. Bank of Syracuse V. Comstock, 148, 279, Merrick, In re, 24 174 373, 289. Merrifield, In re, 350, 366. MerrilL In re, 289. Merrill et al.. In re, 58. Merriman, In re, 144 Merriman's Estate, In re, 386. Metz, Adm'x, etc. v. Buffalo, Corry & Pittsburg R. R. Co., 288, 443, Metzger, In re, 348. Meyer, In re, 347, 400. Meyer et aL v. Preserving Works, 454 Meyers, In re, 201, 425. Meyers, Ass., v. Bank, 454 Michaels et aL v. Post, Ass., 185, 296, 315, 337, 361. Michener v. Payson, Ass., 178, 190, 347. Mickel et aL, In re, 107, 122L MigeU, In re, 96, 101, 103. MUler, In re, 168, 287, 323. Miller v. Bowles et aL, 880. Miller v. Chandler, 143, 191. XXIT TABI/E OF OASES CITED. Miller, Ass., ▼. Jones, 430, 448. Miller v. Keys, In re, 184 3*4. MiUer v, Macken2de et aL, 381. MiUs, William, In re, 70. Mills, In re, 274, 32a Milner, In re, 287. Milner v. Meek, Ass., et aL, 388. Milwain, In re, 91, 262, 375. Minon v. Van Nostrand, 96, 105. Mitchell, In re, 851, 393, 442, Mitchell et aL, In re, 318. Mittledorfer, In re, 31. Mittledorfer & Ck)., In re, 24, 394 Montgomery, In re, 31, 69, 276, 288, 397. Montgomery, Ass., t. Bucyrus Ma- chine Works, 75, 429. Moore, In re, 354. Moore et aL v. Walton et aL, 56. Moran et aL v. Bogart, 235, 410. Morgan v. CampbeU, Ass., 383, 425. Morgan v. ThombiU, 205. MorgenthaL In re, 90. MorriU, In re, 388, 433. Morris, In re, 115, 116. Morris et aL, In re, 134 Morris, Ex parte, 175, 271, 383, 391. Morris v. Davidson, 101, 190, 418, 430. Morris et aL v. Swartz, 30, 300, 340. Morrison, In re, 383, 330. Morse, In re, 65, 69, 70, 343. Moseley, Wells & Ckx, In re, 79, 385. Moses, In re, 417. Moss, In re, 54, 187. Mosselman et aL v. Caen, 199. Mott, In re, 442. Muir & Foley, In re, 63, 114 116. Muirhead, Ass., v. Aldridge et aL, 429. MuUer et aL, In re. 195, 814 413. Munger & Champlin, In re, 38, 402. Munn, In re, 39, 328. Mimson v. Railroad Co., 301. Murdock, In re, 138, 356. Murdock et aL, In re, 138. Murphy, In re, 53, 94 Murphy v. Young, 104 Murray, In re, 384 Myer et aL v. Crystal Lake Pick- ling & Preserving Works, 199. Myers, Ass., v. Seeley et aL, 347, 450. Myrick, In re, 436. K National Bank of Fredericksburg V. Conway et aL, 328, 433. National Bank of Pittsburg v. The Brady's Bend Iron Co., 25. National Iron Co., In re, 488. National Mount Wollaston Bank v. Porter et aL, 355. Neal V. Scruggs et aL, Ex'rs, etc., 154 NeaL In re, 190. Nebe, In re, 174 274 366. NebenzahL In re, 106. Needham, In re, 91, 133. Neilson, In re, 164 Nelson, In re, 886, 418. Newcomb v. Launtz, Afis., 457. Newcomer, In re, 298. New Lamp Chimney Co. v. Ansonia Brass & Copper Ca, 22, 185, 200. Newland, In re, 276, 300, 301, 438, 433. Newman, In re, 187, 138. New Tork Kerosene Oil Ca, In re, 248. New Tork Mail Steamship Co., In re, 30, 31, 367, 375. Nicholas, Ass., v. Murray et aL, 110, 146, 147, 305, 360, 44a Nichols, Ass., v. Eaton et aL, 433. Nickodemus, In re, 53, 315. Nims et aL, In re, 68. Noakes, In re, 434 Noble, In re, 324 269. Noesen, In re, 305, 316, 359, 860. Noonan, In re, 56, 58, 74 130, 199. TABLE OF OASBS CITED. XXV Noonan & Co., In re, 335, 313. Noonan et al.. In re, 137. Noonan v. Orton, 109, 431. Northern Bank of Kentucky v, Cooke, 340. Northern Iron Co., In re, 339, 369. Norton, In re, 261. Norton v. De La ViUebeuve, 110. Nounan & Co., In re, 279, 294. Noyes, In re, 183, 353, 350. Nudd et aL v. Burrows, Ass., 56, 181, 185, 194 o. O'Bannon, In re, 88, 136, 435. Oberhofler, In re, 253, 368. O'Brien v. "Weld et aL, 100. OdeU et al.. In re, 119, 133, 136. O'Donohoe, In re, 186. O'Dowd, In re, 435. Ogden et al v. Redd, 153. Ogden V. Saunders, 9, 10. O'KeU, In re, 183. Okell, In re, 134, 184 Oloott, Ass., V. McLean et aL, S13, 33a Olds, In re, 33. Oliver v. Cunningham et aL, 108. Olmstead, In re, 171, 331. O'Neale, In re, 305. O'Neil V. Dougherty, 106. Onley, etc. v. Tanner et aL, 113, 435. Opelousa & Great Western R R. Co., In re, 55, 331. Opinion of Attomey-GeneraL 456. Oram, In re, 386. Orcutt, In re, 90, 136, 184 Ordway Bros., In re, 134 170. Oregon Bulletin, etc. Co., In re, 13, 39, 45, 168, 307, 330, 327, 344, 357. Oregon Iron Works, In re, 196. Oregon Publishing, etc. Ca, In re, 15. Orem & Co. v. Harley, In re, 160, 163. Osage Valley & S. Kan. E. R. Ca, In re, 318, 363, 406, 407. Osborne v. McBride, 67, 69. Overman, Ass., eta v. Quick, Adm'r, eta, 358. Overton, In re, 239. Owen V. Murrin, In re, 430. Owens, In re, 77, 84 Owsley et aL v. Cowbin et aL, 152. Paddock, In re, 278, 287. Paine, In re, 419. Palmer, In re, 93, 129, 373. Paret v. Ticknor et aL, 117. Parham et aL, In re, 371. Parker et aL, In re, 83, 83. Parker v. Bradford, 154 Parkes et aL, In re, 371, 375, 378, 294 Parks et aL, In re, 72, 78. Parsons v. Topliif, 330, 346. Partridge v. Dearborn et aL, 419. Patterson, In re, 108, 151. Paul & Son, In re, 67. Payne & Bro. v. Able et aL, 91, 133. Payne et aL v. Solomon, 184, 393, 839. Payson V. Dietz, 38, 110, 193, 303. Peabody, In re, 83, 113, 250, 351, 39(^ 438, 443. Pearson, In re, 367. Pease, In re, 66, 69, 274, 351 Peck, In re, 385. Peebles, In re, 393, 407. Pegues, In re, 33, 349. Peiper v. Harmer, 197. Peltasohn et aL, In re, 347, 433. Penn et aL, In re, 60, 61, 111, 1139, 132, 311. Pennington v. Lowenstein et aL, 449. Pennington v. Sale & Phelan et al, 439,441. XXTl TABLE OB OASES CITED. Penny v. Taylor, 81, 101, 104, 149, 194, 196. People ex reL Jennys v. Brennan, 21, 23. People V. Spaulding, 354. People's Mail S. S. Co., In re, 103, _ Perdue, In re, 83, 893. Perm & GaflE Mfg. Co. v. Peale, 316. Perkins, In re, 343, 410. Perkins et al.. In re, 139, 801. ' - Perrin v. Hance, 331. Perry v. Langley, 8. Petrie et al.. In re, 407. Pettis, In re, 39, 97. Pevear et aL, In re, 367. Pfromm, In re, 369. Phelan, Ass., v. Iron Mountain Bank, 386, 436. Phelps, In re, 70, 369, 358. Phelps et al., In re, 361. Phelps V. Olasen, In re, 36. Phelps et aL v. Curts et aL, 150, 436. Phelps, Ass., V. McDonald et aL, 143, 431, 443. Phelps V. SelUck, 29. Phelps V. Stems and Same v. Dud- ley, 297. Phillips, In re, 174, 374. Phillips V. Bowdoin, 369, 886. Phipps et aL v. Sedgwick, Ass., etc., 64 Pickett, Ass., v. McGavick, 113. Pierce et aL, In re, 36, 133, 453. Pierce & Holbrook, In re, 43. Pierce v. Shippee, 151. Pierson, In re, 93, 163, 351, 337. Piper V. Baldy, 384. Pitt et aL, In re, 58, 161. Pittook, In re, 354. Pitts, In re, 105. Piatt V. Arcter, 33, 107, 159, 813, 314 Piatt V. Parker, 151. Piatt V. Preston et aL, 43, 397. Plumb, In re, 75, 180, 31& Poleman, In re, 83, Pollard, Ex parte, 384, 295, 408L Pollard V. Bailey, Ass., 454 Pomeroy, In re, 89. Pool V. McDonald et al„ 43, 63. Portsmouth Savings Fimd Society, In re, 31, 48. Potter et aL v. Coggeshall, 346, 888, 433. Potter V. Coggwell, 416. Powell, In re, 340, 341, 363, 268. Pratt, In re, 53, 94 Pratt V. Curtis, 23, 163, 399, 446. Prescott, In re, 348, 277, 304, 433. Preston, In re, 83, 90, 348, 278, 283, 381, 418. Price, In re, 84, 343. Price & Miller, In re, 45, 167. Princeton, In re, 396. Proby, In re, 119, 334 Puffer, In re, 336. Pullman v. Upton, Ass., etc., 438. Purcell, In re, 130, 375, 406. PurceU & Eobinson, In re, 433. Purviance v. Union Nat. Bank, 416, 453. Pusey, In re, 434 Q. Quimette, In re, 45, 46, 164> 819L E. Rainsford, In re, 133, 186. Randall et al.. In re, 159. Randolph & Co. v, Canby, Ass., 416; 437. Rankin et al. v. Florida, eto. R. R. Co., 43, 55, 363. RatcUfle, In re, 90, 161. Rathbone, In re, 37, 57, 185, 186. Ray V. Brigham et aL, 37, 390, 489, 443. Rayl, Adm'x, v. Lapham, 90, 91, 139, 146, 30& TABLE OF OASES CITED. xxvu Raynor, In re, 159, 166, 319. Redmond & Martin, In re, 60. Reed, In re, 137, 360. Reed et al.. In re, 161, 163. Reed v. Bnllington, 139, 154, 198, 249, 367, 387, 394, 418, 489. Reed v. Mclntyre, Ass., etc., 369. Reeser v. Johnson, 448. Reiman et aL, In re, 77, 115, 117, 121, 123. Rein, In re, 359. Reitz V. People, 140, 152. RepnbUo Ins. Co., In re, 171, 284 819. Revere Copper Ca v. Dimook, 104> 140. Reynolds, In re, 7, 8, 124 370, 459. Rhoads v. Blatt, 173, 424. Rice, In re, 66. Rice et aL v. Grafton Mills, 331, 408. Richards, In re, 181, 183. Richardson, In re, 194 Richardson & Co., In re, 84 Richmond et aL, In re, 115, 270. Richter's Estate, In re, 298, 299. Riggin V. Magwire, 155, 363. Riggs, Leohtenberg & Co., In re, 356. Riter, In re, 288, 314 356. Riordan, In re, 298, 299, 304 341. Risen v. Knapp, 14 35, 39, 186, 327, 344 345, 400, 403, 404. Robert v. Lynch et aL, In re, 273, Robinson, In re, 24 96, 380, 303. Robinson et aL, In re, 179, 363. Robinson & Chamberlain, In re, 31. Robinson et aL v. Elliott, Ass., 330, 378, 397. Robinson et aL v. Hanway, 58. Robinson, Ass., v. Insurance Ca, 382. Robinson v. Pesant, 153. Robinson et aL v. Wilson, 83, 142. Rocket, Ex parte, 367. Rockford, Rook Island & St. Louis R. R. Co., Ex parte, 349, 435. Rodger et aL, In re, 131, 152. Rodgers v. Winsor, 416. Rogers, In re, 13, 54 132, 169, 827. Rogers, Ass., etc. v. Palmer, 334, 841. Rogers v. Winsor, 111, 445. Rollins, Ass., v. Twitchell & Co, 290, 406, 410, 431. Rooney, In re, 36, 189, 401. Roseberry et aL, In re, 892, 39a Rose, Lyon & Co., In re, 366. Rosenberg, In re, 131, 416, 447. Rosenfeld, In re, 91, 132. Rosenfield, In re, 131, 135, 165, 180, 234 335, 324, 335. Rosenfields, In re, 44 188, 816, 834 Rosey, In re, 361, 362, 373, Rowe et aL, In re, 347, 455. Rowe V. Page, 25, 43, 102, 108, 419. Ruddick v. Billings, 304 207, Ruehle, In re, 377. Rugsdale, In re, 54 Rundle & Jones, In re, 105, 151, 861, 363. Rupp, In re, 84 RusseU, Ex parte, 67. RnsseU, Ass., eta v. McCord, Abs., etc., 60. Russell, Ass., etc. v. Owen, 197, 246, 280, 408, 454 Rutherglen, Ex parte, 24 Ryan & Griffin, In re, 349, 351. S. Sabin, In re, 33, 282, 378, 390, 424 Saochi, In re, 243, 389, 448. Sady Bryan Mining Co., In re, 107, 163, 194 Safe Deposit and Savings Insb, In re, 8, 284 458, 459. SaSord et aL, Ex parte, 384 SafEord et aL v. Burgess, Ass., 434 Sage, Jr., v. Wynkoop, 334 343,378. St. Helen's Mill Co., In re, 446. Salkey et aL, In re, 22, 29, 88, 179, 180, 18a xxvm TABLE OF OASES OITBD. Sallee, In re, 88. Salmons, In re, 27, 437. Samson t. Blake, 445. Samson v. Burton, 30, 37, 100, 108, 194 202, 217. Sands Ale Brewing Co., In re, 436. Sandusky, In re, 70. Sandusky v. First Nat. Bank, 20, 163, 208. Sanf ord. In re, 38. Sanford v. Sanf ord, 207, 357. Sanger v. Upton, Ass., Ill, 200, 450. Sargent, In re, 162, 165, 166, 324 Saunders, In re, 262, 273, 278, 294, 299. Sauthoff & Olson, In re, 390, 418, 451. Sawyer, In re, 120, 121, 351, 367. Sawyer & Frazier v. Turpin et aL, 332. Sawyer et aL v. Hoag et aL, 407. Sawyer et aL v. Turpin et aL, 13, 333, 434 Savage, In re, 73. Scammon, In re, 91, 159, 166, 182, 315. Scammon, Ass., v. Cole et aL, 841, 396. Scammon, Ass., v. Cole & Hooper, 342. Scammon v. Kimball, Ass., 410. Schapter, In re, 249. Scheiffer et al. In re, 61, 239, 263, 267. Schepeler et aL, In re, 307. Schoenenberger, In re, 361. Sohuohardt & Wells, In re, 67, 363. Schulze, Ass., v. Bolting, 870, 422. Schumpert, In re, 88, 138, 305. Schuyler, In re, 44, 1321 Schwan, In re, 866. Schwarti, In re, 83, 131. Schwarz, In re, 101, 284 Scofield et aL, In re, 62, 133. Scott, In re, 371, 394 Scott, CoUins & Co., In re, 88, 91, 115, 116, 118, 119, 120, 189, 223, 262, 263, 270. Scott & McCarty, In re, 297. Scott & Nasse v. KeUy, Sheriff, 112, 202. Scrafford, In re, 317, 822, 362. Seckendorf, In re, 129, 263. Second Nat Bank v. Hunt, 341, 378. Second Nat Bank of Louisville v. Bank, 105, 441, 443. Sedgwick, Ass., v. Casey, 283, 379. Sedgwick v. Lynch, 38. Sedgwick v. Menck et aL, 195, 419. Sedgwick, Ass., v. Millward, 382. Sedgwick v. Place, 888, 899, 459. Sedgwick, Ass., v. Place et aL, 25, 44, 325, 331, 345, 397, 403. Sedgwick v. Wormser, 401. Seeley, In re, 132, 178. Serra e Hijo v. Hoffman & Co., 104, 108, 141, 204 Sessions v. Johnson et aL, Ass., 420. Shafer et aL, In re, 88, 102, 120, 122, 415. Shaffer v. Fritchery & Thomas, 335, 854, 384, 427. Sharp, Ass., etc. v. Philadelphia "Warehouse Co., 38, 325, 456. Shaw et aL, In re, 121, 401. Shawhan v. Wherritt, 5. Shearman v. Bingham et al, 20, 194, 196, 205, 447. Sheehan, In re, 48, 279, 319, 853, 367, 874 Sheffer, In re, 823, 324 Shelboume, In re, 853. SheUey et aL v. EUiston, Ass., 882. Shepard, In re, 64, 451. Sheppard, In re, 128, 143, 175, 275, 279, 359. Sherburne, In re, 824 Sherman et aL v. Bingham et aL, 21& Sherry, In re, 164j 173L TABLE OF OASES OITED. XXIX Sherwin, Ex parte, 351. f Sherwood, In re, 54, 330, 333, 268. Shields, In re, 115, 118, 351, 364, 886. Shimer, Ass., v. Huber et aL, 43, 60, 384. Shippen & Eobbins' Appeal, 431. ShoU, In re, 48. Shryock & Rhodes, Ass., v. Bashore, 8, 301, 398, 407, 459. Shney, In re, 103, 420. Shnman v. Struss, 150. Shumann, Ass., v. Fleckenstein, 447. Shurtleff v. Thompson, 104. Sidle, In re, 130, 155, 347. Sigsby V. Willis, In re, 57, 58, 3ia SUl V. Worswick, 3. Silverman, In re, 10, 164, 844. Sime & Ck)., In re, 31, 168, 389, 395. Simmons, In re, 165. Simpson, In re, 97. Sims, In re, 847, 896, 403. Singer, Ass., v. Sloan et aL, 34L Six Penny Savings Bank v. Stuy ve- sant Banlf, 10. Six Penny Savings Bank et aL v. Bank, 316, 373. SkeUey, In re, 46. SkoU, In re, 898. Sleek et aL v. Turner, Ass., 384 Slichter et aL, In re, 53, 409. Sloan V. Lewis, 170, 189, 191, 284, 315. Smith, In re, 10, 24, 43, 53, 74, 77, 79, 88, 133, 149, 187, 192, 318, 335, 239, 375, 371, 374, 397, 436. Smith et aL, In re, 96, 134, 153, 435. Smith et aL v. Bernhard et aL, 118. Smith & Hickford, In re, 135. Smith V. Buchanan et aL, 199, 416, 434 Smith V. Crawford, 118. Smith, Ass., etc. v. Ely et aL, 378. Smith et aL v. Engle et aL, 116. Smith V. Kehr, 81, 896, 401, 403. Smith V. Krauskopf et aL, 106, 118. Smith V. Little, 837. Smith, Ass., v. McLean et aL, 339, 396. Smithy. Manufacturers' Nat. Bank, 53. Smith V. Mason, 36, 196, 445. Smith V. Ramsey, 189. Smith V. Soholtz et aL, 37, 107, 433, 437, 488, 440. Smith et aL v. Vogles, Ass., 110. Smith & Smith, In re, 64, 69. Smith, Stebbins & Co. v. Engle et aL, 104, 122, 144, 309. Snedaker, In re, 101, 370, 390, 440. SneUing, In re, 117, 119. Sohoo, In re, 133, 136. Soldiers' Business Messenger & Dis- patch Co., In re, 379. Solis, In re, 179, 334 Solomon, In re, 79, 137, 138. Southard, Ass., etc. v. Benner et aL, 447. Southern et aL v. Fisher, 112, 196. Southern Express Co. v. Conner, 106, 434 Southern Minnesota Ry. Co., In re, 55. South Side R. R. Co., In re, 39. Southwestern Car Co., In re, 803, 868, 407, 481. Spades, In re, 62, 114, 116, 308. Sparhawk et aL v. Drexel et aL, 35, 74, 300, 301, 393, 398, 433. Sparhawk et aL, Ass., v. Richards et aL, 393, 331, 453. Spencer, In re, 119, 120, 336, 264* 270, 307, 308. Speyer, In re, 236, 334 415. Spicer & Peokham v. Ward & Trow, In re, 43, 313. Spillman, In re, 118, 264 Spilman v. Johnson, 130, 300, 280, 443. StanseU, In re, 317, 871. StanseU et aL, In re, 281. •xinc TABLE or CASES CITED. Stansfield, In re, 128, 154, 361. Starkweather v. Cleveland Ins. Co., S50, 416, 435, 429. State V. Dewey, 197. State of Nortli Carolina v. Trustees of University et al., 194 Steadman, In re, 25, 39. Steadman v. Taylor, 438. Steele, In re, 83. Steele et al.. In re, 369, 386, 418. Steele v. Moody, 79, 80, 114, 301, 443, 444 Stein, In re, 397. Stephens, In re, 74, 398, 858. Stephenson v. Jackson, 71, 356. Stevens, In re, 59, 74 78, 134 148, 325, 338, 269, 281, 399, 381. Stevens v. Brown, 143, 143, 197. Stevenson et aL v. McLaren et aL, 85, 899, 413. Stewart, In re, 282, 301, 439. Stewart v. Isidor etaL, 278, 300, 385. Stewart & Newton, In re, 85. Stewart v. Piatt, Ass., etc., 333. Stickney, In re, 54 Stickney, Ass., v. Wilt, 205. StiUweU, In re, 30, 240, 371, 293. StUlwell V. Walker, Ass., etc., 395. Stoddard v. Locke et aL, 153, 198, 385, 393. Stokes, In re, 131, 326, 242. Stokes & Leonard v. Mason, 12, 189, 290. Stokes V. State of Georgia, 803, 364 StoU V. Wilson, 141. Stores et aL v. Engel et aL, 197, 456. Stowe, In re, 295, 389. Strachan, In re, 183, 307. Strain v. Gourdin et aL, 326, 337. Stranahan v. Gregory & Co., 13, 39, 343. Straiass, In re, 274 Streeper v. MoKee, 800. Stuart V. Aumeller, 163, 185. Stuart V. Hines, 159, 249, 883, 418. Stubbs, In re, 357. Sturgeon, In re, 21, 330. Sturges V. Crowninshield, 7, 9. Sturgis et aL, In re, 124 Sturgis, Ass., v. Colby et aL, 356, 454 Stuyvesant Bank, In re, 181, 241, 370. SuUivan, Ass., v. HeiskeU, 8. Sullivan v. Lewis, 9. Summers, In re, 80. Sutherland, In re, 354 Sutherland v. Davis, 416. Sutherland et aL v. Lake Superior Ship CanaL Bailroad & Iron Ca, 113, 194 389, 445. Svenson, In re, 135. Sweatt V. Boston, Hartford & Erie E. E. Co., 53, 55. Sweet et al.. In re, 349, 43& Swift, In re, 305. Swope et aL v. Arnold, Ass., 387. Symonds v. Barnes, 91, 130, 139, 151. Talcott, Ex parte, 376, 286. TaUman, In re, 138, 177. Tanner, In re, 181. Taylor, In re, 80. Taylor, Ex parte, 97, 149, 153, 180, 300. Taylor, Ass., v. Easch & Bernart, 163. Temple, In re, 63, 64 398, 439. Ten Eyck & Choate, In re, 248, 43& Tenny et aL v. CoUins, 184 Tenth Nat. Bank of New York City et aL v. Warren et aL, Ass., 43, 885. Terry & Cleaver, In re, 334 Tesson et aL, In re, 71, 359. Thomas, In re, 94 107, 155, 195. Thomas & Sivyer, In re, 69. Thompson, In re, 88, 180, 446. TABLE OF OASES CITED. yxxt Thomhill et aL v. Bank, 8, 200. Thornhill v. Bank of Louisiana, 458. Thornhill et aL v. Bank of Louisi- ana, 101, 20a Thornhill & Co. v. Link, 400. Thornton, In re, 83. Thornton v. Hogan, 309. Thrall v. Crampton, Ass., etc., 70, 393. Thurmond v. Andres et aL, 308. Thurmond v. Andrews and Wife, 111, 183, 151, 347, 446. TifiEany v. Boatman's Saving Inst., 339, 397, 403. Tiffany v. Lucas, 402. Tiffany et aL, Ass., v. Morrison, 333. Tifft, In re, 24, 93, 103, 115, 117, 180, 182, 195, 230, 383. Tift, In re, 224. Tills & May, In re, 38a Todd et aL v. Barton et aL, 143. Tomes et aL, In re, 64, 399. Tonkin & Trewartha, In re, 298, 335. Tonne, In re, 79, 85. Toof V. Martin, 13, 185, 337,341,344, 345. Tooker, In re, 122. Towle V. Davenport, 109. Town et aL, In re, 284, 375. Tracy et aL, In re, 131. Traders' Nat. Bank v. Campbell, 41, 111, 326, 335, 408, 449, 450. Trafton, Ex parte, 93, 106, 115, 117. Treadwell et aL v. Holloway et aL, 105, 141, 151. Treadwell et aL v. Harden, 153, 354 Tremont Nail Co., Ex parte, 393. Tremont National Bank, Ex parte, 93. Trim v. Wagner et aL, In re, 391, 392. Trimble v. Williamson, 105, 394. Trowbridge, In re, 393. Troy Woolen Co., In re, 394, 410. Trust Co. V. Sedgwick, 451- Tucker et aL, Ex parte, 55, Tully, In re, 33. TumbuU V. Payson, Ass., 190. Tuttle V. Truax, 185, 396. Tyler, In re, 136. Tyler, Ass., v. Brock et aL, 93, 843, 44a Tyrrel, In re, 134. u. tJlrich et aL, In re, 29, 165, 194, 334. Ungenritter v. Von Sachs, 283. Union Pacific E. E. Co., In re, 54 United States v. Black et aL, 181, 182. United States v. Block, 89, 313. United States v. Bayer, 35, 403. United States v. Clark, 215. United States v. Herron, 151. United States v. Lewis et aL, 66, 70, 371. United States v. Pennsylvania, 177. United States v. Prescott, 313. United States v. Rob Roy & Cargo, 154 36a United States v. Smith, 315. United States v. Throckmorton, 140, 154 Upton v. Bumham, 347. Upton, Ass., V. EEansbrough, 37, 437, 429. Usher v. Pease et aL, 98. Valentine, In re, 272, 289. Valk, In re, 96. Valley National Bank v. Meyers, Ass., 148. Valliant, Ass., v. Childress, 100,449. Valliquette, In re, 3a Van Auken et aL, In re, 11& Van Buren, In re, 101, 354 Vanderhoof et aL, In re, 160, xxxu TABLE OF OASES OITED. Van Kleeck, Asa, etc. v. Miller et aL, 331. Van Tuyl, In re, 179, 181, 183, 26a Vetterlein, In re, 121, 178. Viokery, In re, 285. Vogel, In re, 178, 180, 194, 417, 449. Vogel et aL, In re, 323, 324 Vogle V. Lathrop et aL, 41, 42, 384, 336, 337, 343. ' Voight V. Lewis, Trustee, 371. Von Sachs, Ass., etc. v. Kretz et aL, 181, 408. Voorhees v. Frisbie, 197. w. Wagner et aL v. Wagner et aL, In re, 113. Wait, Ass., etc. v. The Bull's Head Bank, 60. Waite, In re, 81. Waite et aL, In re, 161. Waitzfelder et aL, In re, 458. Walbrun et aL v. Babbitt, Ass., 86, 184 Walbum et aL v. Babbitt, Ass., 403. Walker, In re, 89, 96, 224, 398, 434 Walker, Ass., v. Seigel & Bott et aL, 112, 248, 415, 423. Walker, Ass., etc. v. Towner, 114 Wallace, In re, 194 Wallace v. Conrad, 417. Wallace & Newton, In re, 58. Walther v. Walther, 18a Walton, In re, 297. Walton et aL, In re, 866. Waitzfelder et aL, In re, 123. Ward, In re, 31. Warford, Asa, v. Noble et aL, 430. Waring, Ass., etc v. Buchanan et aL, 335, 333. Warner et aL, In re, 57, 336, 329. Warner v. Cronkite, 150. Warren v. Bank, 310, 345. Warren v. Delaware, Lackawanna & W. Ey. Co., 186, 345. Warren et aL v. Garber, 162. Warren & Eowe, Asa, v. Tenth Na- tional Bank et aL, 837. Warren Savings Bank v. Palmer & Co., 91. Warren v. Tenth Nat. Bank et al, 13, 40, 41, 43, 335. Warshing, In re, 81. Washburn, In re, 368, 428. Watrous et aL, In re, 273. Watson, In re, 33, 440. Watson V. Bank, 198. Watts, In re, 89, 90. Weaver, In re, 39, 60, 333. Webb, In re, 61, 269. Webb & Co., In re, 248, 350, 866. Webb et aL, In re, 364 Webbs, Ass., v. Sachs et aL, 13, 85, 39, 41, 184, 186, 335, 341, 345, 403. Weber Furniture Co., In re, 119, 120, 131, 144 Weeks, In re, 396, 886, 874 Weitzel, In re, 53, 94 Welch, In re, 83. Welch V. Dunham, 89, 16^ 333. Welles, In re, 92, 115. Wells, In re, 13, 40, 41, 119, 336. Wells V. Lamprey, 120, 152, 154 Wente v. Yoimg et aL, 203. Westcott et aL, In re, 333. Western Savings Trust Co., In re, 162, 314, 823. West Philadelphia Bank v. Dickson et aL, Asa, 329. Wetmore et aL, In re, 241. Wheeler et aL, In re, 354, 382. Wheelook, Asa, etc. v. Law, 453. Wheelock v. Lee, 458. Whipple, In re, 100. White et aL, In re, 125, 134, 138, 84a White V. Griffing, 249, 426. White V. Jonea 164, 417, 424 Whitehead, In re, 83, 367. TABLE OF OASES CITED. Tt-x^n "Whithed et aL v. Pillsbury et aL, 801, 341, 381, 389. "Whitehouse, In re, 96. Whiting et al.. In re, 74. "Whiting, Ex parte, 67, 301, 408. "Whiting, In re, 97, 151, 203. Whittaker, In re, 386. Whyte, In re, 374 "Wickham, Ass., v. Valle's Executors et aL, 431. Wicks & Co., Assignee of, v. Per- kins, 150, 390, 438. Wielarske, In re, 339, 311. Wiggin, In re, 33. Wilbur, Ass., v. Stockholders, 407, 438, 450. Wilkins v. Davis, 63, 64 70, 75, 141, 369, 416, 439, 450, 451. Wilkinson, In re, 136. WiUiams, In re, 58, 391, 313, 318, 319, 323, 334 339, 361, 369, 391. Williams et aL, In re, 103, 317. WiUiams, Elias Or., In re, 40. WiUiams v. Butcher, 139, 143, 308. Williams v. Harkins, 155, 363. WiUiams & MoPheeters, In re, 32, 96. Williamson et aL, Ass., v. Colcord and Wife, 431. WiUis V. Carpenter et aL, 305, 379, 456. Wills et aL v. Claflin et aL, 177, 183. Wilson, In re, 60, 311. Wilson et aL, In re, 117, 119, 120, 132, 264 Wilson V. Bank, 345. Wilson V. Childs, 419. Wilson, Ass., v. City Bank of St Paul, 41, 42, 383, 385. Wilson & Shaf er v. Bank of North Carolina, 290. Wilson V. Stoddard, 184 Wilt V. Stiokney, Asa, 114 Wimm, In re, 384 Winkens, In re, 74 129. Winn, In re, 22, 100, 101, 105, 277, 282, 293, 394, 435. Winship v. PhiUips, 886. Winsof, In re, 137, 138, 215. Winter v. Iowa, Minnetona & North Pacific Ey. Co., 39, 55, 831. Winters et aL v. Claitor et aL, 199, 383. WiswaU et al v. Campbell et aL, 308, 377. Withrow V. Fowler, 64 Witkowski, In re, 6, 143, 180, 183, 191. Witt, Ass., V. Hereth, 883. Wood, In re, 161, 165, 330, 401. Wood V. Hazen, 107, 140. Wood Mowing & Reaping Machine Co. V. Brooke, 37, 168, 433, 434 Wooddail, Adm'r, v. Austin & Hol- Uday, 103, 433. Woodford & Chamberlain, In re, 314 Woods, In re, 6, 13, 39, 42, 54 Woods et aL v. Buckewell et aL, 205. Woodward, In re, 334 Woodward et aL, In re, 186, 234 WoolfoUc et aL v. Gunn, 105. Woolfolk V. Murray, 199, 444 Woolford, In re, 183. Woolsey v. Cade, 151. World Co. V. Brooks, 104 Worthington, In re, 378, 387. Wright, In re, 22, 82, 131, 230, 337. Wright, etc. v, Bank, 431, 45a Wright V. FUley, 42, 336. Wrisley et aL, In re, 420. Wronkow et aL, In re, 88, 115, 116, 120, 265, 270. Wyatt, In re, 89, 430. Wylie, In re, 415. Wynne, In re, 106, 351, 854 388, 416, 436. xxxiv TABLE OF CASES CITED. Y. Yeatman v. New Orleans Sav. Inst., 391, 437. York & Hoover, In re, 208, 317. Young, In re, 81, 84, 287. Young et aL v. Eidenbaugh, 147, 279. Zahn V. Fry et aL, 194 334, 335, 8 420. Zeiber v. Hill, 349. Zimmer v. Schleehauf, 103, 363. Zinn et aL, In re, 240. Zug et aL, In re, 72, 89, 207. LAW or BANKEUPTCY. TITLE I. IN GENERAL. With hardly an exception, bankruptcy laws form, a part of the administrative systems of all civilized nations. Great Britain, Germany, Eussia, France, Italy, Norway, Sweden, Spain, Mexico and many other nations have responded to the needs of their people and wisely provided laws govern- ing bankruptcy. One of the earliest systems is found ia the statutes of England of 1542, which has from time to time been perfected and contiaues in force. By the enactment of the law of July 1, 1898, the people of the United States have been given a system which, although it may be im- perfect in some minor respects, yet as a whole shows great thought and care even to many of the minutest details. The systems in vogue in the several nations show much diversity, varying from the system found in Eussia — where the right of the debtor to resume business is dependent upon the good will of his creditors, and where a single dissatisfied creditor can, upon making a paltry monthly payment, keep the bankrupt a prisoner until the debt is paid — to the highly advanced system which prevails in England. As the idea of uniformity in bankruptcy proceedings may be said to have become a part of the Federal constitution by a process of evolution from the English statutory law, it is interesting to note as a matter of history that the earliest statute on the subject of bankruptcy is found in 34 and 35 Henry VIII (chapter 4), which was primarily provided as a protection against the Lombards and fraudulent traders, 1 2 LAW OF BANKEUPTOT. ■who, like the dishonest debtors of to-day, incurred obligar tions and liabilities and then surreptitiously removed them- selves beyond the jurisdiction, without having been first discharged therefrom. It was without Umit as to the per- sons who could become recipients of its provisions, the restriction as to traders first appearing in the statute of Elizabeth. The right of a trader to become a voluntary bankrupt first appears in the statute of 6 George IV (chap- ter 16)} Among the earliest laws affecting insolvents, we find ap- plicants for relief referred to as "persons craftUy obtaining into their hands great substance of other men's goods, who suddenly flee to parts unknown or keep their houses, not minding to pay or restore to their creditors their debts and duties, but at their own will and pleasure consume the sub- stance obtained by credit of other men, for their own pleas- ure and delicate living, against all reason, equity and good conscience.'" While these early bankruptcy laws went upon the hypoth- esis that one guilty of bankruptcy was a criminal,' this view certainly does not now prevail, and in fact did not at the time of Lord Loughborough, who remarked, with reference to bankrupts, " the law, upon the act of bankruptcy being committed, vests his property upon a just consideration; not as a forfeiture; not on a supposition of a crime committed; not as a penalty." * Numerous statutes were enacted in England governing bankruptcy; but one of the most complete was that of August 1, 1849, which is aptly described by its title as "An act to amend and consolidate the laws relatmg to bank- ruptcy," and this in turn has been on several occasions amended. Chief Justice Shaw, in describing the English system, says it is "an adversary proceeding against a defaulting iKunzlerv.Koliaus, 5Hill,332. ^SiH v. Worswick, 1 tt BL 665; 8 34 and 35 Henry VIII, ch. 4 In re De Forrest, 9 N. B. E. 278; s 3 Pars, on Contracts, 425. Fed. Cas. 3745. IN GBNEEAL. trader, upon doing certain acts indicative of present or im- pending insolvency. These (bankrupt) laws provide, gen- erally, that upon a trader's doing certain acts considered acts of bankruptcy, a creditor may apply for and obtain a commission (out of chancery), under which the whole of the trader's property is sequestered and taken into the custody of the law, to be administered by officers appointed for that purpose, the proceeds of which, with some slight exceptions, are appropriated to the payment of all the bankrupt's debts, if sufficient therefor; otherwise to pay them in equal pro- portions, as far as is sufficient for that purpose. The same law further provides that, if the bankrupt wiU honestly and faithfully co-operate in the proceeding, if he wiU disclose all his property and effects, and aid the officers appointed for that purpose by information and by aU means in his power, and do all the duties required of him in the prem- ises, he shall be absolved and discharged of all his debts, and .receive a certificate as the authoritative evidence of his right to such discharge." ^ The oppressor's hand resting heavily upon our forefathers in the old world, and causing them to migrate to new and untried fields, naturally inclined them to incorporate liberal and wise provisions for the protection of aU classes in the Federal constitution. Among them is one evidently sug- gested by the English bankruptcy statutes, and it is found in section 8 of article 1 of that instrument, which authorizes congress " to establish . , . uniform laws on the subject of bankruptcy throughout the United States." This sec- tion, together with section 10 of the same article, providing that " no state shall . . . pass any laws impairing the obligation of contracts," are most important factors in the legal and commercial world. Pursuant to the authority contained in section 8, congress has on three different occa- sions previous to the present one, enacted laws providing a uniform system of bankruptcy, which for evident reasons failed of their purpose and early expired. iMay V. Breed, 7 Cush. 2& 4 LAW OF BANKETJPTOT. The first was the act of April i, 1800,* and was limited to five years; but it was repealed by the act of December 19, 1803.=' The fact that it was intended chiefly for the pro- tection of creditors, the sparseness of the settlements, the scarcity of Federal courts, and the difficulty and slowness of travel, contributed mainly to its failure. The distance be- tween places where courts were held, by reason of the method of locomotion, made ready relief almost impossible and soon brought about a demand for the repeal of the law. The second act was approved August 19, 1841,' but like its predecessor was short lived, being repealed March 3, 1843.* In addition to some of the causes that contributed to the failure of the prior law, this one was framed so as to greatly favor the debtor; it also became the subject of political con- tention ; and, under the combined influence, naturally failed. The next bankruptcy law was approved March 2, 186Y,* and after an existence of eleven years was repealed by the act of June 1, 1878,« to take effect September 1, 1878. The law was several times amended, the most important modifi- cation being that made by the act of June 22, 1874.'' "Wliile this law of 1867 had many imperfections, its provisions were more equable as between creditor and debtor; but the ex- penses attending litigation and its administration, together with the lack of uniform rules and regulations governing assignees and registers, more than aU else, contributed to its failure and induced its repeal. Every business transaction involving the giving of credit necessarily implies two classes — a debtor and a creditor. Bankruptcy laws are not designed for one but for both classes, and are beneficial to aU but the dishonest creditor. The policy and aim of bankrupt laws are to compel an equal distribution of the assets of the bankrupt among all his cred- itors. Hence, when a merchant or trader, by any of these 1 2 Stat. L. 19. 6 14 Stat. L. 517. 2 2 Stat. L. 24a « 20 Stat. L. 99. » 5 Stat. L. 440. 1 18 Stat. L. 17a * 5 Stat. L. 611 IN GENERAL. tests of insolvency, has shown his inability to meet his en- gagements, one creditor cannot, by collusion with him, or by a race of diligence, obtain a preference to the injury of others.* In the absence of a bankruptcy law, the least suspicion of the insolvency of a debtor, his inability to meet financial obligations, etc., naturally causes the zealous creditor to in- stitute attachment proceedings and perhaps cause liquidation of his debtor, who, left to his own resources and given reason- able time, would be able to avoid suspension and perhaps ruin. The sole gainer through the absence of such a law, outside of the dishonest debtor, is he who is first on the ground with his attachment process and whose lien operates to defeat other creditors with equally just claims, but who are perhaps more merciful and less anxious to cause the creditor's liquidation. In addition to the value of a bankruptcy law in conducing to a better business understanding between the debtor and creditor, it acts as a preventive and check to overtrading, by largely preventing the giving of preferences by the insolv- ent. In this connection Cadwalader, J., said: "In this re- spect its operation will be gradual, but must be highly beneficial. When relations and friends of a debtor, and when capitalists, who without affection or friendship would make profit from his embarrassments, learn that they cannot be secured by a preference out of the wreck of his affairs, they will not furnish him the means of overtrading. So long as he could, by securing advances and accommodations, obtain them, the temptation to attempt to retrieve his losses, by doubling his investments, was, before the enactment of the bankrupt law, irresistible ; and the system of business was that of mere gambling adventure. But when a debtor who suffers losses knows that he cannot prefer his relations and friends, and when capitalists know that they cannot, with- out risk, assist hiTin to the injury of other creditors, he will stop his busiaess in season, to give a fair dividend to all » Shawhan v. Wherritt, 7 How. 637. 6 LAW OF BAITOtTJPTOr. his creditors, and thus make a fair settlement with them in the court of bankruptcy, or, much of tener, out of it. Then, in the course of time, few judicial bankruptcies wiU occur." ' The purpose of a bankrupt law is to place within the pos- session of the creditor that to which he may be entitled, within the shortest reasonable time, and at the same time, if the bankrupt has made a fair and honest surrender, and complied with the requisitions made of him, to give him a speedy release, and let him begin anew to provide an honest living for himself and those dependent upon him, and again become a useful and active member of society.^ A bankrupt or insolvent law, viewed as operating on the rights of creditors, is a system of remedy. It takes out of the hands of the creditors the ordinary remedial processes, and suspends the ordinary rights which by law belong to creditors, and substitutes in their place a new and compre- hensive remedy designed for the common benefit of aU. The rights with which the assignee is clothed as the repre- sentative of creditors are to render this great and common remedy effectual.' Bankruptcy is an ancient English word which has come down to us at least from the time of Elizabeth, bearing all the way a meaning co-extensive with insolvency, and it was especially equivalent to that word when the constitution was adopted.* The only substantial difference between a strictly bank- rupt law and an insolvent law lies in the circumstance that the former affords relief upon the application of the cred- itor, and the latter upon the application of the debtor. In the general character of the remedy there is no differ- ence, however much the modes by which the remedy may be administered may vary. But, even in the respect named, there is no difference in this instance. The act of congress (1867) is both a bankrupt act and an insolvent act by defini- 1 In re Woods, 7 N. B. R. 126. » Curtis, J., in Betton v. Valen- *In re Witkowski, 10 N. B. R tine, 1 Curt 176. 209; Fed. Cas. 17930. *Kunzler v. Kohaus, 5 Hill, 320. IN GENERAL. i tion, for it affords relief upon the application of either the debtor or the creditor under the heads of voluntary and in- voluntary bankruptcy.* " The plain object and policy of the insolvent laws is to require a debtor, as soon as he has reason to believe himself insolvent, and before he has frittered away his property by schemes which appear plausible, to put himself and his assets at once into the hands of the law, with a view to two ob- jects: one to make an equal distribution among all his cred- itors; the other, to pay every creditor as large a part of his whole debt as the means of the debtor will allow, under the direction and management of officers and agents who are capable of executing a trust, and responsible for the faithful performance of their duties." ^ One distinction between an assignment and an attachment is, that the former is a sequestration of aU of a debtor's prop- erty to pay all his creditors jpro rata, while the latter is a sequestration of his property to pay a single debt. One may work a preference, the other not.' This difficulty of discriminating with any accuracy be- tween insolvent and bankrupt laws would lead to the opinion that a bankrupt law may contain those regulations which are generally found in insolvent laws; and that an insolvent law may contain those which are common to a bankrupt law.* States have the right to enact insolvent and bankrupt laws, provided there be no act of congress in force establishing a uniform system of bankruptcy, conflicting with their pro- visions, and provided the law itself be so framed that it does not impair the obligation of contracts.' All state laws relating to the subject-matter of the Federal statute are suspended or superseded during the existence of 1 Martin v. Berry, 37 CaL 233. * Sturges v. Crowninshield, 4 s Per Shaw, C. J., Femald v. Gay, Wheat. 196. 12 Gushing, 597. See In re Gitizens' » Baldwin v. Hale, 1 WalL 223; Savings Bank, 9 N. B. E. 152; Fed. Sturges v. Growninshield, 4 Wheat. Gas. 2785. 122; Denny v. Bennett, 138 U. S. •Maltbie v. HotohMss, 5 N. B. E. 489, 497; In re Reynolds, 9 N. B. R. 485. 52; Fed. Gas. 1172a 8 lAW OF BAIfKEIIPTOT. the Federal law,^ even as between citizens of the same state,* but are not repealed by it, and are only suspended, so that, upon the repeal of the Federal law, the state law is revived without the necessity of re-enactment.' The Federal law does not, however, deprive the state tri- bunals of any portion of their jurisdiction necessary to the final administration of the estates of insolvents who had made a surrender previous to its passage.^ But the fact that a state court has taken possession of the property of an in- solvent, thereby first gaining jurisdiction, cannot be allowed to defeat the proper execution of the bankrupt law.' It has been held, however, that a Federal bankrupt act (the act of 1873) " does not i^so facto suspend state laws for the collection of debts," ^ such, for example, as state laws relating to the insolvent estates of persons under legal dis- ability, as lunatics or spendthrifts,' or an insolvent law which merely protects the person of the debtor from imprisonment.' And so it has been held that there is no proper analogy between insolvent laws, properly so called, and those prin- ciples of the common law which allow and sanction the con- veyance of his property by a debtor for the equal benefit of all his creditors, and no such relation or resemblance as to warrant the conclusion that, because the existence of a Fed- eral bankrupt law suspends all state insolvent laws, it must therefore also suspend those common-law principles. Ac- cordingly, a common-law assignment for the benefit of all his creditors alike was held to be valid, notwithstanding the existence of the Federal bankrupt law, as against a creditor 1 Perry v. Langley, 1 N. B. E. 559; * Meekms v. Creditois, 3 N. B. R. Griswold v. Pratt, 9 Mete. 16; In re 136. Eeynolds, 9 N. B. R. 50; Fed. Cas. sin re Safe Deposit & Savings 11723; ThomhiU et aL v. Bank, 5 Inst., 7 N. B. R. 393; Fed. Cas. 12311. N. B. R. 367; 1 Woods, 1; Fed. Cas. s^Chandler, Receiver, v. Siddle, 3 13993; Sluyrook et aL v. Bashore, DiUon, 477; 10 N. B. R 236; Fed. 13 N. B. R 481. Cas. 3594 2 Kassard v. Kroner, 4 N. B. R 569. ' Mayer v. Hellman, 91 U. S. 496; 'Lavender v. Gosnell, 13 N. B. R Hawkins v. Learned, 54 N. H. 333. 283; In re Everitt, 9 N. B. R 90; « Sullivan, Assignee, v. Heiskell, Fed. Cas. 4579. Crabbe, U. S. Dist. Ct 535, 538. m GENEEAX. y refusing to accept the benefit thereof, and who, in an action for the recovery of his debt, seeks to garnish the assignee upon the ground that the assignment is void. "Whether such assignment would be held to be an act of bankruptcy, if the question were raised in a direct proceeding for that purpose, is not passed upon.^ A general assignment for the benefit of creditors under the provisions of a state law, and during the existence of the United States bankrupt act, is superseded by proceedings in bankruptcy,^ though it may be held valid if the rights of creditors are not thereby prejudiced.' But so far as such state laws attempt to discharge the con- tract as against citizens of other states, they are unconstitu- tional;* and so a discharge under a foreign bankrupt law cannot be pleaded in bar to an action on a contract made in this country.' A state law discharging the person or the property of the debtor, and thereby terminating the legal obligation of the debt, cannot constitutionally be made to apply to debts contracted prior to the passage of the law; but the law may be made to apply to such future contracts as can be considered as having been made in reference to the law.' Statutes of this class must be construed to be parts of aU contracts made when they are in existence, and therefore cannot be held to impair their obligation.' In fact, the in- hibition of the constitution is wholly prospective. The states may legislate as to contracts thereafter made as they may see fit. It is only those in existence when the hostile law is passed that are protected from its effects.* In fine, insolvent laws of one state cannot discharge the 1 Cook V. Rogers, 31 Mich. 393, 398. ^Sturges v. Crowninshield, 4 See also Sullivan v. Lewis, Crabbe, Wheat. 133. V. S. Dist. Ct. 535, 538. See Ian- 6 McMillan v. McNeill, 4 Wlieat. gimge of Marshall, C. J., in Brash- 209. ear v. West, 7 Pet 608, 614 eOgden v. Saunders, 13 Wheat. 2Dolson et aL v. Kerr, 16 N. B, E. 218; Baldwin v. Hale, 1 WaE 333. 405. 7 Denny v. Bennett, 138 U. S. 489. sin re Hawkins et aL, 2 N. B, B. « Edwards v. Kearzey, 96 U. a 12a 595, 603; Denny v. Bennett, 128 U. S. 489, 495. 10 LAW OF BANKEUPTOr. contracts of citizens of other states, because they have no extraterritorial operatiou,^ and consequently the tribunal sitting under them, unless in cases where the citizen of such other state voluntarily becomes a party to the proceeding, has no jurisdiction in the case.'' Legal notice cannot be given, and as a result there can be no obligation to appear, and, of course, there can be no legal default.' Any question that may have existed as to the constitutional- ity of a Federal bankruptcy law has long since been dissipated by the decisions of the supreme court of the United States. Congress is given plenary power over the subject of bank- ruptcy, under one limitation only, that the law passed upon that subject shall be uniform throughout the United States.* And this power carries with it a right to establish the de- tails of the system if it shall think proper.' But congress cannot impose upon state courts any duties in connection with the enforcement of a bankrupt law.' The retrospective effect of the bankrupt law, by impairing the obligation of contracts, does not render it unconstitu- tional, as the inhibition to the impairment of contracts does not apply to the Federal government.^ So far as congress has failed to legislate with reference to insolvents, state laws relating to them may be said to be operative. Proceedings instituted under state insolvency laws prior to the passage of the national bankruptcy law, approved July 1, 1898, are not affected by it.' 1 Baldwin v. Hale, 1 Wall 223; « GoodaU v. Tuttle, 7 N. B. R 193; Gilman v. Lookwood, 4 id. 409; 3 Biss. 219; Fed. Caa 5533. Boyle V. Zaoharie, 6 Pet. 635. 'In re Jordan, 8 N. B. R. 180; 80 2 Clay V. Smith, 3 Pet. 411; Denny Leg. Int. 296; Fed. Cas. 7514; In re V. Bennett, 128 U. S. 489. Smith, 14 N. B. R. 295; 2 Woods, 3 Baldwin v. Hale, 1 Waa 223; 458; 8 Clii Leg. News, 315; Fed. Ogden V. Saunders, 13 Wheat. 213. Cas. 12996; In re Everett, 9 N. & K. Six Penny Savings Bank v.Stuy- Ann. 15; Martin v. Berry, 37 CaL vesant Bank, 10 N. B. R. 899; Fed. 208, where the same is held to be Cas. 13919; In re Deokert, 10 N. B. the effect of the act of 1867. E. 1; Fed. Cas. 3728. TITLE II. 'fHE NATIONAL BANKRUPTCY LAW. CHAPTEE L DEFINITIONS, Sec. 1. Meaning of words and phrases. — a. Tlie words and phrases used in this Act and in proceedings pursuant hereto shall, unless the same be inconsistent with the con- text, be construed as follows : (1) " A person against whom a petition has been filed " shaU include a person who has filed a voluntary petition; (2) ^ " adjudication " shall mean the date of the entry of a decree that the defendant, in a bankruptcy proceeding, is a bankrupt, or if such decree is appealed from, then the date when such decree is finally confirmed ; (3) " appellate courts " shall include the circuit courts of appeals of the United States, the supreme courts of the Territories, and the Supreme Court of the United States; (4) ^ " bankrupt " shall include a person against whom an lAn adjudication on a petition in bankruptcy is a final judgment which it is beyond the power of congress to annul or set aside (In re Comstock & Co., 10 N. B. R. 451; 6 Chi. Leg. News, 413; 23 Pittsb. Leg. J. 35; Fed. Cas. 3077), the rights of the parties being fixed at the date of the adjudication. (In re Kerr & Roach, 9 N. R B. 566; Fed. Cas. 7729.) 2 The word "bankrupt" is defined by Lord Coke as "a sign or mark, as we say a cart-rout, which is the sign or mark where the cart hath gone; so, metaphorically it is taken for him that hath wasted his estate and removed his hanque, so that there is left but a mention thereof." 4 Inst. 377. Blackstone defines a " bankrupt " as " a trader who secretes himself or does certain other acts, tending to defraud his creditors." 3 BL Com. 471. The word " bankruptcy," under the act of 1841, meant a particular status, to be ascertained and declared by judicial decree. (In re Black et al., 1 N. B. R. 81; 3 Ben. 196; 1 Amer. Law T. Rep. Bankr. 39; Fed. Cas. 1457.) 12 LAW OF BAIJKEUPTOT. [§ !• involuntary petition or an application to set a composition aside or to revoke a discharge has been filed, or who has filed a voluntary petition, or who has been adjudged a bank- rupt; (5) "clerk" shall mean the clerk of a court of bank- ruptcy; (6) 1 " corporations " shall mean all bodies having any of the powers and privileges of private corporations not pos- sessed by individuals or partnerships, and shall include lim- ited or other partnership associations organized under laws making the capital subscribed alone responsible for the debts of the association; (Y) " court " shall mean the court of bank- ruptcy in which the proceedings are pending, and may in- clude the referee; (8) "courts of bankruptcy" shall include the district courts of the United States and of the Terri- tories, the supreme court of the District of Columbia, and the United States court of the Indian Territory, and of Alaska; (9) "creditor" shall include anyone who owns a demand or claim provable in bankruptcy, and may include his duly authorized agent, attorney, or proxy; (10) "date of bank- ruptcy," or " time of bankruptcy," or ^ " commencement of proceedings," or " bankruptcy," with reference to time, shall mean the date when the petition was filed; (11) '"debt" shall include any debt, demand, or claim provable in bank- 1 An insurance company is one of that class of corporations intended to be within the scope and provisions of the general bankruptcy law. (In re Merchants' Insurance Co., 6 N. B. E. 43; 3 Biss. 163; 20 Pittsb. Leg. J. 33; 4 ChL Leg. News, 78; Fed. Cas. 9441.) 2 It is not the filing of every petition in bankruptcy that is deemed "a commencement of proceediugs," but it is the filing of a petition upon which an order of adjudication may be made by the court (In re Rogers, 10 N. B. R. 444; 1 Cent. Law J. 470; Fed. Cas. 13003), either by a debtor in his own behalf, or by a creditor against a debtor, upon which an order shall be issued adjudicating the debtor a bankrupt (In re Litchfield, 9 N. B. E. 506; 7 Ben. 259; Fed. Cas. 8385.) ' The word " debt," as used in the bankrupt law, is synonymous with claim. (Stokes & Leonard v. Mason, 13 N. B. R 498.) A speculative option, where the object of the parties is not a sale and delivery of the goods, but a settlement in money on differences — commonly called a " put "— is not a provable debt ia bankruptcy. (In re Chandler, 9 N. B. R 514; 18 Amer. Law Eeg. (N. S.) 310; 6 Chi Leg. News, 239; Fed. Cas, 2590.) § 1.] DEFINITIONS. 13 ruptoy; (12) "discliarge " shall mean the release of a bank- rupt from all of his debts which are provable in bankruptcy, except such as are excepted by this Act ; (13) " document " shall include any book, deed, or instrument in writing; (14) " holiday " shall include Christmas, the Fourth of July, the Twenty-second of February, and any day appointed by the President of the United States or the Congress of the United States as a holiday or as a day of public fasting or thanksgiving; (15) a person shaU be deemed^ insolvent 1 Traders and merchants have been held to be insolvent in the fol- lowing oases: When they are unable to pay their debts as they become due in the ordinary course of business (Ecf ort & Petring v. Greely, 6 N. B. R 433; Fed. Cas. 4360; Toof v. Martin, 6 N. B. R. 49; 13 Wall 40; Martin v. Toof et aL, 4 N. B. R. 158; Fed. Cas. 9164; Stranahan v. Gregory & Co., 4 N. B. E. 143; Fed. Cas. 13533; In re Lewis et aL, 3 N. R R. 145; In re Kingsbury et aL, 3 N. B. R. 84; Fed. Cas. 7816; Mer- chants' National Bank of Hastings v. Truax, 1 N. B. R 146; 1 Amer. Law T. Rep. Bankr. 73; Fed. Cas. 9451; "Warren v. Bank, 7 N. B. R. 481; 10 Blatchf. 493; Fed. Cas. 17303; Jackson, Ass., v. McCullooh et aL, 13 N. B. R 388; 1 Woods, 433; 1 N. Y. Weekly Dig. 534; Fed. Cas. 7140; Sawyer et aL v. Turpin et aL, 5 N. B. R 339; 3 Lowell, 39; Fed. Cas. 12410), although the assets of a debtor may be largely in excess of his liabilities (In re Woods, 7 N. B. R 126; 39 Leg. Int. 236; 20 Pittsb. Leg. J. 31; Fed. Cas. 17990); and it is no excuse that he might have paid them if time had been given for that purpose. (Webb, Ass., v. Sachs et aL, 15 N. B. R 168; 4 Sawy. 158; 9 Chi Leg. News, 156; Fed. Cas. 17335.) If his debts cannot be made in full out of his property by levy and sale on execution, he is insolvent within the primary and ordinary meaning of the word, and particularly in the sense in which it is used in the Bankrupt Act. (In re WeUs, 3 N. B. R 95 ; 3 CM. Leg. News, 49 ; Fed. Cas. 17388 ; In re Oregon Bulletin, etc. Co., 13 N. B. R 503 ; 1 Cin. Law J. 87 ; Fed. Cas.10559. But see Harrison v. McLaren, 10 N. B. R 344; Fed. Cas. 6139.) A merchant who had transferred some of his assets as claimed, in fraud of creditors, and who held property enough so that, if it were advanta- geously disposed of, it might pay all his debts, but failed to pay a few Small debts as they became due, was nevertheless held to be insolvent. (Eofort & Petring v. Greely, 6 N. B. R 433; 4 Chi. Leg. News, 209; Fed. Cas. 4360.) Where repeated demands for payment are met by promises to pay a debt at specified times, which are not kept, and where a cred- itor knows that debtor has other debts greater in amount than his own, he will be presumed to know that the debtor is insolvent, if in fact he is. (In re Armstrong, 16 N. B. R 275; 9 Ben. 213; Fed. Cas. 589.) In 14: LAW OF BAITKEUPTOT. [§ 1. within the provisions of this Act whenever the aggregate of his property, exclusive of any property which he may have conveyed, transferred, concealed, or removed, or per- mitted to be concealed or removed, with intent to defraud, hinder or delay his creditors, shall not, at a fair valuation, be sufficient in amount to pay his debts ; (16) ' "judge " shaU mean a judge of a court of bankruptcy, not including the referee ; (17) " oath " shall include affirmation ; (18) " officer " shall include clerk, marshal, receiver, referee, and trustee, large commercial centers, a failure to meet payments as they become due is deemed insolvency, but in the country the custom of traders is generally different. A person should be held insolvent only when he fails to meet his debts according to the custom of the place of his busi- ness. (Hall, Ass., etc. v. "Wager & Fales, 5 N. B. E. 181; 3 Biss. 28; 5 West. Jur. 538; 3 ChL Leg. News, 401; Fed. Cas. 5951.) A banker who receives collateral security for the payment of a draft which he cashed on the preceding day has reasonable cause to believe that the drawer is insolvent. (Merchants' National Bank of Cincinnati v. Cook et aL, Trustees, 16 N. B. E. 391; 95 TJ. S. 343.) The court may properly charge the jury, " That if the jury find that the quantity and value of the assets of the debtor had not materially diminished from the date when the judgment note was given till the day when he filed his petition in bankruptcy and the day when he was adjudged a bankrupt, they may find that he was insolvent when he gave the judgment nota" (First Nat. Bank of Clarion v. Jones, Ass., 11 N. B. E. 381; 21 Waa 325.) The words "insolvent" and "insolvency," used in the act of 1867, are not synonymous with the words " bankrupt " and " bankruptcy." The former words are less restricted. (In re Black et aL, 1 N. B. E. 81; 3 Ben. 196; 1 Amer. Law T. Eep. Bankr. 39; Fed. Caa 1457.) The term " insolvency," when applied to traders, does not mean an absolute in- ability of the debtor to pay his debts at some future time upon a settle- ment and winding up of his affairs, but a present inability to pay in the ordinary course of his business as men in trade usually do, although his inability be not so great as to compel him to stop business, and although he may be able to pay his debts at a future time upon the winding up of his concerns. It cannot be held that a debtor ceases to be insolvent because creditors have entered into an agreement to extend the time of payment of their debts. (Eison v. Knapp, 4 N. B. E. 114; Fed. Cas. 11861.) 1 The word " judge," mentioned in section 23 of the act of 1867, is con- strued to mean or include register. (In re Bininger & Clark, 9 N. B E. 568; Fed. Cas. 1431.) § 1.] ^ DEFINITIONS. ,15 and the imposing of a duty upon or the forbidding of an act by any officer shall include his successor and any person authorized by law to perforin the duties of such officer; (19) ' "persons " shall include corporations, except where oth- erwise specified, and officers, partnerships, and women, and when used with reference to the commission of acts which are herein forbidden shall include persons who are partici- pants in the forbidden acts, and the agents, officers, and members of the board of directors or trustees, or other simi- lar controlling bodies of corporations; (20) " " petition " shall mean a paper filed in a court of bankruptcy or with a clerk or deputy clerk by a debtor praying for the benefits of this Act, or by creditors alleging the commission of an act of bankruptcy by a debtor therein named ; (21) " referee " shall mean the referee who has jurisdiction of the case or to whom the case has been referred, or anyone acting in his stead ; (22) "conceal" shall include secrete, falsify, and mutilate; (23) " secured creditor " shall include a creditor who has se- curity for his debt upon the property of the bankrupt of a nature to be assignable under this Act, or who owns such a debt for which some indorser, surety, or other persons sec- ondarily liable for the bankrupt has such security upon the bankrupt's assets; (24) "States" shall include the Territo- ries, the Indian Territory, Alaska, and the District of Colum- bia; (25) "transfer" shall include the sale and every other and different mode of disposing of or parting with property, or the possession of property, absolutely or conditionally, as a payment, pledge, mortgage, gift, or security ; (26) " trustee " shall include aU of the trustees of an estate ; (27) " wage- iln the absence of any statute definition to that effect, the word "person " should be construed to include a corporation, unless it appears that it was used in a more limited sense. (In re Oregon Publishing, etc. Co., 13 N. B. R 199; 10 Amer. Law Eev. 380; 8 Chi. Leg. News, 81; Fed. Cas. 10588; In re CaL Pac. R. R. Co., 11 N. B. R. 193; 3 Sawy. 340; 3 Cent. Law J. 79; Fed. Cas. 3315.) 2 A petition in bankruptcy is an action or suit. (In re Comstock, etc. Co., 10 N. B. a 451; 6 ChL Leg. News, 413; 33 Pittsb. Leg. J. 35; Fed, Cas. 3077.) 16 lAW 01" BA^STKETTPTOT. [§ 1. earner" shall mean an individual who works for wages, salary, or hire, at a rate of compensation not exceeding one thousand five hundred dollars per year; (28) words import- ing the masculine gender may be applied to and include cor- porations, partnerships, and women; (29) words importing the plural number may be applied to and mean only a single person or thing ; (30) words importing the singular number may be appUed to and mean several persons or things. [Act of 1867. Seo. 38. And le it fv/rther enacted, That the filing of a petition for adjudication in bankruptcy, either by a debtor in nis own behalf, or by any creditor against a debtor; upon which an order maybe issued by the court, or by a register in the manner provided in section four, shall be deemed and taken to be the commencement of proceed- ings in bankruptcy under this act; . . . Seo. 48. And he it fv/rther enacted, That the word " as- signee " and the word " creditor " shaU. include the plural also ; and the word " messenger " shall include his assistant or assistants, except in the provision for the fees of that offi- cer. The word " marshal " shall include the marshal's depu- ties; the word "person" shall also include "corporation;" and the word " oath " shall include " affirmation." . . .] Foi contents of petition under Act of 1867, see sec. i, Title m. CHAPTEE n, CREATION OF COURTS OF BANKRUPTCY AND THEIR JURIS- DICTION. Seo. 2. That the courts of bankruptcy as hereinbefore de- fined, viz, the district courts of the United States in the sev- eral Sta-tes, the supreme court of the District of Columbia, the district courts of the several Territories, and the United States courts in the Indian Territory and the District of Alaska, are hereby made courts of bankruptcy, and are hereby invested, "within their respective territorial limits as now es- tablished, or as they may be hereafter changed, with such jurisdiction at law and in equity as will enable them to ex- ercise original jurisdiction in baniruptcy proceedings, in vacation in chambers and during their respective terms, as they are now or may be hereafter held, to (1) adjudge persons bankrupt who have had their principal place of busi- ness, resided, or had their domicile within their respective territorial jurisdictions for the preceding six months, or the greater portion thereof, or who do not have their principal place of business, reside, or have their domicile within the United States, but have property within their jurisdictions, or who have been adjudged bankrupts by com'ts of compe- tent jurisdiction without the United States and have prop- erty within their jurisdictions; (2) allow claims, disallow claims, reconsider allowed or disallowed claims, and aUow or disallow them against bankrupt estates ; (3) appoint re- ceivers or the marshals, upon application of parties in inter- est, in case the courts shall find it absolutely necessary, for the preservation of estates, to take charge of the property of bankrupts after the filing of the petition and untU it is dismissed or the trustee is qualified; (4) arraign, try, and punish bankrupts, oiScers, and other persons, and the agents, 18 LAW OF BANKEUPTCT. [§ 2. officers, members of the board of directors or trustees, or other similar controlling bodies, of corporations for viola- tions of this Act, in accordance with the laws of proced- ure of the United States now in force, or such as may- be hereafter enacted, regulating trials for the alleged violas tion of laws of the United States ; (5) authorize the business of bankrupts to be conducted for limited periods by receivers, the marshals, or trustees, if necessary in the best interests of the estates ; (6) bring in and substitute additional persons or parties in proceedings in bankruptcy when necessary for the complete determination of a matter in controversy; (7) cause the estates of bankrupts to be collected, reduced to money and distributed, and determine controversies in relation thereto, except as herein otherwise provided; (8) close es- tates, whenever it appears that they have been fully admin- istered, by approving the final accounts and discharging the trustees, and reopen them whenever it appears they were closed before being fully administered ; (9) confirm or reject compositions between debtors and their creditors, and set aside compositions and reinstate the cases ; (10) consider and confirm, modify or overrule, or return, with instructions for further proceedings, records and findings certified to them by referees ; (11) determine all claims of bankrupts to their exemptions ; (12) discharge or refuse to discharge bankrupts and set aside discharges and reinstate the cases; (13) enforce obedience by bankrupts, officers, and other persons to all law- ful orders, by fine or imprisonment or fine and imprisonment ; (14) extradite bankrupts from their respective districts to other districts ; (15) make such orders, issue such process, and enter such judgments in addition to those specifically pro- vided for as may be necessary for the enforcement of the pro- visions of this Act; (16) punish persons for contempts commit- ted before referees; (17) pursuant to the recommendation of creditors, or when they neglect to recommend the appoint- ment of trustees, appoint trustees, and upon complaints of creditors, remove trustees for cause upon hearings and after notices to them ; (18) tax costs, whenever they are allowed by § 2.] JUEISDICTION. 19 law, and render judgments therefor against the imsucoessful party, or the successful party for cause, or in part against each of the parties, and against estates, in proceedings in bankruptcy; and (19) transfer cases to other courts of bank- ruptcy. Nothing in this section contained shall be construed to deprive a court of bankruptcy of any power it would possess were certain specific powers not herein enumerated. [Act of 1867. Sec. 1. Be it enacted . . . That the several District Courts of the United States be, and they hereby are, constituted courts of bankruptcy, and they shall have original jurisdiction in their respective districts in all matters and proceedings in bankruptcy, and they are hereby authorized to hear and adjudicate upon the same according to the provisions of this act. The said courts shaU be al- ways open for the transaction of business under this act, and the powers and jurisdiction hereby granted and conferred shall be exercised as well in vacation as in term time, and a judge sitting at chambers shall have the same powers and jurisdiction, including the power of keeping order and of punishing any contempt of his authority, as when sitting in Court. And the jurisdiction hereby conferred shall extend to all cases and controversies arising between the bankrupt and any creditor or creditors who shall claim any debt or demand under the bankruptcy; to the collection of all the assets of the bankrupt ; to the ascertainment and liquidation of the liens and other specific claims thereon ; to the adjust- ment of the various priorities and conflicting interests of all parties and to the marshalling and disposition of the differ- ent funds and assets, so as to secure the rights of all parties and due distribution of the assets among all the creditors ; and to all acts, matters, and things to be done under and in virtue of, the bankruptcy, until the final distribution and settlement of the estate of the bankrupt, and the close of the proceedings in bankruptcy. The said courts shall have full authority to compel obedience to all orders and decrees passed by them in bankruptcy, by process of contempt and other remedial process, to the same extent that the circuit courts now have in any suit pending therein in equity. Said courts may sit, for the transaction of business in bankruptcy, at any place in the district, of which place and the time of holding court, they shall have given notice, as well as at the places designated by law for holding such courts. 20 LAW OF BANKEUPTOY. [§ 2. Seo. 28. . . . Preparatory to the final dividend, the assignee shall submit his account to the court and file the same, . . . and at such time the court shall audit and pass the accounts of the assignee, and such assignee shaU, if required by the court, be examined as to the truth of such account, and if found correct he shaU thereby be discharged from all liability as assignee to any creditor of the bankrupt. Sec. 18. . , . An assignee refustug or unreasonably neglecting to execute an instrument when lawfully required by the court, or disobeying a lawful order or decree of the court in the premises, may be punished as for a contempt of court. Sec. 49. And ie itfwrther enacted, That aU the jurisdic- tion, power, and authority conferred upon and vested itt the District Court of the united States by this act ia cases in bankruptcy are hereby conferred upon and vested in the Supreme Court of the District of Columbia, and in and upon the supreme courts of the several Territories of the United States, when the bankrupt resides in the said District of Columbia or in either of the said Territories. And in those judicial districts which are not vsdthin any organized circuit of the United States, the power and jurisdiction of a circuit court in bankruptcy may be exercised by the district judge.] (1) Courts of bankruptcy have jurisdiction to adjudge a partnership bankrupt, and, il it has jurisdiction of one of the partners, it may have of all and of the administration of the partnership and individual property. (Sec. 5, a and c.) And in the event petitions are filed against the same person or against different members of a partnership in different courts of bankruptcy, each of which has jurisdiction, the cases shall be trans- ferred by order of the court relinquishing jurisdiction to and be consoli- dated by the court which can proceed with the greatest convenience to parties in interest. (Seo. 33.) Court always open. — The district court, for the purposes of its bank- ruptcy jurisdiction, is always open. It has no separate terms. Its proceedings in any pending suit are, therefore, at aU times open for re- examination upon application made in an appropriate form. Any order made in the progress of the caxise may be subsequently set aside and vacated upon proper showing, provided rights have not become vested under it which will be disturbed by its vacation. (Sandusky v. First Nat Bank, 12 N. B. R. 176; 23 Wall. 289.) In the exercise of its exclu- sive original jurisdiction it may act in administrative matters or mat- ters of mere discretion as well in vacation as in term time, and a judge sitting at chambers in such matters has the same power and jurisdio- tion as when sitting in coui-t (Shearman v. Bingham et aL, 7 H. B. B. 490.) § 2.] JTJEISDIOTIOK. 21 General. — A judge who has been a depositor in an insolvent banking institution, but who has sold his claim, is not thereby disqualified from sitting in the matter, although the motive on the part of the purchaser of the claim may have been to remove the disqualification. (In re Sime & Co., 7 N. B. R. 407; 3 Sawy. 330; 5 Pac. Law Eep. 317; Fed. Cas. 13860.) Neither court nor register can be the general adviser of the assignees as to their acts. (In re Sturgeon, 1 N. B. R. 131; 3 Amer. Law T. Rep. Bankr. 7; Fed. Cas. 13564) Jarlsdiction.— The United States district court sitting in bankruptcy has full and complete jurisdiction to administer the estate of the bank- rupt. (AUen & Co. v. Montgomery et al., 10 N. B. B. 503; In re Archen- brown, 11 N. B. R 149; 7 Chi. Leg. News, 99; Fed. Cas. 504.) This jurisdiction extends to all acts, matters and things to be done under and in virtue of the bankruptcy until the final distribution and settlement of the estate of the bankrupt and the close of proceedings in bank- ruptcy (Bucknam v. Dunn et al., 16 N. B. R 470; 3 Hask. 315; Fed. Cas. 3096); the commencement of proceedings in bankruptcy transfer- ring at once to the district court the jurisdiction over the bankrupt, his estate, and all parties and questions connected therewith. (In re Carow, 4 N. B. R 178; 41 How. Pr. 113; Fed. Cas, 3436.) Whenever the jurisdic- tion of the court is properly and in good faith invoked in the manner prescribed by law, the court is bound to assume and exercise that juris- diction (In re KeUer et al., 18 N. B. R 10; 7 Chi. Leg. News, 43; 9 West Jur. 175; Fed. Cas. 7647), as it has no authority to exercise discretion in the entertainment of actions over which it is given jurisdiction, when properly applied to for the exercise thereof (Cook v. Waters et al., 9 N, B. R 155); and when jurisdiction is taken it is superior and exclusive in all matters arising under the Bankrupt Act. (In re Barrow, 1 N. B. R 135; 1 Amer. Law T. Rep. Bankr. 63; Fed. Cas. 1057.) A creditor attack- ing the jiurfsdiction need not first file formal proof of his debt, as this would import a recognition of the jurisdiction. He must, however, show that he is a creditor and that he has an interest to protect. (In re Boston R & E. R R Co., 6 N. B. R 309; 9 Blatchf, 101; 8 Amer. L. Rev. 683; Fed. Cas. 1678.) Where the court is without jurisdiction, no voluntary act of the de- fendant can give such jurisdiction, and the point can be raised even after the appearance and answer (Jobbins v. Montague, 6 N. B. E. 509; Fed. Cas. 7380); and where want of jurisdiction appeared on the peti- tion, but respondents consented to the jurisdiction, the court took notice of the point on its own motion. (In re Hopkins v. Carpenter et aL, 18 N. B. R 339; Fed. Cas. 6686.) It has been held, however, that objection to the jurisdiction over the person of a party may be expressly waived, and the same thing may be done by implication, by means of any act indicating it to be the design of the person entitled to make it, not to insist upon it. (People ex reL Jennys v. Brennan, 13 N. B. R 567.) The bankrupt court has a right to determine the question as to fraud 22 LAW OF BAIfKEUPTCT. [§ 2. in the contracting of a debt, and it is not bound by a statement in a declaration or complaint made by a party in a state court (In re Will- iams and MoPheeters, 11 N. B. E. 145; 6 Biss. 233; 7 Chi Leg. News, 49; Fed. Cas. 17700; In re Wright, 2 N. B. R 57; 36 How. Pr. 167; 2 Ben. 509; Fed. Cas. 18065.) Orer corporations. — The "dissolution" of a corporation under state insolvency laws does not end its existence so as to prevent the jurisdic- tion of the bankrupt courts from attaching. (In re Independent Insur- ance Co., 6 N. B. R 260; Fed. Cas. 7017; Id., 6 N. B. R 169; 2 Lowell, 97; Fed. Cas. 7018.) Service of the rule to show cause on the cashier of a corporation which has passed iato the hands of a receiver is sufficient to enable the bankrupt court to proceed to adjudication. (Piatt v. Archer, 6 N. B. R 465; Fed. Cas. 11213.) A decree adjudging a corporation bank- rupt is in the nature of a decree in rem, and if the court rendering it had jurisdiction, it can only be assailed by a direct proceeding in a competent court, tmless due notice of the petition was never given or the decree is void in form. (New Lamp Chimney Co. v. Ansonia Brass and Copper Co., 13 N. B. R 385; 91 U. S. 756.) In law and equity. — Under the bankrupt law, the district court has jurisdiction both in law and equity (In re Fendley, 10 N. B. R 250; 3 Amer. Law Eec. 105; Fed. Cas. 4728; In re Salkey and Gerson, UN. B. R 423; 6 Biss. 269; 7 Chi. Leg. News, 178; Fed. Cas. 12353; In re Bowie, 1 N. B. R 185; 15 Pittsb. Leg. J. 448; 1 Amer. Law T. Rep. Bankr. 97; Fed. Cas. 1725) ; and has full equitable discretion to allow a case to be with- drawn from it, provided it can be done without prejudice to the inter- ests of any of the parties who are before it. (In re Indianapolis, Cincin- nati & Lafayette R R Co., 8 N. B. R 302; 21 Pittsb. Leg. J. 4; Fed. Cas. 7023.) It has jurisdiction in a suit in equity by the assignee in bank- ruptcy to set aside conveyances alleged to be fraudulent, although the courts of law may have concurrent jurisdiction. (Pratt v. Curtis, 6 N. B. R 139; Fed. Cas. 11375.) Over liens. — The bankrupt court has jurisdiction to hear and deter- mine aU questions of Hens involving rights to property claimed to belong to the bankrupt's estate (In re High and Hibbard, 3 N. B. R 46; 2 Amer. Law T. 170 ; 2 Chi Leg. News, 9 ; 16 Pittsb. Leg. J. 193 ; 1 Amer. Law T. Eep. Bankr. 175; Fed. Cas. 6473); and it may enforce a lien against the pur- chaser of property sold by an assignee subject to such lien. (Bucknam V. Dunn et aL, 16 N. B. R 470; 2 Hask. 215; Fed. Cas. 2096.) But a judg- ment creditor cannot claim the jurisdiction of the court in bankruptcy for the collection of a debt which is fully secxired by the only hen on real estate. (In re Johann, 4 N. B. R 143; Fed. Cas. 7331.) A prior Uen gives a prior claim, and the district court may ascertain and liquidate a lien. (In re Winn, 1 N. B. R 131; 1 Amer. Law T. Eep. Bankr. 17; Fed. Cas. 17876.) Residence or domicile.— If the defendants do not reside within the district, the district court has no power to obtain jurisdiction over their § 2.] JUEISDIOTIOK. 23 persons by any service of process otherwise than in accordance with the rule (Hyslop v. Hoppock, 6 N. B. R. 557; 5 Ben. 533; Fed. Cas. 6989); and where defendants appeared on the return day and consented to the adju- dication, the court subsequently dismissed the proceedings on objection from other creditors, on the ground that the banknipts had never resided, or carried on business, in the state. (In re Fogarty et ah, 4 N. B. R. 148; lSawy.283; 5 Amer. LawRev. 163; Fed. Cas. 4895.) If a party who is pro- ceeded against by summary petition consents to a reference of the case to a register to take proof, he thereby gives the district court jurisdiction over his person, and cannot impeach its decrees in a collateral action. (People ex rel. Jennys v. Brennan, 12 N. B. R. 567.) In a dispute over the ownership of a fund controlled by the assignee in bankruptcy, the district court has jurisdiction, without reference to the residence of the parties. (In re Sabin, 18 N. B. R 157; 10 Chi. Leg. News, 364; 3 Cin. Law BuL 635 ; Fed. Cas. 12195 ; Markson & Spaulding v. Heaney, 4 N. B. R. 165; 3 ChL Leg. News, 153; Fed. Cas. 9098; Payson v. Dietz, 8 N. B. E, 193; 5 Chi Leg. News, 434; 30 Leg. Int. 313; Fed. Cas. 10861.) The word "residence," in section 11 of the act of 1867, is not synony- mous with "domicile," and where a person, resident with his family in one place, buys a stock of goods in another, and goes there for business, leaving his family in the former place, the petition in bankruptcy is properly filed in the place where he carries on such business. (In re Watson, 4 N. B. E. 197; Fed. Cas. 12372.) Where a bankrupt born in one state becomes domiciled in another, but leaves it with no intention of returning, and finally returns to his native state, and shortly thereafter files his application in bankruptcy, the act of leaving the former domi- cile, with no intention of returning, at once revives the domicile of origin. (In re Wiggin, 1 N. B. R. 90.) A petition can only be filed against a firm in its domicile and only place of business. (Cameron v. Canieo & Co., 9 N. B. R. 527; Fed. Cas. 2340.) A debtor may file his petition in the district in which he has resided or carried on business for the six months next immediately preceding the filing of the petition, or for the longest period during or within such six months that he has resided or carried on business in any district (In re Foster & Pratt, 3 N. B. R. 57; 3 Ben. 386; Fed. Cas. 4963); and a court is vidthout juiisdiction to entertain an application for discharge unless the bankrupt has so resided or carried on business immediately preceding the time of filing, or for the longest period during such sis months. (In re Leighton, 5 N. B. R. 95; 4 Ben. 457; Fed. Cas. 8221.) Where a petitioner in bankruptcy carried on business for many years in one city and then retired and moved to another, but is employed in the former place, his petition is properly filed in the court in which his business was conducted. (In re Belcher, 1 N. B. R. 202; 2 Ben. 468; Fed. Cas. 1237.) A clerk employed in a commercial house in one city and re- siding in another state cannot be regarded as having carried on business in said city for six months immediately preceding the filing of his peti- 24 LAW OF BANKEUPTOT. [§ 3. tion. (In re Magie, 1 N. B. E. 153.) A., being a member of a firm doing business in one state but domiciled in another, moved to dismiss the proceeding in bankruptcy in the state of his domicile and have the cause removed to the district where the business was conducted and his part- ner resided and had filed petition. The court directed that proceedings be stayed. (In re Smith, 3 N. B. R. 15.) The allegation of residence or carrying on of business, in the petition, is the allegation of a jurisdic- tional fact, and the petition must contain an allegation in that respect; (In re Beals et aL, 17 N. B. R. 108; 9 Ben. 333; Fed, Cas. 1165.) The fact that a person has an office at which he receives mail and set- tles up the old business of an insolvent firm of manufacturers of which he was a member, and which has ceased business as manufacturers, is not suificient to sustain an allegation of carrying on business within the jurisdiction of a particular bankruptcy court. (In re Little, 3 N. B. R. 97; 3 Ben. 35; 1 Chi. Leg. News, 133; Fed. Cas. 8391.) Where a person acts as agent and attorney for his brother in buying and selling mer- chandise, at an office with a sign having his brother's name on it, and was well known by those who had dealings with him to be doing such business at that office, he carries on business within the meaning of the act of 1867. (In re Baily, 1 N. B. E. 177; 3 Ben. 437; Fed. Cas. 753.) Neither the actual nor alleged residence or place of business of a bank- rupt can be directly made the ground of opposition to his discharge. (In re Burk, 3 N. B. R. 76; Deady, 435; 3 Amer. Law T. Rep. Bankr. 45; Fed. Cas. 2156.) The "usual place of abode " of a corporation should be construed to mean the principal office of the corporation. (In re CaL Pao. R. R. Co., 11 N. B. R. 193; 3 Sawy. 340; 3 Cent. Law J. 79; Fed. Cas. 3315.) (3) Allowance and proof of claims. — Provision for the proof and al- lowance of claims is set forth at length under section 57. The receiving and filing of a proof of debt concludes nothing, and the power still re- mains in the court to revise and correct or reject such proof altogether. (In re Merrick, 7 N. B. R. 459; Fed. Cas. 9463.) And if creditors seek a re-examination of claims, they must first file a petition for re-examina- tion. (In re TifEt, 17 N. B. E. 503; Fed. Cas. 14029.) Under the act of 1867 it was held that, when an assig-nee files a petition for a re-examina- tion of a proof, the creditor need only offer himself for examination, and the assignee must introduce such opposing proof as he may have, if he desires to contest the proof of the claim. (In re Robinson, 14 N. B. E. 130; 8 Ben. 406; Fed. Cas. 11938.) If a claim has been rejected by the assignee and returned to the register for further proof, it should not be ordered paid without notice to the assignee and opportunity given to answer creditor's petition. (In re Mittledorfer & Co., Ex parte Eutherglen, 3 N. B. E. 9; Chase, 276; Fed. Cas. 9674) (3) Control of a bankrupt's property .—When the bankrupt's estate is such that it may deteriorate through the failure of the creditors to appoint a trustee as required (sec. 44), or he has failed to qualify, and the I 2.] juEisDionoN. 25 court is unwilling to make an immediate appointment, then this pro- vision permits the temporary appoiatment of receivers or marshals to take charge of the property until such trustee qualifies. No compen- sation appears to have been specifically provided for this service of re- ceivers. The estate surrendered by the bankrupt is placed in the custody of the court sitting in bankruptcy, and the ofificer appointed to manage it is accountable to the court appointing him and to that court alone. (In re Carow, 41 N. B. R 178; 4 How. Pr. 113; Fed. Cas. 2436.) If a lease is terminated by condition broken, after the filing of a petition and before the appointment of an assignee, the property is also in the custody of the court; and a re-entry by the lessor, or other interference without leave of the court, is in contempt of its authority. (In re Steadman, 8 N. B. E. 319; Fed. Cas. 13330.) A warrant commanding the marshal to take possession provisionally of all the property and effects of the bank- rupt, and of aU the goods, assets and property conveyed by the bankrupt to another, whether by bill of sale or otherwise, is beyond the power of the court in so far as it commands the marshal to take property con- veyed before the filing of a petition by the bankrupt. (In re HarthUl, 4N. B. R. 131; Fed. Cas. 6161.) The court will appoint receiver, where voluntary assignees fail to properly conduct the business in their charge (In re Sedgwick, Ass., v. Place et aL, 3 N. B. E. 35; 3 Ben. 360; Fed. Cas. 13619), or after adjudica- tion and before the selection of an assignee, for the temporary care and custody of the estate, when special circumstances render it desirable (Lansing v. Manton, 14 N. B. R. 127; 3 N. Y. Weekly Dig. 113; Fed. Cas. 8077); but will not appoint a provisional assignee upon the ground that the debtor removed goods in fulfillment of an existing contract made long before the commencement of bankruptcy proceedings, as such act is not fraudulent. (National Bank of Pittsburg v. The Brady's Bend Iron Co., 5 N. B. R. 491; 19 Pittsb. Leg. J. 5; 8 Chi Leg. News, 403; 28 Leg. Int. 317; 4 Amer. LawT. 168; 8 Phila. 171; 3 Pittsb. Rep. 336; 1 Leg. Op. 302; 1 Amer. Law T. Rep. Bankr. 272; Fed. Cas. 9018.) It was held, under the act of 1867, that so long as the property re- mains in the receiptor's hands or the hands of the debtor, the delivery of attached property to the receiptor does not divest the attachment Uen (Rowe v. Page, 13 N. B. E. 366), and a person was held to be entitled to a judgment in rem, and could levy execution upon the money which might be collected from the receiptor. (Batchelder v. Putnam, 13 N. B. R. 404.) (4) Trial of offenses. — Penalties for violating the provisions of this act are provided by section 39, but the offender is exempt from prosecution un- less the indictment is found or the information is filed in court within one year after the commission of the ofEense. The alleged offender has the right to a trial by jury. (Sec. 19c.) The United States circuit courts have 26 LAW OF BANKETTPTCY. [§ 2. concurrent jiorisdiction with courts of bankruptcy, within their re- spective territorial limits, of the offenses enumerated in this act. (Sec. 23c.) (5) Upon proper showing the court is endowed by this provision with authority to prevent a sacrifice of the estate at times of money depres- sions, absence of a market, etc., and may permit a continuance of the business for a limited period. (6) Substitution of parties. — Where there appears to be an adverse interest in any one not before the court, the bankrupt court cannot ad- judicate on the same without that person being properly before it, and without setting in motion the machinery of a court for the purpose of litigating any proposed rights. (In re Pierce et aL, 15 N. B. E. 449; 7 Biss. 426; 9 Chi. Leg. News, 300; 15 Alb. Law J. 517; Fed. Cas. 11139.) Strangers to the proceedings in bankruptcy, not served -with, process, and who have not voluntarily appeared and become parties to such liti- gation, cannot be compelled to come into court under a petition for a rule to show causa Such parties must be proceeded against by a suit at law or in equity. (Smith v. Mason, 6 N. B. R 1; 14 Waa 419.) (7) Suits of bankrupts. — A trustee may be ordered by the court to enter his appearance and defend any pending suit against a bankrupt (sec. lib), and with the approval of the court he may be permitted to prosecute as trustee any suit commenced by the bankrupt prior to the adjudication, with like force and effect as though it had been com- menced by him- (Sec. lie.) United States circuit courts have jurisdic- tion of all controversies at law and in equity, as distinguished from proceedings in bankruptcy, between trustees as such and adverse claim- ants, concerning the property acquired or claimed by trustees, to the same extent only as though bankrupt proceedings had not been insti- tuted and such controversies had been between the bankrupt and such adverse claimant. (Sec. 23a.) The trustee wiU be subrogated to the right of the holder of any lien created within four months of filing the petition, and may enforce the same. (Sec. 67&) Property of bankrupt. — It is such trustee's duty to account for and pay over to the estate all interest received by him upon property of estate in his charge (47 — 1), and collect and reduce to money the prop- erty of the estate for which he is trustee under the direction of the court, and close up the estate as expeditiously as is compatible with the best interests of the parties in interest. (Sec. 47 — 3.) All property of the bankrupt comes into the power of the court the mo- ment the voluntary petition is filed, and the court has exclusive control of the same. (Byrd, Ass., v. Harrold et al., 18 N. B. E. 483; 36 Kttsb. Leg. J. 315; Fed. Cas. 339.) It has power to take possession of personal as- sets in the hands of a vendee, purchased before adjudication, upon ex parte proof, before trial of issue of title. (In re Hvmt, 2 N. R R. 166; 1 Chi Leg. News, 179; Fed. Cas. 6881.) It may make any assessment upon § 2.] JUEISDIOTION. 27 the stockholders of a bankrupt company as fully as the stockholders or directors could have done. (Upton, Ass., v. Hansbrough, 10 N. B. E. 368; 3 Biss. 417; 5 Chi. Leg. News, 243; 7 West. Jur. 238; Fed. Cas. 16801.) But it has no authority to deprive the assignee of the possession of the bankrupt's property without due process of law, unless the parties con- sent to a trial by the court. (Wood Mowing and Reaping Machine Co. V. Brook, 9 N. B. E. 395; 2 Sawy. 576; Fed. Cas. 17980.) Sales. — The form of an order is sufficient that directs the sale of the right, title, etc., of the bankrupt, and it need not direct the sale of the right, title, etc., which the general assignee acquired by the decree of bankruptcy. (Smith v. Soholtz et al., 17 N. B. E. 520.) If there has been a recovery of judgment before bankruptcy, the sheriff may go on and sell, but the bankrupt court has the right to cause the sale to be made under its supervision and control. (Allen & Co. v. Montgomery et al., 10 N. B. E. 503.) The bankrupt court has authority to order the sale of property pledged or mortgaged by a bankrupt, the proceeds to be brought into court to await the determination of the rights of the pledgee or mortgagee. (In re Columbian Metal Works, 3 N. B. R. 18; Fed. Cas. 3039.) It has the power to sell free of mortgage lien. (In re Barrow, 1 N. B. E. 125; 1 Amer. Law T. Rep. Bankr. 63; Fed. Cas. 1057; In re Kahley, 4 N. B. E. 124; 3 Chi Leg. News, 85; 2 Leg. Gaz. 405; Fed, Cas. 7593; In re Salmons, 2 N. B. R. 19; 15 Pittsb. Leg. J. (O. S.) 541; Fed. Cas. 12268; Ray v. Brigham et aL, 13 N. B. E. 145; Markson et aL v. Haney, 12 N. B. E. 484.) (8) Closing estates. — A trustee is required to close up the estate as expeditiously as is compatible with the best interests of the parties in interest (sec. 47 — 2), and will prepare for the final meeting of the cred- itors a detailed statement of the administration of the estate (sec. 47 — 7), and make final reports and file final accounts with the court fifteen days before the day fixed for the final meeting of the creditors (sec. 47—8). (9) Compositions. — Bankrupt may offer terms of composition to cred- itors after examination in open court or at a creditors' meeting, and the schedule of his property and list of his creditors has been filed in court (sec. 12a), which composition shall be confirmed if the court is satisfied it is for the best interest of the creditors, that the bankrupt has not been guilty of any of the acts or failed to perform any of the duties which would be a bar to his discharge, and that the offer and its acceptance are in good faith, and have not been made or procured by means, prom- ises or acts forbidden, etc. (sec. 12d). The judge may, upon the applica- tion of parties in interest, filed at any time within six months after a composition has been confirmed, set the same aside and reinstate the case, if it shall be made to appear upon a trial that fraud was prac- ticed in the procuring of such composition, and that knowledge thereof has come to the petitioners since the confirmation of such composition 28 LAW OF BAIs^KEUPTCT. [§ 2. (sec. 13), in which event the trustee, upon his appointment and qualifica- tion (sec. 44), becomes vested with the title to all of the bankrupt's prop- erty as of the date of filing the final decree setting the composition aside (sec. 70d). Upon the confirmation of a composition, the consideration is to be distributed as the judge directs, and the case dismissed; when not confirmed, the estate is to be administered as otherwise provided. (Sec. 13e.) The confirmation discharges the bankrupt, except as to debts agreed to be paid by the terms thereof, or such as would not be affected by a discharge (Sec. 14c.) (10) Certiflcation of flndings by referees.— Referees are required to make up records embodying the evidence, or the substance thereof, as agreed upon by the parties in aU contested matters arising before them, whenever requested to do so by either of the parties thereto, together with their findings therein, and transmit the same to the judges. (Sec 39 — 5.) Referees are required to consider all petitions referred to them by the clerks and make the adjudication or dismiss the petition- (See. 38—1.) (11) Exemptions. — With the schedule of the bankrupt's property, which must be iiled in court by him within ten days after the adjudi- cation, unless further time is granted, if involuntary bankrupt, and with the petition if a voluntary bankrupt, there must be filed in triplicate a claim for such exemptions as he may be entitled to, one copy to be for the clerk, one for the referee, and one for the trustee. (Sec. 7 — 8.) As soon as practicable after the appointment of the trustee, he is required to set apart the bankrupt's exemptions and report the items and estimated value thereof to the court. (Sec. 47 — 11.) By operation of law the trustee is vested with the title of the bankrupt, as of the date he was adjudged a bankrupt, except in so far as his property is exempt. (Sec. 70.) (13) Discharge. — Applications for discharge must be made after the expiration of one month and within the next twelve months subsequent to the adjudication of bankruptcy in the court in which the proceed- ings are pending, which time may be extended six months upon a proper showing. (Sec. 14a.) After a hearing the bankrupt should be discharged, unless he has committed an offense punishable by imprisonment as pro- vided herein, or, with a f raudident intent to conceal his true financial condition, has destroyed or failed to keep books of account, etc., from which his true condition might be ascertained. (Sea 14&.) Within one year after the discharge has been granted, the judge may revoke it upon trial, if it is made to appear that it was obtained through the fraud of the bankrupt, and knowledge of such act has come to the petitioner since the granting of the discharge, and that the actual facts did not warrant the granting thereof. (Sec. 15.) The confirmation of a com- position discharges the bankrupt except as to debts agreed to be paid by the terms thereof, or such as would not be affected by a discharga (Sea 14c.) § 2.] JUEISDIOTION. 29 (13) Contempt.— The court may punish for contempt if the bank- rupt refuses or neglects to surrender any portion of his property, after being ordered (In re Salkey and Gerson, 11 N. B. E. 433; 6 Biss. 369; 7 Chi Leg. News, 178; Fed. Cas. 13353); or in case of an attaching creditor, who, having been enjoined from further proceeding against the property attached, makes no effort to stop his suit, but allows his attorney to proceed, or assigns his claim to an assignee who prosecutes the suit and receives the proceeds of the sheriff's sale (Hyde v. Ban- croft & Steiner, 8 N. B. E. 34; Fed. Cas. 6966); or who sells property in defiance of an injunction (In re Atkinson, 7 N. B. R 148; 5 Amer. Law T. Eep. 433; Fed. Cas. 606); or where an injunction was issued restrain- ing an attorney, with knowledge of pending bankruptcy proceedings of his client, from further proceeding with an application for appointment of a receiver, notwithstanding which he had the receiver appointed (In re South Side E. R Co., 10 N. B. E. 374; Fed. Cas. 13190); or where bankrupt made an assignment and creditors attached the property in the hands of the assignee, but before the assignee had been appointed other creditors restrained the attaching creditors from proceeding against the property attached the court held, on motion to vacate the injimction, that it could grant the injunction and punish the attaching creditors for disregarding it (In re Ulrich et al., 8 N. B. R 15; Fed. Cas. 14338); or where one obtains a foreclosure of the mortgaged premises, pending proceedings in bankruptcy, without proof of the mortgage debt or leave of the court first obtained (Phelps v. SeUick, 8 N. B. R 390; Fed. Cas. 11079) ; or where a lease is terminated by condition broken, after the filing of a petition, and before the appointment of an assignee, lessor re-enters or interferes without leave of court (In re Steadman, 8 N. B. E. 819; Fed. Cas. 13330). Where a restraining order is asked for at the commencement of pro- ceedings in bankruptcy against any person other than the debtor, no judgment of contempt can be had against such party for disregard of such order, unless it was granted on a separate petition, distinct from that against the bankrupt. (Creditors v. Cozzens & Hall, 3 N. B. R 73; 3 West. Jur. 349; 16 Pittsb. Leg. J. 336; Fed. Cas. 3378.) When a court of bankruptcy has no power to discharge a judgment, it cannot inter- fere to prevent its enforcement by imprisonment, unless necessary to the exercise of its jurisdiction. (In re Pettis, 3 N. B. R 17; 7 Amer. Law Eeg. (N. S.) 695; Fed. Cas. 11046.) Nor can it enforce an order which is in effect a final judgment for the payment of money, whether the pro- ceeding in which it is made is of equitable or legal cognizance. (Ln re Atlantic Mut. Ins. Co., 17 N. B. R 368; 9 Ben. 837; Fed. Cas. 639). Nor will it punish a bankrupt for contempt when it is satisfactorily purged. (In re Hayden, 7 N. B. R 193; Fed. Cas. 6357.) (14) Extradition. — Whenever a bankrupt is found within the juris- diction of a court other than the one issuing the warrant for his appre- hension, he may be extradited in the same manner in which persona 30 LAW OF BAKKETJPTCY. [§ 2. imder an indictment are now extradited from one district within which a district court has jurisdiction to another. (Sec. 10.) (15) Orders. — "While district courts have no power to make general rules in bankruptcy (In re Keimedy et aL, 7 N. B. E. 337; Fed. Cas. 7699), they are not hampered by such technical rules as will prevent the doing of what is just and for the protection of the state, even if it required the revocation of an order once made. (Samson v. Burton, 6 N. B. E. 403.) (16) Contempt before referees. — In proceedings before a referee no person shall disobey or resist any lawful order, process or vmt; mis- behave during a hearing; neglect to produce, after having been ordered to do so, any pertinent document; or refuse to appear after having been subpcenaed; or refuse to take the oath as a witness or be examined ac- cording to law. (Sec. 41a.) In case a person violates any of these pro- visions, the referee shall certify the facts to the judge, who shall, in a summary manner, hear the evidence as to the acts complained of, and impose such imprisonment as for the like contempt committed before a court of bankruptcy, etc. (Sec. 416.) (17) Assignees; appointment and removal. — Assignees in bankruptcy are public ofiBcers whose appointment must be approved by the judge of the district court (Morris et aL v. Swartz, 10 N. B. R. 305); but an elec- tion persuaded by the importunity of the proposed assignee exercised upon disinterested creditors wUl not be approved. (In re , a Bank- rupt, 3 N. B. R. 100.) The removal of an assignee rests in the discretion of the court, but it is a legal discretion, and cause must be shown to ren- der the removal either necessary or expedient. (In re Blodgett et ai, 5 N. B. R. 473; Fed. Cas. 1553; In re Mallory, 4 N. B. R. 38; Fed. Cas. 8990.) A resolution of creditors of a bankrupt, committing his estate for set- tlement and distribution to a trustee and nominating a committee com- posed of two members, one of whom is the trustee, to supervise and direct the trustee, will not be confirmed. (In re StOlweU, 2 N. B. R, 164; Fed. Cas. 13447.) See also sections 44 and 46. (18) Costs. — As a general rule no charge for professional services of counsel to an assignee rendered prior to the appointment of the assignee wiU be allowed. (In re N. Y. MaU S. S. Co., 3 N. B. E. 137; 1 Chi. Leg. News, 310; Fed. Cas. 10310.) In respect to services rendered to a bank- rupt prior to adjudication, an attorney is a general creditor, and must prove his debt in the usual form. For services rendered after adjudica- tion and before choice of assignee, an attorney's fee may be allowed, if it be clearly shown that the services were properly and necessarily ren- dered for the purpose of benefiting or preserving the estate of the bank- rupt in the interest of the general creditors. (In re Jaycox and Green, 7 N. B. R. 140; Fed, Cas. 7239.) The court wiU order the payment of § 2.] JUEISDICTION. 31 such fees out of the estate upon written approval of the assignee (In re Montgomery, 3 N. B. R. 35; 3 Ben. 364; Fed. Oas. 9726); and a register may certify to the court the amount he has allowed counsel for assignee for revision or approval of the court. (In re Warshing, 5 N. B. E. 350; Fed. Cas. 17209.) Coimsel fees may be allowed petitioning creditors in a petition in invitum to have a creditor adjudged a bankrupt (In re Waite, 2 N. B. R. 146; In re The New York Mail Steamship Co., 3 N. B. E. 155; 7 Blatchf. 178; 3 N. B. E. 185; Fed. Cas. 10208); and they are entitled to a reason- able allowance for expenses incurred by them in procuring an adjudi- cation (In re Mittledorfer, 3 N. B. E. 1; Chase, 288; Fed. Cas. 9675), as where solicitors prepare partnership and individual schedules for invol- untary bankrupts. (In re Andrews and Jones, 11 N. B. R. 59; 23 Pittsb. Leg. J. 41; Fed. Cas. 370.) They have been allowed debtor's counsel in case of involuntary bankruptcy, where there was a contest as to whether acts of bankruptcy had been committed, and whether the debtor should be adjudged a banlsrupt, out of the assets of the bankrupt estata (In re Portsmouth Savmgs Fund Society, 11 N. B. R 303; 2 Hughes, 239; Fed. Cas. 11298.) Where attachment proceedings are not instituted with a view of ob- taining a preference, but were merely auxiliary to bankruptcy pro- ceedings, and so for the benefit of all creditors, the costs and expenses of the former proceedings will be allowed. (In re Ward, 9 N. B. R 349; Fed. Cas. 17145.) The allowance of costs has been refused creditors in the following cases: For expenses in an effort to obtain a preference (In re Archen- brown, 8 N. B. R. 429; Fed. Cas. 503); retainer paid attorneys, or for any services rendered by attorney after adjudication of the debtor bank- rupt (In re Comstock et aL, 9 N. B. R 88; Fed, Cas. 3075); an attaching creditor whose attachment is set aside by bankruptcy proceedings, unless it is shown that the attachment was employed in aid of the proceedings and to the benefit of the creditors generally. (In re Irons & Coon, Ex parte Adler, 18 N. B. R. 95; Fed. Cas. 7067.) But creditors have been held liable for costs when they petition against dischai'ge of bankrupt upon frivolous or unsuccessful charges (In re Eidom, 3 N. B. R 39; Fed. Cas. 4315; In re Robinson & Chamberlain, 3 N. B. R. 17; Fed. Cas. 11943); or, where the petition is dismissed by the order of the court, the debtor is entitled to recover from the petitioner the same costs that are allowed by law to a party recovering in equity (Dundore v. Coats & Bros., 6 N. B. R. 304; Fed. Cas. 4142); or where he has full knowledge of the con- dition of his insolvent debtor, receiving a preference, he should be taxed with the costs of the petition of the assignee to expunge. (In re Forsyth and Murtha, 7 N. B. R. 174; Fed. Cas. 4948.) Where bankruptcy proceedings are mainly for the benefit of secured creditors, they should defray the costs of the suit, and no more of the 32 LAW OF BANKEDPTOT. [§ 2. burden than, the ratable portion of interest in the assets sought to be recovered should be placed upon the general creditors; and, if they were for the benefit of the latter, the circumstances might be such as would require those applying to defray the expenses in the first instance to be ref imded, on recovery, out of proceeds. (Freelander & Gerson v. HoUoman et aL, 9 N. B. E. 331; Fed. Cas. 5081.) The courts have declined to allow costs or attorneys' fees where a debtor made an assignment and subsequently, within six months, was declared a bantrupt. (In re Cohn, 6 N. B. R 379; Fed. Cas. 2966.) And where a mere general allowance was made in a decree aimulUng a vol- untary assignment for creditors, of the reasonable charges and expenses of the voluntary assignee, it will not include expenses of a proposed ac- count in the state court. (Burkholder et al. v. Stump, 4 N. B. R. 191 ; 8 Phila. 172; Fed. Cas. 2165.) Costs and commissions stipulated to be paid on foreclosure of a mortgage will not be allowed when the proceedings to foreclose are invalid. (In re Devore, 16 N. B. E. 56; 24 Pittsb. Leg. J. 186, 187; Fed. Cas. 3847.) It has been held that an assignee may be allowed to charge for court fees in drafting order of composition, publishing notice of appointment, advertising and posting hand-bills, recording assignment, stationery and postage, and for his legal commissions. (In re Davenport, 3 N. B. R. 18; In re Pegues, 3 N. B. R 9; In re Tully, 3 N. B. R 19; 2 Amer. Law T. 136; Fed, Cas. 3587.) An assignee, clerk of the bankrupt's attorney, who is charged with mismanagement, and whose removal is asked for by the creditors, wiU be removed, but he will be protected against costs where it appears that he acted in entire good faith. (In re Mallory, 4 N. B. R 38; Fed. Cas. 8990.) "Where a bill of complaint has been filed by an as- signee without sufficient cause, but the circumstances are not so clear as to require any imputation of his good faith in the prosecution of the suit, the costs will be paid out of the estate in the hands of the assignea (Coxe V. Hale, 8 N. B. R 562; 21 Pittsb. Leg. J. 77; Fed. Cas. 3310.) A mortgagee in possession being entitled to retain all property upon which his mortgage was valid, on a sale of such property by order of the dis- trict court in bankruptcy shoiild only be charged with the reason- able expenses of the sale of such property and not with any portion of the costs in bankruptcy. (In re Eldridge, 4 N. B. R 163; Fed. Cas. 4330.) The costs upon the petition for a discharge of involuntary bankrupts, the hearing, etc., must be paid out of the funds in the assignee's hands. (In re Olds, 4 N. B. R 37; Fed. Cas. 10484) (19) Transfer of cases.— "Where petitions are filed against the same person, or against different members of a partnership in different courts of bankruptcy, each of which has jurisdiction, the cases shall be trans- ferred, by order of the court relinquishing jurisdiction, to and be con- solidated by the court which can proceed with the same for the greatest convenience of the parties in interest. (Sec. 33.) CHAPTEK IIL BAJSTKHUPTS. Sec. 3. Acts of bankruptcy. — a. Acts of bankruptcy by a person shall consist of his having (1) conveyed, transferred, concealed, or removed, or permitted to be concealed or re- moved, any part of his property with intent to hinder, delay, or defraud his creditors, or any of them; or (2) transferred, while insolvent, any portion of his property to one or more of his creditors with intent to prefer such creditors over his other creditors ; or (3) suffered or permitted, while insolvent, any creditor to obtain a preference through legal proceed- ings, and not having at least five days before a sale or final dis- position of any property affected by such preference vacated or discharged such preference; or (4) made a general assign- ment for the benefit of his creditors ; or (5) admitted in writ- ing his inability to pay his debts and his willingness to be adjudged a bankrupt on that ground. [Act of 1867. Seo. 39. And le it furih&r enacted. That any person residing and owing debts as aforesaid, who, after the passage of this act, shall depart from the State, district, or Territory of which he is an inhabitant, with intent to de- fraud his creditors, or, being absent, shall, with such intent, remain absent ; or shall conceal himself to avoid the service of legal process in any action for the recovery of a debt or demand provable under this act ; or shall conceal or remove any of his property to avoid its being attached, taken, or sequestered on legal process ; or shall make any assignment, sale, conveyance, or transfer of his estate, property, rights, or credits, either within the United States or elsewhere, with intent to delay, defraud or hinder his creditors ; or who has been arrested and held in custody under or by virtue of mesne process or execution, issued out of any court of any State, district, or Territory, within which such debtor re- sides or has property founded upon a demand in its nature 3 34 LAW OF BANKEUPTOT. [§ 3, a. provable against a bankrupt's estate under this act, and for a sum exceeding one hundred dollars, and such process is remaining in force and not discharged by payment, or in any other manner provided by the law of such State, district, or Territory applicable thereto, for a period of seven days ; or has been actually imprisoned for more than seven days in a civil action, founded on contract, for the sum of one hun- dred dollars or upwards ; or who, being bankrupt or insolv- ent, or in contemplation of bankruptcy or insolvency, shall make any payment, gift, grant, sale, conveyance, or transfer of money or other property, estate, rights, or credits, or give any warrant to confess judgment ; or procure or suffer his property to be taken on legal process, with intent to give a preference to one or more of his creditors, or to any person or persons who are or may be liable for him as indorsers, bail, sureties, or otherwise, or with the intent, by such dis- position of his property, to defeat or delay the operation of this act; or who, being a banker, merchant or trader, has fraudulently stopped or suspended and not resumed pay- ment of his commercial paper, within a period of fourteen days, shall be deemed to nave committed an act of bank- ruptcy. . . .] Acts of bankruptcy. — They may, in general, be considered under two classes, i. e., those resulting from insolvency, and those which are dis- honest or fraudulent If of the latter class, and accruing within four months prior to the filing of the petition, they may be avoided, if it is to the interest of the estate, and the beneficiary of such fraudulent acts will be compelled to disgorge any property so acquired, if tangible and accessible. (Sec. 67.) A preference given within four months before the filing of the petition, or afterwards, but before the adjudication, w^here the beneficiary had reasonable cause to believe that it was in- tended to give a preference, is voidable (sec. 60), and the lien created while insolvent, or in fraud within four months of the filing of the peti- tion, will be dissolved. (Sec. 67.) The word " conceal " is defined to in- clude secrete, falsify and mutilate. (Sec 1 — 23.) Section 3 of the law of 1898 defines five acts of bankruptcy. The first three definitions of such acts follow closely the definitions given in sec- tion a9 of the act of 1867. The foiirth and fifth definitions have no coimterpart in the act of 1867. The law of 1867 specified two acts of bankruptcy which are omitted from the present statute, namely, the arrest and holding in custody of a debtor, under process of execution, for a period of seven days; and the fraudulent suspension of payment of commercial paper by a banker, merchant or trader for a period of fovir- teen days. § 3, a.] ACTS OF BAMKEtrPTOT, 35 I Conyeyances and transfers constituting acts of bankruptcy.— The ■word "transfer " includes sale^ and every other and diflEerent mode of dis- Ix)sition of or parting with property, or the possession of property, abso- lutely or conditionally, as a payment, pledge, mortgage, gift or security. (Sec. 1—35.) If a debtor intends by his act to delay, hinder or defraud his creditors, or to give a preference to any of them, or to defeat or delay the operation of the Bankrupt Act, he commits an act of bankruptcy, however innocent the act of the preferred creditor or the person to whom the transfer is made. (In re Drummond, 1 N. B. R. 10; 1 Amer. Law T. Eep. Bankr. 7; Fed. Cas. 4093.) The conveyance of his property affords a very violent presumption of a fraudulent intent so far as exist- ing creditors are concerned. (In re Alexander, 4 N. B. R. 45; 18 Pittsb. Leg. J. 81; 3 Amer. Law T. 280; 1 Amer. Law T. Eep. Bankr. 238; Fed- Cas. 161.) The following have been held to be acts of bankruptcy and void: A purchaser who buys goods, intending, at the time of the purchase, not to pay for them (In re Alsberg, 16 N. B. R 116; Fed. Cas. 261); a debtor who has assigned for the benefit of his creditors, and retains, through the agency of the assignee, a portion of the estate, and converts to his own use an amount greater than he would be entitled to hold under the exemption laws (Farrin v. Crawford et aL, 2 N. B. R 181; 7 Chi. Leg. News, 342; Fed. Cas. 4686); transfers made to defeat the operation of the law so far as they stand in the way of enforcing its provisions, where the proceedings are instituted within the time prescribed (Stevenson et aL V. McLaren et aL, 14 N. B. R 403; Beattie v. Gardner et aL, 4 N. B. R 106; Fed. Cas. 1195; In re Cowles, 1 N. B. R 42; 1 West. Jur. 367; Fed. Cas. 8297); any act the effect of which is to evade the pro- visions of the act (Webb, Ass., v. Sachs et aL, 15 N. B. R 168; 4 Sawy. 158; 9 Chi Leg. News, 156; Fed. Cas. 17325); conveyances not made in the usual and ordinary course of business of debtors. (Reson v. Knapp, 4 N. R R 114; Fed. Cas. 11861; Babbitt v. Walbran & Co., 4 N. B. R 80; 2 Chi Leg. News, 285; Fed. Cas. 694.) In determining whether a transaction is made in the usual and ordi- nary course of business, the question is not whether such transactions are usual in the general conduct of business throughout the community, but whether they are according to the usual course of business of the particular person whose conveyance is in question. (Reson v. Knapp, 4 N. B. R. 114; Fed. Cas. 11861.) Payments, sales or transfers of any character, declared void by the bankrupt law, are only void against persons claiming under proceedings in bankruptcy or in course of ad- ministration of a bankrupt's estate in a court of bankruptcy. (Berry- man V. AUen, 15 N. R R 113.) An assignment, though voidable at the suit of the assignee, is not void. (Sparhawk et aL v. Drexel et aL, 12 N. B. R. 450; Weekly Notes Cas. 560; Fed. Cas. 13204.) Chattel mortgage. — A chattel mortgage is a disposition of property out of the ordinary course of business. (United States v. Bayer, 18 N. B. 36 XAW OF BAHKEUPTOT. [§ 3, OS. R. 88; Fed. Cas. 14548.) A fraudulent chattel mortgage on a bankrupt's stock of goods to secure an alleged debt, made with intent to delay, hin- der or defraud creditors, is an act of bankruptcy (In re McKibben, 13 N. B. R. 97; Fed. Ca& 8859); and so is a chattel mortgage which per- mits the mortgagor to dispose of the goods in due course of trade, with- out reference to the good faith of the mortgage debt, or the intentiocs of the mortgagor as to fraud (In re Foster, 18 N. B. R 64; 10 Chi Leg. News, 315; Fed. Cas. 4964); a biU of sale of personalty in which there is no change in possession of the property, the first owner taking back a writing in the nature of a lease. (In re Gurney, 15 N. B. R. 373; 7 Biss. 414; 9 Chi Leg. News, 355; 4 Law & Eq. Eep. 38; Fed. Cas. 5878.) Sale of goods. — The transaction is void against creditors where house- hold fumitxure in a dwelling inhabited by the owner and another person is transferred to such other person by a biU of sale without any other circumstances to indicate actual possession (AUen v. Massey, 4 N. B. E. 75; 3 Chi Leg. News, 309; Fed. Cas. 331); also a conveyance absolute upon its face, by which the grantor, in failing circumstances, secretly re- serves the right to possess for a limited period under a parol agreement as part of the consideration (Lukins v. Aird, 3 N. B. R. 37; 34 WaU. (U. S.) 78); also a sale of a stock of goods in gross, not made in the usual and ordinary course of business of the debtor, who is a retail dealer and mer- chant. (In re Deane & Garret, 3 N. B. E. 39; 15 Pittsb. Leg. J. 581, 583; Fed. Cas. 3700.) In an action by the assignee to recover for goods sold by the bankrupt shortly before commencement of bankruptcy proceed- ings, the burden is on the plaintiff to show a guilty collusion to defraud creditors, (Dickinson v. Adams, 17 N. B. R 380; 4 Savsy. 357; Fed. Cas. 3896.) Where a bankrupt sells his entire stock below cost, and the pur- chaser resells it at an advance, the last purchaser being informed at the time of the circumstances of the first purchase, both sales are void as to the assignee. (Abraham and Daniel Walbrun v. Babbitt, Ass., 9 N. R R 1; 16 Wall. 577.) A purchaser of goods who assumes debts of the vendor as part consideration, and sells them leaving the debts impaid, which the vendor is compelled to discharge, commits an act of bank- ruptcy, and is liable to the vendor for the amount of the debts assumed. (In re Phelps v. Clasen, 3 N. B. R 33; Woolw. 304; 3 West Jur. 331; Fed. Cas. 11074) Transfer by deed. — A deed not at first fraudulent may become so by being concealed, as by its concealment persons may be induced to give credit to the grantor. (Barker v. Smith et ai, 13 N. B. R 474; 3 Woods, 87; 3 Amer. Law T. Eep. (N. S.) 386.) The date of the execution and de- livery of deeds, and not the date named therein, is the time from which to reckon the six months within which a petition in bankruptcy is to be filed, where the deed is intended to defraud creditors. (In re Eooney, 6 N. B. E. 163; Fed. Cas. 13033.) Conveyance to wife or children.— A voluntary conveyance made by a person not indebted at the time, in favor of his wife or children, can- § 3, a.] ACTS OF BAHKEITPTOT. 37 not be impeached by subsequent creditors on the ground of its being Toluntary. It must be shown to have been fraudulent or made with a view to future debts. (Barker v. Smith et aL, 13 N. B. R. 474; 2 Woods, 87; 3 Amer. Law T. Eep. (N. S.) 886.) A conveyance by a father to his sons, in consideration of his support, is fraudulent as to his creditors, and would be a cause of bankruptcy at the instance of creditors. (In re Johann, 4 N. B. R. 143; Fed. Cas. 7331.) And so is a voluntary convey- ance settling property upon the wife and family of the grantor, if the grantor be indebted at the time to such an extent that the settlement vrill embarrass him in the payment of his debts, although the debts due may be subsequently paid in the course of business. (Antriues v. Kelly et aL, 4 N. B. R 189.) Where the wife of a bankrupt purchases with her own money a share in a firm by which her husband is employed as man- ager, receiving a share of the profits, the wife rendering no service, but participating in the profits, her share of which, together with that of the bankrupt, not exceeding a fair remuneration for his services, the bank- rupt is virtually a partner, and there is wilf id concealment of his assets. (In re Rathbone, 3 N. B. R. 89; 8 Ben. 50; 1 Amer. Law Rep. Bankr. 114; 1 Chi Leg. News, 107; Fed. Cas. 11581.) A loan by an insolvent father to his son, who makes a gift of the amount of the loan to his mother by the purchase of a house in her name, is a fraud upon the creditors of the father. (In re Eldred, 3 N. B. R. 61; 1 Chi Leg. News, 889; Fed. Cas. 4338.) Conveyance by member of partnership. See Paetners, sec. 5. Removal of goods. — An allegation that defendant, in contemplation of bankruptcy, consigned goods to a consignee residing beyond the ju- risdiction of the court, is a sufficient charge that the removal was to defraud creditors, if it was, in fact, done with the intent to keep the property from coming into the hands of the assignea (In re Hammond V. Coolidge, 3 N. B. R 71; 1 Lowell, 381; Fed. Cas. 5999.) An agreement between the parties to a suit against the bankrupt, to transfer certain claims to such action so as to shelter them under the lien of an attach- ment issued therein, is in fraud of the Bankrupt Act. (Samson v. Bur- ton, 4 N. B. R. 1; Fed. Cas. 13385.) Not acts of bankruptcy. — The Bankrupt Act does not forbid one, knowing himself to be insolvent, exchanging or selling his property or otherwise disposing of it at any time previous to the filing of the petition, provided such disposition leaves his estate in as good condition as for- merly. (Cook et aL v. Tullis, 9 N. B. R 433; 18 WalL 833; Clark, Ass., V. Iselm, 11 N. B. R 337; 21 WalL 360.) Where a person whose property exceeds his debts conveys it to another who agrees to pay all the debts and support the grantor during the rest of his life, the conveyance is not per se fraudulent and void as to creditors. (In re ComweU, 6 N. B. R 305; 6 Amer. Law Rev. 365; Fed. Caa 3250.) Sale of goods. — Nor is the sale of goods by a merchant in embar- rassed circumstances fraudulent when made to raise money to pay debts, 38 LAW OF BANKEUPTCT. [§ 3, a. although less than cost price is received and the purchaser has knowl- edge of the merchant'o insolvency. (Sedgwict v. Lynch, 8 N. B. R. 289; Fed. Cas. 12615.) The merchant may even continue to sell his stock at retail and endeavor to effect a compromise with his creditors, although insolvent, if there be no fraudulent intent (In re Munger & Champlin, 4 N. B. R 90; Fed. Cas. 9933); or he may sell his property to raise money to defray expenses in contemplated bankruptcy proceed- ings, provided he does not sell at a sacrifice, and provided the sum raised is reasonable (In re Keefer, 4 N. B. E. 136; 3 Chi Leg. News, 135; Fed. Cas. 7636); or he may sell if for the purpose of going into a new business enterprise, even though afterward he does not, in order to prevent the proceeds being seized on process issued out of a state court, put them into tangible shape. (Fox v. Eckstein, 4 N. B. R. 133; Fed. Cas. 5009.) Therefore, an adjudication will not be made on an involuntary petition that sets up the sale of the stock as the only act of bankruptcy, if there be no evidence to show that the vendor, who wishes to change his business, was insolvent at the time. (In re VaUiquette, 4 N. B. E. 92; Fed, Cas. 16833.) Pledge of goods. — It is not a fraud upon creditors for a debtor to re- ceive collateral from his pledgee for collection. (Clark, Ass., v. Iselin, 11 N. B. R. 337; 21 "Wall 360.) Mortgages. — A transfer is made in the usual and ordinary course of business, when a manufacturing company owning a mortgage sells it for its cash value and becomes bankrupt within six months thereafter. (Judson V. Kelty, 6 N. B. E. 165; 5 Ben. 348; Fed. Cas. 7567.) And for a present consideration a debtor may give a mortgage to enable him to carry on his business if there be no intent to delay creditors. (In re Sanford, 7 N. B. R. 353; Fed. Cas. 13310.) Conveyances in general. — A conveyance, even though fraudulent, is not made " in contemplation of bankruptcy or insolvency," where there are no other creditors, and the debt is well secured. (In re Johann, 4 N. B. R. 143; Fed. Cas. 7331.) A sale by a person contemplating bank- ruptcy is not prima fade fraudulent unless surrounded by unusual cir- cumstances, and is not then void as to purchasers in good faith. (In re Hunt, 2 N. B. R. 166; 1 Chi Leg. News, 169; Fed. Cas. 6881.) Such a person may sell or incumber his estate for a present and sufficient consideration, if the transaction be hona fide. (Gattman & Co. v. Honea, Ass., 12 N. B. R. 493; 7 Chi Leg. News, 395; Fed. Cas. 5271.) A debtor may, without committing an act of bankruptcy, exchange goods covered by a warehouse receipt in a warehouse for others of less or equal value, within four months prior to bankruptcy. (Sharp, Ass., etc. v. Philadelphia Warehouse Co., 19 N. B. R. 378.) There is no concealment where a debtor makes a hona fide conversion of his property, and shows good faith in respect to the care of the money received. (Fox v. Eckstein, 4 N. B. R 128; Fed. Cas. 5009.) An unexecuted agreement by a raUroad company to transfer certificates of stock is not an act of bankruptcy. § 3, a.] ACTS OF BANKUrPTOT. 39 (Winter v. Iowa, Minnetona & North Paoiflo Ry. Co., 7 N. B. R 289; 3 DilL 487; 6 West. Jur. 562; 5 ChL Leg. News, 74; 6 Alb. Law J. 358; Fed. Cas. 17890.) A deed of assignment is not rendered void by the fact that the trustee was a clerk of the assignor, or that he had no property, but was of good character, and no bond was taken; or that the assignment authorized a sale on thirty days' credit; or that the debtor threatened bankruptcy unless a certain amount was accepted in satisfaction. (In re Walker, 18 N. B. R. 56; Fed. Cas. 17063.) An instru- ment which purports to transfer accounts, but which bears no revenue stamp, is void and does not constitute an act of bankruptcy. (Welch v. Dtmham, 2 N. B. E. 9; 3 Ben. 488; 1 Am. Law T. Rep. Bankr. 89; Fed. Cas. 4143.) Conyeyances of partnership property. — A transfer of firm property from one member to another is not a fraud upon creditors, nor does it hinder or delay them or constitute a fraudulent preference. (In re Munn, 7 N. B. R. 468; 3 Biss. 443; 7 Amer. Law Rev. 751; Fed. Cas. 9925.) Nor does it constitute an act of bankruptcy to transfer the whole stock of a dissolved partnership to the one solvent partner to settle the affairs, even though a sale is made by such partner in gross. (In re Weaver, 9 N. B, R. 183; Fed. Cas. 17307.) Defluition of insolvency. — Within the provisions of the act of 1898, a person is deemed insolvent whenever the aggregate of his property, ex- cliisive of any property which he may have conveyed, transferred, con- cealed or removed, or permitted to be concealed or removed, with intent to defraud, hinder or delay his creditors, shall not, at a fair valuation, be sufficient in amount to pay his debts. (Seel — 15.) As having some bear- ing by analogy, the following decisions under the act of 1867 are given: Although the assets of a debtor largely exceed his liabilities, yet he is insolvent if he is unable to meet his engagements as they accrue and be- come due. (In re Woods, 7 N. B. R. 136; 29 Leg. Int. 286; 20 Pittsb. Leg. J. 21 ; Fed. Cas. 17990.) Insolvency is inability to pay debts in the ordinary course of business, as men in trade usually do. (In re Kingsbury et al., 3 N. B. R. 84; Fed. Cas. 7816; Reson v. Knapp, 4 N. B. R. 114; Fed. Cas. 11861; Stranahan v. Gregory & Co., 4 N. B. R. 142; Fed. Cas. 13522; Martin v. Toof et aL, 4 N. B. R. 158; Fed. Cas. 9164; Ecfort et al. v. Greely, 7 N. B. R. 488; 4 Chi. Leg. News, 209; Fed. Cas. 4360; Webb, Ass., v. Sacha et aL, 15 N. B. R. 168; 4Sawy. 158; 9 ChL Leg. News, 156; Fed. Cas. 17835.) But a person should be held insolvent only when he fails to meet his debts according to the custom of the place of his business. (Hall, Ass., etc. v. Wager et aL, 5 N. B. R 181; 3 Biss. 38; 5 West. Jur. 538; 3 ChL Leg. News, 401; Fed. Cas. 5951.) He will be held to have knowl- edge of his insolvency when he cannot pay his debts in the ordinary course of business and knows that he cannot. (Martin v. Toof et aL, 4 N. B. R. 158; Fed. Cas. 9164) If his property, when put up for sale on reasonable notice, will not bring enough cash to pay his debts, he is insolvent. (In re Oregon Bulletin, etc. Co., 13 N. B. R. 503; 40 LAW OF BANKBUPTOT. [§ 3, «. 1 Cin. Law J. 87; Fed. Cas. 10559.) Likewise, he is insolvent if his debts cannot be met in full out of his property by levy and sale on exe- cution. (In re Wells, 3 N. B. E. 95 ; 3 Chi. Leg. News, 49 ; Fed. Cas. 17388.) Likewise, he is insolvent if he transfers some of his assets in fraud of his creditors, but held property enough so that, if it were advantageously disposed of, it might pay aU his debts, but he fails to pay a few small debts as they become due. (Ecfort & Petring v. Greely, 6 N. B. R. 433; 4 ChL Leg. News, 209; Fed. Cas. 4360.) Insolvency of partnership.— Upon a petition in bankruptcy by one late copartner for himself and against the other copartner, it is not enough to prove that the joint assets are insufficient to pay the joint liabilities. The firm and its members must be shown to be insolvent. (In re Bennett et al., 12 N. B. R. 181; 3 Lowell, 400.) If a firm is insolv- ent and there has been a joint act of bankruptcy, the creditors may proceed against both, but the solvent partner would have an oppor- tunity to clear himself by paying all the debts; but he cannot safely pay them to his insolvent partner. (In re Bennett et aL, 12 N. B. R. 181 ; 2 Lowell, 400.) Preferences constituting acts of bankruptcy. See Preferences, sec. 60, ante. A creditor holding the commercial paper of his debtor, in respect to which the debtor has committed an act of bankruptcy, must be held to know that the debtor is insolvent and has committed an act of bankruptcy, when he proceeds to take measures to secure a preference over other creditors (Warren v. Bank, 7 N. B. R 481; 10 Blatchf. 483; Fed. Cas. 17303); and a transfer of property which neces- sarily gives a preference to one creditor over another is presumed to have been made with a view to such preference. (Catlin v. HoflEman, 9 N. B. R 343; 2 Sawy. 486; 21 Pittsh Leg. J. 159; Fed. Cas. 2531.) Creditors who have obtained a preference by a bill of sale from the debtor are estopped to set up the execution of the same or the non-pay- ment of a note as an act of bankruptcy. (In re Elias G. Williams, 14 N. B. R 132; Fed. Cas. 17706.) A notice to a creditor of an act of bankruptcy does not affect a trans- fer to him, otherwise than as a chance to show that he had reason to believe that such transfer was fraudulent. (Catlin v. Hoffman, 9 N. B. R 343; 3 Sawy. 486; 31 Pittsb. Leg. J. 159; Fed. Cas. 3531.) And a creditor is charged with knowledge of the insolvency of the assignor when a forced assignment of all properey is made to the creditor. (Grow, Ass., V. Ballard et al., 2 N. B. R 69; 1 Amer. Law T. Rep. Bankr. Ill; Fed. Cas. 5848.) Preferences not constituting acts of bankruptcy.— A person is not prohibited from loaning money at legal rates to one whom he has rea- son to believe insolvent, and taking security, provided the transaction be bona fide. (Darley v. Boatman's Sav. Inst., 4 N. B. R 195; 8 ChL Leg. News, 349; 4 Amer. Law T. 117; 1 Leg. Op. 146; 1 Amer. Law T. Rep. Bankr. 351; Fed. Cas. 3571.) § 3, a.] ACTS OF BAUKBUPTCT. 41 "Where the policies in an insurance company are terminated, the in- sured do not become creditors of the company for the unearned pre- mium, and hence payment to them of such premiums does not constitute such a preference as will support a petition for an adjudication in bank- ruptcy. (Knickerbocker Ins. Co. v. Comstook, 9 N. B. E. 484; 6 Chi Leg. News, 143; Fed. Cas, 1879.) An allegation in an involimtary petition that the debtor, " being in- solvent or in contemplation of insolvency, made a conveyance with intent to give a preference," is insufScient, being alternative. (In re Hanibel et al., 15 N. B. R. 333; 9 Chi. Leg. News, 165; 15 Alb. Law J. 271; 34Pittsb. Leg. J. 153; Fed. Cas. 6033.) Legal proceedings constituting preferences.— When the act of bank- ruptcy is a passive one, such as suffering property to be taken on legal process, when the debtor is insolvent, with intent to give a preference, if the natural and probable consequence of the act is to give a prefer- ence, it will be inferred that the debtor had such intent, and the burden of proof will be upon hun to show the contrary. (In re Black et aL, 1 N. B. R 81; 3 Ben. 196; 1 Amer. Law T. Rep. Bankr. 89; Fed. Cas. 1457. For contra. In re King, 10 N. B. R. 103; Fed. Cas. 7783.) If an insolvent debtor does not apply to the bankrupt court, and his property is taken by legal process by some of his creditors, he will be held to have suffered his property to be so taken with intent to prefer such creditors. (In re Wells, 3 N. B. R. 95; 3 Chi. Leg. News, 49; Fed. Cas. 17388; Warren v. Tenth Nat. Bank et aL, 7 N. B. R. 481; 10 Blatchf. 493; Fed. Cas. 17303; Wilson, Ass., v. City Bank of St. Paul, 5 N. B. R, 370.) He also commits an act of bankruptcy by confessing judgment and allowing his property to be taken on an execution with intent to give a preference. His insolvency or contemplation thereof must be averred and shown. (In re Craft, 1 N. B. R. 89; 3 Ben. 314; Fed. Cas. 3316; Vogel v. Lathrop, 4 N. B. R. 146; 18 Pittsb. Leg. J. 106; Fed. Cas. 16985; 3 Pitts. Rep. 368; Traders' Nat. Bank v. Campbell, 6 N. B. R. 353; 14 Waa 87; Webb, Ass., v. Sachs et aL, 15 N. B. R 168; 4 Sawy. 158; 9 Chi Leg News, 156; Fed. Cas. 17335.) A warrant of attorney to confess judgment, given by a debtor knowing himself to be insolvent, whereby the property is levied on by virtue of an execution with intent to give a preference, constitutes an act of bank- ruptcy. (In re Dibble, 3 N. B. R 185; 3 Ben. 303; 1 Chi Leg. News, 355; Fed. Cas. 3884; Haughey, Ass., v. Albin, 2 N. B. R 139; 3 Bond, 344; 3 Amer. Law T. Rep. Bankr. 47; Fed. Cas. 6323.) But in deciding this, the character, etc., of the alleged bankrupt's business may be taken into consideration (In re Leeds, 1 N. B. R 138; 35 Leg. Int. 146; 1 Amer. Law T. Rep. Bankr. 78; 7 Amer. Law Reg. (N. S.) 693; 6 Phila. 468; 15 Pittsb. Leg. J. 361; Fed. Cas. 8305); and the circumstances connected with the proceedings maybe considered by a jury in determining the truth of an allegation that the debtor has procured or suffered his property to be 42 LAW OF BAKKEirPTCT. [§ 3, a. taken in execution. (In re Woods, 7 N. B. R. 126; 29 Leg. Int. 236; 20 Pittsb. Leg. J. 21 ; Fed. Cas. 17990). The entry of a judgment upon war- rant of attorney constitutes an act of bankruptcy where the creditors have reasonable cause to believe the debtor insolvent, even though at the time of the execution of the bond there was no reason to so believe. (In re Lord, 5 N. B. E. 318; Fed. Cas. 8503.) Where a debtor has com- mitted no act of bankruptcy and will not voluntarily petition, a creditor may sue him so as to force him to commit an act of bankruptcy, and then himself proceed against him for such act in involuntary bank- ruptcy. (Warren v. Tenth Nat. Bank et aL, 7 N. B. E. 481; 10 Blatchf. 493; Fed. Cas. 17203; Coxe v. Hale, 8 N. B. B. 563; 21 Pittsb. Leg. J. 77; Fed. Cas. 3310.) Legal proceedings not constituting preferences.— Where an actual intent to give a preference is negatived, mere honest inaction on the part of an insolvent debtor, sued on a just debt, and who allows judg- ment to go against him and his property to be levied on, is not an act of bankruptcy. (Wright v. FiUey, 4 N. B. R. 197; 5 West. Jur. 212; Fed. Cas. 18077.) And therefore, where there is a passive non-resistance on the part of a debtor in a suit against him, he is imder no obligation to file a petition in bankruptcy to prevent judgment and levy, and his fail- ure to do so is not sufficient evidence of an intent to give a preference. (Wason V. City Bank of St. Paul, 9 N. B. R. 97; 17 WalL 473. But for contra, see Vogel v. Lathrop, 4 N. B. R 146; 3 Pittsb. Rep. 268; 18 Pittsb. Leg. J. 106; Fed. Cas. 16985.) It is not an act of bankruptcy if a debtor suffer a sale to take place from inability to resist, even if the result be a preference of one creditor over another. (Rankin et aL v. Florida, etc. R R. Co., 1 N. B. R. 196; 1 Amer. Law T. Rep. Bankr. 85; Fed. Cas. 11567.) Nor is a judgment obtained by creditors against an insolvent debtor for the want of affidavits of defense necessarily an act of bankruptcy. (Louchheim Brothers v. Henzey, 18 N. B. R 173.) Nor is his mere non- resistance to judicial proceedings against him when the debt is due and there is no valid defense. (Tenth Nat. Bank of New York City et aL v. Warren et aL, Assignees, 17 N. B. R 75; 96 U. S. 539.) Nor is the giving of a confession of judgment as security for a loan of money then made. (Clark v. Iselin et aL, 9 N. B. R 19; 10 Blatchf. 204; 21 Pittsb. Leg. J. 83; Fed. Cas. 2835; In re Leeds, 1 N. B. R. 138; 35 Leg. Int. 140; 1 Amer. Law T. Rep. Bankr. 78; 7 Amer. Law Reg. (N. S.) 693; 6 PhUa. 468; 15 Pittsb. Leg. J. 361 ; Fed. Cas. 8305.) Nor is a warrant for judgment de- livered to a bankrupt one month before the petition was filed, invalid, if it did not appear that the bank had reasonable cause at the time to believe the debtor insolvent or knowledge that the act was in fraud of the bankrupt law. (Shimer, Ass., v. Huber et aL, 19 N. B. R 414; 14 Phila. 403; 86 Leg. Int. 339; 8 Reporter, 393; Fed. Cas. 13787.) General assignments constituting acts of bankruptcy. — Upon ite face a voluntary assignment bears conclusive evidence that the assign- § 3, a.] ACTS OF BANKEUPTOT. 4:3 or's intention is to prevent the property transferred being distributed under the Bankrupt Act. (In re Kasson, 18 N. B. R. 379; Fed. Cas. 7617.) Assignments under state insolvent laws are void (Rowe v. Page, 13 N. B. R 366; In re Langley, 1 N. B. R. 155; In re Mendelsohn, 13 N. B. K. 533; 3 Sawy. 343; Fed. Cas. 9430; Globe Insurance Co. v. Cleve- land Insurance Co., 14 N. B. R. 311; 8 Chi Leg. News, 358; 4 Amer. Law Rec. 653; 13 Alb. Law J. 305; Fed. Cas. 5486; McDonald, Ass., v. Moore et aL, 15 N. B. R. 36; 8 Ben. 579; 33 Int. Rev. Rec. 35; 3 N. Y. Wkly. Dig. 461; 34 Pittsb. Leg. J. 83; Fed. Cas. 8763; Piatt v. Preston et aL, 19 N. B. R. 341; Fed. Cas. 11319, 5046; Pool v. McDonald et al., 15 N. B. R. 560; 9 ChL Leg. News, 333; Fed. Cas. 11368; Cragin, Ass., v. Thompson, 13 N. B. R. 81; 3 Dili. 513; Fed. Cas. 3330); and the assignor's intent to defeat the provisions of the Bankrupt Act will be conclusively presumed. (In re Smith, 3 N. B. R 98; 4 Ben. 1; 3 Amer. Law T. 7; 1 Amer. Law T. Rep. Bankr. 147; Fed. Cas. 13974.) The fact that the cred- itors have offered to assent to such assignment upon condition that the assignee be changed.will not estop them from proceeding in bankruptcy. (In re Spicer & Peckham v. Ward & Trow, 3 N. B. R 137; Fed. Cas. 18341.) The making of a voluntary general assignment by a debtor is an act of bankruptcy of itself. (In re Croft Brothers, 17 N. B. R 334; 6 N. T. Wkly. Dig. 318; 8 Biss. 188; 10 Chi Leg. News, 304; 6 Amer. Law Rep. 597; Fed. Cas. 3404.) A power of revocation, inserted in an assign- ment made for the benefit of creditors, would render such assignment constructively fraudulent, and therefore void. (Jones, Ass., v. Clif- ton, 18 N. B. R 135; 17 Amer. Law Reg. (N. S.) 713; 6 Reporter, 334; 7 Cent. Law J. 533; Fed. Cas. 7453.) But the fact that the execution of a voluntary assignment was defective does not prevent its being an act of bankruptcy. (In re Lawrence et aL, 18 N. B. R 516; 36 Pittsb. Leg. J. 143; Fed. Cas. 8133.) The trustee and aU persons claimiag the benefit of a general assign- ment are chargeable with knowledge of the terms thereof, and with knowledge of the insolvency of the debtor and a purpose on his part to evade the law. (Jackson, Ass., v. McCuUoch et aL, 13 N. B. R 383; 1 Woods, 433; 1 N. Y. Wkly. Dig. 534; Fed. Cas. 7140.) If the assignment occur pending proceedings to have a debtor de- clared a bankrupt, it is fraudulent, and the assignee will be enjoined from making any transfer of the property. (In re ShoU, 16 N. B. R 175; 1 Month. Jur. 350; 1 N. Y. Rep. (O. S.) 108; 9 Chi Leg. News, 377; 6 Amer. Law Rec. 15; 1 Tex. Law J. 43; 4 Law & Eq. Rep. 196; 34 Pittsb. Leg. J. 307; Fed. Cas. 13936.) A general assignment for the benefit of creditors, without preference and in good faith, made sixteen days prior to commencement of pro- ceedings in bankruptcy, and pending adverse proceedings by a creditor, is not a bar to a bankrupt's discharge. (In re Pierce & Holbrook, 3 N. B. R 61; 36 Leg. Int. 333; 16 Pittsb. Leg. J. 304; Fed. Cas. 11141. But 44r LAW OF BANKEUPTOY. [§ 3, a. for contra, In re Kasson, 18 N. B. R 379; Fed. Cas. 7617.) To prevent a discharge, the assignment must have heen made not only in contempla- tion of bankruptcy, but it must have been made with intent to prefer some creditor, or to prevent the property from coming into the hands of his assignee in bankruptcy, or from being distributed in satisfaction of his debts. (In re Croft Brothers, 17 N. B. R. 324; 6 N. Y. Wkly. Dig. 218; 8 Biss. 188; 10 Chi Leg. News, 204; 6 Amer. Law Rep. 597; Fed. Cas. 3404.) Therefore, an assignment for the benefit of creditors with- out preference, but with intent to prevent the equal distribution of the assignor's property, will prevent a discharge. (In re Groldschmidt, 3 N. B. E. 41; 3 Ben. 379; Fed. Cas. 5520.) General assignments not constituting acts of bankruptcy. — A gen- eral assignment for the benefit of creditors, under the provisions of a state law, and during the existence of the United States Bankrupt Act, may be held valid, provided the rights of creditors are not prejudiced. (In re Hawkins et aL, 2 N. B. R 122.) Likewise, an assignment of prop- erty for the benefit of aU creditors, made in good faith and free from taint of fraud, is not an act of bankruptcy. (Farrin v. Crawford, 2 N. B. R 181; 7 Chi. Leg. News, 342; Fed. Cas. 4686; Sedgwick, Ass., v. Place et al, 1 N. B. R 204; Fed. Cas. 12623.) Nor is it if made to secure equal distribution among aU the creditors, unless there be an intent to hinder, delay or defraud them. (Langley v. Perry, 3 N. B. R 180; 8 Amer. Law Reg. (IT. S.) 437; 16 Pittsb. Leg. J. 117; 3 Bait. Law Trans. 531; 2 Amer. Law T. Rep. Bankr. 84; Fed. Cas. 8067; In re Marter, 12 N. B. R 185; Fed. Cas. 9143. But see In re Kimball et aL, 16 N. B. R 188; Fed. Cas. 7770.) Creditors who are beneficiaries imder a general assignment by a debtor of all of his property for the benefit of all of his creditors without pref- erence, and who have assented in writing to a substitution of assignees thereunder, are estopped from opposing the discharge of the debtor in bankruptcy on the ground that such assignment was fraudulent. (In re Schuyler, 3 N. B. R 169; 3 Ben. 200; 16 Pittsb. Leg. J. 94; 2 Amer. Law T. Rep. Bankr. 85; Fed. Cas. 12494.) The fifth defined act of bankruptcy by a person consists of his having " admitted in writing his inability to pay his debts and his willingness to be adjudged a bankrupt on that ground." There was no correspond- ing provision under the act of 1867. Acts of bankruptcy in general. — In order to authorize the making of an order to show cause, the deposition of acts of bankruptcy must be such as constitutes legal testimony. (In re Rosenfields, 11 N. B. R 86; 3 Amer. Law Rec. 724; 1 Cent Law J. 583; Fed. Cas. 12061.) If one of two persons jointly and severally liable for a debt, who are not partners, does an act which would subject him to a decree of bank- ruptcy, such act does not affect his associata (James, Adm'x, v. Atlan- tic Delaine Co. et aL, 11 N. B. R 390; Fed. Cas. 7179.) § 3, &.j ACTS OF BANKE0PTOT. 45 Each distinct charge may be denied in a general manner where sev- eral distinct allegations of bankruptcy are set forth in the petition, if he does not file his answer of denial in the nature of a special plea to each allegation (In re Hawkeye Smelting Co., 8 N. B. R. 385); and as many defenses as there are may be set up to the petition, but each de- fense must be pleaded separately. (In re Quimette, 3 N. B. R. 140; 1 Sawy. 47; Fed. Cas. 10622.) The burden of refuting the allegations contained in the petition is on the respondent (In re Price & MiUer, 8 N. B. E. 514; Fed. Cas. 11411) ; and the petitioner is not obliged to make fuU proof of the insolvency, but he may offer proof tending to show the debtor's insolvency, and the latter must explain the evidence, as he is best acquainted with the condition of his own affairs. (In re Oregon Bulletin Printing and Publishing Co., 18 N. B. R 503; 1 Cin. Law BuL 87; Fed. Cas. 10559.) Likewise, the bur- den is upon the debtor to disprove the allegations of the petition where there is a simple denial, and if no evidence is introduced the petitioning creditor is entitled to an adjudication in bankruptcy (In re Jelsh and Dunnebaoke, 9 N. B. R 412; Fed. Cas. 7257); and the omission to file the proof of an act of bankruptcy is a substantial defect which cannot be remedied. (In re Brown, 15 N. B. E. 416; 9 Chi. Leg. News, 191; Fed. Cas. 1981.) i. A petition may be filed against a person who is insolv- ent and who has committed an act of bankruptcy within four months after the commission of such act. Such time shall not expire until four months after (1) the date of the recording or registering of the transfer or assignment when the act consists in having made a transfer of any of his property with intent to hinder, delay, or defraud his credit- ors or for the purpose of giving a preference as hereinbefore provided, or a general assignment for the benefit of his creditors, if by law such recording or registering is required or permitted, or, if it is not, from the date when the bene- ficiary takes notorious, exclusive, or continuous possession of the property unless the petitioning creditors have received actual notice of such transfer or assignment. [Act of 1867. Sec. 39. . , . he . . . shaU be ad- judged a bankrupt, on the petition of one or more of his creditors, the aggregate of whose debts provable under this act amount to at least two hundred and fifty dollars, pro- vided such petition is brought within six months after the act of bankruptcy shall have been committed.] 46 LAW OF BANEEUPTCT. [§ 3, C. Three or more creditors who have provable claims against any person which amount in the aggregate, in excess of the value of securities held by them, to $500 or over, or if all the creditors of such person are less than twelve in number, then one of such creditors whose claim equals such amount, may file a petition to have him adjudged a bankrupt (59, b). Petitions must be filed in duplicate; one copy for the clerk and one for service upon the bankrupt (59, c), and to be accompanied by a list of the creditors (59, d). Upon the filing of a petition a writ of subpoena shall be served upon the person therein named as defendant in the same manner as service of such process is now had in suits in equity, except that it is returnable in fifteen days (18, a). This section removes aU in- centive to the dishonest debtor to secretly commit acts of bankruptcy and then have the time within which proceedings might be instituted elapse before the creditors may obtain knowledge thereof, and extends the time for instituting proceedings four months from the date the dili- gent creditor obtains knowledge of the offense. Where the debtor, in answer to a petition, alleges part payment, the petition cannot be maintained, if such part payment reduce the debt below the amount required by the bankrupt act (In re Quimette, 3 N. B. R 140; 1 Sawy. 47; Fed. Cas. 10623) and, therefore, payments made by a debtor to petitioning creditors are material facts on the issue in denial of bankruptcy, and the debtor may introduce evidence thereof without special traverse of the amount of the indebtednesa (In re Skelley, 5 N. B. R 214; 3 Biss. 260; Fed. Cas. 13921.) A motion by creditors, not joining in the petition, to contest the ad- judication, wiU be denied if they do not make a case of fraud or collu- sion to procure an adjudication to which the petitioning creditors are not, in fact, entitled. attend the first meeting of his creditors, if directed by the court or a judge thereof to do so, and the hearing upon his application for a discharge, if filed ; (2) ^ comply with all law- ful orders of the court ; (3) ' examine the correctness of all proofs of claims filed against his estate ; (4) esecute and de- liver such papers as shall be ordered by the court; (5) exe- cute to his trustee transfers of all his property in foreign countries; (6) immediately inform his trustee of any attempt, 1 At the first meeting of the creditors, the judge or referee shall pre- side and may publicly examine the bankrupt or cause him to be ex- amined at the instance of any creditor, but the place of such meeting should be one most convenient for parties in interest. The first meet- ing must be held not less than ten nor more than thirty days after the adjudication. (Sec. 55, a.) 2 In case of contempt committed before a referee, he certifies the facts to the judge, and after a hearing the latter is authorized to impose punishment. (Sec. 41.) Courts of bankruptcy may enforce obedience by bankrupts and other persons to all lawful orders by fine or imprison- ment, or both. (Sec. 3 — 13.) 'Should the bankrupt, while such, or after his discharge, conceal from the trustee any of the property belonging to his estate in bank- ruptcy, he is liable to imprisonment. (Sec. 39, 6.) 86 LAW OF BAlfKETJPTOT. [§ 7. by his creditors or other persons, to evade the provisions of this Act, coming to his knowledge; (T) ^ in case of any per- son having to his knowledge proved a false claim against his estate, disclose that fact immediately to his trustee; (8) * prepare, make oath to, and file in court within ten days, unless further time is granted, after the adjudication, if an involuntary bankrupt, and vnth the petition if a voluntary bankrupt, a schedule of his property, showing the amount and kind of property, the location thereof, its money value ia detail, and a list of his creditors, showing their residences, if known, if unknown, that fact to be stated, the amount due each of them, the consideration thereof, the security held by them, if any, and a claim for such exemptions as he may be entitled to, all in triplicate, one copy of each for the clerk, one for the referee, and one for the trustee; and (9) ' when present at the first meeting of his creditors, and at such other times as the court shall order, submit to an ex- amination concerning the conducting of his business, the cause of his bankruptcy, his dealings with his creditors and other persons, the amount, kind, and whereabouts of his property, and, in addition, all matters which may affect the administration and settlement of his estate ; but no testimony 1 Any person presenting, under oath, a false claim for proof against the estate of a bankrupt, or using any such claim in composition person- ally or by agent, is liable to imprisonment. (Sec. 29, b.) 2 In the event the bankrupt faUs to file the schedule of property and list of creditors required, the referee nrnst do so (sec. 39 — 6) ; but if the debtor is notified to furnish the schedule and faUs, the creditor may ap- ply for an attachment against him. (Orders IX) And any debt which was not duly scheduled in time for proof and allowance, with the name of the creditor if known to the bankrupt, unless such creditor had actual notice or knowledge of the proceedings, will not be affected by a dis- charga (Sec. 17, a.) In case the schedule and Ust are defective, it is the duty of the referee to see that they are amended. (Sec. 39 — 2.) ' At the first meeting of the creditors, the bankrupt may be publicly examined at the instance of any of the creditors (sec. 55, 6), but at least ten days' notice by maU must be given to creditors of all examinations. (Sec. 58, a.) A refusal to answer questions propounded is a contempt, and accordingly punishabla (Sec. 41.) § 7.] DUTIES OF BANKKUPTS. 87 ^ven by him shall be offered in evidence against him in any criminal proceeding. Provided, however, That he shall not be required to attend a meeting of his creditors, or at or for an examination at a place more than one hundred and fifty miles distant from his home or principal place of business, or to examine claims except when presented to him, unless ordered by the court, or a judge thereof, for cause shown, and the bankrupt shall be paid his actual expenses from the estate when examined or required to attend at any place other than the city, town, or village of his residence. [Act of 1867. Sec. 11 makes provision for the schedule of property. Sec. 14. . . . The debtor shall also, at the request of the assignee and at the expense of the estate, make and ex- ecute any instruments, deeds, and writings which may be proper to enable the assignee to possess himself fully of all the assets of the bankrupt. . . . Sec. 26. . . . and he shall execute all proper writings and instruments, and do and perform all acts required by the court touching the assigned property or estate, and to enable the assignee to demand, recover, and receive aU the property and estate assigned, wherever situated ; and for neg- lect or refusal to obey any order of the court, such bankrupt may be committed and punished as for a contempt of court. [Provision is here made for bankrupt's absence.] He shall also be at liberty, from time to time, upon oath to amend and correct his schedule of creditors and property, so that the same shall conform to the facts. For good cause shown, the wife of any bankrupt may be required to attend before the court, to the end that she may be examined as a witness ; and if such wife do not attend at the time and place specified in the order, the bankrupt shall not be entitled to a discharge unless he shall prove to the satisfaction of the court that he was unable to procure the attendance of his wife. . . . Sec. 42. . . . The order of adjudication of bankruptcy shall require the bankrupt forthwith, or within such number of days, not exceeding five after the date of the order or notice thereof, as shall by the order be prescribed, to make and deliver, or transmit by mail, post-paid, to the messen- ger, a schedule of the creditors and an inventory of his es- tate in the form and verified in the manner required of a petitioning debtor by section thirteen.] 88 LAW OF BAUKETJPTCT. [§ 7. Attendance of bankrupt at meeting's. — A bankrupt cannot be pro- ceeded against for contempt when, owing to sickness, he is unable to attend a meeting as required by the register. (In re Carpenter, 1 N. B. R 51; Fed. Cas. 2427.) Where, in proceedings against him, on the day of hearing he neither enters appearance nor denies by answer the alle- gations of the petition, he may be ordered to state in writing the num- ber of his creditors and the amount due them, and a request for jury trial to determine the fact of bankruptcy and for leave to file an answer may be denied. (Clinton et aL v. Mayo, 13 N. B. R 39; Fed. Cas. 2899.) The creditors are to decide on the sufficiency of the excuse for the debt- or's absence from their meeting, and the court will not disturb such decision without good cause shown. (In re Wronkow et aL, 18 N. B. R. 81; 26 Pittsb. Leg. T. 2; Fed. Cas. 18105.) He must appear in person or by representative at the creditors' meeting in composition, and submit the required statement, but is not bound to appear at the hearing to submit any statement. (In re Scott et al., 15 N. B. R. 73; 4 Cent Law J. 39; Fed. Cas. 13519.) See also Meetings op Ceeditoes, sec. 55. Compliance with orders. — The court may order a bankrupt to pay over the proceeds received from the sale of notes sold just previous to the serving of an injunction upon him (In re Mempner, 6 N. B. E. 521; Fed. Cas. 7689) ; and if it appears that he has not surrendered any por- tion of his property which he should have, he may be ordered to do so, and upon failure he may be punished for contempt. (In re Salkey et aL, 11 N. B. R. 423; 6 Biss. 269; 7 ChL Leg. News, 178; Fed. Cas. 12358.) He will not be permitted to pay money which he has collected and which belongs to the estate for interest on mortgages, unless it apx)ear that such payment is for the benefit of the estate. (In re Ettinger, 18 N. R K. 322; Fed. Cas. 4543.) Upon being adjudicated a voluntary bankrupt, he must surrender all the assets, notwithstanding there may be a pros- pect of settlement with the creditors. (In re Shafer et aL, 3 N. B. R. 178; 1 Chi Leg. News, 326; Fed. Cas. 12694.) The schedule. — Unless there was a design to conceal the property, where it has been transferred, an omission to place it in the schedule is no ground for refusal of discharge (In re Smith, 13 N. B. R 256; 1 Woods, 478; Fed. Cas. 12995.) It has been held that the foUo\\'ing should be included in the schedule: The interest of an individual mem- ber of a firm in a partnership (In re Brick, 19 N. B. R 508); property conveyed in fraud of the creditors of grantor (In re O'Bannon, 3 N. B. R 6; Fed. Cas. 10394); growing and vmgathered crops, as personal prop- erty (In re Schumpert, 8 N. B. R 415; Fed. Cas. 13491); a judgment in favor of a bankrupt. (In re SaUee, 3 N. B. R 78; 3 Amer. Law T. Rep. Bankr. 7; Fed. Cas. 13356.) The retention of possession of chattels by a vendor after the sale thereof is conclusive evidence of fraud as against creditors, and the failure to include such property in his sched- ule at the time of filing the petition in bankruptcy, or to otherwise dis- § T.] DUTIES OF BAKKBTIPTS. 89 close his interest therein, is concealment thereof, and ground for with- holding dlscharga (In re Hussman, 2 N. B. R. 140; 2 Amer. Law T. Rep. Bankr. 53; 1 Chi Leg. News, 177; Fed. Cas. 6951.) A bankrupt who has not made a complete disclosure of his assets can- not require that creditors opposing the discharge specify objections, or abide by specifications which they may have filed. (In re Long, 3 N. B. R. 66; 7 Phila. 578; 26 Leg. Int. 349; Fed. Cas. 8477.) Where real estate held by partners as tenants in common is classified in the sched- ule as partnership assets, such classification will not convert the separate property of the individual partners into firm property in derogation of the rights of separate creditors. (In re Zug, 16 N. B. R. 280; 23 Int. Rev. Rec. 392; 34 Leg. Int. 403; 25 Pittsb. Leg. J. 29; Fed. Cas. 18333.) The refusal or neglect of an involuntary bankrupt to pay to the assignee a sum returned in his inventory as " cash on hand " constitutes contempt. (In re Dresser, 3 N. B. R. 138; Fed. Cas. 4077.) Where a bankrupt has failed to put property in his schedule, the right of the assignee to re- cover it is not barred by discharge granted before discovery. (Maybin V. Raymond, Ass., 15 N. B. R 353; 4 Amer. Law T. Rep. (N. S.) 21; Fed. Cas. 9338.) The wilful and fraudulent omission by a bankrupt from his inventory of a portion of his assets may be cause for prosecution, but it is not an infamous crime as the term is used at common law and in the fifth amend- ment to the constitution. (United States v. Block, 15 N. B. R. 325; 4 Sav^. 211; 9 Chi Leg. News, 234; Fed. Cas. 14609.) Where it appeared that after a conveyance of property, and before the filing of the petition in bankruptcy, a receiver had been appointed by the state court, it was held that whatever title the bankrupt had in the property, after the conveyance, had vested in the receiver, and there was no false swearing by reason of its not having been inserted in the schedule. (In re Free- man, 4 N. B. R. 17; Fed. Cas. 5082.) It has been held that the following need not be included in the schedule: The gift by a bankrupt to his wife, before adjudication and not in contemplation of insolvency, of funds which were used in iniproving the separate estate of the wife, and which does not vest in him such an interest as would pass to his assignee (In re Wyatt, 2 N. B. R. 84; 1 Chi Leg. News, 107; Fed. Cas. 18106); where a husband's equitable interest in the wife's estate has been levied upon and sold under execution (In re Hummitsh, 3 N. B. R. 3; In re Pomeroy, ibid.; 15 Pittsb. Leg. J. (0. S.) 494; Fed. Cas. 6866); the right of a bankrupt to one-half of the net profits of business of another con- ducted in his own name. (In re Beardsley, 1 N. B. R, 121 ; 1 Amer. Law T. Rep. Bankr. 94; Fed. Cas. 1184.) Amendment of the schednle. — A register has power to allow a bank- rupt to amend his schedule on his ex parte application without notice, and no creditor has a right to oppose such application. (In re Watts, 2 N. R R. 145; 8 Ben. 166; 2 Amer. Law T. Rep. Bankr. 74; Fed. Cas. 17293.> ■90 LAW OF BAHKEUPTCY. [§ 7. Material mistakes, as the entire omission of a debt or the name of a cred- itor, may be corrected. (Beebe v. Pyle, 18 N. B. R. 162; In re Heller, 5 N. B. R 46; 41 How. Pr. 213; Fed. Caa 6339.) Amendment of the sched- ide will be permitted where the debtor had been adjudicated a bankrupt and the warrant issued for the first meeting of creditors, and it is shown by affidavits that the names of certain creditors had been omitted; but the marshal will be required to issue a new warrant. (In re Perry, 1 N. B. R 2; 1 Amer. Law T. Rep. Bankr. 4; Fed. Cas. 10998.) Material ad- ditions to the schedule of debts or of property are not allowable by way of amendment after the first meeting of creditors, except upon such con- ditions as may prevent injustice. In case of amendment the issuing of an alias warrant will be required. (In re Eatcliffe, 1 N. B. R 98; 25 Leg. Int. 92; 6 Phila. 466; 1 Amer. Law T. Eep. Bankr. 47; 15 Pittsb. Leg. J. 343; Fed. Cas. 11578.) The register has power to allow an amendment of his schedule by the bankrupt to include additional property, but cred- itors are not thereby precluded from opposing the discharge on the ground of such omission. (In re Watts, 2 N. R R 145; 3 Ben. 166; 2 Amer. Law T. Rep. Bankr. 74; Fed. Cas. 17293.) Where a bankrupt sought to amend his schedule by adding twenty other debts, the court held that there had been culpable laxity, and refused to allow the amendment except upon such terms, to be reported by the register, as would prevent injustice to creditors. (In re Morgenthal, 1 N. B. R. 98; 38 Leg. Int. 92; 6 Phila. 468; Fed. Cas. 9813.) A bankrupt may, even after consideration of specifica- tions in opposition to discharge, amend his schedule, by order of the court. (In re Preston, 8 N. B. R. 27; Fed. Cas. 11393.) A discharge will not be granted when the bankrupt has omitted from his schedule of as- sets an estate in expectancy under a will, but leave will be granted to amend. (In re Connell, Jr., 3 N. B. R. 113; Fed. Cas. 3110.) False swearing in the schedule. — It must appear that the bankrupt knew the claim was false in order to bar a discharge on the ground that he swore falsely in the affidavit accompanying his schedule that he was indebted to the creditors named therein, or that he did not disclose to the assignee that the claim was false and fictitious. (In re Blumen- thal, 18 N. B. R 555; Fed. Cas. 1576.) If a bankrupt put into his sched- ule, as due, a debt which is false, it will prevent his obtaining a discliarge, even though the debt be not proved. In such case the onus probandi is on such creditors to show that the debt was false, and where there is a failure to substantiate the allegation a discharge will be granted. (In re Orcutt, 4 N. B. R 176; Fed. Cas. 10550.) If, by wilfully making a false schedide or affidavits, the bankrupt prevents notice to a creditor, his discharge may be annulled. (Rayl, Adm'x, v. Lapham, 15 N. B. R 508; In re Herrick, 7 N. B. R 341; Fed. Cas. 6419.) Where a creditor wishes to avoid the discharge on the ground that his claim was not in- cluded In the bankrupt's schedule, he must attack the discharge on the § Y.] DUTIES OF BANKETJPTS. 91 ground of fraud, in the court where granted. (Symonds v. Barnes, 6 N. B. R 377.) Omission of creditors from the schedule.— The omission of names of creditors in the schedule of a bankrupt with their knowledge and con- sent is not ground for withholding a discharge (In re Needham, 2 N. B. R 134; 1 Lowell, 309; 2 Amer. Law T. Eep. Bankr. 39; 16 Pittsb. Leg. J. 318; 1 Chi Leg. News, 171; Fed. Cas. 10081); and the mere omission is not a substantive ground for avoiding or preventing the discharge of such creditor unless the omission be wilful or fraudulent. (Payne & Bro. V. Able et aL, 4 N. B. R. 67.) When it appears at the first meeting of creditors that the names of certain creditors by whom claims against the estate are presented do not appear on the schedule, the proof of such claims should be postponed until after the election of the assignee. (In re Milwain, 13 N. B. R 358; 1 N. Y. Weekly Dig. 76; Fed. Gas. 9633.) It is the province of the court to pass on all questions of concealment of assets and failure to name all creditors. (In re Scott, Collins & Co., 15 N. B. R 78; 4 Cent. Law J. 29; Fed. Ca& 12519.) A discharge cannot be impeached collaterally on the ground that a creditor had no notice of the bankruptcy proceedings, and that notice was not given because of the fraud of the bankrupt in representing in his schedule that a ci-edit- or's residence was unknown to him, when he actually knew the same. (Rayl, Adm'x, etc. v. Lapham, 15 N. B. R 508.) The correctness of the schedule of creditors, or the fact that a creditor received notice of the proceedings by creditors, does not determine the question of jurisdiction either of the proceedings or to grant a discharge. (In re Archenbrown, 11 N. R R 149; 7 ChL Leg. News, 99; Fed. Cas. 504) Creditors cannot recklessly file a petition for the purpose of making the alleged bankrupt file a statement of his creditors. (In re Scammon, 11 N. B. R. 280; 6 Biss. 195; 7 Chi Leg. News, 43; 9 West. Jur. 175; Fed. Cas. 13439.) Claims to be included in the schednle. — A debtor is required to file a list of his creditors and the amount of their respective claims. (War- ren Savings Bank v. Palmer & Co., 10 N. B. R 339; 10 Phila. 286; 31 Leg. Int. 261; 6 Chi Leg. News, 366; 31 Pittsb. Leg. J. 198; Fed. Cas. 17307.) The omission to place a claim upon the list of creditors is merely a circumstance of suspicion. (In re Mendelsohn, 12 N. B. R 533; 3 Sawy. 342; Fed. Caa 9420.) The existence of a difference between the list of creditors filed by the debtor and the list filed by petitioning creditors constitutes an issue to be tried and determined upon the evidence ad- duced. (In re Hymes, 10 N. B. R 433; 7 Ben. 427; Fed. Cas. 6986.) Debtors should set down in the schedule all the papers that they may be liable on, with proper explanations in regard to them. (In re Henry et al., 17 N. B. R 463; 9 Ben. 449; Fed. Cas. 6370.) A debt due the wife should be em- braced in the schedule. (In re Rosenfeld, 3 N. B. R. 49; 1 Amer. Law T. Rep. Bankr. 100; Fed, Cas. 12057.) The omission of a debt contracted 92 LAW OF BANKEUPTCT. [§ 7. ■with the creditor in his individual capacity, and subsequent to the date of the partnership of the creditor, under which partnership name he claimed notice as a creditor, was held not to be fraudulent or wilful omission. (In re Pierson, 10 N. B. R 107; Fed. Cas. 11153.) When all the members of a firm petition for the benefit of the act they are jointly and severally bound to make the required statements of their debts, whether copartnership or individual, or due by them jointly with other persons not parties to the petition. (In re Warren and Charles Leland, 5 N. B. E. 223; 5 Ben. 168; 4 Amer. Law T. 185; Fed. Caa 8328.) The relation of the schedule to composition proceedings. — In cases of composition the statement should conform to the schedule in bank- ruptcy. (In re Haskell, 11 N. B. R 164; 1 Cent. Law J. 531; Fed. Caa. 6193.) A mistake without fraud, made by the debtor in his statement of the amount due to the creditor, will not vitiate a composition. (Ex parte Trafton, In re Trafton, 14 N. B. R 507; 3 Lowell, 505; Fed. Cas. 14138; Beebe v. Pyle, 18 N. B. E. 162.) Where the facts relating thereto were brought out by the testimony and considered by the creditors in com- ing to the conclusion to accept the composition, it is not a good objec- tion that property standing in the name of the bankrupt's wife should have been included in the Schedules. (In re Welles, 18 N. B. R 535; Fed. Cas. 17377.) Nor is the fact that the schedules stated the real estate of the debtor as of unknown or imoertain value a good objection to a com- position. (In re Welles, 18 N. B. E. 535; Fed. Cas. 17377.) The effect upon a discharge of an omission from the schedule.— A certificate of discharge in bankruptcy is not a bar to a suit against a bankrupt by a creditor who was not named in the schedule accompany- ing the petition in the bankruptcy proceedings. (Barnes v. Moore, 2 N. B. R 174; Lamb, Ass., v. Brown, 12 N. B. R 533; 7 Chi Leg. News, 363; 1 N. Y. Weekly Dig. 176; Fed. Cas. 8011.) The effect of the insertion of the claim in the schednle. — The filing of the petition by a bankrupt and his including the claim of a creditor in the schedule of debts is equivalent to a new promise, so as to prevent the claim, if not already barred, from being defeated by the statute of limitations. (In re Eldridge & Co., 12 N. B. R 540; 2 Hughes, 356; 1 N. Y. Weekly Dig. 243; Fed. Cas. 4331; In re Hertzog, 18 N. B. R 526; Fed. Cas. 6423. For contra, see In re Kingsley, 1 N. B. R 66; 1 Lowell, 316; 7 Amer. Law Eeg. (N. S.) 423; 15 Pittsb. Leg. J. 235, 377; Fed. Cas. 7819.) The schednle in general. — A deposition of a creditor setting forth a claim against a bankrupt for unliquidated damages for a breach of con- tract, which does not appear in the schedule, is not proof thereof, unless the amount is fixed by assessment, application for which must be made by the creditor. (In re Clough, 2 N. B. R 59; 3 Ben. 508; 16 Pittsb. Leg. J. 35; Fed. Cas. 3905.) A creditor is not prejudiced by refusal of per- mission to take a copy of the schedule, so long as it was produced before § 8.] DEATH OE INSANITY OF BANKRUPTS. 93 the register and made accessible to the creditor at all times, for the pur- pose of examining it or the bankrupt in respect to it. (In re Tifift, 18 N. B. E. 227 ; Fed. Cas. 14033.) When but a single creditor proves his claim, he is entitled to be paid in full as far as the assets are sufficient for the purpose, and if there be any residue the same must be applied to the payment of such creditors as the bankrupt has acknowledged to hold valid claims. (In re Haynes, 2 N. B. E. 78; 1 Gaz. 78; Fed. Cas. 6369.) In an action brought under the Bankrupt Act, the schedule of indebt- edness is not material evidence of insolvency. (Tyler, Ass., v. Brock et aL, 17 N. B. E. 239.) Acts and duties of the bankrupts generally,— If it appear, in the reg- ular course of proceedings, that an applicant for discharge has failed in any particular to perform his duty as a bankrupt, the application for discharge will be refused. (In re Palmer, 14 N. B. E. 487; 2 Hughes, 177; Fed. Cas. 10678.) Where a bankrupt is indorser on a note which falls due after the adjudication of bankruptcy and before the appointment of an assignee, he ma.y waive demand and notice. (Ex parte Tremont National Bank, In re Battey, 16 N. B. E 397; 2 Lowell, 409; 25 Pittsb. Leg. J. 84; Fed. Cas. 14169.) Examination of bankrupts. Seeposf, p. 178. Sec. 8. Death or insanity of Ibantrupts. — a. The death, or insanity of a bankrupt shall not abate the proceedings, but the same shall be conducted and concluded in the same manner, so far as possible, as though he had not died or be- come insane: Provided, That in case of death the widow and children shall be entitled to all rights of dower and allowance fixed by the laws of the State of the bankrupt's residence. [Act of 1867. Seo. 12. . . . If the debtor dies after the issuing of the warrant, the proceedings may be continued and concluded in like manner as if he had lived.] This is a deviation from the ordinary rule that death or insanity abates a suit, and, jurisdiction once obtained, permits the administra- tion of an estate until closed. Effect of the death of the bankrupt. — A proceeding in bankruptcy will not be discontinued by the death of the bankrupt between the time of entry of the order of adjudication and the physical "issuing of the warrant." (In re Litchfield, 9 N. B. E. 506; 7 Ben. 259; Fed. Cas. 8385.) The death of one partner prior to an adjudication on the question of bankruptcy is not legal cause for dismissing the petition. (Himt, Tilling- hast & Co. V Pooke & Steere, 5 N. B. E. 161; Fed. Cas. 6896.) Where the bankrupt died five months after flUng his petition and his attorney 94 LAW OF BAl^KEUPTCT. [§ 8, asked for discharge on account of the death, it was held that the discharge could not be granted because the bankrupt had not taken the necessary- oath prior to his decease. (In re Gunike, 4 N. B. E. 33; 2 ChL Leg. News, 367; 1 Pac. Law Eep. No. 8, p. 3; Fed. Cas. 5868.) A brother of one ad- judged a bankrupt who died before adjudication is not a partner in inter- est, and is not entitled to file a petition to obtain permission to dispose of the bankrupt's property. (Karr v. Whittaker et aL, 5 N. B. R. 133; Fed. Cas. 7613.) Where the debtor appears and confesses the acts of bank- ruptcy charged in a creditor's petition, and a trustee is appointed, a creditor who has proved his debt cannot have set aside the adjudica- tion after the death of the bankrupt and after the rights of third par- ties have intervened. (In re Thomas, 11 N. B. R 330; 7 Chi Leg. News, 187; Fed, Cas. 13891.) The effect of the insanity of the hanlirnpt. — A person cannot com- mit an act of bankruptcy while insane, but if he becomes insane after committing the act he can be proceeded against in bankruptcy. (In re Pratt, 6 N. B. R. 376 ; 3 Lowell, 96 ; Fed. Cas. 11371.) A person who is under guardianship as a lunatic may be proceeded against in involuntary bank- ruptcy in opposition to the wishes of his guardian. If the person was in- sane at the time of the commission of the alleged act of bankruptcy he cannot be adjudicated a bankrupt for that act. (In re Weitzel, 14 N. B. R 466; 7 Bisa 289; 3 Cent. Law J. 557; Fed. Cas. 17365.) An application to set aside the default and subsequent adjudication in bankruptcy will be granted, and the bankrupt will be allowed to show cause why he should not be so adjudged, when he files affidavits alleging that he was insane at the time the debts were created and also at the time of the proceed- ings against him and until a recent period, where it appears that the as- signee has made no distribution. (In re Murphy, 10 N. B. R. 48; Fed. Cas. 9946.) The relation of the right of dower to bankruptcy. — A valid convey- ance may be made by the assignee of land held by the husband at the time of bankruptcy without reserving or providing for dower interest. (In re KeUy v. Strange, 2 N. B. R. 2; Fed. Cas. 7676.) Where the hus- band and wife join in a deed duly acknowledged so as to release the dower, if the deed be avoided in the hands of a fraudident grantee as having been executed by the bankrupt with intent to hinder, delay and defraud creditors, the assignee in bankruptcy will be entitled to the land divested of the wife's claim of dower and the husband's right to a homestead. (Cox, Ass., v. Wilder et aL, 5 N. B. R 443; Fed. Cas. 3309.) But where a fraudulent conveyance has been set aside, the making of such conveyance does not forfeit the dower right of the wife against the assignee in bankruptcy. (Cox v. Wilder et aL, 7 N. B. R. 241 ; 2 DilL 45; 5 Amer. Law T. Rep. (XJ. S. Cta) 500; Fed. Cas. 3308.) The dower in- terest of a wife claiming her dower in certain real estate belonging to the bankrupt and sold by the assignee in pursuance of an order of the court will not be divested by the sale. (Lazear v. Porter, Ass., 18 N. R § 9, a.] PEOTEOTION AUD DETENTION OF BANKRUPTS. 95 E. 549; In re Angier, 4 N. B. R. 199; 1 Amer. Law T. Eep. Bankr. 248; Fed. Cas. 388.) It has been held that a feme covert does not become a surety for her husband by charging her inchoate right of dower for heT husband's benefit; that she is not entitled to dower in real estate held as partnership assets; and an agreement that she be compensated for a lease of her contingent right of dower is not to be implied. (Hiscocls; Ass., etc. V. Jaycox & Green, 13 N. B. E. 507; Fed. Cas. 6531.) The wife's right of dower, where she joins in the mortgage of her husband's prop- erty, can be barred only by sale of such property under a power of sale contained in the mortgage or by a decree of a court of competent ju- risdiction, where she can be made the party to the proceedings, a sale in bankruptcy proceedings being ineffectual for the purpose. (In re Bar- tenbaoh, 11 N. B. R 61; 3 Amer. Law T. Eep. (N. S.) 33; Fed. Cas. 1068.) Sec. 9. Protection and detention of bankrupts. — a. A bankrupt shall be exempt from arrest upon civil process ex- cept in the following cases : (1) When issued from a court of bankruptcy for contempt or disobedience of its lawful orders; (2) when issued from a State court having jurisdic- tion, and served within such State, upon a debt or claim from which his discharge in bankruptcy would not be a re- lease, and in such case he shall be exempt from such arrest when ia attendance upon a court of bankruptcy or engaged in the performance of a duty imposed by this Act. [Act of 1867. Sec. 26. . . . No bankrupt shall be liable to arrest during the pendency of the proceedings in bankruptcy in any civil action, unless the same is founded on some debt or claim from which his discharge in bank- ruptcy would not release him.] The term " bankrupt " includes a person against whom an involuntary petition or an application to set aside or revoke a discharge has been filed, or who has filed a voluntary petition, or who has been adjudged a bankrupt (sec. 1 — 4); hence this right of exemption from arrest may exist where there is no adjudication of bankruptcy, and where there may never be, the filing of the petition fixing the time when the ex- emption commences to run. The referee may furnish a protection against arrest (Orders XII), and in the event the debtor is under arrest, he may be released on habeas corpus proceedings. (Orders XXX) The bankrupt's liability to arrest. — A bankrupt is liable to arrest, pending bankruptcy proceedings, upon a debt created by his defalcation of the proceeds of goods sent to him to be sold on commission and for which he refuses to account. (In re Kimball, 3 N. B. E 74; afiirmed, 3 96 iAW OF BAHKitUPTOT. [§ 9, a. N. B. R. 114; 2 Ben. 554; Fed. Cas. 7768.) And if arrested on an execution issued on a judgment in an action for fraud, he will not be released pend- ing proceedings in bankruptcy. (In re Whitehouse, 4 N. B. E. 15 ; 1 Lowell, 439; Fed. Cas. 17564; In re Patterson, 1 N. B. E. 58; 3 Ben. 155; 15 Kttsb. Leg. J. 241 ; Fed. Cas. 10817.) He will not be released by the bankruptcy court when under arrest upon process in an action for fraud (In re Devoe, 2N.B.E.11; lLoweU,251; 7Ajner.LawEeg. (U.S.)690; lAmer.LawT. Rep. Bankr. 90; Fed. Cas. 3843); nor when held in arrest in a judgment in an action for fraud, although the judgment debtor may have proved his debt in the proceedings. (In re Robinson, 2 N. B. R. 108; 6 Blatchf. 353; 36 How. Pr. 176; 2 Amer. Law T. Eep. Bankr. 18; Fed. Cas. 11939.) But a civil action for fraud will be stayed until the final determination of the bankruptcy proceedings. (In re Migel, 3 N. B. E. 153; Fed. Cas. 9588.) The mere filing, however, of charges of fraud in a pending civil suit does not act as such a stay. (Minon v. Van Nostrand, 4 N. B. R 38; 1 Lowell, 458; Fed. Cas. 9642.) A debtor arrested at the suit of his creditor in a civil action pending in a state court, and afterwards adjudicated a bank- rupt, wiU not be discharged by the bankruptcy court (In re Hazleton, 3 N. B. E. 12; 1 LoweU, 270; 1 Amer. Law T. Eep. Bankr. 105; Fed. Caa 6387), unless the debt on which he is arrested is one of which a discharge in bankruptcy acts as a release. (Brandon National Bank v. Hatch, 16 N. B. E. 468.) He wUl not be released, even on a writ of habeas corpus, if the debt be not dischargeable in bankruptcy (In re Valk, 8 N. B. R 78; 3 Ben. 431; Fed. Cas. 16814; In re Alsberg, 16 N. B. E. 116; Fed. Cas. 361), even though arrested before the proceedings in bankruptcy have commenced. (In re Walker, 1 N. B. R 60; 1 LoweU, 323; Fed. Cas. 17060.) A debtor under arrest, but in the custody of his baU, is, when sur- rendered in discharge thereof, theoretically and practically in arrest, substantially, to all intents and purposes, as if he had never been released on bail (In re Hazleton, 2 N. B. R 12; 1 Lowell, 270; 1 Amer. Law T. Eep. Bankr. 105; Fed. Cas. 6287.) The bankrupt's exemption from arrest. — Where proceedings in bankruptcy have been commenced, the bankrupt court has a right to protect the bankrupt from an action and arrest under the authority of a state court, and may issue a writ of habeas corpus to that end. (In re Williams and McPheeters, 11 N. B. R 145; 6 Biss. 233; 7 Chi Leg. News, 49; Fed. Cas. 17700.) This exemption is conferred because the party is adjudged a bankrupt by the district court, and the enforcing of the ex- emption by affirmative action is an act "to be done under and in virtue of the bankruptcy." The court has power to relieve him from arrest, on process of a state court, in an action founded upon a debt that may be discharged in bankruptcy; and the question whether the debt be one contracted in fraud may be examined into and determined by the dis- trict court. (In re Glaser, 1 N. B. R 73; 15 Pittsb. Leg. J. 365; 2 Ben. 180; 1 Amer. Law T. Rep. Bankr. 57; Fed. Cas. 5474; In re Smith et aJL, 18 N. B. R 24; Fed. Cas. 12976.) § 9, h.] PEOTEOTION AND DETENTION OF BANKEtTPTS. 97 An agent who sells goods for his principal on commission and pays over the balance of sales monthly is released from liability for an unpaid balance by a discharge in bankruptcy, such debt not having been cre- ated in a "fiduciary character; " and, if such debtor be arrested under a state statute, he will be released on application to the district court. (Grover & Baker v. Clinton, 8 N. B. E. 313; 6 Chi Leg. News, 33; 21 Pittsb. Leg. J. 34; Fed. Cas. 5845.) A bankrupt cannot be held in arrest upon a judgment for costs in a proceeding in a state court (In re Borst, 3 N. B. R 62; 1 Gaz. 18; Fed. Cas. 1665); nor upon a judgment In tres- pass when he has received his discharge in bankruptcy. (In re Simpson, 3 N. B. R. 17; Fed. Cas. 12879.) And if arrested under a warrant of a state court for fraudulently conveying his property prior to the passage of the Bankrupt Act, he may be discharged, since the title to the prop- erty fraudulently conveyed should be regarded as vested in the assignee. (Goodwin v. Sharkey, 3 N. B. R. 138.) But when a court of bankruptcy has no power to discharge a judgment, it cannot interfere to prevent its enforcement by imprisonment, unless necessary to the exercise of its jurisdiction. (In re Pettis, 2 N. B. R. 17; Fed. Cas. 11046.) If the bank- rupt be arrested on an attachment issued by a commissioner in chancery of a state court in proceedings to discover a bankrupt's estate to satisfy a lien established prior to bankruptcy, he will be discharged on applica- tion to a United States court. (Ex parte Taylor, 16 N. B. R. 40; 1 Hughes, 617; 34 Pittsb. Leg. J. 205; Fed. Cas. 13773.) A composition satisfies the debt, though based upon a sale procured through false representations, and will render void an arrest upon civil process. (Bamberg et aL v. Stem, 18 N. B. R. 74.) Subsequent to final judgment, a stay of a proceeding for the purpose of putting in motion the remedy of arrest reserved to the creditor is not allowable. (In re Whitney, 18 N. B. R. 563; Fed. Cas. 17581.) b. The judge may, at any time after the filing of a petition by or against a person, and before the expiration of one month after the qualification of the trustee, upon satisfactory proof by the affidavits of at least two persons that such bankrupt is about to leave the district in which he resides or has his principal place of business to avoid examination, and that his departure will defeat the proceedings in bankruptcy, issue a warrant to the marshal, directing him to bring such bankrupt forthwith before the court for examination. If upon hearing the evidence of the parties it shall appear to the court or a judge thereof that the allegations are true and that it is necessary, he shall order such marshal to keep such bankrupt in custody not exceeding ten days, but not imprison 7 98 LAW OF BANKEtrPTOr. [§ 10. him, until he shall be examined and released or give bail conditioned for his appearance for examination, from time to time, not exceeding in aU ten days, as required by the court, and for his obedience to aU lawful orders made in ref- erence thereto. [Act of 1867. Seo. 40. . , . If it shall appear that there is probable cause for believing that the debtor is about to leave the district, or to remove or conceal his goods and chattels or his evidence of property, or make any fraudulent conveyance or disposition thereof, the court may issue a war- rant to the marshal of the district, commanding him to ar- rest the alleged [bankrupt] and him safely keep, unless he shall give bail to the satisfaction of the court for his appear- ance from time to time, as required by the court, until the decision of the court upon the petition or the further order of the court, and forthwith to take possession provisionally of all the property and effects of the debtor, and safely keep the same until the further order of the court.] Arrest of bankrupt to secure his attendance. — Under the act of 1867 it has been held that the arrest of the debtor under a provisional -warrant to secure his attendance at the hearing and adjudication is au- thorized, but no arrest can be made under the warrant after adjudica^ tion. A bond given by the debtor to secure his release from an arrest made after adjudication is therefore void. (Usher v. Pease et aL, 13 N. B. R. 305.) In an application for a provisional vrarrant and order of ar- rest there should be filed a separate petition, supported by affidavits of persons having knowledge of the facts, when the same are not stated in the petition of the petitioner's own knowledge. (In re McKibben, 13 N. B. R. 97; Fed. Cas. 8859.) A provisional warrant may issue in the case of a debtor adjudicated bankrupt on a voluntary petition and who re- mains in control of his property and disposes of some of it, if he expresses an intention of going abroad to adjust his foreign accounts. (In re Hale, 18 N. B. R. 335; Fed. Cas. 5911.) Sec. 10. Extradition of bankrupts. — a. "Whenever a warrant for the apprehension of a bankrupt shall have been issued, and he shall have been found within the jurisdiction of a court other than the one issuing the warrant, he may be extradited in the same manner in which persons under indictment are now extradited from one district within which a district court has jurisdiction to another. § llj a.] SUITS BT AND AGAINST BAHKEUPTS. 99 ■When a bankrupt has once been extradited, he may be detained (seo. 9), and obedience to all lawful orders enforced by fine or imprisonment, OT both (sec. 3—13). Sec. 11. Suits by and against bankrupts. — a. A suit which is founded upon a claim from which a discharge would be a release, and which is pending against a person at the time of the filing of a petition against him, shall be stayed until after an adjudication or the dismissal of the petition; if such person is adjudged a bankrupt, such action may be further stayed until twelve months after the date of such adjudication, or, if within that time such person applies for a discharge, then until the question of such discharge is de- termined. [Act of 1867. Seo. 21. . . . That no creditor prov- ing his debt or claim shall be allowed to maintain any suit at law or in equity therefor against the bankrupt, but shall be deemed to nave waived all right of action and suit against the bankrupt, and all proceedings already commenced or unsatisfied judgments already obtained thereon, shall be deemed to be discharged and surrendered thereby; and no creditor whose debt is provable under this act shaU be al- lowed to prosecute to final judgment any suit at law or iu equity therefor against the bankrupt, until the question of the debtor's discharge shall have been determined ; and any such suit or proceedings shall, upon the application of the bankrupt, be stayed to await the determination of the court in bankruptcy on the question of the discharge, provided there be no unreasonable delay on the part of the bank- rupt in endeavoring to obtain his discharge, and provided, also, that if the amount due the creditor is ia dispute, the suit, by leave of the court in bankruptcy, may proceed to judgment for the purpose of ascertaining the amount due, which amount may be proved in bankruptcy, but execution shaU be stayed as aforesaid.] This section makes a distinction between suits upon claims from which a discharge would be a release and those in which it would not. The logic of this provision is plain. To prosecute to judgment a suit pend- ing against a person at the time the petition is filed is useless, if it is based upon a claim from which a discharge would be a release, as under any circumstances each creditor would share equally with the others in the distribution of the estate and his rights would be fully preserved 100 LAW OF BANKEUPTCT, [§ 11, a. by proving his claim against the estate. If, however, the banlanpt is not discharged, the suit may then be prosecuted to judgment. The stay must be imtil after an " adjudication," which means the day of the entry of a decree that the defendant in a bankruptcy proceeding is a bank- rupt, or, if such decree is appealed from, then the date when such decree is finally conflrmed, (Sec. 1 — 3.) Non-liquidated claims against the estate may, pursuant to application to the court, be liquidated in such manner as it shall direct, and may thereafter be allowed and proved against the estate. (Sec. 63&.) Stay of suits — Jurisdiction of courts. — Application for injimction to stay proceedings must be heard and decided by the court of bank- ruptcy. (Orders XIL) The United States district court is a court of equity having cognizance of all cases in controversy between the bank- rupt and his creditors, and has the same power to restrain creditors in judgments at law against a bankrupt that a state court of equity would have over such creditors if the debtors were not bankrupts. (Fowler, Ass.,v. Dillon etal., 13 N. B. E. 308; 1 Hughes, 333; Fed. Gas. 5000.) It has full jurisdiction to suspend or control suits brought in state courts against a bankrupt. (In re Davis, 8 N. B. E. 167; Fed. Gas. 8619.) But it has no authority to withdraw from the state court suits pending therein between the bankrupt and other parties and compel their trial in the district court. (Samson v. Burton, 4 N. B. E. 1; 5 Ben. 343; Fed. Gas. 13285.) It may restrain the sheriff of the state court from levying on the prop- erty of the bankrupt to satisfy a judgment of the latter court, although the judgment was obtained prior to the adjudication of bankruptcy. (In re Mallory, 6 N. B. R 33; 1 Sawy. 88; Fed. Gas. 8991.) The bankruptcy court has no jurisdiction over a state court, but it has full and complete original jurisdiction of the bankrupt and all its assets and creditors, and may fine and imprison any of said creditors for inter- fering with the assets in the state court vnthout permission of the dis- trict court, on any debt which might be proven against the estate of the bankrupt. (In re Winn, 1 N. B. E. 131; 1 Amer. L. T. Eep. Bankr. 17; Fed. Gas. 17876; Markson et aL v. Heaney, 4 N. B. R 165; 8 Ghi Leg. News, 153; Fed. Gas. 9098; Irving v. Hughes, 3 N. B. R SO; 7 Amer. Law Eeg. (N. S.) 309; 6 Phila. 451; 24 Leg. Int. 380; 15 Pittsb. Leg. J. 121; Fed. Gas. 7076; In re Whipple, 13 N. B. R 373; 6 Biss. 516; 8 Chi Leg. News, 134; Fed. Gas. 17513.) It is within the power of the bankruptcy court to permit a sale under execution where an injunction has been granted restraining such sale, and the judgment creditors are bound by the bankrupt court's order and cannot recover the proceeds of the sale from the sheriff. (O'Brien v. Weld et aL, 15 N. B. R 405; Samson v. Burton, 6 N. B. R 403; Markson et aL v. Heaney, 4 N. B. R 165; 1 Dili 497; Fed. Gas. 9098.) When the right of a state court is subject to be impeached, it can only be done by the intervention of the assignea (Valliant, Ass., v. Childress, 11 N. B. R 317.) An attempt of a state court to collect and distributa § 11, a.j suns BY AKD AGAINST BAITKEUPTS. 101 the assets of an insolvent corporation is in contravention of the bank- ruptcy law, although the law under which the state court proceeds does not provide for or purport to discharge the debtor from its liabilities. (In re Merchants' Insurance Co., 6 N. B. R 43; 3 Biss. 162; 20 Pittsb. Leg. J. 33; 4 Chi. Leg. News 73; Fed. Cas. 9441.) The jurisdiction of a state court does not extend to the administration of the assets of an insolvent bankrupt, but the property of the corporation should be surrendered into the court of bankruptcy to be there administered upon (ThornhiU et al. V. Bank of Louisiana, 8 N. B. R 110; 3 Amer. Law T. 38; 2 Chi. Leg. News, 157; 1 Amer. Law T. Eep. Bankr. 156; Fed. Cas. 13990; In re Inde- pendent Ins. Co., 6 N. B. R 360 ; Holmes, 103 ; Fed. Cas. 7017 ; In re Merchants' Ins. Co., 6 N. B. R 43; 3 Biss. 162; 4 Chi. Leg. News, 73; 20 Pittsb. Leg. J. 33; Fed. Cas. 9441); but a district court has no jurisdiction to order summarily the delivery to an assignee of goods of a lessee seized by the sherifE xmder a writ of provisional seizure, obtained by the lessor prior to proceedings in bankruptcy. (Marshall v. Knox et al., 8 N. B. E. 97; 16 WalL 551.) The proceeds of sale of mortgaged property in the pos- session of a state court, not brought there by final process to enforce the mortgage lien, must be paid over to the assignee in bankruptcty of the mortgagor, and the mortgagee must go into the bankrupt court and as- sert his Uen there. (Morris v. Davidson, 11 N. B. R 454.) After it is shown that the defendant has been declared a bankrupt, a court is bound to take judicial notice that all his property and effects were vested by operation of law in the assignea (Morris v. Davidson, 11 N. B. R 454.) What suits stayed. — When a debtor is adjudged a bankrupt, all pro- ceedings against him in the state court must be stopped if the subject- matter of the sxiit can be proven against his estate in bankruptcy; and any creditor who holds a claim against the estate of the bankrupt which might be proven in bankruptcy, whether the debt is secured by lien or not, can only enforce such debt in the state court upon permission of the district court. (In re Winn, 1 N. B. R 131 ; 1 Amer. Law T. Eep. Bankr. 17 ; Fed. Cas. 17876; In re Van Buren, 19 N. B. R 149; Fed. Cas. 16833; In re ■ Belden, 6 N. B. E. 443; 5 Ben. 476; Fed. Cas. 1239; R S. McGehee et aL V. Hentz et aL, 19 N. B. R 136; Fed. Cas. 8794; Penny v. Taylor, 10 N. B. R 200; Fed. Cas. 10957.) So if the bankrupt appears and moves for a stay of proceedings in the suit in a state court for the foreclosure of a mortgage, the portion of the suit asking for personal judgment should be stayed. (McKay v. Funk, 13 N. B. R 334; Markson et aL v. Heaney, 13 N. B. R 484; In re Snedaker, 3 N. B. R 155; In re Migell, 2 N. B. R 153; Fed. Cas. 9538.) Also an action on a claim originating in a contract fraudulently induced, sounding in damages, is within the provisions of the bankrupt law prohibiting any creditor from prosecuting to judg- ment a suit on a provable debt before the debtor's final discharge has been settled. (In re Schwarz, 15 N. B. R 330; 14 Blatehf. 196; 53 How. 102 LAW OF BANKEUPTOT. [§ 11, a. Pr. 513; 15 Alb. Law J. 350; Fed. Cas. 12503; sec. 5106, R. S.) A proceed- ing to revive a judgment so that it operates as a lien on real estate is a proceeding that may be stayed (Bratton v. Anderson, 14 N. B. E. 99); and execution may be stayed in order to give the parties an opportunity to apply to a district court, where the assignee appears in an action in the state court brought to enforce a lien against the bankrupt's estate. (Rowe v. Page, 13 N. B. R. 366.) A vessel belonging to bankrupts in the hands of the assignee as assets cannot be attached in an action in rem for damages caused by her col- lision with another vessel prior to the adjudication in bankruptcy, and the bankruptcy court will restrain such proceedings by injunction. (In re Peoples' Mail S. S. Co., 3 N. B. R. IVO; 3 Ben. 226; Fed. Cas. 10970.) In an action for recovery of moneys or goods, where one of the plaintiffs testifies that his firm has been discharged as bankrupts since suit was brought, such fact is not ground for a nonsuit, as the court may direct the jury to find that plaintiffs recover for use of the assignee. (Wood- dail, Adm'r, v. Austin et aL, 10 N. B. R 545.) Although the effect of bankruptcy upon suits pending in state courts is to stay or suspend them, they may, with leave of the bankrupt court, be prosecuted to judgment to ascertain the amount due, but final process to procure sat- isfaction cannot be issued and executed (Allen & Co. v. Montgomery et al., 10 N. B. R. 503); but proceedings in an action in a state court will not be stayed simply on the ground that the plaintiffs have taken pro- ceedings to have the defendants declared bankrupt (Maxwell v. Fax- ton, 4 N. B. R 60.) An injunction to restrain the prosecution of an action against the bankrupt in a state court, during the pendency of a composition, is proper where instalments of the composition have been tendered to the creditors, and the bankrupt is not permitted to plead the composition as a bar to the action. (In re Shafer et al., 17 N. B. R. 116; 1 N. J. Law J. 66; Fed. Cas. 12695.) The bankruptcy of a corporation does not prevent judgments being obtained against it, and the creditor, in default of obtaining satisfaction under the judgment from the property of the corporation, may pursue the remedy given him by statute against stockholders (Allen v. Ward, 10 N. B. R. 285.) At the appointment of an assignee or the dismissal of the petition, the right of action against the debtor is suspended, for a payment to a bank- rupt after the filing of the petition for adjudication wiU not discharge the debtor's liability to an after-appointed assignee. (Booth v. Meyer et al., 14 N. B. R. 575.) Application to begin an action against a bank- rupt for a debt to which a discharge would not be a bar wUl be entertained if it appears that it must be commenced forthwith for the purpose of pre- venting the statute of limitations from running against it, or to enable the making of service, or that the testimony might be lost, and the court § 11, a.} SUITS BY AND AGAINST BANKRUPTS. 103 will then stay the suit to await the determination of the question of the bankrupt's discharge or the expiration of a reasonable time to make the application therefor (In re GhirardelU, 4 N. B. R. 42); but the bankrupt is not entitled to a stay of proceedings where the claim sued upon does not constitute a debt provable in bankruptcy. (Zimmer v. Schleehauf, 11 N. B. R 313.) Execution in the hands of the sheriff against the property of a bank- rupt may be stayed, as the commencement of proceedings in bankruptcy transfers to the court jurisdiction over the bankrupt, his estate, and par- ties, and questions connected therewith, and operates as a supersedeas of the process in the hands of the sheriff, and an injunction against aU other proceedings than such as might thereupon be had under the au- thority of the court, until the question of bankruptcy shaU have been disposed of (Jones v. Leach, 1 N. B. E. 165; Fed. Cas. 7475), though it can- not restrain the creditor, by reason of his being beyond reach of the process. (In re Tifft, 19 N. B. R. 201; Fed. Cas. 14034.) An honest exe- cution levied upon the debtor's property before the filing of his petition is not rendered void by such petition, as the court will interfere with the exercise of the right of the sheriff only where its exercise would materially affect the interests of the general creditors. (Goddard v. Weaver, 6 N. B. R. 440; Fed. Cas. 5495; Beattie v. Gardner et al., 4 N. B. R. 106; Fed. Cas. 1195; In re Shuey, 9 N. B. R. 526; 6 Chi Leg. News, 248; Fed. Cas. 12821.) Property fraudulently conveyed, before the enactment, by the debtor, who subsequently applies for a dis- charge in bankruptcy, will be regarded as vested in the assignee; and proceedings by a creditor for the recovery of such property under a state law are suspended by proceedings in bankruptcy. (Goodwin v. Sharkey, 8 N. B. E. 138; In re Hufnagel, 12 N. B. R. 554; Fed. Cas. 6837.) "Whether a railroad chartered in two states is two corporations acting as a partnership, or one, a proceeding in bankruptcy will be stayed pending a prior proceeding of the same nature in the other state. (In re Boston H. & E. R. R. Co., 6 N. B. R. 209; 6 Amer. Law Rev. 582; Fed. Cas. 1678; 9 Blatchf. 101.) An order of arrest granted by a state court, in a suit against a bank- rupt, upon an aflndavit showing that the suit was founded on a debt created by fraud of the bankrupt, will not be vacated by the bank- ruptcy court, but the suit may be stayed until the final determination of the bankruptcy proceedings. (In re Migel, 3 N. B. R. 153; Fed. Cas. 9538; In re Patterson, 1 N. B. R. 58; 2 Ben. 155; 15 Pittsb. Leg. J. 341; Fed. Cas. 10817.) It would, perhaps, be the proper course for the court to issue a writ of habeas corpus and thus secure the bankrupt from ar- rest under proceedings in a state court. (In re Williams et aL, 11 N. B. R. 145; 6 Biss. 233; 7 Chi Leg. News, 49; Fed. Cas. 17700.) Who may obtain stay. — Before the appointment of an assignee, a pe- tition for an injunction can be filed only by the bankmpt; but, after 104 LAW OF BAKKEUPTOT. [§ 11, a. ! assignees are appointed, the petition should be filed by them (In re Bowie, 1 N. B. R 185; 15 Pittsb. Leg. J. 448; 1 Amer. Law T, Eep. Bankr. 97; Fed. Cas. 1728); but an assignee who voluntarily appears in proceed- ings in a state court to foreclose a mortgage, instituted before the bank- ruptcy proceedings, cannot, after a sale has been made, apply for an injunction to restrain further proceedings in the state court. (Augus- tine, Ass., V. McFarland, 13 N. B. R. 7 ; 1 N. Y. Wkly Dig. 318; Fed. Cas. 648.) Ground must be pleaded. — The mere flUng of a petition in involun- tary bankruptcy does not divest the jurisdiction of a state court over an action (In re Irving et al., 14 N. B. R. 289; 8 Ben. 468; 3 N. Y. Wkly. Dig. 500; Fed. Cas. 7073); Murphy v. Young, 18 N. B. R 505); to aflEect such jurisdiction over pending actions, the adjudication or discharge must be pleaded (Serra 6 Hijo v. Hoffman & Co., 17 N. B. R 124; Haber V. Klauberg et aL, 15 N. B. R 877; Holden v. Sherwood, 18 N. B. R 111; Bracken v. Johnston, 15 N. B. R 106; 4 DiU. 518; 5 Amer. Law Rec. 461; 4 Cent. Law J. 9; 11 Amer. Law Rev. 609; 3 N. Y. Wkly. Dig. 573; 1 Cin. Law Bui. 353; Fed. Cas. 1761; Revere Copper Co. v. Dimock, 19 N. B. R 873; Smith, Stebbins & Co. v. Engle et aL, 14 N. B. R 489; Hu- bert V. Horter, 14 N. B. R. 480); which maybe done at anytime after the institution of bankruptcy proceedings : but if he does neither, a judgment rendered against him is lawful and valid. (Cutter et aL v. Evans, 11 N. B. R 448; Flanagan v. Pearson, 14 N. B. R 87.) Where the declaration of bankruptcy has been suggested as a defense to an action and not de- nied, the plaintiff is estopped from further proceeding with his suit, in the absence of an order authorizing it. (Penny v. Taylor, 10 N. B. R 300; Fed. Cas. 10957.) It has been held that where a bankrupt's counsel fails to appear for him in an action because he supposed that the counsel for a co-defendant also represented the bankrupt, a review of the judgment by default will be granted so that a discharge in bankruptcy may be pleaded. (Shurt- leff V. Thompson, 13 N. B. R 524.) Where an assignee prayed to have a sale under foreclosure restrained, after the proceedings had reached a stage where substantially all the expenses except those which would attend any sale of the property had been incurred, his petition was dis- missed and the costs taxed against him because of his lack of diligence. It would seem that the bankrupt alone may apply for a stay of proceed- ings at any tima (In re Brinkman, 6 N. B. R 541; Fed. Cas. 1883; The "World" Co. V. Brooks, 3 N. B. R 146.) An affidavit of defense setting up that defendants were adjudicated bankrupts, but that the time had not arrived for application for a discharge, is sufficient to stay the action and prevent judgment, although the facts set up in the affidavit may not constitute a defense. (Frostman et aL v. Hicks et aL, 15 N, B. R 41; sec. 5106.) Where a suit is restrained pending the bankrupt's application for a discharge, if the discharge would be a bar to the suit the creditors' § 11, a.] SUITS BY AND AGAINST BANKKUPTS. 105 remedy is to go into the bankruptcy court and oppose the discharge in the manner prescribed by the bankrupt law. (In re Archenbrown, 11 N. B. R. 149; 7 Chi. Leg. News, 99; Fed. Cas. 504) "Suits not stayed." — A suit will not be stayed where the subject- matter of the action is not a debt or liability dischargeable in bank- ruptcy. (Treadwell et aL v. Halloway et al., 13 N. B. R. 61; In re Pitts, 19 N. B. R. 63; Fed. Cas. 11190; Mason et al. v. Warthen, 14 N. B. R. 346.) A claim for alimony is not a provable debt, and proceedings to enforce its payment cannot be stayed by a bankrupt court. (In re Lachemeyer, 18 N. B. R 370; 18 Alb. Law T. 243; Fed. Cas. 7966; In re Qarrett, 11 N. B. R 493; 2 Hughes, 235; Fed. Cas. 5353.) Charges of fraud against a bankrupt, filed by a creditor before a magistrate under a state law, do not constitute a new suit which should be stayed. (Minon v. Van Nos- trand, 4 N. B. R 28; 1 Lowell, 458; Fed. Cas. 9642.) Where the right of a creditor and that of a debtor to redeem property sold under an execu- tion are distinct and independent under the state law, the bankruptcy of the debtor does not affect the right of the creditor. (Trimble v. Williamson, 14 N. B. R. 53.) The bankruptcy of defendants is no reason why a court should not hear and decide upon a motion to correct its minutes and make them speak the truth. (Woolfolk et aL v. Gunn, 10 N. B. R 536.) Where bankrupts were executors and universal legatees ua a will, a suit brought against them by the heirs of deceased prior to institution of proceedings in bankruptcy, asking that the will be set aside and an accounting be had, will be allowed to proceed. (Hewett, Ex'r, v. Nor- ton, Ass., 13 N. B. R. 276; 1 Woods, 68; 1 N. Y. Weekly Dig. 535; Fed. Cas. 6441.) The lien of a mechanic or material-man is not dissolved by his filing a petition in voluntary bankruptcy, and the jurisdiction of the state court over such lien will not be interfered with. (In re Clifton et aL V. Foster et aL, Ass., 3 N. B. R. 162.) Should an assignee and gen- eral creditors voluntarily abandon claim to incumbered property, such property may be subjected by the state court to the satisfaction of the secured creditors' claims, and such courts may afford him any relief touching the property to which he would be entitled if bankruptcy pro- ceedings had not been instituted. (Second National Bank of Louisville V. Bank, 11 N. B. R 49.) A suit may be permitted to proceed to judgment for the purpose of ascertaining the amount due, which amount may be proved in the bank- ruptcy proceedings, but execution shall be stayed. (In re Rundle et al., 2 N. B. R 49; 1 ChL Leg. News, 30; Fed. Cas. 12138; In re Winn, 1 N. B. R 133; 1 Amer. Law T. Rep. Bankr. 17; Fed. Cas. 17876.) Further than this, a mortgagee may institute a proceeding in a state court to foreclose his mortgage after the institution of proceedings in bankruptcy, if the assignee takes no steps to redeem the mortgaged property. (McKay v. Funk, 13 N. B. R. 334) If proceedings to foreclose are pending in a state court at the time of institution of proceedings in bankruptcy, a decree 106 LAW OF BANKEUPTOT. [§ 11, a. rendered and a sale had after the beginning of bankruptcy proceedings are valid, and a good title will pass by the sale. (Eyster v. Gaff et aL, 13 N. B. R 546; 91 U. S. 521; Cutter, Ass., etc. V. Dingee, 14 N. B. R 294; 8 Ben. 469; Fed. Cas. 3518; In re Wynne, 4 N. B. R. 5; 3 Amer. Law T. Rep. Bankr. 116; Fed. Cas. 18117; Jerome et al., Ass., v. MoCarter, 15 N. B. R 546.) But foreclosure proceedings brought upon property of a per- son adjudicated a bankrupt are void, unless brought with consent of the bankrupt court. (In re Brinkman, 7 N. B. R 431; Fed. Cas. 1884; In re Duryea, 17 N. B. R 495; Fed. Cas. 1196; In re Kerosene Oil Co., 2 N. R R 164; 3 Ben. 35; 2 Amer. Law T. Rep. Bankr. 79; Fed. Cas. 7725.) An appeal taken by a bankrupt before bankruptcy will not be dis- missed on the ground that the appellant is no longer the party in inter- est, and it may be heard in the name of the bankrupt or his assignee (O'NeU V. Dougherty, 10 N. B. R 294); and an affirmance of the judg- ment in the absence of a suggestion of his bankruptcy is not a nullity. (Flanagan v. Pearson, 14 N. B. R 37.) If, pending composition proceedings and before they can be set up as a defense, the bankrupt files an answer in a suit in a state court, and, after the composition is perfected, applies for leave to put in a supple- mental answer, which is refused, and judgment in default taken against him, the bankruptcy court will not grant an injunction restraining the enforcement of the judgment. (In re Nebenzahl, 17 N. B. R 23; 9 Ben. 243; Fed. Cas. 10074.) In composition cases the court may provide for an unliquidated claim by permitting the prosecution of a pending action ia the state court, or by ordering an inquiry in the matter at the bar of the bankruptcy court. (Ex parte Trafton, 14 N. B. R 507; 2 Lowell, 505; Fed. Cas. 14133.) The mere filing of a petition in bankruptcy by one partner against his copartner does not prevent the latter from bringing a suit on his individual claim and prosecuting it to judgment. (Booth V. Meyer et aL, 14 N. B. R. 575.) When a suit is brought by a bankrupt with the consent of the trustee in bankruptcy, if the verdict is for the plaintiff it need not be for the use of the trustea (Southern Express Co. V. Connor, 13 N. B. R 53.) The right of action against a party as a stockholder of a corporation is not affected by the bankrupt law. (Allen V. Ward, 10 N. B. R 385.) Where the indorsers of a note file a voluntary petition in bankruptcy before the maturity of the note, and propose a composition, which is not accepted and concluded, the holders of the note may recover on it if they took no part in the proceedings in composition. (Smith v. Krauskopf et al., 18 N. B. R 6.) Where a com- position is fraudulently obtained, an action may be maintained by cred» itors on their original claim, although they have received more than their ten per centum under the provisions of the composition. (Elfelt v. Snow, 6 N. B. R 57; 2 Sawy. 94; Fed. Cas. 4343.) If proceedings in bankruptcy are commenced within four months after the issuing of an attachment, a judgment entered afterwards therein is void. (King v. Loudon, Ass., 14 N. B. R 383.) § 11, a.] SUITS BY AND AGAINST BANKEUPTS. 107 A restraining order directed to the debtor and " all other persons " need not contain the names of those persons if the order is served upon the persons to be restrained. (In re Sady Bryan Mining Co., 6 N. B. R 352; Fed. Cas. 7980.) Where the injunction is modified so as to allow the sheriff to sell the attached property, provided he deposits the pro- ceeds subject to the further order of the court, such order must be strictly followed, and the deposit cannot be dispensed with by consent. (In re Mickel et al., 19 N. B. R 374; Fed. Cas. 9539.) Where an injunc- tion has been granted by the bankruptcy court restraining the sheriff from selling under an execution from the state court, in seeking to have the injunction dismissed the judgment creditor should proceed by a mo- tion to dissolve it. If the creditor proceeds by a petition to dismiss the injunction, the injimction will be continued. (In re Mallory, 6 N. B. R. 22; 1 Sawy. 88; Fed. Cas. 8991.) The debtor's discharge in bankruptcy operates as a dissolution of an injunction restraining creditors from suing pending adjudication. (In re Thomas, 3 N. B. E. 7; Fed. Cas. 13890.) An order forbidding aU proceedings to enforce a claim upon which an attachment is founded is not violated by the dismissal of an appeal in a state court by an order denying the motion to quash and vacate the attachment for want of prosecution, the bankrupt's counsel being pres- ent and not desiring to proceed. (In re Hirsoh, 2 N. B. R 1; 2 Ben. 498; 1 Amer. Law T. Rep. Bankr. 93; Fed. Cas. 6539.) Where funds belong- ing to a bankrupt have been misused, the wrong-doers will be enjoined from collecting rents from the real estate in which the bankrupt has any legal or equitable interest. (Keenan v. Shannon et aL, 9 N. B. R. 441; 10 Phila. 219; 31 Leg. Int. 85; Fed. Cas. 7640.) Suits in general. — If the exempted property of the bankrupt has been wrongfully seized on execution, the bankrupt has the same rights before the state tribunals as any other person whom it is sought to de- prive of a homestead. (In re Bveritt, 9 N. B. R 90; Fed. Cas. 4579.) Where the time has elapsed within which a discharge could be granted, the proceedings in bankruptcy are not terminated without a discharge, so that a right of action wiU be revived. (Wood v. Hazen, 15 N. B. R 491; sec. 29.) Where the assignee was not made a party to partition proceedings of real estate, he may sell the bankrupt's iindivided interest therein. (Smith V. Scholtz et al., 17 N. B. R 520.) The assignee, in a judgment obtained in the federal court, on which execution issued and Tinder which the marshal sold, is entitled to the proceeds of the sale, although the judg- ment, execution and levy under it were subsequent to a judgment, execution and levy of proceeds from a state court. (In re Jordan, 3 N. B. R. 45; Fed. Cas. 7513.) The dissolution by a state coxirt of a cor- poration before the adjudication in bankruptcy, but after service of the order to show cause, does not deprive the bankrupt court of jurisdic- tion or abate the proceedings. (Piatt v. Archer, 6 N. B. R 465; 9 Blatchf, 559; Fed. Cas. 11213.) 108 LAW OF BANKEaPTCJT. [§ 11, 5, 0. 5. The court may order the trustee to enter his appearance and defend any pending suit against the bankrupt. For corresponding feature of act of 1867, vide notes Tinder " e," this section. When assignee may become a party.— The assignee is entitled to be made a party to suits pending in the state court by or against the bank- rupt at the time of the commencement of bankruptcy proceedings, and the bankrupt will be enjoined from interfering. (Samson v. Burton, 4 N. B. R. 1 ; Fed. Cas. 12380.) As to the time when an assignee may enter his appearance in a suit begun by the bankrupt before bankruptcy pro- ceedings, it has been held that he may do so more than two years after his appointment. (Latting v. Fasaman et aL, 17 N. B. R. 183.) If a conven- tional trustee, claiming title under assignment, files a biU to recover assets belonging to the estate, an assignee may intervene by a supple- mental bilL (Collateral Security Bank v. Fowler, Trustee, 13 N. B. R. 289.) Where an assignee of a bankrupt defendant was appointed during pendency of the action, the other defendants cannot make the assignee a party defendant, or, if they have claim for contribution against the bankrupt, the remedy is by intervention in the bankruptcy proceedings. (Oliver v. Cunningham et aL, 19 N. B. R. 400; Fed. Cas. 10493.) The assignee cannot be compelled to become a party to an action against the bankrupt by the court in which the action is pending. (Serra e Hijo v. Hoffman & Co., 17 N. B. R. 134) If the assignee appears and pleads in an action he waives the want of notice before the bringing of the suit (Rowe V. Page, 13 N. B. R. 366.) A plea of a discharge (Serra e Hijo v. Hoffman & Co., 17 N. B. R 134), or the defense of usury, is a personal one to the bankrupt, and such defense is not available by the assignee. (In re Kitzinger et aL, 19 N. B. R 152; Fed. Caa 7861.) c. A trustee may, with the approval of the court, be per- mitted to prosecute as trustee any suit commenced by the bankrupt prior to the adjudication, with like force and effect as though it had been commenced by him. [Act of 1867. Sec. 14. , . . he may sue for and re- cover the said estate debts and effects, and may prosecute and defend all suits at law or in equity, pending at the time of the adjudication of bankruptcy, in wnich such bankrupt is a party in his own name, in the same manner and with the like effect as they might have been presented or defended by such bankrupt. . . . Seo. 16. . . . If, at the time of the commencement of proceedings in bankruptcy, an action is pending in the name § 11, C] SUITS BY AJJTD AGAINST BANKEUPTS. 109 of the debtor for the recovery of a debt or other thing which might or ought to pass to the assignee bjr the assignment, the assignee shall, if he requires it, be admitted to prosecute the action in his own name, in like manner and with like effect as if it had been originally commenced by him.] Suits prosecuted by trustee. — The assignee may prosecute or not, at his election, any action commenced by the bankrupt before bank- ruptcy, the subject-matter of which passes to the assignee; where it does not pass, the bankrupt has the right to prosecute it (Towle v. Davenport, 16 N. B. E. 478), as in the case of a right of action for a mere personal injury. (Noonan v. Orton, 12 N. B. R 405.) Upon the question as to the effect of the assignee's refusal to prosecute a suit in which he is entitled to enter his appearance, the decisions are conflicting, it having been held on the one hand that such a suit must be dismissed (Towle v. Davenport, 16 N. B. R 478), and on the other that it may be prosecuted in the name of the bankrupt. (Noonan v. Orton, 12 N. B. R 405.) A suit in equity is rendered defective merely by the bankruptcy of the plaintiS, and the assignee may be brought forward by supplemental bill (Collateral Se- curity Bank v. Fowler, Trustee, 12 N. B. R 289.) Where an appellant in the supreme court of the United States becomes bankrupt after his appeal is taken, his assignee in bankruptcy may, on motion, be substi- tuted as appellant in the case. (Herndon v. Howard, 4 N. B. R 61 ; 9 WalL 664.) Where at the time a firm is adjudged bankrupt there is pending an action for accounting by one partner against another, the right to continue the suit passes to the assignee, and such partner will be enjoined from further proceeding. (In re Clark et aL, 3 N. B. R 123; 4 Ben. 88; 1 Amer. Law T. Eep. Bankr. 189; Fed. Cas. 2798.) The as- signee on motion may have a case reinstated which has been compro- mised and dismissed by the bankrupt's counsel before the assignee's appointment, but after adjudication, although the bankrupt had as- signed the subject-matter of the action to the counsel for his fees. (Home Ins. Co. V. Hollis, Ass., 14 N. B. R 387.) Where an assignee in bank- ruptcy was n'.ade party plaintiff with the wife of a bankrupt in a suit instituted in the name of the husband and wife on the choses in action owned by the wife before marriage, and judgment was recovered, the assignee may enforce such judgment and distribute the money among the creditors. (In re Boyd, 5 N. B. R 199; 2 Hughes, 349; Fed. Cas. 1745.) An assignee upon petition in a state court may have a judgment set aside which was obtained within four months prior to bankruptcy. (Jordan, Ass., v. Downey, 12 N. B. R 427.) The right of a bankrupt who, prior to commencement of proceedings in bankruptcy, had brought suit, reverts to him to commence such ac- tion after the trustees in bankruptcy have completed their trusts, filed their final accounts and been discharged,- if nothing has been done by 110 LAW OF BANKBUPTOT. [§ 11, 0. said trustees in the original suit in the interval (Connor v. South- em Express Co., 9 N. B. E. 138.) Where, more than two years after his appointment, an assignee was substituted as plaintifi ia an action com- menced in the name of the bankrupt, and a recovery was had in the ac- tion, it was held that the bankrupt could not claim the amoimt recov- ered on the groimd that the hmitation of the bankrupt law barred his remedy at the time of the substitution. (Maybin v. Raymond, Ass., 15 N. B. R 353; 4 Amer. Law T. Rep. (U. S.) 31; Fed. Cas. 9338.) Actions by trustees. — Suit by the assignee must be brought within the period of limitation prescribed by the Bankrupt Act. (Andrews, Ass., V. Dole et aL, 11 N. B. E. 352; Fed, Cas. 373.) When he sues to es- tablish title to and recover possession of real estate and the defendant pleads the statute of Umitations, the fact tbat the assignee did not dis- cover the property until a short time before instituting his action will not relieve bim from the bar of the statuta (Norton v. De La Villebeuve, 18 N. R E. 304; 1 Woods, 163; 2 N. Y. Wkly. Dig. 4; Fed. Cas. 10350.) The assignee may sue in a state court for the enforcement of any right vested in him by the Bankrupt Act, as for the recovery of property transferred in fraud of that act (Cook v. Waters et al., 9 N. B. R. 155); for the proceeds of the sale of goods of the bankrupt under an attach- ment issued within four months of the institution of proceedings. (Damb- mann v. White et aL, 13 N. B. R. 438.) He will not be a party to an action brought for the recovery of property alleged to have been wrong- fully taken and converted by the bankrupt, and which was seized by the sheriff and delivered to the plaintiflE, unless it is shown that there is good reason for believing that the bankrupt has some right to the prop- erty in disputa (In re Gunther et al. v. Greenfield, 3 N. B. R 179.) The assignee may institute and prosecute to final judgment suits to recover the assets of the bankrupt in a United States court in a district other than that in which the decree in bankruptcy is entered. (Dutcher V. Wright, Ass., etc., 16 N. B. R 331; 94 U. S. 553.) He cannot impeach a conveyance of property of moderate value by the bankrupt to his wife when the bankrupt was in prosperous circumstances. (Smith et al v. Vogles, Ass., 13 N. B. R 433; 93 U. S. 183.) The assignee may bring a suit in the circuit court to set aside a fraudulent conveyance of projh erty by a bankrupt, after his discharge, which was concealed by the bankrupt. (Nicholas, Ass., v. Murray et aL, 18 N. B. R 469; Fed. Cas. 10223.) He is not restricted to suing in the district courts in cases pre- scribed by the Bankrupt Act, by reason of being an assignee in bank- ruptcy, but may sue in the circuit court when, if an ordinary suitor, by the provisions of the Judiciary Act he would be entitled to sue in such court (Payson v. Dietz, 8 N. a R 193; 5 Chi. Leg. News, 434; 30 Leg. Int. 313; Fed. Cas. 10861.) An assignee who sues to recover property alleged to have been fraud- ulently conveyed by a bankrupt is not bound by a former decision that § 11, C] SUITS BY AMD AGAINST BANKEUPTS. Ill the same allegations of fraud set up by a creditor in opposition to the bankrupt's discharge had not been proved as a matter of fact. (In re Penn et aL, 8 N. B. R 93; Fed. Cas. 10938.) At the assignee's suit, a gen- eral assignment for the benefit of creditors may be set aside. (Jackson, Ass., V. McCuUooh et aL, 13 N. B. R. 283; 1 Woods, 433; 1 N. Y. Wkly. Dig. 534; Fed. Cas. 7140.) A subsequent judgment creditor is not a nec- essary party in a suit between the assignee in bankruptcy and a prior judgment creditor. (Traders' Nat. Bank v. Campbell, 6 N. B. E. 353; 14 WalL 87.) The assignee may prosecute an action in trover for the recovery of property unlawfully and fraudulently transferred by the bankrupt (Foster, Ass., v. Hackley, 2 N. B. R 131; 2 Amer. Law T. Eep. Bankr. 8; 1 Chi Leg. News, 137; Fed. Cas. 497.) Also to set aside a conveyance claimed to be void under a statute. (Thurmond v. Andrews and Wife, 13 N. B. E. 157.) He may sue at law to recover the balance due on a sub- scription of stock, and an order of the district court that the amount unpaid upon said stock should be paid by a certain date is conclusive as to his right to bring such suit. (Sanger v. Upton, Ass., 13 N. B. E. 236; 91 U. S. 56.) The assignee of a bankrupt corporation does not represent creditors in their legal or equitable right to proceed against a trustee of the cor- poration for the purpose of excluding said trustee from any share in the assets, on the groimid that he had made himself individually liable for the debts of the corporation by having, as an officer thereof, made false reports. (Bristol, Ass., v. Sanford, 13 N. B. E. 78; 12 Blatohf. 341; Fed, Cas. 1893.) The assignee may proceed either at law or in equity to obtain pos- session of books claimed both by him and by an assignee of the bank- rupt's own choosing. (Rogers v. Winsor, 6 N. B. E. 246; Fed. Cas. 12033.) A statement in a complaint that the plaintiff is assignee in bankruptcy nM.y be treated as surplusage or as descriptio personcB. (Dambmann v. White et aL, 13 N. B. E. 438.) Jurisdiction of courts. — A state court may entertain an action brought by an assignee to recover money received as a preference. (Kemmerer v. Tool, 12 N. B. E. 334) Any circuit court having jurisdic- tion of the parties has jurisdiction of a claim to a part of the proceeds of a judgment where the assignee denies the claim. Whenever a state court has jurisdiction over controversies between the assignee and third parties, the circuit court has jurisdiction independent of the bankrupt law, if the proper citizenship of the parties exists. (Burbank v. Bigelow et aL, Ass., 14 N. B. E. 445; 92 U. S. 479; Knight v. Cheny, 5 N. B. R. 305; Fed. Cas. 7883.) The district courts have jurisdiction of suits brought by assignees appointed by other district courts in bankruptcy cases. (Loth- rop V. Drake et aL, 13 N. B. R 472; 91 U. S. 516.) If an assignee in bank- ruptcy submits himself to the jmrisdlction of a state court he cannot, 112 LAW OF BANBEUPTOr. [§ 11, C. after judgment, object to the power of such court, and a federal court cannot then assume jurisdiction. (Scott & Nasse v. Kelly, Sheriff, 12 N. B. R. 96.) But a state court has no jurisdiction to enjoin the assignee from collecting a debt due to the bankrupt. (Southern et aL v. Fisher, Trustee, 16 N. B. E. 414.) Suits against trustees. — A suit against the assignee is the proper pro- ceeding to establish a claim which has been rejected by the district court on his objection. (Adams v. Meyers, 8 N. B. R. 214; Fed. Cas. 62.) An action for the wrongful taking and conversion of property will not lie against the assignee, where a sheriff has delivered the property held by him under an execution levy to the marshal, who in turn delivered it to the assignee. (Ansonia Brass & Copper Co. v. Pratt, Ass., etc., 16 N. B. R. 170 ; In re Wagner et aL v. Wagner et aL, 5 N. B. R. 23 ; 2 Hughes, 355; Fed. Cas. 14174.) Where a claim to property in the hands of the as- signee is set up, and the validity of the claim is denied by the assignee, who asserts title to be in himself as such assignee, the claimant cannot proceed by summary petition. (Hurst v. Teft, Ass., 13 N. B. R 108; 13 Blatchf. 217; Fed. Cas. 6939; In re Linforth et aL, 16 N. B. R. 435; 4 Sawy. 370; Fed. Cas. 8369.) After the commencement of proceedings in bankruptcy, even though a suit was pending in the state court when the proceedings were instituted, a writ of sequestration cannot be issued to take property from, the possession of the assignea (Hewett, Ex'r, v. Norton, Ass., 13 N. B. E. 276; 1 Woods, 68; 1 N. Y. Weekly Dig. 525; Fed. Cas. 6441.) Parties to suit. — Where a junior mortgagee flies a bill against a mortgagor or his assignee, prior incumbiancers are necessary parties where there is substantial doubt as to the amounts which are due, or the property covered by their Uens. (Sutherland et aL v. Lake Superior Ship CanaL Railroad & Iron Co., 9 N. B. E. 298; 1 Cent. Law J. 127; Fed. Cas. 13643.) A bankrupt before bankruptcy, or his assignee thereafter, is a necessary party to a suit in equity on an order on a general fund obtained or given by the bankrupt before bankruptcy. (Walker, Ass., V. Seigel et aL, 12 N. B. E. 394; 3 Cent. Law J. 508; Fed, Cas. 17085.) It has been held that in a suit brought to set aside a voluntary assignment as void, the subject of the assignment being properly transferable and vested in the assignee, all persons having an interest therein to be af- fected by a decree are properly joined as defendants. (Onley, etc. v. Tanner et aL, 19 N. B. R. 178; Fed. Cas. 10506.) The proper remedy of a creditor to compel an assignee to institute proceedings to reach property fraudulently concealed or conveyed by the bankrupt is by petition to a court to enforce action by the assignee. (Glenny v. Langdon et aL, 19 N. B. E. 24; 98 U. S. 20.) Costs. — The assignee is liable for costs, personally, only where guilty of misconduct or bad faith (HaU, Ass., etc. v. Waterbury, 19 N. R E. 15); but if this is not shown, the costs should be paid out of the bank- § 11, d.} SUITS BY AJSD AGAINST BANKEUPTS. 113 rupt's estate. (Coxe v. Hale, 8 N. B. E. 562; 31 Pittsb. Leg. J. 77; Fed. Cas. 3310.) Where a creditor calls for an investigation of the conduct of an assignee, alleging, fraud in a sale of the bankrupt's property, it is proper that he should be required to give security for the costs which may be adjudged against him. (In re Peabody, 16 N. B. R. 343; 9 ChL Leg. News, 343; Fed. Cas. 10866.) d. Suits shall not be brought by or against a trustee of a bankrupt estate subsequent to two years after the estate has been closed. [Act of 1867. Sbo. 14. . . . Wo person shall be entitled to maintain an action against an assignee in bankruptcy for anything done by him as such assignee, without previously giving him twenty davs' notice of such action, specifying the cause thereof, to the end that such assignee may have an opportunity of tendering amends, should he see fit to do so.] Courts of bankruptcy may close estates whenever they have been fully administered, though they may be re-opened whenever it appears that they were closed before being fully administered (sec. 3 — 8); in which event it would seem that, although the two years had commenced to run, the fact that an estate was re-opened would cause the two-year period to run from the time it was last closed. Limitation. — An. action must be brought within two years from the time the cause of action accrued, either by or against the assignee, and the assignee cannot, by amendment, be made a party more than two years after his appointment, to a suit brought by or against the bank- rupt. (Cogdell, Ass., V. Eximi, 10 N. B. R. 327.) There is some question as to whether the limitation of two years will affect actions by the assignee to recover property fraudulently conveyed by a debtor in view of impending bankruptcy, where the fraud was not discovered vrithin such period, and the action is brought only after the fraud is discovered, it having been held in one case that, under such circumstances, the action may be brought after the lapse of two years. (Bailey, Ass., v. Weir, 13 N. B. R. 24; 21 WaU. 343.) It has also been held that this limitation of the Bankrupt Act applies only to cases where suit is brought in regard to property held adversely to the bankrupt and assignee, or to cases where suit is brought to recover any debt that may be due the bankrupt (Pickett, Ass., v. McGavick, 14 N. B. E. 236; 3 Cent. Law J. 803; 13 Alb. Law J. 218, 400; 2 N. Y. Wkly. Dig. 378; Fed. Cas. 11126; Smith v. Crawford, 9 N. B. E. 38; 6 Ben. 497; Fed. Cas. 13030); and in other cases, that the limitation is a bar to a recovery by the assignee, although he has no notice of the existence of the property 8 114 LAW OF BANKEDPTCT. [§, 12, a. sought to be recovered. (Freelander et aL v. HoUoman et aL, 9 N. B. E. 831; Fed. Cas. 5081; Bean v. Brookmire, 4 N. B. R. 57; 10 Amer. Law Reg. (N. S.) 181; 4 West. Jur. 393; Fed. Cas. 1168.) Under the law of 1867, the statute began to run when the estate vested in the assignee as such (Foreman, Ass., v. Bigelow, 18 N. B. R. 457; 7 Reporter, 137; 26 Pittsb. Leg. J. 128; Fed. Cas. 4984); but under the pres- ent law it does not begin to run until the estate has been closed. It has been held that, although the suit may have been commenced within proper time, if the summons does not issue until the expiration of the time prescribed by the statute, the action is barred. (Walker, Ass., etc. V. Towner, 16 N. B. R. 285; 4 Dill. 165; 5 Cent Law J. 206; Fed. Cas. 17089.) In an action by the purchaser at an assignee's sale to recover possession, the two years' limitation cannot be pleaded. (Steele v. Moody, 16 N. B. R 558.) And where an assignee flies a bill in eqmty asking to have a mortgage on real estate owned by the bankrupt declared void, and it is so declared, and four years later the defendant flies a bill of review, the assignee cannot plead the statute of limitations, as the bill of review is not a suit within the meaning of the limitation section of the bankrupt law. (Wilt v. Stickney, Ass., 15 N. B. R. 23; 5 Amer. Law Eec. 630; Fed. Cas. 17854) Sec. 12. Compositions, when confirmed. — a. A bank- rupt may offer terms of composition to his creditors after, but not before, lie has been examined iu open court or at a meeting of his creditors and filed in court the schedule of his property and Ust of his creditors, required to be filed by bankrupts. The right of composition provided by this section is mainly in the in- terest of the honest bankrupt and permits him to compromise claims of his creditors. Unless waived, at least ten days' notice by mail of all hearings upon application for the conflrmation of compositions must be given. (Sec. 58a.) The conflrmation of a composition discharges a bank- rupt from his debts, other than those agreed to be paid by the terms of the composition and those not afiEected by a discharge (sec. 14c), and re- vests him with the title to his property. (Sea 70/.) Questions arising out of the application of bankrupts for compositions must be heard by courts of bankruptcy and not by referees. (Sec. 38 — 1) No provision analogous to this section appears in the act of 1867, but one is found in the act of June 22, 1874 (18 St L. 183, § 17). Petition of debtor for composition.— Upon filing of a petition by a debtor for a composition, the court will direct register to call a meeting of creditors, and issue notices therefor. (In re Spades, In re Muir and Foley, 13 N. B. R. 73; 6 Biss. 448; 8 Chi Leg. News, 33; Fed. Cas. 13196.) And where petition in bankruptcy was filed alleging sufficient facts to § 12, 6.] COMPOSITIONS. 115 show jurisdiction, it was held that the court had jurisdiction to approve a composition. (In re Wronkow et al., 18 N. B. R. 81; 26 Pittsb. Leg. T. 2; Fed. Cas. 18105.) Under the amendment of the act of 1867, although verification of petition is defective, a case is pending, and defect is waived if debtor calls a meeting for composition. (Ex parte Jewett, In re Mor- ris, 11 N. B. R. 443; 2 Lowell, 893; 12 N. B. R. 170; Fed. Cas. 7303.) First creditors' meeting'. — At the first meeting a creditor presented himself and filed proof of claim. He was not present at the session when the vote was talien on a composition. It was held that he was to be counted as voting against the resolution. (In re Richmond et al., 18 N. B. R 362; Fed. Cas. 11798.) Examination of bankrupts. See Evidence, sea 21, post, p. 178. The statement or schedales. — In statement of composition, the state- ment should conform to schedule in bankruptcy (In re Haskell, 11 N. B. R 164; 1 Cent. Law J. 531; Fed. Cas. 6193); but if the bankrupt in composition understates one debt, but not intentionally (Beebe v. Pyle, 18 N. B. R. 162), or has omitted a claim which he believes on advice of counsel to be worthless (In re Reiman et aL, 13 N. B. R. 128; 12 Blatchf. 562; Fed. Cas. 11675), such mistake or omission wiU not avoid composi- tion; nor is composition rendered void by the omission of an asset from the statement, when such omission was without fraud and with knowl- edge of the creditors. The testimony under oath of debtor at meeting of creditors is considered as part of his statement (In re Reiman et al., 13 N. B. R. 128; 12 Blatchf. 562; Fed. Cas. 11675); also a mistake without fraud, made by debtor in statement of amount due creditor, wiU not vitiate composition (Ex parte Trafton, In re Trafton, 14 N. B. R. 507; 2 Lowell, 505; Fed. Cas. 14133); and the fact also that schedules stated the real estate of the debtor as of unknown value is not a good objection to a composition. (In re WeUes, 18 N. B. R. 525; Fed. Cas. 17377.) Big:hts of litigating creditors. — Attaching creditors have no right to participate in a composition meeting (In re Shields, 15 N. B. R. 533; 5 DilL 588; 4 Cent. Law J. 557; 34 Pittsb. Leg. J. 190; Fed. Cas. 13784), unless they should first relinquish their security (In re Scott, CoUins & Co., 15 N B. R. 73; 4 Cent. Law J. 29; Fed. Cas. 12519); but when the debtor files petition in bankruptcy and also for composition and is not adjudicated, and a creditor begins suit before composition approved, the debtor is not entitled to restrain creditor. (In re TifiEt, 18 N. B. R. 78; Fed. Cas. 14031.) J. An application for the confirmation of a composition may be filed in the court of bankruptcy after, but not be- fore, it has been accepted in writing by a majority in num- ber of all creditors whose claims have been allowed, which number must represent a majority in amount of such claims, 116 LAW OF BANKEUPTOT. [§ 12, i. and the consideration to be paid by the bankrupt to his cred- itors, and the money necessary to pay all debts which have priority and the cost of the proceedings, have been deposited in such place as shall be designated by and subject to the order of the judge. Conflrmatiou of composition. — ITpon the adoption of a resolution of composition, a reasonable time may be given in whicb to secure the ad- ditional signatures necessary to confirm it (In re Spades, In re Muir and Foley, 13 N. B. E. 72; 6 Biss. 448; 8 Chi Leg. News, 33; Fed. Cas. 13196), and delay in obtaining requisite signatures, unaccompanied by laches, ■wiU not defeat resolution (In re Cavan et aL, 19 N. B. E. 303; Fed. Cas. 3538); but the creditors aiBxing signatures to the resolution of composi- tion need not have been present at the creditors' meeting (In re Scott, Collins & Co., 15 N. B. E. 73; 4 Cent. Law J. 39; Fed. Cas. 13519); but their names mitist have been attached at or before the hearing. (In re Scott, CoUins & Co., 15 N. B. E. 73; 4 Cent. Law J. 29; Fed. Cas. 12519.) A resolution of composition which provides that the payment shall be guarantied by a satisfactory bond to committee of creditors may be confirmed. (In re Lewis et al, 14 N. B. E. 144; Fed. Cas. 8314) A cred- itor is not bound to accede to compromise, nor is he legally, because he refuses to unite with others, nor morally censurable, if his refusal pro- ceeds from a want of confidence in the debtor (Bean v. Brookmire & Eankin, 7 N. B. R 568; 3 DiU. 108; 5 Chi Leg. News, 314; 3 Amer. Law Eec. 333; 7 West. Jur. 334; Fed. Cas. 1170); but a minority of creditors wiU not be permitted to defeat a proposed composition because, if de- feated, some special benefit wUl accrue to them. (In re Scott et al, 15 N. B. E. 73; 4 Cent Law J. 39; Fed. Cas. 13519.) Minority of creditors. — It must appear that wrong has been done minority creditors by the vote of the majority on composition before the court wiU interfere (In re Wronkow et at, 18 N. B. E. 81; 36 Pittsb. Leg. J. 2; Fed. Cas. 18105); and the determination of the court, that a proper proportion of the creditors have confirmed composition, cannot bo impeached in a collateral action. (Smith et aL v. Engle et aL, 14 N. B. E. 481.) Proof of claim. — It has been held that the form of oath prescribed for proving debts in bankruptcy need not be followed in proofs of claim for composition. (In re Morris, 12 N. B. R 170.) See also sea 57. Qualified votes at composition meeting. — Only those who prove their claims can take part or vote (In re Keller et aL, 1 N. B. R 331; Fed. Cas. 7654; In re Matthews et aL, 17 N. R R 335; Fed. Cas. 9374); but in involuntary proceedings the creditors are not bound to prove anew (In re Scott et aL, 15 N. R R 73; 4 Cent Law J. 29; Fed. Cas. 13519), al- though creditors who have not proved have been permitted to intervene § 12, &.] COMPOSITIONS. 117 in. petition for adjudication and act thereon (In re Bryce et al., 18 N. B. R. 287; Fed. Cas. 3069); and "creditor" means all whose debts are prov- able in bankruptcy. (In re Trafton, 14 N. B. R. 507; 2 LoweU, 505; Fed. Oas. 14133.) See also sec. 1—9. Is it necessary to pay in money. — The law is not violated where com- position agreement provides for deferred payments. (In re Eeiman et aL, 11 N. B. R 31 ; 7 Ben. 455 ; Fed. Caa 11673.) Notes are given only as evidence of security (In re MoNab & Hamlin Mfg. Co., 18 N. B. R 388 ; Fed. Cas. 8906), and time notes will make a valid composition. (In re Hurst, 13 N. B. R 455; 1 Flip. 463; 8 Chi Leg. News, 147; 3 Cent. Law J. 78; Fed. Cas. 6935.) If delay in paying notes is occasioned by legal difficulties, it will not work injury to right of bankrupt aa to creditors who have been paid (In re Kohlsaat et aL, 18 N. B. R 570; Fed. Cas. 7018), and such a composition is not inconsistent with a statute that payment must be made in " money " (In re Reiman et aL, 13 N. B. R 138; 13 Blatchf. 563; Fed. Cas. 11675); but a composition deed that provides that deferred payments are to be evidenced by notes, " to be satisfactorily indorsed," is too indefinite and void. (In re Reiman et aL, 11 N. B. R 21; 7 Ben. 455; Fed. Cas. 11673.) An objection was made to deferred composition payments and return of property to banlorupts on the ground that they were not to be trusted, and objection was sustained. (In re Bloch et aL, 18 N. B. R 338; Fed. Oas. 1551.) A resolution proposing composition, to be paid within thirty days after resolution, upon condition that all property of bankrupt be surrendered and all suits discontinued, is not improper (In re Cavan et aL, 19 N. B. R 303; Fed. Cas. 3538); but a composition that provided that property of bankrupt should be surrendered to him by an assignee, on delivery of notes, was held nugatory as to right of creditors under assignment. (In re Hyman et aL, 18 N. B. R 399; Fed. Cas. 6985.) Fail- ure of bankrupt to perform a composition according to its terms does not empower a creditor to disregard the proceedings and sue for his debt. (In re Bayly et aL, 19 N. B. R 73; 26 Pittsb. Leg. J. 173; Fed. Cas. 1144.) Secured creditors in case of compositions. — A composition is notim- certain because payment is not secured (In re Wilson et aL, 18 N. B. R 300; Fed. Cas. 17785); and where creditor considers himself fully secured, but is not, he cannot be counted as a creditor to make majority (In re Snelling, 19 N. B. R 120; Fed. Cas. 13140); and creditor who is secured, and who takes no part in proceedings in composition though present, is entitled to agreed percentage on his unpaid balance after exhausting security. (Paret v. Ticknor et aL, 16 N. B. R 315 ; 4 Dill. Ill ; 5 Cent. Law J. 338; Fed. Cas. 10711.) If all creditors are secured on realty, a creditor's levy on personalty of bankrupt is at his own risk. (In re Lytle & Co., 14 N. B. R457; llPhila.533; 3 N. Y. Weekly Dig. 303; 5 Amer. Law Rec. 306; 9Chi Leg. News, 18; 1 Cin. Law Bui. 346; 34 Pittsb. Leg. J. 14; Fed. Cas. 8650.) Liens and attachments. — After filing petition of debtor, creditor can- not acquire a lien (In re Tifft, 19 N. B. R 301; Fed. Cas. 14034); but ma- 118 LAW OF BAUKKUPTCT. [§ 12, C. terial-man can have a lien on vessel though he joined in composition. (The "Home," 18 N. B. E. 557; Fed. Cas. 6657.) Attachment within four months before proceedings in bankruptcy wiU fail (MiUer v. Mackenzie et aL, 13 N. B. R 496); but a creditor may have his security valued and come in for the difference. (The "Home," 18 N. B. E. 557; Fed. Ca& 6657.) An attachment against debtor was not dissolved by composition, there being no adjudication (In re Shields, 15 N. B. R. 533; 24 Pittsb. Leg. J. 190; 4 DilL 588; 4 Cent. Law J. 557; Fed. Cas. 12784); and creditor's money cannot be attached when payable under composition. (In re Kohlsaat et aL, 18 N. B. E. 570; Fed. Cas. 7918.) Assignee and set-off. — Under the act of 1867 it was held that the Bankruptcy Act, in authorizing a composition before adjudication, contemplated that it shaU be made without appointment of an assignee, and without requiring debtor to surrender his assets. (In re Van Auken et aL, 14 N. B. E. 425; Fed. Cas. 16838.) The bankrupt in a composition stands, as to set-off, in the position of an assignee, if none has been ap- pointed. (Ex parte Howard Nat Bank, 18 N. B. R 420; Fed. Cas. 6764.) A creditor who receives a composition from his bankrupt debtor, with knowledge of all the facts, is not entitled to have a set-off enforced which he neglected to assert when the composition was made. (Hunt V. Holmes, 16 N. B. R 101; Fed. Cas. 6890.) Double security. — Holders of a note who took no part in composition proceedings of indorsers were not bound, and could recover from indors- ers, the maker not paying. (Smith et aL v. Krauskopf et aL, 18 N. B. R6.) c. A date and place, with reference to tlie convenience of tlie parties in interest, shall be fixed for the hearing upon each application for the confirmation of a composition, and such objections as may be made to its confirmation. Unless waived, at least ten days' notice must be given to creditors, by mail, of all hearings upon applications for confirmation of composi- tions (sec. 58a); and where objection is made to the confirmation, the creditor is required to file a specification in writing of the ground of his opposition. (Orders XXXIl) Hearing npon confirmation of composition. — None but unsecured creditors should be heard at the hearing for ratification of composition, for which due notice was given. (In re Scott et aL, 15 N. B. E. 73; 4 Cent Law J. 39; Fed. Cas. 12519.) Confirmation need not be made at a meeting. (In re SpiUman, 13 N. R R 314; 8 ChL Leg. News, 140 ; 23 Pittsb. Leg. J. 87; Fed. Cas. 13342.) At confirmation meeting objection to vote of creditor for first time is too lata (In re Bloch et aL, 18 N. B. R 328; Fed. Cas. 1551.) Finally, it is only necessary to record decree contain- ing resolution (Smith et aL v. Bernhard et aL, 14 N. B. R 481); and if a § 12, d] COMPOSITIONS. ' 119 creditor fails to act on composition, his non-action is equivalent to a positive vote against wbat the debtor wants. (In re Lissberger, 18 N. B. R 330; Fed. Cas. 8384.) Powers of register at meetings. — His report must be taken to be true. (In re Spencer, 18 N. B. R. 199; Fed. Cas. 13339.) He has power to conduct inquiries and adjourn meetings. (In re Proby, 17 N. B. R. 175; 12 Amer. Law Eev. 598; 17 Alb. Law J. 167; Fed. Cas. 11439.) To examine a dis- puted claim and report thereon. (In re Keller et aL, 18 N. B. E. 331 ; Fed. Cas. 7654.) But court may re-open questions in regard to register's rul- ings on all points. (In re Spencer, 18 K B. E. 199; Fed. Cas. 13339.) Objections to conflrmation of compositiou. — It is the duty of the court to examine objections of minority fully as to requisite number. (In re Keller, 18 N. B. E 36; 10 Chi Leg. News, 399; Fed. Cas. 7648.) Ob- jection to the effect that a corporation was not entitled to privileges of composition was held not good. (In re Weber Furn. Co., 13 N. B. E. 539; Fed. Cas. 17330.) So with an objection that property in name of bank- rupt wife should have been included in schedules. (In re Wells, 18 N. B. R 535; Fed. Cas. 17377.) Also general objection that the estate could pay more than the composition. (Id.) So with objection that debtor paid more in composition than his estate would pay in bankruptcy. (In re SneUing, 19 N. R E. 130; Fed. Cas. 13140.) And objection that one debtor was excused from examination on account of illness was held to be frivolous. (In re Wilson et aL, 18 N. B. E 300; Fed. Cas. 17785.) But confirmation of composition was refused a corporation where trustees were to leave estate in hands of its president, who was a defaiilter to it and not safe to trust (In re Scott et aL, 15 N. B. E. 73; 4 Cent. Law J. 29; Fed. Cas. 12519.) At the hearing on a resolution of confirmation, ob- jections as to the passage of the resolutions and as to what is for the best interest of the parties can be presented. (Id.) A composition of five per cent. wiU be sustained where there is no probability of dividend through an assignee and the parties are acting in good faith. (In re OdeU et aL, 16 N. B. R 501; 9 Ben. 347; Fed. Cas. 10427.) d. The judge shall confirm a composition if satisfied that (1) it is for the best interests of the creditors ; (2) the bank- rupt has not been guilty of any of the acts or failed to per- form any of the duties which would be a bar to his discharge ; and (3) the offer and its acceptance are in good faith and have not been made or procured except as herein provided, or by any means, promises, or acts herein forbidden. A certified copy of an order confirming a composition is evidence of the jurisdiction of the court, the regularity of the proceedings and the fact that the order was made (sec. 21/), and constitutes evidence of the revesting of the title of his property in the bankrupt, and, if recorded. 120 LAW OF BANKETJPTOT. [§ 12, d. shall impart the same notice that a deed from the trustee to the bank- rupt, if recorded, would impart (Sec. 21gf.) Best interests of creditors.— The fact that there is no security for payment of composition notes is to be considered in determining whether the composition is for the best interests of all concerned (In re Wilson et at, 18 N. B. R. 300; Fed. Cas. 17785); another such fact is that debtor proposes advance in per cent, of composition (In re Scott et aL, 15 N. B. R. 73; 4 Cent. Law J. 39; Fed. Cas. 13519); another such fact is that any composition which is satisfactory to requisite majority is allowed by statute (In re PurceU, 18 N. B. R. 447; Fed. Cas. 11470); but composition clearly against best interests of all concerned will not be confirmed. (In re Weber Fum. Co., 13 N. B. R. 539; Fed. Cas. 17330.) Either party may furnish testimony on the question whether the composition is for the best interest of all, at the second meeting (In re Keller et aL, 18 N. B. R. 331; Fed. Cas. 7654); and unless specific errors on a composition can be pointed out, the question of composition being to the best inter- ests of the creditors wUl not be inquired into by an appellate court (In re Wronkow, 18 N. B. R. 81; 36 Pittsb. Leg. T. 2; Fed. Cas. 18105.) Frauds or omissions preventing conflrmation. — It is the duty of the court to entertain applications to correct mistakes, expose and punish fraud or improper practice in composition. (In re Spencer, 18 N. B. R 199; Fed. Cas. 13229.) It is fraud for a creditor who has received pay- ment in full to sign agreement with other creditors to take seventy cents in future. (Bean v. Brookmire et aL, 7 N. B. R 568; 2 DilL 108; 6 Am. Law T. Rep. 418; 7 West Jur. 324; Fed. Cas. 1170.) It is a fraud for a partner who, after composition, procures assignment of claims to a relative, and then institutes proceedings to vacate and to put his firm into bankruptcy (In re HamUn et aL, 16 N. B. R. 522; 8 Biss. 122; 10 Chi Leg. News, 131; Fed. Cas. 5994); also where agent in composition obtains same by false representations (Elfeldt v. Snow, 6 N. B. R 57; 2 Sawy. 94; Fed. Cas. 4342); also if one creditor exacts advantage not known or enjoyed by the other for uniting in composition (Bean v. Brookmire, 7 N, B. R 568; 2 DilL 108; 6 Amer. Law T. Rep. 418; 7 West Jur. 324; Fed. Cas. 1170); but preference creditor is liable to assignee for amount of advantage over others; and if he pays, assignee can prove his original claim. (Brookmire et aL v. Bean, Ass., 12 N. B. R 217.) Fraud in creation of debt. — A composition includes and binds debts created by fraud (In re Shafer et aL, 17 N. B. R 116; 1 N. J. Law J. 66; Fed. Cas. 13695); and a debt so created is discharged by a composition in which creditor participatea (Wells v. Lamprey, 16 N. B. R 305.) A creditor has no moral right to oppose a composition, and, if such opposi- tion is bought off, it must be presumed good ground for opposition ex- isted. (In re Sawyer, 14 N. B. R 241; 2 LoweU, 475; 3 N. Y. Weekly Dig. 143; Fed. Cas. 12395.) Lack of good faith and promises of advantage preventing conflrma- tion.— There is lack of good faith in giving creditor secret benefit and 1 12, e.] COMPOSITIONS. 121 advantage to induce him to sign composition, and makes composition voidable (In re Sawyer, 14 N. B. R. 241; 2 Lowell, 475; Fed. Cas. 12395); and so with the giving of secret preferences; and if found out, compo- sition will not be confirmed unless all creditors are treated aUke. (In re Jacobs, 18 N. B. R. 48 ; Fed. Cas. 7159.) In a secret agreement, whereby signing creditors were to have their claims settled at expense of the others, composition was denied (In re Vetterlein, 6 N. B. R. 518; 5 Ben. 571 ; Fed. Cas. 16928) ; but where there was a discrepancy between compromise oSered and the apparent value of debtor's property, and other indicia of fraud, the court should not refuse to record the composition without notice to the parties concerned to bring before them all the facts. It wlU take into account the relations of creditors favoring the compro- mise in deciding motion to confirm; and also the relative number of creditors whose opinions were in favor of the resolution. (In re Weber Furn. Co., 13 N. B. R 529; Fed..,Cas. 17330.) When conflrined composition stands, — A composition will not be set aside because bankrupt had failed to comply with its terms (In re Ewing et aL, 17 N. B. R. 109; Fed. Cas. 4588); nor on account of inadequacy in price brought at a sale. Bankrupt is a liberty to deal with his assets as he pleases if fraud was not practiced. (In re Shaw et aL, 19 N. B. R. 513; Fed. Cas. 12716.) Refusal to join by a partner in carrying out the pro- ceedings win not avoid it. (In re Henry et aL, 17 N. B. R. 463; 9 Ben. 449; Fed. Cas. 6370.) e. TJpon the confirmation of a composition, tlie considera- tion shall be distributed as the judge shall direct, and the case dismissed. Whenever a composition is not confirmed, the estate shall be administered in bankruptcy as herein pro- vided. The confirmation of a composition discharges a bankrupt from his debts other than those agreed to be paid by the terms of the composi- tion and those not affected by a discharge (sec. 14, c), and revests him with the title to his property. (Sec. 70, /.) After confirmation of composition — Debtor's property. — Creditors cease to have any interest in estate of debtor after confirmation, and assignee is to pay balance into his hands (In re August et aL, 19 N. B. R. 161; Fed. Cas. 645); and if there is no provision for dispossession of prop- erty, the debtor retains same subject to summary order of court (In re Reiman et aL, 11 N. B. R. 21; 7 Ben. 455; Fed. Cas. 11673); so if a compo- sition resolution gives property and books back to debtor, the creditor will not be permitted to undo what was done with his concent. (In re Rodger et aL, 18 N. B. R. 381; Fed. Cas. 11993.) A debtor's receiver has no claim on rents and profits of debtor's land, it being his after-acquired 122 LAW OF BANKEXJPTOT. [§ 12, e. property under composition (Conover et aL v. Dvunahaut et aL, 17 N. R E. 558); and the principal element in determining the question whether the debtor should be allowed to keep his property pending discharge is his personal business character, the composition beiag otherwise just (In re Wilson et aL, 18 N. B. R. 300; Fed. Cas. 17785.) Discharge. See sec. 14, c. Discharge not necessary. — Composition obviates discharge (In re Becket, 13 N. B. R 201; 3 Woods, 173; 7 Chi Leg. News, 343; Fed. Cas. 1310); and fact that discharge has been refused is not absolute bar to composition. (In re OdeU et aL, 16 N. B. R. 501; 9 Ben. 247; Fed. Cas. 10427.) Debtor must pay composition,— Debtor cannot add to provisions of composition by demanding a discontinuance and surrender of property before per cent, is paid (In re McKeon, 11 N. B. R 183 ; 7 Ben. 513 ; 3 Amer. Law R 611; 11 Alb. L. J. 7; Fed. Cas. 8358); and deUvery of notes in composition does not of itself cancel debt (In re Reiman et aL, 13 N. R R. 128; 12 Blatchf. 562; Fed. Cas. 11675. See also In re Hurst, 13 N. B. R. 455; 1 Flip. 463; 8 ChL Leg. News, 147; 3 Cent. Law J. 78; Fed. Cas. 6925); and if notes are not paid creditor can sue on the notes on original debt (In re Leipziger, 18 N. B. R. 264); but the tender of money according to composition is equivalent to payment. (In re Hinsdale, 16 N. B. R. 550; 8 Ben. 91; Fed. Cas. 6526.) Litigation after composition effected. — The court cannot be asked to suspend the right of creditors to receive composition by injim^ction unless there is a lien upon the fund (In re Kohlsaat et aL, 18 N. B. R. 670; Fed. Cas. 7918); and injunction will not be allowed if debtor fails to plead the composition (In re Tooker, 14 N. B. R 35; 8 Ben. 390; 23 Pittsb. Leg. J. 185, 196; Fed. Cas. 14096); and where composition has been complied with, an injunction restraining suit in state court is proper. (In re Shafer et aL, 17 N. R R 116; N. J. Law J. 66; Fed. Ca& 1S695.) Attachments dissolved by compositions. — Composition will dissolve attachment made vsdthin four months of commencement of proceedings (Smith, Stebbins & Co. v. Engle et aL, 14 N. B. R 481); but resolution of composition without first meeting of creditors does not dissolve attach- ment made within four months of such commencement (In re Clapp & Co., 14 N. B. R. 191; 3 Lowell, 468; Fed. Cas. 2785), as confirmation of res- olution of composition does not give legal force to what the resolution vainly attempts. (In re Hyman et aL, 18 N. B. R 299; Fed. Cas. 6985.) Final distribution and disposition. — A court has no power to im- prison a creditor for refusing to receive money on finality of composi- tion (In re Hinsdale, 16 N. B. R 550; 6 Ben. 91; Fed. Cas. 6536); and final order in composition is not disposition of bankruptcy proceedings, and does not, without further order of court, place at disposal of bankrupt moneys belonging to estate held by sheriff. (In re Mickel et aL, 19 N. R R. 374; Fed. Cas. 9529.) § 13, a.] ■WHEN COMPOSITIONS SET ASIDE. 123 Titles to property after composition.— Court has no power to deter- mine titles between debtor and persons not parties (In re Waltzf elder et aL, 18 N. B. R 280; Fed. Cas. 17048), and assignment after failure of composition must be without prejudice to titles acquired by virtue of composition. (Ex parte Hamlin, 16 N. B. E. 320; 2 Lowell, 571; 5 Cent Law J. 281; Fed. Cas. 5993.) Sec. 13. Compositions, when set aside. — a. Tlie judge may, upon the application of parties in interest filed at any- time within six months after a composition has been con- firmed, set the same aside and reinstate the case if it shall be made to appear upon a trial that fraud was practiced in the procuring of such composition, and that the knowledge thereof has come to the petitioners since the confirmation of such composition. While compositions induced through fraud may be set aside under this section, the property acquired by the bankrupt, in addition to his estate at the time the composition was confirmed, naust be applied to the payment in full of claims of creditors for property sold to him on credit in good faith while such composition was in force, and the resi- due, if any, must be applied to the payment of the debts which were owing at the time of the adjudication. (Sec. 64c.) Whenever a compo- sition is set aside the court must reinstate the case (sec. 2 — 9), and the trustee, upon his appointment and qualification, is vested with the title to all of the bankrupt's property, as of the date of the final decree set- ting aside the composition. (Sec. 70d.) A certified copy of the order setting a confirmation aside is evidence of the jurisdiction of the coxirt, the regularity of the proceedings and of the fact that the order was made. (Sec. 21/.) Compositions, when set aside. — Bankrupt offered a comjiosition, which was accepted and certain of the creditors paid. On application to set it aside and appoint an assignee, the appointment was made, but it was held that rights acquired imder the composition were not to be preju- diced. (Ex parte Hamlin, 16 N. B. R. 320; 2 Lowell, 571; 5 Cent. Law J. 281; Fed. Cas. 5993.) When not. — The court refused to set a composition aside where it appeared that the creditors as well as the bankrupts wotdd be benefited by it (In re Allen et al., 17 N. B. R 157; 17 Alb. Law J. 170; 20 Pittsb. Leg. J. 143; 6 N. Y. Weekly Dig. 43; Fed. Cas. 210); and the court will not set aside a composition, two years after final order, on accoimt of laches. (In re Herman et al., 17 N. B. R 440; 9 Ben. 436; Fed. Cas. 6405.) Who may not vacate. — On motion to vacate composition it was held tliat creditors who have not proved debts cannot take part in composi- 124: LAW OF BANKKUPTOT. [§ 14r, a. tion (In re Bryce et al., 19 N. B. R. 387; Fed Cas. 2069), and such creditors as had accepted the composition were not entitled to vote for assignee. (Ex parte Hamlin, 16 N. B. R. 320; 2 Lowell, 571; 5 Cent. Law J. 281; Fed. Cas. 5993; In re Herman et aL, 17 N. B. R. 440; 9 Ben, 436; Fed. Cas. 6405.) Set aside on practice of fraud, — Creditors are not bound by a com- position deed fraudulently procured (Elfeldt v. Snow, 6 N. B. R. 57; 2 Sawy. 94; Fed. Cas. 4352); but see contra: A debt released by composi- tion is not revived by payment in full of other old debts which could not have been enforced, although complaining creditor consented to composition with understanding " that none of the other creditors should receive better terms." (In re Sturgis et aL, 16 N. B. E. 304; 8 Bisa 79; 10 Chi Leg. News, 33; Fed. Cas. 13565.) Petition to review payment. — Wliere notes for composition fall due pending the hearing on a petition to review, the amount of the note of petitioner should be paid into court in order to relieve the bajokrupt (In re Reynolds, 16 N. B. R 176; 5 N. T. Wkly. Dig. 51; Fed. Cas. 11725); but the holder of the note given for deferred payment in composition which falls due pending the hearing of a petition for review, who does not ap- pear to receive payment in pursuance of notice, is entitled, upon subse- quent refusal, to a summary order. (In re Reynolds, 16 K. B. B. 176; 5 N. Y. Wkly. Dig. 51; Fed. Cas. 11725.) Sec. 14. Discharges, when granted. — a. Any person may, after the expiration of one month and within the next twelve months subsequent to being adjudged a bankrupt, file an ap- plication for a discharge in the court of bankruptcy in which the proceedings are pending; if it shall be made to appear to the judge that the bankrupt was unavoidably prevented from filing it within such time, it may be filed within but not after the expiration of the next six months. [Act of 1867. Sec. 29. . . . That at any time after the expiration of six months from the adjudication of bankruptcy, or if no debts have been proved against the bankrupt, or if no assets have come to the hands of the assignee, at any time after the expiration of sixty days, and within one year from the adjudication of bankruptcy, the bankrupt may apply to the court for a discharge from his debts. . . .] By a discharge is meant the release of a bankrupt from aU his debts which are provable in bankruptcy, except such as are excepted by this act. (Sec. 1 — 12.) The petition therefor must state concisely the proceed- ings in the case and the acts of the bankrupt. (Orders XXXL) The Ua- bility of a co-debtor, guarantor or surety for a bankrupt is not altered § 14, &.] WHEN DISCHARGE GEAOT'ED. 125 by the discharge of such bankrupt. (Sec. 16.) For the debts not affected by a discharge, see sec. 17. At least ten days' notice must be given to the creditors, by mail, of all hearings upon applications for the discharge of bankrupts (sec. 58a), which hearing must be before the judge. The court of bankruptcy alone is authorized to discharge or refuse to dis- charge bankrupts C^— 13), and from a judgment granting or refusing a discharge an appeal lies to the circuit court of appeals of the United States and to the supreme court of the territories. (Sec. 25.) The filing of the application for discharge. — Where a bankrupt who was adjudicated on his own petition makes application for a discharge more than two years after the date of the adjudication, the reason given for not making an earlier application being that, although he had dili- gently tried, he had been unable to get the consent in writing of a mar jority of his creditors, is not sufficient. (In re Lowenstein, 13 N. B. R. 479; 3 DilL 145; S Cent. Law J. 83; 88 Leg. Int. 360; Fed. Cas. 8573.) But the refusal of an application for discharge from bankruptcy on the ground that the appUcation was not made within one year from the date of adjudication is not a bar to the filing of a new petition. (In re Farrell, 5 N. B. R 135; Fed. Cas. 4680.) Where a petition for discharge is imseasonably made, and, at the proper time, another petition is filed, the proceedings under the first petition are abandoned by the filing of the second, and the court wUl have jurisdiction. (In re White et aL, 18 N. B. R 107; Fed. Cas. 17533.) It wiU also have jurisdiction where the first petition is withdrawn, on objection thereto by creditors. (In re Svenson, 19 N. B. R 239; 11 Chi Leg. News, 367; 8 Reporter, 261; Fed. Cas. 13659.) The application for a discharge must be made, however, before the administration of the estate is completed and the assignee discharged. {In re Brightman et aL, 15 N. B. R 318; 14 Blatchf. 130; Fed. Cas. 1878; In re Cross, 16 N. B. R 294; 25 Pittsb. Leg. J. 35; 5 Cent. Law J. 313; Fed. Cas. 3437.) An involuntary bankrupt is entitled to a discharge under the same circumstances which wotdd justify the discharge of a voluntary bank- rupt (In re Clark, 3 N. B. R 3; 3 Biss. 73; 1 Chi. Leg. News, 113; Fed- Cas. 2800; In re Bunster, 5 N. B. R 83; 6 Ben. 343; 41 How. Pr. 406; Fed. Cas. 3136.) A volimtary bankrupt who has contracted new debts since the filing of a petition in bankruptcy under which a discharge was refused may file a new petition. (In re Drisco, 13 N. B. R. 113; 2 Lowell, 430; Fed. Cas. 4090.) I. The judge shall heax the application for a discharge, and such proofs and pleas as may be made in opposition thereto by parties in interest, at such time as will give parties in interest a reasonable opportunity to be fully heard, and investigate 126 LA.W OF BAITKEXJPTCT, [§ 14, 5. the merits of the application, and discharge the applicant un- less he has (1) committed an offense punishable by iLiprison- ment as herein provided; or (2) with fraudulent intent to conceal his true financial condition and in contemplation of bankruptcy, destroyed, concealed, or failed to keep books of account or records from which his true condition might be ascertained. [Act of 1867. Seo. 29. . . . the court shall there- upon order notice to be given by mail to all creditors who have proved their debts, and by publication, ... to ap- pear on a day appointed for that purpose, and show cause why a discharge should not be granted to the bankrupt. No discharge shall be granted, or, if granted, be valid, if the bankrupt has wilfully sworn falsely in his afiidavit annexed to his petition, schedule, or inventory, or upon any exami- nation in the course of the proceedings in bankruptcy, in re- lation to any material fact concerning his estate or his debts, or to any other material fact; or if he has concealed any part of his estate or effects, or any books or writing relating thereto, or if he has been guilty of any fraud or negligence in the care, custody, or delivery to the assignee of the prop- erty belonging to him at the time of the presentation of his petition and inventory, excepting such property as he is per- mitted to retain under the provisions of this act, or if he has caused, permitted, or suffered any loss, waste, or destruction thereof ; or if, within four months before the commencement of such proceedings, he has procured his lands, goods, money, or chattels to be attached, sequestered, or seized on execu- tion; or if, siuce the passage of this act, he has destroyed, mutilated, altered, or falsified any of his books, documents, papers, writings, or securities, or has made or been privy to the making of any false or fraudulent entry in any book of account or other document, with intent to defraud his cred- itors ; or has removed or caused to be removed any part of his property from the district, with intent to defraud his creditors ; or if he has given any fraudulent preference con- trary to the provisions of this act, or made any fraudulent payment, gift, transfer, conveyance, or assignment of any part of his property, or has lost any part thereof in gaming, or has admitted a false or fictitious debt against his estate; or if, having acknowledged that any person has proved such false and fictitious debt, lie has not disclosed the same to his assignee within one month after such knowledge; or if, § 14, 6.] WHEN DISCHARGE GEANTED. 127 being a merchant or tradesman, he has not, subsequently to the passage of this act, kept proper books of account, or if he, or any person in his behalf, has procured the assent of any creditor to the discharge, or influenced the action of any creditor at any stage of the proceedings by any pecuniary consideration or obligation; or if he has, ia contemplation of becoming bankrupt, made any pledge, payment, transfer, assignment or conveyance of any part of his property, di- rectly or indirectly, absolutely or conditionally, for the pur- pose of preferring any creditor or person having a claim against him, or who is or may be under liability for him, or for the purpose of preventing the property from coming into the hands of the assignee, or of being distributed under this act in satisfaction of his debts ; or if he has been con- victed of any misdemeanor under this act, or has been guilty of any fraud whatever contrary to the true intent of this act. Sec. 30. . . . That no person who shall have been discharged under this act, and shall afterwards become bankrupt, on his own application shaU be again entitled to a discharge whose estate is insufficient to pay seventy per centum of the debts proved against it, unless the assent in writing of three-fourths in value of his creditors who have proved their claims is filed at or before the time of applica- tion for discharge; but a bankrupt who shall prove to the satisfaction of the court that he has paid all the debts owing by him at the time of any previous bankruptcy, or who has been voluntarily released therefrom by his creditors, shall be entitled to a discharge in the same manner and with the same effect as if he had not previously been bankrupt. Sec. 31. . . . That any creditor opposing the discharge of any bankrupt may file a specification in writing of the grounds of his opposition, and the court may in its discre- tion order any question of fact so presented to be tried at a stated session of the district court. Sec. 32. . . . That if it shall appear to the court that the bankrupt has in aU things conformed to his duty under this act, and that he is entitled, under the provisions thereof, to receive a discharge, the court shall grant him a discharge from all his debts except as hereinafter provided, and shall give him a certificate thereof under the seal of the court lere follows certificate]. Sec. 33. . . . And in all proceedings in bankruptcy . . . no discharge shall be granted to a debtor whose assets do not pay fifty per centum of the claims against his estate, imless the assent in writing of a majority in number and value of his creditors who have proved their claims 128 LAW OF BANKEtTPTOr, [§ 14, h. is filed in tlie case at or before the time of application for discharge.] A certified copy of the order setting aside a discharges, not revoked, is evidence of the jurisdiction of the court, the regularity of the proceed- ings and of the fact that the order was mada (Sec. 21/.) The creditor opposing a discharge must file a specification of his opposition. (Orders XXXII.) Who may oppose a discharge. — The following may oppose the dis- charge: Any creditor with a provable debt (In re Murdock, 3 N. B. E. 36; 1 Lowell, 362; Fed. Oas. 9939); a creditor who has proved his debt (In re Sheppard, 1 N. B. R. 115; 17 Amer. Law Reg. (N. S.) 484; 1 Amer. Law T. Rep. Bankr. 49; Fed. Cas. 12753); the holder of a negotiable note as- signed for value after the filing of the petition (In re Murdock, 3 N. B. R. 36; 1 Lowell, 362; Fed. Cas. 9939); a creditor who recovers a judg- ment pending proceedings in bankruptcy (In re Stansfield, 16 N. B. R 268; 4 Sawy. 334; Fed- Cas. 13294); any person who has a pecuniary in- terest, including creditors who have not proved their debts, when such pecuniary interest is satisfactorily shown to the court. (In re Boutelle, 2 N. B. E. 51; 15 Pittsb. Leg. J. 616; 1 Chi Leg. News, 80; Fed. Cas. 1705.) Under the act of 1867 it was held that when, through inadvertence, creditors who have filed notices of opposition to discharge fail to file specifications within ten days after the return day of the order to show cause, they may be permitted to file the same nunc pro tunc (In re Grefe, 3 N. B. R. 106; Fed. Cas. 5794) Where the proceedings upon an order to show cause in opposition to discharge are adjourned, any cred- itor entitled to show cause may do so on the day to which the pro- ceedings were adjourned, and within ten days thereafter may file his specifications. (In re TaUman, 1 N. B. R. 145; 2 Ben. 404; Fed. Cas. 13470.) The district court may, in its discretion, allow a creditor to enter his appearance and file specifications in opposition to a discharge, although the time for entering an appearance in opposition thereto has expired. (In re Levin, 14 N. B. R. 385; 7 Biss. 231; Fed. Cas. 8291.) A creditor who has given his assent to the bankrupt's discharge in writ- ing, no fraud in procuring such assent being shown, and other creditors having assented, each presumptively being infiuenced by the act of the others, is not entitled, on the date fixed for the hearing, to withdraw his assent. (In re Brent, 8 N.B.R. 444; 2 Dill. 129; Fed. Cas. 1832.) Time may be given to other creditors to appear and oppose a discharge, when speci- fications have been overruled on grounds which apply to the opposing creditor individually. (In re Antisdel, 18 N. B. R. 289; Fed. Cas. 490.) Who may not oppose a discharge. — The following may not oppose a discharge: A creditor who has not proved his claim (In re Burk, 3 N. B. R. 76; Deady, 435; 2 Amer. Law T. Rep. Bankr. 45; Fed. Cas. 2156); an attorney in whose power the concluding words are, " and with like power to attend and vote at any other meeting or meetings of creditors, § 14, 5.] WHEN DISCHAKGE GEAMTBD. 129 or sitting or sittings of the court, which may be holden therein, for any of the purposes aforesaid, or for the declaration of dividends, or for any other purpose in my interest whatever." (Creditors v. Williams, 4 N. B. R 187; Fed. Cas. 3379.) Where the same persons are members of two firms, one of which has proved a claim against the bankrupt and the other has not, the latter firm, has no standing to appear in opposition to the discharge. (In re Palmer, 3 N. B. R. 77; Fed. Cas. 10683.) Creditors will not be allowed to intervene, after the return day, to prosecute specifi- cations filed by a creditor whose claim was stricken out after the filing of the specifications. (In re McDonald, 14 N. B. R. 477; 30 Pittsb. Leg. J. 43; Fed. Cas. 8753.) After the time for the hearing of an application for discharge, a creditor who proves his claim thereafter cannot be heard in opposition to the application, nor can his debt be counted among the claims proved so as to affect the discharga (In re Borst, 11 N. B. B. 96; Fed. Cas. 1666.) Examination of the bankrupt pending his discharge. — A bankrupt in attendance at a meeting to show cause against his discharge may be required by the register to submit to an examination upon oath touching his bankruptcy by a creditor. (In re 'Brandt, 3 N. B. R 76; Fed. Cas. 1813.) When abundant opportunity has been afforded for an examination, and it is not done, a new examination will not be given upon the filing of amended specifications in opposition to discharge, especially in the absence of a showing by affidavit, (In re Isidor & Blumenthal, 1 N. B. R 33; 3 Ben. 123; Fed. Cas. 7105.) The time to ex- amine witnesses does not expire by the bankrupt filing his petition for a discharge. The time to file objections can be kept open by adjourn- ing to any day which may be fixed for showing cause, until a reasonable time has elapsed for the examination of vsritnesses. (In re Seckendorf, 1 N. B. R 185; 3 Ben. 463; 15 Pittsb. Leg. J. 450; 1 Amer. Law T. Rep. Bankr. 132; Fed. Cas. 13600.) The discharge of a flrm or its members. — The question of the juris- diction of the court to make the adjudication should be raised in oppo- sition to the firm's discharge when application is made to have the adjudication set asida (In re Penn et aL, 3 N. B. R 145; 4 Ben. 99; Fed. Cas. 10926.) A member of a firm actually existing and having assets cannot be adjudicated a bankrupt and discharged from his liabilities individually and as a member of the firm unless his copartners are joined with him. (In re Winkens, 3 N. B. R 113; 1 Chi Leg. News, 163; 3 Amer. Law T. Rep. Bankr. 53; Fed. Cas. 17875.) Joint creditors may be admitted to prove under separate commissions for the purpose of assenting to or dissenting from the discharge, but not to receive until after the separate creditors are paid in fuU. The exceptions are, where the joint creditor is the petitioning creditor under a separate fiat, where there is no joint estate and no solvent partner, and where there are no separate debts. (In re Byrne, 1 N. B. R 133; 7 Amer. Law Reg. (N. S.) 9 130 LAW OF BAJiTKETJPTCT. [§ 14, h. 499; 1 Amer. Law T. Rep. Bankr. 122; 15 Pittsb. Leg. J. 315; Fed. Cas. 3270.) One cannot be discharged from his liabilities as a member of a firm miless the debts and assets of the firm are considered and adjudi- cated by the court. (In re Noonan, 10 N. B. R. 330; 5 Chi Leg. News, 557; 30 Leg. Int. 425; 21 Pittsb. Leg. J. 73; Fed. Cas. 10392; Corey et aL V. Perry et aL, 17 N. B. E. 147.) Proceedings in opposition to discliarge. — It is discretionary with the court, when creditors opposing a discharge file a specification in writing of the grounds of such opposition, to postpone the question of fact, to be tried at a stated session of the court (Coit v. Robinson et aL, 9 N. B. E. 289; 19 WaLL 374) There is no provision in the Bankrupt Act for a jury trial on the question of discharga Where a creditor wishes to avoid the discharge on the ground that his claim was not included in the defendant's schedule of indebtedness, he must attack the discharge on the ground of fraud in the court where granted, (^ymonds v. Barnes, 6 N. B. R. 377.) Where it is objected that the purchaser at an assignee's sale was the attorney for the assignee, and thereby incapable of ptu:- chasing, such objection must be set up in the bankrupt court and not in a collateral action. (Spilman v. Johnson, 16 N. B. R. 145.) A bankrupt who has not made a fuU and complete disclosure of his assets cannot require that creditors opposing his discharge specify ob- jections or abide by specifications which they may have filed. (In re Long, 3 N. B. R. 66; 7 Phila. 578; 36 Leg. Int. 349; Fed. Cas. 8477.) The proceeding upon the order to show cause why the discharge should not be granted can be, on the return day of the order, adjourned by reason of the adjournment of the examination of the bankrupt (In re Mawson, 1 N. B. R. 41; 1 Amer. Law T. Rep. Bankr. 46; Fed. Cas. 9320; In re Thompson, 1 N. B. R. 65; 2 Ben. 166; Fed. Cas. 13935.) The discharge — In general. — A bankrupt is not forbidden to pro- cure the assent of a creditor to his discharge, nor is he forbidden to influence the action of a creditor. Under the act of 1867 it was held that the prohibition is against procuring such assent or influencing such action by any pecuniary consideration or obligation (In re Maw- son, 1 N. B. R. 115; 2 Ben. 332; 1 Amer. Law T. Rep. Bankr. 122; Fed. Cas. 9318); and this question will not be considered until the filing of specifications in opposition thereto. (In re Mawson, 1 N. B. R. 43; 2 Ben. 132; Fed. Cas. 9317.) Concealment of estate, to furnish grounds for opposing the discharge, must be wilful and coupled with an intent to deceiva (In re Sidle, 3 N. R R. 77; Fed. Cas. 12844) The question whether a bankrupt has been guilty of fraud, or committed such act as would prevent his discharge, must be postponed until the hearing of the application therefor. (In re Brisco, 3 N. R R 78; 1 Gaz. 78; Fed. Cas. 1886.) A bankrupt must, in a given proceedihg, be discharged from all his debts or none. (In re Plumb, 17 N. R R. 76; 9 Ben. 379; Fed. Cas. 11231.) § 14, 5.] "WHEN DISCHAEQB GEAHTBD. 131 The bankrupt has an interest in the continuance of proceedings which may result in his final discharge; hence he is entitled to notice of an ap- plication for annulling the adjudication in bankruptcy. (In re Bush, 6 N. B. R. 179; 6 West. Jur. 374; Fed. Cas. 2222.) A suit at law to collect a debt, claim or liabiUty from a bankrupt may be restrained untU the application for a discharge has been determined, if made and prosecuted with reasonable diligence; and where the dis- charge would be a bar to such suit at law the creditor must go into the bankruptcy court and oppose a discharge in the manner prescribed by the bankrupt law. (In re Archenbrown, 11 N. B. R 149; 7 Chi. Leg. News, 99; Fed. Cas. 504; In re Rosenberg, 2 N. B. E. 81; 3 Ben- 14; 1 Chi Leg. News, 103; Fed. Cas. 12054) It is not requisite to the constitutionality of a bankrupt act that it must provide for the discharge of all persons subject to its provisions. (In re CaL Pac. R E. Co., 11 N. B. E. 193; 3 Sawy. 240; 3 Cent. Law J. 79; Fed. Cas. 2815.) Creditors acquire no right to proceed in an action against a bankrupt, pending determination of the question of discharge, from the fact that they have not proved their claim in bankruptcy. (In re Schwartz, 15 N. B. R. 330; 14 Blatchf. 196; 53 How. Pr. 513; 15 Alb. Law J. 350; Fed. Cas. 12502; sec. 5106, E. S.) When a discharge will be granted. — Where proper notice has been given to creditors, they are regarded as consenting to a discharge if they make no opposition. (In re Antisdel, 18 N. B. R. 289; Fed. Cas. 480.) The fact that a debt was created by the fraud and embezzlement of the bankrupt, and while acting in a fiduciary capacity, is not valid objec- tion to the discharge, such debts not being thereby discharged. (In re Bashford, 2 N. B. R 26; Fed. Cas. 1090; In re Rosenfield, 1 N. B. E. 161; 7 Amer. Law Reg. (N. S.) 618; 1 Amer. Law T. Eep. Bankr. 81; Fed. Cas. 12058; In re Clarke, 2 N. R R 44; Fed. Cas. 2344; In re EUiott, 3 N. B. R 44; Fed. Cas. 4891; In re Wright, 3 N. B. R 57; 36 How. Pr. 167; 2"Ben. 509; Fed. Cas. 18065; In re Doody, 3 N. B. R 74; Fed. Cas. 3995; In re Stokes, 2 N. B. R 76; Fed. Cas. 13476; In re Tracy et aJL, 3 N. B. R 98; 1 Chi. Leg. News, 123; Fed. Cas. 14124) A judgment obtained after the adjudication in bankruptcy creates a new debt that cannot be proved therein, the judgment being a merger, and therefore the judgment creditor cannot oppose the discharge be- cause he has no provable debt, and because the discharge wUl not bear the judgment. (In re Grallison et aL, 5 N. B. R 353; 3 Lowell, 73; Fed. Cas. 5203.) A fraudulent conveyance made, or a fraudulent preference given, be- fore the passage of the Bankrupt Act, are neither of them good grounds on which to oppose a discharge (In re Rosenfield, 1 N. B. R 161; 7 Amer. Law Eeg. (N. S.) 618; 1 Amer. Law T. Eep. Bankr. 81; Fed. Cas. 12058); but in such case the bankrupt should not conceal, nor attempt to cou- 132 LA.W OF BANKEUPTCT. [§ 14, 5. ceal, the fraud when he asks the benefit of the act (In re Eainsford, 5 N. B. R. 381; Fed. Cas. 11537.) When a bankrupt's discharge is opposed on the grovmds of false swear- ing, of attempt to conceal property, and of transfer of a portion to a creditor with intent to give preference, a discharge will be granted when the evidence shows that the bankrupt had no interest therein, and that the transfer was without fraud. (In re Perm et aL, 5 N. B. R. 388; Fed. Cas. 10939.) The fact that a bankrupt paid certain creditors in full shortly before commencement of proceedings is no ground for withholding a discharge, where it is not shown that such payments were intended as preferences (In re Bvirgess, 3 N. B. R 47; Fed. Cas. 3153); nor where the payment of a debt is made through inadvertence or under a mistaken sense of duty, and without fraudulent intent (In re Bosenfeld, 3 N. B. R 49; 1 Amer. Law T. Rep. Bankr. 100; Fed. Cas. 12057; In re Seeley, 19 N. B. R 1; Fed. Cas. 13638); nor are mere preferences made without contemplation of proceedings in bankruptcy (In re Jones, 13 N. B. R. 386; 2 Lowell, 451; Fed. Cas. 7446); nor is the fact that the bankrupt caused and permitted loss, waste and destruction of his estate and effects, and misspent and misused the same, prior to filing the petition. (In re Rogers, 3 N. B. R 139; 1 Lowell, 423; Fed. Cas. 12001.) Where, in opposition to a discharge, a creditor sets up the fraudulent transfer by the bankrupt of certain of his property in violation of the act, but on trial the allegations are not proved as a matter of fact, the assignee is not prevented by a decision of the court from suing the transferee of the property. (In re Penn et aL, 8 N. B. E. 93; Fed. Cas. 10938.) The matter will be held res adjudicata, and a bank will be estopped from opposing the discharge on the ground that the bankrupt made a fraudulent conveyance to his wife, when it appears that the cashier of the bank had recovered judgment in his own name upon the bank's claim against a debtor, and that he filed a creditor's biU against the bankrupt and his wife asking that the conveyance be set aside, and the biU was dismissed. (In re Antisdel, 18 N. B. R 289; Fed. Cas. 490.) The beneficiaries imder a general assignment for the benefit of all of his creditors without preference, and who have assented in writing to a substitution of assignees thereunder, are estopped from opposing the- discharge of the debtor in bankruptcy on the ground that such assign- ment was fraudvdent. (In re Schuyler, 2 N. B. R 169; 3 Ben. 200; 16 Pittsb. Leg. J. 94; 3 Amer. Law T. Rep. Bankr. 85; Fed. Cas. 12494) A general assignment for the benefit of creditors, without preference, and in good faith, made sixteen days prior to commencement of pro- ceedings in bankruptcy, and pending adverse proceedings by a creditor, is not a bar to a discharge. (In re Pierce et al., 3 N. B. R 61 ; 26 Leg. Int. 333; 16 Pittsb. Leg. J. 204; Fed. Cas. 11141.) The omission of a debtor to have himself adjudged a voluntary bank- § 14, 5.] WHEN DISCHAEQE GEAUTED. 133 rupt, when his property is attached at the suit of a hostile creditor with- out his knowledge or consent, is not sufficient to prevent his discharga (In re Belden, 3 N. B. R. 14; 3 Amer. Law Rev. 771; 15 Pittsb. Leg. J. 547; Fed. Cas. 1240.) The omission from the schedule of a complete statement of the prop- erty owned by the bankrupt is not in itself ground for refusing a dis- charge (In re Smith, 13 N. B. R. 256; 1 Woods, 478; Fed. Cas. 13995); nor is the omission of names of creditors in the schedule with their knowl- edge and consent (In re Needham, 2 N. B. E. 124; 1 Lowell, 309; 3 Amer. Law T. Rep. Bankr. 39; 16 Pittsb. Leg. J. 313; 1 Chi Leg. News, 171; Fed. Cas. 10081); nor is the mere omission of the name of a creditor, unless the omission was wilful and fraudulent. (Payne & Bro. v. Able et al., 4 N. B. R 67.) Neither the actual nor alleged residence or place of business of a bank- rupt can be directly made the ground of opposition to his discharge. (In re Burk, 3 N. B. R 76; Deady, 435; 3 Amer. Law T. Rep. Bankr. 45; Fed. Cas. 3156; In re Ives et aL, 19 N. B. R 97; 5 Dili 146; Fed. Cas. 7115.) A bankrupt court has jurisdiction to grant a discharge, even though there may be creditors who were not regularly brought before it by publication and service of notice. (Thurmond v. Andrews and Wife, 13 N. B. R. 157.) Failure to publish notice of appointment of assignee is not cause for withholding a discharge. (In re Strachen, 3 N. B. R. 148; In re Little- field, 3 N. B. R 13; 1 Lowell, 381; 3 Amer. Law T. 133; 1 Amer. Law T. Rep. Bankr. 164; Fed. Cas. 8398.) Where it appears that the bankrupt has committed an act that, if properly pleaded, will bar a discharge, the court will not of its own mo- tion refuse a discharge (In re Antisdel, 18 N. B. R. 389; Fed. Cas. 490); or where on application for a discharge it appears that the bankrupt had given fraudulent preferences, but no creditors appeared in opposition, the court will not deny a discharge. (In re Clark et al., 19 N. B. R 301 ; 36 Leg. Int. 414; Fed. Cas. 3812. For contra, see In re Sohoo, 3 N. B. R. 53; Fed. Ca& 13162.) Where a member of a late copartnership files his individual petition in bankruptcy and inserts therein debts of the copartnership, the sched- ules showing that there were no partnership assets, and alleging that he was unable to get his late copartner to join in the petition, he is entitled to be discharged of his partnership as well as individual debts, and it is unnecessary that his copartner be made a party to the proceedings. (In re Abbe, 3 N. B. R. 26; 15 Pittsb. Leg. J. 589; Fed. Cas. 4.) The fact that one member of a bankrupt firm did not file a schedule of debts and effects, nor deliver his property into the hands of the assignee, does not affect the right of the other partners to receive a discharge. (In re Scofield et aL, 3 N. B. R. 137; Fed. Cas. 18509.) A partner may be bank- jTupt, while the remaining partners, as individuals, and the firm itself. 134 LAW OF BANEJEUPTCT. [§ 14, 5. may be solvent. The bankrupt partner has an unquestionable right to be discharged from aU his debts provable imder the act (In re Frear, 1 N. B. E. 201 ; 3 Ben. 467; Fed. Cas. 5079; In re E. Stevens, 5 N. B. B. 113; 1 Sawy. 397; 1 Pac. Law Eep. 45; Fed, Cas. 13393.) Objections to the discharge of the bankrupt on the ground that he has promised certain creditors money to vote for comjxjsition cannot be set up against his discharge. (In re Morris et al, 19 N. B. R. Ill; 19 Alb. Law J. 281; 36 Leg. Int. 315; 36 Pittsb. Leg. J. 131; Fed. Cas. 9834.) In the absence of fraud, the original adjudication is conclusive on aU creditors, and cannot be disputed upon the question of granting a dis- charge that is opposed on the ground that the petition was filed by col- lusion between the bankrupt and petitioning creditors. (In re Ordway Bros., 19 N. B. R. 171; 19 Alb. Law T. 483; Fed. Cas. 10553.) An adjudication of bankruptcy, suffered by default, wiU not preju- dice the bankrupt in his application for a discharga (In re Lathrop, Luddington & Co., 3 N. B. E. 11; 3 Amer. Law T. 134; Fed. Cas. 8105.) An act of bankruptcy committed a long time before the passage of the Bankrupt Act is no ground for refusing a discharge. (In re Keef er, 4N. B. E. 126; 3 Chi. Leg. News, 125; Fed. Cas. 7636.) A final disposition of a cause in bankruptcy may take place although no application for a discharge has been made and no action of the court had upon the subject. (In re Brightman et aL, 15 N. B. R 313, 315; 14 Blatchf. 130; Fed. Cas. 1878.) The specification in opposition to discharge. — A creditor opposing the discharge of a bankrupt mtist enter his appearance and file specifi- cations at the time required by law. (In re MoVey, 2 N. B. R 85; 1 Chi Leg. News, 103; Fed. Cas. 8933.) The statute lays down no time certain within which specifications of discharge are to be filed, but leaves that matter to be regulated by the supreme court, and the rule of court gives a power to enlarge the time (In re Houghton, 10 N. B. R 337; Fed. Cas. 6730), which has made the limit ten days after the appearance in opposi- tion to the discharga (Orders XXXIl) On motion, specifications against the bankrupt in opposition to discharge wiU be stricken out if no appear- ance be made on order to show cause. (In re Smith et aL, 5 N. B. R 20; Fed. Cas. 12985.) Whenever the objection to a discharge rests on facts, there must be a specification in order that the bankrupt may produce evidence and that there may be a trial of the fact (In re White et al' 18 N. B. E. 107; Fed. Cas. 17533.) The filing of an opposition to a bank- rupt's discharge is the commencement of an individual proceeding on the part of the creditor against the bankrupt (Creditors v. Williams, 4 N. B. E. 187; Fed. Caa 3379), and the burden of proof is on the creditor filing such specifications. (In re Okell, 2 N. B. R 35; Fed. Cas. 10475; In re Herdic, 19 N. B. R 385; Fed. Cas. 6403.) Specifications in opposition to the discharge of a bankrupt which are in vague and general terms are insufficient In re Tyrrel, 3 N. E, R 73; § 14, 5.] OPPOSITION TO DISCHAEGB. 135 Fed. Cas. 14314; In re HUl, 1 N. B. R 43; 2 Ben. 136; 15 Pittsb. Leg. J. 839; Fed. Cas. 6483; In re Beardsley, 1 N. B. E. 53; 1 Amer. Law T. Eep. Bankr. 46 ; Fed. Cas. 1183 ; In re Hansen, 3 N. B. R. 75 ; Fed. Cas. 6039 ; In re Dreyer, 3 N. B. R 76; Fed. Cas. 4082; In re MoVey, 3 N. B. R 85; 1 Chi Leg. News, 103; Fed. Cas. 8933; In re Eosenfield, 1 N. B. R 161; 7 Amer. Law Reg. (N. S.) 618; 1 Amer. Law T. Rep. Bankr. 81; Fed. Caa 13058; In re Smith & Bickford, 5 N. B. R 20; Fed. Cas. 13985.) They must be precise and definite, and as exact as specifications in an indictment. (In re Butterfield, 14 N. B. R 147; 5 Biss. 130; Fed. Cas. 2247.) They must be of fact, and be distinct, precise and specific, and must not be allegar tions merely in the language of the Bankrupt Act, or allegations so gen- eral as really not to advise the bankrupt what facts he must be prepared to meet and resist. (In re Rathbone, 1 N. B. R 50; 3 Ben. 138; 15 Pittsb. Law J. 333; 25 Leg. Int. 60; Fed. Cas. 11580.) They must be full, clear and positive, as to time, place and person. (In re J. D. Eidom, 3 N. B. R 27; Fed. Cas. 4314.) An allegation lq a specification in opposition to the discharge of a bankrupt, that he had concealed property of considerable value, is bad because it does not describe the property as to kind or quantity, and does not state how the concealment was effected or when it occurred. (In re Rathbone, 1 N. B. R 50; 2 Ben. 188; 15 Pittsb. Law J. 333; 35 Leg. Int. 60; Fed. Cas. 11580.) An allegation in a specification filed in opposition to a discharge, that " said bankrupt has wilfully omitted " certain premises from the schedule attached to his petition, is entirely insufiicient for the reason that it is not alleged that the bankrupt has wilfully sworn falsely in his affidavit annexed to his schedule. (In re Keefer, 4 N. B. R 136; 3 ChL Leg. News, 135; Fed. Cas. 7636; In re Hummitsh, 3 N. B. R 3; 15 Pittsb. Leg. J. (O. S.) 494; Fed. Cas. 6866.) It must appear that the bankrupt knew the claim was false, in order to bar a discharge on the ground that he swore falsely in the affidavit accompanying his schedule that he was indebted to the creditor named thereio, or that he did not disclose to the assignee that the claim was false and fictitious. (In re Blumenthal, 18 N. B. R. 555; Fed. Cas. 1576.) Charges in general terms of the destruction and removal of books and papers to defraud creditors and procurement of certain cred- itors' assent by pecuniary consideration are too vague to prevent a dis- charge. (In re Freeman, 4 N.B.R 17; 4 Ben. 245; Fed. Cas. 5083.) Specifica- tions charging the bankrupt with having concealed his estate and effects, and with having concealed, removed, altered and destroyed the books and writings relating thereto, are insufficient for want of averment of fraud- ulent latent (In re Condiot, 19 N. B. R 143; 3 N. J. Law J. 83; Fed. Cas. 3094) Incomplete specifications in opposition to a discharge may be amended in due course. (In re Mclntire, 1 N. R R 115; 1 Amer. Law T. Rep. Bankr. 120; Fed. Cas. 8833.) Grounds for refusing discharge. — Under the act of 1867, a discharge was refused where the bankrupt had omitted from his schedule of assets 136 LAW OF BANKItUPTCY. [§ 14, J. an estate in expectancy under a will (In re Connell, Jr., 3 N. R R 113; Fed. Cas. 3110); or if he put into his schedule, as due, a debt which was false or fictitious (In re Orcutt, 4 N. B. R 176; Fed. Cas. 10550); or if he wilfully swore falsely in the affidavit annexed to his inventory in stat- ing that he had no assets; or if he had concealed his property and had been guilty of fraud in not delivering such property to his assignee. (In re Rathbone, 1 N. B. R 145; 1 Amer. Law T. Rep. Bankr. 70; Fed. Cas. 11583; In re Hussman, 3 N. B. R 140; 2 Amer. Law T. Rep. Bankr. 53; 1 Chi Leg. News, 177; Fed. Cas. 6951.) And it was refused where a member of a firm withdrew as his exemption a homestead in his wife's name, partly paid for by the wife and partly by money from the firm's earnings. (In re Croft Bros., 17 N. B. R 324; 6 N. Y. Weekly Dig. 218; 8 Biss. 188; 10 Chi Leg. News, 204; 6 Amer. Law Rep. 597; Fed. Cas. 3404.) It was also refused in case of a voluntary petition of partners, where the names of parties who should be joined as petitioners were not so joined. (Citizens' Nat. Bank v. Cass et aL, 18 N. B. R 279; 6 Weekly Notes Cas. 371; 6 Reporter, 579; 19 Alb. Law T. 119; 26 Pittsb. Leg. T. 25; Fed. Cas. 2733.) Where, in opposition to a discharge, issues of fact are raised on the specifications, and a prima fade case of fraud is made out, the discharge wiU be withheld until such prima fade case is overthrown. (In re Doyle, 3 N. B. R 190; Fed. Cas. 4053.) If there be an omission to enter an order refusing a discharge, the bankrupt court may make it nunc pro tunc, if no rights of third persons have intervened which can be thereby prejudiced. (In re Drisco et aL, 14 N. B. R. 551; Fed. Cas. 4086.) That which would prevent a discharge will also invalidate one, if the appropriate remedy be sought. (In re Rainsford, 5 N. B. R 381; Fed. Cas. 11537.) The court will refuse a discharge where it appears, upon an inspection of the record, that the bankrupt is not entitled thereto, although there are not objections interposed by creditora (In re Wilkinson, 3 N. B. R 74; 3 West. Jur. 350; 16 Pittsb. Leg. J. 237; Fed. Cas. 17667; In re Sohoo, 3 N. B. R 52; Fed. Cas. 13162.) Books of acconnt. — Under the corresponding section of the act of 1867 it was provided that a merchant or tradesman must keep books of account in order to be entitled to a discharge in bankruptcy (In re Bound, 4 N. B. R. 164; Fed. Cas. 1697; In re OdeU et aL, 17 N. B. R 73; 9 Ben. 209; Fed. Cas. 10436; In re O'Bannon, 2 N. B. R 6; Fed. Cas. 10394; In re Tyler, 4 N. R R 27; Fed. Cas. 14305); but the books must be such as wiU at all times exhibit to his creditors his position, so that when placed before them for investigation they may at once ascertain his standing and property and the result of his business, and whether everything has been fair and honest on his part. (In re Brookway, 7 N. R R 575; 6 Ben. 326; Fed. Cas. 1917; In re Garrison, 7 N. R R 287; 6 § 14, 5.] DISCHAEGE. 137 Ben. 430; Fed. Cas. 5254) A failure of a bankrupt to surrender the books of account to the assignee in insolvency, make return of them in his schedules or otherwise account for them, creates the presumption that he has them, and he is held guilty of concealing them. (In re Beale, 2 N. B. R 178; 1 Lowell, 323; 2 Amer. Law T. Rep. Bankr. 95; 1 Chi Leg. News, 326; Fed. Cas. 1150.) In the following cases it has been held unnecessary to keep books of account, and discharge has been granted: One who was a stock and gold broker, but was not a member of a stock exchange, and conducted his business through other brokers who were members (In re Moss, 19 N. B. E. 132; Fed. Cas. 9877); an illiterate farmer who also periodically pur chased and sold horses, cattle, etc. (In re Cote, 14 N. B. E. 503; 3 LoweU, 374; Fed. Cas. 3867.) Failure to keep books not exensed. — "Where a bankrupt has not kept proper books of account for several months before his bankruptcy, a dis- charge win be refused. (In re Archenbrown, 12 N. B. R. 17; 7 Chi Leg. News, 231 ; Fed. Cas. 505.) It has also been held under the act of 1867 that a discharge wiU be refused where there is an omission to keep proper books of account, even without fraudulent intent (In re Solomon, 12 N. B. R. 94; 6 Phila. 481; 25 Leg. Int. 364; 1 Chi Leg. News, 77, 107; Fed. Cas. 13167; In re Archenbrown, 12 N. B. R 17; 7 Chi Leg. News, 231; Fed. Cas. 505); or where the omission is not wilful. (In re Newman, 2 N. B. R 99; 3 Ben. 20; 1 Chi Leg. News, 123; Fed. Cas. 10175.) The following have been held to constitute a proper keeping of books of account: The keeping of all invoice bills carefully together without an in- voice book, the other customary books being kept (In re Reed, 12 N. B. R 380; IN.Y.Wkly.Dig. 100; Fed. Cas. 11639); bank books showing amount received, and books showing amoimts and to whom paid, but no cash book (In re Marsh et al, 19 N. R R. 297; Fed. Cas. 9109); an entry of a chattel mortgage or a promissory note in a trader's blotter; a real-estate transaction entered in the blotter kept by the bankrupt as a trader, fidly disclosing his indebtedness thereto. (In reWinsor. 16 N. B. R 152; 9 Chi Leg. News, 402; 3 Cin, Law BuL 212; Fed. Ca& 17885.) A detached check is admissible in evidence, such check having once formed a part of the book, and together with the stub showed just how the book was kept. (In re Brockway, 7 N. B. R. 595; 6 Ben. 336; Fed. Cas. 1917.) A pass-book is a book of account and a necessary one. (In re Blumenthal, 18 N. B. R 575; Fed. Cas. 1576.) Books of accounts in another business need not be kept. (In re Friedberg, 19 N. B. R 802; Fed. Cas. 5116; In re Herdic, 19 N. B. R 385; Fed. Cas. 6403.) The accidental omission of entries in a trader's books of account is no ground for withholding a discharge (In re Burgess, 3 N. B. R 47; Fed. Cas. 2153); nor is the mutilation of books of account, if satisfactorily explained (In re Noonan et aL, 3 N. B. R 63; Fed. Cas. 10291); norvrfUa discharge be refused where material eras- ures and alterations appear on the books of a bankrupt, unless it is evi- 138 LAW OF BAHKEUPTCT. [§ 14, J. dent that they were made with fraudulent intent (In re Antisdel, 18 N. B. R 289; Fed. Cas. 490.) It is not necessary that the books of account contain entries of debts owed at the time the bankrupt went into trade^ previously contracted, as well as those debts incurred in his business as a trader. (In re Winsor, 16 N. B. E. 152; 9 Chi. Leg. News, 403; 3 Cin. Law BuL 312; Fed. Cas. 17885.) If creditors can gather from the books kept by a bankrupt a correct understanding of his financial condition, the requirement that proper books of account shall be kept is satisfied. (In re Antisdel, 18 N. B. E. 389; Fed. Cas. 490.) The following have been held not to have kept proper books of account: Bankrupts whose entries of receipts and disbursements in cash books are unintelligible (In re John Murdock et aL, In re Mackey, 4 N. B. E. 17; Fed. Cas. 8838) ; a merchant or tradesman who keeps neither invoice book, cash book, blotter, day book, journal or ledger, but only books contain- ing m.emoranda of business transactions, from which no correct esti- mate of the condition can be made (In re Sohumpert, 8 N. B. E. 415; Fed. Cas. 13491); one who makes entries of busiaess transactions on slips of paper, each entry being on a separate slip (In re Hammond v. Cool- idge, 8 N. B. E 71; 1 Lowell, 381; Fed. Cas. 5999); one who fails to keep a cash book (In re BeUis et aL, 3 N. B. E. 134; 4 Ben. 58; Fed. Cas. 1275; In re Littlefleld, 3 N. B. R 13 ; 1 Lowell, 331 ; 3 Amer. Law T. 122 ; 1 Amer. Law T. Eep. Bankr. 164; Fed. Cas. 8398); a bankrupt who kept no cash book, but had an account with " merchandise " in his ledger, showing in one column aggregate monthly payments for grain, and in another ag- gregate monthly amount of sales, the books not showing what moneys were expended in carrying on business nor what sums were taken out for family expenses (In re AaketeU, 19 N. B. E. 368; Fed. Cas. 394); a bankrupt who preserved the invoices of his purchases, receipts of his payments, a bank book and canceled checks, and a daUy memorandum of cash receipts on a slate which were erased each succeeding day (In re Solomon, 2 N. B. R 94; 6 Phila. 481; 25 Leg. Int. 364; 1 Chi Leg. News, 77, 107; Fed. Cas. 13167); one who did not keep a book of cash re- ceipts and expenditm:es (In re Gay, 3 N. B. R 114; 1 Hask. 108; 1 Amer. Law T. Eep. Bankr. 73; 2 Amer. Law T. Eep. Bankr. 52; Fed. Cas. 5279); one who did not keep invoice or stock books from which to determine what property he was possessed of in his trade (In re White, 2 N. B. R 179; 16 Pittsb. Leg. J. 110; 3 Amer. Law T. 105: 1 Amer. Law T. Eep. Bankr. 136; 1 Chi Leg. News, 336; Fed. Cas. 17532); a bankrupt who was a merchant, and illiterate, and kept no books of account except a small memorandum book of sales in which the entries were made by his son, daughter,"and even strangers purchasing goods of him, but who relied chiefly upon his memory as to his business transactions (In re Newman, 3 N. B. R 99; 3 Ben. 20; 1 Chi Leg. News, 133; Fed. Cas. 10175) ; a debtor who kept no books showing transactions between liim and a person whom creditors alleged to be his partner, but who kept § 14, 5.] DISCHARGE. 139 proper books of account with customers. (In re Blumenthal, 18 N. B. R, 555; Fed. Cas. 1576.) Impeachment of a discharge. — A bankrupt's discharge cannot be impeached in a state court for any of the reasons which would prevent the United States court from granting it (Alston v. Eobinett, 9 N. B. R. 74) A discharge granted by a court of competent jurisdiction is conclusive as a bar to aU suits commenced in state courts, when prop- erly pleaded, and cannot be impeached on the ground that it was ob- tained by fraud. (Hudson v. Bingham, 8 N. B. R 494; Smith v. Ramsey, 15 N. B. R 447.) A discharge is conclusive in the absence of fraud, and cannot be impeached collaterally by a creditor to whom no notice of the proceedings had been given (Williams v. Butcher, 12 N. B. R 143; Black V. Blazo, 13 N. B. R 195) ; nor on the groimd that such notice was not given because of the fraud of the bankrupt in representing in his schedule that the creditor's residence was imknown to him when he actually knew such residence. (Rayl, Adm'x, etc. v. Lapham, 15 N. B. R 508.) Beplication to plea of discharge. — Under the act of 1867 it was held that where a defendant to a suit on a note pleads his discharge ia bankruptcy, a replication that the plaintiff ought not to be barred because his claim was not included in the schedule and he had no notice will be held bad on demurrer. (Symonds v. Barnes, 6 N. B. R. 377.) Rep- lications filed in an action in a state court, setting up fraudulent acts of a bankrupt in avoidance of the discharge, will also be held bad. (Reed V. BulUngton, 11 N. B. R 408; Stokes et al. v. Mason, 13 N. B. R 498.) Matter intended to avoid a discharge should be replied in response to the plea, and should not be set forth in the declaration. (Brown et aJ. V. Broach et al., 16 N. B. R 396.) In an action on a judgment recovered prior to an adjudication of bankruptcy, the plaintiff is entitled to set up a fraudulent concealment by the bankrupt of his property, against his plea of discharg& (In re Perkins et aL, 3 N. B. R 189.) Proceedings suspended to await a discharge. — A bankrupt de- fendant may file a bond to dissolve an attachment, although it was issued more than four months before the commencement of the proceedings in bankruptcy, and have the case continued to await his discharga (Brar ley V. Boomer et aL, 13 N. B. R 303.) Proceedings to collect a provable debt shall, on application of the bankrupt, be stayed, to await the de- termination of the court in bankruptcy on the question of the discharge, provided there be no unreasonable delay on the part of the bankrupt in endeavoring to obtain his discharge. (In re Belden, 6 N. B. R. 443; Fed. Cas. 1339.) Where a creditor having proved his debt in bankruptcy, and there having been unreasonable delay by a debtor in obtaining his discharge, the former attempts to execute a judgment obtained against the latter prior to bankruptcy, such proof is not a satisfaction of the debt, but a discharge by the bankrupt court must first be obtained, and. 140 LAW OF BANKEIJPTOT. [§ 14, K if refused, the creditor can proceed at law. (Dingee v. Becker, 9 N. B. E. 508; Fed. Cas. 3919.) An action was brought by a creditor, who had proved his claim in bankruptcy, three years after adjudication. No dividend had been paid, no final account rendered, and no discharge granted or refused. The defendant set up the pendency of bankruptcy proceedings. The plaintiff urged that, the time having elapsed within which a discharge could be granted, the proceedings were terminated and his right of ac- tion revived. It was held that the proceedings were not terminated without a discharge, and that the right of action was not revived. (Wood V. Hazen, 15 N. B. E. 491.) Dischargre releases debtor from liability as surety. — A bankrupt is released from liability as surety on a guardian's bond by a discharge in bankruptcy. (Eeitz v. People, 16 N. B. R 96.) A discharge releases a surety on a guardian's bond from liability for defaults of the guardian which occurred prior to commencement of proceedings against the surety. (Jones et aL v. Knox, 3 N. B. R. 559.) Where a principal is re- leased from a debt by his discharge, he will also be released from his contingent liability to his surety for the same debt. (Halliburton v. Carter, 10 N. B. R 359.) A surety on the bond of a United States oflScer is released from his liability thereon by a discharge. (United States v. Throckmorton, 8 N. B. R 309; 18 Int. Rev. Rec. 54; Fed. Cas. 16516.) Where a judgment against the sureties on an appeal bond follows the rendition of a judgment against the principal, sureties discharged in bankruptcy pending such appeal must plead such discharge before judg- ment on the appeal is rendered or it wiU not avail as a defense. (Jones et aL V. Coker et aL, 16 N. B. R. 843.) Failure to plead a discharge. — A delay of over a year in asking for leave to plead a discharge in bar of an action commenced prior to the adjudication is suflScient cause for refusing such request, the plea of a discharge being a purely legal and not an equitable defense. (Medburg V. Swan, 8 N. B. R 537.) A discharge is no defense where a bankrupt fails to plead the same in bar to an action and allows judgment to be recovered against him (Revere Copper Co. v. Dimock, 19 N. B. R 872), and by neglecting to insist upon his discharge he waives its benefits and renders any property he may have liable for the judgment. (Dewey et aL V. Moyer et aL, 16 N. B. R 1.) A discharge in bankruptcy does not per se operate as a discharge of all a bankrupt's debts. A court wiU not take judicial knowledge of a discharge, and, if not pleaded, a valid judg- ment may be rendered against a bankrupt. (Jenks v. Opp, 12 N. B. R 19.) When a discharge may not be pleaded.— A bankrupt wiU not be al- lowed to file a supplemental answer setting up his discharge, where an attachment issued more than four months prior to the institution of bankruptcy proceedings was dissolved by filing a bond. (Holyoke et aL T. Adams et aL, 13 N. B. R 413.) A discharge obtained pending an ap- § 14:, 5.] DISCHAEGE. 141 peal cannot be pleaded in an appellate court. Such court takes cogni- zance only of the matters appearing on the record of the court below. (Serra § Hijo v. HofiEman & Co., 17 N. B. R. 124; Knapp et aL v. Anderson et al., 15 N. B. R. 316.) Where, upon suit against a commission mer- chant for the proceeds of the sale of goods consigned to him, it appears that prior to the commencement of the action the defendant was ad- judged a bankrupt, and had received no discharge, a discharge obtained afterward does not release the debt (Treadwell et aL v. HoUoway et aL, 12 N. B. R 61.) Effect of the discharge on partnership debts. — A man cannot be dis- charged from his liabilities as a member of a firm unless the debts and assets of the firm are considered and adjudicated upon by the court. (Hudgins v. Lane et aL, 11 N. B. E. 462; 2 Hughes, 361; Fed. Cas. 6837.) Where a discharge in bankruptcy is granted to a member of a firm, it is a release of joint debts as well as of separate debts. A discharge binds copartners as well as joint creditors, where granted to a copartner. (WilMns V. Davis, 15 N. B. R. 60; 3 LoweU, 511; Fed. Cas. 17664) A dis- charge properly granted to the individual members of a firm will be available in respect to any indebtedness of any other partnership in w^hich they are interested and for whose debts they might be liable. (In re Warren and Charles Leland, 5 N. B. R 222 ; 5 Ben. 168 ; Fed. Cas. 8228.) A discharge founded upon the individual jjetition of a firm, the other mem- bers of which had died insolvent, would probably operate as a discharge of the petitioner from his debts as a member of said firm as well as in- dividually, but it would be safer to amend the petition. (In re BidweU, 2 N. R r" 78; Fed. Cas. 1393.) Effect, generally, on the discharge, of collateral proceedings. — A discharge may be pleaded by simple averment of the facts in an action to enjoin collection of a judgment on the ground of discharge, and a copy of the discharge need not be set out. (Hayes v. Ford, 15 N. B. R 569.) If a discharge be pleaded, the court cannot dismiss the cause on that ground, but must submit the issue to a jury. (Austin v. Markham, 10 N. B. R 548.) A plea setting up a discharge, if a plea in abatement, is bad if not sworn to. If such plea is in bar, when the notes and bond sued upon were given after bankruptcy, it is insufficient. (Beeson et aL V. Howard, 11 N. B. R 486.) A plea of a discharge which does not set forth a copy of the discharge is bad. A plea is bad at common law Tin- less it aver what court adjudged the defendant to be a bankrupt or granted him his discharge as such, or set out the facts upon which any court would acquire jurisdiction so to da Such plea should conclude with a verification. If defective, it may be amended. (StoU v. Wilson, 14 N. B. R 571.) No satisfaction of a judgment wUl be entered on the record upon the production of a discharge unless the judgment is one from which the discharge wlU release the debtor. An attachment upon exempt prop- 142 LAW OF BANKEUPTOT. [§ 14, 5. erty is not dissolved, but may be enforced after the commencement of proceedings in bankruptcy. (Robinson et aL v. Wilson, 14 N. B. R. 565.) A refusal to set aside an execution on account of defendant's discharge is not subject to a writ of error. The remedy in case of such refusal is by writ of audita querela, upon which the judgment of the court below is examinable. (Williams v. Butcher, 13 N. B. R. 143.) Where, in an attachment suit on a promissory note, the defendant after answering files a petition in bankruptcy and suggests the bankruptcy on the records of the state court, and is denied a continuance pending the proceedings in bankruptcy, and he is afterwards discharged, he may bring a suit of review to reverse the judgment, having obtained leave of court (Todd et aL v. Barton et aL, 13 N, B. R. 197.) Where, in an action of assumpsit upon promissory notes, the defend- ant files an affidavit of defense setting up bis adjudication in bank- ruptcy, and that the time had not arrived for an application for discharge, although such matter does not constitute a defense, it is sufficient to stay the action and prevent judgment. (Frostman et aL v. Hicks et aL, 15 N. B. R. 41; sec. 5106.) The state court has jurisdiction over all subjects arising out of the question whether the debt in litigation is, or not, embraced in the class or classes of liabilities from which the debtor is absolved, and upon which his discharge has no effect. (Stevens v. Brown, 11 N. B. R. 568.) A debtor arrested in a civil action prior to commencement of proceed- ings in bankruptcy is not entitled to be released from such arrest upon being adjudged a bankrupt. But if the debt or claim on which the ac- tion under which he is arrested is one of which a discharge in bankruptcy will act as a release, he will be entitled to release from arrest. (Bran- don National Bank v. Hatch, 16 N. B. R. 468.) Where a bankrupt applies for an adjudication to restrain the collec- tion of a judgment on the ground that he has been discharged, and the record shows nothing giving the bankrupt court jurisdiction, such juris- diction will be presumed. (Hayes v. Ford, 15 N. B. R 569.) The effect, in general, of a discharge.— Bankrupt laws discharge the contract, as contradistinguished from insolvent laws, which only liber- ate the person. (Deford et aL v. Hewlet, 18 N. B. R. 518.) The summary jurisdiction of the bankrupt court over the bankrupt ceases with the granting of his discharge. (In re Dole, 9 N. R R. 193; 11 Blatchf. 499; Fed. Cas. 3964.) Where a bankrupt is required to show cause why he should not be in contempt for not appearing to be examined, and he replies that before the order was issued he had been discharged, the proceedings for con- tempt will be dismissed. (In re Jones, 6 N. B. R 386; Fed. Cas. 7449.) The discharge of the banlirupt is conclusive of the regularity of the pro- ceedings, and can only be attacked in the court granting it upon pro- ceedings for that purpose. (In re Witkowski, 10 N. B. R 309; Fed. Caa. § 14, 5.] DISCHARGE. 143 17920.) The discharge is the judgment of the court and stands upon the footing of other judgments. Opportunity is offered to contest it, and if not availed of in the mode and within the time allowed, all remedy to annul it is cut off. (Stevens v. Brown, 11 N. B. R. 568.) A certificate of discharge in bankruptcy, signed by the judge and attested by the clerk under the seal of the court, is not only sufficiently authenticated, but it is precisely the means by which the bankrupt is to prove and have the benefit of his discharge (MiUer v. Chandler, 17 N. B. R 351); it is conclu- sive evidence in favor of the bankrupt of the fact and regularity thereof, but it is not conclusive evidence in favor of other parties seeking to use it (Dewey v. Moyer, 18 N. B. R 114.) The granting of the discharge does not oust the register of his juris- diction of the cause, as it is a mere incident in the proceedings. The cause proceeds before the register until the final discharge, by the court, of the assignee from the trust. (In re Dole, 7 N. B. R 538; 7 West. Jur. 639; Fed. Cas. 3965.) After a bankrupt's discharge, he cannot be required to appear and submit to an examination touching his acts and business and to give complete statements about his lands, etc., prior to adjudication. (In re Dean, 8 N. B. R 188; Fed. Cas. 3701. For contra, see In re Heath et aL, 7 N. R R 448; Fed. Cas. 6301) Where a debtor has obtained a discharge under a state insolvent law, and subsequently obtains a discharge under the Bankrupt Act, the dis- charge in bankruptcy will not affect the right of the insolvent trustee to property acquired by inheritance after the granting thereof. (Laven- der V. GosneU et aL, 13 N. B. R 283.) Amounts remaining in the hands of the assignee, after discharge of a bankrupt against whose estate no debts were proved, and there is rea- sonable cause to believe none will be proved, wUl, upon proper petition, be paid to the bankrupt. (In re Hoyt, 3 N. B. R 13; Fed. Cas. 6806.) He is entitled to the funds acquired subsequent to his final discharge, and may use them to purchase his former assets at his assignee's sale. (Phelps, Asa, v. McDonald et aL, 16 N. B. R 217.) An application for exemption can only be made before his discharge; afterward he cannot be re-admitted to petition for and to be allowed an additional exemp- tion granted after his discharge. (In re Kean et aL, 8 N. B. R 867; 3 Amer. Law Re& 330; Fed. Cas. 7630.) Where a bankrupt agrees with a creditor to pay his claim in full on condition that the creditor will agree to a discharge, and after the dis- charge a note is made for the difference between the claim and the divi- dend, which the wife of the bankrupt signs and secures by a mortgage on her separate property without knowledge of the agreement, such mortgage and note are void. (Blasdel v. Fowle et aL, 17 N. B. R 413.) A bankrupt's discharge in a foreign country does not discharge a debt made in and with reference to the laws of this country, (In re Shejv 144 LAW OF BANKEUPTOT. [§ 14, C pard, 1 N. B. R 116; 7 Amer. Law Reg. (N. S.) 484; 1 Amer. Law T. Repw Bankr. 49; Fed- Cas. 13753.) For stay of proceedings pending application for a discharge, see sec. 11. c. The confirmation of a composition shall discharge the bankrupt from his debts, other than those agreed to be paid by the terms of the composition and those not affected by a discharge. After a bankrupt has been examined in open court or at a meeting of his creditors, and filed the schedule of his property and list of his cred- itors, he may ofifer terms of composition (sec. 12a), which the judge may confirm if satisfied that it is for the best interests of his creditors, that it is made in good faith, and that the bankrupt has not been guilty of any act which would bar a discharge (sec. I'M), when the consideration must be distributed as the judge directs and the case dismissed (sea 12e), the title to his property thereupon revesting in the bankrupt (Sea 70/.) Effect of composition. — A discharge by virtue of compliance with the terms of composition is a discharge by operation of law. (In re Merri- man, 18 N. B. E. 411; 44 Conn. 587; 26 Pittsb. Leg. T. 130; Fed. Cas. 9479.) The inability of a debtor to obtain a discharge by order of the court does not preclude his obtaining satisfaction of his debts by way of composi- tion (In re Weber Furniture Co., 13 N. B. R 529; Fed, Cas. 17330), the efilect of which is to absolutely discharge the debts of those creditors whose names, addresses and debts are placed in the statement produced at the meeting of creditors, and no other discharge is needed. Other debts are not discharged. (In re Becket, 13 N. B. R 201; 2 Woods, 178; 7 Chi. Leg. News, 248; Fed. Cas. 1210.) But, unless the amount agreed upon is actually paid, the composition will not discharge the debtor. (In re Hurst, 13 N. B. R 455; 1 Flip. 462; 8 ChL Leg. News, 147; 3 Cent Law J. 78; Fed. Cas. 6925.) If a composition has been duly ratified it confines the secured creditor to his security, and discharges the debtor from personal liability for the secured debt (In re Lytle & Co., 14 N. B. R 457; 11 Phila. 532; 3 N. Y. Wkly. Dig. 303; 5 Amer. Law Eea 308; 9 ChL Leg. News, 18; 33 Leg. Int 349; 1 Cin. Law BuL 246; 24 Pittsb. Leg. J. 14; Fed. Cas. 8650.) Where the holder of an accommodation note, knowing it to be such, signs a resolution in favor of composition with the indorser, the maker of the note is not released from liability. (Guild V. Butler, 16 N. B. R 347.) A resolution of composition will dissolve an attachment made within four months before the commencement of the proceedings in bankruptcy. (Smith, Stebbins & Co. v. Engle et aL, 14 N. B. B. 481.) A discharge by composition will eilect the dismissal of an attachment suit instituted two weeks before a petition in bankruptcy is filed. (Smith, Stebbins & Ca v. Engle et aL, 14 N. R R 489.) See also Compositions, sea 13. § 15, a.] EETOOATION OF DISOHAEGES. 145 Sec. 15. Discharges, wlien revoked. — a. The judge may, upon the application of parties in interest who have not been guilty of undue laches, filed at any time within one year after a discharge shall have been granted, revoke it upon a trial if it shall be made to appear that it was obtained through the fraud of the bankrupt, and that the knowledge of the fraud has come to the petitioners since the granting of the discharge, and that the actual facts did not warrant the discharge. [Act of 1867. Seo. 34. . . . That any creditor or creditors of said bankrupt, whose debt was proved or prov- able against the estate in bankruptcy, who shall see fit to con- test the validity of said discharge on the ground that it was fraudulently obtained, may, at any time within two years after the date thereof, apply to the court which granted it to set aside and annul the same. Said application shall be in writing, shall specify which, in particular, of the several acts mentioned in section twenty-nine it is intended to give evidence of against the bankrupt, setting forth the grounds of avoidance, and no evidence shall be admitted as to any other of the said acts ; but said application shall be subject to amendment at the discretion of the court. The court shall cause reasonable notice of said application to be given to said bankrupt, and order him to appear and answer the same, within such time as to the court shall seem fit and proper. If, upon the hearing of said parties, the court shall find that the fraudulent acts, or any of them, set forth as aforesaid by said creditor or creditors against the bankrupt, are proved, and that said creditor or creditors had no knowl- edge of the same until after the granting of said discharge, judgment shall be given in favor of said creditor or credit- ors, and the discharge of said bankrupt shall be set aside and annulled. But if the court shall find that said fraudu- lent acts and all of them, set forth as aforesaid, are not proved, or that they were known to said creditor or credit- ors before the granting of said discharge, then judgment shall be rendered in favor of the bankrupt and the validity of his discharge shall not be affected by said proceedings.] The object of this section is to maintain good faith in the securing of a discliarge. In order to protect persons acting upon the strength of a discharge, it is provided that on its revocation the property acquired by the bankrupt, in addition to his estate at the time the adjudication was 10 146 LAW OF BAHKEUPTCT. [§ 15, Of. made, is to be applied to the payment in full of the claims of creditors for property sold to him on credit, in good faith, while such discharge was in force, and the residue, if any, shall be applied to the payment of debts which were owing at the time of the adjudication. (Sec. 64c.) Whenever a discharge is revoked upon the appointment and qualifica- tion of a trustee, he is vested with the title to all of the bankrupt's prop- erty as of the date of the final decree revoking the discharga (Sec. 70(i) When a discharge will be revoked. — A discharge obtained by fraud will be revoked. (In re Augenstein, 16 N. B. E. 353.) A discharge will also be revoked if it appear that the bankrupt swore falsely in schedul- ing his creditors and liabilities, and that the creditor thus omitted from the schedule did not know of the act until after the discharge was granted. (In re Herrick, 7 N. B. E. 341; Fed. Cas. 6419.) Therefore if, by wilfully making a false schedule or affidavits, the bankrupt prevents notice to a creditor, his discharge may be revoked. (Eayl, Adm'x, v. Lapham, 15 N. B. R 508.) A discharge will also be revoked if the re- quirements of the act in force at the time have not been complied with. (In re Carrier & Baum, 13 N. B. R. 208; 23 Pittsb. Leg. J. 57; Fed. Cas. 2443.) Where a creditor of a bankrupt who has filed objections to his discharge is prevented by accident from attending at the hearing, and the order of discharge is issued, and in the same term files a petition to revoke the discharge, the court has the power to do so; and the court has a right to recall a final decree granting a discharge to a bankrupt upon application in the term at which the decree was passed, and it seems that the court also has the power after the term has ended. (In re Dupee, 6 N. B. R. 89; 3 LoweU, 18; Fed. Cas. 4183.) Where, after the bankrupt has been discharged, creditors bring an ac- tion to have the discharge revoked on the ground that the debtor con- cealed certain property, setting out the manner in which it had been concealed, and asking that certain conveyances be set aside as fraudu- lent, a demurrer will not be sustained. (Nicholas, Ass., v. Murray et aL, 18 N. B. R 469; 5 Sawy. 330; Fed. Cas. 10233.) Waiver of discharge. — In an action to set aside a transfer of property made to defraud creditors, the fraudulent holder of the property cannot set up as a defense the debtor's discharge in bankruptcy, where the debtor has waived such discharge. (Dewey et al v. Moyer et aL, 16 N. KRl.) When a discharge will not he revoked. — Where the creditor has been guilty of laches in filing a motion to revoke the discharge, the mo- tion will be denied (In re Buchstein, 17 N. B. R 1; 9 Ben. 315; Fed. Cas. 2076), since the limitation in relation to proceedings to amend a dis- charge is absolute, and the time begins to run from the date of the discharge and not from the discovery of fraud (In re Brown, 19 N. B. R 312; Fed. Cas. 1983); and therefore, two years after receiving his dis- § 15, a.] KEVOOATION OF DISOHAEGES. 147 charge, a bankrupt cannot be compelled to submit to an examination for the purpose of instituting or aiding a proceeding to vacate his dis- charge. (In re Dole, 7 N. B. E. 538; 7 West. Jur. 629; Fed. Cas. 3965.) Creditors who have proved their debts in bankruptcy cannot have the bankrupt's discharge set aside after his death in order that they may prove their demands against the estate of the debtor in the hands of his administrator. (Young et aL v. Ridenbaugh's Adm'r, 11 N. B. E. 563; 3 Dia 349; 7 Chi. Leg. News, 243; Fed. Cas. 18173.) A discharge in bankruptcy will not be vacated on general averments (In re Mclntire, 1 N. B. R 115; 1 Amer. Law T. Rep. Bankr. 120; Fed. Cas. 8823); nor where the testimony relied on was known to the creditor seeking the revocation before the discharge was granted. (In re Marionneanx, 13 N. B. R. 222; 1 Woods, 37; Fed. Cas. 9088.) Ignorance of the fact that a discharge had been granted will not support a motion to revoke it after the time fixed by rule of court (In re Buchstein, 17 N. B. R 1; 9 Ben, 215; Fed. Cas. 2076); nor wiU a, petition to set aside a discharge be entertained in regard to a matter which is not barred by the discharge. (In re Mansfield, 6 N. B. R 388; Fed. Cas. 9049.) A new trial of specifi- cations against a discharge is not authorized after the discharge has been granted, even if the opposing creditor can adduce new facts. (In re Corwin, 19 N. B. R 422; Fed. Cas. 3359.) Where a party is surety on a bond given to the United States in a suit to forfeit a steamer and cargo, and before the termination of the suit in favor of the United States he becomes bankrupt and is discharged, and the United States sues him and obtains judgment on the bond, which judgment is transferred to a third party for consideration, who then files a petition to set aside the discharge, the petition will be dismissed. (In re Mansfield, 6 N. B. R 386; Fed. Cas. 9049.) Jarisdiction of federal courts.— The authority to revoke a discharge in bankruptcy, conferred upon the federal courts, is incompatible with the exercise of the same by the state court, and the former is para- mount. (Corey v. Ripley, 4 N, B. R 163; Alston v. Robinett, 9 N. B. R 74) Where a district court has granted a discharge it has sole jurisdic- tion of a proceeding to annul it. (Nicholas, Ass., v. Murray et al., 18 N. B. R 469; Fed. Cas. 10333.) A discharge cannot be impeached in a collateral' action. — A dis- charge duly granted, when pleaded in bar to the further maintenance of an action for prior indebtedness, cannot be impeached in a state court for any cause which would have prevented the granting of it (Corey v. Ripley, 4 N. B. R 163); nor can it be impeached in a collateral action on the ground that a creditor had no notice of bankruptcy proceedings, and that the bankrupt fraudulently procured notice to be withheld, nor because the bankrupt removed his property from the jurisdiction of the court in which plaintiff's action was pending, with intent to defraud creditors. (Howland v. Carson, 16 N. B. R 37^) 148 LAW OF BAKKEUPTOT. [§ 16, a. Sec. 16. Co-debtors of bankrupts. — a. The liability of a person who is a co-debtor with, or guarantor or in any man- ner a surety for, a bankrupt shall not be altered by the dis- charge of such bankrupt. [Act of 1867. Sec. 33. . . . and no discharge granted under this act shall release, discharge, or affect any person liable for the same debt for or with the bankrupt, either as partner, joint contractor, indorser, surety or otherwise.] Provisions affecting discharges are found under section 14 Co-debtors of bankrupts. — If a principal debtor become insolvent or procures a discharge in bankruptcy, a surety is not released, and if the principal be discharged by his creditors the effect is the sama (The "Home," 18 N. B. R. 557; Fed. Cas. 6657.) No discharge releases, dis- charges or affects any person liable for the same debt, or with the bank- rupt, either as partner, joint contractor, indorser, surety or otherwise. (In re Stevens, 5 N. B. R 112; 1 Sawy. 397; 1 Pac. LawEep. 45; Fed. Cas. 13393; In re Levy, 1 N. B. R. 66; 3 Ben. 169; 1 Amer. Law T. Rep. Bankr. 132; Fed. Cas. 8397.) Where there are joint debtors, and one is beyond the reach of the process of the court, and equity has jurisdiction, a decree may be taken against the other for the whole amount due. (Lewis, Trustee, v. United States, 14 N. B. R 64; 93 U. S. 618.) If one of two persons jointly and severally liable for a debt, who are not partners, does an act which would subject him to a decree of bankruptcy, such act does not affect his associata (James, Adm'x, v. Atlantic Delaine Co. et aL, 11 N. B. R 390; Fed. Cas. 7179.) An indorser is not released from his liability even if the holder of the note has proved his debt in bankruptcy against the maker for the full amount as an unsecured claim, but the holder, by so proving his debt, releases all his right to a mortgage given for the purpose of indemnify- ing the indorser. (Merchants' National Bank of Syracuse v. Comstock, 11 N. B. R 335.) But the indorser is released by the holder of a note giving an extension of time to the principal for valuable consideration without the assent of the indorser. (Valley National Bank v. Meyers, Ass., 17 N. B. R 357; Fed. Cas. 16831.) The holder of an accommodation note, knowing it to be such, who signs a resolution for composition in bank- ruptcy proceedings against an indorser, does not thereby release the maker from liability. (Guild v. Butler, 16 N. B. R 847.) If the holder of a note assents to the discharge of the maker without the consent of the indorser, this releases the indorser. (In re McDonald, 14 N. B. R 477; 14 Pittsb. Leg. J. 43; Fed. Cas. 8753.) The discharge of a bankrupt does not affect the creditor's remedy against the sureties upon a bond given to dissolve a writ of garnishment issued more than four months before commencement of proceedings in § 17, 0!.] DEBTS NOT AFFECTED BY DISOHAHGE. 149 bankruptcy (In re Albrecht, 17 N. B. R. 387; Fed. Cas. 145); and since a claim for the proceeds arising from the sale of goods by a city auctioneer, not accounted for by him, is a debt not barred by a discharge, the sure- ties on the auctioneer's bond are not released by his discharge in bank- ruptcy. (Mayor et al. v. "Walker et aL, 11 N. B. R. 478.) A joint judgment against a bankrupt and a third party does not in any way affect the right of the plaintiff to proceed against the third party, even though enjoined from enforcing execution against the bank- rupt. (Penny v. Taylor, 10 N. B. R. 200; Fed. Cas. 10957.) And where a defendant, to dissolve an attachment, gives an undertaking with two sureties, and, more than four months after the issue of the attachment, bankruptcy proceedings are had, the discharge in bankruptcy will not prevent the judgment being recovered and the sureties bound therefor. (Holyoke v. Adams, 10 N. B. R 370.) The wife of a bankrupt cannot plead his discharge in bankruptcy in bar of an action against her for her half of community debts, where she has accepted the community (Ludeling v. Felton et al., 17 N. B. R 310); and a discharge in bankruptcy releases a surety on a guardian's bond from liability for defaidts of the guardian which occurred prior to com- mencement of proceedings against the surety. (Jones et aL v. Knox, 8 N. B. E. 559; Ex parte Taylor, 16 N. B. R 40; 34 Pittsb. Leg. J. 305; 1 Hughes, 617; Fed. Cas. 13773.) Where a decree has been rendered against a firm for a debt which is paid out of the firm assets, the solvent partner cannot be subrogated to the rights of the creditor of the firm who obtained the decree, for hia share of the amount paid, against the separate estate of a bankrupt partner, as against that partner's other creditors. (In re Smith, 16 N. B. R 113; Fed. Cas. 13991.) Sec. 17. Debts not affected by a discharge. — a. A dis- charge in bankruptcy shall release a bankrupt from all of his provable debts, except such as (1) are due as a tax levied by the United States, the State, county, district, or munici- pality in which he resides; (2) are judgments in actions for frauds, or obtaining property by false pretenses or false rep- resentations, or for wilful and malicious injuries to the per- son or property of another ; (3) have not been duly scheduled in time for proof and allowance, with the name of the cred- itor if known to the bankrupt, unless such creditor had no- tice or actual knowledge of the proceedings in bankruptcy; or (4) were created by his fraud, embezzlement, misappro- priation, or defalcation while acting as an officer or in any fiduciary capacity. 150 LAW OF BAHKEtrPTCT. [§ 17, a. [Act of 1867. Seo. 33. That no debt created by the fraud or embezzlement of the bankrupt, or by his defalcation as a Eublic officer, or whUe acting in any fiduciary character, shall e discharged under this act; but the debt may be proved, and the dividend thereon shall be a payment on account of said debt; . . . Seo. 34. That a discharge duly granted under this act shall, with the exceptions aforesaid, release the bankrupt from all debts, claims, liabilities, and demands which were or might have been proved against his estate in bankruptcy, and may be pleaded, by a simple averment that on the day of its date such discharge was granted to him, settiug the same forth in hasc verba, as a full and complete bar to all suits brought on any such debts, claims, liabilities, or de- mands, and the certificate shall be conclusive evidence in favor of such bankrupt of the fact and [the] regularity of such discharge.] Taxes due the United States, state, covmty, district or municipality must be paid in advance of dividends to creditors. (Sec. 64a,) The good of the community and public policy forbid the discharge of the bankrupt from a debt incurred through fraud while acting as an officer or in a fiduciary capacity. Judgment in action for frand not barred. — A judgment rendered solely on the ground of fraud does not merge the fraud, ajid is not re- leased by a discharge in bankruptcy. (Warner v. Cronkite, 13 N. B. R. 52; 6 Biss. 453; 1 N. Y. Wkly. Dig. 291; 8 Chi Leg. News, 17; Fed. Cas. 17180.) Where the ground of complaint is fraud in creating a debt, the rendition, with judgment thereon, does not merge in the original indebtedness so as to free it from taint of fraud, or to permit it to be discharged in bankruptcy; but where the original debt arises in con- tract, and the fraud is but an incident of the debt and not its creative power, the debt will be merged in the judgment and the bankrupt dis- charged therefrom, where such judgment was obtained prior to the fil- ing of the petition in bankruptcy. (Shuman v. Struss, 10 N. B. R 800.) When debts unproved or nnschednled are not barred. — A discharge in bankruptcy will not release the lien of a judgment that was not proved (Darsey v. Mumpford, 17 N. B. R. 181), nor will it release the lien of a mortgage that is not proved. (Assignee of Wicks & Go. v. Perkins, 13 N. B. R. 280; 1 Woods, 383; Fed. Cas. 17615.) It is not a sufficient de- fense in an action to set aside a fraudulent conveyance pending at the time of filing the petition, the assignee not having interfered in the cause and the claim of the creditor not having been proved in the pro- ceedings in bankruptcy. (Phelps et al v. Curts et aL, 16 N. B. R 85.) It will not release a claim not included in the debtor's schedule, if the § 17, a.] DEBTS NOT AFFBOTKD BT DISOHAEQE. 151 creditor had no notice (Symonds v. Barnes, 6 N. B. R. 377; Barnes v. Moore, 2 N. B. E. 174; Batohelder v. Low, 8 N. B. R. 571; but for contra, see In re Arohenbrown, 11 N. B. R. 149; 7 Chi. Leg. News, 99; Fed. Oas. 504); or if the omission be fraudulent. (Piatt v. Parker, 13 N. B. R. 14; Thxirmond v. Andrews and Wife, 13 N. B. R. 157; Heard v. Arnold et aL, 15 N. B. R. 543.) But a discharge cannot be impeached in a collat- eral action on such grounds. (Howland v. Carson, 16 N. B. R. 372.) Debt not barred if discharge is not obtained.— Where a defendant pleads his bankruptcy and that the debt sued on is provable and would be barred by a discharge and the proceedings are pending, but does not ask continuance to obtain a discharge, the claim may be prosecuted to final judgment. (Holland v. Martin, 18 N. B. R. 359.) Debts contracted in a fldnciary capacity. — The finding of a state court that a debt was one created by the defalcation of the bankrupt while acting in a fiduciary capacity is conclusive on the bankrupt court. (In re Whitney, 18 N. B. R. 563; Fed. Cas. 17581.) A debt created by fraud or embezzlement of the bankrupt, or by his defalcation while acting in a fiduciary capacity, is provable. (In re Rundle et al., 2 N. B. E. 49; 1 ChL Leg. News, 30; Fed. Cas. 12138.) A commission merchant acts in a fiduciary character, and therefore a debt comprising the proceeds of sale of commission goods will not be released (Lenke v. Booth, 5 N. B. R. 351; Meador et aL v. Sharpe, 4 N. B. R. 492; Treadwell et al. v. Hollo- way et aL, 13 N. B. R. 61); a city auctioneer also acts in this capacity (Mayor et aL v. Walker et al., 11 N. B. R. 478), as does also an attorney (Flanagan v. Pearson, 14 N. B. R. 37), or a guardian. (Halliburton v. Carter, 10 N. B. E. 359; In re Maybin, 15 N. B. R. 488; Fed. Cas. 9337.) An agent may also act in this capacity. (Treadwell et aL v. HoUoway et aL, 12 N. B. R. 61. For contra, see Woolsey v. Cade, 15 N. B. R. 338; Keime v. Graff et aL, 17 N. B. R. 319; 5 Reporter, 489; 35 Pittsb. Leg. J. 118; Fed. Cas. 7650.) The certificate of discharge given to a bankrupt does not include liability as a surety for the faithful performance of duty by a public ofBcer. (United States v. Herron, 9 N. B. R. 535; 20 WaU. 351.) Fraudulent debts. — A judgment recovered on a debt contracted by fraud is not discharged. (In re Patterson, 1 N. B. R. 58; 2 Ben. 155; 15 Pittsb. Leg. J. 241; Fed. Cas. 10817.) Debts not lidnciary. — The fiduciary relation does not exist where the agent is to share in the profits, acting with the knowledge of the prin- cipal, and more as a partner than as an agent (Barber v. Sterling, 17 N. B. R 318) ; nor where a limited partnership is formed, and one member becomes indebted to another (Pierce v. Shippee, 19 N. B. R. 221); nor where an agent sells goods for his principal on commission, accounting and paying over the balance of sales montlily (Grover et aL v. Clinton, 8 N. B. R. 312; 6 Chi. Leg. News, 33; 21 Pittsb. Leg. J. 34; Fed. Cas. 5845); nor where goods are sold by a factor for parties who afterwards became 152 LAW OF BANKEUPTCT. [§ 17, 05. bankrupt and are discharged. (Owsley et aL v. Cowbin et al., 15 N. B. R. 489; 3 Hughes, 433; 4 N. Y. Weekly Dig. 431; 9 Chi Leg. News, 323; 4 Law & Eq. Rep. 49; 23 Int. Eev. Eec. 210; Fed. Cas. 10686.) A judg- ment on a promissory note is not, prima facie, a fiduciary debt (Hayes V. Ford, 15 N. B. R. 569); and a surety on a guardian's bond is released by a discharge in bankruptcy. (Ex parte Taylor, 16 N. B. R. 40; 24 Pittsb. Leg. J. 205; 1 Hughes, 617; Fed. Cas. 13773; Reitz v. People, 16 N. B. R 96.) Where a bankrupt factor is arrested under an order of a state court on a cause of action based on a debt owing by him for the proceeds of goods consigned to and sold by him, he will be discharged from such arrest, as the debt is released by a discharge in bankruptcy. (In re Smith et aL, 18 N. B. R. 24; Fed Cas. 18976.) Fiduciary or fraudulent debts barred by composition. — Fiduciary debts are discharged by a composition (In re Rodger et aL, 18 N. B. R. 352; Fed. Cas. 1199), and a debt created by fraud is discharged by a composition in which the creditor participatea (WeUs v. Lamprey, 16 N. B. R. 205.) The revival of a debt. — If there be no express promise, but a prom- ise is to be raised by implication of law from the acknowledgment of the party, such acknowledgment ought to contain an unqualified and direct admission of a previous subsisting debt which the party is liable and willing to pay. (In re Harden, 1 N. B. R. 97; 1 Hask. 163; 1 Amer. Law T. Rep. Bankr. 49, 119; 15 Pittsb. Leg. J. 843; Fed. Cas. 6048.) The promise must be clear, distinct and imequivocaL (Allen & Co. v. Fer- guson, 9 N. B. R. 481; 18 WalL 1.) A new promise to pay a debt, after a discharge in bankruptcy, revives the debt (Classin v. Schoeneman, 16 N. B. R 98; Dusenbury v. Hoyet, 10 N. B. R. 813); or is a sufficient con- sideration to create a new one. (Dewey v. Moyer, 18 N. B. R 114) A new promise to pay a debt in consideration that the payee vsdll with- draw objections to the discharge is illegal and void, and no action can be sustained thereon, (Austin v. Markham, 10 N. B. R. 548.) A promise of a bankrupt after bankruptcy, but before his discharge, to pay a note made before bankruptcy, cannot be enforced in a suit upon the note. (Ogden et al. v. Redd, 18 N. B. R. 317.) Debts, in general, not barred by discharge. — Where a bankrupt is surety on a bond, on which no cause of action arose until after he was discharged in bankruptcy, the discharge does not release him from lia- bility. (Eastman v. Hibbard, 13 N. B. R 360.) Where, after parties have warehoused their property, they file their petition and are adjudi- cated bankrupts and duly discharged, it has been held that their lia- bility for storage is a continuing one, and their discharge does not release them from liability incurred after the filing of the petition. (Robinson v. Pesant, 8 N. B. R. 426.) Where a suit is brought to recover for a month's rent, part of which accrued before bankruptcy and part afterwards, for the part accruing § lY, a.] DEBTS NOT AI-FEOTED BT DISOHAEGE. 153 before bankruptcy the plaintiff may prove against the estate and the discharge will release it, bnt for that part accruing afterward he may recoYer, as the discharge did not release it. (Treadwell et aL v. Harden, 18 N. B. E. 353.) The discharge of one member of a firm is no bar in a suit against the firm, if the creditor can show that there were no partnership assets at the time of the filing of the petition in banliruptcy. (Crompton et aL v. Conkling et aL, 15 N. B. R. 417; Fed. Cas. 3408.) A creditor may take a decree in rem against property on which he has a hen, notwithstanding his debtor has been discharged as a bank- rupt. (Stoddard v. Locke et aL, 9 N. B. E. 71.) Where, in an action upon an undertaking on which defendants were sureties, the judgment debtor is discharged in bankruptcy before affirm- ance of the judgment in favor of the plaintiff on appeal, such discharge does not constitute a defense. (Knapp et aL v. Anderson et aL, 15 N. B. R 316.) Where the holder of an accommodation note, knowing it to be such, signs a resolution in favor of composition, the maker of the note is not released from liability. (Guild v. Butler, 16 N. B. E. 847.) Where to dissolve an attachment a defendant gives an undertaking with two sureties, and more than four months after the issuance of the at- tachment bankruptcy proceedings are had, the discharge in bankruptcy will not prevent judgment being recovered and the sureties being bound therefor. (Holyoke v. Adams, 10 N. B. E. 370.) Likewise, a bankrupt's- certificate of discharge, duly pleaded in an action against him in a state court, will not dissolve an attachment made by virtue of the writ in the action, more than four months prior to the defendant's commencement of proceedings in bankruptcy, which attachment may be enforced by an execution issued upon a special judgment rendered by the court in which the action was entered and prosecuted. (Deighton v. Kelsey et aL, 4 N. B. R 155.) A creditor who obtains a judgment for his debt after his debtor has been adjudicated a bankrupt and takes out execution cannot prove his debt in bankruptcy, and the judgment will not be affected by the cer- tificate of discharga Such creditor cannot oppose the bankrupt's dis- charge. (In re Gallison et aL, 5 N. B. E. 353; 3 LoweU, 73; Fed. Cas. 5308.) A bankrupt court has no jurisdiction to review or modify in any way the decree of a state court granting alimony to a bankrupt's wife. The monthly payments falling due after bankruptcy are due by natural ob- ligation and not by contract, and they are not affected by a discharge.) (In re Garrett, 11 N. B. R 493; 3 Hughes, 385; Fed. Cas. 5353.) In an action to set aside a transfer of property made to defraud cred- itors, the fraudulent holder of the property cannot set up as a defense the debtor's discharge in bankruptcy where the debtor has waived such discharge. (Dewey et aL v. Moyer et aL, 16 N. B. R 1.) Debts in general released by discharge.— AU debts which by their nature are provable are discharged whether they in fact could be 154 LAW OF BAKKEUPTCT. [§ 17, a. proved or not (In re Kingsley, 1 N. B. R. 66; 1 Lowell, 216; 7 Amer. Law Eeg. (N. S.) 453; 15 Pitteb. Leg. J. 235, 277; Fed. Cas. 7819.) Where a principal is released from a debt by his discharge in bankruptcy, he wiU also be released from his contingent liability to his surety for the same debt (Halliburton v. Carter, 10 N. B. R 859.) A bankrupt who purchases the business of another under a covenant to pay his debts and hold him harmless is released by a discharge in bankruptcy, al- though he falsely represents to the vendor that the debts are paid. (Brown et aL v. Broach et aL, 16 N. B. R 296.) Likewise a person con- veying and covenanting that the premises are free from all incum- brances, when in fact they are subject to a mortgage, which the pur- chaser has to pay, is protected by a discharge by a composition. (Wells V. Lamprey, 16 N. R R 205.) And where land is sold and a warranty deed is given, and it is agreed in writing to pay a certain mortgage, and the seller is discharged in bankruptcy, after which the land is sold under the mortgage, the debt is discharged (Parker v. Bradford, 17 N. B. R 485); also a debt on a bond filed by a claimant to obtain the delivery of property is released, although the bankrupt subsequently endeavored to sustain his case by false testimony. (United States v. Rob Eoy, 18 N. B. R 235; 1 Woods, 42; Fed. Cas. 16179.) A judgment recovered in an action in assumpsit pending proceedings in bankruptcy is barred by a discharge. (In re Stansfleld, 16 N. R R 268; 4 Sawy. 834; Fed. Cas. 18294) A surety on the bond of a United States officer is released from his liability thereon by a discharge in bankruptcy. (United States v. Throck- morton, 8 N. B. R 809; 18 Int Rev. Rec 54; Fed. Cas. 165ia) M a creditor proves his debt against a bankrupt, the only effect is that he cannot afterwards maintain a suit against the bankrupt on the debt, and proceedings pending thereon against the bankrupt, and unsatis- fied judgments already obtained thereon against the bankrupt, are dis- charged. (In re Levy, 1 N. B. R 66; 2 Ben. 169; 1 Amer. Law T. Rep. Rep. Bankr. 122; Fed. Cas. 8297.) A bankrupt who purchases the business of another under a covenant to pay his debts and hold liim harmless is released by a discharge in bankruptcy, although he falsely represents to the vendor that the debts are paid. (Brown et aL v. Broach et aL, 16 N. R R 296.) In an action by Ken-holders a judgment may be rendered limiting the plaintiffs to a sale of the land, where it appears that, by reason of their discharge in bankruptcy, the defendants are released from personal lia- bility on the judgment. (Reed v. BuUington, 11 N. R R 408.) Where a bankrupt has bought notes from an executor of an estate under cir- cumstances which were held to be constructive or legal fraud, but he had been guilty of no actual fraud, and he was afterwards discharged in bankruptcy, and suit is brought against him to recover the value of the notes, the discharge is a good defense. (Neal v. Scruggs et aL, Ex'n etc., 17 N. B. R 102.) § 17, a.] DEBTS NOT AFFECTED BY DISOHAEGE. 155 A claim for damages for wrongful conversion of personal property is provable and a discharge in bankruptcy would release the bankrupt from Buch a claim; and his plea of bankruptcy interposed in a suit brought in a state court to recover such damages is a complete bar. (Coles v. Eoach, 10 N. B. K. 288.) Where, after the commencement of bankruptcy proceedings, the debtor gives a bond to dissolve an attachment issued more than four months before the commencement of proceedings, he may plead his discharge in an action upon the bond. (Hamilton v. Bryant, 14 N. B. R. 479; ch. 176.) Where a bankrupt, prior to bankruptcy, sells land under a covenant for indefeasible title, when in fact the wife of a former owner has a dower interest not relinquished, the claim for breach of covenant in the event of the wife surviving her husband and asserting her rights is not such an " imliquidated " or " contingent " claim as maybe proved in bank- ruptcy, and in an action on such claim a discharge in bankruptcy is a complete defense. (Eiggin & Magwire, 8 N. B. E. 484; 15 Wall. 549.) A claim for a breach of warranty is such a claim as should be proved in a bankrupt court, and therefore the defendant's discharge in bank- ruptcy is a bar to such a claim, it having accrued prior to proceedings in bankruptcy. (Williams v. Harkins, 15 N. B. E 34) A judgment obtained on a breach of a promise to marry is barred by the discharge of the bankrupt. (In re Sidle, 2 N. B. E. 77; Fed. Caa. 12844) An injunction restraining creditors from suing pending adjudication is dissolved by a debtor's discharge in bankruptcy. (In re Thomas, 3 N, B. R 7; Fed. Cas. 13890.) A discharge in bankruptcy is a complete bar to a suit on a claim prov- able under the bankrupt law, but its dismissal does not prejudice pro- ceedings on it under that law. (Humble v. Carson, 6 N. B, E. 84) OHAPTEE IV. COURTS AND PROCEDURE THEREIN. Sec. 18. Process, pleadings, and adjudications. — a. Upon the filing of a petition for involuntary bankruptcy, service thereof, with a writ of subpoena, shall be made upon the person therein named as defendant in the same manner that service of such process is now had upon the commence- ment of a suit in equity in the courts of the United States, except that it shall be returnable within fifteen days, unless the judge shall for cause fix a longer time ; but in case per- sonal service cannot be made, then notice shall be given by publication in the same manner and for the same time as provided by law for notice by publication in suits in equity in courts of the United States. [Act of 1867. Seo. 40. . . . That upon the filing of the petition authorized by the next preceding section, if it shall appear that sufficient grounds exist therefor, the court shall direct the entry of an order requiring the debtor to appear and show cause, at a court of bankruptcy to be holden at a time to be specified in the order, not less than five days from the service thereof, why the prayer of the petition should not be granted ; and may also, by its injunctions, re- strain the debtor, and any other person, in the meantime, from making any transfer or disposition of any part of the debtor's property not excepted by this act from the operation thereof and from any interference therewith. ... A copy of the petition and of such order to show cause shall be served upon such debtor by delivering the same to him per- sonally, or leaving the same at his last or usual place of abode ; or, if such debtor cannot be found, or his place of residence ascertained, service shaU be made by publication in such manner as the judge may direct. No further pro- ceedings, unless the debtor appear and consent thereto, shall be had unto, proof shall have been given, to the satisfaction of the court, of such service or publication ; and if such proof be not given on the return day of such order, the proceed- § 18, aJ] SEETIOE 01" PEOCESS. 157 ings shall be adjourned and an order made that the notice be forthwith so served or published.] Three or more creditors having provable claims against any persons, amounting in the aggregate in excess of the value of the security held by them, if any, to $500 or over, or if all the creditors of such persons are less than twelve in number, then one of such creditors whose claim equals such amount may file a petition (Sec. 59, 6.) Petitions shaU be filed in duplicate, one copy for the clerk and the other for service on the bankrupt. (Sec. 59, ft) Creditors other than original petitioners may at any time enter their appearance and join in the petition or file an answer and be heard in opposition to the prayer of the petition. (Sec. 59, /.) All process, summons and subpoenas must issue out of the coui-t, and be tested by the clerk, and blanks, with the signature of the clerk and seal of the court, may be furnished to the referee. (Orders III.) The rules of practice in equity adopted by the Supreme Court of the United States on January 7, 1884, and which are still in force, make the following provisions with reference to process : 7. The process of subpoena shall constitute the proper mesne process in all suits in equity, in the first instance, to require the defendant to appear and answer the exigency of the bill ; and, unless otherwise provided in these rules, or specially ordered by the circuit court, a writ of attachment, and, if the defendant cannot be found, a writ of sequestra- tion, or a writ of assistance to enforce a delivery of posses- sion, as the case may require, shall be proper process to issue for the purpose of compelling obedience to any interlocutory or final order or decree of the court. 8. Final process to execute any decree may, if the decree be solely for the payment of money, be by a writ of execu- tion, in the form used in the circuit court in suits at com- mon law in actions of assumpsit. If the decree be for the performance of any specific act, as, for example, for the exe- cution of a conveyance of land or the delivering up of deeds or other documents, the decree shall, in all cases, prescribe the time within which the act shall be done, of which the defendant shall be bound, without further service, to take notice; and upon affidavit of plaintiff, filed in the clerk's office, that the same has not been complied with within the prescribed time, the clerk shaU issue a Writ of attachment against the delinquent party, from which, if attached thereon, he shall not be discharged, unless upon a fuU compliance with the decree and the payment of all costs, or upon a spe- cial order of the court, or of a judge thereof, upon motion and affidavit, enlarging the time for the performance thereof. . . . 168 LAW OF BAITKEUPTOT. [§ 18, a. 10. Every person, not being a party in any cause, wlio has obtained an order, or in whose favor an order shall have been made, shall be enabled to enforce obedience to such order by the same process as if he were a party to the cause; and every person not being a party in any cause, against whom obedience to any order of the court may be enforced, shall be liable to the same process for eniorcing obedience to such orders as if he were a party in the cause. 11. No process of subpoena shall issue from the clerk's office in any suit in equity until the bill is filed in the office. 12. Whenever a bill is filed, the clerk shall issue the process of subpoena thereon, as of course, upon the application of the plaintiff, which shall be returnable into the clerk's office the next rule day, or the next rule day but one, at the election of the plaintiff, occurring after twenty days from the time of the issuing thereof. At the bottom of the subpoena shall be placed a memorandum, that the defendant is to enter his appearance in the suit in the clerk's office in. or before the day at which the writ is returnable ; otherwise the bill may be taken pro confesso. Where there are more than one de- fendant, a writ of subpoena may, at the election of the plaintiff, be issued out separately for each defendant, except in the case of husband and wife defendants, or a joint sub- poena against all the defendants. 13. The service of all subpoenas shall be by delivery of a copy thereof by the officer serving the same to the defend- ant personally, or by leaving a copy thereof at the dwelling house or usual place of abode of each defendant, with some adult person who is a member or resident in the family. 14. Whenever any subpoena shall be returned not executed as to any defendant, the plaintiff shall be entitled to another subpoena, toUes quoUes, against such defendant if he shall require it, until the due service is made. 15. The service of all process, mesne and final, shall be by the marshal of the district, or his deputy, or by some other person specially appointed by the court for that purpose, and not otherwise. In the latter case, the person serving the process shall make affidavit thereof. Upon the return of the subpoena as served and executed upon any defendant, the clerk shall enter the suit upon his docket as pending in the court, and shall state the time of the entry. Process — Jurisdiction, seryice. — In general a subpoena in an equity suit cannot be served by leaving it at the "last " place of abode, but it is to be left at tbe existing, present, dwelling-house, or the existing, present, usual, customary place of abode. (Hyslop v. Hoppock, 6 N. B. E. 553; 5 Ben. § 18, a.] THE PETITION, 159 447 ; Fed. Cas. 6988.) But it has been held a service is sufficiently made by inquiry at the last and usual abode of a bankrupt, and upon obtaining no information as to his whereabouts, in reply to inquiries, except that "he is not in," by leaving a copy of the petition and order vrith one who ap- pears and acts as if she is the mistress of the house and stating that they are for the bankrupt (In re Derby, 8 N. B. R 106 ; 6 Alb. Law J. 423 ; Fed. Cas. 3815; Alabama & Chattanooga E. R. Co. v. Jones, 5 N. B. R. 97; Fed. Cas. 136.) Service of the rule to show cause on the cashier of a corpora- tion which has passed into the hands of a receiver is suiflcient to enable the bankrupt court to proceed to adjudication. (Piatt v. Archer, 6 N. B. R 465; 9 Blatchf. 559; Fed. Cas. 11313.) An order to show cause may be served personally outside the district in which the petition is filed, by any one authorized by the petitioner to make it. Publication can be had only where the party to be served can- not be found or his place of residence ascertained. (Stuart v. Hines, 6 N. B. R 416.) Personal service on one member of a firm out of the jurisdiction of the court in which the proceedings are pending is not suflScient service to give the court jurisdiction to adjudicate against the party so served. (Isett V. Stuart, 16 N. B. R. 191.) A corporation created by the laws of one state is not rendered liable to adjudication in bankruptcy by process served in another state, by the fact that it carries on business in the latter state, and that the process had been delivered to the officers thereof found therein. (Alabama & Chattanooga R R Co. v. Jones, 5 N. B. R 97; Fed. Cas. 126.) A warrant which fails to contain a list of creditors with their respective places of residence and the amount of their respective debts is void. (In re Hall, 2 N. B. R. 68; 16 Pittsb. Leg. J. 53; Fed. Cas. 5922.) A petition in involuntary bankruptcy was filed against a debtor. It was signed by six creditors and verified by the first five, they alleging that they verily believed that they constituted one-fourth of the credit- ors, which they knew to be untrue. It was held that the court upon whom such fraud was practiced had power and it was its duty to set aside any proceeds obtained by the deception. (In re Keller et al., 18 N. B. R 10; Fed. Cas. 7647; In re Scammon, 11 N. B. R 380; 6 Biss. 195; 7 Chi Leg. News, 42; 9 West. Jur. 175; Fed. Cas. 13439.) Pleading — The petition. — All petitions must be printed or written out plainly, without abbreviations or interlineations, except where such may be necessary for purpose of reference. (Orders V.) As the petition in bankruptcy is in the nature of a pleading, it should set forth all the facts material to the claim made by the creditor to an adjudication, so that the debtor may be distinctly apprised of what he is called upon to answer. (In re Raynor, 7 N. B. R. 537; 11 Blatchf. 43; 1 Amer. Law Rec. 736; Fed. Cas. 11597; In re Randall et aL, 3 N. B. R 4; Deady, 557; 2 Amer. Law T. Rep. Bankr.69; IChL Leg.News,209; Fed. Cas. 11551; In re Chappel, 4 N. B. R 176 ; Fed. Cas. 3613.) A charge of an act of bankruptcy in the alternative is not sufficient (In re Hanibel et aL, 15 N. B. R 233; 9 Chi. Leg. News, 165; IGO LAW OF BANKEUPTCT. [§ 18, a. 15 Alb. Law J. 371 ; 24 Pittsb. Leg. J. 152; Fed. Cas. 6023.) Where a pref- erence is alleged it is not necessary to state that such preference was in fraud of the Bankrupt Act, but the name of the person preferred should be set forth, (In re Hadley, 12 N. B. R. 366; Fed. Cas. 5894); and where a petition sets forth a fraudulent conveyance as an act of bank- ruptcy, the intent to defraud should be alleged as a fact, and not as a matter of information and belief. (In re Orem & Co. v. Harley, 3 N. B. E. 62; Fed. Cas. 10567.) It is not requisite that an agent of a petitioning creditor in bank- ruptcy proceedings shall set forth the authority by which he acts. (In re CaL Pac. R. R. Co., 11 N. B. R. 193; 3 Sawy. 240; 2 Cent. Law J. 79; Fed. Cas. 2315.) Where the petition in bankruptcy averred that a firm were manufacturers, and that they made and delivered certain notes, etc., which were negotiated but not paid, it was held not necessary to aver that the notes were given for purposes of their manufacturing busi- ness (In re Kenyon et aL, 6 N. B. R. 238); but in another case it was said that a petition based on the failure of an alleged bankrupt as a manu- facturer to pay its notes, which does not state that the notes were made or passed in its alleged business, is defective. (In re Capital Publishing Co., 18 N. B. R. 819.) The allegations in the deposition in proof of the act of bankruptcy should be made upon the personal knowledge of the deponent, and should make out a prima fade case. Such allegations should be made by separate deposition, and not in the petition itself. (In re Hadley, 12 N. B. R. 366; Fed. Cas. 5894) Amendment of petitions. — Amendments may be allowed by the courts, but they must be printed or written, signed and verified like original petitions. (Orders XL) Where one partner files a petition against his copartner, but omits to state the residence of his copartner, he may supply the omission (In re Vanderhoof et aL, 18 N. B. R. 543; Fed. Cas. 16841; In re Jersey City Window Glass Co., 1 N. B. R. 113; 7 Amer. Law Reg. (N. S.) 419; 1 Amer. Law T. Rep. Bankr. 61; Fed. Cas. 7293); and if the proof differs from the allegations, the petition should be amended to conform to the proof (In re Houghton, 1 N. B. R. 121; Fed. Cas. 6328); also where a debtor, being insolvent, sufl:ers his property to be taken on legal process with intent to give a preference, and the petition fails to allege the act of suflEerance to have been done when the debtor was insolvent or in contemplation of insolvency, an amendment of the petition will be allowed (In re Craft, 1 N. B. R. 89; 2 Ben. 314; Fed. Cas. 3816); or where the name of a creditor is stated in the petition asserting a claim by a proper averment, but omitting the amount, the claim may be amended by adding the amount, if done in good faith (In re Blair et aL, 17 N. B. R. 492; 10 Chi Leg. News, 278; 25 Pittsb. Leg. J. 123; Fed. Cas. 1481); or where the amendment is merely the formal assertion of an averment which appeared in substance in the petition, and of which evidence was received at the trial without objection (In re Craft, 3 N. B. R. 44; 6 Blatchf. 177; Fed. Caa 3317; In re McKibben, 13 N. B. R. 97; Fed. Cas. 8859); or § 18, a.] AMENDMENT OF PETITIONS. 161 a bankrupt may amend his petition after adjudication so as to bring in his copartner in order to effect a discharge of copartnership debts (In re Little, 1 N. B. R. 74; 2 Ben. 86; 15 Pittsb. Leg. J. 268; Fed. Cas. 6390); and an amendment introducing six judgment creditors, after the first meeting of creditors, has been permitted. (In re Ratcliffe, 1 N. B. R. 98; 25 Leg. Int. 92; 6 Phila. 466; 1 Amer. Law T. Rep. Bankr. 47; 15 Pittsb. Leg. J. 343; Fed. Cas. 11578.) In general, petitioning creditors may amend their petition on the trial (Hardy et aL v. Bininger et al., 4 N. B. R. 77; Fed. Cas. 6057), and cred- itors whose rights accrue after admitted proof of claim may amend their petition. (In re Jones, 2 N. B. R. 20; Fed. Cas. 7447.) A defective petition may be amended after argument and before judgment (In re Waite et aL, 1 N. B. R. 84; 1 Lowell, 207; Fed. Cas. 17044); also where a jury has been called but not sworn. (May v. Harper & Atherton, 4 N. B. R 156; 4 Brewst. 253; Fed. Cas. 9333.) The court may allow supplemental affidavits or proofs to be filed, if the affidavits to the petition or the depositions as to indebtedness and acts of bankruptcy are not suflSoient. (In re Hanibel et al., 15 N. B. R. 333; 9 Chi Leg. News, 165; 15 Alb. Law J. 271; 24 Pittsb. Leg. J. 152; Fed. Cas. 6023.) A voluntary bankrupt who, after considerable delay, desires to amend his petition in matters affecting the jurisdiction of the court, should state in his application why his petition was not originally in proper form, and why he did not apply sooner, and should file with his appli- cation an affidavit that the facts necessary to give jurisdiction under the statute existed at the time the petition was filed, and he should state specifically what words he desires to strike out and what to insert. (In re Wood, 13 N. B. R. 96; 6 Ben. 339; 1 N. Y. Wkly. Dig. 366; Fed. Cas. 17935.) When amendments denied. — Ainendments vrQl not be permitted for the purpose of introducing into the petition entirely new acts of bank- ruptcy (In re Reed et aL, 1 N. B. R. 137; 1 Amer. Law T. Rep. Bankr. 79; Fed. Cas. 11644) ; nor wUl creditors who have recklessly and falsely made and sworn to a petition, knowing it to be false, be permitted to have others join in and carry it on (In re Keiler et aL, 18 N. B. R 10; 6 Chi. Leg. News, 42; 9 West. Jur. 175; Fed. Cas. 7647); and an involuntary petition cannot be amended by adding a new party after aU the testi- mony has been taken, and the case is on hearing before the court. (In re Pitt et aL, 14 N. B. R 59; 8 Ben. 389; 33 Pittsb. Leg. J. 196; Fed. Cas. 11188.) Principles g'OTerning allowance. — The district court, in allowing amendments to bankruptcy petitions, should be governed by substantially the same principles as those which govern the allowance of amendments in similar cases in other courts. (In re Reed et aL, 1 N. B. R 137; 1 Amer. Law T. Rep. Bankr. 79; Fed. Caa 11644) 11 162 LAW OF BANKEUPTOT. [§ 18, », When special reasons required.— Special reasons are required for the allowance of amendments to sworn petitions or in other pleadings which are required to be verified by the oath of the party ; and where the object is to introduce new facts or to change essentially the grounds of the prosecution or defense, the courts are disinclined to allow such, amendments except for very special reasons, and in cases where they are clearly required in furtherance of justice, and are applied for with- out unreasonable delay (In re Eeed et aL, 1 N. B. R. 137; 1 Amer. Law T. Rep. Bankr. 79; Fed. Cas. 11644; In re Keiler et aL, 18 N. B. R. 10; 7 ChL Leg. News, 42; 9 West. Jur. 175; Fed. Cas. 7647); though to the end that thorough justice may be done to all parties, great latitude of amend- ment will be permitted, up to the final discharge in bankruptcy. (In re Pierson, 10 N. B. R. 193; Fed. Cas. 11154.) One petitioning: creditor cannot object to amendment. — A creditor joining in an involuntary petition in good faith cannot afterwards ob- ject to an amendment which is necessary to the prosecution thereof. (In re Sargent, 13 N. B. R. 144; 1 N. Y. Wkly. Dig. 435; Fed. Cas. 13361.) Objections to amended petitions. — Where an amended petition is faulty, objection maybe taken to it even though no objection was made to the same fault which the original petition contained. (In re Western Savings Trust Co., 17 N. B. R. 413; 4 Sawy. 190; Fed. Cas. 17442.) Practice in suits by assignees. — In suits by an assignee his representa- tive character need not be averred in the pleadings. If a duly certified copy of the assignment be put in evidence, it is not necessary to prove all the steps in the proceedings. A statement in a complaint that the plaintifi" is assignee in bankruptcy may be treated as surplusage or as descriptio personce. (Dambmann v. White et al., 12 N. B. R 438.) In a suit by the assignee to recover of a creditor money paid by the bankrupt by way of preference, the declaration must allege that the payment was made within four months before the filing of the petition in bankruptcy or it will be bad on demurrer. (Maurer v. Frantz, 4 N. B. R. 143; Blau V. Brookmire et aL, 4 N. B. R. 57.) Where an assignee in bankruptcy files a bill in equity to set aside conveyances made in fraud of crebitors, alleging that the deeds were without consideration, and were designed merely to defraud creditors, such allegations are sufficient, and it is not necessary to charge the circumstances which may conduce to prove the general charge. (Johnson, Ass., et aL v. Helmstaeder et aL, 19 N. B. R. 71.) Practice in suits in general. — Where plaintiflf seeks to recover a pref- erence, it is sufficient to make the allegations in accordance with the law as it was when the preference was given, (Warren et aL v. Garber, 15 N. B. R 409; 1 Hughes, 365; Fed. Cas. 17196.) Under a general aver- ment that the plaintiif was in possession of his own property, proof may be given that he acquired the title by means of proceedings in bank- ruptcy. The complaint need not state how the plaintiff acquired titla (Dambmann v. White et aL, 13 N. B. R 438.) The sale of goods by a § 18, h.] APPEAKANOE. 163 vendor, who was afterward adjudicated bankrupt, was attacked on the ground that it was made by an insolvent, and that the vendee had rea- sonable cause to believe him insolvent The court held that the bill must allege that the defendant knew the fraud and such knowledge must be proved. (Crump, Ass., v.. Chapman, 15 N. B. R. 571; 1 Hughes, 183; 24 Pittsb. Leg. J. 169; Fed. Cas. 3455.) Where a resolution of com- position was approved, which provided that it should be void unless con- summated within a certain time, a creditor having brought action on his original claim, and the defendant set up such composition agreement and its performance as to the creditor, the answer was not sufficient, as it did not aver the consummation as to all the creditors. (Evans et aL V. Gallantine, 18 N. B. R 311.) A restraining order directed to the debtor and "all other persons " need nolj contain the names of those per- sons if the order is served upon the persons to be restrained. (In re Sady Bryan Mining Ca, 6 N. B. R 353; Fed. Cas. 7980.) A proceeding in bankruptcy from the time of its commencement until the final settlement of the estate is but one suit. (Sandusky v. First National Bank of Indianapolis, 13 N. B. R. 176; 23 Wall. 389.) Demurrer. — A demurrer will be sustained to a bill to set aside a con- veyance in fraud of creditors, to the joinder of the purchaser of the property, without averring that he had knowledge of the fraud. (Pratt V. Curtis, 6 N. B. R 139;. Fed. Cas. 11375.) A demurrer to a bill in equity brought by the assignee, on the ground that the complainant has a com- plete remedy at law, will be overruled where the facts show that ques- tions of fraud, trust and partnership are all involved in the case at issue. (Taylow, Ass., v. Rasoh & Bernart, 5 N. B. R 899; 4 Amer. Law T. 301; Fed. Cas. 13801.) If a demurrer to an Intervening petition is overruled, the demurrant is entitled to answer and be heard on the merits. (Jor- dan, Ass., V. Downey, 12 N. B. R. 437.) Objection to an averment on the grounds of insufficiency in setting forth an act of bankruptcy should not be made by demurrer, but by an answer. (In re Orem & Co. v. Har- ley, 3 N. B. R. 62; 3 Bait. Law Trans. 948; Fed. Cas. 10567.) In an acticxn by an assignee to recover real estate, claiming title by virtue of the bankruptcy proceedings, an answer by the defendant setting forth a purchase from the bankrupt, and denying the bankruptcy and impeach- ing the adjudication, cannot be replied to by demurrer; and the defend- ant cannot be denied the right to establish by competent evidence that the adjudication was void. (Stuart v. Aumeller, 8 N. B. R. 541.) J. The bankrupt, or any creditor, may appear and plead to the petition within ten days after the return day, or within such further time as the court may allow. Creditors other than original petitioners may at any time enter their appearance and join in the petition, or file an answer and be heard in opposition to the prayer of the petition. (Sec. 59/.) 164 LAW OF BAIfKEUPTOT. [§ 18, h. Defenses. — A respondent may set forth as many defenses to the pe- tition as he has, but each defense must be pleaded separately. (In re Quimette, 3 N. B. R 140; 1 Sawy. 47; Fed. Cas. 10633.) But where sev- eral distinct allegations of bankruptcy are set forth in the petition, if respondent does not file his answer of denial ia the nature of a special plea to each allegation, he may deny each distinct charge in a general manner. (In re Hawkeye Smelting Co., 8 N. B. E. 385.) In the court of bankruptcy pleading must be special Hence, a mere general denial of the intent with which an act relied upon as an act of bankruptcy ia alleged to have been done is not a good defense to the charge; but the respondent must also allege and prove with what intent he did such act (In re SHverman, 4 N. B. R. 173; 13 Int Rev. Eeo. 52; Fed. Cas. 13855.) The necessary effect of a payment by one creditor to the exclusion of others is to give a preference, and judgment may be given against a re- spondent whose answer sets up no other matter of defense than the denial of the intent, as upon failure to answer. (In re Silverman, 4 N. B. R 173; 13 Int Rev. Reo. 53; Fed. Cas. 12855.) Unless the papers show a case in which the court may exercise a dis- cretion as to granting or witliholding it, leave to file a supplemental an- swer must be granted. (Holyoke et aL v. Adams et al., 13 N. B. R 413.) An answer to a creditor's petition denying the commission of the acts of bankruptcy, and averring that they should not be declared bankrupts for any cause alleged in the petition, amounts to the general issue and no replication is necessary. (Welch v. Dvmham, 3 N. B. R 9; 3 Ben. 488; 1 Amer. Law T. Rep. Bankr. 89; Fed. Cas. 4143.) In an answer a general denial amounts to no more than a denial of a conoltision of law. (Lothrop V. Drake et aL, 13 N. B. R 472; 91 U. S. 516.) If any allegation is to be taken as true simply because it is not denied, it is only an allegation of some fact which is presumed to be within the knowledge of the party answering. (White v. Jones, 6 N. B. R 175; Fed. Cas. 17550.) A defendant who, on the return day of the rule to show cause why he should be adjudged bankrupt, appears, but neither files a plea, demurrer nor demand for trial by jury, but obtains a continuance, is not entitled on the day to which the case is continued to demand trial of the issues by a juiy, but the court may permit a plea to be filed and the issues to be tried by the court. (In re Sheriy, 8 N. B. R 143.) A bankrupt moved to set aside his default for not appearing on the return day of the order to show cause, on the ground that the debt of the petitioning creditor was not provable, as it was based wholly upon an unlawful consideration. It was held that the motion came too late and without any excuse; that the defense, when made by the debtor liimself, founded as it is in violation of the law by himself, is not to be favored by the court (In re Neilson, 7 N. P. R 505; Fed. Cas. 10090.) In order that the opposite party may be heard and the court may deter- mine whether there has been inexcusable laches, or whether reasons ap- § 18, 0.] VEEIFIOATIOK. 165 I)ear which are recognized as giving autliority for refusing the motion, the defendant should apply by motion for leave to file a supplemental answer. (Holyoke et aL v. Adams et al., 13 N. B. R. 413.) Plea of discharge.— See Dischakgb, ante, pp. 139, 140. Jurisdiction. — A creditor attacking the jurisdiction of the bankrupt court need not first file formal proof of his debt, for this would import a recognition of the jurisdiction. He must, however, show that he is a creditor and that he has an interest to protect. (In re Boston H. & E. R. R. Co., 6 N. B. R 309; 9 Blatchf. 101; 6 Amer. Law Rev. 365; Fed. Cas. 1677.) Where the want of jurisdiction appeared on the face of the peti- tion, but the respondents consented to the jurisdiction, it was held that the court should take notice of the point of its own motion. (In re Hop- kins V. Carpenter et aL, 18 N. B. R. 339; Fed. Cas. 6686.) Where a vol- untary bankrupt desires to amend his petition in a matter affecting the jui-isdiction of the court, after a long delay, his application should show why the petition was not originally in proper form, why the amendment was not applied for sooner, and should be accompanied by an affidavit that, at the time the petition was filed, the facts necessary to give juris- tion existed. (In re Wood, 13 N. B. R. 96; 6 Ben. 339; 1 N. Y. Weekly Dig. 366; Fed. Cas. 17935.) A party having once appeared cannot withdraw appearance on the ground that the court has not jurisdiction, but must raise such ques- tion by demurrer. (In re Ulrick et aL, 3 N. B. R. 34; 3 Ben. 355; Fed. Cas. 14337.) A state court will not grant an injunction to restrain a party from applying for the benefit of the Bankrupt Act of the United States. (Fillingin v. Thornton, 12 N. B. R. 93.) c. All pleadings setting up matters of fact shall be verified under oath. Verification. — The provisions of the statute as to verification of the petition must be strictly followed. It is a matter of substance and right, and is not to be dispensed with under cover of an apparent compliance with the act. (In re Keller et aL, 18 N. B. R. 10; 7 Chi Leg. News, 42; 9 West. Jur. 175; Fed. Cas. 7647.) The affidavit to a petition, if defective in form, may be amended so as to conform to law. (In re Sargent, 13 N. B. R. 144; 1 N. Y. Weekly Dig. 435; Fed. Cas. 13361.) When several join in a petition in separate and distinct rights, each stands individually, and a verification by or on behalf of each petitioner is required. (In re Simmons, 10 N. B. R. 353; 1 Cent. Law J. 440; Fed. Cas. 13864.) If the name of a petitioner in the body of a petition is omitted from the veri- fication, the petition is imperfect; in a case free from other difficulties, supplementary proof may, in the discretion of the court, be received nunc pro tunc to establish the authority of the agent to sign the petition. (In re Rosenfield, 11 N. B. R. 80; 3 Amer. Law Rec. 724; 1 Cent. Law J. 166 LAW OF BAIJKETIPTCT. [§ 18, d. 583; Fed. Cas. 12061.) When the agent is clothed with full authority and is able to present the proper authentication of the petition required by the forms, such petition should be entertained, although the petition- ing creditor does not, in person, sign or swear to it. (In re Eaynor, 7 N. B. R 527; 11 Blatchf. 43; 1 Amer. Law Eea 736; Fed. Cas. 11597. But see In re Butterfield, 6 N. B. R 257.) Upon a petition by a corporation, a verification by an agent not an officer of the corporation is sufficient, but the authority of the agent must be set forth in the affidavit, or other- wise established. (In re Hanibel et aL, 15 N. B. E. 233; 9 ChL Leg. News, 165; 15 Alb. Law J. 271; 24 Pittsb. Leg. J. 153; Fed. Cas. 6023.) So long as it appears that the petitioning creditor authorized the institution of the proceedings in his behalf and so became liable for costs, the matter of signing and authentication is purely formal and unimportant to any right of the debtor. (In re Eaynor, 7 N. B. R 527 ; 11 Blatchf. 43 ; 1 Amer. Law Eea 736; Fed. Cas. 11597.) An attorney, to verify a petition, affi- davit or proof, must show his authority. (In re Sargent, 13 N. B. R 144; I N. Y. Weekly Dig. 435; Fed. Cas. 12361.) And where a petition is veri- fied by an attorney, the non-residence of his principal should be alleged directly and not by way of recital (In re Hadley, 15 N. B. R 366; Fed. Cas. 5894) Creditors who sign a petition must be held to good faith in a matter, and cannot recklessly file a petition for the purpose of making the alleged bankrupt file a statement of his creditors. (In re Scammon, II N. B. R 280; 6 Biss. 195; 7 Chi Leg. News, 42; 9 West Jur. 175; Fed. Cas. 12420.) It was held imder the act of 1867, as amended, although the verifica- tion of the petition was defective, a case was pending in bankruptcy so that a composition might be proposed and effected, and a defect in the verification of the creditor's petition was waived by the debtor, in the absence of fraud, when he called a meeting in composition. (Ex parte Jewett, 11 N. B. R 443; 2 LoweU, 393; Fed. Cas. 7303.) In courts where answers were verified in common-law actions the answer to involuntary petitions in bankruptcy must always be verified. (In re Findlay, 9 N. B. R 83; 5 Biss. 480; 6 Chi Leg. News, 94; Fed. Cas. 4789.) A plea setting up a discharge in bankruptcy, if a plea in abate- ment, is bad if not sworn to. If such plea is in bar, when the notes and bond sued upon were given after bankruptcy, it is sufficient (Beeson et aL V. Howard, 11 N. B. R 486.) d. If the bankrupt, or any of his creditors, shall appear, ■within the time limited, and controvert the facts alleged in the petition, the judge shall determine, as soon as may be, the issues presented by the pleadings, without the interven- tion of a jury, except in cases where a jury trial is given by this act, and makes the adjudication or dismiss the peti- tion. § 18, d.] DETEEMINATION OF ISSUES. 167 [Act of 1867. Seo. 41. And he it fv/riher enacted, That on such return day or adjourned day, if the notice has been duly served or published, or shall be waived by the appear- ance and consent of the debtor, the court shall proceed sum- marily to hear the allegations of the petitioner and debtor, and may adjourn the proceedings from time to time, on good cause shown, and shall, if the debtor on the same day so demand in writing, order a trial by jury at the first term of the court at which a jury shall be m attendance, to ascer- tain the fact of such alleged bankruptcy.] Determination of issues. — If the respondent desires to controvert the petition, he should, on the return day of the order to show cause, appear before the court and allege that the facts set forth in the petition are not true, and demand a hearing by the court, or a trial by jury, and it has been held that the court should make a record of such allegation and demand ; but no portion of these proceedings previous to the making of the record by the clerk is required to be in writing, except the de- mand for a trial by jury. (In re Heyette. 8 N. B. R 332; Fed. Oas. 6444.) Courts have no authority to exercise discretion in the entertainment of actions over which they are given jurisdiction when properly applied to for the exercise thereof. (Cook y. Waters et aL, 9 N. B. E. 155.) In answer to an order to show cause, the burden is on the respondent to prove that the facts set forth in the petition are not true, in order to defeat an adjudication of bankruptcy against him. (In re Price & Miller, 8 N. B. R. 514; Fed. Cas. 11411.) If a cause be heard on petition and answer, the statements in the answer will be deemed to be true. (Jor- dan, Ass., V. Downey, 13 N. B. R. 437.) In ordinary cases of involuntary proceedings in bankruptcy against corporations, it is to be inferred, barring legal restrictions, that they will have power to appear by counsel, and that the usual confidence will ex- ist between counsel and client, and that the counsel will act within the scope of their authority. (Leiter et aL v. Payson, 9 N. B. E. 305; 6 Chi. Leg. News, 157; Fed. Cas. 8336.) Where parties to bankruptcy proceedings appear on the return day or adjourned day and join issue, and no further proceedings or adjourn- ment is had, the case is to be considered as pending from day to day tmtil disposed of. (In re Buchanan, 10 N. B. E. 97; Fed. Cas. 2073.) A bankrupt who takes issue on facts alleged in the petition and demands a trial by jury waives his right to object to the petition on the grounds of irregularity. (In re McNaughton, 8 N. B. R 44; Fed. Cas. 8912.) The adjourned day on which, if the petitioning creditor does not ap- pear and proceed to an adjudication, another creditor may appear and prosecute, is any day to which the proceedings on the order to show cause may be adjourned for the purpose of inquiring into the allegations 168 LAW OF BAITKRUPTOT. [§ 18, e,fy g. of the acts of bankruptcy. (In re Laoey, Downs & Co., 10 N. B. E. 477; Fed. Cas. 7965.) A petitioning creditor may offer proof tending to show the debtor's insolvency, and the debtor must explain the evidence, as he is best acquainted with the condition of his own affairs. The peti- tioner is not obliged to make full proof of the insolvency. (In re Oregon Bulletin Printing and Publishing Co., 13 N. B. R. 503; 1 Cin. Law BuL 87; Fed. Cas. 10559.) A bankrupt court has no authority to deprive the assignee of the pos- session of the bankrupt's property without due process of law, unless the parties consent to a trial by the court. (Wood Mowing and Reaping Machine Co. v. Brooke, 9 N. B. E. 395; 3 Sawy. 576; Fed. Cas. 17980.) Where the petitioning creditor, the bankrupt, and aU the creditors who had proved their debts, with a single exception, desired the court to dismiss the entire proceedings, it was held that the district court had power so to do, and the proceedings were dismissed. (In re Miller, 1 N. B. E. 105; 1 Amer. Law T. Eep. Bankr. 131; Fed. Cas. 9553.) A judge who has been a depositor in an insolvent banking institution, but who has sold his claim, is not thereby disqualified from sitting in the matter, although the motive on the part of the purchaser of the claim may have been to remove the disqualification. (In re John Sime & Co., 7 N. B. R 407; 3 Sawy. 320; 5 Pac. Law Eep. 317; Fed. Cas. 12860.) Where the court is without jurisdiction, no voluntary act of the de- fendant can give such jurisdiction, and the point can be raised even after appearance and answer. (Jobbins v. Montague, 6 N. B. R. 509; Fed. Cas. 7330.) e. If on the last day within which pleadings may be filed none are filed by the bankrupt or any of his creditors, the judge shall on the next day, if present, or as soon thereafter as practicable, make the adjudication or dismiss the petition. f. If the judge is absent from the district, or the division of the district in which the petition is pendiag, on the next day after the last day on which pleadings may be filed, and none have been filed by the bankrupt or any of his credit- ors, the clerk shall forthwith refer the case to the referee. g. Upon the filing of a voluntary petition the judge shaU hear the petition and make the adjudication or dismiss the petition. If the judge is absent from the district, or the di- vision of the district in which the petition is filed at the time of the filing, the clerk shaU. forthwith refer the case to the referee. § 18, g.] ADJUDICATIONS. 169 [Act of 1867. Seo. 42. . . . That if the facts set forth in the petition are found to be true, or if default be made by the debtor to appear pursuant to the order, upon due proof of service thereof being made, the court shall adjudge the debtor to be a bankrupt, and, as such, subject to the pro- visions of this act, and shall forthwith issue a warrant to take possession of the estate of the debtor. The warrant shall be directed, and the property of the debtor shall be taken thereon, and shall be assigned and distributed in the same manner and with similar proceedings to those hereinbefore provided for the taking possession, assignment, and distribu- tion of the property of the debtor upon his own petition.] The referee exercises the powers of the judge for taking possession of and releasing the property of the bankrupt in the event the clerk issues a certificate showing the absence of the judge from the judicial dis- . trict or the division of the district, or his sickness or inability to act. (Seo. 38—3.) Adjudications. — The petition, whether voluntary or involuntary, ad- judication and warrant, give the court full and complete jurisdiction for all purposes whatsoever. (In re Archenbrown, 11 N. B. R. 149; 7 Chi. Leg. News, 99; Fed. Cas. 504) Where a petitioner in bankruptcy fails to attend before the register on the day fixed in the order of reference, he may, nevertheless, be adjudicated a bankrupt within a reasonable time thereafter. (In re Hatcher, 1 N. B. E. 91; 1 Amer. Law T. Rep. Bankr. 48; Fed. Cas. 6310.) It must be proved by legal evidence that the facts set forth in the petition are true before a debtor can be brought into court to show cause against the same, or be in any manner disturbed in his aflfairs by reason of the filing of the petition. (In re Rogers, 10 N. B. R. 444; 1 Cent. Law J. 470; Fed. Cas. 12003.) In cases of involun- tary bankruptcy, an order of the court of bankruptcy is necessary to ad- judge the party proceeded against a bankrupt, and a warrant cannot issue against his property xmtil such an order has been made. (Maxwell V. Faxton, 4 N. B. R. 60.) Where a decree is not announced and deliv- ered by the judge until a date subsequent to the one on which it was signed, it only takes effect from the latter date. (In re Boston, H. & E. E. R. Co., 6 N. B. R. 233; 9 Blatchf. 409; 6 Amer. Law Rev. 583; Fed. Cas. 1678.) An adjudication of bankruptcy is not a conclusive finding of a fact which tends to defeat the jurisdiction of the court over the alleged bankrupt. (In re Goodfellow, 3 N. B. R. 114; 1 Lowell, 510; 3 Amer. Law T. Rep. Bankr. 69; 1 Amer. Law T. Rep. Bankr. 179; Fed. Cas. 5536.) The adjudication of bankruptcy is in the nature of a statute execution for all the creditors, and the assignee, as their representative, may en- force against the debtor every right a judgment creditor could enforce. (BamewaU et aL, Ass., v. Jones et aL, 14 N. B. R. 378; Fed. Cas. 1037.) In 170 LAW OF BANKEUPTOY. [§ 18, g. Toluntary petitions in bankruptcy, the filing of the petition terminates the right of the bankrupt to dispose of his property, while in involuntary petitions such right ceases upon adjudicatioiL (In re Dillard, 9 N. B. E. 8; 2 Hughes, 190; 6 Amer. Law T. Rep. 490; 21 Pittsb. Leg. J. 83; Fed. Cas. 3913; Maxwell v. Faxton, 4 N. B. R. 60.) Where a petition for ad- judication contains a prayer for an injunction restraining the bankrupt from paying out money, which is granted, the injunction fails when the debtor is adjudged bankrupt. (In re Kintrig, 3 N. B. R. 53; Fed. Cas. 7833.) An adjudication against an infant who does not appear by a guardian ad litem cannot be upheld; and the ratification of such an adjudication by the minor after becoming of age cannot be construed as an afiirmanoe of the debt on which it was based. (In re Derby, 8 N. B. R. 106; 6 Alb. Law J. 438; Fed. Cas. 3815.) Where a court reinstates a proceeding in bankruptcy without notice to or appearance of the debtor, such reinstatement is without authority, and an adjudication following it is absolutely void, and the sheriff will not be protected by an order issued therein directing the payment of naoney to an assignee. (Gage et aL v. Gage, 15 N. B. R. 145.) In the absence of fraud the original adjudication is conclusive on aU creditors, and cannot be disputed upon the question of granting a dis- charge (In re Ordway Brothers, 19 N. B. R. 171; 19 Alb. Law T. 483; Fed. Cas. 10552); nor can it be assailed in a collateral action. (Sloan v. Lewis, 13 N. B. R. 173; 33 WalL 150.) When adjudication Tvill not be set aside. — An adjudication will not be set aside on the ground that the proper portion of creditors did not unite in the petition, unless there be fraud, bad faith or collusion in obtaining it (In re Funkenstein, 14 N. B. R 313; 3 Sawy. 605; 8 Chi Leg. News, 345; 3 Cent. Law J. 448; 3 N. Y. Wkly. Dig. 93; Fed. Cas. 5158); nor because of the co-operation of the debtor in securing creditors, by lawful means, to unite in an involuntary petition (In re Duncan et aL, 14 N. B. R. 18; 8 Ben. 365; Fed. Cas. 4131); nor for the reason that, on the filing of an involuntary petition, debtor defaulted (In re Hopkins, 18 N. B. R. 396; 36 Pittsb. Leg. J. 130; Fed. Cas. 6684); nor because the petition was procured by bankrupt himself as a voluntary one, to ob- viate the necessity of obtaining the assent of the requisite number and value of creditors in case of inadequacy of assets, where the reqmred number of creditors have signed the petition. (In re Matot et aL, 16 N. B. R. 485; 5 N. Y. Wkly. Dig. 529; Fed. Cas. 9283.) Upon a voluntary petition alleging that the bankrupts composed the firm of G. & W., they were adjudicated. Two years later it was held in a state court that one A. was a general partner in the firm. Afterwards a petition was filed to set aside the adjudicatioa The court held that as an interval had elapsed since the adjudication and rights of other parties had arisen under and adapted to it, the application should be denied. (In re Grif- fith et aL, 18 N. B. R. 510; 26 Pittsb. Leg. J. 140; Fed. Caa 5330.) § 19, a.] JTJKT TEIALS. 171 A stockholder of a corporation will not be heard, after the lapse of nearly a year, to impeach the correctness of an adjudication in bank- ruptcy, he knowing all the time all the facts in the case and knowing of the proceedings in bankruptcy. (In re Baltimore County Dairy Ass'n, 11 N. B. R. 253; S Hughes, 350; 3 Md. Law Eep. 297; Fed. Cas. 828.) Contest of adjndication. — An adjudication in bankruptcy may be contested by an attaching creditor (In re Jack, 13 N. B. E. 296; 4 Amer. Law Rec. 453; 1 Woods, 549; Fed. Cas. 7119) on the ground that, though not a party to bankruptcy proceedings, the requisite number and amount of creditors have not joined in the petition. (In re Hatje, 13 N. B. R 548; 6 Biss. 436; Fed. Cas. 6215.) The receiver of a corporation which has been adjudicated a bankrupt on petition of a trustee is entitled to be heard on a motion to set aside the adjudication. (In re Atlantic Mutual Life Insurance Co., 16 N. B. R. 541; 9 Ben. 280; 16 Alb. Law J. 453; 24 Int. Rev. Rec. 13; Fed. Cas. 638.) It is competent for a corporation or an individual against whom a petition was filed, where the attorney for such corporation or individual appeared and gave any waiver of time or other right and admitted the charge brought against it, to appear within a reasonable time and move the court to have the proceedings set aside, providing there has been no unusual delay. (In re Republic Ins. Co., 8 N. B. R 317; Fed. Cas. 11706.) An adjudication was set aside where debtor failed to comply with the requirements of an act passed the day the petition was filed. (In re Carrier & Baum, 13 N. B. R 308; 33 Pittsb. Leg. J. 57 ; Fed. Cas. 2443.) Under the act of 1867 it was held that the fact that the petitioning creditor and the debtor are brothers warrants the court in scrutinizing the claim closely, but not in inferring fraud from it alone. (In re Mendelsohn, 13 N. B. R. 533; 3 Sawy. 343; Fed. Casl 9430.) Practice in proceedings for adjndication. — Another creditor may intervene and be permitted to prosecute the original petition where the court is satisfied that the original petitioning creditor does not intend to prosecute the matter further, and the pending application of the original creditor to discontinue the proceedings is sufficient evidence in that re- gard (In re Buchanan, 10 N. B. R. 97; Fed. Cas. 3073); but the application of a creditor for an adjudication upon the petition of another creditor cannot be made after the return or adjourned day. (In re Olmsted, 4 N. B. E. 71; Fed. Cas. 10505.) Sec. 19. Jury trials. — a. A person against whom an in- Toluntarj petition has been filed shall be entitled to have a trial by jury, in respect to the question of his insolvency, except as herein otherwise provided, and any act of bank- ruptcy alleged in such petition to have been committed, upon filing a written application therefor at or before the 172 LAW OF BANKKTJPTOT. [§ 19, 5. time within which an answer may be filed. If such appli- cation is not filed within such time, a trial by jury shall be deemed to have been waived. 5. If a jury is not in attendance upon the court, one may be specially summoned for the trial, or the case maybe post- poned, or, if the case is pending in one of the district courts within the jurisdiction of a circuit court of the United States, it may be certified for trial to the circuit court sitting at the same place, or by consent of parties when sitting at any other place in the same district, if such circuit court has or is to have a jury first in attendance. [Act of 1867. Seo. 41. . . . The court shall proceed summarily to hear the allegations of the petitioner and debtor, and may adjourn the proceedings from time to time, on good cause shown, and shall, if the debtor on the same day so demand in writing, order a trial by jury at the first term of the court at whicm a jiu-y shaU be in attendance, to ascertain the fact of such alleged bankruptcy.] Whenever an alleged bankrupt denies the allegation of insolvency, he must appear in court and submit to an examination, and in case he fails to so attend, the burden of proving his solvency rests upon him. (Sec. 3, d.) The right of trial by jury extends also to cases where the defend- ant is charged with committing an ofEense in violation of the provisions of this act. (Sec. 19, c.) The writ of subpoena is issued at the time of filing the petition and is returnable in fifteen days, unless such time is extended by the judge (seo. 18, a), and the bankrupt or any creditor may appear and plead within ten days after the return day, or within such further time as the court may allow. (Seo. 18, b.) For the acts of bankruptcy, and the issue of solvency as to which jury trials are specifically provided for, see section 3, a, b, c and d. There are few decisions among the old cases bearing on the particular provisions of this section. The following cases are given as having a possible bear- ing by analogy: A defendant who files a demurrer to the whole petition will not be allowed, after such demurrer is overruled, to file a general answer or denial of aU the acts of bankruptcy alleged and demand a jury trial of the issues so raised. (In re Benham, 8 N. B. R. 94.) Issues of fact raised in summary proceedings may be tried by jury. (Bill, Ass., V. Beckwith, 3 N. B. R. 82; 1 Chi. Leg. News, 103; Fed. Cas. 1406.) A jviry trial may be allowed to determine the amount of rent due which accrued while the assignee occupied the premises. (Buokner v. Jewell § 19, C.J JTTRT TBIALS. 173 et al, 14 N. B. R. 386.) The rule that every one is presumed to contem- plate the necessary consequences of his acts is a presumption of fact, and where there are circumstances in a case tending to show that a party did not, in paying a certain creditor, in fact intend to prefer him, the question as to the actual intent may be left to the jury, notwith- standing the party was insolvent, and the necessary effect of his pay- ment was to prefer. (In re Seeley, 19 N. B. R. 1; Fed. Cas. 12628.) A court may submit a question as to the existence of a partnership to the jury instead of charging them as a matter of law, as the court can take a matter from the jury whether a point is undisputed or not. (In re Jelsh et al., 9 N. B. R. 412; Fed. Cas. 7257.) It is a question of fact for the jury whether or not, at the time a creditor took an assignment of property from the debtor, the creditor knew or had reason to know the debtor was insolvent. (Ecker v. McAllister, 17 N. B. R 42.) The ques- tion of inadequacy of price, as an evidence of fraud in a sale by an in- solvent vendor, should be left to the jviry. (Rhoads v. Blatt, 16 N. B. R 32.) Where a bankrupt had permitted creditors to take goods from his store, and had made a general assignment for benefit of creditors just preceding his bankruptcy, and no explanations of such acts were offered, he is conclusively presumed to have intended to prefer creditors, and there was no question for the jury. (In re Seeley, 19 N. B. R 1 ; Fed- Cas. 12628.) A respondent who does not file his answer until after the expiration of the rule to show cause cannot demand that the issues thus raised shall be tried by a jury. (In re Gebhardt, 3 N. B. R. 63; Fed. Cas. 5294.) A defendant who appears, but neither pleads, demurs nor de- mands trial by jury, but obtains a continuance, cannot then demand trial by jury, but the court may permit a plea to be filed, which shall be tried by the court. (In re Sherry, 8 N. B. R. 142.) Whether a judgment is or is not rendered for fraud is not a question for a jury, but is to be determined by inspection of the record. (Flanagan v. Pearson, 14 N. B. R. 87.) c. The right to submit matters in controversy, or an al- leged offense under this Act, to a jury shall be determined and enjoyed, except as provided by this Act, according to the United States laws now in force or such as may be here- after enacted in relation to trials by jury. By U. S. Rev. Stats., sec. 566, the trial of issues of fact in all causes, except cases in equity and cases in admiralty and maritime jurisdic- tion, shall be by jury. By sec. 648 the trial of issues of fact in the circuit courts shall be by jury, except in cases of equity and of admi- ralty and maritime jurisdiction, and except as otherwise provided in proceedings in bankruptcy, etc. Sec. 649 provides that issues of fact in civil cases in any circuit court may be tried and determined by the court 174 LAW OF BANKEUPTCfT. - [§ 20, a. without the intervention of a jury, whenever the parties file a stipula- tion in writing waiving a jury. The finding of the court upon the facts, which may be either general or special, shall have the same effect as the verdict of a jury. Sec. 20. Oaths, afflrraations. — a. Oaths required by this Act, except upon hearings in court, may be administered by (1) referees; (2) officers authorized to administer oaths in proceedings before the courts of the United States or under the laws of the State where the same are to be taken ; and (3) diplomatic or consular officers of the United States in any foreign country. [Act of 1867. Sec. 11. . . . And shall annex to hi& petition a schedule, verified by oath before the court, or before a register in bankruptcy or before one of the commis- sioners of the circuit court. . . . Seo. 22. . . . To entitle a claimant against the estate of a bankrupt to have his demand allowed, it must be verified by a deposition in writing on oath or solemn affirmation, before the proper register or commissioner. . . .] Any person making a false oath in relation to any proceeding in bank, ruptcy is liable to be punished by imprisonment for a period of two years. (Sec. 296.) For persons who are authorized to administer oaths, see note to section 21b. A notary public before whom proof of debt is made must authenticate the same by his ofScial seal as well as his signatura A seal used in common with others wiU not answer. (In re Nebe, 11 N. B. R. 289; Fed. Cas. 10073.) The requisites of a notarial seal are determined by the law of the locality from which the official derives his authority. In the ab- sence of express legislation, it need not contain the name of the ofliciaL It is the seal, and not its composition or character of words and devices, which raises the presumption of official character of which the courts takeijudioal notice. The presumption is that it is the official seal of the person it purports to be, and who subscribes the jurat. (In re 'William W. Phillips, 14 N. B. R 219; 8 Chi. Leg. News, 409; 23 Int. Rev. Eeo. 306; Fed. Cas. 11098.) The provisions of the statute as to verification of the petition must b» strictly followed. It is a matter of substance and right, and is not to be dispensed with. (In re Keiler et aL, 18 N. B. E. 10; 7 Chi Leg. News, 43; 9 West. Jur. 175; Fed. Cas. 7647.) The court has no discretion to refuse to receive and file a proof of debt which appears on its face to have been taken by a proper officer and to be correct in form and substance. (In re Merrick, 7 N. B. R. 459; Fed. Cas. 9463.) §§ 20, I, 21, «.J EVIDENCE. 175 The verification of a schedule and inventory by a bankrupt is an affi- davit and may be sworn to before a notary public. (In re John W. Bailey, 15 N. B. R 48; Fed. Cas. 737.) A debt against a bankrupt's es- tate may be proven before a United States commissioner, although the bankrupt and the creditor reside in the same judicial district. (In re Sheppard, 1 N. B. It. 115; 7 Amer. Law Reg. (N. S.) 484; 1 Amer. Law T. Rep. Bankr. 49; Fed. Cas. 53.) The form of oath prescribed for proving debts in bankruptcy need not be followed in voting upon resolutions for composition. (Ex parte Morris, 13 N. B. R. 170.) J. Any person conscientiously opposed to taking an oath may, in lieu thereof, affirm. Any person who shall affirm falsely shall be punished as for the making of a false oath. [Act of 1867. Sbo. 48. . . . The word « oath " shall include "affirmation."] Sec. 31. Evidence. — a. A court of bankruptcy may, upon application of any officer, bankrupt, or creditor, by order require any designated person, including the bankrupt, who is a competent witness under the laws of the state in which the proceedings are pending, to appear in court or before a referee or the judge of any state court, to be examined concerning the acts, conduct, or property of a bankrupt whose estate is in process of administration under this Act. [Act of 1867. Seo. Y. . . . Parties and witnesses summoned before a register shall be bound to attend in pur- suance of such summons at the place and time designated therein, and shaU. be entitled to protection, and be liable to process of contempt in like manner as parties and witnesses are now liable thereto, in case of default in attendance under any writ of subpoena. . . . Seo. 22. . , . The court may, on the application of the assignee, or of any creditor, or of the bankrupt, or with- out any application, examine upon oath the bankrupt, or any person tendering or who has made proof of claims, and may summon any person capable of giving evidence con- cerning such proof, or concerning the debt to be proved. Seo. 26. . . . That the court may, on the application of the assignee in bankruptcy, or of any creditor, or with- 176 LAW OF BANKE0PTCT, [§ 21, a. out any application, at all times require tlie bankrupt, upon reasonable notice, to attend and submit to an examination, on oath, upon all matters relating to the disposal or condi- tion of his property, to his trade and dealings with others, and his accounts concerning the same, to all debts due to or claims from him, and to all other matters concerning his property and estate and the due settlement thereof accord- ing to law, which examination shall be in writing, and shall be signed by the bankrupt and filed with the other proceed- ings ; and the court may, ia like manner, require the attend- ance of any other person as a witness, and if such person shall fail to attend, on being summoned thereto, the court may compel his attendance hj warrant directed to the mar- shal, commanding him to arrest such person and bring him forthwith before the court, or before a register in bank- ruptcy, for examination as such witness. If the bankrupt is imprisoned, absent, or disabled from attendance, the court may order him to be produced by the jailor, or any officer in whose custody he may be, or may direct the examination to be had, taken, and certified at such time and place and in such manner as the court may deem proper, and with Like effect as if such examination had been had in court. The bankrupt shall at all times, until his discharge, be subject to the order of the court. Sec. 38. . . . Evidence or examinations in any of the proceedings under this act may be taken before the court, or a register in bankruptcy, viva voce or in writing, before a commissioner of the circuit court, or by affidavit, or on commission, and the court may direct a reference to a reg- ister in bankruptcy, or other suitable person, to take and certify such examination, and may compel the attendance of witnesses, the production of books and papers, and the giving of testimony in the same manner as in suits in equity in the circuit court. This gives full opportunity to all parties concerned in bankruptcy proceedings to obtain desired testimony irrespective of the residence of the witnesses. Under this provision it vFOuld seem that where the witnesses cannot appear before the court or referee having jiirisdiotion of the case, they may be required to appear before a referee or judge of a state court where they may for the time be residing. During the ex- amination of the bankrupt or other proceedings, the referee may author- ize the employment of stenographers, upon the application of the trustee, at the expense of the estate, at a compensation not to exceed ten cents per folio for reporting and transcribing the testimony. (Sec. 38.) § 21, a.] EVIDENCE. 177 Failing to obey or resisting any lawful order, after having been sub- poenaed, or, upon appearing, refusing to take the oath as a witness, or refusing to be examined as a witness according to law, before the ref- eree, subjects one to contempt proceedings and renders him liable to punishment (Sec. 41.) Courts of bankruptcy may enforce obedience to aU lawful orders by fine and imprisonment (sec. 3 — 13), and punish person for contempt committed before referees. (Sec. 3 — 16.) Provision for the method of taking testimony is found in Orders 32 of the Supreme Court. Admissibility of evidence. — It is admissible to introduce, in a trial fusal to permit a reasonable opportunity for the inspection of the ac- counts, papers and records of estates in his charge by the parties in interest, when directed by the court so to do, makes bim liable to pun- ishment and a forfeiture of his oflSce. (Seo. 29, c.) As to whether, in the case of the death of one of three trustees, another must be appointed to take his place, qucere. (Sec. 47, &.) The statute is silent as to per- mitting a trustee to resign. After accepting the oflaoe it appears that he must serve until removed by the court (sec. 8—17), and such removal can only be made by the judge. (Orders XIIL) Death or remoral of trustee.— A motion to set aside the appoint- ment of the assignee can be entertained by the district judge and not by the register. (In re Stokes, 1 N. B. R 130; 1 Amer. Law T. Rep. Bankr. 133; Fed. Cas. 13474) For neglect or fraud.— Upon a creditor's petition for removal of as- signee it was held that assignee who had neglected to secure bankrupt's § 47, a.] DUTIES OF TEtrSTEES. 243 property and had shown gross neglect should be removed (In re Morse, 7 N. B. R 56; Fed. Cas. 9852); and one who is charged with mismanage- ment and whose removal is asked will be removed, but he will be pro- tected against costs where it appears that he acted in good faith (In re Mallory, 4 N. R R. 38; Fed. Cas. 8990); and where an assignee fails to deposit funds in his hands, suffers foreclosure of a mortgage and neg- lects to p\irohase it at less than its face, and where he is guilty of mis- management of the funds of the estate, he wiU be ordered to show cause why he should not be removed (In re Price, 4 N. B. E. 137; Fei Cas. 11409; In re Sacchi, 6 N. B. R. 398; 43 How. Pr. 353; Fed. Cas. 12300; In re Blod- gett et al., 5 N. B. E. 473; Fed. Cas. 1553); and an assignee who has a de- posit with a bank which bought up claims against his estate at a dis- count to set oflE against such deposit, who has knowledge of the facts and does not disclose them to other creditors, nor dispute such claims for set- off, should be removed. (In re Perkins, 8 N. B. E. 56; Fed. Cas. 10983.) Soliciting appointment. — Assignee offered creditors to pay their claims in consideration of giving him power to vote for them at election of assignea It was held that the election should be disregarded. (In re Haas et aL, 8 N. B. E. 189; Fed. Cas. 5884.) But creditors having knowledge of an assignee soliciting his own election and permitting him to qualify and act for months, without objection, are too late in asking his removal on that ground. (In re MaUory, 4 N. B. E. 38; Fed. Cas. 8990.) When not removable. — An assignee chosen by the greater part in number and value of the creditors is assignee by virtue of the law, and the court will not remove him in the absence of imputation, either upon his capacity or integrity (In re Grant, 3 N. B. R. 35; Fed. Cas. 5693); and where it appeared that a majority of creditors in number and value had voted to remove assignee, but that the creditors were few, and sev- eral voting for removal were parties to mortgages and transactions which the assignee was seeking to impeach, that the movement was made on behalf of such parties, and no money remained in the hands of the assignee, and nothing remained to be done excepting to settle those disputes, the court refused to remove the assignee. (In re Dewey, 4 N. B. E. 139; Fed. Cas. 3849.) The court will not set aside election of assignee on account of any irregularity in admitting a claim when its exclusion would not affect the result. (In re Jackson et aL, 14 N. B. E. 449; 7 Biss. 280; Fed. Cas. 7133; R. S. 5034, 5078, 5088.) Proceedings against trustee. — A trustee can only be called to ao coimt by petition to the court, setting forth the grounds. (In re Hicks et aL, 19 N. B. R. 449; Fed. Cas. 6457.) Sec. 47. Duties of trustees. — a. Trustees shall respect- ively (1) account for and pay over to the estates under their control all interest received by them upon property of such 244 LAW OF BANKEUPTOT. [§ 47, ffl. estates; (2)* collect and reduce to money the property of the estates for which they are trustees, under the direction of the court, and close up the estate as expeditiously as is compatible with the best interests of the parties in interest; (3) 2 deposit aU money received by them in one of the desig- nated depositories; (4) disburse money only by check or draft on the depositories in which it has been deposited; (5) ' furnish such information concerning the estates of which they are trustees and their administration as may be re- quested by parties in iaterest; (6) keep regxilar accounts showing all amounts received and from what sources and all amounts expended and on what accounts; (7) lay before the final meeting of the creditors detailed statements of the administration of the estates; (8) make final reports and file final accounts with the courts fifteen days before the days fixed for the final meetings of the creditors; (9) * pay divi- dends within ten days after they are declared by the ref- erees; (10) report to the courts, in writing, the condition of the estates and the amounts of money on hand, and such other details as may be required by the courts, within the first month after their appointment and every two months thereafter, unless otherwise ordered by the courts; and (11)' set apart the bankrupt's exemptions and report the items and estimated value thereof to the court as soon as practicable after their appointment. 1 Courts of bankruptcy are authorized to bring in and substitute addi- tional persons or parties in proceedings in bankruptcy, when necessary for the complete determination of a matter in controversy. (Sec. 2 — 6.) 2 Banking institutions are to be designated by order of court as de- positories for the money of bankrupt estates. (Sec. 61.) ' A refusal by the trustee to permit a reasonable opportunity to in- spect the accoimts, papers and records relating to estates in his charge renders him liable to fine and a forfeiture of his oflScft (Sec. 29, c.) ^ Referees are required to declare dividends and prepare and deliver to the trustee dividend sheets showing the dividends declared and to whom payable (sec. 39, a), and to give at least ten days' notice of the declara- tion and time of payments of such dividends. (Sec. 58, a.) *The bankrupt should file with his schedule a claim for such exemi»- tions as he may be entitled to. (Sec. 7, a.) This law in no vyise affects § 47, a.] DtrriES of tetjstees. 245 [Act of 1867. Seo. 14. . , . The assignee shall have au- thority, under the order and direction of the court, to redeem or discharge any mortgage or conditional contract, or pledge or deposit, or lien upon any property, real or personal, when- ever payable, and to tender due performance of the condition thereof, or to sell the same subject to such mortgage, lien or other encumbrances. The assignee shall immediately give no- tice of his appointment, by publication at least once a week for three successive weeks in such newspapers as shall for that purpose be designated by the court, due regard being had to their circulation in the district or in that portion of the district in which the bankrupt and his creditors shall reside, and shall, within six months, cause the assignment to him to be recorded in every registry of deeds or other office within the United States where a conveyance of any lands owned by the bankrupt ought by law to be recorded ; and the record of such assignment, or a duly certified copy thereof, shall be evidence thereof in all courts. Sec. 15. . . . That the assignee shall demand and re- ceive, from any and aU persons nolding the same, all the estate assigned, or intended to be assigned, under the pro- visions of this act; and he shall sell aU such unencumbered estate, real and personal, which comes to his hands, on such terms as he thinks most for the interest of the creditors; but upon petition of any person interested, and for cause shown, the court may make such order concerning the time, place, and manner of sale as will, in its opinion, prove to the in- terest of the creditors; and the assignee shall keep a reg- ular account of all money received oy him as assignee, to which every creditor shall, at reasonable times, have free resort. . . . Seo. 16. . . . That the assignee shall have the like remedy to recover all said estate, debts and effects in his own name, as the debtor might have had if the decree in bankruptcy had not been rendered and no assignment had been made. . . . the allowances to bankrupts of exemptions which are prescribed by the state laws in force at the time of filing the petition in the state wherein they have had their domicile for the six months, or the greater portion thereof, immediately preceding the filing of the petition. (Sec. 6.) If the bankrupt has an insurance policy which has a cash surrender value, payable to himself or his estate, he may pay or secure the cash surrender value to the trustee, and continue to hold and own such policy free from the claims of creditors. (Sec. 70, a.) 246 LAW OF BANKEUPTcnr. [§ 4:Y, a. Seo. 17. '. That the assignee shall, as soon as may- be after receiving any money belonging to the estate, de- posit the same in some bank in his name as assignee, or other- wise keep it distinct and apart from aU other money in his possession; and shall, as far as practicable, keep all goods and effects belonging to the estate separate and apart from all other goods in his possession, or designated by appropri- ate marks, so that they may be easily and clearly distin- guished, and may not be exposed or liable to be taken as his property or for the payment of his debts. When it appears that the distribution of the estate may be delayed by litiga- tion or other cause, the court may direct the temporary in- vestment of the money belonging to such estate in securities to be approved by the judge or a register of said court, or may authorize the same to be deposited in any convenient bank upon such interest, not exceeding the legal rate, as the bank may contract with the assignee to pay thereon. He shall give written notice to all known creditors, by mail or otherwise, of all dividends, and such notice of meetings, after the first, as may be ordered by the court. Seo. 28. . . . If at any time there shall be in the hands of the assignee any outstanding debts or other property, due or belonging to the estate, which cannot be collected and received Dy the assignee without unreasonable or inconven- ient delay or expense, the assignee may, under direction of the court, seU and assign such debts or other property in such manner as the court shall order.] The duties of trustees are set forth at length in General Orders XVTL Collectlon of assets, etc. — In an action brought by assignee in bank- ruptcy to foreclose, a state court has jurisdiction (Burlingame, Ass., eta V. Farce et al., 17 N. B. R. 246); and in bringing an action to collect a debt he may select the forum, and a state court would have jurisdiction. (Eussell, Ass., etc. v. Owen, 15 N. B. R. 333.) He may prosecute suits to recover assets of a bankrupt in a district other than that in which the decree in bankruptcy is entered. (Dutcher v. Wright, Ass., 16 N. B. R. 831 ; 94 U. S. 553.) Where an attorney agreed with assignee to conduct a suit on contingent fee, and retained the fee agreed upon, upon motion to require the attorney to pay over a portion of the money retained, it was held that the bankrupt court had power to determine the amount of attorney's f ee'and to order the attorney to pay over balance of moneys retained by him. (In re Brinker et al., 19 N. B. R 195; Fed. Cas. 1883.) An assignee obtained authority to employ counsel to prosecute a claim on a contingent contract, but suppressed facts which, if known to the court, would have prevented the giving of authority. It was held that the contract could be sot aside, but a reasonable compensation should § 47, a.] DUTIES OF TEtrSTEES. 247 be paid coiinsel for services. (Maybin v. Raymond, Ass., 15 N. B. R 353; 4 Amer. Law T. Rep. (N. S.) 31; Fed. Cas. 9838.) Where it appears that a bankrupt's wife has property which it is not shown she received from third parties, and where the bankrupt carries on business as the agent of his wife, he will be required to pay over to the assignee a deficit in his assets (In re Peltasohn et aL, 16 N. B. R. 365; 4 Dili. 107; 10 Chi. Leg. News, 9; Fed. Cas. 10913); and for the purpose of sustaining an action to set aside a transfer of property as fraudulent against creditors, an as- signee is deemed to represent the creditors, and may impeach the trans- fer notwithstanding it may be held valid against the bankrupt. (Allen V. Massey, 4 N. B. R 75; 3 ChL Leg. News, 309; Fed, Cas. 331; Thurmond V. Andrews and Wife, 13 N. B. R 157.) It is the duty of the assignee to recover from general assignees any assets which the creditors could have recovered. (Aiken v. Edrington et aL, 15 N. B. R 371; Fed. Cas. 111.) A creditor, upon refusal of assignee, brought an action in his own name against the assignee, bankrupt, and others to reach property fraud- ulently concealed by the bankrupt. It was held that the remedy was by petit 'on to compel the assignee to act (Glenny v. Langdon, 19 N. B. R 34; 98 U. S. 30.) See Actions by Tritstees, ante, p. 110. Assets of corporations. — Stockholders in an insurance company had paid in twenty per cent, and given notes for balance. Thirty-five per cent, remained unpaid at the time the company became bankrupt. The defendants purchased policies, procured adjustment by the company, taking certificates of loss for the amounts, which certificates they sur- rendered to the treasurer at par in payment of their stock-notes. Suit being brought by assignee, judgment was accorded him. (Jenkins, Ass., V. Armour et aL, 14 N. B. R 376; 6 Biss. 313; 8 Chi, Leg. News, 367; 33 Int. Rev. Rec. 169; Fed. Cas. 7360.) A purchaser of stock, which is only transferable on the books of the company, is liable for assessment levied by the assignee of the company, although such transfer had not been made. The provision requiring the transfers to be upon the books is for the benefit of the company and it can waive it (Upton v. Bumham, 8 N. B. R 33;.3 Biss. 431; Fed. Cas. 16798); and where a court in which a corporar tion was declared bankrupt directed an assessment on the unpaid stock of said bankrupt, it was held that such assessment was conclusive. (Mich- ener v. Payson, Ass., 13 N. B. R 49; 1 N. Y. Wkly. Dig. 373; 3 Wkly. Notes Cas. 339; 8 Chi Leg. News, 17; S3 Pittsb. Leg. J. 38; Fed. Cas. 9534) The assignee has all the authority of a receiver to collect demands, and under the order of the court an assessment may be made on unpaid shares. Myers, Ass., v. Seeley et aL, 10 N. B. R. 411; 1 Cent. Law J. 451; Fed, Cas. 9994) The assignee brought suit on a premium note. The defendant set up that the note was taken by the company in Indiana and that the company had not complied vpith the laws of ^that state respecting foreign 248 LAW OF BAJSKEUPTOY. [§ 47, a. corporations. It was held that the defense was sufficient. (Lamb, Ass., V. Lamb, 13 N. B. R. 17; 6 Biss. 420; 7 Chi. Leg. News, 411; 21 Infc Rev. Eec. 317; 1 N. T. Wkly. Dig. 318; Fed. Caa. 8018.) Shall collect, etc., generally.— An assignee who redeems pledges is subrogated to the rights of the pledgee untU, from the proceeds of the pledges, the fund is made good. (McLean et aL v. Cadwalader, 15 N. B. R. 883.) An assignee cannot maintain trover where conversion was con- summated before he had a right to possession. (Jones v. Miller, Ass., 17 N. B. R. 316; 1 N. J. 113; Fed. Cas. 7482.) Property held in trust by a bankrupt does not pass to assignee, but if his trust be coupled with an interest the assignee is vested with such interest. (Walker, Ass., v. Seigel et aL, 12 N. B. R. 394; 3 Cent. Law J. 508; Fed. Cas. 17085.) The- title of an assignee who was before assignee under a deed of assignment relates back to execution of the deed; and all his acts after he received the assets, not inconsistent with his duty as assignee in bankruptcy, will be approved (In re "Walker, 18 N. B. R. 56; Fed. Cas. 17063); also where an assignee filed a petition in respect to property in which he was not interested, he was obliged to pay the costs himself. (In re Preston, 6 N. B. R. 545; Fed. Cas. 11394) Closing of estates, mortgages. — An assignee who desires to test the validity of a mortgage should proceed in equity (In re New York Kero- sene Oil Co., 3 N. B. R. 31; Fed. Cas. 10206); and it is his duty to contest the validity of a mortgage by which one creditor has obtained a prefer" ence over the others. (In re Metzger, 2 N. B. R 114; 1 Clii Leg. News, 163; 3 Amer. Law T. Rep. Bankr. 53; Fed. Cas. 9510.) The defense of usury can be pleaded by the assignee so long as any part of the debt for which usury was paid, or agreed to be paid, remains unpaid. (In re Pres- cott, 9 N. B. B. 385; 5 Biss. 523; 6 Chi Leg. News, 151; Fed. Cas. 11389). Unless it be for the benefit of the estate to discharge a mortgage, or to sell the property subject to the mortgage, so as to realize a sum of money free from the mortgage, it is unnecessary for the assignee to take any proceedings. (In re Lambert, 3 N. B. R. 138; 1 Chi Leg. News, 210; Fed. Cas. 8026.) Leases. — Without an order of court, and without ascertaining whether the assets are sufficient to discharge the expenses of administration, the assignee cannot pay a claim for occupation of premises (In re Hoagland, 18 N. B. R. 530; Fed. Cas. 6545); and until an assignee accepts a lease he does not become liable for rent accruing after adjudication. (In re Ten Eyck et aL, 7 N. B. R. 26; Fed. Cas. 13839.) A bankrupt tenant's liabU- ity for rent ceases on the day of adjudication, and where the assignee occupies the premises after that time he is responsible; but if the occu- pation is for the benefit of the estate he will be allowed credit for the amount so paid out. (In re Webb & Co., 6 N. B. R 303; Fed. Cas. 17315.) An assignee, unless restrained by the terms of the lease, may adopt or reject a lease, as he finds most beneficial for the creditors, and can take § 47, a.] DUTIES OF TETJSTEES. 24:^ a reasonable time for decision (In re Laurie et aL, 4 N. B. R 7); but un- less it will benefit the creditors, an assignee is not bound to take lease- hold estate belonging to bankrupt. (White v. Grifflng, 18 N. B. R 399.) The assignee, if not in funds from the estate to a sufficient extent to defray the expenses for the execution of his trust, may require that funds for that purpose shall be advanced to him before he proceeds. (In re Hughes, 1 N. B. R. 9; 1 Amer. Law T. Rep. Bankr. 45; Fed. Cas. 6841.) Liens. — The assignee may, if to the interest of the estate, discharge the incumbrance, or he may agree with the creditors as to value of the property, or it may be ascertained by sale under direction of court, when the creditor shall prove only for the balance, if any (Reed v. Bullington, 11 N. B. R 408); but after the filing of petition no lien can be acquired upon the property of the bankrupt by proceedings in the state court; and an assignee is not bound to go into a state court to defend such a suit (Stuart v. Hines, 6 N. B. R 418); and where, under an agreement of the execution creditor, the property levied on passes into the possession of the assignee without prejudice to such prior lien, the assignee and the register should, if the execution creditor asks it, expedite the pro- ceedings for decision. (In re Hafer et aL, 1 N. B. R 163; 6 Phila. 474; 25 Leg. Int. 164; Fed. Cas. 5897.) Fraud or mistake. — Where an assignee applies to the court for di- rections, and a reference is ordered to obtain information, and the as- signee fails to attend, but acts independently, he will be held to the strictest account. (In re Schapter, 9 N. B. R 334; Fed. Cas. 12438.) An assignee, directed by the court to sell certain goods, received an offer which was higher than one for which he had promised to selL He re- fiised to entertain this higher prica It was held that he should have rejected first when higher price was offered (In re Eyan & Griffin, 6 N. B. R 385; Fed. Cas. 12182); and if an assignee knows or believes that a creditor has fraudulently proved a debt, and refuses to contest it, any creditor who has proved his debt may obtain the annvilment of such fraudulent proof (First Nat. Bank of Troy v. Cooper et aL, 9 N. B. R 529; 30 WalL 171); also an assignee cannot attack the trust he assumed to execute and defend. (Johnson, Ass., v. Rogers et aL, 15 N. B. Rl; 5 Amer. Law Reo. 536; 14 Alb. Law J. 427; Fed. Cas. 7408.) Closing np estate generally. — The assignee of a bankrupt who has received pay for an article is estopped to deny that an article of the kind contracted for, in the possession of the bankrupt, is the one paid for (Ex parte Rockford, Rock Island & St. Louis R R Co., 3 N. B. R 12; 1 LoweU, 345; 3 Amer. Law T. 105; 1 Chi Leg. News, 337; 1 Amer. Law T. Rep. Bankr. 133; Fed. Cas. 11978); but where the trustee has proved claim for a note against the estate of the payee, and where the holder has not, on the faith thereof, changed his position in regard to the note, the trustee is not estopped from disputing the claim. (In re Dodge et al., 17 N. B. R 504; 9 Ben. 480; Fed. Cas. 3948.) A provision in a deed 250 LAW OF BANKEUPTCr. [§ 47, a. empowering the cestui que trust to appoint new trustee upon the failure of original trustee to act does not authorize the assignee of the cestui que trust to appoint a new trustee. (Clark et aL v. Wilson et aL, 16 N. B. R. 356.) Shall furnish information. — An assignee having failed to give a cer- tificate containing the names and residences of creditors who have proved their claims, in order that the banlirupt might move for dis- charge, application was made to the register to compel the assignee to perform this duty. It was held that register can compel assignee to sign said certificate. (In re Blaisdell, 6 N. B. R 78; 5 Ben. 420; 43 How. Pr. 274; Fed. Cas. 1488.) Shall make to creditors detailed statement of administration. — Application was made for relief from action of trustee in allowing counsel fees alleged to be excessive It was held that such matter was within the discretion of trustee, and in absence of bad faith he would not be interfered with. (In re Baxter et aL, 19 N. B. R. 295; Fed. Caa. 1122.) Shall mate final report and account. — On certificate from register it was held that trustee can be called to account by petition to court setting forth grounds (In re Hicks et aL, 19 N. B. R 449; Fed. Cas. 6457); but on petition to court to pass on items of assignee's account, reported favorably by the register on reference by court, it was held that it would not, but that a meeting of creditors must be called to act thereon (In re Hubbel et aL, 9 N. B. R 523; 19 Int Rev. Rec. 150; Fed. Cas. 6820); and creditors are not bound to object to assignee's account save at a meeting called pursuant to the provisions of the act. (In re Clark, 9 N. B. R 67; Fed. Cas. 2810.) A creditor has a right to call for investigation into the conduct of the assignee in seUing bankrupt's property, even after the latter's account has been approved. (In re Peabody, 16 N. B. R 243; 9 Chi Leg. News, 243; Fed. Cas. 10866.) Shall pay dividends. — It was held, under the act of 1867, that money in the hands of assignee after payment of creditors who have proven their claims must be distributed among such creditors as are named in the bankrupt's list, although they have failed to make proof of claims (In re James, 2 N. B. R 78; 1 Gaz. 78; Fed. Cas. 7175); for an assignee is an agent, standing in the shoes of the bankrupt, with power to do what the bankrupt ought to have done, namely, pay the debts out of assets. (Starkweather v. Cleveland Ins. Co., 4 N. B. R 110; 3 Chi Leg. News, 77; 28 Leg. Int. 36; 10 Amer. Law Reg. (N. S.) 333; 5 Amer. Law Rev. 578; Fed. Caa 13308.) The distribution of the assets of a bankrupt cannot be interfered with by garnishment or process of state court. (In re Bridg- man, 2 N. B. R 84; 1 Chi Leg. News, 103; Fed. Cas. 1867.) See also Declabation and Payment of Dividends, sec. 65. Shall make report; amendment — An assignee is not required to make an amendment to his report where it is not shown to be proper or that the interest of the bankrupt wiU be protected by making it, or in- § 47, i.] DUTIES OF TKUSTEE8. 251 jured by not (Iii re Kingon, 3 N. B. E. 446; 36 How. Pr. 393; Fed. Cas. 7815.) 8hall set apart exemptions. — It was held under the former act that a rule requiring assignees to report within twenty days after receiving the articles set off to the bankrupt as exemptions is to be strictly ob- served, but it is to receive such construction as to prevent injustica "Where the property has not come into possession of the assignee, and a question as to his right to it is pending, the time should be computed from the final decision of the court. (In re Shields, 1 N. B. R. 170; 15 Pittsb. Leg. J. (O. S.) 391; Fed. Cas. 13785.) A schedule of property set aside for the bankrupt was prepared by the register. It was held that it was the duty of the assignee to set aside property to be exempted without interference of the register. (In re Peabody, 16 N. B. R. 843: 9 ChL Leg. News, 348; Fed. Cas. 10866.) The title to property set apart as exempt, when exemption is unauthorized by law, remains in the as- signee, and no exception need be taken to the report making such un- authorized exemption; but accounts may be excepted to for omission therefrom of the value thereof. (In re Gainey, 3 N. B. B. 163; Fed. Cas. 5181.) The only relation sustained by an assignee to a bankrupt is to set aside the exempt property; in other respects he is the agent of the law for the benefit of creditors (Aiken v. Bdrington, Sr., et aL, 15 N. B. R. 371; Fed. Cas. Ill); and an assignee represents the rights of creditors as well as the rights of the bankrupt. (In re Wynne, 4 N. B. R. 5; 3 Amer. Law T. Rep. Bankr. 116; Fed. Cas. 18117.) An assignee cannot make an allowance from the general fund of money in lieu of articles sold imder distress for rent which would have been exempt. (In re Lawson, 3 N. B. E. 19; Fed. Cas. 8149.) Assignee's duties generally. — A trustee cannot purchase at a sale where he as trustee sells (Lookett v. Hoge, 9 N. B. E. 167; Fed. Cas. 8444); nor can an assignee's solicitor bid at the assignee's sale. (Citizens' Bank V. Ober, 13 N. B. E. 838; 1 Woods, 80; Fed. Cas. 3731.) When an assignee has accepted appointment and given bonds, his neglect to take into his own custody the deed of assignment and have the same recorded is no ground for withholding a discharge. (In re Pierson, 10 N. B. R. 107; Fed. Cas. 11153.) If the assignee has any power over a subject, it must be found in the bankrupt law itself. (Dutoher, Ass., v. Bank, 11 N. R R 457; 13 Blatchf. 435; Fed. Cas. 4303.) He is an officer of the court, and is strictly limited to powers conferred by the act and orders of the court. (In re Ryan & Griffin, 6 N. B. R. 335; .Fed. Cas. 13183.) Trustees have no judicial authority, and where such is needed they must resort to it, as the bankrupt would have been compelled to do, if no proceedings had been instituted. (In re Darby, 4 N. B. R. 98; 18 Pittsb, Leg. J. 154; Fed. Cas. 3570.) h. Whenever three trustees have been appointed for an estate, the concurrence of at least two of them shall be nee- 252 LAW OF BANKEUPTCT. [§ 48, a. essary to the validity of their every act concerning the ad- ministration of the estate. There must be appointed at least one or three trustees (sec. 44); and the death or removal of one shall not abate any suit or proceeding which he is prosecuting or defending at the time of his death or removal, but the same may be proceeded with or defended by his joint trustee or suc- cessor in the same manner as though the same had been commenced or was being defended by such joint trustee alone or by such successor. (Sec. 46.) Sec. 48. Compensation of trustees. — a. Trustees shall re- ceive, as full compensation for their services, payable after they are rendered, a fee of five dollars deposited with the clerk at the time the petition is filed in each case, except when a fee is not required from a voluntary bankrupt, and from estates which they have administered, such commis- sions on sums to be paid as dividends 'and commissions as may be allowed by the courts, not to exceed three per centum on the first five thousand dollars or less, two per centum on the second five thousand dollars or part thereof, and one per centum on such sums in excess of ten thousand dollars. [Act of 1867. Sec. 17. ..... He shaU be allowed, and may retain out of the money in his hands, all the necessary disbursements made by him in the discharge of his duty, and a reasonable compensation for his services, in the dis- cretion of the court. Seo. 28. . . . In addition to all expenses necessarily incurred by him in the execution of his trust, in any case, the assignee shall be entitled to an allowance for his services in such case on all moneys received and paid out by him therein, for any sum not exceeding one thousand dollars, five per centum thereon; for any larger sum, not exceeding five thousand dollars, two and a half per centum on the excess over one thousand dollars ; and for any larger sum, one per centum on the excess over five thousand dollars, and if, at any time, there shall not be in his hands a suificient amount of money to defray the necessary expenses required for the further execution of his trust, he shall not be obliged to pro- ceed therein until the necessary funds are advanced or satis- factorily secured to him.] §§ 48, 5, c, 49, a.] accounts and papbks of teustees. 253 The commission is to be computed on tte sums to be paid as divi- dends and not on the income or outlay, thus making the trustees financially interested in the careful management of the estate, and re- duces to a minimum the dangers of extravagant expenditures. The deposit of five dollars is not required in case of a voluntary bankrupt, provided he accompanies his petition with an affidavit setting forth the fact that he has not and cannot obtain the money with which to pay his fee. (Sec. 51. See also Ordei's XXXV, 4.) While the compensation thus allowed trustees is to be in full for the services performed, it does not include expenses necessarily incurred in the performance of their duties and allowed upon the settlement of their accounts. (Orders XXXV, 3.) Compensation of trustee. — In a case so doubtful that investigation is necessary, the assignee is entitled to his commission, in preference to one who has obtained judgment against him for a wrongful conversion as assignee (In re Oberhoffer, 17 N. B. R 546; 9 Ben. 484; Fed. Cas. 10396); and where an assignee desires to charge estate for professional and cler- ical services rendered himself, he must first obtain leave of court; and where the application is withheld untU final account, he must prove the necessity and reasonableness of the charges. (In re Noyes, 6 N. B. R 277; Fed. Cas. 10371.) J. In the event of an estate being administered by three trustees instead of one trustee or by successive trustees, the court shall apportion the fees and commissions between them according to the services actually rendered, so that there shall not be paid to trustees for the administration of any es- tate a greater amount than one trustee would be entitled to. c. The court may, in its discretion, withhold all compen- sation from any trustee who has been removed for cause. Upon the complaint of creditors, the court may remove trustees for cause, upon hearings, and after notice to them. (Sec. 2 — 17.) Sec. 49. Accounts and papers of trustees. — a. The ac- counts and papers of trustees shall be open to the inspection of officers and aU parties in interest. [Act of 1867. Sec. 16. . . . The assignee shall keep a regular account of all money received by him as assignee, to wiich every creditor shall, at reasonable times, have free resort.] The failure of the trustee to permit a reasonable opportunity for the inspection of the accounts relating to the affairs of the estate and the papers and records in his charge, by parties in interest, when directed 254 LAW OF BANKEUPTCT. [§ 50, a, h. by the court so to do, works a forfeiture of his office and renders Mm liable to punishment. (Sec. 39, c.) Sec. 50. Bonds of referees and trustees. — a. Keferees, before assuming the duties of their offices, and within such time as the district courts of the United States ha,ving juris- diction shall prescribe, shall respectively qualify by entering into bond to the United States in such sum as shall be fixed by such courts, not to exceed five thousand dollars, with such sureties as shall be approved by such courts, conditioned for the faithful performance of their official duties. [Act of 1867. Seo. 3. . . . Before entering upon the duties of his office, every person so appointed a register in bankruptcy shall give a bond to the United States, with con- dition that he will faithfully discharge the duties of his of- fice, in a sum not less than one thousand dollars, to be fixed by said court, with sureties satisfactory to said court, or to either of the said justices thereof.] J. Trustees, before entering upon the performance of their official duties, and within ten days after their appointment, or within such further time, not to exceed five days, as the court may permit, shall respectively qualify by entering into bond to the United States, with such sureties as shall be ap- proved by the courts, conditioned for the faithful perform- ance of their official duties. [Act of 1867. Seo. 13. . . . The judge at any time may, and upon the request in writing of any creditor who has proved his claim shall, require the assignee to give good and sufficient bond to the United States, with a condition for the faithful performance and discharge of his duties; the bond shall be approved by the judge or register by his in- dorsement thereon, shall be filed with the record of the case, and inure to the benefit of all creditors proving their claims, and may be prosecuted in the name and for the benefit of any injured party. If the assignee fails to give the bond within such time as the judge orders, not exceeding ten days after notice to him of such order, the judge shall remove him and appoint another in his place.] The notice to be sent to the trustee of his appointment should contain a statement of the penal sum of his bond. (Orders XVL) § 50, O-h.] BONDS OF EEFEKEES AND TEUSTEE8. 255 e. The creditors of a bankrupt estate, at their first meet- ing after the adjudication, or after a vacancy has occurred in the office of a trustee, or after an estate has been reopened, or after a composition has been set aside or a discharge re- voked, if there is a vacancy in the office of trustee, shall fix the amount of the bond of the trustee ; they may at any time increase the amount of the bond. If the creditors do not fix the amount of the bond of the trustee as hereia pro- vided the court shall do so. The creditors' first meeting must be held not less than ten nor more than thirty days after the adjudication. d. The court shall require evidence as to the actual value of the property of sureties. e. There shall be at least two sureties upon each bond. 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 bond. ff. Corporations organized for the purpose of becoming sureties upon bonds, or authorized by law to do so, may be accepted as sureties upon the bonds of referees and trustees whenever the courts are satisfied that the rights of all par- ties in interest will be thereby amply protected. Corporations may become sureties on the bonds of referees and trustees by virtue of this specific provision of the law (sec. 50, g), but the statute is silent as to this right with reference to the other bonds required. There is considerable doubt, however, whether congress, by specifically mention- ing these two instances in which corporations might become sureties, in- tended to exclude them in all other cases when required. On the bond required under section 3, e, there must be "at least two good and suffi- cient sureties who shall reside within the jurisdiction of the court, to be approved by the court," while under section 69 the bond must have " such sureties as the judge shall approve." In the first instance bonding corporations would probably be excluded from becoming surety, while in the latter instance it would seem to be discretionary with the court. h. Bonds of referees, trustees, and designated depositories shall be filed of record in the office of the clerk of the court and may be sued upon in the name of the United States for the use of any person injured by a breach of their conditions. 256 LAW OF BANKECTPTCT. [§§ 50, ■i-wi, 51, a. i. Trustees shall not be liable, personally or on their bonds, to the United States, for any penalties or forfeitures incurred by the bankrupts under this Act, of whose estates they are respectively trustees. j. Joint trustees may give joint or several bonds. h. If any referee or trustee shall fail to give bond, as herein provided and within the time limited, he shall be deemed to have declined his appointment, and such failure shall create a vacancy in his office. [Act of 1867. Seo. 13. . . . If the assignee fails to give the bond within such time as the judge orders, not ex- ceeding ten days after notice to him of such order, the judge shall remove mm and appoint another in his place.] The bond of the referee must be given before he assumes the duties of the office and within such time as the district court shall prescribe (sea 50, a), while a trustee must give it before entering upon the performance of his duties and within ten day after his appointment. (Sea 50, 6.) I. Suits upon referees' bonds shall not be brought subse- quent to two years after the alleged breach of the bond. m. Suits upon trustees' bonds shall not be brought subse- quent to two years after the estate has been closed. Sec. 51. Duties of clerks. — a. Clerks shall respectively (1) accoimt for, as for other fees received by them, the clerk's fee paid in each case and such other fees as may be received for certified copies of records which may be pre- pared for persons other than officers; (2) collect the fees of the clerk, referee, and trustee in each case instituted before filing the petition, except the petition of a proposed volun- tary bankrupt which is accompanied by an affidavit stating that the petitioner is without, and can not obtain, the money with which to pay such fees; (3) deliver to the referees upon application all papers which may be referred to them, or, if the offices of such referees are not in the same cities or towns as the offices of such clerks, transmit such papers by mail, and in like manner return papers which were re- ceived from such referees after they have been used; (4) and § 51, a.] DUTIES OF OLEEKS. 257 within ten clays after eacli case lias been closed pay to the referee, if the case was referred, the fee collected for him, and to the trustee the fee collected for him at the time of filing the petition. A fee of $10 is to be deposited with the clerk at the time the petition is filed in each case, except when not required from a voluntary bank- rupt, for the purpose of paying the referee in addition to his commission, after his services have been rendered. (Sec. 40, a.) A fee of $5 is de- posited with the clerk at the time the petition is filed in each case, except when not required from a voluntary bankrupt, which is to be paid tlie trustee in addition to his commission upon the completion of his service. (Sec. 48, a.) Clerlvs of United States courts are, under section 838, Revised Statutes, entitled to charge ten cents a folio (one hundred words) for making copies of papers on file, or of any entry or record. For a certificate the fee is fifteen cents, and for affixing the seal of the court twenty cents. In the districts of Oregon, Nevada, Northern and Southern California, North Dakota, and the territories of New Mexico and Arizona, the clerks are entitled to charge double fees. In line with the statutes of many states permitting suits to be instituted without first requiring security for costs, a voluntary bankrupt unable to pay the necessary filing fee may, nevertheless, file his petition when ac- companied by his affidavit setting forth his inability to pay such referee. See also act of July 20, 1893 (3 Supp. U. S. Rev. Stat. 41), authorizing suits in United States courts without prepayment of fees or costs, upon the filing of an affidavit of inability to pay the same. The judge, at any time during the pendency of bankruptcy proceedings, may order these fees to be paid out of the estate, or may, after notice to the bankrupt and satisfactory proof that he then has or can obtain the money with which to pay the fees, order him to pay them, and on default dismiss the peti- tion. (Orders XXXV.) Before incurring any expenses, the clerk, mar- shal or referee may require from the bankrupt, or the person in whose behalf the duty is performed, indemnity for such expenses. (Orders X.) The referee is required to transmit to the clerk such papers as may be on file before him, whenever the same are needed in any proceedings in courts (sec. 39 — 8), and transmit to the clerk the records required to be kept by him when the cases are concluded (sec. 39 — 7), and when his office is in the same city where the court of bankruptcy convenes, caU upon and receive from the clerk all of the papers filed therein which have been referred to him. (Sec. 39—10.) Bonds of referees, trustees and designated depositories are to be filed of record in the office of the clerk of the court. (Sec. 50, b.) Clerks are required to keep a docket of the cases brought under the act. (Orders L) 17 258 LAW OF BAITEETTPTCT. [§ 52, (Z, J. Sec. 53. Compensation of clerks and marshals. — a. Clerks shall respectively receive as full compensation for their serv- ice to each estate, a filing fee of ten dollars, except when a fee is not required from a voluntary bankrupt. [Act of 1867. Sec. 47. . . . That in each case there shall be allowed and paid, in addition to the fees of the clerk of the court as now established by law, or as may be established by general order, under the provisions of this act, for fees in bankruptcy, the following fees, which shall be applied to the payment for the services of the registers: (Here follows specification of fees.)] Under this provision the fees of clerks are limited absolutely to the filing fee of $10, and no charge can be made for issmng writs or sum- mons, subpcenas, filing and entering papers, and the many other char- acters of service for which trivial fees are allowed by law in other litigations. But such fees do not cover copies of papers furnished to other persons or expenses necessarily incurred in publishing or mailing notices or other papers. (Orders XXXV.) J. Marshals shall respectively receive from the estate where an adjudication in bankruptcy is made, except as herein otherwise provided, for the performance of their services in proceedings in bankruptcy, the same fees, and account for them in the same way, as they are entitled to receive for the performance of the same or similar services in other cases in accordance with laws now ia force, or such as may be hereafter enacted, fixing the compensation of marshals. [Act of 1867. Sec. 47. . . . Before any dividend is ordered, the assignee shall pay out of the estate to the mes- senger the following fees, and no more : (Here follows speci- fication of fees.) For cause shown, and upon hearing thereon, such further allowance may be made as the court, in its discretion, may determine. The enumeration of the foregoing fees shall not prevent the judges, who shall frame general rules and orders in ac- cordance with the provisions of section ten, from prescribing a tariff of fees for all other services of the officers of courts of bankruptcy, or from reducing the fees prescribed in this section in classes of cases to be named in their rules and orders.] §§ 53, a, 54, a.] statistics of peooeedings. 259' As under the act of 1867 marshals received compensation as such and also as messengers, the provision as to messengers' fees in the earlier act is here inserted, although under the present law no provision is made for the service of messengers. By the act of May 28, 1896 (3 Supp. R S. 479), marshals are placed upon an annual salary, but the fees taxable under existing law for services are fixed by section 829, United States Revised Statutes, and are to be ac- counted for and turned into the treasury of the United States. They must make return under oath of the actual and necessary expenses in the service of warrants addressed to them and of other services per- formed. (Orders XIX.) Majishals must present vouchers for the items charged in their ao counts, or produce satisfactory reasons for the absence of sama (In re Comstock et aL, 9 N. B. R 88; Fed. Cas. 3075.) A marshal's affidavit of expenses should state that they were actually incurred and are just and reasonabla (In re Lowenstein, 3 N. B. R 65; 3 Ben. 422; Fed. Cas. 8573.) When a taxation is made it is conclusive, and the marshal is entitled to receive the fees taxed in his favor, imless there is fraud or bad faith on his part. (In re Rein, 13 N. B. R 551; 8 Ben. 384; Fed. Cas. 11678.) If the marshal has two or more processes in his hands at the same time and in the same proceeding, which may be served at the same time and place, mileage can only be charged once; but if the service of any one of such processes makes additional travel necessary, he may charge for such; additional traveL (In re Donahoe et al., 8 N. B. R 453; Fed. Cas. 3979.)- Sec. 53. Duties of Attorney-General. — a. The Attorney- General shall annually lay before Congress statistical tables showing for the whole country, and by States, the number of cases during the year of voluntary and involuntary bank- ruptcy; the amount of the property of the estates; the divi- dends paid and the expenses of administering such estates; and such other like information as he may deem important. Sec. 54. Statistics of bankruptcy proceedings. — a. Of- ficers shall furnish in writing and transmit by mail such in- formation as is within their knowledge, and as may be shown by the records and papers in their possession, to the Attorney- General, for statistical purposes, within ten days after being requested by him to do so. CHAPTER VL CREDITORS. Sec. 55. Meetings of creditors. — a. The court shall cause the first meeting of the creditors of a bankrupt to be held, not less than ten nor more than thirty days after the adju- dication, at the county seat of the county in which the bank- rupt has had his principal place of business, resided, or had his domicile; or if that place would be manifestly inconven- ient as a place of meeting for the parties in interest, or if the bankrupt is one who does not do business, reside, or have his domicile within the United States, the court shaU fix a place for the meeting which is the most convenient for parties in interest. K such meeting should by any mischance not be held within such time, the court shall fix the date, as soon as may be thereafter, when it shall be held. A bankrupt is required to attend the first meeting of his creditors, if directed by the court or a judge thereof to do so, and the hearing upon his application for a discharge if filed, and, when present at the first meeting or at such other time as the court shall order, submit to an ex- amination concerning the conduct of his business, the cause of his bank- ruptcy, his dealings with his creditors and other persons, the amount, kind and whereabouts of his property, and, in addition, all matters which may affect the administration and settlement of his estate, though he is not required to attend such meetings at a place more than one hun- dred and fifty miles distant from his home or principal place of busi- ness, unless ordered by the court, and he shall be paid his actual expenses from the estate when examined or required to attend at any place other than the city, town or village of his residence. (Sec. 7.) Creditors hold- ing such claims which are secured or have priority shall not, in respect to such claims, be entitled to vote at creditors' meetings. (Sea 56, 6.) Claims of secured creditors and of those who have priority may be allowed to enable such creditors to participate in the proceedings at the creditors' meetings held prior to the determination of the value of their securities or priorities. (Sec. 57, e.) At the first meeting of the creditors after the adjudication or after a vacancy has occurred in the office of trustee, or § 55, J.] MEETINGS OB OEEDITOES. 261 after the estate has been re-opened, a composition set aside or discharge revoked, they should appoint one or three trustees of such estate (sec. 44), and &s. the amount of their bond, which may at any time be in- creased. (Sec. 50, c.) Creditors are entitled to at least ten days' notice by mail, from the referee to their respective addresses, of aU meetings of creditors, in addition to which notice of the first meeting must be pub- lished at least once, and as many times additional as the court may direct, the last publication to be at least one week prior to the date fixed for the meeting. (Sec. 58.) First meeting. — The term "first meeting,'' employed in section 13 of the act of 1867, does not mean the actual first assembling of creditors, but refers to the meeting called to choose an assignee, whether it be held on the day designated in the notice or on the day to which it adjourns, and is used in contradistinction to the terms " second meeting " and "third meetings. (In re Phelps et al., 1 N. B. R 139; 2 Amer. Law T. Rep. Bankr. 25; Fed Cas. 11071.) There can be only one "first meeting," and all adjournments are a continuance of the same. If objection to the appointment of an assignee is made at that stage, it is considered as continuing, and the register cannot appoint unless the objection is act- ually withdrawn. (In re Norton, 6 N. B. R 297; Fed. Cas. 10348.) This " first meeting " should be organized at the hour designated in the offi- cial notice, and should be kept open until an assignee is chosen or it is ascertained that no choice can be made. (In re Phelps et al., 1 N. B. R 139; 2 Amer. Law T. Rep. Bankr. 25; Fed. Cas. 11071.) Adjournments. — Registers with the exercise of proper legal discre- tion have Mitire control over proceedings pending before them, includ- ing the power to grant or refuse adjournments and postponements (In re Hyman, 2 N. B. R 107; 3 Ben. 28; 36 How. Pr. 282; Fed. Cas. 6984; In re Chemy et aL, 19 N. B. R 16; Fed. Cas. 2637); but he has no authority to adjourn a meeting where a warrant was issued in a case returnable on a certain day, but because of yellow fever he was prevented from at- tending at that time, and he made orders of adjournment and forwarded them to his assistant, he being absent from the city. (In re Dickinson, 18 N. B. R 514; 26 Pittsb. Leg. J. 148; Fed. Cas. 3895.) 5. At the first meeting of creditors tlie judge or referee shall preside, and, before proceeding with the other business, may allow or disallow the claims of creditors there presented, and may publicly examine the bankrupt or cause him to be examined at the instance of any creditor. Act of 1867. Seo. 4. . . . Every register in bank- ruptcy shall . . . hold and preside at meetings of cred- itors. 262 LAW OF BAIfTKETIPTOT. [§ 55, 5. Seo. 12. . . . At tlie meeting held in pursuance of the notice, one of the registers of the court shall preside, and the messenger shall make return of the warrant and of his doing thereon; and if it appears that the notice to the cred- itors has not been given as required in the warrant, the meeting shall forthwith be adjourned, and a new notice given as reqmred. . . .] At the first meeting after the adjudication or after a vacancy has occurred in the office of trustee, the creditors shall appoint one or three trustees. (Sec. 44, a.) When present at the first meeting of his creditors, and at such other time as the court shall order, the bankrupt must submit to an examination concerning the conduct of his busi- ness, the cause of his bankruptcy, his dealings with his creditors and other persons, the amount, kind and whereabouts of his property, and, in addition, all matters affecting the administration and settlement of his estate. (Seo. 7, a.) Proof of claims. — A preferred creditor may, in many cases, surrender his security or preference at the first meeting of creditors, and prove his claim. (In re Saunders, 13 N. B. E. 164; 2 Lowell, 444; Fed. Cas. 12371.) At the first meeting of creditors in the case of an involuntary bankrupt, proofs of certain claims against the estate were presented, but, the names of the alleged creditors not appearing on the bankrupt's schedule, it was ordered that the proofs should be postponed until after the elec- tion of an assignee. (In re Milwain, 12 N. B. E. 358; 1 N. Y. Wkly. Dig. 76; Fed. Cas. 9623.) The register has no power either to admit or post- pone a contested claim which he considers vaUd, but must report it to the court if the vote upon it could afEect the choice of assignee. (In re Bartusch, 9 N. B. R. 478; Fed. Cas. 1086.) Examinatious of bankrapts. — Only the bankrupt or a creditor is en- titled to be represented by counsel, either before a register or the court, unless where a witness is made a party to a new collateral proceeding by being cited to answer for an alleged contempt. (In re Fredenburg, 1 N. B. R 34; 3 Ben. 133; Fed. Cas. 5075.) An attorney at law appearing before a register to represent a party in interest is to be recognized as such unless some one puts him to proof, by a rule therefor; but all others must produce formal powers of attorney. (In re Scott, Collins & Co., 15 N. B. R73; Fed. Cas. 12519.) A power of attorrey authorizing a person to appear for a creditor is not required to be acknowledged. (In re Powell, 2 N. B. R 17 ; Fed. Cas. 11354.) An order for the examination of a bankrupt must be applied for by petition or affidavit duly verified, showing good cause therefor. (In re Adams, 2 N. B. R 33; 2 Ben. 503; 86 How. Pr. 51; Fed. Cas. 39.) And a register may allow such order for an examination by each creditor. (In re Adams, 2 N. B. R 93; 3 Ben. 7; 86 How. Pr. 370; 1 Chi Leg. News, 107; Fed. Cas. 40.) A bankrupt may be examined, not- § 55, &.] MEETINGS OF OEEDITOKS. 263 ■withstanding the creditor failed to appear upon the day fixed for the original examination. (In re Robinson et al., 3 N. B. R. 162; 2 Amer. Law T. Rep. Bankr. 87; Fed. Cas. 11942.) The first meeting of creditors had been held, and an order made for the examination of the bankrupt by a certain creditor, but the date was several times postponed. The bankrupt finally obtained an order to show cause why he should not be discharged, to the granting of which the creditor objected, and an exam- ination was allowed. (In re Seckendorf, 1 N. B. R. 185; 2 Ben. 464; 15 Pittsb. Leg. J. 450; 1 Amer. Law T. Rep. Bankr. 132; Fed. Cas. 13600.) He was also required to submit to examination, which, under a previous order, had been abruptly terminated by non-attendance of assignee's counsel (In re Van Tuyl, 3 N. B. R. 25; Fed. Cas. 16881.) At the pubHo meeting after the application for a discharge before the register, or at any adjourned session of it, the bankrupt's examination may be finished (In re Sherwood, 1 N. B. R. 74; 25 Leg. Int. 76; 1 Amer. Law T. Rep. Bankr. 47; 6 Phila. 4G1; Fed. Cas. 13774); and the examination maybe adjourned beyond the return day of the order to show cause. (In re Mawson, 1 N. B. R. 41; 1 Amer. Law T. Rep. Bankr. 46; Fed Cas. 9320.) See also Evidence, sec. 21, ante. Selection of trustees. — If the schedule of a voluntary bankrupt dis- closes no assets, and if no creditor appears at the first meeting, the court may order that no trustee be appointed. (Orders XV.) When at the first meeting of creditors but one creditor proves his debt, he has the right to choose the assignee. (In re Haynes, 2 N. B. R. 78; 1 Gaz. 78; Fed. Cas. 6269.) The right of creditors to choose one or more assignees or trustees at the first meeting cannot be denied, and after an assignee has been appointed he may, at a subsequent meeting, be removed and trustees appointed in his stead. (In re Jones, 2 N. B. R. 30 ; Fed. Cas. 7447.) A cred- itor cannot change his vote, on the ground of his own mistake in voting after the meeting of creditors has adjourned, and thereby give the reg- ister power to appoint the assignee. (In re Scheiffer et aL, 2 N. B. R. 179; 1 Chi Leg. News, 361; Fed. Cas. 13445.) See also Appointment of Tbitstees, sec. 44, ante. Estoppel. — A creditor who assents byword or act, or even by silence, at a meeting of creditors, is estopped to set up a deed as an act of bank- ruptcy. (In re Mass. Brick Co., 5 N. B. R. 408; 2 Lowell, 58; 4 Amer. Law T. 230; Fed. Cas. 9359.) Composition meetings of creditors. — A composition absolutely dis- charges the debts of those creditors whose names, addresses and debts are placed in the statement produced at the meeting of creditors, and no other discharge is needed. (In re Becket, 13 N. B. R. 301 ; 2 Woods, 173; 7 ChL Leg. News, 243; Fed. Cas. 1210.) The creditors affixing con- firmatory signatures to the resolution of composition need not have been present at the creditors' meeting; nor need their signatures be attached at such meeting, but they must have been attached at or before the hearing. (In re Scott, Collins & Co., 15 N. B. R. 73; 4 Cent. Law J. 29; 264 LAW OV BANKEUPTOT. [§ 55, 5. Fed. Cas. 12519.) A resolution of composition cannot be recorded where the statement of assets and of debts shows that the requisite proportion of creditors have not confirmed it, although the statement is inaocuratei. A statement of debts and assets can be corrected only at a meeting of creditors. (In re Asten et aL, 14 N. B. R. 7; 8 Ben. 350; Fed. Cas. 591) Where notice of the first meeting does not reach creditors, and the court is satisfied that their votes would have changed the result, and that they did not attend through failure of the notice, on their application the meeting should be re-opened and each vote received; but this relief should be sought promptly, and if one waits \intil the second meeting has convened, he cannot have the first meeting re-assembled without good cause for the delay. (In re Spencer, 18 N. B. B. 199; Fed. Caa 13329.) The rulings of the register on the right to vote in a composition meet- ing are subject to review by the court to determine whether the requi- site majority of those present has assented to the composition; and when the right of a party to prove his claim and vote at a composition meet- ing is denied by the register, his course is to ask an adjournment of the meeting until his right as a creditor be determined by the court before the final vote. (In re Spencer, 18 N. B. R. 199; Fed. Cas. 13229.) At- taching creditors have no right to participate in a composition meeting. (In re Shields, 15 N. B. R 533; 4 Dill. 588; 4 Cent. Law J. 537; 24 Pittsb. Leg. J. 190; Fed. Cas. 13784) A resolution of composition may be con- firmed, although it does not provide for the expenses of an attachment, if there has been no first meeting of creditors and no appointment of an assignee. A resolution of composition which is passed without call- ing the first meeting of creditors and electing an assignee does not dissolve an attachment issued within four months before the commence- ment of such proceedings. (In re Clapp & Co., 14 N. B. R. 191; 3 Lowell, 468; Fed. Cas. 3785.) When the resolution of composition has been defi- nitely passed upon by the creditors assembled, the business of the meet- ing is over. (In re Spillman, 13 N. B. B. 214; 23 Pittsb. Leg. J. 87; Fed. Cas. 13242.) When a debtor has had a meeting of his creditors duly held, and has had his proposition for a settlement passed upon, he should not be permitted to annoy his creditors by requiring their attendance at further meetings; but where it clearly appears that the object of the meeting failed, by reason of the failure to properly instruct the attor- neys who represented the dissenting creditors, it is proper to direct an- other meeting for the purpose of again considering the debtor's offer of a composition. (In re McDowell et aL, 10 N. B. R. 459; 6 Biss. 193; 6 Chi. Leg. News, 413; Fed. Cas. 8776.) Objection to the confirmation of a composition which was opposed by two creditors on the ground that at the first meeting one of the debtors was excused from examination on account of illness, by vote of the creditors, was held to be frivolous. (In re Wilson et aL, 18 N. B. R. 300; Fed. Cas. 17785.) Small minority of creditors present at a composition meeting have a right to insist upon opportunity for examination of bankrupt before vote is taken, but such § 55, C, (Z.] MEETINGS OF CEEDITOES. 265 right is waived by moving for vote before such examination has been had. (In re Little, 19 N. B. R. 234; 2 N. J. Law J. 311; Fed. Cas. 8893.) The creditors are to decide on the sufficiency of the excuse for a debtor's absence from their meeting, and the court should not disturb such de- cision without good cause shown. (In re Wronkow et al., 18 N. B. R. 81; 26 Pittsb. Leg. J. 2; 15 Blatchf. 38; Fed. Cas. 18105.) c. The creditors shall at each meeting take such steps as may be pertinent and necessary for the promotion of the best interests of the estate and the enforcement of this Act. d. A meeting of creditors, subsequent to the first one, may be held at any time and place when all of the creditors who have secured the allowance of their claims sign a written consent to hold a meeting at such time and place. [Act of 1867. Sec. 27. . . . At the expiration of three months from the date of the adjudication of bankruptcy in any case, or as much earlier as the court may direct, the court, upon request of the assignee, shall call a general meet- ing of the creditors, of which due notice shall be given, and the assignee shall then report, and exhibit to the court and to the creditors just and true accounts of all his receipts and payments, verified by his oath, and he shall also produce and file vouchers for all payments for which vouchers shall be required by any rule of the court ; he shall also submit the schedule of the bankrupt's creditors and property as amended, duly verified by the bankrupt, and a statement of the whole estate of the bankrupt as then ascertained, of the property recovered and of the property outstanding, speci- fying the cause of its being outstanding, also what debts or claims are yet undetermined, and stating what sum remains in his hands. At such meeting the majority in value of the creditors present shall determine whether any and what part of the net proceeds of the estate, after deducting and retaining a sum sufficient to provide for all undetermined claims which, by reason of the distant residence of the cred- itor, or for other sufficient reason, have not been proved, and for other expenses and contingencies, shall be divided among the creditors; but unless at least one-half in value of the creditors shall attend such meeting, either in person or by attorney, it shall be the duty of the assignee so to deter- mine. . . , Sec. 28. . . . If by accident, mistake, or other cause, without default of the assignee, either or both of the said 266 LAW OF BANKEUPTOT, [§ 55, e,f. second and third meetings should not be held within the times limited, the court may, upon motion of an interested party, order such meetings, with like effect as to the valid- ity of the proceedings as if the meeting had been duly held.] In the event that no trustee is appointed by reason of the fact that the schedule of a voluntary bankrupt discloses no assets, and if no cred- itor appears at the first meeting, the court may order that no meetings other than the first meeting shall be called. (Orders XV.) Whenever by reason of a vacancy in the office of trustee or for any other cause, it becomes necessary to call a special meeting, the court may caU such meeting. (Orders XXV.) e. The court shall call a meeting of creditors whenever one-fourth or more in number of those who have proven their claims shall file a written request to that effect ; if such request is signed by a majority of such creditors, which number represents a majority in amount of such claims, and contains a request for such meeting to be held at a desig- nated place, the court shall call such meeting at such place within thirty days after the date of the filing of the request. f. "Whenever the affairs of the estate are ready to be closed a final meeting of creditors shaU. be ordered. [Act of 1867. Sec. 28. . . . That the like proceed- ings shall be had at the expiration of the next three months, or earlier, if practicable, and a third meeting of the credit- ors shall then be called by the court, and a final dividend then declared, unless any action at law or suit in equity be pending, or unless some other estate or effects of the debtor afterwards come to the hands of the assignee, in which case the assignee shall, as soon as may be, convert such estate or effects into money, and within two months after the same shall be so converted, the same shall be divided in manner aforesaid. Further dividends shall be made in like manner as often as occasion requires ; and after the third meeting of creditors no further meeting shall be called, unless ordered by the court.] The trustee must lay before the final meeting a detailed statement of the administration of the estate; and make final reports and file final accounts with the court fifteen days before the day fixed for the final meeting of the creditors (sec. 47, a), of which ten days' notice must be given all creditors. (Sec. 58, a.) § 56, a.] VOTERS AT MEETINGS OF 0EEDITOE8. 267 Sec. 56. Toters at meetings of creditors. — a. Creditors shall pass upon matters submitted to them at their meetings by a majority Tote in number and amount of claims of all creditors "whose claims have been allowed and are present, except as herein otherwise provided. [Act of 1867. Sec. 23. . . . And any creditor may act at all meetings by his duly constituted attorney the same as though personally present.] While this section does not in so many words provide for representa- tion at creditors' meetings otherwise than in the person of the creditor, yet in view of the fact that the term " creditor " comprehends any one who owns a demand or claim provable in bankruptcy, and may include his duly authorized agent, attorney or proxy (sec. 1 — 9), it is clear that the law-makers intended to sanction a mode of representation through a duly authorized agent, attorney or proxy. This is further borne out by the fact that a penalty is provided for any person presenting under oath any false claim for proof against the estate of a bankrupt, or using any such claim in composition, personally or by agent, proxy or attor- ney, or as agent, proxy or attorney. (Sec. 39, b, 3.) By General Orders IV it is provided that a party may appear and conduct the proceedings by an attorney. The time and place for holding meetings is fixed by section 55. Election of trustee. — Where an assignee offered certain creditors to pay their claims in full in consideration of their giving him power of attorney to vote for them at election of assignee, the court held that the election should be disregarded and the official assignee be appointed. (In re Haas & Samson, 8 N. B. R. 189; Fed. Cas. 5884.) Atthe first meet- ing of creditors, fifty creditors, representing about $1,000 of claims, voted for J. C. for assignee, and twenty creditors, representing about $10,000, voted for N. C, whereupon the register stated that as there was no choice made it would be his duty to appoint the assignee, and he accord- ingly appointed J. C. The court held that the duty of appointing the assignee devolved upon the judge of the bankruptcy court, and that any creditor had the right to object to the appointment being made by the register. (In re Pearson, 3 N. B. R. 151; 3 Amer. Law T. Rep. Baukr. 66; Fed. Cas. 10878.) A creditor cannot change his vote on the ground of his own mistake in voting after the meeting of creditors has adjourned, and thereby give the register power to appoint the assignee; but such creditor may explain his mistake, or make any other objection to the choice of the assignee to the court before which the subject of the ap- proval of the assignee wiU be heard and determined. (In re ScheifiEer et aL, 3 N. B. R 179; 1 Chi Leg. News, 361; Fed. Cas. 13445.) See also Appointment of Trustees, sec. 44 268 LAW OF BANKEUPTOT. [§ 56, 05. Postponement of proof of claim as affecting election of trustee. — The postponement of a proof of claim by a register in bankruptcy affects no right of the creditor except the right to vote for assignea (In re Lake Superior Ship Canal, Railroad and Iron Co., 7 N. B. E. 376; Fed. Cas. 7997.) Proofs of claim filed after election for an assignee in bankruptcy will not entitle claimant to vote thereon to change the result of an elec- tion appealed from. (In re Lake Superior Ship Canal, Eailroad and Iron Co., 7 N. B. R. 376; Fed. Cas. 7997.) Debts proved before election of assignee and sold and assigned after proof must be voted upon by owner and not original creditor, the owner being entitled to one vote; and debts proved and filed with the register may be postponed for investiga- tion before the assignee, and not allowed to be voted upon for assignee. (In re Frank, 5 N. B. R. 194; 5 Ben. 164; Fed. Cas. 5050.) Where the of- ficers of a bankrupt corporation present large claims, the register in bankruptcy should postpone the proof of such claims until after the election of assignee. The vote for assignee must be taken at the earliest practicable moment. Creditors who have proved their claims may, if they choose, postpone such action until others have proved, but they are not compelled to do so. So, if proofs of claims are postponed, such cred- itors are not entitled to vota They may, however, have the proceed- ings certified to the court, and, if the register's rulings were erroneous, the court will set aside the result of the vote and refer the matter back for a new vote, unless it appears that the vote of the complaining cred- itor would not change the result. (In re Lake Superior Ship Canal, RaUroad and Iron Co., 7 N. B. R. 376; Fed, Cas. 7997.) Power of attorney to appear for voter. — A power of attorney au- thorizing a person to appear for a creditor is not required to be acknowl- edged (In re Powell, 3 N. B. R. 17; Fed. Cas. 11354); but it has been held that an attorney cannot act for a creditor at meetings held in the course of proceedings in bankruptcy, unless authorized to do so by power of at- torney properly acknowledged. (In re Christley, 10 N. B. R. 268; Fed. Cas. 2703.) A power of attorney executed by one member of a fixm, on behalf of the firm, authorizing a person to cast the vote of the firm for assignee at the first meeting of creditors, is valid. (In re Barrett, 2 N. B. B. 165; 3 Hughes, 444; 1 Chi Leg. News, 303; 3 Amer. Law T. Rep. 183; 11 Lit. Rev Reo. 31; 1 Amer. Law T. Rep. Bankr. 144; Fed. Cas. 1043.) A power of attorney, in accordance with the proper form, in which the concluding words are: "and with like power to attend and vote at any other meeting or meetings of creditors, or sitting or sittings of the court, which may be holden therein, for any of the purposes aforesaid, or for the declaration of dividend, or for any other purpose, in my interest whatever," does not authorize the filing of an opposition to the bank, rupfs discharge by the attorney to whom the letter is given. (Creditors v. Williams, 4 N. B. R. 187; Fed. Cas. 3379.) Proof of claim necessary to qualify voter. — Until he has proven his claim, a creditor has no right to be heard in bankruptcy proceedings or § 56, a.] VOTKRS AT MEETINGS OF OEEDITOES. 269 in any other character (In re Brisco, 2 N. B. E. 78; 1 Gaz. 78; Fed. Cas. 1886); and creditors inhibited from proving their debts will be excluded from voting for an assignee. (In re Stevens, 4N. B. R 123; Fed. Cas. 13391.) Only creditors who prove their claims are entitled to engage in or take part in the proceedings at a composition. (In re Keller et al., 18 N. B. R. 331 ; Fed. Cas. 7654 See also In re Mathews et aL, 17 N. B. R 225; Fed. Cas. 9274.) Powers of general creditors. — The general creditors have no power to act except to vote on the selection of an assignee and on the subject of dividends. (In re Campbell et al., 17 N. B. E. 4; 8 Hughes, 276; Fed. Cas. 2348.) So when at a meeting of creditors for election of assignee one creditor refused to sign after voting, and another's vote was rejected on the ground of having voted corruptly, and three votes were taken be- fore a majority was secured, the court held, first, that a creditor has a right to change his miad after voting ; second, that a corrupt vote should be rejected; and third, the result not being affected by such rejection, a new selection should not be ordered. (In re Pfromm, 8 N. B. E. 357; Fed. Cas. 11061.) Efforts of bankrupt's friends to buy his debts and stop proceedings in bankruptcy do not constitute fraud upon Bankrupt Act, and constitute no reason for not voting upon the debts for election of assignee. (In re Frank, 5 N. B. R 194; 5 Ben. 164; Fed. Cas. 5050.) Testlmouy as to voter's qualification. — A register is not authorized to hear testimony as to a creditor's right to vote for assignee, without special order of the court. (In re Noble, 8 N. B. E. 25; 3 Ben. 332; Fed. Cas. 10282.) As a very general rule, the register should demand the same degree of proof, before admitting a creditor to vote for assignee, as is requisite in a trial at law or a hearing in equity. Exceptional cases, if free from all suspicion, might authorize his deviation from such rule. (In re Northern Iron Co., 14 N. B. R 356; Fed. Cas. 10322; R S. 5083.) Partnership — Choosing an assignee. — Creditors who have proved a debt against a partner of a firm in bankruptcy have no right to partici- pate in the election of the assignee for the firm, who must be chosen by the creditors of the firm only. (In re Phelps, 1 N. B. R 139; 2 Amer. Law T. Eep. Bankr. 25; Fed. Cas. 11071.) In a separate adjudication against a bankrupt who is or has been a member of a firm, the separate creditors are entitled to vote for assignee (In re Falkner, 16 N. B. E. 503; Fed. Cas. 4624); and in case of the separate bankruptcy of one member of a firm, a joint creditor is entitled to prove his joint debt and vote for assignee. (In re Webb, 16 N. B. R. 258; 4 Sawy. 326; 10 Chi. Leg. News, 27; 5 N. Y. Wkly. Dig. 174; Fed. Cas. 17317.) A joint creditor can prove under a separate bankruptcy, though not to compete in the separate assets, and may vote for assignee (Wilkins v. Davis, 15 N. B. R 60; 2 Lowell, 511; Fed. Cas. 17664); but a special partner has no right to vote in composition proceedings of the firm. (In re Henry, 17 N. B. R 463; 9 Ben. 449; Fed. Cas. 6370.) 270 LAW OI' BAKKEUPTOT. [§ 56, 5. Toting at first meeting — Composition. — At the first meeting a creditor represented himself and filed proof of claim. He was not pres- ent at the last session when the vote was taken on a resolution of com- position. The court held that he was to be counted as voting against the resolution unless he clearly indicated his intention to withdraw (In re Eichmond et aL, 18 N. B. R. 363; Fed. Cas. 11798); so if a creditor fails to act on a composition his non-action is equivalent to a vote against what the debtor wants (In re Lissberger, 18 N. B. E. 230; Fed. Caa 8384); and after a composition was accepted at the creditors' meeting, objec- tion was taken to the vote of one of the creditors. It was held that the objection was too late. (In re Block et al., 18 N. B. R. 328; Fed. Cas. 1551.) Where a debtor deceives his creditors into a vote on a composition which they would not have given had they known the facts, the court will interfere and withhold assent to the composition, even if there is only one dissenting creditor (In re Keller, 18 N. B. R 36; 10 ChL Leg. News, 299; Fed. Cas. 7648); and when a party is aggrieved by ruling on his application for opportunity to prove his right to vote, the court may re-open the meeting and adjourn it, and provide for the determination of questions of the right to vote before the final vote is taken. (In re Spencer, 18 N. B. E. 199; Fed. Cas. 13239.) It must appear that wrong has been done to the minority creditors by the vote of the majority on a composition before the court will interfere. (In re Wronkow et aL, 18 N. B. E. 81; 26 Pittsb. Leg. J. 3; Fed. Cas. 18105.) 5. Creditors holding claims -which are secured or have pri- ority shall not, in respect to such claims, be entitled to vote at creditors' meetings, nor shall such claims be counted in computing either the number of creditors or the amount of their claims, unless the amounts of such claims exceed the values of such securities or priorities, and then only for such excess. [Act of 1867. Seo. 18. . . . No person who has re- ceived any preference contrary to the provisions of this act shall vote for or be eligible as assignee. . . The claims of secured creditors and those who have priority may bo allowed to enable such creditors to participate in the proceedings at creditors' meetings held prior to the determination of the value of their securities or priorities. (Sea 57, c.) Secured creditors. — None but unsecured creditors should be heard at the hearing for ratification of the composition for which notice was given (In re Scott, CoUins & Co., 15 N. B. R 73; 4 Cent. Law J. 39; Fed. Gas. 13519) ; and a secured creditor may vote for assignee on so much of § 57, a.] PEOOF AND ALLOWANCE OF CLAIMS. 271 his debt as is imseoured, where the security applies to a specific portion of his debt. (In re Parkes et al., 10 N. B. R. 82; Fed. Cas. 10754. See also In re Bolton, 1 N. B. R. 83; 2 Ben. 189; 1 Am. Law T. Rep. Bankr. 120; Fed. Cas. 1614 Contra, In re StiUwell, 7 N. B. R. 226; 11 Am. Law Reg. (N. S.) 706; Fed. Cas. 13448.) Disqualified by fraud. — One who has received a preference in fraud of the Bankrupt Act cannot vote for assignee, and can surrender his preference to the assignee so as to prove his claim against the bankrupt's estate (In re Parham et aL, 17 N. B. R. 800; Fed. Cas. 10713); and where certain creditors have received preferences, or their claims have been purchased with money belonging to bankrupt, the proof of such claims will be postponed until after the election of assignee, and their votes for assignee wiU be rejected (In re Hermann et aL, 3 N. B. R. 153; Fed. Cas. 6425; see In re Chamberlain et aL, 8 N. B. R. 173; Fed. Cas. 2574); but a creditor who has bought a debt with intent to prevent the adoption of a resolution for composition may vote upon it at the meeting for composi- tion, if he have no fraudulent motive. (Ex parte Morris, 12 N. B. R. 170.) Sec. 57. Proof and allowance of claims — a. Proof of claims shall consist of a statement under oath, in writing, signed by a creditor setting forth the claim, the considerar tion therefor, and whether any, and, if so what, securities are held therefor, and whether any, and, if so what, pay- ments have been made thereon, and that the sum claimed is justly owing from the bankrupt to the creditor. [Act of 1867. Sec. 22. . . . That all proofs of debts against the estate of the bankrupt, by or in behalf of cred- itors residing within the judicial district where the proceed- iugs in bankruptcy are pending, shall be made before one of the registers of the court in said district, and by or in be- half of non-resident debtors before any register in bankruptcy in the judicial district where such creditors or either of them reside, or before any commissioner of the circuit court au- thorized to administer oaths in any district. To entitle a claimant against the estate of a bankrupt to have his demand allowed, it must be verified by a deposition in writing on oath or solemn affirmation before the proper register or Com- missioner setting forth the demand, the consideration thereof (Here follows requirement as to contents of oath.) . . . Such oath or solemn affirmation shall be made by the claim- ant, testifying of his own knowledge, unless he is absent from the United States or prevented by some other good cause from testifying, in which cases the demand may oe verified in like manner by the attorney or authorized agent of the 272 LAW OF BANKEUPTCT. [§ 57, a. claimant testifying to the best of his knowledge, informar tion, and belief, and setting forth his means of knowledge; or if in a foreign country, the oath of the creditor may be taken before any minister, consul, or vice-consul of the United States ; and the court may, if it shall see fit, require or receive further pertinent evidence either for or against the admission of the claim. Corporations may verify their claims by the oath or solemn affirmation of their president, cashier, or treasurer. If the proof is satisfactory to the register or the commissioner, it shall be signed by the deponent, and delivered or sent by mail to the assignee, who shall examine the same and compare it with the books and accounts of the bankrupt, and shall register, in a book to be kept by him for that purpose, the names of creditors who have proved their claims, in the order in which such proof is received, stating the time of receipt of such proof, and the amount and nature of the debts, which books shaR be opened to the inspection of all the creditors.] The bankrupt is required to examine the correctness of all proofs of claims filed against his estata (Sec. 7 — 3.) From a judgment aUowing or rejecting a claim or debt of $500 or over, an appeal may be taken to the circuit court of appeals (sec. 35, a); and if the amount in contro- versy exceeds $3,000 it may be taken from the circuit court of appeals to the Supreme Court, or where a justice of the Supreme Court certifies that the determination of the questions involved is essential to a uniform construction of the act. (Sec. 25, b.) U. S. Rev. Stat, § 1778, and the act of August 15, 1876 (1 Supp. E. S. 133), make provision for the persons before whom oaths may be administered. Proofs of claims and other papers filed subsequently to the reference, except such as call for action by the judge, may be filed either with the referee or with the clerk. (Orders XX) Provision with reference to the proof of claims may also be found in Orders XXL HoTV proof must be given. — A debt is to be considered as proved when it is duly authenticated and sent to the assignee or to the register. (Ex parte Harris et aL, 16 N. B. E. 433; Fed. Cas. 6109.) In a proof of debt the creditor should set forth at least one full Christian name of the affiant and of the bankrupt, in addition to the surname. (In re Valen- tine, 13 N. B. E. 389; 4 Biss. 317; 1 N. Y. "Wkly. Dig. 101; Fed. Cas. 16812.) The court has no discretion to refuse to receive and file a proof of debt which appears on its face to have been taken by a proper officer and to be correct in form and in substance. (In re Merrick, 7 N. B. E. 459; Fed. Cas. 9463.) Informality in proofs is not material where the creditor, as a witness, has sworn positively of his own knowledge. (McKinsey et aL V. Harding, 4 N. B. R. 10; Fed. Cas. 8866.) A deposition in support of a proof of claim in involuntary bankruptcy must show whether the clainx § 57, a.] PEOOF AND ALLOWANCE OF CLAIMS. 273 is secured or unsecured. (Cunningham v. Cady, 13 N. B. R. 535; 8 Chi. Leg. News, 165; 4 Am. Law Eeo. 510; Fed. Cas. 8480.) Where the consideration for a note presented for proof is set forth in a creditor's deposition as goods, wares, merchandise, etc., there should he stated the kind of goods, the quantity, the price, the date of the trans- action and the time of delivery, if delivered at one time, or, if delivered continuously through a period of time, that period should be stated. (In re Elder, 3 N. B. R. 165; 1 Sawy. 73; 17 Pittsb. Leg. J. 178; 3 Amer. Law T. 140; 3 Chi Leg. News, 341; 1 Amer. Law T. Eep. Bankr. 198; Fed. Cas. 4336.) For the holder of the paper of a bankrupt to be able to prove his claim, he must show that he paid value when he took it, or incurred some responsibility, or relinquished some right, or granted some indulgence, or discharged a precedent debt, upon the faith and credit of the paper. (In re Howard, Cole & Co., 6 N. B. E. 373; Fed. Cas. 6751.) If no proof of loss has been furnished an insurance company or its assignee, but the assured proves his loss as a debt against the estate in bankruptcy, the claira wiU only be allowed upon proof that the com- pany while solvent waived such proof. The assignee has no power to waive the proof. (In re Firemen's Ins. Co., 8 N. B. R. 133; 5 ChL Leg. News, 365; Fed. Cas. 4796.) Proof of debt in a foreign country must be taken in accordance with the requirements of the United States statutes. (In re Robert v. Lynch et al, 16 N. B. R. 88; 34 Pittsb. Leg. J. 305; Fed. Cas. 8635.) What must be proved. — All claims against the estate of a bankrupt, however evidenced, must be proved (Blum v. Ellis, 13 N. B. R. 845); and he cannot legally be discharged, where the proofs of debt have been lost, until they are supplied. (In re Friedlob, 19 N. B. E. 133; 11 ChL Leg. News, 189; Fed. Cas. 5118.) By whom proof must be made. — Generally speaking, only the holder and owner of a claim can make proof. (In re Ford et aL, 18 N. B. R. 436; Fed. Cas. 4933.) A mere agent, holding negotiable paper, cannot prove it, under objection, excepting in the name and for the benefit of the real owner, and therefore not at all when the owner is in a situation to make the proof himself (In re Saunders, 18 N. B. R. 164; 3 Lowell, 444; Fed. Cas. 13371); but proof of debt may be made by an agent who has had exclu- sive charge of the same, and knows personally all the facts required to be sworn to in proving it, the creditor himself having no personal knowl- edge thereof. (In re Watrous et al., 14 N. B. R. 358; 3 N. Y. Weekly Dig. 180; Fed. Cas. 17370; R S. 5078.) Mere absence from the state or the locality where the proof is made is not alone cause for proof by an agent. (In re Jackson et aL, 14 N. B. R. 449; 7 Biss. 380; Fed. Cas. 7133.) The absence of a claimant which will render a proof of debt by an agent ad- missible must be "from the United States; " nor will his agent's oath, that he is better acquainted with the facts than his principal, render the 18 274 LAW or BAiiKEUPTor. [§ 57, a. agent's deposition alone admissible as proof. (In re Wiiyte, 9 N. B. E. 267; Fed. Cas. 17606.) A receiver of property of a creditor of a bankrupt is an assignee of the debt due such creditor, and as such assignee may prove it, but if assigned before proof, the proof must be supported by deposition. (In re Mills, 17 N. B. E. 472; Fed. Cas. 9613.) A person who has acquired claims against a bankrupt by purchase, in an endeavor to settle the matter out of court will be allowed to prove these claims as though he were the original creditor. (In re Pease, 6 N. B. E. 173; Fed. Cas. 10880.) Where a note is held by a party as trustee for another, it must be proved by the holder as trustee or by the real owner. (Er parte Dreyfus, 13 N. B. R 43; 3 LoweU, 305; 1 N. Y. "Weekly Dig. 296; Fed. Cas. 8043.) Where there is presented for proof against a bankrupt's estate an ac- count for goods sold to the bankrupt by a third person, which account is assigned for value to the one presenting it, before bankruptcy, the depo- sition of such party only need be produced. (In re Fortune, 3 N. B. E. 83.) Before -whom proof mnst be made.— Where the proof of a debt is taken before the attorney of the creditor it is inadmissible. (In re Nebe, 11 N. B. R 389; Fed. Cas. 10073.) A notary public before whom proof is made must authenticate the same by his official seal as well as his signature, and a seal used in common with others wiU not answer. (In re Nebe, 11 N. B. R 389; Fed. Cas. 10073. For contra see In re Strauss, 3 N. B. R 18; Fed. Cas. 18583; and In re Haley, 3 N. B. R 13; Fed. Cas. 5918.) It is sufficient if a creditor prove his claim before a notary public, who subscribes the jurat with his name, the words " notary public," and the county and state, and on the paper containing his certificate is impressed a seal containing the words " Notarial Seal," and the county and state, there being in the center of the seal a device impressed in the paper. (In re William W. Phillips, 14 N. B. R 319; 8 Chi Leg. News, 409; 33 Int. Eev. Eec. 306; Fed. Cas. 11098.) Although bankruptcy proceedings have been stayed, the sole power to admit claims against the bankrupt's estate is not vested in the trustee, but they may and should be proved before the register. (In re Bakewell, 4 N. B. R 199; 18 Pittsb. Leg. J. 289; 3 Pittsb. Eep. 333; Fed. Cas. 788.) When proof may be made. — Where an assignee's discharge is im- properly made and is set aside, claims may be proved subsequent to such discharge. (In re Maybin, 15 N. B. R 468; Fed. Cas. 9337.) Proofs of claim filed after election for an assignee in bankruptcy wiU not en- title a claimant to vote thereon to change the result of an election appealed from. (In re Lake Superior Ship Canal, Eailroad and Iron Co., 7 N. B. R 376; Fed. Cas. 7997.) A creditor who proves his claim after the time for the hearing of an application for discharge cannot be heard in opposition to the application, nor can his debt be counted among the claims proved so as to affect the discharge. (In re Borst, 11 N. B. R 96; Fed. Cas. 1666.) A plaintiff in a suit to enforce a Uen against property of a bankrupt, pending at the commencement of proceedings in bank- § 57, a.] PKOOF AND ALLOWANCE OF CLAIMS. 275 ruptcy, may, before the conclusion of such suit, prove his claim and have the same allowed by the court in bankruptcy as a valid lien for the full amount, (Buoknam v. Dimn et aL, 16 N. R E. 470; 3 Hask. 315; Fed. Cas. 3096.) Where an attorney files a petition with a register, setting up that prior to the bankruptcy he performed services for the bankrupt, for which he holds a note past due, and asks that the assignee be directed to pay him out of the funds for dividend, but he did not present the claim on the day appointed for the declaration of dividend, the fund cannot be re-opened to pay the claim. (In re Smith, 15 N. B. R. 97; 1 Tex. Law J. 43; Fed. Cas. 13989.) What is not proof. — A creditor who, after making his deposition to prove his debt, retains possession of the deposition and does not allow it to pass into the hands of the assignee in bankruptcy, is not a creditor who has proven his debt. (In re Sheppard, 1 N. B. E. 115; 7 Amer. Law Reg. (N. S.) 49; Fed. Ca& 13753.) A deposition setting forth a claim against a bankrupt for unliquidated damages for a breach of contract, which does not appear in the bankrupt's schedules, is not proof thereof, unless the amount is fixed by assessment, application for which must be made by the creditor. (In re Clough, 3 N. B. R. 59; 3 Ben. 508; 16 Pittsb. Leg. J. 35; Fed. Cas. 3905.) Postponement of proof. — Proof of a claim may be postponed until after the choice of an assignea (In re Smith, 1 N. B. R. 35; 3 Ben. 113; Fed. Cas. 12971.) Where the ofBcers of a bankrupt corporation present large claims, the register should so postpone the proof thereof. (In re Lake Superior Ship Canal, Railroad and Iron Co., 7 N. B. R. 376; Fed. Cas. 7997.) When it appears at the first meeting of creditors that the names of certain creditors by whom claims against the estate are pre- sented do not appear upon the schedule, the proof of such claims should be so postponed. (In re Milwain, 13 N. B. E. 358; 1 N. Y. Wkly. Dig. 76; Fed. Cas. 9623.) Where Skprimafade case is made out that certain cred- itors have received preferences, or that their claims have been purchased with money belonging to the bankrupt and in collusion with him, the proof of such claims will be so postponed (In re Herrman & Herrman, 3 N. B. R. 153; Fed. Caa 6426), as wiU a claim founded upon a large open accoimt between the parties, and which is in dispute between them, as it is of a doubtful character. (In re Jones, 3 N. B. R. 30; Fed. Cas. 7447.) The proof of a claim which, at the first meeting of creditors, was post- poned until the election of an assignee, is to be treated in all respects as if it had not been tendered and postponed. (In re Herrman et aL, 3 N. B. R. 161; 4 Ben. 126; Fed. Cas. 6435.) Amendment of proof. — A bankrupt court may allow proofs of debt to be amended, and in cases of mistake or ignorance, whether of fact or law, will generally exercise that power in the absence of fraud and when all parties can be placed in statu quo, if the error had not occurred, and where justice seems to demand that it should be done. (In re Parkes, 10 276 LAV/ OF BAKKEUPTCT. [§ 57, a. N. B. R. 83; Fed. Cas. 10754.) A creditor, after examination before the register touching his claim, may file supplemental proof of claim, cor- responding with the facts shown by his testimony. (In re Montgomery, 3 N. B. R. 108; Fed. Cas. 9739.) A creditor having security, and proving his demand in ignorance of his privilege, and omitting to mention his security, may be allowed, in the absence of fraud, to amend his proof. (In re McConnell, 9 N. B. R. 887; 10 Phila. 387; 31 Leg. Int. 61; 31 Pittsb. Leg. J. 107; Fed. Cas. 8713.) A deposition at the re-examiaation of an allowed claim may be filed with the same effect as if originally made as a deposition (In re Baxter et aL, 18 N. B. R. 560; Fed. Cas. 1131); but a creditor having proved his claim on an old promissory note will not be allowed to amend his proof to show that a new note was given, for which the old note was part consideration, but such new note should be proved independently. (In re Montgomery, 3 N. B. R. 109; Fed. Cas. 9731.) Withdrawal of proof. — Where a creditor makes proof of a claim and makes no mention of security held therefor, the proof being mad e through inadvertence, he should be given leave to withdraw it. (In re Clark & Bininger, 5 N. B. R. 355; Fed. Cas. 3806.) Where proof is made in igno- rance of the security, or even under a mistake in regard to the law in the case, he should be allowed to withdraw it, and then prove as a secured creditor, when no injury has resulted to the unsecured creditor by such improper proof. (In re Jaycox & Green, 8 N. B. R. 341; Fed. Cas. 7343.) A moiety only of a claim proTable.— If the holder of a biU or note neglect to prove agaiast the estate of one party to the note until he has received, or become entitled to receive, a dividend from any other party, he must give credit for what he has already received when he chooses to prove against the remaining party. (Ex parte Talcott, 9 N. B. R. 503; 3 Lowell, 330; Fed. Cas. 13184) One owning a debt secured by an insur- ance policy on the life of the bankrupt is entitled to prove the amount of the debt less the surrender value of the policy. (In re Newland, 7 N. B. R 477; 6 Ben, 343; Fed. Cas. 10170.) Pledgees of promissory notes void between the original parties thereto, which have been pledged to them as collateral security for the payment of an indebtedness, are en- titled to prove so much of the notes as wUl secure dividends to the full amount of their claim. (Bailey, Ass., v. Nicholas et aL, 3 N. B. R 151; 3 Amer. Law T. Rep. Bankr. 60; 1 Chi Leg. News, 185; Fed. Cas. 741.) Where a claimant, who has for several years held a chattel mortgage executed by the bankrupt, takes possession upon learning of his insolv- ency, and, within four months of the filing of the petition, seUs the prop- erty and purchases it at the sale, and the assignee recovers judgment for the value of the property, the plaintiff can only prove for a moiety of his claim. (In re E:aufman et aL, 19 N. B. R. 383; 3 N. J. Law T. 331; Fed. Cas. 7637.) Where a creditor, whose debt is seciured by a deed of trust upon property of the bankrupt, causes the same to be sold, it being purchased by himself and others, and he, without surrendering his secu- rity, appears before the register to prove his demand, he should have hia § 57, a.] PKOOF AND ALLOWANCE OF CLAIMS. 277 proof heard, and for any deficiency from the sale he is a general cred- itor, to share pro rata in the distribution of the general assets. (In re Ruehle, 2 N. B. E. 175; 3 Amer. Law T. Rep. Bankr. 59; 16 Pittsb. Leg. J. (O. S.) 5; 1 Chi. Leg. News, 186; Fed. Cas. 12113.) The holder of a note advanced by a factor to a manufacturer, and by him indorsed and pro- cured to be discounted, who has agreed to a composition with the factor and receives his right to prove the full amount of the note against the other parties to it, need not, in proving against the manufacturer, give credit for the full amount received by him on the composition, but must abate his proof by giving credit for the amount of the manufacturer's goods in possession of the factor at the time of his bankruptcy. (Ex parte Harris et al., 16 N. B. R 433; 3 Lowell, 568; Fed. Cas. 6109.) The proof, in general. — When a creditor seeks to prove a debt against the estate of a bankrupt, he stands iu the position of a plaintiff at law. (In re Prescott, 9 N. B. R. 385; 5 Biss. 533; 6 Chi Leg. News, 151; Fed. Cas. 11389.) Every person submitting himself to the jurisdiction of the bankrupt coiut in the progress of the cause, for the purpose of having his rights determined, is a party to the suit, and is bound by the deter- mination of the court. (WiswaU et al. v. Campbell et aL, 15 N. B. R. 421; 93 U. S. 347.) The proof of claim in bankruptcy is not a suit, the commencement of which is per se necessary to suspend the running of the statute of limitations (In re Eldridge & Co., 12 N. B. R. 540; 3 Hughes, 256; 1 N. Y. Wkly. Dig. 343; Fed. Cas. 4331); but the proceeding to prove a debt is part of the suit in bankruptcy, and the judgment of the circuit court thereon is finai (WiswaU et ai v. Campbell et ai. Ass., 15 N. B. R. 431; 93U. S. 347.) It is optional with the judgment creditor whether he will prove his debt in bankruptcy or rely on his judgment lien. (Heard v. Jones, 15 N. B. R 403.) When a debtor is adjudged a bankrupt, all proceedings against him in a state court must stop, if the subject-matter of the suit can be proven against his estate in bankruptcy; and no creditor who holds a claim which might be proven in bankruptcy, whether the debt is secured by lien or not, can enforce such debt in a state court, except by the permission of the district court. (In re Winn, 1 N. B. R. 131 ; 1 Amer. Law T. Rep. Bankr. 17; Fed. Cas. 17876.) Although a foreign creditor's rights are not affected by United States bankruptcy proceedings until proof of debt is made in the United States, yet the remedy afforded, when sought in the United States courts, must be determined by the Bankrupt Act and laws of the United States. (In re Bugbee, 9 N. B. R. 358; Fed. Cas. 3115.) Where a holder of promissory notes indorsed by the bankrupt pur- chases them for an exceedingly low price and is aware of trouble be- tween the maker and the indorser, he must be charged with knowledge which he might have obtained if he had made inquiry, and he is also charged with notice of the bankrupt's insolvency. (In re Hook, 11 N. B. R 282, Fed. Cas. 6672.) 278 LAW OF BANKETJPTCY. [§ 57, a. A creditor holding collaterals is not bound to apply them before en- forcing his direct remedies against the debtor. (Lewis, Trustee, v. United States, 14 N. B. R. 64; 92 U. S. 618.) The effect of proof. — Proving a debt in bankruptcy does not of itself operate as an absolute extinguishment or satisfaction of the debt, the creditor being remitted to his former rights and remedies if the bank- rupt be refused his discharge. (Bingee v. Becker, 9 N. B. R 508; Fed. Cas. 3919; Miller t. O'Kain, 14 N. B. R. 145.) Where proof of a claim is given in the form required by statute, a prima fade case is made, sub" jeot only to an order for further proof and the right of a creditor, or person interested, to offer counter-proof. (In re Saunders, 13 N. B. E. 164; 3 Lowell, 444; Fed. Cas. 12371.) Rights of creditors accrue after ad- mitted proof of claim, and such creditors then have the right to ask for an amendment of the petition for any defect therein. (In re Jones, 2 N. B. R 30; Fed. Cas. 7447.) A debt or principal must be proven or allowed before the costs made prior to the commencement of proceed- ing in bankruptcy can be proved and allowed. The original debt having been allowed, attachment costs may be proved if made before commence- ment of proceedings in bankruptcy without knowledge of insolvency. (In re Preston, 5 N. B. R. 298; Fed. Cas. 11393.) A creditor proving his claim is a " party " to the proceedings, and in no sense a witness, and is not entitled to fees. (In re Paddock, 6 N. B. R. 396; Fed. Cas. 10658.) If a creditor prove his full claim without reference to his lien or security, and without apprising the bankrupt court of its existence, such an act would be waiver of the lien and a relinquishment of the security to the assignee. (Stewart v. Isidor et aL, 1 N. B. R. 129 ; In re Granger & Sabin, 8 N. B. R 30 ; Fed. Cas. 5684 ; In re McConnell, 9 N. B. R 387 ; 10 Phila. 387 ; 31 Leg. Int. 61 ; 21 Pittsb. Leg. J. 107 ; Fed. Cas. 8713.) It is prima facie an ex- tinguishment of any security held for the same and may ripen into a con- clusive extinguishment. (In re Parkes, 10 N. B. R 82; Fed- Cas. 10754.) Where, having a security on the property of a third party, he proves his claim without setting out his security and receives a dividend, he for- feits his security only in case those interested in the estate would be benefited thereby. (Bassett et aL v. Baird, 17 N. B. R 177.) The creditor will have the benefit of any counter-bonds or collateral securities which the principal debtor has given to the surety, or person standing in the situation of a surety, for his indemnity; such securities being regarded as trusts for the better security of the debt; but if such creditor prove his debt as unsecured, he waives and relinquishes his lien (In re Jaycox & Green, 8 N. B. R 341; Fed. Cas. 7243); but the mortgage is not thereby extinguished, the assignee being subrogated to the rights of the holder. (Hiscock, Ass., etc. v. Jaycox & Green, 12 N. B. R 507; Fed. Cas. 6531.) An indorser is not released from his liability even if the holder of the note has proved his debt in bankruptcy against the maker for the full amount as an imsecured claim; but the holder by so proving his debt § 57, a.] PEoor and allowance of claims. 279 releases all his right and claim as well at law as in equity to a mortgage given for the purpose of indemnifying the indorser. (Merchants' Nat. Bank of Syracuse v. Comstook, 11 N. B. R. 335.) If a party who took a bill of sale as security deliberately prove a debt which assumes that he is the absolute owner of the goods, and persist in such false claim in an action by the assignee to recover the goods, and attempt to support it by his own oath, he is estopped from claim- ing them as security. (WUlis v. Carpenter et aL, 14 N. B. E. 521; Fed. Cas. 17770.) Where execution has issued, and levy been made on the property of a debtor sufiBcient to satisfy the judgment, the creditor is not estopped from proceeding in bankruptcy against the debtor, but such proceeding wiU be held to be a waiver of the levy. (In re Sheehan, 8 N. B. R. 345 ; Fed. Cas. 13737; In re Bloss, 4 N. B. R. 37; Fed. Cas. 1563.) But a cred- itor who, in ignorance of his legal rights and in good faith, files proof of a claim secured by a deed of trust, will not be deemed to have waived his lien under such deed, especially if he be acting in a fiduciary capac- ity. (In re Brand, 3 N. B. R. 85; 3 Hughes, 334; 2 Amer. Law T. Rep. Bankr. 66; Fed. Cas. 1809.) A security is not waived by merely proving a second claim as a general claim. (Hatch v. Seely, 13 N. B. R. 380.) A creditor holding security for his debt does not in any manner preju- dice his claim to the same, by proving his debt as one with security, and setting out the particulars of the security and its estimated value, such proof being a prerequisite to any action for the appropriation of the security, in satisfaction, in whole or in part, of the debt. (In re Griimell & Co., 9 N. B. R. 39; 7 Ben. 43; 31 Pittsb. Leg. J. 83; Fed. Cas. 5830.) Any creditor of a bankrupt may oppose the discharge whether he has proved his debt or not (In re Sheppard, 1 N. B. R. 115; 7 Amer. Law Reg. (N. 8.) 484; 1 Amer. Law T. Rep. Bankr. 49; Fed. Cas. 13753); but creditors who have proved their debts cannot have the bankrupt's dis- charge set aside after his death in order that they may prove their de- mands against the estate of the debtor in the hands of his administrator. (Young et aL v. Ridenbaugh, 11 N. B. R. 563; 3 DilL 239; 7 ChL Leg. News, 243; Fed. Cas. 18173.) Where creditors each file a petition against a debtor who himself files a petition and is adjudged a bankrupt, and the creditors prove their claims under the voluntary petition, they thereby waive their right to continue the involuntary proceedings. (In re Noun- nan & Co., 6 N. B. R 579.) Where a debt is created by fraud, a creditor does not waive bis right to sue for the balance by proving his claim and taking a dividend (In re Clews et aL, 19 N. B. R. 109; Fed. Cas. 3891); but where he proves his claim, and, finding no assets to pay it, attempts to force payment by a fl. fa., he will be held to have waived his judg- ment lien by proving his claim. (Heard v. Jones, 15 N. B. R 403.) The prohibition that no creditor proving his claim shall be allowed to 280 , LAW OF BANKEUPTOT. [§ 57, 05. maintain any suit therefor at law or equity against the bankrupt can- not have any broader scope than is warranted by the letter of the stat- ute. It does not inhibit collateral remedies. The right of action against a party as a stockholder of a corporation is not affected by the bank- rupt law. (Allen v. Ward, 10 N. B. R. 385.) Proving a debt and receiv- ing a dividend in bankruptcy against a corporation are not a bar to recovering judgment for the balance in a state court. (Ansonia Brass and Copper Co. v. New Lamp Chimney Co., 10 N. B. R. 355.) A creditor whose debt is secured by a mortgage of the bankrupt's estate, having proved his claim, may, with leave of the bankrupt court and in the absence of objection by the assignee, proceed to foreclose the mort- gage in a state court (McHenry et aL v. La Societe PVancaise, 16 N. B. E. 385; 95 U. S. 581); but a creditor who proves his debt and asserts his lien in the bankrupt court is not entitled to resort to a state tribunal to enforce his lien against the same property which was the subject of ad- judication in the bankrupt court. (Spilman v. Johnson, 16 N. B. R. 145.) Where an indorsee receives payment from the indorser during pend- ency of proceedings, he cannot unite in the petition, even though he proved his claim before payment but had not filed it. (In re Broioh et aL, 15 N. B. R 11; 7 Biss. 303; Fed. Ca& 1931.) It is no ground of defense or suspension of an action on a joint or joint and several promissory note against a surety that the note has been proved as a claim against the principal in bankruptcy proceedings. (Greeg v. Wilson, 15 N. B. R. 143.) Where, in making proof of a claim, a creditor does not show that the bankrupt holds an unsatisfied claim against him and the assignee brings suit on the claim, the creditor will not be entitled to a set-off for the amount allowed on his proof. (RusseU, Ass., v. Owen, 15 N. B. R. 323.) In an action for goods sold and delivered the defendant may plead in bar his bankruptcy, and the proof of the plaintiff's claim against his estate, or at any time after the institution of the proceedings in bank- ruptcy may apply to the court in which the action is pending for a stay of proceedings. If he does neither, the judgment rendered against him is vaUd, and, in the absence of fraud, is conclusive against him and the surety on his bond to dissolve an attachment. (Cutter et aL v. Evans, 11 N. B. R. 448.) A bankrupt who is held in arrest and bail in a judgment in a civil ac- tion founded upon a debt created by fraud will not be discharged from custody by the court in which bankruptcy proceedings are pending, al- though the judgment debtor may have proved his debt in the proceed- ings. (In re Robinson, 3 N. B. R. 108; 6 Blatchf. 253; 36 How. Pr. 176; 2 Amer. Law T. Rep. Bankr. 18; Fed. Cas. 11939.) The effect of failure to prove. — A creditor who has not proved his claim is entitled to be heard on a motion to set aside an adjudication of bankruptcy against his debtor (In re Derby, 8 N. B. R. 106; 6 Alb. Law § 57, a.] PEOOF AND ALLOWANCE OF CLAIMS. 281 J. 433; Fed. Cas. 3815. Contra, In re Brisco, 3 N. B. R. 78; 1 Gaz. 78; Fed. Cas. 1886); but he has no rights in composition proceedings (In re Math- ers et al., 17 N. B. R. 335; Fed, Cas. 9374), nor will he be heard in opposi- tion to the bankrupt's discharge. (In re Burk, 3 N. B. R 76; Deady, 435; 3 Amer. Law T. Rep. Bankr. 45; Fed. Cas. 3156; In re Levy, 1"N. B. R. 66; 3 Ben. 169; 1 Amer. Law T. Rep. Bankr. 133; Fed. Cas. 8397. Contra, In re Boutelle, 3 N. B. R. 51; 15 Kttsb. Leg. J. 616; 1 Chi. Leg. News, 30; Fed. Cas. 1705.) A discharge in bankruptcy will not release the lien of a judgment which was not proved. (Darsey v. Mmnpf ord, 17 N. B. R. 181.) Without proof of the debt no lien can be enforced, any more than dividends can be received on account of it. (In re Jordan, 9 N. B. R. 416 ; Fed. Cas. 7539.) Where the state law provides that a judgment is a lien from its date upon all the property of the defendant, a judgment creditor has the right to enforce this lien against exempt property of a bankrupt, if he did not prove his claim. (Bush v. Lester et al., 15 N. B. R. 36.) Where a judgment creditor whose judgment is a lien on the realty of the debtor does not prove his debt, and forecloses imder the authority of the court in bankruptcy, but the land is sold under execution, the sheriff's sale may be set aside upon petition of the assignee. (Davis v. Anderson, 6 N. B. R 146; Fed. Cas. 3633.) A petition by a secured creditor for leave to foreclose a mortgage will be dismissed if no notice be given the as- signee, and no proof be made of the existence of the debt. (In re S. F. FrizeUe, 5 N. B. R 133; Fed. Cas. 5133.) The proof of secured claims. — A creditor secured by a mortgage upon real and personal property may prove his claim, upon making oath to the p,motmt due him and the securities held therefor. (In re Bridgman, 1 N. B. R 59; 1 Amer. Law T. Rep. Bankr. 48; Fed. Cas. 1866.) He may prove his claim to an amount exceeding the value of the security with- out abandoning the same, but he is bound to set forth the value, that he may vote as a creditor in respect to the overplus proven by him, upon the choice of the assignee (In re Bolton, 1 N. B. R 83; 3 Ben. 189; 1 Amer. Law T. Rep. Bankr. 130; Fed. Cas. 1614), who may contest the claim for any usurious surplus. (Bromley, Ass., v. Smith et aL, 5 N. B. R. 153; 2 Biss. 511; 3 Chi Leg. News, 397; Fed. Cas. 1933.) It is not necessary, if he has recovered a judgment after the adjudication of the debtor as a bankrupt, to vacate it before he can prove the claim on which the judg- ment is recovered, provided the claim be otherwise valid and properly provabla (In re Stevens, 4 N. B.R. 133; Fed. Cas. 13391.) He may before hearing waive his security and join with unsecured creditors to make the requisite number and amount, he then having all the rights of an unsecured creditor. (In re Crossette et aL, 17 N. B. R. 308; Fed. Cas. 3435.) If his debt be fully secured he may file a petition in bankruptcy. (In re StanseU, 6 N. B. R 183; Fed. Cas. 13394; In re Bloss, 4 N. B. R 37; Fed. Cas. 1563.) It is necessary for him, if his debt be secured by Uen, to prove 282 LAW OF BANKEUPTOT. [§ 57, d. or liquidate it as secured by him, that the court may be fully informed how to dispose of the assets of the bankrupt so as to do equity between all the creditors. (In re Winn, 1 N. B. R. 131 ; 1 Amer. Law T. Rep. Bankr. 17; Fed. Cas. 17876.) A mortgagee must prove his debt in the bankruptcy court as a secured claim, before he is entitled to apply to such court for leave to foreclose his mortgage in another court. (In re Sabin, 9 N. B. E. 383; Fed. Cas. 13193.) Where there are two classes of creditors having a common debtor who has several fimds, and one class of creditors can resort to aU the funds and the other to but part, the former take payment out of the fund to which they can resort exclusively; if the former resort to the fund common to both classes, to the loss of the latter, the latter are entitled to be substituted, to the extent of the deprivation to which they have been subjected, in the place of the former. (In re Foot et al, 13 N. B. B. 887 ; 8 Ben. 338; 1 N. Y. Wkly. Dig. 76; Fed. Cas. 4906.) Joint and separate estates are considered as distinct estates. A joint creditor having security on the separate estate may prove against the joint es- tate without relinquishing his security, or may prove his whole claim against both estates and receive a dividend for each, but so as not to re- ceive more than the full amount of his debt from both sources. (In re Howard et aL, 4 N. B. R. 185; Fed. Cas. 6750.) A creditor from whom the bankrupt has, with another, purchased land, giving in payment promissory notes on which there are sureties, secured by a deed of trust by the debtor and his joint purchaser to a third person, the deed pro- viding that if any note be not paid the land will be sold by the trustee and the proceeds given the creditor, the latter is a secured creditor, and the land wiU be directed to be sold. (In re Stewart, 1 N. B. R. 42; 1 Amer. Law T. Rep. Bankr. 16; 15 Pittsb. Leg. J. 333; Fed. Cas. 18418.) All subsisting heirs are fully protected, but all their creditors must prove their demands and enforce their liens through the bankruptcy court. (Davis v. Anderson, 6 N. B. R. 146; Fed. Cas. 8633.) If, through negligence of the creditors, the surety has been discharged, or if he has lost his lien, the creditors have no equity. They must work out their equity, and apply their security so as to prove against either estate for the deficiency. (Ex parte Morris, 16 N. B. E. 573; 3 Lowell, 424; Fed. Cas. 9833.) Where an attachment is dissolved by proceedings in bankruptcy, the costs that accrued imder the attachment prior to the flUng of the bank- rupt's petition are not a valid lien upon the property in controversy. If incurred at defendant's request, however, they might be. (In re Pres- ton, 6 N. B. R. 545; Fed. Cas. 11394) A bank should prove its demand for a debt due as secured by stock, and by leave of court have it sold, the proceeds to be applied to pay- ment of tlie debt, and prove as a creditor of the estate for any balance that may remain. (In re Morrison, 10 N. B. R. 105; 6 Chi Leg. News, 110; Fed. Cas. 9839.) § 57, a.] PROOF AND ALLOWANCE OF CLAIMS. 283 A mechanic's lien which derives its existence wholly from a state statute, and the continuation of which is dependent upon the commence- ment of suit within a prescribed period, is not preserved when no suit is commenced in the state court and no step taken in the bankruptcy court equivalent to such suit within the time limited by the statute, although the proceedings in bankruptcy are commenced within that period. A lien claimant can, as an equivalent for commencing a suit in a state court, prove or assert his lien in the bankruptcy proceedings within the time limited by the statute creating the lien. (In re "William Brunquest, 14 N. B. R 529; 7 Biss. 208; Fed. Cas. 2055.) Claims held to be unsecured. — A personal claim of indebtedness against a bankrupt's estate does not constitute a lien upon property of the estate in the hands of one making such claim. (Sedgwick, Ass., v. Casey, 4 N. B. R. 161; 4 Ben. 563; Fed. Cas. 12610; In re P. H. Krogman, 5 N. B. R. 116; Fed. Cas. 7936.) The fact that the sureties on a bond are indemni- fied by a mortgage does not render a claim on the bond a secured claim. (In re Lloyd, 15 N. B. R. 257; 5 Amer. Law Reo. 679; 15 Alb. Law J. 293; 24 Kttsb. Leg. J. 113; Fed. Cas. 8429.) A consignor whose property is sold prior to the bankruptcy and the proceeds mingled with the general assets has no lien or specific claim against the estate and can only share it with the other creditors. (In re Coan & Ten Broeke Carriage Mfg. Co., 13 N. B. R 203; 6 Biss. 315; 7 Chi Leg. News, 260; Fed. Cas. 3915.) This is also true of a bailor who allows the bailee to mix the property with his own property so that they cannot be distinguished. (Adams v. Mey- ers, 8 N. B. R 214; 1 Sawy. 306; Fed. Cas. 63.) A creditor seizing property by attachment issued from a state court, within four months prior to the beginning of bankruptcy proceedings, is not a secured creditor. (In re Broich et aL, 15 N. B. R 11; 7 Biss. 303; Fed. Cas. 1931.) Where a consignment of goods is made under a special contract in which the consignee gives his acceptance for their value, payable partly at sight and partly at a future day, and agrees to account for the whole price, to guarantee the sales and to receive a commission, with other stipulations making him primarily liable for the price of the goods, and he becomes bankrupt, the claim is merely a part of the general claims, and is not of a fiduciary character. (Ex parte Flannagans, 13 N. B. R 330; 2 Hughes, 264; 14 Amer. Law Reg. (N. S.) 688; 4 Amer. Law Rec. 304; Fed. Caa 4855; In re Coan & Ten Broeke Carriage Mfg. Co., 12 N, B. R 203; 6 Biss. 315; 7 Chi Leg. News, 260; Fed. Cas. 2915.) "Where persons place money in the hands of another to be invested in trust for their benefit and he fails to do so, but uses it in his speculations and afterwards becomes bankrupt so that the property does not remain in specie, the cestuis que trust must come in pari passu with the other creditors and prove against the trustee's estate for the amoimt due them. (In re Faneway, 4 N. B. R 36; Ungewitter v. "Von Sachs, 284 LAW OF BAKKETJPTCT. [§ 57, a. Ass., 3 N. B. R 178; 4 Ben. 167; 1 Amer. Law T. Eep. Bamkr. 334; 3 Amer. Law T. Eep. Bankr. 195; Fed. Cas. 14348.) A depositor whose specie deposit has been appropriated by the de- positee, a bankrupt, is not entitled to have the debt paid in full out of general assets, but can only share pro rata with other creditors. (In re King, 9 N. B. E. 140; In re Hosie, 7 N. B. E 601; 5 Leg. Op. 89; Fed, Cas. 6711.) See also subdivision e under this section. Claims proTable. — A claim for spirituous liquors sold and delivered in the original imported packages may be proved in a state where the sale of such liquors is prohibited by law (In re Town et al., 8 N. B. E. 38; Fed. Cas. 14111; In re Murray, 3 N. B. E 187; 1 Hask. 267; Fed. Cas. 9954); there may also be proved a claim by an employee for damages for a breach of contract caused by the filing of a voluntary petition in bankruptcy by his employer (Ex parte Pollard, 17 N. B. E 338; 3 Lowell, 411; Fed. Cas. 11353); or a loss, before final dividend, occurring upon a policy issued by a bankrupt fire insurance company (In re American Plate Glass & Fire Ins. Co., 13 N. B. E. 56; Fed- Cas. 314); or a claim if it originated in contract, even though induced by fraud and prosecuted in an action for damages, although the fraud may have to be proved to entitle the plaintiff to recover (In re Schwarz, 15 N. B. R 380; 14 Blatch. 196; 53 How. Pr. 513; 15 Alb. Law J. 350; Fed. Cas. 13503); or a judg- ment in an action in tort, recovered before the petition is filed (How- land V. Carson, 16 N. B. R 373); or a set-ofiE which a defendant fails to prove in a suit brought by one who before trial becomes bankrupt and judgment is rendered against him (In re Safe Deposit & Savings Inst, 18 N. B. R 493); or accrued interest (Sloan v. Lewis, 13 N. B. R 178; 33 WaU. 150); or a claim for the purchase price of goods which were left in a vendor's warehouse and marked with vendee's mark and there de- stroyed by fire (Ex parte Safford et aL, 15 N. B. R 564; 2 LoweU, 563; 15 Alb. Law J. 338; 24 Pittsb. Leg. J. 159; Fed. Cas. 13212); or a debt may be proved against the estate of a principal debtor, notwithstanding a joint judgment has been recovered therefor against the principal debtor and his surety. (In re Kitsinger et al., 19 N. B. R 153; Fed. Cas. 7861.) A joint indebtedness may be proved and set oflE against the estate of either of the joint debtors who may become bankrupt, without refer- ence to the fact that it maybe subject to be marshaled. (Gray v. EoUo, 9 N. B. R 337; 18 WaU. 629.) An insurance company which re-insures its policies in another company is entitled, upon the bankruptcy of the latter, to prove the policies re-insured in full, without reference to the amount it paid the holdera (In re Eepublio Ins. Co., 8 N. B. E 197; 3 Ins. Law J. 390; 5 Chi. Leg. News, 385; Fed. Cas. 11705.) A debt on which a judgment is recovered after adjudication in an action before a justice of the peace, commenced prior to the filing of the debtor's peti- tion, is not so merged in the judgment as to prevent its proof (In re § 57, a.] PKOOF AND ALLOWANCE OF CLAIMS. 285 Vickery, 3 N. B. E. 171; Fed. Cas. 16930); but the costs which accrue subsequent to filing the petition do not constitute a claim or debt exist- ing at that time and should be excluded. (In re Crawford, 3 N. B. R. 171; 3 Amer. Law T. 169; 1 Amer. Law T. Rep. Bankr. 310; Fed. Cas. 3363.) A wife who deposits money with her husband and receives portions thereof, leaving a balance due at the time of her husband's bankruptcy, may prove such balance as a general creditor, and her debt may not be offset by the value of reasonable gifts from the husband, or of an in- surance policy on his life for the benefit of herself and the children. (In re Bigelow et aL, 2 N. B. R 170; 3 Ben. 198; 3 Amer. Law T. Rep. Bankr. 87; Fed. Cas. 1398; In re E. G. Blandin, 5 N. B. R 39; 1 Lowell, 543; Fed. Cas. 1537.) If a note taken for rent be not paid at maturity, the landlord is en- titled to all his remedies for the security or collection of his claim, in the same manner as if the note had never been given. (In re Bowne & Ten Eyck, 13 N. B. R. 539; 1 N. Y. Wkly. Dig. 100; Fed. Cas. 1741.) Where premises under a lease are condemned to the use of a railroad company, and damages are paid by the company to the tenant upon the basis that his obUgation to pay rent during the remainder of the term will continue, the landlord, on the bankruptcy of the tenant, will be allowed to prove the amount of the unpaid instalments of rent, at their value at the time of bankruptcy. (In re Clancy, 10 N. B. E. 315; Fed. Cas. 2783.) Where a creditor demands payment in fuU in advance as a condition of consenting to sign a composition, and is held liable to repay the amount to the assignee and does so, he may prove his original claim upon failure of a composition. (Brookmire & Rankin v. Bean, Ass., 12 N. B. R 217; 3 DiU. 136; 2 Cent. Law J. 265; Fed. Cas. 1942.) Attorneys of a voluntary bankrupt are not entitled to payment from the assets as preferred creditors for their services in preparing the pe- tition and schedules, but may prove their debt in the usual manner. (In re Gies, 12 N. B. R. 179; 7 Chi Leg. News, 379; 1 N. Y. Wkly. Dig. 101; Fed. Cas. 5407.) A railroad company whose charter provides for the forfeiture to the company of stock upon which an assessment remains impaid may make proof against a bankrupt stockholder of the amount previously ascer- tained to be due for the assessment. (Gibson et aL v. Lewis, 11 N. B. R, 247; 11 Phila. 476; 33 Leg. Int. 33; Fed. Cas. 5398.) The claim may be proved as if unsecured where a person, afterward becoming bankrupt, in order to secure goods upon credit procures a guaranty to a certain amount and goods to a larger amount are furnished. (In re Anderson, 12 N. B. R. 503; 7 Biss. 333; Fed. Cas. 350.) Although a discharge in bankruptcy is a complete bar to a suit on a claim provable imder the bankrupt law, the dismissal of the suit does not prejudice proceedings on it under that law. (Humble v. Carson, 6 N. B. R 84) 286 LAW OF BANKRTTPTOT. [§ 57, a. An agreement made by a creditor and a third party in reference to the prosecution of a claim, although it would be held champertous if either party to it were setting it up as the foundation of a suit or a defense, will not prevent the creditor from proving the claim in bank- ruptcy, if it be otherwise valid. (In re Lathrop et aL, 3 N. B. R. 105; 3 Ben. 490; Fed. Cas. 8103.) Proof of commercial paper. — Commercial paper, acquired in good faith before maturity, may be proved by the indorsee, upon showing a valuable consideration paid by him. (In re Lake Superior Ship Canal, Railroad and Iron Co., 10 N. B. R. 76 ; Fed. Cas. 7998.) Where it is not clearly shown that notes made by a bankrupt are accommodation paper, they may be proved; but those indorsed by the bankrupt should be proved only for the amounts the holders actually paid for them, with lawful inter- est. (In re Many et aL, 17 N. B. R. 514; Fed. Cas. 9054.) The holder of an accommodation note is entitled to prove it in full, against the party for whose accommodation it was given, notwithstanding he has received a part of it from the maker (Ex parte Harris et aL, 16 N. B. R 433; 3 Low- ell, 568; Fed. Cas. 6109); and the holder of a promissory note who has re- ceived a sum of money from an indorser in discharge of the latter's lia- bility may nevertheless prove it in full against the estate of the bankrupt promisor, paying over to the indorser the excess of the sum due the holder. (Ex parte Talcott, 9 N. B. R. 503; SLoweU, 330; Fed. Cas. 13184; In re Ellerhorst & Co., 5 N. B. R. 144; 6 Amer. Law Rev. 163; Fed. Cas. 4381.) So long as both payments do not exceed the face of the note, pay- ments made by the maker after the note has been proved against an indorser will not affect the amount due from the estate. (In re Weeks, 13 N. B. R. 263; 8 Ben. 265; Fed. Cas. 17349.) An indorser or drawer may prove on the note or bill, if he has taken it up, at any time before the iinal dividend. (Ex parte Talcott, 9 N. B. R. 503; 3 LoweU, 320; Fed. Cas. 13184) A creditor who holds a debt against a bankrupt, whose liability arises from his accommodation indorsement of bills of exchange, to se- cure the payment of which the drawers and acceptors have given collat- eral security, may prove his debt as if unsecured. (In re Dunkerson & Co., 13 N. B. R 413; 4 Biss. 353; Fed. Cas. 4157.) Where a composition is effected and approved by the court, and the debtor gives his notes to one of his creditors in renewal of notes held before the composition, and makes payment from time to time, and the debtor again becomes bank- rupt, and the creditor proves the new notes, there is sufficient considera- tion for the claim. (In re Merriman's Estate, 18 N. R R. 411 ; 44 Conn. 587; 26 Pittsb. Leg. J. 120; Fed. Cas. 9479.) Proof of a note payable "in current money of the state " in which it is made is, if not otherwise open to objection, allowable. (In re Whittaker, 4 N. B. R. 41; Fed. Cas. 17598.) Where drafts drawn by a bankrupt are accepted against con- signments of merchandise which the bankrupt agreed to make but failed, and the holder receives fifty per cent, of the amount due on them, after § 57, a.] PEOOF AND ALLOWANCE OF CLAIMS. 287 they are dishonored, in full for all claims against the acceptors, but with- out prejudice to his rights against others, and the acceptors release all claims against the bankrupt, the holder may prove against the bankrupt for the whole amount. (In re Baxter et aL, 18 N. B. R. 497; 26 Pittsb, Leg. J. 140; Fed. Cas. 1130.) Claims not provable. — The statutory liability of stockholders is not a provable claim (James, Adm'x, v. Atlantic Delaine Co., 11 N. B. R 390; Fed. Cas. 7179); nor is a debt of a bankrupt contracted, either in whole or in part, in violation of a law of the state (In re Paddock, 6 N. B. E. 132; Fed. Cas. 10657); nor is a claim for rent which accrues after the filing of the petition in bankruptcy under a lease executed prior to such filing (In re May & Merwin, 9 N. R R. 419; 7 Ben. 338; Fed. Cas. 9335); nor is a debt incurred by the loan of Confederate treasury notes (In re MUner, 1 N. B. R 107); nor is a mere verdict in an action for a personal tort. (Black v. McClelland, 13 N. B. R. 481 ; 7 Chi. Leg. News, 430; 1 N. Y. Wkly. Dig. 174; Fed. Cas. 1463.) A broker who holds stock on a margin an unreasonable length of time after the buyer's bankruptcy, and then sells without notice at a loss, cannot prove for the balance. (In re Dan- iels, 13 N. B. R. 46; 6 Biss. 405; 1 N. Y. Wkly. Dig. 271; 8 Chi. Leg. News, 17; Fed. Cas. 3566.) A judgment obtained after the adjudication in bankruptcy creates a new debt that cannot be proved, the judgment being a merger. (In re Gallison et aL, 5 N. B. R 353; 3 Lowell, 72; Fed. Cas. 5203.) Costs of attachment proceedings pending when the petition in bankruptcy is filed are not to be reckoned among the provable debts of the debtor; nor wiU the costs be paid from the estate unless the pro- ceedings are auxiliary to bankruptcy proceedings or otherwise beneficial to the estate. (In re Hatje, 13 N. B. R 548; 6 Biss. 486; Fed. Cas. 6315.) Where a creditor holding a mortgage sells the mortgaged premises at auction for a small sum without notice to the assignee and without leave of court, he cannot prove for the balance or for any sum whatever. (In re MiUer, 19 N. B. R 78; 19 Alb. Law J. 40; 36 Pittsb. Leg. J. 175; Fed. Cas. 9555.) A lessee, under a lease which provides that, after a breach, the lessee shall remain liable for rent precisely as before, excepting such sums as are actually received for the use of the premises, cannot prove a claim for his liability under such lease in bankruptcy proceedings against a bankrupt to whom he has assigned the lease. (Ex parte Lake et aL, 16 N. B. R 497; 2 LoweU, 544; Fed. Cas. 7991.) Where a wife aUows her husband to appropriate the income of her separate estate in support of the family, this does not create such a debt on his part as is provable against his estate. Aliter, where principal is used. (In re Jones, 9 N. B. R 556; 6 Biss. 68; 6 Chi Leg. News, 371; Fed. Cas. 7444) If there be no legal liability on the part of a bankrupt to pay a claim, notes given therefor are void for want of consideration. (In re Young, 15 N. B. R 305; 1 Tex. Law J. 7; Fed. Cas. 18149.) A prior gift consti- tutes no legal consideration for a promissory note, and the claim of the holder is not provable. (In re Cornwall, 6 N. B. R 305; 6 Amer. Law 2S8 LAW OF BAJSTKEUPTOT. [§ 57, 5. Eev. 365; Fed. Caa 8250.) Notes indorsed by a bankrupt cannot be proved against his estate by any one holding them without paying a valuable consideration therefor, or with notice that there was no con- sideration therefor, or in fraud of the bankrupt's estate. (In re Hook, 11 N. B. E. 383; Fed. Cas. 6673.) A holder of a note who has granted an extension of time to the maker cannot prove the note against the estate of a bankrupt indorser. (In re Granger & Sabln, 8 N. B. R. 30; Fed. Cas. 5684) An indorser on a note which is protested after the maker's bank- ruptcy cannot prove his claim on a new note given in payment of the protested note against the estate of the bankrupt maker. (In re Mont- gomery, 3 N. B. E. 108; Fed. Caa 9730.) One who, being liable as Joint maker of a note, gives his individual note in payment of the joint note, it being accepted as such, discharges the old note, and it cannot be proved against the estate of the other joint maker. (In re Morrill, 8 N. B. R 117; 2 Sawy. 356; Fed. Cas. 9821.) Where an indorser of a protested note has purchased the goods of a bankrupt, he is excluded from prov- ing his dejbt as a claim against the estate of the bankrupt. (Cookingham et aL V. Morgan et al., 5 N. B. E. 16; 7 Blatchf. 480; Fed, Cas. 3183.) Where an indorser of the bankrupt's paper has become absolutely liable to the holders before the filing of the petition, by notice of dishonor, he cannot prove his claim. (In re Eiker, 18 N. R E. 393; Fed. Cas. 11833.) Where a ward recovers a judgment against her bankrupt guardian, after institution of proceedings in bankruptcy, the claim may not be proved without leave of the bankrupt court. (In re Maybin, 15 N. R R. 468; Fed. Cas. 9337.) Where claims draw interest, such interest wUl stop at the date of filing the petition in bankruptcy. (In re Broich et aL, 15 N. B. R 11; 7 Biss. 303; Fed. Cas. 1931.) A landlord of premises rented by a bankrupt, but which vrith the goods are occupied by a marshal, should apply to the court to have them vacated if he wishes to re-rent, and should not make application for allowance of rent. (In re McGrath & Hunt, 5 N. B. R, 254; 5 Ben. 183; Fed. Cas. 8808.) A railroad corporation is not liable for an injury caused by the negli- gence of a special receiver or assignee while operating the road. (Metz, Adm'x, etc. v. Buffalo, Corry & Pittsburgh R. R. Co., 12 N. B. R 559.) b. Whenever a claim is founded upon an instrument of writing, such instrument, unless lost or destroyed, shall be filed with the proof of claim. If such instrument is lost or destroyed, a statement of such fact and of the circumstances of such loss or destruction shall be filed under oath with the claim. After the claim is allowed or disallowed, such in- strument may be withdrawn by permission of the court, upon leaving a copy thereof on file with the claim. § 57, C, d.}. PROOF AND ALLOWANCE OF CLAIMS. 289 [Act of 1867. Sec. 24. ... A bill of exchange, promissory note, or other instrument, used in evidence upon the proof of a claim, and left iq court or deposited in the clerk's office, may be delivered, by the register or clerk hav- ing the custody thereof, to the person who used it, upon his filing a copy thereof, attested by the clerk of the court, who shall indorse upon it the name of the party against whose estate it has been proved, and the date and amount of any dividend declared thereon.] The written instrument upon wliich the claim is founded. — A cred- itor may withdraw the instrument, but not the proof of a debt. (In re Emison, 3 N. B. R 179; 1 Chi. Leg. News, 343; Fed. Cas. 4459.) In pro- ceedings against the estate of a deceased bankrupt, he is competent to prove the contract on which his claim is based. In re Merrill, 16 N. B. R. 35; 9 Ben. 165; 24 Pittsb. Leg. J. 305; Fed. Caa 9466.) A promissory- note in which the initials only of the first names of the parties appear, no evidence being offered as to the full Christian names, is not a suflS- cient basis for a claim. (In re Valentine, 13 N. B. B. 389; 4 Biss. 317; 1 N. Y. "Wkly. Dig. 101; Fed. Cas. 16813.) A certificate of deposit proved as a claim is dishonored paper, and no longer has the qualities of a ne- gotiable instrument. (In re Sime & Co., 13 N. B. E. 315; 8 Sawy. 305; Fed. Cas. 13861.) c. Claims after being proved may, for the purpose of al- lowance, be filed by the claimants in the court where the proceedings are pending or before the referee if the case has been referred. d. Claims which have been duly proved shall be allowed, upon receipt by or upon presentation to the court, unless objection to their allowance shall be made by parties in in- terest, or their consideration be continued for cause by the court upon its own motion. [Act of 1867. Sec. 23. . . . The court shall allow all debts duly proved, and shall cause a list thereof to be made and certified by one of the registers; . . .] The allowance or rejection of claims.— By the receipt and filing of proof of debt the court obtains jurisdiction of the claim and of the cred- itor presenting it, and then only does its revising power over such proof commence. The receiving and filing of a proof of debt concludes noth- ing, and the power still remains in the court to revise and correct, or reject altogether. (In re Merrick, 7 N. B. R 459; Fed. Cas. 9463.) "Where 19 290 LAW OF BANKEUPTOT. [§ 57, d. •written objections are filed by the assignee to a proof of debt and a hearing is had before the register, the matter may upon request be cer- tified to the court. (In re Clark & Bininger, 6 N. B. K. 302; Fed. Cas. 2808.) The register has no power to expunge prima fade proofs of debt or to reject claims, nor has he the authority to refuse the votes of the claimants, nor to exclude thera from the benefit of a dividend (In re Jaycox & Green, 7 N. B. R 303; 7 West. Jur. 18; Fed. Cas. 7240); but he has power to pass upon the validity of the proof of claims, except when an issue of law or fact is raised or contested. (In re Bogert et aL, 2 N. B. R 189; 38 How. Pr. Ill; 1 Chi Leg. News, 311; Fed. Cas. 1598.) Debts proved and filed with the register may be postponed for investi- gation before the assignee, and not allowed to be voted upon for assignea (In re Frank, 5 N. B. R 194; 5 Ben. 164; Fed. Cas. 5050.) An existing adjudication in bankruptcy precludes aU inquiry touching the existence or validity of the debt of a petitioning creditor. (In re FaUon, 3 N. B. R 93; 1 Chi. Leg. News, 107; Fed. Cas. 4638.) No person by assigning an open account can substitute another person as creditor without the ex- press consent of the debtor. (Rollins, Ass., v. Twitohell & Co., 14 N. B. R 201; 2 Hask. 66; 5 Amer. Law Rec. 247; Fed. Cas. 12037.) Upon making proof, all who have valid subsisting claims at the time the bankrupt proceedings commenced wiU be-, permitted to participate in the fund so long as there is anything to distributa (In re Maybin, 15 N. B. R 468; Fed. Cas. 9387.) A claimant may present a claim arising from fraud and receive his dividend, but may not prosecute it until the question of discharge is de- termined, but thereafter, whether the petitioner be discharged or not, it remains a valid claim against him, recoverable in any proper form of suit. (Stokes & Leonard v. Mason, 13 N. B. R 498.) Interest may be paid on claims proven against the bankrupt's estate from the day of filing the petition, when there are sufficient funds in the hands of the assignee to do so. (In re Hagan. 10 N. B. R 383; Fed. Cas. 5893; In re Bousfield & Poole Mfg. Co., 17 N. B. R 153; Fed. Cas. 1704) Where, after the payment of all claims against a bankrupt bank at the amount computed to be due on the date of adjudication, a sur- plus remains, the creditors may be allowed interest from the date of ad- judication to the payment of the dividends. (In re Bank of North Carolina, 13 N. B. R 130; 1 N. T. Weekly Dig. 137; Fed. Cas. 895; WU- son & Shafer v. Bank of North Caroluia, 10 N. B. R 289; Fed. Cas. 894) Claims for rent of the building in which goods of a bankrupt are kept pending sale, and the marshal's and auctioneer's fees, are allowable, (In re Peabody, 16 N. B. R 243; 9 Chi Leg. News, 348; Fed. Cas. 10866.) An assignee under a state law will be allowed the amount of his dis- bursements made before a general assignment in bankruptcy under the Bankruptcy Act. (MacDonald, Ass., v. Moore et al., 15 N. B. R 26; 8 Ben. 579; 1 Alb. N. 0. 53; 38 Int. Rev. Rec. 35; 3 N. Y. Weekly Dig. 461; 24 Pittsb. Leg. J. 83; Fed. Cas. 8763.) § 57, d.l PKOOF AND ALLOWANCE OF CLAIMS. 291 Where a person mortgages all his stock and fixtures to secure the mortgagee for all the liabilities he has assumed, and both become bank- rupt, and the holders of the notes of the mortgagor indorsed by the mort- gagee prove against both estates, the proceeds of the sale of the property should be divided pro rata among all the creditors of the mortgagor. (Ex parte Mon-is, 16 N. B. R. 572; 3 LoweU, 434; Fed. Cas. 9833.) As a general rule, a sherifE's claim for costs in an attachment within four months before bankruptcy will not be allowed against the bank- rupt estate (In re Jenks, 15 N. B. R. 301 ; Fed. Cas. 7376) ; nor is he entitled to fees arid expenses for the attachment, levy, care and custody of prop- erty attached at the suit of creditors before bankruptcy, but upon which judgment is not rendered until thereafter. (In re Williams, 3 N. B. R. 79; 8 Amer. Law Rev. 374; 1 Amer. Law T. Rep. Bankr. 107, 113; Fed. Cas. 17705.) Where a note is given for the insurance premium on a vessel which contains the provision that if the note be not paid at maturity the policy becomes void while it remains unpaid, and after the note becomes due the vessel strands, whereupon the note is paid, and then a gale destroys the vessel, a claim against the estate of the bankrupt insurance com- pany for the amount of the premium will not be allowed. (CardweU v. Insurance Co., 13 N. B. R. 353; 7 Chi. Leg. News, 383; Fed. Cas. 3396.) The claim of a holder of a fire insurance policy will not be allowed where he has not submitted to the company or its assignee proof of loss as re- quired by the policy, nor made proof of debt in bankruptcy proceedings, nor commenced suit within a period after the loss occurred fixed by the policy. (In re Firemen's Insurance Co., 8 N. B. R. 133; 5 Chi Leg. News, 265; Fed. Caa. 4796.) Where a bankrupt receives property as security for indorsements and notes made by him for the benefit of the owner of the property, a holder of one of the notes is not entitled to a simimary order directing payment of his claim out of the property. (Hurst v. Teft, Ass., 18 N. B. B. 108; 13 Blatchf. 317; Fed. Cas. 6939.) The prevention of injury to the premises by not removing machinery is not a circumstance to be considered in determining the compensation to the landlord for the use of the premises by the assignee. (In re Brecfc & Schermerhom, 13 N. B. R. 315; 8 Ben. 98; Fed. Caa 1833.) Rent in arrears will not be paid in full as a preferred claim where no distress warrant has been issued under the state law prior to the petition in bankruptcy. (In re Butler, 6 N. B. R. 501; 19 Pittsb. Leg. T. 146; 3 Pittsb. Rep. 369; Fed. Cas. 2386.) One creditor may not take part of a fund otherwise available for the payment of all creditors, and also be allowed to come in pari passu with other creditors in the remainder of the fund. This principle does not apply when that creditor obtains by his diligence something which did not form part of the fund. (In re Bugbee, 9 N. B. R. 358; Fed. Cas. 3115.) 292 LAW OF BANKETTPTCfT, [§ 67, 6. The claim of a creditor who has proved his debt and had the same al- lowed by the register after the appointment of a trustee to wind up the bankrupt's affairs will be refused vmless he applies directly to the court for its allowance. (In re Trowbridge, 9 N. B. R. 274; Fed. Cas. 14191.) Where a creditor has fraudulently proved a debt against the estate, and the assignee neglects or refuses to contest it, any creditor who has proved his debt may obtain the annulment of such fraudulent proof in a court of equity. First Nat. Bank of Troy v. Cooper et aL, 9 N. B. E. 539; 20 WaU. 171.) Allowance of counsel fees. — "Where an assignee is substituted for a bankrupt in a suit, but afterward withdraws and assigns all interest to another, a claim for counsel services against the assignee will be allowed only for the period that the assignee occupies the place of the bankrupt. (In re Litchfield, 18 N. B. R. 347; 26 Pittsb. Leg. J. 76; Fed. Cas. 8386.) Where an assignee obtains authority from the court to employ counsel to prosecute a claim on a contingent contract for fees, but suppresses facts known to the attorneys, and which if known to the court would have prevented the giving of such authority, the contract may be set aside, but a reasonable compensation should be paid counsel for services actually rendered. (Maybin v. Raymond, Ass., 15 N. B. R. 353; 4 Amer. Law T. Rep. (N. S.) 21; Fed. Cas. 9338.) Assignees under a state law cannot receive allowance for attorney's fees nor compensation for their own services where the debtor has been adjudged a bankrupt. (In re Cohn, 6 N. B. R. 379; Fed, Cas. 2966.) A petition filed by a bankrupt after his discharge, asking that the share of attorneys under contract for contingent fees be paid them, is not a bill in equity, and a decree directing payment of such claim is not an allowance of a claim against the estate. (Maybin v. Raymond, Ass., 15 N. B. R. 353; Fed. Cas. 9338.) e. Claims of secured creditors and those who have prior- ity may be allowed to enable such creditors to participate in the proceedings at creditors' meetings held prior to the determination of the value of their securities or priorities, but shall be allowed for such sums only as to the courts seem to be owing over and above the value of their securities or priorities. A "secured creditor" includes a creditor who has a security for his debt upon the property of the bankrupt of a nature to be assignable imder this act, or who owes such a debt for which some indorser, surety or other person, secondarily liable for the bankrupt, has such security upon the bankrupt's assets. (Sec. 1 — 23.) Such claims are not to be counted in computing either the number of the creditors or the amount of their claims, unless the amount of such claims exceeds the value of such securities or priorities, and then only for such excess. (Sec. 56, 6.) § 57, e.] PEOOF AND ALLOWANCE OF CLAIMS. 293 The allowance of secured claims. — Where the attachment is a secu- rity and the bantrupt is a mere accomxaodation acceptor, the creditor has a right to proceed against the bankrupt for his debt in banlfruptoy and also against the other parties to the bill under his attachment, until he has received the full amount of his debt, for it is a security obtained by the creditor against other parties to the bill by a proceeding in invitum. (In re Cram, 1 N. B. E. 133; 1 Hask. 89; 1 Amer. Law T. Rep. Bankr. 65, 120; Fed. Cas. 8343.) The creditor who has a hen on property for the payment of his debt is admitted as a creditor only for the balance of the debt after deducting the value of such property. (In re Winn, 1 N. B. R. 181; 1 Amer. Law T. Rep. Bankr. 17; Fed. Cas. 17876.) Where a landlord takes a note to cover rent, and it is protested, and on the same day a distress warrant is issued for the rent for other naonths, and a few days later an assignment is made under the state law, the landlord is entitled to the payment of his claim for rent as a secured debt. (In re Bowne&TenEyck,12N.B.R.529; 1 N.T. Wkly.Dig.lOO; Fed. Cas. 1741.) Advances made on the faith of a security presently to be given will be pro- tected, notwithstanding changes in the condition of the borrower pending the consummation of the agreement, by actual delivery of the security. (Sparhawk et aL v. Richards et aL, 12 N. B. R. 74; 1 Wkly. Notes Cas. 510; Fed. Cas. 13205.) Security for the payment of a note, by way of a deed of trust, given on the property of wife of a bankrupt, by the husband and wife jointly, is security witliin the meaning of the Bankrupt Act, and the claim should be allowed as secured, although the wife may have died leaving heirs; and the court will, on proper motion, attend to the application of the security and to the interests of the assignees in realty. (In re Hartel, 7 N. B. R. 559; Fed. Cas. 6157.) Where the defense is that securities were fraudulently obtained by the creditor, the burden of proof is upon the debtor to establish the fraud and the identity of the securities by a fair preponderance of evidence. (Payne et aL v. Solomon, 14 N. B. R. 163; Fed. Cas. 10856.) Where after the holder of a note signed by the bankrupt ha,s made proof in fuU against the estate, an indorser secured by the bankrupt pays the amount to the holder and disposes of the security, he should give credit for the amount realized from his se- curity and take a dividend upon the excess only of the original debt as proved. (In re Baldwin, 19 N. B. R. 53; Fed. Cas. 796.) A secured cred- itor is entitled to interest after the time specified for payment of the principal, by operation of law and not by any provision of the contract. (In re Bartenbach, 11 N. B. R. 61; Fed. Cas. 1068.) Until the debt or liability of a pledged creditor is discharged, he can- not be compelled to surrender his security. (In re Buse, 3 N. B. E. 52; Fed. Cas. 2231.) Where his proof shows that his debt is secured by a mortgage on the bankrupt's homestead, he is entitled to vote on his whole claim for the choice of assignee. (In re Still well, 7 N. B. R. 226; Fed. Cas. 18448.) He may vote for assignee on so much of his debt as is 294 LAW OF BANKEUPTOY. [§ 57,/*. unsecured, where the security applies only to a specific portion of his debt. (In re Parkes et aL, 10 N. B. E. 83; Fed. Cas. 10754) See Proof of Secured Claims, under subdivision a of this section. f. Objections to claims shall be heard, and determined as soon as the convenience of the court and the best interests of the estates and the claimants "wUl permit. The determination of objections to claims. — A creditor who con- tests the validity of the claim of another is liable, upon the decision being adverse to him, for the taxable costs and disbursements of the creditor whose claim is contested, and the fees, costs and expenses of the referee. (In re Troy Woolen Co., 8 N. B. B. 413; Fed. Caa 14303.) A claim which has been rejected by the assignee and returned to the reg- ister for further proof should not be ordered paid without notice to the assignee and opportunity given to answer the creditor's petition. (In re Mittledorfer & Co., 3 N. B. R. 9; Fed. Cas. 9674) Where written ob- jections are filed to a proof of debt with the register, he is required to certify the same to the covirt upon request of either party, although no proof be offered against the validity of the debt upon testimony being taken. (In re Clark & Bininger, 6 N. B. E. 303; Fed. Cas. 3808.) A creditor holding collateral security is entitled to have his claim referred to the register for investigation, and the assignee is not justified in re- jecting it until proofs have been taken and the matter fully inquired into. Where the assignee moves that the claim of a creditor be rejected on the ground that he has received and sold collateral security, the claim will be referred to the register for examination and report. (In re Nounnan & Co., 6 N. B. R. 579.) A creditor is not bound, upon a mere objection to his claim, to produce such evidence thereof as would be necessary at an ordinary trial (In re Saunders, 18 N. B. E, 164; 3 Low- ell, 444; Fed. Cas. 371.) If the other creditors and the court be fully informed of a dispute between a debtor and his creditor as to the amount that is actually owing, and of the claims of the respective parties before their final action in composition is taken, they cannot complain it, when he is called upon to pay, the debtor insists upon what he claimed were his rights in the premises. (In re Lissberger, 18 N. B. R. 380; Fed. Cas. 8384) The fact that the petitioning creditor and the debtor are brothers warrants the court in scrutinizing the claim closely, but not in infer- ring fraud from this fact alone. Objecting creditors have a right to be heard in opposition to the allowance of the claim. (In re Mendelsohn, 13 N. B. E. 533; 3 Sawy. 843; Fed. Cas. 9430.) The amount claimed by a creditor in his proof, although accepted by the creditors and the court in composition proceedings, does not conclude the debtor, who may show that it exceeds what he actually owes. (In re Lissberger, 18 N. B. § ^^^if-] PKOOF AITD ALLOWASrOE OF CLAIMS. 295 E. 230; Fed. Cas. 8384.) An order for the examination of the wife of a bankrupt will be made when z, prima facie case is made out by affidavit that she has in her possession property which should have been surren- dered to her husband's creditors, or has actively participated in any other fraud upon the statute; and when she professes to be a creditor to her husband's estate, if she offers her debt for proof, she may be fully examined in regard to it like any other creditor. (In re Gilbert, 3 N. B. R. 37; 1 Lowell, 340; Fed. Cas. 5410.) An assignee cannot object to a judgment creditor's claim on the ground that the judgment was for a debt procured by fraud on the bankrupt, and was secured by default, as such defense should have been set up at the trial when judgment was had. (StillweU v. Walker, Ass., etc., 17 N. R R. 569; 6 Cent Law J. 406; Fed. Cas. 13451.) That the debts are contingent, in case the contingency happens before the close of the bankruptcy, or that it is difficult to assess damages for a breach of a contract, are not valid objections to the proof of a claim, (Ex parte Pollard, 17 N. B. R. 338; 3 Lowell, 411; Fed. Cas. 11253.) Where a bankrupt, within four months before bankruptcy, borrows money and gives a mortgage on his stock in trade, a prior note already secured and an overdue note which has been taken up and held by the indorser at whose request it was included in the mortgage, the mort- gage may be severed and the valid part paid, notwithstanding that the stock is sold by the assignee, who holds that the mortgage is void as to the overdue note, and that as it is an entirety it is void in toto. (In re Stowe, 6 N. B. E. 439; Fed. Cas. 13513.) Where application is made to expunge the proof of debt of a corpora- tion on notes discounted for a bankrupt in its regular course of busi- ness, on the ground that the notes are not valid because the corporation is not authorized to employ its funds in discounting commercial or ac- commodation paper, the proof will be expunged and the claim rejected, but without prejudice to the right of the corporation to make proof of a claim for money loaned to the bankrupt. (In re Jaycox & Green, 7 N. B. R. 578; Fed. Cas. 7241.) Assignments of certificates of deposit issued by a banker before his bankruptcy, and delivered to a person as secin^ity for an antecedent debt, to be used as a set-off, coming into the hands of third persons, are not negotiable paper and no payment may be made thereon. (In re Sime & Co., 12 N. B. R. 315; 2 Sawy. 305; Fed. Cas. 12861.) Contracts for speculations in "wheat margins" are mere gaming contracts, and claims based thereon may not be proved as for money advanced for such purposes. (In re Green, 15 N. B. E. 198; 7 Biss. 338; Fed. Cas. 5751.) Foreign judgments are only prima fade evidence of the debt ad- judged to be due to the plaintiff, and such a judgment is open to exam- ination, not only to show that the court was without jurisdiction of the subject-matter, but that it was fraudulently obtained. Domestic judg- 296 LA"W OF BANKEITPTOT. [§ 57, g. ments cannot be collaterally impeached if rendered in a court of com- petent jurisdiction. (Michaels et aL v. Post, Ass., 12 N. B. E. 152; 21 WalL 398.) g. The claims of creditors who have received preferences shall not be allowed unless such creditors shall surrender their preferences. [Act of 1867. Seo. 23. . . . Any person who, after the approval of this act shall have accepted any preference, having reasonable cause to believe that the same was made or given by the debtor, contrary to any provision of this act, shall not prove the debt or claim on account of which the preference was made or given, nor shall he receive any din- dend therefrom until he shall first have surrendered to the assignee aU property, money, benefit, or advantage received by him under such preference.] A preference is deemed to have been given where the debtor, while insolvent, has procured or suffered a judgment to be entered against himself in favor of any person, or made a transfer of any of his property whereby any of his creditors would have an advantage over other cred- itors. (Sec. 60, a.) Preferences. — When a security is given a creditor by the bankrupt, of his own property, the creditor is not allowed to prove his debt unless he surrenders up the security, or it is sold with his consent, when he may prove for the residue of his debt which the security when sold does not discharge. "When the security is of a third person, the creditor may prove his debt without surrendering the security and may proceed to enforce his security against such person, provided he does not take from both sources more than the full amount of the debt (In re Cram, 1 K B. E. 133; 1 Hask 89; 1 Amer. Law T. Eep. Bankr. 65, 120; Fed. Cas. 3343; In re Forsythe & Murtha, 7 N. B. E. 174; Fed. Cas. 4948.) Cred- itors having reasonable cause to believe a debtor insolvent and accept- ing a chattel mortgage from him to secure their debts, thereby partici- pating in such fraud as to found a proceeding against the debtor in involuntary bankruptcy, wiU not be permitted to relinquish their in- tended preferences and claims to prove their debts. (In re Princeton, 1 N. B. R 178; 2 Biss. 116; 1 Amer. Law T. Eep. Bankr. 135; Fed. Cas. 11433.) One who obtains a preference within four months, having rea- sonable cause to believe at the time that a fraud was intended and that the debtor was insolvent, loses both his preference and his chance to prove his debt. (Bingham v. Eichmond & Gibbs, 6 N. B. R 137; Fed. Cas. 1415.) Debts proved by one who has taken a mortgage to secure the same within four months of adjudication constitute a fraudulent § 57, g.] PROOF AND ALLOWANCE OF CLAIMS. 297 preference. (Phelps v. Sterns and Same v. Dudley, 4 N. B. R 7 ; Fed. Cas. 11080.) One who, having reasonable cause to believe that his debtor is insolvent, receives from him an assignment of his account against a third party which the creditor collects, or goods to be applied to part payment of the debt, receives a fraudulent preference. (In re Kings- bury et al., 3 N. B. B. 84; Fed. Cas. 7816.) One knowing a debtor to be in- solvent, but who recovers judgment against him and causes execution to be issued and levy made, under which the personal property of the debtor is sold by the sheriff, accepts a preference, and may not prove his debt, and the proceeds of the sale may be ordered to be delivered to the assignee. (In re Davidson, 3 N. B. R 106; 4 Ben. 10; Fed. Cas. 3599.) When an insolvent debtor confesses a judgment and procures and suf- fers his property to be taken on legal process, with intent to give a preference, the creditor by his agent knowing at the time that the debtor is insolvent, such creditor is not permitted to prove his debt when the debtor is adjudged a bankrupt within a specified time of the giving of the preference, on the petition of the creditor. (In re Walton, 4 N. B. R 154; 3 Amer. Law T. 131; 1 Amer. Law T. Rep. Bankr. 163; Fed. Cas. 17130.) A creditor who has accepted a conveyance the effect of which is to defeat or delay the operation of the Bankrupt Act will be excluded from participation in the election of an assignee, and proof of his claim will be postponed imtil after the assignee is chosen; but creditors who have only assented to such transaction after its consummation will not be deprived of their right to vota (In re Chamberlain & Chamberlain, 3 N. B. R 173; Fed. Cas. 3574) A preference will not bar the proof of a debt vmless it was given and received by the parties to such debt. (In re Comstock & Co., 13 N. B. R 110; 3 Sawy. 330; Fed. Cas. 8079.) A creditor having obtained a preference in violation of the bankrupt law cannot prove his debt after the assignee has recovered the prefer- enca (In re Stein, 16 N. B. R 569; Fed. Cas. 13353.) Where one transfers property to another, who knew of the former's insolvency, in payment of a pre-existing debt, and the former at the time has no title to the property so transferred, but the latter is ignorant of the fact, he is not precluded from proving his debt in full, not having received a preferenca (In re Bousfleld & Poole Mfg. Co., 16 N. B. R 489; Fed. Cas. 1703.) Surrender of preference. — Where a preference is knowingly received by a creditor, he is debarred from proving the debt thereby sought to be secured unless, previous to suit brought by the assignee to set aside the preference, he surrenders the same. (In re Leland et aL, 9 N. B. R 309; 7 Ben. 156; Fed. Cas. 8330; In re Scott & McCarty, 4 N. B. R 139; Fed. Cas. 13518; In re Montgomery, 3 N. B. R 97; Fed. Cas. 9738. For contra, see In re Currier, 13 N. B. R 68; 3 Lowell, 436; Fed. Cas. 3493.) 298 LAW OF BANKEUPTOT. [§ 57, g. The prohibition of the creditor to prove his debt applies to cases where he has refused upon demand to surronder his preference and compelled the assignee by suit to recover the money or property claimed, and held by Viim in fraud of the provisions of the act. He may surrender his iweference and prove his debt before a recovery against him by judg- ment, but after a recovery he is not permitted to prova (In re Hunt et al., 5 N. B. E. 433; Fed. Cas. 6883.) Repayment of a preference to a debtor cannot take the place of a STirrender to the assignee. (In re Currier, 13 N. B. E. 68; 3 LoweU, 436; Fed. Cas. 3493.) A full surrender of a fraudulent preference by a creditor is a complete condonation of that offense in either voluntary or involuntary proceed- ings. (In re Stephens, 6 N. B. E. 533; Fed. Cas. 13365; In re Leland etaL, 9 N. B. R 309; 7 Ben. 156; Fed. Cas. 8330.) A creditor who obtained a preference by taking goods from a debtor, and who pays a judgment obtained by the assignee in bankruptcy against them for the value of the goods, may prove his claim against the estate, there being no actual fraud, and the payment being a surrender of the preference. (In re Newcomer, 18 N. B. E. 85; 10 Chi Leg. News, 847; 36 Pittsb. Leg. T. 3; Fed. Cas. 10148.) If the assignee accept the amount received by a preferred creditor after he has put in his proof, and the creditor has put in proof before the special examiner to whom the ac- tion has been referred, and dismisses his suit upon payment of costs, this constitutes a surrender, and such creditor may prove his debt. (In re Eiorden, 14 N. B. E. 333; Fed. Cas. 11853.) If the preferred creditor sur- render his preference before the entry of the judgment, but after the opinion is given, where the debt is tried before the court, he may prove his debt where there is only constructive fraud, but he may be required to pay the expenses of the assignea But ordinarily, in respect to the right to prove a claim, it makes no difference whether a transfer claimed to be a preference is constructively fraudulent. (Burr v. Hopkins, Ass., 13 N. B. E. 311; 6 Biss. 345; 7 Chu Leg. News, 366; Fed. Cas. 3193.) A creditor who resists a suit by the assignee to recover an alleged fraudu- lent preference cannot prove his claim, where he is defeated in the ac- tion, though he pays the judgment recovered against him therein, such payment not being a surrender. (In re Richter's Estate, 4 N. B. E. 67; 3 Chi Leg. News, 33; Fed. Cas. 11803; In re Cramer, 13 N. B. R 335; 8 Chi. Leg. News, 106; Fed. Cas. 3345; In re Tonkin el aL, 4 N. B. R 13; 3 Amer. Law T. 331; 1 Amer. Law T. Eep. Bankr. 332; Fed. Cas. 14094; In re Lee, 14 N. B. R. 89; 23 Pittsb. Leg. 196; Fed. Cas. 8179.) An open riinning account for merchandise sold, consisting of various items of charges and credits on which is credited the amount at which property is purchased by way of fraudulent preference, leaving a bal- ance which is proved against the bankrupt's estate, is but a single debt or claim, and by reason of such preference the creditor is not entitled to any dividend on any part thereof. (In re Richter's Estate, 4 N. B. R 67; § 5Y, A.] PROOF AND ALLOWANCE OF CLAIMS. 299 3 Chi Leg. News, 33 ; Fed. Cas. 11803.) But if a preferred creditor has two separate claims and receives a preference on one of them alone, he may prove the other (In re Lee, 14 N. B. R. 89; 33 Pittsb. Leg. J. 196; Fed. Cas. 8179; In re Eiohter's Estate, 4 N. B. R. 67; 3 Chi. Leg. News, 33; Fed. Cas. 11803; In re Arnold, 3 N. B. E. 61; Fed. Cas. 551); or if he has sepa- rate claims against the estate of a bankrupt for which he has received preferences, some of which he surrenders, he may prove claims, the security for which he has surrendered.. (In re Holland, 8 N. B. R 190; Fed. Cas. 6604) A creditor who is secured by a deed of trust in the nature of a pref- erence, but who disclaims any interest thereunder, may prove his claims imsecured. (In re Saunders, 13 N. B. E. 164; 2 Lowell, 444; Fed. Cas. 12371.) On the hearing of a petition in involuntary bankruptcy, when the debtor defendant declines to appear and defend in form, but is personally present, the court will hear a suggestion from any creditor, though it be one who is charged with receiving a fraudulent preference, that an insufficient number of creditors have joined in the petition. But in de- termining whether a sufficient number of creditors have joined in a petition in involuntary bankruptcy, where it is proved that a preferred creditor had reasonable cause to believe the debtor insolvent, the court wiU throw out of the computation the claim of the creditor so preferred, at least as to a moiety of its amount. (Clinton et aL v. Mayo, 13 N. B. R 39; Fed. Cas. 3899.) The provision which prevents a creditor, in case of actual fraud, from proving more than a moiety of his debt applies only where there has been a recovery. (In re Eiorden, 14 N. B. E. 333; Fed. Cas. 11853.) The amount collected by a foreign creditor under his execution levied after the adjudication in bankruptcy must be accounted for to the as- signee, and proof be made and dividend taken upon the original debt, without regard to the subsequent judgment thereon. (In re Bugbee, 9 N. B. R. 258; Fed. Cas. 3115.) A register has power to postpone the proof of a claim where there are doubts as to its validity, in view of the receipt of a fraudulent prefer- ence. (In re Stevens, 4 N. B. R. 122; Fed. Cas. 13391.) A. The value of securities held by secured creditors shall be determined by converting the same into money accord- ing to the terms of the agreement pursuant to which such securities were delivered to such creditors or by such cred- itors and the trustee, by agreement, arbitration, compromise, or litigation, as the court may direct, and the amount of such value shall be credited upon such claims, and a dividend shall be paid only on the unpaid balance. 300 LAW OF BAIIKEUPTCT. [§ 57, Jl. Value of securities held by creditors.— The security that must be liquidated before the creditor can prove his debt in bankruptcy proceed- ings must be upon property, real or personal, of the bankrupt that may be surrendered to the assignee. A claim secured by the guaranty of a third person may be proved as if unsecured. (In re Anderson, 12 N. B. E. 503; 7 Biss. 333; Fed. Cas. 350. For contra, see In re Bigelow et aL, 1 N. B. R. 186; 3 Ben. 480; 1 Amer. Law T. Eep. Bankr. 95; Fed. Cas. 1396.) Permission to sell securities conceded to be the property of the bankrupt will not be granted a creditor until his right to do so is shown, (In re Bigelow et aL, 1 N. B. R. 186; 2 Ben. 480; 1 Amer. Law T. Eep. Bankr. 95; Fed. Cas. 1396.) He cannot sell seoiu-ities to satisfy his debt before the appointment of the assignee. (In re Grinnell & Co., 9 N. B. E 29; 7 Ben. 43; 31 Pittsb. Leg. J. 83; Fed. Cas. 5830.) Where the value thereof is agreed upon between the assignee and a creditor, and after such valu- ation new facts are developed to show it to have been erroneous, the court wiU order a new valuation to be made where justice will be mani- festly furthered. (In re Newland, 9 N. B. E. 63; 7 Ben. 63; Fed. Cas. 10171.) The value of a security cannot be ascertained by the creditor's sending it to an auctioneer and having it advertised and sold at auction. (In re Hunt, 17 N. B. E. 305 ; 35 Leg. Int. 71 ; Fed. Cas. 6884) If he has had it appraised and received a dividend on the difiEerence between his claim and the appraised value, he can maintain an action on the security. (Streeper v. MoKee, 17 N. B. E. 419.) He may prove his debt for the bal- ance which may remaia after deducting the value of the property held by him as security, to be ascertained by agreement between him and the assignee or by a sale iinder the direction of the court. (Stewart v. Isidor et aL, 1 N. B. E 129; In re Stewart, 1 N. B. E. 42; 1 Amer. Law T. Eep. Bankr. 16; 15 Pittsb. Leg. J. 333; Fed. Cas. 18418.) Where the security is reduced to money, the assignee is entitled to any surplus over and above the amount necessary to liquidate the debt. (In re Newland, 9 N. B. E 63; 7 Ben. 63; Fed. Cas. 10171.) If the debtor, though insolvent, acquiesce in a sale of stocks by a secured creditor, his assignee is boimd by such acquiescence, although the stocks are sacrificed; but he is not bound by the bankrupt's ratification of a sale made after the commence- ment of the proceedings in bankruptcy. (Sparhawk et aL v. Drexel et aL, 13 N. B. E. 450; 1 Wkly. Notes Cas. 560; Fed. Cas. 13304) A creditor whose claim consists of notes and drafts for which he has no security^ and a debt secured by mortgages, may be admitted as a creditor only for that part of his claim which is unsecured, and the indebtedness for which he has security must rest in abeyance until the value of the secu- rities is ascertained. (In re Hanna, 7 N. B. E 503; 5 Ben. 5; Fed. Cas. 6037.) Where he has a general lien, and the debtor, on receiving an advance or other accommodation from him, deposits with him a partic- ular security to meet such advance or to cover such accommodation, the security is subject not only to a particular lien for the advance or § 57, *.] PKOOF AND ALLOWANCE OF CLAIMS. 301 liability, but also to a general lien. (Sparhawk et aL v. Drexel et aL, 13 N. B. R. 450; 1 Wkly. Notes Cas. 560; Fed. Cas. 13204) A creditor who, at the time of the bankruptcy, has in hand goods or chattels of the bankrupt with a power of sale, or choses in action with a power of collection, may sell the goods or collect the claims and set them off against the debt the bankrupt owes him; and this, although the power to sell or to collect would have been revocable by the bank- rupt before his bankruptcy, or he may retain the surplus by way of set-off on another claim which he holds against the bankrupt. (Ex parte Whiting, 14 N. B. R. 307; 3 Lowell, 473; Fed. Cas. 17573.) A policy of insurance as a security is not "a mortgage or pledge of real or personal property of the bankrupt, or a lien thereon for se- curing the payment of a debt to the creditor from the bankrupt; " but, nevertheless, the creditor must credit on the debt the present value of the security. (In re Newland, 7 N. B. R. 477; 6 Ben. 343; Fed. Cas. 10170.) An application upon the part of a national bank for an order direct- ing a sale by the bank of certain stocks belonging to a bankrupt, and which the bank claims to hold as security for the indebtedness of the bankrupt to the bank, will be denied. (In re Bigelow et aL, 1 N. B. E. 186; 3 Ben. 480; 1 Amer. Law T. Rep. Bankr. 95; Fed. Cas. 1896.) i. "Whenever a creditor, whose claim against a bankrupt estate is secured by the individual undertaking of any per- son, fails to prove such claim, such person may do so in the creditor's name, and if he discharge such undertaking in whole or in part he shaU be subrogated to that extent to the rights of the creditor. The snbrogation of another to the rights of the creditor. — A party is entitled to be subrogated to the rights of the creditor, without any agreement to that effect, where he has been compelled to pay the debt of a bankrupt in order to protect his own rights. (Whithed et aL v. PiUs- bury et aL, 18 N. B. R. 341; Fed. Cas. 17573.) A creditor is entitled to the benefit of the indenmity held by the surety, and can seek in equity to be subrogated to his rights, reach the security, and satisfy his debt. (In re Stewart, 1 N. B. R. 43; 1 Amer. Law T. Rep. Bankr. 16; 15 Pittsb. Leg. J. 233; Fed. Cas. 13818.) Sureties, indorsers and persons liable for the bankrupt are authorized to prove the debt for which they are liable when not proven by the creditor, or without first paying it, and such debts being provable are released by the discharge. (In re Perkins et aL, 10 N. B. R. 539; 7 Chi Leg. News, 9; 10 Alb. Law J. 347; 30 Int. Rev. Eeo. 185; 1 Cent. Law J. 507; 23 Pittsb. Leg. J. 48; Fed. Cas. 10983.) 802 LAW OF BANKEUPTOT. [§ 57, j. j. Debts owing to the United States, a State, a county, a district, or a municipality as a penalty or forfeiture shall not be allowed, except for the amount of the pecuniary loss sus- tained by the act, transaction, or proceeding out of which the penalty or forfeiture arose, with reasonable and actual costs occasioned thereby and such interest as may have ac- crued thereon according to law. Detots dne the United States or a state. — It was held under the act of 1867 that the United States was entitled to priority of payment without regard to the form of the indebtedness, and was entitled to priority al- though it does not proye its claim. It need not exhaust the collaterals held by it before claimiug priority of payment out of a bankrupt's estate. It may file a bill in a circuit court to obtain payment out of a trust fund held by a trustee, appointed in proceedings in bankruptcy. (Lewis, Trustee, v. United States, 14 N. B. R 64; 92 U. S. 618.) Its claim against a bankrupt to recover as a penalty the value of goods imported and entered contrary to law is a provable debt against the estate. (Barnes, Ass., v. United States, 13 N. B. E. 536; 31 Int. Rev. Rea 313; 1 N. Y. Weekly Dig. 177; Fed. Cas. 1023.) It was also held that a state need not prove its claim in bankruptcy to recover taxes due it on prop- erty of the bankrupt, and the bankrupt law cannot compel proof of such claim, nor sell the property so subject free from the tax lien. (Stokes v. State of Georgia, 9 N. B. R. 191.) The state is the creditor where the bond is payable to the people of the state, though the moneys collected are to be turned into the treasury of a city thereof. (In re Chamberlain, 17 N. B. R 50; 9 Ben. 149; Fed. Cas. 3580.) Where a bankrupt employs convicts from a state under a contract by the terms of which the state is to keep them under good discipline and at diligent labor, the dam- age sustained by the failure of the state to perform the stipulations should be deducted from the contract price in estimating the amount due the state. (In re Southwestern Car Co., 19 N. B. R 404; Fed. Cas. 13193.) The warden of a state prison deposited money, coming into his hands as warden, in a bank upon the order of the directors, the account being kept in the name of " H. N. Smith, warden." The bank was put into bankruptcy, and the question arose as to whether the state could claim the money and so have priority over other creditors. The district court held that the state could claim, but the circuit court reversed that de- cision and held that the warden could prove his account as a general creditor. (In re Corn Exchange Bank, 15 N. B. R 431; 7 Biss. 400; 9 Chi. Leg. News, 354; 4 Law & Eq. Rep. 39; 15 Alb. Law J. 351; Fed. Cas. 8242; reversing In re Corn Exchange Bank, 15 N. B. R 316; Fed. Cas. 8243.) § 57, k.] PEOOF AND ALLOWANCE OF CLAIMS. 303 k. Claims wMcli have been allowed may be reconsidered for cause and reallowed or rejected in whole or in part, ac- cording to the equities of the case, before but not after the estate has been closed. Estates of bankrupts are to be closed by the court wherever it appears that they have been fully administered. (Sec. 3 — 8.) Claims shall not be proved against a bankrupt estate subsequent to one year after the adjudication; or, if they are liquidated by litigation, and the final judg- ment therein is rendered within thirty days before or after the expira- tion of such time, then within sixty days after the rendition of such judgment. (Sec. 57, n.) The right of creditors who have received divi- dends, or in whose favor final dividends have been declared, shall not be affected by the proof and allowance of claims subsequent to the date of such payment or declarations of dividends, etc. (Sec. 65, c.) Whenever a composition has been confirmed or discharge granted, and it is made to appear that fraud was practiced in procuring the same, it will be revoked or set aside. (Sees. 13, 15.) The reconsideration of allowed claims.— The moving party is en- titled to open and close on the hearing of a motion to expunge a proof of claim. Where papers annexed to an answer to a petition to expimge proof are sought to be used as evidence, they must be proved in the usual manner, but the answer to the petition cannot be used as evidence. (Canby, Ass., v. McLear, 13 N. B. B. 33; Fed. Cas. 3378.) Where proof of a claim is objected to by the assignee, but upon re-examination is sus- tained, the creditor will, upon motion, be held entitled to interest at the rate allowed by the laws of the state. (In re Kitzinger et aL, 19 N. B. R. 388; Fed. Cas. 863.) The proper mode of presenting to the court the question of the right of secured creditors, who have oSeiei prima faoie proofs of debt, to participate in a dividend and vote at a creditors' meet- ing, is by motion of the assignee to expunge the proofs of debt. (In re Jaycox and Green, 7 N. B. E. 803 ; 7 West. Jur. 18 ; Fed. Cas. 7340.) When he files a petition for a re-examination of a proof, the creditor need only offer himself for examination, and the assignee must introduce such op- posing proof as he may have. (In re Robinson, 14 N. B. E. 180; 8 Ben. 406; Fed. Cas. 11938.) Proof of a claim wiU not be expunged on motion of the assignee on the ground that a trustee of a bankrupt corporation has made himself liable for its debts by a false report, as the assignee does not represent the other creditors in their right to proceed against the trustee, and cannot exclude him from a share in the assets. (Bris- tol, Ass., V. Sanford, 13 N. B. R 78; 13 Blatch. 341; Fed. Cas. 1893.) The decision of a register allowing the claim of a creditor for princi- pal and usurious interest may be re-examined, as the creditor forfeits all usurious interest, and the assignee may apply the same towards the 304 LAW OF BANKEUPTOT. [§ 61, Z-W. «xtinguishm6nt of the principal debt. (In re Prescott, 9 N. B. E. 385; 5 Biss. 5S3; 6 Chi Leg. News, 151; Fed. Cas. 11389.) Where a mortgage creditor with leave of the court forecloses in a state court and proves his claim for the deficiency, the claim maybe re-exam- ined, since he has no right to prove the claim, the sale in the state court not being the proper mode for ascertaining the value of the security. (In re Herrick et al., 17 N. B. E. 335; Fed. Cas. 6431.) Where, less than foiir months before the filing of the petition, the debtor assigns securities to cover an indebtedness, and suit is brought by the assignee to recover them, and the defendant then surrenders the entire amount to the assignee and proves his debt, the proof will, upon re-examination, be allowed to stand. (In re Eiorden, 14 N. B. R 333; Fed Cas. 11853.) Where it appears that a bankrupt has paid more usury than principal, an order authorizing the assignee to surrender to the creditor certain securities on a release of the debt secured thereby, granted ex parte on application by the assignee, who files an affidavit setting forth that the debt is due and amounts to more than the value of the securities, will be vacated on motion. (In re Hoole, 19 N. B. E. 477; Fed. Cas. 6673.) I. Whenever a claim shall have been reconsidered and rejected, in whole or in part, upon which a dividend has been paid, the trustee may recover from the creditor the amount of the dividend received upon the claim if rejected in whole, or the proportional part thereof if rejected only in part. Provision for the declaration and payment of dividends is made in section 65. m. The claim of any estate which is being administered in bankruptcy against any like estate may be proved by the trustee and allowed by the court in the same manner and upon like terms as the claims of other creditors. n. Claims shall not be proved against a bankrupt estate subsequent to one year after the adjudication ; or if they are liquidated by litigation and the final judgment therein is rendered within thirty days before or after the expiration of such time, then within sixty days after the rendition of such judgment: Provided, That the right of infants and in- sane persons without guardians, without notice of the pro- ceedings, may continue six months longer. § 58, a.] NOTICES TO 0EEDIT0E8. 305 Courts of bankruptcy may re-open estates whenever it appears they ■were closed before being fully administered. (Sec 2 — 8.) Dividends re- maining unclaimed for one year must be distributed to the creditors whose claims have been allowed but not paid in full, and after such claims have been paid in full the balance must be paid to the bankrupt. If, however, the unclaimed dividends belong to minors, such minors have one year after arriving at majority to claim them. (Sec. 66, b.) The period within irbich a claim maybe proTed. — The statute of limitations ceases to run against the creditor of a bankrupt at the com- mencement of the proceedings in bankruptcy, and if not barred at that time his claim may be proved afterwards, though at the time of proof it would be otherwise barred. (In re Eldridge & Co., 13 N. B. R. 540; 2 Hughes, 356; IN. T. Weekly Dig. 343; Fed. Cas. 4331. For contra, see Nicholas, Ass., v. Murray et al, 18 N. B. R. 469; Fed. Cas. 10333.) But a debt barred by the statute of limitations of the state in which the pro- ceedings in bankruptcy are pending is not provable against the estate of the bankrupt, and cannot be reckoned in computing the number nec- essary to join in an involuntary petition in bankruptcy (In re Noesen, 13 N. R R 433; 6 Biss. 443; 7 Chi Leg. News, 419; 1 N. T. "Weekly Dig. 135; 3 Cent. Law J. 570; Fed. Cas. 10388; In re Doty, 16 N. B. R. 303; 10 Chi Leg. News, 1; 35 Pittsb. Leg. J. 34; Fed. Cas. 4017), if objected to by the bankrupt or any creditor. (In re Kingsley, 1 N. B. R. 53; 1 LoweU, 316; 15 Kttsb. Leg. J. 235; Fed. Cas. 7819.) Where property is held for thirty years without a payment to a third party in trust for others, as directed by a will, there is only an implied or resulting trust, and it is barred by the statute of limitations. (In re O'Neale, 6 N. B. R 435; Fed. Cas. 10513.) Where a note payable in one year is, at the end of one year, taken up and a new note for the same amount and time given in exchange, and this process is repeated year after year, the debt will be deemed to have been contracted on the date of the last note. (In. re Schumpert, 8 N. B. R 415; Fed. Cas. 13491.) A debt due from a bankrupt under an agreement made on the sur- render of a lease for a term, that he would pay any deficiency arising on a reletting by the landlord, wiU be considered as contracted at the time of such agreement, and not at the time a judgment was obtained therefor. (In re Swift, 7 N. R R 591; 6 Ben. 334; Fed. Cas. 13693.) A bankrupt indorser cannot be held on a note payable on demand, when the same is not presented for payment for four years. (In re Crawford, 5 N. B. R 301; Fed. Cas. 3364) Sec. 58. Notices to creditors. — a. Creditors shall have at least ten days' notice by mail, to their respective addresses as they appear in the list of creditors of the bankrupt, or as afterwards filed with the papers in the case by the creditors, unless they waive notice in writing, of (1) all examinations of 20 306 LAW OF BANKEUPTCY. [§ 58, a. the bankrupt ; (2) all hearings upon applications for the con- firmation of compositions or the discharge of bankrupts; (3) all meetings of creditors ; (4) all proposed sales of prop- erty; (5) the declaration and time of payment of dividends; (6) the filing of the final accounts of the trustee, and the time when and the place where they will be examined and passed upon; (7) the proposed compromise of any contro- versy, and (8) the proposed dismissal of the proceedings. [Act of 1867. Sbo. 11. . . . The judge ... or register . . . shall issue a warrant to be signed by such judge or register, directed to the marshal of said district, authorizing him forthwith, as messenger, to publish notices in such newspapers, as the warrant specifies ; to serve writ- ten or printed notice, by mail or personally, on aU creditors upon the schedule filed with the debtor's petition, or whose names may be given to him in addition by the debtor, and to give such personal or other notice to any persons con- cerned as the warrant specifies, which notice shall state : First. That a warrant in bankruptcy has been issued against the estate of the debtor. Second. That the payment of any debts and the delivery of any property belonging to such debtor to him or for his use, and the transfer of any property by him, are forbidden by law. Third. That a meeting of the creditors of the debtor, giv- ing the names, residences, and amounts, so far as known, to prove their debts and choose one or more assignees of his estate, will be held at a court of bankruptcy, to be holden at a time and place designated in the warrant, not less than ten nor more than ninety days after the issuing of the same. Sec. 17. . . . The assignee . . . shall give writ- ten notice to all known creditors, by mail or otherwise,, of all dividends, and such notice of meetings, after the first, as may be ordered by the court. Sec. 27. . . . In case a dividend is ordered, the regis- ter shall, within ten days after such meeting, . . . for- ward by mail to every creditor a statement of the dividend to which he is entitled. Seo. 28. . . . Preparatory to the final dividend, the assignee shall submit his account to the court and file the same, and give notice to the creditors of such filing, and shall also give notice that he will apply for a settlement of his account and for a discharge from all liability as as- § 58, a.] NOTICES TO OEEDITOES. 307 Seo. 29. . . . The bankrupt may apply to the court for a discharge from his debts, and the court shall thereupon order notice to be give by mail to all creditors who have proved their debts, and by publication at least once a week in such newspapers as the court shall designate. . . .] Notices and orders which are not by the act or by the General Orders required to be served on the party personally may be served upon his attorney. (Orders IV.) The creditor may request that all notices to which he is entitled be sent him at any designated place, and all notices shall be so addressed until otherwise directed. (Orders XXL) Before incurring any expense in publishing or mailing notices, indemnity may be demanded therefor of the bankrupt or the person for whom rendered. (Orders X.) Notice must be given of the examination of the bankrupt at the first meeting of his creditors, or at such other meetings as the court shall order him to submit to an examination. (Sec. 7 — 9.) Notice must also be given to the trustee of his appointment. (Orders XVL) Courts of bank- ruptcy are required to designate a newspaper published within their re- spective districts, and in the county in which the bankrupt resides or the major part of his property is situated, in which notices and orders required to be published shall be inserted. For the convenience of par- ties in interest, additional newspapers may be designated in which they may be published. (Sec. 28.) Debts which have not been duly sched- uled in time for proof and allowance, with the names of the creditors, if known to the bankrupt, are not affected by a discharge, unless such creditor had notice or actual knowledge of the proceedings in bank- ruptcy. (Sec. 17 — 3.) Infants and insane persons without guardians, without notice of the proceedings, are given six months longer than other creditors within which to prove their claims. (Sec. 57, n.) A vol- untary or involuntary petition must not be dismissed by the petitioner, or for want of prosecution, or by consent of parties, until after notice to the creditors. (Sec. 59, g.) Notice to creditors. — It was held under the act of 1867, in proceedings before the register, where creditors had not been notified to be present, but their assignee was present, that they were not entitled to notice. (In re Campbell, 17 N. B. E. 4; 3 Hughes, 376; Fed. Cas. 234S.) Insufficient notice. — Warrant was issued and returned by the mar- shal with proof of publication of the notice, but without proof of notice served by mail or personally, as required. It was held that there must be a new warrant (In re Schepeler et aL, 3 N. B. R. 43; 3 Ben. 346; Fed. Cas. 12453); but the proof by a,ffidavit of the giving of the regular notice through the mail to the creditors named in the schedule will, ordinarily, be held sufficient. (In re Spencer, 18 N. B. R. 199; Fed. Cas. 13339.) A notice to the creditors which does not specify all the names of the sev- eral creditors and the several amounts respectively admitted to each 308 LAW OF BANXETJPTOT, [§ 58, a. creditor is defective (In re Jones, 3 N. B. R. 20; Fed. Cas. 7447.) Fail- tire to publish notice of appointment of assignee is not cause for with- holding a discharge. (In re Strachan, 3 N. B. E. 148.) Notice iu composition. — Upon the filing of a petition by a debtor for a composition, the court will direct the register to call a meeting of creditors and issue notice therefor (In re Spades, 13 N. B. R 73; 6 Biss. 448; 8 Chi Leg. News, 33; Fed. Cas. 13196); and creditors as well as the debtor should be notified of an application to set aside a composition (Ex parte Hamlin, 16 N. B. R. 330; 3 LoweU, 571; 5 Cent. Law J. 381; Fed. Cas. 5993); but where the composition agreement provides that the proceedings may be discontinued without notice to the creditors, such provision is only a waiver of notice of an application to discontinue, and the court is not bound to grant the application, (In re McNat, etc. Mfg. Co., 18 N. B. R 388.) Where notice has been given to creditors, they are regarded as consenting to a discharge if they make no opposition. (In re Antisdel, 18 N. B. R 289; Fed. Cas. 480.) It has been held that a bankrupt court has jiirisdiction to grant a discharge, even though there roay be creditors not regularly brought before it by publication and service of notice (Thurmond v. Andres et aL, 18 N. B. R 157); also it is not necessary, to give jurisdiction to the bankrupt court, that the cred- itors have actual notice, and the lack of it vidll not make the discharge invalid, if it be found that the requirements of the act were honestly complied with by the bankrupt (Rayl, Adm'x, v. Lapham, 15 N. B. R 608); and a discharge in bankruptcy is conclusive in the absence of fraud, and cannot be impeached collaterally by a creditor to whom no notice of the proceedings had been given. (Williams v. Butcher, 13 N. B. R 148; Heyl v. Lephen, 15 N. B. R 508.) Notice in general. — Where a discharge has been annulled on account of fraud, the decree annulling such discharge will not be vacated with- out notice to all parties affected. (In re Augenstein, 16 N. B. R 253.) Where the notice of the first meeting does not reach creditors, and the court is satisfied that their votes would have changed the result, and that they did not attend through failure of the notice, on their applica- tion the meeting should be re-opened and each vote received; but, if one waits until the second meeting, he cannot have the first meeting re- assembled without good cause for the delay. (In re Spencer, 18 N. R R 199; Fed. Cas. 13339.) When a bankrupt amends his schedule after an assignee has been chosen, so as to include an additional creditor, it is not necessary to notify the creditors already named in such schedules before the amendment can take place or call a new meeting of creditors. (In re Carson, 5 N. B. R 290; 5 Ben. 277; Fed. Cas. 2460.) The correct- ness of the schedule of creditors, or the fact whether a creditor received notice of the proceedings by creditors, does not determine the question of jurisdiction either of the proceedings or a discharge. (In re Archen- brown, 11 N. B. R 149; 7 Chi. Leg. News, 99; Fed. Cas. 505.) And also a clerical mistake in the name of a creditor, which prevented the cred- § 58, 5.] NOTICES TO CEEDITOES. ^ 309 itor from receiving a special notice, will not invalidate the prooeedinga against such creditor. (Thornton v. Hogan, 17 N. B. R. 377.) Notice of sales. — Under the statute it is imperative that notice shall be given of all public sales, whether the assignee or other officer pro- ceeds under the power given him by the statute or under an order of court. (In re Hunter, 18 N. B. R. 504; Fed. Cas. 6903.) Notice of accounts.— The register should see that the assignee gives creditors notice of proceedings touching the auditing, settlement and adjournment of the assignee's accounts, and of distribution under them, and it has been held that the failure of the assignee to do so may affect the bankrupt's right to a discharge. (In re Bushey, 3 N. B. R 167; 27 Leg. Int 111; Fed. Cas. 2227.) Notice of compromise. — If the court has jurisdiction over the case in bankruptcy, and the notice to creditors of the meeting to consider a proiMjsition of compromise was properly given, the omission to make a proper and sufficient notice of the hearing to determine whether the resolution has been properly passed does not render the order ratifying the resolution void in a collateral action. (Smith, Stebbins & Co. v. Engle et aL, 14 N. B. E. 481.) 5. IN'otice to creditors of the first meeting shall be pub- lished at least once and may be published such number of additional times as the court may direct; the last publican tion shall be at least one week prior to the date fixed for the meeting. Other notices may be published as the court shall direct. [Act of 1867. Seo. 12. . . . That at the meeting held in pursuance of the notice, one of the registers of the court shall preside, and the messenger shall make return of the warrant and of his doings thereon; and if it appears that the notice to the creditors has not been given as required in the warrant, the meeting shall forthwith be adjourned, and a new notice given as required. If the debtor dies after the issuing of the warrant, the proceedings may be continued and concluded in Like manner as if he had lived. Seo. M. . . . The assignee shall immediately give no- tice of his appointment, by publication at least once a week for three successive weeks m such newspapers as shall for that purpose be designated by the court, due regard being had to their circulation in the district or in that portion of the district in which the bankrupt and his creditors shall reside. . . .] See note to preceding section. 310 LAW OF BANKEtlPTCT. [§§ 68, C, 59, O. Publication of notice. — A failvire to publish in one of the newspapers designated for the purpose, notice of the first meeting of creditors to prove their debts and choose an assignee, has been held to render all subsequent proceedings void- (In re Hall, 3 N. B. R. 68; 16 Pjttsb. Leg. J. 53; Fed. Cas. 5933.) c. All notices shall be given by the referee, unless other- wise ordered by the judge. This same duty is imposed upon the referee by section 39, a (4). Sec. 69. Who may file and dismiss petitions. — a. Any qualified person may file a petition to be adjudged a volun- tary bankrupt. [Act of 1867. Sec. 11. . . . That if any person resid- ing within the jurisdiction of the TJnited States, owing debts Srovable under this act exceeding the amount of three hun- red dollars, shall apply by petition . . . the filing of such petition shall be an act of bankruptcy, and such peti- tioner shall be adjudged a bankrupt. . . .] Any person who owes debts except a corporation may become a vol- untary bankrupt. (Sec. 4, a.) Upon the filing of a voluntary petition the judge must make the adju- dication or dismiss the petition; if absent, the clerk must refer the case to the referee (sec. 18, g), who must make the adjudication or dismiss the petition. (Sec. 38, a.) In general. — A man cannot be called upon to show cause why he shall not himself go or put anybody else into voluntary bankruptcy. (In re Harbaugh et aL, 15 N. B. R. 246; 15 Alb. Law J. 194; 23 Int. Eev. Rec. 50; 34 Pittsb. Leg. J. 100; Fed. Cas. 6045.) If a debtor has committed no act of bankruptcy, and will not voluntarily petition, a creditor may sue him, so as to force him to commit an act of bankruptcy, and then himself proceed against him for such act in involuntary bankruptcy (Warren v. Bank, 7 N. B. R 481; 10 Blatchf. 498; Fed. Cas. 17203; Coxe V. Hale, 8 N. B. R 563; 31 Pittsb. Leg. J. 77; Fed. Cas. 3310), or by pro- ceeding to judgment may compel him to apply to be decreed a bankrupt. (Coxe V. Hale, 8 N. B. R 563; 31 Pittsb. Leg. J. 77; Fed. Cas. 3310.) Filing of second petition. — Before the order was made setting com- position aside in case of an involuntary bankrupt, the debtor filed a voluntary petition and was adjudicated bankrupt. The court held that, there being no adjudication on the firet petition, it was no bar to the voluntary petition, and that the involuntary case should be stayed and proceedings continued in the other case. (In re Flanagan, 18 N. B. R 439; 36 Pittsb. Leg. J. 138; Fed. Ca& 4850.) Where an adjudication has § 59, a.] WHO MAT FILE AND DISMISS PETITIONS. 311 been made on a voluntary petition, and a warrant has issued for the first meeting of creditors, and the matter of said petition is still pending without any discharge or discontinuance, and the bankrupt flies a sec- ond petition in which the same debts and the same creditors are named, the choice of an assignee will not be made in the second proceeding pending the first, and an order will be made staying the proceedings under the second petition. (In re Wielarske, 4 N. B. R. 130; Fed. Cas. 17619.) A voluntary bankrupt who has contracted new debts since the filing of a petition in bankruptcy under which a discharge was refused may file a new petition. (In re Drisko, 13 N. B. R 113; 3 Lowell, 430; Fed. Cas. 4090; In re Drisoo et al., 14 N. B. R. 551; Fed. Cas. 4086.) Partners. — Partners may be joined in a voluntary petition in two ways — either by their own act or by the act of the partners petitioning. (In re Harbaugh et aL, 15 N. B. R. 246; 15 Alb. Law J. 194; 33 Int. Rev. Rec. 50; 24 Pittsb. Leg. J. 100; Fed. Cas. 6045.) A proceeding by the petition of one of several copartners to have the copartners adjudicated bankrupts is a proceeding partly voluntary and partly involuntary; but a proceeding by the petition of all the copartners is a purely voluntary petition. (In re Penn et aL, 5 N. B. R. 30; 5 Ben. 89; 3 Chi Leg. News, 225; Fed. Cas. 10927; In re Wilson, 13 N. B. R. 353; 3 LoweU, 453; Fed. Cas. 17784.) If the names of parties who should be joined as petitioners are not so joined, the court will refuse to discharge the petitioning debt- ors (Citizens' Nat Bank v. Cass et aL, 18 N. B. R. 279; 6 Wkly. Notes Cas. 371; 6 Reporter, 579; 19 Alb. Law T. 119; 36 Httsb. Leg. J. 35; Fed. Cas. 8732); but where a member of a firm who was unable to get his partners to join, filed his individual petition in bankruptcy and inserts debts of the copartnership, the schedules showing that there were no partnership assets, the court discharged him from his partnership as well as individual debts, and decided that it was not necessary to make his copartner a party to the proceedings. (In re Abbe, 3 N. B. R. 26; 7 Amer. Law Reg. (N. S.) 834; 15 Pittsb. Leg. J. 589; Fed. Cas. 4.) On the expirar tion of a firm the interests of all the partners were transferred to one of them by bills of sale, he agreeing to apply firm assets to payment of firm debts. Later he filed a voluntary petition in bankruptcy, and the firm assets and debts were included in his schedule. The court held that, to the end of having firm assets applied to firm debts, the other members of the firm should intervene and have the firm adjudicated bankrupt. (In re Gorham, 18 N. B. R 419; 11 ChL Leg. News, 58; 36 Pittsb. Leg. J. 113; Fed. Cas. 5634.) Bankrupt was adjudicated upon creditor's petition. Petition was subsequently filed by bankrupt and assignee, alleging that at time of filing creditor's petition bankrupt was member of firm which had certain debts and assets to be administered, and prayed that other members might be brought in and firm adjudicated; and the court held that it could grant relief. (In re Kelley, 19 N. B. R. 336; Fed. Cas. 7656.) For the purposes of petitioning, a partnership is to be held to exist so 312 LAW OF ■BAJ>TKi:aPTCY. [§ 59, I. long as thore are outstanding debts against the firm or assets undis- tributed belonging to it. (Hunt, Tillinghast & Ca v. Pooke et aL, 5 N. B. R. 161; Fed. Cas. 6896.) Kcvival of debt. — Tlie filing of the petition by a bankrupt and his in- cluding the claim of a creditor in the schedule of debts is equivalent to a new promise, so as to prevent the claim, if not already barred, from being defeated by the statute of limitations. (In re Eldridge & Co., 12 N. B. R. 540; 3 Hughes, 256; 1 N. Y. Wkly. Dig. 243; In re Maybin, 15 N. B. R. 468; Fed. Cas. 9337; In re Hertzog, 18 N. B. E. 526; Fed. Cas. 6433.) h. Three or more creditors who have provable claims against any person which amount in the aggregate, in ex- cess of the value of securities held by them, if any, to five hundred dollars or over ; or if all of the creditors of such person are less than twelve in number, then one of such creditors whose claim equals such amount may file a petition to have him adjudged bankrupt. [Act of 1867. Sec. 39. . . . Any person . . . shall be deemed to have committed an act of bankruptcy, and, subject to the conditions hereinafter prescribed, shall be adjudged a bankrupt, on the petition of one or more of his creditors, the aggregate of whose debts provable under this act amount to at least two hundred and fifty dollars, provided such petition is brought within six months after the act of bankruptcy shall have been committed.] Provision is made for who may become involuntary bankrupts by sec- tion 4, &. A petition may be filed against a person who is insolvent and who has committed an act of bankruptcy within four months after the commission of such act. (Sec. 3, b.) Upon the filing of a petition for in- voluntary bankruptcy, service thereof, with a writ of subpcBna, must be made upon the person therein named as defendant, in the same manner that service of process is now had in suits in equity In United States courts, except that it is returnable within fifteen daj'S, unless the time is extended. Where personal service cannot be made, notice must be given by publication. (Sec. 18, a.) Whenever a person against whom a peti- tion has been filed, as hereinbefore provided, takes issue with and de- nies the allegation of his insolvency, he must appear in court and submit to an examination. (Sec. 8, d.) If, on the last day within which plead- ings may be filed, none are filed by the bankrupt or any of his creditors, the judge shall, on the next day, if present, or as soon thereafter as practicable, make the adjudication or dismiHS the petition. (Sea 18, e.) But if the judge is absent the case must be referred to the referee forth- § 59, J.J WHO MAY FILE AND DISMISS PETITIONS. 313 with (sea 18,/), who must make the adjudication or dismiss the petition. (Sec. 38, o.) A person against whom an involuntary petition has been filed is entitled to a trial by jury in respect to the question of his in- solvency, etc., imless otherwise provided. (Sec. 19, a.) In general. — A proceeding in involuntary bankruptcy is not a mere suit inter partes, but partakes of the nature of a proceeding in rem, in which every creditor has a direct interest. (In re Boston H. & E. R R. Co., 6 N. B. R. 209; 9 Blatchf. 101; 6 Amer. Law Rev. 583; Fed. Cas. 1678; Piatt V. Archer, 6 N. B. R 465; Fed. Cas. 11213.) The running of the statute of limitations is arrested by the filing of a petition in bankruptcy. (In re Maybin, 15 N. B. R 468; Fed. Cas. 9337.) No creditor who has received a preference having at the time reason- able cause to believe his debtor insolvent is authorized to institute pro- ceedings in bankruptcy. (Ecker v. McAllister, 17 N. B. R 43.) Where one who files a petition in bankruptcy against another is him- self adjudged a bankrupt, his assignee is properly substituted as peti- tioner in his placa (In re Jones, 7 N. B. R 506 ; Fed. Cas. 7450.) A. and B., creditors, each filed a petition in involuntary bankruptcy against C. While these proceedings were pending C. himself filed a petition in bankruptcy and vyas adjudged a bankrupt. A. and B. proved their claims imder the voluntary petition. Held, that they thereby waived their right to continue the involuntary proceedings. (In re Noonnan & Co., 6 N. B. R 579.) A creditor, believing his debtor to be insolvent, may sue and by pro- ceeding to judgment compel the debtor himself to apply to be decreed a bankrupt, or if he do not, but suffers his property to be taken on legal process in such manner as gives priority to such creditor, if carried into execution, he may then allege this as an act of bankiniptcy and himself demand that he be adjudged a bankrupt (Coxe v. Hale, 8 N. B. R 562; 21 Pittsb. Leg. J. 77; Fed. Cas. 3310.) The fact that the creditors have offered to assent to a general assign- ment for the benefit of creditors, upon condition that the assignee be changed, vnll not stop them from proceeding in bankruptcy. (In re Spicer et aL v. Ward et aL, 3 N. B. R 137; Fed. Cas. 13241.) The respondent in involuntary bankruptcy may deny that the peti- tioner is his creditor, may maintain such denial, and overcome the prima fade proofs given by the petitioner. The court must thereupon dismiss the petition. (In re ComweU, 6 N. B. R 805; 6 Amer. Law Rev. 365; Fed. Cas. 3250.) The payment into court, in pursuance of a previous tender, of the amount of the petitioning creditor's claim, will not defeat the petition, where there are other creditors. (In re WiUiams, 3 N. B. R 74; 1 Lowell, 406; Fed. Cas. 17703.) More than one petition. — In case two or more petitions are filed against the same person in different districts, the first hearing must be 314: LAW OF BANKEUPTOT. [§ 59, J. had in the district in which the debtor has his domicile; and in case of two or more petitions against the same partnership in different courts, each having jurisdiction, the petition first filed must be first heard, and in each case the prooeediags upon the other petitions may be stayed until an adjudication is made upon the petition first heard. (Orders VL) While proceedings are pending in one district it is Improper to grant an adjudication in another, as the petition first filed takes the prece- dence. (In re Warren and Charles Leland, 5 N. B. E. 333 ; Fed. Cas. 8228.) Jurisdiction not affected by dissolation of corporation. — The "dis- solution " of a corporation under state iusolvency laws, and the appoint- ment of receivers, does not end its existence so as to prevent the juris- diction of the United States bankmpt courts from attaching. (In re Independent Insurance Co., 6 N. B. R. 260; Fed. Cas. 7017.) And where a corporation was dissolved by the decree of the state court before adju- dication, but after service of an order to show cause, the court held that it still existed for the purpose of the bankruptcy proceedings (Piatt v. Archer, 6 N. B. R 465; Fed. Cas. 11313.) If adequate remedy by pro- ceedings in equity is afforded, a court of bankruptcy will not take cogni- zance of a petition in behalf of such a creditor. (In re Avery v. Johann, 3 N. B. R 86; 3 Amer. Law T. Rep. Bankr. 92; 4N. B. R 143; 1 Chi Leg. News, 261; Fed, Cas. 675.) Petitioners. — Petitions in bankruptcy are considered to be joint act of all joining in. them. (In re KeUer, 18 N. B. R 10; 7 Chi Leg. News, 43; 9 West. Jur. 175; Fed. Cas. 7647.) A petition cannot be maintained by a creditor whose debt was contracted after the act of bankruptcy was committed (In re Muller et aL, 3 N. B. R 86; Deady, 515; 3 Amer. Law T. Rep. Bankr. 38; Fed. Cas. 9912), and petitioners must allege that they are creditors at the time of filing the petition (In re Western Savings & Trust Co., 17 N. B. R 413; 4 Sawy. 190; Fed. Cas. 17443); but it is held that a person has a right to purchase, in good faith, claims against a debtor, vsrith a view to joiaing in a petition in bankruptcy to make the necessary number. (In re Woodford et aL, 13 N. B. R 575; Fed. Cas. 17972.) An indorser of the bankrupt's paper who has become ab- solutely liable to the holders before the filing of the petition, by notice of dishonor, is not a creditor of the bankrupt at the time of the filing. (In re Riker, 18 N. B. R 393; Fed. Cas. 11833.) In counting the number requisite, only those owning debts " provable under the act " should be considered, by which is meant those whose debts are unconditionally provable without any release or preliminary action. (In re Frost, 11 N. B. R 69; 6 Biss. 213; 7 Chi Leg. News, 43; Fed. Cas. 5134; In re Hunt et ai, 5 N. B. R 433; Fed. Cas. 6882.) Number of claims, what considered. — In counting the number of claims of creditors, all claims must be counted irrespective of amounts. In re Woodford & Chamberlain, 13 N. B. R. 575; Fed. Cas. 17973.) Ac- crued interest constitutes part of a debt provable against the estate of § 59, &.] "WHO MAT FILE AIJD DISMISS PETITIONS. 315 the bankrupt and may be used to uphold involuntary proceedings- (Sloan V. Lewis, 13 N. B. R 173; 23 Wall. 150.) An indorser's liability on a note constitutes a debt which may be made the foundation of either voluntary or involuntary proceedings in bankruptcy. (In re Nickodemus, 3 N. B. R 55; 2 Chi Leg. News, 49; 16 Pittsb. Leg. J. 333; 2 Amer. Law T. 168 ; 1 Amer. Law T. Rep. Bankr. 140 ; Fed. Cas. 10354) A creditor who waa induced to release his claim without consideration through the fraudulent representations of another creditor has a debt that will support a petition in bankruptcy. (Michaels et aL v. Post, Ass., 12 N. B. R 152; 21 WalL 398.) A petition may be filed by a creditor against his debtor upon a claim which is not yet due, if it is provable in bankruptcy. (Linn et al. v. Smith, 4 N. B. R 12; 3 Amer. Law T. 218; 1 Amer. Law T. Rep. Bankr. 339; Fed. Cas. 8375.) The fact that a creditor is a trustee under a volun- tary assignment, unless some fraud is connected with it, is not sufiScient to exclude the creditor from being counted in estimating the number of creditors necessary to join in a petition in involuntary bankruptcy. (In re Lloyd, 15 N. B. R 257; 5 Amer. Law Reo. 679; 15 Alb. Law J. 393; 24 Pittsb. Leg. J. 113; Fed. Cas. 8439.) Proceedings in involimtary bank- ruptcy were instituted against one who was a partner in several differ- ent firms. The question arose as to whether firm debts were to be included in computing the number of creditors and amount of debts necessary to be represented by the petition, and the court held that both individual and firm debts must be computed. (In re Lloyd, 15 N. B. R 257; 15 Alb. Law J. 293; 34 Pittsb. Leg. J. 113; Fed. Cas. 8429; 5 Amer. Law Rec. 679.) The state is the creditor where the bond is payable to the people of the state, though the moneys to be collected are to be turned into the treasury of a city of the state. (In re Chamberlain, 17 N. B. R 50; 9 Ben. 149; Fed. Cas. 3580.) A petition for involuntary bankruptcy against a firm, signed by one creditor of the firm and another who is an individual creditor of a member of the firm, is sufBcient. (In re Matot et aL, 16 N. B. R. 485; 5 N. Y. Wkly. Dig. 539; Fed. Cas. 9383.) It is not necessary that the larger creditors should be requested to sign petition for adjudication, and refuse. (In re Currier, 13 N. B. R 68; 3 Lowell, 436; Fed. Cas. 3493.) The court has authority to inquire into and determine the value of securities held by creditors of an alleged bankrupt, in order to ascertain whether the claims of the petitioning creditors are of the amount re- quired by law. (In re CaL Pac. R R Co., 11 N. B. R 193; 3 Sawy. 240; 3 Cent. Law J. 79; Fed. Cas. 3315.) The petition must show, with as much certainty as possible, that the creditors uniting in the petition actually constitute the number requisite under the law, and it will be dismissed where it appears to the court by afiidavit or otherwise that at the time it was filed the creditors who filed it knew that they did not constitute the requisite number. (In re Scam- mon, 11 N. B. R 280; 6 Biss. 195; 7 Chi Leg. News, 42; 9 West. Jur. 175; 316 LAW OF BAUXEUPTCT. [§ 59, 5. Fed Cas. 12439.) But if a merchant fails to exhibit a statement of his accounts when demanded, he cannot complain of proceedings in bank- ruptcy commenced against him without the requisite number of credit- ors joining in the petition, provided a sufficient number join before the trial The petition should contain the averment that the petitioners be- lieve that they do constitute the requisite mmiber and amount of prov- able debts which are unsecured. But that they should know such to be the fact cannot in the very nature of the case be required (Perin & GafiE Mfg. Co. V. Peale, 17 N. B. R. 377; Fed. Cas. 10981); and when it alleges upon belief, without charging either information or knowledge, that the petitioners constitute the requisite proportion of creditors, it was held sufficient. (In re Mann, 14 N. B. R. 572; 13 Blatchf. 401; Fed. Cas. 9033.) Unless the petition for adjudication contains a clear, explicit and consistent allegation as to the proportionate number of creditors petitioning and amount of debts represented by them, the court has no jurisdiction, and no amendments can be allowed. (In re Eosenflelds, 11 N. B. E. 86; 3 Amer. Law Eec. 724; 1 Cent. Law J. 583; Fed. Cas. 12061.) An allegation as to the number and amount of creditors petitioning may be amended, when the question of the acceptance of a resolution of com- I)Osition is before the court, after the composition meeting. (Ex parte Jewett, 11 N. B. R. 443; 2 Lowell, 393; Fed. Cas. 7303.) Where a petition in bankruptcy was filed by creditors, but the requisite number did not join, and afterwards a supplemental petition was filed, in which other creditors joined, the total number being sufficient, it was held that the supplemental petition would not be dismissed because the requisite num- ber of creditors had not joined in it. (In re Frisbie et aL, 15 N. B. R 532 ; 14 Blatchf. 185 ; Fed. Cas. 5129.) It has also been held that the same proportion of creditors must join in an involuntary proceeding against a corporation as is required in case of a natural person. (In re Leaven- worth Savings Bank, 14 N. B. R. 93; 4 Dili 363; 3 Cent Law J. 207; Fed. Cas. 8165.) If a petition is based on the failure of an alleged bankrupt as a manufacturer to pay its notes, but does not state that the notes were made or passed in its alleged business, the petition is defeotiva (In re Capital Publishing Co., 18 N. B. R. 319.) Who excluded in computing number of creditors. — In computing the number of creditors necessary to join in a petition, the following should be excluded: One having a debt barred by the statute of limita- tions of the state in which the proceedings in bankruptcy are pending. (In re Noesen, 13 N. B. R 433; 6 Biss. 443; 7 ChL Leg. News, 419; 1 N. Y. Wkly. Dig. 135; 3 Cent. Law J. 570; Fed. Cas. 10338; In re CromweU, 6 N. B. R 305; 6 Amer. Law Rev. 365; Fed. Cas. 3250.) "Where an indorsee re- ceives payment from the indorser during pendency of proceedings, he cannot unite in the petition, even though he proved his claim before payment but had not filed it. (In re Broioh et al., 15 N. B. R 11; 7 Biss. 303; Fed. Cas. 1931.) A note given in the place of a lost note, if there § 59, J.J WHO MAT FILE AND DISMISS PETITIONS. 317 was no consideration for the making of the original or lost note, whether a voluntary gift, is not a sufficient claim on which to base a petition for bankruptcy proceedings. (In re Cornwall, 4 N. B. R. 134; Fed. Cas. 3351.) Can secured or preferred creditors be counted.— It has been held that secured creditors or those holding liens cannot be reckoned among the creditors who constitute the requisite number to sign a petition, whose debts are unconditionally provable. (In re Frost, 11 N. B. R. 69; 6 Biss. 313; 7 Chi Leg. News, 43; Fed. Cas. 5134.) A creditor fully se- cured may file a petition in bankruptcy without expressly waiving his preference thereia, but the better practice is to do so. (In re Stansell, 6 N. B. R. 183; Fed. Cas. 13393; In re Bloss, 4 N. B. R. 37; Fed. Cas. 1563.) But when a creditor obtained a security or lien for his claim in fraud of the Bankrupt Act, or which would be avoided if the debtor is ad- judged a bankrupt, he cannot be included in computing the number and value necessary to be joined in the petition. (In re Scrafford, 15 N. B. R 104; 4 Dili 376; 3 N. Y. Wkly. Dig. 553; 3 Month. J. 614; Fed. Cas. 13556; 3 Cent. Law J. 19.) A creditor who is secured or has a lien upon the property of his debtor, by virtue of a judgment, execution and levy, or is secured by garnishment, filing a petition for adjudication of bankruptcy, without reference to the lien or security, thereby waives and reliaquishes the same, and stands before the court as an unsecureJ creditor. (In re Bloss, 4 N. B. R 37; Fed. Cas. 1563; In re Broich et aL, 15 N. B. R 11; 7 Biss. 303; Fed. Cas. 1931.) Objection was made to the number of debtors joining and the amounts of debts represented by them, but before hearing a secured creditor waived his security and joined, making the requisite number and amount, and it was held he had all the rights of an unsecured creditor and his course was proper. (In re Crossette et aL, 17 N. B. R 308; Fed. Cas. 3435.) It has been held that where it has been proved that a preferred creditor had reasonable cause to believe the debtor insolvent, the court will throw out of the computation the claim of the creditor so preferred, at least as to a moiety of its amount (Clinton et aL v. Mayo, 12 N. B. R 39; Fed. Cas. 3899.) Waiver of bankrupt. — Where a decree in bankruptcy is rendered with the consent of the bankrupt, the fact that less than the requisite number and value of claims of creditors had not joined constituted an irregularity which the bankrupt might waive. (In re Williams et aL, 11 N. B. R. 146; 6 Biss. 333; 7 Chi Leg. News, 49; Fed. Cas. 17700.) And although the debtor has signed a written admission that the requisite quorum has united in the petition, the court must stiU " be satisfied that the ad- mission is made in good faith." (In re Flanagan, 18 N. B. R 439; 36 Pittsb. Leg. J. 138; Fed. Cas. 4850.) Counter-claim. — Where the alleged bankrupt had a counter-claim against the petitioning creditor, being provable in bankruptcy, and such amount will reduce petitioning creditor's claim below the requisite 318 LAW OF BANKEUPTCT. [§ 59, h. amount, the petition will be dismissed. (In re Osage Valley & S. K. E. Co., 9 N. B. R. 381; 1 Cent. Law J. 33; Fed. Cas. 10593.) Adjudication as to number and amount flnal. — It has been held that an adjudication is final, and an application should not be entertained to hold such adjudication void on the ground that the requisite number and amount had not joined (In re Duncan, 14 N. B. R. 18; 8 Ben. 365; Fed. Cas. 4131); and an existing adjudication precludes all inquiry touching the existence or validity of the debt of a petitioning creditor. (In re FaUon, 2 N. B. R. 93; 1 Chi Leg. News, 107; Fed. Cas. 4628.) In partnerships. — So long as joint debts of a firm remain outstand- ing and unsettled, the proceedings, whether voluntary or involuntary, naay be joint. (In re WiUiams, 3 N. B. R. 74; 1 Lowell, 406; Fed. Cas. 17703.) The court has jurisdiction of a petition filed by two members of a firm which originally consisted of tliree. (In re Mitchell et aL, 3 N. B. R. Ill; Fed. Cas. 9656.) And where the partnership is dissolved by the assignment of one member of his interest to a third person, the re- maining partner was held not entitled, under the act of 1867, to main- tain a petition that the original firm and each of its members be adjudged bankrupt. (In re Hartough et al., 3 N. B. R. 107; Fed. Cas. 6164) A petition in bankruptcy may be filed against the members of a firm which has been dissolved by mutual consant, as the rights of creditors then existing, or those who subsequently became creditors, are not af- fected if the members of the firm continue to treat each other as part- ners after the alleged dissolution, and to act as such in their business transactions with others. (In re McFarland & Co., 10 N. B. R 381; Fed. Cas. 8788.) After dissolution of a copartnership, where there has been no settlement, one member is not entitled to an adjudication of bank- ruptcy against his former partners on account of claims for money or assets which had come into his hands over and above his share, or on account of obligations entered into during the continuance of the part- nership, for which both are jointly liable. (In re Sigsby v. Willis, 3 N. B. R. 51; 3 Ben. 371; 1 Amer. Law T. Rep. Bankr. 171; 2 Amer. Law T. 169; Fed. Cas. 13849.) A fraudulent misappropriation of the partner- ship funds by one partner entitled his copartner to institute proceed- ings and prove his claim against the wrong-doer the same as if no partnership had existed. (In re Sigsby v. Willis, 3 N. B. R. 51 ; 3 Ben. 371; 1 Amer. Law T. Rep. Bankr. 171; 3 Amer. Law T. 169; Fed. Cas. 12849.) Where the several members of a firm filed several petitions, and there are firm assets, the estate of the firm is not in the bankruptcy court so as to operate as a discharge of the firm debts, even though the several patitions set out the partnership assets and liabilities, and though they have a common assignee. (In re Plumb, 17 N. B. R. 76; 9 Ben. 279; Fed. Cas. 11331.) Appearance on behalf of corporations. — In ordinary cases of involui»- tary proceedings in bankruptcy against corporations, it is to be inferred, barring legal restrictions, that they will have power to appear by counsel. § 59, 0.] WHO MAT FILE AND DISMISS PETITIONS. 319 and that the usual confldenoe will exist between counsel and client, and that the counsel wUl act within the scope of their authority (Leiter et aL v. Payson, 9 N. B. R 305; 6 Chi Leg. News, 157; Fed. Cas. 8326); and it is not necessary to give authority to counsel to appear and admit the acts of bankruptcy charged, or that the corporators or shareholders shovdd pre- viously by vote authorize or direct that act to be done. (Leiter et aL v. Payson, 9 N. R R. 205; 6 Chi Leg. News, 157; Fed. Cas. 8226.) A duly appointed receiver of a corporation is the proper representative of such corporation in proceedings in bankruptcy, and as such his functions are not limited by the jurisdiction of the court from which he received his appointment. (In re Republic Insurance Co., 8 N. B. R 197; 3 Ins. Law J. 390; 5 Chi Leg. News, 285; Fed. Cas. 11705.) Petition is not defeated by payment into court. — A previous ten- der of the amount of the petitioning creditor's claim, where there are other creditors, is not defeated by payment into comi; (In re Williams, 3 N. B. R 74; 1 Lowell, 406; Fed. Cas. 17703); and the receipt by a creditor of part of his claim does not preclude him from petitioning to have his debtor adjudged a bankrupt, if the creditor offers to bring this payment into the registry of the court (In re Mercer, 6 N. B. R 351; 29 Leg. Int. 76; Fed. Cas. 9060); but where, in answer to a petition, part payment is alleged, the petition cannot be maintained if such part pay- ment reduces the debt below the amount required by the Bankrupt Act. (In re Quimette, 3 N. B. R 140; 1 Sawy. 47; Fed. Cas. 10623.) A petition- ing creditor may proceed to an adjudication, notwithstanding a tender of the fuU amount of his claim and costs; although, if petitioner is the oidy creditor, proceedings against the debtor will be dismissed upon such tender. (In re Sheehan, 8 N. B. R 345; Fed. Cas. 12737.) c. Petitions shall be filed in duplicate, one copy for the clerk and one for service on the bankrupt. AH petitions and the schedules filed therewith must be printed or written out plainly, without abbreviation or interlineation, except where such may be necessary for the purpose of reference. (Orders V.) Contents of petition. — Amendments to petition may be allowed on application. (Orders XL) It should set forth all facts material to the claim made by the creditor to an adjudication, as it is in the natui-e of pleading, so that the debtor may be distinctly apprised what he is called upon to answer. (In re Eaynor, 7 N. B. R 527; 11 Blatchf. 42; 1 Amer. Law Rep. 736; Fed. Cas. 11597.) It should not contain the facts relied upon to justify a warrant of arrest and seizure, nor the allegations in proof of the act of bankruptcy, which should be made on the personal knowledge of the deponent and appear in a separate deposition. (In re Hadley, 13 N. B. R 866; Fed. Cas. 5894.) Petitions in case of a corporation.— The petition should show that it is either a moneyed, business or commercial corporation (In re Ore- 320 LAW OF BANKEUPTOT. [§ 59, d, 6. gon Bulletin Printing & Publishing Co., 14 N. B. R. 405; 3 Sawy. 614; 11 Amer. Law Rev. 181; 3 Cent. Law J. 515; 14 Alb. Law J. 130; 3 Amer. Law T. Rep. (N. S.) 469; Fed. Cas. 10561); and to compel it into involun- tary bankruptcy, it must be averred and proved that the corporation is either a m.oney6d, business or commercial corporation; that it is a banker, broker, merchant, trader, manufacturer or miner. (Alabama & Chattanooga R. R. Co. v. Jones, 5 N. B. R. 97; Fed. Cas. 136.) By appear- ing and answering to a petition a corporation admits that it may be pro- ceeded against in bankruptcy, and afterwards it cannot object that it is not alleged that is a moneyed, business or commercial corporation. (In re Oregon Bulletin Printing & Publishing Co., 13 N. B. R. 503; 1 Cin. Law BuL 87; Fed. Cas. 10559.) d. If it be averred in the petition that the creditors of the bankrupt are less than twelve in number, and less than three creditors have joined as petitioners therein, and the answer avers the existence of a larger number of creditors, there shall be filed with the answer a list under oath of all the creditors, with their addresses, and thereupon the court shall cause all such creditors to be notified of the pendency of such petition and shall delay the hearing upon such peti- tion for a reasonable time, to the end that parties in interest shall have an opportunity to be heard ; if upon such hearing it shall appear that a suiRcient number have joined in such petition, or if prior to or during such hearing a sufficient number shall join therein, the case may be proceeded with, but otherwise it shall be dismissed. 6. In computing the number of creditors of a bankrupt for the purpose of determining how many creditors must join in the petition, such creditors as were employed by him. at the time of the filing of the petition or are related to him by consanguinity or affinity within the third degree, as de- termined by the common law, and have not joined in the petition, shall not be counted. Consanguinity is the relation existing between persons descending from a common ancestor; affinity is the connection existing, in conse- quence of marriage, between the husband or wife and the kindred of the other. The degrees in either case are computed alike, thus: Count- ing from the bankrupt (or the husband or wife, as the case may be) up to the common ancestor and down to the party related, counting each person as one, and excluding the bankrupt (or the husband or wife, etc.). § 59> /•] '^'^^ ^^'^■^ ^II'^ -^^D DISMISS PETITIONS. 321 f. Creditors other than, original petitioners may at any time enter their appearance and join in the petition, or file an answer and be heard in opposition to the prayer of the petition. Any creditor may appear and plead to the petition within ten days after the return day or within such further time as the court may allow. (Sec. 18, b.) There is nothing in the act which specifically gives a creditor appear- ing ia opposition to the prayer of the petition the right to a jury trial as to matters of fact alleged in the petition, but under section 19, c, it would seem that such right would not be denied. Who may interrene and when. — The service of an injunction on a person does not make him a party in. interest to a bankruptcy proceed- ing, though he might, by petition or motion, have wrongful injunction dissolved. (Karr v. Whittaker et aL, 5 N. B. E. 133; Fed. Cas. 7613.) A general unsecured creditor is entitled to be heard in opposition to a creditor's petition for involuntary bankruptcy (In re Austin et aL, 16 N. B. R 518; Fed. Cas. 663); but a person who is not a party to the peti- tion, and sustains merely the relation of a person who claims to be a creditor of the debtor, cannot be permitted to interfere and defend against petition filed by other creditors to have debtor adjudged bank- rupt. (In re Boston, Hartford & Erie R R Co., 5 N. B. R 333; Fed. Cas. 1679.) Any creditor other than the one petitioning that the debtor be adjudged a bankrupt can intervene at any time before adjudication and be heard upon application made to the court in behalf of such debtor (In re MendenhaU, 9 N. B. R 380; 19 Int. Rev. Eec. 86; 6 Chi Leg. News, 193; Fed. Cas. 9434) ; but a creditor has no absolute right to appear and op- pose the discharge of a bankrupt after the return day of the order to show cause, though the proceedings may have been adjourned for other purposes. It is within the power of the court to permit opposition to be made at any time before the discharge is granted. (In re Houghton, 10 N. B. R 337; Fed. Cas. 6730; In re Olmstead, 4 N. B. B. 71; Fed. Cas. 10505.) When debtors filed a denial that the proper number and amount of creditors had joined in the petition, and no reference had been made to ascertain the facts, but an entry of an order for reference appeared on the minutes of the judge, it was held that the judge was not called upon to fix a time within which additional creditors might join in the petition. (In re Frisbie and McHugh, 15 N. B. R 533; 14 Blatchf. 185; Fed. Cas. 5139.) Creditors other than the petitioning creditors in bank- ruptcy have no standing in case of an application to annul an adjudica- tion. (In re Bush, 6 N. B. R 179; 6 West. Jur. 374; Fed. Cas. 332.) Interyening of attaching creditor. — An attaching creditor may in- tervene to contest an adjudication upon the merits, as well as to claim 21 322 ^ LAW OF BANKEUPTOT. [§ 59, ff. that the court has no jurisdiction of the case. (In re Williams, 14 N. B. R 133; Fed. Cas. 17706; In re Mendelsohn, 13 N. B. E. 533; 8 Sawy. 343; Fed. Cas. 9420; In re Burton et aL, 17 N. B. R. 313; 9 Ben, 334; Fed. Cas. 3314.) He may also contest the question as to the number and amount of creditors, as well as any other material fact in the case (In re ScraflEord, 14 N. B. R. 184; 3 Cent. Law J. 353; Fed. Cas. 12557); and he may take advantage of any defense available to the debtor. (In re ■Williams, 14 N. B. R. 133; Fed. Cas. 17706.) He has a right to intervene after default of the debtor and contest the commission of the alleged act of bankruptcy. (In re Jonas, 16 N. B. R. 452 ; Fed. Cas. 7443.) Where a creditor has obtained an attachment after filing of petition and issue of the order to show cause, he has no right to intervene and oppose ad- judication. (In re Vogel et al., 18 N. B. R. 165; Fed. Cas. 16981.) Intervention by partners.— One member of a firm died and his ad- ministrators allowed the surviving partner to continue the business under the same firm name, but without any new partnership agreement. He became a bankrupt, and the court held that, in the absence of a new agreement, the administrators of the dead partner could only come in as any other creditor, the surviving partner having converted the prop- erty of his dead partner to his own use with the knowledge and consent of the administrators. (In re Mills, 11 N. B. R. 74; Fed. Cas. 9611.) Upon the return day of the order to show cause, certain creditors, not peti- tioning creditors, moved for leave to intervene and contest the adjudi- cation upon the ground that the voluntary assignment was void, being executed by only three of the five partners personally and in the name of one of the partners signing as attorney in fact for the firm, and al- leging that such partner had no power of attorney for that purpose; it was held that the motion must be denied, as a case of fraud or collu- sion had not been shown. (In re Lawrence et al., 18 N. B. R 516; 36 Pittsb. Leg. J. 143; Fed. Cas. 8183.) A voluntary petition in bankniptcy was filed by partners, an adjudication had, and the property conveyed to an assignee. Nearly two years afterwards a creditor of the firm filed a bill alleging that two persons not named in the petition were copart- ners with the petitioners, and asked the court to order their joinder in the bankruptcy proceeding. Held, that the creditor could not supply the omission, but could have the same remedies against such parties as they would have had before the petition was filed. (Citizens' Nat. Bank v. Cass et aL, 18 N. B. R 279; 6 Weekly Notes Cas. 371; 6 Reporter, 579; 19 Alb. Law T. 119; 36 Pittsb. Leg. T. 35; Fed. Cas. 3733.) g. A voluntary or involuntary petition shall not be dis- missed by the petitioner or petitioners or for want of prose- cution or by consent of parties until after notice to the cred- itors. § 59, g.'] WHO MAT FILE AITD DISMISS PETITIONS. 323 Creditors nrast have at least ten days' notice by mail of the proposed dismissal of bankruptcy proceedings. (Sec. 68, a.) Where petitioning creditor abandons or fails to proceed.— When a petitioning Creditor abandons the proceeding, any other creditor may intervene, and on his application the court may proceed to an adjudica- tion. Such right of intervention cannot be defeated by any arrange- ment between the bankrupt and any creditor, and any action of the court defeating such right of intervention is in violation of the statute. (In re Lacy, Downs & Co., 10 N. B. R. 477; Fed. Cas. 7965.) The pend- ency of a petition to discontinue proceedings in bankruptcy, instead of depriving creditors of the right to intervene, is notice to them that the original creditor did not intend to prosecute further the matter, confers ujxjn them the very right to intervene and prosecute. (In re Buchanan, 10 N. B. E. 97; Fed. Cas. 2073.) Another creditor may intervene and be permitted to prosecute the original petition where the court is satisfied that the original petitioning creditor does not intend to prosecute the matter further, and the pending application of the original creditor to discontinue the proceedings is sufficient evidence in that regard. (In re Buchanan, 10 N. B. E. 97; Fed. Cas. 2073.) The adjourned day on which, if the petitioning creditor does not appear and proceed to an adjudicar tion, another creditor may appear and prosecute, is any day to which the proceedings on the order to show cause may be adjourned for the pxirpose of inquiring into the allegations of the acts of bankruptcy. (In re Lacy, Downs & Co., 10 N. B. R 477; Fed. Cas. 7965.) Where the pe- titioning creditors omit or decline to proceed, any other creditor repre- senting more than the requisite amount of debts may continue the pro- ceeding. (In re Sheffer, 17 N. B. E. 869; 4 Sawy. 363; 1 San Fran. Law J. 117; Fed. Cas. 12742.) Where a bankrupt gives a receipt and releases under seal to his assignee in a settlement out of court, and a stipulation is filed discontinuing the bankruptcy proceedings, the bankrupt court has power to set aside the stipulation on proof that it was obtained from the bankrupt by fraud, or given under a mistake of fact; but such court will not do so tmtil the bankrupt has sought relief in a court having jurisdiction to set aside the release for fraud, or to award damages (In re Beiler, 7 N. B. R 552; Fed. Cas. 1394); and the court may permit a cred- itor to assign his claim after having joined in the petition, even if it re- sults in defeating the proceedings. (In re Western Savings & Trust Co., 17 N. B. R 413; 4 Sawy. 190; Fed. Cas. 17442.) If aU the creditors ex- press a desire to dismiss the proceeding, they should as a rule be allowed to do so, or creditors who have been misled by false representations wiU be allowed to withdraw upon discovering the truth, if the court is satis- fied they were misled, (In re Heffron, 10 N. B. R 213; 6 Chi Leg. News, 358; Fed. Cas. 6821; In re Miller, 1 N. B. R. 105; 1 Amer. Law T. Rep. Bankr. 121; Fed. Cas. 9558.) A motion for leave to dismiss the proceed- ings and to settle with the debtor comes too late if filed after the debtor 324 LAW OF BANKEUPTOT. [§ 60, a. has been adjudged a bankrupt (In re Sberbume, 1 N. B. R. 155; Fed. Cas. 13758.) Dismissal of bankruptcy proceedings. — The stockholders of a bank- rupt corporation who have bought up aU the floating debt of the corpora- tion, except a few insignificant claims, may dismiss the proceedings and be permitted to take possession of its property and effects, upon giving security for the payment of the remaining claims. (In re Indianapolis, Cincinnati & Lafayette R. R Co., 8 N. B. E. 303; 31 Pittsb. Leg. J. 4; Fed. Cas. 7033.) Under the act of 1867 it was held that a petitioning cred- itor might, at any time before adjudication, discontinue the proceedings and have his petition dismissed without notice to other creditors, who, if they desire to continue proceedings, should apply, on the day to which proceedings have been adjourned, for leave to be substituted, or file a new petition. (In re Camden RoUing MiU Co., 3 N. B. R 146; Fed. Cas. 3338.) Withdrawal of creditor. — Creditors cannot withdraw after having in good faith joined in an involuntary petition (In re Sargent, 13 N. B. R 144; 1 N. Y. WHy. Dig. 435; Fed. Cas. 13361; In re Eosenfields, 11 N. B. R 86; 8 Amer. Law Eec. 734; 1 Cent. Law J. 583; Fed. Cas. 13061); and permission to withdraw wUl be denied whenever necessary in the furtherance of the objects of the Bankrupt Act. (In re Sheffer, 17 N. B. R 869; 4 Sawy. 363; 1 San Fran. Law J. 117; Fed. Cas. 13743.) But when his name has been signed to the petition without his knowledge, he may repudiate the proceedings and the petition will be dismissed as to him (In re Eosenfields, 11 N. B. R 86; 3 Amer. Law Eec. 724; 1 Cent. Law J. 583; Fed. Cas. 13061); or if he join therein through misrepresen- tation, he may be allowed to withdraw at any time before adjudication. (In re Sargent, 13 N. B. R 144; 1 N. Y. Wkly. Dig. 435; Fed. Cas. 13361; In re Heffron, 10 N. B. R 213; 6 Chi Leg. News, 358; Fed. Cas. 6331.) If, however, the misrepresentation was not substantial or intentionally false, they will not be entitled to withdraw. (In re Vogel et aL, 18 N. B. R 165; Fed. Cas. 16981.) Where one of the creditors who joined in a petition in involuntary bankruptcy sought to withdraw, alleging that he had the same right to withdraw that a plaintiff has to discontinue a suit, the court held that he could not, as the rights of his co-petitioners would have been affected. (In re Vogel et aL, 18 N. B. R 165; Fed. Cas. 16981.) A party having once appeared cannot withdraw appearance on the ground that the court has no jurisdiction, but must raise such ques- tion by demurrer. (In re Ulrich et aL, 3 N. B. R 34; 3 Ben. 355; Fed. Cas. 14337.) Sec. 60. Preferred creditors. — a. A person shall be deemed to have given a preference if, being insolvent, he has procured or suffered a judgment to be entered against himself in favor of any person, or made a transfer of any of his property, and § 60, a.] PEEFEKEED CEEDITOES. 325 the effect of tlie enforcement of such jadgment or transfer "will be to enable any one of his creditors to obtain a greater percentage of his debt than any other of such creditors of the same class. See subdivision b of this section for analogous provision in the act of 1867. More than all else, this provision is conducive of a calm and dispassion- ate examination by the creditors of a debtor's financial condition, before crushing out his financial existence by compulsory process. Left with- out the inhibition against preferences, the least suspicion of insolvency causes the diligent creditor to institute attachment proceedings, soon to be followed by an indiscriminate onslaught by other creditors, early re- sulting in the debtor closing his place of business. As under this law aU share alike in the settlement of an estate, nothing is gained by being first in the institution of attachment proceedings, and, as a result, the debtor and his creditors are enabled to meet and counsel together, which will result in a better imderstanding between the two classes and have a tendency to prevent commercial failures. While the statute does not make intent an essential part of the preferences, in some instances it must exist in order to create one. (Sec. 3, a.) It is considered an act of bankruptcy for any person to transfer, while insolvent, any portion of his property to one or more of his creditors with intent to prefer such creditors over his other creditors, or to permit or suffer a creditor to obtain a preference through legal proceedings, and not having, at least five days before a sale or final disposition of any property affected by such preference, vacated or discharged such prefer- ence. (Sec. 3, a.) A person is deemed " insolvent " whenever the aggre- gate of his property, exclusive of any property which he may have conveyed, transferred, concealed or removed, or permitted to be con- cealed or removed, with intent to defraud, hinder or delay his creditors, shall not, at a fair valuation, be sufficient in amount to pay his debts. (Sec. 1 — 15.) In connection with this, section 67, relating to "Hens," should be consulted. When a preference constitntes frand.— It constitutes fraud for a debtor to give preference to a creditor within four months prior to the filing of the petition in bankruptcy, the debtor being insolvent and the creditor having reasonable cause to believe him so. (Kohlsaat v. Hoguet et aL, 5 N. B. R. 159; 4 Ben. 565; Fed. Cas. 7919; In re Lewis et aL, 3 N. B. R. 145; Sharpe, Ass., etc. v. Philadelphia Warehouse Co., 19 N. B. R. 378; Waring, Ass., v. Bichanan, 19 N. B. R 503; Fed. Cas. 17176; Sedg- wick, Ass.. V. Place et al., 5 N. B. R. 168; 5 Ben. 184; 3 Chi. Leg. News, 409; 6 Amer. Law Rev. 151; Fed. Cas. 13630; In re Tonkin & Trewartha, 4 N. B. R. 13; 8 Amer. Law T. 331; 1 Amer. Law T. Rep. Bankr. 333; Fed. Cas. 14094; In re Rosenfeld, 1 N. B. R. 161; 7 Amer. Law Reg. (N. S.) 326 LAW OF BABTKEUPTOY. [§ 60, a. 618; 1 Amer. Law T. Rep. Bankr. 81; Fed- Cas. 13058.) Pressure in mak- ing assignment to one creditor does not ameliorate the fact that it is a preference over other creditors. (In re Batchelder, 3 N. B. E. 37; 1 Lowell, 373; Fed. Cas. 1098.) Whether a preference is voluntary or in- voluntary, or by reason of threats or coercion, is wholly immateriaL (Strain v. Gourdin et aL, 11 N. B. E. 156; 2 "Woods, 380; Fed. Caa 13531.) There is nothing dishonest or illegal in a creditor securing a debt due him from a failing debtor. Actual fraud does not embrace the act of a creditor who attempts by proper and ordinary effort to secure an honest debt, which act may afterwards become a legal fraud by reason of the filing of a petition and adjudication in bankruptcy. A mere fraud on the bankrupt law by accepting a preference in violation of its provisions is not an actiMl fraud. (In re Bousfleld & Poole Mfg. Co., 16 N. B. R. 489; Fed. Cas. 1703.) What payments are preferences. — When a debtor's liabilities exceed his assets and he has ceased to meet his indebtedness as it falls due and has thus become in law and in fact insolvent, every payment made by him is a preference of the creditor so paid (In re Warner et aL, 5 N. B. R. 414; Fed. Ca& 17177); as a payment made by a debtor who knows that he is insolvent, by procuring an order for material from a creditor for the express purpose of discharging the indebtedness (Farrin v. Crawford et aL, 3 N. B. R. 181; 7 Chi Leg. News, 343; Fed. Cas. 4686); and a pay- ment by debtors, being insolvent and contemplating bankruptcy, is a fraudulent preference and an act of bankruptcy, notwithstanding it is made on a fiduciary debt (In re Dibble, 3 N. B. R 185; 3 Ben. 283; 1 Chi Leg. News, 355; Fed. Cas. 3884); also payment of rent in fuU by an in- solvent, even to prevent the forfeiture of a valuable lease, is a technical act of bankruptcy. (In re Merchants' Ins. Co., 6 N. B. R. 43; 3 Biss. 162; 20 Pittsb. Leg. J. 32; 4 Chi Leg. News, 73; Fei Cas. 9441.) If a bankrupt having a deposit with a bank which holds his note gives a check for the amount so deposited, which is credited on the note, this is a preference and is void (Traders' Nat. Bank v. Campbell, 6 N. B. R. 353; 14WalL87); and payment of wages to employees, in contempla- tion of insolvency, is an act of bankruptcy. The preferred wages of an employee must be secured through the proceedings in bankruptcy. (In re Kenyon & Fenton, 6 N. B. R 338.) By an arrangement between the A. bank and the B. bank, the former acted as agent for the latter for clearing-house purposes. When the A, bank found it was going to fail, it notified the B. bank, and after banking hours it paid to the B. bank the full amount of its deposits. Held, that such payjnent was a preference and that the amount could be recovered by the assignee in bankruptcy of the A, bank. (Phelan, Asa, v. Bank, 16 N. B. R 308; 4 Dili 88; 5 Cent. Law J. 351; Fed. Caa 11069.) Where an insolvent debtor honestly believes that he will be able to go on in his business, and with such belief pays a just debt without a design to give a preference, such payment is not fraudulent, although bank- § 60, a.] PEEFEEEED OEEDITOES. 32T ruptcy should subsequently ensue. (In re Gregg, 4 N. B. R. 150; Fed. Cas. 5797; Maurer v. Frantz, 4 N. B. R. 142.) Although proceedings in bankruptcy are pending against him, a debtor who is solvent may pay any or all of his debts (In re Oregon BuUetin Printing and Publishing Co., 13 jSr. B. R 503; 1 Cin. Law^ BuL 87; Fed. Cas. 10559); and it is not a payment if a banker about to fail procures a certificate of deposit in another bank for the benefit of a depositor and payable to the order of said depositor, and it could not be made to relate back to the date of the certificate instead of the date of the ratification. (Strain v. Gourdin et aL, 11 N. B. R. 156; 2 Woods, 380; Fed. Cas. 13521.) The proposition is untenable that a debtor ceases to be insolvent because, being unable to pay his debts in the regular course of business, his creditors have entered into an agreement to extend the time of payment of their debts, or that the payment of the debt by a party who is insolvent cannot be regarded as a preference if made with the hope and expectation by the debtor that he wiU be able eventually to pay all his debts in fulL (Rison v. Knapp, 4 N. B. R 114; 1 DilL 186; Fed. Cas. 11861.) Payments to indorsers and sureties. — Where the indorser of notes of bankrupts aware of their insolvency, to shield himself from loss by such indorsements, accepts money from bankrupts, such acceptance is a preference and void. (In re Ahl v. Thorner, Ass., 3 N. B. R. 29; 2 Bond, 287; 16 Pittsb. Law J. 78; 2 Amer. Law T. 104; 1 Chi. Leg. News, 337; 1 Amer. Law T. Rep. Bankr. 129; Fed. Cas. 103; In re Arnold, 2 N. B. R. 61; Fed. Cas. 551 ; Butcher v. Wright, Ass., 16 N. B. R 331 ; 94 U. S. 553.) The fact that securities obtained from one of his debtors by an obligor on a bond, to indemnify his sureties, were made to run directly to such sure- ties, does not deprive the transaction of its character as a preference, when they were obtained at the instance of the obligor. The substance rather than the form is the test with a court of equity. (Smith v. Little, 9 N. B. R 11; 5Biss. 490; 6 Chi. Leg. News, 86; Fed. Cas. 13072.) Conveyances and transfers constltnting preferences. — Any transfer of property of an insolvent debtor, made with a view to secure it or any part of it to one and thus prevent equal distribution, was held to be a transfer in fraud. (Toof v. Martin, 6 N. B. R 49; 13 Wall 40; Foster, Ass., V. Hackley, 2 N. B. R 131 ; 2 Amer. Law T. Rep. Bankr. 8 ; 1 Chi. Leg. News, 137; Fed. Cas. 497; In re Rogers, 2 N. B. R 129; 1 Chi. Leg. News, 195; Fed. Caa 12002; In re Pierson, 10 N. B. R 107; Fed. Cas. 11153; Barker V. Smith et aL, 12 N. B. R 474 ; 2 Woods, 87 ; 3 Amer. Law T. Rep. (N. S.) 386 ; Fed. Cas. 986.) So where a bank took a deed from a depositor to secure it for an amount for which the depositor's account was overdrawn, knowing that the depositor was unable to pay the overdraft, the deed was set aside as a fraudulent preference (Alderdice, Ass., v. State Bank of Virginia et al., 11 N. B. R 398; 1 Hughes, 47; Fed. Cas. 154); and a sale of prop- erty to an indorser of a note is void where judgment has been recovered against the maker of the note, his property is held under levy and the 328 LAW OF BANKEITPTCT. [§ 60, OL. note has been protested. The insolvent's property cannot be taken from the jurisdiction of the bankrupt court by an arrangement between the debtor and one creditor. (Cookingham et aL v. Morgan et al., 5 N. B. E. 16; 7 Blatohf. 480; Fed. Cas. 3183.) Again, a voluntary conveyance set- tling property upon the vsrife and family of the grantor will be consid- ered fraudulent as to subsequent creditors if the grantor be indebted at the time to such an extent that the settlement will embarrass him in the payment of his debts, although the debts due may be subsequently paid in the course of business. (Antrim v. Kelly et aL, 4 N. B. E. 189; Fed. Cas. 494.) The necessary efiEect of a conveyance to creditors in satisfaction, either in whole or in part, of a pre-existing debt, by one who knows that he is insolvent, is a preference in fraud of the Bankrupt Act (Martin v. Toof et aL, 4 N. B. E. 158; Fed. Cas. 9164); and if a debtor transfers property in the United States to prefer an alien creditor, the latter is liable to an action by the assignee of the bankrupt in a court of the United States (Olcott, Ass., v. McLean et aL, 14 N. B. R 379); and though a writing giving a preference, signed and acknowledged as a deed more than two months before bankruptcy by a bankrupt, but recorded within that pe- riod, may be vahd under the law, yet if, at the time of its being acknowl- edged, there was a tacit agreement between the grantor and grantee that the writing was not to be a deed passing title until the grantee should so elect, and the grantee did not make his election until a day within the period of limitation, the deed is void (National Bank of Fred- ericksburg v. Conway et aL, 14 N. B. E. 175; 1 Hughes, 37; Fed. Cas. 10037); also a sale or transfer by a bankrupt of property to his brother, who was aware of the bankrupt's insolvency, in payment of a debt due to him, although such sale and transfer was necessary to save the prop- erty from destruction, is a fraudulent preference. (Brook v. TerreU, 3 N. B. R. 190; 1 Chi. Leg. News, 349; Fed. Cas. 1914) Where a debtor in embarrassed circumstances, in consideration of property and money of his wife, which he had appropriated to his own use, conveyed his real estate to trustees for the use of his wife, giving her no power of disposition over it during her life, nor by will, without consent of the trustees, but reserving to himself and to the trustees the right to convey aU or any part, without consent of his wife, the convey- ance was void and the property liable for debts existing at the time of filing the petition (Fisher v. Henderson et aL, 8 N. B. R 175; Fed. Cas. 4820); but a transfer of firm property from one member of the firm to another is not a fraud upon the creditors of the firm, nor does it hinder or delay them or constitute a preference contrary to the provisions of the Bankrupt Act. (In re Munn, 7 N. B. R 468; 3 Biss. 442; 7 Amer. Law Rev. 751 ; Fed. Cas. 9925.) The fact that an assignment or transfer of goods to a creditor was made to avert a threatened attachment does not save such transaction from being an Ulegal preference, if such was § 60, a.] PEEFEEEBD 0BEDIT0K8. 329 its eflfeot. (In re Batchelder, 3 N. B. E. 37; 1 Lowell, 373; Fed. Cas. 1098.) A mortgage to secure a sale that contains no provisions by which the collections and proceeds of sale shall be applied to the purposes of the conveyance, or to the payment of the debt to be secured, or indemnity to be provided, or by its re-investment to augment the trust fund, the want thereof being inconsistent with the alleged purpose of the convey- ance, is void as to creditors in bankruptcy. (Smith, Ass., v. McLean et aL, 10 N. B. R 260; Fed, Cas. 18074.) After a bankrupt's paper had been protested for non-payment, and a portion of his stock in trade had been seized by the government for violation of the revenue laws, he began immediately to turn over the remainder of his stock to several creditors in payment of their indebtedness. It was held that the bankrupt, at the time of such transfer, had reason to believe that he was insolvent and acted upon such belief, and that it was a fraudulent preference of such creditors. (In re Lewis et al., 3 N. B. R 145.) The preference at which the Bankrupt Act is aimed is not the col- lateral taken at the time the debt is contracted, but only arises in case of an antecedent debt. (Tiffany v. Boatman's Saving Inst., 9 N. B. R 245; 18 WalL 375.) A banker who sells his sight draft, and on the day following gives to the holder collateral security for its payment, thereby gives a preference to such creditor in violation of the act (Merchants' Nat. Bank of Cincinnati v. Cook et aL, Trustees, 16 N. B. R 391; 95 U. S. 343); or when a banker, according to his custom, charges his depositor in his deposit account for the notes or other obligations as they fall due, the transaction is valid only as between the banker and the depositor, but if the depositor becomes bankrupt it might constitute an unlawful preference (In re "Warner et al., 5 N. B. R 414; Fed. Cas. 7177); or if a bankrupt, being indebted to a bank; and having fimds there, commit* forgery, and the bank, hearing of it, compels an immediate transfer of the funds to it and also attaches money of the debtor in other banks, knowing of his insolvency, the acts are preferences. (West Philadelphia Bank v. Dickson et aL, Ass., 17 N. B. R 483; 95 U. S. 180.) A mere agreement by a debtor that in a certain event he will deliver to a bank such securities as he may purchase with the proceeds of over- drafts will not vest a title to the securities in the bank, so that a trans- fer of them will not be a preference. (Payne et aL v. Solomon, 14 N. B. R 162; Fed. Cas. 10856.) A general promise of security, given at the time a debt is contracted, may not be executed after the debtor has be- come insolvent. Such a promise will not save the act from being a preference if it would have been one without the promise. (Ex parte Ames, 7 N. B. R 330; 1 LowelL 561; Fed. Cas. 333.) Preferences by chattel mortgage or bill of sale.— A chattel mort- gage which the creditor neglects to record imtil a few days before debtor becomes insolvent is void as against the assignee in bankruptcy. (Harvey, Ass., v. Crane, 5 N. B, R 318; 2 Biss. 496; 3 Chi Leg. News, 341 f 330 LAW OF BANKErPTOT. [§ 60, a. Fed. Cas. 6178.) Delivery of goods under a mortgage, itself fraudulent, is a violation of the preference clause of the Bankrupt Act, and the goods cannot be held as a pledge. (Robinson et aL v. Elliott, Ass., 11 N. B. E. 553; 33 WalL 513.) Where an insolvent debtor executes a bill of sale to a creditor who has obtained the levy of an attachment aftei notice of the debtor's insolvency, the same is a violation of the Bank- rupt Act, its inevitable effect being to give a preference. (In re Gregg, 4 N. B. R. 150; Fed. Cas. 5797.) If a person has the goods of anothei under an agreement to sell the same on shares, and, learning that the owner has become insolvent, induces the latter to execute a bill of sale of the property, the sale is void as to creditors, but the assignee acquires no greater rights than the bankrupt himself possessed, nor does the other party to the bill of sale gain or lose any rights by reason of the said bill of sale. (Avery, Ass., v. Hackley, Ex'x, 11 N. B. R. 341; 30 Wall 407.) If an insolvent defendant, in an attachment suit, gives a bUl of sale of the attached property to the receiptor, with the under- standing that the property shall be sold and the proceeds applied to- ward the payment of the debt of the attaching creditor, without regard to the attachment, and without a demand perfected in execution, the bill of sale is a preference; but if the understanding was that the pro- ceeds should be applied only upon demand duly made on execution, it is valid. (Parsons v. Topliff, 14 N. B. R. 547.) Transfers not preferences. — A banker, holding as a special dejjosit certain bonds of a customer, without the latter's knowledge substituted for such bonds a note and mortgage, and upon his failure the customer ratified the act of substitution, after the banker's insolvency was no- torious, and within thirty days of proceedings in bankruptcy against him. On the filing of a bill by the assignee to recover the note and mortgage, it was held that the substitution was valid, it being a mere exchange of property and not calculated in any way to prefer a cred- itor. (Cook et aL v. TulUs, 9 N. B. R. 433; 18 WalL 322.) A debtor, be- fore becoming bankrupt, sold certain land with the intention of giving the notes for the purchase-money to a creditor in payment of a debt. This was done, but just before the transaction a failure endangered his commercial standing. The notes were delivered and within four months he became bankrupt. It w"as held that the transfer was the completion of a contract made in good faith before insolvency. (In re Wood, 5 N. B. R. 421; Fed. Cas. 17937.) And where B. sold to F. a stock of goods in a store theretofore occupied by B., together with the fixtures, the con- sideration to be paid by instalments, it being agreed that, if F. defaulted in the payment of instalments, B. could treat the whole debt as due, take possession of and sell the goods in satisfaction of the amount unpaid, it was held not a preference. (Field, Ass., v. Baker, 11 N. B. R. 415; 13 Blatchf. 438; Fed. Cas. 4763.) Money loaned with security taken in prcesenti does not make the security taken a preference. (In re Morri- son, 10 N. B. R. 106; 6 Chi Leg. News, 110; Fed. Cas. 9839.) § 60, a.] FEEFEKEED CEEDITOKS. 331 A debtor delivered goods to the workmen of one of his creditors, upon the creditor's credit, with the understanding that they would be paid for at the next pay day. The creditor applied the goods to the payment of a debt due from the debtor. It was held there was no preference. (Eice et aL v. Grafton Mills, 13 N. B. E. 209.) If a dealer sells goods for cash, but, before the purchase is delivered to the purchaser, the latter fails, the seller has a right to the goods, and the written assent of the insolvent purchaser is not an illegal preference in fraud of the Bankrupt Act (In re Foot et aL, 11 N. B. R. 153; 11 Blatohf. 530; Fed. Cas. 4907); and a husband out of debt may settle upon his wife such portion of his estate as he pleases, if done in good faith, and not to defraud subsequent creditors (In re Jones et aL, 9 N. B. R. 556; 6 Biss. 68; 6 Chi. Leg. News, 271 ; Fed. Cas. 7444; Sedgwick, Ass., v. Place et aL, 5 N. B. R. 168; 5 Ben. 184; 3 Chi. Leg. News, 409; 4 Amer. Law T. Rep. (IT. S. Cts.) 179; 6 Amer. Law Eec. 181; Fed. Cas. 12620); and where a bankrupt transferred property to his vnfe, to whom he was indebted, preferring her above other creditors, it was held that the transfer was valid. (Van Kleeck, Ass., etc. v. Miller et aL, 19 N. B. R. 484; Fed. Cas. 16860.) The return of goods which have been ordered to fill a special order, and dam- aged in transportation and refused by parties for whom it was designed, is not a preference nor an act of bankruptcy. (Doan v. Ciompton et aL, 2 N. B. R 182; Fed. Cas. 3940.) Payments not preferences. — Bonds and coupons of a railroad are not commercial paper within the meaning of the Bankrupt Act; and the payment of coupons of interest after suit is brought or threatened on the same is not a preference of one creditor over others (In re Opelousa & Great Western R R. Co., 3 N. B. R. 31; Fed. Cas. 10547); and advances made on the faith of a security presently to be given will be protected, notwithstanding changes in the condition of the borrower pending the consummation of the agreement, by actual delivery of the security. (Ex parte Ames, 7 N. B. R. 330; 1 Lowell, 561; Fed. Cas. 323; Perrin v. Hance, 7 N. B. R 283; Sparhawk et aL, Ass., v. Richards et aL, 13 N. B. R. 74; 1 Weekly Notes Cas. 510; Fed. Cas. 13205.) And if policies in an in- surance company are terminated, the insured do not become creditors of the company for the unearned premium so that payment to them of such premiums constitutes such a preference as will support a petition for an adjudication in bankruptcy. (Knickerbocker Ins. Co. v. Comstock, 9 N. B. R 484; 6 ChL Leg. News, 142; Fed. Cas. 1879.) Again, the issue, at par, of stock of a company not theretofore issued, in payment of the bona fide debt of the company, does not operate to the prejudice of creditors or work a fraud upon them. If, however, the stock is owned by the company as paid-up stock lawfully acquired by it, it would probably be regarded ^^ ordinary property, and if disposed of by the authorized act of the corporation to creditors under circumstances to give them an illegal preference, such act would be one of bankruptcy. (Winter v. Rail- 332 LAW OF BANKEUPTCT. [§ 60, a. road Co., 7 N. B. E. 389; 3 Dill. 487; 6 "West. Jur. 563; 5 ChL Leg. News, 74; 6 Alb. Law J. 358; Fed. Cas. 17890.) A payment by a debtor, knowing himself to be insolvent, of one cred- itor in full of his demand, in the absence of proof that the debtor con- templated bankruptcy, or that the creditor had reason to believe that a fraud on the act was intended, is not a fraudulent preference; and where a debtor, knowing himself to be insolvent, settles with as many of his creditors as will accept his offers, and afterwards applies his earnings to the payment of his current expenses and occasional payments on his old debts, such acts do not constitute a fraudulent preference. (In re Locke, 3 N. B. B. 133; 1 Lowell, 393; Fed. Cas. 8489.) A bankrupt was indebted to a bank on a note for $4,000 and had a deposit account with the bank to the amount of $4,500. Just before institution of proceed- ings in bankruptcy, knowing the insolvency of the bankrupt, one day prior to the maturity of the note the bank took the maker's check for $4,000 and delivered to him the note. Such act was only the adjustment of mutual debts and not a fraudulent preference. (Robinson, Ass., v. Insurance Co., 18 N. B. R 343; Fed. Cas. 11969.) Payments to the gov- ernment, although with intent to give a preference, were not forbidden by the Bankrupt Act of 1867. (Tiffany et aL, Ass., v. Morrison, 18 N. B. R. 365.) After the lapse of four months from the date of the conveyance, sim- ple preferences of a bona fide creditor by an insolvent debtor, not other- wise fraudulent, are to be held valid so far as the preferred creditor is concerned. (In re Dow, 6 N. B. R. 10; Fed. Cas. 4036.) When mortgage not a preference. — A mortgage executed in pursu- ance of a parol contract that the mortgage should be given when requested by the creditor, although within four months of institution of proceed- ings in bankruptcy, is not a preference within the meaning of the act (Hewitt et aL v. Northup et aL, 16 N. B. R. 37 ; Sawyer & Frazier v. Turpin et aL, 18 N. B. R. 371; 91 U. S. 114); and a creditor who takes a bill of sale of property purchased with money furnished by him is not giving a pref- erence where such bill of sale does not include more than he was entitled to (In re Bousfield & Poole Mfg. Co., 16 N. B. R. 489; Fed. Cas. 1703); nor is a mortgage a preference where the debt is secured by a prior mort- gage covering goods subsequently acquired, if both mortgages cover the same goods; but, if they do not cover the same goods, the former is liable to be set aside as a preference as to aU goods not included in the latter. (Brett V. Carter, 14 N. B. R. 301; 3 LoweU, 458; 3 N. Y. Wkly. Dig. 381; 23 Int. Rev. Rec. 153; 3 Cent Law J. 286; 13 Alb. Law J. 861; 10 Amer. Law Rev. 600; Fed. Cas. 1844.) A chattel mortgage given for a present consideration and good be- tween the parties ia not rendered invalid as against the assignee by failure to file the same or take possession of the property until a month before the commencement of proceedings in bankruptcy, notwithstand- § 60j a.] PEEFEEEED CEEDITOES. 333 ing the mortgagee knew the mortgagor to be insolvent and that the instrument gave him a preference (In re Barman et aL, 14 N. B. R. 125; 3 N. Y. WMy. Dig. Ill; Fed Cas. 999); and execution of a bill of sale by a broker of a portion of his property to a customer to avoid an action for an unlawful conversion of the proceeds of a sale is not a fraudulent preference (In re Jenkins, Ass., v. Mayer, 3 N. B. K. 189; 3 Biss. 303; Fed. Cas. 7273); and a mortgage executed by a debtor before becoming insolvent, and not in contemplation of bankruptcy, to secure to a cred- itor the payment of a debt previously contracted, although made with the intent to prefer said creditor, was not prohibited by the act of 1867. (Welch V. Dunham, 3 N. B. R 9; 3 Ben, 488; 1 Amer. Law T. Eep. Bankr. 89; Fed. Cas. 4143.) Where a mortgage given by an insolvent was re- corded the day before the petition in bankruptcy was filed, and the evi- dence showed that the consideration did not pass until the mortgage was recorded, the transaction was in good faith and the mortgage was not for a past consideration. (In re Westcott et aL, 7 N. B. R. 385; 6 Ben. 135; Fed. Cas. 17430.) For a loan of money to an insolvent, the mere giving of a security is not a preference under the Bankrupt Act. (Clark V. Iselin et aL, 9 N. B. R. 19; 10 Blatchf. 304; 21 Pittsb. Leg. J. 83; Fed. Cas. 3835.) Exchange of secnrities not a preference.— Giving a deed of trust upon property to secure a debt previously secured by a mechanic's lien is merely a change of securities and not a fraudulent preference given to the lien holder (In re Weaver, 9 N. B. R. 133; Fed. Cas. 17307); and the exchanging of new secured notes for old secured notes within four months of bankruptcy does not withdraw any property from the debt- or's estate and does not constitute a preference (Bernhisel v. Firman, Ass., 11 N. B. R. 505; 33 WalL 170); also where a security by way of mortgage is given more than four months before bankruptcy, a change in the substance of the deeds made within four months of the bank- ruptcy wUl be protected if no greater value were put into the creditors' hands. (Sawyer et aL v. Turpin et aL, 5 N. B. R. 339; 3 Lowell, 39; Fed. Cas. 13410.) Within four months preceding bankruptcy the lessor of a hoteL holding as security for rent chattel mortgages good between par- ties but void as to creditors, released the same upon receiving real estate in payment of the rent. The court held that the transaction, being an exchange of securities in good faith, was valid. (Stewart v. Piatt, Ass., etc., 19 N. B. R. 347; 101 U. S. 731.) But if a bankrupt gives a creditor new securities of much greater value, and the means of ob- taining, by judgment and levy, a lien on property with intent to prefer him, the rule that exchange of securities is not a preference does not apply. (Waring, Ass., etc. v. Buchanan et aL, 19 N. B. E. 503; Fed. Cas. 17176.) Judgments procared and suffered. — Notes with cog'MO'wY to confess judgment thereon by an insolvent debtor to a creditor who had refused 334 LAW OF BANKETJPTOT. [§ 60, a. him further credit, and a few days later caused judgment to be entered and execution issued thereon, constitute an unlawful and fraudulent preference of such creditor (Haughey, Ass., v. Albin, 3 N. B. R. 139; 3 Bond, 344; 3 Amer. Law T. Rep. Bankr. 47; Fed. Cas. 6332; Fitch v. Mo- Gie, 3 N. B. R. 164; 3 Amer. LawT. Rep. Bankr. 80; Fed. Cas. 4835; In re Terry & Cleaver, 4 N. B. R. 33; 3 Chi Leg. News, 106; Fed. Cas. 13835); and where a debtor has given a judgment note to one of his creditors who has taken judgment on the note and so obtained a preference, it is wholly immaterial whether the course pursued by the judgment cred- itors in entering the judgment and issuing execution was expected or unexpected to the debtor, as he gave the creditor power to do what he did in spite of every opposition which he could make. (First Nat. Bank of Clarion v. Jones, Ass., 11 N. B. R. 88; 31 WalL 335.) Where warrants were held by near relatives of bankrupt, and he had stated to creditors that they could make nothing by pushing him, as his relatives had judgments and he should protect them first, and then his relatives entered their judgments and issued executions thereon immediately on learning bankrupt's condition, the executions were procured by bank- rupt, and therefore a preference. (Shimer, Ass., v. Huber et al., 19 N. B. R. 414; 14 Phila. 403; 36 Leg. Int. 339; 8 Reporter, 393; Fed. Cas. 13787; Rogers, Ass., etc. v. Palmer, 19 N. B. R. 471; 103 U. S. 563; Zahm V. Fry et aL, 9 N. B. R. 546; 10 Phila. 343; 31 Leg. Int. 197; 21 Pittsb. Leg. J. 155; Fed. Cas. 18198; In re Dibble, 2 N. B. R. 185; 3 Ben. 303; 1 Chi. Leg. News, 355; Fed. Cas. 3884.) The giving of a note by an in- solvent debtor and causing it to be sued upon to prevent an attachment by the payee is a procuring, by such debtor, of his property to be taken on legal process with intent to give a preference (In re Williams, 3 N. B. R. 74; 1 Lowell, 406; Fed. Cas. 17703); and a bankrupt who gives new notes signed by himself alone, in exchange for other notes secured by the signature and indorsement of parties toward whom he and the payee are friendly, and adds to his stock goods bought on credit from parties who are ignorant of his insolvency, procures the execution which is issued against him on judgment recovered on such notes, within the meaning of the law (Sage, Jr., v. Wynkoop, 16 N. B. R 863; § 5138, R S. ; Fed. Caa 12215); also, if a debtor confesses a judgment within four months previous to the filing of the petition against him, being at the time insolvent, and the creditor having reason to believe him so, though there was as a consideration a pre-existing debt, it is in fraud of the Bankrupt Act. (Vogel v. Lathrop, 4 N. B. R 146; 18 Pittsb. Leg. J. 106; Fed. Cas. 16985.) Where a creditor had been renewing a note, and finally entered judg- ment by virtue of a warrant of attorney attached, and issued execution several days after the debtor had absconded, but just prior to his being adjudicated bankrupt, on petition of trustees, a decree was entered for the amount of the execution with interest. (Golson et aL v. NeihoflE et al., § 60, a.] PEEFEEEED OEEDITOES. 335 5 N. B. R. 56; 2 Biss. 434; Fed. Cas. 5534; In re Herpioh, 15 N. B. R. 426j 7 Biss. 387; 9 Chi Leg. News, 252; 4 Law & Eq. Rep. 39; Fed. Cas. 6418.) The confession of a judgment, the issuing of an execution, and a seizure and sale of property under it, constitute an indirect transfer of such property by the debtor. (Zahm v. Fry et al., 9 N. B. R. 546; 10 Phila. 343; 31 Leg. Int. 197; 31 Pittsb. Leg. J. 155; Fed, Cas. 18198; Catlin v. Hoffman, 9 N. B. R 343; 2 Sawy. 486; 21 Pittsb. Leg. J. 159; Fed. Cas. 3531; Webb, Ass., V. Sachs et aL, 15 N. B. R 168; 4 Sawy. 158; 9 Chi Leg. News, 156; Fed. Cas. 17325.) Where a state ordinance gave a preference to new debts over old, and a father gave to his son a new note to take the place of an old one, and thereon judgmebt was procured, and within four months thereafter a petition in bankruptcy was filed against the father, the transaction constituted a preference (Little, Ass., v. Alexander, 12 N. B. R 134; 21 WaU. 500); and a confession of judgment entered prior to June 1, 1867, but after the approval of the Bankrupt Act, March 3, 1867, was held to be a fraudulent preference, if both parties knew of the debtor's insolvency. (Traders' Nat. Bank v. Campbell, 6 N. B. E. 352; 14 Wall 87.) Judgments whereby a creditor of an insolvent obtains an illegal pref- erence are voidable, but not void per se (Zahm v. Fry et al., 9 N. B. R 546 ; 10 Phila. 343; 31 Leg Int. 197; 31 Pittsb. Leg J. 155; Fed. Cas. 18198); but where circumstantial evidence shows that a suit, apparently antago- nistic, is collusive, the debtor being at the time insolvent, and the cred- itor having reasonable cause to believe him so, the judgment lien thua created wiU be void. (In re Baker, 14 N. B. R. 433; 14 Alb. Law J. 294; Fed, Cas. 763; Shaffer v. Fritchery & Thomas, 4 N. B. E. 179; Fed. Cas. 12697.) Where a creditor placed his claim in the hands of a collection agent, who forwarded it to a firm in the city where the debtor resided, and said firm, knowing of the insolvency of the debtor, induced him to confess judgment for the debt, whereby the amount of the debt was col- lected and forwarded to the collection agent, suit was brought by the assignee of the bankrupt to recover the money, and judgment given for the plaintiff. (Hoover, Ass., etc. v. Wise et aL, 14 N. B. R 264; 91 U. S. 308.) Where a preference is obtained through a judgment and a levy of exe- cution, an assignee in bankruptcy may proceed by suit in equity to set aside the lien, and may make the sheriff, as well as the creditor, a party, if the proceeds of the execution be still in the hands of the sheriff (War- ren V. Tenth Nat. Bank et ai, 7 N. B. R 481; 10 Blatchf. 493; Fed. Cas. 17202) ; and mere non-resistance of a debtor to judicial proceedings against him when the debt is due and there is no valid defense to it is not suffer- ing and giving a'pref erence imder the Bankrupt Act. (Tenth Nat. Bank of New York City et aL v. Warren et aL, Ass., 17 N. B. R 75; 96 U. S. 539.) Non-resistance of debtor. — Provided the debtor does nothing to aid him, a creditor may pursue his insolvent debtor to judgment and execu- 336 LAW OF BAKERTTPTOT. [§ 60, a. tion, witli knowledge of the insolvency, notwithstanding the provisions of the Bankrupt Act. (Clark, Ass., v. Iselin, 11 N. B. R. 337; 21 WalL 360.) Where an actual intent to give a preference is negatived, mere honest inaction on the part of an insolvent debtor who is sued on a just debt, and who allows judgment to go against him, and his property to be levied on, is not an act of bankruptcy (Wright v. Filley, 4 N. B. R 197; 5 West. Jur. 213; Fed. Cas. 18077); and the burden of proof is on the creditor to show that the debtor suffered or procured his property to be taken on legal process with intent thereby to give a preference (In re King, 10 N. B. R 103; Fed. Cas. 7783); though it has been held that passive acquiescence in the seizure of his property on execution by an insolvent debtor, when he could prevent it by going into voluntary bankruptcy, is suffering it to be taken with intent to give a preference, and the act is therefore void (In re Lord, 5 N. B. E. 818; Fed. Cas. 8503; Vogle V. Lathrop, 4 N. B. E. 140; 18 Pittsb. Leg. J. 106; Fed. Cas. 16985; Seattle v. Gardner et aL, 4 N. B. E. 106; Fed. Cas. 1195); and that the act of suffering a creditor to take possession of property, the debtor being insolvent, when the taking could have been prevented by applica- tion in involuntary bankruptcy, constitutes fraud (Haskell, Ass., etc. v. Ingalls, 5 N. B. R 300; 1 Hask. 341; Fed. Cas. 6193); and again, that al- lowing judgment to go by default amounts to suffering goods to be taken in execution, when taken under the judgment. Giving under pressure a warrant of attorney to confess a judgment, under which goods are taken on execution, is not procuring, but is suffering the goods to be taken on execution (In re Croft, 1 N. B. E. 89; 3 Ben. 214; Fed. Cas. 3316; In re Black et al., 1 N. B. R. 81; 2 Ben. 196; 1 Amer. Law T. Rep. Bankr. 39; Fed. Cas. 1457; In re Lord, 5 N. B. R 318; Fed. Cas. 8503); and that it is the duty of an insolvent debtor to apply to the bankrupt court in his own behalf, and if he does not, and his property is taken by legal process by some of his creditors, he will be held to have suffered his property to be taken on legal process, with intent to prefer such credit- ors and defeat the operation of the Bankrupt Act (In re Wells, 3 N. B. R. 95; 3 Chi Leg. News, 49; Fed. Cas. 17388); and the taking of property by a receiver appointed by a state court is a taking under legal process within the meaning of the bankrupt law. (Hardy et aL v. Clark & Bin- inger, 3 N. B. R. 99; 8 Amer. Law T. Rep. Bankr. 11; 17 Pittsb. Leg. J. 61; 2 Chi. Leg. News, 131; 1 Amer. Law T. Eep. Bankr. 151; 7 Blatchf. 363; Fed. Cas. 6058.) Judgments that are valid. — The fact that a judgment was entered upon a warrant of attorney does not invalidate the lien, if the creditor did not know of the failing circumstances of the debtor, and if it was not entered up "in contemplation of bankruptcy or insolvency" (In re Weeks, 4 N. B. E. 116; Fed. Cas. 17850); and where a judgment note is taken within four months of proceedings in bankruptcy for a loan made at the time by one who had no knowledge of the debtor's insolvency. § 60, h.} PEEFEEEED CEEDITOES. 337 thougli he knew him to be so at the time of entering judgment, the judgment was held valid (Vogle v. Lathrop, 4 N. B. R. 146; 8 Pittsb. Rep. 269; 18 Pittsb. Leg. J. 106; Fed. Cas. 16985); also a lien obtained by a cred- itor within four months preceding the commencement of bankruptcy proceedings, the debtor at the time being insolvent, and the creditor cognizant of such fact, is not prohibited, if it affirmatively appears that the bankrupt did not assist the creditor to obtain the same (Britton v. Payen et al., 9 N. B. R 445; 7 Ben. 219; Fed. Cas. 1906); and it has been held that if a creditor realizes his money under judgment entered in an attach- ment suit without collusion, he may retain it, although the attachment was issued within four months before the commencement of the proceed- ings in bankruptcy. (Henkelman, Jackson & Phelps v. Smith, Ass., 13 N. B. R. 121.) When, in accordance with the terms of a lease, a distress is levied within four months prior to bankruptcy, the bankrupt consent- ing to it, and collusion is not shown, such distress is not fraudulent. (Goodwin et aL v. Sharkey et al., 15 N. B. R. 526.) A sale on execution under a judgment by a creditor within four months of the filing of a petition in bankruptcy does not constitute a fraudulent preference if the debtor is compromising his debts and the creditor has no reason to be- lieve himself to be obtaining a preference over other creditors. (Warren & Rowe, Ass., V. Tenth Nat. Bank et al., 5 N. B. E. 479; 5 Ben. 395; 43 How. Pr. 169; Fed. Cas. 17200.) A sale of the property of a bankrupt under an execution upon a judgment rendered before the adjudication in bankruptcy was held valid, although the judgment creditors knew at the time the execution was issued that the debtor was insolvent. (In re Kerr, 2 N. B. R. 124; 2 Amer. Law T. Rep. Bankr. 39; Fed. Cas. 7738; Coxe V. Hale, 8 N. B. R. 563; 31 Pittsb. Leg. J. 77; Fed. Cas. 3310.) Collateral attack of judgment. — A judgment is no more liable to collateral impeachment in proceedings under the Bankrupt Act, except to show that the judgment in question was designed as a means of avoid- ing the equal distribution of the debtor's estate among his creditors, than it is to such impeachment in the courts where it was rendered. (Michaels et aL v. Post, Ass., 13 N. B. R. 152; 21 WaU. 198.) A judgment confessed by warrant of attorney on notes executed simultaneously therewith, when the debtor was not insolvent and the creditor was with- out reasonable cause to believe him to be insolvent, is not a fraudulent preference, and the judgment creditor is entitled to the payment thereof out of the assets of the bankrupt's estate. (In re Wright, 3 N. B. E. 155; Fed. Cas. 18071.) i. If a bankrupt shall have given a preference within four months before the Ming of a petition, or after the filing of the petition and before the adjudication, and the person receiv- ing it, or to be benefited thereby, or his agent acting therein, 33 338 LAW OF BAUKEtrPTOT. [§ 60, J. sliall have had reasonable cause to believe that it was in- tended thereby to give a preference, it shall be voidable by the trustee, and he may recover the property or its value from such person. [Act of 1867. Seo. 35. . . . That if any person, being insolvent, or in contemplation of insolvency, within four months before the filing of the petition by or against him, with a view to give a preference to any creditor or person having a claim against him, or who is under any liability for him, procures any part of his property to be attached, seques- tered, or seized on execution, or makes any payment, pledge, assignment, transfer, or conveyance of any part of his prop- erty, either directly or indirectly, absolutely or condition- ally, the person receiving such payment, pledge, assignment, transfer, or conveyance, or to be benefited thereby, or by such attachment, having reasonable cause to believe such person is insolvent, and that such attachment, payment, pledge, assignment, or conveyance is made in fraud of the provisions of this act, the same shall be void, and the as- signee may recover the property, or the value of it, from the persoa so receiving it, or so to be benefited ; and if any person being insolvent, or in contemplation of insolvency or bank- ruptcy, within six months before the filing of the petition by or against him, makes anv payment, sale, assignment, transfer, conveyance, or other disposition of any part of his property to any person who then has reasonable cause to believe him to be insolvent, or to be acting in contemplation of insolvency, and that such payment, sale, assignment, transfer, or other conveyance is made with a view to prevent his property from coming to his assignee in bankruptcy, or to prevent the same from being distributed under this act, to defeat the object of, or in any way impair, hinder, impede, or delay the opera- tion and effect of, or to evade any of the provisions of this act, the sale, assignment, transfer, or conveyance shall be void, and the assignee may recover the property, or the value thereof, as assets of the bankrupt. Ana if such sale, assignment, transfer, or conveyance is not made in the usual and ordinary course of business of the debtor, the fact shall be prima fa/yoe evidence of fraud. Any contract, covenant, or security made or given by a bankrupt or other person with, or in trust for, any creditor, for securing the payment of any money as a consideration for or with intent to induce the creditor to ■forbear opposing the application for discharge of the bank- rapt, shall be void; and if any creditor shaU obtain any sum § 60, 5.] PEEFEEEED OEEDITOES. 339 of money or other goods, chattels, or security from any per- son as an inducement for forbearing to oppose, or consenting to such application for discharge, every creditor so offending shall forfeit all right to any share or dividend in the estate of the bankrupt, and shall also forfeit double the value or amount of such money, goods, chattels, or security so obtained to be recovered by the assignee for the benefit of the estate. Sec. 39. . . . And if such person shall be adjudged a bankrupt, the assignee may recover back the money or other property so paid, conveyed, sold, assigned, or transferred contrary to this act, provided the person receiving such pay- ment or conveyance had reasonable cause to believe that a fraud on this act was intended, or that the debtor was in- solvent, and such creditor shall not be allowed to prove his debt in bankruptcy.] A lien created pursuant to suit, including an attachment upon mesne process or a judgment by confession, begun against a person within four months before filing a petition in bankruptcy, shall be dissolved by the adjudication of such person a bankrupt, if it appears that the lien was created through fraud, or whUe the defendant was insolvent, or the par- ties to be benefited thereby had knowledge that the defendant was in- solvent. (Sec. 67, c.) The act provides that, in computing time, the number of days shall be computed by excluding J;he first and including the last, unless the last fall on a Sunday or a holiday, in which event the day last included shall be the next day thereafter which is not a Sunday or a holiday. (Sec. 31.) Effect of giving or taking preference.— Creditors who have obtained a preference by a bill of sale from the debtor are estopped to set up the execution of the same as an act of bankruptcy, or if they have taken possession of the entire property of a debtor under a general assignment or bill of sale, intended to prefer them, cannot set up the non-payment of a note as an act of bankruptcy. (In re "Williams, 14 N. B. R. 132; Fed. Cas. 17706.) Certain creditors received preferences from an insolvent debtor, and to prevent other creditors from instituting proceedings in bankruptcy contracted to pay them a sum of money. Suit was brought on this contract, and the question of its validity being raised, the court held that creditors could make such a contract. (Berryman v. Allen, 15 N. B. R 113.) A stipulation by a creditor for a secret advantage is alto- gether void. Not only can he take no advantage from it, but he also loses the benefit of a composition (Brookmire & Eankin v. Bean, Ass., 13 N. B. R. 217; 3 Dia 136; 2 Cent. Law J. 265; Fed. Cas. 1942); and a claim of a creditor for expenses incurred in an effort to obtain a preference will be rejected (In re Archenbrown, 8 N. B. R. 439; Fed. Cas. 503); but mere preferences made without contemplation of proceedings in bank- 340 LAW OF BANKETJPTOT. [§ 60, 5, ruptcy cannot be set up against a discharge. (In re Jones, 13 N. B. R. 286; 3 Lowell, 451; Fed. Cas. 7446; In re Brent, 8 N. B. R. 444; 18 Int. Rev. Eec. 159; Fed. Cas. 1833; In re White et aL, 18 N. B. R. 107; Fed, Cas. 17533.) A debtor who has grounds for fearing and believing that he is insolv- ent, and, acting on such belief, makes a payment to one creditor two days prior to his failure, is not entitled to a discharge in bankruptcy, such payment being a preference of one creditor over the others. (In re Doyle, 3 N. B. R. 158; Fed. Cas. 4051; In re Gay, 3 N. B. R. 114; 1 Hask. 108; 1 Amer. Law T. Rep. Bankr. 73; 2 Amer. Law T. Rep. Bankr. 53; Fed. Cas. 5379; In re Foster, 3 N, B. R. 81; 1 Amer. Law T. Rep. Bankr. 127; 1 Chi. Leg. News, 108; Fed. Cas. 4961; In re Finn, 8 N. B. R 535; Fed. Cas. 4795; In re Jones & Hoyt, 13 N. B. R 48; 7 Chi. Leg. News, 163; Fed. Cas. 7453.) But the fact that a bankrupt paid certain creditors in full shortly before commencement of proceedings is no ground for with- holding a discharge where it is not shown that such payments were in- tended as preferences (In re Burgess, 8 N. B. R 47; Fed. Cas. 2153); and where, on application for a discharge, it appeared that the bankrupt had given fraudulent preferences, but no creditors appeared in opposition, it was held that the court would not deny a discharge where creditors were not opposed thereto. (In re Clark et aL, 19 N. B. R 301; 36 Leg. Int. 414; Fed. Cas. 3813.) A bank obtained payment of a dishonored bill of exchange by an ac- ceptance within four months of the bankruptcy of the acceptor. The assignee recovered back the amount paid. In a suit against the indorser by the bank it was held that the holder having taken a preference with- out the indorser's consent, and so prevented the indorser, for that time, from indemnifying himself, the indorser was discharged. (Northern Bank of Kentucky v. Cooke, 18 N. B. R 306.) A debtor who was insolv- ent gave certain preferences to creditors who knew of his insolvency. A little more than two months after the preference bankruptcy proceed- ings were commenced, the debtor accepting service. Thereupon the debtor proposed a composition, and offered one of the preferred credit- ors as an indorser for deferred payments. The composition was accepted by the requisite number, but objected to by a minority. It was held that the composition would not be confirmed unless the pro rata offered to all of the creditors equaled the amoimt they would have been en- titled to if no preference had been made. (In re Jacobs, 18 N. B. R 48; Fed. Cas. 7159.) No creditor who has received a preference, having at the time reason- able cause to believe his debtor insolvent, is authorized to institute pro- ceedings in bankruptcy. (Ecker v. McAllister, 17 N. B. R 43.) The purpose of the Bankrupt Act being to enforce equal distribution of an insolvent's estate, every act of an insolvent that tends to defeat that purpose should be construed strictly against him (Hall, Asa, v. Wager § 60, 5.] PEEFEEEED CEEDITOES. 341 & Fales, 5 N. B. R. 181; S Biss. 88; 5 West Jur. 588; 3 Chi Leg. News, 401; Fed. Cas. 5951); but there is no such collusion as will deprive the parties of rights to which they would otherwise be entitled, where it is only shown that the parties endeavored to obtain all the advantage that the law would afford them. (Whithed et aL v. Pillsbury et aL, Ass., 13 N. B. R 341; Fed. Cas. 17573.) Nature of frand. — A mere fraud on the Bankrupt Act by accepting a preference in violation of its provisions is not an actual fraud. (In re Riorden, 14 N. B. B. 332; Fed. Cas. 11852.) What is notice to creditor. — Any agreement by an insolvent debtor with a creditor to create a preference in favor of that creditor is void if the creditor has cause to believe the debtor insolvent, and he is after- wards proceeded against under the act. (Second Nat. Bank v. Hunt, 4 N. B. R 198.) A creditor to whom a conveyance has been made by an insolvent debtor need not have absolute knowledge of the fact of in- solvency, in order to defeat the conveyance, but only reasonable cause to know ; that is, that such a state of facts had been brought to his notice as would have led prudent business men to conclude that the debtor could not meet his obligations as they matured in the ordinary course of business. (Toof V. Martin, 6 N. B. R. 49; 13 Wall 40; Lloyd, Ass., v. Strobridge, 16 N. B. R 197; 10 Chi. Leg. News, 1; San Fran. Law J. 13; Fed. Cas. 8435; In re Hauck, 17 N. B. R. 158; Fed. Cas. 6319; In re Mo- Donough, White, Ass., v. RafiEerty, 3 N. B. R 53; 1 Chi. Leg. News, 361; 16 Pittsb. Leg. J. (O. S.) 110; Fed. Cas. 8775; Burfee v. First Nat. Bank of JanesviUe, 9 N. B. R 314; Buchanan et al. v. Smith, 7 N. B. R 513; 16 Waa 377; Armstrong v. Rickey Bros., 2 N. B. R 150; 1 Chi Leg. News, 145; 2 Amer. Law T. Rep. Bankr. 65; Fed. Cas. 546; Boothe, Ass., etc. v. Brooks, Nedy & Co., 12 N. B. R. 398; 1 N. T. Weekly Dig. 135; Fed. Cas. 1650; Singer, Ass., v. Sloan et aL, 13 N. B. R. 308; 3 DOL 110; 7 Chi Leg. News, 331; 2 Cent. Law J. 218; Fed. Cas. 12898; Loudon, Ass., v. National Bank, 15 N. B. R 476; 3 Hughes, 430; Fed. Cas. 8535; Scammon, Ass., v. Cole et ai, 5 N. B. R. 357; 3 Cliflf. 472; Fed. Cas. 13432.) A knowledge of facts and circumstances which would put a prudent man upon inquiry is a reasonable cause to believe a debtor insolvent; and if a creditor had reasonable cause, when taking a preference, to believe the debtor in- solvent, it makes no difference what he thought or knew of the debtor's intentions in giving the preference. (Webb, Ass., v. Sachs et ai, 15 N. B. R 168; 4 Sawy. 158; 9 Chi Leg. News, 156; Fed. Cas. 17325.) Where a creditor to whom preference has been given may by the slightest inquiry be apprised of his debtor's real condition, he is charge- able with a knowledge of the facts as they exist. (Lloyd, Ass., eta v. Strobridge, 16 N. B. R 197; 10 Chi Leg. News, 1; 1 San Fran. Law J. 13; Fed. Cas. 8435.) Knowledge of attorneys of a judgment creditor, of the bankrupt's insolvency and intent to evade the bankrupt law, is the knowledge of the creditor. (Rogers, Ass., etc. v. Palmer, 19 N. B. R 471; 34:2 I-AW OF BAIfKEUPTOT. [§ 60, 5. 102 U. S. 363; Sage, Jr. v. Wynkoop, Ass., 16 N. B. E. 368; Fed. Cas. 12315.V A transfer may be attended by such, circumstances that the creditor will not be entitled to rely on the false statements of the debtor as to his condition (Buoknam, Ass., v. Goss, 13 N. B. R. 337; 1 Hask. 630; Fed. Cas. 2097); as if a deed be taken because the grantor was unable to pay the money which it was given to secure. (Alderdice, Ass., v. Bank, 11 N. B. E. 398; 1 Hughes, 47; Fed. Cas. 154.) It is sufficient notice where a debtor was insolvent and the creditor might have ascertained the fact to be so by reasonable Inquiry (Dutcher v. Wright, Ass., 16 N. B. E. 331; 94 U. S. 553) ; as when a banker cashed a sight draft, and on the following day received from the drawer collaterals to secure the payment of the draft (Merchants' Nat. Bank of Cincinnati v. Cook et al.. Trustees, 16 N. B. R. 391 ; 95 IT. S. 342); and where one constituted attorney for the collection of a debt procured from the debtor a judgment note for the amount in his own name and entered it, knowing that the debtor was insolvent (Vogle v. Lathrop, 4 N. B. E. 146; 18 Pittsb. Leg. J. 106; Fed. Cas. 16985); and where creditors have accounts overdue seven or eight months, and finally have to resort to legal measures for the collection of them. (Stranahan V. Gregory & Co., 4 N. B. R. 142; Fed. Cas. 13522.) Effect of notice to creditor — Preferences arc void. — It has been held that an assignee of a principal cannot recover from a creditor for money paid to the creditor by a surety, even though tbe surety receives the money from the principal by a preference, if the creditor has no knowl- edge of that fact and receives the money in discharge of the obligation of the surety. (Tyler, Ass., v. Brook et aL, 17 N. B. E. 239.) The following have been held to be preferences and void where the creditor had reasonable cause to believe the debtor insolvent: The sale of goods by a debtor to a creditor, with intent to prefer such creditor (In re McDonough, White, Ass., v. Eaferty, 3 N. B. E. 53; 1 Chi Leg. News, 361; 16 Pittsb. Leg. J. (O. S.) 110; Fed Cas. 8775); the receipt from a debtor of an assignment of his account against a third party, which the creditor in proof collects, or goods to be applied to part payment of the debt (In re Kingsbury et aL, 3 N. B. E. 84; Fed. Cas. 7816); the re- ceipt by an indorser on a bankrupt's note of money to secure his lia- bility as indorser (Abel, Jr., et aL v. Thomer, 3 N. B. E. 29; 2 Bond, 287; 16 Pittsb. Leg. J. 78; 1 ChL Leg. News, 337; 1 Amer. Law T. Eep. Bankr. 139; Fed. Cas. 103); a mortgage given to secure a pre-existing debt (In re Graham, Asa, v. Stark et aL, 8 N. B. E. 92; 3 Ben. 520; 2 ChL Leg. News, 73; Fed. Cas. 5676; Soammon, Asa, v. Cole & Hooper, 8 N. B. R. 100; 1 Hask. 214; Fed. Cas. 13433); where an insolvent, vrithin four months of his bankruptcy, executes a second mortgage to his creditor in substitution of a first. (In re Jordan, 9 N. B. R. 416; Fed. Cas. 7529.) A transfer of property which necessarily gives a preference to one creditor over another is presumed to have been made with a view to Buch preference, and fraudulent. (Catlin v. Hoffman, 9 N. B. R. 342; 2 § 60, 5.] PEEFBEEED CEEDITOES. 343 Sawy. 486; 21 Pittsb. Leg. J. 159; Fed. Cas. 2521.) Where an officer of a corporation, without authority, executes a deed of trust as security for a negotiable instrument more than four months prior to commence- ment of proceedings in bankruptcy, wliich act is ratified by the cor- poration, but within the four months prior to commencement of the proceedings, the validity of the deed must be determined by the cir- cumstances existing at the time of the ratification. (In re Kansas City Stone and Marble Mfg. Co., 9 N. B. R 76; Fed. Cas. 7610.) An insolvent substituted small notes payable immediately for larger ones held by his bank, with intent to give a preference, which enabled the bank to ob- tain judgment and levy on the debtor's property more readily. The bank knew of the insolvency of the debtor and demanded the substitu- tion as a condition to a further loan. It was held a preference and void. (Loudon, Ass., v. Bank, etc., 15 N. B. E. 476; 3 Hughes, 430; Fed. Cas. 8535.) To defeat a conveyance for a present consideration the proof must show that the party to whom or for whose benefit it was made knew or had reasonable cause to believe the grantor insolvent and that a fraud was intended. (Gattman & Co. v. Honea, Ass., 13 N. B. R 493; 7 Chi. Leg. News, 395; Fed. Cas. 5371; Barbour et al v. Priest, Ass., 19 N. B. R 518; 103 U. S. 293.) A forced assignment of all property to a creditor is a preference of such creditor, and an act of bankruptcy, and such cred- itor is charged with knowledge of the insolvency of the assignor. (Grow, Asa, v. BaUard et aL, 3 N. B. R 69; 1 Amer. Law T. Rep. Bankr. Ill; Fed. Cas. 5848.) If a mortgagor conveys in fraud of the act, actual notice must be brought home to the mortgagee who has taken the con. veyance under cu'cumstances promising material relief to the debtor and apparently for that purpose. (Boothe, Ass., v. Brooks, Neely & Co., 13 N. B. R 398; 1 N. T. Wkly. Dig. 125; Fed. Cas. 1650.) A creditor having reasonable cause to believe his debtor insolvent, and who receives payment, has reasonable cause to believe he is obtain- ing a preference; but persons other than creditors dealing with an in- solvent, even if they have reasonable cause to believe him so, are not on the same footing, as they do not necessarily enable the debtor to contravene the act. (Darby's Trustees v. Lucas, 5 N. B. R. 437; Fed. Cas. S573.) To make a transfer of demands and accounts a fraudulent pref- erence, it must be shown that the debtors were at the time insolvent or contemplated insolvency; that they made the transfer with a view to giving a preference, and that the transferee had reasonable cause to be- lieve the transferrer was insolvent, and knew that the transfer was in fraud of the provisions of the law. (In re Broich et al., 15 N. B. R 11; 7 Biss. 303; Fed. Cas. 1921.) A chattel mortgage void as against creditors under the state law, and under which mortgagee had taken possession, having reasonable cause to believe the debtor insolvent, is void as against the assignee in bankruptcy (Harvey, Ass., v. Crane, 5 344 LAW OF BAUKETJPTOT. [§ 60, J. I N. B. R. 318; 3 Biss. 496; 3 Chi. Leg. News, 341; Fed. Cas. 6178); but to render a mortgage void under the Bankrupt Act, it is not necessary that the debtor knew or believed himself insolvent. The act treats of Insolvency as a condition of fact, not of belief, and with a knowledge of which he is chargeable in law. (Hall, Ass., v. Wager et aL, 5 N. B. R 131; 3 Biss. 38; 5 West. Jur. 538; 3 ChL Leg. News, 401; Fed. Cas. 5951.) Where a creditor is preferred in a settlement, the preference cannot be set aside unless it can be shown that the creditor receiving it had reasonable cause to believe a fraud on the bankrupt law was intended. (Castle, Ass., v. Lee, 11 N. B. R. 80; Fed. Cas. 3506.) Ignorance of the law no excuse. — Ignorance of the law cannot avail creditors who are possessed of facts that show the insolvency of the debtor, and a preference received under such circumstances is fraudu- lent and void. (Martin v. Toof et aL, 4 N. B. R. 158; Fed. Cas. 9164.) Intent to prefer. — To constitute a fraudulent preference by an in- solvent debtor, the preference must be an advantage actually given to one or more creditors over the others, with the knowledge of his situa- tion and the intent to accomplish this end (In re Miller v. Keys, 3 N. B. R. 54; Fed. Cas. 9578); and there must be guilty collusion. (Clark, Ass., V. Iselin, 11 N. B. R. 337; 31 Wall. 360.) An act of preference is suffi- cient evidence of the intent, and no particular or speoiflo evidence of the intent to prefer is necessary when a payment is made by an insolv- ent debtor (In re Oregon Bulletin Printing and Publishing Co., 13 N. B. R. 503; 1 Cin. Law Bui. 87; Fed. Cas. 10559; Reson v. Knapp, 4 N. B. R. 144; Fed. Cas. 11861); and if the act which is made the act of bank- ruptcy is a passive one, such as suffering property to be taken on legal process, when the debtor is insolvent, with intent to give a preference, if the natural and probable consequence of the act is to give the prefer- ence, it will be inferred that the debtor had such intent, and the burden of proof will be upon him to show the contrary. (In re Black et aL, 1 N. B. R. 81; 3 Ben. 196; 1 Amer. Law T. Rep. Bankr. 39; Fed. Cas. 1457; In re Silverman, 4 N. B. R. 173; 13 Int. Rev. Rec. 53; Fed. Cas. 13855; Curran v. Munger, 6 N. B. R. 38; Fed. Cas. 3487.) The assignee, in proceeding to recover money or property obtained by way of a preference, must not only show the act of the bankrupt of which complaint is made, but must also make it manifest that the trans- fer was made with a view to give a preference over other creditors, and that the creditor so favored knew the person making the transfer was insolvent. (Mays et aL v. Fritton, 11 N. B. R. 339; 30 WalL 414; In re Baker, 14 N. B. R. 433; 14 Alb. Law J. 394; Fed. Cas. 763.) An insolvent debtor who does not go into voluntary bankruptcy, but against whom a judgment by default is obtained, suffers his property to be taken in execution with intent to give a preference, although the judgment was obtained against his will (In re Forsyth and Murtha, 7 N. B. R. 174; Fed. Cas. 4948, citing Toof et aL v. Martin, 6 N. B. R. 49); also § 60, 5.] PEEFEEEED OEEDITOES. 345 where he confesses judgment which is followed by execution (Webbs, Ass., V. Sachs et al., 15 N. B. R 168; 4 Sawy. 158; 9 Chi. Leg. News, 156; Fed. Cas. 17335); or where an officer of a corporation suffers exeoutiona to be levied, one after another, for many weeks, by one creditor, without giving notice to the others (Warren v. Delaware, Lackawanna & W. Ry. Co., 7 N. B. R 451; 5 Chi. Leg. News, 305; 4 Leg. Op. 533; Fed. Cas. 17194; Wilson V. Brinkman, 2 N. B. R 149; 1 ChL Leg. News, 193; 3 Amer. LawT. Rep. Bankr. 65 ; Fed. Cas. 17794) ; and where the debtor signs and deliver* to defendants a judgment note, payable one day after date, giving them the right to enter the same of record and issue execution thereon with- out delay for a debt which was not then due (First Nat. Bank of Clarion V. Jones, Ass., 11 N. B. R 881; 31 WaU. 335; Martin v. Toof et al., 4 N. B. R 158 ; 1 DilL 303 ; Fed. Cas. 9167) ; also if payments are made by an insolv- ent debtor before bankruptcy proceedings (En re Forsyth and Murtha, 7 N. B. R 174; Fed. Cas. 4948); and where a creditor holding a warrant to confess judgment causes execution to issue thereon after notice of such facts as mate it reasonable to believe debtor is insolvent (Golson et al. V. Neihofl et aL, 5 N. B. R 56; 3 Biss. 434; Fed. Cas. 5534); or where a debtor suffers a creditor to do acts which will secure a preference, and knows the consequences of such acts. (Warren v. Bank, 7 N. B. R. 481 ; 10 Blatohf. 493; Fed. Cas. 17303; Hyde v. Corrigan, 9 N. B. R 466; Fed. Cas. 6968; Christman v. Haynes, 8 N. B. R 528; Fed. Cas. 3703.) It does not rebut the intent to prefer to show that the debtor has also another motive to the proceeding, namely, an expectation of future benefit to himself, by means of future loans of money, and being enabled thereby to continue his business. (Risen v. Enapp, 4 N. B. R 114; Fed. Cas. 11861.) When the issue to be decided is whether a judgment against an insolv- ent was obtained with a view to give a preference, the intention of the bankrupt is the turning point of the case, and all the circumstances which go to show such intent should be considered (Little, Ass., v. Alex- ander, 13 N. B. R 134; 31 Wall 500); and the law infers intent if, after deducting the property which is the subject of a voluntary settlement, sufficient available assets are not left for the payment of the settlor's debts. (Sedgwick, Ass., v. Place etal., 5 N. B. R 168; 5 Ben. 184; 3 Chi. Leg. News, 409; 4 Amer. Law T. Rep. (U. S. Ct.) 179; 6 Amer. Law Rev. 181; Fed. Cas. 13620.) The transfer by an insolvent debtor of a large portion of his property to one creditor, with no provision for an equal distribu- tion of its proceeds to all his creditors, is a preference, and is conclusive evidence that such was intended, imless the debtor can show that at the time he was ignorant of his insolvency, and that he could reasonably ex- pect to pay all his debts. (Toof v. Martin, 6 N. B. R 49; 13 Wall. 40.) Very slight circumstances indicating the existence of an affirmative de- sire on a bankrupt's part to give a preference, or to defeat the operation of the act, may, by giving color to the whole transaction, make void a lien against his property. (Wilson v. Bank, 9 N. B. R 97; 17 Wall 478.> 346 I-AW OF BANKEUPTCT. [§ 60, C. Procurement to take in execution may be inferred from such relation- ship between the debtor and creditor, and apparent concert of action on their part as would ordinarily be incompatible with any other inten- tion on the part of the debtor than that of giving a preference to the creditor. (In re Dunkle and Driesbaoh, 7 N. B. E. 73; Fed. Cas. 4160.) In an action to recover that which has been conveyed as a preference under the Bankrupt Act, the burden of proof is on the assignee, but the intent of the parties may be inferred from their acts. (Parsons v. Top- lifE, 14 N. B. E. 547.) An intent to evade the Bankrupt Act is not evinced by taking of steps to obtain satisfaction by the ordinary course of law, even with knowl- edge on part of the creditor that his debtor is insolvent, and in the ab- sence of further facts the party first obtaining possession of property can hold it against interference by the bankrupt court (Appleton v. Bowles et aL, 9 N. B. E. 354); nor where there is an honest intention not to stop payment of a security which was partly given for money previously ad- vanced, if coupled with sufficient present advantage to the debtor to re- lieve the case of any fraudulent appearance. (Ex parte Ames, 7 N. B. K. 230; 1 Lowell, 561; Fed. Cas. 333.) A debtor who pays money xmder an order of his creditor to a third party, with the intent thereby to enable his creditor to give a preference to such third party, will be deemed to still hold it, and the assignee may sue him for its recovery. (Fox et aL V. Gardner, 13 N. B. R 137; 31 Waa 475.) Preferences more than four months before bankruptcy are valid. — A creditor may obtain a preference from an insolvent debtor with knowl- edge of the insolvency, if within the limitation prescribed by law, but the possession must be obtained by a complete act within the limitation. (In re Foster, 18 N. B. R 64; 10 Chi Leg. News, 315; Fed. Cas. 4964) After the lapse of four months the simple preferences which an insolv- ent debtor may have made are to be held valid as against all the world so far as the preferred creditor is concerned (Potter et aL v. CoggeshaU, 4 N. B. R 19; Fed. Cas. 11333); but where the parties at the time of exe- cuting a preferential deed agree to conceal it from other creditors, and for that purpose keep it from record, the time of limitation begins to rim only from the day on which it is filed for record. (Exchange Nat. Bank of Columbus v. Harris, Ass., 14 N. B. R 510; 1 Cin. Law BuL 357; Fed. Cas. 4595.) c. If a creditor has been, preferred, and afterwards in good faith gives the debtor farther credit without security of any kind for property which becomes a part of the debtor's es- tates, the amount of such new credit remaining unpaid at the time of the adjudication in bankruptcy may be set off against the amount which would otherwise be recoverable from him. § 60, d.] PKEFEKEED OEEDITOES. 347 In all cases of mutual debts or mutual credits between the estate of a bankrui t and a creditor, the account must be stated and one debt set off against the other, and the balance only shall be paid or allowed. (Sec. 68, a.) A lien given or accepted in good faith and not in contem- plation of or in fraud upon this act, and for a present consideration, which have been recorded according to law, if a record is necessary, are not affected by this act. (Sec. 67, d) d. If a debtor shall, directly or indirectly, in contempla- tion 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 trustee or any creditor and shall only be held valid to the extent of a reasonable amount to be determined by the court, and the excess may be recovered by the trustee for the benefit of the estate. Payments and transfers to attorneys. — Payment of attorney's fees for services previously rendered and to be rendered does not constitute a preference, even as to the services to be rendered, if the amount is reasonabla (In re Sidle, 3 N. B. R 77; Fed. Cas. 12844.) If an insolvent debtor pays a retainer to counsel to assist him in the proper discharge of his duty under the bankrupt law, the payment is valid, but it is void if made with a view to prevent his property from being distributed under the act and the attorney knows him to be insolvent. (Goodrich V. Wilson, 14 N. B. R. 555.) But where a bankrupt gave a mortgage, after commencement of proceedings in bankruptcy, to secure pay for the services of mortgagee in resisting creditor's petition, it was held that the mortgage might be summarily set aside without a bill in equity. (In re Sims, 16 N. B. E. 251; Fed. Cas. 12888.) Where a bankrupt made an assignment to S., whose attorney was also attorney for the bankrupt and for a creditor, and payments were made by the attorney from the pro- ceeds of the assigned estate to S. and the creditor, it was held that the assignment was void, and the attorney, S. and the creditor must deliver such estate or the proceeds thereof to the assignee in banliruptcy. (In re Meyer, 2 N. B. R. 137; 1 Chi. Leg. News, 210; Fed. Cas. 9515.) Before filing a voluntary petition in bankruptcy, the debtors assigned a number of claims to their attorneys and paid them one hundred and fifty dollars for services rendered and to be rendered in the bankruptcy proceedings. The attorneys collected some of the claims, and upon the suit for the money, and after issue joined, the assignee applied to compromise the claim. The court held it was not a proper case for compromise. (In re Rowe et al., 18 N. B. R. 438; Fed. Cas. 12093.) CHAPTEE VIL ESTATES. Sec. 61. Depositories for money. — a. Coiirts of bank- ruptcy shall designate, by order, banking institutions as de- positories for the money of bankrupt estates, as convenient as may be to the residences of trustees, and shaU require bonds to the United States, subject to their approval, to be given by such banking institutions, and may from time to time as occasion may require, by Like order increase the num- ber of depositories or the amoimt of any bond or change such depositories. [Act of 1867. Sec. 17. . . . That the assignee shall, as soon as may be after receiving any money belonging to the estate, deposit the same in some bank in his name as as- signee, or otherwise keep it distract and apart from all other money in his possession.] Trustees are required to deposit all moneys received by them ia one of the designated depositories and disburse the same only by check or draft on the same. (Sec. 47, a.) No moneys shall be drawn from the depository unless by check or warrant, signed by the clerk of the court or by a trustee, and countersigned by the judge of the court, or by a referee designated for the purpose, or by the clerk or his assistant, under an order from the judge. The name of any referee or judge authorized to countersign such checks must be furnished to the depository. (Orders XXI2.) A bank in which funds are deposited to the credit of an assignee in bankruptcy has no power to pay out any of said funds except upon proper warrant under the authority of the court of bankruptcy. A state court has no authority to order such a bank to pay out of such funds a judg- ment rendered against the assignee. (Havens v. Bank, 13 N. B. E. 95.) Sec. 62. Expenses of administering estates. — a. The actual and necessary expenses incurred by officers in the ad- ministration of estates shall, except where other provisions are made for their payment, be reported in detail, under § 62, a.] EXPENSES OF ADMmiSTEEINO ESTATES. 349 oath, and examined and approved or disapproved by the court. If approved, they shall be paid or allowed out of the estates in which they were incurred. [Act of 1867. Seo. 28. ... If at any time, there shall not be in his (assignee's) hands a sufficient amount of money to defray the necessary expenses required for the further execution of his trust, he shall not be obliged to pro- ceed therein until the necessary funds are advanced or satis- factorily secured to him. . . . Seo. 47. . . . The enumeration of the foregoing fees shall not prevent the judges, who shall frame general rules and orders in accordance with the provisions of section ten, from prescribing a tariff of fees for all other services of the officers of courts of bankruptcy, or from reducing the fees prescribed in the section in classes of cases to be named in their rules and orders.] The compensation of referees (seo. 40), trustees (sec. 48), clerks and marshals (seo. 53) and stenographers (seo. 38) are fixed by law. The cost of preserving the estate subsequent to filing the petition is one of the debts entitled to priority of payment. (Sec. 64, b.) The compensation allowed by the act is in full for the services per- formed by clerks, referees and trustees, but does not include certain ex- penses necessarily incurred in the performance of their duties and allowed upon the settlement of their accounts. (Orders XXXV.) Care and preservation of property. — An assignee may be allowed all sums necessarily expended in caring for the property, and included in such aUowanoe may be sums for repaying others who had advanced money to pay off pressing liens and to put the property in marketable condition. (In re Gregg, 3 N. B. R. 131; 1 Hask. 173; Fed. Gas. 5796.) A sheriff, having in his hands property of a bankrupt taken under an execution prior to commencement of proceedings in bankruptcy, is en- titled to the expenses incurred in keeping such property from the date of filing the petition until their delivery to the assignee. (Zeiber v. Hill, 8 N. B. K. 239; 1 Sawy. 368; Fed Gas. 18306.) Auctioneer's fees. — In view of the fact that all sales must be by pub- lic auction unless otherwise ordered by the court (Order XVIII, 1), the fees of auctioneers is without doubt an allowable expense, while under the act of 1867 the courts held that the law contemplated that the as- signee himself should sell the property of the bankrupt, and the neces- sity for the employment of an auctioneer should be afiirmatively shown before fees were to be allowed the assignee. (In re Pegues, 3 N. B. R. 19; Fed Gas. 10907; In re Sweet et aL, 9 N. B. R. 48; 31 Pittsb. Leg. J. 83; Fed. Gas. 18688.) 350 LAW OF BAUKBUPTOT. [§ 62, a. Attorney's fees. — An assignee cannot charge assets of estate in his hands for professional and clerical services rendered him as such tmtil first duly allowed by the court, upon a showing that the same are reo- essaryand reasonable. (InreNoyes, 6 N. B. R 277; Fed. Cas. 10371.) An assignee has the right to seek professional advice and to employ counsel in necessary and proper cases. But the necessity for counsel must be apparent and the charge reasonabla (In re Davenport, 3 N. B. R 18; Fed. Cas. 3587; In re Colwell, 15 N. B. E. 93.) It was also held that counsel fees are within the discretion of the trustee and the committee chosen to assist him, and in the absence of bad faith vi-ill not be interfered with by court. (In re Baxter et aL, 19 N. B. R. 295; Fed. Cas. 1122.) Assignee under state law.— An assignee imder state law cannot be allowed an attorney's fee, nor compensation for his own services, but may be allowed the actual expenses incuiTed in doing that satisfactorily which the assignee in bankruptcy would have had to do in reference to the estate of the bankrupt (In re Cohn, 6 N. B. R 379; Fed. Cas. 2966; MacDonald, Ass., v. Moore, 15 N. B. R 26; 8 Ben. 579; Fed. Cas. 8763; Burkholder v. Stump, 4 N. B. R 191; Fed. Cas. 2165.) Kent. — An assignee is personally liable for rent, but where his occu- pation was for the benefit of the estate he wiU be credited the amount which he was obliged to pay. (In re Webb & Co., 6 N. R R 303; Fed. Cas. 17315; In re Merrifleld, 3 N. B. R 25; Fed. Cas. 9465; In re Breck & Schermerhom, 13 N. B. R 315; 8 Ben. 93; Fed. Cas, 1833.) The as- signee is bound to pay a reasonable compensation for the portion of a lot actually used, but he does not become an assignee of the lease and is not bound by its covenants. (In re Ives et aL, 18 N. B. R 38; Fed. Cas. 7116; In re Hufnagel, 12 N. B. R 554; Fed. Cas. 6837.) Eent for the time an assignee occupies leased premises after adjudication is a pre- ferred claim. (In re Butler, 6 N. B. R 501; 19 Pittsb. Leg. J. 146; Fed. Cas. 2286.) If the officers of the court keep possession of the premises of a bankrupt, the landlord is entitled to a reasonable compensation for the time they are so occupied. (In re Hamburger & Frankel, 13 N. B. R 277; 1 N. Y. Wkly. Dig. 53; Fed. Cas. 5975.) A landlord's claim for marshal's use of premises for keeping and storing goods is a cost of administration to be paid in full if the assets are sufficient; if not, to be paid pro rata with other claims of same class. (In re Hoagland, 18 N. B. R 530; Fed. Cas. 6545.) Although the claim of a landlord is not strictly a lien, as it does not attach to any specific article of prop- erty, yet under the laws of Mississippi it is entitled to priority of pay- ment out of the estate. (Austin v. O'Reilly, Ass., etc., 12 N. B. R 329; 2 Woods, 670; 2 Cent Law J. 455; 1 N. Y. Wkly. Dig. 36; Fed. Cas. 665.) The expenses of the estate cannot be deducted and allowed be- fore the payment of rent that accrued after the commencement of the proceedings in bankruptcy and while the assignee occupied the premises. (Buokner v. Jewell et aL, 14 N. B. R 286.) Where goods of a bankrupt merchant had been left in the store rented by the bank- § 63, a.] DEBTS WHICH MAT BE PROVED. 351 rupt some months before the assignee took possession, but the assignee immediately removed them, the owner of the store could claim what was a reasonable price for storage of the goods, but not the value of the store as a salesroom. (In re The Lucius Hart Mfg. Co., 17 N. B. E. 459; Fed. Cas. 8592.) The estate is liable for the pasturage of the stock from the date of the institution of proceedings in bankruptcy. (In re Mitch- ell, 8 N. B. R. 47; 5 Chi Leg. News, 271; Fed. Cas. 9657.) "Without an order of the court, and without ascertaining whether the assets are suf- ficient to discharge all the expenses of administration of the same class, the assignee cannot pay a claim for use and occupation of premises. (In re Hoagland, 18 N. B. R. 530; Fed. Cas. 6545). The prevention of in- jury to the premises, by not removing machinery, is not a circumstance to be considered in determining the compensation to the landlord for the use of the premises by the assignee. (In re Breok & Sohermerhom, 13 N. B. R. 215; 8 Ben. 93; Fed. Cas. 1832.) Wages. — Workmen should be first paid, and charges connected with litigation disallowed. (In re Sawyer, 16 N. B. E. 460; 2 Lowell, 551; 15 Alb. Law J. 280; Fed. Cas. 12396.) Taxes. — Funds in the hands of an assignee are liable to taxation by the state. (In re Mitchell, Ex parte Sherwin, 16 N. B. R 535; 17 Alb. Law J. 26; Fed. Cas. 9658.) Cost of improvident suit. — Where a bill of complaint had been filed by an assignee without suflBcient cause, but the circumstances are not so clear as to require any imputation upon the good faith of the assignee in the prosecution of the suit, the costs will be paid out of the estate in the hands of the assignea (Coxe v. Hale, 8 N. B. R. 563; 21 Pittsb. Leg. J. 77; Fed. Cas. 8310.) Sec. 63. Debts which may he prored. — a. Debts of the bankrupt may be proved and allowed against Ms estate which are (1) a fixed liability, as evidenced by a judgment or an instrument in writing, absolutely owing at the time of the filing of the petition against him, whether then payable or not, with any interest thereon which would have been recov- erable at that date or with a rebate of interest upon such as were not then payable and did not bear interest; (2) due as costs taxable against an involuntary bankrupt who was at the time of the filLiig of the petition against him plaintiff in a cause of action which would pass to the trustee and which the trustee declines to prosecute after notice; (3) founded upon a claim for taxable costs incurred in good faith by a creditor before the filing of the petition in an action to re- cover a provable debt; (4) founded upon an open account, 352 LAW OF BANKEXJPTOT. [§ 63, 05. or upon a contract express or implied ; and (5) founded upon provable debts reduced to judgments after the filing of the petition and before the consideration of the bankrupt's ap- plication for a discharge, less costs incurred and interests accrued after the filing of the petition and up to the time of the entry of such judgments. [Act of 1867. Seo. 19. , . . That all debts due and payable from the bankrupt at the time of the adjudication of bankruptcy, and all debts then existing but not payable until a future day, a rebate of interest being made when no interest is payable by the terms of the contract, may be proved against the estate of the bankrupt. All demands against the bankrupt for or on account of any goods or chat- tels wrongfully taken, converted, or withheld by him may be proved and allowed as debts to the amount of the value of the property so taken or withheld, with interest. If the bankrupt shall be bound as drawer, indorser, surety, baU., or guarantor upon any bill, bond, note, or any other specialty or contract, or for any debt of another person, and his lia- bility shall not have become absolute until after the adjudi- cation of bankruptcy, the creditor may prove the same after such liability shall have become fixed, and before the final dividend shall have been declared. In all cases of contin- gent debts and contingent liabilities contracted by the bank- rupt, and not herein otherwise provided for, the creditor may make claim therefor, and have his claim allowed, with the right to share in the dividends, if the contingency shall happen before the order for the filial dividend; or he may at any time apply to the court to have the present value of the debt or liability ascertained and liquidated, which shall then be done in such manner as the court shall order, and he shall be allowed to prove for the amount so ascertained. Any person liable as bail, surety, guarantor, or otherwise for the bankrupt, who shall have paid the debt, or any part thereof, in discharge of the whole, shall be entitled to prove such debt or to stand in the place of the creditor if he shall have proved the same, although such payment shall have been made after the proceedings in bankruptcy were com- menced. And any person so liable for the bankrupt, and who has not paid the whole of said debt, but is still liable for the same or any part thereof, may, if the creditor shall fail or omit to prove such debt, prove the same either in the name of the creditor or otherwise, as may be provided by the rules, and subject to such regulations and limitations as § 63, a.] DEBTS WHICH MAT BB PKOTBD. 353 may be established by such rules. Where the bantrupt is liable to pay rent or other debt falling due at fixed and stated periods, the creditor may prove for a proportionate part thereof up to the time of the banlcruptcy, as if the same grew due from day to day, and not at such fixed and stated periods.] Claims shall not be proved against a bankrupt estate subsequent to one year after the adjudication; or if they are liquidated by litigation, and final judgment therein is rendered within thirty days before or after the expiration of such time, then within sixty days after the ren- dition of such judgment (Sec. 57, n.) The proof of claims consists of a statement under oath in writing, signed by a creditor, setting forth the claim, the consideration therefor, and whether any, and if so what, securities are held therefor, and whether any, and if so what, payments have been made thereon, and that the sum claimed is justly owing from the bankrupt to the creditor. (Sec. 57, a.) Further provisions as to proof and allowance of claim.s may be found under section 57, a-n. Claims of creditor who have received preference will not be allowed unless the preferences are surrendered (sec. 57, g), nor will debts owing to the United States, a state, county or municipality as penalty or for- feiture, except for the amount of the pecuniary loss sustained by the act out of which the penalty or forfeiture arose. (Sec. 57, j.) The court may permit proof of a partnership claim against the in- dividual estates, and vice versa, and marshal assets of partnership and individual estates so as to prevent preferences and secure equitable dis- tribution. (Sec. 5, g.) Section 17 gives a list of debts which, though provable, are not af- fected by a discharga Section 65 provides for the declaration and pay- ment of dividends on all allowed claims. A set-off or counter-claim shall not be allowed in favor of any debtor of the bankrupt which is not provable against the estata (Sec. 68, b, 1.) Fixed liability; jndgment. — A judgment from which an appeal is taken before proceedings in bankruptcy is a provable debt; but no divi- dends will be paid untU judgment on the writ of error (In re Sheehan, 8 N. B. E. 345; Fed. Cas. 13737); and on proof of claim, judgment of ap- pellate court was not conclusive, there being terms imposed (In re Shelboume, 19 N. B. R 359; Fed. Cas. 13745); but a confession of judg- ment by an insolvent debtor for the benefit of a creditor who has cause to believe that the debtor is insolvent is a fraud and deprives creditor of the right to prove claim against the bankrupt, notwithstanding he may disclaim any benefit and surrenders such judgment to the assignee. (In re Colman, 3 N. B. E. 173; 7 Blatchf. 193; Fed. Cas. 3979.) Creditors obtained judgment against bankrupts in an action for fraud, conspiracy and deceit. The court held that the debt was provable and bankrupt was entitled to stay of proceedings, including execution against person 33 354: LAW OF BAlfKETJPTOT. [§ 63, a. (In re Van Buren, 19 N. B. R. 149; Fed Cas. 16833); but a judgment for a fine imposed for a crime is not a debt provable against a bankrupt (In re Sutherland, 3 N. B. R. 83; Deady, 416; 8 Amer. Law T. Rep. (N. S.) 89; Fed. Cas. 13639; citing People v. Spaulding, 10 Paige, Ch. R., 384); and in a suit for that purpose an assignee recovered a Judgment against preferred creditor, setting aside the preference. The creditor sought to prove his claim, but the court held the claim could not be proved. (In re Cramer, 13 N. B. R 335; 8 Chi Leg. News, 106; Fed. Cas. 3345.) See also sec. 57, ante, Claims Provable, p. 384 Fixed liability on an instrnment in writing absolately dne— On leases. — The landlord will be entitled to prove his claim in bankruptcy for the unexpired term of a lease, even though he has been preferred under a state law, for his rent up to the end of the year (In re Wynne, 4 N. B. R. 4; 3 Amer. Law T. Rep. Bankr. 116; Fed. Cas. 18117); but if the assignee elects to accept a lease held by bankrupt, he makes himself liable on be- half of the estate for the rent (In re Laurie, Blood and Hammond, 4 N. B. R. 7) ; and where suit was brought for a month's rent, part of which ac- crued before bankruptcy and part afterwards, it was held, for the part before banki-uptcy, plaintiffs could prove against the estate, and the dis- charge will release it ; for that part afterwards they could recover. (Tread- well et aL v. Harden, 18 N. B. R. 353.) A marshal held property seized on the premises which the bankrupt had leased. The landlord claimed rent for the premises. It was held that the rent was to be measured by the value of the premises for storage of the goods. (In re Wheeler et aL, 18 N. B. R. 385; Fed. Cas. 17490.) See also sec. 57, ante, Claims Provable, p. 284 Interest. — Where borrower gives his note for the loan, with legal in- terest, and pays for the accommodation, such contract is infected with usury, and if the lex loei provide for the forfeiture of the debt the con tract is void, and the debt cannot be proved against the estate in bank- ruptcy (In re Pittock, 8 N. B. R. 78; 3 Sawy. 416; Fed. Cas. 11189); and the reservation of a greater rate of interest than six per centum by bank, or discounting a promissory note, does not render the debt for the principal one not provable in bankruptcy (In re Moore, 1 N. B. R. 123); but notes given for the excess over legal interest are not provable in bankruptcy. (Shaffer v. Fritchery & Thomas, 4 N. B. R 179; Fed. Cas. 12697.) See also sec. 57, ante: Claims Provable, p. 284; The Allowance or Rejection OF Claims, p. 389. Debts due wife. — Husband reduced a legacy to possession and gave a note to his wife for the proceeds. He became bankrupt and the wife sought to prove the note. It was held that the bequest created no separate estate in the wife and the note was a nullity (Canby, Ass., v. McLear, 13 N. B. R. 32; Fed. Cas. 2378); and a claim for alimony is not a provable debt, and proceedings to enforce its payment cannot be stayed by the bankrupt court. (In re Lachemeyer, 18 N. B. R. 380; 18 Alb. Law X 243; Fed. Cas. 7966.) § 63, a.\ DEBTS WHICH MAT BE PEOVED. 355 On insurance.— See also sec. 57, ante: Claims Prov-\ble, p. 284; Thb Allowance or Rejection op Ciaims, p. 289. On mortgages. — When a mortgage is given to indemnify the mort- gagee for his advances and he lends his acceptance to mortgagor, and after bankruptcy of the latter buys up paper at a discount, he can only charge against the mortgage what he has paid to take up his accept- ances. (Ex parte Ames, In re McKay and Aldus, 7 N. B. R. 230; 1 Low- ell, 561 ; Fed. Cas. 333.) A mortgage executed by bankrupt, prior to bank- ruptcy, to secure a note given for services of an attorney in contemplated proceedings in bankruptcy, is void; but the claim for services may be proved. (In re Evans, 3 N. B. R. 62; Fed. Cas. 4552.) See also sec. 57, ante: A Moiett Only op a Claim Provable, p. 276; The Allowance OP Secured Claims, p. 298; Subrogation, p. 301. On indorsement. — An indorser (now bankrupt) is not released from liability on the note of a corporation by purchase of said note by one intending to take the property of said corporation. (Ex parte Balch, In re ElUott Felting Mills, 13 N. B. R. 160; 3 Lowell, 440; Fed. Cas. 789.) But before proving against estate of indorser, claimant received dividend from estate of maker. It was held that he could prove only for balance (In re Hicks et aL, 19 N. B. R. 299; Fed. Cas. 6456); and the holder of a promissory note may prove his claim against the estates of both maker and indorser and receive dividends. (National Mount WoUaston Bank V. Porter et aL, 17 N. B. R. 329.) It was held that an indorsed note was not a secured claim (En re Broich et aL, 15 N. B. R. 11; 7 Biss. 308; Fed. Cas. 1921; sec. 507, R. S.); and finally, a note payable on demand was not presented for payment for four years, when attempt was made to hold the indorser, who had become bankrupt. The claim was disallowed. (In re Crawford, 5 N. B. R. 801; Fed. Cas. 3364) See also sec. 57, ante: Amendment of Proof, p. 275; A Moiett Onlt op a Claim Provable, p. 276; The Proof m General, p. 377; Proof of Commercial Paper, p. 386; The Allowance of Secured Claims, p. 393; Subrogation, p. 301. Partnerships. — A firm note issued to a partner for his share in the capital stock, and by him transferred to his wife, may be proved against the estate of such partner, but not against the partnership (In re Frost & Westfall, 3 N. B. R. 180; Fed. Cas. 5135); and where note was indorsed by one member of a partnership without the knowledge of the other, it cannot be proved against the firm (In re Irving, 17 N. B. R. 33; Fed. Cas. 7074); and notes drawn by one partner in the firm name, ap- parently in the course of business, without actual knowledge by the holder of want of authority or misapplication, entitle the holder to their allowance against the bankrupt estate of the firm (Bush, Appellant, v. Crawford, Ass., 7 N. B. R. 399; Fed. Cas. 3324; reversing In re Dunkle and Dreisbach, 7 N. B. R. 107; Fed. Cas. 4161); and a note given in an individual transaction of one of the bankrupts, though signed in the firm name, is not provable against the firm assets (In re Forsyth and 356 LAW OF BANKETJPTOr. [§ 63, a. Murtha, 7 N. B. E. 174; Fed. Cas. 4948); and a creditor holding the note of a copartnership, indorsed by one of its members, may prove in bank- ruptcy against the copartnership fund, and also against the separate es- tate of the copartner indorsing (Stephenson v. Jackson, 9 N. B. R 355; 2 Hughes, 204; Fed. Cas. 13374); and a bond whereby several members of a firm bind themselves jointly and severally to pay amount therein expressed may be proven against the assets of the individual estate of each member of the firm. (In re Bigelow et aL, 2 N. B. E. 121; 3 Ben. 146; 2 Amer. Law T. Rep. Bankr. 41; Fed. Cas. 1397.) Banks. — A note taken for money loaned by a savings bank prohib- ited by law from loaning money on personal security is void, and does not constitute a debt provable in bankruptcy. (In re Jaycox & Green, 13 N. B. R 122; Fed. Cas. 7244) A. deposited money with bankrupt's branch, and bankrupt made a public offer of twenty-five per cent. Branch bank received from her check for deposit and paid her dividend at rate of twenty-five per cent., so A.'s account balanced, but it was not entered on ledger from which schedule in bankruptcy was made. Such settlement was held valid and binding. (In re Bank of North Carolina v. Dewey, 19 N. B. R 314; Fed. Cas. 897.) See also sec. 57, ante, The De- TEKMINATION OF OBJECTIONS TO CT.ATMS, p. 294. On doubtful paper. — Where a note is subject to offset for an amotmt greater than the amount of the note it is not a provable debt. (In re Ford et aL, 16 N. B. R 436; Fed. Caa 4982.) The claim of one of the cred- itors uniting in a petition was a note for $350 falling due four days after the filing of the petition. It was not provable at date of filing. (In re Riker, 18 N. B. R 393; Fed. Caa 11833.) Where interest in advance has been put into a note, and the maker is adjudged a bankrupt before it becomes due, the interest not yet due shall be abated therefrom. (In re Riggs, Lechtenberg & Co., 8 N. B. R 90.) A depositor of a bank de- livered to the bank check for his full balance, accepting, in part pay- ment, bonds. Upon petition to expunge proof of debt of assignee in bankruptcy of the bank, it was held that such bonds, when accepted by debtor in payment of his debt, constituted a valid payment, (Holleman V. Dewey, Asa, 7 N. B. R 269; 3 Hughes, 341; Fed. Caa 6607.) A surety is entitled to prove against the estate of his bankrupt principal, and receive dividends on the amount which he is required to pay, without deducting any security held by him. (Jervis v. Smith, 3 N. B. R 147.) A university undertook to raise an endowment, and the bankrupt subscribed and gave his note for his subscription. He subscribed toward the erection of a new university building and paid a part of his subscription. Afterward he gave his note to the university for his two subscriptions and for money borrowed. It was held that the whole claim was valid (Sturgis, Asa, v. Colby et aL, 18 N. B. R 168 ; Fed. Caa 13574) ; and the holder of a negotiable note assigned after the filing of the petition may prove the debt against the bankrupt maker. (In re Murdock, 3 N. B. R 36; 1 Lowell, 362; Fed. Caa § 63, a.] DEBTS WHICH MAT BE PEOVBD. 357 9939.) See also sec. 57, ante: A Moiety Only op a Claim Provable, p. 376; Claims Provable, p. 284; Proof of Commercial Paper, p. 286; Claims Not Provable, p. 287; The Written Instrument Upon Which THE Claim is Founded, p. 289; Surrender of Preferences, p. 297. Debt, as cost agrainst him. — Where an assignment by a debtor to an assignee for the benefit of his creditors under a state law is avoided by one of his creditors under the bankrupt law, it was held that the pro- ceedings under the state law were in fraud of the Bankrupij Act, and the court could not allow a party the expenses incurred in an attempt to defeat the operation of the bankrupt law. (In re Stubbs, 4 N. R R. 134; Fed. Cas. 13557.) But where a bankrupt seeks to prevent the establishment of a claim against him, he has sufficient interest to maintain appeal from a judg- ment thereon. If he be declared a bankrupt after the taking of ap- peal and the judgment below is affirmed, he may appeal from the affirm- ance. Costs incurred after bankruptcy are not provable against the estata (Sanford v. Sanford, 13 N. B. R. 565.) See also sec. 57, ante: The Effect of Proof, p. 277; The Allowance or Rejection of Claims, p. 389. Oil open account. — Where a debtor receives a voluntary contribution, such receipt does not create a debt due. (In re Oregon Bulletin Printing and Publishing Co., 13 N. B. R. 503; 1 Gin. Law BuL 87; Fed. Cas. 10559.) An.d a claim founded upon a large open account between the parties, and being in dispute, is of doubtful character, and the rights of the creditor are postponed until an assignee is appointed. (In re Jones, 2 N. B. R. 20; Fed. Cas. 7447.) Where J., administrator of an estate, used funds for firm of which he was a member, the court held that a joint and several claim was thereby created, and it could be proved against firm estate and estate of J. (In re Jordan and Blake, 19 N. B. R. 465.) And a party advancing money to a debtor to aid him in committing an act of bankruptcy will not be permitted to prove a claim for the money so advanced. (Inre Hatje, 12 N.B. R. 548; 6 Biss. 436; Fed. Cas. 6215.) See also sea 57, ante: By Whom Proof Must be Made, p. 373; Claims Provable, p. 384; Surrender of Preferences, p. 397; Debts Due to THE United States or a State, p. 802. On contracts express or implied. — A speculative option, where the ob- ject of the parties is not a sale and delivery, but a settlement on differ- ence, commonly called a "put," is void, either as within statutes against gambling or as against public policy, and is not a provable debt (In re" Chandler, 9 N. B. R. 514; 12 Amer. Law Reg. (N. S.) 310; 6 ChL Leg. News, 239; Fed. Cas. 3590); so upon consideration of claim against bankrupt's estate growing out of a slave contract, the court held that the thirteenth amendment to the constitution repealed all laws sanctioning slavery, and, as such contracts were against natural justice, they depended upon posi- tive law. Therefore, a right of action did not survive the repeaL (Buok- ner v. Street, 7 N. B. R. 255; 13 Int. Rev. Reo. 114; Fed. Cas. 2098.) The 358 LAW OF BANKEUPTCT. [§ 63, a. court will allow a claim of a ohturcli corporation, founded upon a verbal promise by the bankrupt to M. that he would pay a certain sum if M. would subscribe a portion of the indebtedness due from the church to M., the promise being subsequently publicly announced by the bankrupt in the church, it appearing by the proof that the trustees of the church had incurred expenses upon the faith of the subscriptions generally. (Capelle, Ass., v. Trinity M. E. Chiu-oh of Chester, 11 N. B. E. 536; Fed. Cas. 3392.) A, took a mortgage on goods sold to B. to secure pur- chase-money. B. was to sell the goods and apply the proceeds on the mortgage. B. sold part of the goods, but failed to account for them, and, on B.'s going into bankruptcy it was held that the proceeds of the goods , remaining unsold should go to A., and that A. should prove his claim against B.'s estate as an unsecured creditor on A.'s surrendering the mortgage (Overman, Ass., etc. v. Quick, Adm'r, etc., 17 N. B. R 335; 8 Biss. 134; 10 Chi Leg. News, 310; Fed. Cas. 10834); and an assignee of a workman's claim is entitled to prove the same in bankruptcy and re- ceive the same preference which the assignor could have claimed. (In re Brown, 3 N. B. E. 177; 4 Ben. 143; Fed. Cas. 1974.) See also sec. 57, ante, The Determination op Objections to Claims, p. 894. Claims of partners. — A bankrupt creditor of bankrupt copartner has the residuum of the estate, separate and joint, belonging to the latter after all separate creditors of the debtor and joint debts of the firm are paid (In re McLean et aL, 15 N. B. R 833; Fed. Cas. 8879); and a claim of one firm of which bankrupt is a partner against another firm of which he is a partner is not a debt provable against him (In re Lloyd, 15 N. B. R 357; 5 Amer. Law Eec. 679; 15 Alb. Law J. 393; 34 Pittsb. Leg. J. 113; Fed. Cas. 8439) ; and a partner who has had to pay all the firm debts can prove against his bankrupt partner his proportion of the debts, and an agreement which is set aside will not prevent him from claiming this right (In re Stephens, 6 N. B. R 533; Fed. Cas. 13365); and where a part- ner retires and agrees to pay all partnership debts, as between them- selves the remaining partner is a surety for the retiring partner, but in case the surety has not actually paid any such debts he cannot prove claim against the estate of the retiring partner (In re Phelps, 17 N. B. R 144; 9 Ben. 286; Fed. Cas. 11070); also three parties contracted a certain debt, giving a firm note. Afterwards the firm was dissolved. A. retired and B. and C. continued business, agreeing with A. to pay all outstand- ing debts. This agreement was not known to creditor. Afterwards R and C. became bankrupt and the creditor proved his claim, but only received payment of part. Afterwards A. became bankrupt. It was held that the creditor could prove the balance of his claim against the estate of A. in bankruptcy (In re Pease, 13 N. B. R 168; Fed. Cas. 10881); and where one member of copartnership, upon dissolution of the firm, receives the firm assets and agrees to pay the firm debts, on subsequent bankruptcy the firm creditors may, at their election, prove as separate creditors of the estate of the liquidating copartner. (In re Long & Ca, § 63, a.] DEBTS WHICH MAT BE PROVED. 359 9 N. B. R. 237; 7 Ben. 141; Fed. Cas. 8476.) A. and B. entered into a partnership by which it was agreed that the firm should assume the in- dividual debts. The firm having become bankrupt, one of the individ- ual creditors endeavored to prove against the firm assets. There was no evidence that the creditor had consented to the conversion of liabil- ities before bankruptcy. It was held that the rule prevented him from proving. (In re Isaacs & Cohn, 6 N. B. R 92; 3 Sawy. 35; Fed. Cas. 7093.) B., a member of firm B. & Co., was treasurer of a corporation for which B. & Co. were business agents, authorized to receive and disburse mon- eys, except subscriptions to its capital stock. B. received subscriptions and paid the money into his firm. No acquiescence of the corporation appeared. Both B. and B. & Co. were liable, and proof could be made against both estates (In re Baxter et al, 18 N. B. E. 62; Fed. Cas. 1119); also where an executor invests funds of estate in his partnership busi- ness with assent of his copartner, the parties entitled may prove their debts against the partnership although they have proved against the executor's estate. (In re Tesson et aL, 9 N. B. R 378; Fed. Cas. 13844) Effect of statute of limitations on debts. — The fact that a creditor's remedy for his debt, by suit in New York, is barred by the statute of limitations, does not prevent the proof of such debt. (In re Sheppard, 1 N. B. E. 115; 7 Amer. Law Eeg. (N. S.) 484; 1 Amer. Law T. Rep. Bankr. 49; Fed. Cas. 13755.) On the question as to whether a debt barred by the statute of limitations of Massachusetts, where bankrupt had resided for the past ten years, but not barred by the statutes of Vermont, where both parties resided when the contract was made, was provable, it was held that it was not, if objected to (In re Kingsley, 1 N. B. E. 52; 1 Lowell, 216; 1 Amer. Law Eeg. (N. S.) 423; 15 Pittsb. Leg. J. 335; Fed. Cas. 7819); and a debt barred by the statute of limitations of Maine, where bankrupt resides, cannot be proved against his estate in bank- ruptcy by a creditor resident in another state (In re Harden, 1 N. B. R 97; 1 Hask. 163; 1 Amer. Law T. Rep. Bankr. 48; 15 Pittsb. Leg. J. 343; Fed. Cas. 6048); and a debt barred by the statute of limitations of the state where the bankrupt resides cannot be proved against his estate (In re Kingsley, 1 N. B. R. 66; 1 LoweU, 316; 7 Amer. Law Reg. (N. S.) 423; 15 Pittsb. Leg. J. 235; Fed. Cas. 7819); but see contra: A debt barred by the statute of limitations in a state in which bankrupt re- sides may be proven against his estata (In re Sheppard, 1 N. B. R. 115; 7 Amer. Law Eeg. (N. S.) 484; 1 Amer. Law,T. Eep. Bankr. 49; Fed. Cas. 12753.) Where the petitioner in involuntary bankruptcy claimed to be a creditor by reason of a claim which was barred by the statute of limitations, it was held bad and that the bankrupt court was not bound by the state statute. (In re Comwell, 6 N. B. E. 305; 6 Amer. Law Eev. 365; Fed. Cas. 3350.) A debt barred by the statute of limita- tions of the state in which the proceedings are pending is not provable against the bankrupt, and cannot be reckoned in computing the number necessary to join in an involimtary petition (In re Noesen, 13 K B. B. 360 LAW OF BANKEUPTCT. [§ 63, a. 423; 6 Biss. 443; 7 ChL Leg. News, 419; 1 N. Y. Weekly Dig. 135; 3 Cent. Law J. 570; Fed. Cas. 10283); and the defease of the statute of limita- tions should be allowed whenever that defense is allowable in the state where the debtor resides. (In re Reed, 11 N. B. R. 94; 6 Biss. 350; 7 Chi Leg. News, 76; Fed. Cas. 11635.) The statute of Umitations of the state which is the bankrupt's resi- dence applies to proof of debts against his estate; and after adjudicar tion the statute continues to run, and no claim can be enforced against the estate unless an action could be maintained in the state courts. (Nicholas, Ass., v. Murray et aL, 18 N. B. R 469; Fed. Cas. 10233.) The filing of the petition by a bankrupt, and his including the claim of a creditor in the schedule, is equivalent to a new promise, so as to prevent the claim from being defeated by the statute. (In re Eldridge & Co., 12 N. B. R. 540; 3 Hughes, 350; 1 N. Y. Wkly. Dig. 343; Fed. Cas. 4381.) On a motion to expimge the proof of a debt against which the statute had run, it was held that said debt having been included in the debtor's schedules, it was provable. (In re Hertzog, 18 N. B. R. 536; Fed. Cas. 6433.) Where the assignee resisted a claim on the ground that it was barred by the statute, it was held that an acknowledgment of the debt by the debtor before the bar was sufficient (In re Reed, 11 N. B. R 94; 6 Biss. 250; 7 ChL Leg. News, 76; Fed. Cas. 11635.) The act of 1867 allows the petitioner to object to debts barred by the statute; yet such a claim, if proved and not objected to, must be allowed, and the assignee must receive it as a claim entitled to dividend (In re Frear, 1 N. B. R 201; 3 Ben. 467; 35 How. Pr. 249; 1 Amer. Law T. Rep. Bankr. 123; Fed. Cas. 5074); and a petitioner alleging a, claim barred by the statute of limitations cannot maintain a petition in involuntary bank- ruptcy for an adjudication declaring his debtor a bankrupt. (In re Corn well, 6 N. B. R. 305; 6 Amer. Law Rev. 365; Fed. Cas. 3250.) The running of the statute of limitations is arrested by filing of petition in bankruptcy (In re Maybin, 15 N. B. R 468; Fed. Cas. 9337); and the stat- ute of limitations ceases to run against the creditor at the commence- ment of proceedings in bankruptcy, and if not barred at that time his claim may be proved afterwards, though at the time it would be othei^ wise barred. (In re Eldridge & Co., 13 N. R R 540; 3 Hughes, 256; 1 N. Y. Wkly. Dig. 343; Fed. Cas. 4331.) In a case in involuntary bank- ruptcy the debtor sought to defeat petition on the ground that one- fourth in number and one-third in amount of creditors had not joined, the claim of one of such creditors being barred by the statuta It was held that such claim was not provable. (In re Noesen, 13 N. B. R 432; 6 Biss. 443; 7 ChL Leg. News, 419; 1 N. Y. Wkly. Dig. 125; 3 Cent Law J. 570; Fed. Cas. 10238.) See also sea 57, ante: How Proof Must be Given, p. 273; Claims Provable, p. 284; Claims Not Provable, p. 387. (generally — Fraud or preference, as defeating the right to proTC. — Where the assignee has recovered against a preferred creditor, he may prove his debt if he has not assisted in the fraud. (In re Black et aL, 17 § 63, a.] DEBTS WHICH MAT BE PEOVKD. 361 N. B. R. 899; Fed. Cas. 1459.) H., who had received a preference from a bankrupt, offered proof of other debts against the bankrupt which were not due at the time preference was given. It was held that the same were not affected by the preference (In re Arnold, 3 N. B. R. 61 ; Fed. Cas. 551); and a creditor, knowing that the bankrupt was insolvent, re- ceived preferences and afterwards filed his claim for the amounts due hiuL The assignee raised the question that he was not entitled to prova It was held that he could prove only a moiety of the debt. (In re Schoenenberger, 15 N. B. R. 305; Fed. Cas. 13473; sec. 5138, R. S.) A cred- itor induced to release his claim without consideration through the fraudulent representations of another credtor has a debt that will sup- port a petition in bankruptcy. (Michaels et aL v. Post, Ass., 13 N. B. R. 153; 31 WalL 398.) There is only constructive fraud where a creditor volimtarily restores a preference, and he wUl share in the estate (In re Schoenenberger, 15 N. B. R. 305; Fed. Cas. 13473); and a debt created by fraud of the bankrupt or by defalcation while acviing in a fiduciary ca- pacity was provable under the act of 1867. (In re Rundle and Jones, 3 N. B. R. 49; 1 Chi Leg. News, 30; Fed. Cas. 13138.) Contained in the sched- ule of a bankrupt was a debt for legal services in preparing the petition and schedules and advice in relation thereto. Proof was filed of the claim. The claim was held not to be within the law (In re Heirsoh- berg, 1 N. B. R. 195; 1 Amer. Law T. Rep. Bankr. 133; Fed. Cas. 6339); and no one who has received a preference shall, under the bankruptcy act, prove claim or receive dividends until he shall have surrendered to the assignee all property, money or benefit received by him. (Ecker v. McAllister, 17 N. B. R. 43; sec. 33.) See also sec. 57, ante: How Pkoof Must be Given, p. 373; By Whom Proof Must be Given, p. 374; Claims Pkovable, p. 384; Claims Not Provable, p. 287; Surrender op Pref- erences, p. 297; The Reconsideration op Allowed Claims, p. 308. On provable debts redaced to judgment after adjudication. — A judgment recovered after adjudication, in a suit to which the assignee was not a party, may be proved against the estate of a bankrupt, if the debt was a claim provable (In re Rosey, 8 N. B. R. 509; 6 Ben. 507; Fed. Cas. 12066); and where a judgment is recovered after commencement of pro- ceedings, upon a debt which existed before that time, such debt is not so merged in the judgment as to deprive the creditor of right to prove it (In re Brown, 3 N. B. R. 145; 5 Ben. 1; Fed. Cas. 1975); and a judgment recovered in an action commenced prior to, and prosecuted during, pro- ceedings in bankruptcy, is a provable debt (In re Stansfield, 16 N. B. R. 268; 4Sawy. 334; Fed. Cas. 13394); and a judgment rendered after ad- judication, although suit thereon was instituted prior thereto, is not provable against the estate, and no dividend can be declared thereon. (In re WUliams, 3 N. B. R. 79; 3 Amer. Law Rev. 374; Fed. Cas. 17705.) Action in tort. — After verdict, and before judgment, the defendant was adjudged bankrupt and moved for a continuance pending proceed- ings in bankruptcy. It was held that defendant was not entitled to 362 LAW OF BANKETTPTCfY. [§ 63, h. stay of proceedings, as the cUvitn was not provable under section 19 of the act of 1867. (Zimmer v. Schleehauf, 11 N. B. R. 313.) See also sec. 57, ante: Claims Provable, p. 284; Claims Not Pbovable, p. 387. What are debts provable. — A creditor who had not proved his claim, though it was prova'jle, sued on it. Defendant pleaded his bankruptcy and that the debt was provable and woiild be barred by discharge, and that proceedings were pending. It was held that the claim could be prosecuted to judgment. (Holland v. Martin, 18 N. B. E. 859; see. 5105, E. 8.) After proceedings in bankruptcy, government recovered against the bankrupt in a suit to which the assignee had not been made a party. It was held that as the claim was provable at the time of adjudication the judgment might be proved. (In re Rosey, 8 N. B. R. 509; 6 Ben. 507; Fed. Cas. 12066.) A petition may be filed by a creditor upon a claim which is not due if it is provable in bankruptcy. (Linn et aL v. Smith, 4 N. B. E. 12; 3 Amer. Law T. 218; 1 Amer. Law T. Rep. Bankr. 339; Fed. Cas. 8375.) Involuntary proceedings may be instituted against a debtor, although the debt is n ot due, if it is a provable debt. (In re Alexander, 4 N. B. R. 45 ; 18 Pittsb. Leg. J. 81; 3 Amer. Law T. 280; 1 Amer. Law T. Rep. Bankr. 238; Fed. Cas. 161.) By the term "debts provable under this act," Congress meant debts unconditionally provable, vidthout preliminary action, either by the court or by the assignee, being necessary. (In re Sorafford, 14 N. B. R. 184; 3 Cent. Law J. 252; Fed. Cas. 12557; In re Frost, 11 N. B. R. 69; 6 Biss. 213; 7 Chi Leg. News, 42; Fed. Cas. 5134.) Any debt which may be proved by complying with the Bankrupt Act is a provable debt (Rankin et aL v. Florida, etc. E. E. Co., 1 N. B. E. 196; 1 Amer. Law T. Eep. Bankr. 85; Fed. Cas. 11567.) See also sec. 57, ante: Claims Pbov- able, p. 384; Claims Not Peovable, p. 387; The Eeconsideeation op Allowed Claims, p. 303. h. Unliquidated claims against the bankrupt may, pursu- ant to application to the court, be liquidated in such manner as it shall direct, and may thereafter be proved and allowed against his estate. [Act of 1867. Sec. 19. . . . In all cases of contingent debts and contingent liabilities contracted by the bankrupt, and not herein otherwise provided for, the creditor may make claim therefor, and have his claim allowed, vdth the right to share in the dividends if the contingency shall happen before the order for the final dividend ; or he may at any time apply to the court to have the present value of the debt or liability ascertained and liquidated, which shall then be done in such manner as the court shall order, and he shall be allowed to prove for the amount so ascertained. ... If any bank- rupt shall be liable for unliquidated damages arising out of § 64, a.] DEBTS WHICH HATE PEIOEITT. 363 any contract or promise, or on account of any goods or chat- tels wrongfully taken, converted, or withheld, the court may cause such damages to be assessed in such mode as it may deem best, and the sum so assessed may be proved against the estate. No debts other than those above specified shall be proved or allowed against the estate.] When unliquidated damages provable.— Unliquidated damages grow- ing out of contract when assessed are provable debts, and may be set up to show that no debt is due to petitioner entitling him to have defend- ant declared bankrupt. (In re Osage Valley & S. Kan. R E. Co., 9 N. B. E. 381; 1 Cent. Law J. 33; Fed. Cas. 10593.) A debt which is contested in a state court may be allowed to proceed to judgment for the purpose of ascertaining the amount due, which amount may be proved in bank- ruptcy proceedings, but execution shall be stayed. (In re Rundle and Jones, 2 N. B. R 49; 1 Chi. Leg. News, 30; Fed. Cas. 13138.) Plaintiff sued for breach of covenant of warranty. Defendant pleaded in bar a discharge. It was held that a claim for breach of warranty is such a claim as should be proved in a bankrupt court; and therefore the dis- charge was a bar to such a claim, it having accrued prior to proceedings in bankrupt court. (Williams v. Harkins, 15 N. B. R. 34.) If a decision is not rendered until after final dividend, a bond to return property, if the decision requires it, is not a provable debt. (United States v. Rob Roy and Cargo, 18 N. B. R 335; 1 Woods, 43; Fed. Cas. 16179.) No claims can be provable that were not liquidated at the time of the adjudication. (United States v. Rob Roy and Cargo, 13 N. B. R 335; 1 Woods, 43; Fed. Cas. 16179.) A right of action for misrepresentation of a firm's condition, afterward bankrupt, is not provable as a debt. (In re Schuchardt and WeUs, 15 N. B. R 161; 8 Ben. 585; Fed. Cas. 12483.) Where a bankrupt, prior to bankruptcy, sells land under a covenant for title, when the wife of a former owner has a dower not relinquished, the claim for breach of covenant, in the event of the wife surviving and asserting her rights, is not such an "unliquidated" claim as may be proved in bankruptcy, and in an action a discharge is a complete defense. (Riggin v. Maguire, 8 N. B. R 484; 15 Wall. 549.) A claim for rent, falling due after proceedings and after surrender of the premises by the assignee, caimot be proven as a debt against the bankrupt estate. (Bailey, Ass., v. Loeb & Bro., 11 N. B. R 271; 3 Woods, 578; 2 Cent. Law J. 42; Fed. Cas. 739.) See also sec. 57, ante: The Proof of Secubed Claims, p. 381 ; Claims Held to BE Unsecubed, p. 282; Claims Peovable, p. 284; Claims Not Provable, p. 287; The Allowance ob Rejection of Claims, p. 289; Debts Due THE United States ob a State, p. 302. Sec. 64. Debts which have priority. — a. The court shall order the trustee to pay all taxes legally due and owing by the bankrupt to the United States, State, county, district. 364: LAW OF BANKEUPTCT. [§ 64, a. or municipality in advance of the payment of dividends to creditors, and upon filing the receipts of the proper public ofiicers for such payment he shall be credited with the amount thereof, and in case any question arises as to the amount or legality of any such tax the same shall be heard and determined by the court. See subdivision "6" of this section for analogous provision In the act of 1867. By this section the United States as well as the state, county or mu- nicipality are entitled to priority of payment of aU taxes legally due and owing by the bankrupt, and a discharge is no release therefrom. (Sec. 17, a.) While debts owing to the United States, state, county or munici- pality as a penalty or forfeiture are only allowable for the amount of the pecuniary loss sustained by the act, transaction or proceedings out of which the penalty or forfeiture arose (sec. 57, /), neither of the foregoing sections, nor anything else contained in this or any other act, appears to operate as a repeal of Revised Statutes, section 3466, which was enacted March 3, 1794, and which is as follows: "Whenever any person indebted to the United States is insolvent, or whenever the estate of any deceased debtor, in the hands of the executors or administrators, is insufficient to pay all the debts due from the deceased, the debts due to the United States shall be first satisfied; the priority hereby established shall ex- tend as well to cases in which a debtor, not having sufficient property to pay all his debts, makes a voluntary assignment thereof, or in which the estate and effects of an absconding, concealed or absent debtor are attached by process of law, as to cases in which an act of bankruptcy is committed." Taxes due the United States.— The United States was entitled to priority without regard to the form of the indebtedness, under the act of 1867, and it was in nowise bound by that act, but -svas entitled to priority, although it did not prove its claim. It was not required to ex- haust the collaterals held by it before claiming priority of payment. (Lewis, Trustee, v. United States, 14 N. B. R 64; 92 U. S. 618.) An internal revenue bond upon which individual members of a co- partnership are sureties is not entitled to priority out of the partnership assets of the estate of the copartnership in bankruptcy. (In re Webb et al., 3 N. B. R 183; 3 Amer. Law T. Rep. Bankr. 87; 9 Int. Rev. Rea 169; 16 Pittsb. Leg. J. 43; Fed. Cas. 17318.) A state need not prove its claim in bankruptcy to recover taxes due it on property of the bankrupt, and the bankrupt law cannot compel proof of such claim, nor sell the prop- erty so subject free from the tax lien. (Stokes v. State of Georgia, 9 N. B. R. 191. See also In re Brand, 3 N. B. R. 85; 3 Hughes, 334; 3 Amer. Law T. Rep. Bankr. 66; Fed. Cas. 1809.) See also PWOEITY under Fed- MiuXi OK State Laws, sec. 64 § 64, J.] DEBTS WHICH HATE PBIOEITT. 365 5. The debts to have priority, except as herein provided, and to be paid in full out of bankrupt estates, and the order of payment shall be (1) the actual and necessary cost of pre- serving the estate subsequent to filing the petition; (2) the filing fees paid by creditors in involuntary cases; (3) the cost of administration, including the fees and mileage payable to witnesses as now or hereafter provided by the laws of the United States, and one reasonable attorney's fee, for the pro- fessional services actually rendered, irrespective of the num^- ber of attorneys employed, to the petitioning creditors in involuntary cases, to the bankrupt in involuntary cases while performing the duties herein prescribed, and to the bank- rupt in voluntary cases, as the court may allow; (4) wages due to workmen, clerks, or servants which have been earned within three months before the date of the commencement of proceedings, not to exceed three hundred dollars to each claimant ; and (5) debts owing to any person who by the laws of the States or the United States is entitled to priority. [Act of 1867. Sec. 27. . . . Except that wages due from him to any operative, or clerk, or house servant, to an amoimt not exceeding fifty doUars, for labor performed within six months next preceding the adjudication of bank- ruptcy, shall be entitled to priority, and shall be first paid in full. Sec. 28. . . . In the order for a dividend, under this section, the following claims shall be entitled to priority or preference, and to be first paid in full in the following order: First. The fees, costs, and expenses of suits, and the sev- eral proceedings in bankruptcy under this act, and for the custody of property, as herein provided. Second. AU debts due to the United States, and all taxes and assessments under tJie laws thereof. Third. AU debts due to the State ia which the proceed- ings in bankruptcy are pending, and all taxes and assess- ments made under the laws of such State. Fourth. Wages due to any operative, clerk, or house serv- ant, to an amount not exceeding fifty dollars, for labor per- formed within six months next preceding the first publication of the notice of proceedings in bankruptcy. Fifth. All debts due to any persons who, by the laws of 366 LAW OF BANKEUPTOT. [§ 64, 5. the United States, are or may be entitled to a priority or preference, in like manner as if this act had not been passed : AUowys provided That nothing contained in this act shall ' interfere with the assessment and collection of taxes by the authority of the United States or any State.] Cost of preserring estate — Rent.— The assignee of the bankrupt oo cupied the leased premises after adjudication. It was held that rent due for such time was a preferred claim (In re Butler, 6 N. B. E. 501; 19 Pittsb. Leg. J. 146; Fed. Gas. 3236. See also In re Webb & Co., 6 N. B. R 302; Fed. Cas. 17315); and also from the time of filing the petition, and from the time of taking possession by court ofEcera (In re Rose Lyon & Co., 3 N. B. E. 63; 1 Bait. L T. 625; Fed. Cas. 13043; In re Hufnagel, 12 N. B. R. 554; Fed. Cas. 6837; In re Walton et aL, 1 N. B. E. 154; Fed. Caa 17131; In re Merrifield, 3 N. B. R 1; Fed. Cas. 9465; In re Hamburger & Frankel, 12 N. B. R. 277 ; 1 N. Y. Wkly. Dig. 53 ; Fed. Cas. 5975 ; In re Ives etaL, -8N. B. R 28; Fed. Cas. 7116; Buckner v. JeweU et aL, 14N. B. R 386.) When a landlord makes a demand upon the assignee, before the removal of the goods, for an amount not exceeding a year's rent, it should be ad- mitted as entitled to priority of payment. (In re Appold, 1 N. B. R 178; 7 Amer. Law Reg. (N. S.) 624 6 Phila. 469; 35 Leg. Int. 180; 1 Amer. LawT. Bep. Bankr. 83; Fed. Cas. 499.) A claim fol rent which accrued after the filing of the petition in bankruptcy, under a lease executed prior to such filing, is not provable in bankruptcy (In re May & Merwin, 9 N. B. R 419; 7 Ben. 288; Fed. Cas. 9325); and where, a debtor being adjudged bankrupt, the marshal took possession of the goods and premises for a period of two m^onths, after which the landlord appUod for an allowance for rent for such period, the court refused to allow the rent. (Jn. re McGrath & Hunt, 5 N. B. R. 254; 5 Ben. 183; Fed. Cas. 8808.) The pre- vention of injury to the premises by not removing machinery is not to be considered in determining the compensation to the landlord for the use of the premises by the assignea (In re Breok & Schermerhom, 12 N. B. E. 215; 8 Ben. 93; Fed. Cas. 1822.) See also. Rent Undeb State Laws, post, p. 368. Court fees paid by creditors. — Petitioning creditors who have pro- cured the involuntary adjudication of a bankrupt, and an injunction staying proceedings against him in actions in state courts in which war- rants have been levied upon his property, are entitled to be reimbursed their expenses from the assets of the bankrupt's estate (In re Schwan, 3 N. B. R 155; 3 Ben. 281 ; 3 Bait Law Trans. No. 9; 16 Pittsb. Leg. J. 123; Fed. Cas. 13498) ; but notaries taking proofs of debt in bankruptcy pro- ceedings are not entitled to priority of payment of their fees. (In re Nebe, 11 N. B. R. 389; Fed. Cas. 10073.) Costs of administration. — Costs and expenses in bankruptcy proceed- ings are payable out of the fund derived from the sale of the bankrupt's § 64, 6.] DEBTS WHICH HAVE PEIOEITT. 367 estate, and have priority or preference in the order for a dividend (In ra Whitehead, 3 N. B. E. 180; 1 Chi Leg. News, 336; Fed. Cas. 17563; In re Lane, 3 N. B. R. 100; 3 Ben. 98; 1 ChL Leg. News, 133; Fed. Cas. 8043); and the petitioning creditor, where the adjudication has been resisted, is entitled to "the same costs that are allowed by law to a party recovering in a suit in equity." (In re Sheehan, 8 N. B. R 353; Fed. Cas. 13738.) Attorneys' fees. — The claim of a common-law assignee for services as assignee and for attorneys' fees does not have priority (In re Lains, 16 N. B. R. 168; 1 N. W. Rep. (O. S.) 116; 6 Amer. Law Reo. 366; 34 Pittsb. Leg. J. 307; Fed. Cas. 7989); nor are attorneys entitled to payment as a preferred claim, out of the fund in the hands of an assignee, of fees for opposing a petition of involuntary bankruptcy. (In re New York Mail Steamship Co., 3 N. B. R 170; Fed. Cas. 10311.) An attorney's fee for preparing the petition and schedules in bankruptcy is not a preferred claim. (In re Gies, 18 N. B. R. 179; 7 Chi Leg. News, 379; 1 N. Y. Wkly. Dig. 101; Fed. Cas. 5407; In re Heirschberg, 1 N. B. R. 195; 1 Amer. Law T. Rep. Bankr. 133; Fed. Cas. 6339; In re Richard Handell, 15 N. B. R. 73; Fed. Cas. 6017.) Wages due workmen, clerks, etc. — Assignee of an estate, against which there were debts due workmen more than enough to absorb the funds, engaged in litigation concerning the rights of the general cred- itors. It was held that the workmen should be first paid, and charges connected with litigation disallowed. (In re Sawyer, 16 N. B. R. 460; 3 LoweU, 551, 15 Alb. Law J. 880; Fed. Cas. 13396.) And debts for wages maybe paid as soon as the assignee receives enough money for that pur- pose, if the general creditors agree. (In re Sawyer, 16 N. B. R. 460; 3 LoweU, 551; 15 Alb. Law J. 380; Fed. Cas. 13896; Ex parte Rockett, 15 N. B. R. 95; 2 Lowell, 588; Fed. Cas. 11977.) Upon proof of claims made by the father of a minor son, for the labor of such son, in the employment of the bankrupt within the six months next preceding the first publica- tion of the notice of proceedings in bankruptcy, the coiirt held that the father is entitled to be preferred (In re Harthorn, 4 N. B. R. 87; Fed. Cas. 6168) ; and an assignee for value of a workman's claim is entitled to prove the same in bankruptcy and receive the same preference which the assignor could have claimed. (In re Brown, 3 N. B. R. 177; 4 Ben. 143; Fed. Cas. 1974) Where an employee is thrown out of employment by the bankruptcy of his employer, and has been paid for the time he actually worked, he is not entitled to priority in payment for the time during which he was unable to find other employment. (In re Pevear et aL, 17 N. B. R. 461; Fed. Cas. 11053.) See Prioeity Under Federal, Laws, p. 871. If liens have been acquired bona fide and are recognized by the state law, they have the same priorities as though no proceedings in bank- ruptcy had taken place. (Reed v. Bullington, 11 N. B. R 408.) Where bankrupt employed convicts under contract with a state, the court held 368 LAW OF BANKEUPTCT. [§ 64, h. that claim of state under such contract was entitled to preference. (In re Southwestern Car Co., 19 N. B. B. 404; Fed. Cas. 13193.) Where a voluntary assignment was set aside, only for the reason that proceedings in bankruptcy superseded it, the voluntary assignee is en- titled to reasonable expenses and compensation for his services, where to allow it will not subject the estate to a double charge (In re Kurth, 17 N. B. E. 573; Fed. Cas. 7948); and where the plaintiff elected to sue the assignee for damages, he waived any claim he may have had to money in the assignee's hands, and is not entitled to priority over ex- penses. (In re Oberhoffer, 17 N. B. R. 546; 9 Ben, 485; Fed. Caa 10396.) The preferred creditors can have a priority in payment only out of as- sets the debtor has, which would go to his assignee in bankruptcy. (In re Chamberlin, 17 N. B. E. 50; 9 Ben, 149; Fed, Caa 2580.) Kent under state laws. — The Bankrupt Act makes no preference in favor of a landlord, but, in Its administration, it is the court's duty to en- force any lien he may have by virtue of the state law (In re McConnell, 9 N. B. R. 887; 10 Phila. 287; 31 Leg. Int. 61; 21 Pittsb. Leg. J. 107; Fed. Cas. 8712); but not where a distress warrant had not been issued (Austin V. O'Reilly, Asa, etc., 12 N. B. E. 329; 2 Woods, 670; 2 Cent. Law J. 455; 1 N. Y. Wkly. Dig. 86; Fed. Caa 665; In re Butler, 6 N. B. R 501; 19 Pittsb. Leg. J. 146; 2 Pittsb. Rep. 369; Fed, Caa 2236; Austin v. O'Reilly, 8 N. B. R 129; Fed. Cas. 664); when sufficient goods remain on the prem- ises occupied by the bankrupt to satisfy the rent on distress, the assignee should pay the amount due up to the time of surrender to the landlord. (Longstreth v. Pennook et aL, 7 N. B. R 449; 9 Phila. 394; 30 Leg. Int 39; 20 Pittsb. Leg. J. 107; Fed. Cas. 8488.) Kent before adjudication. — At the time of the adjudication the bankrupts were indebted to the landlord for a year's rent, which was demanded of the assignee as a prior claim and was allowed. (Austin v. O'Reilly, Ass., etc., 12 N. B. R 829; 2 Woods, 670; 3 Cent. Law J. 455; 1 N. Y. Wkly. Dig. 86; Fed. Caa 665; In re Hoagland, 18 N. B. R 530; Fed. Caa 6545.) Goods of a bankrupt merchant had been left in the store rented by him some months before the assignee took possession. Assignee inunediately removed them. The court held that the owner of the store could claim what was a reasonable price for storage, but not the value of the store as a salesroom, (In re The Lucius Hart Mfg. Co., 17 N. B. R 459; Fed. Caa 8593.) An assignee who knows nothing of a lease effected by the bankrupt is not boimd by its covenanta There must be some unequivocal act of acceptance of said lease before the as- signee can be held liabla (In re Washburn, 11 N. B. R 66; Fed. Caa 17211.) Upon writ of error, where rent was claimed for a period terminating when the assignee took possession, it was held that it must be paid first out of the proceeds of the sale. (Longstreth v. Pennock et aL, 12 N. B. R. 95; 20 Wall 575.) A judgment was obtained by a creditor before the § 64, 5.] DEBTS WHICH HAVE PEIOEITT. 369 beginning of proceedings, and execution levied after the defendant was adjudged bankrupt. The levy was on personal property located on leased premises, and the debtor's landlord notified the sheriff that he claimed the rent due him out of the proceeds of the sale. The court held that the landlord was entitled to his lien for rent. (Barnes' Ap- peal, 13 N. B. E. 543; 91 U. S. 521. But see In re Joslyn, 3 N. B. R. 118; 3 Biss. 235; 2 Chi Leg. News, 137; Fed. Gas. 7550.) See also Cost of Preskeving Estate, ante, p. 366. Priority of judgments. — A judgment creditor may enforce his claim against property sold by the bankrupt before the commencement of the proceedings in bankruptcy (Phillips v. Bowdoin, 14 N. B. R. 43) ; and it has been held, under the act of 1867, that a judgment rendered before the adjudication in bankruptcy has priority in payment out of the bank- rupt's estate, on which it was a lien, over the fees and costs of the bank- ruptcy proceedings. (In re Hansbright, 2 N. B. R. 157; 3 Amer. Law T. Rep. Bankr. 61; 1 Chi. Leg. News, 201; Fed. Cas. 5978.) A proper levy of an execution consummates the lien of the execution creditors, and they are entitled to be paid their claim out of the proceeds arising from the sale of the goods afterwards taken by the marshal in bankruptcy. (In re Hughes et aL, 11 N. B. R. 453; 7 Chi. Leg. News, 162; Fed. Cas. 6843.) S. made an assignment for benefit of creditors. On the following day R. obtained judgment against S., upon which execution was issued and levied upon goods in possession of assignee. Subsequently S. was adjudged bankrupt, and assignee in bankruptcy under written agree- ment between himself and R took possession of property levied on without prejudice to R.'s rights. The court held that R acquired no priority of right by the execution levy. (Reed v. Mclntyre, Ass., etc., 19 N. B. R. 45; 98 U. S. 507.) Priority of attachment. — A judgment creditor who has made a levy on property of a bankrupt attached for its full value, subject to such at- tachment, is not entitled to priority as against the assignee. (In re Steele et aL, 16 N. B. R 105; 7 Biss. 504; Fed. Cas. 13345.) Sheriff's costs in attachment. — A sheriff is not entitled to fees and expenses for the attachment, levy and custody of property of a debtor which were attached at the suit of creditors before his adjudication in bankruptcy, but upon which judgment was not rendered until subse- quently (In re Williams, 2 N. B. R. 79; 8 Amer. Law Rev. 374; 1 Amer. LawT. Rep. Bankr. 107, 113; Fed. Cas. 17705), unless by the state law such costs are a hen against the property attached. (Gardner v. Cook, Ass., 7 N. B. R 346; Fed. Cas. 5326.) A bankrupt's property was attached within four months prior to bankruptcy. The sheriff turned the prop- erty over to the marshal with the understanding that whatever the sheriff's rights were as to costs should remain the same as if the goods were in his possession, and evidence showed that the sheriff had pre- served the goods. The court held that his claim was provable against 24 370 LAW OF BiNKEUPTCrr. [§ 64, 5, the estate, but on the ground only of having preserved the goods. (In re Jenks, 15 N. B. R 301; Fed. Cas. 7276; Ex parte Holmes, 14 N. B. E. 493; Fed. Cas. 6631.) Priority of mortgage. — A landlord petitioned to have his rent paid in full out of the proceeds of certain property of the bankrupt, on which he claimed a lien by the terms of his lease, which he alleged operated as a mortgage. The court held that he had no Uen, the lease not having been recorded. (In re Dyke & Marr, 9 N.B.R. 430; Fed.Cas.4227.) And where a creditor claims a lien by virtue of a judgment recovered on November 5, 1866, but which was not recorded in the clerk's office until October 16, 1867, and the creditor holds a mortgage executed by bank- rupt, and recorded April 7, 1867, the court held the mortgage lien has priority over the judgment. (In re Lacy, 4 N. B. R. 15; 3 Amer. Law T. 215; 1 Amer. Law T. Rep. Bankr. 226; Fed. Cas. 7970.) And a mortgagee cannot claim that a deficiency after sale on his mortgage stiall be paid in preference to the claims of other creditors. (In re Snedaker, 4 N. B. R. 43.) A mortgage given by a bankrupt before commencement of bank- ruptcy proceedings to secure an existing debt and future advances of goods is valid. (Sohulze, Ass., v. Bolting, 17 N. B. R 167; 8 Biss. 174; Fed. Cas. 12489.) Where there are two mortgages, and the proceeds of a sale in bankruptcy are sufficient to pay off the first mortgage, the senior mortgage is entitled to be paid in full (In re Bartenbach, 11 N. B. E. 61 ; 3 Amer. Law T. Rep. (N. S.) 33 ; Fed. Cas. 1068.) And the claim of the wife's separate estate is prior to that of judgment creditors, where the separate estate has been used to improve property of the bankrupt, with an agreement that the property is to be deeded to the wife, and the claim should be paid out of the proceeds of such property. (In re Camp- bell, 17 N. B. R. 4; 3 Hughes, 276; Fed. Cas. 2348.) A surety on a note who takes an assignment of a bond for title to land to indemnify him- self has priority over judgment creditors of the assignor. (In re Rey- nolds, 16 N. B. R. 158; Fed. Cas. 11724.) Security — Banks, — Where a savings bank claimed a preference, by way of lien, on the assets of an insolvent bank created under a statute which provides " That upon its becoming insolvent, after paying its cir- culation, the assets should be first applied to paying deposits made with it by savings banks," the court held that such provision was a mere rule of distribution, creating no lien; that such preferences are not protected by the Bankrupt Act. (In re Stuyvesant Bank, 9 N. B. R. 318; 1 Cent. Law J. 83; Fed. Cas. 13584.) A check given by A, who becomes bank- rupt before presentation, entitles the payee to so much of the money of the bankrupt as the check calls for (Fourth Nat. Bank of Chicago v. Bank, 10 N. B. R 44); but one bought of a banker, afterwards bankrupt, a check on his bank. The check was not presented for payment imtil after banlcruptcy of the drawer, when payment was refused. The court held that the funds in the bank passed to the assignee of the bankrupt. § 64, &.] DEBTS WHICH HATE PEIOEITT. 371 and payee was not entitled to priority of payment (In re Smith, 15 N. B. E. 459; 2 Cin. Law BuL 119; Fed. Oas. 12990.) The obligation incurred by a banker, in the ordinary course of business with his customers, Is not fiduciary in its nature, but the liability only of an ordinary debtor, and his assignee will not be required to pay, out of funds belonging to the bank, the amount of a note, on the ground that it had been placed in the bank for collection, the customer's account having been overdrawn at the time (In re Bank of Madison, 9 N. B. R. 184; 5 Biss. 515; Fed. Gas. 890); and a depositor whose special deposit has been appropriated by the depositee, a bankrupt, is not entitled to have the debt paid in full, but can only share 'gvo rata with other creditors. (In re King, 9 N. B. E. 140.) Where, prior to bankruptcy, the holder of a note deposits it with an attorney and subsequently draws orders requesting him to pay divers sums to the payees out of the proceeds of the note, the holders of such orders are entitled to payment out of such proceeds in preference to the assignee (In re Smith, 16 N. B. E. 399; 10 ChL Leg. News, 86; 5 N. Y. Wkly. Dig. 333; Fed. Cas. 12992); and if the bankrupts carry on a bro- kerage business, for which they keep a separate account, a party whose bonds were sold is entitled to payment in full, if the amount in the bank is more than sufficient to pay claims against the brokerage department. (Voight V. Lewis, Trustee, 14 N. B. E. 543; 11 Phila. 511; 38 Leg. Int 403; 9 Chi Leg. News, 65; 3 N. Y. "Wkly. Dig. 431; 34 Pittsb. Leg. J. 54; Fed. Cas. 16989.) A consignor, being a creditor of a bankrupt, filed a petition seeking the establishment of a trust fund upon the ground that certain of the property sold by thei assignee had been consigned to the bankrupt. The petition was dismissed upon the ground that the claim must be shared with the other creditors. (In re Coan & Ten Broeke Carriage Mfg. Co., 13 N. B. E. 203; 6 Biss. 315; 7 ChL Leg. News, 260; Fed. Cas. 3915.) AU valid liens which exist on the property of a bankrupt when the proceedings in bankruptcy are commenced are preserved and en- forced and allowed to be paid out of the proceeds of the property on which they are liens. (In re Grinnell & Co., 9 N. B. E. 85; 7 Ben. 42; 21 Pittsb. Leg. J. 82; Fed. Cas. 5830.) A creditor fully secured may file a petition in bankruptcy without expressly waiving his preference therein, but the better practice is to do so. (In re StanseU, 6 N. B. E. 183; Fed. Cas. 18393.) Under federal laws. — Liens set up against the proceeds of the sale of a vessel owned by a bankrupt shall be allowed in the order of dates, except maritime liens, which have been held to be entitled to priority. (In re Scott, 3 N. B. E. 181; 18 Pittsb. Leg. J. 53; 1 Abb. (U. S.) 336; 13 Int. Eev. Eeo. 139; 3 Chi Leg. News, 398; Fed. Cas. 13517.) The United States is not obliged to exhaust its securities for a claim before enforcing its rights to priority. (United States v. Lewis et ai, 13 N. B. R 33; 3 Wkly. Notes Cas. 31; 23 Int. Eev. Eec. 39; 33 Leg. Int. 371; 33 Pittsb. Leg. J. 34; Fed. Cas. 15595.) The preference, after that 8T2 LAW OF BAUKETJPTOT. [§ 64, 0. of the United States, of the state in which proceedings are pending, ex- ists because Congress so enacts; and if Congress had not so enacted, or if it should afterwards enact otherwise, the preference would ceasa (Six Penny Savings Bank et aL v. Estate of the Stuyvesant Bank, 10 N. B. R 399; Fed. Cas. 13919.) Under internal revenue laws. — A claim of the United States against bankrupts to recover the value of goods imported and entered contrary to law is a provable debt against the estate. (Barnes, Ass., v. United States, 12 N. B. E. 536; 21 Int. Rev. Eeo. 212; 1 N. T. Wkly. Dig. 177; Fed. Cas. 1023; In re Rosey, 8 N. B. R. 509; 6 Ben. 507; Fed. Cas. 13066.) And if a party purchases an inported article duty free, and is compelled to pay the duty in order to get possession of the article, he is entitled to be subrogated to the priority of the United States. (In re Kirkland, Chase & Co., 14 N. B. R 139; 2 Hughes, 308; Fed. Cas. 7843.) c. In the event of the confirmation of a composition being set aside, or a discharge revoked, the property acquired by the bankrupt in addition to his estate at the time the com- position was confirmed or the adjudication was made shall be applied to the payment in full of the claims of creditors for property sold to him on credit, in good faith, while such composition or discharge was in force, and the residue, if any, shall be applied to the payment of the debts which were owing at the time of the adjudication. Two classes of creditors arise where a confirmation of a composition is set aside or a discharge revoked, i. e., those whose claims accrued prior and those subsequent to the confirmation or discharge. The lat- ter class, acting in good faith on the strength of the confirmation or discharge, give new credit to the debtor, and the purpose of this provis- ion is to permit the application of the subsequently-acquired property, together with the estate at the time the composition was confirmed or the adjudication was made, to the payment in full of such claims to the exclusion of those antedating such confirmation or discharge. The residue of the estate, if any, after the payment of such claims, should be applied to the payment of the debts which accrued prior to the ad- judication. The purpose of this provision is self-evident. It is only by placing this sanctity upon the adjudication that it will cause full faith and credit to be given it. It permits the transaction of business with persons who have been discharged or who have entered into a compo- sition with creditors, without fear as to the title they may convey, and without fear of loss. A composition may be set aside or a discharge revoked on the grovmd of fraud. (Sees. 13, 15.) § 65, a.} DIVIDENDS. 373 Sec. 65. Declaration and payment of dividends. — a. Divi- dends of an equal per centum shall be declared and paid on aU allowed claims, except such as have priority or are secured. [Act of 1867. Seo. 27. . . . That all creditors whose debts are duly proved and allowed shall be entitled to share in the bankrupt's property and estate pro rata, without any priority or preference whatever, except that wages due from nim to any operative, or clerk, or house servant, to an amount not exceeding fifty dollars, for labor performed within six months next preceding the adjudication of bankruptcy, shall be entitled to priority, and shall be first paid in full: Pro- vided, That any debt proved by any person liable, as bail, surety, guarantor, or otherwise, for the bankrupt, shall not be paid to the person so proving the same until satisfactory evidence shall be produced of the payment of such debt by such person so liable, and the share to which such debt would be entitled may be paid into court, or otherwise held for the benefit of the party entitled thereto, as the court may direct.] Referees are required to declare dividends and prepare and deliver to the trustees dividend sheets showing the dividends prepared and to ■whom payable (sec. 39 — 1), while the trustee must pay such dividends within ten days after having been declared. (Sec. 47 — 9.) The debts entitled to priority of payment are set forth under section 64, and liens, etc., given in good faith, under section 67. Whenever a claim shall have been reconsidered and rejected, in whole or in part, upon which a dividend has been paid, the trustee may recover from the creditor the amount of the dividend received upon the claim, if rejected in whole, or the proportional part thereof, if rejected only in part. (Sec. 57, 1.) Payment of dividends. — Perfect equality among creditors is the fun- damental principle upon which the Bankrupt Act proceeds; anything that defeats that is a fraud upon the law. (In re Palmer, 14 N. B. E. 437 ; 2 Hughes, 177; Fed. Cas. 10678.) Upon making proof, aU who had valid subsisting claims at the time the bankrupt proceedings commenced shall be permitted to participate in the fund so long as there is anything to distributa (In re Maybin, 15 N. B. R. 468; Fed. Cas. 9337.) The holder of a note given by a firm and also by an individual member of the firm is entitled to receive dividends from the estates of both. (Emery et aL v. Canal National Bank, 7 N. B. R 217; 3 Cliff. 507; 6 West. Jur. 515; 5 Amer. Law T. Rep. (U. S. Ct&) 419; Fed. Caa 4446.) On objections by assignee to a foreign creditor claiming dividend on his debt without regard to the amount collected by a judgment and levy had against the bankrupt subsequent to the adjudication, held, that he must account to 374: LAW OF BANKEHPTOT. [§ 65, a. assignee for such amount, and could only have dividend on the original debt. (In re Bugbee, 9 N. B. R 358; Fed. Cas. 2115.) The trustee of a bankrupt corporation, vrho as creditor has proved his debt against said corporation, cannot be deprived of his right to share in the dividends merely because he has rendered himself individually liable for the debts of said corporation. (Bristol, Ass., v. Sanford, 13 N. B. R 78; 12 Blatchf. 341 ; Fed. Cas. 1893.) A creditor held certain notes indorsed by the bank- rupt, upon which payments vrere made by the makers after the creditors had proved the notes against the estate of the bankrupt. Held, that such payments must be deducted from the sum on which a dividend could be demanded. (In re Weeks, 13 N. B. R 263; 8 Ben. 265; Fed. Cas. 17349.) A debt was proved against the estate of the bankrupts on a note made by them and indorsed. After proof was made, the indorsers paid a portion of the amount due and were released by the holder from further habUity. Held, that the creditor should receive dividends on the whole amount, holding any excess of dividends in trust for the surety. (In re Ellerhorst & Co., 5 N. B. R 144; 6 Amer. Law Rev. 162; Fed. Cas. 4381.) Dividends not allowed. — If a creditor of a bankrupt include in his claim items which are valid, and also items which he knows to be ille- gal, supporting his claim for the entire amount by a false oath, he is not entitled to any dividends whatever on any part of his claim. (Mar- rett, Ass., v. Atterbury, 11 N. B. R 235; 3 DiU. 444; 2 Cent Law J. 11; Fed. Cas. 9103.) A firm filed a petition with a register, setting up that they had performed certain services for the bankrupt, for which serv- ices they held a note past due, and prayed that the assignee be directed to pay them out of the funds for dividend. They had not presented the claim either on or prior to the day appointed for the declaration of the dividend, and the court held that the fund could not be re-opened to pay such claim. (In re Smith, 15 N. B. R 97; 1 Tex. Law J. 43; Fed. Cas. 13989.) Payment saspended. — The assignee can withhold payment of divi- dend to creditor declared upon the net proceeds of firm property until recovery or final determination of suit brought by assignee against said creditor to recover amount due a member of said firm. (Atkinson v. KeUogg,'10 N. B. R 535; 7 Chi Leg. News, 9; Fed. Cas. 613.) A judgment from which an appeal is taken on writ of error before commencement of proceedings in bankruptcy is a provable debt; but no dividends will be paid to the judgment creditor until judgment on the writ of error. (In re Sheehan, 8 N. B. R 345; Fed. Cas. 13737.) The assignee may with- hold payment of a dividend on a particular claim where its declaration was unauthorized. (In re Herriok et aL, 13 N. B. R 313; Fed. Cas. 6420.) Where a dividend was ordered on a claim for professional services ren- dered the bankrupt, the court restrained the register and assignee from m aking or paying such dividend until further order, to enable those in- § 65j J.] DIVIDENDS. 375 terested to apply to vacate the order for dividend. (In re New York Mail Steamship Co., 3 N. B. R 73; Fed. Caa 10313.) Interest. — Interest on claims proved will be allowed from day of filing of petition when funds in hands of assignee are sufficient. (In re Hagan, 10 N. B. R. 383; 6 Ben. 407; Fed. Cas. 5898.) Proof of claim by C. was objected to by trustee, but upon re-examination was sustained. On mo- tion for interest on dividend, held, that creditor was entitled to interest at rate allowed by laws of state, (In re Kitzinger et aL, 19 N. B. E. 338; Fed. Cas. 7863.) If a surplus remain after the payment of aU claims at the amount computed to be due on the date of adjudication, creditors may be allowed interest from the date of adjudication to the time of payment of dividends. (In re Bank of North Carolina, 13 N. B. R. 130; 1 N. Y. Weekly Dig. 127; Fed. Cas. 895; In re Town et aL, 8 N. B. R 40; Fed. Cas. 14113.) Miscellaneous. — The distribution of the assets of a bankrupt cannot be interfered with by the process of a state court. (Tn re Bridgeman, 3 N. B. R. 84) Any money remaining in the hands of the assignee after the payment in full of creditors who have proven their claims must be distributed among such creditors as are named in the bankrupt's list, although they have failed to make proof of their claims. (In re James, 2 N. B. R. 78; 1 Gaz. 78; Fed. Cas. 7175.) When but a single creditor proves his claim, he is entitled to be paid in full as far as the assets are sufficient for that purpose, and if there be any residue the same must be applied to the payment of such creditors as the bankrupt has ac- knowledged to hold valid claims. (In re Haynes, 2 N. B. R 78; 1 Gaz. 78; Fed. Cas. 6269.) If an offer of composition is accepted, the payment is for the satisfaction of the debts, and not as a dividend from the estate in bankruptcy. (In re Lissberger, 18 N. B. R 230; Fed. Cas. 8384.) Ap- peal having been taken from order allowing creditor interest upon unpaid dividends, creditor procured order directing trustee to deposit dividend, interest and costs. Held, that such deposit was not a setting aside of money as constituting creditor's dividend. (In re Kitzinger et aL, 19 N. B. R 307; Fed. Cas. 7863.) A debtor gave a creditor his ac- commodation notes for an amount greater than the debt, and the notes were discounted and afterwards proved against the debtor's estate in bankruptcy. Held, that an assignee could set off against the dividend due the creditor the dividend paid on the notes and recover from the creditor the balance of the dividend paid, and that in case of a compo- sition the same right obtained. (In re PurceU, 18 N. B. R 447; Fed. Cas. 11470.) h. The first dividend shall be declared within thirty days after the adjudication, if the money of the estate in excess of the amount necessary to pay the debts which have pri- ority and such claims as have not been, but probably will be, 876 LAW or BANKEUPTOT. [§ 65, o-^. allowed equals five per centum or more of such allowed claims. Dividends subsequent to the first shall be declared upon like terms as the first and as often as the amount shall equal ten per centum or more and upon closing the estate. Dividends may be declared of tener and in smaller propor- tions if the judge shall so order. [Act of 1867. Sec. 28. , . . The court shall there- upon [on the discharge of the assignee] order a dividend of the estate and effects, or of such part thereof as it sees fit, among such of the creditors as have proved their claims, in proportion to the respective amount of their said debts.] c. The rights of creditors who have received dividends, or in whose favor final dividends have been declared, shaU not be affected by the proof and allowance of claims subsequent to the date of such payment or declarations of dividends; but the creditors proving and securing the allowance of such claims shall be paid dividends equal in amount to those al- ready received by the other creditors if the estate equals so much before such other creditors are paid any further divi- dends. [Act of 1867. Sec. 28. . . . Wo dividend already de- clared shall be disturbed by reason of debts being subse- quently proved, but the creditors proving such debts shall be entitled to a dividend equal to those already received by the other creditors before any further payment is made to the latter.] d. Whenever a person shall have been adjudged a bank- rupt by a court without the United States and also by a court of bankruptcy, creditors residing within the United States shall first be paid a dividend equal to that received in the court without the United States by other creditors before creditors who have received a dividend in such courts shall be paid any amounts. e. A claimant shall not be entitled to coUect from a bank- rupt estate any greater amount than shall accrue pursuant to the provisions of this Act. §§ 66, a, i, 67, a.} unclaimed dividends — liens. 377 Sec. G6. Unclaimed diyidends. — a. Dividends which re- main unclaimed for six months after the final dividend has been declared shall be paid by the trustee into court. Instead of permitting the unclaimed dividends to be indefinitely tied up, and perhaps ultimately inuring to the benefit of the depository in which held, pending a claimant therefor, this section provides a deter- minate period for making claim, after which such dividends are to be distributed to the creditors who have not been paid in fiill, and the sur- plus given the bankrupt. Provision for the declaration and payment of dividends is found in section 65. Dividends cannot be attached in the hands of the assignee (In re Bridgman, 2 N. B. E. 84; Jackson v. Miller, 9 N. B. R. 143); but creditor may have receiver of debtor's property, who may appear in the bank- ruptcy proceedings as representative of debtor. (Jackson v. MUler, 9 N. B. E. 143.) Amounts remaining in the hands of the assignee, after discharge of a bankrupt against whose estate no debts were proved and there is rea- sonable cause to believe none will be proved, will upon proper peti- tion be paid to the bankrupt. (In re Hoyt, 8 N. B. R. 13; Fed. Cas. 6806; citing In re James, 3 N. B. E. 78; Fed. Cas. 7175; In re Haynes, 2 N. B. R. 78; Fed. Cas. 6369.) The right of a bankrupt who, prior to commence- ment of proceedings in bankruptcy, had brought suit, reverts to him to continue such action after the trustees in bankruptcy had completed their trust, filed their final accounts and had been discharged, nothing having been done by said trustees on the original suit in the intervaL (Conner v. Southern Express Co., 9 N. B. E 138.) i. Dividends remaining unclaimed for one year shall, under the direction of the court, be distributed to the creditors whose claims have been allowed but not paid in full, and after such claims have been paid in full the balance shall be paid to the bankrupt: Provided, That in case unclaimed dividends belong to minors such minors may have one year after arriving at majority to claim such dividends. Sec. 67. Liens. — a. Claims which for want of record or for other reasons would not have been valid liens as against the claims of the creditors of the bankrupt shall not be Uens against his estate. [Act of 1867. Seo. 20. . . . When a creditor has a mortgage or pledge of real or personal property of the bank- rupt, or a lien thereon for securing the pa3mient of a debt 378 LAW OF BANKEUPTCT. [§ 67, «. owing to Mm from the bankrupt he shall be admitted as a creditor only for the balance of the debt after deducting the value of such property. . . .] Claims otherwise invalid are not liens. — A lien authorized by a stat- ute in compliance with certain provisions concerning record and notice is not complete until the statutory requisites are com^pUed with; and if these are postponed until after the filing of a petition in bankruptcy, on which an adjudication follows, no lien wiU exist (In re Sabin, 12 N. B. R. 143; Fed. Cas. 13194; 1 N. Y. Wkly. Dig. 101; In re Brunquest, 14 N. B. E. 539; 7 Blss. 308; Fed, Cas. 3055; In re Dyke & Marr, 9 N. B. E. 430; Fed. Cas. 4337); and one who has taken an inchoate security, e. g., a confession of judgment, cannot, on learning later of the insolvency of the debtor, perfect the same by entering it of record. (Clark v. Iselin et aL, 9 N. B. E. 19; 10 Blatchf. 301; 31 Plttsb. Leg. J. 83; Fed. Cas. 3835.) The docketing of a judgment on a day that is declared a holiday by statute is void and confers no lien, for the term " holiday " imports dies non juridicus (In re Worthington, 14 N. B. E. 388; 3 Cent. Law J. 536; 8 Chi. Leg. News, 363; 14 Alb. Law J. 153; Fed. Cas. 18053); and a judg- ment recovered after a general assignment for the benefit of creditors, without preference, creates no lien on the property so assigned, although such assignment be subsequently set aside upon application of an as- signee in bankruptcy (Belden, Ass., v. Smith et aL, 16 N. B. R 303; Fed. Cas. 1343) ; also a judgment which, by the laws of the state in which it was recovered, is not a valid and binding lien, wiU not be recognized as a lien in proceedings in bankruptcy (In re Cozart, 3 N. B. R 136; Fed. Cas. 3313); and where goods taken under an execution have been re- linquished before filing a petition in bankruptcy, no lien is created in favor of the judgment creditor. (Sage, Jr., v. Wynkoop, Ass., 16 N. B. E. 363; Fed. Cas. 13315.) A mechanic's lien for work done and material furnished, which is not perfected prior to filing of petition in bankruptcy, will not be recognized. (In re Dey, 3 N. B. E. 81; 3 Ben. 450; Fed. Cas. 3870.) A chattel mortgage of a stock of goods, which permits the mortgagor to dispose of the goods in due course of trade, is fraudulent as to other creditors, and Is void as to them, without reference to the good faith of the mortgage debt, or the intentions of the mortgagor as to fraud (In re Foster, 18 N. B. E. 64; 10 ChL Leg. News, 315; Fed. Cas. 4964; Second Nat. Bank v. Hunt, 4 N. B. E. 198; Kane, Ass., v. Eice, 10 N. B. E. 469; Fed. Cas. 7609; Eobinson et aL v. Elliott, Ass., 11 N. B. R 553; 33 Wall 513; Smith, Ass., etc. v. Ely et aL, 10 N. B. R 553: Fed. Ca& 13044); and a chattel mortgage void as against creditors under state law and under which mortgagee had taken possession, having reasonable cause to be- lieve debtor insolvent, is void as against assignee in bankruptcy (Harvey, Ass., V. Crane, 5 N. B. E. 218; 2 Blss. 496; 3 Chi. Leg. News, 341; Fed. Cas. 6178); but a chattel mortgage of a stock of goods, executed by one oo- § 67, h, 0.} UENs. 379 partner and assented to by the other partners, containing a stipulation that the mortgagors are to remain in possession of the goods as agents of the mortgagee, and account to him monthly for all sales of the mort- gaged property until the indebtedness is paid, is valid and does not in- dicate fraud per- se. (Hawkins, Ass., v. Bank, 3 N. B. E. 108; 1 DiU. 463; Fed. Cas. 6344.) A mortgage of goods and chattels situate partly in New York and partly in New Jersey, and recorded only in the first- named state, is valid against creditors of the mortgagor as to that por- tion of the property situate in New York, and void as to that portion situate in New Jersey. (In re Soldiers' Business Messenger and Dispatch Ca, 3 N. B. R 163; 3 Ben. 304; 3 Amer. Law T. Rep. Bankr. 87; Fed. Oas. 13163.) B., in 1857, not in debt, conveyed certain realty by deed absolute on its face, but in reality in trust to his wife. In 1867 B. was adjudged a bank- rupt, until which time he remained in possession of the realty, and the property was sold by the assignee. In 1869 the deed was recorded and a bill was filed to set aside the sale. The bill was dismissed, the omis- sion to record being a fraud on subsequent creditors. (Barker v. Smith et aL, 13 N. B. R 474; 3 Woods, 87; 3 Amer. Law T. Rep. (N. S.) 386; Fed. Cas. 986.) A personal claim of indebtedness against bankrupt's estate does not constitute a lien upon property of the estate in the hands of one making such claim. (Sedgwick, Ass., v. Casey, 4 N. B. R 161; 4 Ben. 563; Fed. Cas. 13610; In re Eiogman. 5 N. B. R 116; Fed. Cas. 7936.) h. Whenever a creditor is prevented from enforcing his rights as against a lien created, or attempted to be created, by his debtor, who afterwards becomes a bankrupt, the trustee of the estate of such bankrupt shall be subrogated to and may enforce such rights of such creditors for the benefit of the estate. c. A lien created by or obtained in or pursuant to any suit or proceeding at law or in equity, including an attachment upon mesne process or a judgment by confession, which was begun against a person within four months before the filing of a petition in bankruptcy by or against such person shall be dissolved by the adjudication of such person to be a bankrupt if (1) it appears that said Uen was obtained and permitted while the defendant was insolvent and that its existence and enforcement wiU work a preference, or (2) the party or parties to be benefited thereby had reasonable cause to believe the defendant was insolvent and in contemplation 380 LAW OF BA:off shall be allowed in favor of any debtor to the bankrupt of a claim purchased by or transferred to him after the filing of the petition.] Creditors cannot purchase worthless claims or such as are worth but a percentage of their face value and use them as a set-off or counter- claim to pay off the amounts due the bankrupt's estate. To make a set- off or counter-claim valid, it must be provable against the estate or must have been purchased by or transferred to the creditor four months or more prior to the filing of the petition. If a creditor has been preferred, and afterwards in good faith gives the debtor further credit without security of any kind for property which becomes a part of the debtor's estate, the amount of such new credit remaining unpaid at the time of the adjudication in bankruptcy may be set off against the amount which otherwise would be recovered from him. (Sec. 60, ft) Not allowed when not provable claim.— Where a note is subject to set-off for an amount greater than the amount of the note, it is not a provable debt (In re Ford et aL, 18 N. B. R. 426; Fed. Cas. 4933); nor can a joint claim, a debt due to several joint creditors, be set off against a debt due by one of them to the bankrupt. (Gray v. BoUe, 9 N. B. E. 337; 18 WalL 639.) A chose in action is not negotiable, and does not become a mutual debt or credit in the hands of the assignee of such debt or 410 LAW OF BAITKEtrFrOY. [§ 68, h. credit so as to be a matter of set-oflE. (Rollins, Ass., v. Twitohell & Co., 14 N. B. R. 201; 2 Hask. 66; 5 Amer. Law Rec. 247; Fed. Cas. 12027.) Corporations. — A stockholder who is also a policy-holder of a bank- rupt insurance company cannot set off a claim for loss by fire against his unpaid stock subscription; neither can the treasurer of such com- pany set off a claim for loss against an amount due the company as treasurer (Scammon v. KimbaU, 8 N. B. R. 337; 18 Int. Rev. Rec. 118; 4 ChL Leg. News, 284; Fed. Cas. 12435; also 13 N. B. R. 445: 92 U. S. 362); but where the holder of policies of insurance in a bankrupt company had money of the company deposited with him, it was held that he could set off the amount due on the policies against the claim for the deposits. (Scammon v. Kimball, Ass., 13 N. B. R 445; 92 U. S. 362.) A banking society for ten years had not conducted its business as a bank, but for seven years had pursued a policy of liquidation by set-off. The deposits became a commodity like stocks, and were not paid, but simply represented by checks, which were good as set-offs in favor of debtors of the society. It was held that as these papers did not represent money, were not payable at sight, and limited in negotiability, they were evi- dences of assignment of choses in action; and that parties selling these papers were not responsible to an assignee of the society for the face value of the papers (Harmanson, Ass., v. Bain et aL, 15 N. B. R 173; 1 Hughes, 188; Fed. Cas. 6073); also the assignee of an insolvent bank cannot accept in payment of debts due the bank a protested draft dravni by such bank upon another bank and sold to the debtor. (Bashore et al. V. Rhoads et al., 16 N. B. R 73.) A creditor of a bankrupt who, with knowledge of the circumstances, enters into a new agreement by which he is to act as the agent of the bankrupt in the sale of his goods, treating the same as a special account and turning over the cash received therefor, cannot set off his old debt against an amount due from him on the new account (In re Troy Woolen Co., 8 N. B. R 412; Fed. Cas. 14203.) Not allowed when purchased in view of bankruptcy. — The act of 1867 differed from the present in forbidding the allowance of a counter- claim only in case of claims purchased by or transferred to a debtor after the filing of the petition. A debtor to a bankrupt's estate will not be aided by a court to set off notes of the bankrupt, bought on a speculation of the probable dividends against his debt to the estate. (Hunt v. Holmes et aL, 16 N. B. R. 101; Fed. Cas. 6890.) A claim against the bankrupt cannot be set off against an indebtedness for goods purchased from the assignee; but a claim against the bankrupt's estate may be set off against an indebtedness for goods purchased from the assignee. (Moran et al. v. Bogert, 14 N. B. R. 393.) An assignee of a bankrupt who has a large deposit with a bank, which bought up claims against the bankrupt's estate to set off against such deposit, who has knowledge of all the facts and does not disclose them, nor dispute such claims for set-off, does not perform his duty and should be removed. (In re Perkins, 8 jST. B. R. 56; 5 Biss. 254; Fed. Cas. 10982^) § 69, a.] POSSESSION of peopeett. 411 Sec. 69. Possession of property. — a. A judge may, upon satisfactory proof, by affidavit, that a bankrupt against whom an involuntary petition has been filed and is pending has committed an act of bankruptcy, or has neglected or is neg- lecting, or is about to so neglect his property that it has thereby deteriorated or is thereby deteriorating or is about thereby to deteriorate in value, issue a warrant to the mar- shal to seize and hold it subject to further orders. Before such warrant is issued the petitioners applying therefor shall enter into a bond in such an amount as the judge shall fix, with such sureties as he shall approve, conditioned to indem- nify such bankrupt for such damages as he shall sustain in the event such seizure shall prove to have been wrongfully obtained. Such property shall be released, if such bankrupt shall give bond in a sum which shall be fixed by the judge, with such sureties as he shall approve, conditioned to turn over such property, or pay the value thereof in money to the trustee, in the event he is adjudged a bankrupt pursuant to such petition. [Act of 1867. Sec. 25. . . . That when it appears to the satisfaction of the court that the estate of the debtor, or any part thereof, is of a perishable nature, or Liable to deteri- orate in value, the court may order the same to be sold, in such manner as may be deemed most expedient, under the direction of the messenger or assignee, as the case may be, who shall hold the funds received m place of the estate dis- posed of. Sec. 40. . . . If it shall appear that there is probable cause for believing that the debtor is about to leave the dis- trict, or to remove or conceal his goods and chattels or his evidence of property, or make any fraudulent conveyance or disposition thereof, the court may issue a warrant to the marshal of the district . . . and forthwith to take pos- session provisionally of all the property and effects of the debtor, and safely keep the same until the further order of the court. . . .] Whenever a petition is filed for the purpose of having a person ad- judged a bankrupt, and at the same time an application is made to take ' charge of and hold the property, the petitioner must give a bond with at least two good and sufficient sureties who shall reside within the ju- 4:12 LAW OF BANKRUPTOT. [§ 70, a. risdiction of the court, conditioned to indemnify the bankrupt for all costs and expenses, in addition to the damages occasioned, in the event the petition is dismissed. (Sec. 3, e.) As to whether a corporation can become a surety on the bond required by section 3, e, in view of the ex- press provision permitting them to do so on the bonds of referees and trustees (sec. 50, g), is doubtful, but it would seem discretionary with the judge whether or not he will accept them under section 69. A receiver may be appointed, after an adjudication of bankruptcy and before the selection of an assignee, for the temporary care and custody of the estate, when special circumstances render it desirable. (Lansing V. Manton, 14 N. B. R 137; 3 N. Y. Weekly Dig. 112; Fed. Cas. 8077.) Application for a provisional assignee on the ground that the debtor was removing his property was denied, it appearing that the prop- erty was being removed in view of a contract made long before the commencement of the bankruptcy proceedings. (M. & M. Nat. Bank of Pittsburg V. Brady's Bend Iron Co., 5 N. B. R. 491; 19 Pittsb. Leg. J. 5; 3 Chi Leg. News, 403; 38 Leg. Int. 317; 4 Amer. Law T. 168; 8 Phila. 171; 3 Pittsb. Rep. 826; 1 Amer. Law T. Rep. Bankr. 273; Fed. Cas. 9018.) A warrant commanding the marshal to take possession provision- ally of all the goods, assets and property conveyed by the bankrupt to another is beyond the power of the court in so far as it commands the marshal to take property conveyed before the filing of a petition by the bankrupt. (In re Harthill, 4 N. B. R. 131 ; 4 Ben. 488 ; Fed. Cas. 6161.) A petition in involuntary bankruptcy having been filed, and certain goods which had been transferred having been seized upon a warrant, a. peti- tion was filed for the annulment of the warrant, which was granted; but an injunction was issued to prevent disposal of the goods. (In re Hol- land, Jr., 12 N. B. R. 403; 1 N. Y. Weekly Dig. 135; Fed. Cas. 6605.) Liability for unlawful seizure.— It was held, mider the act of 1867, that where property is unlawfully taken by the marshal under a war- rant of seizure, the actual value of the property may be recovered. (Doll V. Harlow, 11 N. B. R. 350.) If the United States marshal, in exe- cuting a warrant for the seizure of a bankrupt's property, seize that of a stranger, he renders himself liable to an action for trespass which may be brought in a state court. (Marsh and Palmer, Ex'rs, v. Armstrong, 11 N. B. R. 135; In re Muller & Bretano, 3 N. B. R. 86; Deady, 518; Fed. Cas. 9913; In re Marks, 2 N. B. R. 175; Fed. Cas. 9095. But see Stevenson et aL V. McLaren et al., 14 N. B. R. 403; In re Briggs, 3 N. B. R. 157; Fed. Cas. 1869.) A marshal has no authority under a warrant to seize prop- erty provisionally, outside of his district. (Carr v. PhiUips, 18 N. B. R. 527; sec. 5046, R. S.) Sec. 70. Title to property. — a. The trustee of the estate of a bankrupt, upon his appointment and qualification, and Ms successor or successors, if he shall have one or more, upon. § 70, a.] TITLE TO PEOPEETT. 413 his or their appointment and qualification, shall in turn be vested by operation of law with the title of the bankrupt, as of the date he was adjudged a banlirupt, except in so far as it is to property which is exempt, to all (1) documents re- lating to his property; (2) interest in patents, patent rights, copyrights, and trade-marks; (3) powers which he might have exercised for his own benefit, but not those which he might have exercised for some other person ; (4) property transferred by him in fraud of his creditors; (5) property which prior to the filing of the petition he could by any means have transferred or which might have been levied upon and sold under judicial process against him : Provided, That when any bankrupt shall have any insurance policy which has a cash surrender value payable to himself, his es- tate, or personal representatives, he may, within thirty days after the cash surrender value 'has been ascertained and stated to the trustee by the company issuing the same, pay or secure to the trustee the sum so ascertained and stated, and continue to hold, own, and carry such policy free from the claims of the creditors participating in the distribution of his estate under the bankruptcy proceedings, otherwise the policy shall pass to the trustee as assets; and (6) rights of action arising upon contracts, or from the unlawful tak- ing or detention of, or injury to, his property. [Act of 1867. Sec. 14. . . . That as soon as said as- signee is appointed and qualified, the judge, or, where there is no opposing interest, the register, shall, by an instrument under his hand, assign and convey to the assignee all the estate, real and personal, of the bankrupt, with all his deeds, books, and papers relating thereto, and such assignment shall relate back to the commencement of said proceedings in bankruptcy, and thereupon, by operation of law, the title to all such property and estate, both real and personal, shall vest in said assignee, although the same is then attached on mesne process as the property of the debtor, and shall dis- solve any such attachment made within four months next preceding the commencement of said proceedings: . . . and all the property conveyed by the bankrupt in fraud of his creditors; all rights in equity, choses in action, patents 414 LAW OF BANKEUPTCT, [§ 70, 05. and patent rights and copyrights ; all debts due him, or any person for his use, and all liens and securities therefor; and all his rights of action for property or estate, real or per- sonal, and for any cause of action which the bankrupt had against any person arising from contract or from the unlaw- ful taking or detention, or of injury to the property of the bankrupt, and all his rights of redeeming such property or estate, with the like right, title, power, and authority to sell, manage, dispose of, sue for, and recover or defend the same, as the bankrupt might or could have had if no assignment had been made, shall, in virtue of the adjudication of bank- ruptcy and the appointment of his assignee, be at once vested in such assignee ; and he may sue for and recover the said estate debts and effects, and may prosecute and defend aU suits at law or in equity, pending at the time of the adjudi- cation of bankruptcy, in which such bankrupt is a party in his own name, in the same manner and with the like effect as they might have been presented or defended by such bankrupt. . . . JSTo person shall be entitled, as against the assignee, to withhold from him possession of any books of account of the bankrupt, or claim any lien thereon; . . . but no property held by the bankrupt in trust shall pass by such assignment]. This is a substantial deviation from the act of 1867. Under that act the courts held the title to vest in the assignee as of the date of filing the petition, while under the present law it is limited to the date a party is adjudged a bankrupt, thus avoiding much of the difiBculty and inconvenience incident to a transfer of title to be subsequently avoided upon a judgment of solvency, and permits business transactions with the bankrupt without fear as to imperfections of title. Should this lib- erality conduce to improvident treatment of the estate by the bank- rupt, the court, upon satisfactory proof that the property is being neglected, is deteriorating or about to deteriorate in value, may issue a warrant to the marshal to seize and hold it subject to further orders, upon the giving of a satisfactory bond by the creditor. Upon the bank- rupt giving a bond, the property may be released to him, (Sec. 69.) Fur- thermore, the practicing of fraud by the bankrupt will defeat his discharge, and his concealing any of the property belonging to the estate in bankruptcy, or making a false oath or account in relation to any pro- ceedings, subjects him to imprisonment. (Sea 29, b, 1, 2.) In addition, any attempt on the part of the alleged bankrupt to defeat the provisions of the law by conveying or delivering to others any material amount of property after the filing of the petition and before the adjudication renders the person receiving such property liable to imprisonment. (Sec 29, b.) § 70, ».] TITLE TO PEOPEETT. 415 Control of court over property of bankrupt.— A bankrupt before bankruptcy, or his assignee thereafter, is a necessary party to a suit in equity on an order on funds obtained before bankruptcy, and the bank- ruptcy ooiurt has exclusive jurisdiction for the determination of all ques- tions pertaining to the bankrupt's estate (Walker, Ass., v. Seigel & Bott et aL, 12 N. a R 394; 3 Cent. Law J. 508; Fed. Cae. 17085; In re Carow, 4 N. B. R 178; Fed. Cas. S426); and its jurisdiction operates as a supersedeas of the process in the hands of the sheriff, and an injunction against all other proceedings than such as might thereupon be had under the au- thority of the court, until the question of bankruptcy shall have been dis- posed of. fJonesv. Leach, IN. B.R 165; Fed. Cas. 7475.) All property of the bankrupt included in the schedule comes into the exclusive control of the court as fully as if it were actually and visibly in its presence, the moment the voluntary petition is filed (Byrd, Ass., v. Harrold et aL, 18 N. B. R 433; 36 Pittsb. Leg. J. 815; Fed. Cas. 2269); and no steps can there- after be taken to enforce claims against the property except through the bankrupt court, or by its permission in the state court (In re Huf nagel, 13 N. B. R 554; Fed. Cas. 6837; Davis v. Anderson, 6 N. B. R 146; Fed. Cas. 8638); and the oflScer appointed to manage it is accoimtable to the court appointing him and to that court alone. (In re Carow, 4 N. B. R 178; Fed. Cas. 2426.) The property of the bankrupt, though situate in another state and though mortgaged by the bankrupt prior to the institution of pro- ceedings in bankruptcy against him, is under the control of the court. (Markson & Spalding v. Heaney, 4 N. B. R 165; 3 Chi. Leg. News, 153; Fed. Ca& 9098.) Receivers of a company " dissolved " under state insolvency laws have no power to withhold the assets of the bankrupt company from the jurisdiction of the court of bankruptcy. (In re Independent Ins. Co., 6 N. B. R 260; Holmes, 103; Fed. Cas. 7017.) A bankruptcy court has power to take possession of personal assets in the hands of a vendee of a bankrupt, purchased before the adjudication in bankruptcy, upon the ex parte allegations and proof by the assignee that such sale is fraudulent and void, anterior to a trial upon an 'issue of title thereto. (In re Hunt, 3 N. B. R 166; 1 Chi Leg. News, 169; Fed. Cas. 6881.) Property of bankrupt surrendered to register. — Bankrupts upon filing their petition and being adjudicated bankrupts must surrender all the assets to the register, notwithstanding there may be a prospect of settlement with their creditors. (In re Shafer et al., 3 N. B. R 178; 1 Chi. Leg. News, 326; Fed. Cas. 12694; In re Howes & Macy, 9 N. B. R 423; 7 Ben. 103; Fed. Cas. 6787.) The register may order the bankrupt to hand over to the custodian of the estate funds in his hands, and failure to obey is contempt for which an attachment may issue. (In re Speyer, 6 N. B. R 355; 43 How. Pr. 397; Fed. Cas. 13239.) The register has the right to convey the estate of the bankrupt to the assignee if there be no one before him contesting the appointment of an assignee, although title to the property is in dispute. (In re Wylie, 3 N. B. R 53; Bank Ct. Rep. 133; 1 Chi. Leg. News, 30; Fed. Cas. 18109.) 416 LAW OF BANKETJPTOT. [§ 70, 05. Nature of title of assignee.— If the assignee has any power over a subject, it must be found in the bankrupt law itself. (Dutcher, Ass., v. Bank, 11 N. B. E. 457; 13 Blatchf. 435; Fed. Cas. 4203.) The title to prop- erty remains in the bankrupt until the trustee or assignee is duly ap- pointed and qualified and the conveyance or assignment has been made to him. (Sutherland v. Davis, 10 N. B. R. 424.) All the rights and all the duties of the bankrupt in respect to whatever property, not excluded from the operation of the Bankruptcy Act, he may hold under whatever title, whether legal or equitable, and however incumbered, pass to and devolve upon the assignee at the date of the filing of the petition in bankruptcy (In re Wynne, 4 N. B. E. 5; 2 Amer. Law T. Eep. Bankr. 116; Fed. Cas. 18117; In re Eosenberg, 8 N. B. E. 33; 3 Ben. 366; Fed. Cas. 12055; Smith v. Buchanan etaL, 4 N. B. E. 133; 3 Alb. Law J. 97; Fed. Cas. 13016; Markson & Spalding v. Heaney, 4 N. B. E. 165; 1 DilL 497; 3 Chi. Leg. News, 153; Fed. Cas. 9098; Purviance v. Bank, 8 N. B. E. 447; 30 Leg. Int. 353; 31 Pittsb. Leg. J. 33; Fed. Cas. 11475; Foui-th Nat. Bank of Chi- cago V. Bank, 10 N. B. R. 44; Randolph & Co. v. Canby, Ass., 11 N. B. E. 296; Fed. Cas. 11559; Barnard et aL, Ass,, v. RaUroad Co. et al., 14 N. B. R. 469; 4 Cliff. 351; 3 Cent. Law J. 608; 5 Amer. Law Eec. 361; 33 Int. Eev. Eec. 313; Fed. Cas. 1007; Aiken v. Edrington et aL, 15 N. B. E. 371; Fed. Cas. Ill; Hayes v. Dickinson, 15 N. B. E. 350; Hersey v. Elliott, 18 N. B. E. 358), and he must be considered in the light of a purchaser. (In re Griffith, 3 N. B. R 179; Potter v. Cogswell, 4 N. B. E. 9; Bromley, Ass., V. Smith et al., 5 N. B. E. 152; 3 Biss. 511; 3 ChL Leg. News, 397; Fed. Cas. 1932.) The effect of the petition, the adjudication and the assign- ment is to vest the assets in the assignee as a trust against which the statute of limitations ceases to run. (In re Eldridge & Co., 13 N. B. E. 540; 3 Hughes, 356; 1 N. Y.Wkly.Dig.343; Fed. Cas. 4331; Starkweather V. Cleveland Ins. Co., 4 N. B. E. 110; 3 Chi. Leg. News, 77; 38 Leg. Int. 36; 10 Amer. Law Eeg. (N. S.) 333; 5 Amer. Law Eev. 568; Fed. Cas. 13308.) He has all the rights and powers which are given to the whole body of creditors, whether at law or in equity (Wilkins v. Davis, 15 N. B. R. 60; 3 Lowell, 511; Fed. Cas. 17664), and he has the same remedies they would have had, to reach and subject it to the payment of the debts of the estate. (AUen & Co. v. Montgomery et al., 10 N. B. R 503.) There is not vested in the assignee any more beneficial interest in the debtor's estate than his execution creditors, under the laws of the respective states already in force, could have obtained under adversary proceed- ings. (In re Appold, 1 N. B. E. 178; 7 Amer. Law Eeg. (N. S.) 624; 6 Phila. 469; 25 Leg. Int 180; 1 Amer. Law T. Eep. Bankr. 83; Fed. Cas. 499.) He can claim only such interest and right in any property, except in case of fraud, as the bankrupt himself could have claimed. (Eodgers V. Winsor, 6 N. B. R 346; Fed. Cas. 12023; In re Dow, 6 N. B. E. 10; Fed. Cas. 4036.) All money and property in the hands of the bankrupt at the time of filing his petition, which he is vising and holding as his own, pass § YO, a.] TITLE TO PEOPEETT. 417 to the assignee, and lie cannot set up, in defense to the claim of the as- signee, title in a thii-d person, merely to hold it himself. (In re Moses, 19 N. B. R. 412; Fed. Cas. 9870.) Where the assignee has received mOney from the bankrupt, it is subject to every equity to which it was subject in the bankrupt's hands; but where he has recovered it in spite of the bankrupt's efforts to part with it, it will be free for distribution among the creditors generally. (White v. Jones, 6 N. B. E. 175; Fed. Cas. 17550.) When a discharged bankrupt enters into a written agreement with his creditors as to the disposal of his property among them, as the culminsr tion of a suit brought after the adjudication, the agreement is not bind- ing upon the estate without the assignee's signature. (In re Anderson, 9 N. B. R 860; 3 Hughes, 878; Fed. Cas. 851.) Eights of assignee over attached property, etc. — Where personal property of a bankrupt has been attached, the assignee in bankruptcy can take advantage of any remedy which would have been open to a subsequent attaching creditor, since he represents the creditors of the bankrupt as well as the bankrupt himself. (Beers v. Place et al., 4 N. B. R. 150; 36 Coun. 578; 4 Amer. Law T. 136; 1 Amer. Law T. Rep. Bankr. 262; Fed. Cas. 1233.) The general or ultimate property in goods levied on by attachment being in the debtor (In re Hull, 18 N. B. R. 1 ; 14 Blatchf. 257; Fed. Cas. 6857), the net proceeds of the sale of the property of a bank- rupt on a legal process suffered by him will be ordered to be paid by the sheriff to the assignee, when it appears that the creditor had reason- able cause to believe the debtor insolvent. (In re Black et al., 1 N. B. R. 81; 2 Ben. 196; 1 Amer. Law T. Rep. Bankr. 39; Fed. Cas. 1457.) He is entitled to the surplus proceeds of a sheriff's sale of the bankrupt's real estate, as against a judgment creditor who has waived his Uen and proved his claim. (Wallace v. Conrad, 3 N. B. R 10.) Where, more than four months prior to bankruptcy proceedings, a sheriff having writs of attachment against the bankrupt takes receipts for property without taking possession, and the assignee finds the property in the bankrupt's possession and takes it, the sheriff's proceedings create no Hen upon the property as against the assignee. (In re Ashley, 19 N. B. E. 237; Fed. Cas. 581.) Where a sheriff sells perishable goods under attachment by order of a state court, but without notice of the adjudication of the de- fendant in bankruptcy, he is guilty of a conversion of the goods and is liable for the market value thereof (Long, Ass., v. Conner, 17 N. B. E. 540; Fed. Cas. 8479); but where he delivers property which he holds under an execution levy to the marshal, who dehvers it to the assignee, an action for wrongful taking and conversion will not lie against the latter. (Ansonia Brass & Copper Co. v. Pratt, Ass., etc., 16 N. B. R. 170.) Creditors to whom a sheriff, having taken such property into his posses- sion under process of replevin from a state court, has delivered the same, will be required to deliver it or pay the value thereof, if sold, to the assignee. (In re Vogel, 2 N. B. R. 138; 1 Chi Leg. News, 210; Fed. 27 418 LAW OF BANKETJPTOT. [§ 70, a^ Cas. 16983.) Until a receiver is appointed in a creditor's action, the lien is not so far fixed as to authorize it to be upheld upon the debtor's chat- tels subject to levy on execution against the assignee in bankruptcy. (Johnson, Ass., v. Eogers et aL, 15 N. B. R 1; 5 Amer. Law Kec. 536; 14 Alb. Law J. 427; Fed. Cas. 7408.) After a voluntary general assignment the bankrupt has no leviable interest, since, though it is not good as against creditors, it is good against the bankrupt. (In re Croughwell, 17 N. B. R. 337; 9 Ben. 360; Fed. Cas. 3440.) Where a general assignment is made by a debtor for the benefit of his creditors, and subsequently creditors recover judgments and levy on the property in the hands of the assignee and it is sold, the creditors may not assail it, as the title passes to the assignee by the general assign- ment. (In re Biesenthal et aL, 15 N. B. E. 338.) All the property of the bankrupt is vested in the assignee, including property attached on mesne process, made within four months next pre- ceding the commencement of proceedings. (Reed v. Bullington, 11 N. B. R. 408; Morris v. Davidson, 11 N. B. R. 454.) If no attachment has been made within four months before commencement of proceedings in bank- ruptcy, and if there has been no conveyance in fraud of creditors, the title of the assignee is the same as that of the bankrupt. (Donaldson, Ass., V. Farwell et aL, 15 N. B. R. 377.) The vacation of an attachment by proceedings in bankruptcy does not enlarge the lien of judgment cred- itors under subsequent executions, but such vacation operates to vest the property in the assignee free from incumbrance to the extent of the a1> taohment, and subject to the liens of the judgment creditors as to the excess. (In re Nelson, 16 N. B. R. 313; 9 Ben. 338; Fed. Cas. 10100.) An attachment under proceedings in the state court is dissolved from the date of the commencement of the bankruptcy proceedings. (In re Pres- ton, 6 N. B. R. 545; Fed. Cas. 11394) When, under the state law, a creditor acquires a lien on the property of a debtor upon docketing a judgment, if the docket be incomplete and ambiguous, no lien arises in favor of the judgment creditor as against the assignee. (In re Boyd, 16 N. B. R. 137; 4Sawy. 263; 9 Chi. Leg. News, 385; 10 Chi. Leg. News, 1; 4 Law & Eq. Rep. 488; 6 Amer. Law Reo. 311; Fed. Cas. 1746.) A judg- ment given in a state court against the property of a bankrupt subse- quent to the filing of his petition is void (Stuart v. Hines, 6 N. B. R. 410); and funds in the hands of the assignee are not subject to garnishment. (In re Cunningham, 19 N. B. R. 276; 30 Alb. Law T. 357; Fed. Cas. 3478.) A judgment creditor who has made a levy on property of a bankrupt attached for its full value, subject to such attachment, is not entitled to priority as against the assignee. (In re Steele et aL, 16 N. B. R. 105; 7 Biss. 504; Fed. Cas. 13345.) Where goods levied on are allowed to be sold by the assignee, and the lien is transferred to the fund, the creditor should first exhaust securities held by him for his debts. (In re Sauthoff & Olson, 14 N. B. R. 364; 7 Biss. 167; 5 Amer. Law Reo. 173; 8 ChL Leg. News, 370; 3 Cent. Law J. 544; 3 N. Y. Wkly. Dig. 96; Fed. Cas. 12379.) § 70, a.J TITLE TO PEOPEETT. 41& Property in the hands of an assignee that may be payable to any cred- itor is not subject to attachment by such creditor. (Jackson v. Miller, 9 N. B. R. 143.) The amount collected by a foreign creditor under his execution levied after the adjudication in bankruptcy must be accounted for to the as- signee, and proof be made and dividend taken upon the original debt -without regard to the subsequent judgment thereon. (In re Bugbee, 9 N. B. K. 358; Fed. Cas. 2115.) A lien obtained by a creditor for a debt not yet payable is invalid against the assignee. (Partridge v. Dearborn et al., 9 N. B. R. 474; 3 Lowell, 286; Fed. Cas. 10785.) Rights withheld from assignee in cases of attachments. — The Bank- rupt Act does not confer on the assignee the rights of a judgment cred- itor. (Cook V. "Waters et aL, 9 N. B. R. 155.) A creditor who obtains payment of his debt under a judgment, through the passive non-resist- ance of the debtor, is not liable to repay the money to the assignee. (Henkelman, Jackson & Phelps v. Smith, Ass., 13 N. B. R. 131.) Where creditors' bills are filed and a receiver appointed, who obtains possession of the property of the debtor, the assignee has no right to the property as against such judgment creditors. (Sedgwick, Ass., v. Minck et aL, 1 N. B. R 314; 6 Blatchf. 156; Fed. Cas. 13616.) Where the execution is a lien upon all the personal property of the defendant from the time it reaches the sheriff's hands, the right of an execution creditor, upon an execution issued before the commencement of proceedings in bankruptcy, is paramount to the assignee, and will control the fund as against general creditors. (WUson v. Childs, 8 N. B. R 537 ; Fed. Cas. 17796.) Where prop- erty upon which there is an attachment lien is delivered to a receiptor, the lien follows the property into the hands of the debtor's assignee. (Rowe V. Page, 13 N. B. R. 368.) An assignee in bankruptcy, who gets posses- sion of goods subsequent to the delivery to the sheriff of an execution, holds the goods subject to the lien of the execution, even where there has been no actual levy by the sheriff. (In re Paine, 17 N. B. R. 37; 9 Ben. 144; Fed. Cas. 10673.) Where a debtor makes a general assign- ment, subsequent to which one creditor obtains judgment and levies on the goods in the hands of the general assignee, and the debtor is then adjudicated a bankrupt, the claim of the execution creditor takes pre- cedence over the claim of the assignee in bankruptcy. (McDonald, Ass., V. Moore et aL, 15 N. B. R. 26; 8 Ben. 579; 1 Abb. N. C. 53; 23 Int. Rev. Rec. 25; 8 N. Y. Weekly Dig. 461; 24 Pittsb. Leg. J. 83; Fed. Cas. 8763.) Upon the dissolution of an attachment by the commencement of pro- ceedings in bankruptcy, title to the property attached vests in the as- signee, subject to the hen of the sheriff therein for his fee, if it accrue prior to the filing of the petitioiL (In re House berger, 3 N. B. R. 33; 3 Ben. 504; Fed. Cas. 6734.) Where a surplus fund remains in the hands of the state court that is claimed by judgment liens antedating the com- mencement of proceedings in bankruptcy, the good faith or validity of which are proven, the fund will be distributed to the claimants, and not 420 LAW OF BANKETJPTOT. [§ 70, a. turned over to the assignee. (Biddle's Appeal, 9 N. B. E. 144) The United States district court has no authority to order property to be taken out of the hands of the sheriff, who holds by virtue of an execution issued upon a judgment obtained in a state court, and the lien under the exe- cution is prima facie valid; and until the writ is set aside for fraud or violation of the bankrupt law, the assignee cannot have possession be- fore satisfaction of such judgment. (In re Shuey, 9 N. B. R. 536; 6 CM. Leg. News, 248; Fed. Cas. 13831.) A purchaser at a sheriff's sale, after proceedings commenced in bankruptcy, where the levy is made prior thereto, will acquire a good title, notwithstanding that the judgments under which the sale took place are afterwards declared void. (Zahn v. Fry et al., 9 N. B. R 546; 10 Phila. 343; 31 Leg. Int. 197; 31 Pittsb. Leg. J. 155; Fed. Cas. 18198.) Assignee's relation to mortgages.— The assignee in bankruptcy of a mortgagor stands in the position of a judgment creditor, the adjudica- tion being equivalent to recovery of judgment and a levy. (Miller, Ass., V. Jones, 15 N. B. R 150; Fed. Cas. 9576.) The proceeds of the. sale of mortgaged property in the possession of a state court, not brought there by final process to enforce the mortgage lien, must be paid over to the assignee of the mortgagor, and the mortgagee must go into the bankrupt court and assert his lien there. (Morris v. Davidson, 11 N. R R 454.) A mortgagee must be content with proceeds realized from a foreclosure sale and cannot touch rents in the hands of the assignee. (Foster v. Estate of Rhodes, 10 N. B. R 523; Fed. Cas. 4981.) He can claim no rights under a mortgage given to secure him as indorser, where he has paid nothing and is no longer liable, but he is liable to the as- signee for moneys realized by him on the mortgage. (Sessions v. John- son et aL, Ass., 17 N. B. R 65; 95 IT. S. 347.) He may not by petition obtain an order that the assignee make sale of simply his right of re- demption. (Ferguson v. Peckham, 6 N. B. R 569; 39 Leg. Int 385; 6 Alb. Law J. 391; Fed. Cas. 4741.) Where property is sold under a mort- gage, for less than the amount thereof, to the mortgagee, who takes judgment for the deficiency, and the assignee redeems the property by paying the amount for which it has been bid in, with interest, the judg- ment for the deficiency is not a lien on the property. (Lloyd, Ass., v. Hoo Sue et al., 17 N. B. R 170; 5 Sawy. 74; 1 San Fran. Law J. 392; Fed. Cas. 8432.) Where there is no leviable interest in a mortgagor's equity of redemption, and where a petition in bankruptcy has been filed before sale under the mortgage, an execution creditor has no lien on the sur- plus proceeds of sale left after satisfying the mortgage. (In re Wrisley et aL, 17 N. B. R 259; Fed. Cas. 18103.) Before the appointment of an assignee or trustee, proceedings for an injunction to protect bankrupt's property may be instituted by him or the petitioning creditor. After an assignee or trustee has been appointed, he is the only person who could institute such proceedings on behalf of the bankrupt's estata Whenever the proceedings sought to be enjoined are prosecuted for the § 70, a.] TITLE TO PEOPEETT. 421 purpose of enforcing a valid lien, and were Instituted before the com- mencement of proceedings in bankruptcy, the courts, in granting or refusing an injunction, are governed by the same principles that regu- late their actions in the liquidation of liens, and will only interfere when it clearly appears that such interference will benefit the creditors gen- erally. (Blake et aL v. F. Valentine Co., 89 Fed. Eep. 691.) Where a debtor gives mortgages on his exempt property in which he waives aU homestead and exemption rights and his right to a discharge in bankruptcy, the property being left by the assignee in the debtor's possession temporarily, and afterwards the mortgages are foreclosed and the property levied on, the assignee at no time actually having pos- session thereof, although it had been included in the schedule, the levy is a contempt of court and the waiver cannot be enforced until the property is allotted to the bankrupt. (Byrd, Ass., v. Harrold et aL, 18 N. B. R. 433; 26 Pittsb. Leg. J. 315; Fed. Cas. 2269.) A second mortgagee is not entitled, the first mortgagee consenting, to take and hold possession of the mortgaged property to foreclose his mort- gage, as against an assignee, nor to appropriate the rents and profits to the payment of his debt. (Hutchings et aL v. Muzzy Iron Works, 8 N. B. E. 458; 6 Chi Leg. News, 27; Fed. Cas. 6952.) Where money is deposited in a court to the credit of a person against whom a warrant for adjudication of bankruptcy has been issued, and the funds have thereby been lodged in court without prejudice to the rights of creditors or of a mortgagee, the legal intendment of such de- posit would be that the rights of the assignee and of the mortgagee should be adjudicated according to the usage of the court. (In re Mas- terson, 4 N. B. R. 180; Fed. Cas. 9268.) A bankrupt who has collected money belonging to the estate wiU not be permitted to pay it for inter- est on mortgages, unless it appear that such payment is for the benefit of the estate. (In re Ettinger, 18 N. B. E. 222; Fed. Cas. 4543.) A sale of land after proceedings commenced in bankruptcy against the debtor, but prior to the appointment of the assignee under a deed of trust exe- cuted prior to the bankruptcy, is voidable, but not void. (McGready v. Harris, 9 N. B. R 135.) A chattel mortgage or bill of sale, void as against creditors under a state statute of frauds, conveys no title as against the assignee. (Ed- mondson v. Hyde, 7 N. B. R. 1; 2 Sawy. 205; 5 Amer. Law T. Rep. (IT. S. Cts.)380; Fed. Cas. 4285.) Where a mortgage of personal property is, under the laws of the state, ineffectual to pass after-acquired property, the assignee is entitled to such property as against the mortgagee. (In re Eldridge, 4N. B. R. 162; 3 Chi Leg. News, 177; Fed. Cas. 12610.) Bights in mortgages tliat do not pass to assignee. — A bankrupt court does not acquire such exclusive jurisdiction over the bankrupt's prop- erty, from an adjudication in bankruptcy, as would prevent a decree of foreclosure on a bill filed before the adjudication. (Jerome et aL, Ass., V. McCarter, 15 N. B. R 546.) Where a mortgage is executed just prior 422 LAW OF BAKKEUPTOT. [§ 70, a. to the institution of bankruptcy proceedings, but in pursuance of a parol agreement of several months previous, it is valid as against the assignee. (Burdick, Ass., etc. v. Jackson et al., 15 N. B. R. 318.) The filing of a bill for the sale of property free from incumbrances does not give the mort- gagee a right to the rents thereafter collected. The assignee is entitled to the rents until the mortgagee claims them. The filing of a petition and notice thereof to the assignee is suificient to entitle the mortgagee to rents thereafter accruing. (In re Bennett, 12 N. B. E. 257; 2 Hughes, 156; Fed. Cas. 1313.) Where a debtor is adjudged bankrupt, and incum- bered property coming into the hands of the assignee is sold, but does not satisfy a mortgage, the mortgagee is entitled to the rents and profits only from the date of notice to the assignee of intent to enforce the right to them. (In re Bennett, 13 N. B. R 257; 2 Hughes, 156; Fed. Cas. 1313.) When a receiver of the rents and profits of the real estate is ap- pointed after the mortgagor files his petition in bankruptcy, but before adjudication, and a sale of the premises does not satisfy the mortgage debt, the mortgagee is entitled to the rents in reduction of the deficiency. (Hayes v. Dickinson, 15 N. B. E. 350.) A mortgagee of real estate, vcith condition broken before the institution of proceedings in bankruptcy, where the mortgage is valid as against the bankrupt law, is entitled to all the bark, wood and timber cut on the premises and crops unharvested, as against the assignee of the mortgagor. (In re Bruce, 16 N. B. R 318; 9 Ben. 236; Fed. Cas. 2045.) An assignee cannot make up, out of the general funds of the estate, any difference between the net proceeds of the sale of the mortgaged property and the amount due to the mort- gagee by virtue of the mortgage. (In re PuroeU & Robinson, 2 N. B. R 10; 2 Ben. 485; 36 How. Pr. 43; Fed. Cas. 11469.) The assignee takes the property of the bankrupt subject to all equities and Uens as held by him, and a mortgage, which under a state law is valid as between the bank- rupt and his grantees, although not recorded, is valid as between the bankrupt's trustee and them. (Potter et aL v. Coggeshall, 4 N. B. R 19; Fed. Cas. 11333.) He cannot impeach the validity of a mortgage which is void as against creditors on account of the omission to record it as required by state laws. (In re Collins, 12 N. B. R 379; 13 Blatchf. 548; 1 N. Y. Wkly. Dig. 78; Fed. Cas. 3007.) He simply succeeds to the rights the bankrupt had in property, and a suit may be maintained to correct a description in a mortgage given by the bankrupt. (Schulze, Ass., v. Bolting, 17 N. B. R 167; 8 Biss. 174; Fed. Cas. 12489.) If a guardian transcend his power by making an agreement to discharge one mort- gage and take a new one, such agreement is only voidable, and that only at the election of the ward on coming of age, and it is vaUd against the assignee of the mortgagor until so avoided. (Burdick, Ass., v. Jack- son et aL, 15 N. B. R 318.) An unrecorded chattel mortgage, having been delivered to, and re- tained by, the mortgagee, is valid as against the mortgagor's assignea (In re Griffiths, 3 N. B. R. 179.) A mortgage executed in good faith to § 70, a.] TITLE TO PEOPEETT. 423 secure future sales of goods to the mortgagor is good as against the assignee to the extent of advances actually made. (Marvin, Ass., v. Chambers, 13 N. B. R 77; IS Blatohf. 495; 1 N. Y. Wkly. Dig. 365; Fed. Cas. 9179.) Where a mortgage made by a railroad corporation provides that it shall include all property subsequently acquired by the mort- gagor, it will include a railroad vnth its appiirtenances subsequently leased by the mortgagor, and the title thereto will be valid as against the assignee of the mortgagor. (Barnard et aL, Ass., v. Norwich & Wor- cester R. R Co. et al., 14 N. B. R 469; 4 Clifif. 851; 3 Cent. Law J. 608; 5 Amer. Law Rec. 861; 33 Int. Eev. Eec. 313; Fed. Cas. 1007.) A chattel mortgage given for a present consideration, and good between the par- ties, is not rendered invalid as against the assignee by failure to file the same, or take possession of the property, until a month before the com- mencement of proceedings in bankruptcy, notwithstanding the mortga- gee knew the mortgagor to be insolvent, and that the instrument gave him a preference. (In re Barman et aL, 14 N. B. R 135; 3 N. Y. Wkly. Dig. Ill; Fed. Cas. 999.) The relation of assignee to trnst property. — The possession of assets in the use of a bankrupt, though by a defeasible title, makes a sufficient title for his assignee until it should be successfully disputed. (In re Beal, 3 N. B. R 178; 1 Lowell, 338; 3 Amer. Law T. Rep. Bankr. 95; 1 Chi Leg. News, 326; Fed. Cas. 1156.) Where money is placed in the hands of another to be invested by him in trust, and he fails to invest it, but uses it in his speculations and afterwards becomes bankrupt, so that the property does not remain in specie, the cestuis que trust must come in pari passu with the other creditors, and prove against the trustee's estate for the amount due them. (In re Faneway, 4 N. B. R. 26.) If a trustee deposit the trust funds in a bank with his own, in his own name, after his bankruptcy the mode of ascertaining how much be- longs to the trust estate is to take the deposits and withdrawals in the order of their dates, find out how much of the balance belongs to the trust and how much to the general fund, and divide accordingly. (Ex parte Hobbs, In re Hapgood, 14 N. B. R 495; 2 LoweU, 491; Fed. Cas. 6549.) Trusts that do not pass to the assignee. — Property held in trust merely, by a bankrupt, does not pass to his assignee, but if his trust be coupled with an interest the assignee is vested with such interest. (Walker, Ass., v. Seigel & Bott et al., 12 N. B. R. 894; 3 Cent. Law J. 508; Fed. Cas. 17085.) If a deed of trust be actually delivered to the trustee, with power to record it when he deems proper, it is valid as against the assignee, although it is not recorded until after the grantor's failure. (National Bank of Fredericksburg v. Conway et al., 14 N. B. R 513; 1 Hughes, 37; Fed. Cas. 10037.) Where a will gives a trustee an absolute discretion, which he is not obliged to exercise in favor of the bankrupt- the bankrupt has not such an interest as his assignee can establish. (Nichols, Ass., v. Eaton et al, 13 N. B. R. 431 ; 91 U. S. 716.) Where a cred- itor has received from his debtor money, imder circumstances which are i2i LAW OF BAHKEUPTOT. [§ YO, d. entirely lawful, it is free from all trust and claim on behalf of the cestui que trust, unless it bo shown that the creditor knew of the trust. (White V. Jones, 6 N. B. E. 175; 29 Leg. Int. 325; Fed. Cas. 17550.) Where suit is brought by a bankrupt against an express company for negligent loss of goods, the court will not charge the jury that the verdict, if for the plaintiff, be for the use of the trustee in bankruptcy. (Southern Express Co. V. Connor, 12 N. B. R. 53.) Where a sum is deposited in trust, the income of which is to be applied to the support of the cestui que trust and his wife, and for the maintenance and education of their children, the annuity and principal sum beij.g declared to be inalienable by the grantees, and not subject to their debts or control, such income does not pass to the assignee in bankruptcy, nor can the court decree an aliquot part to the assignee. (Durant, Ass., v. Insurance Co., 16 N. B. E. 324; Fed. Cas. 4188.) Fraudulent conveyances. — A general assignment for the equal bene- fit of all creditors is void as against an assignee in bankruptcy, being at war with the policy of the bankrupt law. (Globe Ins. Co. v. Cleveland Ins. Co., 14 N. B. E. 311; 8 Chi. Leg. News, 358; 4 Amer. Law Eec. 653; 13 Alb. Law J. 305; Fed. Cas. 5486.) Title to real estate will not pass under an assignment of " all the goods, chattels and effects and property of every kind, personal and mixed," of the assignor, for the benefit of his creditors. (Ehoads v. Blatt, 16 N. B. E. 32.) An assignee under a state law will be allowed the amount of his disbursements made before a gen^ era! assignment in bankruptcy under the bankruptcy law. (Macdon- ald. Ass., V. Moore et al., 15 N. B. E. 26; 8 Ben. 579; 1 Abb. N. C. 58; 23 Int. Eev. Eec. 25; 3 N. Y. Wkly. Dig. 461; 24 Pittsb. Leg. J. 83: Fed. Cas. 8763.) The title of an assignee in bankruptcy who was assignee under a deed of assignment relates back to the execution of the deed, and all his acts after he received the property and assets, not inconsistent with his title and duty as assignee in bankruptcy, will be ratified by the court. (In re Walker, 18 N. B. E. 56; Fed. Cas. 17063; In re Biesenthal et aL, 15 N. B. R. 338.) Where a motion is made for attachment for contempt against one to whom there has been a general assignment of all the goods of a debtor for the benefit of his creditors, and an injunction has been issued to re- strain him from disposing of the bankrupt's property, but he thereafter sells it, the motion will be dismissed, as it involves the determination of the assignee's title by summary proceedings. (In re Marter, 13 N. B. R. 185; Fed. Cas. 9143.) Where a fund is in the hands of an assignee in bankruptcy for distribution, to which assignees of the bankrupt under a general assignment and assignees under a special assignment prior to the general one both lay claim, and an equity suit is pending between the parties involving their rights to the fund, the bankrupt court will de- tain the fund until the rights of the parties are determined. (In re Sabin, 18 N. B. E. 157; 10 Chi. Leg. News, 364; 8 Cin. Law Bui. 635; Fed. Cas. 13195.) Where, six months prior to bankruptcy proceedings, the bankrupt makes I 70, a.] TITLE TO PKOPEETT. 425 a voluntary assignment, and before the filing of the petition a receiver is appointed in proceedings supplementary to execution, a suit against the bankrupt, the assignee in bankruptcy, and the voluntary assignee, to set aside the voluntary assignment as void, properly joins them as de- fendants, and the property covered thereby is " property transferable to and vests in the assignee." (Onley, etc. v. Tanner et aL, 19 N. B. E. 178; Fed. Cas. 10506.) Where a debtor is arrested, under a warrant issued pursuant to the provisions of a state law, for fraudulently conveying his property prior to the passage of the Bankrupt Act, and the defendant moves to quash the warrant on the ground that before it was issued he had applied for a discharge, proceedings on which are pending, the motion to quash will be granted, and the title to the property fraudulently conveyed will be regarded as vested in the assignee. (Goodwin v. Sharkey, 3 N. B. R. 138.) The statutory trust of creditors in real estate held by the wife of a debtor, who is subsequently adjudicated a bankrupt, inures as assets to the assignee when the estate is purchased by the bankrupt prior to bankruptcy and is paid for with his own money in fraud of his credit- ors. (In re Meyers, 1 N. B. R 163; 3 Ben. 434; Fed. Cas. 9518.) A con- veyance of lands for the purpose of protecting the same from sale for the benefit of creditors of the grantor is valid as between the grantor and grantee, and vests a valid title and estate thereto in the vendee which would pass to his assignee in bankruptcy. (In re O'Bannon, 3 N. B. E. 6; Fed. Cas. 10394.) An assignment of lands for the benefit of such creditors as should sign a corapromise agreement and of none oth- ers is void as against the assignee in bankruptcy. (In re Broome, 3 N. B. E. 113; Fed. Cas. 1967.) No payment by or to a bankrupt subsequent to the commencement of bankruptcy proceedings in relation to transactions which took place prior to such date is valid, even though made or received bona fide or without notice. (Mays v. The N. Nat. Bank, 4 N. B. E. 147.) Liens for rent as against assignee. — If the landlord have no lien on the bankrupt tenant's goods as against the bankrupt on the day the pe- tition is filed he has none subsequently as against the assignee. (In re Butler, 6 N. B. E. 501; 19 Pittsb. Leg. J. 146; 3 Pittsb. Eep. 369; Fed. Cas. 3336.) The levying of a distress warrant after the commencement of proceedings in bankruptcy, but before the appointment of the as- signee, does not give the landlord a lien on the property levied upon as against the assignee. (Morgan v. Campbell, Ass., 11 N. B. E. 539.) Assignee's relations to leases. — Bankruptcy and judgments are in- voluntary, and do not avoid covenants against assignments and trans- fers, either in leases or policies of insurance. (Starkweather v. Cleveland Ins. Co., 4 N. B. E. 110; 3 ChL Leg. News, 77; 38 Leg. Int. 36; 10 Amer. Law Reg. (N. S.) 333; 5 Amer. Law Eev. 568; Fed. Cas. 13308.) An as- signee who knows nothing of the existence of a lease effected by the 426 LAW OJ BANKEUPTOT. [§ 70, a. bankrupt is not bound by its covenants. There must be some unequiv- ocal and positive act of acceptance of the lease before the assignee can be held liabla (In re Washburn, 11 N. B. R. 66; Fed. Cas. 17311.) The assignee, unless restrained by the terms of the lease itself, may adopt or reject it on behalf of the estate, as he finds most beneficial for the cred- itors, and may take a reasonable time for decision. Where the rent is very large a speedy decision would be demanded. (In re Laurie, Blood & Hammond, 4 N. B. R. 7; White v. Grifflng, 18 N. B. R 399.) Until the assignee elects to accept a lease as assignee, he does not become liable for rent accruing after the adjudication in bankruptcy. (In re Ten Eyck & Choate, 7 N. B. R 26; Fed. Cas. 13839; In re Laurie, Blood & Hammond, 4 N. B. E. 7.) Where the assignee accepts a lease held by the bankrupt, and sells the interest so acquired to the lessor, the guar- antor of the lease is discharged from all liability accruing after commencement of the bankruptcy proceedings, as the lease is extin- guished. (White V. Grifiing, 18 N. B. R. 399.) A lease which cannot be assigned without the consent of the landlord is canceled by the bank- ruptcy of the tenant. (In re Breck & Sohermerhom, 13 N. B. R 315; 8 Ben. 93; Fed. Cas. 1833.) Title to funds in bank, etc. — The obligation incurred by a banker is not fiduciary in its nature, but is the liability only of an ordinary debtor, and his assignee ■^ill not be required to pay, out of funds belonging to the bank, the amount of a note and interest, on the ground that it had been placed in the bank simply for collection, the customer's account having been overdrawn at the time of crediting the proceeds on the books of the bank. (In re Bank of Madison, 9 N. B. R 184; 5 Biss. 515; Fed. Cas. 890.) Where a depositor, immediately after making a deposit, draws a check for the amount in payment of a draft drawn by the bank, the title to the money deposited passes to the bank, although the banker was insolvent and knew at the time that the draft would be dishonored, and such depositor is only entitled to share pro rata with the other cred- itors. (In re King, 8 N. B. R 385.) Where one buys of a banker, after- wards bankrupt, a check on another bank that is not presented for pay- ment until after bankruptcy of the drawer, when payment is refused, the funds in the bank pass to the assignee of the bankrupt and the pur- chaser is not entitled to priority of payment. (In re Smith, 13 N. B. R 459; 3 Cin. Law BuL 119; Fed, Cas. 13990.) An arrangement between two banks, by which the one acts as agent for the other for clearing- house purposes, the latter agreeing to keep on deposit with the former sufficient funds to meet all its checks which are received at the clearing- house, creates the relation of debtor and creditor upon the bankruptcy of the former, and the amount so held on deposit passes to the assignee. (Phelan, Ass., v. Iron Mountain Bank, 16 N. B. R 308; 4 DiU. 88; 5 Cent. Law J. 351; Fed. Cas. 11069.) The title to the money in the bank, upon the presentation of a check by the payee thereof, is superior to the banker's lien for maturing paper, and will pass to and may be enforced § 70, a.] TITLE TO PEOPEETT. 427 by the assignee of the payea (Fourth Nat. Bank of Chicago v. City Nat. Bank of Grand Rapids, Mich., 10 N. B. R. 44.) Assignee's rights as to commercial paper, etc. — The payee of a nego- tiable bill or note, who sells or delivers the same before bankruptcy without indorsement, may after bankruptcy indorse it so that the holder can maintain an action thereon in his own nama (Hersey v. Elliott, 18 N. B. R. 358.) The mere presentation of an ordinary commercial bill of exchange to the drawee, without acceptance by the latter, who holds funds of the bankrupt by whom the bill is drawn, does not operate as an appropriation or equitable assignment of the amount drawn for, and creates no lien as against such funds, and the assignee of the bankrupt will be entitled to the funds. (Randolph & Co. v. Canby, Ass., 11 N. B. R. 296; Fed. Cas. 11559.) Where a trustee has proved the claim for a note against the estate of the payee in banlcruptcy, and where the holder has not, on the faith thereof, changed his position in regard to the note, the trustee is not estopped from disputing the claim of the holder. (In re Dodge et aL, 17 N. B. R. 504; 9 Ben. 480; Fed. Cas. 3948.) Notes given for the excess over legal interest are not provable in bankruptcy, and must be surrendered to the assignee. (Shaffer v. Fritchery & Thomas, 4 N. B. R. 179; Fed. Cas. 13697.) It having been represented by a firm that certain notes are business paper, and the holder having parted with his money on the faith of the representation, the assignee of the fif m cannot deny it. (In re Many et aL, 17 N. B. R. 514; Fed. Cas. 9054.) Where one gives another, in the regular course of business and for valuable consideration, a promissory note, and delivers certificates in pledge, and becomes bankrupt, the re- fusal of the payee to return the certificates if he does not prove his claim does not amount to a conversion thereof. (Yeatman v. New Or- leans Savings Institution, 17 N. B. R. 187; 95 U. S. 764) Where a banking society has not for years conducted its business as a bank, but has pursued a policy of liquidation by set-off, the deposits being a commodity represented by papers in the form of checks, and such papers do not represent money, are not payable at sight, and are limited in negotiability, they are not checks, but mere evidence of assignment of choses in action, and those selling them are not responsible to the assignee of the society for the face value thereof. (Harmanson, Ass., v. Bain et al., 15 N. B. R. 173; 1 Hughes, 188; Fed. Cas. 6072.) StoekJiolders' liability. — A stockholder cannot, after the company has become insolvent, avoid his liability on the ground that false repre- sentations were made to him that no assessment could be made on his stock. (Upton, Ass., v. Hansbrough, 10 N. B. R. 368; 3 Biss. 417; 5 Chi. Leg. News, 242; 7 West. Jur. 388; Fed. Cas. 16801.) Where one, induced by false representations, takes stock in a corporation two years before its bankruptcy, and in payment gives his promissory note secured by a deed of trust, and during such period makes no inquiry as to the financial condition of the coi-poration, he cannot, after the bankruptcy thereof, 428 LAW OF BAITKEUPTOT. [§ 70, a. rescind his purchase of stock and avoid the obligation. (Farrar v. Walker, Ass., et al., 13 N. B. E. 83; 3 Dili 506, note; 1 N. Y. Weekly Dig. 239; 3 Cent. Law J. 670; Fed. Cas. 4679.) Limitation of title of assignee in case of stockholders.— The individ- ual liability of stockholders for the debts of the corporation to the amount of their stock is neither property, nor a right of property, nor a credit of the bankrupt corporation, and the assignee has no legal or equitable right or interest therein. (Dutoher, Ass., v. Marine Nat. Bank of New York et al., 11 N. B. R. 457; 13 Blatchf. 435; Fed. Cas. 4303.) Where creditors of an insolvent corporation are also stockholders, they will not be per- mitted to deduct the amount of their claims from their proportions of the unpaid capital; yet if their debts be proved in bankruptcy, deduc- tions may be made, perhaps, from the assignee's demands, equal to their estimated dividends, (Wilbur, Ass., v. Stockholders, 18 N. B. R. 178; 13 Phila. 479; 35 Leg. Int. 346; 36 Pittsb. Leg. T. 15; Fed. Cas. 17636.) An assignee of corporate stock who has caused it to be transferred to him- self on the books of the company and holds it as collateral security for a debt due from his assignor is liable for unpaid balances thereon to the company or to the creditors of the company after it has become bank- rupt. (Pullman V. Upton, Ass., etc., 17 N.B.R 489; 9611. S. 338.) Where by the articles of a stockholders' association a seat in it, in the event of insolvency of the member, is required to be disposed of and the proceeds applied first exclusively to the payment of debts due other members, the assignee of the bankrupt broker is only entitled to the surplus after other members are paid in fulL (Hyde, Ass., v. Woods et al., 10 N. B. R. 54; 1 Amer. Law T. Rep. (N. S.) 354; 3 Sawy. 655; Fed. Cas. 6975.) Insurance. — When a debtor at his own expense effects an insurance on his life, as security to a creditor, the representative of the debtor is entitled to the surplus after the debt is paid. If such debtor, in his life- time, pay the debt, he is entitled to have the policy delivered up to him. (In re Newland, 7 N. B. R. 477; 6 Ben. 343; Fed. Cas. 10170.) Where a creditor takes out an insurance on the life of his debtor as security for the debt due him, and pays all the premiums, proves his debt in bank- ruptcy and receives dividends thereon, and receives in full the original amount of the debt from the insurance company, upon the death of the bankrupt prior to the declaration of the last dividend, after deducting the premiums paid by him with interest, the creditor must pay to the assignee all over the amount sufScient, with the dividends and pay- ments previously made, to pay the debt in full. (In re Newland, 9 N. R R. 63; 7 Ben. 63; 3 Ins. Law J. 860, 895; 4 Bigelow, Ins. Cas. 383; Fed. Cas. 10171.) An adjudication of bankruptcy terminates the interest of the bankrupt in any policy of insurance, and it is void; but an insurance company may consent to continue its liability by the usual transfer of the policy to the register in charge of the bankruptcy proceedings, until an assignee shall have been appointed, and may also transfer the policy to the assignee when appointed. (In re Carow, 4 N. B. R. 178; 41 How. § 70, a.] TITLE TO PEOPEETT, 429 Pr. 113; Fed. Cas. 2426.) Where a bankrupt is at the time of adjudication the owner of a building covered by a policy of insurance providing that, "if the title to the property is transferred or changed, this policy shall be void," and " if without the written consent of the company this policy be assigned, it shall be void," and the building is destroyed by fire after the transfer to the assignee, the transfer, being by operation of law, does not avoid the policy, and the assignee may recover the insurance money. (Starkweather v. Cleveland Ins. Co., 4 N. B. E. 110; 3 Chi. Leg. News, 77; 28 Leg. Int. 36; 10 Amer. Law Reg. (N. S.) 333; 5 Amer. Law Rev. 568; Fed. Cas. 18308.) Where an insurance company reorganizes under a special charter giving a right to increase its capital and issues certifi- cates of stock, twenty per cent, only of the par value thereof being re- quired to be paid, the stockholders will, upon the bankruptcy of the company, be liable for the unpaid balance due on such certificates. (Upton, Ass., V. Hansbrough, 10 N. B. R. 368; 3 Biss. 417; 5 Chi Leg. News, 242; 7 West. Jur. 238; Fed. Cas. 16801.) Assig'nee's relation — Partnership property. — Where a siorviving partner is adjudged a bankrupt as such, and as an individual, his assignee is entitled to the partnership assets (In re Temple, 17 N. B. R 345 ; 4 Sawy. 62; Fed. Cas. 13825); and his share in the joint estate will vest in the as- signee, though the firm is not declared, bankrupt. (Wilkins v. Davis, 15 N. B. R 60; 3 Lowell, 511; Fed. Cas. 17664.) The assignee of a bankrupt firm takes by the assignment all the property of the firm and of the in- dividual members thereof, even though part of the property may be out of the district in which the bankrupts reside, and owned in part by the partners not joined in bankruptcy proceedings. (In re Leland, 5 N. B. R 232; 5 BeiL 168; Fed. Cas. 8228.) Where agents of a corporation con- sign goods thereof for sale to a firm, of which one of the agents is a mem- ber, and the firm accepts and pays drafts of the agents to an amount in excess of aU their consignments before receipt of the goods, such acts do not constitute a payment, and the firm is liable. (In re Baxter et aL, 18 N. B. R 63; Fed. Cas. 1119.) An assignee of an individual member of a firm appointed upon his petition alone acquires no title to the property of the firm, whether the firm be existing or dissolved. (Hudgins v. Lane & Smithson, 11 N. B. R 463; 3 Hughes, 361; Fed. Cas. 6827.) Where goods are obtained through a misrepresentation, by a firm composed of several members, a return of the goods or their proceeds to the creditor will be valid, as against the assignee of two of the creditors, if the goods have not lost their identity, BO as to form a part of the property of the bankrupt. (Montgomery, Ass., V. Bucyrus Machiue Works, 14 N. B. R 193; 93 U. S. 357.) Interest of wife In property of bankrupt. — If a husband receive money from his wife and invest it in realty in her name xmtil he accu- mulates property of considerable value by his skill and energy, the prop- erty is liable to his assignee. (Muirhead, Ass., v. Aldridge et al., 14 N. B. R 349; 3 N. Y. Wkly. Dig. 480; 38 Leg. Int. 313; Fed. Cas. 9904.) Where 430 LAW or BANXEUPTCT. [§ 70, a. a bankrupt and his wife build a house on land to which the latter acquires the title with funds furnished by both, the assignee is entitled to a con- veyance in the right of the wife by her and her husband, of an undivided one-half interest in the premises, to be lessened by the amount of the homestead right. (Johnson, Ass., v. May et aL, 16 N. B. K. 435; Fed. Cas. 7397.) A valid conveyance may be made by an assignee of land held by the husband at the time of bankruptcy, without reserving or providing for dower interest. (In re Kelly v. Strange, 3 N. B. R. 2; Fed. Cas. 7676.) A gift by a bankrupt to his wife before adjudication, and not in con- templation of insolvency, of funds which were used in improving the separate estate of the wife, does not 'vest him with such an interest therein as would pass to his assignee. (In re Wyatt, 3 N. B. E. 94; 1 Chi Leg. News, 107; Fed. Cas. 18106.) The legal title to a policy of in- surance on the life of a husband, taken out by him for the benefit of his wife, is vested in the wife and cannot be assigned by him (In re Bear and Steinberg, 11 N. B. R. 46; 1 Cent. Law J. 607; Fed. Cas. 1178); and a bankrupt whose wife takes out a policy of insurance on her own life for his benefit, pays the premiums out of her separate estate, and dies after the adjudication of bankruptcy, is entitled to the proceeds of such policy as against his assignee. (In re Owen & Murrin, 8 N. B. R. 6; Fed. Cas. 10637.) Where a bankrupt, when solvent, conveys land to his wife, reserving a power of revocation and appointment to other uses, such power does not pass to the assignee. (Jones, Ass., v. Clifton et al., 19 N. B. R. 434; 101 U. S. 835.) "Where real estate is conveyed to a bankrupt and his wife to be held in entirety, and the wife obtains a decree of di- vorce, if the divorce operate to transform the joint tenancy into a ten- ancy in common, the interest of the bankrupt as tenant in common is a subsequent acqmsition which cannot be claimed by his assignee. (In re Benson, 16 N. B. R. 377; 8 Biss. 116; Fed. Cas. 1838.) Where a debtor files his petition in bankruptcy after the passage of an act restoring the common-law right of dower, and dies after issuance of the warrant in bankruptcy, the wife is entitled to dower in lands owned by the bank- rupt at the date of filing of the petition, but she is not entitled to ex- empted personal property. (In re Hester, 5 N. B. R. 385; Fed. Cas. 6437.) Where there is at the time of filing of the petition an equitable inter- est in a bankrupt which passes to the assignee, the widow is entitled to one-third of such interest absolutely as against the assignee. (Warford, Ass., V. Noble et al., 19 N. B. R. 440.) Where a wife's right of dower ia established against the assignee, an exception to the confirmation of the sale of real estate, by the purchaser, on the ground that such sale was subject to the dower right, when it was stated at the sale that the prop- erty woidd be conveyed free from all incumbrances, wiU be sustained. (In re Angier, 4 N. B. R. 199; 1 Amer. Law T. Rep. Bankr. 348; Fed. Cas. 388.) Where a wife executes a mortgage on her realty to secure a loan, the money obtained being used by her husband to pay his own debts, the amount exceeding what he would be entitled to by the curtesy, and § 70, a.] TITLE TO PEOPEETT. 431 he and the wife unite in a general assignment of all his property, ex- pressly reserving that of the wife, and the wife dies, and her realty being sold realizes a sum greater than the incumbrances, the neirs or repre- sentatives of the wife are entitled to the fund. (Shippen and Eobbins' Appeal, 15 N. B. R 553.) The relation of assig'nee to choses In action. — The husband has a right to the chose in action of the wife, and the law reduces it into his possession. The bankrupt law gives over all that the husband had to the assignee. The question of survivorship is laid aside by the bankruptcy. (In re Boyd, 5 N. B. R 199; 2 Hughes, 349; Fed. Cas. 1745.) A claim against the government for property of a bankrupt destroyed " during the war " will pass to his assignee (Phelps, Ass., v. McDonald et al., 16 N. B. R 217); also a claim against the United States for cotton seized by the military forces thereof during the war of the rebellion. (Erwin V. United States, 19 N. B. R 172; 97 U. S. 392; Phelps, Ass., v. McDonald et aL, 19 N. B. R 187; 99 U. S. 298.) Where, under state laws, convicts may be hired in any number not exceeding one hundred in any one con- tract, and a bankrupt before his bankruptcy executes four contracts with different sureties for one hundred convicts, each of the contracts is valid. (In re Southwestern Car Co., 19 N. B. E. 404; 9 Biss. 76; Fed. Cas. 18192.) A party who purchases a chose in action from the assignee can- not maintain an action thereon in his own name in a state court where the laws of the state do not permit an assignee of a chose in action to sue in his own name. (Leach v. Greene, 12 N. B. E. 376.) A voluntary assignee is a mere representative of the assignor and takes his choses in action, not as a purchaser for value, but subject to all the equities at- taching to them. (City Bank of Harrisburg v. Sherlock, 16 N. B. R 62.) Choses in action that do not pass to the assignee.— Eights of action for torts to the debtor's person do not pass to the assignee (Wright, etc. V. Bank, 18 N. B. R 87; 18 Alb. Law T. 115; 10 Chi. Leg. News, 348; 6 Reporter, 229; 26 Pittsb. Leg. T. 11; Fed. Cas. 18078; Noonan v. Orton, 12 N. B. E. 405); nor do choses in action held by the bankrupt in a fiduciary capacity (En re Bank of Madison, 9 N. B. R 184; 5 Biss. 515; Fed. Cas. 890); nor an action for the malicious abuse of the garnishee process (Noonan v. Orton, 13 N. B. R 405); nor a cause of action ex delicto (In re Brick, 19 N. B. E. 508); nor a chose in action of a wife not reduced to jxjssession by her husband. (Wickham, Ass., v. Valle's Executors et al., 11 N. B. R 83; Fed. Cas. 17613.) A claim for compensation for the de- struction of a vessel by a Confederate cruiser, equipped and sent out in England, may be transferred to the wife at a time when the claimant is free from debt. (Williamson et aL, Ass., v. Coloord and Wife, 13 N. B. R 819; 1 Hask. 620; Fed. Cas. 17752.) A chose in action which is not negotiable, and on which the assignee must sue in the name of the assignor, does not become a mutual debt or credit in the hands of the assignee, so as to be a matter of set-off. (Eollins, Ass., v. Twitchell & Co., 14 N. B. R 201; 2 Hask. 66; 5 Amer. Law Eec. 247; Fed. Cas. 12027.) 432 LAW OF BAHKEUPTOT. [§ 70, a. Sights of assignee to payments made to bankrupts. — Payments made by creditors to a bankrupt after the filing of the petition in bank- ruptcy are invahd as against the assignee (In re J. P. Hayden, 7 N. B. E. 192; Fed. Cas. 6257; Babbitt v. Burgess, 7 N. B. R. 561; 4 DilL 169; 5 ChL Leg. News, 326; Fed. Cas. 693), even though without knowledge of the appointment of the assignee. (Duffield et aL, Ass., v. Horton et aL, 16 N. B. E. 59.) An injunction order and proof of its service are competent evidence to show that a debtor making payment to a bankrupt after adjudication had notice of the demand of the assignea (Babbitt v. Bur- gess, 7 N. B. E. 561; 3 DUL 169; 5 Chi. Leg. News, 336; Fed, Cas. 693.) A payment to a bankrupt after the filing of the petition for adjudication will not discharge the debtor's liability to an after-appointed assignee. Until the appointment of an assignee or the dismissal of the petition, the right of action against the debtor is suspended. (Booth v. Meyer et al., 14 N. B. E. 575.) Where an attachment is issued within four months preceding the commencement of bankruptcy proceedings and is served upon the debtor of the bankrupt, and, pending the bankruptcy proceed- ings, a general judgment is recovered in the action and an execution is- sues, and the debtor pays the sheriff the amount of his indebtedness, such payment is voluntary and does not discharge his obligation to the bankrupt or to the assignee. (Duffield, Ass., v. Horton et al., 19 N. B. R 13.) Claims against property in hands of assignee. — A bankrupt court has no authority to deprive the assignee of the possession of the bank- rupt's property without due process of law, unless the parties consent to a trial by the court. (Wood Mowing & Reaping Machine Co. v. Brooke, 9 N. B. R. 395; 3 Sawy. 576; Fed. Cas. 17980.) Where a claim to prop- erty in the hands of the assignee is set up, and the assignee denies the validity of the claim and asserts title to be in himself, as property of the bankrupt, the claimant cannot proceed by a summary petition. (Hurst V. Teft, Ass., 13 N. B. R 108; 13 Blatchf. 217; Fed. Ca& 6939.) In taking possession of the bankrupt's estate, the assignee takes the place of a sheriff or marshal, and if the property would not be recoverable from them it is not from him. (Aiken v. Edrington et aL, 15 N. B. R 271; Fed. Cas. HI.) The equities of creditors of a bankrupt, to whom property was fraudulently transferred before bankruptcy, and of creditors of the transferrer, are equal, and the assignee of the bankrupt cannot be re- quired to surrender the property. (Aiken v. Edrington, 15 N. B. R 271 ; Fed. Cas. 111.) The defense of usury can be pleaded by the assignee in bankruptcy so long as any part of the debt for which the usury was or was agreed to be paid remains unpaid. (In re Prescott, 9 N. B. R 385; 5 Biss. 523; 6 ChL Leg. News, 151; Fed. Cas. 11389.) A sale of goods with a verbal agreement that the vendor is to remain in possession and carry on the business under his own name until such time as the vendee should please to take possession is fraudulent and void as to creditors, and § 70, a.] TITLE TO PEOPEKTT. 403 such vendee is not entitled to the goods as against the vendor's assignee. (InreMorrill,8N.B.E.117; 3Sawy.356; Fed. Cas. 9821.) Where a debtor, shortly before filing his petition in bankruptcy, purchases a quantity of carpets, and the vendor brings replevin, the sheriff takes possession, the bankrupt bonds them back, they come into the hands of the assignee, and the parties apply to the register, asking that the goods be held by the assignee to await the determination of ownership, since the title is in dispute, application must be made to the court by petition, but other- wise the register may dispose of the matter. (In re Graves, 1 N. B. E. 19; 2 Ben. 100; Fed. Cas. 5709.) A state cannot tax the fimds in the hands of an assignee. (In re Booth, 14 N. B. R. 232; 8 Chi Leg. News, 307; 1 Cin. Law Bui 131; Fed. Cas. 1645.) Assignee's relation to property in general. — The assignee is not bound by the bankrupt's ratification or acquiescence in a sale of collat- erals made after the commencement of the proceedings in bankruptcy. (Sparhawk et aL v. Drexel et al., 13 N. B. R. 450; 1 Wkly. Notes Cas. 560; Fed. Cas. 13204) Where the security of a creditor is reduced to money, the assignee is entitled to any surplus over and above the amount nec- essary to liquidate the debt. (In re Newland, 9 N. B. E. 62; 7 Ben. 63; S Ins. Law J. 860, 895; 4 Bigelow, Ins. Cas. 283; Fed. Cas. 10171.) A se- cured creditor who proves his claim as unsecured relinquishes his right to any and all securities he holds for his debt, and must deliver the same to the assignee. (In re Granger & Sabin, 8 N. B. R. 30; Fed. Cas. 5684) Where a bankrupt does not satisfactorily explain a deficit in his assets, he must pay over to the assignee the amount of such deficit. (In re Peltasohn et aL, 16 N. B. R 265; 4 DilL 107; 10 Chi. Leg. News, 9; Fed. Cas. 10912.) Where a will devises bonds to A., B. and C. and their heirs, provides against alienation and for rents and profits to be paid them by executors, and in case of death of either A., B. or C. without lawful issue the share of such an one is to go to the survivors and heirs forever, and at death of testator C. has several children living, the remainder to the issue of C. is vested and alienable, and passes to a general assignee in bankruptcy during the life of C. (Smith v. Scholtz et aL, 17 N. B. R. 520.) An assignee who redeems pledges is subrogated to the rights of the pledgee untiL from the proceeds of the pledges redeemed, the fund is made good. (McLean et aL, Ass., v. Cadwalader, 15 N. B. R. 383.) It is not a ground for nonsuit that the plaintifiE has been adjudged a bankrupt since the suit was begun, as the court may direct the jury, if they find for the plaintiff, to find that he may recover for the use of his assignee in bankruptcy. (Wooddail, Adm'r, v. Austin & HoUiday, 10 N. B. E. 545.) Where, by agreement between a bankrupt and another, the latter agrees to furnish the bankrupt goods of his manufacture at a fixed price, the bankrupt to pay aU freight, storage and charges, and at the expira- tion of each three months to pay for all goods sold or shipped from the 28 434: LAW OF BANKEUPTOT. [§ YO, a. bankrupt's warehouse, the assignee is entitled to the proceeds of all the goods sold by the bankrupt. (In re Linforth et al., 16 N. B. E. 435; 4 Sawy. 370; 1 San Fran. Law J. 199; Fed. Cas. 8369.) Where a person has the exclusive right to sell another's machines, with the understand- ing that he is to pay for them if sold within a certain time, and if not he is " to take them for the next season," and the transaction appears upon his books and upon the owner's invoices as a sale, the property in the machines passes upon delivery and upon bankruptcy of the pur- chaser to his assignee. (Wood Mowing and Reaping Machine Co. v. Brooke, 9 N. B. E. 395; 3 Sawy. 576; Fed. Cas. 17980.) A contract for the conditional delivery of goods to a debtor gives his creditors no title to them imtil the account for the same is paid. (Sawyer et aL v. Turpia et aL, 5 N. B. R. 339; 2 LoweU, 29; Fed. Cas. 13410.) Where a bankrupt had a fee title in a street, subject to the pubUo ease- ment, which street once terminated in a lake, but accretions accumu- lated between the street and the lake shore, the right of accretion being a vested one passes to the assignee. (Kinzie v. Winston, 4 N. B. R. 21; Fed. Cas. 7835.) After the filing of a petition in involuntary bankruptcy, no person can acquire any interest by a receivership created by a state court, or otherwise, in the property of the debtor, which the decree in bankruptcy will not displace. (Smith v. Buchanan et aL, 4 N. B. E. 133; 3 Alb. Law J. 97; Fed. Cas. 13016.) Property in general in which assignee has no title. — The assignee must surrender to the owners property found in the possession of the bankrupt but belonging to others. (In re Noakes, 1 N. B. E. 164; Bankr. Ct. Eep. 162; Fed. Cas. 10381; In re Pusey, 7 N. B. R. 45; Fed. Cas. 11478.) Where, under a written contract, ownership of personal property is not to pass to the vendee until the f uU amount of the stipidated price is paid, the assignee in bankruptcy is not entitled to the property unless lie makes payment of the balance due. (In re J. H. Lyon, 7 N. B. E, 183; 4 CM. Leg. News, 431 ; Fed. Cas. 8644.) Where a bankrupt has charge of, and conducts in his own name, the business of another, taking half of the net profits as his compensation, his right thereto does not pass to his assignee. (In re Beardsley, 1 N. B. R 131 ; 1 Amer. Law T. Rep. Bankr. 94; Fed. Cas. 1184) Hides purchased by a bankrupt to be tanned into leather under an agreement by which another, for whom the leather is to be manufactured, is to furnish the money, belong to the party fur- nishing the money, although some of the hides may have been purchased with the proceeds of drafts which such party refused to accept. (Saf- ford et aL v. Burgess, Ass., 16 N. B. R 402; Fed. Cas. 13313.) Where a sale of scales is agreed to, and the payment is to be made after the delivery and the setting up thereof, and they are delivered and partly set up, when the purchaser is declared a bankrupt, the title does not pass to the bankrupt. (In re Pusey, 6 N. B. R 40; Fed. Cas. 11477.) Where the bankrupt under a general contract has rendered partial I 70, a.] TITLE TO PEOPEETT. 435 service, but has not completed the contract prior to the flling of the petition, but subsequently fulfills the same, unless the contract for pay- ment is contingent upon fuU performance of the services, the compen- sation will be apportioned between the assignee and the bankrupt in proportion to the value of the services rendered before and after the bankruptcy. (In re Jones, 4 N. B. R. 114; Fed. Cas. 7448.) The assignee of a bankrupt who contracted for the manufacture of and received pay for an article is estopped to deny that an article of the kind contracted for, in the possession of the bankrupt at the time of the adjudication, is the one paid for. (Ex parte Rockford, Bock Island & St. Louis R. E. Co., In re McKay & Adams, 3 N. B. R. 12; 1 Lowell, 345; 3 Amer. Law T. 105; 1 ChL Leg. News, 337; 1 Amer. Law T. Rep. Bankr. 138; Fed. Cas. 11978.) Where the bankrupt is a non-resident when the cause of action ac- crues, and it does not appear when he became a resident of the state, nor that since the cause of action aocinied he had resided more than three years in the state, the assignee cannot set up the state act of limitar tions as a defense. (Capelle, Ass., v. Trinity M. E. Church of Chester, 11 N. B. R. 586; Fed. Cas. 2392.) If a biU of sale be recorded in the clerk's office at one place, upon a representation by the bankrupt that he re- sided there, it will bind the assignee, although the bankrupt actually resided in another place. (Allen v. Whittemore, Ass., 14 N. B. R. 189; 8 Ben. 485; Fed. Cas. 241.) A lease executed by the bankrupt prior to the bankruptcy and not recorded, and free from fraud as to the cred- itors of the bankrupt, is valid as against the assignee though he had no notice of it. (Goss v. Coffin, 17 N. B. R 882.) A tenant who occupies land under an agreement to pay rent, with provision for ouster and distraint upon default, has no such interest in the land as will pass to his assignee. (In re O'Dowd, 8 N. B. R. 451; Fed. Cas. 10439.) Assignee's interest in exempt property. See Exemptions, sec. 6. Lien of assignee. — The assignee takes the property of the bankrupt with the like right, title, power and authority to sell it as the bankrupt could have done. He acquires no other or better title to the property than the bankrupt had, and if there were a lien on the property in the hands of the bankrupt the same lien follows the property into the hands of the assignee (In re Winn, 1 N. B. R 131; 1 Amer. Law T. Rep. Bankr. 17; Fed. Cas. 17876), if it were perfected before the commencement of the proceedings in bankruptcy. (In re Smith et aL, 1 N. B. R. 169; 2 Ben. 432; 1 Amer. Law T. Rep. Bankr. 112; Fed. Cas. 12973.) He ac- quires his title to movable property found upon the premises, subject to the rights of all other persons; and where rent is a lien upon the per- sonal property of the bankrupt it must be paid first out of the proceeds of the sale. (Longstreth v. Pennock et al., 13 N. B. R. 95, U. S. S. C.) The landlord wiU be entitled to prove his claim in bankruptcy for the unexpired term of a lease beyond one year, even though he has been 436 LAW OF BiLNKEUPTOT. [§ 70, 5. preferred, under a state law, for his rent up to the end of the year. (In re Wynne, 4 N. B. E. 5; 3 Amer. Law T. Eep. Bankr. 116; Fed. Cas. 18117.) Where a corporation gives a deed of trust in which it agrees to keep the premises insured and to make the policies payable to the trustee, and to deliver them when efiPected, and the insurance, though effected, is not so made payable nor are the policies delivered, and the buildings bum and the corporation becomes bankrupt, whereupon the assignee collects the insurance, the trustee, through the covenant in the deed, has an equitable lien upon the proceeds. (In re Sands Ale Brewing Co., 6 N. B. E. 101; 3 Biss. 175; 4 Chi Leg. News, 137; 6 Amer. Law Eev. 574; Fed. Cas. 12307.) Preferences. — Where an assignment is made for the benefit of credit- ors, the title to property so assigned rests in the common-law assignee until such assignment is set aside, and does not vest in the assignee in bankruptcy by the mere force of the adjudication and his appointment as assignee. (Belden, Ass., v. Smith et aL, 16 N. B. E. 302; Fed. Cas. 1242.) A conveyance of real estate made to defraud creditors is not void, but voidable, and the property so conveyed does not absolutely vest in the assignee. (Phelps et aL v. Curts, 16 N. B. E 85.) An assignment made bona fide twelve months prior to the filing of the petition in bank- ruptcy is good against the assignea (In re Arledge, 1 N. B. R 195; Fed. Cas. 533.) Where a lease is made of a hotel for a term of years and it is trans- ferred to a creditor to secure a debt, and the lessor becomes bankrupt, the assignee takes the estate subject to such lease. (Meador et aL v. Everett, Ass., 10 N. B. E. 431; 1 Cent. Law J. 453; Fed. Cas. 9376.) Title to realty. — If a deed without any certificate of acknowledg- ment be good against a bankrupt, it is good against his assignee. (In re Kansas City Stone and Marble Mfg. Co., 9 N. B. R 76; Fed. Cas. 7610.) Where a limitation has ceased and division is made of an estate, the bankrupt taking his share in fee, such land is liable to the bankrupt's debts, although contrary to the stipulation in the instrument by which he takes it (In re Myrick, 3 N. B. E 38; Fed. Cas. 10000.) i. All real and personal property belonging to bankrupt estates shall be appraised by three disinterested appraisers ; they shall be appointed by, and report to, the court. Heal and personal property shall, when practicable, be sold sub- ject to the approval of the court ; it shall not be sold other- wise than subject to the approval of the court for less than seventy-five per centum of its appraised value. While real and personal property may be sold subject to the approval of the court, after appraisal, at least ten days' notice by mail must be § 70, J.] TITLE TO FEOPEETT. 437 given to all creditors of the proposed sales of property (sec. 58 — t), which sales, must be by public auction unless otherwise ordered by the court. For good cause the court may authorize the trustee to seU any specified portion of the bankrupt's estate at private sale, in which event he must keep an accurate account of each article sold and the price received therefor and to whom sold. (Orders XVIIL) Sale of property of bankrupt — Control of court thereover. — A court in bankruptcy does not possess the power to order in a summary way the sale of property, real or personal, although the same is claimed by the assignee, even though the title be in dispute, if the estate be in actual possession of a third person holding as owner and claiming abso- lute title to it, whether derived from the debtor before he was adjudged bankrupt or from another (Gifford et al. v. Helms et al., 19 N. B. R. 113; 98 U. S. 348); but it has power to order the sale of the incumbered prop- erty and the money arising therefrom brought into court to be distrib- uted among the creditors holding the securities. (In re Salmons, 2 N. B, R. 19; 15 Pittsb. Leg. J. (O. S.) 541; Fed. Cas. 13368.) It may leave the purchasers to establish their titles whenever the occasions may arise. (In re Alden, 16 N. B. R 39; 33 Int. Rev. Reo. 334, 383; 9 Chi. Leg. News, 346; 25 Pittsb. Leg. J. 4; Fed. Cas. 151.) The form of the order is suffi- cient that directs the sale of the right, title, etc., of the bankrupt, and it need not direct the sale of the right, title, etc., which the general as- signee acquired by the decree of bankruptcy. (Smith v. Scholtz et al., 17 N. B. R 520.) Appraisers wiU not be appointed to ascertain the value of the assets of an involuntary bankrupt before there has been proof of debts or appointment of an assignee. (In re Frederick, 3 N. B. R 117; 8 Amer. Law T. Rep. Bankr. 71; 3 Chi. Leg. News, 139; 1 Amer. Law T. Rep. Bankr. 181 ; Fed. Cas. 5092.) A sale cannot be ordered by the court untU the appointment of the assignee, as such a course would prevent the election given to the assignee to redeem the property pledged, to sell it subject to the lien, and to release the equity of redemption at an agreed price. (In re Grinnell & Co., 9 N. B. R 29; 7 Ben. 43; 31 Pittsb. Leg. J. 83; Fed. Cas. 5830.) A sale by the marshal, as messenger, under a special order, prior to the appointment of an assignee, is to be con- sidered as in the nature of a sale made by a provisional assignee. (In re Hitohings, 4 N. B. R 125; Fed. Cas. 6542.) A petition to sell realty be- longing to the bankrupt may be presented to the court by the assignee, but he may make such sale without any order of court. (In re McCleUan, 1 N. B. R 91; 1 Amer. Law T. Rep. Bankr. 48; Fed. Cas. 8694.) Where property is sold by the assignee without such order, the purchaser will be entitled to the rents and profits of the property from the day of sale, and not from the day of confirmation of the sale by the court. (Hall v. Scovel, 10 N. B. R. 395; Fed. Cas. 5945.) In a sale of real estate by the assignee, as- suming that it is to be assimilated to a sale under a decree in equity silent as to the manner of sale, it cannot be attacked collaterally and held ab- 438 LAW OF BAJIKETJPTOT. [§ 70, J. solutely void because not made in parcels. (Smith v. Scholtz et aL, 17 N. B. R. 620.) The assignee himself must sell the property, and the ne- cessity for the employment of an auctioneer must be affirmatively shown or the auctioneer's charges will not be allowed the assignee by the court. (In re Sweet et aL, 9 N. B. R. 48; 31 Pittsb. Leg. J. 83; Fed. Cas. 13688.) Where a party intending to bid at the assignee's sale and the assignee's solicitor agree that the bidder will let the solicitor have the property at a certain price without reference to the selling price, such agreement wiU not avoid the sale. (Citizens' Bank v. Ober, 13 N. B. R. 328; 1 Woods, 80; Fed. Cas. 3731.) A creditor has a right to call for an investigation into the conduct of the assignee in selling the property, even after the latter's accoimt has been filed and approved. (In re Peabcdy, 16 N. B. R. 343; 9 Chi Leg. News, 243; Fed. Cas. 10866.) A purchaser at a sale by the assignee stands on the same footing with a purchaser at an execu- tion sale. He takes the estate of the bankrupt subject to all equities against it, whether he knows of them or not. (Steadman v. Taylor, 17 N. B. R 383.) Sale of incumbered realty. — A sale of incumbered land by the as- signee, subject to the incumbrance, does not divest the lien of the incum- brance. (Assignee of Wicks & Co. v. Perkins, 13 N. B. R 280; 1 Woods, 383; Fed. Cas. 17615.) Where property is incumbered it wiU be taken for granted that the assignee sold subject to incumbrances, but the lien creditor or creditors must be notified before the sale takes place. (Meeks V. Whatley, 10 N. B. R 498.) The purchaser of property sold subject to alien by order of the court is estopped to deny the validity of the lien. (Bucknam v. Dunn et aL, 16 N. B. R 470; 3 Hask. 315; Fed. Cas. 2096.) If the interests of all parties demand it, the court will direct the assignee of a bankrupt corporation to sell its real estate discharged of all liens and incumbrances excepting existing and recorded mortgages. (In re National Iron Co., 8 N. B. R 433; 10 Phila. 374; 30 Leg. Int. 372; 30 Pittsb. Leg. J. 208; Fed. Cas. 10045.) The court has the right to take possession of and sell mortgaged property free from the lien of the mortgage, without first satisfying it. (In re Kahley, 4 N. B. R 134; 3 Chi Leg. News, 85; 3 Leg. Gaz. 405; Fed. Cas. 7593; In re Barrow, 1 N. B. R 135; 1 Amer. Law T. Rep. Bankr. 63; Fed. Cas. 1057.) In a sale of real estate discharged of liens, by the assignee, interest on such liens should be allowed to the date of the report of distribution. (In re Devore, 16 N. B. R 56; 24 Pittsb. Leg. J. 185, 187; Fed. Cas. 3847.) A judgment creditor who does not perfect his lien by execution and levy is not entitled to the proceeds of the sale of the bankrupt's property by his assignee, free from incumbrances, as against a junior judgment creditor whose lien was perfected prior to the commencement of proceedings. (In re Mebane, 3 N. B. R 91; Fed. Cas. 9380.) Where the assignee sells the bankrupt's real estate discharged of liens, and a judgment, acting as a lien upon the property at the time the order for sale was made, expires the day before § 70, J.J TITLE TO PEOPBETT. 439 the sale, it should be allowed its proper portion of the fund for distribu- tion. (Davis V. Assignee, etc., 19 N. B. E. 61; 7 Eeporter, 484; 86 Leg. Int. 176; 26 Pittsb. Leg. T. 115; Fed. Cas. 3654.) The assignee may, if to the interest of the estate, relieve the property from the lien by discharg- ing the incumbrance, or he may agree with the creditors as to the value of the property, or it may be ascertained by a sale under the direction of the court, when the creditors shall only be such for the balance. (Eeed V. BuUington, 11 N. R R. 408.) Where the assignee applies to the court for leave to sell real estate subject to specified incumbrances, and an order is made, and after the sale the assignee reports that the property has been sold free of all incumbrances other than those specified, the holder of a judgment which is a lien against the property, and who was not a party to any of the proceedings, is not debarred from enforcing his hen, as the court confirms the sale and not the assignee's report. (In re McGilton et aL, 7 N. B. E. 394; 3 Biss. 144; 29 Leg. Int. 882; 5 Chi. Leg. News, 1; 20 Pittsb. Leg. J. 39; Fed. Cas. 8798.) Where a levy is not made at the date of the bankruptcy, the title by operation of law is vested in the assignee, who nrast make the sale and dejxjsit the proceeds subject to whatever claims may be made upon it. (Pennington v. Sale & Phelan et al., 1 N. B. E. 157; 2 Amer. Law Eev. 776; Fed. Cas. 10939.) The assignee may apply to have a lien ascertained and liquidated, or for an order directing the sale of the property held as security for any debt existing or provable under the bankruptcy, as the most correct means of ascertaining its true value, and may from the pro- ceeds pay to the creditor the amount of his debts covered by the security. (In re Stewart, 1 N. B. E. 43; 1 Amer. Law T. Eep. Bankr. 16; 15 Pittsb. Leg. J. 233; Fed. Cas. 13418.) Where the assignee sells mortgaged realty, and thereafter the transferee of the mortgaged notes, having had the mortgage rendered executory, files a petition claiming the property, he is entitled thereto. (Eay v. Brigham et al., 12 N. B. E. 145, U. 8. S. C.) A mortgagee in possession being entitled to retain all property upon which his mortgage is valid, on a sale of such property by order of the court, he should be charged only with the reasonable expenses of the sale of such property, and not with any portion of the costs in bankruptcy. (InreEldridge,4N.B.E.163; 3 Biss. 363; Fed. Cas. 4330.) Where the prop- erty of a bankrupt corporation is sold at the petition of the assignee, under a mortgage, and the proceeds of the sale are not sufScient to pay the mortgaged debt, only the actual costs of the sale are chargeable upon the proceeds thereof. (In re Blue Eidge Railroad Co., 13 N. B. R. 315 ; 3 Hughes, 334; 8 Chi Leg, News, 390; 4 Amer. Law Rec. 456; Fed. Cas. 1570.) Where a former assignee of a bankrupt, a second mortgagee, is made a defend- ant in a suit for the foreclosure of a first mortgage, and dies after entry of a decree pro confesso, but before final decree, and his successor is not made.a party to the suit, the second mortgage, and the right of the as- signee to redeem, are not affected by a sale of the mortgaged premises. 440 LAW OF BANKETJPTOT. [§ 70, h. (Avery, Ass., eto. v. Eyerson et al., 16 N. B. E. 289.) Where a mortgagee fails to secure an equitable lien by bill, and the appointment of a re- reiver of rents or profits of the mortgaged premises after a default, and the premises sell for less than his claim, at a sale by the mortgagor's as- signee, he will only be entitled to a pro rata share on the deficiency of his claim of the bankrupt's assets. Profits of the mortgaged premises reduced to possession by the mortgagor's assignee prior to sale of the mortgaged premises are to be treated as assets, and the mortgagee can- not claim that a deficiency after sale on his mortgage shall be paid in preference to the claims of other creditors. (In re Snedaker, 4 N. B. R. 43.) The circuit court has jurisdiction to entertain a petition for relief from orders of the district court directing that the bankrupt's land shall be sold, and that the holder of the first lien, a deed of trust, shall be pur- chaser, the trust bond to be accepted at par in part payment. (In re Alexander, 3 N. B. R 6; Chase, 295; 8 Amer. Law Eeg. (TJ. S.) 423; 3 Amer. Law T. Eep. Bankr. 81; 16 Pittsb. Leg. J. 91; 2 Bait. Law Trans. 759; Fed. Caa 160.) Exempt property. — A bankrupt to whom an exemption of real estate to be used as a homestead has been allotted, is vested, under the exemp- tion laws of Ohio, with only a qualified interest therein so long as he uses it as a homestead for his family, with reversion in the assignee, which may be sold by the assignee subject to the bankrupt's interest therein. (In re Watson, 2 N. B. R 174; 2 Amer. Law T. Rep. Bankr. 93; Fed. Cas. 17271.) Dower. — A sale by the assignee of realty of a bankrupt whose wife claims her dower therein does not divest the dower. (Lazaer v. Porter, Ass., 18 N. B. R 549; sec. 5044, R S. For contra, see In re Kelly v. Strange, 8 N. B. R 2; Fed. Cas. 7676.) A wife's right of dower, where she joins in a mortgage of her husband's property, can be barred only by sale of the mortgaged property under a power of sale contained in the mortgage, or by a decree of a court of competent jurisdiction where she can be made a party to proceedings, a sale in bankruptcy proceed- ings being ineffectual for the purpose. (In re George A. Bartenbach, 11 N. B. R 61; 2 Amer. Law T. Eep. (N. S.) 33; Fed. Cas. 1068.) The sale in general. — Where the assignee is not made a party to par- tition proceedings of real estate, he may sell the bankrupt's undivided interest therein. (Smith v. Scholtz et al., 17 N. B. R 520.) Where one not in debt conveys realty by deed absolute on its face, but in reality in trust to his wife, and afterwards is adjudged banknipt, until which time he remains in possession of the realty, which is sold by the assignee, and thereafter the deed is recorded, a bill to set aside the sale will be dismissed, as the omission to record is a fraud upon creditors. (Barker V. Smith et al., 12 N. B. R 474; 2 Woods, 87; 2 Amer. Law T. Eep. (N. S.) 886.) After a bankrupt's discharge an order will not be issued directing the assignee to sell and convey real estate to which the bankrupt did § 70, &.] TITLE TO PEOPEETT. Ml not have a legal title at the date of adjudication, and which was not included in his schedule of assets, to satisfy an alleged lien created by » judgment recovered prior to adjudication. (In re Dean, 3 N. B. E. 188; Fed. Cas. 3701.) Sale of personalty. — Where a levy is made by a sheriff on goods of the bankrupt after the date of his filing a petition in bankruptcy, the assignee must make sale thereof and deposit the proceeds of the goods subject to whatever claims may be determined by the court to be upon them. (Pennington v. Sale & Phelan et al., 1 N. B. R 157; 2 Amer. Law Rev. 776; Fed. Cas. 10989.) In a sale by the marshal as messenger, under a special order of the court, prior to the appointment of an assignee, of the lease, good- will and fixtures of a store, only such things (or their accessories) as are actually or constructively fastened to the freehold will pass to the purchaser of fixtures; and such a purchaser may make claim upon the funds in the hands of the assignee for the sale of such articles as were properly included under the sale of the fixtures and afterwards resold as movables. (In re Hitchings, 4N. B. E. 125; Fed. Cas. 6542.) Property which has been mortgaged by a bankrupt may be sold by the assignee imder the direction of the court discharged of the incumbrances, the lien being remitted to the proceeds of sale, provided the substantial rights of the mortgagee will not be thereby injuriously affected, and the assignee may, for the purpose of such sale, expend money upon finishing chattels which he finds in an incomplete or un- finished condition. (Foster, Ass., v. Ames, 2 N. B. R 147; 1 Lowell, 313; 2 Amer. Law T. Rep. Bankr. 65; Fed. Cas. 4965.) If bank stock be trans- ferred as security for the payment of money loaned, the delivery of pos- session is complete, the only defect in the title being the non-transfer of the stock on the books of the bank issuing the stock, and the bank can become entitled to the stock only by satisfying the debt which has been secured by the transfer, notwithstanding the fact that it may have pur- chased a right to them from the assignee. (Second National Bank of Louisville v. National State Bank of Newark, 11 N. B. E. 49.) Where one holds a lien as security of the bankrupt on his letters patent, the court may order the letters patent to be sold jointly by the assignee and the holder of the lien and the proceeds obtained deposited pending settle- ment of suit. (In re Columbian Metal Works, 3 N. B. R 18; Fed. Cas. 3039.) The amount of premiums paid by a husband after his bankruptcy on life insurance policies for the benefit of his wife may be claimed by his creditors, and the claim may be sold for cash and become a lien on the policy, collectible when the policy shall be paid. (In re Bear & Steinberg, 11 N. B. R 46; 1 Cent. Law J. 607; Fed. Cas. 1178.) Where one of several, formerly partners, is adjudicated a bankrupt and receives his discharge, and the assignee sells all the assets to the bankrupt, who afterwards brings an action on a claim so purchased, the statute of lim- itations runs from the time of adjudication. (BlackweU v. Claywell et 442 LAW OF BANKEUPTCT. [§ YO, J. aL, 15 N. B. R. 300.) An agistor who delivers a bankrupt's cattle to the assignee, without claiming a hen granted him for purchasing stock by a state statute, and allows it to be sold as belonging to the bankrupt's estate and unincumbered, waives the hen, (In re Mitchell, 8 N. B. E. 47; 5 Chi Leg. News, 371 ; Fed. Cas. 9657.) Where a claim against the gov- ernment is marked " worthless " in the schedule of assets, and is sold with the bankrupt's other property, the fact that the claim subsequently becomes valuable does not impair the validity of the sale, (Phelps, Ass., V. McDonald et aL, 16 N. B. R. 317.) Sale set aside. — A sale of the assets of the bankrupt's estate to him before the appointment of an assignee is void. (March, Ass., v. Heaton et aL, 3 N. B. R. 66; 1 Lowell, 378; Fed. Cas. 9061.) The assignee's so- licitor cannot bid at the assignee's sale (Citizens' Bank v. Ober, 18 N. B. R. 328; 1 Woods, 80; Fed. Cas. 3731); but such objection mxist be set up in the bankrupt court and not in a collateral action. (Spilman v. Johnson, 16 N. B. R. 145.) Where fraud in a sale by the assignee is alleged, every fact which is relied on to establish the fraud should be distinctly stated, and the whole should be verified by some one having knowledge of the circumstances. (In re Peabody, 16 N. B. R. 243; 9 Chi. Leg. News, 343; Fed. Cas. 10866.) If the assignee's petition for a private sale of the dis- puted interests of the bankrupt, an order by the register for such sale, and the assignee's report thereon, are all made on the same day, the order is void and the sale is a nullity. Notice of the petition for the sale of such an interest must be given personally to those claiming adversely, and the sale must be public, and after a public notice. (Ex parte Bryan, Ass., In re Major, 14 N. B. R. 71; 2 Hughes, 373; 23 Pittsb. Leg. J. 196; Fed. Cas. 2061.) The purchase from a general assignee of property, which a few months afterward is held at a vastly increased price, cannot be regarded as made in good faith, and may be set aside. When such sale is set aside by the court upon the ground of fraud, an application for the return of the purchase-money vpill not be granted unless the convey- ance deeds be surrendered to be canceled. (In re Mott, 1 N. B. R 9; Fed, Cas. 9879.) A sale to him of stock, held by a creditor as collateral se- curity, for two-fifths of its value, wiU. be set aside, and another sale or- dered. The bankmpt court has discretion to refuse to confirm a sale made under its orders, for mere inadequacy of price, such sale being sub- ject to the approval of the court. (In re Bousfield & Poole, 16 N. B. R. 481 ; Fed. Cas. 1703.) Where a suit to foreclose a mortgage is filed and a receiver is appointed before the institution of proceedings in bankruptcy, and the court orders the mortgaged property to be delivered to the as- signee from the receiver, which is done against his protest, the property being sold under order of the court, the sale is void, and the trustees under the mortgage may recover the property from the purchasers, to whom the purchase-money will be returned. (Davis et aL, Trustees, v. Railroad Co. et aL, 13 N. B. R. 308; 1 Woods, 661; Fed. Cas. 3648.) Where, § 70, C] TITLE TO PKOPERTT. 443 after adjudication of bankruptcy, the appointment of the assignee and the conveyance by the register of the estate of the bankrupt, the holder of a mortgage brings foreclosure proceedings in a state court, making the assignee a party, and judgment is obtained and the property sold by the sheriff, such proceedings are void. (In re Brinkman, 7 N. B. R. 431; Fed. Cas. 1884.) c. The title to property of a bankrupt estate whicli has been sold, as herein provided, shall be conveyed to the pur- chaser by the trustee. Title of purchaser from assignee. — An assignee can transfer only such title as he may possess. (Second Nat. Bank of Louisville v. Na- tional State Bank of Newark, 11 N. B. R. 49.) When he sells property of the bankrupt incumbered by a mortgage, he conveys only the inter- est of the bankrupt, subject to the hen of the mortgagee. (In re Cooper, 16 N. B. R. 178; Fed. Cas. 3190.) When he sells incumbered property without any special order of the court, he sells it subject to aU lawful incumbrances, and can convey no better or higher interest than the bankrupt could have done. (Ray v. Brigham et aL, 13 N. B. R. 145.) When he sells to a third person property in which the bankrupt had title at the time of adjudication of bankruptcy, no other court can in- quire whether such property was exempt from the assignment in bank- ruptcy. (Steele v. Moody, 16 N. B. R. 558.) A sale of land free from incumbrances does not pass to the purchaser the bankrupt's rights to any portion of the growing crops thereon, stipulated to be paid him by way of rent. (In re Bledsoe, 13 N. B. R 403; 1 N. Y. Wkly. Dig. 101; Fed. Cas. 1533.) Parties who purchase the property and franchise of a corporation from the assignee do not thereby become its corporators and acquire the corporate entity. (Metz, Adm'x, etc. v. Buffalo, Corry & Pittsburg R. R Co., 13 N. B. R 559.) The record of the assignment is not necessary to give force or validity to the transfer to the assignee, or for the purpose of constructive notice, but to enable the purchaser under the assignee to have in the proper county a record of his derivative title. (Davis V. Anderson, 6 N. B. R. 146; Fed. Cas. 3633.) A purchaser of mortgaged property, sold imder a judgment of foreclosure by permis- sion of the bankrupt court, will not be relieved from the purchase, nor can an assignee in bankruptcy of the mortgagor set aside such sale. (Lenihan v. Hanson, 8 N. B. R. 557.) A district court wUl not grant an injunction to restrain a mortgagee from prosecuting a suit in trover against the purchaser of mortgaged property sold by the assignee of the bankrupt without an order of court. (In re Cooper, 16 N. B. R 178; Fed. Cas. 3190.) If the assignee make a sale of property, but refuse to deliver possession, he is liable to an action at law, if the sale has never been brought to the attention of the bankrupt court, nor acted on by it. (Ives 444 LAW OF BAJSTKEUPTOT. [§ 10, d, 6. et aL V. Tregent, 14 N. B. E. 60.) Where property is purchased at an as- signee's sale, which the bankrupt holds claiming homestead exemption, the validity of the sale cannot be questioned. (Steele v. Moody, 16 N. B. R. 558.) "Where the bankrupt occupies premises until the conveyance is made by the assignee to a purchaser, and after the purchaser has per- fected the title the bankrupt agrees to vacate on a specified day and does not do so, he holds as tenant under the purchaser and not under the assignee. (In re Hale, 19 N. B. R 330; Fed. Cas. 5912.) Where a wife applies for exemptions to which the trustee objects on the groimd that the husband's property, including exemptions, passed to the marshal, and that he had been allowed exemptions, and action in ejectment is brought against the bankrupt, purchasers of the lands from the assignee having notice at the time the portion was set apart for the wife, and that the bankrupt husband was her tenant and that he had not been discharged, the taking of an exemption by the bank- rupt defeats the wife's rights to a homestead, and the purchaser at the assignee's sale has good title as against the wife and children. (Wool- folk V. Murray, Bryan v. Sims, 10 N. B. R. 540; Fed. Cas. 18028.) A purchaser of real estate at a foreclosure sale will not be discharged from his purchase on the ground that the title is defective by reason of proceedings in bankruptcy having been begun against the owners of the equity of redemption. (Lenihan v. Bta,man et aL, 11 N. B. R. 471.) d. Whenever a composition shall be set aside, or discharge revoked, the trustee shall, upon his appointment and qualifi- cation, be vested as herein provided with the title to all of the property of the bankrupt as of the date of the final decree setting aside the composition or revoking the discharge. Upon application of parties in interest filed at any time within six months after a composition has been confirmed, the judge may set it aside and reinstate the case (sec. 18), or he may revoke a discharge at any time within one year after it was granted. (Sec. 15.) Composition set aside. — An assignment to an assignee after an in- complete composition must be without prejudice to lawful acts done or titles acqiiired under and by virtue of such composition. (Ex parte HamUn, 16 N. B. R. 320; 2 Lowell, 571; 5 Cent. Law J. 281; Fed. Cas. 5993.) e. The trustee may avoid any transfer by the bankrupt of his property which any creditor of such bankrupt might have avoided, and may recover the property so transferred, or its value, from the person to whom it was transferred, unless he was a bona fide holder for value prior to the date § 70, e.] TITLB TO PEOPEETT. 445 of the adjudication. Such property may be recovered or its value collected from whoever may have received it, ex- cept a bona fide holder for value. Any preference given by a bankrupt within four months before the filing of the petition and before the adjudication, where the person ben- efited had reasonable cause to believe it was intended as a preference, is voidable by the trustee (sec. 60, b); so is any payment to counsel ex- cept to the extent of a reasonable amount. (Sec. 60, d.) Any hen cre- ated in pursuance of suit in law or equity within four months before the filing of a petition shall be dissolved, and any conveyance, transfer, assignment or incumbrance of the bankrupt's property, with intent to defraud or delay his creditors, is null and void as against the creditors, except as to purchasers in good faith and for present consideration. Property that may be recovered by the assignee — Nature of ac- tion. — Where the property in controversy at the time the debtor is ad- judged bankrupt is in the actual possession of a third person claiming absolute title to the same, tne question of ownership, if the same is claimed by the assignee, must be determined by a suit in equity or by an action at law, subject'to re-examination as provided in the law of the place where the suit is commenced. (Knight v. Cheney, 5 N. B. E. 305; Fed. Cas. 7883.) A state court passing upon claims of an assignee is not proceeding imder the Bankrupt Act, but simply recognizes that act as the source of the assignee's title, in like manner as it would if such title were derived from a contract or deed. (Cook v. Waters et aL, 9 N. B. R 155.) An action by the assignee to collect a debt due the bankrupt is not a matter of proceeding. (Kidder, Ass., v. Horrabin et aL, 18 N. B. R 146.) A district court may not proceed summarily against persons claiming title to property adverse to that of the assignee. The proceed- ing must be by suit at law or in equity. (In re Marter, 13 N. B. R 185; Fed. Cas. 9143; In re Bonesteel, 3 N. B. R 137; 7 Blatchf. 175; Fed. Cas. 1637; Eogers v. Winsor, 6 N. B. E. 346; Fed. Cas. 13033.) Where a fund in a depositary's hands is claimed absolutely by several parties, and among them by the assignee, the possession of the depositary is the pos- session of the claimant, if the claim be just and legal, and proceedings to recover must be by suit in law or equity. (Smith v Mason, 6 N. B. R 1 ; 14 WaU. 419.) A petition of a bankrupt's assignee to recover prop- erty from one claiming by virtue of a voluntary assignment brought in the bankruptcy court is a suit at law. (In re Krogman, 5 N. B. E. 116; Fed. Cas, 7936.) Where an assignee obtains an order of the district court requiring the bankrupt and others to deliver to him the property be- longing to the bankrupt, an appeal will lie although the proceedings below be by petition. (Samson v. Blake, 6 N. B. R 401; Fed. Cas. 13384.) A circuit court wUl entertain a bill by the assignee against mortgagors and other lien-holders to ascertain the amount due, and sell all the prop- erty free from incumbrances. (Sutherland et aL v. Lake Superior Ship 446 LAW OF BANKRUFTOr. [§ 70, 6. Canal, Railroad & Iron Co., 9 N. B. R. 298; 1 Cent. Law J. 127; Fed. Cas. 13643.) Assignee represents the bankrupt and also his creditors. — An as- signee represents the rights of the creditors as well as the bankrupt, and may therefore maintain or defend proceedings in regard to the property of the latter, which, on groimds of public policy or otherwise, he would not be allowed to do. (In re St. Helen's Mill Co., 10 N. B. R. 411 ; 3 Sawy. 88; 8 West. Jur. 597; Fed. Cas. 12223.) As the adjudication of bant- ruptcy is in the nature of a statute execution for all the creditors, the assignee, as their representative, may enforce against the debtor every right a judgment creditor could enforce. (Bamewall & Gaynor, Ass., V. Jones et aL, 14 N. B. R. 278; Fed. Cas. 1037.) If creditors who have received from a bankrupt full payment of their debts sign an agree- ment with other creditors to take a certain amount on the doUar in the future, this constitutes a fraud which will give a right of action both to the debtor or creditor thereby injured, and such creditors will be liable to the assignee, who represents both the rights of the bankrupt and of creditors who have been defrauded. (Bean v. Brookmire & Ran- kin, 7 N. B. R 568; 2 DiU. 108; 5 Chi Leg. News, 314; 3 Amer. LawRec. 233; 6 Amer. Law T. Rep. 418; 7 West Jur. 334; Fed. Cas. 1170.) Limitation of actions by and against assignee. See Sxnrs by and Against Bankrtjpts, sec. 11. Eecovery of fraudulent conveyances. — The right given the assignee of recovery of property transferred by an insolvent debtor is not a pen- alty, but has its operation in the vesting of the title in the assignee after the transfer is declared void. (Cook v. Waters et aL, 9 N. B. R 155.) A creditor should not bring suit after proceedings in bankruptcy are begun to set aside a conveyance claimed to be void, but such suit should prop- erly be brought by the assignee (Thurmond v. Andrews and Wife, 13 N. B. R 1-57), who stands in the place of an attaching or execution creditor and may impeach the validity of a secret mortgage of his assignor. His right is stronger than the right of the bankrupt. (In re Gurney, 15 N. B. R 373; 7 Biss. 414; 9 Chi. Leg. News, 255; 4 Law & Eq. Rep. 28; Fed. Cas. 5873.) Where a bankrupt executes a mortgage two days before his adjudication as such on his own petition, and the assignee petitions for an order that he may pay to him the proceeds thereof, the bankrupt may retain from the proceeds the sum paid counsel for preparing his petition and schedules, and an amoimt, to be determined by the assignee, sufBcient for the support of himself and family. (In re Thompson, 13 N. B. R. 300; 2 N. Y. Wkly. Dig. 4; Fed. Cas. 13938.) He can avoid any con- veyance which the creditors could avoid although made more than six months before bankruptcy. (Pratt v. Curtiss, 6 N. B. R. 139 ; 3 Lowell, 87 ; Fed. Cas. 11375.) Where a petition in bankruptcy is filed against an in- solvent more than two months after executing a mortgage, but within two months of the filing of the same for record, and the state registry law provides that the mortgage is not "good in law to hold lands against § 70, 6.] TITLE TO PEOPEETT. 447 any other person than the grantor and his heirs" without record, the transaction is not complete until the instrument is recorded, and it should be set aside as against the assignee. (Bostwick, Ass., v. Foster, 18 N. B. R. 133; 14 Blatohf. 436; Fed. Cas. 1683.) Title to property mort- gaged by a bankrupt, but in his possession at commencement of pro- ceedings in bankruptcy, passes to his assignee, and if possession has been obtained subsequent thereto by the mortgagee, or one claiming in his right, the assignee is entitled to recovery in specie, or, if that be im- possible, the value of the property when taken. (In re Rosenberg, 3 N. B. R 33; 3 Ben. 366; Fed. Cas. 12055.) In attacking a conveyance on the ground of fraud the assignee repre- sents the rights of general creditors and may avoid the instrument, though he has no specific lien on the property. (Cragin v. Carmichael, 11 N. B. R 511; 3 Dill. 519; Fed. Cas. 3319.) An assignee may maintain an action to recover the proceeds of a sale of a bankrupt's lumber ma,de by the defendant under a chattel mortgage alleged by the assignee to be fraudulent on account of an agreement of the parties under which the mortgagor continues to sell lumber of the stock, using the proceeds m. his business. (Southard, Ass., etc. v. Benner et aL, 19 N. B. R 124) Where it appears that the bankrupt fraudulently put into the hands of another money to be invested m stocks, after the adjudication of the bankrupt, at his request, the assignee is entitled to the stocks, and to a decree that such party vest in the assignee the title to the same and pay the costs of suit. (Hyde, Ass., v. Cohen et aL, 11 N. B. E. 461; Fed. Cas. 6967.) He can bring a suit in a United States district court, other than that in which bankruptcy proceedings are pending, to recover money alleged to have been paid in violation of the Bankrupt Act. (Sherman V. Bingham et aL, 7 N. B. R 490; 3 Cliff. 553; Fed. Cas. 13763.) A debtor vrho pays money under an order of his creditor to a third party, with the intent thereby to enable his creditor to give a preference to such third party, will be deemed to still hold it, and the assignee may sue him for its recovery. (Fox et aL v. Gardner, 13 N. B. R. 137; 31 WalL 475.) The assignee may recover damages for an injury or detention of goods by a party to whom they are transferred by the bankrupt con- trary to the provisions of the Bankrupt Act, and such recovery may be had in an action to obtain possession of the property. (Shumann, Ass., V. Fleckenstein, 15 N. B. R 334; 4 Sawy. 174; Fed. Cas. 12836.) Suit may be maintained by the assignee to have declared void a conveyance of all the personal property of the bankrupt, where it appears that the conveyance did not vest title in the defendant until within two months of the bankruptcy proceedings, the defendant until that time holding the property in trust to await composition proceedings. (Haskill v. Frye, Ass., 14 N. B. E. 535; Fed. Cas. 6195.) Conveyances not fraudulent and not recorerable. — Where a debtor executes a deed of trust which is duly delivered and recorded, and, after 448 LAW OF BAITKETJPTOT. [§ 70, tf. condition on which the trust is to be carried out comes into operation, the trustees do not take possession of the land and carry out the trust, but allow the bankrupt to retain possession, there is no fraud, and a pe- tition of the assignee to have the deed, set aside will be denied. (In re Broome, 3 N. B. E. 90, 3 Ben. 488; Fed, Cas. 1966.) The assignee must show something more than that debts were created without notice of it before it was recorded in order to defeat a mortgage recorded before the bankruptcy proceedings were instituted. (Cragin v. Carmichael, 11 N. B. R 511; 3 DilL 519; Fed. Cas. 3319.) An assignee wiU not, except upon most convincing evidence, be removed for attacking mortgages upon a bankrupt's property which he does not succeed in having set aside. (In re Sacchi, 6 N. B. E. 398; 43 How. Pr. 253; Fed. Cas. 12200.) It was held that where one executes a chattel mortgage covering all chattels iu his business establishment, and the mortgagee takes posses- sion of the property and sells it, and the mortgagor is adjudicated a bankrupt, the assignee cannot recover the value of the property, as the mortgagee took possession before the proceedings in bankruptcy were commenced, even though the mortgage be not properly recorded. (Mil- ler, Ass., V. Jones, 15 N. B. R. 150; Fed. Cas. 9576.) An action of trover will not lie by an assignee against a judgment creditor to recover the value of property sold under an execution prior to the commencement of the proceedings in bankruptcy. (Carol Gates> Ass., V. American et al., 14 N. B. R. 141; Fed. Cas. 5269.) Where two deeds have been given for property, the first by a sheriff by virtue of an execution in fraud of the act, the second to a bona fide purchaser, for value, without notice, from the person to whom the fraudulent deed was given, the assignee has no greater rights than a judgment creditor, and though the iirst deed may be a cover, a bona fide purchaser will be protected. (BeaU v. HarreU et aL, 7 N. B. R 400 ; Fed. Cas. 1163.) "Where the plaintiff claims a judgment to be a lien upon real estate formerly owned by the bankrupt and seeks to sell it, and the assignee denies the existence of the lien and obtains an injimction enjoining the sale, the injunction will be dissolved and the creditor allowed to sell the prop- erty, the title to which may then be tried by ejectment. (Reeser v. Johnson, 10 N. B. R 467.) The assignee of a principal cannot recover from a creditor for money paid to the creditor by a surety, even though the surety receives the money from the principal by a preference under the act, if the creditor have no knowledge of that fact and receive the money in discharge of the obligation of the sm-ety. (Tyler, Asa, v. Brock et aL, 17 N. B. R 239.) After satisfying valid claims, the estate of the bankrupt belongs to him, and a conveyance alleged to be fraudulent against creditors wiU not be set aside at the suit of the assignee, if it appear that no debts exist that are provable against the estate. (Nicholas, Ass., v. Murray, 18 N. B. R 469; Fed. Cas. 10323.) § 70, e.] TITLE TO PKOPEETT. 449 Recovery of attached property.— When at the time bankruptcy pro- ceedings are instituted property is in the hands of the sheriff, under attachments issued out of state courts, the assignee should apply to the state and not the federal courts to obtain possession of the property. (Johnson v. Bishop, 8 N. R R 533; 31 Pittsb. Leg. J. 77; Fed. Cas. 7373.) If an injunction issue out of the circuit court under the equitable ju- risdiction auxiliary to that of the district court in bankruptcy, the exe- cution creditor may, at his election, require the assignee, as complainant, to proceed in the circuit court in equity, or invoke the summary juris- diction of the court of bankruptcy for a decision of the question of prior- ity. (In re Hafer et al., 1 N. B. R. 163; 6 Phila. 474; 25 Leg. Int. 164; Fed Cas. 5897.) Where goods are consigned by the owner, who after- ward becomes bankrupt, and an attachment is issued against the goods and they are sold, an action by the assignee may be maintained in the state court for the recovery of the proceeds. (Dambmann & White et aL, 13 N. B. R 438.) As title to all goods in the possession of the bank- rupt at the date of filing his petition passes to the assignee, goods subse- quently taken on a writ of replevin may be recovered by the assignee. (In re Vogel, 3 N. R R 49; 7 Blatchf. 18; 1 Amer. Law T. Eep. Bankr. 170; 3 Amer. Law T. 154; Fed. Cas. 16983.) His petition to have the levy of an execution on personal property of the bankrupt declared void will be granted where it appears that such levy is not in conformity with the laws of the state in which the same is made. (Beers v. Place et aL, 4 N. R R 150; 36 Conn. 578; 4 Amer. Law T. 136; 1 Amer. Law T. Rep. Bajikr. 263; Fed. Cas. 1333.) A demurrer wiU be overruled that is filed to a bill alleging an attachment and levy upon goods which were sold by the sheriff, who holds the proceeds, the bill praying that the sheriff be enjoined from paying the proceeds to the attaching cred- itors, and that they be paid to the assignea (Pennington v. Lowenstein et aL, 1 N. B. R 157; Fed. Cas. 10938.) A subsequent judgment creditor is not a necessary party in a suit between the assignee in bankruptcy and a prior judgment creditor. (Traders' Nat. Bank v. Campbell, 6 N. R R 353; 14 WaJL 87.) Although a creditor secures judgment and execu- tion issues upon lands of the debtor, the assignee of another creditor may secure judgment in bankruptcy against the same debtor, and under execution the same lands may be sold. (In re Jordan, 3 N. B. R 45; Fed. Cas. 7518.) An assignee cannot attack collaterally a sale under attachment of property in the possession of the sheriff before the filing of the petition, but should intervene and claim the property in the attachment suit. (ValHant, Ass., v. Childress, 11 N. B. R 317.) Recovery of funds in ban&, etc.— The assignee has the right to re- cover from the judgment creditor, a bank, although it has given no receipt to the sheriff for moneys deposited as a result of levy, but has given only a certificate of deposit (Traders' Nat Bank v. Campbell, 6 29 450 LAW OF BANKEUPTOY. [§ 70, 0. N. B. E. 353; 14 Wall. 87.) Where a judgment creditor, a bank, makes collections for its debtor and turns them over to the sheriff, who levies on them, and the debtor becomes a bankrupt, the assignee may recover upon a suit against the creditor for the money received by the sheriff's levy, including the collections. (Traders' Nat. Bank v. Campbell, 6 N. B. R. 853; 14 Wall. 87.) Liability of stockholders to assignee.— Stockholders are liable in bankruptcy to the assignee for their respective amounts unpaid on their stock (Wilbur, Ass., v. Stockholders, 18 N. B. E. 178; 13 Phila. 479; 35 Leg. Int. 346; 36 Pittsb. Leg. T. 15; Fed. Cas. 17686), and an order of the court that the amount unpaid upon the stock must be paid by a certain date is conclusive as to the assignee's right to bring the suit for any sum unpaid. (Sanger v. Upton, Ass., 13 N. B. E. 236; 91 U. S. 56.) To recover the balance due on a subscription of stock, the assignee in bankruptcy of a corporation may sue at law. (Sanger v. Upton, Ass., 13 N. B. E. 326; 01 U. S. 56.) He is entitled to recover against a transferee of stock, but not where the transferee does not accept the stock. (Wilbur, Ass., v. Stockholders, 18 N. B. E. 178; 13 Phila. 479; 35 Leg. Int. 846; 36 Pittsb. Leg. T. 15; Fed. Cas. 17636.) He has all the authority of a receiver to collect demands and pay debts, and, under the order of the court appoint- ing him, an assessment may be made on the unpaid shares, as if the same had been ordered by the corporation before bankruptcy. (Myers, Ass., V. Seeley et aL, 10 N. B. E. 411; 1 Cent. Law J. 451; Fed. Cas. 9994) The assignee of a bank may maintain a suit to recover the balance due on stock subscription from one who has assigned shares not fully paid up, and concerning some of which the transfer has not been noted on the books of the company, where a by-law provides that stock shall not be transferred by one Indebted to the bank, as the transfer is not valid, (In re Bachman, 13 N. B. E. 333; 2 Cent Law J. 119; 22 Int Eev. Eea 19; Fed. Caa 707.) Where stockholders in a fire insurance company pay a portion in cash and give their notes for the balance of their stock, and a portion remains unpaid when the company becomes bankrupt, and the defendants purchase policies from other persons, and procure their ad- justment by the company, taking certificates of loss for the amounts, which they surrender to the treasurer at par in payment of their stock- notes, suit may be maintained by the assignee of the company for the balance due upon the stock-notes. (Jenkins, Ass., v. Armour et al., 14 N. B. R. 276; 6 Biss. 812; 8 Chi Leg. News, 267; 23 Int. Rev. Eeo. 169; Fed. Oas. 7360.) Bights of assignee with reference to partncrslilp property.— Where one partner is bankrupt, his assignee may recover from a solvent part- ner, either at law or in equity, what is due under the articles of copart- nership. (Wilkins v. Davis, 15 N. B. R 60; 3 Lowell, 511; Fed. Cas. 17684) A retiring partner may take from the assets a portion for his own use, provided that which remains is clearly ample to satisfy the § YO, e.] TITLE TO PEOPEETY. 451 partnership obligations; but if the partnership be insolvent or the assets not more than sufficient for the payment of the partnership debts, such appropriation is fraudulent and void as to creditors. (In re SauthofE & Olson, 16 N. R R. 181; 8 Biss. 35; 5 Cent. Law J. 364; Fed. Cas. 12380.) Where one of the members retires from a Arm but permits his name to be used, although notice of his separation is published in the newspapers, and the firm exchanges notes with one who sells for value before ma- turity, and the firm becomes bankrupt, the former partner is liable. (In re Krueger et aL, 5 N. B. R. 439; 2 LoweU, 66; Fed. Cas. 7941.) Where partnership property is divided among several, who each agree to pay the firm debts applicable to the property taken, and one sells his interest in his property to another, and the new firm, comprising these two members, contracts debts and becomes bankrupt, preceding which prop- erty is attached for a debt due by the former firm on the property taken under the dissolution, the assignee has the right to the property at^ tached, but it should be sold and the creditors of the second firm should be paid first. (Crane, Ass., v. Morrison et aL, 17 N. B. B. 393; 4 Sawy. 138; Fed. Cas. 3355.) Where a settlement of a large amount of property upon his wife is made by a member of a firm whose nominal assets exceed the liabilities by only a small amount, and the firm is dissolved and the settler and another member form a new partnership and continue the business as if the old firm existed, furnishing no new capital, and there- after fail, the wife dying before the failure, and the executor sells the property and loses the money in a business transaction, the settlement is invalid, and the assignee is entitled to possession of a mortgage repre- senting a portion of the seUing price, but he caimot have judgment against the estate for the balance. (Trust Co. v. Sedgewick, 18 N. B. R. 340.) Where a bankrupt is the general partner of a limited partnership, the capital of which is furnished by a special partner receiving a largo per cent, of the profits and contracting to bear the losses in the same proportion, the balance devolving on the general partner, the contract providing that the special partner shall lose no more than his capital and interest thereon and the amount of profits received by him, the assignee in bankruptcy may recover the amount of profits received by him. (WiUdns v. Davis, 15 N. B. R. 60; 2 Lowell, 511; Fed. Cas. 17664.) Partnership property which assignee cannot recover, etc. — An as- signee of an individual partner cannot recover property transferred by a retiring partner to the bankrupt, and by him assigned to a third per- son. (In re Shepard, 3 N. B. R 42; 3 Ben. 347; Fed. Cas. 12751) Where partners, being insolvent, dissolve partnership, and on the same day con- vey all their property to creditors who have reasonable cause to believe that they are insolvent, and one of the former partners is subsequently adjudged bankrupt, his assignee cannot avoid the conveyance. (For- saith. Ass., v. Merritt, 3 N. B. R 11; 1 Lowell, 336; 3 Amer. Law T. 122; 1 Amer. Law T. Rep. Bankr. 168; Fed. Cas. 4946.) Where an insolvent 452 LAW OF BANKEtTPTCT. [§ 70, 6. firm makes a loan, througli an agent after its failure, and the lender, immediately after learning of the failure, makes efEort to reclaim the money in the agent's hands, and before the money reaches the firm, title to it is disclaimed by a member thereof and by him placed in a bank to the credit of the lender, the title to the money does not pass from the lender, nor is the assignee of the firm entitled to recover it from the bank. (Purviance v. Union Nat. Bank, 8 N. B. E. 447; 30 Lieg. Int. 353; 31 Pittsb. Leg. J. 38; Fed. Cas. 11475.) The interest of the wife in the property of the bankrupt. — Where there has been no consummated conversion by the bankrupt of his wife's separate estate, the assignee cannot get the legal title vrithout coming into a competent court and obtaining a decree for its conveyance to him, and such court will then decree according to the equity of the case; the same rule applies where the conversion has been consummated by fraud. (In re Campbell, 17 N. B. R. 4; 3 Hughes, 276; Fed. Cas. 2348.) Where the debtor conveys his farm to his wife, the deed not being re- corded until seven years later, and after adjudication as bankrupt the assignee files a bill to obtain conveyance of the property to himself most of the money paid on the farm being from proceeds of property the title to which was in the bankrupt, the property being partly paid for by the wife with money earned by herself after marriage, the farm is assets of the bankrupt. (Keating v. Keefer, 5 N. B. R 183; 4 Amer. Law T. 163; 1 Amer. Law T. Eep. Bankr. 266; Fed. Cas. 7635.) Where a bankrupt purchases articles of luxury and gives them to his wife while he is insolvent, and they are not appropriated to her individ- \ial use, and she attempts to hold them against the assignee, the bank- rupt must answer the petition of the assignee, and if it appear that the wife had an adverse interest she will be entitled to have the right de- termined in an independent proceeding. (In re Pierce et al, 15 N. B. R. 449; 7 Biss. 436; 9 Chi. Leg. News, 300; 15 Alb. Law J. 517; Fed. Cas. 11189.) Where A. loans money to B., and takes a conveyance of land, which he reconveys to B. and wife on the payment of a certain sum annually during the life of A, at whose death R and wife should have the fee, and B. and wife (a daughter of A.) release all rights to A's es- tates, and B.'s wife dies, then A., B. becoming bankrupt, and the annual sum being paid until the death of B.'s wife, R and wife are tenants by the entirety, and B.'s assignee is entitled to the land subject to a lien in favor of A's administrator for sums due from the death of B.'s wife to the death of A., with interest. (Atwood, Ass., et al v. Kittel et aL, 17 N. B. R. 406; 9 Ben. 478; Fed. Cas. 641.) Conveyance to wife in which assignee has no title. — Where a bank- rupt, when free from debt and not contemplating bankruptcy, makes a conveyance to his vrif e of lands to her separate use, and reserves to him- self a power of revocation and also the power to appoint to other uses, and two years later he files a petition in voluntary bankruptcy and is § 70, e.] TITLE TO PKOPEETT. 453 adjudged bankrupt, the assignee has no title to the lands and the con- veyances will be upheld. (Jones, Ass., v. Clifton, 18 N. B. R. 125; 17 Amer. Law Reg. (N. S.) 713; 6 Reporter, 324; 7 Cent. Law J. 523; Fed. Cas. 7453.) Where an assignee applies to have property of a wife deliv- ered to him as assignee of her bankrupt husband, alleging, but submit- ting no proof, that she holds the property in her name as cloak against her husband's creditors, the application will be denied. (In re Driggs, Ass., V. RusseU, 3 N. R R. 39; 1 Chi. Leg. News, 353; 3 Amer. Law T. 306; 1 Amer. Law T. Rep. Bankr. 160; Fed. Cas. 4084) Assignee's right to sue for money paid as usury. — An assignee in bankruptcy may sue for money paid as usury by the bankrupt. (Whee- look V. Lee, 10 N. B. R 363; Wheelock, Ass., etc. v. Lee, 17 N. B. R. 563.) He may maintain an action to recover double the amount of usurious interest paid by the bankrupt, although the defendant demur on the ground that he has no legal capacity to prosecute the action, as the claim is one which passes to him. (Wright, etc. v. Bank, 18 N. B. R 87; 18 Alb. Law T. 115; 10 Chi Leg. News, 34S; 36 Pittsk Leg. T. 11; Fed. Cas. 18078.) The collaterals given by the bankrupt for a usurious loan cannot be recovered by the assignee imless he tender the amount actually loaned to the bankrupt. (Wheelock, Ass., v. Lee, 17 N. B. R 563.) Where the charter of a bank prohibits it from taking greater than a specified rate of interest, but is silent as to the penalty if more than the charter rate be contracted for, the effect is not to render the whole note void, but only the excess beyond the legal rate, and if such a note be voluntarily- paid, neither the borrower nor his assignee can recover the principal sum or anything more than the excess beyond the legal rate of interest, and equity will entertain a bill to recover such excess. (Darby v. Boatman Sav. Inst, 4 N. B. R 195; 3 Chi Leg. News, 249; 4 Amer. Law T. 117; 1 Leg. Op. 351; Fed. Cas. 3571.) Transfer of stock. — Where a person, being indebted to a bank in ■which he owns stock, executes an irrevocable power of attorney to the cashier to transfer such stock, with power to appoint a substitute, and afterward becomes bankrupt and the cashier dies, the jrawer is not re- voked, and the stock will not, upon suit brought, be delivered to the assignee (Lightner, Ass., v. Bank, 15 N. B. R. 69); nor where one broker purchases from another shares of stock, the transfer and payment to be made the next day, and payment is duly made but the stock is not transferred, and thereupon the vendor fails, but gives a certificate of certain of the shares with power of attorney to make the transfer and procure the transfer of the remainder, at the request of the vendee, who knows of the failure. (Sparhawk et ai, Ass., v. Richards et aL, 12 N. B. R 74; 1 Wkly. Notes Cas. 510; Fed. Cas. 13205.) Where a bank- rupt holds shares in a bank, on which the bank claims a lien imder its Ijy-laws, as security for a debt of the bankrupt, and refuses to give the 454: LAW OF BANKEtrPTOT. [§ 70, €. certificate of stock to the assignee, the latter cannot maintain an action to recover the value of the same, alleging that the by-law is void, as the bank cannot hold the title, and a judgment for conversion vrould vest the title in the bank. (Meyers, Ass., v. Bank, 18 N. B. E. 34; Fed. Cas. 9519.) The assignee of one creditor of a corporation cannot maintain an action against one stockholder to recover the full amount of his debt, without regard to the other creditors or the ability of the other stock- holders to respond, where the charter provides that stockholders are "bound respectively for all the debts of the bank in proportion to their stock holden therein." (Pollard v. Bailey, Ass., 11 N. B. R. 376; 20 WaR 520.) Where a bank buys some of its own stock, and because it has no right to hold the stock in its own name parcels it out among the direct- ors, one of them giving his note for some of the stock, which is trans- ferred to him on the books, he receiving the dividends and the bank retaining the certificate, and the director becomes insolvent and trans- fers the stock to the bank's teller, and the bank retains the note as an asset, the assignee cannot maintain an action to set aside the transfer as a preference. The bankrupt is not the owner of the shares, as the bank had no stock to convey. (Meyers, Ass., v. Bank, 18 N. B. R 34; Fed. Cas. 9519.) Commercial paper. — An indorser of a note who receives none of the proceeds of the same, and whose contingent liability never becomes ab- solute, cannot be compelled to pay the bankrupt's assignee the amount of the note paid by the bankrupt to the holder and while the debtor was carrying on the business. (Bean, Ass., v. Laflin, 5 N. R R. 333; Fed. Cas. 1172.) Where a imiversity undertakes to raise an endowment fund, and one afterward bankrupt subscribes and gives his note, his assignee can- not maintain an action to have the amount due on the subscription set asida (Sturgis, ass., v. Colby et aL, 18 N. B. R. 168; Fed. Cas. 13574) Set-off. — Where, in making proof of a claim, a creditor does not show that the bankrupt held an unsatisfied claim against him, and the as- signee brings sviit on the claim and pleads the amount allowed on his proof as a set-off, he is not entitled thereto. (Russell, Ass., v. Owen, 15 N. B. R. 332.) See also Set-obt, sec. 68. Receivers nnder state courts. — A state court having appointed a re- ceiver on a creditor's bill prior to the commencement of the proceedings in bankruptcy, it will not, on a mere motion, direct the delivery of the property to the assignee (Freeman et al.. Trustees, v. Fort et aL, 14 N. B. R. 46); and it was held, under the act of 1867, that an action cannot be maintained in a United States court in behalf of the assignee in bank- ruptcy, to compel such receiver to deliver up the property to the as- signee. (Meyer et aL v. Preserving Works, 14 N. B. R 9.) Where one partner brings an action in a state court against the other for a settle- ment, and the court appoints receivers, who take possession of the firm's property, and the firm is subsequently adjudged bankrupt, an assignee § >70, e.] TITLE TO PEOPEETT. 455 being appointed, who makes application for an order directing the mar- shal to take possession of the joint property in the hands of the receivers, the bankrupt court will not interfere with the possession of the receivers. (In re Clark & Bininger, 8 N. B. R 130; 4 Ben. 88; Fed. Cas. 3798.) Where assignee may recover in general.— The assignee may sue on a written contract entered into between the bankrupt and another to re- cover a debt alleged to be due the bankrupt thereunder. (Babbit v. Bur- gess, 7 N. B. E. 561; 3 Dia 169; 5 Chi Leg. News, 336; Fed. Cas. 693.) Where an assignee has filed a bill in equity to redeem real estate, a sub- sequent incumbrancer cannot redeem and acquire complete title. (In re Longfellow, 17 N. B. R 37; 3 Hask. 331; Fed. Cas. 8486.) "Where, on a suit on a mortgage by the assignee of the mortgagee, the defendant pleads an executory contract with the mortgagor by the terms of which the mortgage, held as collateral security by a third party, should be redeemed and satisfied, and the assignee redeems the mortgage, it is an asset in his hands for the benefit of creditors. (McLean et aL v. Cadwalader, 15 N. B. R 383.) Where a bankrupt owns a license to occupy stalls in a market, which license is revocable at the will of the city, and its assignment gives the assignee no rights unless consented to by the city, the license passes to the assignee, and a motion to compel the bankrupt to transfer it will be granted. (In re Gallagher et aL, 19 N. B. R 334; Fed. Cas. 5197.) Where a bankrupt has failed to put property in his schedule, the right of the assignee to recover it is not barred by a discharge granted before discovery. (May bin v. Raymond, Ass., 15 N. B. R 353; 4 Amer. Law T. Rep. (0. S.) 31; Fed. Cas. 9338.) Where one engages counsel to bring suit upon an insurance policy, assigning the same to the counsel as se- curity for fees, and after suit is brought becomes bankrupt and the counsel compromises the suit, an entry of dismissal being made, the assignee may at a subsequent term have the case reinstated. (Home Insurance Co. v. HoUis, Ass., 14 N. B. R 337.) Where, before filing a voluntary petition, the debtor avssigns a number of claims to his attor- neys and pays them for services rendered and to be rendered in the bankruptcy proceedings, and the attorneys collect some of the claims, and the assignee sues for the money and claims, alleging that the transfer is void, the matter is not a proper one for compromise on the part of the assignea (In re Eowe et aL, 18 N. B. R 438; Fed. Cas. 13093.) Where a sale of projjerty void under a state statute of frauds is sought to be set aside by the assignee of the vendor, a bankrupt court should follow the construction of the state court, and a sale void by the terms of the state statute is also void under the Bankrupt Act. (Massey et aL v. AUen, 7 N. B. R 401; 17 WaU. 351.) Where an order of seizure is given against goods in the hands of a purchaser from a bankrupt, and upon giving bond with securities the goods are returned to the purchaser, and in proceedings to set aside the sale a decree is made declaring the sale fraudulent, and the purchaser prosecutes imsuccessful appeals, exe- 456 LAW OF BAKKEUPTOY. [§ 70, 6. outing bonds with different sureties, and execution issues against the purchaser and part of the sum due under decree is paid, the assignee may proceed by summary motion or petition against the sureties on the original bond for the balance due and need not resort to plenary suit on the bond. (Stores et aL v. Engel et aL, 19 N. B. R. 90; 3 Hughes, 414; Fed. Cas. 13494.) If a party, taking a bill of sale as security, deliberately proves a debt which assumes that he is the absolute owner of the goods, and persists in such false claim in an action by the assignee to recover the goods, and at- tempts to support it by his own oath, he is estopped from claiming them as security. (Willis v. Carpenter et al., 14 N. B. R. 521; Fed. Caa 17770.) Bona flde holders for value. — The filing of the petition praying the ad- judication in bankruptcy is notice to all the world and all persons dealing with the person so charged to do so at their periL A purchaser of negoti- able paper, after such filing, is not a hcma fide, holder without notices (In re Lake, 6 N. B. R. 543; 6 West. Jur. 360; 3 Biss. 304; 4 Chi Leg. News, 281; Fed. Cas. 7993.) The purchasers from a first vendor must, in order to mvalidate their title, be affected by notice of or participation in the original fraud; that is, must have been purchasers without valuable con- sideration or mala fide. (Babbitt v. Walbrun & Co.j 6 N. B. R. 359; Fed. Cas. 695.) A purchaser with notice, who acquires his title from a pur- chaser who formerly acquired the property by fraud, takes no better title than his vendor had. (Harrell v. Beall, Ass., 9 N. B. R. 49; 17 WaU. 590.) The claim of an assignee duly appointed will prevail against the debtor who has made a payment to his creditor after the filing of the petition, notwithstanding it was made bona fide and without knowledge of the bankruptcy proceedings. (Opinion of Attorney-General, 9 N. B. R. 117.) Where assignee may not recover. — Where a contract is terminated by default of the purchaser, the seller being ready to perform it, an ac- tion will not lie by the purchaser or by his assignee to recover the part of the purchase-money paid previous to the default. (Kane, Ass., v. Jen- kinson, 10 N. B. R. 316; Fed. Cas. 7607.) Where one contracts to sell grain on the market with reference to the future, and the purchaser contracts to deliver the grain to a third person, part of which he does, and part of which he settles for without delivery according to custom, and the first seller gives notes and mortgages to adjust the differences between him and his purchaser and becomes bankrupt, his assignee cannot maintain an action to have the mortgages and notes set aside as wagering con- tracts. (Clark, Ass., v. Foss et aL, 17 N. B. R. 261.) Where, prior to bankruptcy, a bankrupt issues warehouse receipts, the assignee is estopped to deny the validity of the receipts. (Sharpe, Ass., V. Warehouse Co., 19 N. B. R 378.) Where numerous bonds are held by the bailee in escrow for a corporation which becomes bankrupt after having sold and received payment for some of the bonds, and the as- § 70, /■.] TITLE TO PEOPEETT. 457 signee claims the bonds as against the vendee, the latter is entitled to them, the bonds being all alike. (Hamilton, Asa, v. Bank, 18 N. B. K. 97; 3 DilL 330; Fed. Cas. 5987.) Where an insurance firm secures a loan for the bankrupt and he leaves a portion of the money in the firm's hands to pay premiums of insurance to be taken in the company which the firm represents, the money being left and the insurance being procured as a compensation for obtaining the loan, and half the amount is furnished and half the fund is applied to the payment of a premium, the assignee cannot upon action brought recover the balance of the fund, as the firm has a vested interest therein. (Newcomb v. Launtz, Ass., 18 N. B. R. 276.) Where a merchant, who afterwards becomes bankrupt, buys goods when insolvent without any intention to pay for them, and fraudulently conceals his insolvency, and the vendor retakes possession of the goods and the meroha,nt is adjudicated bankrupt, it was held that his assignee could not maintain an action to recover the value of the goods. (Donr aldson. Ass., v. Farwell et aL, 15 N. B. R. 377.) Where delivery of exclusive possession of goods accompanies an abso- lute or conditional sale, a reservation of a lien or right of property in the vendor wiU not protect the goods from the vendee's creditors, and tne assignee cannot, in an action brought, recover the value of the goods. (Enwer, Ass., v. Van Giessen et aL, 19 N. B. R. 263.) f. Upon the confirmation of a composition offered by a bankrupt, the title to his property shall thereupon revest ia hinL, A certified copy of an order confirming a composition constitutes evi- dence of the revesting of the title of his property in the bankrupt, and if recorded imparts the same notice that a deed from the trustee to the bankrupt, if recorded, would impart. (Sea 31, g.) The composition must be confirmed if the judge be satisfied it is for the best interests of the creditors, that the bankrupt has not been guilty of any act which virould be a bar to his discharge, and that the offer and its acceptance are made in good faith. (Sec. 12, d) Confirmation of composition. — The right of a party to the use of an alley, reserved to him so long as he should continue to own an adjoining piece of land, is not terminated by bankruptcy proceedings which are afterwards arranged, the land being reconveyed by the assignee. (Colie V. Jamison, 13 N. B, B. 1.) Where, in accordance with the terms of a composition, the assignee reconveys the land in question to the judg- ment debtor, the receiver appointed by the court in which the judgment was rendered has no claim upon the rents and profits of the land, it being the after-acquired property of the judgment debtor. (Conover et aL v. Dumahaut et aL, 17 N. R R. 558.) Where a composition is effected pro- 458 LAW OF BANKEUPTOT. viding that upon payment of the composition notes the property of the bankrupt, in the possession of an assignee under a -voluntary assignment for benefit of creditors, executed before petition in bankruptcy was filed, should be restored to the debtor, and payment of the composition is made, the bankruptcy court has no power to determine questions of title be- tween the debtor and persons not parties to the proceedings. (In re Waitzf elder et aL, 18 N. B. R. 260; Fed. Cas. 17048.) Where, after the appointment of an assignee, a composition is accepted and confirmed, creditors cease to- have any interest in the estate, and it is the duty of tiie assignee to pay the balance in his hands to the bankrupt. (In re August et aL, 19 N. B. E. 161; Fed. Cas. 645.) Interpretation of bankrupt law. — The national bankruptcy law- should be interpreted reasonably and according to a fair import of its terms, with a -view to effect its objects and to promote justice. (Blake et aL V. F. Valentine Co., 89 Fed. Eep. 691.) THE TIME WHEN THIS ACT SHALL GO INTO EFEEOT. a. This Act shall go into full force and effect upon its passage : Provided, however. That no petition for voluntary bankruptcy shall be filed within one month of the- passage thereof, and no petition for involuntary bankruptcy shall be filed within four months of the passage- thereof. [Act of 1867. Seo. 50. . . . That this act shaU com- mence and take effect as to the appointment of the officers created hereby, and the promulgation of rules and general orders, from and after the date of its approval: Provided, That no petition or other proceeding under this act shall be filed, received, or commenced before the first day of June, Anno Domini, eighteen hundred and sixty-seven.] 5. Proceedings commenced under State insolvency laws before the passage of this Act shall not be affected by it. Snpremacy of federal la-w. — When a Congress has exercised its con- stitutional power to establish uniform laws on the subject of bankruptcy, the law passed under such power is paramount and exclusive and super- sedes and suspends aU state insolvent laws, at least until its repeaL (In re Langley, 1 N. B. R 155; Van Nostrand v. Barr, 3 N. B. R. 154; Thorn- hill V. Bank of Louisiana, 5 N. B. E. 367; 1 Woods, 1; Fed. Cas. 13992; In re Merchants' Ins. Co., 6 N. B. R. 43; 3 Biss. 162; 20 Pittsb. Leg. J. 33; 4 ChL Leg. News, 73; Fed. Cas. 9441; In re Independent Ins. Co., 6N. B. R. 260; Holmes, 103; Fed. Cas. 7017; In re Safe Deposit and Savings Insti- tution, 7 N. B. R. 892; Fed. Cas. 13211; In re Citizens' Savings Bank, 9 TTrLE TO PBOPEETT. 459 N. B. K. 152; Fed. Cas. 2735; In re Shiyook et aL, Asb., v. Bashore, 18 N. R R 481; Fed. Cas. 13820. Contra, Sedgwick t. Place, 1 N. B. B. 204; 34 Conn. 552; Fed. Cas. 12622; Maltbie v. Hotchkiss, 5 N. B. R. 485, Chandler et aL v. Siddle, 10 N. R R 236; 1 Cent Law J. 341; Fed. Caa. 8594.) Extent of snch supremacy. — The passage of a bankrupt law for the United States suspends the state insolvent law in force at the time of its passage, in so far as the provisions of the bankrupt law cover the Bubjects-matter of the provisions of the state insolvent laws. (In re Rey- nolds, 9 N. B. R 50; Fed. Cas. 11733.) Does not supersede. — A state law " to prevent fraudulent assignments in trust for creditors and other fraudulent conveyances " is not an in- solvent law, and is not superseded by the federal bankrupt law. (Eber- sole & McCarty v. Adams, etc., 13 N. B. R 141.) Effect of repeal. — When a Bankrupt Act is repealed, the state insolv- ent laws are again in full force and need not be re^nacted. (Lavender v. Gosnell et aL, 12 N. B. R 282.) Effect on pending proceedings.— The adoption of a bankrupt law does not divest the state courts of jurisdiction over insolvent proceed- ings pending at the time of its adoption. (Lavender v. Gosnell & Tripp^ 12 N. R R 282.) Effect of prior acquired jurisdiction of state court.— The fact that a state coiut has taken possession of the property of an insolvent cannot defeat the execution of the bankrupt law. (In re Safe Deposit and Sav- ings Institution, 7 N. B. R 893; Fed. Cas. 12211.) Common-latr assignment, — A common-law assignment is not ren- dered void by the existence of a bankrupt law, ipso facto, and is there- fore good against a judgment creditor who attempts to enforce his judgment by garnishee process against the assignee. (Cook et aL v. Eogeis, etc., 18 N. B. R 97.) Winding np affairs of insolvent corporation. — Although the law imder which a state court undertook to collect and distribute the assets of an insolvent corporation did not provide for discharging, or purport to discharge, the debtor from its liabilities, such proceedings are in con- travention of bankruptcy law. (In re Merchants' Ins. Co., 6 N. B. R 43; 8 Biss. 162; 20 Pittsb. Leg. J. 83; 4 ChL Leg. News, 78; Fed. Cas. 9441.) See also generally, ante, pp^ 8-10, g§ 11 and 23, TITLE III. THE NATIONAL BANKRUPTCY LAW OP 1867 AND AMENDMENTS. As ACT to establish a unif orm System of Baakraptoy throughout the United States.* £e it eriacted Try the Senate cmd House of Representatives of {he TJmted States of America im, Congress assemhled. That the several District Courts of the United States be, and they hereby are, constituted courts of bankruptcy, and they shall have original jurisdiction in their respective districts in aU matters and proceedings in bankruptcy, and they are hereby authorized to hear and adjudicate upon the same according to the provisions of this act. The said courts shall be al- ways open for the transaction of business under this act, and the powers and jurisdiction hereby granted and conferred shall be exercised as well in vacation as in term time, and a judge sitting at chambers shall have the same powers and jurisdiction, including the power of keeping order and of punishing any contempt of his authority, as when sitting in court. And the jurisdiction hereby conferred shall extend to all cases and controversies arising between the bankrupt and any creditor or creditors who shall claim any debt or demand under the bankruptcy; to the collection of aU the assets of the bankrupt; to the ascertainment and liquidation of the liens and other specific claims thereon; to the adjust- ment of the various priorities and conflicting interests of aU 1 This act, together with the act of pealed by the act of June 7, 1878, June 22, 1874 and aU acts in amend- to take effect September 1, 1878 (20 ment or supplementary thereto or St. L. 99). in explanation thereof, were re- 462 LAW OF BANKETJPTOT. parties; and to the marshalling and disposition of the differ- ent funds and assets, so as to secure the rights of all parties and due distribution of the assets among all the creditors; and to all acts, matters, and things to be done under and in virtue of the bankruptcy, until the final distribution and set- tlement of the estate of the bankrupt, and the close of the proceedings in bankruptcy. The said courts shall have fuU authority to compel obedience to all orders and decrees passed by them in bankruptcy, by process of contempt and other remedial process, to the same extent that the circuit courts now have in any suit pending therein in equity. Said courts may sit, for the transaction of business in bankruptcy, at any place in the district, of which place and the time of holding court they shall have given notice, as well as at the places designated by law for holding such courts.* Seo. 2. Avhd he it fwriher enacted. That the several circuit courts of the United States, within and for the districts where the proceedings In bankruptcy shaU be pending, shall have a general superintendence and jurisdiction of all cases and questions arising under this act; and, except when special provision is otherwise made, may, upon biU, petition, or other proper process, of any party aggrieved, hear and determine the case in a court of equity. The powers and jurisdiction hereby granted may be exercised either by said court or by any justice thereof in term time or vacation. Said circuit courts shall also have concurrent jurisdiction with the dis- trict courts of the * same district of aU suits at law or in equity which may or shall be brought by the assignee in bankruptcy against any person claiming an adverse inter- 1 The act of June 32, 1874 (18 St L, debt does not exceed five hundred 178, § 2), amends this section by add- dollars, be collected in the courts of ing thereto the foUovring words: the State where such bankrupt re- " Provided, That the court having sides having jurisdiction of claims charge of the estate of any bank- of such nature and amount." nipt may direct that any of the *Section3of the above act of 1874 legal assets or debts of the bank- inserts the word "any " in Ueu of rupt, as contradistinguished from the word "same." equitable demands, shall, when such NATIONAL BANKEUPTOT LAW OF 1867. 463 est/ or by such, person against such assignee, toucliing any property or rights of property of said banlcrupt transferable to or vested in such assignee ; but no suit at law or in equity shall in any case be maintainable by or against such assignee, or by or against any person claiming an adverse interest, touching the property and rights of property aforesaid, in any court whatsoever, unless the same shall be brought within two years from the time the cause of action accrued, for or against such assignee : Provided, That nothing herein con- tained shall revive a right of action barred at the time such assignee is appointed. Of the Administeation of the Law in Cotjets of Bank- EUPTOY. Sec. 3. And "be it further enacted. That it shall be the duty of the judges of the district courts of the United States, within and for the several districts, to appoint in each Congressional district in said districts, upon the nomination and recommen- dation of the Chief Justice of the Supreme Court of the United States, one or more registers in bankruptcy, to assist the judge of the district court in the performance of his duties under this act. No person shall be eligible to such appointment unless he be a counsellor of said court, or of some one of the courts of record of the state in which he re- sides. Before entering upon the duties of his office, every person so appointed a register in bankruptcy shall give a bond to the United States, with condition that he will faith- fully discharge the duties of his office, in a sum not less than one thousand dollars, to be fixed by said court, with sureties satisfactory to said court, or to either of the said justices thereof; and he shall, in open court, take and subscribe the oath prescribed in the act entitled "An act to prescribe an oath of office, and for other purposes," approved July second, eighteen hundred and sixty-two, and also that he will not, 1 Section 3 of the act of June 33, words, "or owing any debt to such 1874 (18 St. L. 178), here adds the bankrupt." 464 LAW OF BANKEUPTCY. during his continuance in office, be, directly or indirectly, interested in or benefited by the fees or emoluments arising from any suit or matter pending in bankruptcy, in either the district or circuit court in his district. Sec. 4:} And be it further enacted, That every register in bankruptcy, so appointed and qualified, shall have power, and it shall be his duty, to make adjudication of bankruptcy, to receive the surrender of any bankrupt, to administer oaths in all proceedings before him, to hold and preside at meet- ings of creditors, to take proof of debts, to make all compu- tations of dividends, and all orders of distribution, and to furnish the assignee with a certified copy of such orders, and of the schedules of creditors and assets filed in each case, to audit and pass accounts of assignees, to grant protection, to pass the last examination of any bankrupt in cases whenever the assignee or a creditor do not oppose, and to sit in cham- bers and dispatch there such part of the administrative busi- ness of the court and such uncontested matters as shall be defined in general rules and orders, or as the district judge shall in any particular matter direct; and he shall also make short memoranda of his proceedings in each case in which he shall act, in a docket to be kept by him for that purpose, and he shall forthwith, as the proceedings are taken, forward to the clerk of the district court a certified copy of said mem- oranda, which shall be entered by said clerk in the proper minute-book to be kept in his office, and any register of the court may act for any other register thereof: Provided, how- ever, That nothing in this section contained shall empower a register to commit for contempt, or to hear a disputed ad- judication, or any question of the allowance or suspension of an order of discharge ; but in all matters where an issue of fact or of law is raised and contested by any party to the proceedings before him, it shall be his duty to cause the ques- tion or issue to be stated by the opposing parties in writing, I The act of June 22, 1874 (18 St. court of the business transacted by L. 185, § 19), requires the register to him. make a report to the clerk of the NATIONAL BANKKUPTCT LAW OF 1867. 465 and lie shall adjourn the same into court for decision by the judge.* No register shall be of counsel or attorney, either in or out of court, in any suit or matter pending in bankruptcy in either the circuit or district court of his district, nor in an appeal therefrom; nor shall he be executor, administrator, guardian, commissioner, appraiser, divider, or assignee of or upon any estate within the jurisdiction of either of said courts of bankruptcy, nor be interested in the fees or emolu- ments arising from either of said trusts. The fees of said registers, as established by this act, and by the general rules and orders required to be framed under it, shall be paid to them by the parties for whom the services may be rendered in the course of proceedings authorized by this act. Sec. 5. And he it further enacted, That the judge of the district court may direct a register to attend at any place within the district for the purpose of hearing such voluntary applications under this act as may not be opposed, of attend- ing any meeting of creditors, or receiving any proof of debts, and, generally, for the prosecution of any bankruptcy or other proceedings under this act ; and the travelling and in- cidental expenses of such register, and of any clerk or other ojEcer attending him, incurred in so acting, shall be set[tled] by said court in accordance with the rules prescribed under the tenth section of this act, and paid out of the assets of the estate in respect of which such register has so acted ; or, if there be no such assets, or if the assets shall be insufficient, 1 The act of June 23, 1874 (18 St. any suit or matter pending in bank- L. 184, § 18), makes the following ruptoy in either the circuit or dis- amendment: And no register or trict court of his district, or in an clerk of court, or any partner or appeal therefrom. Nor shall they, clerk of such register or clerk of or either of them, be executor, court, or any person having any administrator, guardian, commis- interest with either in any fees or sioner, appraiser, divider, or as- emoluments in bankruptcy, or with signee of or upon any estate within whom such register or clerk of the jurisdiction of either of said court shall have any interest in re- courts of bankruptcy; nor be inter- spect to any matter in bankruptcy, ested, directly or indirectly, in the shall be of cotmsel, solicitor, or at- fees or emoluments arising from tomey, either in or out of court, in either of said trusts. 30 4:66 LAW OF BANKEUPTOT. then such expenses shall form a part of the costs in the case or cases in which the register shall have acted in. such jour- ney, to be apportioned by the judge, and such register, so acting, shall have and exercise all powers, except the power of commitment, vested in the district court for the summon- ing and examination of persons or witnesses, and for requir- ing the production of books, papers and documents : Provided, ahoays, That all depositions of persons and witnesses taken before said register, and all acts done by him, shall be re- duced to writing, and be signed by hitn, and shall be filed in the clerk's ofBce as part of the proceedings. Such register shall be subject to removal by the judge of the district court, and all vacancies occurring by such removal, or by resig- nation, change of residence, death or disability, shall be promptly filled by other fit persons, unless said court shall deem the continuance of the particular office unnecessary. Seo. 6. And le it fwrther enacted, That any party shall, during the proceedings before a register, be at Liberty to take the opinion of the district judge upon any point or matter arising in the course of such proceedings, or upon the result of such proceedings, which shall be stated by the register in the shape of a short certificate to the judge, who shall sign the same if he approve thereof ; and such certifi- cate, so signed, shall be binding on all the parties to the proceeding ; but every such certificate may be discharged or varied by the judge at chambers or in open court. In any bankruptcy, or in any other proceedings within the jurisdic- tion of the court, under this act, the parties concerned, or submitting to such jurisdiction, may at any stage of the pro- ceedings, by consent, state any question or questions in a special case for the opinion of the court, and the judgment of the court shall be final unless it be agreed and stated in such special case that either party may appeal, if, in such case, an appeal is allowed by this act. The parties may also, if they think fit, agree, that upon the question or questions raised by such special case being finally decided, a sum of money, fixed by the parties, or to be ascertained by the NATIONAX BANKRtTPTOT LAW 01" 1867. ^67 court, or in such maimer as thie court may direct, or any property, or the amoumt of any disputed debt or claim, shall be paid, delivered or transferred by one of such parties to the other of them either with or without costs. Seo. Y. And 1)6 it fv/riher enacted, That parties and wit- nesses summoned before a register shall be bound to attend in pursuance of such summons at the place and time desig- nated therein, and shall be entitled to protection, and be liable to process of contempt in like manner as parties and witnesses are now liable thereto itt case of default ia attend- ance under any writ of subpoena, and all persons wilfully and corruptly swearing or affirming falsely before a register shall be liable to all the penalties, punishments, and conse- quences of perjury. If any person examined before a register shall refuse or decline to answer, or to swear to or sign his examination when taken, the register shall refer the matter to the judge, who shall have power to order the per- son so acting to pay the costs thereby occasioned, if such person be compellable by law to answer such question or to sign such examination, and such person shaU also be liable to be punished for contempt. Op Appeals and Pkaotioe. Seo. 8. And le it fwrther enacted, That appeals may be taken from the district to the circuit courts in aU cases of equity, and writs of error may be allowed to said circuit courts from said district courts in cases at law under the jurisdiction created by this act, when the debt or damages claimed amount to more than five hundred dollars, and any supposed creditor, whose claim is wholly or in part rejected, or an assignee who is dissatisfied with the allowance of a claim may appeal from the decision of the district court to the circuit court from the same district ; but no appeal shall be allowed in any case from the district to the circuit court unless it is claimed, and notice given thereof to the clerk of the district court, to be entered with the record of the pro- 468 LAW OF BANKEUPTCT, ceedings, and, also to the assignee or creditor, as the case may be, or to the defeated party in equity, within ten days after the entry of the decree or decision appealed from. The appeal shall be entered at the term of the circuit court which shall be first held within and for the district next after the expiration of ten days from the time of claiming the same. But if the appellant in writing waives his appeal before any decision thereon, proceedings may be had in the district court as if no appeal had been taken; and no appeal shall be allowed unless the appellant at the time of claiming the same shall give bond in man[ner] now required by law in cases of such appeals. No vsrrit of error shall be allowed unless the party claiming it shall comply with the statutes regulating the granting of such writs. Sec. 9. And le it further enacted, That in cases arising under this act no appeal or writ of error shall be allowed in any case from the circuit courts to the Supreme Court of the United States, unless the matter in dispute in such case shall exceed two thousand dollars. Sec. 10. And he it fv/rther enacted, That the Justices of the Supreme Court of the United States, subject to the pro- visions of this act, shaU frame general orders for the follow- ing purposes : For regulating the practice and procedure of the district courts in bankruptcy, and the several forms of petitions, orders, and other proceedings to be used in said courts in all matters under this act; For regulating the duties of the various officers of said courts; For regulating the fees' payable and the charges and costs to be allowed, except such ^ as are established by this act or by law, with respect to all proceedings in bankruptcy before said courts, not exceeding the rate of fees now allowed by law for similar services in other proceedings ; ' See note 1 to sea 47. cept such as are established by ttua 2 The act of June 32, 1874 (18 St. act or by law." L. 184, § 18i repeals the words "ex- NATIONAL BANKBTrPTOT LAW OP 1867. 469 For regulating the practice and procedure upon appeals; For regulating the filing, custody, and inspection of rec- ords; And generally for carrying the provisions of this act into effect. After such general orders shall have been so framed, they or any of them may be rescinded or varied, and other gen- eral orders may be framed in manner aforesaid; and all such general orders so framed shall from time to time be reported to Congress, with such suggestions as said justices may think proper. YOLTJNTAET BaNKRUPTOY COMMENCEMENT OP PeOCEEDINGS. Sec. 11. And he iifwrther enacted, That if any person re- siding within the jurisdiction of the United States, owing debts provable under this act exceeding the amount of three hundred dollars, shall apply by petition addressed to the judge of the judicial district in which such debtor has re- sided or carried on business for the six months next imme- diately preceding the time of filing of such petition, or for the longest period during such six months, setting forth his place of residence, his inability to pay all his debts iu full, his willingness to surrender all his estate and effects for the benefit of his creditors and his desire to obtain the benefit of this act, and shall annex to his petition a schedule, veri- fied by oath before the court or before a register in bank- ruptcy, or before one of the commissioners of the circuit court of the United States, containing a full and true state- ment of all his debts, and, as far as possible, to whom due, with the place of residence of each creditor, if known to the debtor, and if not known the fact to be , so stated, and the sum due to each creditor; also, the nature of each debt or de- mand, whether foimded on written security, obligation, con- tract, or otherwise, and also the true cause and consideration of such indebtedness in each case, and the place where such indebtedness accrued, and a statement of any existing mort- 4:70 LAW OF BANKEITPTOT. gage, pledge, lien, judgment, or collateral or other security given for the payment of the samo ; and shaU also annex to his petition an accurate inventory,' verified in like manner, of aU his estate, both real and personal, assignable under this act, describing the same and stating where it is situated, and whether there are any, and if so, what encumbrances thereon, the filing of such petition shall be an act of bank- ruptcy, and such petitioner shall be adjudged a bankrupt: Provided,^ That all citizens of the United States petitioning to be declared bankrupt shall on filing such petition, and be- fore any proceedings thereon, take and subscribe an oath of allegiance and fidelity to the United States, which oath shall be filed and recorded with the proceedings in bankruptcy. And the judge of the district court, or, if there be no oppos- ing party, any register of said court, to be designated by the judge, shall forthwith, if he be satisfied that the debts due from the petitioner exceed three hundred dollars, issue a warrant, to be signed by such judge or register, directed to the ^ marshal of said district, authorizing him forthwith, as messenger, to publish notices in such newspapers as the war- rant specifies ; ' to serve written or printed notice, by mail or personally, on all creditors upon the schedule filed with the debtor's petition, or whose names may be given to him in addition by the debtor, and to give such personal or other 1 The act of June 23, 1874 (18 Stat two; " and inserting after the word li. 182, § 15), adds the words " and " specifies," where it last occurs, the valuation " after the word " inven- words " but whenever the creditors toiy." of the bankrupt are so numerous as 2 The act of 1874, above, § 19, pro- to make any notice now required vides for the making of a report by by law to them, by maU or other- the marshal to the clerk. wise, a great and disproportionate 'Section 5 of the act of 1874, expense to the estate, the court above referred to, makes the fol- may, in lieu thereof, in its disore- lowing amendment: That section tion, order such notice to be given 11 of said act be amended by strik- by publication in a newspaper or ing out the words " as the warrant newspapers, to all such creditors specifies," where they first occur, whose claims, as reported, do not and inserting the words " as the exceed the sums, respectively, of marshal shall select, not exceeding fifty dollars." NATIONAL BANKEUPTOT LAW OF 1867. 471 notice to any persons concerned as the warrant specifies, which notice shall state : — First. That a warrant in bankruptcy has been issued against the estate of the debtor. Second. That the payment of any debts and the delivery of any property belonging to such debtor to him or for his nse, and the transfer of any property by him, are forbidden by law. Third. That a meeting of the creditors of the debtor, giv- ing the names, residences, and amounts, so far as known, to prove their. debts and choose one or more assignees of his estate, will be held at a court of bankruptcy, to be holden at a time and place designated in the warrant, not less than ten nor more than ninety days after the issuing of the same. Of Assignments and Assignees. Sec. 12. And he it fnrthsr enacted, That at the meeting held in pursuance of the notice, one of the registers of the court shall preside, and the messenger shall make return of the warrant and of his doings thereon ; and if it appears that the notice to the creditors has not been given as required in the warrant, the meeting shall forthwith be adjourned, and a new notice given as required. If the debtor dies after the issuing of the warrant, the proceedings may be continued and concluded in like manner as if he had lived. Seo. 13. Andle it further enacted, That the creditors shall, at the first meeting held after due notice from the messen- ger, in presence of a register designated by the court, choose one or more assignees of the estate of the debtor; the choice to be made by the greater part in value and in number of the creditors who have proved their debts. If no choice is made by the creditors at said meeting, the judge, or if there be no opposing interest, the register, shall appoint one or more assignees. If an assignee, so chosen or appoiated, fails within five days to express in writing his acceptance of the trust, the judge or register may fill the vacancy. All 472 LAW OF BANKEUPTOT. elections or appointments of assignees shall be subject to the approval of the judge; and when in his judgment it is for any cause needful or expedient, he may appoint additional assignees, or order a new election. The judge at any time may, and upon the request in writing of any creditor who has proved his claim shall, require the assignee to give good and sufficient bond to the United States, with a condition for the faithful performance and discharge of his duties ; the bond shall be approved by the judge or register by his indorsement thereon, shall be filed with the record of the case, and inure to the benefit of all creditors proving their claims, and may be prosecuted in the name and for the benefit of any injured party. If the assignee fails to give the bond within such time as the judge orders, not ex- ceeding ten days after notice to him of such order, the judge shall remove him and appoint another in his place. Seo. 14. Arid ie it fwriher enacted, That as soon as said assignee is appointed and qualified, the judge, or, where there is no opposing interest, the register, shall, by an instru- ment under his hand, assign and convey to the assignee aU the estate, real and personal, of the bankrupt, with all his deeds, books, and papers relating thereto, and such assign- ment shall relate back to the commencement of said pro- ceedings in bankruptcy, and thereupon, by operation of law, the title to aU such property and estate, both real and per- sonal, shall vest in said assignee, although the same is then attached on mesne process as the property of the debtor, and shall dissolve any such attachment made within four months next preceding the commencement of said proceedings: Provided, however, That there shaU be excepted from the operation of the provisions of this section the necessary house- hold and kitchen furniture, and such other articles and nec- essaries of such bankrupt as the said assignee shaU designate and set apart, having reference in the amount to the family, condition, and circumstances of the bankrupt, but altogether not to exceed in value, in any case, the sum of five hundred (dollars; and also the wearing apparel of such bankrupt, and NATIONAL BANKETJPTOT LAW OF 1867. 473 that of his wife and children, and the uniform, arms and equipments of any person who is or has been a soldier in the militia, or in the service of the United States; and such other property as now is, or hereafter shall be, exempted from attachment, or seizure, or levy on execution by the laws of the United States, and such other property not included in the foregoing exceptions as is exempted from levy and sale upon execution or other process or order of any court by the laws of the State in which the bankrupt has his domicile at the time of the commencement of the proceedings in bankruptcy, to an amount not exceeding that allowed by such State exemption laws in force in the year ^ eighteen hundred and sixty-four : Provided, That the foregoing exception shall operate as a lim- itation upon the conveyance of the property of the bankrupt to his assignees ; and in no case shall the property hereby excepted pass to the assignees, or the title of the bankrupt thereto be impaired or affected by any of the provisions of this act ; and the determination of the assignee in the mat- ter shall, on exception taken, be subject to the final decisiont of the said court: And provided further, That no mortgage of any vessel or of any other goods or chattels, made as se- curity for any debt or debts, in good faith and for present considerations and otherwise vaM, and duly recorded, pur- suant to any statute of the United States, or of any State, shall be invalidated or affected hereby ; and all the prop:- erty conveyed by the bankrupt in fraud of his creditors; all rights in eqtiity, choses in action, patents and patent rights and copyrights; all debts due him, or any person for his use, and all liens and securities therefor; and all his rights of action for property or estate, real or personal, and for any cause of action which the bankrupt had against any person arising from contract or from the unlawful taking or deten- tion, or of injury to the property of the bankrupt, and all his rights of redeeming such property or estate, with the like right, title, power, and authority to sell, manage, dis- ' The act of June 8, 1873 (17 St. L. 334), changes this year from " 1864" to "1871." 474: LAW OF BANKEUPTOT. pose of, sue for and recover or defend the same as the bank- rupt might or could have had if no assignment had been made, shall, in virtue of the adjudication of bankruptcy and the appointment of his assignee, be at once vested in such assignee ; and he may sue for and recover the said estate, debts and effects, and may prosecute and defend all suits at law or in equity, pending at the time of the adjudication of bankruptcy, in which such bankrupt is a party in his own name, in the same manner and with the like effect as they might have been' presented or defended by such bankrupt; and a copy, duly certified by the clerk of the court, under the seal thereof, of the assignment made by the judge or register, as the case maybe, to him as assignee, shall be con- clusive evidence of his title as such assignee to take, hold, sue for, and recover the property of the bankrupt, as herein- before mentioned; but no property held by the bankrupt in. trust shall pass by such assignment. No person shall be en- titled to maintain an action against an assignee in bank- ruptcy for anything done by him as such assignee, without previously giving him twenty days' notice of such action, specifying the cause thereof, to the end that such assignee may have an opportunity of tendering amend, should he see fit to do so. No person shall be entitled, as against the as- signee, to withhold from him possession of any books of account of the bankrupt, or claim any lien thereon ; and no suit in which the assignee is a party shaU be abated by his death or removal from office ; but the same may be prose- cuted and defended by his successor, or by the surviving or remaining assignee, as the case may be. The assignee shall have authority, under the order and direction of the court, to redeem or discharge any mortgage or conditional con- tract, or pledge or deposit, or lien upon any property, real or personal, whenever payable, and to tender due perform- ance of the condition thereof, or to seU the same subject to such mortgage, lien or other encumbrances. The debtor shall »The act of July 27, 1868 (15 St. L. 228, § 3), changes the word "pre- Bented " to "prosecuted." NATIONAL BANKKTTPTOT LAW OF 1867. 475 also, at the request of the assignee and at the expense of the estate, make and execute any instruments, deeds, and writings which may be proper to enable the assignee to possess him- self fully of aU the assets of the bankrupt. The assignee shall immediately give notice of his appointment, by publi- cation at least once a week for three successive weeks in such newspapers as shall for that purpose be designated by the court, due regard being had to their general circulation in the district or in that portion of the district in which the bank- rupt and his creditors shall reside, and shall, within six months, cause the assignment to him to be recorded in every registry of deeds or other office within the United States where a conveyance of any lands owned by the bankrupt ought by law to be recorded; and the record of such assign- ment, or a duly certified copy thereof, shall be evidence thereof in all courts. Sec. 15.' And ie itftirther enacted, That the assignee shall demand and receive, from any and all persons holding the 1 The act of June 23, 1874 (18 St. the bankrupt, whether real or per- il. 178, § 1), provides: "That the sonal, at public auction, in such court may, in its discretion, on parts or parcels and at such times sufficient cause shown, and upon and places as shall be best calou- notioe and hearing, direct the re- lated to produce the greatest ceiver or assignee to take posses- amount with the least expense, sion of the property, and carry on All notices of public sales under the business of the debtor, or any this act by any assignee or officer part thereof, under the direction of of the court shall be published once the court, when, in its judgment, a week for three consecutive weeks the interest of the estate as well as in the newspaper or newspapers, to of the creditors will be promoted be designated by the judge, which, thereby, but not for a period ex- in his opinion, shall be best oalou- ceeding nine months from the time lated to give general notice of the the debtor shall have been de- sale. And the court, on the appli- clared a bankrupt: Provided, that cationof any party in interest, shall such order shall not be made until have complete supervisory power the coiurt shall be satisfied that it over such sales, including the power is approved by a majority in value to set aside the same and to order of the creditors." a resale, so that the property sold Section 4 provides: That unless shall realize the largest sum. And otherwise ordered by the court, the the court may, in its discretion, assignee shall sell the property of order any real estate of the bank- 476 LAW OF BANKEUPTCT. same, all the estate assigned, or intended to be assigned, under the provisions of this act ; and he shall seU all such unencumbered estate, real and personal, which comes to his hands, on such terms as he thinks most for the interest of the creditors ; but upon petition of any person interested, and for cause shown, the court may make such order con- cerning the time, place, and manner of sale as will, in its opinion, prove to the interest of the creditors ; and the as- signee shall keep a regular account ' of all money received by him as assignee, to which every creditor shall, at reason- able times, have free resort. Sbo. 16. ATid he it fv^ther enacted, That the assignee shall have the like remedy to recover all said estate, debts and be received, directly or indirectly, from the use, disposal or proceeds of the bankrupt's estate. And he shall be required, upon such settle- ment, to make and file in court an affidavit declaring, according to the truth, whether he has or has not, as the case may be, received, or is or is not, as the case may be, to receive, directly or indirectly, any interest, benefit or advantage from the use or deposit of such funds; and such assignee may be exam- ined oraUy upon the same subject, an d if he shall wilfully swear falsely, either in such affidavit or examina- tion, or to his report provided for ia this section, he shall be deemed to be guilty of perjury, and on con- viction thereof, be punished by im- prisonment in the penitentiary not less than one and not more than five years. iThe act of June 23, 1874 (18 St L. 185, § 19), requires the assignee to make a report of the business transacted by him, and of the fees received, etc. rupt, or any part thereof, to be sold for one-fourth cash at the time of sale, and the residue within eight- een months in such instalments as the court may direct, bearing in- terest at the rate of seven per cen- tum per annum, and secured by proper mortgage or lien upon the property so sold. And it shall be the duty of every assignee to keep a regular account of all moneys re- ceived or expended by him as such assignee, to which account every creditor shall, at reasonable times, have free access. [Here follows the penalty for failure to properly dis- charge his duties, etc.] That the assignee shall report, under oath, to the court, at least as often as once in three months, the condi- tion of the estate in his charge, and the state of his accounts in detail, and at all other times when the court, on motion or otherwise, shall so order. And on any settlement of the accounts of any assignee, he shall be required to account for all interest, benefit or advantage re. ceived, or in any manner agreed to KATIONAL BAITKEUPTOT LAW OF 1867. 477 effects in his own name, as the creditor might have had if the decree in bankruptcy had not been rendered and no as- signment had been made. If, at the time of the commence- ment of proceedings in bankruptcy, an action is pending in the name of the debtor for the recovery of a debt or other thing which might or ought to pass to the assignee by the assignment, the assignee shall, if he requires it, be admitted to prosecute the action in his own name, in like manner and with like effect as if it had been originally commenced by him. No suit pending in the name of the assignee shall be abated by his death or removal; but upon the motion of the surviving or remaining or new assignee, as the case may be, he shall be admitted to prosecute the suit in like manner and with like effect as if it had been originally commenced by him. In suits prosecuted by the assignee a certified copy of the assignment made to him by the judge or register shall be conclusive evidence of his authority to sue. Sbo. 17. And he itfv/riher enacted. That the assignee shall, as soon as may be after receiving any money belongiug to the estate, deposit the same in some bank in his name as as- signee, or otherwise keep it distinct and apart from all other money in his possession; and shall, as far as practicable, keep all goods and effects belonging to the estate separate and apart from all other goods in his possession, or desig- nated by appropriate marks, so that they may be easily and clearly distinguished, and may not be exposed or Liable to be taken as his property or for the payment of his debts. "When it appears that the distribution of the estate may be delayed by litigation or other cause, the court may direct the temporary investment of the money belonging to such estate in securities to be approved by the judge or a register of said court, or may authorize the same to be deposited in any convenient bank upon such interest, not exceeding the legal rate, as the bank may contract with the assignee to pay thereon. He shall give written notice to aU known creditors, by mail or otherwise, of aU dividends, and such notice of meetings, after the first, as may be ordered by the 478 LAW OF BANKEUPTOY. court. He shall be allowed, and may retain out of the money in his hands, all the necessary disbursements made by him in the discharge of his duty, and a reasonable com- pensation for his services, in the discretion of the court. He may, under the direction of the court, submit any contro- versy arising in the settlement of demands against the es- tate, or of debts due to it, to the determination of arbitrators, to be chosen by him, and the other party to the controversy, and may, under such direction, compound and settle any such controversy, by agreement with the other party, as he thinks proper and most for the interest of the creditors. Seo. 18. And he it further enacted, That the court, after due notice and hearing, may remove an assignee for any cause which, in the judgment of the court, renders such re- moval necessary or expedient. At a meeting called by order of the court in its discretion for the purpose, or which shall be called upon the application of a majority of the creditors in number and value, the creditors may, with consent of [the] court, remove any assignee by such a vote as is herein, before provided for the choice of assignee. An assignee may, with the consent of the judge, resign his trust and be discharged therefrom. Yacancies caused by death or other- vrise in the office of assignee may be filled by appointrdent of the court, or at its discretion by an election by the creditors- in the manner hereinbefore provided, at a regular meeting, or at a meeting called for the purpose, with such notice thereof in writing to aU known creditors, and by such person, as the court shall direct. The resignation or removal of an assignee shall in no way release him from performing all things req- uisite on his part for the proper closing up of his trust and the transmission thereof to his successors, nor shall it affect the liability of the principal or surety on the bond given by the assignee. When, by death or otherwise, the number of as- signees is reduced, the estate of the debtor not lawfully dis- posed of shall vest in the remaining assignee or assignees, and the persons selected to fill vacancies, if any, with the same powers and duties relative thereto as if they were orig- NATIONAL BANKETJPTOT LAW OF 1867. il9 inally cliosen. Any former assignee, his executors or ad- ministrators, upon request, and at the expense of the estate, shall make and execute to the new assignee all deeds, con- ▼eyanoes, and assurances, and do all other lawful acts requi- site to enable him to recover and receive all the estate. And the court may make all orders which it may deem expedient to secure the proper fulfillment of the duties of any former assignee, and the rights and interests of all persons inter- ested in the estate. No person who has received any pref- erence contrary to the provisions of this act shall vote for or be eligible as assignee ; but no title to property, real or personal, sold, transferred, or conveyed by an assignee, shall be affected or impaired by reason of his ineligibility. An assignee refusing or unreasonably neglecting to execute an instrument when lawfully required by the court, or disobey- ing a lawful order or decree of the court in the premises, may be punished as for a contempt of court. Of Debts and Peoof of Claims. Seo. 19. And ie itfwrih&r enacted. That all debts due and payable from the bankrupt at the time of the adjudication of bankruptcy, and all debts then existing but not payable until a future day, a rebate of interest being made when no interest is payable by the terms of the contract, may be proved against the estate of the bankrupt. AU demands against the bankrupt for or on account of any goods or chat- tels wrongfully taken, converted, or withheld by him may be proved and allowed as debts to the amount of the value of the property so taken or withheld, with interest. If the bankrupt shall be bound as drawer, indorser, surety, bail, or guarantor upon any biU, bond, note, or any other specialty or contract, or for any debt of another person, and his liability shall not have become absolute until after the adjudication of bankruptcy, the creditor may prove the same after such liability shall have become fixed, and before the final divi- dend shall have been declared. In aU cases of contingent 480 ^^^ OF BAIfKEtJPTOT. debts and contiugent liabilities contracted by the bankrupt, and not herein otherwise provided for, the creditor may make claim therefor, and have his claim allowed, with the right to share in the dividends, if the contingency shall hap- pen before the order for the final dividend; or he may at any time apply to the court to have the present value of the debt or liability ascertained and liquidated, which shall then be done in such manner as the court shaU order, and he shall be allowed to prove for the amount so ascertained. Any person liable as baU, surety, guarantor, or otherwise for the bankrupt, who shall have paid the debt, or any part thereof, in discharge of the whole, shall be entitled to prove such debt or to stand in the place of the creditor if he shall have proved the same, although such payment shall have been made after the proceedings in bankruptcy were commenced. And any person so liable for the bankrupt, and who has not paid the whole of said debt, but is still liable for the same or any part thereof, may, if the creditor shaU fail or omit to prove such debt, prove the same either in the name of the creditor or otherwise, as may be provided by the rules, and subject to such regulations and Umitations as may be estab- lished by such rules. Where the bankrupt is liable to pay rent or other debt falling due at fixed and stated periods, the creditor may prove for a proportionate part thereof up to the time of the bankruptcy, as if the same grew due from day to day, and not at such fixed and stated periods. If any bankrupt shall be liable for unliquidated damages arising out of any contract or promise, or on account of any goods or chattels wrongfully taken, converted, or withheld, the court may cause such damages to be assessed in such mode as it may deem best, and the sum. so assessed may be proved against the estate. No debts other than those above speci- fied shall be proved or allowed against the estate. Sec. 20. And he it further enacted, That, in aU cases of mutual debts or mutual credits between the parties, the ac- count between them shall be stated, and one debt set off against the other, and the balance only shall be allowed or NATIONAL BANKEUPTCT LAW OF 1867. 481 paid, but no set-off shall be allowed of a claim in its nature not provable against the estate : ^ Provided, That no set-off shall be allowed in favor of any debtor to the bankrupt of a claim purchased by or transferred to him after the filing of the petition. "When a creditor has a mortgage or pledge of real or personal property of the bankrupt, or a lien thereon for securing the payment of a debt owing to him from the bankrupt, he shall be admitted as a creditor only for the balance of the debt after deducting the value of such prop- erty, to be ascertained by agreement between him and the assignee, or by a sale thereof, to be made in such manner as the court shall direct ; or the creditor may release or con- vey his claim to the assignee upon such property, and be admitted to prove his whole debt. If the value of the prop- erty exceeds the sum for which it is so held as security, the assignee may release to the creditor the bankrupt's right of redemption therein on receiving such excess ; or he may sell the property, subject to the claim of the creditor thereon; and in either case the assignee and creditor, respectively, shall execute all deeds and writings necessary or proper to con- summate the transaction. If the property is not so sold or released and delivered up, the creditor shall not be allowed to prove any part of his debt. Sec. 21. And le it fwrtJv&r enacted, That no creditor prov- ing his debt or claim shall be allowed to maintain any suit at law or in equity therefor against the bankrupt, but shall be deemed to have waived all right of action and suit against the bankrupt, and all proceedings already commenced or un- satisfied judgments already obtained thereon, shall be deemed to be discharged and surrendered thereby;^ and no creditor 1 The act of June 33, 1874 (18 St. L., L. 179, g 7), amends this section by § 6), amends this section by adding inserting, immediately after the after the word " estate " the words word "thereby,"' "But a creditor "or in oases of compulsory bank- proving his debt or claim shall not ruptoy, after the act of bankruptcy be held to have waived his right of upon or in respect of which the ad- action or suit against the bankrupt judication shall be made, and with where a discharge has been refused a view of making such set-oflE." or the proceedings have been deter- 2 The act of June 33, 1874 (18 St. mined without a discharge." 31 482 LAW OF BANKEUPTCT. whose debt is provable under this act shall be allowed to prosecute to final judgment any suit at law or in equity there- for against the bankrupt, until the question of the debtor's discharge shall have been determined ; and any such suit or proceedings shall, upon the application of the bankrupt, be stayed to await the determination of the court in bankruptcy on the question of the discharge, provided there be no unrea- sonable delay on the part of the bankrupt in endeavoring to obtain his discharge, and provided, also, that if the amount due the creditor is in dispute, the suit, by leave of the court in bankruptcy, may proceed to judgment for the purpose of ascertaining the amount due, which amount may be proved in bankruptcy, but execution shall be stayed as aforesaid. If any bankrupt shall, at the time of adjudication, be liable upon any bill of exchange, promissory note, or other obliga- tion in respect of distinct contracts as a member of two or more firms carrying on separate and distinct trades, and hav- ing distinct estates to be wound up in bankruptcy, or as a sole trader and also [as] a member of a firm, the circum- stance that such firms are in whole or in part composed of the same individuals, or that the sole contractor is also one of the joint contractors, shall not prevent proof and receipt of dividend in respect of such distinct contracts against the estates respectively liable upon such contracts. Seo. 22.^ And he it further enacted, That all proofs of debts against the estate of the bankrupt, by or in behalf of credit- ors residing within the judicial district where the proceed- ings in bankruptcy are pending, shall be made before one of the registers of the court in said district, and by or in behalf of non-resident ^ debtors before any register in bankruptcy 1 Section 20 of the act of June 22, tified by the notary and attested by 1874 (18 St. L. 186), provides "that his signature and official seal." By in addition to the officers now au- the act of July 27, 1868 (15 St. L. 228, thorized to take proof of debts § 3), this right to take proof was against the estate of a bankrupt, extended to United States commis- notaries public are hereby author- sioners. ized to take such proof in the man- ^ The act of July 27, 1868 (15 St. L. ner and under the regulations pro- 228, § 2), changes this word " debt- vided by law; such proof to be cer- ors " to " creditors." NATIONAL BANKETTPTOT LAW OF 1867. 48S in the judicial district where such creditors or either of them reside, or before any commissioner of the circuit court author- ized to administer oaths in any district. To entitle a claim- ant against the estate of a bankrupt to have his demand allowed, it must be verified by a deposition iu writing on oath or solemn affirmation before the proper register or commissioner setting forth the demand, the consideration thereof, whether any and what securities are held therefor, and whether any and what payments have been made thereon; that the sum claimed is justly due from the bank- rupt to the claimant; that the claimant has not, nor has any other person, for his use, received any security or satisfaction whatever other than that by him set forth, that the claim was not procured for the purpose of influencing the proceed- ings under this act, and that no bargain or agreement, ex- press or implied, has been made or entered into, by or on behalf of such creditor, to sell, transfer, or dispose of the said claim or any part thereof, against such bankrupt, or take or receive, directly or indirectly, any money, property, or con- sideration whatever, whereby the vote of such creditor for as- signee, or any action on the part of such creditor, or any other person in the proceedings under this act, is or shall be in any way affected, influenced, or controlled, and no claim shall be allowed unless all the statements set forth in such deposition shall appear to be true. Such oath or solemn affirmation shall be made by the claimant, testifying of his own knowl- edge, unless he is absent from the United States or prevented by some other good cause from testifying, in which cases the demand may be verified in like manner 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; or if in a foreign country, the oath of the creditor may be taken before any minister, consul, or vice-consul of the United States; and the court may, if it shall see fit, require or receive further pertinent evidence either for or against the admission of the claim. Corpora- tions may verify their claims by the oath or solemn affirma- 484 LAW OF BAJSTKEUPTOT. tion of their president, cashier, or treasurer. If the proof is satisfactory to the register or commissioner, it shall be signed by the deponent, and delivered or sent by mail to the assignee, who shall examine the same and compare it with the books and accounts of the bankrupt, and shall register, in a book to be kept by him for that purpose, the names of creditors who have proved their claims, in the order in which such proof is received, stating the time of receipt of such proof, and the amount and nature of the debts, which books shall be opened to the inspection of all the creditors. The court may, on the application of the assignee, or of any cred- itor, or of the bankrupt, or without any application, examine upon oath the bankrupt, or any person tendering or who has made proof of claims, and may summon any person capable of giving evidence concerning such proof, or concerning the debt sought to be proved, and shall reject all claims not duly proved, or where the proof shows the claim to be founded in fraud, illegality, or mistake. Sec. 23. And ie it fv/rther enacted, That when a claim is presented for proof before the election of the assignee, and the judge entertains doubts of its validity or of the right of the creditor to prove it, and is of opinion that such validity or right ought to be investigated by the assignee, he may postpone the proof of the claim until the assignee is chosen. Any person who, after the approval of this act shall have accepted any preference, having reasonable cause to believe that the same was made or given by the debtor, contrary to any provision of this act, shall not prove the debt or claim on account of which the preference was made or given, nor shall he receive any dividend therefrom until he shall first have surrendered to the assignee all property, money, bene- fit, or advantage received by him under such preference. The court shall allow all debts duly proved, and shall cause a list thereof to be made and certified by one of the regis- ters ; and any creditor may act at all meetings by his duly constituted attorney the same as though personally present. Seo. 24. And ie it further enacted, That a supposed cred- NATIONAL BANBEUPTOT LAW OF 1867. 485 iter who takes an appeal to the circuit court from the decis- ion of the district court, rejecting his claim in whole or in part, shall, upon entering his appeal in the circuit court, file in the clerk's office thereof a statement in writing of his claim, setting forth the same, substantially, as in a declara- tion for the same cause of action at law, and the assignee shaU plead or answer thereto in like manner, and like pro- ceedings shaU thereupon be had in the pleadings, trial, and determination of the cause, as in action at law commenced and prosecuted, in the usual manner, in the courts of the United States, except that no execution shall be awarded against the assignee for the amount of a debt found due to the creditor. The final judgment of the court shall be con- clusive, and the list of debts shall, if necessary, be altered to conform thereto. The party prevailing in the suit shall be entitled to costs against the adverse party, to be taxed and recovered as in suits at law; if recovered against the assignee, they shall be allowed out of the estate. A bill of exchange, promissory note, or other instrument, used in evi- dence upon the proof of a claim, and left in court or depos- ited in the clerk's office, may be delivered, by the register or clerk having the custody thereof, to the person who used it, upon his filing a copy thereof, attested by the clerk of the court, who shall indorse upon it the name of the party against whose estate it has been proved, and the date and amount of any dividend declared thereon. Of Peopeett Peeishable and in Dispute. Seo. 25. And he U further enacted, That when it appears to the satisfaction of the court that the estate of the debtor, or any part thereof, is of a perishable nature, or liable to de- teriorate in value, the court may order the same to be sold, in such manner ag may be deemed most expedient, under the direction of the messenger or assignee, as the case may be, who shall hold the funds received in place of the estate disposed of; and whenever it appears to the satisfaction of 486 LAW 01" BANKETTPTOT. the court that the title of any portion of the estate, real or personal, which has come into possession of the assignee, or which is claimed by him, is in dispute, the court may, upon the petition of the assignee, and after such notice to the claimant, his agent or attorney, as the court shall deem rea- sonable, order it to be sold, under the direction of the assignee, who shall hold the funds received in place of the estate dis- posed of ; and the proceeds of the sale shall be considered the measure of the value of the property in any suit or con- troversy beitween the parties in any courts. But this pro- vision shall not prevent the recovery of the property from the possession of the assignee by any proper action com- menced at any time before the court orders the sale. EXAMIITATION OF BaNKEUPTS. Sbo. 26. And ie it fv/rther enacted, That the court may, on the application of the assignee in bankruptcy, or of any creditor, or without any application, at all times require the bankrupt, upon reasonable notice, to attend and submit to an examination, on oath, upon all matters relating to the dis- posal or condition of his property, to his trade and dealings with others, and his accounts concerning the same, to aU debts due to or claimed from him, and to all other matters concerning his property and estate and the due settlement thereof according to law, which examination shall be in writing, and shall be signed by the bankrupt dnd filed with the other proceedings ; and the court may, in like manner, require the attendance of any other person as a witness, and if such person shaU fail to attend, on being summoned thereto, the court may compel his attendance by warrant di- rected to the marshal, commanding him to arrest such per- son and bring him forthwith before the court, or before a register in bankruptcy, for examination as such witness. If the bankrupt is imprisoned, absent, or disabled from attend- ance, the court may order him to be produced by the jailer, or any officer in whose custody he may be, or may direct NATIONAL BANKEUPTOT LAW OF 1867. 487 the examination to be had, taken, and certified at such time and place and in such manner as the court may deem proper, and with like efiEeot as if such examination had been had in court. The bankrupt shall at all times, until his discharge, be subject to the order of the court, and shall, at the expense of the estate, execute all proper writings and instruments, and do and perform all acts required by the court touching the assigned property or estate, and to enable the assignee to demand, recover, and receive all the property and estate assigned, wherever situated ; and for neglect or refusal to obey any order of the court, such bankrupt may be com- mitted and punished as for a contempt of court. If the bankrupt is without the district, and unable to return and personally attend at any of the times or do any of the acts which may be specified or required pursuant to this section, and if it appears that such absence was not caused by wil- ful default, and if, as soon as may be after the removal of such impediment, he offers to attend and submit to the order of the court in aU respects, he shaL. be permitted so to do, with like effect as if he had not been in default. He shall also be at liberty, from time to time, upon oath to at- tend and correct his schedule of creditors and property, so that the same shall conform to the facts. For good cause shown, the wife of any bankrupt may be required to attend before the court, to the end that she may be examined as a witness; and if such wife do not attend at the time and place specified in the order, the bankrupt shall not be en- titled to a discharge unless he shaU. prove to the satisfaction of the court that he was unable to procure the attendance of his wife. No bankrupt shall be liable to arrest during the pendency of the proceedings in bankruptcy in any civil ac- tion, unless the same is founded on some debt or claim from which his discharge in bankruptcy would not release him.* 1 This section is amended by the causes and trials arising or ordered act of June 33, 1874, § 8 (18 St. L. under this act, the alleged bank- 180), by adding the following words rupt, and any party thereto, shall at the end thereof: "Tha,t in all be a competent witness." 4:88 law of bawssuftoy, Of the Disteibtjtion of the Bankrupt's Estate. Seo. 27. Andieit further enacted, That all creditors whose debts are duly proved and allowed shall be entitled to share in the bankrupt's property and estate pro rata, without any priority or preference whatever, except that wages due from, him to any operative, or clerk, or house servant, to an amount not exceeding fifty dollars, for labor performed within six months next preceding the adjudication of bankruptcy, shall be entitled to priority, and shall be first paid in full : Pro- vided, That any debt proved by any person liable, as bail, surety, guarantor, or otherwise, for the bankrupt, shall not be paid to the person so proving the same until satisfactory evidence shall be produced of the payment of such debt by such person so liable, and the share to which such debt would be entitled may be paid into court, or otherwise held for the benefit of the party entitled thereto, as the court may direct. At the expiration of three months from the date of the ad- judication of bankruptcy in any case, or as much earlier as the court may direct, the court, upon request of the assignee, shall caU a general meeting of the creditors, of which due notice shall be given, and the assignee shall then report, and exhibit to the court and to the creditors just and true ac- counts of all his receipts and payments, verified by his oath, and he shall also produce and file vouchers for all payments for which vouchers shall be required by any rule of the court; he shall also submit the schedule of the bankrupt's creditors and property as amended, duly verified by the bankrupt, and a statement of the whole estate of the bank- rupt as then ascertained, of the property recovered and of the property outstanding, specifying the cause of its being outstanding, also what debts or claims are yet undetermined, and stating what sum remains in his hands. At such meet- ing the majority in value of the creditors present shall de- termine whether any and what part of the net proceeds of the estate, after deducting and retaining a sum sufficient to provide for all undetermined claims which, by reason of the NATIONAL BAlTKRtrPTOT LAW OF 1867. 489 distant residence of the creditor, or for other sufficient reason, have not been proved, and for other expenses and contin- gencies, shall be divided among the creditors ; but unless at least one half in value of the creditors shall attend such meeting, either in person or by attorney, it shall be the duty of the assignee so to determine. In case a dividend is ordered, the register shall, within ten days after such meet- ing, prepare a list of creditors entitled to dividend, and shall calculate and set opposite to the name of each creditor who has proved his claim the dividend to which he is entitled out of the net proceeds of the estate set apart for dividend, and shaU forward by mail to every creditor a statement of the dividend to which he is entitled, and such creditor shall be paid by the assignee in such manner as the court may direct. Sec. 28. ATid he itfv/rther enacted. That the like proceed- ings shall be had at the expiration of the next three months, or earlier, if practicable, and a third meeting of the credit- ors shall then be called by the court, and a final dividend then declared, unless any action at law or suit in equity be pending, or unless some other estate or effects of the debtor afterwards come to the hands of the assignee, in which case the assignee shall, as soon as may be, convert such estate or effects into money, and within two months after -the same shall be so converted, the same shall be divided in man- ner aforesaid. Further dividends shall be made in like man- ner as often as occasion requires; and after the third meeting of creditors no further meeting shall be called, unless or- dered by the court. If at any time there shall be in the hands of the assignee any outstanding debts or other prop- erty, due or belonging to the estate, which cannot be col- lected and received by the assignee without unreasonable or inconvenient delay or expense, the assignee may, under direction of the court, sell and assign such debts or other property in such manner as the court shall order. No divi- dend already declared shaU be disturbed by reason of debts being subsequently proved, but the creditors proving such 490 LAW OF BANKEtrPTCT. debts shall be entitled to a dividend equal to those already received by the other creditors before any further payment is made to the latter. Preparatory to the final dividend, the assignee shall submit his account to the court and file the same, and give notice to the creditors of such filing, and shaU also give notice that he will apply for a settlement of his account, and for a discharge from all liability as assignee, at a time to be specified in such notice, and at such time the court shall audit and pass the accounts of the assignee, and such assignee shall, if required by the court, be examined as to the truth of such account, and if found correct he shall thereby be discharged from all liability as assignee to any creditor of the bankrupt. The court shall thereupon order a dividend of the estate and effects, or of such part thereof as it sees fit, among such of the creditors as have proved their claims, in proportion to the respective amount of their said debts. In addition to all expenses necessarily incurred by him in the execution of his trust, in any case, the assignee shall be entitled to an allowance for his services in such case on aU moneys received and paid out by him therein, for any sum not exceeding one thousand dollars, five per centum thereof; for any larger sum, not exceeding five thousand dollars, two and a half per centum on the excess over one thousand dollars ; and for any larger sum, one per centum on the excess over five thousand dollars, and if, at any time, there shall not be in his hands a sufficient amount of money to defray the necessary expenses required for the further execution of his trust, he shall not be obliged to proceed therein until the necessary funds are advanced or satisfac- torily secured to him. If by accident, mistake, or other cause, without fault of the assignee, either or both of the said second and third meetings should not be held within the times limited, the court may, upon motion of an inter- ested party, order such meetings, with like effect as to the validity of the proceedings as if the meeting had been duly held. In the order for a dividend, under this section, the NATIONAL BANKRUPTCY LAW OF 1867. 491 following claims shall be entitled to priority or preference, and to be first paid in full in the following order: — First. The fees, costs and expenses of suits, and the sev- eral proceedings in bankruptcy under this act, and for the custody of property, as herein provided. Second. All debts due to the United States, and all taxes and assessments under the laws thereof. Third. All debts due to the state in which the proceedings in bankruptcy are pending, and all taxes and assessments made under the laws of such state. Fourth. Wages due to any operative, clerk, or house serv- ant, to an amount not exceeding fifty dollars, for labor per- formed within six months next preceding the first publication of the notice of proceedings in bankruptcy. Fifth. All debts due to any persons who, by the laws of the United States, are or may be entitled to a priority or preference, in like manner as if this act had not been passed : Always provided, That nothing contained in this act shall interfere with the assessment and collection of taxes by the authority of the United States or any State. Of the Bankeih?t's Dischaegb and Its Effect. Sec. 29. And he it fv/riher enacted. That at any time after the expiration of six months from the adjudication of bank- ruptcy, or if no debts have been proved against the bank- rupt, or if no assets have come to the hands of the assignee, at any time after the expiration of sixty days,^ and within one year from the adjudication of bankruptcy, the bankrupt may apply to the court for a discharge from his debts, and the court shaE. thereupon order notice to be given by mail to all creditors who have proved their debts, and by publi- cation at least once a week in such newspapers as the court 1 The act of July 26, 1876 (19 St. tion of bankruptcy " the words " be- L. 102), amends this section by sub- fore the final disposition of the stituting in lieu of the words "and causa" within one year from the adjudica- 492 LAW OF BAlfKEUPTOT. shall designate, due regard being had to the general circula- tion of the same in the district, or in that portion of the dis- trict in which the bankrupt and his creditors shall reside, to appear on a day appointed for that purpose, and show cause why a discharge should not be granted to the bankrupt. 'No discharge shall be granted, or, if granted, be valid, if the bankrupt has wilfully sworn falsely in his affidavit annexed to his petition, schedule, or inventory, or upon any examina- tion in the course of the proceedings in bankruptcy, in rela- tion to any material fact concerning his estate or his debts, or to any other material fact; or if he has concealed any part of his estate or effects, or any books or writings relating thereto, or if he has been guilty of any fraud or negligence in the care, custody, or delivery to the assignee of the prop- erty belonging to him at the time of the presentation of his petition and inventory, excepting such property as he is per- mitted to retain under the provisions of this act, or if he has caused, permitted, or suffered any loss, waste, or destruction thereof; or if, within four months before the commencement of such proceedings, he has procured his lands, goods, money, or chattels to be attached, sequestered, or seized on execu- tion; or if, since the passage of this act, he has destroyed, mutilated, altered, or falsified any of his books, documents, papers, writings, or securities, or has made or been privy to the making of any false or fraudulent entry in any book of account or other document, with intent to defraud his cred- itors ; or has removed or caused to be removed any part of his property from the district, with intent to defraud his creditors ; or if he has given any fraudulent preference con- trary to the provisions of this act, or made any fraudulent payment, gift, transfer, conveyance, or assignment of any part of his property, or has lost any part thereof in gaming, or has admitted a false or fictitious debt against his estate ; or if, having acknowledged that any person has proved such false or fictitious debt, he has not disclosed the same to his assignee within one month after such knowledge; or if, being a merchant or tradesman, he has not, subsequently NATIONAL BANKRTTPTOT LAW OF 1867. 493 to the passage of this act, kept proper books of account ; or if he, or any person in his behalf, has procured the assent of any creditor to the discharge, or influenced the action of any creditor at any stage of the proceedings, by any pecuniary consideration or obligation ; or if he has, in contemplation of becoming bankrupt, made any pledge, payment, transfer, assignment or conveyance of any part of his property, di- rectly or indirectly, absolutely or conditionally, for the pur- pose of preferring any creditor or person having a claim against him, or who is or may be under liability for him, or for the purpose of preventing the property from, coming into the hands of the assignee, or of being distributed under this act in satisfaction of his debts; or it he has been convicted of any misdemeanor under this act, or has been guilty of any fraud whatever contrary to the true intent of this act; and before any discharge is granted, the bankrupt shall take and subscribe an oath to the effect that he has not done, suffered, or been privy to any act, matter, or thing specified in this act as a ground for withholding such discharge, or as invali- dating such discharge if granted. Sec. 30. And he it further enacted, That no person who shall have been discharged under this act, and shall after- wards become bankrupt, on his own application shall be again entitled to a discharge whose estate is insufficient to pay seventy per centum of the debts proved against it, unless the assent in writing of three fourths in value of his credit- ors who have proved their claims is filed at or before the time of application for discharge ; but a bankrupt who shall prove to the satisfaction of the court that he has paid all the debts owing by him at the time of any previous bankruptcy, or who has been voluntarily released therefrom by his cred- itors, shall be entitled to a discharge in the same manner and with the same effect as if he had not previously been bankrupt. Sec. 31. And le it further enacted, That any creditor op- posing the discharge of any bankrupt may file a specification in writing of the grounds of his opposition, and the court 494 LAW OF BANKEUPTCT, may in its discretion order any question of fact so presented to be tried at a stated session of the district court. Seo. 32. And le itfwrth&r enacted. That if it shall appear to the court that the bankrupt has in aU things conformed to his duty under this act, and that he is entitled, under the provisions thereof, to receive a discharge, the court shall grant him a discharge from all his debts except as herein- after provided, and shall give him a certificate thereof under the seal of the court, in substance as follows: District Cov/rt of the United States, District of . Whereas, has been duly adjudged a bankrupt under the act of Congress establishing a uniform system of bankruptcy throughout the United States, and appears to have conformed to all the requirements of law in that be- half, it is therefore ordered by the court that said be forever discharged from all debts and claims which by said act are made provable against his estate, and which existed on the day of , on which day the petition for adjudication was filed by (or against) him ; excepting such debts, if any, as are by said act excepted from the operation of a discharge in bankruptcy. Given under my hand and the seal of the court at , in the said district, this — day of , A. D. . , Judge. ISeal.-] Sec. 33. And ie it fiirther enacted. That no debt created by the fraud or embezzlement of the bankrupt, or by his de- falcation as a public officer, or while acting in any fiduciary character, shall be discharged under this act; but the debt may be proved, and the dividend thereon shall be a payment on account of said debt; and no discharge granted under this act shall release, discharge, or affect any person liable for the same debt for or with the bankrupt, either as part ner, joint contractor, indorser, surety, or otherwise. And in all proceedings in bankruptcy commenced after one year from the time this act shall go into operation, no discharge shall be granted to a debtor whose assets do not pay fifty ' 1 The act of June 33, 1874 (18 St (15 St. L. 338, § 1), as follows: That L. 180, § 9), amends this section as in cases of compulsory or involun- amended by the act of July 37, 1868 tary bankruptcy, the provisions of NATIONAL BANKEUPTCT LAW OF 1867. 495 per centum of the claims against his estate, unless the assent in writing of a majority in number and value of his credit- ors who have proved their claims is filed in the case at or before the time of application for discharge. Seo. 34. And le itfwrther enacted. That a discharge duly granted under this act shall, with the exceptions aforesaid, release the bankrupt from all debts, claims, liabilities, and demands which were or might have been proved against his estate in bankruptcy, and may be pleaded, by a simple aver- m.ent that on the day of its date such discharge was granted to him, setting the same forth in hsec verba, as a full and complete bar to all suits brought on any such debts, claims, liabilities, or demands, and the certificate shall be conclu- sive evidence in favor of such bankrupt of the fact and [the] regularity of such discharge: Always provided, That any creditor or creditors of said bankrupt, whose debt was proved or provable against the estate in bankruptcy, who shall see fit to contest the validity of said discharge on the ground that it was fraudulently obtained, may, at any time within two years after the date thereof, apply to the court wrhich granted it to set aside and annul the same. Said ap- plication shall be in writing, shall specify which, in particu- lar, of the several acts mentioned in section twenty-nine it is intended to give evidence of against the bankrupt, setting said act, and any amendment voluntary bankruptcy, no discharge thereof, or of any supplement shall be granted to a debtor whose thereto, requiring the payment of assets shall not be equal to thirty any proportion of the debts of the per centum of the claims proved bankrupt, or the assent of any por- against his estate, upon which he tion of his creditors, as a condition shall be liable as principal debtor, of his discharge from his debts, without the assent of at least one- shall not apply; but he may, if fourth of his creditors in number, otherwise entitled thereto, be dis- and one-third in value; and the charged by the court in the same provision in section thirty-three of manner and with the same effect said act of March second, eighteen as if he had paid such per centum hundred and sixty-seven, requiring of his debts, or as if the required fifty per centum of such assets, is proportion of his creditors had as- hereby repealed, sented thereta And in cases of 496 LAW OF BANKEUPTCT. forth the grounds of avoidance, and no evidence shall be admitted as to any other of the said acts ; but said applica- tion shall be subject to amendment at the discretion of the court. The court shaU. cause reasonable notice of said ap- plication to be given to said bankrupt, and order him to ap- pear and answer the same, within such time as to the court shall seem fit and proper. If, upon the hearing of said par- ties, the court shall find that the fraudulent acts, or any of them, set forth as aforesaid by said creditor or creditors against the bankrupt, are proved, and that said creditor or creditors had no knowledge of the same until after the granting of said discharge, judgment shall be given in favor of said creditor or creditors, and the discharge of said bank- rupt shall be set aside and annulled. But if said court shall find that said fraudulent acts and all of them, set forth as aforesaid, are not proved, or that they were known to said creditor or creditors before the granting of said discharge, then judgment shall be rendered in favor of the bankrupt, and the validity of his discharge shall not be affected by said proceedings. Peepeeences and Featjdtilen-t Oonveta:s-oes Deolaeed YoiD. Sec. 35.^ And le it further enacted, That if any person, being insolvent, or in contemplation of insolvency, within four months before the filing of the petition by or against 1 The act of June 23, 1874 (18 St. tioned in said section thirty-five is L. 180, §§ 10, 11), makes the follow- hereby changed to three months; ing change with reference to this but this provision shall not take ef- section: " That in cases of involun- feet imtil three months after the tary or compulsory bankruptcy, the passage of this act." period of four months mentioned It is further amended as foUows: in section thirty-five of the act to "First. After the word 'and,' in which this is an amendment, is line eleven, insert the word 'know- hereby changed to two months; but ing.' this provision shall not take effect "Secondly. After the word 'at- until two months after the passage tachment,' iu the same line, insert of this act. And in the cases afore- the words ' sequestration, seizura' said, the period of six months men- " Thirdly. After the word ' and,' NATIONAL BANKEXTPTOT LAW OF 1867. ^gV him, with a view to give a preference to any creditor or per- son having a claim against him, or who is under any liabil- ity for him, procures any part of his property to be attached, sequestered, or seized on execution, or makes any payment, pledge, assignment, transfer, or conveyance of any part of his property, either directly or indirectly, absolutely or con- ditionally, the person receiving such payment, pledge, as- signment, transfer, or conveyance, or to be benefited thereby, or by such attachment, having reasonable cause to believe such person is iasolvent, and that such attachment, payment, pledge, assignment, or conveyance is made in fraud of the provisions of this act, the same shall be void, and the as- signee may recover the property, or the value of it, from the person so receiving it, or so to be benefited; and if any per- son being insolvent, or in contemplation of insolvency or bankruptcy, within six months before the filing of the peti- tion by or against him, makes any payment, sale, assignment, transfer, conveyance, or other disposition of any part of his property to any person who then has reasonable cause to believe him to be insolvent, or to be acting in contemplation of insolvency, and that such payment, sale, assignment, transfer, or other conveyance is made with a view to pre- vent his property from coming to his assignee in bankruptcy, or to prevent the same from being distributed under this act, or to defeat the object of, or in any way impair, hinder, impede, or delay the operation and effect of, or to evade any of the provisions of this act, the sale, assignment, transfer, or conveyance shall be void, and the assignee may recover the property, or the value thereof, as assets of the bankrupt. And if such sale, assignment, transfer, or conveyance is not made in the usual and ordinary course of business of the debtor, the fact shaU be prima facie evidence of fraud. Any contract, covenant, or security made or given by a banlcrupt in line twenty, insert the word ual Talue, or the security therefor, 'knowing.' And nothing in said made in good faith, upon a security section thirty-flve shall be con- taken in good faith on the occasion strued to invalidate any loan of act- of the making of such loan. " 82 498 LAW OF BANKKUPTOT. or other person with, or in trust for, any creditor, for secur- ing the payment of any money as a consideration for or with intent to induce the creditor to forbear opposing the application for discharge of the bankrupt, shall be void ; and if any creditor shall obtain any sum of money or other goods, chattels, or security from any person as an induce- ment for forbearing to oppose, or consenting to such appli- cation for discharge, every creditor so offending shall forfeit all right to any share or dividend in the estate of the bank- rupt, and shall also forfeit double the value or amount of such money, goods, chattels, or security so obtained to be recov- ered by the assignee for the benefit of the estate. BaKKEUPTOT of PAETiraiESHrPS AND OP COEPOEATIONS. Seo. 36. And be it further enacted. That where two or more persons who are partners in trade shall be adjudged bankrupt, either on the petition of such partners, or any one of them, or on the petition of any creditor of the partners, a warrant shaU. issue in the manner provided by this act, upon which all the joint stock and property of the copart- nership, and also all the separate estate of each of the part- ners, shall be taken, excepting such parts thereof as are hereinbefore excepted; and aU the creditors of the company, and the separate creditors of each partner, shall be allowed to prove their respective debts; and the assignee shall be chosen by the creditors of the company, and shall also keep separate accounts of the joint stock or property of the co- partnership and of the separate estate of each member thereof; and after deducting out of the whole amount re- ceived by such assignee the whole of the expenses and dis- bursements, the net proceeds of the joint stock shaU be appropriated to pay the creditors of the copartnership, and the net proceeds of the separate estate of each partner shaU be appropriated to pay his separate creditors; and if there shall be any balance of the separate estate of any partner, after the payment of his separate debts, such balance shall NATIONAL BANKEUPTOT LAW OF 1867. 4:99 be added to the joint stock for tlie payment of the joint creditors; and if there shall be any balance of the joint stock after payment of the joint debts, such balance shall be divided and appropriated to and among the separate estates of the several partners according to their respective right and interest therein, and as it would have been if the part- nership had been dissolved without any bankruptcy; and the sum so appropriated to the separate estate of each part- ner shall be applied to the payment of his separate debts ; and the certificate of discharge shaU be granted or refused to each partner as the same would or ought to be if the pro- ceedings had been against him alone under this act; and in all other respects the proceedings against partners shall be conducted in the like manner as if they had been commenced and prosecuted against one person alone. If such copart- ners reside in different districts, that court in which the pe- tition is first filed shall retain exclusive jurisdiction over the case. Seo. 37. And he it fwriher enacted. That the provisions of this act shall apply to all moneyed business or commercial corporations and joint stock companies, and that upon the petition of any officer of any such corporation or company, duly authorized by a vote of a majority of the corporators at any legal meeting called for the purpose, or upon the pe- tition of any creditor or creditors of such corporation or company, made and presented in the manner hereinafter provided in respect to debtors, the like proceedings shall be had and taken as are hereinafter provided in the case of debtors ; and all the provisions of this act which apply to the debtor, or set forth his duties in regard to furnishing sched- ules and inventories, executing papers, submitting to exami- nations, disclosing, making over, secreting, concealing, con- veying, assigning, or paying away his money or property, shall in Uke manner, and with like force, effect, and penal- ties, apply to each and every officer of such corporation or company in relation to the same matters concerning the cor- poration or company, and the money and property thereof. 500 LAW OF BAITKEUPTOT. All payments, conveyances, and assignments declared fraud- ulent and void by this act when made by a debtor, shall in like manner, and to the like extent, and with like remedies, be fraudulent and void when made by a corporation or com- pany. No allowance or discharge shall be granted to any corporation or joint stock company, or to any person or offi- cer or member thereof: Provided, That whenever any cor- poration by proceedings under this act shall be declared bankrupt, all its property and assets shall be distributed to the creditors of such corporations in the manner pro- vided in this act in respect to natural persons. Of Dates and DEPOsrrioirs. Seo. 38. And he itfwrih&r enacted. That the filing of a pe- tition for adjudication in bankruptcy, either by a debtor in his own behalf, or by any creditor against a debtor; upon which an order may be issued by the court, or by a register in the manner provided in section four, shall be deemed and taken to be the commencement of proceedings in bank- ruptcy under this act; the proceedings in all cases of bank- ruptcy shall be deemed matters of record, but the same shall not be required to be recorded at large, but shall be care- fully filed, kept, and numbered in the office of the clerk of the court, and a docket only, or short memorandum thereof, kept in books to be provided for that purpose, which shall be open to public inspection. Copies of such records, duly certified under the seal of the court, shall in all cases be prima facie evidence of the facts therein stated. Evidence or examina- tion in any of the proceedings imder this act may be taken before the court, or a register in bankruptcy, viva voce or in writing, before a commissioner of the circuit court, or by affidavit, or on commission, and the court may direct a refer- ence to a register in bankruptcy, or other suitable person, to take and certify such examination, and may compel the at- tendance of witnesses, the production of books and papers, and the giving of testimony in the same manner as in suits in equity in the circuit court. national bankettptot law of 1867. 501 Intoluntaet Bankedptot. Sec. 39. And le it further enacted, That any person resid- ing and owing debts as aforesaid, who, after the passage of this act, shall depart from the State, district, or Territory of which he is an inhabitant, with intent to defraud his credit- ors, or, being absent, shall, with such intent, remain absent; or shall conceal himself to avoid the service of legal process in any action for the recovery of a debt or demand provable under this act; or shall conceal or remove any of his prop- erty to avoid its being attached, taken, or sequestered on legal process; or shall make any assignment, gift, sale, convey- ance, or transfer of his estate, property, rights, or credits, either within the United States or elsewhere, with intent to delay, defraud, or hinder his creditors ; or who has been ar- rested and held in custody under or by virtue of mesne pro- cess or execution, issued out of any court' of any State, dis- trict, or Territory, within which such debtor resides or has property founded upon a demand in its nature provable against a bankrupt's estate under this act, and for a sum exceeding one hundred dollars, and such process is remain- ing in force and not discharged by payment, or in any other manner provided by the law * of such State, district, or Ter- ritory applicable thereto, for a period of " seven days ; or has been actually imprisoned for more than * seven days in a civil action, founded on contract, for the sum of one hundred dollars or upwards; or who, being bankrupt or insolvent, or in contemplation of bankruptcy or insolvency, shall make any payment, gift, grant, sale, conveyance, or transfer of money or other property, estate, rights, or credits,' or give any warrant to confess judgment; or procure or suffer his property to be taken on legal process, with intent to give a preference to one or more of his creditors, or to any person iThe act of June 22, 1874 (18 St. 1874, above, changes "seven" to L. 180, § 12), amends this section by " twenty." here inserting the words "of the 'Section 12 of the act of 1874 XJnited States or." here adds the words "or confess * Section 13 of the act of judgment." 502 LAW OF BANKEUPTCY. or persons who are or may be liable for him as indorsers, bail, sureties, or otherwise, or with the intent, by such dis- position of his property, to defeat or delay the operation of this act; 1 or who, being a banker,^ merchant, or trader, has iThe act of June 22, 1874 (18 St. li. 180, § 12), amends this section by- inserting the following in lieu of the balance of this para graph : " Or who being a bank, banker, broker, merchant, trader, manufacturer, or miner, has fraudulently stopped payment, or who, being a bank, banker, broker, merchant, trader, manufacturer, or miner, has stopped or suspended and not re- sumed payment, within a period of forty days, of his commercial paper (made or passed in the course of his business as such), or who, being a bank or banker, shall fail for forty days to pay any depositor upon de- mand of payment lawfully made, shaU be deemed to have committed an act of bankruptcy, and, subject to the conditions hereinafter pre- scribed, shall be adjudged a bank- rupt on the petition of one or more of his creditors, who shall consti- tute one-fourth thereof, at least, in number, and the aggregate of whose debts provable under this act amounts to at least one-third of the debts so provable: Provided, That such petition is brought within sue months after such act of bank- ruptcy shall have been committed." [The act of July 26, 1876 (19 St L. 103), here inserts a provision to the effect that an assignment made by a debtor of all his property, in good faith, for the benefit of his credit- ors, without creating a preference and valid under the state laws, shall not be a bar to the discharge of such debtor.] •' And the provis- ions of this section shall apply to all cases of compulsory or involun- tary bankruptcy commenced since the first day of December, eighteen hundred and seventy-three, as well as to those commenced hereafter. And in all cases commenced since the first day of December, eighteen hundred and seventy-three, and prior to the passage of this act, as well as those commenced hereafter, the court shall, if such allegation as to the number or amount of pe- titioning creditors be denied by the debtor, by a statement in writing to that effect, require him to file in court forthwith a full list of his creditors, with their places of resi- dence and the sums due them respectively, and shall ascertain, upon reasonable notice to the cred- itors, whether one-fourth in num- ber and one-third in amount thereof, as aforesaid, have peti- tioned that the debtor be adjudged a bankrupt But jf such debtor shall, on the filing of the petition, admit in virriting that the requisite number and amount of creditors have petitioned, the court (if satis- fied that the admission was made in good faith) shall so adjudge, which judgment shall be final, and the matter proceed without fur- ther steps on that subject And if 2 The act of JiUy 14, 1870 (16 St adding the words "broker, manu- Ii 276, g 2), amends this clause by facturer or miner." NATIONAL BAHKEUFrCY LAW OF 1867. 603 fraudulently stopped or suspended and not resumed payment of his commercial paper, within a period of fourteen days, shall be deemed to have committed an act of bankruptcy, and, subject to the conditions hereinafter prescribed, shall be adjudged a bankrupt, on the petition of one or more of his creditors, the aggregate of whose debts provable under this act amount to at least two hundred and fifty dollars, provided such petition is brought within six months after the act of bankruptcy shall have been committed. And if such person shall be adjudged a bankrupt, the assignee may it shall appear that such number and amount have not so petitioned, the court shall grant reasonable time, not exceeding, in cases here- tofore commenced, twenty days, and, in cases hereafter commenced, ten days, within which other cred- itors may join in such petition. And if, at the expiration of such time so limited, the number and amount shall comply with the re- quirements of this section, the matter of bankruptcy may pro- ceed; but if, at the expiration of such limited time, such number and amount shall not answer the requirements of this section, the proceedings shall be dismissed, and, in cases hereafter conmienced, with costs. And if such person shall be adjudged a bankrupt, the assignee may recover back the money or property so paid, conveyed, sold, assigned, or transferred contrary to this act: Provided, That the per- son receiving such payment or con- veyance had reasonable cause to believe that the debtor was insolv- ent, and knew that a fraud on this act was intended; and such per- son, if a creditor, shall not, in cases of actual fraud on his part, be al- lowed to prove for more than a moiety of his debt; and this limit- ation on the proof of debts shall apply to cases of voluntary as well as involimtary bankruptcy. And the petition of creditors under this section may be sufficiently verified by the oaths of the first five signers thereof, if so many there be. And if any of said fli-st five signers shaU not reside in the district in which such petition is to be filed, the same may be signed and verified by the oath or oaths of the attor- ney or attorneys, agent or agents, of such signers. And in comput- ing the number of creditors, as aforesaid, who shall join in such petition, creditors whose respective debts do not exceed two hundred and fifty dollars shall not be reck- oned. But if there be no creditors whose debts exceed said smn of two hundred and fifty dollars, or if the requisite nmnber of creditors holding debts exceeding two hun- dred and fifty dollars f^il to sign the petition, the creditors having debts of a less amount shall be reckoned for the purposes afore- said." 504 LAW OF BANKRUPTCY. recover back the money or other property so paid, conveyed, sold, assigned, or transferred contrary to this act, provided the person receiving such payment or conveyance had reason- able cause to believe that a fraud on this act was intended, or' that the debtor was insolvent, and such creditor shall not be allowed to prove his debt in bankruptcy. Sec. 40. And he Ufwrther enacted. That upon the filing of the petition authorized by the next preceding section, if it shall appear that sufficient grounds exist therefor, the court shall direct the entry of an order requiring the debtor to appear and show cause, at a court of bankruptcy to be holden at a time to be specified in the order, not less than five days from the service thereof, why the prayer of the petition should not be granted ; and may also, by its injunctions, re- strain the debtor, and any other person, in the meantime, from making any transfer or disposition of any part of the debtor's property not excepted by this act from the opera- tion thereof and from any interference therewith; and if it shall appear that there is probable cause for believing that the debtor is about to leave the district, or to remove or conceal his goods and chattels or his evidence of property, or make any fraudulent conveyance or disposition thereof, the court may issue a warrant to the marshal of the district, commanding him to arrest the alleged [bankrupt] and him safely keep, unless he shall give bail to the satisfaction of the court for his appearance from time to time, as required by the court, until the decision of the court upon the peti- tion or the further order of the court, and forthwith to take possession provisionally of all the property and effects of the debtor, and safely keep the same until the further order of the court. A copy of the petition and of such order to show cause shall be served on such debtor by delivering the same to him personally, or leaving the same at his last or usual place of abode ; or, if such debtor cannot be found, or his place of residence ascertained, service shall be made by publication iBy the act of July 27, 1868 (15 St L. 328, §2), thia word "or" ia <3hanged to "and." NATIONAL BANSJiUPTCT LAW OP 1867. 505 in sucli manner as the judge may direct. No further pro- ceedings, unless the debtor appear and consent thereto, shall be had until proof shall have been given, to the satisfaction of the court, of such service or publication; and if such proof be not given on the return day of such order, the pro- ceedings shall be adjourned and an order made that the no- tice be forthwith so served or published.' Sec. 41. And he it further enacted. That on such return day or adjourned day, if the notice has been fully served or pub- lished, or shall be waived by the appearance and consent of the debtor, the court shall proceed summarily to hear the allegations of the petitioner and debtor, and may adjourn the proceedings from time to time, on good cause shown, and shall, if the debtor on the same day so demand in writ- ing, order a trial by jury at the first term of the court at which a jury shall be in attendance, to ascertain the fact of such alleged bankruptcy; ^ and if upon such hearing or trial, I The act of June 33, 1874 (18 St. Ik 183, § 13), amends this section by adding at the end thereof the following words: "And if, on the return-day of the order to show cause as aforesaid, the court shall be satisfied that the requirement of section thirty-nine of said act as to the number and amount of petition- ing creditors has been complied with, or if, within the time pro- vided for in section thirty-nine of this act, creditors sufficient in num- ber and amount shall sign such peti- tion so as to make a total of one- fourth in number of the creditors and one-third in the amount of the provable debts against the bank- rupt, as provided in said section, the court shall so adjudge, which judgment shall be final; otherwise it shall dismiss the proceedings, and, in cases hereafter commenced, with C08t&" 2 The act of June 23, 1874 (18 St Ii. 183, § 14), amends this section by striking out aU of said section after the word " bankruptcy " and insert- ing the words, " Or, at the election of the debtor, the court may, in its discretion, award a venire facias to the marshal of the district, return- able within ten days before him for the trial of the facts set forth in his petition, at which time the trial shall be had, unless adjourned for causa And unless, upon such hear- ing or trial, it shaU appear to the satisfaction of said court, or of the jury, as the case may be, that the facts set forth in said petition are true, or if it shall appear that the debtor has paid and satisfied all Uens upon his property, in case the existence of such liens was the sole ground of the proceeding, the pro- ceeding shall be dismissed, and the respondent shall recover costs; and 506 LAW OF BANKEUPTCT the debtor proves to the satisfaction of the court or of the jury, as the case may be, that the facts set forth in the peti- tion are not true, or that the debtor has paid and satisfied all liens upon his property, in case the existence of such liens were the sole ground of the proceeding, the proceedings shall be dismissed and the respondent shall recover costs. Sec. 42. And he it fwrther enacted, That if the facts set forth in the petition are found to be true, or if default be made by the debtor to appear pursuant to the order, upon due proof of service thereof being made, the court shall ad- judge the debtor to be a bankrupt, and, as such, subject to the provisions of this act, and shall forthwith issue a war- rant to take possession of the estate of the debtor. The war- rant shall be directed, and the property of the debtor shaU be taken thereon, and shall be assigned and distributed in the same manner and with similar proceedings to those hereinbefore provided for the taking possession, assignment, and distribution of the property of the debtor upon his own petition. The order of adjudication of bankruptcy shall re- quire the bankrupt forthwith, or within such number of days, not exceeding five after the date of the order or notice thereof, as shall by the order be prescribed, to make and de- liver, or transmit by mail, post-paid, to the messeaiger, a schedule of the creditors and an inventory * of his estate in the form and verified in the manner required of a petition- ing debtor by section ^ thirteen. If the debtor has failed to all proceedings in bankruptcy may ruptcy, except so far as such estate be discontinued on reasonable no- shall have been already adminis- tice and hearing, with the approval tered and disposed of. And the of the court, and upon the assent, court shall have power to make aU in writing, of such debtor, and not needful orders and decrees to carry less than one-half of his creditors in the foregoing provision into effect" number and amount; or, in case aU • The act of June 23, 1874 (18 St the creditors and such debtor as- L. 183, § 15), adds the words " and sent thereto, such discontinuance valuation," after the word "in- shall be ordered and entered; and ventory." all parties shall be remitted, in ^The act of July 27, 1868 (15 St either case, to the same rights and L. 338, §2), changes the word "thir- duties existing at the date of the teen" to "eleven." filing of the petition for bank- NATIONAX BANKRUPTCY LAW OF 1867. 507 appear m person, or by attorney, a certified copy of the ad- judication shall be forthwith served on him by delivery or publication in the manner hereinbefore provided for the service of the order to show cause; and if the bankrupt is absent or cannot be found, such schedule and inventory shall be prepared by the messenger and the assignee from the best information they can obtain. If the petitioning cred- itor shall not appear and proceed on the return day, or ad- journed day, the court may, upon the petition of any other creditor, to the required amount, proceed to adjudicate on such petition, without requiring a new service or publication of notice to the debtor. Of Sxtpeeseding the Bankrttpt Peoceedings bt Akbjjssget MENT. ( Sec. 43. Arid he itfwrther ervacted. That if at the first meet- ing of creditors, or at any meeting of creditors to be specially called for that purpose, and of which previous notice shall have been given for such length of time and in such manner as the court may direct, three fourths in value of the credit- ors whose claims have been proved shall determine and re- solve that it is for the interest of the general body of the creditors that the estate of the bankrupt should be wound up and settled, and distribution made among the creditors by trustees, under the inspection and direction of a commit- tee of the creditors, it shall be lawful for the creditors to certify and report such resolution to the court, and to nomi- nate one or more trustees to take and hold and distribute the estate, under the direction of such committee. If it shall appear to the court, after hearing the bankrupt and such creditors as may desire to be heard, that the resolution was duly passed, and that the interests of the creditors will be promoted thereby, it shall confirm the same; and upon the execution and filing, by or on behalf of three fourths in value of aU the creditors whose claims have been proved, of a con- sent that the estate of the bankrupt be wound up and settled 508 LAW OF BANKHUPTCfT. by said trustees according to the terms of such resolution, the bankrupt, or his assignee in bankruptcy, if appointed, as the case may be, shall, under the direction of the court, and under oath, convey, transfer, and deliver all the property and estate of the bankrupt to the said trustee or trustees, who shall, upon such conveyance and transfer, have and hold the same in the same manner, and with the same powers and rights, in all respects, as the bankrupt would have had or held the same if no proceedings in bankruptcy had been taken, or as the assignee in bankruptcy would have done had such resolution not been passed ; and such consent and the proceedings thereunder shall be as binding in all respects on any creditor whose debt is provable, who has not signed the same, as if he had signed it, and on any creditor whose debt, if provable, is not proved, as if he had proved it; and the court, by order, shall direct all acts and things needful to be done to carry into effect such resolution of the creditors, and the said trustees shaU proceed to wind up and settle the estate under the direction and inspection of such committee of the creditors, for the equal benefit of all such creditors, and the winding up and settlement of any estate under the provisions of this section shall be deemed to be proceedings in bankruptcy under this act; and the said trustees shaU have all the rights and powers of assignees in bankruptcy. The court, on the application of such trustees, shall have power to summon and examine, or [on] oath or otherwise, the bankrupt and any creditor, and any person indebted to the estate, or known or suspected of having any of the estate in his possession, or any other person whose examination may be material or necessary to aid the trustees in the execu- tion of their trust, and to compel the attendance of such persons and the production of books and papers in the same manner as in other proceedings in bankruptcy under this act; and the bankrupt shall have the like right to apply for and obtain a discharge after the passage of such resolution and the appointment of such trustees as if such resolution had not been passed, and as if aU the proceedings had con- NATIONAL BANKETJPTOT LAW OF 1867. 509 tinued in the maimer provided in tlie preceding sections of this act. If the resolution shall not be duly reported, or the consent of the creditors shall not be duly filed, or if, upon its filing, the court shall not think fit to approve thereof, the bankruptcy shall proceed as though no resolution had been passed, and the court may make all necessary orders for re- suming the proceedings. And the period of time which shall have elapsed between the date of the resolution and the date of the order for assuming proceedings shaL. not be reckoned in calculating periods of time prescribed by this act.^ iThe act of June 23, 1874 (18 St. L. 183, § 17), here adds the follow- ing proTisions: That in all cases of bankruptcy now pending, or to be hereafter pending, by or against any person, whether an adjudica- tion in bankruptcy shaU have been had or not, the creditors of such alleged bankrupt may, at a meet- ing called under the direction of the court, and upon not less than ten days' notice to each known creditor of the time, place and pur- pose of such meeting, such notice to be personal or otherwise, as the court may direct, resolve that a composition proposed by the debtor shall be accepted in satisfaction of the debts due to them from the debtor. And such resolution shall, to be operative, have been passed by a majority in number and three- fourths in value of the creditors of the debtor assembled at such meet- ing either ia person or by proxy, and shall be conflrmed by the sig- natures thereto of the debtor and two-thirds in number and one-half in value of all the creditors of the debtor. And in calculating a ma- jority for the purposes of a com- position under this section, credit- ors whose debts amount to sums not exceeding $50 shall be reckoned in the majority in value, but not in the majority in number; and the value of the debts of secured creditors above the amount of such security, to be determined by the court, shall, as nearly as circum- stances admit, be estimated in the same way. And creditors whose debts are fully secured shall not be entitled to vote upon or sign such resolution without first relinquish- ing such security for the benefit of the estate. The debtor, unless prevented by sickness or other cause satisfactory to such meeting, shall be present at the same, and shall answer any in- quiries made of him; and he, or, if he is so prevented from being at such meeting, some one in his be- half, shall produce to the meeting a statement showing the whole of his assets and debts, and the names and addresses of the creditors to whom such debts respectively are dua Such resolution, together with the statement of the debtor as to his assets and debts, shall be pre- sented to the court; and the court 510 LAW OF BANKEUFTOT. Penalties Against Baj^keupts. Sec. 44. And he it further enacted, That from and after the passage of this act if any debtor or bankrupt shall, after the commencement of proceedings in bankruptcy, secrete or con- ceal any property belonging to his estate, or part with, con- ceal, or destroy, alter, mutilate, or falsify, or cause to be shall, upon notice to all the credit- ors of the debtor of not less than five days, and upon hearing, inquire whether such resolution has been passed in the manner directed by this section; and if satisfied that it has been so passed, it shall, subject to the provisions hereinafter con- tained, and upon being satisfied that the same is for the best inter- est of all concerned, cause such resolution to be recorded and state- ment of assets and debts to be filed ; and until such record and filing shall have taken place, such reso- lution shall be of no validity. And any creditor of the debtor may in- spect such record and statement at all reasonable times. The creditors may, by resolution passed in the manner and under the circumstances aforesaid, add to, or vary the provisions of, any compo- sition previously accepted by them, without prejudice to any persons taking Interests under such provis- ions who do not assent to such ad- dition or variation. And any such additional resolution shall be pre- sented to the court in the same manner, and proceeded virith in the same way, and with the same con- sequences, as the resolution by which the composition was ac- cepted in the first instance. The provisions of a composition ac- cepted by such resolution in pursu- ance of this section shall be binding on all the creditors whose names and addresses and the amounts of the debts due to whom are shown in the statement of the debtor pro- duced at the meeting at which the resolution shall have been passed, but shall not affect or prejudice the rights of any other creditors. Where a debt arises on a bill of exchange or promissory note, if the debtor shall be ignorant of the holder of any such bill of exchange or promissory note, he shall be re- quired to state the amount of such bill or note, the date on which it falls due, the names of the acceptor and of the person to whom it is payable, and any other particulars within his knowledge respecting the same ; and the insertion of such particulars shall be deemed a suffi- cient description by the debtor in respect to such debt Any mistake made inadvertently by a debtor in the statement of his debts may be corrected upon rea- sonable notice, and with the con- sent of a general meeting of his creditors. Every such composition shall, subject to priorities declared in said act, provide for a pro rata pay- ment or satisfaction, in money, to the creditors of such debtor in pro- portion to the amount of their un- secured debts, or their debts in re- NATIONAL EANKEOTTOT LAW OF 1867. 511 concealed, destroyed, altered, mutilated, or falsified, any book, deed, document, or writing relating thereto, or remove, or cause to be removed, the same or any part thereof out of the district, or otherwise dispose of any part thereof, with intent to prevent it from coming into the possession of the assignee in bankruptcy, or to hinder, impede, or delay either of them in recovering or receiving the same, or make any payment, gift, sale, assignment, transfer, or conveyance of any property belonging to his estate with the like intent, or spends any part thereof in gaming; or shall, with intent to defraud, wilfully and fraudulently conceal from his assignee or omit from his schedule any property or effects whatso- ever; or if, in case of any person having, to his knowledge or belief, proved a false or fictitious debt against his estate, he shall fail to disclose the same to his assignee within one month after coming to the knowledge or belief thereof; or shall attempt to account for any of his property by fictitious losses or expenses ; or shall, within three months before the commencement of proceedings in bankruptcy, under the false color and pretense of carrying on business and dealing in spect to which any such security the court, on notice, satisfactory shall have been duly surrendered evidence and hearing, that a com- and given up. position under this section cannot. The provisions of any composi- in consequence of legal difaoulties, tion made in pursuance of this sec- or for any sufScient cause, proceed tion may be enforced by the court, without injustice or undue delay on motion made in a summary man- to the creditors or to the debtor, ner by any person interested, and the court may refuse to accept and on reasonable notice; and any dis- confirm such composition, or may obedience of the order of the court set the same aside; and, in either made on such motion shaU be case, the debtor shall be proceeded deemed to be a contempt of court, with as a bankrupt in conformity Rules and regulations of court may with the provisions of law, and pro- be made in relation to proceedings ceedings may be had accordingly; of composition herein provided for and the time during which such in the same manner and to the composition shall have been in same extent as now provided by force shall not, in such case, be law In relation to proceedings in computed in calculating periods of bankruptcy. time prescribed by said act If it shall at any time appear to 512 LAW or BANKEgPTCT. the ordinary course of trade, obtain on credit from any per- son any goods or chattels with intent to defraud ; or shall, with intent to defraud his creditors, within three months next before the commencement of proceedings in bankruptcy, pawn, pledge, or dispose of, otherwise than by bona fide trans- actions in the ordinary way of his trade, any of his goods or chattels which have been obtained on credit and remain unpaid for, he shaU be deemed guilty of a misdemeanor, and, upon conviction thereof in any court of the United States, shall be punished by imprisonment, with or without, hard labor, for a term not exceeding three years. Penalties Against Officees. Seo. 45. And he itfwriher enacted, That if any judge, reg- ister, clerk, marshal, messenger, assignee, or any other offi- cer of the several courts of bankruptcy shall, for anything done or pretended to be done under this act, or under color of doing anything thereunder, wilfully demand or take, or appoint or aUow any person whatever to take for him or on his account, or for or on account of any other person, or in trust for him or for any other person, any fee, emolument, gratuity, sum of money, or anything of value whatever, other than is allowed by this act, or which shaU be allowed under the authority thereof, such person, when convicted thereof, shall forfeit and pay the sum of not less than three hundred dollars and not exceeding five hundred dollars, and be imprisoned not exceeding three years. Seo. 46. And he it further enacted, That if any person shall forge the signature of a judge, register, or other officer of the court, or shall forge or counterfeit the seal of the courts, or knowingly concur in using any such forged or counterfeit signature or seal for the purpose of authenticating any pro- ceeding or document, or shall tender in evidence any such proceeding or document with a false or counterfeit signature of any such judge, register, or other officer, or a false or coun- terfeit seal of the court, subscribed or attached thereto, know- NATIONAL BANKKITPTOT LAW OF 1867. 613 ing such signature or seal to be false or counterfeit, any such. person shaU be guilty of felony, and upon conviction thereof shall be liable to a fine of not less than five hundred dollars, and not more than five thousand dollars, and to be impris- oned not exceeding five years, at the discretion of the court. Fees ajsd Costs. Seo. 4:1} And "be it further enacted, That in each case there shall be allowed and paid, in addition to the fees of the clerk of the court as now established by law, or as may be estab- lished by general order, under the provisions of this act, for fees in bankruptcy, the following fees, which shall be ap- plied to the payment for the services of the registers: — For issuing every warrant, two dollars. For each day in which a meeting is held, three dollars. For each order for a dividend, three dollars. For every order substituting an arrangement by trust deed for bankruptcy, two dollars. For every bond with sureties, two dollars. For every application for any meeting in any matter under this act, one dollar. 1 The act of June 22, 1874 (18 St. make and promulgate new rules L. 184, § 18), makes the following and regulations in respect to the amendment of this section: "That matters aforesaid, under the pow- f rom and after the passage of this ers conferred upon them by seo- act the fees, commissions, charges, tions ten and forty-seven of said and allowances, excepting actual act, and no longer, which duties and necessary disbursements, of, they shall perform, as soon as may and to be made by the officers, be. And said justices shall have agents, marshals, messengers, as- power under said sections, by gen- signees, and registers in cases of eral regulations, to simplify and, so bankruptcy, shall be reduced to far as in their judgment will con- one-half of the fees, commissions, duce to the benefit of creditors, to charges, and allowances heretofore consolidate the duties of the regis- provided for or made in like cases: ter, assignee, marshal, and clerk, Provided, That the preceding pro- and to reduce fees, costs, and vision shall be and remain in force charges, to the end that prolixity, tmtil the justices of the Supreme delay, and unnecessary expense Court of the United States shall may be avoided." 514: LAW OF BANKEUPTOr. Tor every day's service while actually employed under a special order of the court, a sum not exceeding five dollars, to be allowed by the court. For taking depositions the fees now allowed by law. For every discharge when there is no opposition, two dollars. Such fees shall have priority of payment over all other claims out ot the estate, and, before a warrant issues, the pe- titioner shall deposit ^ with the senior register of the court, or with the clerk, to be delivered to the register, fifty dollars as security for the payment thereof; and if there are not sufficient assets for the payment of the fees, the person upon whose petition the warrant is issued, shall pay the same, and the court may issue an execution against him to compel pay- ment to the register. Before any dividend is ordered, the assignee shall pay out of the estate to the messenger the following fees, and no more : — First. For service of warrant, two dollars. Second. For all necessary travel, at the rate of five cents a mile each way. Third. For each written note to creditor named in the schedule, ten cents. Fourth. For custody of property, publication of notices, and other services, his actual and necessary expenses upon returning the same in specific items, and making oath that they have been actually incurred and paid by him, and are just and reasonable, the same to hf taxed or adjusted by the court, and the oath of the messenger shall not be conclusive as to the necessity of said expenses. For cause shown, and upon hearing thereon, such further allowance may be made as the court, in its discretion, may determine. The enumeration of the foregoing fees shall not prevent iThe act of July 27, 1868, (15 St. ior register or" and "to be deliv- li. 338, § 2), amends this section by ered to the register." omitting the words " with the sen- NATIONAL BANXEUPTCT LAW OF 1867. 515 the judges, wlio shall frame general rules and orders in ac- cordance witli the provisions of section ten, from prescribing a tariff of fees for all other services of the officers of courts of bankruptcy, or from reducing the fees prescribed iu this section in classes of cases to be named in their rules and orders. Of Meaning of Teems and Computation of Time. Seo. 48. And he it fwrih&r enacted. That the vrord " as- signee " and the vrord" " creditor " shall include the plural also ; and the word " messenger " shall include his assistant or assistants, except in the provision for the fees of that offi- cer. The word " marshal " shaU include the marshal's depu- ties; the word "person" shall also include "corporation;" and the word " oath " shall include " affirmation." And in all cases in which any particular number of days is pre- scribed by this act, or shall be mentioned in any rule or order of court or general order which shall at any time be made imder this act, for the doing of any act, or for any other purpose, the same shall be reckoned, in the absence of any expression to the contrary, exclusive of the first, and inclusive of the last day, unless the last day shall f aU on a Sunday, Christmas day, or on any day appointed by the President of the United States as a day of public fast or thanksgiving, or on the fourth of July, in which case the time shall be reckoned exclusive of that day also. Seo. 49. And le it fv/riher enacted. That all the jurisdic- tion, power, and authority conferred upon and vested in the District Court of the United States by this act in cases in bankruptcy are hereby conferred upon and vested in the Su- preme Court of the District of Columbia, and in and upon the^ supreme courts of the several Territories of the United States," when the bankrupt resides in the said District of iThe act of June 23, 1874 (18 St. 1874 inserts here the words "sub- L. 183), § 16, amends this section by ject to the general superintendence substituting the words "District and jurisdiction conferred upon Court "in lieu of "Supreme Courts." circuit courts by section two of * Section 16 of the above act of said act," 516 LAW OF BANKEUPTOT. Columbia or in either of the said Territories. And in those judicial districts which are not within any organized circuit of the United States, the power and jurisdiction of a circuit court in bankruptcy may be exercised by the district judge. Sec. 50. And he it fwriher enacted, That this act shall commence and take effect as to the appointment of the oflQ.- cers created hereby, and the promulgation of rules and gen- eral orders, from and after the date of its approval : Provided, That no petition or other proceeding under this act shall be filed, received, or commenced before the first day of June, Anno Domini, eighteen hundred and sixty-seven. Approved, March 2, 1867. TITLE lY. THE NATIONAL BANKRUPTCY LAW OP 1898. An Act to establish a uniform system of bankruptcy throughout the United States. Be it enacted hy the Senate and House of Representatives of the United States of America in Congress assembled, CHAPTER L DEBTNITIONS. Section 1. Meaning op Words and PHRASEa — a. The words and phrases used in this Act and in proceedings pursuant hereto shall, unless the same be inconsistent with the context, be construed as follows: (1) "A person against whom a petition has been filed " shall Include a I)erson who has filed a voluntary petition; (3) "adjudication" shall mean the date of the entry of a decree that the defendant, in a bank- ruptcy proceeding, is a bankrupt, or if such decree is appealed from, then the date when such decree is finally confirmed; (3) "appellate courts " shall include the circuit courts of appeals of the United States, the supreme courts of the Territories, and the Supreme Court of the United States; (4) "bankrupt" shall include a person against whom an involuntary petition or an application to set a composition aside or to revoke a discharge has been filed, or who has filed a voluntary petition, or who has been adjudged a bankrupt; (5) "clerk" shall mean the clerk of a court of bankruptcy; (6) " corporations " shall mean all bod- ies having any of the powers and privileges of private corporations not possessed by individuals or partnerships, and shall include limited or other partnership associations organized under laws making the capital subscribed alone responsible for the debts of the association; (7) " court " shall mean the court of bankruptcy in which the proceedings are pending, and may include the referee; (8) "courts of bankruptcy" shall include the district courts of the United States and of the Terri- tories, the supreme court of the District of Columbia, and the United States court of the Indian Territory, and of Alaska; (9) "creditor" shall include anyone who owns a demand or claim provable in bankruptcy, and may include his duly authorized agent, attorney, or proxy; (10) " date 518 LAW OF BANKETJPTCY. of bankruptcy," or "time of bankruptcy," or "commencement of pro- ceedings," or " bankruptcy," with reference to time, shall mean the date when the petition was filed; (11) "debt" shall include any debt, de- mand, or claim provable in bankruptcy; (12) " discharge " shall mean the release of a bankrupt from all of his debts which are provable in bankruptcy, except such as are excepted by this Act; (13) "document" shall include any book, deed, or instrument in writing; (14) "holiday" shall include Christmas, the Fourth of July, the Twenty-second of Feb- ruary, and any day appointed by the President of the United States or the Congress of the United States as a holiday or as a day of public fasting or thanksgiving; (15) a person shall be deemed insolvent within the provisions of this Act whenever the aggregate of his property, ex- clusive of any property which he may have conveyed, transferred, concealed, or removed, or permitted to be concealed or removed, with intent to defraud, hinder or delay his creditors, shall not, at a fair valua- tion, be sufiScient in amount to pay his debts; (16) "judge" shall mean a judge of a court of bankruptcy, not including the referee; (17) "oath " shall include affirmation; (18) "officer" shall include clerk, marshal, receiver, referee, and trustee, and the imposing of a duty upon or the forbidding of an act by any officer shall include his successor and any person authorized by law to perform the duties of such officer; (19) " per- sons " shall include corporations, except where otherwise specified, and officers, partnerships, and women, and when used with reference to the commission of acts which are herein forbidden shall include persons who are participants in the forbidden acts, and the agents, officers, and members of the board of directors or trustees, or other similar control- ling bodies of corporations; (20) "petition" shall mean a paper filed in a court of bankruptcy or with a clerk or deputy clerk by a debtor praying for the benefits of this Act, or by creditors alleging the commission of an act of bankruptcy by a debtor therein named; (21) " referee " shall mean the referee who has jurisdiction of the case or to whom the case has been referred, or anyone acting in his stead; (32) "conceal" shall include secrete, falsify, and mutilate; (23) "secured creditor " shall include a creditor who has security for his debt upon the property of the bankrupt of a nature to be assignable imder this Act, or who owns such a debt for which some indorser, surety, or other persons secondarily liable for the bankrupt has such security upon the bankrupt's assets; (24) " States " shall include the Territories, the Indian Territory, Alaska, and the District of Columbia; (25) "transfer" shall include the sale and every other and different mode of disposing of or parting with property, or the possession of property, absolutely or condi- tionally, as apayment, pledge, mortgage, gift, or security; (26) "trustee" shall include all of the trustees of an estate; (27) "wage-earner" shall mean an individual who works for wages, salary, or hire, at a rate of compensation not exceeding one thousand five hundred dollars per year; NATIONAL BANKEUPTOT LAT^ OF 1898. 519 (28) words importing the masculine gender may be applied to and in- clude corporations, partnerships, and women; (29) words importing the plural number may be applied to and mean only a single person or thing; (30) words importing the singular number may be applied to and mean several persons or things. CHAPTER n. CEEATION OF COUKTS OF BANKRTTPTOT AND THEIR JUEISDICTION. Sec. 2. That the courts of bankruptcy as hereinbefore defined, viz, the district courts of the United States in the several States, the supreme court of the District of Columbia, the district courts of the several Ter- ritories, and the United States courts in the Indian Territory and the District of Alaska, are hereby made courts of bankruptcy, and are hereby invested, within their respective territorial limits as now established, or as they may be hereafter changed, with such jurisdiction at law and in equity as wiU enable them to exercise original jurisdiction in bankruptcy proceedings, in vacation in chambers and during their respective terms, as they are now or may be hereafter held, to (1) adjudge persons bank- rupt who have had their principal place of business, resided, or had their domicile within their respective territorial jurisdictions for the preced- ing six months, or the greater portion thereof, or who do not have their principal place of business, reside, or have their domicile within the United States, but have property within their jurisdictions, or who have been adjudged bankrupts by courts of competent jurisdiction without the United States and have property within their jurisdictions; (2) allow claims, disallow claims, reconsider allowed or disallowed claims, and allow or disallow them against bankrupt estates; (3) appoint receivers or the marshals, upon application of parties in interest, in case the courts shall find it absolutely necessary, for the preservation of estates, to take charge of the property of bankrupts after the filing of the petition and until it is dismissed or the trustee is qualified; (4) arraign, try, and pun- ish bankrupts, officers, and other persons, and the agents, officers, mem- bers of the board of directors or trustees, or other similar controlling bodies, of corporations for violations of this Act, in accordance with the laws of procedure of the United States now in force, or such as may be hereafter enacted, regulating trials for the alleged violation of laws of the United States; (5) authorize the business of bankrupts to be con- ducted for limited periods by receivers, the marshals, or trustees, if nec- essary in the best interests of the estates; (6) bring in and substitute additional persons or parties in proceedings in bankruptcy when neces- sary for the complete determination of a matter in controversy ; (7) cause the estates of bankrupts to be collected, reduced to money and distrib- uted, and determine controversies in relation thereto, except as herein otherwise provided; (8) close estates, whenever it appears that they have been fully administered, by approving the final accounts and discharg- 520 LAW OF BANKEUPTOT. ing the trustees, and reopen them whenever it appears they were closed before being fully administered; (9) confirm or reject compositions between debtors and their creditors, and set aside compositions and reinstate the cases; (10) consider and confirm, modify or overrule, or re- turn, with instructions for further proceedings, records and findings cer- tified to them by referees; (11) determine aU claims of bankrupts to their exemptions; (12) discharge or refuse to discharge bankrupts and set aside discharges and reinstate the cases; (13) enforce obedience by bankrupts, ofScers, and other persons to all lawful orders, by fine or imprisonment or fine and imprisonment ; (14) extradite bankrupts from their respective districts to other districts; (15) make such orders, issue such process, and enter such judgments in addition to those specifically provided for as may be necessary for the enforcement of the provisions of this Act; (16) punish persons for contempts committed before referees; (17) pur- suant to the recommendation of creditors, or when they neglect to recom- mend the appointment of trustees, appoint trustees, and upon complaints of creditors, remove trustees for cause upon hearings and after notices to them; (18) tax costs, whenever they are allowed by law, and render judgments therefor against the unsuccessful party, or the successful party for cause, or in part against each of the parties, and against es- tates, in proceedings in bankruptcy; and (19) transfer cases to other courts of bankruptcy. Nothing in this section contained shall be construed to deprive a court of bankruptcy of any power it would possess were certain specific pow- ers not herein enumerated. CHAPTER in. BANKEUPTS. Se& 3. Acts op Bankruptcy. — o. Acts of bankruptcy by a person shall consist of his having (1) conveyed, transferred, concealed, or re- moved, or permitted to be concealed or removed, any part of his prop- erty with intent to hinder, delay, or defraud his creditors, or any of them; or (2) transferred, while insolvent, any portion of his property to one or more of his creditors with intent to prefer such creditors over his other creditors; or (3) suffered or permitted, while insolvent, any cred- itor to obtain a preference through legal proceedings, and not having at least five days before a sale or final disposition of any property af- fected by such preference vacated or discharged such preference; or (4) made a general assignment for the benefit of his creditors; or (5) ad- mitted in writing his inability to pay his debts and his willingness to b© adjudged a bankrupt on that ground. &. A petition may be filed against a person who is insolvent and who has committed an act of banlcruptcy within four months after the com- mission of such act. Such time shall not expire until four months after {!) the date of the recording or registering of the transfer or assignment NATIONAL BANKKirPTOT LAW OF 1898. 521 when the act consists in having made a transfer of any of his property ■with intent to hinder, delay, or defraud his creditors or for the purpose of giving a preference as liereinbef ore provided, or a general assignment for the benefit of his creditors, if by law such recording or registering is required or permitted, or, if it is not, from the date when the bene- ficiary takes notorious, exclusive, or continuous possession of the prop- erty unless the petitioning creditors have received actual notice of such transfer or assignment c It shall be a complete defense to any proceedings in bankruptcy instituted under the first subdivision of this section to allege and prove that the party proceeded against was not insolvent as defined in this Act at the time of the filing the petition against him, and if solvency at such date is proved by the alleged bankrupt the proceedings shall be dismissed, and under said subdivision one the burden of proving solvency shall be on the alleged bankrupt. d. Whenever a person against whom a petition has been filed as here- inbefore provided under the second and third subdivisions of this section takes issue with and denies the allegation of his insolvency, it shall be his duty to appear in court on the hearing, with his books, papers, and accounts, and submit to an examination, and give testimony as to all matters tending to establish solvency or insolvency, and in case of his failure to so attend and submit to examination the burden of proving his solvency shall rest ui)on him. e. Whenever a petition is filed by any person for the purpose of having another adjudged a bankrupt, and an application is made to take charge of and hold the property of the alleged bankrupt, or any part of the same, prior to the adjudication and pending a hearing on the petition, the petitioner or applicant shall file in the same court a bond with at least two good and suflBcient sureties who shall reside within the juris- diction of said court, to be approved by the court or a judge thereof, in such sum as the court shall direct, conditioned for the payment, in case such petition is dismissed, to the respondent, his or her personal repre- sentatives, all costs, expenses, and damages occasioned by such seizure, taking, and detention of the property of the alleged bankrupt. If such petition be dismissed by the court or withdrawn by the peti- tioner, the respondent or respondents shall be allowed all costs, counsel fees, expenses, and damages occasioned by such seizure, taking, or deten- tion of such property. Coimsel fees, costs, expenses, and damages shall be fixed and allowed by the coiut, and paid by the obUgors in such bond. Sec. 4 Who May Become Bankeupts. — a. Any person who owes debts, except a corporation, shall be entitled to the benefits of this Act as a voluntary bankrupt. b. Any natural person, except a wage-earner or a person engaged chiefiy in farming or the tillage of the soil, any unincorporated company, and any corporation engaged principally in manufacturing, trading. 622 LAW OF BAUKEUPTCT. printing, publishing, or mercantile pursuits, owing debts to the amount of one thousand dollars or over, may be adjudged an involuntary bank- rupt upon default or an impartial trial, and shall be subject to the pro- visions and entitled to the benefits of this Act. Private bankers, but not national banks or banks incorporated under State or Territorial laws, may be adjudged involuntary bankrupts. Sec. 5. Paetnees. — a. A partnership, during the continuation of the partnership business, or after its dissolution and before the final settle- ment thereof, may be adjudged a bankrupt. b. The creditors of the partnership shall appoint the trustee; in other respects so far as possible the estate shall be administered as herein pro- vided for other estates. c. The court of bankruptcy which has jurisdiction of one of the part- ners may have jurisdiction of all the partners and of the administration of the partnership and individual property. d. The trustee shall keep separate accounts of the partnership property and of the property belonging to the individual partners. e. The expenses shall be paid from the partnership property and the individual property in such proportions as the court shall determine. /. The net proceeds of the partnership property shall be appropriated to the payment of the partnership debts, and the net proceeds of the in- dividual estate of each partner to the payment of his individual debts. Should any surplus remain of the property of any partner after paying his individual debts, such surplus shall be added to the partnership assets and be applied to the payment of the partnership debts. Should any surplus of the partnership property remain after paying the part- nership debts, such surplus shall be added to the assets of the individual partners in the proportion of their respective interests in the partner- ship. g. The court may permit the proof of the claim of the partnership es- tate against the individual estates, and vice versa, and may marshal the assets of the partnership estate and individual estates so as to prevent ' preferences and secure the equitable distribution of the property of the several estates. h. In the event of one or more but not all of the members of a part- nership being adjudged bankrupt, the partnerslup property shall not be administered in bankruptcy, unless by consent of the partner or part- ners not adjudged bankrupt; but such partner or partners not adjudged bankrupt shall settle the partnership business as expeditiously as its nature vrill permit, and account for the interest of the partner or part- ners adjudged bankrupt. Sec. 6. Exemptions op Bankrupts.— a. This Act shall not affect the allowance to bankrupts of the exemptions which are prescribed by the State laws in force at the time of the filing of the petition in the State wherein they have had their domicile for the six months or the greater portion thereof immediately preceding the filing of the petition. NATIONAL BANKEUPTCT LAW OF 1898. 523 Sec. 7. Duties of Bankrupts.— a. The bankrupt shall (1) attend the first meeting of his creditors, if directed by the court or a judge thereof to do so, and the hearing upon his application for a discharge, if filed; (2) comply with all lawful orders of the court; (3) examine the correct- ness of all proofs of claims filed against his estate; (4) execute and de- liver such papers as shall be ordered by the court; (5) execute to his trustee transfers of all his property in foreign countries; (6) immediately inform his trustee of any attempt, by his creditors or other persons, to evade the provisions of this Act, coming to his knowledge; (7) in case of any person having to his knowledge proved a false claim against his estate, disclose that fact immediately to his trustee; (8) prepare, make oath to, and file in court within ten ten days, unless further time is granted, after the adjudication, if an involuntary bankrupt, and with the petition if a voluntary bankrupt, a schedule of his property, show- ing the amount and kind of property, the location thereof, its money value in detail, and a list of his creditors, showing their residences, if known, if unknown, that fact to be stated, the amounts due each of them, the consideration thereof, the security held by them, if any, and a claim for such exemptions as he may be entitled to, all in triplicate, one copy of each for the clerk, one for the referee, and one for the trustee; and (9) when present at the first meeting of his creditors, and at such other times as the court shall order, submit to an examination, concerning the conducting of his business, the cause of his bankruptcy, his dealings with his creditors and other persons, the amount, kind, and whereabouts of his property, and, in addition, all matters which may affect the administration and settlement of his estate; but no testimony given by him shall be offered in evidence against him in any criminal proceeding. Provided, however. That he shall not be required to attend a meeting of his creditors, or at or for an examination at a place more than one hundred and fifty miles distant from his home or principal place of business, or to examine claims except when presented to him, unless ordered by the court, or a judge thereof, for caiise shown, and the bank^ rupt shall be paid his actual expenses from the estate when examined or required to attend at any place other than the city, town, or village of his residence. Sec. 8. Death or Insanity of Bankrupts. — a. The death or insan- ity of a bankrupt shall not abate the proceedings, but the same shall be conducted and concluded in the same manner, so far as possible, as though he had not died or become insane: Provided, That in case of death the widow and children shall be entitled to all rights of dower and allowance fixed by the laws of the State of the bankrupt's residenca Sec. 9. Protection and Detention of Bankrupts. — a. A bankrupt shall be exempt from arrest upon civil process except in the following cases: (1) When issued from a court of bankruptcy for contempt or dis- 524 LAW OF BANKETJPTOr. obedience of its lawful orders; (3) when issued from a State court hav- ing jurisdiction, and served within such State, upon a debt or claim from which his discharge in bankruptcy would not be a release, and in such case he shall be exempt from such arrest when in attendance upon a court of bankruptcy or engaged in the performance of a duty imposed by this Act. b. The judge may, at any time after the filing of a petition by or against a person, and before the expiration of one month after the qual- ification of the trustee, upon satisfactory proof by the afi5davits of at least two persons that such bankrupt is about to leave the district in which he resides or has his principal place of business to avoid examina- tion, and that his departure will defeat the proceedings in bankruptcy, issue a warrant to the marshal, directing him to bring such bankrupt forthwith before the court for examination. If upon hearing the evi- dence of the parties it shall appear to the court or a judge thereof that the allegations are true and that it is necessary, he shall order such mar- shal to keep such bankrupt in custody not exceeding ten days, but not imprison him, imtil he shall be examined and released or give bail con- ditioned for his appearance for examination, from time to time, not ex- ceeding in all ten days, as required by the court, and for his obedience to all lawful orders made in reference thereto. Sec. 10. Extradition of Bankrupts. — a. Whenever a warrant for the apprehension of a bankrupt shall have been issued, and he shall have been found within the jurisdiction of a court other than the one issuing the warrant, he may be extradited in the same manner in which persons rmder indictment are now extradited from one district within which a district court has jurisdiction to another. Sec. 11. Suits by and against Bankrupts. — a. A suit which is founded upon a claim from which a discharge would be a release, and which is pending against a person at the time of the filing of a petition against him, shall be stayed imtil after an adjudication or the dismissal of the petition; if such person is adjudged a bankrupt, such action may be further stayed until twelve months after the date of such adjudication, or, if within that time such person applies for a discharge, then until the question of such discharge is determined. b. The court may order the trustee to enter his appearance and defend any pending suit against the bankrupt. c A trustee may, with the approval of the court, be permitted to prosecute as trustee any suit commenced by the bankrupt prior to the adjudication, with like force and effect as though it had been com- menced by him. d. Suits shall not be brought by or against a trustee of a bankrupt estate subsequent to two years after the estate has been closed. Seo. 13. Compositions, when Confirmed. — a. A bankrupt may offer terms of composition to his creditors after, but not before, he has been NA.TIONAL BANKEUPTOT LAW OF 1898. 525 ) examined in open court or at a meeting of his creditors and filed in court the schedule of his property and list of his creditors, required to be filed by bankrupts. 6. An application for the confirmation of a composition may be filed in the court of bankruptcy after, but not before, it has been accepted in writing by a majority in number of all creditors whose claims have been allowed, which number must represent a majority in amount of such claims, and the consideration to be paid by the bankrupt to his creditors, and the money necessary to pay all debts which have priority and the cost of the proceedings, have been deposited in such place as shall be designated by and subject to the order of the judge. e. A date and place, with reference to the convenience of the parties in interest, shall be fixed for the hearing upon each application for the confirmation of a composition, and such objections as may be made to its confirmation. d. The judge shall confirm a composition if satisfied that (1) it is for the best interests of the creditors; (2) the bankrupt has not been guilty of any of the acts or failed to perform any of the duties which would be a bar to his discharge; and (3) the ofEer and its acceptance are in good faith and have not been made or procured except as herein provided, or by any means, promises, or acts herein forbidden. e. Upon the confirmation of a composition, the consideration shaU be distributed as the judge shall direct, and the case dismissed. Whenever a composition is not confirmed, the estate shall be administered in bank- ruptcy, as herein provided. Sec. 13. Compositions, when Set Asidk— o. The judge may, upon the application of parties in interest filed at any time within six months after a composition has been confirmed, set the same aside and reinstate the case if it shall be made to appear upon a trial that fraud was practiced in the procuriag of such composition, and that the knowledge thereof has come to the petitioners since the confirmation of such com- position. Sec. 14. Discharges, when Granted. — a. Any person may, after the expiration of one month and within the next twelve months subsequent to being adjudged a bankrupt, file an application for a discharge in the court of bankruptcy in which the proceedings are pending; if it shall be made to appear to the judge that the bankrupt was unavoidably pre- vented from filing it within such time, it may be filed within but not after the expiration of the next six months. b. The judge shall hear the application for a discharge, and such proofs and pleas as may be made in opposition thereto by parties in interest, at such time as will give parties in interest a reasonable oppor- tunity to be fully heard, and investigate the merits of the application and discharge the applicant unless he has (1) committed an o£Eense punishable by imprisonment as herein provided; or (3) with fraudulent 526 LAW OF BANKEUPTOT. intent to conceal his true financial condition and in contemplation of bankruptcy, destroyed, concealed, or failed to keep books of account or records from which his true condition might be ascertained. c The confirmation of a composition shall discharge the bankrupt from his debts, other than those agreed to be paid by the terms of the composition and those not affected by a discharge. Sec. 15. DiscHAEGES, when Eetoked.— a. The judge may, upon the application of parties in intei-est who have not been guilty of undue laches, filed at any time within one year after a discharge shall have been granted, revoke it upon a trial if it shall be made to appear that it was obtained through the fraud of the bankrupt, and that the knowledge of the fraud has come to the petitioners since the granting of the dis- charge, and that the actual facts did not warrant the discharge. Sec. 16. Co-Debtoes of Bankettpts. — o. The liability of a person who is a co-debtor with, or guarantor or in any manner a surety for, a bank- rupt shall not be altered by the discharge of such bankrupt. Sec. 17. Debts not Affected by a Dischaege. — o. A discharge in bankruptcy shall release a bankrupt from all of his provable debts, ex- cept such as (1) are due as a tax levied by the United States, the State, county, district, or municipality in which he resides; (2) are judgments in actions for frauds, or obtaining property by false pretenses or false representations, or for willful and malicious injuries to the person or property of another; (3) have not been duly scheduled in time for proof and allowance, with the name of the creditor if known to the bankrupt, unless such creditor had notice or actual knowledge of the proceedings in bankruptcy; or (4) were created by his fraud, embezzlement, mis- appropriation, or defalcation while acting as an oflScer or in any fiduci- ary capacity. CHAPTER IV. cotjets and peoceduee theeedt. Sec. 18. Peocess, Pleadings, AND Adjudications.— a. Upon the filing of a petition for involuntary bankruptcy, service thereof, with a writ of subpoena, shall be made upon the person therein named as defendant in the same manner that service of such process is now had upon the com- mencement of a suit in equity in the courts of the United States, except that it shall be returnable within fifteen days, unless the judge shall for cause fix a longer time; but in case personal service can not be made, then notice shall be given by publication in the same manner and for the same time as provided by law for notice by publication in suits in equity in courts of the United States. 5. The bankrupt, or any creditor, may appear and plead to the peti- tion within ten days after the return day, or within such further time as the court may allow. c All pleadings setting up matters of fact shall be verified under oath. NATIOKAL BANXErPTOT LAW OF 1898b 527 d. If the bankrupt, or any of his creditors, shall appear, -within the time limited, and controvert the facts alleged in the petition, the judge shall determine, as soon as may be, the issues presented by the plead- ings, without the intervention of a jury, except in cases where a jury trial is given by this Act, and malses the adjudication or dismiss the petition. e. If on the last day within which pleadings may be filed none are filed by the bankrupt or any of his creditors, the judge shall on the next day, if present, or as soon thereafter as practicable, make the adjudica- tion or dismiss the petition. /. If the judge is absent from the district, or the division of the dis- trict in which the petition is pending, on the next day after the last day on which pleadings may be filed, and none have been filed by the bank- rupt or any of his creditors, the clerk shall forthwith refer the case to the referee. g. Upon the filing of a voluntary petition the judge shall hear the pe- tition and make the adjudication or dismiss the petition. If the judge is absent from the district, or the division of the district in which the petition is filed at the time of the filing, the clerk shall forthwith refer the case to the referee. SEa 19. Jtirt Trials. — a. A person against whom an involuntary pe- tition has been filed shall be entitled to have a trial by jury, in respect to the question of his insolvency, except as herein otherwise provided, and any act of bankruptcy alleged in such petition to have been com- mitted, upon filing a written application therefor at or before the time within which an answer may be filed. If such application is not filed within such time, a trial by jury shall be deemed to have been waived. b. If a jury is not in attendance upon the court, one may be specially siunmoned for the trial, or the case may be postponed, or, if the case is pending in one of the district courts within the jurisdiction of a circuit court of the United States, it may be certified for trial to the circuit court sitting at the same place, or by consent of parties when sitting at any other place in the same district, if such circuit court has or is to have a jury first in attendance. e. The right to submit matters in controversy, or an alleged offense under this Act, to a jury shall be determined and enjoyed, except as provided by this Act, according to the United States laws now in force or such as may be hereafter enacted in relation to trials by jury. Sec. 20. Oaths, Afftemations. — a. Oaths required by this Act, ex- cept upon hearings in court, may be administered by (1) referees; (2) offi- cers authorized to administer oaths in proceedings before the courts of the United States, or under the laws of the State where the same are to be taken; and (3) diplomatic or consular officers of the United States in any foreign country. b. Any person conscientiously opposed to taking an oath may, in lieu 528 LAW OF BANKEUPTOr. thereof, affirm. Any person who shall affirm falsely shall be punished as for the making of a false oath. Sec. 21. EviDBNOE. — a. A court of bankruptcy may, upon application of any officer, bankrupt, or creditor, by order require any designated person, including the bankrupt, who is a competent witness under the laws of the State in which the proceedings are pending, to appear in court or before a referee or the judge of any State court, to be exam- ined concerning the acts, conduct, or property of a bankrupt whose es- tate is in process of administration under this Act. h. The right to take depositions in proceedings under this Act shall be determined and enjoyed according to the United States laws now in force, or such as may be hereafter enacted relating to the taking of depo- sitions, except as herein provided. c. Notice of the taking of depositions shall be filed with the referee in every case. When depositions are to be taken in opposition to the allow- ance of a claim notice shaU also be served upon the claimant, and when in opposition to a discharge notice shaU also be served upon the bank- rupt. d. Certified copies of proceedings before a referee, or of papers, when issued by the clerk or referee, shall be admitted as evidence with like force and effect as certified copies of the records of district courts of the United States are now or may hereafter be admitted as evidence. e. A certified copy of the order approving the bond of a trustee shall constitute conclusive evidence of the vesting in him of the title to the property of the bankrupt, and if recorded shall impart the same notice that a deed from the bankrupt to the trustee if recorded would have imparted had not bankruptcy proceedings intervened. /. A certified copy of an order confirming or setting aside a composi- tion, or granting or setting aside a discharge, not revoked, shall be evi- dence of the jurisdiction of the court, the regularity of the proceedings, and of the fact that the order was made. g. A certified copy of an order confirming a composition shall consti- tute evidence of the revesting of the title of his property in the bank- rupt, and if recorded shall impart the same notice that a deed from the trustee to the bankrupt if recorded would impart. Sec. 32. Reference op Cases after Adjudication. — a. After a per- son has been adjudged a bankrupt the judge may cause the trustee to proceed with the administration of the estate, or refer it (1) generally to the referee or specially with only limited authority to act in the prem- ises or to consider and report upon specified issues; or (2) to any referee within the territorial jurisdiction of the court, if the convenience of par- ties in interest will be served thereby, or for cause, or if the bankrupt does not do biisiness, reside, or have his domicile in the district. 6. The judge may, at any time, for the convenience of parties or for cause, transfer a case from one referee to another. NATIONAL BANKEUPTCT LAW OF 189a 529 Sec. 23. JuEiSDiCTiON of United States and State Courts. — a. The United States circuit courts shall have jurisdiction of all controversies at law and in equity, as distinguished from proceedings in bankruptcy, between trustees as such and adverse claimants concerning the property acquired or claimed by the trustees, in the same manner and to the same extent only as though bankruptcy proceedings had not been instituted and such controversies had been between the bankrupts and such ad- verse claimants. b. Suits by the trustee shall only be brought or prosecuted in the courts where the bankrupt, whose estate is being administered by such trustee, might have brought or prosecuted them if proceedings in bankruptcy had not been instituted, unless by consent of the proposed defendant. a The United States circuit courts shall have concurrent jurisdiction with the courts of bankruptcy, within their respective territorial limits, of the offenses enumerated in this Act. SEa 24. Jurisdiction of Appellate Courts. — a. The Supreme Court of the United States, the circuit courts of appeals of the United States, and tHe supreme courts of the Territories, in vacation in chambers and during their respective terms, as now or as they may be hereafter held, are hereby invested with appellate jurisdiction of controversies arising in bankruptcy proceedings from the courts of bankruptcy from which they have appellate jurisdiction in other cases. The Supreme Court of the United States shall exercise a like jurisdiction from courts of bank- ruptcy not within any organized circuit of the United States and from the supreme court of the District of Columbia. b. The several circuit courts of appeal shall have jurisdiction in equity, either interlocutory or final, to superintend and revise in matter of law the proceedings of the several inferior courts of bankruptcy within their jurisdiction. Such power shall be exercised on due notice and petition by any party aggrieved. Sec. 25. Appeals and Writs of Error. — a. That appeals, as in equity cases, may be taken in bankruptcy proceedings from the courts of bank- ruptcy to the circuit court of appeals of the United States, and to the supreme court of the Territories, in the following oases, to wit, (1) from a judgment adjudging or refusing to adjudge the defendant a bankrupt; (2) from a judgment granting or denying a discharge; and (3) from a judgment allowing or rejecting a debt or claim of five hundred dollars or over. Such appeal shall be taken within ten days after the judgment appealed from has been rendered, and may be heard and determined by the appellate court in term or vacation, as the case may be. b. From any final decision of a court of appeals, allowing or rejecting a claim under this Act, an appeal may be had under such rules and within such time as may be prescribed by the Supreme Court of the United States, in the following cases and no other: 1. Where the amount in controversy exceeds the sum of two thousand 84 530 LAW OF BAKKKUPTOT. dollars, and the question involved is one which might have been taken on appeal or writ of error from the highest court of a State to the Su- preme Court of the United States; or 3. Where some Justice of the Supreme Court of the United States shall certify that in his opinion the determination of the question or questions involved in the allowance or rejection of such claim is essen- tial to a uniform construction of this Act throughout the United States. c. Trustees shall not be required to give bond when they take appeals or sue out writs of error. d. Controversies may be certified to the Supreme Court of the United States from other courts of the United States, and the former court may exercise jurisdiction thereof and issue writs of certiorari pursuant to the provisions of the United States laws now in force or such as may be hereafter enacted. Sec. 26. Arbitration of Controversies. — a. The trustee may, pur- suant to the direction of the court, submit to arbitration any contro- versy arising in the settlement of the estate. b. Three arbitrators shall be chosen by mutual consent, or one by the trustee, one by the other party to the controversy, and the third by the two so chosen, or if they fail to agree in five days after their appoint- ment the court shall appoint the third arbitrator. c. The written finding of the arbitrators, or a majority of them, as to the issues presented, may be filed in court and shall have like force and effect as the verdict of a jury. Sec. 37. Compromises. — a. The trustee may, with the approval of the court, compromise any controversy arising in the administration of the estate upon such terms as he may deem for the best interests of the es- tate. Sec. 38. Designation of Newspapers. — a. Courts of bankruptcy shall by order designate a newspaper published within their respective terri- torial districts, and in the county in which the bankrupt resides or the major part of his property is situated, in which notices required to be published by this Act and orders which the court may direct to be pub- lished shall be inserted. Any court may in a particular case, for the convenience of parties in interest, designate some additional newspaper in which notices and orders in such case shall be published. Sec. 29. Offenses. — a. A person shall be punished, by imprisonment for a period not to exceed five years, upon conviction of the offense of having knowingly and fraudulently appropriated to his own use, embez- zled, spent, or unlawfully transferred any property or secreted or de- stroyed any document belonging to a bankrupt estate which came into his charge as trustea b. A person shall be punished, by imprisonment for a period not to exceed two years, upon conviction of the offense of having knowingly and fraudulently (1) concealed while a bankrupt, or after his discharge, from his trustee any of tlie property belonging to his estate in bank- NATIONAL BANKEUrXOT LAW OF 1898. 531 ruptcy; or (2) made a false oath or account in, or in relation to, any pro- ceeding in bankruptcy; (3) presented under oath any false claim for proof against the estate of a bankrupt, or used any such claim in com- position personally or by agent, proxy, or attorney, or as agent, proxy, or attorney; or (4) received any material amount of property from a bankrupt after the filing of the petition, with intent to defeat this Act; or (5) extorted or attempted to extort any money or property from any person as a consideration for acting or forbearing to act in bankruptcy proceedings. c. A person shall be punished by fine, not to exceed five hundred dol- lars, and forfeit his ofSce, and the same shall thereupon become vacant, upon conviction of the offense of having knowingly (1) acted as a referee in a case in which he is directly or indirectly interested; or (3) pur- chased, while a referee, directly or indirectly, any property of the estate in bankruptcy of which he is referee; or (3) refused, while a referee or trustee, to permit a reasonable opportunity for the inspection of the ac- counts relating to the affairs of, and the papers and records of, estates in his charge by parties in interest when directed by the court so to do. d. A person shall not be prosecuted for any offense arising under this Act unless the indictment is found or the information is filed in court within one year after the commission of the offense. Sec. 30. EuLES, Forms, and Ordeks.— a. AJl necessary rules, forms, and orders as to procedure and for carrying this Act into force and ef- fect shall be prescribed, and.may be amended from time to time, by the Supreme Court of the United States. SEa 31. Computation of Time. — a. Whenevertime is enumerated by days in this Act, or in any proceeding in bankruptcy, the number of days shall be computed by excluding the first and including the last, unless the last fall on a Sunday or holiday, in which event the day last included shall be the next day thereafter which is not a Sunday or a legal holiday. Sec. 33. Tkanspee of Cases. — a. In the event petitions are filed against the same person, or against different members of a partnership, in different courts of bankruptcy each of which has jurisdiction, the cases shall be transferred, by order of the courts relinquishing jurisdic- tion, to and be consolidated by the one of such courts which can pro- ceed vfith the same for the greatest convenience of parties in interest. CHAPTER V. officers, their duties and compensation. SEa 83. Creation of Two Offices.— o. The oflBoes of referee and trustee are hereby created. Sec. 34. Appointmbnt, Removal, and Districts of Referees. — o. Courts of bankruptcy shall, within the territorial limits of which they 532 LAW OF BAHKEUPTOT. respectively have jurisdiction, (1) appoint referees, each for a term of two years, and may, in their discretion, remove them because their services are not needed or for other cause; and (3) designate, and from time to time change, the limits of the districts of referees, so that each county, where the services of a referee are needed, may constitute at least one district. Sbc. 35. Qualifications op Eefeeees. — a. Individuals shall not be eligible to appointment as referees unless they are respectively (1) com- petent to perform the duties of that office; (2) not holding any office of profit or emolument under the laws of the United States or of any State other than commissioners of deeds, jxistices of the peace, masters in chancery, or notaries public; (3) not related by consanguinity or affinity, within the third degree as determined by the common law, to any of the judges of the courts of bankruptcy or circuit courts of the United States, or of the justices or judges of the appellate courts of the districts wherein they may be appointed ; and (4) residents of, or have their offices in, the territorial districts for which they are to be appointed. Sec. 36. Oaths of Opfecb of Eefeeees. — o. Referees shall take the same oath of office as that prescribed for judges of United States courts. Sec. 37. NiMBEK OF Eefeeees. — a. Such number of referees shall be appointed as may be necessary to assist in expeditiously transacting the bankruptcy business pending in the various courts of bankruptcy. Sec. 38. JuEiSDiCTiON of Eefeeees. — a. Referees respectively are hereby invested, subject always to a review by the judge, within the limits of their districts as established from time to time, with jurisdic- tion to (1) consider all petitions referred to them by the clerks and make the adjudications or dismiss the petitions; (2) exercise the powers vested in courts of bankruptcy for the administering of oaths to and the exam- ination of persons as witnesses and for requiring the production of docu- ments in proceedings before them, except the power of commitment; (3) exercise the powers of the judge for the taking possession and releas- ing of the property of the bankrupt in the event of the issuance by the clerk of a certificate showing the absence of a judge from the judicial district, or the division of the district, or his sickness, or inability to act; (4) perform such part of the duties, except as to questions arising out of the applications of bankrupts for compositions or discharges, as are by this Act conferred on courts of bankruptcy and as shall be prescribed by rules or orders of the courts of bankruptcy of their respective districts, except as herein otherwise provided; and (5) upon the application of the trustee during the examination of the bankrupts, or other proceedings, authorize the employment of stenographers at the expense of the estates at a compensation not to exceed ten cents per foUo for reporting and transcribing the proceedings. Sec. 39. Duties of Eefeeees. — a. Eeferees shall (1) declare dividends and prepare and deliver to trustees dividend sheets showing the dividends NATIONAL BANKEUPTOT LAW OF 1898. 533 declared and to whom payable; (3) examine all schedules of property and lists of creditors filed by bankrupts and cause such as are incom- plete or defective to be amended; (3) furnish such information con- cerning the estates in process of administration before them as may be requested by the parties in interest; (4) give notices to creditors as herein provided; (5) make up records embodying the evidence, or the substance thereof, as agreed upon by the pai-ties in all contested mat- ters arising before them, whenever requested to do so by either of the parties thereto, together with their findings therein, and transmit them to the judges; (6) prepare and file the schedules of property and lists of creditors required to be filed by the bankrupts, or cause the same to be done, when the bankrupts fail, refuse, or neglect to do so; (7) safely keep, perfect, and transmit to the clerks the records, herein required to be kept by them, when the oases are concluded; (8) transmit to the clerks such papers as may be on file before them whenever the same are needed in any proceedings in courts, and in like manner secure the return of such papers after they have been used, or, if it be impracti- cable to transmit the original papers, transmit certified copies thereof by mail; (9) upon application of any party in interest, preserve the evi- dence taken or the substance thereof as agreed upon by the parties be- fore them when a stenographer is not in attendance; and (10) whenever their respective offices are in the same cities or towns where the courts of bankruptcy convene, call upon and receive from the clerks all papers filed in courts of bankruptcy which have been referred to them. b. Referees shall not (1) act in cases in which they are directly or in- directly interested; (3) practice as attorneys and ooxmselors at law in any bankruptcy proceedings; or (3) purchase, directly or indirectly, any property of an estate in bankruptcy Sec. 40. Compensation of Referees. — a. Referees shall receive as full compensation for their services, payable after they are rendered, a fee of ten dollars deposited with the jclerk at the time the petition is filed in each case, except when a fee is not required from a voluntary bankrupt, and from estates which have been administered before them one per centum commissions on sums to be paid as dividends and com- missions, or one half of one per centum on the amount to be paid to creditors upon the confirmation of a composition. 6. Whenever a case is transferred from one referee to another the judge shall determine the proportion in which the fee and commissions therefor shall be divided between the referees. a. In the event of the reference of a case being revoked before it is concluded, and when the case is specially referred, the judge shall de- termine what part of the fee and commissions shall be paid to the ref- eree. SEa 41, Contempts before Referees. — a. A person shall not, in pro- ceedings before a referee, (1) disobey or resist any lawful order, process, 534 LAW or BANKETJPTOT. or writ; (3) misbehave during a hearing or so near the place thereof as to obstruct the same; (3) neglect to produce, after having been ordered to do so, any pertinent document; or (4) refuse to appear after having been subpoenaed, or, upon appearing, refuse to take the oath as a wit- ness, or, after having taken the oath, refuse to be examined according to law: Provided, That no person shall be required to attend as a wit- ness before a referee at a place outside of the State of his residence, and more than one hundred miles from such place of residence, and only in case his lawful mileage and fee for one day's attendance shall be first paid or tendered to him. 6. The referee shall certify the facts to the judge, if any person shall do any of the things forbidden in this section. The judge shall there- upon, in a summary manner, hear the evidence as to the acts complained of, and, if it is such as to warrant him in so doing, punish such person in the same manner and to the same extent as for a contempt committed before the court of bankruptcy, or commit such person upon the same conditions as if the doing of the forbidden act had occurred with refer- ence to the process of, or in the presence of, the court. Sec. 43. Ebcords of Referees. — a. The records of all proceedings in each case before a referee shall be kept as nearly as may be in the same manner as records are now kept in equity cases in circuit courts of the United States. h. A record of the proceedings in each case shall be kept in a separate book or books, and shall, together with the papers on file, constitute the records of the case. a The book or books containing a record of the proceedings shall, when the case is concluded before the referee, be certified to by him, and, together with such papers as are on file before him, be transmitted to the court of bankruptcy and shall there remain as a part of the rec- ords of the court. Sec. 43. Referee's Absence or Disability.— a. Whenever the oQce of a referee is vacant, or its occupant is absent or disqualified to act, the judge may act, or may appoint another referee, or another referee hold- ing an appointment under the same court may, by order of the judge, temporarily fill the vacancy. Sec. 44 Appointment of Trustees. — a. The creditors of a bankrupt estate shall, at their first meeting after the adjudication or after a va- cancy has occurred in the office of trustee, or after an estate has been reopened, or after a composition has been set aside or a discharge re- voked, or if there is a vacancy in the oflSce of trustee, appoint one trustee or three trustees of such estate. If the creditors do not appoint a trustee or trustees as herein provided, the court shall do so. Sec. 45. Qualifications of Trustees.— a. Trustees maybe (1) indi- viduals (who are respectively competent to perform the duties of that office, and reside or have an office in the judicial district within which NATIONAL BANKEUPTOT LAW OF 1898. 535 they are appointed, or (3) corporations authorized by their charters or by law to act in such capacity and having an office in the judicial district within which they are appointed. Sec. 46. Death or Removal op Teustees.— a. The death or removal of a trustee shall not abate any suit or proceeding which he is prosecut- ing or defending at the time of his death or removal, but the same may be proceeded with or defended by his joint trustee or successor in the same manner as though the sarae had been commenced or was being defended by such joint trustee alone or by such successor. Sec. 47. DxjTiES OP Trustees. — a. Trustees shaU respectively (1) ac- count for and pay over to the estates under their control all interest received by them^ upon property of such estates; (3) coUeot and reduce to money the property of the estates for which they are trustees, under the direction of the court, and close up the estate as expeditiously as is compatible with the best interests of the parties in interest; (3) deposit all money received by them in one of the designated depositories; (4) dis- burse money only by check or draft on the depositories in which it has been deposited; (5) furnish such information concerning the estates of which they are trustees and their administration as may be requested by parties in interest; (6) keep regular accounts showing all amounts received and from what sources and all amounts expended and on what accounts; (7) lay before the iinal meeting of the creditors detailed state- ments of the administration of the estates; (8) make final reports and file final accounts with the courts fifteen days before the days fixed for the final meetings of the creditors; (9) pay dividends within ten days after they are declared by the referees; (10) report to the courts, in writ- ing, the condition of the estates and the amounts of money on hand, and such other details as may be required by the courts, within the first month after their appointment and every two months thereafter, unless otherwise ordered by the courts; and (11) set apart the bankrupt's ex- emptions and report the items and estimated value thereof to the court as soon as practicable after their appointment. b. Whenever three trustees have been appointed for an estate, the concurrence of at least two of them shall be necessary to the validity of their every act concerning the administration of the estate. Sec. 48. Compensation op Trustees.— a. Trustees shall receive, as full compensation for their services, payable after they are rendered, a fee of five dollars deposited with the clerk at the time the petition is filed in each case, except when a fee is not required from a voluntary bank- rupt, and from estates which they have administered, such commissions on Slims to be paid as dividends and commissions as may be allowed by the courts, not to exceed three per centum on the first five thousand dollars or less, two per centum on the second five thousand dollars or part thereof, and one per centum on such sums in excess of ten thou- sand dollars. 536 LAW or BAISrKEUPTOT. b. In the event of an estate being administered by three trustees in- stead of one trustee or by successive trustees, the court shall apportion the fees and commissions between them according to the services actu- ally rendered, so that there shall not be paid to trustees for the ad- ministering of any estate a greater amount than one trustee would be entitled to. c. The court may, in its discretion, withhold all compensation from any trustee who has been removed for cause. Seo. 49. Accounts and Papers op Trustees. — a. The accounts and papers of trustees shall be open to the inspection of ofiBcers and all par- ties in interest. Seo. 50. Bonds op Reperees and Trustees.— a. Referees, before as- suming the duties of their offices, and within such time as the district courts of the United States having jurisdiction shall prescribe, shall respectively qualify by entering into bond to the United States in such sum as shall be fixed by such courts, not to exceed five thousand dollars, with such sureties as shall be approved by such courts, conditioned for the faithful performance of their official duties. b. Trustees, before entering upon the performance of their official duties, and within ten days after their appointment, or within such further tim.e, not to exceed five days, as the court may permit, shall re- spectively qualify by entering into bond to the United States, with such sureties as shall be approved by the courts, conditioned for the faithful performance of their official duties. c. The creditors of a bankrupt estate, at their first meeting after the adjudication, or after a vacancy has occurred in the office of trustee, or after an estate has been reopened, or after a composition has been set aside or a discharge revoked, if there is a vacancy in the office of trustee, shall fix the amount of the bond of the trustee; they may at any time increase the amount of the bond. If the creditors do not fix the amount of the bond of the trustee as herein provided the court shall do so. d. The court shall require evidence as to the actual value of the prop- erty of sureties. e. There shall be at least two sureties upon each bond. /. 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 bond. g. Corporations organized for the piirpose of becoming sureties upon bonds, or authorized by law to do so, may be accepted as sureties upon the bonds of referees and trustees whenever the courts are satisfied that the rights of all parties in interest wiU be thereby amply protected. h. Bonds of referees, trustees, and designated depositories shall be filed of record in the office of the clerk of the court and may be sued upon in the name of the United States for the use of any person injured by a breach of their conditionSi NATIONAL BANKEUPTOY LAW OF 1898. 537 i. Trustees shall not be liable, personally or on their bonds, to the TTnited States, for any penalties or forfeitures incurred by the bankrupts under this Act, of whose estates they are respectively trustees. j. Joint trustees may give joint or several bonds. fc. If any referee or trustee shall fail to give bond, as herein provided and within the time limited, he shall be deemed to have declined his appointment, and such failure shall create a vacancy in his ofiBce. I. Suits upon referees' bonds shall not be brought subsequent to two years after the alleged breach of the bond. m. Suits upon trustees' bonds shall not be brought subsequent to two years after the estate has been closed. Sec. 51. Duties op Clerks. — a. Clerks shall respectively (1) account for, as for other fees received by them, the clerk's fee paid in each case and such other fees as may be received for certified copies of records which may be prepared for persons other than officers; (2) collect the fees of the clerk, referee, and trustee in each case instituted before filing the petition, except the petition of a proposed voluntary bankrupt which is accompanied by an affidavit stating that the petitioner is without, and can not obtain, the money with which to pay such fees; (3) deliver to the referees upon application all papers which may be referred to them, or, if the offices of such referees are not in the same cities or towns as the offices of such clerks, transmit such papers by mail, and in like manner return papers which were received from such referees after they have been used; (4) and within ten days after each case has been closed pay to the referee, if the case was referred, the fee collected for him, and to the trustee the fee collected for him at the time of filing the petition. Sec. 53. Compensation of Clerks and Marshals.— a. Clerks shall respectively receive as full compensation for their service to each estate, a ffiing fee of ten dollars, except when a fee is not required from a vol- untary bankrupt. b. Marshals shall respectively receive from the estate where an adju- dication in bankruptcy is made, except as herein otherwise provided, for the performance of their services in proceedings in bankruptcy, the same fees, and account for them in the same way, as they are entitled to receive for the performance of the same or similar services in other cases in accordance with laws now in force, or such as may be hereafter enacted, fixing the compensation of marshals. Sec. 53. Duties op Attorney-General. — a. The Attorney-General shall annually lay before Congress statistical tables showing for the whole country, and by States, the number of cases during the year of voluntary and involuntary bankruptcy; the amoxmt of the property of the estates; the dividends paid and the expenses of administering such estates; and such other like information as he may deem important. Sec. 54. Statistics op Bankruptcy Proceedings. — a. Officers shall furnish in writing and transmit by mail such information as is within 538 LAW OF BAKKEUPTCT, their knowledge, and as may be shown by the records and papers in their possession, to the Attorney-General, for statistical purposes, within ten days after being requested by him to do so. CHAPTER VL CREDITORS. Sec. 55. Meetings of Creditors. — a. The court shall cause the first meeting of the creditors of a bankrupt to be held, not less than ten nor more than thirty days after the adjudication, at the coimty seat of the county in which the bankrupt has had his principal place of business, resided, or had his domicile; or if that place would be manifestly incon- venient as a place of meeting for the parties in interest, or if the bank- rupt is one who does not do business, reside, or have his domicile within the United States, the court shall fix a place for the meeting which is the most convenient for parties in interest. If such meeting should by any mischance not be held within such time, the court shall &s. the date, as soon as may be thereafter, when it shall be held. b. At the first meeting of creditors the judge or referee shall preside, and, before proceeding with the other business, may allow or disallow the claims of creditors there presented, and may publicly examine the bankrupt or cause him to be examined at the instance of any creditor. c. The creditors shall at each meeting take such steps as may be pertinent and necessary for the promotion of the best interests of the estate and the enforcement of this Act. d. A meeting of creditors, subsequent to the first one, may be held at any time and place when all of the creditors who have secured the allowance of their claims sign a written consent to hold a meeting at such time and place. e. The court shall call a meeting of creditors whenever one-fourth or more in number of those who have proven their claims shall file a writ- ten request to that effect; if such request is signed by a majority of such creditors, which number represents a majority in amount of such claims, and contains a request for such meeting to be held at a desig- nated place, the court siiall call such meeting at such place within thirty days alter the date of the filing of the request. f. Whenever the affairs of the estate are ready to be closed a final meeting of creditors shall be ordered. Sec. 56. Voters at Meetings op Creditors.— a. Creditors shall pass upon matters submitted to them at their meetings by a majority vote in num ber and amount of claims of all creditors whose claims have been allowed and are present, except as herein otherwise provided. b. Creditors holding claims which are secured or have priority shall not, in respect to such claims, be entitled to vote at creditors' meetings, nor shall such claims be coimted in computing either the number of NATIONAL BANKEUPTOT LAW OF 1898. 539 creditors or the amount of their claims, xmless the amounts of such claims exceed the values of such securities or priorities, and then only for such excess. Sec. 57. Proof and Allowance of Claims.— a. Proof of claims shall consist of a statement under oath, in writing, signed by a creditor set- ting forth the claim, the consideration therefor, and whether any, and, if so what, securities are held therefor, and whether any, and, if so what, payments have been made thereon, and that the sum claimed is justly owing from the bankrupt to the creditor. b. Whenever a claim is founded upon an instrument of writing, such instrument, unless lost or destroyed, shall be filed with the proof of claim. If such instrument is lost or destroyed, a statement of such fact and of the circumstances of such loss or destruction shall be filed under oath with the claim. After the claim is allowed or disallowed, such in- strument may be withdrawn by permission of the court, upon leaving a copy thereof on file with the claim. c. Claims after being proved may, for the purpose of allowance, be filed by the claimants in the court where the proceedings are pending or before the referee if the case has been referred. d. Claims which have been duly proved shall be allowed, upon receipt by or upon presentation to the court, unless objection to their allowance shall be made by parties in interest, or their consideration be continued for cause by the court upon its own motion. e. Claims of secured creditors and those who have priority may be allowed to enable such creditors to participate in the proceedings at creditors' meetings held prior to the determination of the value of their securities or priorities, but shall be allowed for such sums only as to the courts seem to be owing over and above the value of their securities or priorities. /. Objections to claims shall be heard and determined as soon as the convenience of the court and the best interests of the estates and the claimants will permit. g. The claims of creditors who have received preferences shall not be allowed unless such creditors shall surrender their preferences. h. The value of securities held by secured creditors shall be deter- mined by converting the same into money according to the terms of the agreement pursuant to which such securities were delivered to such creditors or by such creditors and the trustee, by agreement, arbitra- tion, compromise, or litigation, as the court may direct, and the amount of such value shall be credited upon such claims, and a dividend shall be paid only on the unpaid balance. i. Whenever a creditor, whose claim against a bankrupt estate is se- cured by the individual undertaking of any person, fails to prove such claim, such person may do so in the creditor's name, and if he discharge such imdertaking in whole or in part he shall be subrogated to that ex- tent to the rights of the creditor. 540 LAW OF BANKEUPTOT. j. Debts owing to the United States, a State, a county, a district, or a municipality as a penalty or forfeiture shall not be allowed, except for the amount of the pecuniary loss sustained by the act, transaction, or proceeding out of which the penalty or forfeiture arose, with reasonable and actual costs occasioned thereby and such interest as may have ac- crued thereon according to law. Te. Claims which have been allowed may be reconsidered for cause and reallowed or rejected in whole or in part, according to the equities of the case, before but not after the estate has been closed. I. Whenever a claim shall have been reconsidered and rejected, in whole or in part, upon which a dividend has been paid, the trustee may recover from the creditor the amount of the dividend received upon the claim if rejected in whole, or the proportional part thereof if rejected only in part. m. The claim of any estate which is being administered in bank- ruptcy against any like estate may be proved by the trustee and allowed by the court in the sanae manner and upon like terms as the claims of other creditors. n. Claims shall not be proved against a bankrupt estate subsequent to one year after the adjudication; or if they are liquidated by litigation and the final judgment therein is rendered within thirty days before or after the expiration of such time, then within sixty days after the ren- dition of such judgment: Provided, That the right of infants and insane persons without guardians, without notice of the proceedings, may con- tinue six months longer. Seo. 58. Notices to Ceeditobs. — a. Creditors shall have at least ten days' notice by mail, to their respective addresses as they appear in the list of creditors of the bankrupt, or as afterwards filed with the papers in the case by the creditors, unless they waive notice in writing, of (1) all examinations of the bankrupt; (3) all hearings upon applications for the confirmation of compositions or the discharge of bankrupts; (3) all meetings of creditors; (4) all proposed sales of property; (5) the declaration and time of payment of dividends; (6) the filing of the final accounts of the trustee, and the time when and the place where they will be examined and passed upon; (7) the proposed compromise of any controversy, and (8) the proposed dismissal of the proceedings. 6. Notice to creditors of the first meeting shall be published at least once and may be published such number of additional times as the court may direct; the last publication shall be at least one week prior to the date fixed for the meeting. Other notices may be published as the court shall direct. c. All notices shall be given by the referee, unless otherwise ordered by the judge. Seo. 59. Who may Pile and Dismiss Petitions.— o. Any qualifled person may file a petition to be adjudged a voluntary bankrupt. NATIONAL BANKEUPTOT LAW OF 1898. 541 b. Three or more creditors who have provable claims against any per- son which amount in the aggregate, in excess of the value of securities held by them, if any, to five hundred dollars or over; or if all of the creditors of such person are less than twelve in number, then one of such creditors whose claim equals such amount may file a petition to have him adjudged a bankrupt. c. Petitions shall be filed in duplicate, one copy for the clerk and one for service on the bankrupt. d. If it be averred in the petition that the creditors of the bankrupt are less than twelve in number, and less than three creditors have joined as petitioners therein, and the answer avers the existence of a larger number of creditors, there shall be filed with the answer a list under oath of all the creditors, with their addresses, and thereupon the couit shall cause all such creditors to be notified of the pendency of such peti- tion and shall delay the hearing upon such petition for a reasonable time, to the end that parties in interest shall have an opportunity to be heard; if upon such hearing it shall appear that a sufficient number have joined in such petition, or if prior to or during such hearing a sufBcient number shall join therein, the case may be proceeded with, but otherwise it shall be dismissed. e. In computing the number of creditors of a bankrupt for the purpose of determining how many creditors must join in the petition, such creditors as were employed by him at the time of the filing of the peti- tion or are related to him by consanguinity or affinity within the third degree, as determined by the common law, and have not joined in the petition, shall not be counted. /. Creditors other than original petitioners may at any time enter their appearance and join in the petition, or file an answer and be heard in opposition to the prayer of the petition. g. A voluntary or involuntary petition shall not be dismissed by the I)etitioner or petitioners or for want of prosecution or by consent of par- ties until after notice to the creditors. Sec. 60. Peepeered Creditoes. — a. A person shall be deemed to have given a preference if, being insolvent, he has procured or suffered a judg- ment to be entered against himself in favor of any person, or made a transfer of any of his property, and the effect of the enforcement of such judgment or transfer wiU be to enable any one of his creditors to obtain a greater percentage of his debt than any other of such creditors of the same class. b. If a bankrupt shall have given a preference within four months before the filing of a petition, or after the filing of the petition and be- fore the adjudication, and the person receiving it, or to be benefited thereby, or his agent acting therein, shall have had reasonable cause to believe that it was intended thereby to give a preference, it shall be voidable by the trustee, and he may recover the property or its value from such person. 642 LAW OF BANKBTTPTOY. c. If a creditor has been preferred, and afterwards in good faith gives the debtor further credit without security of any kind for property which becomes a part of the debtor's estates, the amount of such new credit remaining impaid at the time of the adjudication in bankruptcy may be set off against the amount which woiild otherwise be recoverable from him. d 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 at- torney and counselor at law, solicitor in equity, or proctor in admiralty for services to be rendered, the transaction shall be re-examined by the court on petition of the trustee or any creditor and shall only be held valid to the extent of a reasonable amount to be determined by the court, and the excess may be recovered by the trustee for the benefit of the estate. CHAPTEE VIL ESTATES. Seo. 61. Depositories foe Monet. — a. Courts of bankruptcy shall designate, by order, banking institutions as depositories for the money of bankrupt estates, as convenient as may be to the residences of trustees, and shall require bonds to the United States, subject to their approval, to be given by such banking institutions, and may from time to time as occasion may require, by like order increase the number of depositories or the amount of any bond or change such depositories. Sec. 63. Expenses of AoMiNiSTERraa Estates. — a. The actual and necessary expenses incurred by ofSoers in the administration of estates shall, except where other provisions are made for their payment, be re- ported in detail, under oath, and examined and approved or disapproved by the court. If approved, they shall be paid or allowed out of the es- tates in which they were incurred. Sec. 63. Debts which may be Proved. — a. Debts of the bankrupt may be proved and allowed against his estate which are (1) a fixed lia- bility, as evidenced by a judgment or an instrument in writing, abso- lutely owing at the time of the filing of the petition against him, whether then payable or not, with any interest thereon which would have been recoverable at that date or with a rebate of interest upon such as were not then payable and did not bear interest; (3) due as costs taxable against an involuntary bankrupt who was at the time of the filing of the petition against him plaintiff in a cause of action which would pass to the trustee and which the trustee declines to prosecute after notice; (3) founded upon a claim for taxable costs incurred in good faith by a creditor before the filing of the petition in an action to recover a prov- able debt; (4) founded upon an open account, or upon a contract express or implied; and (5) founded upon provable debts reduced to judgments after the filing of the petition and before the consideration of the bank- NATIONAL BANKBUPTCT LAW OF 1898. 54:3 rupt's application for a discharge, less costs inoiirred and interests ac- crued after the filing of the petition and up to the time of the entry of Buch judgments. 6. Unliquidated claims against the bankrupt may, pursuant to appli- cation to the court, be liquidated in such manner as it shall direct, and may thereafter be proved and allowed against his estate. Sec. 64 Debts which have Prioritt.— a. The court shall order the trustee to pay all taxes legally due and owing by the bankrupt to the United States, State, county, district, or municipality in advance of the payment of dividends to creditors, and upon filing the receipts of the proper public ofScers for such payment he shall be credited with the amount thereof, and in case any question arises as to the amount or legal- ity of any such tax the same shall be heard and determined by the court. b. The debts to have priority, except as herein provided, and to be paid in full out of bankrupt estates, and the order of payment shall be (1) the actual and necessary cost of preserving the estate subsequent to filing the petition; (2) the filing fees paid by creditors in involuntary cases; (3) the cost of administration, including the fees and mileage payable to witnesses as now or hereafter provided by the laws of the United States, and one reasonable attorney's fee, for the professional services actually rendered, irrespective of the number of attorneys employed, to the peti- tioning creditors in involuntary cases, to the bankrupt in involuntary cases while performing the duties herein prescribed, and to the bankrupt in voluntary cases, as the court may allow; (4) wages due to workmen' clerks, or servants which have been earned within three months before the date of the commencement of proceedings, not to exceed three hun- dred dollars to each claimant; and (5) debts owing to any person who by the laws of the States or the United States is entitled to priority. a In the event of the confirmation of a composition being set aside, or a discharge revoked, the property acquired by the bankrupt in addition to his estate at the time the composition was confirmed or the adjudica- tion was made shall be applied to the payment in fuU of the claims of creditors for property sold to him on credit, in good faith, while such composition or discharge was in force, and the residue, if any, shall be applied to the payment of the debts which were owing at the time of the adjudication. Sec. 65. Dbclaeation and Payment of Dividends.— o. Dividends of an equal per centum shall be declared and paid on all allowed claims, except such as have priority or are secured. b. The first dividend shall be declared within thirty days after the ad- judication, if the money of the estate in excess of the amount necessary to pay the debts which have priority and such claims as have not been, but probably will be, allowed equals five per centum or more of such allowed claims. Dividends subsequent to the first shall be declared upon like terms as the first and as often as the amount shall equal ten 544 LAW OF BANKETTPTOT. per centum or more and upon closing the estate. Dividends may be declared oftener and in smaller proportions if the judge shall so order. c. The rights of creditors who have received dividends, or in vrhose favor final dividends have been declared, shall not be affected by the proof and allowance of claims subsequent to the date of such payment or declarations of dividends; but the creditors proving and securing the allowance of such claims shall be paid dividends equal in amount to those already received by the other creditors if the estate equals so much before such other creditors are paid any further dividends. d. Whenever a person shall have been adjudged a bankrupt by a court without the United States and also by a court of bankruptcy, creditors residing within the United States shall first be paid a dividend equal to that received in the court without the United States by other cred- itors before creditors who have received a dividend in such courts shall be paid any amounts. e. A claimant shall not be entitled to collect from a bankrupt estate any greater amount than shall accrue pursuant to the provisions of this Act. Sec. 66. Unclaimed Dividends. — a. Dividends which remaiu im- claimed for six months after the final dividend has been declared shall be paid by the trustee into court. 6. Dividends remaining unclaimed for one year shall, under the direc- tion of the court, be distributed to the creditors whose claims have been allowed but not paid in full, and after such claims have been paid in full the balance shall be paid to the bankrupt: Provided, That in case unclaimed dividends belong to minors such minors may have one year after arriving at majority to claim such dividends. Sec. 67. Liens. — a. Claims which for want of record or for other rea- sons would not have been valid liens as against the claims of the credit- ors of the bankrupt shall not be liens against his estate. b. Whenever a creditor is prevented from enforcing his rights as against a lien created, or attempted to be created, by his debtor, who afterwards becomes a bankrupt, the trustee of the estate of such bank- rupt shall be subrogated to and may enforce such rights of such cred- itor for the benefit of the estate. c. A lien created by or obtained in or pursuant to any suit or proceed- ing at law or in equity, including an attachment upon mesne process or a judgment by confession, which was begun against a person within four months before the filing of a petition in bankruptcy by or against such person shall be dissolved by the adjudication of such person to be a bankrupt if (1) it appears that said lien was obtained and permitted while the defendant was insolvent and that its existence and enforce- ment will work a preference, or (2) the pai-ty or parties to be benefited thereby had reasonable cause to believe the defendant was insolvent and in contemplation of bankruptcy, or (3) that such lien was sought NATIONAL BANKEUPTCT LAW OF 1898. 54:5 and permitted in fraud of the provisions of this Act; or if the dissolu- tion of such lien would militate against the best interests of the estate of such person the same shall not be dissolved, but the trustee of the estate of such person, for the benefit of the estate, shaU be subrogated to the rights of the holder of such lien and empowered to perfect and enforce the same in his name as trustee with like force and efEect as such holder might have done had not bankruptcy proceedings inter- vened. d. Liens given or accepted in good faith and not in contemplation of or in fraud upon this Act, and for a present consideration, which have been recorded according to law, if record thereof was necessary in order to impart notice, shall not be affected by this Act. e. That all conveyances, transfers, assignments, or incumbrances of his property, or any part thereof, made or given by a person adjudged a bankrupt under the provisions of this Act subsequent to the passage of this Act and within four months prior to the filing of the petition, with the intent and purpose on his part to hinder, delay, or defraud his creditors, or any of them, shall be null and void as against the creditors of such debtor, except as to purchasers in good faith and for a present fair consideration; and all property of the debtor conveyed, transferred, assigned or incumbered as aforesaid shall, if he be adjudged a bank- rupt, and the same is not exempt from execution and liability for debts by the law of his domicile, be and remain a part of the assets and estate of the bankrupt and shall pass to his said trustee, whose duty it shall be to recover and reclaim the same by legal proceedings or otherwise for the benefit of the creditors. And all conveyances, transfers, or in- cumbrances of his property made by a debtor at any time within four months prior to the filing of the petition against him, and while insolv- ent, which are held null and void as against the creditors of such debtor by the laws of the State, Territory, or District in which such property is situate, shall be deemed null and void under this Act against the creditors of such debtor if he be adjudged a bankrupt, and such property shall pass to the assignee and be by him reclaimed and recov- ered for the benefit of the creditors of the bankrupt. /. That all levies, judgments, attachments, or other liens, obtained through legal proceedings against a person who is insolvent, at any time within four months prior to the filing of a petition in bankruptcy against him, shall be deemed null and void in case he is adjudged a bankrupt, and the property affected by the levy, judgment, attachment, or other lien shall be deemed wholly discharged and released from the same, and shall pass to the trustee as a part of the estate of the bankrupt, unless the court shall, on due notice, order that the right under such levy, judg- ment, attachment, or other lien shall be preserved for the benefit of the estate; and thereupon the same may pass to and shall be preserved by the trustee for the benefit of the estate as aforesaid. And the court 85 546 LAW OF BANKEUPTCT. may order such conveyance as shall be necessary to carry the purposes of this section into effect: Provided, That nothing herein contained shall have the effect to destroy or impair the title obtained by such levy, judgment, attachment, or other lien, of a bona fide purchaser for value virho shall have acquired the same without notice or reasonable cause for inquiry. Sec. 68. Set-Offs and Counterclaims.— a. In all cases of mutual debts or mutual credits betvp^een the estate of a bankrupt and a creditor the account shall be stated and one debt shall be set off against the other, and the balance only shall be allowed or paid. &. A set-off or counterclaim si' all not be allowed in favor of any debtor of the bankrupt which (1) is not provable against the estate; or (3) was purchased by or transferred to him after the filing of the petition, or within four months before such iiling, with a view to such use and with knowledge or notice that such bankrupt was insolvent, or had commit- ted an act of bankruptcy. Sec. 69. Possession op Property. — a. A judge may, upon satisfactory proof, by afiSdavit, that a bankrupt against whom an involuntary peti- tion has been filed and is pending has committed an act of bankruptcy, or has neglected or is neglecting, or is about to so neglect his property that it has thereby deteriorated or is thereby deteriorating or is about thereby to deteriorate in value, issue a warrant to the marshal to seize and hold it subject to further orders. Before such warrant is issued the petitioners applying therefor shall enter into a bond in such an amount as the judge shall fix, with such sureties as he shaU approve, conditioned to indemnify such bankrupt for such damages as he shall sustain in the event such seizure shaU prove to have been wrongfully obtained. Such property shall be released, if such bankrupt shaU give bend in a sum which shall be fixed by the judge, with such sureties as he shall approve, conditioned to turn over such property, or pay the value thereof in money to the trustee, in the event he is adjudged a bankrupt pursuant to such petition. Sbo. 70. Title to Property. — a. The trustee of the estate of a bank- rupt, upon his appointment and qualification, and his successor or suc- cessors, if he shall have one or more, upon his or their appointment and qualification, shall in turn be vested by operation of law with the title of the bankrupt, as of the date he was adjudged a bankrupt, except in so far as it is to property which is exempt, to all (1) documents relating to his property; (2) interests in patents, patent rights, copyrights, and trade-marks; (3) powers which he might have exercised for his own benefit, but not those which he might have exercised for some other per- son; (4) property transferred by him in fraud of his creditors; (5) prop- erty which prior to the filing of the petition he could by any means have transferred or which might have been levied upon and sold under judicial process against him: Provided, That when any bankrupt shall NATIONAL BANKEIJPTOT LAW OF 1898. 547 have any insurance policy which has a cash surrender value payable to himself, his estate, or personal representatives, he may, within thirty days after the cash surrender value has been ascertained and stated to the trustee by the company issuing the same, pay or secure to the trustee the sum so ascertained and stated, and continue to hold, own, and carry such policy free from the claims of the creditors participating in the distribution of his estate imder the bankruptcy proceedings, otherwise the policy shall pass to the trustee as assets; and (6) rights of action aris- ing upon contracts or from the unlawful taking or detention of, or injury to, his property. b. All real and personal property belonging to bankrupt estates shall be appraised by three disinterested appraisers; they shall be appointed by, and report to, the court. Real and personal property shall, when practicable, be sold subject to the approval of the court; it shall not be sold otherwise than subject to the approval of the court for less than seventy-flve per centum of its appraised value. c The title to property of a bankrupt estate which has been sold, as herein provided, shall be conveyed to the pvurchaser by the trustea d. Whenever a comiposition shall be set aside, or discharge revoked, the trustee shall, upon his appointment and qualification, be vested as herein provided with the title to all of the property of the bankrupt as of the date of the final decree setting aside the composition or revoking the discharge. e. The trustee may avoid any transfer by the bankrupt of his property which any creditor of such bankrupt might have avoided, and may re- cover the property so transferred, or its value, from the person to whom it was transferred, unless he was a bona fide holder for value prior to the date of the adjudication. Such property may be recovered or its value collected from whoever may have received it, except a bona fide holder for value. /. Upon the confirmation of a composition offered by a bankrupt, the title to his property shall thereupon revest in him. THE TIME WHEN THIS ACT SHALL GO INTO EFFECT. a. This Act shall go into full force and effect upon its passage: Pro- vided, however, That no petition for voluntary bankruptcy shall be filed within one month of the passage thereof, and no petition for involuntary bankruptcy shall be filed within four months of the passage thereof. b. Proceedings commenced under State insolvency laws before the passage of this Act shall not be affected by it. Approved, July 1, 1898. TITLE V. STATE EXEMPTION LAWa AT.ARAMA, Besidents of this state are entitled to liave exempt from levy and sale a homestead not exceeding one hundred and sixty acres, together with improvements thereon of the value not to exceed $2,000; a burial place, a church pew, and $1,000 of personal property, to be selected by the debtor ; wages and salary to the amount of $85 per month are exempt from levy imder a writ of garnishment or other process. No partnership property, however, is exempt against copartners or partnership creditors. A pro- vision is made whereby the homestead exemption does not apply so as to defeat the liens of laborers, mechanics or material-men for work done or material furnished. Crops whUe growing or gathering are exempt from levy and sale except in actions for the enforcement of rent and the labor furnished as described by the statutes of the stat& It is permissible for a husband or wife to insure their lives for the benefit of each other or of their children, and such insurance money will be exempt from execution. The debtor may waive his right to ex- emption as to personal property, either by a separate instrument in writing or by incorporating it in any bond, bill or nota If, however, such waiver relates to real property, it must be by separate instrument; and if the person be a married man, the waiver must be acknowledged by the wife. The homestead exemption may be claimed in the fee simple of the land or any lesser estate, even though it be a term of years or a tenancy at wiU. If goods levied upon be subsequently claimed by the defendant under the exemption laws of the state, the plaintiff may contest the same. If the defendant give bond within five days after notice of contest, he may take the property; and if he do not do so, the plaintiff may give such bond within five days thereafter and receive the property. If no bond is given within ten days after notice of contest, the property will be delivered to the defendant vrithout bond. This digest includes changes in code which went into effect September 17, 1898k 550 lAW OF BAHKEUPTOT. ALASKA- It is provided by the act of congress of May 17, 1884, that the general laws of the state of Oregon, now in force, are hereby declared to be the law of said District of Alaska so far as the same may be applicable and not in conflict with the provisions of this act or the laws of the United States. For exemptions, see Oregon. ARIZONA. By the laws of this state the following property is exempt from exe- cution against every head of a family: Personal property of not more than $1,000, which may be selected by the debtor; a homestead which shall not exceed in value the sum of $4,000; the earnings of a judgment debtor for his personal services for thirty days next preceding the date of the levy. It will be observed that by the laws of this state these ex- emptions are only given to the heads of families, and it would appear therefrom that a person not the head of a family, or imless he has some one dependent upon him, is not entitled to the benefit of these provisions. AEKANSAS. The exemption laws of this state are contained in its constitution. Unmarried persons, residents of the state, who are not heads of families, are given exemptions in specific articles to be selected by such a resi- dent not exceeding in value the sum of $300 in addition to his or her wearing apparel, but such exemption does not extend to the purchase- money for the articles selected while in the hands of the vendee. If the person is married or is the head of a family, exemption is given in per- sonal property in specific articles to be selected by such person, not ex- ceeding in value the sum of $500, in addition to his wearing apparel By section 3 it is provided that the homestead of any resident of this state who is married or the head of a family shall not be subject to any judgment or decree of any court or sale under execution or other pro- cess thereon, except such as may be rendered for the purchase-money or for specific liens, laborers' or mechanics' hens for improving the same, or for taxes, or against executors, administrators, guardians, receivers, at- torneys for moneys collected by him, and other trustees of an expressed trust for moneys due from them in their fiduciary capacity. The home- stead outside of any town or village owned and kept as a residence shall not exceed one hundred and sixty acres of land with the improvements thereon, to be selected by the owner, provided the same shall not exceed in value the sum of $3,500, and in no evwit shall the homestead be re- duced to less than eighty acres without regard to value. The home- stead in any city, town or village owned and kept as a residence shall not exceed one acre of land with the improvements thereon and shall not be valued at more than $3,500, and in no event shall the homestead STATE EXEMPTION LAWS. 551 \>e reduced to less than a quarter of an acre of land independently of its value. The homestead cannot be sold or mortgaged without the wife joining and releasing the same, but if the husband fails to claim it, it may be claimed by the wife; and if the estate of a decedent is less than $300, it is aU. turned over to the widow and children. CALIFORNIA, Except on an execution issued upon a judgment for the purchase price of an article, or a judgment in foreclosure upon a mortgage of the article, the following property is exempt from execution: (1) Chairs, tables, desks and books to the value of $300. (3) Necessary household, table and kitchen furniture belonging to the judgment debtor, including one sewing machine, stoves, stove-pipes and furniture, wearing apparel, beds, bedding and bedsteads, hanging pictures, oil paintings and draw- ings drawn or painted by any member of the family, and family portraits in their necessary frames, provisions actually provided for individual or family use sufficient for three months, and three cows with their suck- ing calves, four hogs with their sucking pigs, and food for such cows and hogs for one month; also one piano, one shot-gun and one rifle. (3) The farming utensils or implements of husbandry not exceeding in value the sum of $1,000; also two oxen, or two horses or two mules and their harness, one cart or wagon, and food for such oxen, horses or mules for one month; also all seed grain or vegetables actually pro- vided, reserved or on hand for the purpose of planting or sowing at any time within the ensuing six months, not exceeding in value the sum of $300, and seventy-five bee hives, and one horse and vehicle belonging to any person who is maimed or crippled and the same is necessary in his business. (4) The tools or implenaents of a mechanic or artisan neces- sary to carry on his trade, the notarial seal, records and office fumitme of a notary public, the instruments and chests of a surgeon, physician or siirveyor or dentist necessary to the exercise of their profession, with their professional library and their necessary office furniture, the pro- fessional libraries of attorneys, judges, ministers of the gospel, editors, teachers and music teachers and their necessary office furniture; also the musical instruments of music teachers actually used by them in giving instructions, and all indexes, abstracts, books, papers, maps and office furniture of a searcher of records necessary to be used in his pro- fession; also the typewriters actually used by the owner thereof for making his living; also one bicycle when the same is used in carrying on his business or in transporting the ovmer to and from his place of business. (5) The cabin or dwelling of a miner not exceeding in value the sum of $500; also his sluices, pipes, hose, windlass, derrick, cars, pumps, tools, implements and appliances necessary for carrying on any mining operations, not exceeding in value the aggregate sum of $500, and two horses, mules or oxen with their harness and food for same for 552 LAW OF BANKEUPTOT. one month when necessary to be used in any windlass, derrick, car, pump or hoisting gear, and also his mining claim, actually worked by him, not exceeding in value the sum of $1,000. (6) Two horses, two oxen or two mules and their harness and one cart or wagon, one dray or truck, one coupe, one hack or carriage for one or two horses, by the use of which a cartman, truckman, huckster, peddler, hackman, team- ster or other laborer habitually earns his living, and one horse with vehicle and harness or other equipments, used by a physician, surgeon, constable or minister of the gospel in the legitimate practice of his pro- fession or business, with food for such oxen, horses or mules for one month. (7) One fishing boat and net not exceeding the total value of $500, the property of any fisherman, by the lawful use of which he earns a livelihood. (8) Poultry not exceeding in value $25. (9) Seaman and sea-going fisherman's wages not exceeding $100. (10) The earnings of the judgment debtor for his personal services rendered at any time within the thirty days next preceding the levy of execution or attach- ment, when it appears, by the debtor's aflidavit or otherwise, that such earnings are necessary for the use of his family residing in this state, supported in whole or in part by his labor; but when debts are incurred by any such person or his wife or family for the common necessaries of life, or occurred at a time when the debtor had no family residing in this state supported in whole or in part by his labor, one-half of such earnings above mentioned are nevertheless subject to execution, gar- nishment or attachment to satisfy debts so incurred. (11) The shares held by a member of a homestead association duly incorporated not ex- ceeding in value $1,000, if the person holding the shares is not the owner of a homestead under the laws of this state. All the nautical instru- ments and wearing apparel of any master, officer or seaman of any steamer or other vessel (13) All moneys, benefits, privileges or immu- nities accruing or in any manner growing out of any life insurance on the life of the debtor, if the annual premiums paid do not exceed $500. (13) All fire-engines, hooks and ladders, with the carts, trucks, car- riages, hose buckets, implements and apparatus thereunto appertaining, and all furniture and uniforms of any fire company or department or- ganized under the law of this state. (14) All arms, uniforms and accou- trements required by law to be kept by any person, and also one gun, to be selected by the debtor. (15) All court-houses, jails and town, county and state buildings, all public buildings, grounds, etc. (16) AU material purchased in good faith for use in the construction, alteration or re- pair of any building, mining claim or other improvement, as long as in good faith the same is about to be applied to the construction, alteration or repair of such building, mining claim or other improvement. A homestead which shall not exceed in value the sum of $5,000, con- sisting of the dwelling-house where the debtor resides, together with the land upon which it is situated, may be selected by the husband, or. STATE EXEMPTION LAWS. 65$ in the case of his failure to do so, by his wife. If it be selected from the separate property, his wife must consent thereto by joining in it or by making declarations. Such selection may also be made from the community property, or from the separate property of the husband; The homestead, however, is not exempt from execution under the fol- lowing judgments: (1) Before the declaration of homestead was filed for record, and which constitute liens upon the premises. (3) On debts secured by mechanics, contractors, subcontractors, artisans, architects, builders, laborers of every class, material-men's or vendors' liens upon the premises. (3) On debts secured by mortgages on the premises, exe- cuted and acknowledged by husband and wife or by an unmarried claim- ant. (4) On debts secured by mortgages on the premises executed and recorded before the declaration of homestead was filed for record. A homestead not exceeding the value of $1,000 may be declared by any person not the head of a family. A homestead can only be aban- doned by a duly executed and acknowledged instrument to that effect, which must be recorded, and which takes effect only from the date of recordation. If the homestead be selected from the community prop- erty, it vests, on the death of the husband or wife, in the survivors. If it be taken from individual property, it vests in the heirs or devisees; subject to the order of the superior court assigning it for a limited pe- riod to the family of the decedent. COLORADO. Every householder or head of the family is given a homestead, fre& from execution while such homestead is occupied by him or his family, not to exceed in value the sum of $2,000. This homestead is selected by writing the word "homestead " upon the margin, of the title as recorded in the recorder's office and attested by that officer. There is likewise exempt from execution and attachment the necessary wearing apparel of aU persons and the following property of persons who are heads of families: family pictures, school books and library, a seat or pew in any house of public worship, sites for burial for the dead, beds, bedding, bed- steads kept and used for the debtor and his family, stoves, cooking uten- sils and household furniture not exceeding $100 in value. Necessary provisions and fuel for six months; the tools and implements of any mechanic, miner or other person not exceeding $300; the bbrary and im- plements of any professional person not exceeding $300 ; working animals of any person not exceeding $200; one cow and calf, ten sheep, and food for the same for six months; one farm wagon, cart or dray, one plow, one harrow, and other farming implements, including harness and tackle for the same, not exceeding in value the sum of $50. Upon the death of the head of a family, the family is entitled to these exemptions. In case of any execution, attachment or garnishment being levied upon the wages or earnings of the head of the family or his wife who are depend- 554 LAW OF BANKETJPTOT. «nt in whole or in part upon such earnings, the sum of $60 is likewise exempt. Pension money received from the government of the United States is likewise exempt whether the pensioner be at the head of the family or not. CONNECTICUT. The following property is ixempt from warrant or execution: Of the property of any person, his necessary wearing apparel and bedding, and household furniture necessary for supporting life, arms, military equip- ments, uniforms or musical instruments owned by any member of the militia for military purposes, any pension moneys received from the United States while in the hands of the pensioner, implements of the debtor's trade, a library not to exceed |500 in value, one cow of the value of $150, any number of sheep not exceeding ten nor of a greater value than $130, two swine and the pork produced therefrom, or poultry not exceeding $25 in value. If the debtor have a wife or family, the follow- ing are the exemptions: Twenty-five bushels of charcoal, two tons of other ooal, two hundred pounds of wheat flour, two cords of wood, two tons of hay, two hundred pounds each of beef and fish, five bushels each of potatoes and turnips, ten bushels each of Indian corn and rye and the meal and flour manufactured therefrom, twenty pounds each of wool or flax, or the yam or cloth made therefrom, the horse of any practicing physician or surgeon not to exceed $300 in value, together with his sad- dle, bridle, harness and buggy, one boat owned by one person and used by him in the business of planting or taking oysters or clams, or taking shad, together with the sails, tackle, rigging and implements used in said business of the value not more than $300, one sewing machine, one pew, a burial ground, so much of any debt which has accrued by reason of the personal services of the debtor as shall not exceed $50, including wages due for personal service of any minor or child under the age of twenty-one years. All benefits allowed by any association of persons in this state towards the support of any of its members incapacitated by sickness or infirmity from attending to his usual business. A homestead of the value of $1,000 is exempt from execution so long as the same is actually occupied as a dwelling, and only the excess of value over $1,000 can be set off. The husband, wife and guardian of minor children, with consent of the judge of probate, may release such right of homestead, and this release may be recorded as a deed. DELAWARE. The exemptions in this state diflfer in the three counties of the state. Family books and pictures, wearing apparel of the debtor and his family, his tools and implements used in his business or trade not exceeding in value the sum of $75, are exempt in the counties of Sussex and New Castle, and of the value of $50 in Kent county. In addition the head of the family STATE EXEMPTION LAWS. 555 in New Castle county is entitled to have set off to him other personal property out of his estate of the value of $300; in Kent county $150, and in Sussex county no additional exemption is allowed. Sewing machines owned and used by seamstresses or private families are exempt from execution or restraint. In New Castle county wages are exempt from execution and attachment, and wages for one month not exceeding $50 are a first lien on the real and personal property of the employer. Widows are entitled to the same exemption out of the husband's goods that the husband would have if he were alive. (See DeL Laws 1879, vol 16, page 214, and Del. Laws 1893, voL 19, page 1131.) DISTRICT OF COLUMBIA. The following exemptions are allowed by the Revised Statutes of the District of Columbia, section 797: To all persons being householders or heads of families, all wearing apparel, beds, bedding, household furniture, stoves, cooking utensils, etc., of the value not to exceed $300, provisions for three months' support, fuel for three months, mechanics' tools and implements of the debtor's trade or business, amounting to $200 in value, together with $200 worth of stock for carrying on the business of the debtor or his family. The library and implements of professional men or artists to the value of $300, one horse, mule or yoke of oxen, one cart, wagon or dray and harness for such teams, farming utensils, with food for such team for three months, and, if the debtor be a farmer, any other farming tools of the value of $100, all family pictures and all the family library, not exceeding in value $400, one cow, one swine, six sheep. But none of the foregoing exemptions, except that of wearing apparel, beds, household furniture and provisions for the debtor and his family, are good against any debt due for the wages of servants, common laborers or clerks. The earnings not to exceed $100 per month of all residents of the District of Columbia, and who are married persons or who have to provide for the support of a family within this district, are exempt for two mcfnths next preceding the attachment. (See Act of Congress, June 19, 1878.) FLORIDA. A homestead to the extent of one hundred and sixty acres of land, or the half of one acre if the same be situated within the limits of any in- corporated city or town, owned by the head of the family residing in this state, together with $1,000 worth of personal property and the im- provements on the real estate, shall be exempt from forced sale under process of any court, and the real estate shall not be alienable without the joint consent of husband and wife, when that relation exists. The head of a family cannot devise his homestead so as to deprive his chil- dren of the benefit of the same. Money due for the personal labor ot services of any person who is the head of a family residing in this state is exempted from attachment or garnishment. (See Const. 1885, art. 10, 556 LAW OF BANKEUPTOT. sees. 1, 3, 3, 4 and 5.) A piece of land never occupied as a dwelling- place, and incapable of such occupancy, is not a homestead within the meaning of the exemption provided for in the constitution and laws of this stata (Drucker v. Kosenstein, 19 Fla. 191.) GEORGIA- The constitution of 1877 provides: "There shall be exempt from levy and sale, by virtue of any process whatever, under the laws of this state, except as hereinafter excepted, of the property of every head of a fam- ily, or guardian or trustee of a family of minor children, or every aged or infirm person, or person having the care and support of dependent female of any age, who is not the head of a family, realty or personalty, or both, to the value in the aggregate of $1,600. No court or ministerial officer in this state shall ever have jurisdiction or authority to enforce any judgment, execution or decree against the property set apart for such purpose, including such improvements as may be made thereon from time to time, except for taxes, for the purchase-money of the same, for labor done thereon, for material furnished therefor, or for the re- moval of incumbrances thereon. The debtor shall have the power to waive or renounce in writing his right to this benefit of exemption, ex- cept as to wearing apparel and not exceeding $300 worth of household and kitchen furniture and provisions, to be selected by himself and his wife, if any, and he shall not, after it is set apart, alienate or incumber the property so exempted, but it may be sold by the debtor and his wife, if any, jointly, with the sanction of the judge of the superior court of the county where the debtor resides or the land is situated, the proceeds to be reinvested upon the same uses." The act of 1878 carries out these provisions. K the debtor is the head of a family and does not avail himself of the benefit of the exemptions above recited, it is permissible for him to claim the benefit of those existing in prior laws, to wit: Fifty acres of land, and five additional for each child under the age of sixteen years, which shall include the dwelHng-house, together with the improvements thereon, of the value not to exceed $200; provided, however, that such land be not situated in any city, town or village, nor have upon it any factory, mill or other machinery propelled by water or steam, the value of which ex- ceeds $300. Land situated in any city, town or village is not exempt beyond the sum of $500. The following articles are also exempt: One farm horse or mule, one cow and calf, ten head of hogs, $50 worth of provisions and $5 worth for each additional child, beds, bedding and common bedsteads sufficient for the family, one loom, one spinning wheel, two pair of cards, one hundred pounds of lint cotton, common tools of trade of the debtor or his wife, ordinary cooking utensils, table crockery and wearing apparel; the library of professional men in actual practice or business which does not exceed $300 in value; fifty bushels STATE EXEMPTION LAWS. 557 of corn, one thousand pounds of fodder, one one-horse wagon, one table, household and kitchen furniture not to exceed $150 in value. The debtor may likewise waive the benefit of these exemptions except so much as are excepted in the constitution of 1877. IDAHO. A homestead may be selected by the husband, or, in case of his failure, by Ms wife or other head or the family, to the value of $5,000; or if a a person be not the head of a family to the value of $1,000. This decla- ration of homestead must be properly acknowledged and recorded, and when this has been done, it is prior to all claims against the property which are not existing liens at the time the declaration of homestead was recorded. In addition to such homestead, there is likewise exempt from execution the following property: The chairs, tables, desks and books to the value of $200; necessary household furniture of the value of $300; wearing apparel, paintings, drawings, pictures and the like, and provisions provided for individual or family use sufiBcient for six months ; two cows, two hogs, together with their increase ; farming uten- sils to the value of $300; four horses, four oxen or four mules, together with harnesses; a cart or wagon, together with harness and food for such team for six months; water-right not exceeding one hundred and sixty inches of water for the irrigation of lands annually cultivated, and crop or crops growing or grown on fifty acres of land leased, owned or possessed by claimant; necessary tools or implements of a mechanic or artisan of the value of $500; notary's seal and records; necessary instru- ments for use of surgeon, physician, surveyor and dentist, with their libraries; professional libraries and office furniture of attorneys, coun- selors and judges, and the libraries of clergymen; cabin or dwelling of a miner of the value of $500, also his sluices, pipes, hose and other neces- sary tools and machinery of the value of $300; one saddle horse and one pack horse, together with their saddles and equipments, belonging to a miner actually engaged in prospecting, of the value of $250; the team, wagon or cart and harnesses of teamster or other laborer; a horse, har- ness and vehicle used by a physician, surgeon or clergyman, with food for all such animals for six months ; . earnings of judgment debtor, if nec- essary for his family, for services rendered within the thirty days next preceding levy of execution, not exceeding in value $100, where his fam- ily is residing in the state; shares held by a member of a homestead as- sociation, or building or loan association, duly incorporated under the laws of the state, where the person holding the shares is not the owner of the homestead, under the laws of the state; life insurance in an amount represented by an annual premium not exceeding $250; engines, appa- ratus and uniforms of a fire company or department organized under any law of the state; arms, uniforms and accoutrements required by law 558 LAW OF BANKEUPTOT. to be kept; public buildings, grounds and personal property appertain- ing thereto. The above exemptions, however, do not apply to any judg- ment recovered upon the purchase price of the article named. ILLINOIS. Every householder having a family is entitled to a homestead of $1,000 in valua Any farm or lot of land and buildings thereon, owned or pos- sessed under this law or otherwise, and kept as a residence, shall be ex- empt from seizure or sale on attachment or execution for the payment of these debts or other purposes. Such exemptions continue for the benefit of the surviving husband or vnfe so long as he or she continues to keep such homestead until the youngest child becomes twenty-one years of age. In order to release this homestead the husband and wife must join in the conveyance. The proceeds of the sale of any home- stead to the extent of $1,000 is exempt for one year after the receipt of it, and if it be reinvested in a homestead, such homestead is exempt. Insurance money, in case of fire, is exempt to the same extent as the property insured. The creditor may have the premises claimed as homestead appraised, and if found to exceed the value of $1,000, and can be divided without injury, so much of the premises including the dwell- ing as in the opinion of the appraisers is worth $1,000, will be set over to the debtor as exempt and the residue sold for the satisfaction of the judgment. If the premises, however, cannot be divided, the property is valued by appraisers, and the debtor may pay the surplus over $1,000; otherwise, the property may be sold, and the oiiicer having the execu- tion pays $1,000 to the debtor, and the remainder is applied in satisfac- tion of the creditor's claim. In addition to this homestead the following personal property is like- wise exempt : The necessary wearing apparel, bibles, family books and fam- ily pictures, $100 worth of other property to be selected by the debtor, and in addition, when the debtor is the head of a family and resides with his family, $300 worth of other property to be selected by the debtor, pro- vided the exemption shall not be allowed from any money, salary or wages due the debtor. If the head of any family dies, or if he desert or does not live with his family, the exemptions continue to the family. No personal property is exempt from processes under a judgment for a debt for the wages of a laborer or servant. Exemptions cannot be claimed out of partnership property. (See 37 III App. 489, also 38 id. 269.) When a debtor desires to claim exemptions, he must, within ten days after the service of process and notice, make a schedule imder oath of all his personal property of every kind, including money in hand and debts due or owing to him. Any property not included in this schedule is not subject to exemptions. A valuation is then placed upon the arti- cles named in the schedule by appraisers appointed for that purpose. The total value of the articles selected by the debtor shall not exceed STATE EXEMPTION LAWS. 559' the amount of the exemption allowed, and the remainder is sold by the officer in satisfaction of the debt. The benefit moneys received from any life or accident insurance company organized under the act of July 1, 1893, are exempt If a debtor be the head of a family and resides with his family, his wages are exempt to the extent of $8 a week. The stat- utes of this state make it a misdemeanor and provide a penalty for send- ing a claim to another state for collection out of the earnings of the debtor by garnishment or other proceeding when the debtor is a resi- dent, and the creditor, debtor and garnishee are all within the jurisdic- tion of the courts of Illinois, with intent to deprive the debtor of his rights under the exemption laws of this state; or to transfer for such purpose a claim against a citizen of this state. ESTDIAK TEEEITOEY. The exemptions in this territory are the same as those in the state of Arkansas. INDIANA. There is not in this state any homestead exemption in the ordinary acceptation of that term. Every resident householder or resident mar- ried woman may, however, claim as exempt from execution against them, respectively, his or her property, real or personal, to the amount of $600 upon any debt founded upon any contract made since May 3, 1879, and this right exists while the property is in transitu from one residence to another within the state, and to be claimed by the wife for the husband ia his absence. Twenty-five dollars is exempt from garnishment, and, on proceedings supplemental to execution, as long as the employment continues, but no exemption can affect any laborer's or mechanic's lien, or lien for the purchase-money of real prop- erty or for taxation. The right of exemption cannot be waived by con- tract. The property of a resident householder which is exempt from sale on execution may be real or personal, or both. It must, however, be properly appraised by the officer after receiving from the debtor a sworn schedule of aU his property, credits and effects. If the property claimed exceeds ia value the sum of $600, provision is made by the stat- utes for the sale thereof and the application of the residue for the pay- ment of the debts. IOWA The following property is exempt from execution, provided the debtor be the head of a family residing in the state of Iowa: All wearing ap- parel of himself and family kept for actual use and suitable for their condition, and the trunks or other receptacles necessary to contain the same; one musket or rifle and shot-gim; all private libraries, family bi- bles, portraits, pictures, musical instruments and paintings not kept for the purpose of sale; a seat or pew occupied by the debtor or his family ggQ LAW OF BANKEUPTCT. in any house of public worship; an interest in a public or private bury- ing ground, not exceeding one acre ; two cows and two calves ; fifty sheep and the wool therefrom and the materials manufactured from such wool; six stands of bees; five hogs and all pigs imder six months; the necessary food for all animals exempt from execution, for six months; one bedstead and the necessary bedding for every two in the family; all eloth manufactured by the defendant, not exceeding one hundred yards in quantity; household and kitchen furniture not exceeding $200 in value; all spinning wheels and looms; one sewing machine and other instruments of domestic labor kept for actual use; the necessary provis- ions and fuel for the use of the family for six months; the proper tools, instruments or books of the debtor, if a farmer, mechanic, surveyor, clergyman, lawyer, physician, teacher or professor; if the debtor is a physician, public officer, farmer, teamster or other laborer, a team con- sisting of not more than two mules or horses, or two yoke of cattle, and the wagon or other vehicle, with the proper harness or tackle, by the use of which he habitually earns his living, otherwise one horse; if a printer, a printing press and the types, furniture and material necessary for the use of such printing press and a newspaper office connected therewith, not to exceed in aU the value of $1,200; poultry to the value of $50, and the same to any woman whether the head of a family or not; and if the debtor is a seamstress, one sewing machine. All money received by any person a resident of the state, as a pension from the United States government, whether the same shall be in actual possession of such pensioner, or deposited, loaned or invested by him, shall be exempt from execution, whether such pensioner shall be the head of a family or not. The homestead of every such pensioner, whether the head of a family or not, purchased and paid for with any such pen- sion money, or the proceeds or accumulations thereof, shall also be ex- empt; and such exemption shall apply to debts of such pensioner contracted prior to the purchase of the homestead. The earnings of a debtor who is a resident of the state and the head of a, family for his personal services, or those of his family, at any time within ninety days next preceding the levy, are exempt from liability for debt. None of the foregoing exemptions are allowed against an execution issued for the purchase-money of property claimed to be exempt, and on which such execution is levied. If the debtor absconds and leaves his family, such property as is ex- empt to him under the laws of this state is exempt in the hands of his wife and children. The homestead of every family is exempt from judicial sale where there is no special declaration of statute to the contrary. If within a town plot, it must not exceed one-half acre in extent, and if without, it must not embrace more than forty acres, and in each case embraces all STATE EXEMPTION LAWS. 561 the buildings and improvements thereon without limitation as to value. Upon the death of either husband or wife, the survivor may continue to possess and occupy the whole homestead. If there is no survivor and no will, the homestead descends to the issue of either husband or wife, and is to be held exempt from any antecedent debts of their parent or their own. The avails of all policies of insurance on the life of any in- dividual payable to his surviving widow shall be exempt from liabilities for all debts of such beneficiary contracted prior to the death of the in- sured, the total exemption of any one person not exceeding $5,000. KANSAS By the constitution it is provided that a homestead to the extent of one hundred and sixty acres of farming land, or of one acre vrithin the limits of an incorporated tov^n or city, occupied as a residence for the family of the owner, together with aU the improvements on the same, siiall be exempted from forced sale under any process of law, and shall not be alienated without the joint 'consent of husband and wife, when that relation exists; but no property shaU be exempt from sale for taxes, or for the payment of obligations contracted for the purchase of said premises, or for the erection of improvements thereon. This, how- ever, does not apply where the lien is given by consent of the husband or wife. It is provided by statute that every resident of the state, and being the head of a family, shall have exempt frona seizure and sale upon any attachment, execution or other process, the follovdng articles of per- sonal property: The family books, pictiires and musical instruments, a seat or pew in church and a lot in burial ground, all wearing apparel, all spinning wheels and looms, and all other instruments of industry and household furniture not above enmnerated, not exceeding in value $500; also two cows, ten hogs, one yoke of oxen and one horse or mule, a span of horses or mules, twenty sheep and the wool from the same, the nec- essary food for the support of the stock just mentioned for one year, one wagon, cart or dray, two plows, one drag, and other farming uten- sUs not exceeding in value $300, provisions and fuel for the support of the family for one year, the necessary tools and implements of any me- chanic, miner or other person, used and kept for the purpose of carrying on his trade or business, and in addition thereto stock in trade not ex- ceeding $400 in value, the Ubraiy, implements and oflBce furniture of any professional man. No property, however, is exempt from attach- ment or execution for the wages of any laborer. The earnings of a debtor who is a resident of this state, for his per- sonal services at any time within three months next preceding the issuing of an execution, attachment or garnishment process, cannot be applied to the payment of his debts when it is made to appear by the debtor's affidavit, or otherwise, that such earnings are necessary for the maintenance of a family supported wholly or partly by his labor, 86 562 LAW OF BANKEUPTOT. KENTUCKY, There is exempt to every bona fide housekeeper, resident upon the property and the owner thereof at the time of the creation of the debt, a homestead of tbe value of $1,000. The tools of all mechanics and the libraries of all professional men are exempt to the extent of $500. There is also exempt to any resident with a family, property, if on hand, consisting of work beasts, domestic ani- mals and fowls, farm and garden implements, household furniture, one sewing machine, and all family portraits and pictures; certain manu- factured articles necessary for the family use, provided the same be manufactured by the family; all wearing apparel; sufficient provisions, including bread stuff and animal food to sustain the family for one year; if this latter property is not on hand, other personal property, money or growing crops, not to exceed $40 in value, for each member of the fam- ily; provender suitable for live-stock, if there be any such stock, not to exceed $70 in value. And if such property be not on hand, such prop- erty as shall not exceed such sum in value. LOUISIANA. A homestead to the value of $8,000 is exempt. Any head of a family or person having others dependent upon him for support can, by proper declaration and registry, set aside real property with certain farm im- plements and stock, of a value not exceeding $3,000, as a homestead. Such property must be actually occupied by him, and in order to cre- ate this homestead a declaration under oath must be recorded in the book of mortgages in the parish where the projrerty is situated. This declaration must contain a statement of the facts that show the per- son claiming the homestead is a person of the description entitled thereto; that the person claiming is residing on the property and has a bona fide title thereto, stating nature of title, description of land and enumeration of the other exemptions, an estimate of the cash value of the exemptions, and statement of intention to claim such homestead and exemptions. No husband can have benefit of homestead whose wife owns or is in actual enjoyment of property or means to the amount of $2,000. The owner of the homestead has the right, at any time, to supplement his exemption until the amount equals the sum of $3,000. The home- stead is not susceptible of mortgages, except for the purchase price, labor and materials furnished for its building, repairing or improving. Nor is any waiver or renunciation of homestead rights or exemptions vaUd. The homestead, however, may be sold. It may be claimed in cities aa well as counties. The following property is likewise exempt: Laborers' wages, the clothes belonging to the debtor or his wife, Ms bed, those of his family, his arms and military accoutrements, the tools and instru- STATE EXEMPTION LAWS. 563 ments necessary for the exercise of the trade or profession by which he gains a living, the rights of personal servitude, use and habitation, the usuf i-uot to the estate of a minor child, the income of dotal property, the books and sewing machines necessary for the exercise of one's call- ing, trade or profession by which the owner makes a living, the salary of an oflBcer, cooking stove and utensils, plates, forks, etc., dining table and chairs, washtubs, smoothing irons and ironing furnaces, family portraits, and musical instriiments played on by any member of the family. MAINE. The real estate of the value of $500 is exempt as a homestead from attachment, except for liens of mechanics and material-men, provided the owner files the required certificate in the office of the registry of deeds. A burial ground in cemetery is likewise exempt. The following personal property is exempt from attachment and levy; Wearing apparel; $100 worth of household furniture necessary for the family, one bedstead, bed and bedding for each two members, family portraits, bibles, school books in actual use; copy of state statutes, library worth $150; pew in use; one cooking and all iron warming stoves, charcoal, twelve cords of wood at home for use, five tons of anthracite and fifty bushels of bituminous coal, $10 worth of lumber, wood or bark, all produce untU harvested, one barrel of flour, thirty bushels of corn, grain, all potatoes raised or bought for debtor or his family, half an acre of flax and manufactures therefrom for use, tools of trade, $50 worth of materials and stock procured and necessary for trade or business and intended to be used in same, sewing machine worth $100, one pair of working cattle or one pair of horses or mules worth $300, and hay to keep them through the winter, one harness worth $20 for each horse or mule, a horse sled or ox sled, two swine, one cow and a heifer under three years, or two cows if no oxen, horse or mule, ten sheep with their wool and lambs, hay sufHoient to keep them through the winter, $50 worth of domestic fowl, one plow, one cart or truck wagon, or one ex- press wagon, one harrow, one yoke with bows, ring and staple, two chains, one mowing machine, one boat of two tons employed in fisliing, and owned exclusively by an inhabitant of the state, life and accident insurance policies, except excess of annual cash premiums for two years above $150. Also two shares in loan and building associations. (See Code, ch. 81, sec. 63; ch, 75, sea 10; oh. 49, sec. 94; ch. 15, sea 8; ch. 81, sees. 63-66.) MARYLAND. There is exempt from execution wearing apparel, mechanical text- books or books of professional men; the mechanic or professional men's tools used by them in their trade or profession. There is exempt also $100 worth of other property to be selected by the defendant, or, if $100 564 LAW OF EAITKEUPTCT. worth cannot conveniently be set aside, that amount shall be paid to the defendant out of the proceeds of the sale. This provision, however, does not apply to any judgment obtained in any action for breach of promise to marry or seduction. (Code of 1888, art. 83; vide 57 Md. 314.) In- tangible property, whether real or personal, except stocks, cannot be taken under execution, such as a chose in action or a lien coupled with possession. The course in such a case is for the creditor to cause his execution to be levied and returned, and then seek his redress in a court of equity. MASSACHUSETTS. The following personal property of a debtor is exempt from attach- ment or execution: The necessary wearing apparel of himself, wife and children; one bedstead, etc., for every two members of his family; one iron stove and fuel to value of $20; other necessary household furniture to value of $300; books to value of $50; one cow, six sheep, one swine, and two tons of hay; tools, etc., in his business to value of $100; mate- rials and stock in his business to value of $100; provisions to the value of $50; one pew; the boat, fishing tackle and nets of a fisherman to the value of $100; uniform and arms of an oflSceror soldier in militia; rights of bmrial and tombs in use; one sewing machine in use to the value of $100; shares in certain co-operative associations to value of $30 in the aggregate. The debtor's homestead to the extent of $800 is also exempt, provided it is declared in the conveyance to be designed for a homestead, or such design is declared by writing signed, sealed, acknowledged and recorded. Benefits provided by assessment and fraternal insurance are exempt on claim against either insured or beneficiary. MICHIGAN, A homestead not to exceed forty acres of land, and the house thereon if situated in the country, or a house and lot in any city or village not exceeding in value $1,500. If it exceeds that amount in value it may be sold, and after paying the judgment debtor the balance may be taken by the creditor. A married householder cannot sell or incumber such homestead without the consent of the wife. The following property is exempt from sale under execution: Spinning-wheels, weaving-looms and stoves put up and kept for tise in any dweUing-house; a x)ew ia a church and a lot in a cemetery, if used; arms required by law to be kept; all wearing apparel of every person and his family; the library and school books of every individual or family, not exceeding in value $150; one sewing machine; all family pictures; to each householder ten sheep, two cows and five swine; six months' provisions and fuel, and household goods, furniture and utensils not exceeding in value $250; to each debtor the tools, implements, materials, stock, apparatus, team, vehicle, horses, harness or other things not exceediog in value $350, to enable him to STATE EXEMPTION LAWS. 665 carry on the business in which he is wholly or principally engaged; a sufficient quantity of hay, grain and feed for properly keeping for six months such exempt animals. No lien can be created on any of the above property, except the $250 worth of tools, implements, etc., without the signature of the wife to the mortgage, etc. A non-resident cannot avail himself of the exemption laws. In case of partnership, each part- ner is entitled to the exemption contained in the provision relative to the tools, implements, materials, stock, etc., of the debtor's principal business. MINNESOTA, By the laws of 1895, chapter 37, the following property is exempt: Family bible, family pictures, school books or library or musical instru- ments for use of family; seat or pew in any house or place of public worship; a lot in a burial ground; all wearing apparel of debtor and family; all beds, bedding and bedsteads kept and used by debtor and his family; all stoves and appendages put or kept for use of debtor and family; aU cooking utensils, and all the household furniture not herein enumerated not exceeding $500 in value; three cows, ten swine, one yoke of oxen and a horse, or in lieu thereof a span of horses or mules; twenty sheep and the wool from same; necessary food for stock for one year, provided or growing, or both; one wagon, cart or dray, one bicycle. By the laws of 1897, page 6, there is exempt one sleigh, two plows, one drag and other farming utensils, including tackle for team, not exceed- ing $300 in value; one sewing machine, one typewriter. By the laws of 1897, page 13, there is exempt grain necessary for one year's seed, not exceeding one hundred bushels of wheat, fifty bushels of oats, one hun- dred bushels of barley, one hundred bushels, of potatoes and ten bushela of com, and binding material for use in harvesting crop raised from seed grain above specified. By the General Statutes of 1878, chapter 66, section 310; laws of 1885, page 44j and the laws of 1889, page 335, the following exemptions are allowed: The provisions of the debtor and his family for one year's sup- port, provided or growing, or both, and one year's fuel; tools or instru- ments of any mechanic, miner or other person, used and kept for the purpose of carrying on his trade, and stock in trade not exceeding $400; library and implements of any professional man. Also the wages of any laboring man or woman or their minor children, not exceeding $25, due for services rendered during the thirty days precedii^ the issue of pro- cess, and moneys arising from insurance or exempt property. By the General Statutes of 1878, chapter 66, section 310, there are exempt from attachment or sale, in addition to the above enumerated, all the presses, stones, types, cases and other tools and implements xised by any copart- nership, or by any printer, publisher or editor of any newspaper, and in the printing or publication of the pame, not to exceed $3,000 in value^ together with stock in trade not exceeding $400 in value. 566 I^'W OF BAliTKEDPTOT. By the laws of 1897, pages 262, 620, the library of any public college or school is exempt; and the money derived from insirranoe upon the life of the deceased husband or father in the hands of a widow or child, not exceeding $10,000, is exempt. By the General Statutes of 1878, chap- ter 68, section 1, there is exempt a homestead not exceeding eighty acres of land, with dwelling-house thereon, to be selected by the owner, not included in the laid-out or platted portion of any incorporated town, city or village; or instead thereof, at the owner's option, a quantity of land not exceeding one lot, if within the laid-out or platted portion of any incorporated town, city or village having over five thousand inhab- itants; or one-half an acre if within the laid-out or platted portion of any such town, city or village having less than five thousand inhabit- ants; and the dwelliag-house thereon and its appurtenances, owned and occupied by any resident of this state, is not subject to attachment, levy or sale upon execution. Such a homestead is exempt while occu- pied by the widow or minor children of any person deceased who was, while living, entitled to the benefit of the homestead act. If a married man absconds from the state or deserts his wife or minor children, such wife and children may continue to occupy such homestead, and the same shall be exempt from levy or sale upon attachment, execution or other final process issued against such husband and wife or either of them. MISSISSIPPL The following property is exempt from seizure for debt: A mechanic's tools necessary for carrying on his trade; the agricultural implements of a farmer necessary for two male laborers, necessary in his usual em- ployment; the books of a student required to complete his education; the wearing apparel of every person; the libraries of lawyers, doctors and ministers not exceeding $250 in value; instruments of surgeons and dentists used in their profession, not exceeding $250 in value; the arms and accoutrements of militiamen; books, maps, globes, etc., used by teachers of schools, etc. ; wages of a laborer to the extent of $20. The head of the family is entitled to the following exemptions: Two work horses or mules, two oxen, two cows and calves, twenty head of hogs, twenty sheep or goats, two hundred and fifty bushels of corn, ten bushels of wheat or rice, five hundred pounds of pork or bacon, one wagon or buggy or cart and harness, five hundred bundles of fodder, one sewing machine, all colts under three years of age raised in the state by the debtor, one hundred bushels of cotton seed, forty gallons of sorghum, one thousand stalks of sugar cane, one bridle and saddle and side-saddle, household and kitchen furniture not exceeding in value $200, wages of a laborer or mechanic not exceeding $100, all poultry, one thousand pounds of hay, one sorghum mill worth not more than $150, proceeds of insurance policy on exempt property; also one hundred and sixty acres of land or town residence not exceeding $2,000 in value. A resident of STATE EXEMPTION LAWS. 567 a city or town having a family may select $350 worth of property in lieu of the personalty above named. Exempt property may be conveyed as security for debt, but exemptions cannot be waived. The homestead exemption only exists where the debtor resides on the property. The owner of a homestead in a city or tovm, or in the country, may desig- nate the land claimed as such by writing acknowledged, and have it re- corded, and thus secure exempt property worth $3,000 instead of $3,000 if not so designated. No property is exempt from liability for debts which consist in whole or in part of the purchase-money thereof or for labor done thereon, or materials furnished therefor, or where the judg- ment is for labor performed, or upon forfeiture of bail bond or a cog- nizance, or for taxes. The proceeds of a life insurance policy not ex- ceeding $10,000 in amount upon one life inures to the parties named as beneficiaries therein, and is exempt from liability for the debts of the person whose life was insured. Proceeds of life insurance not exceeding $5,000, payable to the executor and administrator of the insured, inure to the heirs or legatees free from liability for the debts of the decedent, except where such person's life is insured for the benefit of such heirs or legatees at the time of his death in addition, which additional insurance must be deducted from the $5,000, and the excess only shall be exempt. Money recovered upon a judgment for unlawful killing is exempt from execution for the debts of the decedent. MISSOXJEL The wearing apparel of all persons, and the necessary tools and imple- ments of any mechanic, are exempt from execution. The last thirty days' wages are also exempt from execution. The following property is ex- empt to every head of a family: Ten head of hogs; ten head of sheep, and the products thereof in wool, yam or cloth; two cows and calves; two plows, one axe, one hoe and one set of plow gears, and all necessary farm implements for the use of one man; working animals to the value of $150, or two work animals; the spinning wheel and cards, one loom and apparatus necessary for manufacturing cloth in a private family; all the spun yam, thread and wool not exceeding twenty-five pounds each; all wearing apparel of the family; four beds with the usual bed- ding; and such other household and kitchen furniture, not exceeding the value of $100, as may be necessary for the family, agreeably to an in- ventory thereof, to be returned on oath with execution of the officer whose duty it may be to levy the same; all arms and military equip- ments required by law to be kept; all such provisions as may be found on hand for family use, not exceeding $100 in value; the bibles and other books used in a family; lettered gravestones, and one pew in a house of worship. In lieu of other property, lawyers and ministers may select such books as may be necessary to their profession, and physicians their medicines. In lieu of the property mentioned above, each such head of 568 LAW OF BANKEUPTOT. a family may select and hold exempt any other property, real, personal or mixed, or debts and wages, not exceeding in value the sum of $300. The wife may claim exempt personal property when husband has ab- sented himself. Personal property, except in the hands of an innocent purchaser for value without notice, is subject to execution against pur- chaser for the purchase price. No property is exempt from execution issued upon a judgment for not exceeding $90, recovered by the house servant or common laborer for personal services rendered to defendant, provided the suit is brought within six months after the last service is rendered. The members of a firm are neither severally nor jointly enti- tled to partnership assets exempted to heads of families. MONTANA, A homestead not exceeding the sum of $3,500 in value, and agricult- ural land not exceeding one hundred and sixty acres, and if within the limits of a town, city or viUage, not exceeding one-fourth of an acre, is exempt. This exemption does not affect the lien of any mechanic or laborer, or extinguish the mortgage lawfully obtained, and such ex- emptions apply only to married men or the heads of families. There shall be no exemption from attachment or execution for wages of any olerk, mechanic, laborer or servant. The following personal property is likewise exempt: All clothing of the debtor and family; chairs, tables, desks and books to the value of $200; all necessary household, table and kitchen furniture, which in- cludes all articles used for the comfort of the debtor or his family; and provisions and fuel actually provided for individual or family use and suflScient for two months; one sewing machine not exceeding in value $100, in actual use by the debtor or his family; also one horse, two cows with their calves, two swine and fifty domestic fowL In addition to the above, a farmer can claim the farming utensils not exceeding $600 in value; two oxen, or two horses or mules and their harness, two cows, one cart or wagon, and food for such stock for three months; $200 worth of seed, grain or vegetables, actually provided for the purpose of sowing or planting; the tools, instruments or books of any mechanic, physician, dentist, lawyer or clergyman; to a miner, his dwelling, not exceeding $500 in value, all his tools and machinery necessary for carry- ing on his vocation, not exceeding $500 in value, and one horse or mule, or two oxen and their harness, with their food for three months. There is exempt also one horse, mule or two oxen, vehicle and harness belong- ing to a physician or clergyman, used in making professional visits, with food for such stock for three months. Wages of the debtor earned at any time within thirty days next preceding levy, provided they are necessary for the use of his family residing in the state, supported whoUy or in part by his labor, are exempt. STATE EXEMPTION LAW9. 569 NEBRASKA. Heads of families are entitled to have exempt a homestead not ex- ceeding in value $3,000, consisting of a dwelling in which the plaintiif resides, together with the appurtenances thereunto belonging, and one hundred and sixty acres of land on which the same is situated, or, at the option of the plaintiff, two contiguous lots in any incorporated city, town or village. Such exemption, however, does not extend to mechan- ics' or laborers' liens in regard to mortgages executed by both husband and wife. If the claimant has no homestead as above, he shall have exempt $500 in personal property. In addition to this there is likewise exempt the family bibles, pictures, school books and library; a pew in a place of worship; a lot in any burial ground; all necessary wearing apparel of the debtor and his family; all beds, bedsteads and bedding necessary for the use of such famUy; all stoves and appendages not to exceed four; all cooking utensils and other household furniture not herein enumerated, to be selected by the debtor, not exceeding in value $100; also one cow, three hogs, all pigs under six months old, and if the debtor be engaged in agriculture, in addition to the above, one yoke of oxen, or a pair of horses in lieu thereof, ten sheep and the wool there- from, either raw or manufactured, alj necessary food for the stock herein mentioned for three months; one wagon, cart or dray, two plows and one drag; the necessary gearing for the team, and other fanning im- plements not exceeding $50 in value; the provisions necessary for the support of debtor and family, and fuel for six months. Any mechanic, miner or other person, whether the head of a family or not, shall have exempt the tools and instnmients used and kept for his trade or busi- ness, and any professional man likewise shall have his library and im- plements exempt. In addition to the foregoing, every resident of the state who became disabled in the service of the United States shall have exempt from levy or attachment all pension money received, and all property purchased or improved therewith, not exceeding $2,000 in value. It is provided by the laws of this state that the phrase " head of a family " shall include the following persons: The husband or wife when the claimant is a married person, every person who is residing on the premises with him or her, and under his care or maintenance, that is to say, either his or her minor child, or the minor child of his or her de- ceased wife or husband, or the minor brother or sister, or a minor child of a deceased brother or sister, or a father, mother, grandfather or grandmother, or the father, mother, grandfather or grandmother of a deceased husband or wife, or an unmarried sister, or any other of the relatives mentioned above who have attained the age of majority and are unable to take care of or support themselves. These exemptions do not apply where execution or attachment has issued for clerks', laborers' or mechanics' wages, or for money due and 570 LAW OF BAUKEUPTOY. owing by an attomey-at-law for money or other valuable considerations received by said attorney for any person. The wages of any laborer, mechanic or clerk who is the head of a family are likewise exempt. NEVADA. Except upon judgments for the recovery of the purchase price, or upon a judgment rendered upon a mortgage given upon the same, tho following property is exempt from execution: Chairs, tables, desks and books to the value of $100; necessary household table and kitchen fur- niture, including stove, stovepipe and stove furniture; wearing apparel; beds, bedding and bedsteads; and provisions and firewood actually pro- vided for individual or family use, sufficient for one month. Farming utensils or instruments of husbandry; also two oxen, two horses or mules, and their harness; two cows; one cart or wagon; and food for such animals for one month; also all seed, grain or vegetables reserved for the purpose of planting or sowing vidthin the ensuing six months, not exceeding the value of the sum of $200. The tools and implements of a mechanic or artisan necessary to carry on his trade; the instru- ments and chest of a physician, surgeon, surveyor or dentist, necessary to the exercise of their professions, their scientific and professional libraries; the law library of an attorney, and the libraries of ministers of the Gospel; the dwelling of a miner, not exceeding the value of $500, together with the implements and appurtenances necessary to carry on any kind of mining, of a value not to exceed the aggregate sum of $500, together with two horses, mules or oxen, with harness and food for such animals for one month, necessary for mining operations. Two horses, mules or oxen, their harness and one cart or wagon, by wliich a carman, huckster, peddler, teamster or other laborer actually earns his living; one horse with vehicle and other equipments used by a physician or surgeon or minister of the Gospel in making professional visits, to- gether with food necessary for such animals for one month; one sewing- machine in actual use, not to exceed the value of $150; the fire-engines, hooks and ladders and all other implements and apparatus thereunto appertaining, and all fumitvure and uniforms of any company existing under the laws of this state; the horses and other equipments of officers of military companies; all arms required by law to be kept by any per- son ; aU school properties and the other estate or property of the state, or of a county or incorporated town. A homestead exemption of $5,000 is allowed, if the same be owned by the head of a family. But this exemption does not extend to purchase- money of the homestead property, or improvements made on the same, or for taxes due, or for the payment of a mortgage, if tlie same has been properly executed by the h\isband and wife. STATE EXEMPTION LAWS. 571 NEW HAMPSHIRE. The wife, widow and children of every persrai who is the owner of a homestead, or of any interest therein, are entitled to so much thereof as does not exceed the value of $500, as against creditors, grantees or heirs of such persons during the lives of the wife or widow, and during the minority of the children. If the wife owns a homestead, at her decease the life estate of the surviving husband not exceeding the value of $500 is exempt to him. A homestead of the value of $500 is also exempt to any unmarried person owning the same. (Pub. Stat., ch. 138.) There is likewise exempt from attachment and from liability to be taken upon execution the following goods and property: Necessary wear- ing apparel and bedding and household furniture to the value of $100; bibles and school books in use in the family, and a library of the value of $300; one cow; six sheep and their fleeces; one hog; one pig, and the XX)rk of the same when slaughtered; domestic fowls not exceeding the value of $50; tools used by the debtor in his occupation to the value of $100; four tons of hay; provisions and fuel to the value of $50; beasts of the plow not exceeding one yoke of oxen or a horse; the uniform, arms and equipments of every officer or private in the militia; the debt- or's interest in one pew in any meeting-house and in one lot in any cem- etery. (Pub. Stat., ch. 120, sec. 3.) NEW JERSEY. The goods and chattels, not exceeding in value the sum of $300, ex- clusive of all wearing apparel, and all wearing apparel the property of any debtor having a family residing in this state, are exempt from seizure by virtue of execution or other civil process, except for the purchase- money thereof. (Rev. Stat., p. 386.) In addition to the above, by con- forming to the provisions of the homestead exemption act, the land and building thereon occupied as a residence and owned by the debtor, being a householder and head of a family, to the value of $1,000, may be ex- empted from sale or execution for debt. But the requirements of this act are such that but little practical use is made of this homestead ex- emption in the state of New Jersey. NEW MEXICO. The husband and wife, or the widow or widower living with an un- married minor son, naay hold a homestead not exceeding $1,000 in value; and if not the owner of the homestead, may hold other property to bo selected by them not exceeding the value of $500. Every person who has a family, and every widow, may hold the fol- lowing property exempt from execution, attachment, or sale, for all species of indebtedness except taxes: Wearing apparel, bedsteads, beds and bedding, one cooking stove and pipe, one heating stove and pipe. 572 LAW OF BANKEUPTOT. and fuel sufficient for thirty, days; one cow or household furniture, not exceeding $40 in value; two swine or the pork therefrom, or household furniture not exceeding $15 in value; six sheep, the wool therefrom shorn, and all clothing or other articles manufactured therefrom, or household furniture not exceeding $20 in value, together with sufficient food for such animals for not exceeding sixty days. Bibles, hymn-books, testaments, school and miscellaneous books used in the family, and all the family pictures. Provisions for the use of the family, which shaU not exceed in value the sum of $50; other articles of household and kitchen furniture, not exceeding in value $200 ; one sewing machine ; one knitting machine ; one gun or pistol ; the tools or implements of the debtor necessary for carrying on his trade, whether the same be mechanical or agriculturaL not exceeding $150 in valua The personal earnings of the debtor for sixty days next preceding his application for such exemption, when it is made to appear by affidavit of the debtor or otherwise that such earn- ings are necessary for the support of such debtor, his wife or his family, provided that such exemption shall not apply to debts incurred for man- ual labor or for the necessaries of life furnished to the debtor or his fam- ily. The articles, specimens and cabinets of natural history or science, whether animal, vegetable or mineral, except such as may be intended for show or exhibit for money or pecuniary gain. Every person engaged in the business of trading shall, in addition to the above exemptions, hold one horse, one set of harness, dray or wagon. Every head of a family engaged in the business of agriculture shall, in addition to the above exemptions, hold as exempt two horses or one yoke of cattle, with the nec- essary gearing, and one wagon. Every head of a family engaged in the practice of medicine shall, in addition to the above exemptions, have one horse with bridle and saddle, books, medicines and instruments per- taining to his profession. Every unmarried woman shall have exempt wearing apparel of a value not exceeding $150, one sewing machine, one knitting machine, and, if engaged in teaching music, one piano or organ ; also one bible, one hymn-book, one album, and other books not to exceed in value $50. Any person the head of a family engaged in the practice of the law shall, in addition to the above articles, hold exempt books pertaining to his profession not exceeding the sum of $500 in value. Any beneficiary fund not exceeding the sum of $5,000 appropriated by any benevolent association or society to the family or any member of the family of a deceased brother, shall not be liable for the debts of such deceased brother. The regalia, insignia of office, journals of proceed- ings, account books and private work of any benevolent society shall not be liable for the debts of such society. The property used by a municipal corporation or flre company for the purpose of extinguishing fires shall be exempt from execution or sale to satisfy any judgment or order arising upon contract or otherwise. The chattels above referred to are to be selected by the debtor at any STATE EXEMPTION LAWS. 573 time before sale, and where any dispute arises as to the value or amount of personal property, it shall be estimated and appraised under oath by two disinterested householders selected by the officers holding the writ of execution or attachment. NEW YORK. The lot and buildings of value not to exceed $1,000, owned and occu- pied as a residence by a householder having a family, are exempted if designated and recorded as such homestead property in the office of the clerk of the county where it is situated; but such property is not ex- empted from sale for the non-payment of taxes or assessments, or from sale or execution for debts contracted before the property was so desig- nated as a homestead, or for the purchase-money thereof. Such exemp- tion continues after the owners death for the benefit of the widow and family so long as any of them continue to occupy such homestead until the death of the widow, and until the youngest child shall have attained his majority. No release or waiver of such exemption is valid unless the same be in writing, and be subscribed by the householder and by him acknowledged and recorded. The husband and wife may jointly mort- gage the homestead. (C. P., sec. 1404.) The exemption is not affected by ceasing to occupy the exempted property as a residence for a period not to exceed one year, where such failure to occupy is the result or conse- quence of injury to or destruction of the dwelling-house. A married woman is entitled to the same homestead exemption as a householder having a family. (0. P., sees. 1397-1401.) There is likewise exempt from sale on execution against a householder having a family, or a woman, certain property absolutely and certain property in addition, which property additionally exempted is subject to execution upon a judgment recovered for the purchase price of any such exempted property. The property absolutely exempt consists of all spinning wheels, weaving looms, stoves set up or kept for tise in a dwelling-house, one sewing machine, the family bible, family pictures, school books, other books of a family library to the value of |50; the family seat or pew in a place of public worship; ten sheep, the fleece, yam and cloth therefrom; one cow, two swine, and necessary food for them or necessary food actually provided for the family's use ; sixty days' supply of oil, candles and fuel; aU necessary wearing apparel; beds, bed- steads, bedding, and cooking utensils; one table, and certain table china, etc.; one pair andirons, one coal scuttle, one shovel, one pair tongs, one lamp and one candle-stick; also the tools and implements of a mechanic necessary to his trade, not to exceed in value the sum of $35; the addi- tional articles of household furniture, wagon, tools and team, professional instruments, furniture and library, not exceeding in value the simi of $350, together with sixty days' necessary food for team. There is also exempt one-fourth of an acre of land if it be set apart as a family bury- ing ground; also the equipment, pay, bounty and pension of a person in 574: LAW OF BANKEUPTOT. the military or naval service of the state or of the United States, to- gether with all property purchased with pension money. (See Laws of 1891, ch. 112; C. P., sees. 1300-1393, 2463.) The earnings of a judgment debtor for his personal services rendered within sixty days preceding the levy of the execution or attachment, where the same are necessary for the use of his family, in whole or in part supported by his labor, cannot be reached by supplementary proceedings. (C. P., sec. 2463.) Insurance money, etc., paid or to be paid to a member of such insurance association, or to the widow of a member of a life or casualty corporation doing business upon a co-operative or assessment plan, cannot be reached for any debt or liability incurred before such money was paid. (Laws of 1897, ch. 345.) NORTH CAROLINA. Personal property to the value of $500 to be selected by any resident of this state is exempted from execution. There is likewise exempted a homestead and the dwelling and buildings thereon, not to exceed in value the sum of |1,000, to be selected by the owner thereof, or, in Ueu thereof, any lot in the city, town or village with the dwelling and build- ings used thereon ovsmed and occupied by any resident of the state, not exceeding in value the sum of $1,000. This exemption, however, does not apply to debts due for the purchase-money of such homestead, nor does it apply to mechanics' or laborers' liens or to taxes thereon. (Code, sees. 501-524.) The widow and infant children of the deceased debtor are entitled to the benefit of this homestead exemption until the young- est child shall have reached the age of twenty-one years. During the existence of such homestead or homestead interest, the statute of limita- tions does not run against a judgment against the owner of such home- stead or homestead interest. If the owner of such land be unembarrassed he may convey the same absolutely or mortgage the same free of all home- stead rights without the assent of his wife, except in the following cases: (1) Where the land in question has been allotted to him as a homestead either upon his own petition or byanojicer' in accordance with the law; (2) where no homestead has been allotted to him, but there are judgments against him which constitute a lien upon the land, and upon which exe- cution might issue and make it necessary to have his homestead al- lotted; (3) when no homestead has been allotted, but there has been a mortgage reserving an undefined homestead, which mortgage consti- tutes a lien upon the land and cannot be foreclosed without allotting the homestead; (4) where the conveyance is fraudulent as to creditors and no homestead has been allotted in other lands. If the husband make a fraudulent conveyance of his lands (the wife not joining in the deed), the proceedings of creditors to have the deed vacated inure to the benefit of all of the fraudulent grantor's family, because the creditors ultimately subject the reversion to the payment of their demands, while the wife and children of the debtor get the homestead in the land. STATE EXEMPTION LAWS. 575 NORTH DAKOTA. There is exempt to every head of a family a homestead which shall not exceed in value the sum of $5,000, and if it be in a town plat, not exceeding two acres, and if not, not to exceed one hundred and sixty acres, to be selected and appraised as provided by the statute. This ex- emption, however, does not apply to debts secured by mechanics' or other laborers' liens for work or labor done or material furnished ex- clusively for the improvement of such homesteads. Nor does it extend to debts secured by mortgage on the premises executed and acknowl- edged by both husband and wife or by an unmarried debtor, nor does it extend to debts created for the purchase price thereof, nor to any taxes accrued and levied upon the same. The term "head of a family" is held to include: (1) The husband or wife, when the claimant is a married person, provided that in no case shall both husband and wife be entitled each to a homestead; (3) any person who has resided on the premises with him or her and under his or her care and maintenance, either as his or her minor child or the minor child of his or her deceased wife or husband, whether by birth or adoption, or a minor brother or sister, or the minor child of a deceased brother or sister, or a father, mother, grandfather or grandmother of the father or mother, grandfather or grandmother of the deceased hus- band or wife, or an unmarried sister, or any other of the relatives men- tioned above who have attained the age of majority and are unable to take care of or support themselves. The homestead of a married person cannot be conveyed or incumbered unless the instrument by which it is conveyed or incumbered is executed and acknowledged by both husband and wife. The following property is absolutely exempt to the head of a family from attachment or mesne process, and from levy and sale on execu- tion and from any other final process issued out of any court: The family pictures, a pew or other sitting in any house of worship, a lot or lots in any burial ground, the family bible and all school books used by the family, and all other books used as a part of the family library, not to exceed in value the sum of $100; all wearing apparel and clothing of the debtor and his family; all provisions for the debtor and his family necessary for one year's supply, either provided or grow- ing, or both, and fuel necessary for one year; the homestead as cre- ated and defined and limited as above set forth. In addition to the above mentioned property the head of a family may, by himself or his agent, select from all other of his personal property not absolutely ex- empt goods, chattels, merchandise, money or other personal property not to exceed in the aggregate the sum of $1,500 in value, which shall also be exempt. Instead of the $1,500 exemption as above set forth, the head of a family may select and choose the following property, which shall then be exempt, to wit: All miscellaneous books and musical la- 576 LAW OF BANKEtJPTCT. struments for the use of the family, not to exceed in value the sum of $500; all household and kitchen furniture, including bed, bedsteads and bedding, used by the debtor and his family, not to exceed the sum of $500 in value; and in case the debtor shall own more than $500 worth of such property he may select therefrom such articles to the value of $500, leaving the remainder subject to legal process; three cows, ten swine, one yoke of cattle and two horses or mules, or two yoke of cattle or two span of horses or mules, one hundred sheep and their lambs under six months old, and all wool of the same and all clothing or yarn manufactured therefrom; the necessary food for such animals for one year, either provided or growing, or both, as the debtor may choose; also one wagon, one sleigh, two plows, one harrow and farming utensils, including tackle for teams, not exceeding in value the sum of $300; the tools and implements of any mechanic, whether of age or not, if the same be used and kept for the purpose of carrying on his trade or busi- ness, and in addition thereto the stock in trade not to exceed $300 in value; the library and instruments of any professional person, not ex- ceeding $600 in value. No personal property is absolutely exempt from execution for laborers' or mechanics' wages, or for physicians' biUfi, or for a debt incurred for property obtained imder false pretenses. Except that class of personal property which is made absolutely ex- empt as above set forth, the exemptions do not apply to a corporation for profit, to a non-resident, or a debtor who is with his family removing from the state or who has absconded taking his family with him. A partnership firm can claim but one exemption of $1,500 in value, or the alternative property when so applicable, instead thereof out of the part- nership property, and not a separate exemption for each partner. After the debtor's death such exempt property is set aside for the benefit of the surviving wife or husband or the minor children, and is not liable for any prior debts or claims against the deceased, except when there are no assets available for the payment of the necessary expenses of his last illness, funeral charges and the expenses of administering upon his estate; provided, however, that no property is exempt from execution for the purchase-money or any part thereof. OHIO. A husband and wife living together, a widow or widower living with an unmarried daughter or unmarried minor son, may hold exempt from sale on judgment or order a family homestead not to exceed in value the sum of $1,000; and the husband, or, in case of his failure or refusal to do so, the wife, shall have the right to make the demand therefor. But neither husband nor vsdfe can make such demand if the other al- ready has a homestead. When the homestead is of a greater value and is not, in the opinion of the appraisers, susceptible of division, the plaint- STATE EXEMPTION LAWS. 577 iff in the execution is entitled to the annual rental value over $100 until the debt, cost and interest are paid. (Rev. Stat., sees. 5435, 5438, 5439.) The husband and wife living together, the widower living with an unmarried daughter or minor son, every widow and every unmarried female having in good faith the care, maintenance and custody of any minor child or children of the deceased relative, who are residents of the state and county, and who are not the owners of a homestead, may, in lieu thereof, hold exempt from levy and sale real or personal prop- erty to be selected by such person, his agent or attorney, at any time before the sale, not exceeding $500 in value, in addition to the amoimt of chattel property that is by law exempt. (Rev. Stat., sec. 5441.) It is provided that when a married woman sues or is sued, like pro- ceedings shall be had and judgment rendered and enforced as if she was unmarried, and her property and estate shall be liable for the judgment against her, but she shall be entitled to the benefit of all exemptions. (Rev. Stat., sec. 5319.) Under this section of the statute, the supreme court of the state has held that a man-ied woman is entitled to the benefit of all exemptions allowed by law to the heads of families, though she be living apart from her husband, and have no child or children living with her or supported by her. (See 53 Ohio St. 468.) The provisions above recited concerning the homestead or the $500 exemption in lieu thereof do not extend to a judgment rendered upon a mortgage executed by the debtor and his wife, nor to claims for manual work and labor less than $100, nor does it extend in such wise as to impair a lien by mortgage or otherwise of the creditor for the purchase-money of the premises in question, nor a lien of any mechanic or other person imder any statute of this state for materials furnished or labor performed in the erection of any dwelling-house thereon, nor for the payment of taxes due thereon. (R. S., sees. 5435, 5440.) In addition to the homestead provisions as above set forth, the follow- ing personal property is likewise exempt: Wearing apparel not exceed- ing in value the sum of $1 00, one sewing machine, one knitting machine, a bible and other books not exceeding in value the sum of $25 (R. S., sec. 5426); any beneficiary fund not exceeding the sum of $5,000 paid by any benevolent association to the family of any deceased member, or to any member of such family, is exempt from the payment of any debts of such deceased member. (R. S., sec. 5437.) Every person who has a family and every widow may hold the following property exempt: The wearing apparel of such persons or family, necessary beds and bed- ding; two stoves and fuel actually provided sufficient for sixty days' use; one cow, or household furniture not exceeding $35 in value; two swine, or household furniture not exceeding $15 in value ; six sheep, or furniture not exceeding $15 in value, and sufficient food for such animals for sixty days; the bibles and school books used in the family, and all family pic- tures; provisions actually provided and designated for the use of such 37 578 LAW OF BAJSTKETTPTOT. family not exceeding $50 in value, and other articles of household and kitchen furniture or either, necessary for such person or family, not to exceed in value the sum of $50; one sewing machine, one knitting mar chine, all tools and implements of the debtor necessary for carrying on his or her trade or business, whether the same be mechanical or agri- cidtural, of a value not to exceed $100; the personal earnings of the debtor, and the personal earnings of his or her minor child or children for three months, whenever it is made to appear that such earnings are necessary for the support of such debtor or of his or her family; all ar- ticles, specimens and cabinets of natural history or science, except such as are to be kept or intended for exhibition for pecuniary gain. (E. S., sec. 5430.) In addition to the above exemptions every drayman may hold one horse, harness and dray; every farmer one horse or yoke of oxen with the necessary gearing for the same, and one wagon; every physician one horse, one saddle and bridle, and also books, medicines and instruments pertaining to his profession not exceeding the sum of $100 in value. (K. S., sees. 5430, 5431.) OKLAHOMA. To every head of a family residing in this territory the following prop- erty is exempt: One hundred and sixty acres of land or a lot in a town or city not exceeding one acre; all household furniture; all lots in a cemetery; all implements of husbandry used on the homestead; aU tools, apparatus and books belonging to and used in any trade or pro- fession; the family library and aU. family portraits and pictvires and wearing apparel ; five milch cows and their calves under six months old ; one yoke of work oxen with necessary yoke and chains; two horses or mules and one wagon, cart or dray; one carriage or buggy; one gun; ten hogs; twenty head of sheep; all saddles, harness and bridles necessary for the use of the family; all provisions and forage on hand or growing for home consumption and for the use of exempt stock for one year; all current wages and earnings for personal or professional services earned within ninety days next preceding the levy of the execution or attach- ment. To persons who are not the heads of families the following property is exempt: Lots in a cemetery; all wearing apparel; all tools, apparatus and books belonging to any trade or profession; one horse, bridle and saddle or one yoke of oxen; current wages for personal services. ■None of the exemption provisions are applicable to debts due for the w^ages of any clerk, laborer, mechanic or servant. All pension money is likewise exempt. OREGON. The following property is exempt from execution, provided the same be selected and reserved by the judgment debtor or his agent at the time STATE EXEMPTION LAWS. 67& of the levy of the execution or attachment, or so soon thereafter and before the sale as the same shall become known to him. And if not so selected and reserved it is not exempt from execution. A homestead to the value of $1,500. If the homestead exceed $1,500 in value, the creditor may pay the debtor that amount and proceed to sell the property, adding the said sum of $1,500 to his lien; provided, how- ever, that the said sum of $1,500 so paid by the judgment creditor to the debtor shall likewise be exempt. (Laws of 1893, p. 94) Under the same conditions the following personal property is also ex- empt: Books, pictures and musical instruments owned by any person to the value of $75; necessary wearing apparel owned by any person to the value of $100, and, if such person be a householder, to each member of his family to the value of $50 ; tools, implements, apparatus, team, ve- hicle, harness or library necessary to enable any person to carry on his trade, occupation or profession by which such person habitually earns his living, of a value not to exceed $400; also sufficient food to support such team sixty days. The word "team " as used in the Oregon statutes does not include more than one yoke of oxen, or a span of horses or mules, as the case may be. The following property, if owned by a house- holder and if actually used or kept for use by and for his family, or when being removed from one habitation to another on a change of residence, is exempt: Ten sheep, with one year's fleece or the yam or cloth manufactured therefrom; two cows and five swine; hou^hold goods, furniture and utensils to the value of $300; also food sufficient to support such animals, if any, for three raonths, and provisions actually provided for family use and necessary for the support of such house- holder and family for the period of six months. There is exempt the seat or pew occupied by any householder or his family in any place of pubUc worship; the property of the state or any county, incorporated city, town or village therein, or any other public or municipal corporar tion of like character. Such exemptions do not, however, apply to judg- ments recovered for the purchase price of the articles mentioned as being exempt. (Code of Oregon, sec. 283.) The earnings of a judgment debtor for personal services rendered at any time within thirty days next preceding a judgment against a gar- nishee shall not be included in such judgment whenever it shall be made to appear that such earnings are necessary for the use of the fam- ily supported in whole or in part by his labor. (Code of Oregon, sec. 313.) There is likewise exempt from taxation to every white male citizen above the age of sixteen years, provided the same be kept for his own use and defense, the following flre-arms: one revolving pistol, and either a rifle, a shot-gun, single or double-barreled, or a musket. PEKNSYLVAJSriA. Real dr personal property to the value of $300, to be selected by the debtor, and in addition thereto all wearing apparel, bibles and school books are 580 LAW OF BANKEUPTOT. exempt from sale on execution or distress for rent. This right of ex- emption survives to the widow out of the estate of the husband upon the husband's decease. A sewing machine belonging to a seamstress is exempt, as are also all leased musical instruments, if the lessor give no- tice of the leasing to the landlord. A debtor noay waive the benefit of the exemption laws by an express agreement, or by fraudulent conceal- ment of the property he may be deprived of the benefit of such exemp- tions. A non-resident cannot avail himself of the exemption law, nor can a copartnership nor a corporation. No exemption is aUowed when the judgment is allowed for manual labor and is of the sum of $100 or less, nor when the judgment is for four weeks' board or less. (See Act March 4, 1887, and Act AprU 4, 1889.) EHODE ISLAND. The professional library of a professional man in actual practice; working tools of the value of $200 ; household furniture of the value of $300; books of the value of $300; one cow, one hog, one pig, and one and one-half tons of hay, all chains and machinery; ordinary wages of the value of $10, except for debts contracted for necessaries; all wages of the wife and minor children of any debtor. SOUTH CAROLINA. To the head of a family a homestead exemption is aUowed consisting of $1,000 worth of real estate with the yearly produce thereof, and $500 in personal property. To a person not the head of a family an exemp- tion is allowed consisting of wearing apparel, tools and implements of trade not to exceed the sum of $300 in value. Before assignment of the homestead it cannot be waived except by conveyance or mortgage, and then only in favor of the mortgage debt. After assignment the homestead cannot be waived imless the deed is executed by both hus- band and wifa The benefit of the exemption laws does not extend to obligations contracted for the purchase of the homestead or for the mak- ing of improvements thereon, and the yearly products of the said home- stead shall not be exempt from the payment of obligations contracted in the production of the same. SOUTH DAKOTA. Homesteads are exempt from execution. If the same be situated within a town plat it shall not exceed one acre in extent; and if it be not within a town plat it shall not exceed more than one hundred and sixty acres in farming land ; and in neither case shall it exceed in value the sum of $5,000. Suoli homestead mvist be occupied as a residence by the debtor and his family. If the homestead exceed in value the sum of $5,000 it may be reached by the execution creditor as against debts STATE EXEMPTIOK LAWS. 581 incurred prior to March 7, 1890. The homestead, to the extent of one hundred and sixty acres in the coxintry or one acre in town, is exempt without any limitation as to value. Such exemption continues after the debtor's death for the benefit of the surviving husband or wife and children, and, if both husband and wife be dead, imtil the youngest child become of age. (Rev. Code, oh 38; C. L., ch. 23.) The following chattels are absolutely exempt: The family pictures, family library, not exceeding in value $300; all wearing apparel of the debtor and his family; one year's supply of fuel and provisions; and in addition to the above absolute exemptions the debtor may select out of his personal property as exempt, if a single person, articles to the value of $300. And if the head of a family, he may select such articles to the value of $750. But as against debts incurred prior to March 7, 1890, the exemption extends to the value of $1,500, whether the debtor be a single person or the head of a family. No personal property, except such articles as are above mentioned as absolutely exempt, is exempt from execution for laborers' or mechan- ics' wages or physicians' biUs, nor for the purchase-money of the same property, nor for a debt incurred for property obtained under false pre- tenses. A partnership has but one exemption out of partnership prop- erty. Neither a corporation for profit, nor a non-resident, nor a debtor who is in the act of removing with his family from this state, has any exemption of personal property, except the articles enumerated above as being absolutely exempt. {Vide Code Civ. Proc, sees. 833-834; C. L., sees. 5126-5149.) After the debtor's death such exempt property is set apart for the benefit of the surviving wife or husband, or the minor children, and is not liable for any prior debts or claims against the de- cedent, except when there are no assets available for the payment of the necessary expenses of his last illness, funeral charges and the ex- pense of administration upon his estata (Prob. C, sec. 139; O. L., sea sec. 5779; Laws of 1890, oh. 86.) All moneys received by a widow or children for insurance upon the life of any person who, when living, was the head of a family, shall be forever exempt. (Laws of 1890, ch. 86.) TENNESSEE. A homestead or real estate in the possession of or belonging to each head of a family, and the improvements thereon to the value of $1,000, shall be exempt from sale under legal process during the life of such head of a family, and shall inure to the benefit of his widow and be ex- empt from sale in any way at the instance of any creditor or creditors during the majority of the children occupying the same and imtil the youngest child reaches the age of twenty-one years; provided, that such real estate shall not be alienated without the joint consent of the hus- band and wife when that relation exists, to be evidenced by conveyance duly executed as required by law for married women; and further pro- 582 ^^^ O^ BANEEUPTOT. vided, that such real estate shall not be exempt from sale for the pay- ment of public taxes legally assessed upon it, or from sale for the satis- faction of any debt or liability contracted for its purchase, or liability incurred for improvements made thereon. (Act of 1870, 2d sess., ch. 80, sec. 1 ; Code (M. & V.), sec. 2935.) Each head of a family owning real estate shall have the right to elect where the homestead or said exemp- tion shall be set apart, whether living on the same or' not. These pro- visions apply as well to equitable as to legal interests. (Ibid., sec. 2; Code (M. & v.), sec. 2937.) The homestead exempt in the possession of a husband shall upon his death go to his widow during her natural life, with the products thereof for her own use and benefit and that of her family who reside with her, and upon her death it shall go to the minor children of the deceased husband, free from debts of the father or mother or of said children; and upon the death of said minor children or their arrival at age, the same may be sold and the proceeds distributed among all the heirs at law of the deceased head of the family, according to the laws of descent and distribution in force in the state of Tennessee. (Ibid., sec. 6; Code (M. & v.), sec. 2943.) Upon the death of the head of a family without widow or minor children said land shall be sold for the payment of the debts legally established against the estate; and the remainder distrib- uted among his heirs according to the rules of descent in force at the time in this state. (Ibid., sec. 7; Code (M. & V.), sec. 2945.) The following personal property is exempt from execution, seizure or attachment in the hands of every male citizen of the age of eighteen years and upward, and every female who is the head of a family, to wit: One gun; to every single woman who uses it for a livelihood, one sew- ing-machine; to every mechanic engaged in the pursuit of his trade or occupation, one set of mechanic's tools such as are usual and necessary to the pursuit of his trade; the wages of every mechanic and laboring man to the value of $30, and the lien created by service or garnishment shall only affect that portion of the laborer's wages that may be due at the time service is made, and shall not affect any future wages; in the hands of heads of families, a number of household articles, etc., too large to be set out in full (Code (M. & V.), sec. 2931); if the head of the family be engaged in agriculture, there shall be further exempt two plows, two hoes, one grubbing-hook, one cutting-knife, one harvest- cradle, one set of plow gears, one pitchfork, one rake, three iron wedges, and ten head of stock hogs. Exempt property shall be exempt from seizure in criminal as well as sivil cases, but shall not be exempt from distress or sale for taxes or a judgment for failure or refusal to work on the public roads, or for fines and costs for voting out of the civil district or the ward in which the voter lives, or for carrying deadly or concealed weapons, or for giving away or selling intoxicating liquors on election days. (Code (M. & V.), Bees. 2932, 293a STATE EXEMPTION LAWS. 583 TEXAS. By the constitution of 1875 the homestead of a family not in a town or city is made to consist of not more than two himdred acres of land, which may be in one or more parcels, together with the improvements thereon. A homestead in a city, town or village is made to consist of the lot or lots not to exceed $5,000 in value at the time of designation, without reference to the improvements thereon; provided, the same shall be used for the purpose of a home or as a place of exercising the calling or business of the head of the family. The homestead is ex- empted from forced sale for payment of all debts except for the pur- chase-money or the taxes due thereon, or for work and material used in constructing improvements thereon; and if the claim be for materials used in the construction of improvements thereon, the contract for such woi-k and materials must have been made with the consent of the wife given in the same manner as she is required to give her consent under mortgages or deeds of trust. In addition to these provisions, it is pro- vided that in case of the death of a person leaving a wife or children, or either, there shall be granted out of the estate a sum sufficient to sup- port them for one year; also, if the exempted articles provided for by the law do not exist in kind, the property of the estate may be sold for cash to raise their value, not to exceed $5,000 for a homestead and $500 for other exempted property. To every family there is also exempted the following personal prop- erty: All household and kitchen furniture; any lot or lots used for bur- ial purposes in a cemetery; all implements of husbandry; private or public libraries and family bedsteads and pictures; five mUch cows and calves; two yoke of work oxen; two horses and one wagon; one car- riage or buggy; one gun; twenty hogs; twenty head of sheep; all provis- ions and forage on hand for home consumption; all bridles, saddles and harness necessary for the use of the family. And to every citizen not a, head of a family there is exempt one horse, bridle and saddle; all wearing apparel; any lot or lots for burial purposes in the cemeteries; aU tools, apparatus and books belonging to his trade or profession. Current wages for personal service are not subject to garnishment. UTAH. A homestead, consisting of lands and appurtenances, which may be in one or more localities, but shall not exceed in value the sum of $1,500, is exempt to the head of a family, and the further sum of $500 for his wife, and the further sum of $250 for each other member of his family; chairs, tables and desks to the value of $300; the library of the judg- m.ent debtor; musical instruments in actual use in the family; neces- sary household furniture to the value of $300; sewing machine; family pictures; carpets in use; provisions for three months; two cows with 584 LAW OF BANKETJPTCT. their sucking calves; two hogs with their sucking pigs; all wearing ap- parel; all beds and bedding; and, if the family consists of five or more members, the further exemption of two cows and calves. The farming implements of a farmer not exceeding the value of $300; two oxen, or two horses, or two mules, and their harness; one cart or wagon; all seed grain and vegetables actually provided or on hand for the purpose of planting or sowing at any time within six months, pro- vided the value thereof does not exceed $300; the crops and the proceeds thereof, not to exceed the value of $200. The tools and implements of mechanics or artisans of the value of $500 or less; necessary instruments and chests of a physician, surgeon or dentist, together with their professional libraries. The law Hbraries and office furniture of attorneys and judges; the libraries of ministers; and the typewriting machine of a stenographer; the cabin of a miner not exceeding the value of $500, with his necessary tools and appliances, of a value not to exceed $500. To every ferryman there is exempt one ferry-boat with the necessary tackle, not exceeding in value $500; two oxen or two horses or mules and their harness and cart or wagon; one dray or truck by the use of which a drayman, huckster, peddler, hack- man or teamster or other laborer actually earns his living; the horse and vehicle of a physician or minister; one-half of the wages of the judgment debtor for personal services rendered at any time within sixty days next preceding the levy of the execution. If said sum is |1 a day or less, no part shall be liable to execution; all moneys and annu- ities growing out of life insurance, if the annual premiimi paid does not exceed $00. The exemption laws do not extend to executions issued upon judg- ments for the purchase price of any exempt article or any portion thereof, or upon judgment for foreclosure of mortgage or for mechanics' or laborers' liens. Non-residents and those who are about to depart from this state cannot claim the benefit of these exemption laws. VERMONT. To each householder there is exempted a homestead which shall not exceed in value the sum of $500. The homestead is to consist of a dwell- ing-house and the lands appertaining thereto and shall be used or kept as a homestead. It shall not exceed in value the sum of $500. Such homestead cannot be mortgaged by the owner, if a married man, unless his wife joins in the mortgage. This homestead goes, on the death of the owner, to his widow and minor childi-en, but the children's rights continue only until majority. The exemptions of personalty consist of wearing apparel, bedding, tools, arms, household furniture, sewing machine, one cow of a value not to exceed $100, one swine or the meat of one swine, ten sheep, with one year's product in wool, yarn or cloth, one cow, two oxen or horses^ STATE EXEMPTION LAWS. 585 with one year's forage for such animals, ten cords of wood and five tons of coal, twenty bushels of potatoes, harness and equipments, ten bushels of grain, one barrel of flour, three swarms of bees and hives, two hundred pounds of sugar, gravestones, bibles and other books used in the family, a pew in the church, poultry to the amount of $10, professional books of physicians, clergymen and attorneys not to exceed $200 in value; one two-horse wagon, one one-horse wagon or one ox cart, as the debtor may choose; one sled or one set of traverse sleds; two harnesses; two halters; two chains; one plow and one yoke, team and equipments not to exceed $200 in value. No personal property is exempt upon suit for the pur- chase-money thereof or for repairs made thereon. VIRGINIA, The homestead provision in this state is as follows: Every householder residing in this state shall, in addition to the property or estate which he is entitled to hold exempt from levy, distress or garnishment, be entitled to hold exempt from levy, seizure, garnishment or sale under any execu- tion, order or process issued on any demand for any debt or liability on contract, his real or personal estate, or either, to be selected by him, in- cluding money and debts due him, to the value of not exceeding $2,000; provided, that no such exemption shall extend to any execution, order or other process issued on any demand in the following cases: 1st, for the purchase price of said estate or any part thereof; 2d, for the services rendered by a laboring person or a mechanic; 3d, for liabilities incurred by any public ofiBcer of a court or fiduciary or by any attorney at law for money collected by him; 4th, for a lawful claim for any taxes levied or assessed; 5th, for rent; 6th, for the legal or taxable fee of any public officer or officer of court; 7th, for any debt or liability on contract as to which the debtor or party to the contract has waived as hereinafter pro- vided, the exemption to which he is entitled imder this section. (Code, sec. 3630.) The homestead exemption, as this is called, may be waived by express stipulation in a bond, note or other evidence of contract, but there can be no waiver of the poor-law exemption; and a deed of trust upon such articles as are exempted by the poor-law exemption is void. The home- stead exemption may be claimed on legal or equitable estates of any kind. The waiver shall be in the following words or their equivalent: " I (or we) waive the benefit of my (or our) homestead exemptions as to this obligation." It is provided that a deed of the property claimed under this exemp- tion shaU be recorded; but the exemption inay be claimed after suit and judgment as weU as before. The property set apart as homestead ex- emption may be mortgaged or sold by the joint act of husband and wife; or, if the householder be unmarried, by his act alone. If the householder die without claiming the exemption, the right survives to the widow 586 LAW OF BANKEUPTOT. and the infant children. If a widow claim dower or jointure, she can- not claim the home; but in such case the rights of the minor children therein are not impaired. An unmarried man who kept house and had hirelings on his farm was held not to be a householder or head of a family within the meaning of this statute. (See Calhoun v. WiUiams, 33 Gratt. 18.) In addition to this homestead exemption, as it is called, there is like- wise exempt from levy or distress a long list of enumerated articles of personal property, to which no limitation is set as to value, but which appear to be absolutely exempt in kind. (See Code of 1887, ch. 178.) There is also exempt the wages owing to a laboring man who is a house- holder, provided the same do not exceed $50 per month, WASHINGTON. Homesteads may be selected and claimed in lands and tenements with the improvements thereon not exceeding in value the sum of $3,000. The premises thus included must be actually intended and used for a home by the claimants and must not be devoted exclusively to any other purposes. (Laws 1895, p. 113.) In order to select a homestead, the husband or other head of a family, or, in case the husband has not made such selection, the wife must execute and acknowledge, in the same manner as a grant of real property is acknowledged, a declaration, of homestead in the manner provided by the statute, which must be duly recorded. (Laws of 1895, p. 113.) The real and person estate belonging to a married woman at the time of her marriage, and all she subsequently becomes entitled to in her own right, and all her personal earnings and rents and profits of such real estate, shall not be liable for her husband's debts so long as she or any minor heir of her body is living, but her property is liable for debts owing by her at the time of her marriage. The following personal property is exempt: All wearing apparel; all private libraries not exceeding $500 in value. In addition thereto, the following is allowed to a householder or head of a family: Beds, bedding and other household furniture not exceeding in value $500; five swine; two cows with their calves; two hives of bees; thirty-six domestic fowls; fuel and provisions for six mouths' support. A farmer is allowed a pair of horses or mules and their harness, or two yoke of oxen and a wagon; also $500 worth of farming implements in actual use, tpgether with farming utensils in actual use not exceeding $500 in value; also one hundred and fifty bushels of oats or barley; fifty bushels of pota- toes; ten bushels of corn; ten bushels of peas; ten bushels of onions, for seeding purposes. A minister or lawyer is allowed a library worth $1,000, together with his stationery and office furniture not exceeding $300 in value. A physician is allowed his horse and vehicle, together with his library, not exceeding in value $500, ajid also his instruments STATE EXEMPTION LAWS. 587 and medicines used in practice to a value not to exceed $300. To a teamster or drayman engaged is that business for the support of his family or himself, there is allowed his team consisting of one span of horses or mules or two yoke of oxen, or a horse or mule with harness, yokes, one wagon, truck or dray. To a mechanic, the tools and instru- ments used in his trade, not exoeediag in value the sum of $500. To per- sons engaged in lightering, one or more lighters, barges or scows and a small boat, to a value not more than $350. In addition to the above, each householder is allowed personal property to the extent of $1,000, provided that no property shall be exempt from execution for clerks', laborers' or mechanics' wages earned within this state, nor from execu- tion issued upon a judgment against an attorney on account of any liability incurred by such attorney to his client on account of any money coming into his hands belonging to his client. The proceeds of all life and accident insurance are exempt from liability for any debt. Whenever property which is exempt from execution or attachment is insured and is destroyed by fire, the insurance money to an amount equal to the exempt property is likewise exempt. No property is ex- empt from execution issued upon a judgment recovered for the pur- chase price of such property. (Laws of 1897, p. 70; Laws of 1895, p. 135, sec. 1.) Any person making a general assignment for the benefit of creditors may reserve the property exempt by law from levy by execu- tion or attachment. (Laws of 1897, p. 6.) WEST VIEGINL^ Any husband or parent residing in this state, or the widow or infant child of deceased parents, may hold a homestead of the value of $1,000, provided such homestead is duly recorded before the debt against which it is claimed is contracted, and if so recorded it may be held free from execution as against debts created since August 33, 1878, except debts in- curred for the purchase-money thereof, for the erection of permanent improvements thereon, or for taxes due thereon. (Acts of 1881, ch. 19; art. 6, sec. 48, Constitution of 1873.) And such persons may likewise set apart the personal estate of such husband or parent not exceeding $300 in value, to be exempt from execution or other process. Any resident mechanic, artisan or laborer, whether a husband or par- ent or not, ma.y hold the working tools of his trade or occupation to the value of $50, provided that in no case shall the exemption allowed to any one person exceed $300. (Acts of 1881, ch. 19.) If any of the ex- empted property consists of wages, it is unlawful for any person to sue in his own name or in the name of any other person, or to assign any claim held by him against a resident of this state for the purpose of hav- ing payment of the same or any part thereof enforced out of such ex- empted wages in attachment or garnishment in any other state of the Union, or to send out of this state for assignment, transfer, or in any 588 LAW OF BANKEUPTOY. other manner any claim or debt against any resident thereof, for the purpose or with the intent of depriving such person of the right to have his wages exempt from distress, levy or garnishment according to the statutes of the state of West Virginia, And if any person institute such suits or permit such suits to be instituted with the intent as aforesaid, he shall be liable in an action of debt to the person from whom pay- ment of the same or any part thereof shall have been enforced by at- tachment or garnishment or otherwise for the full amount with costs. The fact that the payment of the claim or debt against any person entitled to the exemption has been enforced by legal proceedings in some state other than this state in such manner as to deprive such person to any extent of the benefit of such exemption shall be prima facie evi- dence that any residence of this state who may at any time have been the owner or holder of such claim or debt has violated the law. (Acts of 1897, ch. 47.) WISCONSIN. Real estate without limit in value to the extent of one-quarter of an acre in a city or village, or of forty acres when used for agricultural purposes elsewhere, is exempt from execution as the debtor's homestead when occupied by him, or when he is only temporarily absent there from; also its proceeds when so held for not more than two years with the intention of buying another homestead therewith. The homestead is subject, however, to mortgage execution thereon and to mechanics' liens, but it cannot be conveyed or mortgaged without the wife's signa- ture. It descends unless it is devised and the widow accepts other pro- vision for her by a will, first to the widow during widowhood, then it descends as other real estate. Its exemption is not lost by devise or by descent to the widow or issua Chattels exempt from execution (besides certain unimportant exemp- tions which are of no interest to creditors) are as follows: The debtor's library, wearing apparel, beds and bedding, stoves, cooking utensils and other farm furniture to the amount of $200; two cows; ten swine; two horses; two mules (or in lieu of one of these last, a yoke of oxen); ten sheep and their wool, either raw or manufactured, and one year's food for all this stock; one wagon; one sleigh; one plow; one drag and $50 worth of other farming utensils or tackle or teams; one year's provisions either provided or growing or both, for the debtor and his family; tools and implements or stock in trade or partly either to the value of $300; one sewing machine kept for family use; printing material and presses of any printer or publisher to the value of $1,500, except that as to claims of laborers and servants for service only, $400 shall be exempt; and in- ventor's interests in his own patents ; three months' earnings of the debtor not to exceed $60 in each month if he is married and has a family to support, and not exceeding $180 in all, including any part paid to the STATE EXEMPTION LAWS. 589 debtor diiring that time, and all insurance moneys arising from the loss of any exempted property. These exemptions, except those of clothing, household furniture and earnings, exist only in favor of actual residents of the state, or those who ai-e removing from one place to another. They are not available to corporations, but are practically to the partners in a firm out of a firm property. The benefit of exemptions cannot be waived prior to a levy. If the debtor does not claim his exemptions his wife may do so for hun. ■WYOMING. Every householder being the head of a family is entitled to a home- stead not exceeding in value $1,500 to be exempt from execution or at- tachment for any debt, contract or civil obligation while such homestead is actually occupied as such by the owner thereof or by his family. The homestead may consist of a house and lot in any town or city or a farm of not more than one hundred and sixty acres. The o^vner of the home- stead may mortgage the same, but such mortgage shall not be binding on the wife of a married man who had been occupying the premises with him unless she shall freely and voluntarily acknowledge and sign the same, and the officer taking such acknowledgment shall fully ap- prise her of her rights and of the effect of signing such a mortgage. In addition to the homestead as above mentioned, the wearing apparel of every person is exempt from judicial or ministerial process; likewise the following property when owned by any person being the head of a family and residing with the same: The family bible, pictures and school books; a lot in a cemetery or burial ground; furniture, bedding, provisions and such other articles as the debtor may select to a total value of $500, which shall be assessed by the appraisement of three dis- interested householders. Such exemption, however, does not apply to any person who is about to abscond from the stata The tools, team and implements or stock in trade of a mechanic, miner, or other person, and used and kept for the purpose of carrying on his trade or business, is exempt to a value of not exceeding $300. The library, instruments or implements of any professional man not to exceed in value $300. The person claiming exemption must in aU cases be a bona fide resident of the state of Wyoming. The earnings of the debtor for his personal services not exceeding $100 are exempt from levy whenever it may be made to appear that such earnings are necessary for the use of his fam- ily supported in whole or in part by his labor. TITLE YI. RULES, FORMS AND ORDERS PROMULGATED BY THE SUPREME COURT OP THE UNITED STATES, NO- VEMBER 28, 1898. In pursuance of the powers conferred by the Constitution and laws upon the Supreme Court of the United States, and particularly by the act of Congress approved July 1, 1898, entitled " An act to establish a uniform system of bankruptcy throughout the United States," it is ordered, on this 28th day of November, 1898, that the following rules be adopted and established as general orders in bankruptcy, to take effect on the first Monday, being the second day, of January, 1899. And it is further ordered that aU proceedings in bankruptcy had before that day, in accordance with the act last afore- said, and being in substantial conformity either with the provisions of these general orders, or else with the general orders established by this court under the bankrupt act of 1867 and with any general rules or special orders of the courts in bankruptcy, stand good, subject, however, to such further regulation by rule or order of those courts as may be necessary or proper to carry into force and effect the bankrupt act of 1898 and the general orders of this court. L DOCKET. The clerk shall keep a docket, in which the cases shall be entered and numbered in the order in which they are commenced. It shall contain a memorandum of the filing of the petition and of the action of the court thereon, of the reference of the case to the referee, and of the trans- mission by him to the clerk of his certified record of the proceedings, with the dates thereof, and a memorandum of all proceedings in the 592 I'A'W OF BAJSTKEUPTOT. case except those duly entered on the referee's certified record afore- said. The docket shall be arranged in a manner convenient for refer- ence, and shall at aU times be open to public inspection. IL FTLINa OP PAPERS. The clerk or the referee shall indorse on each paper filed with him the day and hour of filing, and a brief statement of its character. IIL PROCESS. All process, summons and subpoenas shall issue out of the court, under the seal thereof, and be tested by the clerk; and blanks, with the signa- ture of the clerk and seal of the court, may, upon application, be fur- nished to the referees. IV. CONDUCT OP PKOCEEDINGS. Proceedings in bankruptcy may be conducted by the bankrupt in per- son in his own behalf, or by a petitioning or opposing creditor; but a creditor will only be allowed to manage before the court his individual interest. Every party may appear and conduct the proceedings by at- torney, who shall be an attorney or counselor authorized to practice in the circuit or district court. The name of the attorney or counselor, with his place of business, shall be entered upon the docket, with the date of the entry. AU papers or proceedings offered by an attorney to be filed shall be indorsed as above required, and orders granted on mo- tion shall contain the name of the party or attorney making the motion. Notices and orders which are not, by the act or by these general orders, required to be served on the party personally may be served upon hia attorney. V. FRAME OP PETITIONa All petitions and schedules filed therewith shall be printed or written out plainly, vrithout abbreviation or interlineation, except where such abbreviation and interlineation may be for the purpose of reference. VL PETITIONS IN DIFFERENT DISTRICTS. In case two or more petitions shall be filed against the same individ- ual in different districts, the first hearing shall be had in the district in which the debtor has his domicil, and the petition may be amended by ETTLES, FOEMS AND OEDEES. 593 inserting an allegation of an act of bankruptcy committed at an earlier date than that first alleged, if such earlier act is charged in either of the other petitions; and in case of two or more petitions against the same partnership in different courts, each having jurisdiction over the case, the petition first filed shall be first heard, and may be amended by the insertion of an allegation of an earlier act of bankruptcy than that first alleged, if such earlier act is charged in either of the other peti- tions; and, in either case, the proceedings upon the other petitions may be stayed until an adjudication is made upon the petition first heard; and the court which makes the first adjudication of bankruptcy shall retain jurisdiction over all proceedings therein until the same shall be closed. In case two or more petitions shall be filed in different districts by different members of the same partnership for an adjudication of the bankruptcy of said partnership, the court in which the petition is first filed, having jurisdiction, shall take and retain jurisdiction over all proceedings in such bankruptcy until the same shall be closed; and if such petitions shall be filed in the same district, action shall be first had upon the one first filed. But the court so retaining jurisdiction shall, if satisfied that it is for the greatest convenience of parties in in- terest that another of said courts should proceed with the casesi, order them to be transferred to that court va naoEnry of petitions. Whenever two or more petitions shall be filed by creditors against a common debtor, alleging separate acts of bankruptcy committed by said debtor on different days within four months prior to the filing of said petitions, and the debtor shall appear and show cause against an adjudication of bankruptcy against him on the petitions, that petition shall be first heard and tried which alleges the commission of the earli- est act of bankruptcy; and in case the several acts of bankruptcy are alleged in the different petitions to have been committed on the same day, the court before which the same are pending may order them to be consolidated, and proceed to a hearing as upon one petition; and if an adjudication of bankruptcy be made upon either petition, or for the commission of a single act of bankruptcy, it shall not be necessary to proceed to a hearing upon the remaining petitions, imless proceedings be taken by the debtor for the purpose of causing such adjudication to be annulled or vacated. vin. PROCEEDINGS IN PAETNEESHIP OASES. Any member of a partnership, who refuses to join in a petition to have the partnership declared bankrupt, shall be entitled to resist the prayer of the petition in the same manner as if the xietition had been 38 594 I-AW OF BANKEUPTOT. filed by a creditor of the partnership, and notice of the filing of the pe- tition shall be given to him in the same manner as provided by law and by these rules in the case of a debtor petitioned against; and he shall have the right to appear at the time fixed by the court for the hearing of the petition, and to make proof, if he can, that the partnership is not insolvent or has not committed an act of bankruptcy, and to make all defenses which any debtor proceeded against is entitled to take by the provisions of the act; and in case an adjudication of bankruptcy is made upon the petition, such partner shall be required to file a schedule of his debts and an inventory of his property in the same manner as is required by the act in cases of debtors against whom adjudication of bankruptcy shall be mad& rx. SCHEDULE m raVOLUNTAET BANKEUPTOV; In all cases of involuntary bankruptcy in which the bankrupt is ab- sent or cannot be found, it shall be the duty of the petitioning creditor to file, within five days after the date of the adjudication, a schedule giving the names and places of residence of all the creditors of the bankrupt, according to the best information of the petitioning cred- itor. If the debtor is found, and is served with notice to furnish a sched- ule of his creditors and fails to do so, the petitioning creditor may apply for an attachment against the debtor, or may bimseU furnish Buch schedule as aforesaid. X. mDEUNrry fob expenses. Before Incurring any expense in publishing or mailing notices, or in travelling, or in procuring the attendance of witnesses, or in perpetuat- ing testimony, the clerk, marshal or referee may require, from the bankrupt or other person in whose behalf the duty is to be performed, indemnity for such expensa Money advanced for this purpose by the bankrupt or other person shall be repaid him out of the estate as part of the cost of administering the same. XI AMENDMENTS. The court may allow amendments to the petition and schedules on ap- plication of the petitioner. Amendments shall be printed or written, signed and verified, like original petitions and schedules. If amend- ments are made to separate schedules, the same must be made separately, with proper references. In the application for leave to amend, the pe- titioner shall state the cause of the error in the paper originally filed. EXILES, F0EM8 AND OEDEES. 595 XIL DUTIES OF REFEREE. 1. The order referring a case to a referee shall name a day upon which the bankrupt shall attend before the referee; and from that day the bankrupt shall be subject to the orders of the court in all matters relat- ing to his bankruptcy, and may receive from the referee a protection agaiast arrest, to continue until the final adjudication on his applica- tion for a discharge, unless suspended or vacated by order of the court. A copy of the order shall forthwith be sent by mail to the referee, or be delivered to him personally by the clerk or other officer of the court. And thereafter all the proceedings, except such as are required by the act or by these general orders to be had before the judge, shall be had before the referee. 3. The time when and the place where the referees shall act upon the matters arising under the several cases referred to them shall be fixed by special order of the judge, or by the referee; and at such times and places the referees may perform the duties which they are empowered by the act to perform. 3. Applications for a discharge, or for the approval of a composition, or for an injunction to stay proceedings of a court or officer of the United States or of a State, shall be heard and decided by the judga But he may refer such an application, or any specified issue arising thereon, to the referee to ascertain and report the facts. XIIL APPOINTMENT ASD REMOVAL OP TRUSTEE. The appointment of a trustee by the creditors shall bo subject to be approved or disapproved by the referee or by the judge; and he shall be removable by the judge only. XIV. NO OFFICIAL OR GENERAL TRUSTEE. No official trustee shall be appointed by the court, nor any general trustee to act in classes of cases. XV. TRUSTEE NOT APPOINTED IN CERTAIN CASE& If the schedule of a voluntary bankrupt discloses no assets, and if no creditor appears at the first meeting, the court may, by order setting out the facts, direct that no trustee be appointed; but at any time there- after a trustee may be appointed, if the court shall deem it desirable. If no trustee is appointed as aforesaid, the court may order that no meeting of the creditors other than the first meeting shall be called. 896 LAW OF EAHKEUPTOT. XVI NOTICE TO TRUSTEE OF HIS APPOINTMENT. It shall be the duty of the referee, immediately upon the appointment and approval of the trustee, to notify him in person or by mail of his appointment; and the notice shall require the trustee forthwith to no- tify the referee of his acceptance or rejection of the trust, and shall con- tain a statement of the penal sum of the trustee's bond. xvn DUTIES OF TRUSTEE. The trustee shall, immediately upon entering upon his duties, prepare a complete inventory of all the property of the bankrupt that comes into his possession. The trustee shall make report to the court, within twenty days after receiving the notice of his appointment, of the articles set oflE to the bankrupt by him, according to the provisions of the forty- seventh section of the act, with the estimated value of each article, and any creditor may take exceptions to the determination of the trustee vrithin twenty days after the filing of the report. The referee may re- quire the exceptions to be argued before him, and shall certify them to the court for final determination at the request of either party. In case the trustee shall neglect to file any report or statement which it is made his duty to file or make by the act, or by any general order in bank- ruptcy, within five days after the same shall be due, it shall be the duty of the referee to make an order requiring the trustee to show cause be- fore the judge, at a time specified in the order, why he should not be removed from office. The referee shall cause a copy of the order to be served upon the trustee at least seven days before the time fixed for (the hearing, and proof of the service thereof to be delivered to the clerk. All accounts of trustees shall be referred as of course to the referee for audit, unless otherwise specially ordered by the court, xvin. SAIjE op PROPERTY. 1. AU sales shall be by public auction imless otherwise ordered by the court. 2. Upon application to the court, and for good cause shown, the trustee may be authorized to sell any specified portion of the bankrupt's estate at private sale; in -which case he shall keep an accurate account of each article sold, and the price received therefor, and to whom sold; which account he shall file at once with the referea 8. Upon petition by a bankrupt, creditor, receiver or trustee, setting forth that a part or the whole of the bankrupt's estate is perishable, the nature and location of such perishable estate^, and that there wiU be loss EULES, F0EM3 AND OEDBES. 597 if the same is not sold immediately, the court, if satisfied of the facts stated and that the sale is required in the interest of the estate, may order the same to be sold, with or without notice to the creditors, and the proceeds to be deposited in covirt. ACCOUNTS OP MARSHAI. The marshal shall make return, under oath, of his actual and neces- sary expenses in the service of every warrant addressed to him, and for custody of property, and other services, and other actual and necessary expenses paid by him, with vouchers therefor whenever practicable, and also with a statement that the amounts charged by him are just and reasonable. XX PAPERS FILED AFTER REFERENCE. Proofs of claims and other papers filed subsequently to the reference, except such as call for action by the judge, may be filed either with the referee or with the clerk. XXI PROOF OF DEBTS. 1. Depositions to prove claims against a bankrupt's estate shall be correctly entitled in the court and in the cause. When made to prove a debt due to a partnership, it must appear on oath that the deponent is a member of the partnership; when made by an agent, the reason the deposition is not made by the claimant in person must be stated; and when made to prove a debt due to a corporation, the deposition shall be made by the treasurer, or, if the corporation has no treasurer, by the officer whose duties most nearly correspond to those of treasvurer. Depo- sitions to prove debts existing in open account shall state when the debt became or will become due; and if it consists of items maturing at dif- ferent dates the average due date shall be stated, in default of which it shall not be necessary to compute interest upon it. All such depositions shall contain an averment that no note has been received for such ac- count, nor any judgment rendered thereon. Proofs of debt received by any trustee shall be delivered to the referee to whom the cause is referred- 3. Any creditor may file with the referee a request that all notices to which he may be entitled shall be addressed to him at any place, to be designated by the i)ost-offlce box or street number, as he may appoint; and thereafter, and until some other designation shall be made by such creditor, aU notices shall be so addressed; and in other cases notices shall be addressed as specified in the proof of debt. 598 I^'W OF EANKEUPTOT. 3. Claims which have been assigned before proof shall be supported by a deposition of the owner at the time of the commencement of proceed- ings, setting forth the true consideration of the debt and that it is en- tirely tmsecured, or if secured, the security, as is required in proving secured claims. Upon the filing of satisfactory proof of the assignment of a claim proved and entered on the referee's docket, the referee shall immediately give notice by mail to the original claimant of the tiling of such proof of assignment; and, if no objection be entered within ten days, or within further time allowed by the referee, he shall make an order subrogating the assignee to the original claimant. If objection be made, he shall proceed to hear and determine the matter. 4. The claims of persons contingently liable for the bankrupt may be proved in the name of the creditor when known by the party contin- gently liable. When the name of the creditor is unknown, such claim maybe proved in the name of the party contingently liable; but no dividend shall be paid upon such claim, except upon satisfactory proof that it will diminish pro tanto the original debt 5. The execution of any letter of attorney to represent a creditor, or of an assignment of claim after proof, may be proved or acknowledged before a referee, or a United. States commissioner, or a notary publia "When executed on behalf of a partnership or of a corporation, the per- son executing the instrument shall make oath that he is a member of the partnership, or a duly authorized officer of the corporation on whose behalf he acts. When the person executing is not personally known to the officer taking the proof or acknowledgment, his identity shall be established by satisfactory proof. 6. When the trustee or any creditor shall desire the re-examination of any claim filed against the bankrupt's estate, he may apply by petition to the referee to whom the case is referred for an order for such re- examination, and thereupon the referee shall make an order fixing a time for hearing the petition, of which due notice shall be given by mail addressed to the creditor. At the time appointed the referee shall take the examination of the creditor, and of any witnesses that may be called by either party, and if it shall appear from such examination that the claim ought to be expunged or diminished, the referee may order accordingly. XXII. TAKING OP TESTIMONY. The examination of witnesses before the referee may be conducted by the party in person or by his counsel or attorney, and the witnesses shall be subject to examination and cross-examination, which shall be had in conformity with the mode now adopted in courts of law. A deposition taken upon an examination before a referee shall be taken down ia writing by him, or under his direction, in the form of narrative, unless 599 he determines that the examination shall be by question and answer. When completed it shall be read over to the witness and signed by him in the presence of the ref erea The referee shall note upon the deposi- tion any question objected to, with his decision thereon; and the court shall have power to deal with the costs of incompetent, immaterial, or irrelevant depositions, or parts of them, as may be just. xxin OEDEEIS OP EEFEEEE. In all orders made by a referee, it shall be recited, according as the fact may be, that notice was given and the manner thereof; or that the order was made by consent; or that no adverse interest was represented at the hearing; or that the order was made after hearing adverse in- terests. xxrv. TRANSMISSION OF PROVED CLAIMS TO CLERE. The referee shall forthwith transmit to the clerk a list of the claims proved against an estate, with the names and addresses of the proving creditors. XXV. SPECIAL MEETINa OP CREDITORS. Whenever, by reason of a vacancy in the office of trustee, or for any- other cause, it becomes necessary to call a special meeting of the credit- ors in order to carry out the purposes of the act, the court may call such a meeting, specifying in the notice the purpose for which it is called. XXVI ACCOUNTS OP REFEREE. Every referee shall keep an accurate account of his traveling and in- cidental expenses, and of those of any clerk or other officer attending him in the performance of his duties in any case which may be referred to him ; and shall make return of the same under oath to the judge, with proper vouchers when vouchers can be procured, on the first Tuesday in each month. xxvn REVIEW BY JUDGa When a bankrupt, creditor, trustee, or other person shall desire a re- view by the judge of any order made by the referee, he shall file with the referee his petition therefor, setting out the error complained of; and the referee shall forthwith certify to the judge the question pre- sented, a summary of the evidence relating thereto, and the finding and order of the referee thereon. 600 I^W OF BAHXEUPTOT. xxvnL REDKMPnON OP PROPERTY AND COMPOmTDINO OP CLAIMS. Whenever it may be deemed for the benefit of the estate of a bank- rupt to redeem and discharge any mortgage or other pledge, oj: deposit or lien, upon any property, real or personal, or to relieve said property from any conditional contract, and to tender performance of the condi- tions thereof, or to compound and settle any debts or other claims due or belonging to the estate of the bankrupt, the trustee, or the bankrupt, or any creditor who has proved his debt, may file his petition therefor; and thereupon the court shall appoint a suitable time and place for the hearing thereof, notice of which shall be given as the court shall direct, so that all creditors and other persons interested may api)ear and show cause, if any they have, why an order should not be passed by the court upon the petition authorizing such act on the part of the trustea XXIX. PAYMENT OF MONEYS DEPOSITEIX No moneys deposited as required by the act shall be drawn from the depository unless by check or warrant, signed by the clerk of the court, or by a trustee, and countersigned by the judge of the court, or by a referee designated for that purpose, or by the clerk or his assistant under an order made by the judge, stating the date, the sum, and the account for which it is drawn; and an entry of the substance of such check or warrant, with the date thereof, the sum drawn for, and the account for which it is drawn, shall be forthwith made in a book kept for that pur- pose by the trustee or his clerk; and all checks and drafts shall be ei^ tered in the order of time in which they are drawn, and shall be numbered in the case of each estate. A copy of this general order shall be furnished to the depository, and also the name of any referee or clerk authorized to countersign said checks. IMPRISONED DEBTOR. If, at the time of preferring his petition, the debtor shall be imprisoned, the court, upon application, may order him to be produced upon habeas corpua, by the jailor or any oflScer in whose custody he may be, before the referee, for the purpose of testifying in any matter relating to his bankruptcy; and, if committed after the filing of his petition upon pro- cess in any civil action founded upon a claim provable in bankruptcy, the court may, upon like application, discharge him from such imprison- ment. If the petitioner, during the pendency of the proceedings in bankruptcy, be arrested or imprisoned upon process in any civil action, the district court, ux)ou his application, may issue a writ of habeas carpwa AND OEDEES. 601 to bring him before the court to ascertain whether such process has been issued for the collection of any claim provable in bankruptcy, and if so provable he shall be discharged; if not, he shall be remanded to the custody in which he may lawfully be. Before granting the order for discharge the court shall cause notice to be served upon the creditor or his attorney, so as to give him an opportunity of appearing and being heard before the granting of the order. XXXL PETITION FOR DIBCHAEaE. The petition of a bankrupt for a discharge shall state concisely, in ac- cordance with the provisions of the act and the orders of the court, the proceedings in the case and the acts of the bankrupt. OPPOSITION TO DKCSHARGB OB COMPOSITION. A creditor opposing the application of a bankrupt for his discharge, or for the confirmation of a composition, shall enter his appearance in op- position thereto on the day when the creditors are required to show cause, and shall file a specification in writing of the grounds of his op- position within ten days thereafter, unless the time shall be enlarged by special order of the judg& xxxm. ABBITRATION. Whenever a trustee shall make application to the court for authority to submit a controversy arising in the settlement of a demand against a bankrupt's estate, or for a debt due to it, to the determination of arbi- trators, or for authority to compound and settle such controversy by agreement with the other party, the application shall clearly and dis- tinctly set forth the subject-matter of the controversy, and the reasons why the trustee thinks it proper and most for the interest of the estate that the controversy should be settled by arbitration or otherwiset ZXXIV. COSTS IN CONTESTED ADJUDICATIONS. In cases of involuntary bankruptcy, when the debtor resists an adjudi- cation, and the court, after hearing, adjudges the debtor a bankrupt, the petitioning creditor shall recover, and be paid out of the estate, the same costs that are allowed to a party recovering in a suit in equity; and if the petition is dismissed, the debtor shall recover like costs against the petitioner. 602 I^W OF BANKEUPTOT. XXXV. COMPENSATION OP CIiERKS, BEFEEEES AND TETJSTEES, 1. The fees allowed by the act to clerks shall be in fiill comi>eiisation for all services performed by them in regard to filing petitions or other papers required by the act to be filed with them, or in certifying or de- livering papers or copies of records to referees or other officers, or in re- ceiving or paying out money; but shall not include copies furnished to other persons, or expenses necessarily incurred in publishing or mailing notices or other papers. 2. The compensation of referees, prescribed by the act, shall be in full compensation for all services performed by them under the act, or under these general orders; but shall not include expenses necessarily incurred by them in publishing or mailing notices, in traveling, or in perpetuat- ing testimony, or other expenses necessarily incurred in the performance of their duties under the act and allowed by special order of the judge. 8. The compensation allowed to trustees by the act shall be in full compensation for the services performed by them; but shall not include expenses necessarily incurred in the performance of their duties and allowed upon the settlement of their accounts. 4. In any case in which the fees of the clerk, referee and trustee are not required by the act to be paid by a debtor before filing his petition to be adjudged a bankrupt, the judge, at any time during the pendency of the proceedings in bankruptcy, may order those fees to be paid out of the estate; or may, after notice to the bankrupt, and satisfactory proof that he then has or can obtain the money vnth which to pay those fees, order him to pay them within a time specified, and, if he fails to do so, may order his petition to be dismissed. XXXVL APPEAIB. 1. Appeals from a court of bankruptcy to a circuit court of appeals, or to the supreme court of a Territory, shall be allowed by a judge of the court appealed from or of the court appealed to, and shall be regulated, except as otherwise provided in the act, by the rules governing appeals in equity in the courts of the United States. 3. Appeals under the act to the Supreme CJourt of the United States from a circuit court of appeals, or from the supreme court of a Territory, or from the supreme court of the District of Columbia, or from any court of bankruptcy whatever, shall be taken vdthin thirty days after the judgment or decree, and shall be allowed by a judge of the court appealed from, or by a justice of the Supreme Court of the United States. 8. In every case in which either i)arty is entitled by the act to take an appeal to the Supreme Court of the United States, the court from BTTLSS, FOSMS ASJ) OBDSBS. 603 which the appeal lies shall, at or before the time of entering its judg- ment or decree, make and file a finding of the facts, and its conclusions of law thereon, stated separately; and the record transmitted to the Supreme Court of the United States on such an appeal shall consist only of the pleadings, the judgment or decree, the finding of facts, and the condusioiis of law. xxxvn. GENERAL PEOTISIOKS, In proceedings in equity, instituted for the purpose of carrying into effect the provisions of the act, or for enforcing the rights and remedies given by it, the rules of equity practice established by the Supreme Court of the United States shall be followed as nearly as may be. In proceedings at law, instituted for the same purpose, the practice and procedure in cases at law shall be followed as nearly as may be. But the judge may, by special order in any case, vary the time allowed for return of process, for appearance and pleading, and for taking testimony and publication, and may otherwise modify the rules for the preparation of any particular case so as to facilitate a speedy hearing; Txx vm, FORBIS. The several forms annexed to these general ordeis shall be observed and used, with such alterations aa may be necessary to suit the circumt- etances of any particular casa 604 lAW OF BAIfSSUTTOT. FOKMS m BANKKUPTCY. [N. B. — Oaths required by the act, except upon hearings in court, may be administered by referees and, by officers authorized to administer oaths in proceedings before the courts o£ the United States, or under the laws of the State where the same are to be taJien. Bankrupt Act of 1898, c. 4, § 20.] [FoEM No. 1.] Debtoe's Petition. To the Honorable , Judge of the District Cburt of the United States for the District of : The petition of , of — -, in the county of and district and State of , [state occupation], respectfully represents: That he has had his principal place of business [or has resided, or has had his domicil] for the greater portion of six months next immediately preceding the filing of this petition at , within said judicial district; that he owes debts which he is unable to pay in f uU ; that he is willing to surrender all his property for the benefit of his creditors except such as is exempt by law, and desires to obtain the benefit of the acts of Con- gress relating to bankruptcy. That the schedule hereto annexed, marked A, and verified by your petitioner's oath, contains a full and true statement of all his debts, and (so far as it is possible to ascertain) the names and places of residence of his creditors, and such further statements concerning said debts as are required by the provisions of said acts: That the schedule hereto annexed, marked B, and verified by your petitioner's oath, contains an accurate inventory of all his property, both real and personal, and such further statements concerning said property as are required by the provisions of said acts: Wherefore your petitioner prays that he may be adjudged by the court to be a bankrupt within the purview of said acts. > , Attome]/.' Unitbd States op Ameeioa, District of , ssr J, , the petitioning debtor mentioned and described in the foregoing petition, do hereby make solemn oath that the statements con- tained therein are true according to the best of my knowledge, informa- tion, and belief. , Petitioner. Subscribed and sworn to before me this day of , A. D. 18— > [Official charactar.} FOEM3 m BANKETJFTOT. 605 SCHEDULE A.— STATEMENT OP AT.T. DEBTS OF BAI^KRUPT. SCHEDTTLE A. (1) Statement of aU creditors who are to be paid in fuU, or to whom, pri- ority is secured by law. Olaius -which havb pbi- OBITT. <1) Taxes and debts due and owing to the United States Taxes due and owing to the State of , or to any county, district or, munid- pality tliereof (3) Wages due workmen, clerks, or servants, to an amount not exceeding $300 eacli, earned within tliree months before filing the petition Other debts bavlng prioritiy t^law |a 2 «"! Total. Amount, SCHEDUIJ! A. (8) Creditors holding securities. , Petitioner. [N. B. — Particulars of securities held, with dates of same, and when they were given, to be stated under the names of the several creditors, and also particulars concerning each debt, as required by acts of Congress relating to bankruptcy, and whether con- tracted as partner or joint contractor with any other person; and if so, with whom.] I ill 9[f.a III o ■§ ■^■d 1 ■5^ ■g •0 9 §8 ^ H s gs "3 p t> I Total. -, Petitioner. 606 LAW OF BAJfKEUPTOT. SCHEDXTLE A. (3) Creditors whose claims are unseciared. [S. B.— When the name and residence (or either) of any drawer, maker, indorser, or holder of any bill or note, etc., are unknown, the fact must be stated, and also the name and residence of the last holder known to the debtor. The debt due to each creditor must be stated in full, and anj claim by way of set-ofC stated in the schedule of property.] S 11 % I Amoimtk Total., , PetitioaeT, SCHEDin^B A. (4) JAabUUies on notes or biUs discounted which ought to be paid by the drawers, makers, acceptors, or indorsers. [N. B.— The dates of the notes or bills, and when due, with the names, residences, and the business or occupation of the drawers, makers, or acceptors thereof, are to be set forth under the names of the holders. If the names of the holders are not known, the name of the last holder known to the debtor shall be stated, and his business and placo of residence. The same particulars as to notes or bills on which the debtor is liable 88 indorser.] S if 1" 1^ llli^ nulla- Amonnk Total. . Petitioner, F0EM8 IN BANKKUPTOY. 607 Schedule A* (5) Accommodation paper. [N. B. — The dates of the notes or bills, and when due, with the names and resldencea of the drawers, makers, and acceptors thereof, are to-be set forth under the names of tlie holders; if the bankrupt be liable as drawer, maker, acceptor, or indorser thereof, it is to be stated accordingly. K the names of the holders are not known, the name of the Ifist holder known to the debtor should be stated, with hia residence. Same particu- lars as to other commercial paper.] ^ §1 gag ■^ 2 3 IS ij u fe§° S§S3 [050 lis- Amount* Total. -, Petitioner. Oath to Schedxtle A. United States of America, District of , ss: On this day of , A- D. 18 — , before me personally came , the person mentioned in and who subscribed to the foregoing schedule, and who, being by me first duly sworn, did declare the said schedule to be a statement of all his debts, in accordance with the acts of Congress relating to bankruptcy. Subscribed and sworn to before me this day of , A. D. 18—% [Offldal character,} 608 LAW OF BASKETTPTOT. SCHEDULE B.— STATEMENT OF ALL PROPERTY OF BANKRDPT. SOHEDTJLE B. (1) Real estate. LOOATION AHD DESCRIPnOK OF ALL BBAL ESTATE OWNED BX SEBIOB OB HELD BS Hill. 1^ IS II 3 II 00 Estimated value. S e. Total.... * SCHEDTJLE R (2) Personal property. ~, Petitioner. S e. b. Bills of exchange, promissory notes, or securities of any description (eacli to be set out separately) c. Stock in trade, m — business of ,,at , of the value of d. Household goods and furniture, household stores, wearing apparel and ornaments of the person, viz, e. Books, prints, and pictures, viz /. Horses, cows, sheep, and other animals (with num- 0. Carriages and other vehicles, viz ft. Farming stock and implements of husbandry, viz. i. Shipping, and shares m vessels, viz fc. Machinery, fixtures, apparatus, and tools used in business, with the place where each is situated, viz {. Patents, copyrights, and trade-marks, viz m. Goods or personal property of any other descrip- Total , Petitioner. FOEMS IN BANKRUPTOT, 609 SCHBJDULE B. (3) Choses in action. ) Dollars. Cents. b. Stocks in incorporated companies, interest in joint c. Policies of insurance d. Unliquidated claims of every nature, with their es- e. Deposits of money in banking institutions aad else- Total , Petitioner, SCHEDTILE B. (4) Property in reversion, remainder, or expectancy, including property held in trust for the debtor or suly'ect to any power or right to dispose of or to charge. [N. B. — A particular description of each Interest must be entered. If all or any of the debtor^s Jproperty has been conveyed by deed of assignment, or otherwise, for the benefit of creditors, the date of such deed should be stated, the name and address of the person to whom the property was conveyed, the amount realized from the proceeds thereof, and the disposal of the same, as far as known to the debtor.] GBSfERAL XNTERBST. Particular description. Supposed value of my interest. Interest in land s Personal property Property in money, stock, shares, bonds, annuities, Total Bights and powers, legacies and bequests Property heretofore conveyed for benefit of creditors. Amount realized from proceeds of property con- veyed. What portion of debtor's property has been conveyed by deed of assignment, or otherwise, for benefit of creditors; date of such deed, name and address of party to whom conveyed; amount realized there- from, and disposal of same, so far as known to $ c What sum or sums have been paid to counsel, and to whom, for services rendered or to be rendered in Total * 89 , Petitioner, 610 LAW OF BAUKEUPTOT. SCHEDTJIiE B. (5) A particular statement of the property claimed as exempted from the operation of the acts of Congress relating to banJeruptcy, giving each item of property and its valuation; and, if any portion of it is real estate, its location, description, and present use. Military imif onn, arms, and equipments Property claimed to be exempted by State laws; its valuation; whether real or personal; its description and present use; and reference given to the statute of the State creating the exemption Total. Valuation. , Petitioner. SCHEDtll-E B. (6) BOOKS, PAPERS, DEEDS, AMD WEITINGS RELATING TO BAKKEUPT'S BUSINESS AND ESTATE. The following is a true list of all books, papers, deeds, and writings relating to my trade, business, dealings, estate, and effects, or any part thereof, which, at the date of this petition, are in my possession or under my custody and control, or which are in the possession or custody of any person in trust forme, orformyuse, benefit, or advantage ; and also of all others which have been heretofore, at any time, in my possession, or under my custody or control, and which are now held by the parties whose names are hereinafter set forth, with the reason for their custody of the same. Books ■•••••■•••■■ Deeds. „ Papers «.. -, Petitioner. Oath to Scheddle R United States op America, District of , ss: On this day of , A. D. 18 — , before me personally came , the person mentioned in and who subscribed to the foregoing schedule, and who, being by me first duly sworn, did declare the said schedule to be a statement of all his estate, both real and personal, in accordance with the acts of Congress relating to bankruptcy. [Official character.\ rOEMS IN BANKETTPTOT. 611 Summary of Debts and AssEia [From the statements of the bankrupt in Schedules A and B.] Schedule A. Schedule A. Schedule A. Schedule A. Schedule A. , Schedule B . Schedule B . Schedule B .... Schedule B . Schedule B . Schedule B . 1 (1) Taxes and debts due United States 1 (3) Taxes due States, counties, districts, and municipalities 1(8) Wages 1 (4) Other debts preferred by law. a Secured claims 8 Unsecured claims 4 Notes and bills which ought to be paid by other parties thereto 6 Accommodation paper Schedule A total. 1 Beal estate Z-a, Cashonhand 2-b Bills, promissory notes, and securities 2-c Stock m trade 2-d Household goods, etc 2-e Books, prints, and pictures 2-f Horses, cows, and other animals 2-g Carriages and other vehicles 3-h Fanning stock and implements 2-i Shipping and shares in vessels 3-k Machinery, tools, etc 2-1 Patents, copyrights, and trade-marks 3-m Other personal property 3-a Debts due on open accounts 3-b Stocks, negotiame bonds, etc. 3-c PoKcies of msurance 8-d Unliquidated claims 3-e Beposits of money in banks and elsewhere. . 4 Property in reversion, remainder, trust, etc. 5 Property claimed to be excepted 6 Books, deeds, and papers Schedule B, total. [FOEM No. 2.] Paktneeship Petition. To the Honorable , Judge of the District Court of the United States for the District of : The petition of respectfully represents: That your petitioners and have been partners under the firm name of , having their principal place of business at , in the county of , and district and State of , for the greater portion of the six months next immediately preceding the filing of this petition; that the said partners owe debts which they are vmable to pay in full; that yoiu- petitioners are willing to surrender all their property for the benefit of their creditors, except such as is exempt by law, and desire to obtain the benefit of the acts of Congress relating to bankruptcy. That the schedule hereto annexed, marked A, and verified by oath, contains a full and true statement of all the debts of said partners, and, as far as possible, the names and places of residence of their creditors, and such further statements concerning said debts as are required by the provisions of said acts. 612 LAW OF BAKKEUPTOT. That the schedule hereto annexed, marked B, verified by oath, contains an accnrate inventory of all the property, real and personal, of said partners, and such further statements concerning said property as are required by the provisions of said acts. And said further states that the schedule hereto annexed, marked C, verified by his oath, contains a full and true statement of all his individual debts, and, as far as possible, the names and places of residence of his creditors, and such further statements concerning said debts as are required by the provisions of said acts; and that the sched- ule hereto annexed, marked D, verified by his oath, contains an accu- rate inventory of all his individual property, real and personal, and such further statements concerning said property as are required by the pro- visions of said acts. And said further states that the schedule hereto annexed, marked E, verified by his oath, contains a full and true statement of all his individual debts, and, as far as possible, the names and places of residence of his creditors, and such further statements concerning said debts as are required by the provisions of said acts; and that the sched- ule hereto annexed, marked F, verified by his oath, contains an accu- rate inventory of aU his individual property, real and personal, and such further statements concerning said property as are required by the pro- visions of said acts. And said further states that the schedule hereto annexed, marked G, verified by his oath, contains a full and true statement of all bis individual debts, and, as far as possible, the names and places of residence of his creditors, and such further statements concerning said debts as are required by the provisions of said acts; and that the sched- ule hereto annexed, marked H, verified by his oath, contains an accu- rate inventory of all his individual property, real and personal, and such further statements concerning said property as are required by the pro- visions of said acts. And said further states that the schedule hereto annexed, marked J, verified by his oath, contains a fuU and true statement of aU his individual debts, and, as far as possible, the names and places of residence of his creditors, and such further statements concerning said debts as are required by the provisions of said acts; and that the sched- ule hereto annexed, marked K, verified by his oath, contains an accu- rate inventory of all his individual property, real and personal, and such further statements concerning said property as are required by the pro- visions of said acts. Wherefore your petitioners pray that the said firm may be adjudged by a decree of the court to be bankrupts within the purview of said acts. -, Attorney. Petitioners. rOKMS IN BANKKUPTOT. 613 , the petitioning debtors mentioned and described in the fore- going petition, do hereby make solemn oath that the statements con- tained therein are true according to the best of their knowledge, infor- mation, and beUefi , Petitioners. Subscribed and sworn to before me this day of , A. D. 18— » [Official character.] [Schedules to be annexed corresponding with schedules tmder Form No.1.] [FOEM No. 3.] CEEDrrOEs' Petition. To the Honorable , Judge of the District Court of the United States for the District of : The petition of , of , and , of , and , of , respectfully shows: That , of , has for the greater portion of six months next preceding the date of filing this petition, had his principal place of busi- ness [or resided, or had his domioil] at , in the county of , and State and district aforesaid, and owes debts to the amount of $1,000. That your petitioners are creditors of said , having provable claims amounting in the aggregate, in excess of securities held by them, to the sxtm of |500. That the nature and amount of your petitioners' claims are as follows: . And your petitioners f lurther represent that said is insolvent, and that within four months next preceding the date of this petition the said committed an act of bankruptcy, in that he did here- tofore, to wit, on the day of , . Wherefore your petitioners pray that service of this petition, with a Bubpcena, may be made upon , as provided in the acts of Con- gress relating to bankruptcy, and that he may be adjudged by the coiu-t to be a bankrupt within the purview of said acta. -, Attorney. Petitioner*, 614 LAW OF BANKEUPTOT. United States of America, District of , s& : ^ , , being three of the petitioners above named, do hereby make solemn oath that the statements contained in the foregoing petition, subscribed by them, are true. Before me^ , this day of , 18— » [Official character.] [Schedules to be annexed corresponding with schedules under Form NaLJ [FOEM No. 4.] Oedbr to Show Cause upon Creditors' Petitioh'. In the District Court of the United States for the District of k In thematter of J j^^ Bankruptcy. Upon consideration of the petition of that be de- clared a bankrupt, it is ordered that the said do appear at this court, as a court of bankruptcy, to be holden at , in the district aforesaid, on the day of , at — o'clock in the ^noon, and show cause, if any there be, why the prayer of said petition should not be granted; and It is further ordered that a copy of said petition, together with a writ of subpcena, be served on said , by delivering the same to him personally or by leaving the same at his last usual place of abode in said district, at least five days before the day aforesaid. Witness the Honorable , judge of the said court, and the seal thereof, at , in said district, on the day of , A. D. 18 — . [Seal of i Clerk. the court.} [FoEM No. 5.] SuBPCEiNA to Alleged Bankkuph United States op America, District of » To , in said district, greeting: For certain causes offered before the District Court of the United States of America within and for the district of , as a court of bankruptcy, we command and strictly enjoin you, laying all other matters aside and notwithstanding any excuse, that you personally ap- pear before oiu: said District Court to be holden at , in said district, on the day of , A. D. 189-, to answer to a petition filed by in our said court, praying that you may be adjudged a FORMS m BAIIKETJPTOT. 615 bankrupt; and to do further and receive that which our said District Court shall consider in this behalf. And this you are in no wise to omit, under the pains and penalties of what may befall thereon. "Witness the Honorable , judge of said court, and the seal thereof, at , this day of , A. D, 189-v [Seal of » Clerk, the court.] [FoEM No. 6.] Denial of Banketjptct. In the District Court of the United States for the District of k In the matter of j the matter of 1 1^ Bankruptcy. At , in said district, on the day of , A- D. 18 — t ' And now the said appears, and denies that he has committed the act of bankruptcy set forth in said petition, or that he is insolvent, and avers that he should not be declared bankrupt for any cause in said petition alleged; and this he prays may be inquired of by the court [or, he demands that the same may be inquired of by a jury]. Subscribed and sworn to before me this day of , A. D. 18 — » 9 [Offldal character,] [FoEM No. 7.] Order for Jury Trtat> In the District Court of the United States for the District of ^— » In the matter of ) the matte r of J j^ Bankruptcy. At , in said district, on the day of , 18 — b Upon the demand in writing filed by , alleged to be a bank- rupt, that the fact of the commission by him of an act of bankruptcy, and the fact of his insolvency may be inquired of by a, jury, it is or- dered, that said issue be submitted to a jury. [Seal of , Clerk. the court] [FoEM No. 8.] Special Warrant to Marsh at. In the District Court of the United States for the District of » Inthematterof J in Bankruptcy. To the poarshal of said district or to either of his deputies, greeting: Whereas a petition for adjudication of bankruptcy was, on the — day of , A. D. 18 — , filed against , of the county of and 616 LAW OF BANKIlTJPTOT. State of , in said district, and said petition is still pending; and whereas it satisfactorily appears that said has committed an act of bankruptcy [or has neglected or is neglecting, or is about to so neglect his property that it ha,s thereby deteriorated or is thereby dete- riorating or is about thereby to deteriorate in value], you are therefore authorized and required to seize and take possession of aU the estate, real and personal, of said , and of all his deeds, books of account, and papers, and to hold and keep the same safely subject to the further order of the court. Witness the Honorable , judge of the said court, and the seal thereof, at , in said district, on the of , A. D. 189-. [Seal of , Clerk. the cottrfc] EETUEN BY MATtSHATi THEREON. By virtue of the within warrant, I have taken possession of the estate of the within-named , and of all his deeds, books of account, and papers which have come to my knowledge Marshal [or Deputy Marshal^ Fees and expenses. 1. Service of warrant 2. Necessary travel, at the rate of six cents a mile each way 3. Actual expenses in custody of property and other services as follows. [Here state the particulars.] Marshal [or Deputy Marshal}^ District of , A. D. 18— ^ Personally appeared before me the said , and made oath that the above expenses returned by him have been actually incurred and paid by him, and are just and reasonabla ^ B^eree in Bankruptcy. [FoEM No. 9.] Bond of PETiiioNiNa Creditob. Know all men by these presents: That we, , as pnncipal, and , as sureties, are held and firmly bound unto , in the full and just sum of dollars, to be paid to said , executors, administrators, or assigns, to which payment, well and truly to be made, we bind ourselves, our heirs, executors, and administrators, jointly and severally, by these presents. Signed and sealed this day of , A. D. 18^ The condition of this obligation is such that whereas a petition in FOEMS IN BANKETTPTOT. 617 bankruptcy has been filed in the district court of the United States for the district of against the said , and the said has applied to that court for a warrant to the marshal of said distrioi directing him to seize and hold the property of said , subject to the further orders of said district court. Now, therefore, if such a warrant shall issue for the seizure of said property, and if the said shall indemnify the said for such damages as he shall sustain in the event such seizure shall prove to have been wrongfiilly obtained, then the above obligation to be void; otherwise to remain in full force and virtue. Sealed and delivered in presence of — ' [Seal.] < [Seal] [Seal] Approved this day of , A. D. 189-* •^^ ■, District Judge. [FoEM No. 10.] Bond to Maeshat. Know all men by these presents that we, , as principal, and , as sureties, are held and firmly bound unto , marshal of the United States for the district of , in the fuU and just sum of dollars, to be paid to the said , his executors, ad- ministrators, or assigns, to which payment, well and truly to be made, we bind ourselves, our heirs, executors, and administrators, jointly and severally, by these presents. Signed and sealed this day of , A. D. 18&-. The condition of this obligation is such that whereas a petition in bankruptcy has been filed in the district court of the United States for the district of , against the said , and the said court has issued a warrant to the marshal of the United States for said district, directing him to seize and hold property of the said , subject to the fiirther order of the court, and the said property has been seized by said marshal as directed, and the said district court upon a petition of said has ordered the said property to be released to him. Now, therefore, if the said property shall be released accordingly to the said , and the said , being adjudged a bankrupt, shall turn over said property or pay the value thereof in money to the trustee, then the above obligation to be void ; otherwise to remain in full force and virtue. Sealed and delivered in the presence of— [Seal] [SeaU] [Seal] Approved this day of , A D. 189-w , District Jvdge, 618 LAW OF BAHKETJPTOT. [FOEM No. 11.] Adjudication that Debtoe is not Bankeupt. In the District Court of the United States for the District of k In the matter of ) , „ , {■ In Bankruptcy. At , in said district, on day of , A. D. 189-, before the Hon- orable , judge of the district of , Tliis cause came on to be heard at , in said court, upon the petition of that be adjudged a bankrupt within the true intent and meaning of the acts of Congress relating to bankruptcy, and [Sere state the proceedings, whether there was no (Opposition, or, if opposed, state what proceedings were had.] And thereupon, and upon consideration of the proofs in said cause [and the arguments of counsel thereon, if any], it was found that the facts set forth in said petition were not proved; and it is therefore ad- judged that said was not a bankrupt, and that said petition be dismissed, with costs. Witness the Honorable , judge of said court, and the seal thereof, at , in said district, on the day of , A. D. 18 — . [Seal of , Clerk. the court] [FoKM No. 12.] Adjudication of Bankkuptct. In the District Court of the United States for the District of * In the matter of i , Bankrupt. \ ^ Bankruptcy. At , in said district, on the day of , A. D. 18 — , before the Honorable , judge of said court in bankruptcy, the petition of that be adjudged a bankrupt, within the true intent and meaning of the acts of Congress relating to bankruptcy, having been heard and duly considered, the said is hereby declared and ad- judged bankrupt accordingly. Witness the Honorable , judge of said court, and the seal thereof, at , in said district, on the day of , A. D. 18—% [Seal of , Clerh the court] [FoEM No. 13.] Appointment, Oath, aud Eepobt of Appeaisees. In the District Court of the United States for the District of » In the matter of i , Bankrupt \ ^ Bankruptcy. It is ordered that , of , , of , and , of , three disinterested persons, be, and they are hereby, appointed ap- FOBMS IN BAKKEUPTCT. 619 praisers to appraise the real and personal property belonging to the estate of the said bankrupt set out in the schedules now on file in this court, and report their appraisal to the com't, said appraisal to be made as soon as may be, and the appraisers to be duly sworn. Witness my hand this day of > A. D. 18— > Referee in Bankruptcy. District of , ss: Personally appeared the within named and severally made oath that they will fuUy and fairly appraise the aforesaid real and per- sonal property according to their best skill and judgment. Subscribed and sworn to before me this day of > A. D. 189-. [Qffldal character.} "We, the undersigned, having been notified that we were appointed to estimate and appraise the real and personal property aforesaid, have at- tended to the duties assigned us, and after a strict examination and careful inquiry, we do estimate and appraise the same as follows: Dollara. Cents. In witness whereof we hereunto set our hands, at , this day ot , A. D. 18-» . [FOEM No. 14.] Obdeb Off Befebekci* In the District Court of the United States for the District of ■ In the matter of I the matter of ) in Bankruptcy. , Bankrupt i Whereas , of , in the county of , and district afore- said, on the day of , A. D. 18 — , was duly adjudged a bankrupt upon a petition filed in this court by [or, against] him on the day of , A. D. 18—, according to the provisions of the acts of Congress relating to bankruptcy. It is thereupon ordered, that said matter be referred to , one 620 LAW OF BANKEUPTOr. of the referees in bankruptcy of this court, to take such further proceed- ings therein as are required by said acts; and that the said shall attend before said referee on the day of , at > and thenceforth shall submit to such orders as may be made by said referee or by this court relating to said bankruptcy. Witness the Honorable , judge of the said court, and the seal thereof, at , in said district, on the day of , A. D. 18 — . [Seal of , Clerk. the court] [FoEM No. 15.] Oedee of Refeeence m Judge's Absence. In the District Court of the United States for the District of k In the matter of ) thematter of J j^ Bankruptcy. Whereas on the day of , A. D. 18 — > a petition was iiled to have , of , ia the county of , and district aforesaid, ad- judged a bankrupt according to the provisions of the acts of Congress relating to bankruptcy; and whereas the judge of said court was absent from said district at the time of filing said petition [or, in case of invol- untary bankruptcy, on the next day after the last day on which plead- ings might have been filed, and none have been filed by the bankrupt or any of his creditors], it is thereupon ordered that the said matter bo referred to , one of the referees in bankmiptcy of this court, to consider said petition and take such proceedings therein as are required by said acts; and that the said shall attend before said referee on the day of , A. D. 18 — , at . Witness my hand and the seal of the said court, at , in said dis- trict, on the day of > A. D. 18 — k [Seal of , Clerk, the court] [FoEM ¥0. 16.] Eefeeee's Oath of Office I, , do solemnly swear that I will administer justice without respect to persons, and do equal right to the poor and to the rich, and that I will faithfully and impartially discharge and perform all the duties incumbent on me as referee in bankruptcy, according to the best of my abilities and understanding, agreeably to the Constitution and laws of the United States. So help me God. , Subscribed and sworn to before me this day of , A. D. 18 — » District Judge, FOBMS IN BANKEUPTOT. 621 [FoEM No. 17.] Bond of Befekee. Know all men by these presents: That we, of , as princi- pal, and of and of , as sureties, are held and firmly bound to the United States of America in the sum of dol- lars, lawful money of the United States, to be paid to the said United States, for the payment of which, well and truly to be made, we bind our- selves, our heirs, executors, and administrators, jointly and severally, by these presents. Signed and sealed this day of , A. D. 18 — k The condition of this obligation iss uch that whereas the said has been on the day of , A. D. 18 — , appointed by the Honorable , judge of the district court of the United States for the district of , a referee in bankruptcy, in and for the county of , in said district, under the acts of Congress relating to bankruptcy. Now, therefore, if the said shall well and faithfully dis- charge and perform all the duties pertaining to the said office of referee in bankruptcy, then this obligation to be void; otherwise to remain in full force and virtua Signed and sealed in the presence of . ,[L.S.] '.IL.S.] Approved this day of , A. D. 189-k , District Judge. [FoEM 1^0. 18.] NoncJE OF FmsT MEETma of Ceeditoes. In the District Court of the United States for the District of k In Bankruptcy, In the matter of I jn Bankruptcy. , Bankrupt, i To the creditors of , of , in the county of , and district aforesaid, a bankrupt: Notice is hereby given that on the day of , A. D. 18 — , the said was duly adjudicated bankrupt; and that the first meeting of his creditors will be held at in , on the day of , A. D. 18 — , at o'clock in the noon, at which time the said creditors may attend, prove their claims, appoint a trustee, examine the bank- rupt, and transact such other business as may properly come before said meeting. , , 18— w Referee in Bankruptcy. 622 lAW OB' BANKEUPTOT. [FoEM No. 19.] List of Debts Proved at First MEETma In the District Court of the United States for the District of > In the matter of ) j^ Bankruptcy. , Bankrupt. ) At , in said district, on the day of ', A. D. 18—, before , referee in bankruptcy. The following is a list of creditors who have this day proved their debts: Names of creditors. Besldence. Sebta proved. DoUa. eta. Referee in Bankruptcy. [Form No. 20.] Geneeal Letteb op Attoenet m Fact when Ceeditob is not Rep- RESENTED BY ATTOENBY AT LAW. In the District Court of the United States for the District of k In the matter of ) j^^ Bankruptcy. , Bankrupt, > To , I, , of , in the county of and State of , do hereby authorize you, or any one of you, to attend the meeting or meetings of creditors of the bankrupt aforesaid at a court of bankruptcy, wherever advertised or directed to be holden, on the day and at the hour appointed and notified by said court in said matter, or at such other place and time as may be appointed by the court for holding such meeting or meetings, or at which such meeting or meetings, or any adjournment or adjourn- ments thereof may be held, and then and there from time to time, and as often as there may be occasion, for me and in my name to vote for or against any proposal or resolution that may be then submitted under the acts of Congress relating to bankruptcy; and in the choice of trustee or trustees of the estate of the said bankrupt, and for me to assent to such appointment of trustee; and with like powers to attend and vote at any other meeting or meetings of creditors, or sitting or sittings of the court, which may be held therein for any of the purposes aforesaid; also to accept any composition proposed by said bankrupt in satisfaction FOBMS IN BANKETJPTOT. 623 of his debts, and to receive payment of dividends and of money due me under any composition, and for any other purpose in my interest what- soever, with full power of substitution. {« In witness whereof I have hereunto signed my name and affixed my seal the day of ^, A. D. 189-. . [L.S.} Signed, sealed, and delivered in presence of — Acknowledged before me this day of , A. D, 189-k > [Offldal character.} [ToEM No. 21.] Special Lettbe of ATTomnEY in Faox, In the matter of i ^ „ , Bankrupt \ ^ Bankruptcy. To . I hereby authorize you, or any one of you, to attend the meeting of creditors in this matter, advertised or directed to be holden at > on the day of , before , or any adjournment thereof, and then and there for and in name to vote for or against any pro- posal or resolution that may be lawfully made or passed at such meet- ing or adjourned meeting, and in the choice of trustee or trustees of the estate of the said bankrupt. . [L. S.] In witness whereof I have hereunto signed my name and affixed my seal the day of , A. D. 189-. Signed, sealed, and delivered in presence of — Acknowledged before me this day of , A. D. 189-» [Offloial character.^ [FoEM No. 22.] Appointment op Teustee by Cbbdixobs. In the District Court of the United States for the — - District of -^-. In the matter of ) , Bankrupt. \ ^ Bankruptcy. At > in said district, on the day of — — , A. D, 18 — , before , referee in bankruptcy. This being the day appointed by the court for the first meeting of creditors in the above bankruptcy, and of which due notice has been given in the [here insert the names of the newspapers in which notice was published\, we, whose names are hereunder written, being the mar 624 LAW OF BANKEUPTOT. jority in number and in amoiont of claims of the creditors of the said bankrupt, whose claims have been allowed, and who are present at this meeting, do hereby appoint , of , in the county of and State of > to be the trustee of the said bankrupt's estate and eflEects. Signatures of creditors. Residences of the same. Amount of debt. -■'-'.'.''<-J Dolls. Cts. Ordered that the above appointment of trustee be, and the same is hereby, approved. , Beferee in Bankruptcy. [FoEM No. 23.] Appointment of Teustee by Rbfeeeb, In the District Court of the United States for the District of . In the matter of ) t t> i j. „ , [-In Bankruptcy. . , Bankrupt. > At , in said district, on the day of > A. D. 18—, before , referee in bankruptcy. This being the day appointed by the court for the first meeting of creditors under the said bankruptcy, and of which due notice has been given in the [here insert the names of the newspapers in which notice was published], I, the undersigned referee of the said court in bank- ruptcy, sat at the time and place above mentioned, pursuant to such notice, to take the proof of debts and for the choice of trustee imder the said bankruptcy; and I do hereby certify that the creditors whose claims had been allowed and were present, or duly represented, failed to make choice of a trustee of said bankrupt's estate, and therefore I do hereby appoint , of , in the county of and State of , as trustee of the same. ^ Referee in Bankruptcy. [Form No. 24.] Notice to Tkusteb of his Appointment. In the District Court of the United States for the District of . In the matter of ) t t> , j. „ , X f 111 Bankruptcy. , Bankrupt ) To , of , in the county of , and district aforesaid: I hereby notify you that you were duly appointed trustee \pr one of the trustees] of the estate of the above-named bankrupt at the first meet- ing of the creditors, on the day of , A. D. 18—, and I have ap- rOEMS IN BAHXEUPTOT. 625 proved said appointment. The penal sum of your bond as such trustee has been fixed at dollars. You are required to notify me forthwith of your acceptance or rejection of the trust. Dated at the day of , A. D. 18 — k Referee in Barihni/ptcy, [FoEM No. 25.] Bond of Trustee. Know all men by these presents: That we, , of , as prin- cipal, and , of , and , of , as sureties, are held and firmly bound imto the United States of America in the sum of dollars, in lawful money of the United States, to be paid to the said United States, for which payment, well and truly to be made, we bind ourselves and our heirs, executors, and administrators, jointly and sev- erally, by these presents. Signed and sealed this day of , A, D. 18^. The condition of this obligation is such, that whereas the above named was, on the day of , A. D. 189- appointed trustee in the case pending in bankruptcy in said court, wherein is the bankrupt, and he, the said , has accepted said trust with aU the duties and obligations pertaining thereunto: Now, therefore, if the said , trustee as aforesaid, shall obey such orders as said court may make in relation to said trust, and shaU. faithfully and truly accoimt for all the moneys, assets, and effects of the estate of said bankrupt which shall come into his hands and possession, and shall in all respects faithfully perform all his official duties as said trustee, then this obligation to be void; otherwise, to remain in full force and virtue. Signed and sealed in presence of , [8eal.'\ , [Seai] ,\Seal.-\ [FoEM No. 26.] Oedee ApPEOvipra Teustee's Bond. At a court of bankruptcy, held in and for the District of , at , , this day of , 189- Before , referee in bankruptcy, in the District Court of the United States for the District of ^ In the matter of hn Bankruptcy. , Bankrupt. ) It appearing to the Court that , of , and in said district, has been duly appointed trustee of the estate of the above-named bankrupt, 40 C26 LAW OF BANKEUPTCT. and has given a bond with sureties for the faithful performance of his official duties, In the amount fixed by the creditors [or by order of the court], to wit, in the sum of dollars, it is ordered that the said bond be, and the same is hereby, approved. , Beferee in Bankruptcy. [TOEM No. 2Y.] Order that no Trustee be Appointed. In the District Court of the United States for the District of > In the matter of ) , Bankrupt. \ ^ Bankruptcy. It appearing that the schedule of the bankrupt discloses no assets, and that no creditor has appeared at the first meeting, and that the appoint- ment of a trustee of the bankrupt's estate is not now desirable, it is hereby ordered that, imtil further order of the court, no trustee be ap- pointed and no other meeting of the creditors be called. Beferee in Bankruptcy. [FoEM No. 28.] Order for Examination of BANKEXTPii In the matter of i , „ , , Bankrupt] ^^ Bankruptcy. At , on the day of , A. D. 18 — . Upon the application of , trustee of said bankrupt [or cred- itor of said bankrupt], it is ordered that said bankrupt attend before , one of the referees in bankruptcy of this court, at , on the day of , at — o'clock in the noon, to submit to examination under the acts of Congress relating to bankruptcy, and that a copy of this order be delivered to him, the said bankrupt, forthwith. 9 Beferee in Bankruptcy. [FoEM No. 29.] Examination of Bankrupt or Witness. In the District Court of the United States for the District of > In the matter of 1 1^ Bankruptcy. , Bankrupt. > At , in said district, on the day of , A. D. 18 — > before , one of the referees in bankruptcy of said court rOEMS IH BAHKETJPTOT. 627 , of , in the county of , and State of , being duly sworn and examined at the time and place above mentioned, upon hia oath says: [Here insert substance of examination of party.] Beferee in Bankruptcy. [FoEM JSTo. 30.] Summons to "Witness. In the District Court of the United States for the District of > In the matter of > i^ Bankruptcy. , Bankrupt, i To : Whereas , of , in the county of , and State of , has been duly adjudged bankrupt, and the proceeding in bankruptcy is pending in the District Court of the United States for the District of , These are to require you, to whom this summons is directed, person- ally to be and appear before , one of the referees in bankruptcy of the said court, at , on the day , at — o'clock in the noon, then and there to be examined in relation to said bankruptcy. Witness the Honorable , judge of said court, and the seal thereof, at , this day of , A. D. 189-i , Clerk. Eetuen of Summons to Witness. In the District Court of the United States for the District of k In the matter of I in Bankruptcy. , Bankrupt. J On this day of , A. D. 18 — , before me came , of , in the county of and State of , and makes oath, and says that he did, on , the day of , A. D. 189-, personally serve , of , in the county of and State of , with a true copy of the summons hereto annexed, by delivering the same to him; and he further makes oath, and says that he is not interested in the proceeding in bankruptcy named in said summons. % Subscribed and sworn to before me this day of — > A. D. 18 — k [FoEM No. 31.] Peoof of Unsecured Debt. In the District Court of the United States for the District of - In the matter of ) j^^ Bankruptcy. , Bankrupt. > At , in said district of , on the day of , A. D. 189-, came , of , in the county of , in said district of , and made oath, and says that , the person by [or against] whom a 628 LAW or BANKEUPTOT. petition for adjudication of bankruptcy has been filed, was, at and before the filing of said petition, and still is, justly and truly indebted to said deponent in the sum of dollars; that the consideration of said debt is as follows: ; that no part of said debt has been paid [except ]; that there are no set-offs or counter-claims to the same [except 1; and that deponent has not, nor has any person by his order, or to his knowl- edge or belief, for his use, had or received any manner of security for said debt whatever. , Creditor, Subscribed and sworn to before me this day of , A. D. 18—. [Offldal character.] [FoEM "Eo. 32.] Proof op Secueed Debt. In the District Court of the United States for the District of • In the matter of ) ^ Bankruptcy. , Bankrupt. ) At , in said district of , on the day of , A. D. 18^, came , of , in the county of , in said district of , and made oath, and says that , the person by [or against] whom a petition for adjudication of bankruptcy has been filed, was, at and before the filing of said petition, and still is, justly and truly Indebted to said de- ponent, in the sum of dollars; that the consideration of said debt is as follows: ; that no part of said debt has been paid [except ]; that there are no set-offs or counter-claims to the same [except ]; and that the only securities held by this deponent for said debt are the fol- lowing: . , Creditor. Subscribed and sworn to before me this day of , A. D. 18 — k [Offldal character.] [FoEM No. 33.] Proof of Debt Due Corporation. In the District Court of the United States for the District of b In the matter of U Bankruptcy. , Bankrupt. ) At , in said district of , on the day of , A. D. 189-, came , of . in the county of and State of , and made oath and says that he is of the , a corporation incorpo- rated by and under the laws of the State of , and carrying on busi- ness at , in the county of and State of , and that he is duly authorized to make this proof, and says that the said . the per- son by [or against] whom a petition for adjudication of bankruptcy has rOEMS IN BANKEUPTOT. 629 been filed, was at and before the filing of the said petition, and still is, justly and truly indebted to said corporation in the sum of dollars; that the consideration of said debt is as follows: ; that no part of said debt has been paid [except ] ; that there are no set-offs or counter- claims to the same [except 1; and that said corporation has not, nor has any person by its order, or to the knowledge or belief of said de- ponent, for its use, had or received any manner of security for said debt whatever. . of said Corporation, Subscribed and sworn to before me this day of , A. D. 18 — k — "^ f [Offldal character.} [FoEM No. 34.] Proof of Dkbt by Paetneeship. In the District Court of the United States for the District of ^— » In the matter of I in Bankruptcy. , Bankrupt. > At , in said district of , on the day of , A. D. 189-> came , of , in the county of , in said district of , and made oath and says that he is one of the firm of , consisting of himself and , of , in the county of and State of ; that the said , the person by [or against] whom a petition for adjudication of bankruptcy has been filed, was at and before the filing of said petition, and still is, justly and truly indebted to this deponent's said firm in the sum of dollars; that the consideration of said debt is as follows: ; that no part of said debt has been paid [except ]; that there are no set-offs or counter-claims to the same [except }; and this deponent has not, nor has his said firm, nor has any person by their order, or to this deponent's knowledge or belief, for their use, had or re- ceived any manner of security for said debt whatever. , Creditor. Subscribed and sworn to before me this day of , A, D. 18—. [Official character.] [FoEM No. 35.] Proof of Debt by Agent or Attorney. In the District Court of the United States for the District of k In the matter of U Bankruptcy. , Bankrupt. ) At , in said district of , on the day of , A. D. 189-, came , of , in the county of , and State of , attorney [or 630 LAW Off BANKEUPTOT. authorized agent] of , in the county of , and State of , and made oath and says that , the person by [or against] whom a petition for adjudication of bankruptcy has been filed, was at and before the filing of said petition, and still is, justly and truly indebted to the said , in the sum of dollars; that the consideration of said debt is as follows: ; that no part of said debt has been paid [except ]; and that this deponent has not, nor has any person by his order, or to this deponent's knowledge or belief, for his use had or received any manner of security for said debt whatever. And this deponent further says, that this deposition can not be made by the claimant in person be- cause ; and that he is duly authorized by his principal to make this affidavit, and that it is within his knowledge that the aforesaid debt was incurred as and for the consideration above stated, and that such debt, to the best of his knowledge and belief, stiU remains unpaid and unsatisfied. k Subscribed and sworn to before me this day of , A. D. 18— w [Official character.} [FoEM 'So. 36.] FBOOF of SECTTHKD 'D^EBT BY AOENT. In the District Court of the United States for the District of — — » In the matter of ) j^ Bankruptcy. , Bankrupt, i At , in said district of , on the day of , A. D. 189-, came , of , in the county of , and State of , attorney [or, authorized agent] of , in the coimty of , and State of , and made oath, and says that , the person by [or, against] whom a petition for adjudication of bankruptcy has been filed, was, at and be- fore the filing of said petition, and still is, justly and truly indebted to the said in the simi of dollars; that the consideration of said debt is as follows: ; that no part of said debt has been paid [except 1; that there are no set-offs or coimter-claims to the same [except ]; and that the only securities held by said for said debt are the following: ; and this deponent fvurther says that this deposition oaimot be made by the claimant in person because ; and that he is duly authorized by his principal to make this deposition, and that it is within his knowledge that the aforesaid debt was incurred as and for the consideration above stated. , Subscribed and sworn to before me this day of , A. D. 18— t. [Official character.} EOEMS IN BANKEUPTOr. 631 [FoEM No. 3Y.] Affidavit of Lost Bill, ok NoTa In the District Court of the United States for the District of k In the matter of i , Bankrupt. ] ^ Bankruptcy. On this day of , A. D. 18—, at , came , of , in the county of , and State of , and makes oath and says that the bill of exchange [or note], the particulars whereof are underwritten, has been lost under the following circumstances, to wit, ; and that he, this deponent, has not been able to find the same; and this deponent fur- ther says that he has not, nor has the said , or any person or persons to their use, to this deponent's knowledge or belief negotiated the said bill [or note], nor in any manner parted with or assigned the legal or beneficial interest therein, or any part thereof; and that he, this deponent, is the person now legally and beneficially interested in the sama Bill or note above referred to. Date. Drawer or maker. Acceptor. Sum. ' Subscribed and sworn to before me this day of , A. D. 18—. > [Offlcial character.] [FoEM ]Sro. 38.] Ordee Eedtjoing Claim. In the District Court of the United States for the District of > In the matter of ) , Banhmpt. \ ^ Bankruptcy. At , in said district, on the day of , A D. 18 — b Upon the evidence submitted to this court upon the claim of against said estate [and, if the fact he so, upon hearing counsel thereon], it is ordered, that the amount of said claim be reduced from the sum of , as set forth in the affidavit in proof of claim filed by said creditor in said case, to the sum of , and that the latter-named sum be en- tered upon the books of the trustee as the true sum upon which a divi- dend shall be computed [if with interest, with interest thereon from the day of , A D. 18—]. , Beferee in Bankruptcy. 632 LAW OF BANKBUPTOT. [EOEM No. 39.] Order ExPUNGifo Claem. In the District Court of tlie United States for the ■ In the matter of ) i^ Bankruptcy. . , Bankrupt. ) ■ District of - At , in. said district, on the day of , A. D. 18 — k Upon the evidence submitted to the court upon the claim of -^— against said estate [and if the fact he so, upon hearing counsel thereon], I it is ordered, that said claim be disallowed and exptmged from the list of claims upon the trustee's record in said case. ■^~"~ r Referee in Bankruptcy. [FoEM No. 40.] List of Claims and Dividends to be Recorded by Eefeeee and by HTM Deliveeed to Trustee, In the District Court of the United States for the District of — -» In the matter of ) ^^ Bankruptcy. , Bankrupt. ) At , in said district, on the day of , A. D. 18 — k A list of debts proved and claimed under the "bankruptcy of , vnth dividend at the rate of per cent, this day declared thereon by , a referee in bankruptcy. No. Creditors. [To be placed alphabetically, and the names of all the parties to the proof to be care- fully set forth.] Sum proved. Dividend. DoUars. Cents. Dollars. Cents. Referee in Bankruptcy. [FoEM No. 41.] Notice of Dividend. In the District Court of the United States for the District of n In the matter of 1 1^ Bankruptcy. , Bankrupt. ) At — — , on the day of , A. D. 18— k To , Creditor of , bankrupt: I hereby inform you that you may, on application at my o£Sce, » on the day of , or on any day thereafter, between the hours of FOEMS IN BANKETJPTOT. 633- , receive a warrant for the dividend due to you out of the above estate. If you cannot personally attend, the warrant wiU be delivered to your order on your filling up and signing the subjoined letter. , Trustee. Ckeditor's Lettek to Trustee. To , Trustee in bankruptcy of the estate of , bankrupt: Please deliver to the warrant for dividend payable out of the said estate to me. , Creditor. [FoEM Fo. 42.] Petition and Order for Saib by Auction op Eeal Estate. In the District Court of the United States for the District of * In the matter of ) j^^ Bankruptcy. , Bankrupt. > Respectfully represents , trustee of the estate of said bank- rupt, that it would be for the benefit of said estate that a certain portion of the real estate of said bankrupt, to wit: [here describe it and its esti- mated value} should be sold by auction, in lots or parcels, and upon terms and conditions, as follows: . Wherefore he prays that he maybe authorized to make sale by auction of said real estate as aforesaid. Dated this day of , A. D. 18 — . , Trustee. The foregoing petition having been duly filed, and having come on for a hearing before me, of which hearing ten days' notice was given by mail to creditors of said bankrupt, now, after due hearing, no adverse interest being represented thereat \pr after hearing in favor of said petition and in opposition thereto], it is ordered that the said trustee be authorized to seU the portion of the bankrupt's real es- tate specified in the foregoing petition, by auction, keeping an accurate account of each lot or parcel sold and the price received therefor and to whom sold; which said account he shall file at once vpith the referee. Witness my hand this day of , A. D. 189-. Referee in Bankruptcy. [Form No. 43.] Petition and Order for Redemption of Property from Lien. In the District Court of the United States for the District of ^ In the matter of i , „ , , Bankrupt. \ ^ Bankruptcy. Respectfully represents , trustee of the estate of said bank- rupt, that a certain portion of said bankrupt's estate, to wit: \here d»- 634 LAW OF BANKEUPTOT. soribe the estate or property and its estimated valtie] is subject to a mort- gage [describe the mortgage], or to a conditional contract [deseribing if], or to a lien [describe the origin and nature of the lien], [or, if the prop- erty be personal property, has been pledged or deposited and is subject to a lien] for [describe the nature of the lien], and that it would be for the benefit of the estate that said property should be redeemed and dis- charged from the lien thereon. Wherefore he prays that he may bo empowered to pay out of the assets of said estate in his hands the sum of , being the amount of said lien, in order to redeem said property thex-efrom. Dated this day of , A. D. 18—. , Trustee. The foregoing petition having been duly filed and having come on for a hearing before me, of which hearing ten days' notice was given by mail to creditors of said bankrupt, now, after due hearing, no adverse interest being represented thereat [or after hearing in favor of said petition and in opposition thereto], it is ordered that the said trustee be authorized to pay out of the assets of the bankrupt's es- tate specified in the foregoing petition the sum of , being the amount of the lien, in order to redeem the property therefrom. Witness my hand this day of , A. D. 189-. Referee in Bankruptcy. [FoEM No. 44.] Petition and Oedeb foe Sale SrrBJEcr to Lien. In the District Court of the United States for the District of -^-% In the matter of ) ij^ Bankruptcy. , Bankrupt. ) Respectfully represents , trustee of the estate of said bank- rupt, that a certain portion of said bankrupt's estate, to wit: [here de- scribe tlie estate or property and its estimated value] is subject to a mortgage [describe mortgage], or to a conditional contract [describe it], or to a lien [describe the origin and nature of the lien], or [if the prop- erty be personal property] has been pledged or deposited and is subject to a lien for [describe the nature of the lien], and that it would be for the benefit of the said estate that said property should be sold, subject to said mortgage, lien, or other incumbrance. Wherefore he prays that he may be authorized to make sale of said property, subject to the in- cumbrance thereon. Dated this day of , A. D. 189-. , Trustee. The foregoing petition having been duly filed and having come on for a hearing before me, of which hearing ten days' notice was given by mail to creditors of said bankrupt, now, after due hearing, no adverse interest being represented thereat [or after hearing in favor FOEMS IN BANKEUPTOT. 635 of said petition and in opposition thereto], it is ordered that the said trustee be authorized to sell the portion of the bankrupt's es- tate specified in the foregoing petition, by auction [or, at private sale], keeping an accurate account of the property sold and the price received therefor and to whom sold; which said account he shall file at once with the referee. Witness my hand this day of , A, D. 189-. Referee in Bankruptcy. [FoEM ISo. 45.] Petition and Order for Private Sale, In the District Court of the United States for the District of 1 In the matter of i _ , , Banhnipt \ ^ Bankruptcy. Respectfully represents , duly appointed trustee of the estate of the aforesaid bankrupt. That for the following reasons, to wit, , it is desirable and for the best interest of the estate to sell at private sale a certain portion of the said estate, to wit: , Wherefore he prays that he may be authorized to sell the said prop- erty at private sale. Dated this day of , A. D. 189- , Trustee. The foregoing petition having been duly filed and having come on for a hearing before me, of which hearing ten days' notice was given by mail to creditors of said bankrupt, now, after due hearing, no adverse interest being represented thereat [or after hearing in favor of said petition and in opposition thereto], it is ordered that the said trustee be authorized to sell the portion of the banki-upt's estate specified in the foregoing petition, at private sale, keeping an accurate accoimt of each article sold and the price received therefor and to whom sold; which said accoimt he shall file at once with the referee. Witness my hand this day of , A. D. 189-. Seferee in Bankruptcy. [FoEM No. 46.] Petition and Oedek foe Sale of Peeishablb Property. In the District Court of the United States for the District of . In the matter of > ^ „ , , Bankrupt. \ ^ Bankruptcy. Respectfully represents , the said bankrupt [or, a creditor, or the receiver, or the trustee of the said bankrupt's estate]. 636 LAW OF BANKETJPTOr. That a part of the said estate, to wit, , no-w in , is perishable, and that there will be loss If the same is not sold immediately. Wherefore he prays the court to order that the same be sold imme- diately as aforesaid. Dated this day of , A. D. 189-. . The foregoing petition having been duly filed and having come on for a hearing before me, of which hearing ten days' notice was given by mail to the creditors of the said bankrupt [or, without notice to the creditors], now, after due hearing, no adverse interest being represented thereat [or after hearing in favor of said petition and in opposition thereto], I find that the facts are as above stated, and that the same is required in the interest of the estate, and it is therefore or- dered that the same be sold forthwith and the proceeds thereof deposited in court. Witness my hand this day of , A. D. 189-» Beferee in Bankruptcy. [FoEM No. 47.] Trustee's Eepoet op Exempted Peopeett. In the District Court of the United States for the District of « In the matter of ) j^ Bankruptcy. , Bankrupt. > At , on the day of , 18 — . The following is a schedule of property designated and set apart to be retaiaed by the bankrupt aforesaid, as his own property, under the pro- visions of the acts of Congress relating to bankruptcy: General head. Particular description. Value. Military uniform, anna, and DoUa. Cts. Property exempted by State ■, Trustee. [FoEM No. 48.] Trustee's Return op no Assets. In the District Court of the United States for the District of > In the matter of ) j^^ Bankruptcy. , Bankrupt. ) At , in said district, on the day of , A. D. 18 — k On the day aforesaid, before rue comes , of , in the county of and State of , and makes oath, and says that he, as trustee of FOEMS IN BANKEXJPTOT. 637 the estate and eflfeots of the above-named bankrupt, neither received nor paid any moneys on account of the estate. Subscribed and sworn to before me at , this day of , A. D. 18^ , Referee in Bankruptcy. The Db. [FoEM No. 49.] ACCOTJMT OF TEXJSTEa of — — , hanhrupt, in account with -, trustee. Cb. Dolls. Cts. Dolls. Cts. Dolls. Cts. Dolls. Cts, [FoEM No. 50.]' Oath to Final Account op Trustee. In the District Court of the United States for the Bistrict of * In the matter of ) i^ Bankruptcy. , Bankrupt. ) On this day of , A. D. 18 — , before me comes , of , in the county of and State of , and makes oath, and says that he was, on the day of , A. D. 18 — , appointed trustee of the es- tate and effects of the above-named bankrupt, and that as such trustee he has conducted the settlement of the said estate. That the account hereto annexed containing sheets of paper, the first sheet whereof is marked with the letter [reference may here also be made to any prior account filed by said trustee\, is true, and such account contains entries of every sum of money received by said trustee on account of the estate and effects of the above-named bankrupt, and that the pay- ments purporting in such account to have been made by said trustee have been so made by him. And he asks to be allowed for said pay- ments and for commissions and expenses as cliarged in said accounts. , Trustee. Subscribed and sworn to before me at , in said district of , this day of ', A. D. 18— » > [Offlmd character.} 638 LAW OF BANKEXJPTOT. [FOEM No. 51.] Order Allowtng Account and DiscHAEGiNa Trustee. In the District Court of the United States for the District of k In the matter of ) j^ Bankruptcy. , Bankrupt. > The foregoing account having been presented for allowance, and hav- ing been examined and found correct, it is ordered, that the same be allowed, and that the said trustee be discharged of his trust. Beferee in Bankruptcy, [FoEM No. 52.] Petition foe Removal of Trustee. In the District Court of the United States for the District of > In the matter of i , Bankrupt. \ ^ bankruptcy. To the Honorable , Judge of the District Court for the Dis- trict of : The petition of , one of the creditors of said bankrupt, re- spectfully represents that it is for the interest of the estate of said bank- rupt that , heretofore appointed trustee of said bankrupt's estate, should be removed from his trust, for the causes following, to wit: [Here set forth the particular cause or causes for which such removal is requested.] Wherefore pray that notice may be served upon said , trustee as aforesaid, to show cause, at such time as may be fixed by the court, why an order should not be made removing him from said trust k [FoEM No. 53.] Notice of Petition for Removal of Trustee. In the District Court of the United States for the District of — ^ In the matter of i , „ , , Bankrupt. \ ^ Bankruptcy. At , on the day of , A. D. 18 — i To ■, Trustee of the estate of , bankrupt: You are hereby notified to appear before this court, at , on the day of , A. D. 18 — , at o'clock — . m., to show cause (if any you have) why you should not be removed from your trust as trustee as aforesaid, according to the prayer of the petition of , one of the FORMS IN BAlirKEUPTOT. 639 creditors of said bankrupt, filed in this court on the day of , A. D. 18 — > ia which it is alleged [here insert the allegation of the peti- tiorii, i Clerk. [FoEM No. 64r.] Obdee for Removal of Trtjsteb. In the District Court of the United States for the District of b In the matter of I in Bankruptcy. — — , Bankrupt, i Whereas , of , did, on the day of , A. D. 18 — , present his petition to this court, praying that for the reasons therein set forth, , the trustee of the estate of said , bankrupt, might be removed: Now, therefore, upon reading the said petition of the said and the evidence submitted therewith, and upon hearing counsel on be- half of said petitioner and counsel for the trustee, and upon the evidence submitted on behalf of said trustee, It is ordered that the said be removed from the trust as trustee of the estate of said bankrupt, and that the costs of the said pe- titioner incidental to said petition be paid by said , trustee [or, out of the estate of the said , subject to prior charges]. Witness the Honorable '■ — , judge of the said court, and the seal thereof, at , in said district, on the day of , A. D. 18 — . [Seal of , Clerk. the court.} [FoEM K"o. 55.] Oedeb foe Choice of New Trustee. In the District Court of the United States for the District of 1 In the matter of ) i^ Bankruptcy. , Bankrupt, > At , on the day of , A D. 18 — . Whereas by reason of the removal [or the death or resignation] of , heretofore appointed trustee of the estate of said bankrupt, a vacancy exists in the ofSce of said trustee, It is ordered, that a meeting of the creditors of said bankrupt be held at , in , in said district, on the day of , A. D. 18 — , for the choice of a new trustee of said estate. And it is further ordered that notice be given to said creditors of the time, place, and purpose of said meeting, by letter to each, to be de- posited in the mail at least ten days before that day. f Beferee in Bankrupten, 640 LAW OF BAITKEUPTOY. [FOEM No. 56.] Cektifioate by Rbfebeh to Judge. In the District Court of the Uuited States for the District of k In the matter of | j^ Bankruptcy. , Bankrupt. J I, , one of the referees of said court in bankruptcy, do hereby certify that in the course of the proceedings iq said cause before me the following question arose pertinent to the said proceedings: [Here state the question, a summary of the evidence relating thereto, and th^ finding the day of , A, D. 18—. Referee in Bankruptcy, [Form No. 57.] Bakkkupt's Petition foe Dischaegbl In the matter of ) i^ Bankruptcy. , Bankrupt. ) To the Honorable , Judge of the District Court of the United States for the District of : , of , in the county of and State of , in said dis- trict, respectfully represents that on the day of , last past, he was duly adjudged bankrupt under the acts of Congress relating to bankruptcy; that he has duly surrendered aU his property and rights of property, and has fully complied with all the requirements of said acts and of the orders of the court touching his bankruptcy. Wherefore he prays that he may be decreed by the court to have a full discharge from all debts provable against his estate under said bank- rupt acts, except such debts as are excepted bylaw from such discharge. Dated this day of , A. D. 189-% k Bankrupt. Oedee op Notice Theeeon. District of , ss: On this day of , A. D. 189-, on reading the foregoing peti- tion, it is — Ordered by the court, that a hearing be had upon the same on the day of , A. D. 189-, before said court at , in the said dis- trict, at o'clock in the noon; and that notice thereof be pub- lished in , a newspaper printed in said district, and that all known creditors and other persons in interest may appear at the said time and place and show cause, if any they have, why the prayer of the said petitioner should not be granted. FOEMS IN BANKKUPTCT. 641 And it is further ordered by the court, that the clerk shall send by- mail to all known creditors copies of said petition and this order, ad- dressed to them at their places of residence as stated. Witness the Honorable , judge of the said court, and the seal thereof, at , in said district, on the day of , A. D. 189-. [Seal of , Cleric. the court] hereby depose, on oath, that the foregoing order was published in the on the following days, viz: On the day of and on the day of , in the year 189-. District of . , 189-. Personally appeared , and made Oath that the forgoing state- ment by him subscribed is true. Before me, . [Offiaial character.] I hereby certify that I have on this day of , A. D. 189-, sent by mail copies of the above order, as therein directed. — — , Clerk. [Poem No. 58.] Specification of Geoiotds of Opposition to Bankrupt's Discharge. In the District C!ourt of the United States for the > District of . In the matter of I the matter of ) i^ Bankruptcy. , Bankrupt. ) , of , in the county of and State of , a party in- terested in the estate of said , bankrupt, do hereby oppose the granting to him of a discharge from his debts, and for the grounds of such opposition do file the following specification: [Here specify the grounds of opposition.] , Creditor. [FoEM No. 59.] DiscHABGB OF Bankrupt. District Court of the United States, District of > Whereas, of in said district, has been duly adjudged a bankrupt, under the acts of Congress relating to bankruptcy, and ap- pears to have conformed to all the requirements of law in that behalf, it is therefore ordered by this court that said be discharged from all debts and claims which are made provable by said acts against his estate, and which existed on the day of , A. D. 189-, on which day the petition for adjudication was filed him; excepting 41 642 LAW OF BANKEUPTCT. such debts as are by law excepted from the operation of a discharge in bankruptcy. Witness the Honorable , judge of said district court, and the seal thereof, this day of , A, D. 189-. [Seal of , Clerk. the court.] [FoEM No. 60.] Petition foe MEExiNa to Consider Composition. District Court of the United States for the District of > Bankrupt. \ ^ Bankruptcy. To the Honorable , Judge of the District Court of the United States for the District of : The above-named bankrupt respectfully represents that a composition of per cent, upon all unsecured debts, not entitled to a priority in satisfaction of debts has been proposed by -; to cred- itors, as provided by the acts of Congress relating to bankruptcy, and verily believe that the said composition will be accepted by a majority in number and in value of creditors whose claims are allowed. Wherefore, he prays that a meeting of creditors may be duly called to act upon said proposal for a composition, according to the pro- visions of said acts and the rules of court. , Bankrupt. [FoEM No. 61.] Application for Confirmation of Composition, In the District Court of the United States for the District of . In the matter of ) in Bankruptcy. , Bankrupt, i To the Honorable , Judge of the District Court of the United States for the District of : At , in said district, on the day of , A. D. 189-, now comes , the above-named bankrupt, and respectfully represents to the court that, after he had been examined in open court [or at a meeting of his creditors] and had filed in court a schedule of his property and a list of his creditors, as required by law, he offered terms of composition to his creditors, which terms have been accepted in writing by a ma- jority in number of all creditors whose claims have been allowed, which number represents a majority in amount of such claims; that the con- sideration to be paid by the bankrupt to his creditors, the money neces- sary to pay all debts which have priority, and the costs of the proceed- ings, amounting in all to the sum of dollars, has been deposited, subject to the order of the judge, in the National Bank of , a designated depository of money in bankruptcy cases. Wherefore the said respectfully asks that the said compo- sition may be confirmed by the court. , Bankrupt. foems in baitkerptot. 643 [Form No. 62.] OuDEK Confirming Composition. In the District Court of the United States for the District of . In thematter of j j^ Bankruptcy. An application for the confirmation of the composition offered by the bankrupt having been filed in court, and it appearing that the com- position has been accepted by a majority in number of creditors whose claims have been allowed and of such allowed claims; and the considera- tion and the money required by law to be deposited, having been de- posited as ordered, in such place as was designated by the judge of said court, and subject to his order; and it also appearing that it is for the best interests of the creditors; and that the bankrupt has not been guilty of any of the acts or failed to perform any of the duties which would be a bar to his discharge, and that the offer and its acceptance are in good faith and have not been made or procured by any means, promises, or acts contrary to the acts of Congress relating to bankruptcy: It is therefore hereby ordered that the said composition be, and it hereby is, confirmed. Witness the Honorable -, judge of said court, and the seal thereof, this day of , A. D. 189. [Seal of , aierk. the court] [EoEM No. 63.] Order of Distribution on Composition. United States of Ajibrica: In the District Court of the United States for the District of > In the matter of bj^ Bankruptcy. , Bankrupt, i The composition offered by the above-named bankrupt in this case having been duly confirmed by the judge of said court, it is hereby or- dered and decreed that the distribution of the deposit shall be made by the clerk of the court as follows, to wit: 1st, to pay the several claims which have priority; 2d, to pay the costs of proceedings; 3d, to pay, ac- cording to the terms of the composition, the several claims of general creditors which have been allowed, and appear upon a list of allowed claims, on the files in this case, which list is made a part of this order. "Witness the Honorable , judge of said court, and the seal thereof, this day of , A. D. 18 — . [Seal of , Clerk. the court.] II^TDEX References are to pages, " A PERSON AGAINST WHOM A PETITION TTAyi BEEN FILED " — construction o^ 11. ABBRE V^IATIONS — •when permitted in petitions, 593. ABSENCE — of ref eree> appointment of substitute, 237, 534 ACCOUNTS — separate, to be kept of partnership and indiyidual property, eta, 63. trustee to keep, 244. when to make final, 244 250. court to approve, 1& notice of filing to be given, 306, 309. open to inspection, eta, 253, 686. debts due on open, when provable^ 357. of trustees, reference to referee for audit, 596, referee to keep, 599. of marshals, 597. ACT— when to take effect, 458. ACTS — of bankruptcy, of what to consist, 33, 5S0i. amendment of petition showing earlier than alleged, eta, 593. trial of, where several alleged, 593. ADJOURNMENTS — of meetings, powers of referee over, 225, of creditors' meetings, 261. ADJUDICATION — definition of, 11. of partnership, when set aside, 60l of one member, 74 presumption of validity, 185, 200. conclusive, if without fraud, 134 where allegation of petition denied, 166. 646 INDEX ADJUDICATION (continued) — of petition, when made, 168, 169, 526. when not to be set aside, 170. contest of, 171. practice in proceedings for, 171. reference of cases after, 191, 538. when made by a referee, 332. as to number and amount of claims, final, 318. court making first, where several petitions filed, to retain jurisdio- tion, 593. not necessary to proceed with others, 593. AFFIRMATIONS — may be taJien in bankruptcy proceedings, 175, 537. AGENT— proof of claim by, 373, ALABAMA — exemptions allowed in, 549. ALASKA — United States courts in, made courts of bankraptcy, 17, 519. exemptions allowed in, 550. ALIENS — when may be declared bankrupts, 53a AMENDMENT — of schedule, when allowed, 89. oi petitions, when allowable, 160i when denied, 161. when special reasons required, 1621 objections to, 163. of petitions and schedules, when permitted, 594 of petitions showing earlier acts of bankruptcy, etc., 692. of proof of claims, 375. APPEALS— from decisions of bankruptcy courts to United States Supreme Court, etc., 203. when allowable, 205, 589. what constitutes matter in dispute, 209. to circuit cotirts of appeals, 529, 603. to Supreme Court of the United States, 629, 602. APPEARANCE — trustee to enter, in suit against bankrupt, 108. of bankrupt or creditor, when required, 163. by creditors, when not original, 821. may be in xierson or by attorney, 592. INDEX. 647 APPELLATE COURTS (see Supreme Court of the United States)— definition of, 11. APPOINTMENT — in bankruptcy proceedings, of trustees, 237, 534. of referees, 219, 531. APPRAISAL — of bankrupt's property, 436, ARBITRATION— submission of controversies in settling estates, 310, 530l selection of arbitrators, 310, 530. findings, etc., 310. application for, what to contain, 601. ARIZONA — exemptions allowed in, 550. ARKANSAS — exemptions allowed in, 550. ARREST— bankrupt exempt from, on civil process, 6tc-» 95> 533. for failure to appear, etc., 183b when may be released, 600. ASSIGNEE (see Trustee)- under State law, payment of fees, 350. ASSIGNMENTS— superseded by bankruptcy proceedings, etc., 9. general, constituting acts of bankruptcy, 33, 43, 53(L when not, 44. discharge may not bar, 133. effect of, 397. subsequent to act, etc., to defraud, void, 395, 545. of claims before proof, reqmrements, 596. ATTACHMENTS — effect of compositions on, 117, 133. when entitled to priority of payment, 369. obtained within four months, etc., void, 379, 545. within four months, when dissolved, 380. costs, 381. lien of, when valid, 385. created through legal proceedings, when void, 405. rights of trustee over property under, 417. cases in which he has no rights, 419. recovery by trustee of property under, 449. bankrupt refusing to furnish schedule liable to, 594 648 INDEX. ATTORNEY-GENERAL — in bankruptcy proceedings, to report annually to Congress, 259, 537. officers to furnish Btatisticai information, 259, 537. ATTORNEYS — payments to, by bankrupt, may be reexamined, etc., 347, 542. fees; when allowable, 350. when entitled to priority of payment, 367. authorized to practice, to represent bankrupts, 692. to indorse papers, etc., 593. execution of letter of, 598. AUCTION — sales of property to be by, 596. AUCTIONEER — payment of fees, etc., 349. B. BANK — private, but not State, may become involuntary bankrupts, 51, 52, notes of, when provable, etc., 356. when entitled to priority of payment, 370. when deposits may be set off, 407. recovery of fund in, by trustee, 449, title to funds in, etc., 436. BANKRUPT — definition of, 11. coUeotion of property of, 26. closing of estates, 27. acts of bankruptcy, 33, 520. transferring, etc., property with intent to defraud, 33. while insolvent, etc., 33. permit preferences through legal proceedings, 33. general assignment, 33. admitting inability to pay debts, etc., 33. petition to be filed in four months, 45. from when to date, 45. defense of solvency, 46. burden of proof, 47. testimony, etc., 47. to be accompanied by bond, 48. liability for costs, etc., 48. counsel fees, etc., fixing of, 49. who may become voluntary, 49, 521. involuntary, 51. INDEX. 6'1& BANKRUPT (continued) — partnership, may be adjudged, 55, 523. administration of estate, 61. jurisdiction over one partner sufficient, etc., 62, trustee's duty, 63. payment of debts, 64 claims of, against individual estates, etc., 75. administration of estate where all not bankrupts, 76. exemptions of, 76, 522. duties of, 85, 533. attendance at meetings, 88. to comply with orders, etc., 88. schedule, preparation of, 88. amendment of, 89. false swearing in, 90. omission of creditors from, etc., 91. duties in general, 93, 523. effect of death or insanity of, 93, 94, 523. when dower allowable, 94. protection and detention of, 95, 523. detention for purpose of examination, 97, 98. extradition of, 98, 524. suits by and against, 99, 524. when may offer terms of compositions, 11^ 534. when composition set aside, 133. application for discharge, 134 535. filing of new application by voluntary, 135. examination, pending discharge, 129. may procure assent of creditor to discharge, 130. what discharged from, 130. discharge, when revoked, 145, 536. liability of co-debtors, not affected by, 148, 536. when to plead to petition, 168, 536. determination of issues, when allegation of petition denied, etc., 166, 537. may be required to testify, etc., 175, 178, 528. to what extent, 177. at creditors' meetings, 263. examination, power of referee over, 334 notice to be given, 306. arrest of, for failure to appear, etc, 183. examination of wife of, 183. appeal in case of refusal to adjudicate, 206. penalty for concealing property, etc., 313, 530. trustee not personally liable on bond for penalties of, 356, 537. when considered to have given preference, 834, 541. 650 INDEX. BANKRUPT (continued) — conveyance, eta, of, when void, 395, 545. rights of trustee to payments to, 433. appraisal and sale ot estate, 436. interest of wife in property of, 453. property of, interest in, 439. trustee to convey, 448, 547. title to, revests in, on confirming composition, 457, 647. may conduct proceedings in person or by attorney, 593. refusing to furnish schedule, to be attached, 594 release of imprisoned, 600. subject to orders of court, 595. BANKRUPTCY (see Bankrupt; Coxtets of Bankeuptct) — foreign laws on, 1. history of United States laws on, 4. distinction between insolvency and, 6. when States may enact laws on, 7. power of Congress to enact laws on, 10. with reference to time of, what to mean, 13. courts of; jurisdiction, 17. acts of, 38, 530. by partners, 60. attorney-general to report proceedings, eta, 359. statistical information for, 359. who may file volimtary petition, 310. involimtary petition, 813. jurisdiction not affected by dissolution of composition, 814 law of 1867, 461. law of 1898, 517. orders of Supreme Court, forms, etc., 591. BILL OF SALE — when a preference, 339. BILLS AND NOTES (see Commekcial Papee). BOARD OF DIRECTORS — punishment of, by courts of bankruptcy, 18. BONA FIDE — purchaser, who is, 456. purchaser for value, eta, title obtained by lien, etc., not affected, 405. BOND — petitioner in bankruptcy, when to give, 48. of trustees and referees, 854, 536. increase of amount in trustee's, 355, 356. INDEX. 661 BOND (continued) — sureties' property, value of, S55. two necessary, 255. excess of property, 255. corporations may be, 255. filing of, 255, 536. suits on in name of United States, 536. trustee's, not liable for penalties, etc., 356, 537. join.t or several, 256, 537. failure to give, creates vacancy, 256, 537. suits upon referee's and trustee's, 255, 256, 537, of depositories of money of bankrupt estates, 348. to be given, on seizure of. property, 411. liability for unlawful seizure, 412. copy of trustee's, evidence of vesting of title, etc., 190. trastees not to give, on appeals in bankruptcy cases, 309, 530l BOOKS OF ACCOUNT (see Dischabge)— must be kept, to gain discharge, 13& when unnecessary to keep, 137. what constitutes, 137. what does not constitute, 133. CALIFORNIA— exemptions allowed in, 551. CASE — transfer of, from one referee to another, 192l CERTIFICATION — of findings by referee to court, 28, 237, 339t hypothetical questions, 330. CERTIORARI — when Supreme Court may issue, 310, 530. CHATTEL MORTGAGES- giving of, when an act of bankruptcy, 35. when a preference, 329. CHECKS — on depositories, how signed, etc., 60flL CHILDREN— effect of conveyances to, 398. CH0SE8 EST ACTION— when to vest in trustee, 413. relation of trustee to, 431. 652 INDEX, CIRCUIT COURTS — jurisdiction of controversies between trustee and adverse claimant, 192, 529. concurrent with courts of bankruptcy, 193. CIRCUIT COURTS OF APPEALS — granted appellate jurisdiction over courts of bankruptcy, 203, 205, 529. on refusal to adjudge defendant bankrupt, 206. on denying a discharge, 806. on allowing, etc., debts of $500 or over, 206. when to be taken, 306. appeal to Supreme Court from decision of, 208, where amount is over $2,500, 208. where question is certified by Supreme Court justice^ 2091 trustees not to give bond, 209. rules governing appeals from courts of bankruptcy, 602k to Supreme Court of United States, 602. CLAIMS (see Proof)— courts of bankruptcy to allow, disallow, etc., 17, 24 unliquidated, may be liquidated and allowed, 20, 362, secured, holders of not to vote, 370. allowance of counsel fees, 392. of secured creditors, etc., 392, 539. hearings of objections to, etc., 394 539. of preferred creditors, 296. surrender of preference, 297, 539. value of securities held by secured creditors, etc., 299, 539k secured by individual undertaking, 301, 539. due to government, etc., allowance of, 303, 539, reconsideration of allowed, 303, 540. recovery of dividend, 304, 540. of one bankrupt against another, 304, 540, time for proving, 304, 540. computing number, method of, 314, 330, who excluded, 316. waiver of bankrupt, 317. consideration of counter-claim, 317, in case of partnership, 318. adjudication of number and amount of claims final, 818L withdrawal of creditors from petition, 334 not provable, cannot be used as set-off, 409, against property in trustee's hands, 432. assigned before proof, requirements, 598. of persons contingently liable, proof, 598. application for re-examination, 598, INDEX. 653 CLAIMS (continued) — redemption and compounding of, 600. referee to certify list to clerk, eta, 599. CLERK — definition of, 12. duties of, 356, 537. compensation of, 258, 537. when to refer case to referee, 168. may require indemnity for costs, 594 order requiring a docket to be kept, 591. to indorse papers filed, etc., 593. to send order referring case to referee, 595. compensation of, 603. CaDEBTOES — liability of, not afEected by discharge of bankrupt, 148, 526. COLLATERAL — when may be used as a setoff, 407. COLLATERAL ATTACK— of decisions of courts of bankruptcy, 300. COLORADO — exemptions allowed in, 553. COMMENCEMENT OF PROCEEDINGS — definition of, 12. COMMERCIAL PAPER — proof of, 286. not provable, 387, 28a amount of, when provable debt, 856. rights of trustee to, etc., 427, 454. COMPENSATION— of referees, 231, 583. to be paid by clerk, eta, 257. of trustees, 253, 535. of clerks, 357, 537. of marshals,' 257, 537. orders relative to clerks, referees and trustees, 603. in case of poor debtors, 602. COMPOSITIONS — courts of bankruptcy to confirm or reject, IS. jurisdiction of court over, 27, 26L when may be offered, 114. statement should conform to schedules, 115. relation of schedule to proceedings, 92. rights of litigating creditors in, 115. application for confirming, etc., 115. 654 INDEX. COMPOSITIONS (continued) — meeting, minority of creditors at, 116. qualified voters at, 116. voting at, 370. in what payments should be made, 117. effect of, on liens and attachments, 117. set-oflf, in case of, 118. confirmation, date and place of hearing, application for, 118, 524 objections to, conditions of, 119. frauds or omissions preventing, 120. lack of good faith, etc., 120. when confirmed, to stand, 121. confirmation of, distribution of consideration upon, 131 debtor's property after, 121. obviates discharge, etc., 122, 144 debtor must pay, etc., 123. effect of, on attachments, etc., 133. final distribution and disposition, etc., 123. title to property after, 123. when set aside, 133, 525. petition to review payment, 134 fiduciary debt barred by, 152. copy of order confirming, etc., evidence of jurisdiction, 190. of revesting of title in bankrupt, 191. meetings, etc., 363. title of property revested in bankrupt on confirming, 457. notice of confirmation to be given, 306, 308. property acquired after setting aside, how applied, 373. when set aside, title to vest in trustee, 444 application for approval to be heard by judges 595. specification in opposition to, 601. COMPOUND — of claims, application for, what to contain, 601. when permitted, etc., 600. COMPROMISE— trustees may, in certain controversies, etc., 211, 530. notice of, to be given, 306, 309. CONCEAL — definition of, 15. CONCEALING — property, when act of bankruptcy, 33, 620. ground to oppose discharge, 130. may not bar discharge, 133, 135. CONFIDENTIAL COMMUNICATIONS — when privileged, 186. INDEX. C55 CONGRESS — power to enact bankrupt laws, lOL CONNECTICUT — exemptions allowed in, 554. CONSOLIDATION— of petitions, when required, 593. CONTEMPT — before referee, proceedings to punish, 13. 18, 80, 333, 335, 533. punishment of, by court, 39, 30. CONTRACTS — when debts on, provable, 357. CONVEYANCE- when act of bankruptcy, 33, 35, 530. in general, when not act of bankruptcy, 38. of partnership property, when not fraudulent, 39. to wife or children, effect of, 36, 898. invalid, in general, 899. when held valid, 401. evidence of fraudulent intent in making, 403. when a preference, 837. subsequent to act, etc., to defraud, void, 895, 545. within four months of petition, void under State laws, etc., 395. court may order, when necessary, 405. fraudulent, title of trustee to, etc., 434. fraudulent, recovery of by trustee, 446. not fraudulent and not recoverable, 447. to wife, in which trustee has no title, 453. COPIES — certified, when admitted as evidence, 189. COPYRIGHTS — title of bankrupt to vest in trustee, 413. CORPORATIONS — definition of, 13. pimishment of, by courts of bankruptcy, 3, 18. jurisdiction of bankruptcy court over, 33. cannot become voluntary bankrupts, 49. when may become involuntary bankrupts, 51, 55. may become trustees, 340. collection of assets of, 847. may be sureties for trustees and referees, 355, 536. dissolution not to affect jurisdiction over petition, 314. appearance on behalf of, 318. petitions in case of, contents, 319. when set-off may be pleaded in case of, 410. 658 INDEX. COSTS allowance of, etc., 18, 30. judgments for, 49. in suits by trustee, etc., 112. when a provable debt, 857. when court fees entitled to priority of payment, 366. of administering estate, when entitled to priority, 368. bankrupt may be required to advance, etc., 594 in contested adjudications, 601. COUNSEL FEES — allowance of, 49, 393. COUNSELOR-AT-LAW — payments to, by bankrupt, may be re-examined, 347. COUNTER-CLAIMS (see Set-opp) — between bankrupt and cieditor, 405, 406. consideration of, in counting number of clajms, 317. COUNTY — debts due, allowance of, 803^ COURT — definition of, 13. always open, 30. stay of suits against bankrupt in State, 100. jurisdiction of, over suits by trustee. 111. discretion to postpone determination of discharge, 130. to determine issues where facts controverted, 166i. decision, where pleadings not filed, 168. to hear and adjudicate voluntary petitions, 168. when case may be certified for trial by circuit court, 173. jurisdiction of, suits between trustee and adverse claimant, 193. suits by trustee, where brought, 193. circuit, concurrent jurisdiction with courts of bankruptcy, 193. when Federal wiU enjoin proceedings in State, 194. when not, 195. application for injunction, 195. not granted in composition matters, 195. power to discharge from arrest, 196. jurisdiction in law and equity, 196. limit to jurisdiction, 196. personal conduct of judges, 194 district cannot correct or annul judgment of State, 301. acts of State which bind Federal, 303. concurrent jurisdiction with State, 303. when to appoint trustee, 337. iiTOBx. 657 COURTS OF BANKRUPTCY (see CouiiTS; Jurisdiction) — definition of, 13. of what to consist, 17. jurisdiction of, 17, 21, 519. to adjudge bankrupt, 17. allow and disallow claims, etc., 17. appoint receivers, etc., 17. try and punish bankrupts, 17. permit temporary transaction of business, 18. substitute additional persons in proceedings, etc., 18. collect and distribute assets, 18. close estates, 18. confirm or reject compositions, 18. modify, etc., referee's findings, 18. determine exemptions, 18. discharge bankrupts, etc., 18. enforce orders, 18. extradite bankrupts, 18, 524 punish for contempt, 18. make orders, etc., 18. appoint trustees, 18. tax costs, 18. transfer cases, 19. unspecified powers, 19. in law and equity, 33. over liens, 23. always open, 30. objection to petition for want of jurisdiction, 165. may compel attendance of witnesses, etc., 175. not barred by jurisdiction of State court, 198. collateral attack of decisions, 300. when an appeal may be taken from decisions, 205. to designate newspapers for publishing notices, 211. transfer of cases commenced in different, 318. to appoint and remove referees, etc., 219. when to call meeting of creditors, 260. to designate depositories, 348. rules governing appeals to circuit courts of appeals, 603. CREDITOR (see MEETDsras; Notices) — definition of, 12. may oppose discharge, 138. assent may be procured, 130. if suit barred by, must oppose, 131. not opposing, consent to, 131. when to plead to petition, 168. determination of Issues where facts denied, 166. 42 658 INDEX. CEEDITOR (continued) — to appoint trustee at first meeting, etc., 337. who may not vote for, 238. right to vote, S39. first meeting of, 339. who may file petition, 318, 541. jurisdictidn not affected by dissolution of corporation, 314 method of computing number of, 314, 330. secured or preferred creditors, 317. notice to, when not joined, 330. appearance, when not original petitioners, 331. who may intervene and when, 331. petition not to be dismissed without notice, 333. when to fix amount of trustee's bond, 255. meetings, time and place of, 360, 538. composition, 363. to take steps for best interest of estate, 265, voting at, 267, 538. powers of general, 269. notice to, 305, 640. where petitioning abandons or fails to proceed, 333. withdrawal from petition, 334 ■what constitutes notice of insolvency, etc., 341. preferred, who deemed, 334, 541. giving further credit, etc., 346, 543. examination of payments to attorneys, on application of, 347, 543. receiving dividends not affected by proof of subsequent claims, etc., 376. within United States, entitled to certain preferences, 876. set-offs between bankrupt's estate and, 405. notices to be sent to, where requested, etc., 597. to file schedule in absence of bankrupt, 594. CRIMES AND OFFENSES — courts of bankruptcy to punish violations of act, 17, 530. making false oath or affirmation, 175, 531. concurrent jurisdiction of circuit court over trials, 193, 539. jurisdiction in general, 193. in bankruptcy proceedings, to misappropriate property, etc., 313, 531. concealing property, 313, 530. making false oath or account, etc., 213, 531. receiving property from bankrupt, 213, 531. extorting money for forbearing to act, etc., 213, 631. acting as referee, when interested, 215, 531. purchasing property, etc., 315, 531. refusing to permit inspection of acooimts, 215, 681. prosecutions to be in one year, 216, 631. contempts before referee, 333. I INDEX. . 65t> D. DAMAGES — allowance of, on dismissing petition, 49. when unliquidated, may be set off, 407. DATE — from when reckoned in case of assignment, etc., 4S. when act takes effect, 45& "DATE OF BANKRUPTCY"— definition of, 13^ DEATH— of bankrupt, not to abate proceedings, 93, 523. widow and children entitled to dower, eta, 93> of trustee, suits not to abate, 341, 635. DEBT— definition o:^ 13. effect of discharge on, 141, 143. not affected by discharge, 149. judgment in action for fraud, 150. when unproved or unscheduled, 150. contracted in a fiduciary capacity, 151. fraudulent, 151. not fiduciary, etc., 151. revival of, 153. in general, not barred, 153. when appeal allowed, on allowance or rejection ot, 2061 due the United States, allowance of, 303. ■what may be proved, 351, 363, 543. fixed liability, judgment, 853. on written instrument, leases, 354 interest, 854. due to wife, 354 due on mortgages, 854 liability of indorser, 855. of partnerships, 355. of banks, 856. on doubtful paper, 356. costs; due on open account, 357. on contracts, expressed or implied, 857. on claims of partners, 358. effect of statute of limitation on, 805, 359. fraud or preference as defeating right to prove^ 8601 reduced to judgment after adjudication, 361. when unliquidated, may be proved, 362* 660 INDEX. DEBT (continued) — priority of taxes as, 363, 543. costs of preserving estate, etc., 365. attorney's fees; wages, 377. rent, 368. when judgments and attachments entitled, 869. mortgages; banks, 370. imder Federal law, entitled, 371. payment of claims accruing after composition, etc., 879^ mutual, may be set-ofE, etc., 405. when set-off cannot be pleaded, 409. proof of, of what to consist, etc., 597. DEFINITIONS — a person against whom a petition has been filed, 11. adjudication, 11, appellate courts, 11. bankrupt, 11. bankruptcy, 13, business, 55. business corporation, 55. carrying on business, 55. clerk, 13. corporations, 13. court, 13. conceal, 15. courts of bankruptcy, 13. creditor, 13. commencement of proceedings, 13, date of bankruptcy, 13, debt, 13, discharge, 13. document, 13. head of famUy, 80. holiday, 13. insolvency, 39. insolvent, 13. judge, 14 matter in controversy, 209. moneyed, business or commercial corporations, 55. oath, 14i ofiBcer, 14 persons, 15. petition, 15. referee, 15. secured creditor, 15w INDEX. 661 DEFINITIONS (continued) — separate estate, 73. states, 15. transfer, 15. trustee, 15. time of bankruptcy, 12. wage earner, 15. words importing masculine gender, 16. plural number, 16. singular nimiber, 16. DELAWARE — exemptions allowed in, 554 DEMURRER— in general, 163. DEPOSITIONS — determination of right to take, 188. notice of taking, 189. to prove debts, of what to consist, etc., 597. DEPOSITORIES— trustee to deposit money in, 244, 543. to disburse money by check or draft only, 244 designation of, for money of bankrupt estates, 8481 to give bond, 348. bonds of, to be filed, 255. withdrawal of money from, 600. DETENTION— of bankrupt, for purposes of examination, 9& length o^ 97. DISABILITY — of referee, substitute for, 237, 634 DISCHARGE (see Examhiation)— definition of, 18. court to grant or refuse, 18. on revocation, payment of claims accruing after, 20, rules with reference to, 28. omissions from schedule, effect upon, 92> composition obviates, 123. hearing of application for, 125. when granted, 126, 131, 525. application for, 135. filing of second, 125. who may oppose, 138. proceedings in opposition to, 180. postponement of determination, 130. 662 INDEX. DISCHARGE (continued)—" specification in opposition, ISO, 134, 185. failure to file, 138. limit for filing, 184. burden of proof, 134 concealment of estate, ground for opposing, 130, 183. judgment after adjudication, not bar to, 131. fraudulent conveyance, when not bar to, 131. payment to creditor may not prevent, 133. preference, when may not prevent, 133. omission from schedule may not bar, 183L bar thereto not pleaded, 133, 186. wilful false swearing bars, etc., 185, 186, 146. groimd for refusing, 185. books of account must be kept to entitle to, 13S. impeachment of, 139. replication to plea of, 139. proceedings suspended to awaii^ 189. releases debtor as surety, 140. effect of failure to plead, 140. when may not be pleaded, 140. effect on partnership debts, 141. on collateral proceedings, 14L in general, 143. certificate of, 148. in foreign country, 148. by confirmation of composition, 144 when revoked, 145, 536k waiver of, 146. when not revoked, 146. not impeachable collaterally, 147. jurisdiction to revoke, 147. coKiebtor not affected by, 148, 536. debts not affected by, 149, 536. judgment in action for fraud not barred by, 150. unproved debts not barred by, 150. unsohedviled debts not barred by, 150. if not obtained, debt not barred, 151. not of fiduciary debts, 151. debts released by, 153. revival of debt thereafter, 153. debts not released by, 153. copy of order setting aside, etc., evidence of jurisdiction, etc., 190l appeal allowable in case of refusal to, etc., 306. notices of application to be given, 806. INDEX. 663 DISCHAEGE (continued)— of a firm or its members, 139. examination of bankrupt pending, 139. ■when revoked, title to vest in trustee, 444 petition for, wliat to state, 601. specification in opposition to, 601. to be decided by the judge, 695. DISMISSAL — of proceediags, notice to be given, 306. DISTRICT COURTS (see United States Cotjbts)— made courts of bankruptcy, 17, 519. DISTRICT OF COLUMBIA — exemptions allowed in, 555. Supreme Court made a court of bankruptcy, 17, 519, appeal from Supreme Court of, 303, 603. DIVIDENDS — to be declared by referee, etc., 336. trustee to pay, 344 payment of, by trustee, 350. in portion of claim not secured, etc., 399. recovery of, on reconsideration of allowed claims, 304 notice of, to be given, 306. declaration and payment on allowed claims, 373, 543. payment suspended, 374 declaration of first, 375, 543. subsequent, 376. creditors receiving, not affected by proof of subsequent Olaimfl, eta, 376, 544 preference to certain creditors, etc., 376, 544 Umit to right to collect, 376, 544. unclaimed after six months, disposition, 377, 544 after one year, 377, 544 of minors, 377, 544 DOCKETS— orders requiring clerk to keep, 591. DOCUMENT— definition of, 13. DOMICILE- duration of, to give jurisdiction, 17. necessary for jurisdiction, 23. DOWER— death of bankrupt, not to affect widow, 93, 94 right not divested by sale of assignee, 440. 664 IKDBX. ■ E. ESTATES— bankrupts', courts of bankruptcy to close, etc., 18. control of court over, 24, 415. trustee's duty in connection with, etc., 26, charge of bankrupt's, 26. closing of, 27, 249. trustee to collect and reduce bankrupt's, 244 expenses of administering, 348, 543. when entitled to priority, 366. of bankrupt, vested in trustee, 413. surrender of, to trustee, 415. rights of trustee over attached, 417. vrith reference to mortgages, 430. in trustee's hand, claim against, 483. trustee's relation to, in general, 438. in which trustee has no title, 484 appraisal and sale of, 436. recovery of property by trustee, etc., 444 ESTOPPEL— of creditor, assenting by silence at meetings, 363. EVIDENCE — compulsory attendance of witnesses, 175. how far back bankrupt maybe required to testify, 177. admissibility of, 177. of bankrupt, application for examination, etc., 178, examination of, 47, 86, 88, 178, 538. examination of wife, 183. arrest for refusing to testify, etc., 183. power of referee over examination, 224 manner of examination, 224 burden of proof, 183. of fraud, 184 record, eta, 184 foreign judgments, open to examination, etc., 185. adjudication, presumption of validity, 185. of partnership, 185. of a preference, 185. confidential communications, 186. of witnesses in general, 186. of trustee, 187. determination of right to take, 188. notice of taking, 189, 306. certified copies of proceedings, when admitted, 189, 190. certified copy of order approving bond constitutes, of title, 190. INDEX. 66& EVIDENCE (oontiimed) — examination of assignee, 325. preservation of, by referee, 328. as to voters' qualification, 369. of fraudulent intent, in conveyances, 403. examination of witness, how conducted, etc., 598. EXAMINATION (see Evidence) — bankrupt to submit to, etc., 47, 86, 88, 178. when not required to attend, 87. detention of, for purpose of, 97, 98. pending discharge, 139. at creditors' meetings, 363. EXECUTORS — when may be declared bankrupt, 53. EXEMPTION LAWS (see various States) — of various States, etc., 549. EXEMPTIONS — court to determine claims, 18. rules with reference to, 38. of bankrupts, allowed by State laws, etc., 76, 533. constitutionality of law affecting, 77. title to property in case of, 77. of homestead, 79. to head of family, 80. when allowed in general, 81. when disallowed, 81. waiver of, 83. allowance of, in case of personal property, 83. effect of allotment in case of liens, 83. in case of partnership, 84. claim for, by bankrupt, when made, 86. trustee to set apart, 344, 351. exceptions to allowance may be heard before referee, 596. EXPENSES — of administering estate, payment, 348L indemnity for, 594 EXTRADITION — jurisdiction of court of bankruptcy over, 18, 39. of bankrupts, 98, 534 F. FARMER— cannot become involuntary bankrupt, 51. FEES feee Compensation). 666 INDEX. FEMME COVERT (see WrFE) — set-oS of debts by and against, 409. FIDUCIARY CAPACITY — debts created in, not aflfeoted by discharge, 149, 151. FINDINGS — consideration of, by court when certified, 18. relation of court to certification of, 28. certification of, by referee for review, 599. FINES (see Crimes and Offenses)— for acting as referee when interested, etc., 215. purchasing property of estate, etc., 215. refusing inspection of accounts, eta, 215. FIRST MEETING (see Mebtinqs). , FLORIDA — exemptions allowed in, 555. FORMS — in bankruptcy matters, to be prescribed by Supreme Court, 2181 forms provided by United States Supreme Court, 601 No. 1. Debtor's petition, 604. Schedule A, 605. Schedule B, 608. I Summary of debts and assets, 611. 2. Partnership petition, 611. 8. Creditors' petition, 613. 4 Order to show cause upon creditors' petition, 614 6. Subpoena to alleged bankrupt, 614 6. Denial of bankruptcy, 615. 7. Order for jury trial, 615. 8. Special warrant to marshal, 615. 9. Bond of petitioning creditor, 616. 10. Bond to marshal, 617. 11. Adjudication that debtor is not bankrupt, 618. 13. Adjudication of bankruptcy, 618. 13. Appointment, oath, and report of appraisers, 618. 14 Order of reference, 619. 15. Order of reference in judge's absence, 620. 16. Referee's oath of office, 630. 17. Bond of referee, 631. 18. Notice of first meeting of creditors, 681. 19. List of debts proved at first meeting, 623. 20. General letter of attorney in fact, 633. 21. Special letter of attorney in fact, 633. 23. Appointment of trustee by creditors, 623. 23. Appointment of trustees by referee, 634 INDEX. 667 FORMS (continued) — forms provided by United States Supreme Court (continued) — Na 34 Notice to trustee of his appointment, 634 25. Bond of trustee, 635. 26. Order approving trustee's bond, 635. 27. Order that no trustee be appointed, 636. 28. Order for examination of bankrupt, 636. 29. Examination of bankrupt or witness, 636. SO. Summons to witness, 637. 81. Proof of unsecured debt, 637. 83. Proof of secured debt, 638. 88. Proof of debt due corporation, 638. 84 Proof of debt by partnership, 639. 85. Proof of debt by agent or attorney, 639. 86. Proof of secured debt by agent, 630. 87. Affidavit of lost bill or note, 681. 88. Order reducing claim, 631. 89. Order expunging claim, 633. 40. List of claims and dividends, 633. tL Notice of dividend, 633. 43. Petition and order for sale by auction of real estate, 633. 43. Petition and order for redemption of property from lien, 633. 44 Petition and order for sale subject to Uen, 634 45. Petition and order for private sale, 635. 46. Petition and order for sale of perishable property, 635. 47. Trustee's report of exempted property, 636. 48. Trustee's return of no assets, 636. 49. Account of trustee, 637. 50. Oath to final account of trustee, 637. 51. Order allowing account and discharging trustee, 638. 53. Petition for removal of trustee, 638. f 63. Notice of petition for removal of trustee, 638. 64 Order for removal of trustee, 639. 65. Order for choice of new trustee, 639. 66. Certificate by referee to judge, 640. 67. Bankrupt's petition for discharge, 640. 68. Specification of grounds of opposition to discharge, 64L 69. Discharge of bankrupt, 641. 60. Petition for meeting to consider composition, 643, 61. Application for confirmation of composition, 643, 63. Order confirming composition, 643. 63. Order of distribution on composition, 643k FEATTD — preventing confirmation of compositions, etc., 130. practice of, grounds for setting composition aside^ 133, 124 668 INDEX. FRAUD (continued) — discharge, when not barred by preference in, 181. to be revoked on ground of, 145. judgment in action for, not affected by discharge^ 149. evidence of, 184 of trustee in general, 349. disqualification to vote, 371. when a preference is a, 325. defeats right to prove debts, 360. liens valid when not given in, 387. evidence of intent in conveyances, 403. title of trustee to property conveyed in, 434 G. GENERAL ORDERS — in bankruptcy, 591. GEORGIA — exemptions allowed in, 556. GUARANTOR — liability of, not affected by a discharge, 14S. H. HOLIDAY — definition of, 13. computing time when last day falls on, 817. HOMESTEADS (see Exemptions) — exemptions of, 79. HYPOTHETICAL QUESTIONS— certification of by referee, 830. L IDAHO — exemptions allowed in, 557. IGNORANCE — of law, does not excuse creditor, eta, 844 ILLINOIS — exemptions allowed in, 558. IMPRISONED DEBTOR (see Arrest). INCUMBRANCES — subsequent to act, etc., to defraud, void, 895. within four months of petition, void under State laws, ebo., 89Sk INDIANA — exemptions allowed in, 659. INDEX. 669 INDIAN TERRITORY — exemptions allowed in, 559. ^ United States courts in, made courts of bankruptcy, 17. INDORSER — when may be declared bankrupt, 53. claim due as, provable, 355. INFANTS — cannot be declared bankrupt, 53. time for proving claims against bankrupt, 304, 540. INJUNCTION— how may be allowed, 195. not granted in matters of composition, 195. by State courts, 196. judge to hear request for, 595. INSANITY — of bankrupt, effect of, 94, 533. , not to abate proceedings, 93. ' time for proving claims against, 304, 540. INSOLVENCY — distinction between bankruptcy and, 6. definitions of, 39. of partnership, 40. trial of questions of, by jury, 171. what constitutes notice of, 341. proceeding under State laws not affected, 458. INSOLVENT (see Insolvency)- definition of, 13. when committing acts of bankruptcy, 33. filing of petition against, 45. from what to date, 45. failure to prove, a complete defense, 46. Uens created while, to be dissolved, 379. INSURANCE — proof of claim for, 284, 291. when may be proved as debt, 355. relation of trustee to, 428. INSURANCE POLICY — of bankrupt, how may be retained, 413. INTENT— necessary to constitute a preference, 344 evidence of fraudulent, in conveyances, 403. 670 INDEX. INTEREST — trustee to pay over to estate, 243. may be paid on claims proved, etc., 290, 375. when may be proved, 354. INTERLINEATIONS — permitted in petition, etc., for reference only, 593, INTERNAL REVENUE — debts due under law entitled to priority, etc., 372. INVOLUNTARY BANKRUPT — who may become, 51. who may file petition, 312. IOWA — exemptions allowed in, 559. J. JUDGE — definition of, 14. qualifications of, 21. to hear applications for discharge, etc., 595. JUDGMENT — in action for fraud, not affected by discharge, 150, 151. foreign, evidence of the debt adjudged, etc., 185. open to examination, 295. permitting rendition, a preference, 324* procuring and suffering, a preference, 833. non-resistance of debtor, 335. when valid, 336. collateral attack of, 337. may be proved against estate, 351, 363. when entitled to priority of payment, 369. lien cr:?ated by, when dissolved, 379, 545. obtained within four months, etc., void, 405. JURISDICTION— of courts of bankruptcy, in general, 17, 21, 519. over corporations, 22. in law and equity, 22. over liens, 22. residence or domicile necessary to, 22. over allowance and proof of claims, 24 bankrupt's property, 24. trial of offenses, 25. substitution of parties, 26. suits of bankrupts, 26. property of bankrupts, 26. IHBEZ. 671 JUEISDICTION (continued) — in connection with compositions, 27. over certified findings, 38. exemptions, 28. discharges, etc., 38. contempts, 39, 30. extraditions, 39. with reference to orders, etc., 30. over appointment and removal of assignees, 30. taxation of costs, 30. transfer of cases, 33. partners in case of bankruptcy, 63. snits by and against bankrupts, 100. suits by trustees. 111. to grant discharge, 133. to revoke discharge, 147. objection to petition for want of, 165. of circuit court in suits between trustee and adverse claimant, 192; concurrent, between circuit and courts of bankruptcy, 193* of district court in law and equity, 196. when State court has, 197, 539. wiU not bar bankruptcy court, 198. of appellate courts, 204. court making first adjudication, where several petitions filed, to retain, 593. JURY— defendant in involuntary bankruptcy entitled to trial by, 171, 537, waiver of right of trial by, 173. attendance of, 173. laws as to trials, 173. K KANSAS— exemptions allowed in, 561. KENTUCKY — exemptions allowed in, 563, LANDLORDS- lien of, 391. LAW, BANKRUPTCY— general review of, 1. act of 1867, 461, act of 1898, 517. €72 INDEX. LEASES— duty of trustee with reference to, 348, 435. liability on, a provable debt, 354. LEGAL PROCEEDINGS — constituting acts of bankruptcy, 41. wben not, 43. LEVY — waiver of, 379. obtained within four months, etc., void, 405, 545. LIENS— jurisdiction of court over, 22. e£Eect upon, in case of allotting exemptions, 83. effect of compositions on, 117. duty of trustee with reference to, 349. waiver of, 278, 279. mechanics', 283. unrecorded claims, etc., not, 877. trustees subrogated to right of creditors, 379, 544 created vsdthia four months, to be dissolved, 379, 544i attachment within four months, 380. execution, 381. effect of notice of, 383. cannot be acquired after filing petition, 383. when obtained through judicial proceedings, are valid, 383, 545. attachments, when valid, 385. enforcement of valid, 386. given in good faith, etc., not affected, 387, 546. no distinction between various kinds, 388. when mortgages valid against estate, 388. enforcement of mortgagee's rights, 389. rights of pledgees, 391. landlord's, 391. in general, 393. enforcement of, 393. priority of, 394 when mortgages are valid, 39& effect of general assignments, 397. conveyances to wife or children, 898. 'Conveyances, when invalid, etc., 399, 545. when held valid, 401. evidence of fraudulent intent, 403. created through legal proceedings, when void, 405, 545. disposition of property, etc., 405. purchaser for value, etc., not affected, 405, 545. for rent as against trustee's title, 435. of trustee, to take place of bankrupt's, 435. INDEX. 673 LOUISIANA — exemptions allowed in, 562. LUNATICS (see Insanity) — when may be declared bankrupts, 53. M. MAIL — when referee may use, without paying jjostage, 319, MAINE — exemptions aUowed in, 563. MANUFACTUREES — who are, 54 MARRIED WOMEN — when may be declared bankrupt, 51. MARSHALS — when court of bankruptcy to appoint, 17. compensation of, 257, 358, 537. orders relative to accoiints of, 597. requiring indemnity for costs, 594 MARYLAND — exemptions allowed in, 563. MASCULINE GENDER — words importing, how construed, 16. MASSACHUSETTS — exemptions allowed in, 564 MATTER IN CONTROVERSY — what constitutes, 209. MEETINGS (see Composition)- bankrupt to attend creditors', etc., 85, 88. when not required, 87. power of referee over adjournments, 225. trustee to lay statements, etc., before final, 244 when creditors to fix amount of trustee's bond, 255i. of bankrupt's creditors, time and place, 260, 538. first; adjournments, 261, 538. presiding officer, 261. proof of claims at, 262. examination of bankrupt, 263. selection of trustee, 363. composition, 263. what steps to be taken, 265. time and place of subsequent, 365. call of, by judge, 366. final, ordered, 266. voting at, 367, 53a 43 674 INDEX. MEETINGS (continued) — notice of, to be given, 306. how to be given, 309. when not to be ordered, 595. when special may be called, 599. MERCHANTS — who are, 54 MICHIGAN — exemptions allowed in, 564 MINNESOTA — exemptions allowed in, 565. MINORS — time for claiming dividends, 377. MISSISSIPPI — exemptions allowed in, 566. MISSOURI — exemptions allowed in, 567. MONEY— to be disbursed on check or draft, 344 "MONEYED BUSINESS OR COMMERCIAL CORPORATIONS "- defined, 55. MONTANA — exemptions allowed in, 568. MORTGAGE — chattel, when giving, act of bankruptcy, 35, when a preference, 329. when giving of, not act of bankruptcy, 38. when not a preference, 333. when entitled to priority of payment, 370. when valid against estates, 388. enforcement of mortgagee's right, 389. when invalid, 396. trustee's relation to, 420. rights that do not pass to trustee, 848, 431. MUTUAL DEBTS— may be set off, 405. what are, 406. K NATIONAL BANKS — cannot become involimtary bankrupts, 51. NEBRASKA — exemptions allowed in, 569. INDEX. 675 NEVADA — exemptions allowed in, 570. NEWSPAPERS — designation of, to publish notices, 311, 530. NEW HAMPSHIRE — exemptions allowed in, 571. NEW JERSEY — exemptions allowed in, 571, NEW MEXICO — exemptions allowed in, 571. NEW YORK — exemptions allowed in, 573. NON COMPOS MENTIS (see Insaottt). NORTH CAROLINA — exemptions allowed in, 574 NORTH DAKOTA — exemptions allowed in, 575. NOTARY PUBLIC — proof of claims before, 274 NOTES — holder of negotiable, may oppose discbarge, 128L effect of composition on accommodation paper, 144 NOTICES — designation of papers for publishing, 211, 530. referee to give, 337, 229. to creditors, when to be given, 305. may be waived, 306. iiLSu£Scient, 307. in general, 308, 540. of compositions, 308. of sales, 309. of accounts, 309. of compromises, 309. of first meeting, etc., 309. to be given by referee, 310. to creditors not joined in petition, 320. petitions not to be dismissed without notice, 333. of insolvency, what constitutes, 34L effect of, 842. effect of, on creditors' liens, 382. to transferee, of fraudulent intent, etc., 404 orders permitting service upon attorneys, 593. to trustee, of his appointment, 596. to be sent creditor at place requested, 597. C76 INDEX. NUMBER — ■words importing plural, how construed, 16. singular, how construed, 16. of claims, method of computing, 314 o. OATH — definition of, 14. by whom administered in bankruptcy matters, 174, 537. of office of referees, 321, 633. to be administered by a referee, 333, 334» OFFENSES (see Cemes and Offenses)— jurisdiction over trial of, 35, 530. jurisdiction of court over, 35. OFFICER— definition of, 14 in bankruptcy matters, creation of trustee and referee, 219. OHIO — exemptions allowed in, 576. OKLAHOMA — exemptions allowed in, 578. ORDERS — in bankruptcy, promulgated by Supreme CJourt, 591. validation of proceedings had, 591. may be served upon attorneys, 593. OREGON— exemptions allowed in, 578. P. PAPERS — of trustees, open to inspection, etc., 353, 536. orders relative, when filed after reference, 597. filed by attorneys, to be indorsed, 593, PARTIES — courts may allow substitution of, 36. PARTNERS — discharge of, 139. effect of discharge on debts, 141. filing of voluntary petition by, 311. when conveyance of property not fraudulent, 89. insolvency of, 40. who are, 56. who may be adjudicated bankrupt, 55, 56, 523. INDEX. 677 PARTNERS (continued) — bankruptcy of one, 57. when proceedings joint, 58. when may proceed against copartner, 58, acts of bankruptcy of, 60. nature and effect of proceedings against, 60. when adjudication may be set aside, 60. administration of estates, 61. jm-isdiction over one partner sufficient, 63. trustee's duty, 63. expenses, payment of, 64 payment of debts, 65. surplus of property, 65. claims of firm creditors, 67. rights and liability of individual members, 69. claim against individual and partnership estates, 71. firm assets, 71. individual assets, 73. claims between the estates, etc., 73. adjudication of one partner, 74. settlement of joint affairs, 75. claims of, against individual estates, etc., 75. administration of estate where all not bankrupts^ 78> exemptions in cases of, 84. evidence of, 185. election of trustee, 269. computation of number and amount of claims, 318. what debts may be proved, 355. when claims of, provable, 358. trustee's relation to property of, 439, 450. orders relative to hearing of petitions in different courts, 593. where filed by different members, 593. proceedings where partner refuses to join, 593. PATENTS— title of bankrupt vested in trustee, 413, 441. PAYMENT — into court, does not defeat petition, 319. made to bankrupt, rights of trustee to, 433. orders governing making of, 600. PENNSYLVANIA — exemptions allowed in, 579. PERISHABLE PROPERTY— orders relative to sales, 596. PERSONAL SERVICE — when may be pleaded as set-off, 408. 678 INDEX. PERSONALTY — bankrupt's sale of, 436* in general, 441. PERSONS — definition of, 15. PETITION — definition of, 15. against insolvent, when filed, 45, 530, 540. from when to date, 45. taxation of costs on dismissal of creditor's, 49. of debtor for composition, 114. involuntary bankruptcy, service of, 156. when returnable, 156. rules as to, 159. amendments of, when allowable, 160. when not, 161. when special reasons required, 162L objections to, 162. averments by assignee, etc., 163. averments in general, 163. adjudication of, etc., 168, 169. referee to consider such as referred, 333. in voluntary bankruptcy, who may file, 310, 332, 541. filing of second petition, 310, 313. not defeated by payment into court, 319. must be in duplicate, 319, 541. contents of, 319. in case of corporations, contents, 319. notice to creditors not joined, 320. not to be dismissed without notice, 353, 541. withdrawal of creditor from petition, 334. when act took effect concerning, 458. orders relative to amendments, 594. reqxdring, to be printed or written, 593. without abbreviations, etc., 592. relative to hearings, where more than one filed, 592. amendments, showing earlier acts of bankruptcy, 598. in different courts against partnership, 593. consolidations, 693. POWER OF ATTORNEY— ' authorizing appearance at meetings, 268. PLEADING— grounds for stay of suit in State court must be pleaded, 104 failure to plead discharge, etc., 133, 140. when discharge may not be pleaded, 140. INDEX. 679 PLEADING (continued) — petition, service of, etc., 166, 536w requirements as to, 159. amendments of, 160. demurrers in general, 163. by bankrupt or creditor to be within ten days, 163. defenses in general, 164 decision where none filed, 168. reference of case to referee, 168. adjudication of petition, etc., 168, 169. reference of case after adjudication, 191. transfer of case from one referee to another, 1931 when to be verified, etc., 165. determination of issue where facts denied, 166. PLEDGE — when not fraudulent, 38. rights of, 391. POLICY OF INSURANCE — of bankrupts, how may be retained, 413. POOR BANKRUPTS — not required to pay filing fee, payment of fees in case o:^ 60% POSSESSION — of bankrupt's property, when taken, tlL release of, on giving bond, 411. POSTAGE — referees not required to pay, on ofiScial matter, 319, POWERS — which bankrupt may exercise, to vest in trustee, 413. PREFERENCE — constituting acts of bankruptcy, 40, 520, when not, 40. legal proceedings constituting, 33, 41. when not, 42. when fraudulent, 325. what payments are, 336. when payments are not, 331. conveyances and transfers constituting, 33, 337 when not, 330. by chattel mortgages or bill of sale, 339, when mortgages are not, 382. exchange of securities not, 333. procuring and suffering judgments, 833. non-resistance of debtor, 385, judgments, when not, 386, when voidable^ 837. 680 INDEX. PREFEEENCE (cwntinued)— effect of giving and taking, 339, 343. when constitutes notice of insolvency, 341. intent, what constitutes, 344. more than four months prior to bankruptcy, 348k when transfer or payments to attorneys valid, 347. evidence of, 185. defeats right to prove claims, 296, 360. surrender of, 397. lien operating as, to be dissolved, eta, 379. PREFERRED CREDITORS (see Cebditoes)— who deemed, 334, 541. claims not to be allowed unless preference sorrendered, etc, ' 297, 539. PROCEDURE — in accordance with act of 1867 validated, 591. rules of equity practice to be followed, 603. PROCEEDINGS— may be conducted by bankrupt or attorney, etc., 593. attorneys to indorse papers, etc., 592k PROCESS- court to issue necessary, 1& rules governing, 157. service of, 158, 536. general orders relative to issuance of, 593l blanks, etc., to be furnished referee, 593. PROOF OF CLAIMS (see Claims)— jurisdiction of court over, 24 jurisdiction of referee over, 225. bankrupt to examine, 85. of what to consist, 271, 539. how must be given, 373. what must be proved, 273. by whom to be made, 373. before whom to be made, 374 when may be made, 274 what is not, 275. postponement of, 275. amendment of, 275. withdrawal of, 276. a moiety only provable, 276. in general, 277. effect of, 378. effect of failure of, 280. INDEX. 681 PKOOF OF CLAIMS (continued)— secured, 281. what held not to be secured, 283. what are provable, 284 what are not, 387. commercial paper, 286. when founded upon a writing, 288, 539. after proved, may be filed, 289, 539. allowance of, 289, 539. postponement as affecting trustee's election, 268. necessary to qualify voter, 268. of partnership estate against individual, etc., 7i general orders relative to, 597. when filed after reference, 597. PROPERTY (see Estates)— application to take possession of, prior to adjudication, 48, seizure of, to prevent deterioration, etc., 411. PROXY — term " creditor " includes, 13. PURCHASER — conveyances to, etc., in good faith, valid, 395. for value, etc., title obtained by lien, not affected, 4(^. E. RAILROADS — are comprehended by words "moneyed, business, etc., corporations," 55. RECEIVERS— courts of bankruptcy to appoint, 17, 519. effect of appointment prior to bankruptcy proceedings, 199. under State courts, relation to assignee, etc., 454 RECORDS — of referee, how kept, 235, 534 when case concluded, to be filed with clerk, 236. order reqiiiring keeping of, 591. REDEMPTION— of bankrupt's property, when permitted, 600. RE-EXAMINATION— of allowed claim, 303. orders with reference to claims, 598. REFEREE- dfiflnition of, 15. punishment of contempt before, 18, 3(X 682 INDEX. REFEREE (continued) — reference of case to, in absence of judge, 168. may administer oath, etc., 174. power to announce conclusion of examination in advance, 184 reference of cases to, after adjudication, 191. transfer of cases from one to another, 198. penalty for acting when interested, etc., 215, 531. for refusing inspection of accounts, 215, 531. when may use penalty envelopes, etc., 819. office of, created, 219, 531. appointment, remioval and districts, 219, 531. qualifications of, 230, 532. to take oath of office, 321, 533. number of, 221, 532. jurisdiction, 231, 533. over petitions for adjudication, 323. over administration of oaths, 284, 527. over examination of bankrupts, 234, 528. clerk of court to collect and pay filing fee, 256, 257. to deliver certain papers to, 256. powers of, over proof of claim, 225, 539. as to meetings and adjournment, 235. to perform certain duties of court, 235. duties of, in general, 326, 533. to give notices, 337, 339, 310, 540. to certify findings to court for review, 227, 239l hypothetical questions, 230. not to act if interested, etc., 230. not to purchase property of a bankrupt's estate, 230. compensation of, 231, 533. contempts before, 233, 533. certification of, to court, 235. records of, how kept, 235. 534. absence or disability, 337, 534. bond of, 254, 536. corporation may become sureties, 355, 586^ filing of, 255. failure to give creates vacancy, 256. when suits to be brought, 356. general orders requiring indorsement of papers filed, eta, 593; to be furnished subpoenas, etc., in blank, 592l may require indemnity for costs, 594» duties of, 595. proceedings before, 595. to notify trustee of his appointment, 596. duties in connection with taking testimony, 599. INDEX. 683 REFEREE (continued) — orders of, what to contain, 599. to transmit list of claims to clerk, eta, 599. accounts of, 599. petition for review of orders of, 599L compensation of, 603. REFERENCE (see FmDiNas). REJECTION — of claims, 289, 290, 291. REMOVAL — of property, when act of bankruptcy, 33, 37. of trustee, 535. RENT— payment of, as an expense, 350. when entitled to priority of payment, 366, 36& liens for, as against trustee's title, 42S, REPORT— to be made by trustee, 250. to be made by attorney-general, 537. RESIDENCE (see DomcmE)— prerequisite to jurisdiction, 23, REVIEW — by court of referee's orders, etc., 599. RHODE ISLAND — exemptions allowed in, 580: RULES — with reference to process in equity, 157. in bankruptcy matters, to be prescribed by Supreme Court, 2161 promulgated by Supreme Court, 591. s. SALES — of bankrupt's property, duty of coiuHis, etc., 27. notice of, to be given, 306, 309. subject to court's approval, 426. in general, 440. of personalty, 441. when set aside, 442. trustee to make conveyances, 443L of goods, when act of bankruptcy, 3& when not act of bankruptcy, 37. orders requiring to be by auction, 596. when private, 596. of perishable property, 596. 684 INDEX. SCHEDULE — of property to be filed by bankrupt, 86. preparation of, 88. amendment of, 89. false swearing in, 90. omission of creditors from, 91. what claims to be included, 91. relation of, to composition proceedings, 92. effect of inserting claims in, etc., 93. statement of composition to conform to, 115. omis^ons in, effect upon discharge, 93> when not a bar to discharge, 133. wilful false swearing in, 135, 136, 146. referee to examine, etc., 226. to prepare if bankrupt is delinquent, 237. order requiring preparation in absence of bankrupt, 594' permitting amendment, 594 to be printed or written, eta, 593. without abbreviation or interlineations, 592L SECURED CREDITORS — definition of, 15. when not entitled to vote, 270, 538. allowance of claims of, 392, 539. value of securities held by, 299, 539. claims secured by individual undertaking, eto., 301, 639. SECURED CLAIMS— proof of, 281. what held not to be, 283. SEIZURE — of bankrupt's property to prevent deterioration, eta, 411. bond to be given, 411. when may be released, 411, liability for unlawful, 413. "SEPARATE ESTATE" — defined, 72L SERVICE— personal, when may be pleaded as set-off, 403. SET-OFF— relation o^ in cases of compositions, 118. between bankrupt and creditor, 405, 406, 546. in case of stock liability, 407. bank deposits, 407. Tinliquidated damages, 407. for personal service, 408. INDEX. 685 SET-OFF (continued) — of preferences, 408. where debts are not proved, etc,, 408. otfevie covert, 409. when not allowed, 409, 546. SOLVENCY — a complete defense to bankruptcy proceedings, 46. SOUTH CAROLINA — exemptions allowed in, 580. SOUTH DAKOTA — exemptions allowed in, 580. SPECIFICATIONS (see Discharge) — in opposing to discharge, requirements of, 134. may be amended, 185. orders of, with reference to, 601. STATE (see States). STATE BANKS — cannot become involuntary bankrupts, 51. STATE COURTS — stay of suits against bankrupts, etc., 100. proceedings in, enjoined by Federal courts, 194. when not, 195. application for injunction, 195. injunction by, 196. in bankruptcy matters, when have jurisdiction, 197, 539. when bankrupt court not barred, 198. efleot of appointm.ent of receiver, 199. when have no jurisdiction, 199. practice in, 201. acts of, which bind Federal courts, 803. concurrent jurisdiction with Federal, 302l STATES — definition of, 15. when may enact bankruptcy and insolvency laws, 7. debts due to, allowance of, 302. when entitled to priority, 365, 543. proceedings under insolvent laws of, not affected, 458. STATUTE OF LIMITATIONS — effect of proof of claims on, etc., 305, 359. STAT (see State Cotjkts)- of suits against bankrupt, etc., 99. who may obtain, 103. order requiring judge to hear request for, 595. 686 INDEX. STENOGRAPHERS — referees to authorize employment, 223. STOCK— setofiE of liability, 407. right of trustee, when transferred, etc., 453. STOCKHOLDER — Liability on insolvency of company, etc., 427. liability of trustee in case of, 438. liability to trustees, 450. STJBPCBNAS — orders relative to issuance of, 593. blank, to be furnished referee, 593. STTBROGATION — of one creditor to rights of another, 301, 544 SUBSTITUTION — court of bankruptcy to authorize, of parties, 18. jurisdiction, etc., 26. SUITS (see Trustee) — of bankrupts, jurisdiction of court over, 26. by and against bankrupts, 97, 534 stay until adjudication, etc., 99, 100. what suits stayed, 101. who may obtain stay, 103. i ground to be pleaded, 104 suits not stayed, 105. by trustee to collect bankrupt's property, etc., 26. against bankrupt, appearance of trustee, 108. when may become a party, 108. against trustees, 113. parties to, 113. costs in, 113. when may be brought, 113. commenced prior to adjudication, 108. at law, restrained till discharge determined, 131. where brought by, 198, 194 not to abate on death of trustee, 341. upon bonds of referees and trustees, in name of United States, 355. when to be brought, 256. lien created pursuant to, when dissolved, 379. SUMMONS — orders relative to issuance of, 593. blanks to be furnished referees, 592. INDEX. 687 SUPREME COURT OF "THE DISTRICT OP COLUMBIA — made court of bankruptcy, 17, 519. appeal from, 203. rules governing appeals from, 603. SUPREME COURT OF THE TERRITORIES (see Tebeitobies) — rules governing appeals from, 608. SUPREME COURT OF THE UNITED STATES — appellate jurisdiction over courts of bankruptcy, etc., 203, 529. over circuit court of appeals, 208, 529, 602. certification of cases to, 209, 530. to prescribe rules, forms and orders, 216, 531. orders and rules in bankruptcy, 591. forms in bankruptcy, 604 SURETY (see Bonds) — liability as, released by discharge, 140. not affected by discharge, 148. on bonds of trustees and referees, 254 two necessary on each, 255. corporations may be, 255, 536. T. TAXES — entitled to priority of payment, 365, 371, 543. X>ayment, as an expense, 351. owing by bankrupt, payment of, 363. TENNESSEE — exemptions allowed in, 581. TERMS — courts always open, 20. TERRITORIES — district courts of, made courts of bankruptcy, 17. appeal to Supreme Court of, from courts of bankruptcy, 303, 529. when, to United States Supreme Court, 208. TESTIMONY (see Evidence) — person denying insolvency, to give, 47, 521. burden of proof, 47. general orders relative to taking of, 598. TEXAS— exemptions allowed in, 583. TIME — method of computing, 217, 531. when act to take effect, 458, 547. 688 INDEX. "TIME OF BANKEUPTCY "— definition of, 13. TITLE — in case of bankruptcy to partnership property, 6i, 439, vested in trustee, 412, 546. nature of trustee's, 416. liens for rent as against trustee's, 435. funds in bank, etc., 436. to commercial paper, 437. trustee to convey, 443. in case of composition, vested in trustee on setting aside, 444, 647. revested in bankrupt on confirming, 444, 547. trustees may avoid transfers, etc., 444 547. TRADE-MARKS — title of bankrupt vested in trustee, 413. TRADESMEN — who are, 54 "TRANSFER"- definition of, 15. of cases by court, 19, 531. when permitted, etc., 33, 218. of property when acts of bankruptcy, 33, 35, 36, 530. when a preference, 334, 327. when not, 3C0. subsequent to act, etc., to defraud, void, 395, 546. within four months of petition, void understate laws, 395, 545. in foreign countries by bankrupt, 85. TRIALS (see Jury)- by jury, in involuntary bankruptcy cases, 171, 527. TRUSTEE (see Suits; Title) — definition of, 15. court of bankruptcy, when to appoint, 18. to punish, 18. to discharge, 18. relation of to appointment and removal, 80. how selected in case of partnership, 61, 269. duty, etc., 63. office of created, 319. appointment of, 337, 534 at first meeting, 263. election of, 267. postponing proof of claim as affecting election, 268. who may not vote for, 238, INDEX. 689 TRUSTEE (continued) — right to vote, 239. appointment of additional, 23& qualifications of, 240, 584 death or removal of, 241, 535. duties of, 243, 535. to collect assets, etc., 246. duty with reference to mortgages, leases and liens, 248. fraud or mistake of, 249. closing estates generally, 249. to furnish information, etc., 250. to pay dividends, 250. to make final report, 250. to set apart exemptions, 251. concurrence of two out of three necessary, 251. compensation of, 252, 535. apportionment, where more than one, 253. when may be withheld, 253. accounts and papers open to inspection, 253, 538. bonds of, 254, 536. of new trustees, 255. amount may be increased, 255, 536. filing of, 255, 536. when not liable, 256, 537. failure to give, 256, 537. joint or several, 256, 537. suits upon, when brought, 356, 537. clerk of court to coUeot and pay filing fee, 256, 537. payments to attorneys, re-examination on petition of, 847. averments in petitions, etc., 162. when required to testify, 187. examination of, 225. jxirisdiction of court over controversies, 192. not required to give bond on bankruptcy appeals, 310, 580. may submit controversies to arbitration, 211. may compromise controversies, 211. penalty for refusing inspection of accoimts, 215. property conveyed in fraud passes to, 395. Bubjeot to Uen, etc., when to pass to, 405. nature of title to bankrupt's property, 416. rights of, over attached property, 417. when none conferred, 419. relation of, to mortgages of bankrupt, etc., 420. to trust property, 423. title to property conveyed in fraud, 424. 44 690 INDEX. TRUSTEE (contlmied) — relation to leases, 425. right to commercial paper, 427. liability of, in case of insolvency of stockholder, 438, relation to partnership property, 429. to choses in action, 431. rights of trustee to payments to bankrupt, 433. claims against estate in hand of, 432. relation to property in general, 433. in which trustee has no title, 434. lien of, in place of bankrupt's, 435, 544. may avoid transfers by bankrupt, etc.,' 444. what property may recover, etc., 445, 455, fraudulent conveyances, 446. when may not be recovered, 456. represents bankrupts and creditors, 4A& recovery of attached property, 449. of funds in bank, 449. liability of stockholders to, 450. rights of, with reference to partnership property, 450. right to sue for money paid as usury, 453. orders requiring appointments, to be approved, 595. removal to be by judge, 595. no official or general to be appointed, 595. not appointed in certain cases, 695. notice of appointment to, 596. duties of, 596. accounts to be audited by referee, 59ft compensation of, 602. TRUST PROPERTY— relation of trustee to, 433. u. UNITED STATES— debts due to, allowance of, 302, 540. debts due, entitled to priority of payment, eta, 865, 371, 643. suits on bonds to be in name of, 536. UNITED STATES COURTS (see Coubts of Bankbuptot; Supeeme COXTBT OF THE UNITED STATES) — district, etc., made courts of bankruptcy, 17, 519. UNLIQUIDATED DAMAGES (see Damages). USURY— right of trustee to sue for money paid as, 453. UTAH— exemptions allowed in, 583. INDEX. 691 V. VENUE (see Transfer)— transfer of cases from one court of bankruptcy to another, 19l VERIFICATION— of pleading, when required, 165i of petitions, eta, 174» VERMONT— exemptions allowed in, 584. VIRGINIA— exemptions allowed in, 585. VOLUNTARY BANKRUPT— who may become, 49. filing of petition, 810. VOTERS (see VOTiNa)— right of creditors as, S39. qualified, at composition meetings^ 116. VOTING (see Voters) — counted as, when absent, 115. at creditors' meetings, 267, 538. election of trustees, 267. postponement of proof as affecting election, 268. power of attorney to appear for voter, 268. proof of claim necessary to qualify, 268. power of general creditors to act, 269. testimony as to voter's qualification, 269. for trustee of partnership, 269. at first meeting, composition, 270. holders of secured claims not entitled, 270. disqualified by fraud, 271. w. WAGE EARNER— definition of, 15. cannot become involuntary bankrupt, 51. WAGES — payment, as an expense, 351. entitled to priority of payment, 865, 867, 543L WAIVER— of exemptions, 83. effect of, on discharge, 146. of necessary number to file i)etitioii, 817. WASHINGTON— exemptions allowed in, 586. 692 INDEX. WEST VIRGINIA— exemptions allowed in, 587. •WIFE — examination of bankrupt's, 183. proof of claim by, 285, 287. debts due, when may be proved, 854 effect of conveyances to, 398. interest of, in bankrupt's property, etc, 439, 4S3, WISCONSIN— exemptions allowed in, 583. WITHDRAWAL — of proof, 278. WITNESS (see Evidbnob) — application for discharge, examination after, 129L compulsory attendance of, 175. testimony of, in general, 186ii appearance by counsel, 187. not required to attend outside of State, eta, S33. fees of, when entitled to priority, 36S. WOBDS (see Dbedhtions)- importing masculine gender, IQ. plural number, 16. singular number, 18. WRITING— proof of claim founded upon, 288. WRITS OF ERROR— when allowed to review decisions of bankruptcy conrte^ 205, 529. WYOMING — exemptions allowed in, 689, I'i f 1