F He- ainmrll ffiaui ^rlynol EibratB KF1524.H6™""""'"'"'>""'™^ A treatise on the law of bankruptcy and 3 1924 019 205 347 Cornell University Library 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/cu31 92401 9205347 TREATISE ON THE UW BANKRUPTCY AND INSOLVENCY. I : - ' V r V ■ ■ A BY FRANCIS gJLLIAEB, AUTHOR OP THE LAW OF TORTS, ETC. EMBBACING THE BABTKBUPT ACT OF 1867. PHILADELPHIA: J. B. LIPPINCOTT & 00. LONDON : TETJBNER AND CO. 1867. rdz It fz- Entered, according to the Act of Congress, in the year 1867, by FRANCIS BILLIARD, In the Clerk's Office of the District Court for the District of Massachusetts. PREFACE TO THE SECOND EDITION. The present issue of the following work contains no change from the former one, with the exception of the new Bankrupt Law, which will be found at the close of the volume. The old United States Acts, and the Massachusetts Insolvent Law, are still re- tained. In two points of view these latter statutes, though now obsolete or superseded, may be regarded as still of great importance. Whenever, as is very often done, their respective provisions are substan- tially re-enacted, the old and the new laws should stand in juxtaposition, in order that this identity may show the application of former judicial decisions to the latter as well as the former. And, on the other hand, when, with a general similarity, there are points of difference, however apparently minute, there should be the same opportunity of comparison, for the purpose of meeting any questions which may arise as to the authority of (i) U PREFACE TO THE SECOND EDITION. cases which are predicated upon the precise phraseology of the repealed statutes. The design and scope of the work are fully set forth in the original preface, which is hereto subjoined. F. H. April, 1867. PR'EFACE. Bankruptcy and Insolvency, though depending wholly on the statutory law, and liable to be at any time not only changed and modified, but entirely abro- gated, by a simple alteration or repeal of the legislation which created them, are, notwithstanding, important topics of permanent jurisprudence, and furnish abund- ant material for an elementary treatise or tex1>book. While, in the legislation of England and America, a series of acts is found i^on these subjects, with great diversity of detailed provisions, and a large proportion of them now obsolete; yet through the whole there runs an unbroken thread of policy and purpose, which renders the system, however often changed by positive enactment, virtually one, and perpetuates the authority of judicial decisions, even when nominally predicated upon particular statutes which have long ceased to exist. It is indeed within the limits of possibility, as has been already suggested, that the whole system of bankruptcy and insolvency may be exploded; in (iii) PREFACE. which event, of course, the entire body of bankrupt and insolvent law, whether legislative or judicial, falls to the ground. But, in a commercial age and nation, there is little reason to apprehend, that the two great purposes of this law, the equal distribution of a debtor's property among his creditors, and the discharge of an honest debtor, after such distribution, from his debts, will fail to be recognized, with perhaps occasional in- tervals and exceptions, as among the most imperative demands of National or State legislation. Whenever such legislation occurs, there is now on record a volu- minous body of English and American decisions, made in construction of former statutes, of which distribu- tion and discharge were the paramount objects, and substantially applicable to any new enactment i7i pari materid, however they may differ in detail from acts long since repealed. Indeed judicial decisions rather supply than construe the words of statutes. They constitute the complement for those innumerable open- ings, which the necessary brevity of every legislative act, and the unavoidable imperfection of language, must leave in all positive enactments, for dispute and interpretation. Accordingly it will be found, by any reader of the present work, that the rules and principles, which the author has attempted to deduce from English and American cases, rarely depend upon the precise phraseology of any particular statute, unless, PRBFACB. V indeed, it is so vital to the system itself as to be vir- tually repeated in all of them ; but are alike applicable to the successive bankrupt acts of England, to the two, now repealed, acts of the United States, and to those insolvent laws of particular States, which, with a few exceptions necessarily incident to State legislation, in the absence of a national law, themselves constitute systems of bankruptcy. And it may be added, that if, as seems not improbable, for the relief of wide-spread commercial embarrassment and prostration, and in re- sponse to the very urgent popular demand. Congress shall enact a new, and it is to be hoped permanent law upon the subject; such law cannot, in the nature of things, be expected to contain many provisions which are not found in substance in some pre-existing statute, and which have not therefore been construed by the English and American courts. If the present work should afford any aid in the preparation of such a statute, by exhibiting in a connected form those numer- ous decisions, found scattered in the reports, which affix a prospective as well as historical meaning to legislative terms, or supply applications which no legislative terms can expressly reach; one of its objects will have been attained. If, on the other hand, the national legislature in its wisdom should postpone action upon the subject, till questions of more engrossing interest shall be brought to a final issue ; the present work, it is hoped, VI PREFACE. whenever that joyful time may arrive, will still be found useful throughout the country; while in the mean time it may serve to throw light upon those State insolvent laws, which have been or may be enacted, to supply the place of a national bankrupt act. Some of the leading bankrupt and insolvent statutes will be found in an Appendix. New Yoek, 1863. CONTENTS. I'AWES Table of Cases Cited xv-xxxiii CHAPTER I. Nature of Bankktjptct, etc . 1-17 1. Meaning of the terms banJcrupt and insolvent; analogy and distinc- tion between them. 3. General purposes of bankrupt and insolvent laws, 5. Necessity and inefficiency of such laws. 6. When proceedings may be annulled. 9. English and American bankrupt acts. 13. Nature of a commission. 17. Constitutional questions in the United States. CHAPTER II. Acts op Bankruptcy and Insolvency .... 18-39 1. General rule. Bankruptcy consists in acts. 2. What are aats of bankruptcy. 3. EEFect of an act of bankruptcy upon subsequent dealings — relation. 4. Notice. 5. Whether bankruptcy is a crime. 6. The act constitutes bankruptcy. 8. Act of an agent. 9. A bankrupt cannot set up a prior act. 10. The act cannot be purged. 11. Concerted act. 12. Joint commission. 13. Intent to defraud. 14. Time of the act. 16. Place. 17. Absenting or keeping house. (v!i) Vlii CONTENTS. 21. Dental. 32. Departing. 38. Concealment of goods. 39. Imprisonment. 45. Failure to dissolve attachment. CHAPTER III. Who may be Bankrupts or Insolvents . . . 40-55 1. General remarks. 2. Trading, whether necessary; question of trading; how determined; estoppd. 6. Miscellaneous occupations. 8. Whether selling the produce of labor is sufiBcient. Mechanics, artificers, etc. 9. Innkeepers. 10. Ship-owners. 11. Drawing, etc. of bills. 12. Banking, etc. 13. Selling the produce of land. 15. Single acts of trading. 16. Allegation of the mode of trading. 17. Unlawful trading. 18. Trading in one's own right — executors, etc. 20. Time of trading. 21. Infants. 22. Married women. Provision for them in case of the bankruptcy of their husbands. 25. Place of trading ; foreigners ; aliens. 27. Form of objecting that the party is not subject to bankruptcy. CHAPTER IV. Bankruptcy and Insolvency in case of Partnership . 56-80 1. General remarks. 2. Bankruptcy or insolvency of a partnership — form of proceeding. 6. Bankruptcy, etc. of one partner. 8. Bankruptcy dissolves a partnership. Effect on the right of the part- ners to dispose of property, etc. 11. Mutual and relative rights of the assignee and the solvent partner. 14. Besidence — jurisdiction. 16. Joint and separate property. Change of title before bankruptcy- transfer by one partner to the other. CONTENTS. IX 23. Joint and several commissiona — joint and several debts— form of peti- tion — appropriation of assets — double proofs — election of proofs, etc. 31. Whether the partnership may prove against a partner. 32. Different firms consisting of the same members. 34. Choice of assignees, by whose vote. 36. Allowance. 37. Set-off. 38. Costs. 39. Discharge. CHAPTER V. Forms or Proceeding in Bankruptcy and Insolvency . 81-100 1. Regulated by statute. 2. The petition ; signature, oath, etc. 4. Notice to the debtor. 5. Proof of the petition. 6. Misnomer, etc. 8. Amendment. 9. Schedules of property and debts. 12. Warrant. 13. Clerk. 14. Meetings. 16. Decree or judgment. 17. Trial by jury. 18. Evidence. 30. Mutual bearing of proceedings in bankruptcy, etc. and actions at law — right of election. 37. Parties. CHAPTER VI. Property op the Bankrupt or Insolvent — Messenger — Assignment . 101-181 1. Messenger and provisional assignee. 5. Assignee. 6. Who may be. 7. Election. 8. Removal. 10. What property passes to the assignee. 11. Subject to equities; incomplete contracts, etc. 12. Trusts. 14. Possibilities — inheritance — devise. 15. Miscellaneous property — policies of insurance, patents, offices, etc. 19. Liens and incumbrances — equitable liens. 20. Sale, etc. for liens — statutory provisions. K CONTENTS. 24. Bills, etc. held as security. 27. Lien, on whose property. 28. Lien by legal proceedings ; attachment, judgment, etc. 41. Lien by judgment. 42. Lien by execution. 43. Eights of assignee in case of fraud. 46. Property in the order and disposition of the bankrupt. 49. Leases. 59. Ghoses in action. 62. Claims for torts or wrongs. 64. • Foreign property. 73. Rights of the bankrupt or insolvent in his property; allowance, etc. 77. Time in connection with the assignment, the title of the assignee, etc. 84. Sale of property by assignees. 94. General responsibility of assignees. 100. Conflicting assignments — voluntary and ofiScial assignees. 103. Joint assignees. 107. Successive assignees. 112. Assignees and receivers. 116. Assignment by special order of court. CHAPTER VII. Debts in Bankruptcy, etc. — Petitioning Creditor . 182-193 1. Debts — importance of the subject. 2. Petitioning creditor. 4. Question of time. 6. Form of proof^strict. 7. Duties of the creditor. 8. Case of a former commission. 9. Bond of creditor. 11. Parties — husband and wife. 12. Infant. 13. Partners. 14. Foreign creditor. 15. Bankrupt and assignee. 16. Holder of bill of exchange. 17. Executors. 18. Mortgagees, etc. 19. Agent. 20. Sole creditor. 21. Amount of debt — interest, etc. 22. Limitation. 23. Claim must be complete. 24. Consideration. CONTENTS. XI 25. Equitable claim. 26. Liquidated. 27. Claim secured by mortgage. 28. Judgment, verdict, award, costs, execution. 30. Payment of the petitioner's debt. 31. Liability of petitioner for costs. 32. When a creditor is estopped from petitioning. CHAPTER VIII. Proof of Claims 194-226 1. Rights of proving creditors. 2. Connection betweeij proof and discharge. 3. Whether a special contract is provable — claim requiring a jury. 5. Time of the debt — future debts. 7. Consideration. 8. Illegality. 9. Who muat prove. 10. Mode of proof. 11. Creditor holding security. 12. Amount of debt. 13. Interest. 16. Contingent claims. 21. Surety. 22. Equitable claim. 23. Bonds. 24. Notes, etc. 27. Judgment, verdict, etc. 35. Torts. 36. Dividends. 41. Preferred claims. 48. Set-off. 51. Withdrawing and expunging of claims. 53. Appeal. CHAPTER IX. Discharge 227-821 1. Nature, history, and various kinds of discharge. 4. Application of statutes providing for a discharge to pending cases. Discharges under National and State laws. 9. Discharge in case of previous batikrnptcjf, etc. j assent of creditorg. XU CONTENTS. 10. Whether judicial or mimstenal ; matter of right or discretion ; form of proceeding. 12. Necessity of a certificate. 13. Conclusiveness of the certificate ; question of jurisdiction ; notice ; whether the record is to be offered in evidence. 18. How pleaded ; form of plea and replication ; notice of objections to the discharge. 25. Fraud, as an answer to a plea of discharge. 26. Duty of creditors objecting to a discharge ; whether estopped by pre- vious proceedings. 27. Specification of acts of fraud. 28. Concealment of property; insufficiency of schedule. 38. Concealment or misrepresentation as to debts. 39. Estoppel of creditor. 41. General character of the bankrupt. 44. Subsequent promise to pay. 58. Effect of a discharge upon a, judgment. 63. Costs. 64. Continuances of suit in case of bankruptcy, etc. Plea puis darrein continuance. 69. Release from arrest and imprisonment ; stay or supersedeas of execu- tion, etc. 74. What debts are discharged — provable debts. 76. Foreign debts ; effect of a discharge under a State law upon citizens of other States, etc. 89. Debts due the State. 90. Fiduciary debts. 94. Necessaries. 97. Torts. 102. Unliquidated and contingent claims. 106. Eent 107. Surety. 108. Bail, and miscellaneous suretyship. 114. Claim of surety against the principal. 116. Assent of creditors. 123. Effect of statutes, in reference to the time of enactment and Vepeal. 132. Limitation. CHAPTER X. Preference ......... 322-361 1. General right of preferring. 3. Statutory provisions against it. 6. Construction of statutes. 7. Amount of property conveyed ; the whole or a part. 10. Whether the conveyance must be in contemplation of bankruptcy etc.; meaning of the term. CONTEXTS. Xlll 16. Pre-existing indebtedness ; agreement for future security; sale in the regular course of business. 20. Whether the conveyance must be voluntary; effect of pressure or compulsion. 24. Questions of time in regard to preference. 26. Voluntary assignment for the benefit of creditors. 27. A preference is in general only voidable by proceedings in bank- ruptcy, etc. 29. Evidence — presumption — burden of proof. 31. Preference by legal process. 34. Notice. 38. Preference by promise to pay a debt. 40. By payment. CHAPTER XI. JtJRISDIOTION 362-381 1. General — presumed, etc. 3. Interest — limited jurisdiction — in rem. 6. Change of jurisdiction. 7. Equity. 11. United States Courts ; Local Insolvency Courts ; State Courts — respective and relative jurisdiction. 17. Commissioners. 24. Appeal, etc. CHAPTER Xri. Suits Relating to Bankruptcy, etc 382-405 1. General remarks. 2. Concurrent proceedings. 4 Suit by and against assignees. 19. Limitation. 21. Form of declaration. 23. Bond of assignee. 24. Costs. 27. Evidence in suit by assignee. 32. Suit by bankrupt. 35 Pleading. 46. Proceedings in equity. 47. Set-off. 50. Costs. 52. Evidence. XIV CONTENTS. CHAPTER XIII. Supersedeas 406-414 1. General grounds for, and mode of superseding. 4. Effect. 6. By whom. 7. For what. 14. On whose application. 16. Miscellaneous points. APPENDIX. Statutes of Bankruptcy and Insolvency . . . 415 Index. TABLE OF CASES CITED. A. Arden v. Watkins 110 FAG£ Arnold v. Leonard 171, 172 Abel V. Sutton 60 V. Maynard 10, 334, 335 Abell 69 412 Arrowsmith 6 Abraham v. Plestaro 155, 159 161 Artis 205 Adam 48, 75 Arundel 98 Adams 75, 122 230 Ashby V. Steere 254, 336, 342, 346 Adams v. Beaman 327 Ashley v. Robinson 249, 349 V. Blodgett 350 Ashton 190 V. Porter 402 Assignees, etc. v. Fendall 74 V. Storey 12 Atkins V. Spear 237 Afflalo V. Fourdrinier 73 Atkinson 73 Agawam Bank v. Morris 71 201 Atkinson v. The Farmer's, etc . 329, 333 Ainslie v. Wilson 315 ■u. Jordan 322 Akhurst v. Jackson 146 V. Purdy 368 Alcock 78 Austin V. CaTerly 4, 321 Alcott V. Avery 248 281 V. Denniford 409 Aldrich v. Campbell 222 V. Slough 313 Aldridge ». Ireland 29,30 Aylett V. Harford 96, 214 Aldritt V. Eittridge 385 Ayres v. Scribner 247 Alexander 216 Alexander v. Vaughan 52 Allen 167 230 B. Allen V. Hartley 25 V. Kilbre 63 Babcock 208, 210 Alsop V. Brown 265 Back V. Gooch 193 V. Price 206 303 Backwell's case 9 Alsopp 216 Badcock 104 Ambrose v. Clendon 184 Badger 203 Ames V. Chew 112 Bagaley v. Waters 338 V. Wentworth 127 Baglehole 187 Amphletts 121 Bailey 48 Ancker v. Leery 329 Bailey v. Burtu 280 Anderson v. Anderson 219 V. Seal 291 V. Wheeler 292 Bailie v. Wallace 308 Anderton 406 Baillie v. Grant 26,48 Andrews v. Scotton 279 Baker 6, 119, 378 V. Southwiok 130 Baker's case 79 Ansell V. Kobson 143 Baker v. Judges 278 Anstill V. Crawford 294 V. Bidgway 276 Anthony Bateman's case 48 V. Vining 173 Antram v. Chace 191 V. Wheaton 291 Appleby 69 Ball V. Bowdeu 97 Appling 365 ■1). Thompson 322 Arbouin 70 Ballantine v. Haight 288 Arbouin v. Hanbury 342 344 Balme v. Hutton 336 (xy) XVI TABLE OF CASES CITED. Bamford 28, 33 Beaty v. Beaty 191 Bamford v. Baron 21 Beokman v. Wilson 262 V, Burrell 197, 282 Beekwith 83 Banchor v. Fisk 288 Beers v. Haughton 375 376 Sandier 63 D. Rhea 289 Bangs V. Lincoln 207 Beeston v. White 212 V. Strong 281 Belcher v. Campbell 137 V. Watson 297 V. Gummow 20, 22 Bank, etc. 70, 75, 199 1). Pritlie 332 342 Bank, etc. v. Horn 108 Belden v. Edwards 395 V. Onion 275 Bell V. Hunt 388 Bank of Alexandria v. Herbert 135 ■u. Tuttle 297 Missouri v. Pranciscus 282 V. Young 45 Ftica V. Card 241 Bellows -125 Westminster v . Whyte 112 Belton 90 Banks v. Greenleaf 288 Belton V. Hodges 48 Bannister v. Scott 196, 301 Bemis v. Smith 225 Barber 186 Benchley v. Chapin 172 Barclay 138, 139 Benedict v. Parmenter 155 Barclay v. Carson 404, 392 Beniield v. Solomons 123 V. Phelps 68 Bennett 203 Barker's case 86, 207 Bennett v. Bartlett 301 Barker v. Goodair 63, 123 Benny 3 • V. Haskell 98, 275, 276 Benson 75 365 V. Mann 196 Benson v. Flomer 150 Barnard v. Eaton 119 Bentley 72,73 V. Vaughan 30 Bentley v. Page 401 Earned 68 Berghaus ». Alter 395 Barnes v. Billingtou 25, 26, 33 Bernasconi 214 V. Freeland 324 Bernasconi v. Farebrother 29,46 V. Wilkinson 300 V. GlengaU 46 Barnett 106 Berney v. Davison 327 Barrow 66, 185, 186 Berry 198 Barstow v. Adams 107, 392 Berry v. McLean 301 Bartlett 317 Berthelon v. Betts 13 183 Bartlett v. Bramhall 176 Betton V. Allen 226 381 V. Decreet 352, 357, 358 V. Valentine 9, 155 158 161 Barton's, etc. 113 Betts V. Bayly 269 291 Barwis 48, 204, 205 V. Lockwood 299 Basarro 68, 78 Bevan 7 9, 72 Bass 412 Bevan v. Nunn 346 Batchelor v. Vyse 23 Beverly, etc. v. Wilkinson 225 Bate 70, 78 Bigelow t). Pritchard 132 Bateman 197, 212 Bigg 70 Bateman v. Bailey 30 Bigg 0. Spooner 32 Bates 49, 107 Biggs V. Cox 388 Bates V. Chapin 38 V. Fellows 59 V. West 305 BiUiald 414 Bather 193 Billings V. Waters 198 Bather 408 Bingham v. Jordan 108 Batson 74 Bingley v. Mallison 184 Bauerman 69 Birch 213 Baxter v. Pritchard 841 Birch V. Tillotson 171 Bayley v. Ballard 344 Bird V. Hampstead 150 V. Schofleld 29 V. Major 19 Beadles 83 V. Pierpoint 154 Beal V. Burchstead 290 V. Sedgwick 58 Beale 410 Birkett 167 Beals V. Clark 165, 336, 350 Bisscll V. Post 392 Bean 379, 406, 412 Bittleston v. Timmis 221 Beardmore v. Shaw 185 Bivins v. Newcomb 294 TABLE OF OASES CITED. XVll Blaokbourn v. Ogle Blackman v. Green Blake v. Bigelow V. Williams Blakes Blakey Blanchard v. Kussell V. Young Blane ». Drummond Blandford v. Foote Bleasby v. Croasley Blight V. Ashley Blodgett V. Hildreth Bloomer v. Darke Bloxham Blythe v. Johns 267 288 241, 272 159, 161 158 82, 185, 187 13 91, 363 160 270, 278 33, 185 177 24, 339 400 122 243 Boardman v. Deforest 175, 213 Boas V. Hetzel 241 Bobyshall v. Oppeuheimer 308 Bold 406 Bolton 68 Bolton V. Williams 49 Bonbonus 66, 75, 107 Bond 72 Bond V. Baldwin 161, 243, 372 V. Gardiner 307 Bonsor 413 Book 49 Booth V. Clark 180 Boorman v. Nash 207 Borden v. Cuyler 71 Borrodailes 73 Bosler ». Kuhn 306 Bostwick V. Dodge 278 Botcherby v. Lancaster 348 Botten 187 Bottomley 193 Botton V. Jager 361 Botts V. Batton 249, 384 e. Lockwood 262 Bourdillon v. Dalton 142 Bourne 6, 26, 82, 409 Bourne v. Cabot 149 Bouteflour v. Coates 244, 270 Bowden 120, 122 Bowditch V. Jackson 115 Bowers 411 Bowie V. Jones 241, 242, 364 Bowness 197 Boyd V. Vanderkemp 281 Boyle 134 Boyle V. Turner 319 Boynton v. Lenter ■ 38 Bradbury 92, 93, 94 Bradley v. Miller 72 Bradstreet 408 Braggiotti 80 Bramwell v. Lucas 31 Branden v. Gowing 346 Brandon 141 Brandon v. Pate 150 Brandon v. Robinson ■ V, Sands Blaynard v. Marshall Brealey v. Andrew Brearey v. Kemp 141 150 29i 359 153 Breneman 2, 4, 11, 323, 327 Brenchley 75 Brereton v. Hull 252 Brett 0. Levett 184 Brewster v. Shelton 100 Brichta v. New York, etc. 113 Brickwood v. Miller 59 Bridges 226 Brigham v. Coburn 390 V. Henderson 288 Briggs V. Farkman 847 V. Stephens 133 Brine 183 Bristow V. Fiastman 177 Brix V. Braham 262 Broadhurst 190 Bromley v. Goodere ' 203 V. Munda;y 24, 25, 32 Broome 74 Brook «. Chaplin 259 V. Wood 265 Brooks V. Thomas 353 Brouwer v. Harbeck 357 Brown 42, 409, 410, 412 Brown v. Brice 103 V. Chapman 185 V. CoUier 265 V. Cumming 403 .;. Lamb 5, 202, 203 .;. Rebb 259 V. Thompson 259 V. The Branch Bank at Montgomery 277, 280 Brown's case 118, 256, 295 Browne 183 Browne v. Carr 307, 316 V. Lee 204 V. Ins. Co., etc. 404 Bryant 36, 82, 213, 378, 411 Bryant v. Withers 184, 191 Bryar v. Willcooks 320 Bryson v. Wylie 138 Buck V. Burlingame 79 V. Sayles 3 Buckey v. SnoufFer 130 Buckingham v. McLean 354 Buckland v. Newsom 186 Buckley v. Artcher 3 Buckner «. "Calcott 378 V. Caleste 76 Buel V. Gordon 314 Buffum V. Green 322 Buglehole 406 BuUen 409 Bumford 18S Burbidge 83 IB xnu TABLE OF CASES CITED. Burd V. Smith 322 Castelli 80, 878 Burgess 188 414 Catskill Bank v. Hooper 62, 72 Burk V. M'Laiu 161 Cavalliere 199 Burn V. Carvellio 109 Cawkwell 89, 193 Burnaljy'a case 191 Cawthoru 408 Burnside v. Brigham 258 Cazenove v, Prevost 284 V. Merrick 67 Chadwick v. Starrett 249, 311 Burrow 84 Chamberlain v. Hall 91 Burt V. Perkins 350 Chambers v. Bernasconi 162 Burton 66 V. Neal 249 Burwood V. Kant 193 Champion 202 Buschall V. Hogg 43 Champneys v. Lyle 221 Bush V. Cooper 301 306 Chandler 68 Buss V. Gilbert 300 Chaplin v. Shoot 85 Bussing V. Eice 103 Chapman v. Ayery 175 Butcher v. Churchill 203 ■V. Forsyth 294, 296 ■0. Easto 48, 183 344 V. Lamphire 43 V. Forman 73 Chappell 183 Butler V. Breck 109, 149 336 Chappie's case 302 V. Hildreth 352 Charles 192, 212 ■u. Morgan 98 Charrington v. Brown 31 V. Purnell 42 Chase 354 V. Kichardson 114 Cheesewright 84 Butterfell 104 213 Cheetham 379 Butts V. Bilke 409 414 Chemung, etc. v. Judson 366 Byess v. Southwell 183 Chenometh v. Hay 25 Byrne v. Walker 160 Che-valier Chickering v. Raymond Child 70 149 200 c. Chilton V. Cabiness V. Whiffen 148 211 Cabot V. Boardman 201 Chippendale v. Tomlinson 162 Caines v. Brisban 342 Christie 6, 72, 133, 370, 371, 380 Cake V. Lewis 308 Christie v. Winnington 21 Calender 168 Chuck 64 Callowell V. Cluttehuck 198 Claffin V. Beach 54 Camack v. Bisquay 149 Clark V. Calvert 152 Cameron v. Smith 188 'v. Clark 179 Campbell v. Hancock 99 V. Gilbert 407 Canfield 413 V. Hatch 290 Cannan v. The South, etc. 21 V. Minot 168 Capper v. Desauges 27 V. Potter 165 Garden 47 V. Smith 231 Carey v. Conrad 289 V. Tipping 387 Carlton v. Leighton 112 Clarke 70, 203 Carne v. Brice 164 Clarke v. Clarke 412 Carney v. Dewing 13 V. Porter 813 Carpenter 73 V. Ray 37, 363 Carpenter v. Thornton 189 Clarkes 70 Carr v. Hilton 112, 114, 135 389 Clarkson 66 Carrington 49 Clason V. Morris 115 Carrington v. Holabird 279 Claughton v. Leigh 277 Carson v. Osborn 263 Clavey v. Haley 22, 354, 355 Carter 74, 379 408 Clayton v. Gosling 198, 210 Carter v. Sibley 13 Clegg 199 V. Warne 142 Cleveland v. Boerum 170, 172, 389 Cartwright 187 Cleverly v. M'CuUoiigh 386 Caryl v. Eussell 828 Clinton v. Hart 209 Case V. Belknap 275 Clowes 66,70 Cashing 406 Coates V. Blush 260 Castell 75 Coburn v. Boston, etc. 80 TABLE OP OASES OITED. XIX Cook V. Goodfellow 322 Crabb 37,42 Cockerell v. Owstin 213, 308 Crafts V. Mott 208, 313 Cooks 202, 211 Craggs 102 Cookshot Codwise v. Gelston 209 133, 352 249 320 Cranston Bank v. Baker Coe V. "Whitbeck 61 Craven v. Edmonson 59 Colien V. Barrett 228, 365 Crawfoot 218 V. Cunuingham 191 Crawford v. Points 380 «. Gibbs 107 Crellar 218 «. Patton 263 Cridland 94 , 316, 409 Cohoon V. Morris 268 Crisp V. Pratt 43 Coit V. Owen 404 Crispe 9, 67 Colby V. Coates 175 Cromwell v. Comegys 404 Cole V. Davis 22, 24, 35 Crosby v. Crouch 342, 344 Coles V. Barrow 162 V. Wentworth 298 Colkett V. Freeman 22, 24, 32, 34 Crossley 201 CoUings 177 Croswell v. AUis 333 Collins V. Forbes 418 Crouch V. Gridley 300 Collis V. Malin 45 Crowder v. Davies 8 Colt V. Wilder 66 Crowninshield v. Kittredge 357 Combe v. Bruges 19 Crowther 406 Comegys v. McCord 389 Crump V. Barne 42, 55 V. Vasse 112 Culhane 235 Commonwealth v. Farmers 83 Culver V. Calender 413 V. Hutchinson 294 Cummiugs v. Bailey 22, 28, 29 V. Lelar 169, 391 Cundall 98 Compton ». Bedford 327 Cunningham v. Freetorn 322 Comstock 98, 214 Curteis v. Willis 27,28 Comstock ». Grout 278, 372 Curties 231 Conire v. Harris 184 Curtis V. Barnum 130 Conklin v. Leuptin 403 V. Leavitt 341, 353 Connell 122 V. Slosson 278 Conway 408 Gushing v. Arnold 366 Conway v. Nail 21 Cust 74 Cook 75, 126, 127 Cutler V. Day 275 Cook ». Moffat 289 V. Middlesex 207 V. Rogers 342, 344 V. Taylor 253 Cooke 163 Cutten 412, 418 Cooper V. Chitty 21, 66, 384 0. Henderson 108, 179, 390 Copeland 106 D, Copelaud v. Stephens 142 Copeman v. Gallant 64 Dally V. Smith 42 Coppendale v. Bridgen 3, 36 Dame v. Holdsworth 191 Corbet v. Poelnitz 49 Darent 105 Cornwell's, etc. 325, 346, 349 Darling 90 Cossens 91 Davis . 206, 381 Cothay v. Murray 184 Davis V. Living 162 Cotton 49 V. Newton 147, 224 Cotton V. Daintry 48, 54 V. Reynolds 332 V. James 24, 31 V. Shapley 229 Courtivron v. Meunier 253 Davison v. Farmer 53 Cousins 193 Day 83, 206 Coverly v. Morley 409 Dayton v. Nichols 176 Covington v. Hogarth 97, 382 Deadriok v. Armour 390 Cowan 366 Deal V. Harris 243 Cowgill 364 Dearborn v. Keith 57 Cowley V. Dunlop 313 Dechapeaurouge 105, 106 Cox 185 Decoster v. Livermore 389 Cox V. Austin 319 Deey 211 Coysgrave 40 De Gols V. Ward 184 XX TABLE OF CASES CITED. Demmon v. Boylston Bank 223 Den V. Wright 304, 396 Denham's case 28 Dennia v. Sayles 88, 214 Denny v. Dana 8, 19, 336, 346, 352, 358 Denston v. Morris 366 Derry v. Mazarine 49 De Tastett 105, 106, 120, 121 De Tastett v. Carroll Devas v, Venables Devisme v. Martin Dewdney Dexter v. Snow !). Stewart Dey V, Lovett Diamond Dick Dick V. Powell Dietus V. Fuss Diinsdale Dinsdale v. Eames Dinsmore v. Bradley Dixon V. Evans Doane v. Russell D'Obree Dobson Dodge V. Sheldon Dodgson Dodsworth v. Anderson Doe V. Andrews V. Ball V, Bevan V. Bluck ■V. Bouloot V. Britain V. Carter V. Gillitt 1^. Boe XI. Smith Doggett V. Emerson Dole V, Bodman V. Warren Donelly v. Corbett Donovan Donovan v. Duff Donthat Dornford Dorsey v. Maury Doswell V. Impey Douglas V. Brown Dowman Downer v. Brackett V. Rowell Downes Downs V. Lewis Drake Drayton v. Dale Dresser v. Broolcs Drew V. Long Dubois Dudley v. Vaughan 59 356 160 26, 188, 410 4, 359 117 220 381 414 294 326 95 270, 273 288 184 392 123 261 350 73 53 142 351 141 397 24 351 141 342 111 141 276 348 314 17, 236 411 24 187, 192 3 244 377 177 198, 205 168, 195 247, 251 120 859 406, 414 162 195, 245 50 90, 199 Dufaur Dufrene Dulaney v. Hoffman Dumas Duncan v. Darst V. Sutton Dunkley v. Dunkley Dunn V. Sparks Dupuy V. Swart During's appeal Dutton V. Freeman V. Morrison Dwinel v. Perley £. 42 23, 25, 26, 36 337,. 866 47, 138 376 883 61 314 265 174, 177 100, 200 58 136 Earle 222 Earnest v. Parke 263 Eastman v. Eveleth 333 V. Foster 217 V. Hillard m Eckersley 219 Eokhardt v. Wilson 58, 348 Eckstein v. Shoemaker 12 Eddie v. Davidson 63 Eddy's case 381 Eddy V. Ames 317 Edgar v. McArn 255 Edmonson 6, 25 Edmonson v. Parker 409 Edwards 105, 185, 409 Edwards «. Coleman 135 ■u. Mitchell IB V. Sumner 130 Eggington 120 Eicke V. Nokes 383 Elderkin v. Elderkin 383 Elford .. 82 ElUott V. Clayton 163 Ellis 47,74 Ellis V. Russell 383 Elton 68, 69 Emery 408, 412 Emly 74 Enderby 64 Englebert ». Blanjot 186 English 205 Enuis V. Halse 168 Ensign v. Briggs 38,66 Evans v. Brown 162 ». Carey 265, 267 V. Mann 392 V. Manse 390 V. Sprigg 289 Everett v. Backhouse 162 V. Stone 133, 346, 351 Ev?rhard 277 Ewing V. Peck 279 TABLE OP CASES CITED. XXI F. Frith 96 Frit(s V. Doe 319 Falconer v. Griffith 333, 357 Frost V. Carter 315 Fales V. Thompson 150 Fuller V. Hooper 71 Fall River, ^tc. v. Sturtevant 59 Furey 216 Farnum 71 FurtresB v. Markle 313 Farrenden 189 Fydell 230 Farrington v. Farrington 404 Fawcett v. Fearne 21, 137 Fenelon ». Lonergan 355, 356 G. Fern v. Gushing 181 Fessenden v. Willey 291 Gale V. Vernon 398 Fetter v. Oirode . 272 Gales 196 Fidgeon v. Sharpe 329, 332, 334, Gallimore 6 386, 842 Gang 6 Field V. Howland 277 Gardener 6 Field's case 263 Gardiner 406 Pinchett v. Howe 192 Gardner 28, 89 Finney v. Cecil 85 Gardner v. Clark 176 Fisher 84 t>. Hooper 113 Fisher v. Boucher 28, 32 V. Nute 3, 17, 243 V. Currier 169, 237, 239 V. Way 238 V. Fobs 270 Gardom 206 Fisk 1). Sarber 171 Garland 47 Fiske V. Foster 292 Garnett 406 V. Hunt 108 126, 127, 367 Garnett v. Moule 82 Fitzgerald v. Alexander 264 Garratt v. Biddulph 414 Flagg V. Tyler 123, 311 Garretson v. Brown 322 Fleming v. Hayne 265 Garwood 361 Fletcher 142 Gary v. Bates 387 Fletcher «. Manning 137 Gates V. Campbell 239 11. Morey 108, 116 V. Mack 80, 243 V. Neally 263 Geddes v. Mowat 183 Flight 413 Gedge 183 Flood 174, 376 Geller 122 Flood V. Finlay 148 George v. Summers 280 Flourney v. Newton 164, 249 Gervis v. Woottou 89 Flower 96 Gibbons v. Phillips 89, 332, 334, 344 Fogg V. Willoutt 168, 341 V. Wendover 133 Folks V. Scudder 185 Gibbs V. Gibbs 132 Forth 413 V. Thayer 171 Foster 9, 32, 124 Gibson 66 Foster v. Goulding 183 Gibson v. Boutts 327, 336, 342 V. Remiok 89, 90 V. King 20 Fowler v. Coster 410 V. Muskett 334 V. Kendall 209 V. Thompson 46, 54 V. Padget 22, 25, 32, 34 Gilbert v. Hebard 238 e. Treadwell 310 Gile 407 Fox V. Hanbury 35, 59, 63 Giles 412 V. Paine 360 Giles V. Powell 184 V. Woodruff 268 Gilham v. Locke 198 Francis v. Ogden 278 Gill V. Oliver 147 Franks 50 V. Scriveus 306 Frazer v. Hallowell 116 Gillett V. Bippon 193 Freeman 66, 70, 81, 410 1 Givens v. Bobbins 97 Freeman v. Warren 272 Glaister v. Hewer 188 French v. Howard 173 Glasgow V. Sands 178 V. Morse 301 Glassington v. Rawlins 25, 36 Freshney v. Carriok 139, 141 Glenn v. Boston 288 Freydeburgh's case 256 u. Fowler 367 Frisbee 86 1 V. Humphreys C 293 xxu TABLE OF CASES CITED. Glenn v, Karthees 178 Groom 122 Glossop 185 Groome v. Potts 164 Glover 191 Grosvenor 96 Glyde 117 Gudgen v. Bassett 144 Glyn 406 Gull 234 Goddard v. Vanderli«yden 314 Gulston 36 Goding 172 Gunningham v. Laing 29 Godling V. Godling 198 Gupton V. Connor 248 , 251 Golden v. Prince 12 Guthrie 84 Goldsmid 68, 76 Guthrie v. Fisk 187 Goodall 78 Goodhue v. Hitchcock 353 Gooding v. Oliyer 374 H. Goodman 123 Goodtitle v. North 216 282, 297 Haddon v. Chambers 315 Goodwin 147 Hague 27 Goodwin v. Lightbody 146 Hague V. Bolliston 63 •D. Stark 309 Haldemau v. Michael 342 Gordon v. East 137 Hale 192 V. Wilkinson 36 Hale V. Allnutt 328 342 Gorham v. Stearns 335 V. Small 46 Gottschalk v. his Creditors 218 Hall 34, 62, 74, 78, 84, 188, 359, Gough 218 410 412 Gouthwaite 25 Hall V. Boardman 290 Goward v. Dunbar 275 V. Fowler 311 Grafton, etc. v. Bickford 364, 366 ■V. Gill 169 Graham 84, 216 ■V. Sewall 396 Graham v. Benton 277 V. SmaUwood 192 V. Chapman 339 Haller v. Homer 27 V. Furber 139 140, 345 Hamber v. Hall 103 V. Grill 409 Hamersly e. Lambert 28S V. Pierson 277, 300 Hamilton v. Atherton 306 Grant 6, 111 118, 164 V. Chevalier 404 Grant v. Lyman 131, 132 Hamlin v. Hamlin 318 V. Mills 66 Hammond 117 234 Grave v. Bishop 277 Hammond v. Hicks 28 Graves 185, 413 V. Rice 887 Graves v. Delaplaine 404 V. Toulmin 196 301 Gray v. Bennett 4 108, 151 Hancock v. Entwisle 204 ■1/. Coffin 383 Handy v. Carter 312 V. Schroeder 346 Hankey v. Jones 46 Grazebrook 74 Hankiu v. Bennett 204 804 Greaves 121 Hanson v. Paige 57 Green 183, 410 V. Stevenson 143 Green s). Bicknell 196 Harcourt 6 i>. Bradfield 329 Harding 214 V. Sarmiento 287 Harding v. Stevenson 351 Greene 200 Hardison 257, 295 Greene v. Durfee 244 Hare 64 Greenough v. Whittemore 88 Hargreaves 75 Greenshields 80 Harlow v. Tufts 326 881 Greenway 188, 200 Harman 84 Greenway v. Fisher 300 Harmer v. Davis 89 Greenwood 120 Harmon v. Clark 57, 64. 77 Greenwood v. Churchill 348 V. Fisher 324 Gregory v. Mertin Gresley v. Price 409, 410 184 Harrington v. McNaughton 269, 278, 282 Grey 106 Harris 31, 74, 218 Griffiths 42, 191, 379 Harris v. Collins 889 Griswold v, McMillan 898 V. Mandeville 286 V. Pratt 13, 15 Harrison 20, 42, 44, 46, 89, 211, 217 ■TABLE OF OASES CITED. xxm Harrison v. Sterry 63, 114, 128, 154, 161, 220 Harrman v. Spottiswood 22 Hart V. Strode 396 V. White 192 Hartshorn v. Sloden 332, 342 Harvey v. Crickett 59 V. Bamsbottom 31, 83 Harwood 225 Harwood v. Keys 6 Hassels v. Simpson 323, 327 Hassinger 90, 100, 324 Hastings v. Belknap 350 V. Fowler 106, 373, 390, 396 V. Wilson 143 Haswell v. Thorogood 274 Hatten v. Speyer 298 Haviland v. Cook 410 Hawkes v. Dunn 102 V. Sands 33 Hawkins 105 Hawkins v. Saunders 82 Hawsou V. Paige 393 Hawthorn 189 Haxton v. Corse 272 Hayden v. Palmer 229, 323 Hayllar v. Sherwood 897, 408 Hayman v. Pond 294 Haynes 78, 215 Hayton v. Wilkinson 308 Haywood v. Chambers 358 Heane v. Rogers 399, 412 Heath 92 Homing 413 Henbest v. Brown 184 Henderson 48, 67 Hendricks ». Judah 307 Herbert 46, 47, 109 Herbert v. Sager 397 Herndon v. Givens 265 Hesham 75 Heskuyson v. Woodbridge 315 Heslop 140 Heslop V. Baker 139, 141, 167, 239 Hesse v. Steyenson 113 Hewlett J). Hewlett '90 Hewson v. Heard 26 Heywood v. Beed 336, 357 Hiokley v. Farmers, etc. 356 Hicks V. Burfitt 193 ■u. Hotchkiss 289 Higgins 89 Higgins V. McAdam 20, 36 Highmore v. MoUoy 42, 44 Hill 69, 70, 412 Hill V. Cowdery 140 Hill V. Harris 184 Hilliard «. Allen 110 Hines v. Ballard 242 Hinton 70 Hinton v. Acraman 204, 303 Hinton v. Hinton 47 Hitchcock V. Sedgwick 53 Hoag V. Hunt 155 Hoane f . Conyton 89 Hobart v. Haskell 98, 274 Hodge 94 Hodges V. Chace 299 Hodgkinson 70, 82, 185, 199, 409, 410 Hodgson 69, 117 Hodson 41, 406 Hoffendahl v. Evers 88, 184 Hofifman v. Foudrinier 206 Hogan V. Hutton 54, 250 HMbrook v. Bassett 341 V. Foss 271 «;. Jackson 88, 336 Holderness v. Shaoklesels 63 Holding 184 Holding V. Impey 276, 300 Holland v. Palmer 358 V, Seaver 391 Hollingworth 239 Holmes v. Bemsen. 154, 158, 161 V. Wainewright 185 V. Woodworth 402 Holroyd v. Gwynue 22, 28 V. Whitehead 28 Hood 411 Hoo^ier 412 Hooper v. Smith 21, 25 Hope V. Booth 144 V. Meek 183 Hopkins 406 Hopkins v. Banks 149 V. Ellis 35 Hopper V. Eiohmond 26 Horn V. Baker 64 V. Ion 249 Hornby 226, 412 Horner v. Speed 265 Horrocks 84 Horsey 73 Horsley 83 Hoskins v. Duperoy 184, 198 Houle V. Baxter 210 Houston V. The City Bank, etc. 370 Hovill V. Lethwaite 111 Howard v. Crowther 150 V. Jemmett 47, 200 Howe V. Lawrence 65, 70 V. Sheppard 220 Howell 191 Hoxtun v'. Corse 96 Hubbard v. Smith 246 Hughes 99 Hughes V. Gilman 32, 38, 84 V. Morris 171 j 172, 174 V. Oliver 299 Hull 367 Humphries v. Blight 209 Humphreys 218 XXIV TABLE OF CASKS CITED. Humprey's case 181 Jones V. Brown 396 Humphreys v. Knight 277 V. Horsey 286 287 Hunnewell v. Goodrich 119 V. Howland 8, 330 384 Hunt 235 Jordan 3, 90 335 Hunt «. Benson 74 Joseph 96 253 V. Mortimer 339, 842 Joseph v. Orme 313 Hunter 64, 66, 75, 89 Joseph Richardson 320 Hunter v. Potts 154 Journeay v. Brown 181 V. United States 146, 221 V. Gardner 317 Huntseoker v. Bering 136 Joy V. Cossart 185 Hurst 349 V. Wager 183 Hurt V. Biggs 177 Judd V. Flint 352 Husband 70, 72, 73 V. Gibbs 114 Hutohins v. Taylor 334, 346 V. Ives 16 Hutchinson v. Reed 138 V. Lawrence 53 Button V. Cooper 133 Judine v. Da'Cossen 27 Button V. Crittwell 341 V. Self 108 Hyams v. Valentine 326 K. HylUard 189, 190 Kane ». Ingraham 308 I. V. Piloher Kedie 392 66 Hsley V. Merriam 296 Kelley v. Pike 266 Ingalls 78 Kellogg V. Schuyler 216 Ingliss V. Grant ' 27, 53, 323 Kelly V. Holdship 388 Irving 96 ■0. Smith 368 Ishester 211 Kelton V. Phillips Kemp V. Hurry V. Potter 207 258 96 J. Kennedy v. Strong Kensington v. Inglis 298 187 Jaokman v. Nightingale 32 Kensington Bank v. Wilkinson 263 Jackson 64, 69, 104 118, 119, 187 Kenyon v. Worsley 263 Jackson v. Gamp 48 Kernet v. Cattlin 113 V. Chichester 402 Kerney v. Smith 42 V. Irwin 184, 193 Kettle 4). Hammond 348 Jaoohson v. Williams 47 Key V. Cook 184 392 James 107, 184 V. Flint 225 Jameson v. Camplsell 270 ■u. Goodwin 184 V. Chesnut 174 'u. Shaw 30, 34 ■u. Eamer 34 Kimball v. Loring 87 Janson 69 V. Morris 39, 82, 85, 94 Jarrett v. Leonard 89 King 73 206 Jeeks 413 King V. Dietz 241 Jelfs V. Ballard 409 V. Egginton 198 Jellis V. Mountford 186 V. Leith 36 Jenkins v. Stanley 247 B. Wcstendorf 321 Jenks V. Stebbins 242 Kingston v. Wharton 266 Jepson 78 Kip V. Bank 111 Jewett V. Preston 170 Kirby 92 V. Woodward 99 Kirk 412 Johns 75 Kirkpatrick v. Tattersall 262 Johnson 104, 230, 411 Kitchen v. Bartoh 163 Johnson v. Ball 240, 400 Kittredge v. Warren 128 V. Pitzhugh 269, 271, 388 Knight 410 4). Smiley 173 Knowell 97. 98 Johnston v. Woolf 23 Kohlman v. Wright 244 Jollet V. Depouthier 159 Krumbaar v. Burt 118 Jones 64, 71, 406 Kunzler v. Kohaus 11 ,274 TABLE OF OASES CITED. XXV L. Lingard v. Messiter Lingnard v. Hibbertson 137 272 Labron v. Woram 275 Lingood 214 Labrooke 70 Lingwood v. Bade 35 Lacey 104 Linton v. Stanton 380 Lackiugton v. Elliott 21 List's case 200 Lacy V. Rookett 386 401 Livermore v. Bagley 8, 35 V. Woolcott 59 V. Swasey 392 Laffert 257 Livingston ». Livingston 132 Laforest 75 Lizardi v. Cohen 283 Lamb v. Fries 158 Llewellyn 200 Lambert v. Slade 100 Lloyd V. Heathcote 31, 32 u. Smith 257 Loan, etc. v. Capron 302 Lancaster, etc. 206 302 Lobb 70 Lanckton v. Woloott 121 Lobb V. Stanley 264 Lane 42, 70, 72, 185 236 354 Loines v. Phillips 86, 309 Lane v. Haynes 386 Long 217 Langmead v. Beard 276 Longford v. Ellis 215 Langston 379 Longman 78 Lansing v. Prendegast 814 Lord 295 Laroche v. Wakeman 162 Loring v. Eager 810 Larssent v. Bibby 320 Lothrop V. Tilden 79, 85 Lash V. Miller 389 Loughry v. McCullough 245 Lathrop v. Stewart 247 252 Love V. Hill 166 Lavender 406 Lovett V. Cutler 395 Lavie v. Phillips 9,49 Lowe 6, 365 Law- 73 Lowry v. Morrison 117 Lawrence 41 Loxley 216, 217 Lawson v. Kobinson 184 Lucas V. Morris 368 .,. Wright 3 Lummus v. Fairfield 8, 240 Laytou 48 Luther v. Deyo 299 Lazarus v. Waiihman 34 Luton V. Bigg 42 Leaf 69 Lyall V. Miller 350 Leake v. Young 340 Lynbury v. Wrightman 265 Lecompte 205 Lyon V. Marshall 261 Ledbetter v. Salt 89 Lee 36 189 Lee V. Hart 340 M. V. Kilburn 2 358 V. Phillips 275 Maag 47 V. Sangster 373 385 Mabry v. Herndon 294, 873 Leeke 200 Macarty v. Barrow 210 Lees, etc. 410 Macbirnie 51, 199 Lees V. Marton 30 Mace V. Cadell 138 Leicestershire, etc. 72 V. Wells 302 Leigh 412 Mack V. Proctor 138 Leland v. Marsh 207 Maggot V. Mills 43 Le Roy v. Crowninshield 287 Maggs V. Hunt 26, 320 Leslie 41 Mair v. Glennie 110 Lester v. Thompson 241 Mallory v. Snow 155 Lewes 191 Man V. Lowden 252 Lewis 54 411 Manahan v. Sammon 134, 366 Lewis V. Piercy 273 Mangam 84, 185 V. Shattuck 275 Mann v. Drost 213 Leworthy 410 V. Houghton 276 Liddell 70 Mansfield v. Andrews 287 Like V. Home 412 Maples V. Burnside 246 Lilley v. Torbet 309 Marcus 5,38 Linkcer v. Ayeshford 138 383 Marks v. Barker 223, 405 Lindsey v. Hunter 258 Marlar 202 i>. Limbert 145 Marmelman v. Caen 283 XXVI TABLE OF CASES CITEDi Marsh v. Putnam 290 Mendel 106 Marshall 204 Menham v. Edmonson 6, 385 Marshall v. Barclay 220 Mercer v. Wise 412 v. Barkworth 25 Mcrriam v. Richards 318 V. Lamb 323 V. Sewall 81 , 83, 188, 365 V. Rutton 49 Merrick 159, 160, 178 V. Sharland 223 Merrick's, etc. 399 Marson v. Barber 185 Merrill v. Tamany 883 Martin 121 234 Merritt v. Arden 275 Martin v. Ballard 216 Meymot 42, 92 V. Drumm 325 Michell V. Hughes 151 Marwick 69 Middlebrook v. French 352 Mascarnas 187 M ilbran 6 Mason v. Benson 308 Miles V, Bawlyns 24, 184 187 V. Kughart 267 Millar 381 Masson 70, 73 213 Wills 78, 107, 208 Masterman 6 186 Mills V. Auriol 306 Mather 199 ■V. Bennett 25 Matheson 231 V. Elton 30 Matthews 71 V. Hughes 44 Mavor 26, 28 Milmhurst 413 Mavor v. Pyne 184 Milne v. Moneton 159, 161 Maxim v. Morse 266 Milnor v. Metz 147, 166 May V. Breed 15, 285, 286 288 Mims V. Lockett 3 V. Dawson 86 Minchin 203 Maylin v. Eyloe 35 Mlnet 198, 205 Mayo V. Archer 41, 42 Minot V. Brickett 387 Mayor v. Steward 306 V. Thacher 87, 238 McAllister 87 Mires v. Smith 325 McAllister v. Richards 334 Mitchell 41, 199 V. Samuel 166 Mitchell V. Black 357 McAlpin V. Newell 263 V. Great Works, etc. 3, 368, McArthur v. Chase 2 369 McCabe v. Corney 114 401 V. Winslow 108, 347 McCauseland v. Waller 308 Mitford V. Mitford 109 McCormick v. Pickering 246 Mogg 185 McCullough V. Caldwell 298 Moggridge 199 MoDaniel v. King 62 Moline 165 McDoland v. Ingraham 268 Moody V. Wright 110 McDonald v. Hansen 173 Moon V. Raphael 393 McDougald v. Reid 277 Moore 74. 75. 211 McEweu V. Gibbs 404 Moore v. Jones 151, 375, 384 McGennis 412 V. Waller 307 McGlesney v. McLear 308 Moran v. Hays 171, 384 Mclntire v. Maynard 132 Mordecai v. La Rissey 83 McKenzie v. Garrison 325 Morewood v. Hollister 2, 190, 243 McKim V. Willis 293 Morgan v. Brundi-ett 882, 342 McLeod V. Kirkham 86 V. Horsman 336 McMenomy v. Murray 283 Morley 410 V. Roosevelt 322, 336 346 Morris 413 McMillan v. McNeill 287 Morris v. Briggs 215 McNair v. Gilbert 257 Morris' estate 366, 407 410 McNeil V, Colquhoon 161 Morrison v. Woolson 245, 367 McNeilly v. Richardson 288 Morse «. Cloyes 242 363 Mead v. Braham 99 388 V. Hovey 11 Mear 4<), 50 V. Lowell 9. 295, 296 Mechanics' Bank v. Capron 303 V. Presby •^t 194 V. Hazard 276 309 V. Reed 318 Medlioot's case 189 Morton 186 Meed v. Nelson 201 Morton v. Austin 148 Meggott V. Mills 42 V. Richards 78 196 TABLE OF CASES CITED. XXVU Mosby 0. Steele 272 o. Moser v. Newman 36 Moule 48 Oakey v. Bennett 158, 159 Moult 70 Oakley v. Steddiford 308 Mower v. Kip 183 Obbard v. Betham 184 Muir V. Schenok 149 O'Brien v. Currie 48 Mullikin v. Aughinbaugh 159 V. Dow 288 Mumford 216 Ogden V. Cowley 403 Munk V. Clark 400 V. Harris 281 Murklow V. May 24,31 V. Jackson 324, 337 v. St. John 26.5 ■V. Saunders 161 Murphy V. Richards 245 Ogilby 74 Murray 203 Olcott V. Lilly 308, 309 Murray v. De Bottenham 283 Oliver 92 350, 411 V. Marsh 395, 405 Oliver v. Smith 389 V. Murray 61, 63 Olyphant v. Atwood 159, 289 285, 286 V. Reeyes 193 O'Neil V. Glover 23, 36, 81, 82, 84, V. Riggs 222, 403 188, 190 Muskett ti. Drummond 183 Onslow V. Corrie 142, 145 Mutrie 29, 58 Ontario Bank v. Mumford 148 Muzzy V. Whitney 244 Orford 220 Myers 206 Osborn v. Baxter 170 Osborne 29, 31 Osgood V. Fernald 364 Otis V. Gazlin 262, 263 TO- Overseers v. Warren 207 Nash 105 V. Bouth 300 Nash V. Drew 109 Neale 218 Neale v. Cottingham 157 P. Neate v. Ball 324 Nelson v. Chernell 409 Paddy 187 V . Pierson 174 Page 69, 98, 102, 108, 190 Nesbit V. Greaves 803 Palmer 413 Newhall 108, 109, 169 Palmer v. Dayton 381 Newhouse v. Commonwealth 299 V. Morse 26 Newman 281 Parker v. Crole 8 Newman v. Stretch 28 ■u. Manning 184 Newton v. Chantler 344 V. Muggridge 59 V. Trigg 43, 47, 48, 54 V. Norton 298, 301 Nias V. Adamson 162 V. Phillips 57 Nichol V. Nichol 172 V. Ramsbottom 78 Nichols 406 Parkinson v. Scoville 269, 290 Nichols V. Bellowes 151 Parks V. Goodwin 278 NichoUs 881 Parr 122 Nixon u. Young 263 Parry 83 Nobes V. Mountain 94 Parry v. Jones 114 Noble V. Johnson 242 Partridge v. Hannum 392 Norcott 406 Patten v. EUingwood 263 Norcross 58, 60 Paxton 81 Norman v. Booth 183, 184, 896 Payson v. Payson 123 Norris v. Goss 241 Peabody v. Harmon 91, 94 Northam 411 Peacock 122, 123 Norton v. Boyd 871 Peake 65, 66 Nowers V. Colman 277 Peaker 406 Nowlan 92 Pearce 100 Nunn 120 Pearsall v. M'Cartney 261, 329 Nunny v. Hall 276 Peck V. Jenness 129 Nutt 47, 414 Peel V. Ringgold 385 TABLE OF OASES CITED. Peele 82, 185 Pemberton 66 Pennell v. Roy 155 Penniman v. Cole 350, 351 V. Freeman 397 ■,,. Meigs 287 V. Norton 248 People V. Abel 229 V. Beheman 82, 368 ■o. Herkimer 293 V. Spalding 299 V. Strylcer 85, 99, 241, 260 V. Underwood 405 People's, etc. v. Paterson 325, 340, 342 Perkins v. Webster 343 Perley v. Dole 397 Perring v. Tucker 406 Perry v. Brown 132, 374 Pesoa V. Passmore 280 Pettee v. Coggeshall 353 Phillips V. Hopwood 26, 409 V. Eussell 295 V. Sheriff 35 Phillpott V. Corden 409 Phoenix v. Ingraham 329, 330 Pierce v. Eaton 269 Pike V. Lowell 170 V. McDonald 270 Pingree v. Comstook 323 Pitkin V. Thompson 307 Planters', etc. v. Conger 384 Pleasants • 81 Pleasants v. Meng 35 Plowden 75 Pooock V. Russell 193 Poe V. Duck 287, -288, 289 Poland V. Glyn 322 PoUitt V. Parsons 229 Pollock V. Pratt 312 Poole 408 • Port V. Turtin 48 Porter v. Miller 363 ■V. Porter 262, 265 V. Walker 392, 393 Potts 23, 339, 361 Pouoher 215 Poulsou 66 Powell 79, 217 Powell V. Knox 255, 258 Power V. HoUmau 390, 398 Powles V. Dilley 353 V. Hargreayes 219 Pratt 91 Pratt V. Babcook 272 V. Russell 264 Prentice v. Richards 4, 296 Prentiss v. Kingsley 306 Prcsoott 123 Preston 82, 49 Prewett v. Oaruthers 265 Price 414 Price V. Ralston Prideaux Pritohard v. Chandler Prosser Pressor v. Smith Prowse Pugh Pugh V. Hookham Pulliam V. Christian Pulling V. Tucker Purple V. Cooke Purviance v. Glenn Purvis V. Robinson Q. Quantock v. England Quartermaine v. Bitterstone 138 191 890 368 25 95, 413 51 257 880 334, 336 '4 363, 364 251 188 140, 171 H, Raffey 9 Ralston v. Bell 132 Ramsbottom v. Cator 60 V. Duck 59 Ramsey v. George 185 186 Rand v. Upham 254 Randall 411 Randall v. Barton 89 Randon v. Toby 147 Rank 288 Rashleigh 213 Rathbone v. Blackford 20 Rawson 74 222 Rawson v. Haigh 81 Raymond v. Johnson 397 Read 72 Reader 203 Reed 411 Reed v. Gordon 242 ■a. Frederick 266 V. Vaughn 242 Reed's case 408 Regina v. Gordon 83 377 ■V. Hill 22 V. Sands 395 V. Scott 92 V. Sloggett 92 Reid 72 365 Reily ». Lamar 289 Beapublioa v. Clarkson 241 Revere v. Newell 317 Rex V. Bullock 24, 31, 411 412 ■u. Cole 48. 55 V. Page 87 V. Whalley 102 Reynard v. Robinson 342 Reynolds 106 TABLE OF CASES CITED. XXIX Eioe 104 S. Rice V. Dewy 122 V. Sims 89 Sackett v. Andress 274 V. Wallace 88, 316 Sadler 69 Richards v. Meriam 99, 376 Sadler v. Leigh 187 V. Nixon 248, 275 Sadlier v. Fallen 375 Richardson 47 Salters v. Tobias 247 Richardson v. Bradshaw 41,44 Sampson v. Burton 3 V. Mclntyre 308 V. Clark 213 V. Wyman 201 Samuel Hopkins 376 Riddles v. Mitchell 308 Samuel v. Cravens 267 Ridley v. Gyde 342 Sanbourne 83 Ridout V. Brough 221 Sanders v. Smallwood 254 Riggs V. Murray 322 Sanderson v. Laforest 32 Rimene 185 V. Rowles 43 Rindge v. Breck 297 Sands v. Codwise 136, 179, 352 Binglands v. Spaulding 272 Sanzmerez 230 Robb V. Powers 280 Sarden v. Galewood 294 Roberts 107, 184 Sargent v. Fitzpatrick 221 Roberts v. Albany 181 Saunders v. Boho 308 ». Hardy 187 V. Williams 159, 282 ■«. Morgan 239 Saunderson v. Gregg 36 V. Teasdale 25 Savage v. Marsh 292 Robertson v. Liddell 25, 34 Savory v. Stocking 306 Robinson 69, 74 Savytelle i>. Rollins 397, 398 Robinson v. Crowder 161 Say 118 V. Richardson 95 Sohmalding 199 V. Vale 212, 276, 299 Schofield 83 V. Wadsworth 255 Scholey 105 Robson V. Bolls 28 Sohonwald v. Capps 164 V. Calze 358 Schooling V. Lee 32,37 V. Jonassohn 103' Schoudler v. Wace 113 Eoch 203 Scott 142 Bochford v. Hackman 9 Scott V. Grant 272 Roden v. Jace 280 V. Leather 395 396 Rogers 211 0. Thomas 342 Rogers v. Allen 158 Soribner v. Fisher 288 ■V. James 187 Scull V. Alter 65 ■0. Western, etc. 259, 268 Seaman v. Stoughton 331, 350 400 Eolfe V. Caslou 313 Seavey 78 Roosevelt v. Mark 8, 265, 303, 314 Sebring v. Mersereau 287 Rose V. Hart 221, 223 Seddon 66, 70 V. Main 183 Selby 240 V. Rowcroft 183 Selfridge v. Gill 217 225 Roseboom v. Mosher 108, 170 V. Lithgow 287 Ross V. McJunkin 169 Sells V. Hubbell 384 Rowe 31 Senior 54 Rowell 329 Sewell 377 Eowlandson 66, 72, 73 Shadbolt 83 Roxby 70 Shaeffer v. Childs 172 280 Ruby V. Glenn 166 Shaffer v. M'Maken 128 Ruckman v. Gowell 246, 253, 279 Shakeshaft 75 Ruffin 64 Sharpe 98 Rufford 232 Shaw 104 106, 107 411 Rugan V. West 378, 395 Shaw.w. Harvey 188 Rugeby v. Robinson 169, 373 V. Thompson 32 Russell 164, 220 V. Williams 6 Eutledge 84 Shawhau v. Wherritt 357 Ryall V. Rowles 66 Shelton v. Codman 132 Ryerss v. Farwell 144 ... Walker 106 XXX TABLE OF CASES CITED. Sheriff v. Buckner 85 Soames v. Watts 37 Sherman v. Barrett . 6, 86, 87 Sohier «. Loring 210 V. Reigart 112 Solomon 73 120 Sherrill v. Hopkins 288 Somers 280 Shirley v. Long 108 136 South, etc. V. Burnside 302 Shoemaker v. Keely 150 Soutten V. Soutten 307 Shore v. Edgell 263 Sowley V. Jones 276 Shuttleworth 186 211 Sparrow 328 Siddiard ■ 72 Sparrow v. Caruthers 49 Sigourney v. Williams 307, 316 Spaulding v. Hood 174 Silk V. Oshorn 162 Spencer v. Beebe 401 Sill V. Worswick 22 ■u. Billing 25 Sillitoe 75 Sprague v. Wheatland 131 Simpson 78 214 Springer v. Foster 132 288 Simpson v. Sikes 82, 183 348 V. Vanderpool 384 Sinclair v. Smyth 372 Sprye v. Porter 147 Skaife v. Howard 392 St. Barhe 75 Skinner 218 Stacey v. Frederic 276 Slater 226 Stadgroon 43 Sleeper v. Miller 305 Staff 6 Sletor V. Oram 321 Stafford v. Clarke 31 Slidell V. McCrea 189 Stammers 84 Sloan V. Apgar 172 Stamp 50 Small V. Graves 260 Stance 231 V. Marwood 193 Stanton 378 V. Dudley 47, 322 Stanton v. Collier 388 Smallcombe v. Bruges 89 V. Ellis 373 Smith 27, 53, 66, 68, 70, 74, 75, 83, 120, V. Smith 42 206, 226 , 273, 409, 410 Staples 186 Smith V. Bahcock 298 Stark V. Stinson 265 V. Brown 128 State V. Bethune 254 V. Brownhead 6 185 V. Harris 220 V. Blackman 183 V. Sherman 397 V. Bennett 246 ■V. Shinn 320 V. Buchanan 283 284 •«. Walsh 294 V. Carman 328 V. Ward 279 ■u. Chandler 147 V. Williams 371 384 V. Coffin 151 Stebbins v. Sherman 262 V. Currie 32 V. Wilson 274 V. Eaton 155 Stedman v. Martinnant 313 V. Gale 314 Steele 6, 107 191 V. Gardiner 292 Steele v. Towne 257 ■u. Gordon 141 162 Steene v. Aylesworth 147 405 V. Hill 224 Steiner 116 V. Hodson 224 324 Steiner's appeal 80 V. Jamesons 177 Stephenson 84 V. Milles 188, 385 Stetson V. Exchange, etc. 110 V. Moon 33 a. Gulliver 109 174 V. Oriel 59 V. Heyden 131 V. Randall 296 304 Stevens v. Blanchard 361 V. Rogers 165 V. Elizee 245 V. Saltzman 360 ■b. Jackson 37.48 V. Sandilands 46 V. Norris 291 V. Smith 66 V. Palmer 102 K. Strickland 120 Stevenson 191 ■a, Watson 64 Stevenson's case 83 Smithey v. Edmonson 185 Stevenson v. Newnham 167 Smyth 122 Steward v. Green 271 Snelth V. Gale 315 Stewart v. Colwell 271 Sneyds 186 V. Hargrove 114 252 Snow 864 V. Moody 348 TABLE OF CASES CITED. XXXI Stewart «. Reckleas 265 Thayer v. Mann 880 V. Kioliman 25 V. Smith 402 V. Union 338, 353 The Commonwealth v. Lelar 169, 391 Stinemets v. Ainalie 807 Thelluson v. Smith 220 Stinson v. McMurray 369 Thomas 184 Stoeyer v. Stoever 398 Thomas v. Minot 203 Stokes 413 ■u. Pemberton lis Stone 390 V. Rideing 390 Stone V. Boston 150 V. Striker 273 V. Parks 8 Thomason v. Frere 58 Stones 185 Thompson 75, 84, 91, 199 Storey v. Barns 313 Thompson v. Councell 164 Stoveld 74 104 ■V. Freeman 342 Stow V. Parks 246 294 400 V. Hervey 49 Straehan v. Barton 361 V. Hewitt 271 Streeter v. Sumner 148 V. Snow 39, 412 Strong V. White 216 ■u. Thompson 57 58, 63, 412 Stroud 75 V. Wiley 245, 401 Sturges D. Crowninshield 288 Thorley 107 Sullivan v. Bridge 150 Thornton v. Dallas 409 V. Hieskill 16 V. Hargreaves 345 Summerset v. Jarvis 399 Thwaites 84 Sumner v. Brady 358 Till V. Wilson 409 Surtees 105 106 Tindall 24, 205 Sutton 189 191 Tindall i>. Hibberd 319 Swaine v. De Mattoa 183 Todd 84, 213 Swan V. Littlefield 346 Todd V. Maxfield 276 Swanzy 73 V. Stokes 49 Swayne v. Wallinger 188 Tolemau v. Jones 30 Sydenbotham 48 Tomlinson v. Wilkes 89 Sylvester 413 Tompkins v. Bennett 225 Symons v. May 86 Toms V. Myton Topham Topham v. Chapman 184 187 161 T. Tower v. Cameron Towle V. Robison 276 210 Tailor v. Hertzag 170 Town V. Smith 132, 292 Talbert v. Melton 133 Treasure v. Jones 187 Talbot V. Jones 333 Treibert v. Burgess 361 Talcott V. Dudley 60 Trigmell 413 Tallis 408 Troughton v. Giltey 410 Tanner 47 410 Trumbull v. Smith 260 Tappenden v. Burgess 348 Tucker v. Daly 116 Tarratt v. Austin 189 V. Oxley 68, 255, 379, 403 Tassett v. Carrott 59 Tudway v. Bowen 169, 230 Tattle V. Grimwood 320 Tnnno v. Bethune 116, 207 Taylor 78 , 346 u. Edwards 397 Taylor v. Geary 161 Turner 217 V. Kinlock 184 Turner v. Esselman 305 V. Mills 314 V. Gatewood 279 V. Nixon 266 V. Mcllhany 244 ■V. Roberts 165 V. Richardson 142, 144 V. Wheeler 12 Twogood 117 V. Whitthorn 13 V. Williams 85 TT, Teackle v. Gibson 104 Tebbetts 295 United States v. Clark 220 Tebbetts v. Pickering 239 288 V. Davis 295 Temple v. Pullen 303 V. Delaware, etc. 220 Terrell 73 V. Evans 72, 220 Texas 299 V. King 220, 404 xxxu TABLE OP CASES CITED. Usborne 66 Wells V. Brackett 368 Utley V. Smith , 332 V. Brander 166 Utterson v. Vernon 196 198 300 V. Mace West Westcott V. Hodges 315 49 312 V. Weston Wetherbee v. Martin 71 385 Vairin v. Edmonson 400 Wheeler 66 Valentine v. Vaughan 42 Wheeler v. Bacon 37, 39 Valpy V. Sanders 221 297 Wheelock v. Hastings 393 Vanderheyden v. De Paiba 211 V. Leonard 291 V. Mallory 50 311 Whistler v. Webster 73 Van Epps v. Van Deusen 51 117 193 White 31, 82, 184 Vanhark v. Whitlock 319 White V. Foljambe 173 Vanher v. Disborough 111 V. Mullet 139 Van Valkenburgh v. Elmendorf 177 Whitehead v. Mallory 11, 87, 393 Vasae v. Comegys 148 Whitelock's case 48 Viele V. Ogilvie 265 Whitfield V. Brand Whiting V. Gray 138 381 w. Whitney v. Crafts V. Whiting 240 293 Wade 232 V. Willard 352 Wadham v. Marlow 141 306 Whittenton, etc. v. Upton 80 Wagner v. Imbrie 179, 239 253 Whittington 145, 406 Wainman 195 Whitwell V. Thompson 69 Wait 59 Wickes V. Strahan 73 Wakefield 410 Wilder v. Keeler 122 Walcott V. Hall 205 Wilkes 241 Wales V. Lyon 251 Wilkins v. Casey 3,110 Walker 75, 209 222 V. Fry 146 Walker v. Best 134 V. Manning 258 V. Burrell 413 V. Warren 274 V. Edwards 243, 295 Willett V. Pringle 273 V Pilbeam 383 Williams 65,72 Wall V. Lakin 354 Williams v. Bugbee 264 Wallace v. Coil 291 V. Coggeshall 260, 294, 317, V. Patterson 261 341 Walsh V. Ferrand 291 ■V. Ellicott 103 Ward 96 V. Gibbes 374 Ward V. Morris 154 V. Miller 164 I/. Wilkinson 89 V. Bobbins 263, 264 Warder 97 o. Robinson 317 Wardmell v. Poster 267 V. Vermeule 134 Warne v. Constant 273 V. Walsby 177 Warner v. Bancroft 289 Williamson 90 185, 230, 414 V. Barker 165, 409 Williamson v. Dickens 282, 294, 297 Warren v. Homestead 170 Willis V. Bucher 9 Warwick 98, 232 V, Freeman 110 Washburn v. Bump 236, 240 WiUock 69 Waterman v. Robinson 395 Wilson 44, 193, 411 Watson 71, 7!: ,97, 337 Wilson V. Day 327 Watson V. Bourne 291 V. Norman 31, 35 ■u. Wace 406 J'. Whittaker 320 Watts 107 Winch V. Keeley 47, 149 Watts V. Thorpe 12 Winchester 209 Way V. Sperry 267 Windham v. Patterson 186 Wearing v. Ellis 398 Winingder v. Diffenderffer 242 Weber v. Samuel 176 Winslow V. Parkhurst 307 Webster 26 Winsor 91 Wedge V. Newlyn 827 Winsor v. M'Lellan 108, 347 Welch V. Myers 143 D. Kendall 359 TABLE OF CASES CITED. xxxm Winter v. Mousely 209 Wright V. Paton 12 Winwood 410 V. Simpson 210 "Witt V. Follett 229 Wydown 26, 28, 32, 82 Witter V. Latham 245 Wyles V. Beals IS, 348 Wolstonhome 27,29 Wyllie V. Wilkes 205. Wood 31 Wood V. Dodgson 73 V. Grundy 395 Y. Woodard v. Herbert 305 Woodbridge v. Swann 69 Yallop 64 Woodbury v. Perkins 21.i, 270 Yate V. HoUingsworth 266 Woodhead 83 Yonge 120, 189 Woodier's case 34 Young 74 Woodman v. Saltonstall 492 Young V. Hockley 314, 315 Woodmason 67 V. Keighly 66 Woods V. Sanford 165 u. London, etc. 89 Woodward 350 V. Timmins 392 Wooldridge 232 ■0. Ward 328 Woolland v. Dean 216 V. Willing 383 WooUey 105 V. Winter 301 WooUey v. Cobbe 308 V. Wright 25,29 ■V. Smith 196 Younge 73, 364 Wordell 203 Worseley v. De Mattos 23, 24, 327 Worth V. Budd 26 Z. Wray 409 Wride 83 Zarega 283 Wright 84 Zeigler v. King 174 Wright V. Fairfield 147 ZiegenfuBs's case 13 THE LAW BANKRUPTCY AND INSOLVENCY. THE LAW BANKKUPTCY AND INSOLVENCY. CHAPTER L 1. Meaning of the terms bankrupt and iTuolvent; analogy and distinction between them. 3. General purposes of bankrupt and insolvent laws. 5. Necessity and inefficiency of such laws. 6. When proceedings may be an- nulled. 9. English and American bankrupt acts. 13. Nature of a commission. 17. Constitutional questions in the United States. § 1. Bankrupt and Insolvent, like many other legal terms, have both a technical and a popular signification. It may be remarked, generally, that, when used as adjectives, they are to be understood in the popular sense ; when used as substantives, in the technical sense. To say that one is bankrupt or insolvent, means that he has not property enough to pay his debts ; but to say that one is a bankrupt or an insolvent, means that he is in a legal, publicly recognized condition of bankruptcy or insolvency, or has done some act, or has passed or is passing through some legal process, by which his property is or will be surrendered, and his debts are or are to be liquidated, {a) Strictly speaking, (a) That the terras hankrwpt and insolvent are somewhat promiscuously used by lexicographers, see Webster, McCuUoch, Ash, Johnson — " Bank- rupt." In respect to the derivation of the word hankrwpt, high authorities differ. Blackstone derives it from hancus or hanque, meaning table or connter, and ritptus or broken. 2 Bl. Com. 472, n. Lord Coke, on the other hand, defines the word as follows : "A sign or mark, as we say a cart-rout, which is the sign or mark where the cart hath gone; bo, metaphorically, it 1 2 BANKRUPTCY AND INSOLVENCY. [CHAP. I. it is not the proceedings in court that constitute bankruptcy ; but it takes place in the course of a man's business, and the court or jury are to ascertain whether the party was or was not a. bank- rupt at a certain time.' § 2. It will be seen, however, that between bankruptcy and insolvency, in the technical sense of the words, there is an estab- lished distinction, which has given rise in this country to very grave constitutional questions, connected with United States and State laws upon these subjects. The term bankruptcy is said to be applicable only to unfortunate traders, or persons who get their livelihood by buying and selling for gain, and who do cer- tain acts which afford evidence of an intention to avoid pay- ment of their debts; and a bankrupt is defined as "a trader who secretes himself, or does certain other acts, tending to defraud his creditors."^ Insolvency — more especially as the term is used in an insolvent law — means the condition of a person unable to pay his debts as they fall due, or in the usual course of trade and business, 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.' So the word insolvency, occurring in an act relating to limited part- nerships, signifies that the partnership has not sufficient property or effects to pay all its debts.* So an assignment, by a debtor, of all his estate, to pay his debts, is, as to the debtor, conclusive evidence of his insolvency at the time ; and if, by such assign- ment, a preference is given to one or many of his creditors, it is a bar to his discharge.' (a) And insolvency may be inferred from ' Breneman, Crabbe, 456. Termes de '2 Kent, (9th Ed.) 496 and n. ; Thomp- la Ley, [Bankrupt,) defines a bank- son v. Thompson, 4 Cush. 127; rupt as a person who commits any Shore v. Lucas, 3 D. & R. 218; Lee one of a long series of enumerated v. Kilburn, 3 Gray, 594. acts of bankruptcy. * McAnhur v. Chase, 13 Gratt, (Va.,) > 2 Bl. Com. B. 2, ch. 18, s. 8. 683. 6 Morewood ». HoUister, 2 Seld. 309. is taken for him that hath wasted his estate and removed his hanque, so that there is left but a mention thereof." 4 Inst. 277. See 2 Parsons on Contr. 577, n. (a) Upon a reverse application of the same principle, if a petitioner for the benefit of the insolvent laws has, within a recent period prior to his appli- cation, represented himself on oath as being in solvent circumstances and adequate as bail, the Court will expect from him clear and conclusive evi- CHAP. I.] NATURE OF BANKRUPTCY, ETC. 8 circumstances. Thus A. purchased cabinet furniture of the plain- tiff on credit ; soon after, he executed a chattel mortgage to the defendant of all his stock in trade, including this furniture, to secure the payment of a sum much larger than the price of the furniture. A short time before the purchase, he had confessed judgment in favor of B. and C. in a large amount, and, a short time after, the sheriff returned several executions against him, unsatisfied for want of property. Held, that from these circum- stances it might well be inferred that A, was insolvent at the time of the purchase.' And a return on fi. fa. of no property is of itself primd facie evidence of insolvency.^ So if a man lie in prison two months, the law presumes insolvency, by relation, at the time of the arrest.^ But, on the other hand, it is held that a man may fairly carry on his trade, even where, if his assets were realized, they would have been less than his debts. Such a course may be likely to be beneficial to existing creditors, and may be pursued without dishonesty, if he have a well-grounded expecta- tion and reasonable hope of surmounting his difficulties.* § 3. The purposes of bankrupt and insolvent laws are thus expressed by elementary writers and judges. § 4. Bankrupt and Insolvent Laws (a) are intended to secure the application of the effects of the debtor to the payment of his debts, and then to relieve him from the weight of them.' "Three 1 Buckley v. Artoher, 21 Barb. 585. * Dornford, 5 Eng. L. & Eq. 242. 2 Lawson v. Wright, 21 Geo. 242. ^2 Kent, 389. ' Coppendale v. Bridgen, Burr. 819. dance of his existing insolvency, and will carefully scrutinize his case. Benny's case, 1 Ashmead, 261. But the fact that a petitioner justified as bail — which justification was not authorized by the true state of his circumstances — will not in itself induce the Court to reject his petition. If it should- manifestly appear that the petitioner had wilfully and knowingly committed perjury in such case, the Court will discharge him as an insolvent debtor, but will commit him to answer before the appropriate criminal tribunal for his crime. Ibid. (a) It is said they are positivi juris, and ought not to be extended. Cooper, 143. They are to be construed liberally. Mims v. Lockett, 20 Geo. 474. That suggestions in debate concerning the bankrupt law are entitled to little weight, see Mitchell v. Great Works, etc., 2 Story, 653. Successive insolvent statutes, being in pari materia, are to be construed together. Jordan, 9 Met. 294 ; Buck v. Sayles, ibid. 461. 4 BANKRUPTCY AND INSOLVENCY. [CHAP. I. great objects are manifest in the system of insolvent laws: First, a distribution of all the insolvent's property; second, an equal distribution of his property amongst all his creditors, when it is insufficient to pay the whole; and third, to discharge an honest debtor from all prior debts. We speak of the general policy; of course the laws make some exceptions to the complete accom- plishment of each of these objects."* And, with more special reference to the duty of a person in an actual condition of insol- vency, in regard to the law, and his liability to lose its benefits by delaying the performance of this duty, it is said: "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 plausi- ble, to put himself and his assets at once into the hands of the law, with a view to two objects: one is to make an equal distri- bution among all his creditors; 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 faith- ful performance of their duties."^ § 5. Both the neeeisity and the inefficaey of this class of laws are illustrated by the language of statutes and of judges and commentators. Thus the earliest statute (34 & 35 Hen. 8, c. 4) describes the candidates for its provisions as "persons craftily ob- taining 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 substance obtained by credit of other men, for their own pleasure and delicate living, against all reason, equity, and good conscience." So Lord Coke says: "We have fetched as well the name as the wickedness of bankrupts from foreign nations;" and that the first statute on the subject was made "against strangers, viz. against Lombards, who, after they had made obligations to their creditors, suddenly escaped out of the realm without any agreement made with their creditors."* 1 Per Shaw, C. J., Prentice «. Richards, » Per Shaw, C. J., Fernald v. Gay, 12 8 Gray, 227, aco. Purple v. Cooke, Cusb. 597 ; aco. Smith's Merc. L. 4 ibid. 121 ; Gray i>. Bennett, 3 Met. 465-6. 525; Breneman, Crabbe, 456 ; Dex- '4 Inst. 277. ter V. Snow, 12 Gush. 594^5; Aus- tin 0. Caverly, 10 Met. 838. CHAP. I.J NATURE OF BANKRUPTCY, ETC. 5 And with regard to the abuses of the bankrupt law itself, it is hardly necessary to repeat the often-quoted remark : " The abuse of the bankrupt law ia a disgrace to the country, and it would be better at once to repeal all the statutes, than to suffer them to be applied to such purposes. There was no mercy to the estate. Nothing was less thought of than the object of the commission. As they were frequently conducted in the country, they were little more than stock in trade for the commissioners, the as- signee, and the solicitor."^ (a) So Lord Hardwicke says: "The new laws relating to bankrupts have turned the edge of commis- sions of bankruptcy from being, as they were originally, remedial to the creditor, and in the nature of punishments to the bankrupt, whom they considered as an offender, to be the accidental occasion of great frauds."^ § 6. It will be seen hereafter, (see Fraud, Supersedeas, Dis- charge, Preference,) that the effect of proceedings in bank- ruptcy and insolvency may often be annulled for specific reasons, relating to the party himself or other persons interested in the case. We may in the present connection refer briefly to the grounds, on which, under the English law, a commission may be superseded, for having been perverted to other than its legitimate purposes. § 7. It has been doubted, under statutes which authorized bank- ruptcy proceedings only on application of creditors, whether such 1 Per Ld. Eldon, 6 Ves. 1. » gmith, Mont. Dig. 119. (a) StiU stronger language is used in a recent case concerning "the wind- ing-up act," (so called,) which relates to insolvent corporations : "It is to be hoped that the legislature will take steps to prevent the recurrence of conflicts and complications such as the proceedings before us exhibit and portend — miserable conflicts, distressing complications, which it has itself created — conflicts and complications characterized by the grave frivolity, the costly uselessness, the sickening delay, in which chicane rejoices — con- flicts and complications which, to a civilized people, are nationally discredit- able, and in a govern^JI country ought not to be possible." Per Enight Bruce, Marcus, 39 Bng. L. & Bq. 273. In a late case under the Massachusetts insolvent law, where the question of interest upon debts proved arose, it was said by the Court: "This is the first case which has ever come before the court of a surplus under the insol- vent law." Per Hubbard, J., Brown v. Lamb, 6 Met. 208. 6 BANKRUPTCY AND INSOLVENCY. [CHAP. I. proceedings are avoided by being instituted through the agency of the bankrupt himself.' (a) § 8. A commission is in general supersedable, if sued out by one creditor in breach of good faith to the others.^ So if sued out in order to force compliance with a pending arrangement; being considered an abuse of process.* Or to dissolve a partner- ship.* Or, by a landlord, to terminate a lease." Or to compel a compromise or composition.* Or if taken out for the purpose of defeating an action by the bankrupt against the petitioner, al- though afterward pursued for the benefit of creditors.'^ But it may be taken out to defeat a previous execution, unless by collu- sion with the bankrupt.* § 9. In regard to the English bankrupt acts, which are numer- ous, voluminous, and complicated, and of course have no binding force in this country, it is unnecessary to state them in detail. A simple reference to the leading statutes will be sufficient.(6) The earliest (or one of the earliest) of these acts (St. 34 & 35 H. 8, c. 4) was not confined to traders, but embraced all persons. The limitation to traders was first contained in a statute of Eliza- beth. St. 6 Geo. 4, ch. 16, is said to have introduced the right of a trader voluntarily to declare himself bankrupt.' And this act repealed all prior laws.'" It was succeeded by the leading act, 2 Wm. 4, c. 56, which in its turn was followed by 12 & 13 Vict., c. 106, a long and elaborate statute, in which many of the former provisions are retained and consolidated, with the addition of 1 See Shaw v. Williams, R. & M. 19 ; ' Haroourt, 2 Rose, 203 ; Masterman, CFardener, 1 Rose, 377 ; Gang, 1 ibid. 444 ; Ayer, 2 Dea. & Chit. 67. Mont. & Mac. 399; Grant, 1 Glyn See Baker, 1 Dea. & Chit. 533. & J. 17; Staff, Buck, 249; Steele, 'Bourne, 2 Glyn & J. 137. 16 Vea. 161 ; Harwood v. Keys, 1 « Menham v. Edmonson. 1 B. & P. 369 ; M. & Rob. 204. Gardener, 1 Rose, 377 ; Edmonson, 2 Lowe, 1 Glyn & J. 78. 7 Ves. 308 ; Arrowsmith, 14 Ves. ' Haroourt, 2 Rose, 203. 209; Bowes, 11 Ves. 541. See Smith < Christie, 1 Mont. & Bl. 314; Browne, v. Brownhead, 7 T. R. 300. 1 Rose, 151; Milbran, 5 Madd. 1. 'Per Cowen, J., Eunzler v. Kohaus, 5 6 Gallimore, 2 Rose, 424. Hill, 322. w Owen, 1. (o) St. 1 & 2 Wm. 4, c. 56, s. 42, made such proceeding legal. (6) Bankruptcy, though almost wholly the creature of positive statutes, is sometimes traced back to ancient commercial practices in Venice, and the principles upon which it is founded to the Roman law; and statutes are said to be found as early as the reign of Edw. I., premonitory of the bankrupt system. CHAP. I.] NATURE OF BANKKUPTCY, ETC. 7 many others wholly new. This statute consists of two hundred and seventy-eight sections, and is entitled "an act to amend and consolidate the laws relating to bankrupts." It bears date Au- gust 1, 1849. § 10. Bankruptcy in England is said to be "an adversary proceed- ing against a defaulting trader, upon doing certain acts, indicative of present or' impending insolvency. These (bankrupt) laws provide, generally, that, upon a trader's doing certain acts, considered acts of bankruptcy, a creditor may apply for and obtain a com- mission (a) (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 ofiScers appointed for that purpose, the pro- ceeds 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 proportions, as far as is sufficient for that purpose. The same law further provides that, if the bankrupt will honestly and faithfully co-operate in the proceed- ing, if he will disclose all his property and effects, and aid the officers appointed for that purpose by information and by all means in his power, and do all the duties required of him in the premises, he shall be absolved and discharged of all his debts, and receive a certificate, as the authoritative evidence of his right to such discharge."* § 11. The first bankrupt law in the United States was passed April 4, 1800, expressly limited to the period of five years, and 1 Per Shaw, C. J., May v. Breed, 7 Cush. 28; 7 How. 627. (a) "The commissioners are not a court of record." Per Grier, J., Shew- han v.Wherritt, 7 How. 627. The petitioning creditor's " first step must be to ascertain, by a search at the Bankrupt Office, that no docket has been struck against the trader. His next, to swear before a Master in Chancery to the amount.of his debt, and his belief that the trader has become bankrupt, and execute a bond condi- tioned for proving his debt, and the, act of bankruptcy, and for proceeding on the fiat. When the affidavit and bond are delivered at the Bankrupt Office, an entry is made in a book called the docket book, and the petition- ing creditor is then said to have 'struck a docket' against the trader. We now come to the fiat, which is substituted for a commission, by the Bank- rupt Court act. This, when the above preliminaries have been complied with, is, on the creditor's formal petition, granted to him by the Court of Chancery." Smith's Merc. L. 8 BANKRUPTCY AND INSOLVENCY. [CHAP. I, repealed December 19, 1803. The second act was passed in 1841, and repealed (a) by an act which took effect March 3, 1843, after liquidating debts estimated to amount to thirty millions of dollars. § 12. The act of 1800 consolidated the provisions of the Eng- lish statutes ; therefore, English decisions were held applicable to it.^ So, "though the late bankrupt law of the United States is different, in its provisions, from the English statutes, in respect to payments and transfers of property declared to be void, yet the English decisions throw much light on the language of our statute, which was probably in part framed by incorporating into it the principles of those decisions."^ But it is also remarked: "The decisions upon the English statutes, while they furnish helps to enable us to arrive at just conclusions, do not constitute legal precedents binding us in the construction of our own stat- ute."' So it is said: "The English bankrupt laws are so different from our insolvent system, that the decisions under the one do not apply with much force to the other."* § 13. In regard to the precise nature of a commission of bank- ruptcy in England, it is said the commission of bankrupt, which arms the commissioners with all the power they are to exercise over the bankrupt and his estate, is to be granted by the Lord Chancellor, Lord Keeper, or Commissioners of the Great Seal, on the application of creditors only ; and this is a matter not discre- tionary, but to be granted de jure,' But proceedings in bank- ruptcy are not proceedings in equity.^ "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 lEoosevelt v. Mark, 6 John. ch. 266; 'Per Hubbard, J., Brown v. Lamb, 6 Lummua v. Fairfield, 5 Mass. 249; Met. 209. Livermore v. Bagley, 8 Mass. 511. * Per Shaw, C. J., Denny v. Dana, 2 "Per Hubbard, J., Jones v. Howland, Cush. 170. 8 Met. 383. SBao. Abr. (1832,) Bankrupt B. ' Crowder v. Davies, 3 Y. & J. 433. (a) It is said : " If the statute was pernicious, or even wicked, it has paid the penalty of its mischief by death." Per Oowen, J., Kunzler v. Kohaus, 5 Hill, 324. This act was obligatory in all those States and Territories to which the ordinance of 1787 extended, as well as to the others. Stone v. Parks, 1 Chandler, (Wis.,) 60. CHAP. I.] NATURE OF BANKRUPTCY, ETC. 9 comprehensive remedy designed for the common benefit of all. The rights with which the assignee is clothed, as the representa- tive of creditors, are to render this great and common remedy effectual."" § 14. Upon the same subject it is further said, a commission is an execution, not an action.^ And Judge Story remarks : "A commission and decree, declaring a man to be a bankrupt, has been emphatically said to be a statute execution for all the cred- itors."^ And, upon the ground that a commission is a statute execution, the death of a party after being declared a bankrupt does not abate it.^ § 15. Lord Eldon, in two elaborate judgments, expressed his opinion that a commission of bankruptcy was merely a substitu- tion of the authority of the Lord Chancellor, enabling him to work out the payment of those creditors who could, by legal or equita- ble suit, have compelled payment.* But, in another case, he expressed the opinion that a commission is not strictly an execu- tion.^ (a) § 16. And it is to be further remarked, that "when the pro- ceedings are instituted by the voluntary act of the bankrupt him- self, they are uniformly regarded and treated, in the act, as done for the benefit of the bankrupt."' So it is said: "The English doctrine is that, the act of bankruptcy being voluntary, the prop- erty of the bankrupt must be deemed to pass to the assignee with the consent of the bankrupt."* But, in general, there is a marked distinction between insolvency and bankruptcy, as being volun- tary and involuntary modes of alienation.' § 17. As has been suggested, the distinction between bank- » Per Curtis, J., Bettont). Valentine, 1 SDeiydney, 15 Ves. 498; Koffey, 19 Curt. (U. S.) 176. ibid. 498. 2 Crispe, 1 Atk. 133; per Aston, J. , Lavie « Brown, 1 Ves. & B. 60. V. Phillips, 3 Burr. 1783; Cooper, 'Per Shaw, C. J., Morse v. Lowell, 7 130; Green, Bank. L. 9. Met. 155. » Per Story, J., Foster, 2 Story, 142. 'Per Curtis, J., Betton v. Valentine, 1 * Cooke, 7; Backwell's case, 1 Vern. Curt. (U. S.) 177. 158. » Rochford v. Haokman, 10 Eng. L. & Eq. 64. * (o) With regard to the legal effect of proceedings upon the title to real estate, the insolvent law of Pennsylvania, passed in 1799, does not extend to estates tail, so as to make a conveyance executed according to that law operate as a bar to such estate. Willis v. Bucher, 3 Wash. C. C. 369. 10 BANKRUPTCY AND INSOLVENCY. [CHAP. I. ruptcy and insolvency has been made the ground of some consti- tutional objections to the bankrupt act of the United States. § 18. It is to be observed in advance, that "the English bank- rupt acts apply, for the most part, to cases of involuntary bank- rupts, whereas the main purposes of ours" — meaning the act of 1841 — " are for the benefit of voluntary bankrupts."* In Sackett V. Andross,^ Justice Bronson held the voluntary branch of the bankrupt law unconstitutional, for the following reasons: 1. It embraces all classes of debtors, instead of being confined to traders. 2. It places the whole power in the hands of the debtor, giving no means of coercion to the creditor. 3. It discharges the debt without the consent of the creditor in any form, thus violating the obligation of the contract. 4. In discharging prior debts, it goes beyond the limits of the bankrupt power. It is an assumption of judicial power by Congress — not a law, but a sentence or judgment against creditors. § 19. But these objections had been long before anticipated, and answered in advance by the Supreme Court of the United States in the following remarks: "The line of partition between them (bankrupt and insolvent laws) is not so distinctly marked as to enable any person to say, with positive precision, what belongs exclusively to the one and not to the other class of laws. But if an act of Congress should discharge the person of the bankrupt, and leave his future acquisitions liable to his creditors, we should feel much hesitation in saying that this was an insolvent, not a bankrupt act, and therefore unconstitutional. Another distinc- tion has been stated, and has been uniformly observed. Insol- vent laws operate at the instance of the imprisoned debtor — bankrupt laws at the instance of a creditor. But should an act of Congress authorize a commission of bankruptcy to issue on the application of a debtor, a court would scarcely be warranted in saying that the law was unconstitutional and the commission a nullity."* Conformably with these views, in Klein's case,* the Supreme Court of the United States, reversing the judgment of the District Court in Missouri,' affirmed the constitutionality of the bankrupt law. So it is held in the State Courts, that 1 Per Story, J., Arnold v. Maynard, 2 ' Per Marshall, C. J., Sturges v. Crown- Story, 866. inshield, 4 Wheat. 19. 25 Hill, 828. *1 How. 277. s 2 N. Y. Leg. Observ. 184. CHAP. I.] NATURE OF BANKRUPTCY, ETC. 11 the voluntary branch of the act applies to debts created both after and before its passage, and is constitutional.* And Judge Dewey says, the voluntary feature of the bankrupt law "seems to us to be no longer an open question. The act has been indi- rectly sustained in all the courts of the United States."^ § 20. Such decisions are justified upon the ground that "it was undoubtedly in reference to the state of American legislation on the subject, and not to the principles of the English bankrupt law, that these provisions of the constitution, depriving the States of the power to impair the validity of contracts, but giving to Congress the power to do so by establishing uniform laws on the subject of bankruptcy, were adopted."' Still, however, under the bankrupt law of 1841 the cases of voluntary and involuntary bankrupts are held to stand on very different grounds.* And in regard to a State insolvent law, it is said : " One obvious difference between a voluntary and an adversary application to the commis- sioner is that, in the former, the debtor submits himself in the outset to the jurisdiction of the commissioner, as an insolvent under the law ; whereas, in the latter, the commissioner does not obtain jurisdiction of his person, as an insolvent, till an adjudi? cation that he is such, under the statute, and the issuing of a warrant."* § 21. As has been stated, the act of 1841, unlike the old bank- rupt law, was not confined to traders, and included cases of volun- tary application. This increased the identity between bankrupt and insolvent laws, and, except in name, and in reference to the exclusive application of the latter to debts contracted after their enactment, made them alike in their purposes and efiFects. § 22. One of the most elaborate and approved State insolvency systems is that of Massachusetts. For nearly half a century after the establishment of the Constitution of the United States, Massa- chusetts had no insolvent law, owing, in part at least, to the prev- alent impression that such a law, discharging debts, would be unconstitutional. Other States took a different view of the sub.7 ject, and enacted statutes, really of bankruptcy, though assuming the name of insolvent laws. The first general insolvent law of 1 Eunzler v. Kohaus, 5 Hill, 817. ^Breneman, Crabbe, 466. ' Thompson v. Alger, 12 Met. 442. 6 Per Shaw, C. J., Whitehead v. Mal- ' Per Walworth, Chr., Morse v. Hoyey, lory, 4 Gray, 183. 1 Barb. Ch. 405. 12 BANKEUPTCY AND INSOLVENCY. [CHAP. I. New York was in 1784. In April, 1811, another insolvent law was passed. (a) It was a voluntary process on the part of a debtor imprisoned or prosecuted. No consent of the creditor was neces- sary, and, on assignment of his property, he was discharged from all his debts and contracts. It was repealed in 1812, and after- wards by the Supreme Court of the United States adjudged uncon- stitutional.' In Pennsylvania, also, a law was enacted in 1812 for the relief of insolvent debtors ; but, upon the ground that it authorized the discharge of a contract, by the payment of a smaller sum, or at a different time, or in a different manner, than the parties agreed, and thus impaired its obligations, "by sub- stituting for the contract of the parties a legislative contract to which they never assented, it was held unconstitutional and void.* But the act of March 26, 1814, releasing a debtor on the consent in writing of a majority in number and value of his creditors, was held constitutional as respects a dissenting creditor, whose con- tract was made after the date of the act.^ (b) § 23. The important question has often arisen, whether and how far the powers of the National and the State Governments conflict with each other, in reference to bankrupt and insolvent laws. An analogous question occurred in Massachusetts, with regard to successive State laws, of very different character, con- cerning insolvent debtors. It was there held, that St. 1836, c. 238, regulating the assignment and distribution of the property of insolvent debtors, was repealed by the more general insolvent law of 1838, c. 168, so far as it affected the same class of per- sons, upon the ground that it could not have been the intention of the legislature to have two distinct systems, operating upon the same persons and property, and leaving it to the option of the 1 2 Kent, 391, n. ' Eckstein v. Shoemaker, 3 Whart. 15. 2 Golden v. Prince, 8 Wash. C. C. 313. (a) This act, entitled "an act for the benefit of insolvent debtors and their creditors," was held an insolvent, and not a bankrupt act. Adams v. Storey, Paine, 79. (6) The act of 1803, for the relief of insolvent debtors in the District of Columbia, is a private act, of which the courts of the several States are not bound to take notice, unless set forth in the pleading, or so much of it at least as to enable the Court to decide whether the discharge is warranted by the provisions of the act. Wright v. Paton, 10 Johns. 300. CHAP. I.] NATURE OF BANKRUPTCY, ETC. 13 debtor to elect one or the other at his pleasure.' In respect to the National and State laws, it was held in North Carolina, that a State insolvent law may exist and operate with full vigor, until the bankrupt law attaches itself upon the person or property of the debtor, by proceedings instituted in bankruptcy; but that no case of conflict could arise, until after the proceedings in bank- ruptcy had reached that stage in which the debtor had been judi- cially declared a bankrupt.'' (a) This has been called, at first view, a plausible doctrine.^ But it is open to the objection that its effespt would be to supersede proceedings once commenced, at the will of the insolvent, making application under the bankrupt law; whereas, "sound principle would require that, in all cases where proceedings could be legally instituted, they should have the legal capability of being perfected and closed under the State law."* And in an early case in Massachusetts, the defence relied upon was a discharge under the insolvent law of the State of New York, The plaintiff insisted that the insolvent law of New York was invalid, being repugnant to the Constitution of the United States, authorizing Congress to establish a uniform bankrupt law. This broad proposition was not sustained; but it was said that the actual enactment of a bankrupt law would supersede State laws, which in such case would become inconsistent with that uniformity which it was the wish of the people to establish." And it has been expressly decided in Massachusetts that, while the United States bankrupt act of 1841 was in force, proceedings against a debtor, under the insolvent law of the State, were un- authorized and void, if the debtor and his property were subject .to the operation of that bankrupt act, although no proceedings under it were had against him.* § 24. The following remarks of the Court in MassachusettSj in a late case, present a clear and concise view of what may now be regarded as the settled law upon this subject: "In default, on » Carter v. Sibley, 4 Met. 298; Wyles sPer Dewey, J., Griswold v. Pratt, 9 V. Beals, 1 Gray, 236; Edwards v. Met. 20. Mitchell, ibid. 240. * Ibid. 2 Ziegenfuss's case, 2 Ired. 463. ^ Blanchard v. Russell, 13 Mass. 1. » Griswold v. Pratt, 9 Met. 16. (a) In New York, the assignment under the 17th section of the act of 1831 is not an insolvent law, and is not suspended by the act of Congress Aug. 19, 1841. Berthelon v. Betts, 4 Hill, 577. 14 BANKRUPTCY AND INSOLVENCY. [CHAP, I, the part of the National Government, to enact a bankrupt law, many of the States had enacted insolvent laws of a very extended character, directly discharging all debts of the insolvent, as well those contracted previously as subsequently to the passage of those laws. Th^ese State laws were apparently coextensive, in all their purposes and effects, with a general bankrupt law. Under this course of State legislation, cases frequently arose as to the effect of a discharge under such insolvent laws, and questions as to the validity of such laws came to be fully discussed before the Supreme Court of the United States. The broad ground was originally taken, that such State insolvent laws were, under all circumstances, invalid, being in violation of the provisions of the Constitution of the United States, authorizing Congress to establish uniform laws on the subject of bankruptcy throughout .the United States, and the further provision that no State should pass any law impairing the obligation of contracts. The result of these judicial inquiries and decisions was, as is well known, that it was held that the power vested in Congress to enact a bankrupt law did not supersede the right and authority of the several States to enact insolvent laws, while the power remained dormant, and was not called into exercise by any act of legislation of Congress upon the subject; and that the mere existence of the power in the National Government to act on the subject was not an absolute restriction upon the powers of the several States to act in the matter, in the absence of any existing bankrupt law ; holding, however, that the other provision of the Constitution, already adverted to, that the State should pass no law impairing the obligation of contracts, would render invalid any State insolvent law, so far as it author-, ized the granting of a discharge from liability for debts contracted before the enactment of such State insolvent law. The great question in the cases referred to was, whether the power, vested in the National Government, to establish a uniform bankrupt law, did not supersede all State legislation on the subject. The ques- tion of the effect of the actual exercise of this power by the Con- gress of the United States was only incidentally considered, as no such act was in force, or had been, except for a very short period, and that long previous. In these discussions and judicial opin- ions, which were pronounced by the members of the Supreme Court of the United States, it seems, however, to be assumed or CHAP. I.] NATUKE OF BANKRUPTCY, ETC. 15 held as unquestioned, that if the authority conferred by the Con- stitution to establish such uniform bankrupt system was exercised by Congress, and a bankrupt law was actually in force, all State legislation on%he matter would be at once superseded ; certainly as to all cases falling within the provisions of sach bankrupt law."' § 25. To these remarks may be added those of the same court in a later case, of more general applicability to the whole consti- tutional question connected with National and State laws. § 26. "A question has sometimes arisen, whether the obligation of a contract, made in one country, to be performed in another, arises from the force and eflFect of the municipal law, either of the place of making Or that of performance ; or from that univer- sal law of moral obligation, acknowledged by all men above the condition of barbarism, and admitted and carried into effect by the comity of all civilized nations. This may be a difficult and delicate question, in expounding that clause in the Constitution of the United States, which prohibits the respective States from passing any laws impairing the obligation of contracts. The construction of this clause may be affected by a consideration of all the provisions of the Constitution, of the relative powers intended to be vested in the United States, or reserved to the several States, of the condition of the legislatures of the several States, when they existed as British provinces, and by many considerations not affecting the general question."^ (a) § 27. But the bankrupt act, which took effect February 1, 1842, did not supersede nor suspend proceedings commenced against an insolvent debtor before that day, under the Massachu- 'Per Dewey, J., Griswold v. Pratt, 9 ''Per Shaw, C. J., May v. Breed, 7 Met. 17. Gush. 31. (a) In this case the learned Chief Justice remarks, that the leading case of Blanchard v. Eussell (13 Mass. 1) has been sometimes overruled as to the effect of an insolvency discharge, but the general principles advanced have been repeatedly recognized as sound law. May v. Breed, 7 Gush. 33. The Chief Justice also remarks, upon the case of Ogden v. Saunders, (12 Wheat.) as "the leading and most elaborate case — most ably and fully argued by eminent counsel ; — argued several times, not only with the keenest legal discrimination, but with the closest,metaphysical acumen." lb. 39. The case itself, of May v. Breed, 7 Cush. 15, from which these observa- tions are taken, may well be noted as a most able and elaborate exposition of the whole subject. 16 BANKRUPTCY AND INSOLVENCY. [CHAP, I. setts insolvent law. (St. 1838, c. 163.) It was contended that, as the insolvency proceedings had not reached the point of an assignment, they were by this means superseded. But the Court held, that not only does the assignment relate bafk to the first publication of notice, but that the debtor is divested of his prop- erty by virtue of the warrant to the messenger and the taking of the property of the debtor into custody. It was said, that the effect of suspending the insolvent law as to prior cases would be to change the tribunal, to divest the messenger or assignee of his rights, for the mere purpose of giving the same trust to others, with new provisions respecting creditors, and without benefit to either debtor or creditor, and with the certainty of lessening the avails of the property by the increase of expenses consequent upon such a change. And these views were held more especially to control the case, inasmuch as no bankruptcy proceedings had been actually commenced.^ So in Pennsylvania, a debtor made a voluntary assignment of all his estate to the defendant, for the benefit of certain creditors. Afterwards he applied for the benefit of the insolvent laws of Pennsylvania, was discharged, and the defendant appointed his assignee. Under these assign- ments, the defendant obtained possession of and sold the property of the debtor. The latter petitioned for the benefit of the bank- rupt law, and was decreed a bankrupt. The plaintiflf was appointed his assignee, and brought an action of trover to recover the value of the property received under the voluntary assignment. Held, that the plaintiff could not recover.^ And the enactment of a national bankrupt law only suspends, but does not repeal or abro- gate, an existing State insolvent law. Upon this subject it was said in Massachusetts : " The insolvent law, during its suspension, existed to many purposes. It was suspended only during the existence of another system of paramount authority, designed for the accomplishment of the same purpose. "When, therefore, the operation of this suspending law ceased, the original act was rein- stated in active operation, and took effect from its original enact- ment."' § 28. From what has already been said it abundantly appears, that State insolvent laws are held to be consistent with that pro- 1 Judd ». Ives, 4 Met. 401. » Per Shaw, C. J., Ward v. Proctor, 7 iiSuUiTan i>. Hieskill, Crabbe, 525. Met. 321. CHAP. I.] NATURE OF BANKRUPTCY, ETC. 17 vision of the Constitution which forbids the enactment of State laws that impair the obligation of contracts, only in reference to such contracts as are made after their enactment; and this upon the ground that the law itself under these circumstances becomes part of, or incorporated with, the contract. In an early and leading case it was said, that, inasmuch as a knowledge of the laws is imputed to every one who enters into contracts, no one can complain of surprise or want of public faith in the appli- cation of those laws.^ It should be added, however, that this well-established distinction has not escaped some ingenious and plausible criticism. In a late case in New York it was said: "The notion that insolvent laws constitute a part of the agree- ment of parties, under any circumstances, has been considered as fallacious by judges of the court, in which the doctrine was first broached.^ The permission by these laws accorded to a debtor to absolve himself is an act of sovereignty, induced by considerations of public expediency. It is the exercise of a power not derived from or dependent upon contract, but beyond and in hostility to it. If the insolvent law of South Carolina consti- tuted a part of the undertaking of the defendant, so for the same reason did the Constitution of the United States. The substance of the contract of the parties would then be, that the maker should pay the money specified in the note unless discharged by some law of the place, by performance not in conflict with the supreme law of the land. This would lead us through a circle back to the question, whether annulling the contract without sat- isfaction and against the will of the creditor, impaired its obliga- tion."* 1 (In substance) per Johnson, J., Og- ' Per Gardiner, J., Donnelly ». Corbett, den V. Saunders, 12 Wheat. 213. 3 Seld. 505. 25 Howard, 311. . CHAPTER II. ACTS OF BANKRUPTCY AND INSOLVENCY. 1. General rule. Bankruptcy con- sists in acts. 2. What are acts of bankruptcy. 3. Effect of an act of bankruptcy upon subsequent dealings — relation. 4. Notice. 5. Whether bankruptcy is a crime. 6. The act constitutes bankruptcy. 8. Act of an agent. 9. A bankrupt cannot set up a prior act. 10. The act cannot he purged. 11. Concerted act. 12. Joint commission. 13. Intent to defraud. 14. Time of the act. 16. Place. 17. Absenting or keeping house. 21. Denial. 32. Departing. 38. Concealment of goods. 39. Imprisonment. 45. Failure to dissolve attachment. § 1. It has been already stated that bankruptcy, in a legal and technical sense, consists rather in the doing of some act, which by express statute is made the foundation for legal proceedings against the alleged bankrupt, than in the actual institution of such proceedings. It becomes very important, therefore, to con- sider particularly the subject of acts of hanhruptcy. The Eng- lish statutes upon this point authorize bankruptcy proceedings for a great variety of acts, indicative of insolvency or an intention to defraud creditors ; and the decisions which have attempted to construe and apply those statutes are proportionally numerous. The English law, however, both statutory and judicial, proceeds for the most part upon the theory that a bankrupt must be a trader, and that proceedings are instituted not by, but against him ; whereas it is the prevailing American system, that all per- sons alike are subject to the bankrupt or insolvent law, and for the most part bankruptcy or insolvency proceedings are com- menced by the voluntary application of the party himself. Still, by way of analogy and illustration, at least, the English acts and (18) CHAP. II.] ACTS OB' BANKRUPTCY AND INSOLVENCr. 19 cases are very important; and a complete view of the subject of bankruptcy requires that they be fully though summarily stated. § 2. Acts of bankruptcy are sometimes classified as 1, those ■which relate to the person of the trader, and are designed to defeat the remedy against the person ; 2, those which relate to disposal of property, and seem designed to keep it out of the reach of creditors ; 3, those which relate merely to the state of his circumstances or credit, and raise a presumption of insol- vency, whether attended with fraud or not.^ Blackstone enumer- ates the acts of bankruptcy of his day as follows. Later statutes have of course greatly modified the English law upon this subject, (a) and the American law depends wholly upon express statutory provisions, which, with a general conformity, vary very materially in details from the English acts. Departing the realm; departing one's own house; keeping in one's own house; procuring or suffering himself willingly to be arrested, outlawed, or imprisoned without cause ; procuring attachment or sequestration ; fraudulent conveyance; procuring protection from arrest; en- deavoring by petition or bill to compel creditors to take less than the amount of their debts, or procrastinate the time of payment ; lying in prison for two months upon arrest for debt; escaping from prison; neglecting to pay a debt of ^£100 within two months from service of process upon a trader having privilege of Parlia- ment.^ (See p. 27, n.) § 3. It is the general rule, that the bankrupt cannot afi^eet his estate by any proceedings subsequent to an act of bankruptcy, though prior to the commission.^ It is said, "the English bank- rupt law avoids all transactions, with some slight exceptions, after an act of bankruptcy, though secret, and though considerable time elapses before the issuing of a commission under it."* So it is remarked by an English writer, " the trader who has committed one of them is, from that time forth, a bankrupt; and if pro- ceedings be not thereupon taken against him, it is only in conse- 1 Cullen's Bank. L. 30. < Per Shaw, C. J., Denny v. Dana, 2 2 2 Bl. Com. book 2, ch. 31. Cush. 170. » Combe v. Bruges, 13 Price, 137. (a) Whether a person who is brought within the law of bankruptcy by a later statute can be made a bankrupt by acts provided for in an earlier one, see Bird v. Major, Ld. Bay. 851. 20 BANKRUPTCY AND INSOLVENCY, [CHAP. 11. quence of the ignorance, indisposition, or good nature of his creditors."* But on the other hand it is said: "The relation back to any antecedent period to make an act of bankruptcy is a case strictissimi juris, and ought not to prevail, except where the words of the statute, upon which that construction is to be found, are clear and without doubt, "^ Thus an act of bankruptcy, by pro- curing one's goods to be taken in execution, is not committed till actual seizure. There is no relation.^ And under the United States act of 1800, if commissioners of bankruptcy, in their declaring a man a bankrupt, specified the day when he became so, it was not conclusive as to the time, they having no authority to decide it.*(a) § 4. It is in general provided, that parties dealing with a bank- rupt shall not be prejudicially affected by an act of bankruptcy on his part, either prior to or consisting in such dealing, without notice of the character of the act. Thus a bankrupt, previously to his bankruptcy, deposited timber with the defendants, who were wharfingefs, to be kept on their wharf, and delivered on pay- ment oi the wharfage. On the 7th of February, 1848, a fiat issued against him, and the plaintiff was appointed oflScial assignee. The bankrupt, after the fiat, sold the timber, and between Sep- tember, 1848, and January, 1849, it was delivered to the pur- 1 Smith's Merc. L. 466. ' Belcher v. Gummow, 9 Ad. & Ell. N. 2 Higgins V. MoAdam, 3 Y. & Jerv. 873 ; Gibson v. King, Car. & M. 10. 462. * Rathbone v. Blackford, 1 Caines, 588. (a) A trader entered into a contract to deliver goods at a stated time at a specified price. He performed part of the contract, but before the time or times for the performance of the remainder he petitioned, under ? 211 and subsequent sections of the bankrupt law consolidation act, 12 & 13 Vict, c. 106, but, no arrangement being effected, he was adjudicated bankrupt on that petition. In the account of debts filed, he inserted a sum as due from him for loss on the unfulfilled parts of the contract. A proof was tendered by the purchaser of the goods, for the amount (less than that specified by the bankrupt) of the loss by reason of the non-delivery of the goods. One of the commissioners allowed the proof for the sum claimed. Upon appeal, it was held, that the original petition for arrangement created a valid act of bankruptcy under ? 76 of the statute; that the bankruptcy did not reliite back to the presentation of that petition; and that the admission of the debt by the bankrupt in his account was evidence of a debt as against the assignees, and the purchaser was entitled to prove for the amount he claimed. Harrison, 39 Eng. Law & Eq. 313. CHAP. II.] ACTS OF BANKRUPTCY AND INSOLVENCY. 21 chaser by the defendants, who had no notice of the bankruptcy. In February, 1849, the other plaintiffs were appointed trade assignees. In trover, held, that the defendants were not liable, being protected by the 6 Geo. 4, c. 16, s. 84 ; that the issuing of the fiat was not notice to all the world of its issuing, the fiat not standing on the same footing as the old commission of bank- ruptcy ; and that the words in the 84th section, " goods belonging to any bankrupt," mean goods which belonged to the bankrupt at the time they were deposited in the possession or custody of the person delivering them, and which would have continued to be his property unless an act of bankruptcy had occurred.' So an execution against the goods of a bankrupt is valid, within the 12 & 13 Vict., c. 106, s. 133, when the sheriff executes the bill of sale, notwithstanding it contains a clause of indemnity to the sheriff by the execution creditor, and is not executed by the latter until after he has had notice of an act of bankruptcy.^ But though a levy is protected by the statutes, yet where one com- mitted an act of bankruptcy by assigning his effects to a trustee, and a creditor, without notice, levied upon them, and the trustee then paid the execution, taking -an assignment of the goods from the sheriff, it was held that the assignees in bankruptcy might maintain trover against him.* And notice that one has executed a deed of all his property for benefit of creditors is notice of an act of bankruptcy.* § 5. An act of bankruptcy is sometimes spoken of as a crime.^ It is said : " The early bankrupt laws of England proceeded upon an assumption which they maintain to this day ; it is, that bankruptcy is a crime, and that he who is guilty of it may prop- erly be proceeded against as a criminal."^ So Lord Mansfield remarks: "An act of bankruptcy, in the eye of the law, is considered as a crime ; but where is the crime of denying one's self to another by previous consent and agreement ?"' So it is said, "the bankrupt acts are Juris positivi ; no positive crime can 1 Cannan v. The South., etc., 14 Eng. 6 Hooper v. Smith, 1 Bl. R. 441. L. & Eq. 334. « 2 Pars, on Contr. 583. 2 Christie v. Winnington, 18 Eng. L. & ' Hooper v. Smith, 1 Bl. B. 441. See Eq. 529. Bamford v. Baron, 2 T. R. 595, n. ; 8 Fawcett v. Fearne, 6 Ad. & Ell., N. 20. Cooper v. Chitty, 1 Burr. 31. ^Lackington-!>. Elliott, 7 Man. & Gr. 588. See Conway v. Nail, 1 Man. Gr. & So. 643. 22 BANKRUPTCY AND INSOLVENCT. [CHAP. 11. be created by construction."' So Lord Kenyon remarks : " The bankrupt in the old laws is called an ofiFender; but it is a prin- ciple of natural justice and of our law, that actus non facit reum nisi mens sit rea."^ And it is said by an approved elementary writer: "In consequence of a principle which long obtained, though now almost exploded, that bankruptcy was to be looked on as a erime, and acts of hanhruptcy as criminal, it has been frequently laid down that such acts are not to be multiplied by any construction or implication."* For the same reason, among others, it has been decided that an act of bankruptcy could not be committed abroad. (See pp. 26-7.) But in later cases it is said that an act of bankruptcy is no longer a crime,* and that "it is long since the original view of bankruptcy, according to which it was regarded as a crime, has become obsolete."' (a) So Lord Loughborough remarks : " 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."* § 6. As has been already remarked, acts of bankruptcy are specific, and the creatures of positive law.'^ But when committed, they constitute, and are not merely evidence of, bankruptcy or insolvency. "A clear act of bankruptcy can in no case be ex- plained."® Thus departure from a dwelling-house is itself an act of bankruptcy ; therefore the length of absence is immaterial.' And a party may be estopped to deny the truth of his own declarations as proving an act of bankruptcy. Thus an absent- 1 Per Aston, J., Cooke, 113. ' Cole v. Davis, 1 Ld. Ray. 725 ; Gas. in 2 Fowler v. Padget, 7 T. R. 509. Cha. 42 ; Clayey v. Haley, Cow. s Smith's Merc. L. 490. 429 ; Bull. N. P. 40 ; Harrman v. *Cumming v. Bailey, 6 Bing. 871. See Spottiswood, Cooke, 126. ch. 1. 8 Per BuUer, J., Colkett u. Freeman, 5 Per Lord Denman, C. J., Belcher v. 2 T. R. 59. Gummow, 9 Ad. & Ell., N. 876. 'Holroyd v. Gwynne, 2 Taun. 176. 6 Sill V. Worswick, 1 H. Bl. 665. (a) An indictment for not surrendering must allege an intent to defraud. Eeg. V. Hill, 1 Car. & Ker. 168. I have been able to find no precedent of an indictment for bankruptcy, as such, divested of any criminal element or incident. But Blackstone says that the bankrupt, upon examination, is bound, upon pain of death, to make a full discovery of all his estate. 2 Bl. Com. Book 2, c. 31. And that fraud in general in bankruptcy proceedings is a capital crime. lb., Book 4, c. 12, s. 3. CHAP. II.] ACTS OF BANKRUPTCY AND INSOLVENCY. 23 ing which is shown to be fraudulent by the declarations of the party is an act of bankruptcy, although the jury find that such declarations were not made bond fide} So any of the fraudu- lent acts enumerated in the Massachusetts insolvent law (St, 1844, c. 178, s. 9) furnish ground for proceedings in insolvency against the debtor, without alleging or proving that he is insol- vent.* These remarks, however, apply only to the legal eifect of the act when potitively proved. In regard to the proof itself, as in other cases, primd facie or circumstantial evidence is open to explanation. Thus it is said: "A denial, by order of a trader, to a creditor is not of itself an act of bankruptcy, but only evidence of it, and therefore to be explained. If a man is sick, or if a man lives three days in business and the rest of the week in the coun- try, this explains a denial at any other house or lodging at any other part of the town, saying, Go to the shop. On the other hand, it is not necessary, in order to constitute a denial an act of bankruptcy, that the bankrupt should have given orders to deny any particular person by name ; if he gives orders to be denied to everybody, it includes creditors, and is a keeping of the house."* So evidence may be received, to show that a transfer of property by indorsement merely was intended for the benefit of all the creditors, and therefore not an act of bankruptcy.* And in regard to this particular class of acts of bankruptcy. Lord Mans- field remarked : " Of all the equivocal facts which can amount to acts of bankruptcy, deeds are the most open to be explained by a variety of circumstances."* So it seems, where one whose goods have been seized quits his home, whether he did it for the purpose of obtaining the means of payment, and whether he remains ab- sent to avoid his creditors, are questions for the jury.* § 7. It has been sometimes held that a commission may be sup- ported by proof of any antecedent act.' But, in general, either the provisions of the statute or the rules of court require the particular acts of bankruptcy intended to be relied on to be specially set forth, and no other will be considered.* And, the legislature having by positive laws declared what acts shall be considered as 1 Johnston v. Woolf, 2 Scott, 372. * Potts, Crabbe, 469. 2 0'Neil V. Glover, 5 Gray, 144; ace. ^ Worseley v. De Mattos, Burr. 484. Smith's Merc. Law, 465-6. • Batohelor v. Vyse, 4 Moo. & So. 552. "Per Lord Mansfield, Bound v. Hope, 'Dufrene, 1 Ves. & B. 51. Coo. B. L. 94. 8 Potts, Crabbe, 469. 24 BANKEUPTCT AND INSOLVENCY. [CHAP. II. criterions of insolvency or fraud whereon to ground a commis- sion, (a) none other can be admitted by inference or analogy.' § 8. One cannot commit an act of bankruptcy by the conduct of his agent, unknown to him.^ § 9. A bankrupt cannot, either in law or equity, set up a prior secret act of bankruptcy to invalidate his commission.* Nor will such commission be invalidated by a prior act of bankruptcy, though a sufficient debt then existed.* § 10. " Once a bankrupt, and always a bankrupt. "° A clear act of bankruptcy cannot be purged or cancelled ; (6) -a doubtful act may be.* Thus absconding, even for half an hour, is suffi- cient.^ So, if a trader gives a general order to be denied, and is denied to a creditor, this is a beginning to keep house, though he immediately overtake the creditor and say that he was not afraid of him, but of another creditor.* So an agreement by a creditor who has received an unlawful preference, to surrender the prop- erty received, and to share pro raid with other creditors, made before commencement of insolvency proceedings, but not consum- mated until afterwards, does not purge the illegality.' § 11. A concerted denial or other act of bankruptcy, or one committed by collusion with any of the creditors, is held no legal 1 Cole V. Davies, 1 Ld. Ray. 725 ; Manning, 2 Esp. 597 ; Miles o. Paclienliam o. Blan, Sel. Cas. in Rawlins, 4 Esp. 194. Cha. 42. 6 2 Bl. Com. B. 2, o. 31. 2 Cotton V. James, M. & M. 273 ; 3 C. « Bromley v. Munday, Bull. N. P. 39 ; & P. 505. Oolkett v. Freeman, 2 T. R. 59. 'Rex V. Bullock, 1 Taun. 71. 'Palm. 325, Colkett v. Freeman, 2 T. ■« Donovan v. Duff, 9 E. 21 ; Kennett R. 60. ■u. Duff, 2 Smith, 44. But see Doe ^jiuotiow v. May, 1 Taun. 479. ■0. Bouloot, 2 Esp. 595; Parker v. 'Blodgett «. Hildreth, 11 Cush. 311. (a) Where the signature of the commissioner to the original summons, shown to a trader on serving him with the summons, under the 78th section of the bankrupt law consolidation act, was omitted in the copy of such sum- mons left with him, it was held that this was not a personal service of the summons upon the trader, within the meaning of the 80th section of the act, and that his not appearing before the commissioner after such service did not constitute an act of bankruptcy upon which an adjudication against him could be founded. Tindall, 31 Eng. Law & Bq. 545. (6) " Unless a man pays off or compounds with all his creditors, in which case he becomes, as the phrase is, a new man." Hopkins v. Ellis, Salk. 110. Lord Mansfield remarked, however : " I am sorry the phrase has crept into use, because it confounds the idea which ought to be. annexed to it." Worseley v. De Mattos, Burr. 484. CHAP. 11.] ACTS OF BANKRUPTCY AND INSOLVENCY. 25 ground . for a commission.' (a) But though a trader deny him- self for the express purpose of becoming bankrupt, this is ground for a commission by a creditor not privy to it.* § 12. It is held that, in order to sustain a joint commission, there must be separate acts of bankruptcy by each partner.* Thus where one of several bankers, partners, who was the only one that resided at the place where their banking-house was, and was the only acting partner, shut the bank, absented himself from it, and stopped payment, held not evidence of a bankruptcy of all.* But where A. and B. were partners, A. residing in Man- chester, B. in London, and B. left his home with no fraudulent intent, and made a visit of a few days at Manchester, and both A. and B. left the house of business at Manchester, to avoid arrest, taking their books with them ; held an act of bankruptcy in both.® § 13. It is in general expressly provided that acts of bank- ruptcy must be done with intent to delay creditors, and this intent, rather than the a'ctual result, is held to constitute the essence of the act. Thus, if one depart with intent to delay his creditors, this is bankruptcy, though no one is delayed;* while, on the other hand, without such intent, actual delaying is insuffi- cient.' Thus a trader went to his neighbor, and told him that he expected to be arrested. While at the neighbor's, he was informed that an officer was going toward his house, whereupon he hid in a back room, requesting the neighbor to watch. On being told that the officer had passed his house and left the street, he immediately went home. No creditor was hereby or possibly could be delayed. Held an act of bankruptcy.* § 14. There must be a valid, subsisting, and complete act of bankruptcy when the commission is sued out.' But an act subse- 1 Barnes v. Billington, 1 Wash C. 29 ; ^ Spencer v. Billing, 3 Camp. 314. Hooper v. Smith, W. Bl. 441 ; « Eobertson v. Liddell, 9 E. 487. Bramley v. Mundee, Bull. N. P. 39 ; ' Fowler Padget, 7 T. R. 509. Stewart?). Richman.Esp.N. P. 108; sChenometh v. Hay, 1 M. & S. 676. Pleasants v. Meng, 1 Dall. 390. See Young v. Wright, 2 Marsh. 2 Roberts v. Teasdale, Peake, 27. 233 ; 6 Taun. 540. 3 Allen V. Hartley, 4 Doug. 20. "Glassington v. Rawlins, 4 Esp. 224; * Mills V. Bennett, 2 M. & S. 556. 3 E. 407. (a) See Marshall v. Barkworth, 4 B. & Ad. 508 ; Stewart v. Richman, 1 Esp. 108 ; Gouthwaite, 1 Rose, 87 ; Bourne, 16 Ves. 145 ; Roberts v. Teas- dale, Peake, 27; Prosser v. Smith, Holt, 442; Edmonson, 7 Ves. 303; Dufrene, 1 Ves. & B. 56. 26 BANKRUPTCY AND INSOLVENCY. CHAP. II. quent to the striking of the docket, but previous to the sealing of the commission, is sufficient.^ For this purpose the law notices a fraction of a day, admitting evidence that the act, though on the same day, was previous to the issuing, i.e. the awarding and seal- ing of the commission." And the commission is valid, though the act was so short a time prior to it, and at such a distance from London, that notice of the act was impossible.^ (a) So it is held that a docket struck without an act of bankruptcy, upon the belief of a creditor that one had been committed, will support a com- mission upon a subsequent act.* (6) § 15. The act may be committed after the trading has ceased; if during the existence of a petitioning creditor's debt, contracted while in trade.* So, where a person became indebted, and after- wards became a trader, and committed an act of bankruptcy, the debt still subsisting; held, the debt would support a commis- sion.' An act committed before the passing of the statute is not sufficient to support a commission.' But where a trader commit- ted an act of bankruptcy, upon which a commission might issue under then existing statutes, which statutes were repealed, and the repealing statute afterwards repealed; held, a commission might issue.* (c) § 16. In regard to place, it is held that the act must be com- 1 Dufrene, 1 Rose, 333 ; 1 Ves. & B. « Baillie v. Grant, 2 M. & So. 193. 51 ; Simpson v. Sikes, 6 M. & S. 312. ' Hewson v. Heard, 9 B. & C. 754, n. ; 2 Wyolown, 14 Ves. 80. Palmer v. Moore, ibid. 754, n. ; ' Hopper V. Richmond, 1 Stark. 607. Maggs v. Hunt, 12 Moo. 357. See * Webster, 2 Glyn & J. 252. Surtees v. Ellison, 9 B. & C. 750; ^Dewdney, 15 Ves. 495; Bourne, 16 Worth v. Budd, 2 B. & Ad. 172. ibid. 145. » Phillips v. Hopwood, 10 B. & C. 38. (a) By St. 2 & 3 'Vict. c. 29, s. 1, an act of bankruptcy shall not affect the validity of any transaction with the bankrupt, unless the other party had notice of such act. (6) On an application to supersede a commission and issue another, the commission being prior to the act of bankruptcy, an affidavit was required from the solicitor of his reason for taking out the commission ; pending which, the time having expired, another creditor obtained a supersedeas and a commission, under the apprehension of immediate extents. The bank- ruptcy was afterwards declared under the first commission, upon prior acts; but the latter commission was preferred. Mavor, 19 Ves. 539. (c) Under the old United States bankrupt law, the act which constituted a bankruptcy must have happened within six months before the commission issued. Barnes v. Billington, 1 Wash. C. C. 29. CHAP. II.] ACTS OF BANKRUPTCY AND INSOLVENCY. 27 mitted in England or Wales.* (See p. 22.) Thus, where one exe- cuted a deed in India in trust for his creditors, Lord Kenyon re- marked, that he "was not then in a situation in which the bank- rupt laws of this country could have any operation either upon him or upon his property."^ But a letter from a trader who has gone abroad in the course of his trade, connected with circum- stances in England, may be suflScient evidence of the act.^ § 17. Among the prominent acts of bankruptcy, is absenting one's self or keeping house, to delay creditors. (a) The language of the English statutes is, "absent from his dwelling-house, or otherwise absent himself." Under this act, it is held suflScient for one to absent himself from any place with the intent, whether a creditor is delayed or not.* So the house need not be literally a dwelling-house. Thus it is sufficient if a miller keep within his mill, or a church-warden within his church." So absence from one's usual abode is sufficient, if he has no fixed place of residence.^ So two partners left their shop, telling the shopman that they were going out to get some bills discounted, and directing him to say that they were not in the way, or to make some excuse for them if a creditor should call. On that and the next day a creditor called, when they were both at home, and requested to see either of them; when the shopman without authority denied them. Held, sufficient evidence for the jury of an absentingJ So a trader, having a counting-house in town and a dwelling- house in the country, left the former, carrying his books, with no intention of returning, and in fact never returned; slept a few nights at his dwelling, and then finally left that also. Held, the first act was an absenting himself, within the statute.' So, 1 Smith, Cow. 402. 'Cooper, 141; Stone, 124. 2Inglis8 V. Grant, 5 T. R. 534. ecom. Dig. Bankrupt, C. c. 1. 'Hague, 1 Rose, 150. 'Capper v. Desauges, 8 Moo. 4; Deffle * Haller ». Homer, 1 C. & P. 108; Cam- v. Desauges, 8 Taun. 671. bridge u. Auderdon, 1 ibid. 218 ; ' Judine v. Da CoBsen, 1 N. R. 34. Curteis v. Willes, 4 D. & R. 224. (a) Or concealing himself — sometimes called obscuring. Wolstonhome, Hughes Abr. 315; Mont. 66. Taking sanctuary was by the old statutes an act of bankruptcy, but abol- ished by a later statute. CuUen's Bank. L. 39. So non-payment of a debt to the amount of £100 within two months from a summons, by a trader "having privilege of Parliament." But it is said, "for the honor of Par- liament; there is no case upon the subject." Ibid. 61. 28 BANKRUPTCY AND INSOLVENCY. [CHAP. 11. where one has no settled house or counting-house, but takes up his temporary abode at an inn in the place where his business carries him, it is an act of bankruptcy for him to leave the inn with intent to defraud his creditors.^ So a country trader was in the habit of occasionally visiting London, and staying a day or two at the house of a friend, where he wrote letters, and ordered goods to be sent to him. A creditor living in the same street, he told his friend not to inform the creditor that he was in town, because he would ask for money. Soon after, the creditor called at the house on business, and the bankrupt went into a back warehouse for ten or fifteen minutes to avoid him. Held, a be- ginning to keep house.^ So an act of bankruptcy by beginning to keep house may be by closing the doors, without change of place or denial to creditors.^ So it is an act of bankruptcy in bankers, being themselves within, to close the doors and win- dows of the bank, and thus exclude their customers, and for that purpose, and this, though neither of them live there.* So shut- ting a banker's shop is an act of bankruptcy in a partner who resides elsewhere." So, if one leave his house to avoid a creditor without collusion, he is liable to a commission, though he subse- quently reside with the petitioning creditor.^ Or if one leave his house to avoid his creditors, though no creditor called in his absence.^ Or if one leave his house, or avoid a particular place, under the influence of an unfounded apprehension of his cred- itors.* Or if one liable as a surety keep house for fear of arrest.' Or if one leave his house to avoid irritation and harsh language from his creditors, who were at the house.^" Or on account of family dissensions, if he make no arrangements for carrying on business in his absence, and foresee that his establishment must be broken up and his creditors delayed; which result actually ensues." So a trader under arrest escaped into another's house. The officer pursued and inquired for him, but he was denied and iHolroydw. Gwynne, 2 Taun. 176. SBamford, 15 Ves. 447; Newman v. 2 Curteis v. Willes, 4 D. & R. 224. Stretch, M. & M. 338 ; Robsoa v. 8 Gumming v. Bailey, 6 Bing. 863 ; 4 Rolls, 2 M. & Sc. 786 ; 9 Bing. 648. M. & P. 36. » Denham's case. Stone, 188 ; Heyler *Ibid. «. Hall, Palm. 825. 'Mavor, 19 Ves. 543. loyinoent v. Prater, 4 Taun. 603. « Gardner, 1 Ves. & B. 45. n Holroyd v. Wliitehead, 3 Camp. 580. ' Hammond t). Hioks, 6 Esp. 189 ; Wy- But see Fisher v. Boucher, 10 B. & down's case, 14 Ves. 86. C. 705. CHAP. II.] ACTS OF BANKRUPTCY AND INSOLVENCY. 29 the door kept fast ; and he declared that this was done for fear of other creditors. At dark, he returned to his house, ordered that he should be denied to all callers, and remained nearly a month in his bedroom. Held, an act of bankruptcy by absenting him- self.' So one of three partners, bankers, left his house at Bath, and went to London to raise funds ; but, not succeeding, he re- mained there three days. Held, the jury were authorized to find an absenting.^ So the alleged bankrupt collusively assigns his house in town, stock, etc. to the plaintiff, and retires to Padding- ton. The plaintiff takes possession and carries on the business, concealing the bankrupt's residence from his creditors. Three months afterwards a commission issues against the bankrupt, under which the assignees take possession of the house, etc. ; and the plaintiff brings trespass against them. Held, the facts were evidence for the jury of an act of bankruptcy, in the party's departing from his dwelling or otherwise absenting himself.* So it is an act of bankruptcy, for one in the habit of frequenting the exchange to collect news, to leave it on sight of a creditor, re- questing a friend to say he was not there. Or for the proprietor of a theatre to go behind the scenes, to avoid an oflBcer, giving orders to be denied.* So, if a debtor appoint a time and place to meet and pay his creditors, a failure to keep such appointment is presumptive evidence of an intent to delay creditors." But, on the other hand, "if a trader leave his house, circumstances may show that it was not for the purpose of absconding."* So the departure of a man under embarrassed circumstances is strong but not conclusive evidence of intention.' It is a question for the jury.' So absenting one's self, except from the place of abode or business, or to avoid a creditor, is not an act of bankruptcy.® Nor for a trader to go abroad to look after his concerns, without any fraudulent purpose, though his creditors are thereby delayed.'" Though it would be otherwise, if another object was to avoid arres*." So a trader, being informed by the attorney of the 1 Bayly v. Sohofield, 1 M. & S. 338<' ' Osborne, 2 Tea. & B. 177. 2 CummiDg v. Bailey, 6 Bing. 363. 8 Aldridge v. Ireland, 1 Tauu. 273, n. 8 Young V. Wright, 2 Marsh. 233 ; 6 » Bernaeooni o. Farebrother, 10 B. & Taun. 540. C. 549. * Gunmingham v. Laing, 2 Marsh. 236 ; " Warner v. Barber, Holt, 175; Mutrie, 6 Tann. 532. 5 Ves. 574. 5 Widger v. Browning, 9 D. & R. 306. " Ibid. • Per Lord Mansfield, Worseley v. De- mattos, 1 Burr. 467. 30 BANKRUPTCY AND INSOLVENCY. [CHAP. 11. petitioning creditor that he had delivered to an officer a warrant for his arrest, who was seeking for him, was advised by the attor- ney to go to his office, in order that he might not be arrested in the street, which he did, and stayed there some time. Held, not an act of bankruptcy.^ So a mere failure to keep an appoint- ment with a creditor is not an act of bankruptcy.^ Thus, if a trader promise to meet a creditor at the office of his solicitors, in order to give him security, but fail to do so, this is not an act of bankruptcy, unless done with intent to delay the creditor.* So it is not sufficient, that a sheriff who comes with an execution is refused admittance after the party has left his house.* So a trader left a message at his house for a creditor, who in his absence had called for a debt, that he could spare no money and would not pay him that day, and would go out of the way and stay till dinner-time. Held, this evidence justified the jury in finding that he did not absent himself to delay the creditor.* So a trader left her dwelling-house and went to London, to induce a creditor to withdraw his execution, and left word where she had gone, but, not being successful, did not return to her dwelling. Held, no act of bankruptcy.* So a trader, fearing an unpleasant letter from a creditor, quit his house, desiring that the letter be forwarded to him at a turnpike, and intending not to return if the letter should be unfavorable — otherwise, to proceed with his busi- ness. The letter being favorable, he went on in business. Held, not an act of bankruptcy.' § 18. With regard to the evidence of absenting, etc. ; in an ac- tion between an assignee and a creditor, a declaration by the bankrupt, made at the time, of his motives for absenting himself from his home, is competent evidence to prove an act of bank- ruptcy;* though it is held otherwise, with declarations made shortly after an absence.' So the declaration of a bankrupt, on his return, that he had absented himself to avoid a writ, is suf- ficient proof of an act of bankruptcy, without other proof of the existence of such writ, or of the debt on which it was founded, or 1 Mills V. Elton, 8 Price, 142. * Barnard v. Vaughan, 8 T. R. 149. » Key V. Shaw, 1 M. & So. 462 ; 8 Bing. See Schooling v. Lee, 3 Stark. 149. 820 ; Toleman v. Jones, 9 Moo. 24. » Vincent v. Prater, 4 Taun. 608. See Lees v. Marton, 1 M. & R. 210. « Aldridge v. Ireland, 8 Doug. 397. » Toleman v. Jones, 9 Moore, 24 ; Tucker ' Fisher v. Boucher, 10 B. & C. 705. V. Jones, 2 Bing. 2. »Bateman ». Bailey, 5 T. R. 512. » Lees V. Marton, 1 M. & Bob. 210. CHAP. II.] ACTS OF BANKRUPTCY AND INSOLVENCY. 31 of the creditor of the bankrupt.* So where the act of bankruptcy is an absconding to avoid arrest, general proof of the fact is suf- ficient, without proof that writs were issued.'' (a) § 19. A trader, at the suggestion of his attorney, called a meet- ing of his creditors at a certain time and place ; and on the morn- ing of that day went to the attorney's office, and inquired of him whether he could safely attend without arrest. The attorney advised him to remain at the office till it should be ascertained whether the creditors would agree to give him a safe conduct. Accordingly, he remained at the office over two hours, to avoid arrest, till the attorney returned from the meeting. Held, upon the question whether the proceeding was an act of bankruptcy, the above communication between the bankrupt and his attorney was competent evidence.* § 20. It is not necessary that a creditor be actually delayed.^ § 21. With regard to denial as an act of bankruptcy, (which of course is closely connected with absenting,) an order to servants to deny a party because he is busy is an act of bankruptcy,* more especially an order to deny, accompanied by an act — as retir- ing to an unusual part of the house.^ So where a creditor called upon the bankrupt by appointment, and he left the room and did not return, and his wife said he had gone out; held, sufficient to warrant a jury in inferring that he left for the purpose of avoid- ing his creditor.^ So, though a creditor call, not for his debt, but for another purpose, yet, if the party deny himself, supposing that the former is the object, it is an act of bankruptcy.^ Or denial to a creditor who comes to buy goods, intending thus to obtain payment.* Or a general order to be denied to all comers, and a consequent denial to one.'" So where creditors call upon a 1 Newman u. Stretch, M. & M. 338. sFlgher v. Boucher, 10 B. & C. 705; 2 Wilson V. Norman, 1 Esp. 384. ace. Dudley v. Vaughan, 1 Camp. s Bramwell v. Lucas, 4 D. & R. 367 ; 2 271 ; 9 E. 491 c. B. & C. 745. ' Charrington v. Brown, 11 Moore, 341. * Lloyd V. Heathcote, 5 Moo. 129 ; Har- s White, 3 Ves. & B. 129. vey V. Ramsbottom, 2 D. & R. 142. » Harris, 2 Rose, 07. 6 Stafford v. Clarke, 1 C. & P. 27. " Lloyd v. Heathcote, 5 Moo. 129 ; Mucklow V. May, 1 Taun. 479. (a) Whether letters of and to the bankrupt are evidence; see Sanderson v. Laforest, 1 0. & P. 46 ; Kawson v. Haigh, 9 Moo. 217 ; Cotton v. James, M. & M. 273. As to the general mode of proof of acts of bankruptcy, see Eex V. Bullock, 2 Leach C. C. 996 ; 1 Taun. 71 ; Osborne, 2 Ves. & B. 177; Wood, 1 Rose, 298 ; Rowe, 2 Rose, 339. 32 BANKRUPTCY AND INSOLVENCY. [CHAP. II. party for money, and he is not denied to them, but sees them, and pretends to go out for money, but does not endeavor to get it, nor return, this is an act of bankruptcy,' § 22. But an order to deny is not sufficient, without actual de- nial.^ So if a trader, apprehending arrest, direct his servant to deny him in case a- particular officer call, but he does not call, this is no evidence of a beginning to keep house.^ And subsequent approval of a denial not previously ordered is not sufficient.* Nor a denial, if the debt is payable in futuro.^ Nor if the creditor merely asks payment, but not to see the party.* Nor where one directs his servant to deny him to any one who should call while he was dining or engaged in business, which is accordingly done.' Nor, in such case, where the trader knew of the coming of a particular creditor.' § 23. There must be a denial with an intent to defraud or hinder the creditor. Keeping house with such intent is not enough.' And there must be a purpose to avoid a creditor. Thus a party was arrested, and released on a promise to give bail. To the officer calling for that purpose, he was repeatedly denied. Held, no evidence of an act of bankruptcy, the purpose being notj to avoid a creditor, but to escape giving bail.'" So it is not an act of bankruptcy for one to cause himself to be denied to a creditor who calls for payment on Sunday, though by the debtor's appointment." Nor a denial at a late hour, after retiring to rest.'^ § 24. It has been made a question whether the denial must be to the creditor personally. In practice this is treated as unne- cessary.*' Denial to a tax-collector is sufficient." Or a collector of church and highway rates.'* But denial to a sheriff has been held not an act of bankruptcy, unless he went to serve process 1 Bigg V. Spooner, 2 Eap. 651. « Garnett ». Moule, 5 T. R. 575 ; Jaok- 2 Fisher v. Boucher, 10 B. & C. 705 ; man v. Nightingale, Bull N. P. 49. Wydown's case, 14 Ves. 86; Jack- i" Schooling v. Lee, 3 Stark. 149. See man v. Nightingale, Bull N. P. 40; Barnard ti. Vaughan, 8 T. R. 149. Fowler «. Paget, 7 T. R. 515; Haw- " Preston, 2 Ves. and B. 311. kins V. Saunders, Cooke, 96. 12 Hughes «. Gilman, 10 Moo. 480. ° Ibid. 13 Bramley v. Mundee, Bull. N. P. 39 ; « Foster, 1 Rose, 60. Colkett v. Freeman, 2 T. R. 59 ; s 6 Vin. Abr. 61. ' Jackman v. Nightingale, Bull. N. P. 6 Dudleys). Vaugh«,n, 1 Camp. 271. 89, 40; Esp. Dig. 554; Garret v. ' Shew «. Thompson, Holt, 159. Moule, 5 T. R. 575. 8 Smith V. Currie, 3 Camp. 349. " Sanderson v. Laforest, 1 C. & P. 46. "Lloyd V. Heatheote, 5 Moo. 129. CHAP. II.] ACTS OF BANKRUPTCY AND INSOLVENCY. 33 on the debtor.^ Nor a debtor's concealing himself or being denied to his creditors, unless a service was thereby prevented.^ § 25. With regard to the immediate agents or servants of the creditor, denial to a clerk of a creditor, who merely asks to see the party, but not for money, is suflScient, if the clerk, to the knowledge of the party, called for money.' So, if a trader denies himself to one who desires he may be told that a designated bill is dishonored, and he therefore wishes to see him, it is sufficient, without further proof of his being a creditor, if the party so con- sidered him.* So is a denial to a servant, calling for a debt by direction of the acknowledged agent of the creditor, and by appointment of the debtor.' So an aged member of a banking firm was arrested at his dwelling-house, several miles distant from the place of business, for a partnership debt. The officer having been induced to retire under the promise to give bail, he reproved his servants for admitting the officeis, and forbade their admitting any stranger, saying he was afraid of another arrest. The next day the servants ascertained from the windows who applied for admission, before opening the door, and the outer gate of the house was kept locked, and the party removed to another room to avoid being seen by a caller, whom he supposed to be a cred- itor. Held, though no creditor was denied, there was an act of bankruptcy on the latter day.* § 26. If one of the trader's family deny him in his hearing, and with intent to delay he remain quiet, this is an act of bank- ruptcy.' § 27. The place of denial is immaterial.' Though the party is always accessible at his place of business in London.' § 28. When the order to deny is on one day, and the denial on another, the act of bankruptcy is on the latter.'" § 29. On the morning of the day when a bill matured, the debtor was denied to the holder by his express order, but before five o'clock it was paid. By custom, a party has the whole day 1 Barnes v. Billington, 1 Wash. C. 29 ; « Harvey v. Bamsbottom, 2 D. & R 4 Day, 81, n. 142. 2 Ibid. ' Smith v. Moon, M.. & M. 458. ' Hughes V. Grilman, 10 Moo. 480. ^Park v. Prosser, 1 C. & P. 176. * Bleasby v. Crossley, 8 Bing. 430. » Ibid. 5 Bamford, 15 Ves. 449. «> Hawkes v. Sands, 3 Doug. 429. 3 34 BANKRUPTCY AND INSOLVENCY. [CHAP. 11. till that hour in which to pay a bill. Held, a complete act of bankruptcy.* § 30. In case of an alleged keeping house, denial is usually shown, not as proof of delaying, but to explain the equivocal act of the party, as done with intent to delay.'' § 31. The question, whether the denial was tO a creditor, is for the jury.* If a witness testify that several persons called whom he believed to be creditors, this is evidence for the jury.* So a trader directed his servant to say, if any creditors called, that he was not at home. He was accordingly denied, but was at the time ill, in bed. Held, it was a question for the jury, whether this was a beginning to keep house, and they were justified in finding that it was.* So a trader, having been denied to a creditor calling for money, was soon after seen peeping over the shoulder of his wife. At another time, seeing a creditor coming, he retired behind a partition at the back of his shop, and his wife, coming forward, said he was not at home. Held, it was a question for the jury whether he had committed an act of bankruptcy.* So, if a trader is denied to a creditor's clerk, at his shop, after it is closed for the evening, though at an earlier hour than usual, it is a question for the jury whether the denial was made on account of the time, or for the purpose of delaying the creditor.^ § 32. Another act of bankruptcy is departing. It was for- merly held, that if one depart, and creditors are actually delayed, this is no act of bankruptcy, unless such was the intent.' It is otherwise by later decisions.' But the former doctrine is now revived in the leading case of Fowler v. Padget,*" where it is held that the later cases are decided on other grounds. § 33. But the intent may always be explained by evidence. The absence, etc. is not an act of bankruptcy, but only evidence of one." The prevailing rule is, that if delay of creditors is the necessary consequence of the act done, the statutes apply; as in the old cases where one fled for the murder of his wife ; ojr went 1 Colkett V. Freeman, 2 T. K. 59 ; Wood « Hall, 1 Atk. 201 : Worsely ■e. Demat- V. Thwaites, 8 Esp. 245. tos, 1 Burr. 484. 2 Robertson v. Liddell, 9 E. 487. » Woodier's case. Bull. N. P. 39 ; » Jameson v. Earner, 1 Eap. 881. Raikes v. Porreau, Cooke, 95 ; Ver- * IWd. non », Hankey, ibid. 123. 5 Lazarus v. Waithman, 5 Moo. 813. '"V T. R. 609. • Key V. Shaw, 8 Bing. 320. " Ub. supra. ' Hughes V. Oilman, 10 Moo. 480. CHAP. II.] ACTS OF BANKRUPTCY AND INSOLVENCY. 35 abroad at the instigation of a young lady whom he courted; or absconded to Calais, on account of an impending prosecution for perjury. But absconding to avoid an excommunicato capiendo, is held not an act of bankruptcy. And the departure must be voluntary. Thus the acts do not apply where one is taken away under an arrest.' Though if one is arrested, gives his word to the bailiff to put in bail, and then absconds or keeps within to avoid the consequence, this is an act of bankruptcy.^ And if one absconds to avoid arrest, it need not be shown that any writ had issued.* § 34. Where the absconding is doubtful, if the party go beyond sea, and trade, as this negatives the purpose of concealment, he is not a bankrupt. Otherwise if the first act is clear,* § 35. Absconding, accompanied by misrepresentation made to a creditor by the party's desire, is bankruptcy.* But where a merchant went to his estate at Barbadoes, with the knowledge of his creditors, seeing them daily and remitting to them ; held, he should not be made a bankrupt for having five years before denied himself to such creditors.* § 36. It has been doubted whether a party's flying to his own State to avoid arrest, is an act of bankruptcy.'^ § 37. A distinction is made between absconding to avoid per- formance of a duty and payment of a debt. Thus if it be to avoid an attachment for non-performance of an award, this is not sufficient.* § 38. Under the English law, concealment of goods has been held not to be bankruptcy.' In the earlier statute of the United States, this was expressly included among acts of bankruptcy. The concealment of goods, as distinct from a fraudulent conveyance of them, must have been not constructive, but actual, and by the party himself or his procurement, while they continued to be in his intention his own goods.'" But any act of a debtor, by which his true title and ownership of property are kept from the view of his creditors, if made with the intent to prevent its being 1 Phillips o. Sheriff, etc. Esp. Dig. 555. 6 Gulston, 1 Atk. 193. But see Majlin v. Eyloe, 1 Str. 809. ' Pleasants v. Meng, 1 Dall. 390. 2 Barnes, 160. SLing^ood „_ gade, 1 Atk. 196; Co- ' Wilson V. Norman, 1 Esp. Rep. 334. myns' Dig. Bankrupt C. c. 1. * Hopkins v. Ellis, 1 Salk. 110; Colket »Cole v. Davis, 1 Ld. Ray. 725. V. Freeman, 2 T. R. 59. i" Livermore v. Bagley, 3 Mass. 487. 5 Ibid.; Fox v. Hanbury, Cow. 448. 36 BANKRUPTCY AND INSOLVENCY. [CHAP. II. attached or taken on legal process, is a concealment within the meaning of the Massachusetts insolvent law, (St. 1844, c. 179, s. 9.)i § 39. Imprisonment is another act of bankruptcy. A debtor mnst have been both arrested, and imprisoned for two months or more.^ It was formerly held, that the act only relates to the last day of imprisonment.* But the prevailing doctrine is, that lying in prison relates back to the time of arrest and first im- prisonment.* And the day of arrest is to be included.' So also the whole of the day. But a particular hour may be taken into account, for the purpose of showing a valid act done by the bank- rupt, prior to the act of bankruptcy, or for all purposes con- nected with a right as to his property.* So, where the sheriff took possession upon an execution, and afterwards, on the same day, the party surrendered in discharge of bail, and then lay in prison two months; held, the Court would notice the fraction of a day.' Therefore, the sheriff having entered before the sur- render, the assignees could not recover.* § 40. To constitute a lying in prison twenty-one days, the first and last days must be included.' But, under the whole statute, . a commission cannot be sued out till the expiration of two months.'" Hence, if a commission is sued out within the two months, it can- not be sustained by his lying in prison for the remainder of that time." § 41. A commission will lie upon a debt, for which a judgment was recovered pending the two months' imprisonment. It would be otherwise with a bond, which would be void by relation to the commencement of the imprisonment.'^ § 42. Under a similar enactment in the United States bank- rupt law, if a party were imprisoned three months, the bank- ruptcy was at the end of two months, and the creditors had only one month to petition, after which the act of bankruptcy ceased 1 0'Neil V. Glover, 5 Gray, 144. 6 Glassington v. Rawlins, 3 E. 409. »Nehus». Pugh, 1 Mur. 149. e gaundersou v. Gregg, 3 Stark. 72; 8 Moser v. Newman, 6 Bing. 656 ; Hig- Saddler v. Leigh, 4 Camp. 185. gins ». MoAdam, 3 Y. & J. 1 ; ' Thomas v. Desanges, 2 B. & A. 58'6. Tucker v. Barrow, 3 C. & P. 85. 8 ibid. Simpson v. Sikes, 6 M. & S. 311 ; ' Bourne, 16 Vea. 145. Wydown, 14 Vea. 80. s Elford, 2 Gljn & J. 65 ; White, 1 2Peele, Buck, 457; Hodgkinson, 19 Mont. & Mao. 214: 1 Glyn & J. Vea. 291. 197. 3 Blakey, 1 Glyn & J. 197. » Ibid. * O'Neil V. Glover, 5 Gray, 144. loi Mont. 187. 5 Bryant, 1 Ves. & B. 211; Bryant « " Ibid. Withera, 2 M. & S. 123. 12 Kimball v. Morria, 2 Met. 573. 8 People V. Belirman, Hill & Denio, 81. (a) In New York the affidavit of the defendant indorsed upon the petition is sufficient if it follows the statute, without saying anything in particular concerning the account of creditors. People v. Behrman, Hill & D. 81. CHAP, v.] FORMS OF PROCEEDING. 83 ■ notice to the debtor, previous to the appointment of the messen- ger, would furnish great facilities for withdrawing the property and placing it beyond the reach of legal process. "'(a) § 5. The facts stated in a creditor's petition must be proved by legal and competent evidence ; and it seems that taking the testi- mony of a material witness without oath or afiSrmation is ground for setting aside the proceedings.^ § 6. Misdescription will not avoid the commission, if the party is well known as described.' And "in reply to an alleged misno- mer, it may be averred that the party is as well known by the name by which he is described, as by a certain other name by which he was also known."* Thus a commission against a per- son named Knox, by the name of Wicks, under which he had traded and become indebted, was sustained against a subsequent fiat under his true name.° § 7. The bankrupt must be described as of the place where he is chiefly and generally known as a trader. It is not enough to state his last place of trading.^ But "the city of London," in- stead of "the county of Middlesex," is not a materl.tl variance.'^ So, in the adjudication and proceedings, the bankrupts were described as of C. Lane, in the city, colonial brokers, and of W. Lane, in the county of Middlesex, distillers. In the advertise- ment of the bankruptcy, in the Gazette, the description was identical, except that W. Lane was said to be in the county of Essex. Held, that the misdescription was immaterial.' iPerBewey, J., Kimball u. Morris, 2 Gex, 99 ; Burbidge, 10 Jur. 156; Met. 680-81. See Com. v. Farmers, 1 De Gex, 256; Wall v. Jarrott, 3 etc. 21 Pick. 542. Ired. 42. 2 Merriam v. Sewall, 8 Gray, 316. 6 Shadbolt, 1 Mont, 89 ; Parry, 2 Glyn 3 Horsley, 2 Madd. 11 ; Wride, 2 Glyn & J. 225 ; Beadles, ibid. 243 ; Day, & J. 99. 1 Mont. & Mac. 208 ; Beckwith, 1 * Per Dewey, J., Hubbard v. Smith, 4 Glyn & J. 20. Gray, 74. ' Smith, 1 Glyn & J. 256. 5 Sambourne, 2 Dea. & Chit. 22. See * Regina v. Gordon, 33 Eng. Law & Schofield, 2 Rose, 246; Stevenson's Eq. 556. case, 19 Ves. 277 ; Woodhead, 1 De (a) The form of notice required by law must be strictly complied with. Thus iu South Carolina notice to creditors under the insolvent debtors' act must, in all cases, be published for three months in a gazette, unless a dif- ferent mode of publication be authorized by a special order of the court ; and notice by the clerk, without such order, posted on the court-house, will not be sufficient. Mordecai v. La Bissey, 1 Bichardson, 192. 84 BANKRUPTCY AND INSOLVENCY. [CHAP. V. § 8. A fiat may be amended, where no proceedings have taken place under it.' So a commission may be resealed and amended to correct a mistake in a name, if not opened.^ So, under the insolvent law of Massachusetts, it seems a commissioner may allow an amendment of a creditor's petition, by which the debt originally relied on shall be more precisely and fully set forth.' So a creditor's petition, which alleges that the debtor, within sixty days, and with intent to defraud the petitioner, "has con- cealed his property or some part thereof, to prevent its being attached or taken on legal process," is not so defective as to require the proceedings in insolvency to be quashed, after the petitioning creditor, by order of the commissioner, has filed a specification of the particular acts of concealment relied on.* So, where the creditor was wrongly described in the petition and com- mission, but the docket papers were correct; an amendment was ordered after the commission had been prosecuted.^ So, where one of the bankrupts died before the adjudication under a joint fiat ; held, the fiat should be amended by omitting his name.* So, in case of an incorrect statement of the indebtedness, a supple- mental aflBdavit may be filed without new bonds.' But, on the other hand, it is held, that a fiat cannot be altered or amended after it is opened;* nor the description of the bankrupt be altered.' So it is held, that the Lord Chancellor has no jurisdic- tion to order amendment of a fiat.'" The court of review may order the fiat to be taken off the file, to be amended by the >chancellor, if he see fit. The court cannot amend it, having ^nothing to amend by." So, if an affidavit upon which a commis- sion has issued is erroneous, it cannot be corrected, but a new ■docket must be struck.'^ § 9. In regard to the usual requisition that the debtor furnish a schedule of his property and debts, it is held that a statute which requires this to be done applies to involuntary as well as 1 Graham, 1 Dea. & Chit. 458. 8 Todd, 1 Mont. 455 ; Thwaites, 13 2 Cheesewright, 18 Vea. 480 ; Burrow, Vcs. 825. See Fisher, 10 Ves. 190 ; 10 ibid. 286; Harman, 2 Glj'n & Slepiienson, Mont. 116; HorroclES, J- 25. 1 Glyn & J. 368 ; Cheesewright, 18 "Merriamti. Sewall, 8 Gray, 316. Ves. 480; Stammers, 1 Mont. & *0'Neil V. Glover, 5 Gray, 144. Mac. 290. 6 Guthrie, 1 Glyn & J. 245. 9 Thompson, 9 Ves.207. 6 Hall, 1 De Gex, 332. lo Wright, 1 Dea. & Chit. 547. ' Mangham, 1 Glyn & J. 365. n Walker, 1 Dea. & Chit. 381. 12 Kutledge, 2 Rose, 869. CHAP, v.] FORMS OP PROCEEDING. 85 voluntary proceedings.* But a recital in the record, that the debtor furnished such schedules, is primd facie evidence of the fact.^ And if the specification of the cause and consideration of the debts is such as to fairly apprise the creditors of the general ground of indebtedness, so as to give them a clue to inquiry, it is sufficient.'(a) So, where the act requires the debtor, applying for a discharge, to furnish an account of creditors, but does not prescribe any particular form ; if the account be full and intelli- gible it is sufficient, without giving the residence of the creditor, the nature of the debt, consideration, etc.^ And in insolvent proceedings, if the judge or commissioner decides, that the requisites of the statute with regard to the schedule of the debtor have been complied with, any question as to the sufficiency of the schedule is barred by the decision.* But where, to an action by the indorsee of a promissory note for £1000, made by the defend- ant, payable to John Jackson Lee, the defendant pleaded his dis- charge under the insolvent debtors' act, (1 and 2 Vict. c. 110,) and gave in evidence his schedule, in which James Jackson Lee was described as creditor, on a bond for £1000, but the plaintiff's name was not mentioned in the schedule, and it was proved that the defendant had at one time known, but had forgotten, that the plaintiff was the holder of the note in question; held, that this was not a full and true description of the debt sued for, so as to satisfy the 69th and 75th sections." So bills of exchange, drawn by the defendant in India, were purchased there for the plaintiff, Moses Symons, who resided in England, and were indorsed and transmitted to him in this country. The defendant afterwards petitioned the insolvent court in India, and in his schedule de- 1 Kimball v. Morris, 2 Met. 573. = People v. Stryker, 24 Barb. 649. 'Lothrop V. Tilden, 8 Cush. 375. « Finney v. Cecil, 37 Eng. Law & Eq. » Taylor v. Williams, 20 Johns. 21. 379. * People V. Behrman, Hill & Denio, 81. (a) The schedule of property surrendered by an insolvent debtor, under the laws of Kentucky, need not state on what execution it was surrendered. Sheriff v. Buckner, 1 Litt. 126. Where the land of an insolvent debtor, who was discharged under the Maryland insolvent law of 1774, was sold and conveyed by the sheriff, the sale was held good, although the schedule transmitted by the justices to the clerk of the county was not signed by the insolvent or the justices. Chaplin V. Shoot, 3 Har. & McHen. 350. 86 BANKRUPTCT AND INSOLVENCY. [CHAP. V. scribed the plaintiflf's debt thus : " Creditor, A. M. Symons, for the following bills of exchange (describing them) drawn by us upon Messrs. R., I. & Co., in favor of Moses Symons." A per- son named A. M. Symons resided in Calcutta, but was not shown to be connected with the bills in question. Held, that the de- scription in the schedule was insufficient within the meaning of the 11 Vict. c. 21, s. 6, sched. C, the insolvent act, (India,) and, therefore, that the defendant was still liable on the bills.^ § 10. Under the insolvent laws of North Carolina it was con- sidered no objection to granting a discharge, that the schedule was amended before the oath was administered ; and it was not held to be necessary to file the evidences of debt in the defendant's pos- session at the time of filing the schedule, but any time before the oath was administered was held to be sufficient.^ More especially an insolvent debtor may amend his schedule, upon showing satis- factorily to the Court that the omission therein arose from igno- rance, mistake, inadvertence, or from inability at the time it was filed to make it more perfect. But the amendment must be made instanter, so as not to cause delay. \a) And in bankruptcy the Court will be very cautious in allowing amendment of the schedule of property. It will not be allowed, unless it appears that the error occurred inadvertently and bond fide; nor then, but on payment of costs.* And, as we have seen, it must be shown by affidavit, or otherwise, to the satisfaction of the Court, that the omission to insert the property omitted in the schedule arose from ignorance, inadvertence, or mistake. And the debtor will not be permitted to amend, if it will create surprise or delay to the other party.* § 11. An insolvent cannot /aisi/^ his own schedule.* So where an applicant for the benefit of the insolvent law delivered to the Court a schedule of his property, but no books of account, and there was evidence that he had acted as a merchant, and pur- chased large quantities of merchandise, not accounted for in his 1 Symons v. May, 6 Eng. Law & Eq. * Frisbee, Law Rep., April— 42, p. 483 Rep. 541. _N. y. 2 MoLeod V. Kirkham, 11 Ired. 509. s Sherman v. Barrett, 1 MoMul. 147. » May V. Dawson, 12 Geo. 118. « Barker's case, 1 Browne, 298. (a) In Ohio, between the filing and final hearing of the petition of an insol- vent debtor, his inventory may be enlarged or diminished at his pleasure. Loines v. Phillips, 4 Ham. 172. CHAP, v.] FORMS OF PROCEEDING. 87 schedule; it was held, that he must show by his books, or by satisfactory evidence, that the property had been taken from him in a course of fair dealing, or that he never did assume the char- acter of a merchant.^ So an insolvent will not be permitted to discontinue or withSraw his application, after a suggestion charg- ing his schedule with fraud has been filed.'* § 12. In Massachusetts, an insolvency warrant, from a master in chancery to the messenger, without a seal, is void; and a new warrant upon a second petition may accordingly be issued. A formal and separate proceeding to set aside the warrant seems necessary, only where the master is unwilling to regard the case as a nullity, and to begin de novo ; or where the defect occurs in a later stage of the proceedings, and doubts exist whether it is im- portant enough to make the whole proceeding void, or only the bad part void or voidable. In such case, the debts set out in the second petition, to the amount of $200, are presumed to be the same referred to in the first; the one being a substitute for the other, and not an additional petition for a new case.' § 13. It is no defence to a writ of entry to recover land claimed by the demandant, under a deed from an assignee in insolvency, that the clerk, by whom all the proceedings in insolvency were recorded, was appointed on the day of the filing of the creditor's petition on which the proceedings were founded, and months be- fore the adjudication of insolvency, and issuing of the warrant.* § 14. In Massachusetts, under the statute of 1838, c. 163, claims against an insolvent debtor are not required to be proved at one of the first three or four meetings of the creditors, but may be proved at any regular meeting of them.° So the provision of the insolvent law, that the second meeting should be held within three months after the date of the warrant, was held merely directory; and an omission to call it in that time did not render other proceedings void. Though the magistrate might not have power to call such meeting after a year, the Supreme Court would have that power.' But, in reference to the provision for a third meeting of creditors, it is said : " This right is sometimes of much importance to creditors ; they may be prevented from attending the earlier meetings by 1 McAllister, Charlt. 222. * Whithead v. Mallory, 4 Gray, 180. 2 Sherman v. Barrett, 1 MeMul. 147. * Minot v. Thacher, 7 Met. 848. 'Perry, etc. v. Brown, 2 Woodb. & ° Kimball ». Loring, Law Rep., May — Min. 449, 458. 48, p. 34. 88 BANKRUPTCY AND INSOLVENCY. [CIIAP. V. misinformation, accident, want of preparation to substantiate their claims, or other contingencies; and as the first dividend is to be declared at the third meeting, nothing is lost by the delay, except the right of voting for an assignee."* § 15. Under St. 1838, c. 163, the second meeting might be adjourned, and any business transacted at the adjourned meet- ings which would have been lawful at the original 'meeting.^ But the adjournment of an insolvency meeting must be to a time and place certainly designated in the order therefor and in the record of the order, and not to a time and place then uncertain, and to be made certain only by the happening of some future event. Therefore an adjournment of the second meeting to "the time and place of holding the third meeting" is illegal; and a certifi- cate of discharge granted at the adjourned meeting is invalid.* § 16. It is not necessary to the validity of proceedings in in- solvency, instituted on the petition of the debtor, that there should be a formal adjudication by the magistrate, before issuing the warrant, of the debtor's inability to pay all his debts, of his will- ingness to assign all his property for the benefit of his creditors, or of the fact that the debts due from him amount to the sum required by the statute. The petition is evidence of all the facts stated in it, except the indebtedness. This may be proved by any evidence which satisfies the magistrate; and the issuing of the warrant, with its statements and recitals, implies an adjudi- cation of his satisfaction. The petition is conclusive upon the insolvent and those claiming under him; and any third party prejudiced by the proceeding may petition the Supreme Court for redress. So where a judge of probate, after receiving and hearing a petition of a creditor for a warrant against an insolvent debtor, pursuant to a statute of Massachusetts of 1833, c. 163, s. 19, refused to issue such warrant, because "it did not satisfac- torily appear that there was, nor that there was not, one hundred dollars due" from the debtor to the petitioner; held, this was an adjudication that it did not appear, to the satisfaction of the judge, that such sum was due from the alleged debtor to the petitioner.* The case is distinguished from those of summary 'Per Forbes, J., Sanderson «. Taylor, ' Greenough » Thorley, 3 Madd. 273 ; Buck, 231, 5 Steel, 1 Deac. & Chit. 489. 465. «Shaw, 1 Glyn & J. 127. "Barstoww. Adams, 2Day,70; Kitchen ' Koberts, Buck, 465. w. Bartsch, 7 E. 53. 12 Cohen v. Gibbs, 1 Hill S. C. 206. (a) Whether the assignee accepts the trust or not. 1 Hill, S. C. 206. 108 BANKRUPTCY AND INSOLVENCY. [OHAP. VI. And nothing further than the bankrupt's own rights, unless in case of fraud} In other words, the assignees stand precisely in the situation of the bankrupt himself.^ It is said, "any one, who affirms that a particular thing does not pass by force of the stat- ute, must bring himself within its exceptions, or show conclu- sively aliunde, that it was the design of the makers of the law that the thing specified should not pass to the assignee."' And, in another case, referring to him as the representative of ered- itors, "the assignee, while for some purposes he represents the debtor and stands in his place, is clothed with much higher and more extensive rights in relation to the estate than the debtor himself possessed."* So, it is said, "in cases unaffected with fraud, the assignee generally, although perhaps not universally, succeeds to those rights and those rights only, which belong to the bankrupt. His remedy may be more extensive, growing out of the bankruptcy ; but his rights are not enlarged."* So the assign- ment of an insolvent debtor passes all his property, whether men- tioned on the schedule o,r not.* And if an insolvent debtor include in his schedule "all his interest in certain property assigned to" a person named, and, on an issue found, the jury find the deed assigning such property fraudulent, the debtor shall be imprisoned until he make a surrender of the whole of such property.' So it is immaterial whether the property be in the possession of the debtor, or in that of any other person.* So an assignment by a debtor of "all his estate, real and personal," pursuant to an insol- vent act, passes the title to all the lands which he owns, without further description.^ § 11. The assignee takes the bankrupt's interest, subject to all rights and equities}" It is said, no estate vests in him but that of which the bankrupt had the legal and equitable title}\a) So it 1 Fletcher v. Money, 2 Story, 553 ; Mil- Shirley v. Long, 6 Rand. 735; Bank, chell t). Winslow, ibid. 630; Winsor etc. t). Horn, 17 How. 157 ; 6 Rand. V. McLellan, ibid. 493. 735; 2 Denio, 61. See Huttou v. ^Stoutfer V. Coleman, 1 Yea. 399. Self, 6 Ired. 285. sper Hubbard, J., Gray v. Bennett, 3 ' Hutton v. Self, 6 Ired. 285. Met. 525. B Shirley v. Long, 6 Rand. 735. *Per Hoar, J., Bingham v. .Jordan, 1 ' Roseboom v. Mosher, 2 Denio, 61. Allen, 374. "> Mitchell v. Winslow, 2 Story, 630; sPer Story, J., Fiske «. Hunt, 2 Story, Winsor v. McLellan, ibid. 493; 684. Newhall, ibid. 860. 6 Cooper V. Henderson, 6 Binn. 189; " 10 John. 65. (a) It is said, that the early statute of 13 Bliz. c. 7, did not embrace equities of redemption. 2 Bl. Com. B. 2, ch. 1, s. 8. CHAP. VI.] ASSIGNMENT. 109 is said, " I have always understood the assignments from the com- missioners, like any other assignment by operation of law, passed his (the bankrupt's) rights, precisely in the same plight and con- dition as he possessed them. Even where a complete title vests in them, and there is no notice of any equity aifecting it, they take subject to whatever equity the bankrupt was liable to. This shows that they are not considered purchasers for a valuable con- sideration, in the proper sense of the words. Indeed, a distinc- tion has been constantly taken between them and a particular assignee for a valuable consideration ; and the former are placed in the same class, as voluntary assignees and personal representa- tives."^ But, contrary to the general rule as to bond fide pur- chasers for consideration, the assignee in insolvency of a fraudu- lent grantee takes no better title than the grantee had.^ So if a grantee of land give back a bond of defeasance, his assignee in insolvency is bound by such bond, though not recorded.^ So an infant insolvent debtor cannot, in favor of his assignee, revoke a transfer of property in payment of his wife's debts.* So where, after filing his petition and prior to the decree of bankruptcy, the party inherited property from his mother, to whose estate he was indebted; held, the assignee took the inheritance, subject to this debt.* But though, in general, assignees do not take property of which the equitable title has been transferred by the bankrupt, there must have been a specific transfer of the very property in question. Thus the bankrupt had drawn bills on A., and nego- tiated them to B., the bills were dishonored, and the bankrupt, at B.'s request, wrote to A., instructing him to turn over to B.'s agent all the bankrupt's property in A.'s hands for the bank- rupt's account ; which was accordingly done after the bankruptcy. Held, the assignees were entitled to the property.^ So a clerk in the store of a dry goods dealer has no implied authority to pledge or hypothecate the goods ; and if he attempts thus to secure a debt of his employer, the assignee in insolvency of the lattef may claim the goods.' So if a mortgage of chattels provides that the 1 Per Sir Wm. Grant, Mitford v. Mit- 5 Newhall, 2 Story, 360. ford, 9 Ves. 100; Herbert, 13 Ves. SBurn v. Carvalho, 4 Nev. & M. 889. 188. See Meynell v. Surtees, 31 Eng. L. 2 Pratt V. Wheeler, 6 Gray, 520. & Eq. 475. 8 Stetson V. Gulliver, 2 Gush. 494. ' Nash v. Drew, 5 Gush. 422. 4 Butler V. Brack, 7 Met. 164. 110 BANKRUPTCY AND INSOLVENCY. [CHAP. VI. mortgagor may sell them and substitute others, which is done; upon his insolvency before the mortgagee takes possession of the new property, it vests in the assignee.* So the assignee is en- titled to notes left by the debtor with a bank for discount, but not discounted ; and the bank cannot set off debts of the insolvent against the assignee's claim.^ So a mortgagee, having entered to foreclose, agreed with the' mortgagor that he, the mortgagee, should receive the rents and profits and apply them to another debt. Before any rents were received by the mortgagee, the mortgagor became insolvent. Held, the insolvency revoked the agreement thus to apply the rents, and those afterwards received must be applied to the mortgage.* So the owner of a ship and cargo at sea transferred them as security, executing a bill of sale and a policy of insurance, and indorsing the bill of lading; but upon the arrival of the ship, with notice to the purchaser, he neglected to take possession, and the seller soon became bank- rupt. Held, the title to the ship vested in the assignees of the seller.^ And, on the other hand, in favor of the assignee, no mere equities of a seller of property will be allowed to interfere with the completed title of the buyer, prior to his insolvency. Thus A., owning wood cut and packed upon his land, sold a part of It, which was measured and marked off to B., the purchaser, who was to have a year to remove it. B. gave a note for the price, payable in six months, and afterwards became insolvent. Held, his assignee was 'entitled to the wood, subject to a lien for the price ; though the note had not matured or been negotiated, and the bill of sale had been given up after the insolvency, and though, after the year had elapsed, A. had re-sold a portion of the wood.°(a) § 12. "Property held in trust never passes by the commission, and if that property consists of goods remaining in specie, or of notes and other choses in action, the cestui que trust is entitled 1 Moody V. Wright, 13 Met. 17. ^ Hilliard v. Allen, 4 Cusli. 532. 2 Stetson v. Exchange, etc., 7 Gray, * Mair v. Glennie, 4 M. & S. 240. 425. 5 Arnold v. Delano, 4 Gush. 33. (a) As to the title of an assignee to negotiable paper, transferred by the bankrupt after an act of bankruptcy, see Willis v. Freeman, 12 B. 656; Wilkins v. Casey, 7 T. R. 711 ; Arden v. Watkins, 3 E. 317 ; Kitchen v. Bartch, 7 E. 53. CHAP. VI.] ASSIGNMENT. Ill to the property, and not the creditors at large. The only check to the operation of the rule is, when the property is converted into cash by the bankrupt, and has been absorbed in the general mass of the estate, so that it cannot be followed or distinguished. It is the difficulty of tracing the trust tnoney, which has no ear- mark, that prevents the application of the rule. But here that difficulty ceases, for the money, which was the proceeds of the trust goods, was kept separate and distinct, and deposited as such with the defendants."^ But, as suggested above, where a debtor has converted trust property into cash, and it has become .mixed with his own property, so that it cannot be followed, the cestui que trust stands on the same footing with other creditors.^ And, on the other hand, a mere executory agreement between the bank- rupt and a third person, prior to the bankruptcy, will not have the effect of vesting an interest in the latter sufficient to defeat the title of the assignee. Thus, if the bankrupt deposited a lease as a security for money, but made no mortgage or assignment of it, the assignees may recover it.' So if the bankrupt has given a power of attorney to another to receive sums of money due to him, in consideration of engagements entered into by such person on account of the bankrupt; money received under such power, after bankruptcy, may be recovered by the assignees. *(a) 1 Kip V. Bank, etc. 10 John. 65. s Doe v. Roe, 5 Esp. 105. 2 Vanlier v. DisboTough, 1 Green, 343. * HotUI ». Lethwaite, 5 Esp. 158. (a) In another connection (see chap..iii.) we have considered the rights of the wife of a bankrupt or insolvent in the disposition of his estate, as coming under the general head of an implied trust. It may here be stated, that it was held, under the late United States bankrupt law, that the assignee of a hus- band might claim a watch presented to his wife about ten years before the petition ; articles of jewelry given her by third persons before, or by the husband before or since the marriage ; but not jewelry given her by third persons since the marriage, as personal memorials. In the same case it appeared, that two minor sons of the bankrupt had each a gold watch worth about fifty dollars, purchased two years before with money given by a third person and by the bankrupt. It was held, that the assignee could not claim the watches, nor could he claim any part of their value, if, when the advance was made, the father was solvent, and made it bond fide, and it was suitable to his rank, condition, and estate. But if otherwise, then the sons must account to the assignee for the sum thus advanced by the father. Grant, 112 BANKRUPTCY AND INSOLVENCY. [CHAP. VI. § 13. Where the bankrupt, before passage of the law, had acquired a resulting trust in certain real estate by payment of the whole purchase money, such property belongs to the assignee, under the general clause in the law, which provides that all rights of property shall thus vest, by mere operation of the decree of bankruptcy. And although, in such case, the transaction had for its object to defraud the bankrupt's creditors, and he might oh that ground be prevented from enforcing the trust for his own benefit, the assignee could still claim the property.^(a) § 14. Possibilities coupled with an interest pass to the as- signee. But not ba7-e possibilities, such as the expectancy of an heir.'' Thus the distributive share of an intestate estate, to which an insolvent debtor is entitled in right of his wife, after the death of the widow of the intestate, vests in the assignee.' And in regard to interests acquired by will, where a devise has been made to and accepted by a bankrupt, even though the will has not been approved, it is a fraud upon creditors for him to dis- claim or renounce it, and the Court will compel him to do all acts necessary to perfect his title. And his consent is presumed, if the devise is plainly for his benefit, as in case of an unconditional fee, without trust or incumbrance.* So in personal property be- queathed in trust, to pay the income to the testator's widow for life, and, at her decease, to convey the remainder to such of his children or their issue as shall survive her; the husband of a daughter of the testa,tor has an equitable interest, which will pass by an assignment of his property under the insolvent law, during the life of the testator's widow ; though the assignees will take, subject to an equitable provision for the daughter and her chil- 1 Carr v. Hilton, 1 Curt. (U. S.) 231. ' Sherman v. Keigart, 7 Watts & Serg. 2 Carlton v. Leighton, 8 Merl. 667; 168. Comegys v. Vasse, 1 Pet. 193, 220. * Fuller, 2 Story, 827. 2 Story, E. 312 ; 5 Law Rep. 11. Money deposited in a bank, in her own name, by a married woman, who lives apart from her husband and is not supported by him, passes to the assignees upon his bankruptcy. Ames v. Chew, 5 Met. 320. (a) In Maryland, where an insolvent has made an absolute conveyance of property, in the nature of a trust, to secure a debt due to his grantee, it is the duty of his trustee in insolvency to administer upon such property. Bank of Westminster v. Whyte, 3 Md. Ch. Decis. 508. CHAP. VI.] ASSIGNMENT. 113 dren.^ So, in land devised in trust to pay the income to the tes- tator's widow for life, and, at her decease, to convey the remainder to such of his children or their issue as shall survive her, the hus- band of a daughter of the testator, after issue born alive, has an equitable tenancy by the curtesy, which will pass by an assignment of his property under the insolvent law, during the life of the tes- tator's widow.^ But a legacy to the bankrupt's wife, even if vested but not payable, and more especially if dependent on her surviv- ing another person, being a mere possibility, does not pass to the assignees of the husband.^ So the right of a joint tenant by survivorship will take precedence of the title of an assignee in bankruptcy. Thus, one of four joint tenants of a sum of .£2000, subject to a life estate in B., married A. ; afterwards A. became bankrupt; then the wife died ; then B. died. Held, the surviving joint tenants were entitled, in preference to the assignees in bank- ruptcy of A.* § 15. It is held that a policy of insurance passes to the as- signee.°(a) Or a patent.^ It is said : " It is true that the schemes which a man may have in his own head before he obtains his cer- tificate, or the fruits which he may make of such schemes, do not pass, nor could the assignees require him to assign them over, provided he does not carry his schemes into effect until after he has obtained his certificate. But if he avail himself of his knowl- edge and skill, and thereby acquire a beneficial interest, which may be the subject of assignment, I cannot frame to myself an argument why that interest should not pass in the same manner as any other property acquired by his personal industry."' But diplomas, conferring degrees and honors, and certificates from med- ical institutions and practitioners, do not pass to the provisional as- signee by the vesting order of the Insolvent Debtors' Court, under Stat. 1 & 2 Vict. 110, s. 37.' So it is held in England, that the ' Gardner v. Hooper, 3 Gray, 398. ^ gchoudler v. Waoe, 1 Cowp. 487. 2 Ibid. 6 Hesse v. Stevenson, 3 B. & P. 565. 3 Shay 0. Sessaman, 10 Barr. 432; ' Per Lord Alyanley, 3 B. & P. 565. Krumbaar O.Burt, 2 Wash. C.C. 406. sgernot v. Cattlin, 22 Eng. L. & Eq. * Barton's, etc. 12 Eng. L. & Eq. 323. 234. (a) How far this Is so, even notwithstanding the usual clause forbidding an assignment, see Lazarus v. Commonwealth, etc. 5 Pick. 76 ; 19 ibid. 81 ; Brichta v. New York, etc. 2 Hall, 372. 8 114 BANKRUPTCY AND INSOLVENCY. [CHAP. VI. place of under-marshal of London is salable under a commission of bankruptcy.Xa) But not the place of a Jew broker.^ So the franchise of a toll bridge passes to the assignee in bankruptcy.* § 16. An assignment from a commissioner of insolvency, upon proceedings against a partnership, of "all the estate, real and personal, of said insolvent debtors," passes the separate estate of each partner.* But under a separate commission against one of several partners, only his private property and his interest in the funds of the firm pass to his assignees.' § 17. Upon the ground that property of the bankrupt vests in the assignee by force of the decree ; a creditor's bill Tvill not lie to subject it.^ § 18. In construction of the third section of the bankrupt law of 1841, which provides that the assignee shall have all rights, etc. "as fully, to all intents and purposes, as if the same were vested in, or might be exercised by, such bankrupt, before, or at the time of his bankruptcy," Judge Curtis held this clause of the section not to restrict but enlarge the rights of the assignee, as created by the preceding part of the section. " The design of that clause was not to deprive the assignee, of rights which attach to the ownership of the property, in the capacity in which he holds it, but to enlarge his powers and confer rights upon him which, on the ordinary principles of law, do not belong to a mere voluntary assignee."' § 19. As the assignee of a bankrupt or insolvent takes the property of the latter, subject to all legal and equitable titles to such property, of course, as a general rule, any lien or incum- brance, prior to the act of bankruptcy or the commencement of 1 Butler ». Richardson, Amb. 73. ^ Harrison v. Sterry, 5 Cranch, 302. ^ Lyons, Amb. 89. « MoCabe v. Cooney, 2 Sandf. Ch. 314. 3 Stewart v. Hargrove, 23 Ala. 429. ' Carr v. Hilton, 1 Curt. 235-6. * Judd V. Gibbs, 2 Gray, 539. (a) An interim order for protection, granted under the insolvent acts, 5 & 6 Vict. c. 116, and 7 & 8 Vict. c. 96, only protects from process such prop- erty of the insolvent as would pass to, or could be distributed by, the assignees under those acts. Those statutes contain no provision by which the assignees can obtain the profits of an ecclesiastical benefice. A writ of sequestrari facias, therefore, may be issued by a plaintiff in an action against the bene- fice of the defendant, after the latter has obtained an interim order for protection. Parry v. Jones, 37 Bng. L. & Bq. 413. CHAP. VI.] ASSIGNMENT. 115 proceedings, is recognized and protected. (a) "It is undoubtedly the policy and the legal effect of the insolvent law, to transfer to the assignee, for the benefit of creditors, all the property of the debtor, and all the rights and interests which he could properly transfer, by his own act. But the purpose of the law is, to trans- fer the rights of the debtor, in the same plight which they were in, in the hands of the debtor himself, subject in all respects to the same liens, incumbrances, and equities."^ Nor is it necessary that assignees should have had notice of such liens.^ So, in re- gard to the nature of these contingent and partial claims, and the construction of a statutory provision relating to them, it is remarked by high authority : " It would be an arbitrary and fan- ciful exposition of the terms of this proviso to say, that it saved common law liens, and not statute liens; liens after judgment, and not liens before judgment."* And equitable as well as legal liens are protected. (J) Thus, where it appeared that the bank- rupts were authorized to make drafts on the plaintiffs, in payment for merchandise, which was pledged and hypothecated to the plain- tiffs as collateral security for their advances ; held, the plaintiffs had an equitable lien upon shipments and the proceeds thereof in the hands of the assignee ; and duties and charges upon such shipments, paid by the bankrupts, are not to be deducted from their value, or the proceeds in the hands of the assignee, except in reference to such goods as came into the hands of the assignee charged with the duties since the bankruptcy. Judge Story re- marks: "It is suggested, that in the proviso of the second section of the bankrupt act of 1841, ch. 4, there is no saving of any liens, except such as are valid by the laws of the States respectively; and it is added that, by the laws of Massachusetts, where the 'Per Shaw, C. J., Davis «. Newton, 6 'Per Grier, J., Pecks. Jennese, 7How. Met, 542-3. 620. ' Clason V. Morris, 10 John. 624. (a) See remarks of Oatron, J., in Norton v. Boyd, 3 How. 440. See also Steiner, 27 Penn. 313. (6) A statutory lien is also protected. Thus a mutual fire insurance com- pany are entitled to a special judgment upon a premium note, for the purpose of enforcing their lien on the real estate insured, although it has been sold and conveyed to a lond fide purchaser. Bowditch v. Jackson, 12 Gray ; Outl. Ins. L. (3d ed.) 71. 116 BANKRUPTCY AND INSOLVENCY. [CHAP. VI. bankruptcy took place, no equitable lien exists, or can be en- forced, in cases of this sort. My opinion is, that the terms of the proviso in the second section embrace all liens, equitable as well as legal, -which are valid by the State laws. I am yet to learn that an equitable lien may not exist in Massachusetts, and is not valid between the parties in this State. It is no answer to say, that no remedy is provided for the enforcement of such liens by the State jurisprudence in the State courts. That does not show that no such liens exist; for many cases of acknowledged trusts no remedy at present exists in the courts of this State; but that does not show that they have no existence or validity. "^(a) So A. agreed with B. to become his surety, if B. would assign to him, as indemnity, a bond of C. to B. B. agreed so to do, and A. became surety. B. became bankrupt before assigning the bond, and A., after the assignment, collected the amount of C. Held, that A. was entitled to hold the proceeds of the bond against B.'s general assignee.^ So A., as agent for B., and to secure a debt due to him, takes a mortgage of real estate, in his own name, from the debtor, and then obtains a release of the equity of re- demptibn. A. retains the title deeds, and B. receives the rents and profits. Afterwards A. lends his notes to B., and finally takes them up, shortly after which B. is declared a bankrupt. His assignees cannot recover the premises from A. until they reimburse him the amount so paid for B.* So an assignment by a husband, under the insolvent act, is no bar to the wife's right to a provision for the support of herself and children out of the property which belonged to her husband in her right merely, pro- 1 Fletcher v. Money, 2 Story, 555, 567. ' Frazer v. Hallowell, 1 Binn. 126. 2 Tucker v. Daly, 7 Gratt. 330. (a) But mere possession by a creditor will not give a lien as against the assignees of the debtor. Thus A. B. and C, engaging in a mercantile ad- venture, agreed, for greater convenience, to place the management thereof in the hands of A., and the bills of lading, insurance policies, etc. were made out in his name. A. indorsed for B. and 0. several notes, on their separate account. Before the return of the ship, B. died, and 0. became bankrupt; and, upon its return, A. took possession thereof, with the cargo, to indemnify him against the indorsements, which, after the bankruptcy, he had been obliged to pay. Held, he had no lien upon the property, and could not retain it against the bankrupt's assignees. Tunno v. Bethune, 2 Dessau. 285. CHAP. VI.] ASSIGNMENT. 117 vided her other property is insufficient for that purpose.^ So, where a creditor's bill is filed before a decree of bankruptcy against the defendant, so as to obtain a lien upon his property, and the defendant subsequently obtains his discharge, he cannot plead it generally in bar of the bill, as it is only a personal dis- charge, and does not affect the lien of the bill upon his estate.^ So "a vendor's lien will prevail against assignees claiming by a general assignment under the bankrupt and insolvent laws — for, in such cases, the assignees are deemed to possess the same equi- ties only as the debtor himself would possess."* Hence an appli- cation by a vendor, who had not conveyed, for a sale of the premises, in discharge of his lien for the unpaid purchase-money, and to prove for any deficiency, was granted.* So, where A. agreed to sell land to B., for which B. was to pay a certain sum, and A. also gave B. a power of attorney to sell the land only for the purpose of carrying the agreement into effect, and B. sold portions of the land, taking securities for the price, and after- wards, becoming insolvent, made an assignment of such securities, with his other property; held, A. had a lien upon them, which could be enforced by a bill in equity.^ § 20. The various statutes of bankruptcy and insolvency make specific provision for the case of debts secured by pledge, mort- gage, or other lien, by way of valuation, sale, or surrender of the property, in such mode as to secure the respective rights of the debtor, the creditor secured, and the other creditors. In Eng- land, it has been sometimes held that a bankrupt's property pledged must be sold, and the excess proved as a debt.* And a mortgagee, more especially with a power of sale, may apply to the Court to have the premises sold.' In such sale, the assignees are not permitted to bid in^ their private character.' And it is neces- sary for a mortgagee of premises sold under a commission, who wishes to bid for them at the sale, to obtain the leave of the Court for that purpose." Thus a mortgagee, who was the sole assignee and principal creditor, there being only one other creditor to a small amount, was permitted to bid for the estate, subject to the ' Van Epps v. Van Dusen, 4 Paige, C. = Dexter v. Stewart, 7 John. Ch. 52. B. 64. (See chap, iii.) « Twogood, 19 Ves. 231. ^Lowry v. Morrison, 11 Paige, 327. 'Hodgson, 1 GUn & J. 12. 5 2 Story, Equ. s. 1228 8 1 Glyn & J. 12. * Glyde, 1 Glyn & J. 323. 9 Hammond, Buck, 464. 118 BANKRUPTCY AND INSOLVENCY. [CHAP. VI. approbation of the master, the mortgagee undertaking to make good the deficiency between the sum bid and the price to be fixed by the master in case he should not approve of the bidding.'(a) § 21. Under the bankrupt law of 1841, a creditor holding col- lateral security might take such security at its value, to be ascer- tained by the Court, and prove for the balance, or the Court might order it sold or appraised, or allow the creditor to take it at its full nominal value.^ And in Massachusetts it was provided by statute 1838, eh. 163, s. 8 — the insolvent law — that when the creditor of an insolvent holds a mortgage to secure his debt, the property may be sold, if he so require, and the proceeds applied to such debt, and he be admitted as a creditor for the residue, if any ; or that such creditor may release and deliver up to the as- signees the premises held as security, and shall thereupon be admit- ted as a creditor for his whole debt; and unless the property is thus sold or released, that the creditor could not prove any part of his iBuok, 245. 2 Grant, Law Rep., Not. — 42, p. 303. (a) The costs of the application of a mortgagee to bid at the sale were ordered to be paid out of the proceeds of such sale. Say, 1 Deac. & Chit. 32 ; 1 Mont. 364; Brown, 1 Deac. & Chit. 34. The Lord Chancellor had no authority in bankruptcy to compel a second mortgagee not complaining under the commission, but resting upon his secu- " rity, to join in a sale obtained by a prior mortgagee under the general order. 8 May, 1794. Jackson, 5 Ves. 357. See p. 119. St. 2 & 3 Vict. c. 37, by which bills or notes payable within twelve months, and upon which a higher rate of interest than £5 per cent, has been reserved, are protected from the operation of the usury laws, subject only to the pro- viso in the statute, that nothing therein contained "shall extend to the loan or forbearance of any money upon security of any lands, tenements, or here- ditaments, or any estate or interest therein," protects the bills or notes spe- cified in the act, although they are secured by a mortgage or charge upon lands given contemporaneously or otherwise with the bills or notes; the proviso of the statute afiecting only the validity of the real security, and not that of the notes. Therefore, where promissory notes, payable at six weeks, three months, and other periods, within twelve months, were given for ad- vances of money, and the payment thereof, with interest at £6 per cent., was secured by mortgages and charges upon land given contemporaneously with the notes, and the debtor afterwards became bankrupt; it was held, that the holder of the notes was entitled, on giving up the real security, to be admit- ted to prove for the full amount of the notes against the estate of the bankrupt. Leake, 19 Eng. L. & Eq. 26. •CHAP. VI.] ASSIGNMENT. 119 debt. In construction of this act it was held, that the creditor can- not prove his claim at the first meeting, at least not till after the choice or appointment of an assignee. The statute provides, that all papers necessary to the sale shall be executed by the creditor and the assignee, or the property given up to the assignee; neither of which conditions can be complied with, unless there be an assignee in existence.^ And the statute does not authorize an absolute sale of mortgaged premises, upon petition of the mort- gagee, where the equity of redemption has been absolutely con- veyed by the insolvent, with a verbal condition to recoHvey upon payment of a debt. Such a construction would be inconsistent with the statute which allows a right of redemption for three years, and this act is not to be considered as repealed by impli- cation. But where both creditors thus petitioned, and the peti- tion of the first was granted, and that of the second disallowed, and the latter then applied to the Supreme Court for an injunc- tion upon the sale by the first mortgagee, and for permission to sell upon his own petition; it was held that, the petitioner having' thus submitted himself to the Court, a sale of the estate should be ordered, the two mortgagees joining the assignee in the deed, and the proceeds applied to the mortgages in their order.^(a) § 22. As has been suggested, a.-sale is not the only remedy of creditors holding security. Thus, in England, an equitable mortgage may be proved in bankruptcy, though it cannot be the foundation of the commission, as the petitioning creditor's 1 Baker, Sup. Jud. Ct., Jan. 1846; 8 ^Hunnewell v. Goodrich, 3 Cush. 469. Law Rep. 461. See Jackson, 5 Ves. 357. (a) See p. 11 8, n. The Supreme Court have no appellate jurisdiction, under the insolvent act of 1838, c. 163, s. 3, of an application by a mortgagee for a sale of the mortgaged property, and an appropriation of the proceeds towards pay- ment of his debt ; but under s. 18, of the same statute, they have original juris- diction to hear and adjudicate upon the application of a mortgagee, under s. 3 ; and, therefore, where a petition was presented to this court praying a revision of the proceedings of a master in chancery, in relation to such an applica- tion, on the ground that the petitioner had appealed from the adjudication of the master thereon, and it appeared that the petition had all the charac- teristics of an original proceeding, the court entertained jurisdiction, and adjudicated upon it accordingly. Barnard v. Baton, 2 Oush. 294. 120 BANKRUPTCY AND INSOLVENCY. [CHAP. VI. debt.^ And, where a joint creditor .took an equitable mortgage from one of two partners, as a security for his debt ; after which that partner died, and the other became bankrupt; it was held that the creditor might prove the amount of his debt, without the previous sale of his security.^ But a creditor who proves his whole debt, and exhibits a mortgage for part, and receives a divi- dend, forfeits the mortgage.' And a mortgagee, having given up his mortgage, and proved, under a commission against the mort- gagor, is not allowed to retract.* § 23. A creditor who holds a security, and is desirous of voting in the choice of assignees, is entitled to have the security taken at its value, and to prove for the difference.^ Though the discretion of the court to order proof upon a valuation, instead of a sale of securities, is regulated by circumstances, and not too readily exer- cised. ° Thus, where debts were secured by a deposit of hops, the Court directed a value to be set upon them according to the mar- ket price at the day of the choice of assignees, and permitted the creditors to prove for the difference between the price so fixed and the debts secured, and to vote in the choice of assignees.' § 24. There is held to be a difference between Mils of exchange deposited as a security, and property the value of which cannot be properly ascertained till a sale. If the creditor is willing to take the bills at their amount, as they cannot produce more, the estate cannot be damnified, and his proof should be admitted for the difference.* And, under special circumstances, the Court refused to order the sale of a bond that was pledged as a security for a debt, permit- ting the creditor to prove his whole debt under the commission.' But it is sometimes held that unindorsed bills, given by the bank- rupt, must be sold, and then the holder may prove for the residue.'" § 25. A depository has a right to avail himself of his pledge to its utmost extent, in point of proof, and to his fullest and most complete indemnity at the time of proving. Thus a creditor, with whom a bill of exchange had been deposited as a security, first 1 Yonge, 3 Ves. & B. 31 ; 2 Rose, 40. « Smith, 1 Ves. & B. 518 ; 2 Rose, 63. 2 Bowden, 1 Deao. & Chit. 135. ' Greenwood, Buck, 823. sEggington, 1 Mont. 72. s pe Tastet, 1 Ves. & B. 281. < Downes, 18 Ves. 290. But see Solo- » Smith w. Strickland, 2 Glyn & J. 105. mon, 1 Glyn & J. 25. '» Smith, 2 Cox, 209. 5 Nunn, 1 Rose, 822. CHAP.'VI.] ASSIGNMENT. 121 proved his debt against the estate of his principal debtor, and thereby and by other means reduced his debt to £14. Subse- quently the acceptor became bankrupt; and under his commis- sion the creditor was allowed to prove, not only the £14, but all the interest upon his debt at the time of making that proof to the complete liquidation of the account for which he held the bill as a security.^ § 26. Though unliquidated damages cannot be proved, yet if the demand be partly of that nature, and partly liquidated, the creditor, having a security, may apply it first to the former, then to the latter, and may prove for the residue.^ So a mortgagee, having by order of the commissioner sold part of the property, may surrender the rest which proves unsalable, and prove for the balance of his debt.* So the proof of a creditor, who claims to retain property against, or has interests inimical to, the gen- eral creditors, ought not to be rejected (for the amount of his debt beyond the value of his securities) on the ground that he will by his proof be enabled to elect himself an assignee.* So a creditor who has a bond may apply it to part of the debt, and prove for the residue.^ § 27. With regard to the party by whom the security must have been given, in order to debar the creditor from proving his claim, until such security is accounted for according to law; that is, whether the property must belong to the debtor himself, or may have been pledged or mortgaged by a third person ; different opinions have prevailed. Under the Massachusetts insolvent law it is held, that, where A. signs a note with B. as his surety, and B. afterwards executes a mortgage to the payee for securing pay- ment of the note, and A. becomes insolvent, the payee cannot prove his whole debt against A., under statute 1838, c. 163, but must deduct the value of the mortgage, and be admitted as a cred- itor for the residue of the debt, in the manner prescribed by s. 8 of that statute, for creditors who have a mortgage or pledge of the property of "the debtor. "° The Court remark: "It is a general rule of equity, that where a final settlement is to be made, 1 Martin, 1 Rose, 87. * De Tastet, 1 Rose, 324 ; 1 Ves. & B. 2 Pulteney v. Warren, 6 Ves. 94. 281. s (Jreaves, 1 De Gex, 119 » Amphletts, 1 Mont. 77. 6 Lanckton v. Woloott, 6 Met. 305. 122 BANKRUPTCY AND INSOLVENCY. [CHAP. VI. as in cases of bankruptcy or insolvency, all mutual accounts shall be balanced; that a pledge of property, held as security for a debt, shall be deemed in the nature of set-off or payment, an ex- tinguishment pro tanto ; and the balance only is the actual amount to which the creditor has trusted to the personal responsibility of the debtor ; and it is for that sum only that he can come in pari passu with other creditors, who have relied on the same responsi- bility. If the debt is reduced and diminished, by a pledge thus given by one of the debtors, it is equally reduced, as against the co-debtors."* So property mortgaged to secure notes indorsed by the mortgagee for the mortgagor's accommodation will be applied in equity, upon the insolvency of both, to the payment of the notes.^ But, on the other hand, it is held in England, that the deduction of a security is never made in bankruptcy, except when it is the property of the bankrupt.'(a) But that creditors, having securities of third persons to a greater amount than the debt, may prove, and receive dividends upon the full amount of the securities, to the extent of 20s. in the pound upon the actual debt.* Thus where bills are drawn and accepted by the same persons as constituting distinct firms, proof may be made against the acceptor, without deducting the value of a security from the drawer.' So in case of a separate mortgage made for a joint debt, it is the prevailing rule that the security may be retained, though the whole debt be proved under the commission ; the contrary rule and practice applying only where the security consists of property of the bankrupt himself.^ So a creditor having joint property of the bankrupts in pledge, and selling the same after the bank- ruptcy, may, notwithstanding, prove the remainder of his debt under the separate estates of the bankrupts, if there is no other joint property.'^ So where a bankrupt, previous to the commis- 1 Per Shaw, C. J., ibid. 307. « Parr, 1 Rose, 76 ; Peacock, 2 Glyn & "Rice V. Dewey, 13 Gray, 47. J. 27; Bowden, 1- Dea. & C. 135; 8 Parr, 1 Rose, 76 ; 18 Ves. 65. Smyth, 3 Dea. 597 ; Adams, 3 Mont. * Bloxham, 6 Ves. 449, 800. & A. 157 ; Groom, 2 Dea. 265. But 6 Parr, 18 Vep. 65; 1 Rose, 76. see Connell, 3 Dea. 201. ' Geller, 2 Madd. 262. (a) In New York, a creditor of an insolvent debtor is entitled to prove his whole debt against the estate, notwithstanding any security he may have from third persons, who stand in the situation of mere sureties for the debtor. Wilder v. Keeler, 3 Paige, 167. CHAP. VI.] ASSIGNMENT. 123 sion against him, procured persons to assign an interest in copy- hold premises, as a security to a creditor of his, the creditor may prove under the commission, without delivering up such security.^ So a joint creditor, having separate security from one of his co- debtors, may prove his debt against the joint estate, without sur- render or sale of his security.^ But if before the proof the creditor has received a portion of his debt in the proceeds of the security, this must be deducted.^ § 28. A fruitful subject of discussion has been, whether and how far a lien or security, acquired by the institution of legal proceedings against the debtor, is valid against a subsequent assignment. The general rule under the English law is, that a creditor in England, and subject to the bankrupt laws, having attached the bankrupt's estate abroad, must restore it.* Thus an injunction was granted against a proceeding under a foreign attachment by a joint creditor, upon the ground of a separate commission, overreaching the attachment, by relation of the act of bankruptcy." But the distinction is made, that where property attached abroad is by the local laws vested in the creditor attach- ing, upon confirmation by the Court ; in case of bankruptcy, the creditors attaching may hold the property, and prove for the resi- due, where the act of bankruptcy was subsequent to the completion of the judicial act, whether on the same or any other day; but, where the act of bankruptcy was previous, they cannot hold against the assignee.^ § 29- By the bankrupt law of 1800, attachments under State laws to secure provable debts were discharged.'' § 30. Under the act of 1841, by which all liens are expressly protected, the question was distinctly raised, and ably and elabo- rately discussed in the State and United States courts, whether an attachment upon a writ of mesne process — a proceeding by which, in the ordinary course of a suit, the attaching creditor gains a priority, contingent upon his subsequent judgment and levy of execution — falls within the legal definition of a lien, and takes precedence of the claim of an assignee under a subsequent bankruptcy. 1 Goodman, 3 Madd. 373. e D'Obree, 8 Ves. 82. 2 Peacock, 2 Glyn & J. 27. ' Payson v. Payson, 1 Mass. 290 ; Flagg 3 Presoott, 4 Dea. & C. 23. v. Tyler, 6 ibid. 36 ; Harrison v. * Benfield v. Solomons, 9 Ves. 80. Sterry, 5 Cranch, 801. 5 Barker v. Goodair, 11 Ves. 78. 124 BANKRUPTCY AND INSOLVENCY. [CHAP. VI. § 31. The question first arose in the United States Court for the District of Massachusetts, where a debtor, whose goods were attached upon a suit brought in the State Court, filed a petition in bankruptcy, and then applied to the District Court for an order to stay proceedings in such suit, and for other relief. And it was held, that the District Court had authority over the suit ; that the creditor might be allowed to enter the action and continue it, but not to proceed to trial and judgment.' Judge Story remarked: "An attachment does not come up to the exact definition or mean- ing of a lien, either in the general sense of the common law, or in that of the maritime law, or in that of equity jurisprudence. Not in that of the common law, because the creditor is not in posses- sion of the property; but it is in custodid legis, if personal prop- erty ; if real property, it is not a fixed and vested charge, but it is a contingent, conditional charge, until the judgment and levy. Not in the sense of the maritime law, which does not recognize or enforce any claim as a lien, until it has become absolute, fixed, and vested. Not in that of equity jurisprudence, for there a lien is not a Jus in re, or a jus ad rem. It is but a charge upon the thing, and then only, when it has, in like manner, become absdute, fixed, and vested. In truth, it bears a closer resemblance to the lien created by a judgment upon the real estate of the debtor. But that is only a general lien or charge over all the real estate of the debtor, to be enforced by an elegit, or other legal process, upon such part of the real estate of the debtor as the creditor may elect. And it is not a common law lien, for it had its origin in the statute of 2d Westminster, 13 Edw. 1, Stat. 1, chap. 18. And in case of a judgment the debt is ascertained; and yet it is held to create no interest in the land, so that the creditor might pro- ceed to levy, even after releasing all his right in the land. Both in case of attachment and judgment the property is in custodid legis. "^ § 32. In another case, the same learned judge held, that taking judgment, after bankruptcy, in a suit where an attachment has been made, and levying execution on the property, are a fraud upon the act, and void.* Also, that a discharge may be pleaded in bar of a suit commenced against the bankrupt prior to the peti- 1 Foster, 2 Story, 132. 3 Everett v. Stone, 3 Story, 446. 2 Ibid. 145-62. CHAP. VI.J ASSIGNMENT. 125 tion, with an attachment of property. So, hefore the discharge, the District Court, upon the application of the bankrupt or as- signee, may enjoin such suit. If the creditor resides out of the district, the injunction may be issued ngainst his agents or attor- neys. And it will be a contempt to proceed with the suit. If a discharge is not granted, the creditor may apply for dissolution of the injunction, and proceed with the suit to judgment and exe- cution. If the discharge is obtained, and the creditor would con- test it in the State Court, he should apply for leave to do so to the District Court. If the general validity of the discharge is not denied, and the State Court, on demurrer, hold it invalid as to the property attached, and the creditor proceed to judgment and execution, the District Court should enjoin the sheriff from levying on the property, and order him to deliver it to the assignee, or, if sold, to bring the proceeds into court. These several points of decision proceed upon the ground that an at- tachment is not a lien or security upon the property within the statute of 1841, ch. 9, s. 2.' § 33. In still another case, Judge Story remarks: "If the debtor proceeding in bankruptcy should be decreed a bankrupt, and should receive a discharge under the act, that discharge could be pleaded as a good bar to the suit in the nature of a plea puis darrein continuance ; and consequently, under such circum- stances, the District Court, acting in bankruptcy, ought not to permit the creditor, pending the proceedings in bankruptcy, and before it was possible for the debtor to obtain a discharge in a race of diligence, to obtain a judgment, which should give him a priority of satisfaction over the general creditors, out of the prop- erty attached in his suit. If he did not obtain his discharge, then the creditor might be at liberty to proceed and get judgment, and thus to perfect his lien under his attachment, by following it up by a seizure of the property in execution, which might, under such circumstances, (for the Court gave no opinion on the point,) give him an unconditional priority of satisfaction out of the same, so that the effect of the injunction was not to annul the attach- ment, but only to suspend proceedings in the suit, until it could be ascertained whether the bankrupt had a good bar, or defence 1 Bellows, 3 Story, 428. 126 BAXKRUPTCT AND INSOLVENCY. [CHAP. VI. upon the merits, to the suit, or the creditor had an absolute right to judgment therein."^ § 34. In a later case, under the peculiar circumstances of which the preceding doctrine was not held applicable, Judge Story re- marks: "I adhere to the doctrine laid down in ex parte Foster; and, indeed, after much reflection upon it since it was delivered, I maintain, notwithstanding some doubts which have been at- tempted to be thrown over it by those who have certainly mis- understood its true bearing, or have dissented from it, without condescending to answer its reasoning, that it is founded in the true interpretation of the bankrupt act of 1841, ch. 9, and upon authorities of the highest consideration and value. But in that case there was not only no default, but the cause was but just commenced, and no pleadings were had, and, indeed, the writ itself was not returnable until April after the petition was filed. Parker v. Moggridge (p. 127) was a case of default, and a con- tinuance for judgment under a special agreement, and it was held, that the creditors had a right, under the agreement, to proceed to judgment, and had an equitable lien on the property attached. In ex parte Cook (s. 33) the judgment itself was obtained before the petition in bankruptcy was filed; and it was held to be a clear case of lien within the protection of the bankrupt act. JEx parte Vose has been already referred to, and, as has been said, approaches very near to the present."^ § 35. But, in the case in which these observations were made, an action was brought in a State Court against the party after- wards bankrupt, in which real estate was attached, and trustees were summoned, and the defendant was by consent defaulted, without surprise, mistake, or fraud, and no motion ever made to take off the default. After continuances, in reference to the sup- posed trustees, judgment was rendered, and execution taken out and levied upon the property attached. Prior to the rendition of judgment, a petition in bankruptcy was filed, the party declared bankrupt, and an assignee appointed, who had knowledge of the above proceedings. The assignee then brings a bill in equity to set aside the judgment, have the proceeds of the levy paid over 1 Per Story, J., Cook, 2 Story, 378. « Per Story, J., Fiske v. Hunt, 2 Story, 588. CHAP. VI.J ASSIGNMENT. 127 to him, and for further relief. But the bill was dismissed, though ■without costs.* § 36. So in another case in the same court, the plaintiffs, citi- zens of Massachusetts, brought suits against a corporation and several individuals of New Hampshire, in which property was attached. In virtue of agreements between the parties, the ac- tions were continued from term to term, finally defaulted, and at a subsequent term judgments rendered, several of the defendants having been previously decreed bankrupt on their own petition. The general tenor and purpose of the above agreement was, to perfect the attachments as securities for the plaintiff's debt. Held, on a petition to dissolve an injunction previously obtained in the District Court by the assignees in bankruptcy, that the agreement created an equitable trust by process of law, or an equitable lien, and superior title to the property over the assignee and general creditors, as valid against them as the bankrupt himself; and the injunction was accordingly dissolved.^ § 37. And in another case, involving the effect of a judgment in the suit upon which an attachment had been made. Judge Story remarks : "The proceedings in bankruptcy after the judgment can have no effect whatsoever upon that judgment, or upon the prop- erty attached in the suit. The creditors, by their judgment, have made their right (call it, if you please, their lien) perfect under the attachment. It is no longer a conditional or contingent right, but it has attached absolutely to the property, and by the laws of Massachusetts it remains a fixed and positive lien for thirty days after the judgment, by means of which, the creditor, at his election, may obtain a preference of satisfaction out of the property attached, over all other creditors. The Court has no authority to deprive him of that election, nor, by an injunction, to obstruct or stop his proceedings on his execution. If the bankrupt should obtain his discharge, it would be no bar or defence to the due execution and satisfaction of that judgment in the regular course of proceedings thereon, for the debtor, after the judgment, has no day in court to plead any bar or defence."' § 38. The same subject was considered in the State Court of 1 Fiske V, Hunt, 2 Story, 582. ral opinions upon this subject, see ' Parker v. Moggridge, 2 Story, 334. the remarks of Judge Dewey in 3 Per Story, J., Cook, 2 Story, 379. Ames t). Wentworth, 5 Met. 296-7. For a review of Judge Story's seve- 128 " BANKRUPTCY AND INSOLVENCY. [CHAP. VI. New Hampshire, and it was there held, that whether an attach- ment is a lien, within the saving of the act, or not, it certainly becomes a perfect lien by the rendition of judgment ; and the discharge of the defendant, subsequent to the judgment, will not discharge the receiptor} And in a subsequent case it was held, generally, that an attachment made before any act of bankruptcy or petition by the debtor is a lien or security upon property, valid by the laws of the State, and thus within the proviso of the act.^ So in Indiana it was held, that an attachment on a writ oi foreign attachment, made more than twenty days before a decree in bank- ruptcy, in the absence of proof that it was made after the filing of the petition, is a lien, within the proviso of the act.' And in the Supreme Court of the United States, upon a rehearing of one of the cases in New Hampshire, the question may be considered as finally settled in favor of the alleged lien. The facts, as there appearing, are found thus stated : An attachment of property having been made in the State Court of New Hampshire, the defendant afterwards went into bankruptcy. His assignee, being admitted to defend, set up the discharge. The plaintiffs, by way of replication, relied on the attachment as a lien, and claimed judgment for the purpose of levying on the attached property. Rejoinder, a decree of the United States District Court, annulling the attachment, and ordering the sherifi" to de- liver the goods to the assignee, or account for their value. Demurrer to the rejoinder. Held, the replication was good, the attachment constituting a valid lien, expressly saved by the bank- rupt law; and that the rejoinder was bad. Upogi the last point the Court say, the rejoinder "does not pretend to show how the proceedings in the Court of Common Pleas had been removed to the District Court, or how its judgment on the cause pending before it could be thus anticipated ; nor that the District Court had found any means of enforcing its decree by compelling the sheriff to deliver the property attached to the assignee, and thus, in effect, destroy the lien ; but it seems to rely on the decree as a judgment on the question, which should operate by way of estoppel. This necessarily involves the inquiry, whether the Dis- trict Court was vested with any power or authority to oust the 1 Smith V. Brown, 14 N. H. 67. » Shaffer v. MoMaken, 1 Cart. 274. 2Ki(lredge v. Warren, 14 N. H. 509. CHAP. Vr.] ASSIGNMENT. 129 Court of Common Pleas of its jurisdiction over the cause, and supersede its judgment, by this summary proceeding. The Dis- trict Court has exclusive jurisdiction 'of all suits and proceed- ings in bankruptcy.' But the suit pending before the Court of Common Pleas was not a suit or proceeding in bankruptcy; and, although the plea of bankruptcy was interposed by the defendants, the Court was as competent to entertain and judge of that plea as of any other. It had full and complete jurisdiction, and its jurisdiction had attached more than a month before any act of bankruptcy. It was an independent tribunal, not deriving its authority from the same sovereign. The District Court had no supervisory power over it. Where a court has jurisdiction, it has a right to decide every question which occurs in the cause, and its judgment, till reversed, is regarded as binding in every other court ; and where the jurisdiction of a court, and the right of a plaintiff to prosecute his suit in it have once attached, that right cannot be arrested or taken away by proceedings in another court. These rules have their foundation, not merely in comity, but on necessity; for, if one may enjoin, the other may retort by injunction, and thus the parties be without remedy, being liable to a process .for contempt in one, if they dare to proceed in the other. The act of Congress of the 2d of March, 1793, ch. 66, s. 5, declares that a writ of injunction shall not be granted to stay proceedings in any court of a State."' And in the same case it is held, that the two sections of the law, the one making a discharge a bar to all provable claims, the other saving all liens, are to be construed together. Hence, where an attachment has been made, a special judgment is to be rendered in the suit, dis- charging the defendant from personal liability, and saving to the plaintiff his remedy, and awarding satisfaction out of the property attached, and not otherwise. The case is said to be similar to that of an administrator, pleading plene admin., and a judgment of assets quando acciderint, or the plea of a discharge of the person under an insolvent law, and judgment of the defendant's future effects.^ § 39. The insolvent law of Massachusetts provides, in general, that an attachment on mesne process shall be dissolved by subse- 1 Peck V. Jenness, 7 How. 612, 624-5. ' Peck v. Jenness, 7 How. 623. , 9 130 BANKRUPTCY AND INSOLVENCY. [CHAP. VI. quent insolvency proceedings, (a) In construction of this pro- vision it is held, that though in case of attachment the first publication of notice (the point of time at which the insolvency proceedings are construed to commence) is made after judgment in the suit, but before levy of execution, the attachment is dis- solved; that no new lien is created by the judgment, notwith- standing the statutory provision that property attached shall be held for thirty days after judgment, in order to being taken in execution. The insolvent law, being subsequent to this stat- ute, if inconsistent with, repealed it.' So an attachment of personal property, which is sold on the writ, pursuant to the provisions of the Rev. Sts. c. 90, ss. 57, 61, is dissolved by the insolvency of the debtor, in the same manner as if the property remained unsold, whether the creditor or the oflScer have knowl- edge of the insolvency or not ; provided the first publication takes place before judgment, or even before the proceeds of the sale are seized on the execution ; and if the officer, without notice of the debtor's insolvency, pay over such proceeds to the judgment cred- itor, lifter the first publication, he may recover them back of the creditor.^ So a bailee of the officer or receiptor for the prop- 1 Andrews !). Southwick, 13 Met. 535. i" Edwards v. Sumner,' 4 Gush. 393; Wheelock v. Hastings, 4 Met. 504. [a) In Oonnecticnt, the act of 1853, relating to insolvent debtors, which provides that all attachments of the property of a debtor, made within sixty days preceding an assignment by such debtor, under the provisions of the act, shall be dissolved, and the property attached vest, free from the attach- ment, in the trustee, applies to attachments made within the sixty days pre- ceding the first day of January, 1854, although the statute, by its terms, was not to take effect until that date. Curtis v. Barnum, 25 Conn. 370. As the bankrupt acts of the province of New Brunswick do not give any lien upon property attached by a creditor before the filing of a petition by the debtor, the property cannot be made available after a discharge. Long V. Hammond, 40 Maine, 204. Rent can be said in no sense to have the attributes of a lien, and defeat so far the operation of the insolvent laws, unless goods on the premises have been seized as a distress, before the debtor's application. Buckey v. Snonffer, 10 Md. 149. And where a party, under the insolvent laws of Maryland, files his peti- tion, his property is in custody of law, and cannot be distrained for rent due "from the petitioner at the time of the application, but is held by the trustee for the benefit of creditors. Ibid. CHAP. VI.] ASSIGNMENT. 131 erty is discharged from his liability, even though indemnified.' So an attachment is dissolved, though made in an action for a tort — as for a malicious prosecution — -which is not a provable clafm.^ And where attached property is replevied, and judgment rendered for the defendant in replevin, he is entitled to a return, notwithstanding the insolvency of the debtor, and will be bound to deliver the property to the assignee.' So it has been held that where, in a trustee process against an insolvent debtor, the trustee delays to answer till judgment day, and judgment is immediately entered against him, the assignee is not barred of his claim, although he knew that the trustee was chargeable, and failed to claim the funds of the trustee according to the statute; more especially if notice of the assignment was given to the trustee, and a demand made upon him by the assignee before the judg- ment.* But an attachment of the property of a partnership, by the trustee process, is not dissolved by the subsequent several insolvency of one of the partners, after a dissolution of the part- nership.° § 40. To avoid the result of dissolving an attachment, that other liens might thereby be let in, to the prejudice of the gen- eral creditors, (a) it is expressly provided that, in case of the existence of such liens, the Court may order, upon petition, that the attachment shall survive in favor of the assignee. In con- struction of this provision it is held, that where the assignee is authorized by the Court, in pursuance of the statute, to proceed 'Sprague v. Wheatland, 3 Met. 416; ' Kimball » Thompson, 4 Cush. 441. Andrews v. Southwiok, 13 Met. 535. * Phelps v. Dunham, 8 Law Rep. 26. 2 Stetson V. Heyden, 8 Met. 29. ^ pern v. Cashing, 4 Cush. 357. (a) A creditor caused the goods of his debtor to be attached, and the officer took a receipt therefor ; the debtor then mortgaged the same goods to another creditor, and afterwards applied for the benefit of the insolvent act, (statute 1838, c. 163,) and all his estate was thereupon assigned under that statute. The attaching creditor afterwards recovered judgment, and took out a writ of execution, which the attaching officer returned wholly nnsatisfled. Held, that, as the attachment was dissolved by the assignment, the attaching creditor had no cause of action against the officer, although the attached goods never came into the possession of the debtor's assignees, but were applied in discharge of the debt due to the mortgagee. Also that the plaintiff could not contest the validity of the assignment, by showing irregularities and errors in the proceedings had against the debtor, under the statute. Grant v. Lyman, 4 Met. 470. 132 BANKRUPTCY AND INSOLVENCY. [CHAP. VI. with the suit to final judgment and execution, the proceedings are to be conducted, and the judgment rendered and execution thereon issued, in the name of the assignee, as such ; and, upon being so authorized, the assignee takes the attaching creditor's place, with all the remedies and securities, and the benefit of all official liabil- ities, respecting the attached property, to which the creditor would otherwise be entitled.^ And a mortgagee of real estate previously attached has no right to object to an order, passed under subse- quent proceedings in insolvency, that the attachment should sur- vive for the benefit of creditors. And it seems such order may be passed, without notice to any one but the assignee.^(a) § 41. A judgment, as well as attachment, may constitute a lien, with reference to the operation of a bankrupt or insolvent law. It was generally held, that the bankrupt act of 1800 did not affect any preceding judgment, which was a lien on the bankrupt's property .^(5) So under the act of 1841, where the lien of a judg- ' Bacon v, Lincoln, 2 Cush. 124. ' Liyingston v. Livingston, 2 Games, 2 Mclntire v. Maynard, 4 Gray, 429. 300 : White v. Hamilton, 1 Yea. 183; Ralston v. Bell, 2 Dall. 15«. But see Gibbs ». Gibbs, 1 Dall. 374. (a) Independently of statute, insolvency proceedings were held not to dis- solve an attachment made upon process which issued from the United States Court. But it was provided otherwise by act of Congress of March 14, 1848. Springer v. Foster, 2 Story, B. 383 ; Towne v. Smith, 1 "Woodb. & M. 115. See Perry, etc. v. BroWn, 10 Law Eep. 264. The assignment dissolves all attachments made subsequent to the taking effect of the insolvent law, though made before the first publication of notice, and upon a contract entered into before the law took effect. So although the assignee does not take or claim the property. But not an attachment made before the enactment of the law, such attachment being a right, pro- tected by the express terms of the act. This protection, however, does not extend to an attachment made during a suspension of the law, in consequence of the enactment of the bankrupt act. Bigelow v. Pritchard, 21 Pick. 169 ; Shelton v. Codman, 3 Gray, 318; Kilborn v. Lyman, 6 Met. 299; Ward v. Proctor, 7 Met. 318. An attachment on a process issued from the State Court, in favor of a citi- zen of another State, for breach of a contract to be there performed, was held to be dissolved. Grant v. Lyman, 4 Met. 470. So also on process from the United States Court, if made after the first publication. Perry, etc. v. Brown, 10 Law Rep. 264. (6) The distinction was made, that a judgment creditor, for the benefit of whom, among others, the debtor has made an assignment in trust, without the privity of such creditor, will not waive the lien of his judgment, by con- CHAP. VI.] ASSIGNMENT. 183 ment has attached, it could not be defeated by the subsequent bankruptcy of the judgment debtor.' And an assignee of a debtor under the insolvent act of New York is not a purchaser within the meaning of the statute limiting the lien of a judgment to ten years.^(a) But a judgment creditor, who proved his debt in bank- ruptcy, thereby lost the lien of the judgment upon real estate.^ So, as land passes by a general assignment under the New York insolvent act, a creditor, whose judgment is perfected after the assignment, has no lien, and therefore cannot redeem.* § 42. In England, the seizure of a trader's goods under an exe- cution, in an action commenced adversely, gives the creditor no priority, in case such trader is made bankrupt upon a petition for adjudication filed before the sale of the goods, whether the act of bankruptcy is before or after the seizure.' But under the bank- 1 Talbert v. Melton, 9 S. & M. 9. * Gibbons v. Wendover, 3 Cow. 69. 2 Mower v. Kip, 2 Edw. Ch. 165. 5 Hutton v. Cooper, 2 Eng. L. & Eq. ' Briggs V. Stephens, Law Rep. Oct. — 423. 44, p. 281— N. y. ; Christy, 3 How. 292. senting to receive the benefit of the assignment. But it seems that the cred- itor may, upon the bankruptcy of the debtor, be compelled to elect between the judgment and assignment. Codwise v. Gelston, 10 John. E. 507. And more especially a judgment in the nature of a preference will not be recog- nized as a valid lien. Thus A. and B., partners, apprehending embar- rassment in their business, conveyed all their stock and real estate and certain notes, being the bulk of their property, to some of their creditors, to secure them as sureties and indorsers. Suits were afterwards brought upon the debts thus secured, judgment rendered, and execution levied, but, before judgment, A. and B. became bankrupt. Previous to the bankruptcy, the personal property thus transferred was sold, and the proceeds applied to the debts. Held, the assignment was an act in contemplation of bank- ruptcy, and a preference, and therefore void ; that the judgments were not liens within the exception of the act ; that the assignee was entitled to the proceeds of the sale ; and that the bankrupt was debarred of his discharge. Everett v. Stone, 3 Story, 446. (a) Upon the insolvency of a person who has become surety in the recog- nizance of one indicted, a bond of indemnity given him does not vest in his assignee, if not adjudged forfeit before commencement of the proceedings, although the debtor has through mistake delivered the bond to the assignee, and requested him" to enforce it. And, if the assignee have recovered judg- ment in his own name against the obligor, which is satisfied, the court of insolvency will be enjoined from ordering distribution of the proceeds among the creditors, the debtor being entitled to have them applied on the recog- nizance. Mack V. Proctor, Mass. S. J. 0. Oct. 1859 ; Outl. Ins. L. (3d ed.) 45. 134 BANKRUPTCY AND INSOLVENCY. [CHAP. VI. rupt act of 1841, in a State where an execution constitutes a lien, the act of bankruptcy of a party, against ■whom & fi.fa. has pre- viously issued, and been delivered to an officer, does not defeat the execution creditor's prior lien.'(a) § 43. Under the comprehensive rule, by which the assignee is vested with all the rights of property of the bankrupt, he acquires the right of creditors to avoid any transactions of the bankrupt, which were intended to defraud the creditors.^ In reference to cases of fraud it is said: "There is a very broad distinction be- tween a bill by the bankrupt, the author of the fraud, and one by the a'ssignee, who seeks to recover the property, for the benefit of the very interest sought to be defrauded. The ground for refusing relief to the author of the fraud is a principle of public 1 Waller v. Best, 3 How. 111. 2 Williams v. Vermeule, 4 Sandf. Ch. 388 ; 8 Cranoh, 36. But see Peavis V. Garner, 12 Ala. 661. (a) A trader gave a warrant of attorney, on which, in April, 1848, judg- ment was entered up. In February, 1852, an arrangement was attempted with the general body of creditors to avoid a bankruptcy. The trader signed a declaration of insolvency. At a meeting between the judgment creditors and an agent for the other creditors, the former were informed of this, and were asked and made a promise, the terms of which were in controversy, not to take any steps to gain priority ; and the meeting was adjourned to a future day. In the mean time the judgment creditors registered their judgment; and, on the trader being adjudicated bankrupt, they petitioned the commis- sioner that they might be declared equitable mortgagees of the real estate of the bankrupt, but, on the ground of breach of faith, the commissioner dis- missed the petition, with costs. On appeal, the Court decided that what took place at the meeting, even if a promise was generally made, was not enough, on the one hand, to support a bill to restrain the registration of the judgment, nor, on the other, to support a bill to restrain the filing of the declaration of insolvency; and that the decision of the commissioner must be reversed. Boyle, 19 Eng. L. & Eq. 493. In Maryland, judgments were recovered against G. in 1843, on which exe- cutions were issued in 1844, and returned levied. On January 7, 1847, G. applied for the benefit of the insolvent laws, and his trustee was duly ap- pointed and qualified. In February, 1847, writs of vendi. exponas on these executions were issued, under which the property was sold in May following, by the sheriff, at public sale. Held, that the insolvent application transferred to the trustee the sole and exclusive right of selling the property, notwith- standing the executions previously levied, that, the sheriff having no right to sell, his proceedings were null and void, and that the sale by him passed .no title to the purchaser. Manahan v. Sammon, 3 Md. 463. CHAP. VI.] ASSIGNMENT. 135 policy, ■which forbids the Court to be auxiliary to a plan for evad- ing the law and depriving creditors of their just and legal rights. But where the assignee sues, the case is reversed; to grant the relief, is to act in accordance with these rights of creditors, and in opposition to the contemplated fraud, while to refuse it would be to aid in its perpetration."' So as to the class of fraudulent conveyances which an assignee may avoid, a liberal construction in favor of creditors is given to the statute of bankruptcy. The Court remark: "It is a notorious fact that the pecuniary state of the country at the time (of the act of 1841) was the great and leading inducement to the passage of the law, and that -it was expected and intended to operate, as in fact it did operate, upon a vast number of cases of persons who had previously become in- solvent. To hold that no property, fraudulently conveyed by any of these persons, before the date of the law, could be distributed under it, would be so much in conflict with one of its great pur- poses, that I should come very reluctantly to that conclusion. It does not seem to me necessary to do so. A fraudulent convey- ance is no effectual conveyance, as against the interest intended to be defrauded. This interest the assignee represents, so far as respects all creditors who prove their claims. They can have no remedy which will reach property fraudulently conveyed, except through the assignee, because they can sustain no suit against the debtor. Their remedies are absorbed in the great and compre- hensive remedy under the commission. The assignee prays the aid of this Court to remove an apparent cloud upon the title, which, though void, interferes with the discharge of his official duty."^ § 44. Upon these principles, the trustees of an insolvent have all the rights of his creditors to set aside a fraudulent assignment made by the insolvent.^ So the trustee of an insolvent debtor can take advantage of a defect in a mortgage, of which the insol- vent himself could not.* And the assignee, and not individual creditors, must sue for property fraudulently conveyed by the bankrupt, and withheld from the list of the estate given in.* Un- less the assignee refuses to bring a suit, in which case any cred- > Per Curtis, J., Carr v. Hilton, 1 Curt. » Englebert v. Blanjot, 2 Whart. 240. (U. S.) 233. *Bank of Alexandria v. Herbert, 8 2 Per Curtis, J., Carr v. Hilton, 1 Curt. Cranch, 36. (U. S.) 234. 5 Edwards v. Coleman, 2 Bibb, 204. 136 BANKRUPTCY AND INSOLVENCY. [OHAP. VI. itor may bring a bill in equity.' So, in general, the assignee may sell property which has been fraudulently conveyed;^ and the purchaser of a bankrupt's land, at an authorized sale of it by the assignee, takes the land freed from any incumbrance thereon, made by the bankrupt, in fraud of creditors.' So where a bill in chancery is filed by creditors, to set aside the deeds of a bankrupt on the ground of fraud, the property is not to be placed in the hands of a master, but is to be disposed of by the assignees of the bankrupt, according to the bankrupt law.*(a) § 45. The trustee or assignee may, at his election, sue for prop- erty fraudulently sold by the insolvent, or may affirm the sale, and bring assumpsit on the special contract.* § 46. In immediate connection with the right of the assignee to claim property which has been transferred in fraud of creditors, may be briefly considered an established rule of the English bank- rupt law, with reference to property in possession of the debtor at the time of his bankruptcy, although, independently of the effect of such bankruptcy, actually belonging to other persons.- The rule has not been generally adopted in the bankrupt or insolvent laws of this country, but being recognized and affirmed in all the English statutes, and prolific of questions and decisions in the courts, requires to be summarily explained in the present work. § 47. By St. 6 Geo. 4, c. 16, s. 72, if a bankrupt has in his possession, order, or disposition, by consent of the owner, any 1 Sands v. Codwise, 4 John. 536. ' Dwinel v. Perley, 32 Maine, 197. 2 Williams v. Vermeule, 4 Sandf. Ch. * Sands v. Codwise, 4 John. 536. 888. 5 Huntseclter v. Hering, 11 S. & R. 250. (a) But the distinction has been made, that the sheriff has the right to sell and to pass by deed a slave, or other chattel, of which the insolvent debtor has made a fraudulent gift to his child, but of which the debtor retairis pos- sesswn, and the purchaser under such sale may recover the slave, or other chattel, although the sheriff had not the possession of it at any time. But if the property is not in the possession of the debtor, but of some other person, although the title vests in the sheriff, it seems that he cannot sell the prop- erty, but must proceed by summons against the persons holding it. The sheriff, in such case, is a trustee for the creditors, and, if he violates his trust, or the spirit of the act, by selling the chattels improperly, he is responsible like other trustees ; but the sale is not void, and the purchaser may recover. Shirley v. Long, 6 Rand. 735. CHAP. VI.] ASSIGNMENT. 137 goods, etc. of which he is reputed owner, or whereof he has taken upon him the sale, alteration, or disposition as owner ; the commis- sioners may dispose of them; not affecting, however, the trans- fer of ships. "The object of this enactment was to prevent a trader's obtaining false and delusive credit by the possession of the goods of another; and if by having such possession the trader gain false credit, the goods are to be distributed under this act to those who may be supposed to have given him credit."^ It is said : " Questions arising from this clause have more of fact than of law in them. The sort of possession, disposition, etc. are facts to be proved, and for the consideration of the jury."^ "When once it is ascertained whether the bankrupt was the re- puted owner or not, there would be very little difficulty in decid- ing. From that reputed ownership false credit arises; from that false credit arises the mischief; and to that mischief the remedy of the statute applies."^ So it is said: "The question of reputed ownership , generally speaking, is a question of fact for the jury ; but when once it is proved in an action brought by the assignees of the bankrupt, that the latter, who was the former owner of the goods, continued in possession of them till the time of his act of bankruptcy, it must be taken that he continued in pos- session as owner until that time, unless it be shown by the defendant not only that there was a change of ownership, but that the change of ownership had become notorious to the world.*" § 48. The words in the statutes upon the subject, "at the time he becomes bankrupt," mean the time of an act of bankruptcy, not when the fiat issues.'* And in order to render goods in the posses- sion, order, or disposition of a bankrupt, etc. within the 12 & 13 Vict. c. 106, s. 125, two things are required : first, they must be in his possession tinder such circumstances as to render him reputed owner; secondly, they must have been left in his possession through some impropriety or laches of the true owner, under cir- cumstances calculated to enable the bankrupt to obtain a false iPer BuUer, J., Gordon v. East, etc. *Per Bayley, J., Lingard «. Messiter, 7 T. E. 236. 1 B. & C. 312. See Belcher «. Camp- 2 Per BuUer, J., Walker v. Burnell, bell, 4 Man, Gr. & So. 1 ; 8 Ad. & Doug. 306. Ell. n. 1 ; Fletcher v. Manning, 1 8 Per Eyre, C. J., Twigham v. Biggs, 1 Car. & Kir. 350. B. &. P. 89. 6 Fawoett v. Fearne, 6 Ad. & EU. n. 20. 138 BANKRUPTCY AND INSOLVENCY. [CHAP, VI. credit, by inducing the world to look on him as the true owner. And the question may depend on the usage of some particular trade, which may vary at different times and places. Thus when property is left by the true owner in a shop where goods are notoriously left by parties for other purposes than for sale, the proprietor of the shop is not a reputed owner of them within that statute.^ So, " contrary to the express words of the former statute, factors have been excepted out of it for the sake of trade and mer- chandise."^ "By the course of trade bankers and factors must have the goods of other people in their possession, and therefore this does not hold out a false credit to the world, "'(a) So, in general, "the clause does not apply to cases where the possession is in the ordinary course of business, and where it cannot reasonably induce persons to give credit; as in case of books left with a bookseller to be sold, such being a notorious practice."* And "there must be a real owner, distinct from an apparent owner, and the real owner must consent to the apparent ownership as such."°(5) • Hamilton v. Bell, 29 Eng. Law & Eq. *Per Ld. Cranworth, Barclay, 35 Eng. 557. Law & Eq. 173 ; Wliitfield v. Brand, 2 Per Ld. Hardwicke, Dumas, 1 Atk. 16 M. & W. 282; Mace v. CadeU, 284. Coop. 232. 3 Per Buller, J., Bryson v. Wylie, 1 B. ^Ibid. 176. & P. 84, n. (a) Under the old United States bankrupt law, goods of another in pos- session of a bankrupt, which he was allowed to sell as his own, were subject to the commission ; but not those which he sold as factor. And his taking security in his own name, for goods thus sold, did not destroy the right of the principal to the money thus secured. Price v. Ealston, 2 Ball. 66. Certain goods were shipped from Liverpool to San Francisco by A., who indorsed the bills of lading to his agent, the plaintifl', and before the arrival of the goods became a bankrupt. Held, that the plaintiff, as it appeared on the face of the complaint, being the mere naked agent of the shipper, could not recover the goods in his own name of the master of the vessel, who claimed to hold them for A.'s assignees in bankruptcy. Lineker V. Ayeshford, 1 Gal. 75. A debt due from a sub-agent for goods consigned to a factor to sell, upon the bankruptcy or death of the factor, does not go into the general assets, but belongs specifically to the owner of the goods sold. Hutchinson v. Reed, 1 Hoff. 316. (6) An owner of goods suffered them to be in possession of A., and died intestate. After his death, A. retained them in his order and disposition until he became a bankrupt, subsequently to which, at his desire, the defendant sold them. Held, the statute applied, and the defendant, in an action of CHAP. VI.] ASSIGNMENT. 139 § 49. Although the property of the bankrupt or insolvent vests, as of course, in the assignee, there are obviously some trover by the assignees, was not at liberty to set up the title of the ordinary as true owner. White v. Mullet, 5 Eng. Law & Bq. Rep. 609. A. B., a publican, being indebted to C. D., deposited with him the lease of a public house and other houses, accompanied by a memorandum, expressly constituting 0. D. equitable mortgagee of the premises and ordinary house and trade fixtures. A. B. remained in possession, and became bankrupt. Held, the fixtures were not in the order, etc. (5f the bankrupt, but belonged to the mortgagee. By the word "fixtures" the Court understood such things as are ordinarily affixed to the freehold for the convenience of the occupier, and which might be removed without material injury to the freehold, and the removal of which by a tenant would not give a ground of action to the land- lord. Barclay, 35 Eng. Law & Eq. 169. A trader by deed assigned his goods by way of mortgage, subject to a proviso, that it should be lawful for him to hold and make use of the goods, until default in payment of the money secured, after demand in writing. The mortgagee allowed the trader to continue in possession of the goods until after his bankruptcy. Held, the goods were in the order, etc. of the bankrupt. Preshney v. Carrick, 38 Eng. Law & Eq. 542. In trover against assignees, the defendants proved, that before the mort- gage to the plaintiffs the bankrupt had assigned the goods mortgaged to the plaintifis to A., and that, A. having allowed them to remain in the order and disposition of the bankrupt until after the date of the flat, an order was made by the commissioner for a sale. Held, A. was the true owner, and the assignees, having a good title as against him, had a right as against the plaintiffs to set up the deed to A., and the title acquired by them by reason of the goods having been left by A. in the order and disposition of the bank- rupt. Ibid. By clause 125 of the English act of 1849, goods in the "order and dispo- sition" of the bankrupt are to be sold. By former acts, they pass with other property to the assignees. Such goods do not now pass to the assignees by the adjudication of bankruptcy. In order to divest the bankrupt's property, the court of bankruptcy must make an order to sell them under the 125th section. Heslop v. Baker, 4 Eng. Law & Eq. 555. Such order is not final and conclusive against the true owner. Graham v. Furber, 24 Eng. Law & Bq. 333. A mortgagee of goods, under a power of sale, allowed the goods to remain in the order and disposition of the mortgagor, until the latter committed an act of bankruptcy, but took possession before any petition of adjudication. The messenger took the goods, and sold them, and the mortgagee brought an action of trover and recovered, on the ground that the assignees could not sell without an express order. The assignees applied to the commis'- sioner, who made an order, respectively confirming the sale, and reciting that the goods were in the order, etc. of the bankrupt. Held, the mortgagee 140 BANKRUPTCY AND INSOLVENCY. [CHAP. VI. cases where the title thus acquired must be rather a loss than a gain to the assignee and the creditors, in consequence was not entitled to have the order discharged on his appeal, as being invalid on the face of it; and on his declining to enter into the question whether he had notice of the act of bankruptcy, when he took possession, his appeal was dismissed with costs. Heslop, 15 Bng. Law & Eq. 18. The true owner has a right, at any time before the fiat, to take back his goods which he has allowed" the bankrupt to have the possession of as the reputed owner, provided he does so without notice of any prior act of bank- ruptcy, it being "a transaction" with the bankrupt, within the meaning of the 133d section of the 12 & 13 Vict. c. 106, and therefore protected. Gra- ham V. Furber, 24 Eng. Law & Eq. 333. There is nothing illegal or contrary to the policy of the bankrupt laws, in a stipulation by the assignor, on an assignment of goods, under which they are to remain in his possession, not to do any act by means of which the goods assigned might become charged or alienated, or whereby the assign- ment might become ineffective, or the assignor might be deprived of them. And it is a breach of such stipulation for the assignor, while the goods are in his possession, to file a declaration of insolvency, upon which a fiat in bankruptcy issues, under which the goods are seized by the assignees in bankruptcy, as being in the possession and order of the bankrupt as reputed owner, by the consent of the true owner. For there would be nothing ille- gal or contrary to the policy of the bankrupt laws, in an express stipulation by the assignor not to file such a declaration, so as that the goods assigned might be liable to be seized in bankruptcy, or while the goods remained in his possession; and his duty would be to give notice to the assignee of his insolvency, that the latter might remove them, and thus they might no longer remain in the possession and order of the assignor as owner, by consent of the true owner. And as the effect of the act of bankruptcy, while the goods so remained in his order and possession, was to vest them in the assignees in bankruptcy, the act of filing the declaration was an " act by means whereof" the assignee was deprived of the goods. Hill v. Cowdery, 37 Bng. Law & Eq. 553. An order by a commissioner of bankruptcy, for the sale of goods in the possession, order, or disposition of a bankrupt, as reputed owner, under the 125th section of the 12 & 13 Vict. c. 106, must be specific as to the goods to which it is to apply, (although it may be made on an ex parte application,) and therefore, an order to sell all goods which at the time, etc. were ia pos- session, etc. of the bankrupt, was held bad. Quartermaine v. Bittlestone, 20 Eng. Law & Eq. 204. And it seems that orders under the 126th, 127th, and 128th sections must also be specific. Ibid. An order is sufficient, if it specifies the goods, without referring by name CHAP. Vr.] ASSIGNMENT. 141 of the burdens and liabilities inseparably incident to the estate assumed, (a) § 50. Prominent among this class of interests are leases, which necessarily involve a liability for rent and sometimes other obliga- tions, and the acceptance of which, therefore, might well involve the assignee in serious personal responsibility, and, unless the value of the estate manifestly exceeded the rent, might result in diminishing instead of increasing the assets. § 51. Property may be limited or leased to a man, to be void, go over, or revert back, in the event of his bankruptcy.' And if a lease to a trader contain such proviso, the term does not pass to his assignees, but determines altogether upon that event.^ But, to prevent its passing, there must be an express proviso to that effect.* The usual covenant or proviso, not to let, assign, etc. without consent, will not be sufficient.* The commissioners may still assign the lease to the assignees without such consent.' The assent of the lessor is presumed.' The distinction, however, is said to have been taken in England that, unlike bankruptcy, which is a proceeding in invitum, insolvency, being a voluntary 1 Brandon v. Robinson, 1 Rose, 197 ; Carter, 8 T. R. 57, 300 ; Lloyd v. Brandon, 18 Ves. 429. Crisp, 5 Taunt. 249. 2 Roe V. Galliers, 2 T. R. 133. 6 Doe v. Beyan, 3 M. & S. 353 ; 2 Rose, 3 Doe V. Bevan, 3 M. & S. 353 ; 2 Rose, 456. 456. « Wadham v. Marlowe, 2 Chit. 600 ; 4 4 Doe V. Smith, 1 Marsh, 359; 5 Taunt. Dougl. 54; 8 East, 314, n. ; 1 H. 795 ; 2 Rose, 280. And see Doe v. Black. 438, n. to the persons supposed to be the true owners. Freshney v. Oarrick, 38 Bng. Law & Eq. 542. An order stated, that "the said J. A. (the bankrupt) had, at the time he became bankrupt, by the consent of R. H., (the owner,) who then claimed, and still claims, to be true owner thereof, in his, the said J. A.'s possession, order and disposition, divers goods," etc. (the goods in dispute.) Held, the order was good, although it did not state in express terms that E. H. was the true owner of the goods. Heslop v. Baker, 20 Eug. Law & Bq. 536. In trover by the owner of the goods against assignees, the defence was, that the goods were in the order, etc. of the bankrupt. Held, such defence was admissible under the plea of not possessed, although the action was brought before the order was applied for. Ibid. As to reputed ownership in case oi partnership, see Arbonin, IDe Gex, 359 (a) Interests of this nature are sometimes termed dariinosa hereditas. Smith V. Gordon, 6 Law Kep. 313. 142 BANKRTJPTCT AND INSOLVENCY. [OHAP. VI. proceeding on the part of the debtor himself, is a breach of the covenant against assignment, and works a forfeiture.^ § 52. But the general assignment of a bankrupt's personal estate does not vest a term of years in the assignees, unless they do some act to manifest their assent to the assignment as it regards the term, and their acceptance of the estate; and, therefore, till some act of this sort is done by them, or until the bankrupt him- self delivers it up, (in England, under the provisions of 6 Greo. 4, c. 16, s. 75,) the term still remains in the bankrupt, and he is liable to the payment of rent falling due subsequent to the bankruptcy. ^(a) But assignees, by accepting the lease or taking ' possession of the premises, discharge the bankrupt from any claim upon him for rent, and themselves become liable therefor.' The law, however, allows a reasonable time to make the election. Time, as well other acts necessary for this purpose, is allowed, upon the equitable ground that, " on the one hand, if they entered and were possessed they became liable to be sued upon the bank- rupt's covenants, which might amount to more than the value of the lease ; on the other hand, if the lease were valuable, and they did not take it, the creditors would have had a right to call upon them for neglect of their duty."* Thus, in one case, the assignees were allowed ten days.® In another, thirteen days.* So, where an equitable mortgagee of leasehold property applied for a sale, the Court refused to order him to indemnify the assignees against any breach of covenants in the lease, but gave the assignees time to accept or reject the lease.' § 53. If the assignees so act as to make the property of less value to the landlord, and as if the property were vested in them, it is said to be an election.' Thus, if they intermeddle with and 1 2 Pars, on Contr. 644-5. * Turner v. Richardson, 7 E. 335— a ' Copeland v. Stephens, 1 B. & A. 593. leading case. And see Doe v. Andrews, 4 Bing. ^ Scott, 1 Rose, 446, u. 348 ; 12 Moore, 601 ; 2 C. & P. 598 ; « Fletcher, 1 Deac. & Chit. 356. Tuck V. Tyson, 6 Bing. 321; 3 M. 'Fletcher, 1 Deac. & Chit. 318. & P- 715. . 'Carter v. Warne, 4 C. & P. 191. » Onslow V. Corrie, 2 Madd. 330; Bour- dillon V. Dalton, 1 Esp. 223; Peake, 238. (a) Until the assignee accepts a lease, he is said to have only an tnteresse termini, like a lessee before entry. Per Lord Ellenborough, 1 B. & Aid 593. CHAP. VI.] ASSIGNMENT. 143 assume the management of a farm, this is a sufficient election to take the term, and make them liable to the landlord, in consider- ation of their tenancy, for all mismanagement.^ So ■where they enter upon and take possession of leasehold property, they be- come chargeable with the covenants in the lease, although the bankrupt's efiFects were upon those premises, and the assignees delivered up the keys immediately after the effects were sold.^ So where the assignee, on being applied to, replied, that, if he could not let it by the next quarter-day, he would give up the property, and continued in possession and paid rent until that time ; held, an assent.' So if a bankrupt have a lease of premises, and also a reversionary interest in them, and his assignees sell his estate and reversionary interest, this amounts to an accept- ance of the lease.* So where the assignees of a bankrupt, who was lessee of pasture land, being chosen on the eighth of the month, allowed his cows to remain upon the demised premises till the tenth, and ordered them to be milked there; held, that they thereby became tenants to the lessor, and, the cows being removed on the tenth to avoid a distress for arrears of rent, that he had a right to follow and distrain them, under 11 Qeo. 2, c. 19.° So a coachmaker, who was tenant from year to year of certain prem- ises, and had several coaches on hire, became bankrupt, and his assignees entered upon the premises to keep the coaches in repair, in pursuance of the bankrupt's contracts. In August, the bank- rupt's effects were sold, and the key of the premises delivered to the bankrupt, but the assignees paid the rent up to the Michael- mas following. In an action by the landlord for a quarter's rent due the Christmas following ; held, that the assignees were liable.' So, although assignees are not concluded ,by putting up the prem- ises to sell, but may make an experiment to see if the lease be beneficial, yet, where they put up the premises to auction, and found a purchaser, and received a deposit, but the contract of sale afterwards went off, without their showing any reason why they did not enforce the sale; held, that they were liable to the rent.^ § 54. And, on the other hand, the assignees may become liable for use and occupation, upon the ground that a proposed lease 1 Thomas v. Pemberton, 7 Taunt. 206. 5 Welch v. Myers, 4 Camp. 368. 2 Hanson v. Stevenson, 1 B. & A. 303. « Ansell v. Robson, 2 C. & J. 610. ' Broome v. Robinson, 7 East, 339. ' Hastings v. Wilson, Holt, 290. * Page V. Godden, 2 Stark, 309. 144 BANKRUPTCY AND INSOLVENCY. [OHAP. VI. was never perfected between the lessor and the bankrupt. Thus a lease of premises from the plaintiflF to P., containing the usual words, "signed, sealed, and delivered," was executed by both parties, pursuant to a previous agreement to let, in which the annual rent was stated to be J55, and by which it was agreed that P. should pay £100 for the plaintiff's good-will and fixtures, and that the lease should not be delivered, but remain in the plaintiff's possession until the whole of the £100 was paid. P. paid £50 of that sum, and entered into possession and car- ried on the business of a baker, the plaintiff keeping possession of the lease. P. became a bankrupt without paying the remain- ing £50, the lease still remaining with the plaintiff. The defend- ant became assignee in bankruptcy. Held, in an action for use and occupation, (it appearing that the defendant had accepted the tenancy,) that the evidence warranted the jury in finding that there had been no delivery of the deed so as to operate as a lease, and that until the payment of the remaining £50 only a tenancy from year to year existed, and, therefore, that the defendant was liable for rent in an action for use and occupation.^ And the bankrupt himself m&y incur a similar liability. Thus, where the assignee of a lessee is discharged under the bankrupt act, his whole title and interest in the demised premises vests in the assignee in bankruptcy. And if he continues to occupy, ii; the absence of any proof that the assignee in bankruptcy ever sold or assigned the lease to him, or any one else, or that the tenant ever paid rent to the landlord, or held under the assignee in bank- ruptcy ; it is a conclusion of law that he held under the landlord as tenant at will, and he is liable in an action of assumpsit, for use and occupation.^ § 55. But, as already suggested, assignees have a right to do reasonable acts to ascertain the value of the property.^ Thus the mere fact that the assignees advertised and put the estate up to sale, without stating themselves to be the owners or possessed, they never having in fact taken possession, and, for want of a bidder, the premises not being sold; is no more than an experi- ment to ascertain the value of the lease, and not a legal assent.* 1 Gudgen v. Bessett, 38 Eng. L. & Eq. » Hope v. Booth, 1 B. & Ad. 505. 51- * Turner v. Richardson, 7 East, 335; 2 Ryerss v. Farwell, 9 Barb. 615. • 3 Smith, 330. CHAP. VI.] ASSIGNMENT. 145 So the assignees of a bankrupt, having allowed his effects to re- main on the premises occupied by him nearly a twelvemonth after the bankruptcy, for the purpose of preventing a distress, paid the arrears of the rent due, at the same time intimating to the land- lord that they did not mean to take the lease unless it could he advantageously disposed of. The effects were soon after sold, and removed from the premises ; and the lease was at the same time put up to sale by order of the assignees, but there were no bidders. They omitted to return the key to the landlord for near four months after, not, however, being asked for it; and they no otherwise made use of the premises. Held, they were not liable to the landlord as assignees of the lease.'' So, if the assignees hold the lease from December to May, and put a person into pos- session with instruction to let the premises, and several applica- tions are made by parties desirous to take them, but they remain unlet, and, on the landlord calling upon the assignee for payment of rent, he says he will pay it if he can make anything by the house, and the jury find that this is only a conditional acceptance of the lease, and that he has not retained it an unreasonable time; the Court will not disturb the verdict.^ So where the assignees of a bankrupt, who was possessed of a term, part of which he had underlet to another, released such under-tenant, and, on being afterwards asked by the lessor to elect, refused to take the orig- inal lease; held, that this did not amount to an acceptance by them, and that they were not liable as assignees of the term.^ § 56. If a lease is determinable upon notice at the will of the lessor or lessee, and the lessee covenants to leave, on quitting, the hay, straw, etc. on the premises, the bankruptcy of the lessee, and the election of his assignees not to take the lease, have the same effect, with reference to the covenant, as though the lessee had quitted upon notice.* § 57. Assignees, being liable only by privity of estate, not of contract, may assign a lease to an insolvent person, or a beggar, to exonerate themselves from future claims for rent.' But as- signees assigning a lease are not entitled to a covenant of indem- 1 Wheeler v. Bramah, 3 Camp. 340. * Whittington, Buck, 87; Nixon, 1 Rose, ^Lindsey v. Limbert, 12 Moore, 209; 445. 2 C. & P. 526. 6 Onslow v. Corrie, 2 Madd. 330. 3 Thilt V. Dobie, 2 Moore, 342 ; 8 Taunt. 325. 10 146 BANKRUPTCY AND INSOLVENCY, [CllAP. VI. nity, either for themselves or the bankrupt, against the covenants with the lessor.^ § 58. If a lease is delivered up by the lessee, in pursuance of the statute, it does not operate, by relation, as a surrender of the lease from the date of the commission.'' And a surety for a lessee is liable for breaches of covenant after the date of a commission against the lessee, but before the delivering up of the lease by the bankrupt.^ § 59. It is the general rule, that the chases in action, as well as property in possession, of the bankrupt, pass to his assignee. It is said: "It is true, that on general principles^ rights of action are not forfeitable nor assignable, except in a particular mode; but that rule is founded on the policy of the common law, which is averse to encourage litigation; but in this case the policy of the bankrupt law requires that the right of action should be as- signable and transferred to the assignees as much as any other species of property."* And the rule applies not merely to speci- fic, liquidated claims, such as bills, notes, and accounts, but often to special, executory contracts. Thus a sole trader having agreed, in consideration of a sum payable by instalments, to take two persons into partnership with him for a period of eighteen years, and having become bankrupt five months after the commencement of the partnership, when only one instalment was due ; his assignees are entitled at the respective periods to receive the remaining in- stalments.* (See p. 148.) So a trader makes a conveyance of all his real and personal property to trustees, to sell for the benefit of his creditors, under which the trustees contract to sell certain lands to the defendant. The contract not being completed, they file a bill against the defendant for a specific performance; but, before answer, the trader becomes bankrupt, and his assignees file a sup- plemental bill to enforce the contract. Held, that although the conveyance to the trustees was an act of bankruptcy, the assignees may compel the performance of the contract made under it.* So the assignment passes a claim of the debtor against another for whom he has paid a debt as surety.'- So it was held that 1 Wilkins V. Fry, 2 Rose, 371 ; 1 Mer. •• Per Eyre, Ld. C. J., Smith v. Coffin 244. 2 H. Bl. 444. 2 Tuck V. Tyson, 6 Bing. 321. » Akhurst ». Jackson, 1 Swans. 85. " Ibid. 6 Goodwin v. Lightbody, 1 Daniel, 153. ' Hunter v. United States, 6 Pet. l72. CHAP. VI.] ASSIGNMENT. 147 assignees, under St. 6 Geo. 4, c. 16, might maintain an action for unliquidated damages, which have accrued before the bankruptcy by non-performance of a contract.* So a claim for supplies, fur- nished within the United States to a military expedition against a foreign power, with whom the United States were at peace, was held to pass to an assignee in insolvency.^ Or money due on account of extra services rendered the United States in the State department.^ So, where a vendor, after a sale, becomes insolvent, and is appointed one of the assignees to settle his insolvent es- tate, he may maintain a suit against the purchaser on a note sub- sequently given to him for the purchase-money.* So where A. conveyed estate to B,, for the benefit of his (A.'s) creditors, and afterwards C, the assignee in bankruptcy of A.'s estate, brought assumpsit against B. for the avails of the estate so conveyed to him; it was held, that A. might have sustained such a suit against B., if A.'s bankruptcy had not intervened ; and that under the bankrupt law the right of A. devolved on C, his assignee.' So it is the right and duty of an assignee to take the choses in action of the debtor's wife, though never reduced to possession by the debtor.* Thus a promissory note, given to a married woman for a debt due her before her marriage, though not reduced to possession by her husband, passes by an assignment of his prop- erty under the bankrupt act; and a subsequent indorsement of the note by the husband and wife will not enable the indorsee, with notice of the circumstances, to maintain an action on the note, without the consent of the assignee in bankruptcy.^ And, upon the general ground above stated, it is a good plea by a defendant, that, after he had made the promise declared on, the plaintiff petitioned the insolvent court, and a vesting order was made whereby all debts due to him were vested in his assignee ; because the debt vested in the assignee without his interfering to claim it.* And where a bankrupt dies, his executor cannot take out a commission against a debtor of the bankrupt, because such debt vests in the assignees.' § 60. But though contracts of a bankrupt generally pass as > Wright V. Fairfield, 2 B. & Adol. 727. « Davis v. Newton, G Met. 537. 2 Gill V. Uliver, 11 How. U. S. 548, 549. ' Smith v. Chandler, 3 Gray, 392. 3 Milnor v. Meiz, 16 Pel. 221. ^Sprye v. Poner, 38 Eng. Law & Eq. * Randon v. Toby, 11 How. 0. S. 493. 67. 5 Sieene w. Aylesworth, 18 Conn. 244. » Goodwin, 1 Atk. 100. 148 BANKRUPTCY AND INSOLVENCY. [CHAP. VI. property to his assignee, under the bankrupt law, yet this is not universally true. Thus it is held that contracts continuing after the bankruptcy, and depending on the future personal services of the bankrupt, do not pass. (See p. 146.) Nor (as has been seen in case of leases) those which must be a charge upon, instead of a benefit to the estate. Nor contracts which cannot be made availa- ble for the payment of the debts.^ Nor (for the purpose of specific performance) a contract for a lease, entered into with a view to the personal accommodation of the bankrupt.^ So a mechanic s lien does not pass to the assignee; more especially if the mechanic has received negotiable notes for the claim, though not in pay- ment, and has actually negotiated them.^ So a claim for spolia- tions by Spain on the bankrupt's property was held not assign- able; and the assignees, having received the amount of such claim, awarded to them by commissioners under the treaty between Spain and the United States, were held liable to the bankrupt therefor, in an action for money had and received.* And no action can be maintained by the assignee, unless under all the circumstances the bankrupt himself could have brought a suit. Thus A. executed several notes, payable to B., guardian of C, with D. as his surety. D. married the ward, and became, and was declared a bankrupt. Suit being instituted on the notes against A., by the assignee in bankruptcy of D., it was held, that, as it did not appear that the notes ever passed from the guardian to the bankrupt, or that he had ever come to a final settlement with the guardian, or how the account stood between the guardian and his ward, and as the ward herself could not have sued at law upon the notes, no such right passed to the assignee in bank- ruptcy of her husband.* So where a bond is assigned for a valu- able consideration, or as security for a debt larger than the amount of the bond, and the assignor afterwards becomes bank- rupt, the bond does not pass to the assignee in bankruptcy, the assignor having no beneficial interest therein ; and a suit thereon may be brought in the name of the assignor, or, under the statute in New York, in the name of the assignee of the bond.* It is said : " The previous assignment of a chose in action, made bond fide 1 Streoter v. Sumner, 11 Fost 542. ■* Vasse v. Comegys, 4 Wash. C. C. 570. 2 Flood V. Finlay, 2 Eose, 147. s Chilton v. Cabiness, 14 Ala. 447. 3 Morton v. Austin, 12 Cush. 389. e Ontario Bank v. Mumford, 2 Barb Ch. 696. CHAP. VI.J ASSIflNMBNT. 149 and for a valuable consideration, will prevent its passing to as- signees by a general assignment under the bankrupt or insolvent acts ; an assignment carrying even the legal right, and this too ■without notice either to the debtor or the subsequent assignees, "'(a) And the assignor of a chose in action, who has become a bank- rupt, may and is bound to sue the debtor in his own name, for the benefit of the assignee.^ But a security, which is the evidence of a debt due the bankrupt, belongs to the assignees. Thus they may maintain trover for the conversion of a promissory note cov- ered by an assignment, which gives them a property in the note, and a right to possession.' § 61. An assignment of an insolvent debtor's estate does not revoke an order previously drawn by him, bond fide, on one of his debtors, in payment of one of his creditors, and accepted by the drawee, though the order be not paid at the time of the first pub- lication of the notice of the issuing of the warrant to the mes- senger.* So A. drew an order, requesting B. to pay C. money, not exceeding a certain amount, from any funds of A. which might come to B.'s hands. B. accepted the order, deducting whatever should be due from A. to him. Before B. received the funds, A.'s estate was assigned under the insolvent law, and B., after receiving them and making such deduction, insisted that he was bound to pay the balance to A.'s assignee. In a suit by C. against B., it was held, that the or Aer •wa.3 primd facie an assign- ment of the fund, and, in the absence of evidence of want of consideration or fraud, 0. was entitled to recover.' iPer Cowen, J., Muir v. Sohenck, 3 ^ cjiickering ». Raymond, 15 111. .362. Hill, 231; Hopkins v. Banks, 7 * Butler t). Breck, 7 Met. 164. ibid. 650. ^ Bourne v. Cabot, 3 Met. 305. 2 Winch V. Keeley, 1 T. R. 619 ; Car- penter V. Marnell, 3 B. & P. 40. (a) With reference to the transfer of a chose in action 5y the assignee, it is held that a bankrupt act clothes the assignee with all the right, title, and powers in and over the assets, that the bankrupt possessed before his bank- raptcy, but nothing more. It does not enable him to convey a legal title, where, by the rule of law, the bankrupt could not have done so. A sale, therefore, by the assignee, of a chose in action, does not divest him of the legal title, and authorize the purchaser to sue in his own name. Camack v. Bisquay, 18 Ala. 286. 150 BANKRUPTCY AND INSOLVENCY. [CHAP. VI. § 62. Whether a claim for a personal tort or injury passes to the assignee, is a point not very decisively settled. The general principles are laid down (though there has been some confusion in their application) that the assignee takes "those rights of action to which he (the bankrupt) was entitled, for the purpose of recov- ering in specie real or personal property, or damages in respect of that which has been unlawfully damnified in value, withheld, or taken from him ; but causes of action not falling within this description, but arising out of a wrong personal to the bankrupt, for which he would be entitled to remedy whether his title were diminished or impaired or not, are clearly not within the letter, and have never been held to be within the spirit, of the enactment, even in cases where injuries of this kind may have been accom- panied or followed by loss of property; and to this class we think the action of trespass quare clausum fregit, and that of trespass to the goods of the bankrupt, must be considered to be- long."^ Upon these grounds the right of action for an injury to personal comfort, or for wounded feelings, is held not to pass. As for assault, seduction, or adultery.^ Nor an action for slan- der.* So an action for deceit in a sale does not pass to assignees.* So it has been held, that the assignee cannot prosecute a real action commenced by the bankrupt.* (See p. 151.) So a claim against a rail- road corporation for an injury to the person does not pass by the assignment.' But it is held, on the other hand, that the bankrupt's right of action against a sheriff, for not collecting an execution, passes to the assignee.' So assignees must sue in their own name for a trespass in seizing and detaining the bankrupt's ship, and delaying a voyage.' So the assignee of a bankrupt may recover under the St. 9 Anne, c. 14, for money lost at play, although no duty is fixed in the loser till the action is brought.' And, in Mas- sachusetts, the right of action which an insolvent debtor has, to recover threefold the amount of interest paid by him on a usuri- ous contract, is held to pass by an assignment under the statute to the assignee, and he may maintain a bill in equity to recover 1 Per Ld. Denman, Rogers v. Spenee, « Stone v. Boston, etc. 7 Gray, 539. 13 M. & W. 571 ; 12 CI. & Fin. 700. ' Sullivan «. Bridge, 1 Mass. 511. 2 Howard v. Crowther, 8 M. & W. 601. « gird ^_ Hempstead, 3 Day, 272; Stan- 3 Benson v. Flomer, Sir W. Jones, 216. ly v. Duliuvst, 2 Root, 52. * Shoemaker v. Keely, 1 Yea. 245. 'Brandon v. Pate, 2 H. Bl. 308; ace. SFales v. Thompson, 1 Mass. 134. Brandon v. Sands, 2 Ves. 514. CHAP. VI.] ASSIGNMENT. 151 it.* In a very elaborate judgment, this decision is placed upon the ground, that modern legislation upon the subject of usury, un- like the more ancient statutes, is rather of a remedial than a penal character. (a) So, where there is an implied duty, on the part of a lessee, to indemnify his under-tenant from his covenants with the superior landlord, for breach of which an action would lie, and the under-tenant's goods are seized under a distress for rent by the superior landlord, the injury resulting to the under-tenant from the distress gives a right of action to his assignees in bank- ruptcy.^ So where H., before his bankruptcy, hired a carriage of M., and let it to the defendant; and the defendant sent it back to H., damaged ; and M. repaired it with the assent of H., and (H. having become bankrupt) proved the amount due for repairs under H.'s commission; held, that H.'s assignee had a right of action against the defendant, although H.'s estate paid no dividend; but for nominal damages only.' So the right to bring a real action, ex. gr. a writ of entry sur abatement, is held to pass to the assignees by the assignment.* (See p. 150.) So a right of entry, vested in husband and wife in right of the wife, passes to the assignees of the husband upon his bankruptcy, and they may recover the freehold by a writ of entry.* And, in a leading case upon this subject, > Gray v. Bennett, 3 Met. 522. 'Smith ». Coffin, 2 H. Bl. 451. 2 Hancock v. Caffyn, 1 M. & Scott, 521; 5 Miohell v. Hughes, 6 Bing. 689 ; 4 M. 8 Bing. 359. & P. 677. 3 Porter v. Vorley, 9 Bing. 93 ; 2 M. & Scott, 141. (a) But in Vermont the contrary was at first held, for the reason that, although the statute has given a form of action in assumpsit, by which money so paid may be recovered, yet this remedy, in legal contemplation, is no less a mode of redressing an injury caused by personal wrong and oppression, than if the action sounded wholly in tort. Nichols v. Bellows, 22 Vt. 581. But in a later case it is held, that under the statute of Vermont, which gives to one paying usurious interest the right to recover back, by action of assumpsit, the amount so paid, the excess of interest paid becomes money in the hands of the creditor belonging to the debtor, and recoverable as money had and received to his use ; and an absolute and perfect interest therein vests in the debtor, existing anterior to the bringing of an action, and not a mere inchoate right, dependent on his suing, or on any other per- sonal act to be by him performed. And the right to recover back money so paid is a right vested in property, or, in the words and sense of the bank- rupt act of 1841, a " right of property," which passes to and vests in the assignee under the bankruptcy. Moore v. Jones, 23 Vt. 739. 152 BANKRUPTCY AND INSOLVENCY. [CHAP. VI. where the decision in the court below was reversed, the right of action upon a contract to employ the bankrupt, though in its nature clearly personal, was held to pass to the assignee, and the following distinctions were taken: "A right of action for an in- jury to the body or feelings of a trader, arising from a tort inde- pendent of contract, does not pass. And the same may be said of some personal injuries arising out of breaches of contracts, such as contracts to cure or to marry; and if, in the case last supposed, a consequential damage to the personal estate follows from the injury to the person, that may be so dependent upon and inseparable from the personal injury which is the primary cause ' of action, that no right to maintain a separate action, in respect of such consequential damage, will pass to the assignees. In the present case, although the contract was for the personal skill and labor of the bankrupt, the breach of that contract does not appear to cause him any other injury than the diminution of his personal estate. In the cases referred to, the injury (if any) to the personal estate is a consequence of an injury to the person; in this case, the injury to the person (if any) is a consequence of the injury to the personal estate."^ § 63. The right of action in the assignees or the bankrupt is sometimes held to depend upon the actual interference of the former with the claim in question. Thus trespass quare clausum is maintainable by the bankrupt himself. The right of action does not pass to the assignees, more especially unless they inter- fere. He may sue as a trustee for, and has a good title against, all persons but them.^ So an action for an illegal arrest was referred, the costs of the reference being in the arbitrator's dis- cretion. The award directed that final judgment be entered for the plaintiff, with £F>0 damages, and gave him the costs of the reference and award. The arbitrator had no authority to direct judgment to be entered, and for this excess the award was remit- ted to him ; and, in a second award, he recited that he had made a former one, and that it had been referred back, and gave the plaintiff the same damages and costs, and also the costs of the amended award. After the first award the plaintiff became insol- vent. The vesting order was made after the reference back, and I Per Ld. Denman, Beckham v. Drake, 2 Clark v, Calvert, 3 Moore, 96 11 M. & W. 315. CHAP. VI.] ASSIGNMENT. 153 a few days before the second award. A rule, applied for on the part of the plaintiff, (in substance by his attorney,) calling on the defendants to pay the damages and both sets of costs, was made absolute; though the defendants objected, that the plaintiff's right had passed to the assignees, that they themselves were judgment creditors of the plaintiff to a larger amount than the damages awarded, and that the arbitrator had no authority over the costs of the reference back. Held, first, that, the action being for a personal tort, no right could pass to the assignees until the mat- ter was adjudicated on, which could not be said to have been done until the second award; and that, as this award was not made until after the vesting order, the title of the plaintiff would be good, unless the assignees interfered, which they had not done.^ § 64. Foreign property, or property situated out of the country or State, whose bankrupt or insolvent laws are claimed to apply to it, has been a prolific source of conflicting opinion in the Eng- lish and American courts ; and the numerous points of discussion and difference can hardly now be considered as finally settled. It will be seen that some authorities give the same effect to a transfer in bankruptcy as to a voluntary conveyance by the party, which would pass all property alike, wherever situated. Others deny the right of an assignee to maintain a suit in a foreign court. While the intermediate doctrine is in this country more generally recognized, that the title of such assignee shall prevail, except as against the liens acquired by parties residing in the place where the property is found. A distinction is also very commonly adopted between personal and real property. (a) § 65. By the English law, it is the prevailing doctrine, that the commissioners may assign all the bankrupt's property abroad, as well as at home. This point was settled in a leading case, where, after an assignment, a creditor having notice of it, and residing in England, attached money of the bankrupt in the hands of his debtor in Rhode Island. And it was held that the assignees might recover the money from the creditor, to whom it had been remitted 1 Brearey v. Kemp, 32 Eng. L. & Eq. 147. (a) A summary view may be found of the arguments upon this question in Story's Conflict of Laws, (3d ed.) s. 404. 154 BANKKUPTCY AND INSOLVENCY. [CHAP. VI. by his attorney, after receiving it upon the judgment.^ The case was fully argued on both sides, and the foreign and civil law largely cited. The Court remark : "The bankrupt statutes have expressly enacted that the commissioners may assign all the prop- erty of the bankrupt in the most extensive words ; and, therefore, on the general reason of the thing, if there be no positive decision to the contrary, no doubt could be entertained but that, by the laws of this country, uncontradicted by the laws of any other country where personal property may happen to be, the commis- sioners of a bankrupt may dispose of the personal property of a bankrupt resident here, though such property be in a foreign country."^ And in another case it is said: "The only question is whether the property in that island passed by the assignment,, in the same manner as if the bankrupt had assigned it by his own voluntary act. And that it did so pass cannot be doubted, unless there was some positive law of that country to prevent it."^ So it is said in Massachusetts : " The English bankrupt law would enable the assignees to take possession of, and appropriate to the use of creditors, personal property not attached or otherwise sub- ject to any lien under our laws, and also to collect and receive all moneys due the bankrupt, and give a good discharge therefor, and sue for and recover them, either in their own name or in the name of the bankrupt, if not attached or held by any process -or lien by any other creditor. "*(a) > Hunter „. Potts, 4 T. R. 192 ; ace. » Hunter v. Potts, 4 T. R. 192. Phillips V. Hunter, 2 H. Bl. 402. *Per Shaw, C. J., May v. Breed, 7 2 Per Ld. Kenyon, C. J., ibid. 192. Cush. 42. • . (a) It was early held in the State of Maryland, that the English bankrupt acts did not extend to the Province of Maryland, nor the assignment of com- missioners operate either as a legal or equitable transfer of the propetty held there by the bankrupt. Ward v. Morris, 4 Har. & McHen. 330 ; Harrison V. Sterry, Bee, 247. In New York, a series of cases have arisen, involving the same question. In Bird v. Oaritat, 2 Johns. 342, it was held that a suit might be brought in New York in the name of a foreign bankrupt, and that he might join with the assignees of a copartner who was bankrupt in this country. In Bird v. Pierpoint, 1 Johns. 118, the Court were equally divided on this question. In both cases it was held, that the foreign assignee could liot sue at law in his own name in New York. In Holmes v. Remsen, elsewhere cited, Kent, Oh., held, that the assignees of a foreign bankrupt might sue here for a debt due to his estate, either as assignees or in the name of the bankrupt. In CHAP. VI.] ASSIGNMENT. 155 § 66. But, as will be seen by the language of the United States courts, before which questions of this nature usually arise, there is a wide American departure from the English doctrine on this important subject. It is said, in explanation of the peculiarly local character of acts of bankruptcy and insolvency : " Systems of bankrupt and insolvent law necessarily define the rights and powers of the assignee as against all third persons, and generally contain many provisions which, though deemed necessary to the policy of the system, are in themselves arbitrary, and find no place in general jurisprudence. They can have no place in any other system of law, and an attempt to enforce them in a foreign country would be universally allowed to be futile."* So it is remarked by another judge of the same court: "In this country there is some diversity of opinion among the State courts, whether a bankrupt law, in regard to personal property, has an extra- iPer Curtis, J., Betton v. Valentine, 1 Curt. U. S. 175. Abraham v. Plestaro, 3 Wend. 538,it was held, that an assignee under a foreign commission of bankruptcy is not entitled, before judgment, to an injunc- tion, to restrain the bankrupt from receiving from the custom-house here property which was on the high seas, on its way from England to New York, when the commission was sued out, (reversing the decree in 1 Paige, 236.) It is held in Maine, that the owner, resident in the Province of New Brunswick, of property situated there, is divested of his property, on receiv- ing a certificate of bankruptcy, and it is thereby transferred to his assignee. And afterwards one who had been indebted to him cannot be charged as his trustee. Smith v. Baton, 36 Maine, 298. In New Hampshire it is held, that the goods of an inhabitant of Massa- chusetts, in the hands of an inhabitant of New Hampshire, pass by an assign- ment under the insolvent laws of Massachusetts, Stat. 1838, c. 163, s. 5, to the assignee of the inhabitant of Massachusetts, and cannot be attached in New Hampshire by trustee process, as the property of the insolvent. Hoag V. Hunt, 1 Post. 106. See Benedict «. Parmenter, 13 Gray, 89; Mallory v. Snow, 21 Law Eep. 431. In a recent English case, a Scotchman, who was resident and carried on trade in England, became bankrupt there, and subsequently succeeded to real estate in Scotland. The plaintiffs, assignees, possessed themselves of this real estate, and perfected their title according to the Scotch law. The defendant, a creditor, commenced an action in Scotland, which was dropped, and another brought against the assignees for a dividend, and in the latter action he arrested the rents of the real estate, so as to prevent them from dealing with the property. The plaintiffs filed a bill for an injunction upon the action. Bill dismissed. Pennell v. Roy, 17 Bng. Law &; Eq. 408. 156 BANKRUPTCY AND INSOLVENCY. [CHAP. VI. territorial operation. It is held in England, that an assignment of personal property under the bankrupt law of a foreign country- passes all such property and debts owing in England ; that an attachment of such property by an English creditor, with or with- out notice, after such an assignment, is invalid. And the doc- trine is there established, that an assignment under the English bankrupt law transfers the personal effects of the bankrupt in foreign countries. But an attachment by a foreign creditor, not subject to British laws, under the local laws of a foreign country, is held valid. The personal estate is held as situate in that coun- try where the bankrupt has his domicile. And this is the pre- vailing doctrine in this country. A proceeding in rem against the property of a foreign bankrupt, under our local laws, may be maintained by creditors, notwithstanding the foreign assign- ment."^ And another judge of the same court remarks as fol- lows : "In England, the property of the bankrupt is vested in the assignees in bankruptcy by legislative enactment. Where com- missioners have been appointed, it is imperative upon them to convey to the assignees the property of the bankrupt, wherever it may be or whatever it may be, and it is done by deed of bar- gain and sale, which is afterwards enrolled. It vests the assignees with the title to the property from the date of the conveyance, it having previously been vested in the commissioners for convey- ance by them to the assignees. A.S to the bankrupt's personal estate, the statute looks beyond the debts and effects of a trader within the kingdom, and vests them in the commissioners in every part of the world. The last is done in England, upon the prin- ciple, that personal property has no locality, and is subject to the law which governs the person of the owner. As by that law the property of a bankrupt becomes vested in the assignee, for the purposes of the assignment, his title to such property out of Eng- land is as good as that which the owner had, except where some positive law of the country, in which the personal property is, forbids it. In claiming such a recognition of assignees in bank- ruptcy from foreign courts, England does no more than is per- mitted in her courts, for they give effect to foreign assignments made under laws analogous to the English bankrupt laws. But such comity between nations has not become international or 1 Per McLean, J., Oakey v. Bennett, 11 How. 44. CHAP. VI.] ASSIGNMENT. 157 universal. It was not admitted in England until the middle of the last century in favor of assignees in bankruptcy. It may now be said to be the rule of comity between the nations of Europe; but it has never been sanctioned by the courts of the United States, nor in the judicial tribunals of the States of our nation, so far as we know, and we know that it has been repeat- edly refused in the latter. Our courts, when the States were colonies, had been schooled, before the Revolution, in the earlier doctrines of the English courts upon the subject."^ § 67. As illustrative of the suggestion in these remarks, that Great Britain has recognized in other nations the same rights which she claims for herself ; in a leading English case, the par- ties were merchants in London, and Messrs. Denenfoilles, of Am- sterdam, corresponded with them. In 1759 the Messrs. D. stopped payment, and in 1760 the chamber of desolate estates in Amster- dam took cognizance thereof, and they were declared bankrupts, and curators or assignees of their effects appointed. The defend- ant was a creditor, and two days after they stopped payment, and a few days before curators were appointed, he attached in the Mayor's Court in London their money in the hands of their debtor, M. Solomons. In 1760, Ross obtained judgment by de- fault, and execution issued against the garnishee, who gave Ross his note for the debt. Afterwards the plaintiff, as attorney for the curators, filed a bill in chancery on their behalf, praying that the garnishee might account as debtor to them, and be restrained from paying Ross. The garnishee filed a bill of interpleader, and brought the money into court. And it was decreed, that the money be paid to the complainant, for the creditors of the bank- rupts, and that Ross deliver up the note to be cancelled.^ Upon the same subject of international comity Chancellor Kent re- marks: "When Lord Thurlow was told, (in Nov. 1787,) in the case ex parte Blahes,^ that in America, the interest of the as- signees, under the English bankrupt laws, was not noticed, he observed, with surprise, that 'he had no idea of any country refusing to take notice of the rights of the assignees, under 1 Per Wayne, J., Booth v. Clark, 17 aoo. JoUet v. Depouthier, 1 H. Bl. How. 335-6. 182, n. ; Neale v. Cottingham, 4 T. 2 Solomons v. Ross, 1 H. Bl. 131, n.; R, 182. 3 1 Cox, 898. 158 BANKRUPTCY AND INSOLVENCY. [CHAP. VI. their laws, and he believed every country on earth would do it b.esides.'"'(a) § 68. With reference to real estate, the civil law doctrine — Lex rei sitae — is said to prevail, generally, in cases of bankruptcy and insolvency. ^(5) And, in the following observations, a distinction seems to be made between real and personal estate, in reference to the conflicting views of the English and American courts. " Great diversities of opinion have existed and do still exist, respecting the effect to be allowed to assignments by force of foreign bankrupt and insolvent laws. On the one side, it is the settled law of England that the assignment of the bankrupt's effects, under the bankrupt law of a foreign country, passes all his movable property and debts to the assignees. This doctrine has been admitted to be one of universal obligation, and maintained with much learning and abil- ity by Hon. Chancellor Kent.' But at a later period, and after a wide survey of the decisions, he says: 'The weight of Amer- ican authority is decidedly the other way. Personal property, as against creditors, has locality, and the lex loci rei sitse prevails over the law of the domicile.' "* Upon the ground above stated, a decree in bankruptcy, on the petition of the bankrupt, does not ' Holmes v. Bemsen, 4 John. Ch. 477. ' Holmes v. Bemsen, 4 John. Ch. R. 485. ^Oakey t). Bennett, 11 How. 45; Story, *Per Curtis, J., Betton v. Valentine, 1 Conf. L. 359. Curt. U. S. 170. (a) Though the American government will not take notice of the rights of the assignees under the bankrupt laws of England, the English court can- not compel a bankrupt to execute to his assignees an assignment of debts due to him in America. Blakes, 1 Cox, 398. j (6) An assignment by a debtor, under the insolvent law of another State, of all his property, including certain land in Massachusetts in trust for the benefit of his creditors, but none of them being parties to the assignment, is void as to such land, the title to real estate being subject exclusively to the laws of the State where the land lies. And a voluntary deed of the same land, made at the same time to the assignee, referring to the assignment as to the purposes of the conveyance, and duly executed and recorded in Massachusetts, being ancillary to the assignment, is without consideration, and void as to subse- quently attaching creditors in Massachusetts. Osborn v. Adams, 18 Pick. 245. An assignment to trustees, by an insolvent debtor in Pennsylvania, of his real and personal property, passes no title, legal or equitable, to the trustees, to lands situated in Ohio. Rogers v. Allen, 3 Ham. 488. But the assign- ment of an insolvent debtor, in the court of another State, having apt words, will pass lauds in Pennsylvania. Lamb v. Fries, 2 Barr, 83. CHAP. VI.] ASSIGNMENT. 159 pass to his assignee in bankruptcy his real estate in a foreign State, although the laws of that State provide, that, when relief has been given under any foreign bankrupt law to a person who has surrendered his property, and who afterwards becomes a citi- zen of that State, he shall be considered as discharged from his debts.^ And this notwithstanding the subsequent annexation of such foreign State to the country in which the decree in bankruptcy was passed.^ Thus a decree in bankruptcy, passed in 1843 by the U. S. District Court for the Eastern District of Louisiana, was held not to vest in the assignee a house and lot of the bank- rupt in the City of Galveston and State of Texas, Texas being then a foreign State. More especially, a deed from the assignee, not conforming to the law of Texas, was ineffectual to pass the title, though made after the annexation of Texas to the United States; and, the bankrupt having died, it was held that the title of the purchaser from the assignee could not prevail over that of the administrator of the bankrupt, who represented the creditors in Texas, and returned his proceedings before having any notice of the bankruptcy.* § 69. As already suggested, "while, by comity, the assignees (foreign) in bankruptcy are allowed to sue in our courts, in order to recover claims or property due or belonging to the bankrupt within our own territory, they do not acquire, by the assignment itself, a lien on such debts or property, so as to entitle to a pri- ority over a resident creditor who has attached the same subse- quently to such assignment, and before the assignee has asserted his claim to the property by a resort to legal process in our own courts."*(a) § 70. And even this qualified right of foreign assignees seems to be questioned in a late case in Massachusetts. The Court 'Oakey v. Bennett, 11 How. U. S. 33. *Per Slosson, J., Olyphant ». Atwood, 2Ibi(i. 5 Bosw. 461. 3 Ibid. (a) In a late case, Betton v. Valentine, 1 Curt. U. S. 171, Judge Curtis refers to the leading cases in the several States which have decided that the right of a foreign assignee cannot prevail over that of domestic creditors. Blake V. Williams, 6 Pick. 286; Milne v. Moneton, 6 Bin. 353; Saunders v. Wil- liams, 5 N. H. 213 ; Lord v. Watchman, Ware, 232 ; Abraham v. Plestaro, 3 Wend, 538 ; Merrick, 2 Ashm. 485 ; 5 W. & S. 20 ; MuUiken v. Aughin- baugh, 1 Penn. 117. 160 BANKRUPTCY AND INSOLVENCY. [CHAP. VI. remarked: "To have permitted actions to be instituted by such assignees, would probably have required the giving of full force and effect to the assignment in bankruptcy, on transferring the property of the bankrupt that might be within our jurisdiction, to the prejudice of the interests of creditors living in this com- monwealth; probably upon much the same principle and for the same reason that we refuse to sustain actions in the name of ad- ministrators or executors appointed by the authority and under the laws of other States, namely, that we may not aid in the withdrawal of assets from our own jurisdiction, without first securing the proper distribution among our domestic creditors."' § 71. With more particular reference to the form of action, it was formerly held in Pennsylvania, that, although foreign assignees could not support an action in their own names, yet, if no adverse claim appear, a judgment in favor of the bankrupt might be marked to their use; and if an adverse claimant appeared, even after judgment affirmed, the court below might stop the payment until the right was decided.^ But in the same State it is decided, that a foreign assignee in bankruptcy may sue, in the name of the bankrupt, for the assets of the estate, and recover them, ex- cept as against the rights of the American creditor.* So in Vir- ginia, the assignees of a bankrupt in England cannot maintain an action at law in their own names against a debtor in Virginia. The suit must be brought in the name of the bankrupt.*(a) § 72. As throwing some further light upon these much-agitated questions, may be cited the observations of Judge Curtis in a 1 Per Dewey, J., Ward v. Jenkins, 10 ' Merriok, 2 Ashm. 485; 5 W. & S. 9. Met. 589. * Blane v. Drummond, 1 Brook. 62. 2 Byrne v. Walker, 7 S. & E. 483. {a) In an early case in equity in the same State, where the question arose whether the right to money due to a bankrupt, from citizens of Virginia, was so transferred to his assignees that a British creditor, resident in Eng- land, who did not claim any benefit from the assignment, could recover sat- isfaction for his demand out of that money ; it was held that the question, being in fact one between British creditors on the one side, and the assignees of a British debtor, declared bankrupt according to the laws of England, on the other, and discussed before an American court, should be decided by those principles which ought to govern if the matter were before an English court; so that, according to the English statutes of bankruptcy, the bill should be dismissed. Devisme v. Martin, Wythe, 133. CHAP. VI.] ASSIGNMENT. 161 late case,* distinguishing, in reference to the extra-territorial operation of foreign bankrupt laws, between the rights of an assignee, as representing the bankrupt, and therefore succeeding to his jus disponendi under a principle of general jurisprudence, and as the representative of creditors merely, in which capacity he stands on the same footing as a foreign administrator. Accord- ingly it is held, that the assignee of an insolvent debtor, appointed under the laws of Massachusetts, does not so far represent cred- itors in' Rhode Island, as to be able to avoid a conveyance of personal property in Rhode Island, which is valid as against the party, but void against creditors, by the law of Rhode Island.''(a) § 73. Though it is the general policy of bankrupt and insol- vent laws, as already explained, to vest all the debtor's property in his assignees; yet, so far as is consistent with this purpose, his own rights and interests are protected, and all practicable facilities afforded for resuming his suspended business. Hence it is held that all the acquisitions of a bankrupt, made after the filing of his petition in bankruptcy, are exempt from liability to pay debts previously contracted.^ So the assignee's having sold the good- will and interest of his trade does not preclude him from setting it up again, provided he does not hold himself out as carrying on the same trade which has been the subject of purchase ; the ben- efits which he derives from his commission (as his certificate, etc.) not being a sufficient consideration, to raise an implied undertaking on his part that he will not resume it. If there be an express covenant or fraud, the Court will interfere; but publishing adver- tisements and handbills, that he is reinstated in his business, and soliciting the old customers, are not sufficient grounds for an injunc- iBetton V. Valentine, 1 Curt. (U. S.) ^Ibid. 1G8 174. ' Bond v. Baldwin, 9 Geo. 9 (a) See, as to the foregoing subject, Taylor v. Geary, Kirby, 313 ; Burk ■;;. M'Lain, 1 Har. & M'Hen. 236; Wallace v. Patterson, 2 ibid. 463 ; M'Neil V. Colquhoon, 2 Hayw. 24 ; Eobinson v. Crowder, 4 M'Oord, 519 ; Topham V. Chapman, 1 Eep. Con. Ct. 283 ; Milne v. Moreton, 6 Binn. 353 ; Blake v. Williams, 6 Pick. 286 ; Harrison v. Starry, Bee, 244 ; 5 Cranch, 302 ; Og- den V. Saunders, 12 Wheat. 361 ; Abraham v. Plestaro, 3 Wend. 538 ; Holmes v. Bemsen, 4 Johns. Ch. 460, 11 162 BANKRUPTCY AND INSOLVENCY. [CHAP. VI. tion.* So property acquired by an uncertificated bankrupt, after an act of bankruptcy, does not vest absolutely in his assignees, although they have a right to claim it ; for if they remain pas- sive, and do not make any claim, the bankrupt has a right to such property, and may maintain an action therefor as against all other persons.^ So if the assignees of a bankrupt manufacturer employ him in carrying on the manufacture for the benefit of the estate, and pay him money from time to time; this is evi- dence of such a contract as will enable him to recover from them a reasonable compensation for his work and labor.' So if an un- certificated bankrupt carry on trade, and sell a vessel, of which he is the ostensible owner, the buyer has a good title against all persons but the assignees.* So if an uncertificated bankrupt hires a shop, and goods are supplied in the name of his son, but prin- cipally upon the father's guaranty, his assignees are liable to an action of trespass at the suit of the son, for seizing them as the goods of the bankrupt.' So an uncertificated bankrupt may maintain an action for work and labor for his personal services, and for materials found, as well as for the mere work and labor.^ Or for money lent.^ Unless his assignees interfere to prevent him.' But, in general, an uncertificated bankrupt can have no right to property as against his assignees f and can acquire prop- erty only for the creditors. Therefore, having entered into a trade, in partnership, the creditors of that partnership have no equity against the assignees for an account and application to their debts of the property used or acquired in the partnership."* So where the assignees of an uncertificated bankrupt, by agree- ment, for a valuable consideration paid to them by a third person, had allowed the bankrupt to remain in the possession of his fur- niture, but which, notwithstanding, they afterwards seized ; held, that they were warranted in so doing, on the ground that an un- certificated bankrupt cannot acquire property for himself, nor is he entitled to retain any property against his assignees." So it is 1 Crutwell V. Lye, 1 Rose, 128 ; Webb » Davis v. Living, Holt, 275. V. Fox, 7 T. E. 391 ; Smith v. Gor- « Silk v. Osborn, 1 Esp. 140. don, 6 Law Rep. 318. ' Evans v. Brown, 1 Esp. 170. ^Draycon Ji. Dale, 3 D. &R. 534. 2 B. » Chippendale w. Tomlinson, 7 E. 57, n.; & C. 293; Webb v. Fox. 7 T. R. 4 Dougl. 318. 391 ; Smiih v. Gordon, 6 Law Kep. ' Chambers v. Bernasconi, 6 Bing. 601 ; 318. 4 M. & P. 278. 'Coles V. Barrow, 4 Taunt. 754; 2 >» Everett ». Backhouse, 10 Ves. 94. Rose, 277. " Nias v. Adamson, 3 B. & A. 225. * Laroche v. Wakeman, Peake, 140. CHAP. VI.] ASSIGNMENT. 163 a good plea to an action on a promissory note and for money lent, that the plaintiff is an uncertificated bankrupt, and that his as- signees required the defendant to pay them the money claimed by the plaintiff; and it is no good replication that the causes of ac- tion accrued after the plaintiff became bankrupt, and that the defendant treated with the plaintiff as a person capable of receiv- ing credit in that behalf, and that the commissioners had made no new assignment of the said notes and money; for the general assignment of the commissioners passes to the assignees of the bankrupt all his after-acquired as well as his present personal property and debts.' So in an action of debt for work and labor as a surgeon and apothecary, and for medicines found and ad- ministered; plea, bankruptcy of the plaintiff, and that the debt was claimed by the assignees. Replication — That the labor was personal labor bestowed after the bankruptcy, and done for the necessary present maintenance of the plaintiff and his family; that the medicines were purchased out of the earnings of his personal labor done after his bankruptcy; and that the medicines were increased in value by the plaintiff's personal labor, and were found and administered for the necessary present maintenance of the plaintiff and his family. Rejoinder — That the labor was not per- sonal labor, nor the medicines purchased out of the earnings of personal labor, nor the medicines found or administered for the necessary present maintenance of the plaintiff and family. The plaintiff was a general medical practitioner ; he had filed a decla- ration of insolvency, and was an uncertificated bankrupt. By an arrangement with a friend, who had purchased his stock of medi- cines, he continued in possession of them on credit, carried on his business as before, and was supplied with fresh medicines on credit from wholesale houses. The plaintiff attended the defendant, giving him the benefit of his skill, and furnishing him the medi- cines which he thought necessary. Held, that the plaintiff was carrying on his business as a medical practitioner, and therefore the replication was not proved.^ § 74. Formerly a bankrupt was not entitled to any maintenance out of his effects during his examination. But bankrupt and in- solvent laws uniformly reserve to the debtor a sum of money or t Kitchen v. Bartsh, 7 East. 53; 3 Smith, ^ Elliott v. Clayton, 3 Eng. Law & Eq. 68. 396. 164 BANEETIPTCT AND INSOLVENCY. [CHAP. VI. amount of property sufficient to sustain himself and his family for a reasonable time after the institution of proceedings by or against him.' And even independently of statute, it is held that a bankrupt may appropriate so much of his effects as may be necessary to raise the means to enable him to maintain his appli- cation in bankruptcy.^ So, although under the act of 1841 the Court had no authority to order an allowance to the bankrupt for the support of himself and his family, the assignee might allow him a sum not exceeding $300; and also any reasonable sum for taking care of the property.' But it is held in England, that the official assignee of the bankrupt's estate is not a person to whom an allowance can be made, under the 160th section of the bank- rupt law consolidation act, 1849, out of the estate and effects of the bankrupt, for assisting him to prepare his balance-sheet and accounts.^ And it is held that an action does not lie by a bank- rupt against his assignees for his allowance.' § 75. It will be seen by reference to the statutes, (see Appen- dix,) that they almost uniformly reserve to the bankrupt or insol- vent such articles of property as the law deems to be necessaries; the value and character of which are usually determined by the statutory provisions relating to exemption from attachment and execution. (a) And where an assignee has designated and set apart for the bankrupt, under the act, certain implements of trade which are exempt from execution, a sale of them on execution, previous to the decree in bankruptcy, does not divest the bank- rupt of his title, or vest any title in the purchaser.* So it is held, that the articles allowed insolvent debtors under an insolvent act may be laid off to them after an issue of fraud is made up, and while it is pending in court.' But, it seems, if a wife buy wear- ing apparel with the income of money settled to her separate use, it passes to the husband's assignees, unless exempted by statute.* 1 Thompson v. Councell, 1 T. R. 157. « Williams v. Miller, 16 Conn. 144. ■' Flournoy v. Newton, 8 Geo. 306. ' Schonwald v. Capps, 3 Jones, Law. » Grant, 2 Story, 312. 342. * Russell, 28 Eng. Law & Eq. 146. » Came v. Brice, 7 M. & W. 183 5 Groome v. Potts, 1 Esp. 396 ; 6 T. R. 548. (a) The bankrupt law of 1841 exempted household and kitchen farniture, and snch other necessary articles as the assignee might set apart, not exceed- ing in value, in the whole, the sum of $300. CHAP. VI.] ASSIGNMENT. 165 And an insolvent debtor is not entitled to have two watches ex- empt from sale. It is doubtful whether he is entitled to have one. Nor are his wife's "implements or tools" of "trade or call- ing" exempt.^ And in England, an insolvent seeking to except his wearing apparel, furniture, etc. under the value of £20 from the operation of the 7 & 8 Vict. c. 96, must in his schedule specify each article and its value. It is not enough to state generally the character of the goods, and a gross sum as their value.^ § 76. Where a statute exempts from execution the homestead of a debtor to the value of $800, except for debts prior to the act ; if his old debts exceed that amount, his assignee in in- solvency takes the property.* So where the amount of the old debts exceeds the value of the property, which is less than $800.* But where the homestead is vrorth more than that sum, and the amount of the old debts less, the debtor may hold a homestead equal in value to the difference between that sum and the amount of the debts.* § 77. The precise time, at which a change of title occurs, in case of bankruptcy or insolvency, is a point expressly and very variously regulated by different statutes. In England, before 1 & 2 Wm. 4, c. 56, a commission did not pass the property ; but until assignment the bankrupt represented the estate.* "In the earlier English statutes, and even in Stat. 6 Geo. 4, c. 16, provi- sion was made for the conveyance of the estate of the bankrupt by the commissioners, with formal deeds, and further providing that until such conveyance, the act of bankruptcy and decree, and appointment of assignees, should have no operation or effect in passing the estate, and it was as essential that all formalities should be observed in the execution of the commissioners' deed as in that of a private person. At this day, however, the pro- visions of the statutes of bankruptcy usually are to the effect that the decree in bankruptcy sequestrates at once the property of the bankrupt, and leaves it in the hands of his assignees, without the necessity of a grant. "^ And it is further held, that "the assign- ment by commissioners of bankruptcy is the execution of a stat- » Smith V. Rogers, 16 Geo. 479. * Beals v. Clark, 13 Gray, 18 2 Taylor v. Robert8, 37 Eng. Law & Eq. 5 Clark v. Potter, 18 Gray, 21. 504. * Warner ». Barber, 2 Moore, 71 ; Mo- 3 Woods V. Sanford, 8 Gray ; Cutl. Ins. line, 19 Ves. 217. L. 46. ' 2 Pars, on Contr. 624, u. 166 BANKRUPTCY AND INSOLVENCY. [CHAP. VI. utdble power, given to them for a particular purpose, namely, the payment of the bankrupt's debts. Nothing passes from them, for nothing was vested in them. Whatever passes, passes by force of the statute, and for the purpose of effecting the object of the statute. "*(«) It is said, in regard to the source of the assignee's title: "The judge, by such assignment, merely executes a power devolved by law upon him ; he conveys no interest of his own ; the property which passes by it is transferred by force of the statute ; and, therefore, the legal effect of such transfer depends little upon the terms of the assignment, either as to the property transferred, or the time at which it shall take effect."^ So it is remarked by a late writer : "Although the word ' assignee' is used, it is inaccurate, as the property is transferred by the law, and not by the owner, who is the only party who can assign. The pro- cess of transfer to the assignee is rather one of sequestration ; the law taking the property or interest from the insolvent, and then placing it in the hands of the assignee as trustee."* § 78. In England, the property in a bankrupt's goods is, after assignment, in the assignee from the time of the act of bankruptcy, by relation.^ So, under the 125th section of the bankrupt act, 12 & 13 Vict. c. 106, which makes an order necessary, for the vesting of 1 Per Lord EUenborough, 1 B. & Aid. s 2 Pars, oa Contr. 632. 593. > * Cooper v. Chitty, 1 Burr, 20; 1 W. 2 Per Shaw, C. J., Clarke v. Minot, 4 Black. 65. Met. 348. (a) In this country it is held, that the mere declaration of bankruptcy is not evidence of the transfer of the bankrupt's effects out of him. Wells v. Brander, 10 S. & M. 348. In Pennsylvania, the discharge of an insolvent debtor vests in his trustees all his real and personal property; a formal assignment is not necessary to pass it. McAllister v. Samuel, 17 Penn. 114 ; Ruby v. Glenn, 5 Watts, 77. In case of a change of trustees, they take by substitution, not by transfer. 5 Watts, 77. An assignment by a debtor, under the insolvent laws, passes to the assignee a claim of the debtor on the United States for extra services as a public officer, where such claim is presented before the assignment in a memorial to Congress, although not granted by an act until after the debtor has received his discharge; and the assignee, and not the debtor, will be entitled to receive the amount allowed from the government. Milnor V. Metz, 16 Pet. 221. The assignment under the insolvent act of Delaware passes the title to land, without any act of the assignee. Love v. Hill, 3 Harring. 530. CHAP. VI.J ASSIGNMENT. 167 property in goods in the order of the bankrupt, as reputed owner, in the assignees or vendee of the goods ; the title of the assignees relates back to the act of bankruptcy, in the same manner as their title relates by the general assignment.'(a) But the relation is confined to an act subsequent to the petitioning creditor's debt.^ § 79. Under the U. S. act of 1841, a decree of bankruptcy and the title of the assignee related to the filing of the petition, and embraced all the property the bankrupt then had.' And, though the assignee did not actually acquire a title till the decree, he might avoid many mesne acts, such as fraudulent transfers, pref- 1 Healop I). Baker, 20 Eng. Law & Eq. a Allen, Law Rep. Dec. — 42, p. 362— 636. N. Y. 2 Birkett, 2 Rose, 71. (o) Where a. fiat and adjudication in bankruptcy proceeded on the bank- rupt's own petition under the 7 & 8 Vict. c. 96, a. 41, the title of the assignees related back only to the act of bankruptcy on which the fiat proceeded. And it seems it will be the same under the bankrupt law consolidation act, 1849, ss. 93 and 101. A trader, indebted to several creditors in a sum suffi- cient to form a petitioning creditor's debt, caused his goods to be taken in execution by the plaintiff, another creditor, with intent to defeat or delay his creditors, and by way of fraudulent preference ; after which the defendants distrained them for rent while on the trader's premises. The trader subse- quently filed a declaration of insolvency, and on this a fiat was awarded before the bankrupt law consolidation act, 1849, came into operation, and he was adjudged bankrupt on his own petition, under the 7 & 8 Vict. c. 96, s. 41. The plaintifif then sued the defendants for maliciously distraining for more rent than was due, and for taking an excessive distress, etc. After the commencement of the action, the assignees gave notice to the plaintiff that they elected to treat the execution as void ; and they also gave notice to the defendants, claiming the goods taken under the distress. Held, that as the fiat and adjudication proceeded on the bankrupt's own petition, the title of the assignees could not relate further back than to the act of bank- ruptcy on which the fixit proceeded, namely, the declaration of insolvency, and therefore that it did not relate back to the fraudulent execution ; but that the case would have been otherwise had the fiat been obtained on the petition of creditors, and possibly so if the adjudication had proceeded on their petition, though the^ai had issued on the petition of the trader. Also, that the assignee had a right to disaffirm the fraudulent execution and claim the goods, as the transaction was voidable but not void ; but that such dis- affirmaace had no relation back, and that the goods, at the time of the seizure by the defendants, and until the assignees assumed their rights, were the plaintiff's property, and consequently that he was entitled to maintain an action for illegal taking. Stevenson v. Newnham, 16 Eng. L. & Eq. 401 168 BANKRUPTCY AND INSOLVENCY. [CHAP. VI. erences, etc. Perhaps, too, in the mean time, the property was in the bankrupt in trust for creditors, or in custody and protec- tion of the law.' So in bankruptcy, after a creditor's petition, the Court will restrain the party by injunction from collecting debts or disposing of property.^ § 80. An assignment of the estate of an insolvent debtor, under the Massachusetts insolvent law, vests in the assignee only the property which the debtor could have sold, etc., or which could have been taken on execution against him, at the time of the first pubUeation in a newspaper of the issuing of the warrant to the messenger. Therefore, where one is charged as the trustee of such debtor, by a judgment in the trustee process, and pays to the judgment creditor, on execution, the sum with which he is so charged, before such publication of notice, he will be protected against the assignee, although he had personal notice, before pay- ment, of the issuing of the warrant.^ The Court remark: "Whe- ther such notice may be considered as made public by advertise- ment, when the advertisement, duly signed, is delivered to the printer at the office of publication, with orders to print it in the next paper, or by putting it in type and striking it oif on paper, or by the first delivery of one of the newspapers containing it, it is not necessary in this case to decide; nor, if the latter is required, is it necessary now to decide, whether the publication must await the regular day of publication of the newspaper, or whether it would be a publication by advertisement, within the statute, to anticipate the day of publication, by striking off, issu- ing, and distributing an extra number of such newspaper. "*(a) And where an insolvent, after filing his petition, but before pub- lication of notice, transfers a note, as security to one who is surety for the costs of the proceedings, although he does not indorse the note till after the first publication, the surety may maintain an action on the note against the maker; the latter cannot defend on the ground that the note passed to the assignee in insolvency.^ 1 Downer v. Brnokett, Law Rep. Jan. — ' Clark v. Minot, 4 Met. 846. 48, p. 899— U. S. Court, Vermont. * Per Shaw, C. J., ibid. 349. a Calender, Law Eep. July— 42, p. 129 5 pogg v. Willoutt, 1 Cush. 300. —Conn. (a) In Ohio, an assignment to a commissioner of insolvents has no retro- active effect. Ennis v. Hulse, Wright, 259. CHAP. yi.J ASSIGNMBNT. 169 § 81. The English statutes of bankruptcy, in express terms, vest in the assignee all the property of the bankrupt, which comes to him by descent, distribution, or otherwise, before the discharge is granted.^ As, for example, 'a legacy left to him at any time before the discharge.^ But, by the United States act of 1841, only the property and rights of property of the bankrupt at the time of the decree of bankruptcy passed to the assignee for distribu- tion. Thus the assignee took property which came to the bank- rupt by distribution or descent between the times of filing the petition and the decree.^(a) § 82. In regard to the bankrupt's own rights after the proceed- ings have taken effect, and the continuance of the assignee's title, it seems one who has been declared bankrupt may enter into busi- ness and hold property, pending the proceedings. *(6) § 83. It is held that an assignee of an insolvent debtor cannot be appointed seventeen years after his discharge in insolvency, merely for the purpose of being made a party defendant, in a proposed ac- tion of partition ."* So, where an assignee, for more than five years, neglected to institute proceedings to obtain the condemnation of the bankrupt's interest in certain trust property, though he con- tinued to contest the right of a creditor, who had ferreted out the interest, and, after a long litigation, had obtained a decree subjecting the property to the satisfaction of his debt; such as- signee will be presumed to have abandoned his claim, and cannot assert it against such creditor.^ So, where an assignment was made in 1817, under an insolvent act, and ejectment was brought in December, 1831, by the assignee, which was tried December 11, 1836; it was held, that the jury might presume that the insol- 1 Per Story, J., Newhall, 2 Story, 363. * Grant, 2 Story, 312. ^Tudway v. Bowen, 2 Burr. 716; 2 » The Commonwealth t>. Lelar, 18 Penn. Ken. 423. 22. ' Newhall, 2 Story, 360 ; Fisher v. Cur- « Bugeby v. Robinson, 19 Ala. 404. rier, 7 Met. 427. (a) In Maryland, property acquired by an insolvent debtor, subsequently to his petition, by gift, descent, or in his own right by bequest, devise, or in the course of distribution, does not pass to his trustee. Hall v. Gill, 10 Gill & Johns. 325. (6) Where an insolvent has made an assignment, there is in him a resulting trust by law for the balance, after paying his debts. Boss v. MoJunkin, 14 S. & R. 364. 170 BANKRUPTCY AND INSOLVENCY. [cHAP. VI. vent's debts were paid.' So the limitation in s. 8, of the bank- rupt law, applies to actions in the name of the assignee, though brought wholly for the benefit of a third party.'' And if the power of an assignee to recover" lands has expired, it will not be revived by a conveyance from him in favor of his grantee.' But it is held that mere lapse of time, without an assertion of a title under the assignment, will not lead to a presumption that the trustees have reconveyed, when there is no proof that the debts of the insolvent have been paid ; nor can the Court say that their title is extinguished.* § 84. The sale of the property of a bankrupt or insolvent is generally provided for by express statutory regulation, and the rule is laid down, that, to sustain a title claimed under statutory proceedings, more especially a title to real estate, all the requisite preliminaries must have been adopted and must be averred and proved. There is no presumption in their favor. Hence an assignee cannot sell and convey the property without an order of court, where the statute provides for such order, and a deed, reciting an order, is no proof of it, but only of the bankruptcy, and the appointment of, and conveyance by, the assignee.* And a sale of a bankrupt's real estate, even under an order of court, in which no time or place of sale is fixed by the court, is irregular and void.* So the conveyances of land, in which, by the 15th section of the United States bankrupt law, the assignee was bound to recite a copy of the decree of bankruptcy, and of the appoint- ment of the assignee, included transfers of mortgages. And where an assignee obtained leave to sell the bankrupt's estate, "as it was set forth in the schedule;" a transfer of a mortgage not men- tioned in the schedule was held invalid.'' But, in general, the property of the bankrupt, whether inserted in his schedule of effects or not, vests in his assignee on his appointment ; and if sold by the assignee, pursuant to a decree of sale by the Court, the title vests in the purchaser, so as to enable him to maintain an action thereon in his own name.* And an assignee in insolvency may sell and convey his interest, as such, in real estate which has been con- » Tailor v. Hertzag, 4 Whar. 259. 5 Cleveland i'. Boerum, 27 Barb. 262. ' Pike V. Lowell, 32 Maine, 245. e Osborn v. Baxter, 4 Cush. 406. ' Cleveland v. Boerum, 27 Barb. 252. ' Warren ». Homestead, 33 Maine, 256. Treasure v. Jones, 1 Selw. N. P. 265. 2 O'Mealey v. Wilson, 1 Camp. 482. " Paddy, 3 Madd. 241. 3 Baglehole, 18 Ves. 525. "Rogers v. James, 7 Taun. 147. * Roberts v. Hardy, 3 M. & S. 533. ^^ Jackson, 5 Ves. 357 ; Topham, 1 5 Cartwright, 2 Rose, 230. Madd. 38. 6 Mascarnas, 1 Dea. & Chit. 507. " Miles v. Rawlyns, 4 Esp. 194. ' Blatey, 1 Glyn & J. 197. "5 Sadler v. Leigh, 4 Camp. 185. 8 Ibid. 16 Ibid. " Guthrie v. Fisk, 5 D. & R. 24. 188 BANKRUPTCY AND INSOLVENCY. [OHAP. VII. holding a claim against the debtor, unless authorized by the bank.' § 20. It is no objection to issuing a warrant in insolvency against a debtor, that he has no creditor whose debts are not secured, except the petitioner.^ § 21. As to the amount of the debt,(a) if there is a sufficient debt when the act is committed, after which payments are made and credits given, but still £100 due, though, if the payments are applied in the order of time, they will be sufficient to discharge the balance due at the time of the act ; the debt is sufficient for a commission.' So if a creditor, having a claim at the time of an act of bankruptcy less than £100, afterwards increase it to more than that amount by receiving a note due at such time ; he may maintain a petition.* § 22. A debt more than six years old has been held to support a commission. Thus a commission of bankruptcy issued in 1726, and the debt of the petitioning creditor appeared to be a promis- sory note in 1714. And the Chief Justice (Eyre) allowed it to be good, saying that though six years were passed, he could not presume it to be barred.* But the distinction is taken, that a debt barred at law by the statute of limitations, or in equity by lapse of time, is not a good petitioning creditor's debt, if objected to by the debtor. But in an action by the assignee against a debtor of the bankrupt, the defence cannot be set up, that the petitioning creditor's debt was barred by the statute. More espe- cially, this is no ground for setting aside a verdict. Nor can any third person allege this objection, where the bankrupt himself waived it.* § 23. A claim must be complete, and not merely incipient, to constitute a good petitioning creditor's debt. Thus, where two persons exchange acceptances, and before they mature one com- 1 Merriam v. Sewall, 8 Gray ; Cutl. Ins. 5 g^ayne v. Wallinger, 2 Str. 974. See L. (3d ed.) 95. Mosely, 37; Quantook v. England, 2 O'Neil V. Glover, 5 Gray, 144. 5 Burr. 2629. 'Shaw V. Harvey, M. & M. 526. e Quantook v. England, 5 Burr. 2628;' * Glaister v. Hewer, 7 T. R. 498. Dewdney, 15 Ves. 479. See Gregory V. Hurrill, 8 Moore, 189. (a) See Hill v. Heale, 2 N. R. 196 ; Smith v. Milles, 1 T. R. 475. As to the addition of interest to make up a sufficient claim, see Cameron v. Smith, 2 B. & A. 305 I Burgess, 2 Moore, 745 ; Ureenway, Buck, 412. CHAP. VII.] DEBTS — PETITIONING CREDITOR. 189 mits an act of bankruptcy, the other cannot maintain a commis- sion, till he has paid his own acceptance.'' So A., purchasing coals of B., agreed to give him bills for part of the price, payable in two months ; and afterwards sent B. a paper purporting to be a bill accepted by him, with a blank left for the name of B. as drawer. B. kept the paper, but before filling the blank sued out a commission against A. Held, not a good debt, and that B., having elected to keep the bill, could not prove his claim.^ § 24. In regard to the consideration of the claim, where the debt of a petitioner consisted of notes made by the bankrupt, and indorsed by the payees to the petitioner, he paying only ten shil- lings in the pound; held, a sufficient debt, it being immaterial whether the indorsee paid any consideration for the notes.^ But one cannot be a petitioning creditor, under the act of New York of 1819, for the full amount of a judgment against the debtor, which he may have purchased at a nominal sum.* And a debt founded on an illegal consideration is insufficient.' § 25. An equitable claim is held insufficient for a petition.* Thus a claim founded on a decree in equity, for interest, in a suit for specific performance.^ Or a claim arising from an equitable mort- gage.* So a commission of bankruptcy was superseded, because granted upon the petition of the assignee of a bond ; who is a merely equitable creditor.' § 26. The debt must be a liquidated claim. Thus A. and B., partners, C. being about to join them, stipulated, that D., the father of B., should covenant with him, that the debts due to A. and B. would realize a stated sum, and, if not, he would, on de- mand of C, pay the dilference to the new firm; and also should covenant with C. that the debts owing by A. and B. did not exceed a stated sum, and, if they did, D. would, on the demand of C, pay to the new firm or their representatives the excess over that sum. The new partnership was formed, and the covenants entered into accordingly. C. made a demand for payment of a sum which appeared to be due from the firm of A. and B. over the stated sum, and, not being paid, an adjudication of bankruptcy 1 Tarratt ». Austin, 4 Taun. 200. « Sutton, 11 Ves. 163; Hawthorn, 1 ^Farrenden, Buck, 34. Mont. 132; Hillyard, 2 Ves. 407. 3 Lee, 1 P. Wms. 783. ' Carpenter v. Thornton, 3 B. & A. 52. iSlidell V. McCrea, 1 Wend. 156. s Yonge, 3 Ves. & B. 31. 5 Wells V. Girling, 1 B. & B. 447. ' Medlioot's case, 2 Str. 899. 190 BANKRUPTCY AND INSOLVENCY. [CHAP. VII. was pronounced and affirmed against D., who appealed. Held, the covenant was not to pay a stated or liquidated sum, but the remedy lay in damages, and the demand, therefore, did not con- stitute a good petitioning creditor's debt; and the adjudication was annulled.^ But an unliquidated account is held sufficient.^ And, in Massachusetts, a balance, if actually amounting to $100, of an account consisting of many disputed items, is a sufficient demand against a debtor to be the foundation of proceedings in insolvency against him under Sts. 1838, c. 163, s. 19, and 1844, c. 178, s. 9; even although the creditor has commenced an action thereon.? § 27. A note secured by mortgage is held not a good petitioning debt.'' Thus Alsworth treated with Hylliard for the purchase of the fequity of redemption of his estate, which was mortgaged to Field, for .£400. Articles were signed, and Alsworth paid more than half the price, to pay the mortgage, and was to pay the balance upon execution of the deed. Hylliard refused to com- plete the purchase, or pay off the mortgage. Alsworth then brought an action for the money paid, upon which Hylliard was carried to jail, where he remained two months, and thereupon Alsworth takes out a commission, and Hylliard is declared bank- rupt. After the issuing of the commission, Alsworth took an assignment of the mortgage. Upon a petition to supersede the commission, the lord chancellor expressed a doubt, whether the debt was one upon which a commission could be supported, as strictly no action at law would lie, but only a bill for perform- ance; but, upon the ground that Alsworth had taken the mort- gage, and might hold it till redeemed, he superseded the commis- sion, with costs." So, in New York, when petitioning creditors have collateral security for their claims or some, of them, and do not relinquish such security to the assignees for the benefit of all the creditors; and, the amount of the security being deducted from their claims, less than two-thirds of the whole amount of credits remains: the judge has no authority to grant a discharge.^ But where a consignee transfers bills of lading to a creditor as se- curity, and the consignor stops the gbods in transitu; the latter may sustain a commission against the consignee on his original debt.'' 1 Broadhutst, 19 Eng. Law & Eq. 466. 6 Hylliard, 1 Atk. 147. « Flower v. Herbert, 2 Ves. 327. « Morewood v. Hollister, 2 Seld. 309. 8 O'Neil V. Glover, 6 Gray, 144. ' Ashton, 2 Dea. & Chit. 5. « Page, Glyn & J. 100. CHAP. VII.] DEBTS — PETITIONING CREDITOR. 191 § 28. A petitioning creditor has not the ordinary election to sue at law or come under the commission ; for, if he elected the former, the commission must be superseded, which would affect proving creditors.^ But a creditor may maintain a commission upon hia debt, though since an act of bankruptcy he has recov- ered a judgment upon it.^ So, where the obligee in a bond recovered judgment upon it after the obligor had ceased trad- ing ; held, the bond debt was not so merged in the judgment, as to preclude the obligee from petitioning for adjudication against the obligor. Also that such a judgment was a good foundation for such an act of bankruptcy under the 72d section of the St. of Vict., having for this purpose relation to the trading, and that the notice under that section was correct, although it required payment of the judgment, and not of the bond.* So an award is a good petitioning creditor's debt, unless on its face bad ; or unless the submission is void.* But taxed costs upon a judg- ment, as in case of nonsuit under a rule of court, are held not a good petitioning creditor's debt ; being recoverable only by attachment, in the nature of execution.°(a) And it has been held that a cred- itor cannot sue out a commission, after taking his debtor in exe- cution.^ Thus, where the petitioners in bankruptcy had recov- ered a judgment against the bankrupt, and he was surrendered by his bail, and then charged in execution ; the commission was superseded upon petition of the bankrupt, the chancellor being of opinion, that, the body of the debtor being in execution, it was a satisfaction of the debt in point of law, so that the petitioners were not creditors.' But by a recent decision a judgment debt is a good debt on which to found a petition in bankruptcy, although the debtor has been taken in execution, and subsequently, and before the date of the petition, discharged from custody under 1 Lewes, 1 Atk. 154. s Stevenson, 1 M. & M. 262. 2 Bryant v. Withers, 2 M. & S. 23 ; 2 « Cohen v. Cunningham, 8 T. R. 123. Rose, 8. See Glover, 2 Glyn & J. 60. ' Griffiths, 21 Eng. Law & Eq. 227. ' Burnaby's case, 1 Str. 653. Ace. Beaty * Dame v. Holdsworth, Peake, 64 ; v. Beaty, 2 John. Ch. 430. Lovrndes, 1 JUonl . 24 ; Antram v. Chace, 15 E. 209. (a) As to a claim of a solicitor for costs, as a petitioning debt, see Sutton, 11 Ves. 163; Howell, 1 Rose, 312; Steele, 16 Ves. 166; Prideaux, 1 Glyn & J. 28. 192 BANKRUPTCY AND INSOLVENCY. [CHAP. VII. the insolvent debtor's act, 1 & 2 Vict. c. 110, and the debt duly inserted in the schedule.* § 29. A verdict, more especially in an action for tort, is not a sufficient debt. Thus there was a verdict for the plaintiff in an action for breach of promise. The defendant then committed an act of bankruptcy ; and judgment was afterwards rendered on the verdict. The plaintiff then instituted proceedings against the de- fendant as a bankrupt. Held, her judgment did not constitute a good petitioning creditor's debt. Although the damages had been liquidated by the verdict, yet, as there was then no judgment, there was no debt.^ § 30. Under some circumstances payment will not invalidate a debt as the foundation of a petition. Thus A., being indebted to B. in the sum of ^148, drew a bill upon 0. for that amount, and, before its maturity or presentment for acceptance, committed an act of bankruptcy. Held, the bill was a good petitioning cred- itor's debt, although after the commission it was duly presented, and paid by the acceptor.* So if a bill of sale of goods is given in satisfaction of a bond, and it is afterwards discovered that the obligor had previously committed an act of bankruptcy; the obligee may abandon the bill of sale, and sue out a commission against the obligor, and a co-obligor cannot plead the bill as an accord and satisfaction.* § 31. The petitioning creditor is liable to pay the costs and expenses of a commission until the assignees are chosen.'(a) Thus he is liable to the messenger under a commission, for the costs and expenses attending it, notwithstanding such messenger was employed by the solicitor.* So the messenger may recover from the petitioning creditor his fees for his services, before the party be declared a bankrupt, though the party was since de- clared a bankrupt, and the messenger's bill ordered by the com- 1 Watson V. Humphrey, 29 Eng. Law « Hall©. Smallwood.Peake's (Addl.)13. & Eq. 446. 6 Finohett v. How, 2 Camp. 275 : St. 5 2 Charles, 16 Ves. 256 ; 14 E. 1,97. See Geo. 2, o. 30, s. 25. See Back „. Buss V. Gilbert, 2 M. & S. 70. Goooh, 4 Camp. 232. 3 Donthat, 4 B. & A. 67. « Hart v. White, Holt, 376. (a) It seemsj a creditor who incurs costs and expenses in prosecuting a petition against a bankrupt in invitum, may be compensated from the assets. Hale, Law Bep. Jan.— 43, p. 403, per Story, J. CHAP. VII.J DEBTS — PETITIONING CREDITOE. 193 missioners to be paid by the assignees out of the estate.^ But he is only liable to the messenger for necessary expenses.^ There- fore, he is not liable for the expenses of an unnecessary and fruit- less journey to the Isle of Man, unless upon a special contract.^ So, the petitioning creditor being appointed one of two assignees, a joint action cannot be maintained against him and the other.* § 32. In some cases, a party is estopped by his own acts from being a petitioning creditor. Thus one, who receives and is party to an assignment by deed of another's stock in trade, cannot be a petitioning creditor, upon the ground that such assignment is an act of bankruptcy.* Nor a creditor who has assented to the deed by approving of acts done under it by the trustees ; or acted under the deed.^ Nor the trustee of an equitable creditor, who has signed a composition deed.^ So if by composition deed an insolvent assigns to four trustees all his goods for the benefit of creditors, provided the trustees and creditors on or before a cer- tain day prove their debts, if required, and execute the deed; they covenanting not to sue, etc., and that, if they do so, the deed shall be a discharge ; and the deed is executed by only two of the trustees: the debt of one of them who has executed it is extin- guished, and he cannot sue out a commission.' § 33. The oaths of an insolvent and the petitioning creditor, under an insolvent act, to the existence of a debt due from the insolvent to such petitioning creditor, are conclusive upon them and their representatives, as to this fact, and they will not be per- mitted to deny it.' • Burwood V. Kant, 2 C. & P. 123. s Jackson v. Irvin, 2 Camp. 49. See 2 Billings V. Waters, 1 Stark. 363. Bamford v. Baron, 2 T. R. 594. s Ibid. « Back v. Gooch, 4 Camp. 232 ; Hicks * Finchett v. Howe, 2 Camp. 275. See v. Burfitt, 4 Camp. 235, n. ; Cawk- Gibson, 1 Glyn & J. 303 ; Pocock v. well, 19 Ves. 233. See Tappenden Rusaell, 4 C. & P. 14 ; Gillett v. Rip- v. Burgess, 4 E. 280. pon, M. & M. 406 ; Murray v. Reeves, ' Bather, Buck, 426. 8 B. & C. 421 ; Wilson, Buck, 806 ; s gmaU „. Marwood, 9 B. & C. 300. Paul, 1 Mont. & Mac. 185; Cousins, 'Van Epps v. Van Deusen, 4 Paige, 2 Glyn & J. 270 ; Bottomley, 5 Madd. 64. 91. 13 CHAPTER VIII. PROOF OF CLAIMS. 1. Rights of proving creditors. 2. Connection between proof and discharge. 8. Whether a special contract is provable — claim requiring a jury. 5. Time of the debt — future debts. 7. Consideration. 8. Illegality. 9. Who must prove. 10. Mode of proof. 11. Creditor holding security. 12. Amount of debt. 18. Interest. 16. Contingent claims. 21. Surety. 22. Equitable claim. 23. Bonds. 24. Notes, etc. 27. Judgment, verdict, etc. 35. Torts. 36. Dividends. 41. Preferred claims. 48. Set-off. 61. Withdrawing and expunging of claims. 53. Appeal. § 1. The proof of debts is of course one of the most important steps in bankruptcy or insolvency proceedings ; no creditors being in general recognized as parties, or entitled to share in the prop- erty or to have a voice upon the question of discharge, except those who prove their claims in the mode prescribed by law.(a) (See sec. 10.) In a preceding chapter (chapter v,) relating to the forms of proceeding, this subject has of course been some- what considered; but it has been for the most part reserved for separate consideration in the present connection. (a) It was held by the United States Court, in the Matter of King, (5 Law Rep. 320,) that creditors could not file objections and contest the bankrupt's right to a discharge, without having come in and proved their debts. But see Haxtun v. Corse, 2 Barb. Ch. 506. A replication to a plea of discharge under the United States bankrupt act of 1841, which alleges that the plaintiff was a creditor and his place of residence known, and that he was not notified, either personally or by letter, of the defendant's application for a discharge, without stating that he had proved his debt, is bad ; for only those creditors, who have proved their debts, are entitled to such notice, under the act. Morse v. Presby, 5 Fost. 299. (194; CHAP. VIII.] PROOF OF CLAIMS. 195 § 2. The question what debts are provable ia said to be one of mixed law and fact.* It is a point which will necessarily be much considered, incidentally, in a subsequent portion of this work, relating to the important subject of discharge; (see chap, ix.;) for the reason that in general only provable debts are discharged by the certificate, and only those which will be discharged are prov- able.(a) It is said : " The creditor must in every case swear, that the bankrupt was indebted at the time of suing out the commis- sion ; and debts provable under the commission, and debts to be discharged by the certificate, are convertible terms."* So it is remarked, with more especial reference to the point of time, as affecting the rights of parties ; that where an act provides for the debtor's discharge from all debts due at the time of the bank- ruptcy, debts due at that time are to be proved; if from all debts due at the issuing of the commission, then all debts due at that time are to be proved.^ And the coincidence of the three most material points in bankruptcy and insolvency proceedings is thus expressed: "All the property then owned by the bank- rupt passes to and vests in the assignee, and consequently all debts existing before and at the date of the decree are provable under the bankruptcy, and all debts up to that time passed by the bankrupt's certificate of discharge."* § 3. As has been suggested, the rules upon this subject, like others in the law of bankruptcy, are mostly dependent upon ex- press statute; and there is of course a corresponding variance in the judicial decisions. With respect to the general character of the claim offered for proof, under the English law, the former pre- vailing rule was, that where a creditor has a debt which is capable 1 Dresser o. Brooks, 3 Barb. 429. ' Wainman, Cooke, 21. 2 Per Buller, J., Bamford v. Burrell, 2 *Per Prentiss, J., Downer v. Braokett, B. & P. 1. 5 Law Rep. 392. (a) This identity is so absolute, that some of the leading English statutes make no express provision as to provable debts, but only provide what debts shall be discharged : and the same rule is applied, by implication, to the proof, more especially with reference to the time at which the debt must have existed; upon the ground, that, if subsequent creditors were allowed to prove, and at the same time not barred by the certificate, they would have a great advantage over pre-existing creditors, whose right of proof is offset by the entire extinguishment of the debt. 196 BANKKUPTCT AND INSOLVENCY. [CHAP. VIII. of being ascertained without the intervention of a jury, and the debtor becomes a bankrupt, it may be proved under the commis- sion.^ The reason assigned for not allowing unliquidated claims to be proved is, that the creditor must swear positively and precisely to a particular sum, and be liable to prosecution for perjury if he take a false oath.^ Hence a special contract is held not to be a (provable) debt.^ Thus a contract was made by the plaintiffs to sell to the defendant all the oil that should arrive by a certain vessel, at a certain price, and by the defendant to accept and pay for it. The ship arrived, and the oil was tendered before the de- fendant became bankrupt, but he did not accept or pay for it. Held, the demand of the plaintiffs for breach of contract was not provable, although it was to be ascertained by the appli- cation of a well-established principle.* So a covenant to build a certain number of houses, according to a particular plan and within a given time, is not a provable claim.* Nor a covenant that the seller of a frigate for a certain sum had authority to sell free of incumbrance.^ So a promise, by a new firm to an outgoing partner, to pay the firm debts, is not a claim which can be proved by him upon their subsequent insolvency, although he has been obliged to pay one of the debts. The promise is not a debt due in the language of the act, but a mere contract for the perform- ance of a future act or acts, for breach of which an action might be maintained. Neither did the promise make the retiring part- ner a surety within the meaning of the act, because the debt paid was his own — he was the principal debtor.' But, in Massachu- setts, a debt payable in work is provable.' And in a recent case in England, where the objection was taken to a claim offered for proof, that it was in its nature unliquidated, and that the ques- tion of value was not alone in dispute. Turner, L. J., remarked: " There will, as it seems to me, be an end to all proofs in bank- ruptcy for goods sold and delivered, and for work and labor done, if mere suggestions of this description, unaccompanied by proof, are to be attended to. I believe that if we were to hold the con- trary, we should be carrying the law much beyond the decided 1 Utterson v. Vernon, 3 T. R. 539. ♦Green v. Bicknell, 8 Ad. & Ell. 701. 2 Cullen's Bank. L. 88. 6 Bannister v. Scott, 6 T. E. 489. 'Gales, 10 Jur. KiO. See WooUey v. « Hammond ». Toulmin, 7 T. R 612. Smith, 4Dowl. &L. 469; 3 Man. Gr. ' Morton v. Richards, 13 Gray, 15. & Sc. 624. 8 Barker ». Maun, 4 Met. 302. CHAP. VIII.] PROOF OF CLAIMS. 197 cases, and be straining it most prejudicially both to bankrupts and to the administration of their estates."' § 4. In another recent case is found the following view of some of the leading decisions upon this subject: "Lord Mansfield decided that the claim might have been proved, because the defendant might have been sued for money had and received before his bankruptcy. Parher v. Norton was an action of trover ; and the Court held that it was not barred by the bankruptcy and certifi- cate of the defendant, although the conversion was before the bankruptcy, and the plaintifi" might, had he so elected, have waived the tort and proved the claim under the commission as a debt. And the efiect of the dictum of Buller, J., in Johnson v. Spiller, that a party may prove a demand in trover, where the amount can be liquidated, was explained to mean, not that the party must prove, but that, where he has a right to sue in trover, or, waiving the tort, to sue in assumpsit for a liquidated demand, he may prove it. (See sec. 35.) The cases relating to contracts to replace stock appear to rest on the same principle as Johnson v. Spiller, viz., that where the day for replacing it has passed before the bankruptcy, so much of the money produced by the original sale as would have been necessary to replace it on the day appointed, may be considered as money had and received to the use of the party lending the stock, and it is therefore a debt, ascertained at the time of the bankruptcy ; on the other hand, where a contract has been broken, and the demand thereupon arising is not a debt, but damages, the amount of which may depend on various circum- stances, and which it is necessary that a jury should estimate, unless they are ascertained before the issuing of a. fiat, they can- not be proved."^ § 5. It is laid down as the general rule in bankruptcy, that a debt accrued subsequent to an act of bankruptcy, and previous to the issuing of the commission, is not provable.' This principle, however, as we have explained in other connections, is greatly modified by statutes relating to notice, and other express statutory provisions.^ And, by late and existing statutes, all debts contracted prior to the issuing of the commission may be proved, though subsequent to 1 Bateman, 35 Eng. Law & Eq. 428. ' Bamford v. Burrell, 2 B. & P. 1. 2 Per Coltman, J., Woolley v. Smith, 3 * See Bowness, 2 M. & S. 479 ; 2 Rose, Man. Gr. & Sc. 622-3. 206. 198 BANKRUPTCY AND INSOLVENCY. [CHAP. VIII. the act of bankruptcy, unless the creditor had notice of such act. § 6. Before St. 7 Geo. 1, future debts were not provable; but the cause of action must 'have accrued} Thus, where an overseer of the poor became bankrupt before the time when his accounts were to be made out; the claim was held not provable, there being no cause of action accrued.'' By that act "bills, bonds, notes, or other person's (personal) securities" were made provable claims. And St. 49 Geo. 3, c. 121, made a mere oral debt, pay- able in future, provable, interest being deducted on a future claim. And this is now the general statutory rule in bankruptcy and insolvency.^ § 7. There must in general be a valuable consideration for a provable debt. Thus voluntary bonds, though given under a strong moral obligation, as a marriage contracted, and property received as husband, or by a man having a wife living at the time, are not provable, being void as against creditors.* Assignees in this respect are compared to executors, who could not properly allow such a claim.® But a voluntary bond, though void against creditors, being valid as between the parties, its surrender is a consideration that will sustain a substituted bond against creditors, unless made with a fraudulent design, as by an insolvent to sub- stitute a valid for an invalid security against creditors; and there- fore such substituted bond may be proved.* So a trader, about to be married, and being in fact insolvent, of which insolvency the intended wife was ignorant, entered into a covenant with trustees to pay them a moderate sum of money, the interest to be paid to the wife's appointment, and, in default, to the in- tended wife for life for her separate use, then to the husband for life, and the capital to be in trust for the survivor absolutely. Property of the wife was also agreed to be settled upon the same trusts. The husband became bankrupt, and the trustees applied to prove for the amount, which had never been paid, but the com- missioner rejected the proof. Held, on appeal, that the settle- iCallowellj) Clullehuok, Str. 867; 241 ; Clayton »>. Gosling, 5 B. & C. Godling V. Codling, Ld. Rny. 1548. 860; Utterson v. Vernon, 4 T. R. 2 King t)' Egginton, 1 T. K. 3fi9. 670. ' East India Co. 2 P. Wms. 395 ; Hos- * Gilham v. Locke, 9 Ves. 613. kins V. Duperoy, 9 E. 498; Minet, 5 2 Sch. & Lef. 228. 14 Ves. 189 ; Dowman, 2 Glyn & J. « Berry, 19 Ves. 218. CHAP. VIII.] PROOF OF CLAIMS. 199 ment was good as against the assignees, and that the trustees were entitled to prove.' And it is said: "The proper order to make in case of a voluntary bond, is not to expunge it ; but that it shall not be set against the creditors; but if there be a surplus after payment of all joint and separate debts, the party shall be allowed to come in."* § 8. Illegal claims are held not provable. Thus a debt, arising out of a contract to convey British goods to a market in an enemy's country, cannot be proved under a commission in bank- ruptcy after peace has been established between that country and Great Britain.* So the rule in equity in regard to usurious con- tracts, only to deduct the excess of interest, does not prevail in bankruptcy, but usury avoids the whole claim.* So a claim for the price of goods illegally exported cannot be proved; unless the seller disproves knowledge of their destination.* But a seller abroad of contraband goods is entitled to prove, unless he be a participator in smuggling them.* And it is held, that, where the consideration of a debt is partly illegal, the amount of that part which is legal may be proved. As where a broker was em- ployed to effect insurances, one of which was illegal, being upon a voyage from Ostend to the East Indies ; and his employer, in consideration of the money thus expended, indorsed to him a bill drawn by the employer upon and accepted by the party, who afterwards became bankrupt. Proof was allowed, deducting the amount paid for illegal insurance.^ § 9. In general, a proof cannot be made by one person on behalf of several creditors entitled to prove, unless from neces- sity, or by consent.* Thus a trustee cannot prove a debt alone ; the cestui que trust must join in the proof.'(a) But one partner may act for all in proving debts.'" A collector of taxes may prove for 1 Mao Birnie, 13 Eng. Law & Eq. 479. « Cavalliere, 2 Glyn & J. 227. 2 Per Kedesdale, Ld. Chanc, Gardiner ' Mather, 3 Ves. 373, V. Shannon, 2 Sch. & Lef. 228. ^Bank of England, 2 Glyn & J. 363. 3 Schmalding, Buck, 93. « Dubois, 1 Cox, 310. ♦Thompson, 1 Atk. 125; Skip, 2 Ves. "Hodgkinson, 19 Ves. 298; 2 Rose, 489. 172; Coop. C. 0. 99; Mitchell, 14 5 Moggridge, Co. B. L. 185. Ves. 597. (a) A creditor resident in England may vote by letters of attorney at meetings held nnder the 230th section of the bankrupt law consolidation act, to take into consideration an offer made by a bankrupt to his creditors, with a view to superseding the bankruptcy. Clegg, 7 Eng. Law & Eq. 316. 200 BANKRUPTCY AND INSOLVENCY. [CHAP. VIII. the parish. If the collector himself becomes bankrupt, one parishioner may prove for himself and others.^ If an executor become bankrupt, he may prove against himself for the testator's estate ; but the Court will order the dividends paid into the bank.^ If an executor commit a devastavit, creditors and legatees may prove under a commission against him.^ But it is held that they must apply to a court of equity for an account.* § 10. As has been remarked, (sec. 1,) in bankruptcy, one cannot exercise the rights of a creditor till he has proved his debt. And this must be done absolutely, yiii\ioni protest, qualification, or res- ervation. It cannot be allowed merely for the avowed purpose of resisting the petition of another creditor in invitum.^ And the petitioning creditor, as well as others, must prove his debt at a public meeting.^ So, although proof was allowed under a com- mission, in respect of a bill alleged to be lost, the most extensive indemnity was ordered to be given, and to be settled by the commissioners.' § 11. It is in general provided, that no claim shall be proved for which the creditor holds security, without giving up such secu- rity in the manner provided by law. The security, however, must in general come from the debtor, and be directly held by the cred- itor, in order to be either sold, or surrendered to the assignee. (See chap. vi. s. 27.) It is said, in reference to the former point: " Neither the creditor, the assignees, nor the commissioner of insol- vency can have any authority, power, or right to sell or dispose of property belonging to other persons. The latter are not parties to the proceedings against the insolvent or against his estat§; and as strangers to these proceedings they cannot be bound or affected in relation to their own estates, by any decree or adjudication which may be made concerning the estate of the insolvent or the insolvent himself. Nor, in the second place, can the creditor who holds, as in this case, the several property of the insolvent and of other debtors as security for their joint debt, surrender and de- liver up to the assignees the whole property mortgaged, and still have and retain any debt due to himself. He may surrender the property of the insolvent, which is in pledge, and still retain the 1 Green, 116 ; Child, 1 Atk. 111. 6 Dutton v. Freeman, Law Rep. Feb.— 2 Leeke, 2 Bro. 896. 4.?, p. 447— Mass. 8 Llewellyn, Co. B. L. 135. « List's case, 2 Yes. & B. 273; 2Kose,24. ■• Howards). Jemraeit, BL R. 401. ' Greenway, 6 Ves. 812. CHAP. VIII.] PROOF OF CLAIMS. 201 debt; but the only way in whicli he could surrender and deliver up to the assignees the property or his interest in the property of the other debtors, would be by assigning to them his note and mortgage. And he would thus have no debt left to prove against the insolvent."\a) So, a partnership note having been indorsed by the payee to a third person, and by him indorsed to and dis- counted at a bank of which he was president, and one of the promisors having afterwards become insolvent, the bank proved the note as a claim against his estate. The solvent promisor, afterwards, at the urgent request of the second indorser, and for the purpose of securing him and the bank, but without the knowl- edge of the bank, gave him security applicable to the note in ques- tion, and also to another note held by the bank, such indorser promising to account to the promisor for the surplus of the secu- rity, if any. It was held, that the security was not given to the bank, but was a personal one to the second indorsee, and to indemnify him as such; and that a subsequent order of the com- missioner, on the motion of the assignee, directing the note to be struck out of the list of claims proved, and disallowing the same on the ground that the bank held collateral security therefor, which had not been surrendered or applied, was erroneous.^ So the holder of a note may prove it against the maker, though an indorser for the maker's accommodation holds another note, secured by mortgage of the maker, which was given as indemnity for the indorser's liability, and though the holder offers to prove at the indorser's request.' And it is said to be held, that a debt may be proved against a corporation, notwithstanding a mortgage to secure it from a stockholder who is personally liable.^ § 12. In regard to the amount of a debt to be proved, the pledgee of a bill or note (though for part only) may prove the whole amount.* But where A., at the request of B., and upon the security of a bill from him for the amount, delivered goods to C, and such goods were afterwards partly paid for by C, and then ' Richardson «. Wy man, 4 Gray, 655. * Cabot, etc. v. Boardman, 11 Gray; 2 Agawam Bank v. Morris, 4 Gush. 99. Cutl. Ins. L. (3d ed.) 32. 3 Meed v. Nelson, Cutl. Ins. L (3d ed.) ^Crossley, 3 Bro. C. C. 237. (a) It was ordered, that the property of the insolvent be sold, a valuation made of the rest, and proof allowed for the balance. 202 BANKRUPTCY AND INSOLVENCY. [CHAP. VIII. B. became bankrupt ; held, that A. could only prove, as against the estate of B., the sum remaining due for the goods, and not the full amount of the bill.* § 13. In regard to interest upon debts proved in bankruptcy or insolvency ; formerly, interest was not allowed, unless expressly reserved, because commissioners could not award damages, and as such only, in this case, could it be recovered at law.^ But the distinction seems now established, between interest merely claim- able as damages for detention of the debt, and that impliedly contracted for. And the present rule is, that it is allowed, whe- ther the contract to pay interest appear on the face of the secu- rity or by extrinsic evidence.* As where, by course of trading and settling accounts, interest was allowed after a certain credit.* But interest out of the surplus was refused upon the bankrupt's notes payable on demand, as not being debts carrying interest, either by contract or on the face of them.® § 14. The rules on this subject in the United States, with a general similarity, are expressed in various language. Thus in New York, in the distribution of the estate of a debtor under the insolvent act, interest is computed to the time of the assignment, on all debts drawing interest, either by agreement of the parties or as legal damages for non-payment; and, if there is a surplus, after paying the principal and interest thus computed, interest should be allowed on all the debts from the time of the assign- ment.* In Massachusetts, interest is allowed when expressly reserved. If the debt matures before the first publication of notice, though not expressly reserved, interest is allowed from the publication, or from such maturity, if occurring after publica- tion. If the debt were payable on demand, then from the first demand, or if none, from publication. If the magistrate allow interest, and the assignee appeal, and the judgment be afiBrmed, interest is allowed to the final decree.' The Court remark as fol- lows: "The word 'debts' in the statute is used in its broadest latitude. As the act deals with insolvent estates, the language of it relates rather to the securing to the creditor a part of the principal of his debt, than the making of provision for the pay- 1 Reader, Buck, 881. "Cooks, 1 Rose, 317. 2 Marlar, 1 Atk. 150. 6 Murray, 6 Paige, 204. ' Mills, 2 Ves. 295. J Brown v. Lamb, 6 Met. 203. * Champion, 8 Bro. C. C. 436. CHAP. VIII.] PROOF OF CLAIMS. 203 ment of his interest. The exonerating of the debtor from the charge of interest on his debts was never in the contemplation of the framers of the statute. The fixing of a time for rendering a schedule of his debts was for the purpose of doing justice to all the creditors, by giving them the same proportional rights, and not for the purpose of defining a period when the debtor should be relieved from the payment of interest, in case the funds should ultimately prove adequate for that purpose. He becomes in fact a solvent debtor, and his duties and obligations are the same with those of other solvent debtors."^ § 15. As already stated, interest generally stops at the date of the commission, (a) and, in the rare case of a surplus, independ- ently of statute, only creditors having debts which bear interest receive subsequent interest.^ In case of partnership, a separate creditor is not entitled to interest from the surplus, until joint creditors have been paid in full.* So upon the insolvency of a firm, if the estate of one partner exceeds his debts, his creditors cannot claim interest till payment of the partnership debts; al- though the separate estate is made up in part of interest received by the assignee from investments made by him.* § 16. We shall have occasion hereafter, in connection with the subject of discharge, to speak of contingent debts, as provable or otherwise, and therefore barred or not barred by the certificate. The subject is one which has long been expressly regulated by statute, but it is somewhat difficult to determine, whether the decided cases depend upon the statutory provisions exclusively, or in part upon general principles of policy and practicability. iPer Hubbard, J., Brown u. Lamb, 6 s Minohin, 2 Glyn & J. 287; Clarke, 4 Met. 210-11. See Williams u. Amer- Ves. 677. ican, etc. 4 Met. 317. * Thomas v. Minot, 10 Gray ; Cutl. Ins. 2 Butcher v. Churchill, 14 Ves. 573; L. (3ded.) 90. Koch, 1 Ves. & B. 842. (a) A creditor, under the insolvent laws of New Jersey, is entitled to interest due him at the time of the application of the debtor for the benefit of such law. Pritchett v. Newbold, Saxton, 571. The reason why interest stops with the commission is said to be, that "the estate being a dead fund, a salvage of part to each is all that in such a general loss can be expected." Bromley v. Goodere, 1 Atk. 79 ; Bennett, 2 ibid. 528. A mortgagee, who applies for a sale and to prove for the balance, is allowed interest only to the date of the commission. "Wardell, Co. B. L. 181; Badger, 4 Ves. 165. 204 BANKRUPTCY AND INSOLVENCY. [CHAP. VIII. § 17. It is remarked in a late case, that, "up to the time of the passing of the consolidation act, the law had made no provision for a proof in respect of contingent liabilities."^ But by St. 6 Geo. 4, c. 16, s. 56, debts might be proved which were payable on a contingency that had not happened before the issu- ing of the commission. Under this act it was held, that contin- gent liabilities are not provable, but only debts, contracted before bankruptcy, and payable after it upon a contingency.'' In other words, the distinction was made between subsisting debts payable on a contingency, and contingent liabilities which may never be- come debts. Claims were provable, if capable of valuation before the contingency happened, or if they had become payable by the occurrence of the contingency after the bankruptcy.^(a) And, by a similar construction, the "uncertain contingent demands," which might be proved, under the United States bankrupt act of 1841, did not include demands whose existence depended on a contin- gency, but existing demands, the cause of action upon which depended on a contingency.* Thus annuities on lives, though 1 Per Turner, L. J., Barwis, 35 Eng. s Per Erskine, C. J., Marshall, 3 Dea. & Law & Eq. 413. Ch. 120. And see St. 12 & 13 Vict. 2 South, etc. V. Burnside, 5 Exch. 138 Hankiu v. Bennett, 8 ibid. 107 Hinfon v. Aoraman, 2 C. B. 409 3 Dowl. & L. 426. 0. 106, s. 56. ' French v. Morse, 2 Gray, 111. (a) Independently of this statute, it was held, that a demand payable at all events, though at a future day, might be proved or set off in an action brought by the assignees ; otherwise, if it rested in contingency, whether the debt would be paid or not, unless it were secured by a penalty which had been forfeited at law. Hancock v. Entwisle, 3 T. E. 435. And see Browne v. Lee, 6B. &0. 689; 9 D. & R. 700. "Those debts only can be proved, which were either originally debts cer- tainly payable, and existed at the time of the bankruptcy, or which, though originally contingent, yet from the contingency having happened before the bankruptcy, were then become absolute." But contingent debts not prova- ble "are to be distinguished from such where the contingency relates only to their defeasance ; for the latter, if originally vested and certain in their first constitution, may still be proved, though liable to be defeated by some future contingency; provided the contingency has not happened before the time of proving." Cullen's Bank. L. 84-5. Contingent debts do not fall within the statute makvag future debts prova- ble, because it is impossible to make the rebate of interest required by the act, there being no certain time to compute it from. Ibid. 86. CHAP. VIII.] PROOF OF CLAIMS. 205 peculiarly in their nature contingent, have been held provable claims, more especially when secured by a bond which has become forfeited. The courts have adopted the proceeding of setting a value upon the annuity, and allowing a proof for that single amount.^ So a vested legacy is a provable claim against the bankrupt executor, though liable to be divested upon the lega- tee's dying under twenty-one." So, in a leading case, in which three successive judgments were reversed, a covenant was made by marriage settlement that the heirs of the party after his death should pay a certain sum to trustees, the interest to be paid to the wife for life, and then the principal to the children ; if no children, to the wife, if she survived him ; otherwise, to his execu- tors. The proof was finally allowed.' So where it was agreed, upon a loan to the bankrupt, bearing interest, that six months' notice should be given before repayment was required, the debt is provable, though no notice were given before the bankruptcy .''(a) § 18. Under the old bankrupt law of the United States, the question arose in reference to a claim in its nature merely equita- ble, and the following remarks upon the general subject illustrate the prevailing distinction already referred to: "All the cases agree, that a mere contingent debt is not provable under the commission; but if there be a legal debt subsisting before the bankruptcy, though liable to be defeated afterwards upon a con- tingency, it may be proved under the commission. This was so ruled in the K. B., in Staines v. Planck, (8 T. R. 386.) Now, here was a legal debt subsisting, in the shape of the judgment which stood in the names of T. and J. (the trustees,) but which actually belonged to the plaintiff, to the extent of all his de- 1 Le Compte, 1 Atk. 251 ; Artis, 2 Ves. ' Tindal, ,1 Dea. & Ch. 291. 493; Perkins o. Rempland, Bl. R. *Downman, 2 Glyn & J. 241. But see 1106; Wylliej). Wilkes, Dougl. 519; Downman, 2 Glyn & J. 85; Minet, English, 2 Bro. 610. 14 Ves. 189. 2 Walcott V. Hall, 2 Bro. 305. (a) A joint and several covenant was entered into by a principal debtor and his surety, that the principal would pay a sum of money by three instal- ments, with interest, on three specified days. The first instalment was duly paid, but before the second became payable the surety became bankrupt. Held, the creditor might claim two unpaid instalments and interest, as a contingent liability, under s. 178 of the St. 12 & 13 Vict. c. 106. Barwis, 35 Eng. Law & Eq. 410. 206 BANKRUPTCY AND INSOLVENCY. [CHAP. VIII. mands. In the view of a court of equity, and in the view of the lord chancellor sitting in bankruptcy, it was a legal subsist- ing debt, of which the plaintiff was a beneficial owner by a title not to be denied or resisted, and the plaintiff, according to the view of the proper tribunal in the case, would have been entitled to prove, as a debt, before the commissioners, the judg- ment standing in the names of T. and J., equally as if it stood in his own name. Had this judgment bond been made payable in the event that the plaintiff should have paid the notes and bonds on which he stood as surety, or either of them, then it would have been a debt payable on a contingency which did not happen until after the bankruptcy. But it was not so ; and the bond and judgment thereon were absolute, and the plaintiff, under them, would have been entitled, iefore he paid as surety, to have re- quired his trustees to have collected under the judgment to the extent of his absolute responsibility as surety."^ So in case of a bond to replace stock by a given day, and to pay the dividends in the mean time ; if the bond be forfeited before the bankruptcy, either as to the stock, or the dividends, the obligee may in either case be admitted to prove the dividends due, and the value of the stock at the date of the commission, by analogy to the case of annuities, even though the bankruptcy was previous to the time at which the stock was to be replaced.'' And in these cases, the discretion of the chancellor sitting in bankruptcy, to order proof upon a valuation, instead of a sale of the securities, is regulated by circumstances.* § 19. It is a point somewjiat unsettled, whether a debt on a guaranty, which did not become absolute before the bankruptcy, is provable as a contingent debt.* But a guaranty of the debt of another on a day certain, which had not elapsed, was held provable.^ § 20. But, as already suggested, there must be an actual debt to constitute a contingent debt.* And contingent debts, when the contingency is remote, are not provable.' So a demand for 1 Per Kent, Chan., Roosevelt ». Mark, 6 ^jgop „_ Price, 1 Dongl. 160. See 6 John. Ch, 288. HoflFman v. Foudrinier, 5 M. & S. 21. » Day, 7 Ves. 301 ; King, 8 Ves. 334. e Lancaster, etc. 1 Mont. 44. 8 Smith, 1 Ves. & B. 518. i Davis, 1 Mont. 121. * Myers, 1 Mont. & Bligh, 229; 2 Deao. & Chit. 251 ; Gardom, 16 Ves. 286. CHAP. VIII.] PROOF OF CLAIMS. 207 goods bargained and sold, to be delivered at a future day, which is after the commission, is not provable as a contingent debt.^ Nor a debt payable at a future uncertain period, as within three months after the decease of two obligors in a bond, or the sur- vivor.' Nor the claim in a case of bastardy, being wholly uncer- tain in value, as depending upon the contingencies of life and health and doubtful expenses.* Nor the qualified statutory lia- bility of the member of a manufacturing corporation for the debts of the corporation.* The exclusive remedy in such case is expressly given by statute.* § 21. Proof by a surety is said to be " part of the common law of bankruptcy in this country. "*(a) The distinction has been sometimes made in England, that a mere gurety cannot prove a claim against the principal, unless he has paid the debt before the bankruptcy, not being in any sense a creditor till such pay- ment; while, in case of an indorser, it is to be presumed that before negotiation of the bill or note it was actually due to Mm, though subsequently he changed this absolute claim against the maker into a conditional liability to the indorsee.' But this dis- tinction is not generally adopted. Thus, under the old United States bankrupt law, where an indorser was compelled to pay money for a bankrupt, after the bankruptcy, upon an indorse- ment prior to the bankruptcy, he was allowed to prove his debt under the commission.* And, under the act of 1841, where two persons give their joint obligation upon a joint consideration, each stands in the relation of surety for the other in respect to one half the debt. And if an agreement is afterwards made be- tween them, by which one of them assumes the whole obligation, the other, from thenceforth, becomes his surety in respect to the whole, and as such may prove his claim under the bankruptcy of his principal, although he has paid nothing on the joint obliga- 1 Boorman v. Nash, 9 B. & C. 145. « Kelton v. Phillips, 3 Met. 61. See 2 Barker, 9 Ves. 110. Leland v. Marsh, 16 Mass. 389; 3 The Overseers, etc. v. Warren, 1 B. & Cutler v. Middlesex, etc. 14 Pick. Aid. 491. 483. * Kelton V. Phillips, 3 Met. 61 ; Bangs «2 Pars, on Contr. 658, n. V. Lincoln, 10 Gray ; Cutl. Ins. L. ' Cnllen's Bank. L. 98, n. (3d ed.) 27. » Tunno v. Bethune, 2 Dessau. 285. (a) It seems St. 49 Geo. 3, c. 121, first established this right. 208 BANKRUPTCY AND INSOLVENCY. [CHAP. VIII. tion, and it is not yet due.' And, in the following leading and important case, Kendall was the holder of a bill drawn by Leon- ard, agent of the Dudley Manufacturing Gompany, payable to his own order, upon the bankrupt, accepted by him, and indorsed by Leonard to Kendall. The bankrupt was a mere accommodation acceptor, but that fact was not known to Kendall at the time of his taking the bill. The bill was dishonored, and Kendall proved his debt against the bankrupt ; and also brought a suit against the Dudley Manufacturing Company as drawers, and attached their property. Upon a petition by the assignee of the bankrupt, that Kendall might be ordered to proceed in that suit, levy his execution upon the goods attached, and apply the proceeds in satisfaction of the bill, and that he might not be allowed any dividend on the estate of the bankrupt till he had so done, it was held as follows: That a surety can require his creditor to proceed against the principal, only when the suretyship appears on the face of the instrument, or when he offers to indemnify the cred- itor in his proceedings against the principal, and to pay whatever the latter fails to pay ; that, where the principal is bankrupt, equity will, on application of the surety, compel the creditor to prove his debt against the principal, if the surety bring the amount due into court, and, if the surety pay the debt, he will be entitled to be substituted for the creditor ; that an accommodation acceptor is a surety as to the drawer, but a principal as to the holder, though the holder knew him to be an accommodation party; that the holder of a bill may prove his debt against all prior parties, and receive a dividend from each, till full payment, or, if only one be bankrupt, may prove against him, and proceed against the others at law; that a creditor may prove his claim without sur- rendering a security received from a third person, and may enforce such security, not receiving more than his claim ; and that in this case the creditor was not bound to pursue the suit at his own expense, but, if he did not, the assignee might pursue it for the benefit and at the expense of the estate, either party being at liberty to apply to the Court from time to time for further direc- tions.^ § 22. In the case of Murphy,' Lord Redesdale said, it was a > Crafts 0. Mott, 4 Comst. 603. 2 Baboock, 8 Story, 393. 8 1 Soil. & Lef. 44. CHAP.VIII.] 'PROOF OF CLAIMS. 209 great mistake to suppose, that a debt being provable depends on whether it is a legal debt. It depends on whether it be a debt in law or equity ; for, sitting in cases of bankruptcy, the lord chan- cellor decides on equitable as well as legal debts. § 23. A bond forfeited before the insolvent's discharge, and conditioned to procure certain conveyances to be executed and re- corded, was held to contain a debt provable under the insolvent act.' So "in the case of annuity bonds, if the penalty of the bond for securing the annuity be forfeited before the bankruptcy, the value of the annuity, though contingent, may be proved under the commission, for the redemption of the forfeiture can only be admitted, and the forfeiture relieved, by paying the value of the annuity."^ So in cases of bonds to trustees, for securing a pro- vision to the wife, if there be a remedy at law prior to the bank- ruptcy, and the bond be forfeited at law, chancery will avail itself of the debt at law, and allow the trustees to prove, in order to protect the party who is in conscience entitled, though the debt is in equity not then payable, and is suspended upon a defeas- ance.^ So where there is a bond of indemnity, and the petitioners have paid part before bankruptcy and part after, they may prove the whole.* But a bond of indemnity to a surety for payment of instalments, the first of which was not due till after the bank- ruptcy of the principal, cannot be proved, though payable before the bankruptcy.' And a bond, conditioned for the payment of a sum to the executors of the obligee, and interest in the mean time to him, on certain days or within twenty days after demand, is not provable under a commission against the obligor, though no interest has been paid, and there has been no demand ; for not until neglect to pay after demand was the bond forfeited.* So no claims resulting from the breach of an official bond subsequently to the debtor's petition could be proved under the act of 1841.'' § 24. The holder of a note made before, but assigned after, bankruptcy, may prove it.* Allowing all offsets available against the assignor, though the note was payable "without defalcation."' 1 Clinton v. Hart, 1 John. 375. « Winter v. Mousely, 2 B. & A. 802. 'Perkins v. Eempland, 2 Bl. B. 1106. And see Parker v. Ramsbotham, 5 » Winchester, 1 Atk. 116; V T. B. 98. D. & B. 138; 3 B. & C. 257. * Cockshot, 3 Bro. C. C. 502. ' Fowler v. Kendall, 44 Maine, 448. 6 Walker, 4 Ves. 385. » Humphries v. Blight, 4 Ball. 370. 9 Ibid. 1 Wash. C. 44. 14 210 BANKRUPTCY AND INSOLVENCY. [OHAP. VIII. And a bill drawn before, though not protested till after, bank- ruptcy of the drawer, may be proved. The non-acceptance or protest does not create the debt. It is debitum in praesenti, sol- vendum in futuro} So, where a note payable with interest twelve months after notice is expressed to be "for value received," and the maker becomes bankrupt before any notice, the payee may prove it.^ So where the plaintiff lent his indorsement upon a bill at the desire of the drawer, but without any privity with the de- fendant, (the acceptor,) who had himself no consideration at the time for such acceptance, and the day before the bill became due the defendant became bankrupt, and it was immediately after taken up by the plaintiff out of the hands of the indorsee ; held, the bill was provable.* § 25. The holder of a bill may be compelled to prove against the acceptor, for the benefit of the drawer.^ And he may prove against the acceptor, drawer, and indorser, and receive a dividend from all, till his debt is fully paid. If only one is bankrupt, he may prove the debt against him, and also proceed against the others at law.^ But this right is subject to the proviso, that the holder does not receive in all more than the whole amSiint of the bill; and any proof, sought to be made after he has been paid any part of his claim, can be only for the unpaid balance. Thus the holder of bills drawn or indorsed by A. and accepted by B. proved them in insolvency against the estate of A., and made a composition with B., whereby B. conveyed certain property to trustees, in trust to pay one-fifth of the bills, which conveyance the holders accepted, reserving their remedies against the other parties. Held, that those bill-holders, who applied to prove their claims against the estate of A. before entering into the composition with B., were entitled to prove the full amount of their bills ; but that those who applied to prove their claims against the estate of A., after joining in the composition with B., could prove only the amount due them after deducting the one- fifth secured by the composition.* § 26. The costs arising from the protest of bills shall be proved 1 Maoarty v. Barrow, Str. 949 ; 8 Wils. ' Houle ». Baxter, 3 E. 177. And see 16. Porster v. Surtees, 12 E. 605. •' Clayton v. Gosling, 5 B. & C. 860 ; 8 * Wright v. Simpson, 7 Ves. 784. D. & R. 110. 6Babcock, 3 Story, 393. ' Sohier v. Loring, 6 Cush. 687. CnAP.VIII.J PROOF OF CLAIMS. 211 under a commission, only when incurred antecedent to the act of bankruptcy, not to the issuing of the commission.* But where the drawer of a bill had a judgment against him, and after the fiat against the drawer the acceptor paid the bill; held, the holder might prove for the costs.^ But one giving cash for a bill or note, without the indorsement of the person from whom he takes it, cannot prove it under his bankruptcy.' Nor is a debt due on a bill from which the drawer has been discharged by want of notice provable under a commission issued against him.* And where a bill or note is indorsed after the bankruptcy of the acceptor, the indorsee can only prove such debt as the indorser could have proved at the time of the bankruptcy .' So notes bought up after the bankruptcy of the maker cannot be proved, unless it be shown that the persons from whom they were purchased were individ- ually entitled to a proof.' So where A., the payee of a bill, indorsed it in blank, and delivered it to B., and B. wrote above the blank indorsement, "Pay C. or order," and B. took up the bill after a commission of bankruptcy had issued against the ac- ceptor; a petition to prove it was dismissed, with an offer of a caseJ So where the defendant drew a bill on the plaintiff, but promised to pay it himself when due, and afterwards became a bankrupt ; upon the plaintiff's being afterwards sued, and obliged to pay the bill ; held, he could not prove any debt under the com- mission.* § 27. The question often arises, as to the proof of claims estab- lished and evidenced by legal proceedings. The subject will be more fully considered hereafter, under the head of discharge. (See chap, ix.) § 28. It is said that a creditor, who has sued a debtor, declared bankrupt under the law of England, may, on relinquishing the suit, prove his debt under the commission.' § 29. It is held in England, that, where a verdict is obtained before the act of bankruptcy, and final judgment signed after- wards, but before the issuing of a commission, the debt is prova- 1 Moore, 2 Bro. 597 ; ] Atk. 140 ; Fran- 5 Deey, 2 Cox, 423. ois V Kucker, Amb. 672. • Jftogers, buck, 490. « Cocks, 11 Jur. 270. 'Isbester, 1 Kose, 20. s ShuUleworth, 3 Ves. 868; Harrison, s Vanderheyden v. De Paiba, 3 Wils. 2 Bro. C. C. 615. 528; Chilton v. Whiflfen, 3 Wila. 13. *B.ohdor v. Proctor, 6 D. & E. 510; 4 'Per Walworth, Ch., Plestaro v. Abra- B. & C. 517. ham, 1 Paige, 286. . ' 212 BANKRUPTCY AND INSOLVENCT. [CHAP. VIII. ble.^ Thus a plaintiff recovered damages and costs against a defendant in an action of trespass, and signed final judgment on the 29th of January. On the 23d the defendant committed an act of bankruptcy, and a commission issued against him on the 31st, and on the 3d of May he obtained his certificate. Held, the' damages and costs were a bond fide debt within the meaning of 46 Geo. 3, c. 135, s. 2, and provable; and, he having been arrested for them, the Court discharged him.^ So where, in an action for damages on a tort, a verdict was taken, subject to the award of an arbitrator, and the defendant became bankrupt be- tween the verdict and the award ; held, that execution could not be sued out on the judgment, either for the damages or costs, because the plaintiff might have proved the damages recovered under the commission by the production of the record. And the fi. fa. was set aside, on the terms of the defendant's undertaking to bring no action against the sheriff.^ So proprietors of saw- mills contracted to saw timber for a merchant, and to insure him against loss as to any timber that might be destroyed by fire. A fire took place, and the timber at that time at the mills was de- stroyed. The parties to the contract agreed as to the quantity and quality of the timber destroyed, and the merchant brought an action for the alleged value, and the saw-mill proprietors soon afterwards were adjudicated bankrupt. The merchant proceeded with the action, notwithstanding the adjudication, and recovered a verdict for the sum alleged to be the value, and tendered a proof for that sum before the commissioner, who rejected it, but recom- mended an appeal. Held, that the amount of the loss was capa- ble of being ascertained, and that the merchant was entitled to prove, and with that declaration the matter was sent back to the commissioner.* But if a defendant commit an act of bankruptcy between the time of a vferdict in case for unliquidated damages, and final judgment, the damages are not a provable debt.' So where, prior to the petition for adjudication, a verdict for damages had been recovered against the bankrupt in an action for tort, but the amount, being made the subject of a reference, was not ascer- tained till after the adjudication ; held, that this did not consti- 1 Robinson v. Vale, 4, D. & R. 430 ; 2 * Bateman, 35 Eng. Law & Eq. 422. B. &C. 762. 6 Charles, 14 E. 197; 16 Ves. 256; ' Ibid. Buss I). Gilbert, 2 M. & S. 70 ; 2 8 Beeston v. -White, 7 Price, 209. Rose, 167 ; Todd, 3 Wils. 270. CHAP. Vlir.J PROOF OF CLAIMS. 213 tute a liability, contracted by the bankrupt prior to his petition for adjudication to pay a sum of money upon a contingency, en- titling the party recovering the verdict to prove in the bankruptcy, under the provisions of s. 178 of the bankrupt law consolidation act, for the amount of the damages ultimately ascertained under tjie reference.^ § 30. A judgment for damages and costs in assumpsit was a debt contracted within the meaning of the 46 Geo. 3, c. 135, s. 2, and provable, though final judgment was not entered up until after the commission issued.^ So a bankrupt is liable to the judg- ment on a bail-bond, recovered prior to his certificate, although the act of bankruptcy preceded the action upon the bond, and the bond itself was discharged.^ But under the insolvent law of Massachusetts a judgment recovered after, upon a debt prior to, the first -publication of notice, is not provable, being a claim not in existence at the commencement of proceedings; nor is the debt provable, being merged in the judgment.* So in Con- necticut, an action was commenced before the date of an insol- vent's petition, judgment recovered after his discharge, and an execution exhibited to the assignees as a claim against the estate. Held, the original debt by contract was extinguished by the judg- ment, and, as the judgment debt accrued after the date of the petition, it could not be allowed by the assignees.* And neither a verdict nor judgment is more than primd facie evidence of a debt, which the creditors or the bankrupt are at liberty to im- peach, and into the circumstances of which, if impeached, the commissioners are bound to inquire.^ And more especially is this true of a judgment subsequent, though founded upon a verdict prior to, the commission.' § 31. The setting aside a judgment confessed in an action on a note, for fraud in the note, does not affect the validity of the note ; and will not prevent proof of the note against the estate of the debtor, after making an assignment for the benefit of his creditors.* 1 Todd, 31 Eng. Law & Eq. 549. s Butterfell, 1 Rose, 198. 2 Birch, 4 B. & C. 880. » Rashleigh, 1 Rose, 192; Bryant, 1 sCockerill v. Owston, 1 Burr. 436. Ves. & B. 211 ; Masson, 3 Mont. & * Sampson v. Clark, 2 Gush. 173; A. 155. Woodbury v. Perkins, 5 Gush. 86. ^ Jiann v. Drost, 3 Harr. 336. 5 Boardman v. Deforest, 5 Conn. 1. 214 BANKRUPTCY AND INSOLVENCY. [CHAP. VIII. § 32. An award in favor of one partner, upon an arbitration between the partners, is a suflBcient debt to support a commission against the other.^ So a creditor brought an action against his debtor for the balance alleged to be due upon an account between them. The debtor consented to a verdict for £100,000, subject to a reference, the arbitrator to have authority to order a verdict tq be entered for either party, with the costs of the suit and of the arbitration. The arbitrator, after more than six years, made an award in favor of the creditor for £11,455. After the date of the award, and before judgment was signed, the debtor committed an act of bankruptcy, and gave notice thereof to the creditor, who afterwards entered up judgment, and subsequently the debtor was adjudicated bankrupt. The creditor claimed to prove for the awarded sum and the costs, which the commissioner allowed; whereupon the creditor's assignee appealed. Held, that the creditor was entitled to prove for the debt awarded, interest and costs, as a liquidated sum, on the ground that the award was more than a verdict, rendering this sum provable as a debt, until it could be shown that the award could be set aside at law.^ But a mere award does not make provable a claim which was not so before.' § 33. A creditor who has proved his claim will, upon petition by the assignees, be restrained from issuing execution against the property of the bankrupt in their possession.* On the other hand, a judgment on which an execution has issued, and been returned satisfied, by a levy on real estate not the property of the judg- ment debtor, is not such a demand as will authorize proceedings in insolvency against the debtor, on the judgment creditor's peti- tion, until the levy has been set aside, on scire facias, pursuant to a statutory provision for that purpose.' § 34. A creditor, who obtains a verdict upon a contract before commission against a bankrupt, is held entitled to prove his costs, as well as his debt, under the commission, though judgment was not signed till after the commission issued.* So, though judgment be not obtained till after the certificate is allowed.^ So a creditor iLingood, 1 Atk. 240. ^ A.y\eit v. Harford, 2 W. Black, 1317; 2 Harding, 28 Eng. Law & Eq. 267. Pouoher, 1 Glyn & J. 885 ; Simpson, 'Comstoek, 5 Law Rep. 163. 3 Bro. C. C. 46. * Bernasconi, 2 Glyn & J. 381. 7 Boutcflour v. Coates, Cowp. 25. 'Dennis t>. Sayles, 11 Met. 233. CHAP. VIII.J PROOl OF CLAIMS. 215 of the bankrupt, previous to the commission, obtained a verdict against him for a nominal sum, in an action for money had and received, subject to a reference. After the issuing of the com- mission, the award was made, and judgment entered up for the debt and costs awarded ; and the creditor, having proved his debt, took the bankrupt in execution for the costs. Ordered, that he be discharged.' So where, upon an action on a contract, there was a verdict for the plaintiff, subject to a reference before the bank- ruptcy, by which it was directed that the costs of the action should abide the event of the award, and the award was made in favor of the plaintiff; after the bankruptcy, the costs were held to be provable.'' And in general the costs of suits brought before the bankruptcy are allowed to be proved, upon the ground that at least an inchoate right to the costs was vested in the party by a suit actually commenced, and that the subsequent proceedings were considered as springing out of it, and as steps necessary only to complete a right before vested, and to ascertain its amount.^ So, in Massachusetts, a verdict having been rendered against a party, he carried the case by exceptions to a higher court, where by leave a suggestion was made of his insolvency. The exceptions being overruled, and judgment entered on the verdict, the Court ordered that no execution issue, but that the amount of debt and costs be certified, to be allowed as a debt proved by the plaintiff, under proceedings in insolvency, against the defendant, and the costs be paid in full.* But the costs were held not provable, where, in an action for defamation, the defend- ant became bankrupt between verdict and judgment.* Nor upon a verdict and judgment after bankruptcy, in an action previously brought, whether for an antecedent debt by contract, or mere damages in tort.' Though, it seems, the costs are barred by the certificate.' § 35. We shall hereafter consider more particularly whether claims for torts or wrongs are discharged by the certificate, and there- fore provable. It may here be stated, in general, that such claims are not provable. As for example a claim for mesne » Haynes, 1 Glyn & J. 107. s Longford v. Bllis, 1 H. Black. 29, n. 2 Helm. 1 Mont. & Mao. 70. « Hill, 11 Vob. 64b ; 2 N. R. 191. But 3 CuUen's Bank. L. 106. see St. 6 Geo. 4, c. 16, s. 58. « Morris v. Briggs, 3 Cush 342. ' Poucher, 1 Glyn & J. 385. 216 BANKRUPTCY AND INSOLVENCY. [CHAP. VIII. profits.' Or for a trespass.^ So the North Carolina insolvent act of 1822, s. 7, was held to refer to debts ex contractu, not ex delicto.^ So the New York insolvent act of 1811 did not ex- tend to actions for libels or torts.* So persons confined in jail for torts and trespasses did not come within the provisions of the act of Congress, or that of South Carolina, for relief of insolvent debtors.® But, in Pennsylvania, a delinquent collector of county rates and levieSj arrested and. held under a treasurer's warrant, pursuant to the 18th section of the act of April 11, 1799, was held entitled to give bond to the commissioners of the county to appear and make application for the benefit of the insolvent law ; such a proceeding being a civil process, in the nature of an exe- cution.^ And in England proof was allowed on promissory notes given for liquidated damages, by compromise of an action for seduction, per quod servitium, etc.'^ . (See sec. 4.) § 36. The important subject of dividends is variously regulated by difi"erent statutes. (See chapter v.) § 37. An order for payment of dividends, declared upon a creditor's petition for that purpose, raises, like the execution in the action for which the petition is substituted, a personal respons- ibility against the assignee.' An oflScial assignee cannot resist payment of a dividend.' And assignees are not justified in delay- ing payment, on the ground that notice has been given them by a third person of a claim upon the dividends, no petition having been presented by the claimant within a reasonable period after such notice.'" So upon a petition to be paid a dividend, the debt cannot be disputed." But where a dividend was declared and repeatedly advertised to be paid, and subsequently to the ap- pointed days for payment the bankers to the commission, in whose hands a sum more than sufficient for the payment of the dividend had been left by the assignees, stopped payment, and afterwards became bankrupt ; held, that an order of dividend is to be considered as a separation from the bulk of the estate of the sum to be divided, and that the unpaid dividends were lying 1 Goodtitle v. North, Doug. 584. ' Mumford, 15 VeS. 289. 2 Kellogg V. Schuyler, 2 Denlo, 73. s Graham. 1 Rose, 456. 8 Woolland v. Dean, 2 Dbt. & Bat. 490. » Alexander, 1 Mont. 503 ; 1 Deae. & * Strong V. While, 9 Johns. 161. Chit. 51, 6 Martins v. Ballard, Bee, 258. m Alsopp, 1 Madd. 603. « Furey, 1 Ashmead, 383. n Loxley, Buck, 450. CHAP. Viri.] PKOOF OF CLilMS. 217 in the hands of the bankers at the risk of the creditors, who had neglected to apply for payment.' § 38. It has been held, that -where there is a surety for a debt of the bankrupt, the creditor may prove his claim or not, as he prefers ; or, having proved, he may expunge it. If after proving he received payment from the surety and then took his dividend, he held so much of the amount received, as was equal to the dividend, to the surety's use.^ So a surety for indemnity to a limited amount, having paid to the extent of his engagement, is entitled to dividends upon proof by the creditor under the bank- ruptcy of the principal debtor, subject to a deduction of the pro- portion of dividend upon the residue of the debt proved, after expunging that for which the surety was liable.^ So, where a surety on several notes takes a mortgage of indemnity from the principal, and thereby holds the property in trust for the holders of the notes, and he remains liable on only one of the notes, and the property is assigned under the insolvent law ; if sufficient to pay all the notes, it is to be thus applied, and the surplus, if any, distributed among the general creditors. But if insufficient, the surety is first to be indemnified, and the surplus paid to the holders of the notes, pro raid.* Bat a surety paying", after the bankruptcy, to a creditor who has proved, can only stand in his place upon the bankrupt's estate; and, in case of a surplus, can claim no interest which the creditor could not have claimed.' § 39. In England, interest is payable on a dividend at five per cent.' So on a petition for payment of dividend, which is unsuc- cessfully opposed by the assignees, interest at five per cent., and costs, are allowed of course against the assignees, who, if they act bond fide, may reimburse themselves out of the estate.' § 40. It is held that, after a dividend, fresh creditors coming in shall only be paid subsequent dividends pari passu with those who have proved before; but if the assignees have paid other creditors differently, they must let these creditors in for the first dividend.*(a) 1 Powell, 1 Mont. & Mac. 283. 5 Houston & Boyd, 2 Glyn & J. 36. 2 Selfridge v. Gill, 4 Mass. 96. ' Loxley, 1 Glyn & J. 345. sPaley v. Field, 12 Ves. 485. And 'Harrison, 1 Mont. 250. see Turner, 3 Ves. 243. » Long, 2 Bro. C. C. 50. * Eastman v. Foster, 8 Met. 19. (a) Under Mass. Stat. 1836, c. 238, a creditor who became a party to an 218 BANKRUPTCY AND INSOLVENCY. [CHAP. VIII. § 41. Provision is uniformly made by statute, that certain claims shall be treated as f referred, and paid in full if the assets will allow it. Thus by St, 6 Geo. 4, c. 16, s. 48, where a bank- rupt is indebted to any servant or clerk for wages or salary, the commissioners may order so much of what is due, not exceeding six months' wages or salary, to be paid out of the estate; and the servant or clerk may prove for the residue.(a) In construction of this act, it is held that the words "six months" mean six lunar months.' The act is not to be confined to trade clerks.^ It ex- tends only to yearly servants.^ Weekly laborers, and workmen employed as excavators and bricklayers, are not servants.* Nor the workmen of a coachmaker, who worked by the piece, and received a specific sum for each job, under separate and distinct contracts, and where there was no hiring for a specific time.^ But if a clerk and foreman is engaged at a weekly salary, and to have two suits of clothes per annum, it is a yearly hiring within the section.* So a person engaged as traveller at an annual salary is a servant or clerk within the act.' § 42. Drawers, employed in the excavation of mines, are not entitled, under the 169th section of the bankrupt law con- 1 1 Mont. & B. 413. 5 Crellar, 1 Mont. 264 ; S. C. contra, 1 2 Gough, 1 Mont. & Bligh. 417. Mont. & Mac. 95. ' Skinner, ibid. « Humphreys, 1 Mont. & Bligh. 413 ; *Crawfoot, 1 Mont. 270. 3 Deac. & Chit. 114. ' Neale, 1 Mont. & Mac. 194. assignment, after the first dividend was paid, but before the second was declared, was entitled to the full amount of the first dividend, if the assignees had unappropriated funds enough to enable them to make such payment, without disturbing the first dividend paid. Peck v. Stimpson, 20 Pick. 312. But not to interest on his share of the first dividend. But he was entitled to costs, paid out of the funds in the assignees' hands. Ibid. In Louisiana, a syndic who had a surplus in his hands, after paying all the debts placed upon his tableau of distribution, is not bound to pay over such balance to the ceding debtor, if subsequent to the filing of the tab- leau new debts were discovered to exist. Gottschalk v. His Creditors, 12 La. An. 70. The syndic is bound to administer any surplus in his hands for the benefit of such newly-discovered creditors ; and until all the creditors are paid, the assets in the hands of the syndic must be applied to the payment of the debts of the insolvent. Ibid. (o) See Harris, 1 De Gex, 165. CHAP. VIII.] PEOOF OF CLAIMS. 219 solidation act, to payment of wages out of the estate of the bankrupt proprietors of the mines. Thus, by the custom of mining districts in Lancashire, a collier or excavator, on being hired by the owners or manager of the mine, brings with him an assistant workman, called a drawer, with whom he divides, in proportions agreed upon between themselves, the gross earn- ings of the two, which are paid by the manager to the collier alone, but in proportion to the work done by the two. The drawer is always hired by the collier, but sometimes upon the rec- ommendation of the manager, and the collier keeps or dismisses him as he pleases, the manager, however, exercising a power to dismiss either the collier or the drawer for misconduct, and also a veto in case of improper dismissal of the drawer by the collier. Held, upon the bankruptcy of certain proprietors of mines in Lancashire, that the drawers of the mines were not laborers or workmen of the bankrupts entitled to payment of their wages in fuU.i § 43. Where, in the distribution of the estate of an insolvent debtor, a fund on which a creditor has a specific lien proves insuf- ficient to satisfy his debt, he is not therefore entitled to a prefer- ence in respect to the general fund.^ § 44. The principles stated by Ld. Eldon, (in the case of Wa- ring, 19 yes. 345,) that where A. and B. are acceptor and drawer of bills of exchange, and property of the one comes to the hands of the other, to be held as security against the bills, and then both become bankrupt, the bill-holders have a right to have the property applied exclusively, in the first instance, in payment of the bills, is in a late case held applicable as well to cases of double insol- vency as of double bankruptcy, although the property is not suflScient to pay the bills in full.' § 45. Money, which by the rules of a friendly society ought to have been deposited with a treasurer appointed by the society, was paid directly to the bankers of the society. The bankers were adjudicated bankrupts, and the society, under the 167th section of the bankrupt act, claimed to be paid in full, and in support of the claim filed an affidavit, swearing that the bankers ' Eokersley, 17 Eng. Law & Eq. 215. ' Powles v. Hargreaves, 23 Eng. Law 2 Anderson *. Anderson, 1 Hen. & M & Eq. 257. 12. 220 BANKRUPTCY AND INSOLVENCY. [CHAP. VIII. were "employed in the office of treasurer." Held, that the peti- tioners were not entitled to payment in full.' § 46. The preferred costs of suit mentioned in the 21st section of the New York act, of session 24, c. 131, giving relief in cases of insolvency, do not include costs arising on suits before insti- tuted by the insolvent.^ § 47. Bankrupt statutes do not bind the Crown.' And debts due the United States were not within the bankrupt act of 1800.*(a) So the United States were preferred, though they voted for an assignee, and proved their claim. So, though the debt was con- tracted abroad by a foreigner.* So the law of 1800 did not abrogate the preference given to sureties for custom-house bonds 1 Orford, 13 Eng. Law & Eq. 540. * United States v. King, Wallace, 13. 2 Day V. Lorett, 7 Johns. 374. 6 Harrison v. Sterry, 5 Cranoh, 289. 3 Russell, 19 Ves. 165. (a) In regard to the priority of debts due to the United States, the statute of 1797, c. 74, giving such priority in cases of insolvency, applies to equitable as well as legal debts. Howe v. Sheppard, 2 Sumn. 133. But if before the right of preference has accrued by an act of insolvency the debtor has made a bond fide conveyance or mortgage, or the property has been levied on, there is no preference. A mere judgment is insufficient to prevent such preference. There must be a legal insolvency, or in the terms of the act a legal hanhruptcy. Mere insolvency or inability to pay one's debts is insufficient, unless accompanied by a voluntary assignment of all the debtor's property for benefit of creditors. An omission of an article of property, in an assignment purporting to be general, does not take the case out of the act. But, unless the assignment purport to be general, the burden of proof is on the United States. And mere concealment gives no priority. United States v. Delaware, etc. 4 "Wash. 0. 418; Thellnson v. Smith, Pet. 0. 195 ; United States v. Clark, Paine, 629 ; Marshall v. Bar- clay, 1 Paige, 159. As to the notice necessary to charge the assignee, see Paine, 629. A partnership, becoming insolvent, executed an assignment of their joint and several property. One of the partners was indebted to the United States. Held, that the United States had no right of preference over the joint creditors of the partnership, to be paid out of the partnership fund. United States v. Evans, Crabbe, 60. The State is not entitled to precedence (except for debts which are liens upon the property, such as taxes,) in the distribution of a debtor's estate, under the insolvent debtors' act of South Carolina. State v. Harris, 2 Bailey, 598. CHAP. VIII.] . PROOF OF CLAIMS. 221 by a prior statute, either for principal or interest, even where the bond was paid after the commission issued.^(a) § 48. The statutes of get-off extend to assignees under a com- mission of bankruptcy.^ And a mutual credit may be created, though the parties do not mean particularly to trust each other.' It is said : " The clause in the statute relating to mutual credit 1 Champneys v. Lyle, 1 Bin. 327 ; Mott 511 ; Valpy v. Sanders, 5 Man. Gr. V. Maris, 2 Wash. C. 196; Hunter & Sc. 886; Bittlestou v. Timmis, V. United States, 5 Pet. 172. 1 ibid. 389 ; Rose v. Hart, (a lead- 'Kidout V. Brough, Cowp. 133; Lofft, ing case,) 2 Smith, Lead. Cas. 172, 608. See Kyall v. Larkin, 1 Wils. & Aran. note. 155 ; Sargent v. Fitzpatrick, 4 Gray, 3 Hankey v. Smith, 8 T. K. 507, n. (a) A., as surety for B. in a custom-house bond, was compelled to pay the amount to the United States. A. filed his petition for the benefit of the insolvent laws of Ehode Island, but, before he made an assignment of his property, the United States recovered judgment against him as surety of the marshal of the district, who wag in default. The assignee in insolvency of A. was also assignee in insolvency of B., and, as assignee of B., received the amount of certain Spanish claims, which passed to him by the assignment of B. The United States were entitled to priority of payment out of this fund, to satisfy tbe custom-house bond. Held, that on payment of the bond by A. this right of priority attached to the fund in favor of A., whose estate was entitled to the amount paid by A. as surety of B., and that the United States were entitled by right of priority to have this amount applied to the satisfaction of their judgment against A. as surety of the marshal. Hunter V. United States, 5 Pet. 172. In such case, a suit at law might not be an adequate remedy, and it was proper to proceed in equity. Ibid. The proceeds of such claims coming to the hands of the United States, the Secretary of the Treasury was directed to retain out of such fund the amount of the debt due to the United States; but by mistake he paid over the whole fund to the assignee. Held, that the United States did not, by this act of the officer, lose their lien on the fund ; as the secretary, not acting within his authority, did not bind the government by such payment. Ibid. A subsequent assignment of the same property by the debtor to the United States will pass no title to the property, although made in part satis- faction of a debt due to the United States from the debtor before his assign- ment under the insolvent laws. Ibid. But, in such case, the United States are entitled to the property assigned by virtue of their right of priority. Ibid. And though a bill in equity be filed by the United States against the assignee in insolvency, claiming the property under the second assignment, this will not preclude them from filing an amended bill, abandoning this claim, and claiming under their right of priority. Ibid. 222 BANKRUPTCY AND INSOLVENCY. [CHAP. VIIT. has received a very liberal construction ; and there have been many cases, which that clause has been extended to, where an action of account would not lie, nor could the Court of Chan- cery upon a bill decree an account."* So in a later case, "the principle which the bankrupt laws seem to have in view from the earliest time to the last provisions made therein is this, that where two persons have dealt with each other on mutual credit, and one of them becomes bankrupt, the amount shall be settled between them, and the balance only payable on either side."* And in reference to set-off of an indorsed note: "This case is not to be determined upon the technical rules of set-off, but upon the prin- ciples regulating the settlement of insolvent estates, whether of persons living or deceased. The settlements with such estates are final, and all mutual demands are to be balanced. Claims not. liquidated, and debts absolutely due, though payable in the future, are to be included. The balance found upon such adjustment is the only debt remaining."' And the set-off, allowed under the statute in case of bankruptcy, is not confined to pecuniary demands, but extends to all cases where the creditor has goods of the debtor in his hands, which can be reached only by a suit at law or in equity.* So where part of the account between two mercantile houses, which become bankrupt, consists of bills that may be proved against both estates, there can be no proof in respect of bills as between the two houses, unless there is a surplus after satisfying the holders of the bills.* So where there was cross paper dishonored on each side, and both parties were bankrupts, the proof, as between the two estates, was confined to the cash balance with regard to the dishonored bills.* And in such case no proof can be made in respect of the bad paper, or the excess of damage eventually sustained on that account.^ So if the maker of a promissory note, which has been discounted at a bank, becomes insolvent, having money on deposit in such bank, the amount of the note may be set off against the amount of the deposit, and the balance only of the latter paid to the assignees, provided the note is due •Per Ld. Hardwicke, Deese, 1 Atk. * Murray o. Eiggs, 15 John. 571. 228. See 2 Smith's Lead. Cas. 172. ' Rawson, Jacob, 274. 'Per Tindal, C. J., Gibson v. Bell, 1 « Earle, 6 Ves. 838. Bing. N. C. 746. J Walker, 4 Ves. 873. ' Per Thomas, J., Aldrich t>. Campbell, 4 Gray 285. CHAP. VIII.] PROOF OP CLAIMS. 223 absolutely, although not payable until afterwards ; the right of set- off accruing at the time of the first publication of the notice of the insolvency, and the account being stated, and the balance ascer- tained, as of that day.' So the indorser of a bill, protested before the drawer's bankruptcy, and paid afterwards, might set it off against a demand of the assignee, though he could not prove it under the commission ; provided, however, at the commence- ment of suit the debt was due to him alone.^ So where a creditor files an afiidavit of debt under the bankruptcy consoli^ dation act, (12 & 13 Vict. c. 106, s. 78,) he is bound to notice and deduct any sum due to the debtor arising out of the same transaction as that out of which his own debt arises, and to claim for the difference only; and if he omits to do so, he will be held not to have had reasonable or probable cause for making the aflBdavit in the amount at which it was made. Where, therefore, in an action for goods sold and delivered, the plaintiff sought to recover the price of a cargo of coals, the freight of which he was bound to pay to the captain of the ves- sel before they could be discharged, and the defendant proved at the trial, as a set-off, payment of the freight, and reduced the verdict for the plaintiff by that amount; it was held, that the plaintiff had not any reasonable or probable cause for making an afiidavit of debt in the bankruptcy court, for the full price of the coals, without deducting the amount paid by the defendant for freight; and the Court, under 12 & 13 Vict. c. 106, s. 86, ordered that the defendant should have the costs of the suit.^ § 49. But in order to constitute a mutual credit within the 5 Geo. 2, c. 30, s. 28, it must be confined to pecuniary demands on such credits as in their nature will terminate in a debt ;* or where the balance can be ascertained by computation.® Therefore a guaranty, being merely a contract to indemnify against contin- gent damages, cannot form the subject of a mutual credit.^ So, to enable the holder of a bankrupt's acceptances to avail himself of them in an action by the assignees against himself on his own acceptance, by way either of set-off or of mutual credit, hemust ' Demmon v. Boylston Bank, 5 Cush. * Rose v Hart, 2 Moore, 547 ; 8 Taunt. 194. 499. ^Marks v. Barker, 1 Wash. C. 178. 64 Moore, 515. ' Marshall v. Sharland, 1 Eng. Law & ^ Sampson v. Burton, 4 Moore, 515 ; 2 Eq. 231. B. & B. 89. 224 BANKRUPTCY AND INSOLVENCY. [CHAP. VIII. roost distinctly prove, either that the obligation on himself to pay the bill so set off subsisted before the bankruptcy, or that there was a mutual credit created in the origin of the bill.^ So debts purchased with knowledge of the debtor's insolvency, and reason to believe that he is about to go or be forced into insol- vency, and notice of such purchase to him, cannot be set off in an action by the assignee in insolvency upon a debt due from the purchaser to the debtor.^ Though it seems such purchaser might file the claims purchased as debts due from the insolvent, and receive his pro raid distributive share of the assets. "To allow this set-off would enable a debtor of an insolvent — one notori- ously so, and who was about to become the subject of proceedings in insolvency — to give a preference to such creditors of the insol- vent as he might be disposed to favor, making their debts avail- able to the whole amount due, if the purchaser pleased to take them at that rate, as he might well do if he was to be allowed their full amount as an available set-off against his own debt to the insolvent; or, what would be equally objectionable, to allow the debtors of the insolvent to discharge their liabilities by a set- off acquired by purchasing the depreciated debts of the insolvent at a large discount from their nominal amount."^ So an admin- istrator cannot set off a debt due to him in his own right against a claim by the assignee of a distributive share belonging to the insolvent.* So a creditor of an insolvent joint stock corporation is not, by reason of his being a stockholder therein and indebted thereto, by a promissory note given in payment of his subscrip- tion for stock, deprived of any right to recover his claim, which other creditors possess." § 50. If a bankrupt, on the eve of his bankruptcy, fraudu- lently deliver goods to one of his creditors, the assignees may disaffirm the contract, and recover the value of the goods in trover ; but if they bring assumpsit, they affirm the contract, and then the creditor may set off his debt.* But where a person, previous to his bankruptcy, deposited a bill of exchange with the defendant for the purpose of raising money thereon, and an ad- iQuchterlong t>. Easterby, 4 Taunt. 'Per Dewey, J., ibid. 678. 888; 2 Rose, 272. * Davis v. Newton, 6 Met. 537. » Smith V. Hill, 8 Gray, 572. Affirmed s Pondville Co. ». Clark, 25 Conn. 97. by St. 1856, o. 284, b. 28. ^SmiVa. v. Hodson, 4 T. R. 211. CHAP. VIII.] PROOF OF CLAIMS. 225 vance was accordingly made; held, that the assignees of such bankrupt were entitled to recover the bill in an action of trover, on having tendered the money advanced, although a balance remained due from the bankrupt to the defendant on a general account; and that this, therefore, was not a case of mutual trust or credit, within the St. 5 Geo. 2, c. 30, s. 28.^ § 51. In England, it is doubted whether a claim can be with- drawn without leave of court.^ But where, under the United States bankrupt law, a creditor holding collateral securities proved his debt, but presented his petition, alleging that it was never his intention -to relinquish the securities, nor did he sup- pose that, by proving his debt, he should affect his rights thereto; he was allowed to withdraw his proof.' § 52. "Under the English bankrupt laws, until the statute of 6 Geo. 4, c. 16, s. 60, the power of expunging proofs was vested solely in the lord chancellor upon petition. That statute gives the commissioner but a limited authority."* But, in Massachu- setts, the Supreme Court has power, under its general superin- tendence and jurisdiction, as a court of chancery, of all cases arising under the insolvent law, to expunge the proof of a fraudu- lent claim against the estate of an insolvent debtor, on the peti- tion of his assignee, who did not know of the fraud until the expiration of the time allowed by law for an appeal from the allowance of the claim by the commissioner of insolvency. °(a) And with regard to the remedy of expunging it is said: "The provisions for appeal in the fourth section furnish a wholly inad- 1 Key V. Flint, 1 Moore, 451 ; 8 Taunt. ' Harwood, Crabbe, 496. 21. *Per Thomas, J., Hill v. Hersey, 1 2 See Beverly, etc. «. Wilkinson, 2 Grav, Gray, 586. 520; Morse v. Lowell, 7 Met. 162; 6 ibid. 584. Bemis v. Smith, 10 Met. 194. (a) Under the bankrupt law of 1800, commissioners had no power over a dividend declared by them. Selfridge v. Gill, 4 Mass. 95. When a dividend had been made by commissioners, every creditor, whose claim had been allowed, was entitled to his dividend, and no court could prevent his receiving it, nor cause it to be distributed among other cred- itors. Ibid. A full dividend might be received where a joint debt was proved under a separate commission ; and equity only could restrain the creditor from receiv- ing his full dividend. Tuckers v. Oxley, 5 Oranch, 34. 15 226 BANKRUPTCY AND INSOLVENCY. [CHAP. VIII. equate remedy against the proof pf false and groundless claims. The time of appeal is limited to ten days, and no degree of dili- gence on the part of assignees would enable them to detect the frauds committed in the proof of claims, and to file their appeals within the time limited. Especially is this true, where the cred- itors are numerous, and the accounts of the debtor complicated and involved. Beside the case of fraudulent proofs, there are frequent cases of innocent error or mistake. Indeed, it is quite plain to those having any acquaintance with the practical opera- tion of bankrupt or insolvent laws, that the existence of the power to expunge proof of debts is necessary to their just admin- istration."^ So in England, where a creditor proved in respect of several bills of exchange drawn by the bankrupt and dis- counted by the creditor, and one of those bills was subsequently wholly paid ; held, that so much of the proof as related to that bill must be expunged.^ So where the indorser of a bill of ex- change becomes bankrupt, and the holder proves his bill under the commission, and afterwards compounds it, and discharges the acceptor without notice to the assignees of the indorser; he also discharges the indorser's estate, and the proof of his debt must be expunged.' So proof under the bankruptcy of one joint debtor, after receiving a composition from the other, was ex- punged, the release to one being a release to both.* So on peti- tion to expunge a proof, founded on an afiidavit of a creditor, who died before the proof was made, the commissioners were directed to review the proof, although two dividends had been paid.' § 53. Under the insolvent law of Massachusetts, a person whose claim against the insolvent estate has been formally allowed by the commissioner, but from which allowance an appeal has been taken and prosecuted according to law, is not a creditor, entitled to vote as such, after the appeal has been taken and perfected, and before any judgment upon it has been rendered by the appellate court.'' iPer Thomas, J., Hill v. Hersey, 1 » Smith, 8 Bro. C. C. 1. Gray, 585. 4 giater, 6 Ves. 146. » Barralt, 1 Glyn & J 327. See Hornby, 6 Bridges, 4 Madd. 269. 1 De Gex, U9. 6 Betton v. Allen, 9 Cush. 382. CHAPTER IX. DISCHARGB. 1. Nature, history, and various kinds of discharge. 4. Application of statutes provid- ing for a discharge to pending cases. Discharges under National and State laws. 9. Discharge in case of previous bankruptcy, etc. ; assent of creditors. 10. Whether judicial or ministerial; matter of right or discretion; form of proceeding. 12. Necessity of a certificate. 13. Conclusiveness of the certifi- cate; question of jurisdiction; notice; whether the record is to be offered in evidence. 18. How pleaded ; form of plea and replication; notice of objections to the discharge. 25. Fraud, as an answer to a plea of discharge. 26. Duty of creditors objecting to a discharge ; whether estopped by pre- vious proceedings. 27. Specification of acts of fraud. 28. Concealmentof property; insuf- ficiency of schedule. 38. Concealment or misrepresenta- tion as to debts. 39. Estoppel oi creditor. 41. General character of the bank- rupt. 44. Subsequent promise to pay. 68. Effect of a discharge upon a judgment. 63. Costs. 64. Continuances of suit in case of bankruptcy, etc. Plea puis darrein continuance. 69. Release from arrest and impris- onment ; stay or supersedeas of exe- cution, etc. 74. What debts are discharged — provable debts. 76. Foreign debts; effect of a dis- charge under a State law upon citi- zens of other States, etc. 89. Debts due the State. 90. Fiduciary debts. 94. Necessaries. 97. Torts. 102. Unliquidated and contingent claims. 106. Rent. Surety. Bail, and miscellaneous surety- Claim of surety against the prin- 107. 108. ship. 114. cipal. 116. Assent of creditors. 123. Effect of statutes, in reference to the time at enactment and repeal. 132. Limitation. § 1. It has already been explained, (see chapter i.) that one of the leading purposes of a bankrupt or insolvent law is to re- lease or discharge the debtor from his liabilities. This feature, however, would seem to have been unknown to the early English (221) 228 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. statutes of bankruptcy. It is remarked by an Englisb writer on the subject: "The alteration which took place by the introduc- tion of the certificate, seems to be by far the greatest and the most important in its consequences, of all the changes that the bankrupt law has undergone, since its first institution : not merely for the variety of questions, and the multitude of determinations, to which it has given rise ; but principally on account of the remarkable change of the temper and character which has been impressed by it, upon the whole system, in modern times. Instead of being, as formerly, only a peculiar species of criminal law, operating in the very first instance against the person of the indi- vidual, upon the presumption of crime, in an unhappy debtor's avoiding creditors whom he was unable to pay ; and in the last in- stance, after stripping him of the whole of his property, still leaving him to the mercy of his unsatisfied creditors, (13 Eliz. c. 7, s. 10,) and offering to him no one^rospect either of any recompense of his integrity or alleviation of his distress, except only the hope- less chance of a surplus, from a wrecked fortune; it has, by the introduction of the certificate, and the different regulations de- pendent upon or connected with it, been converted into an equita- ble and liberal system, founded upon principles of humanity as well as justice, calculated not only for the security and satisfac- tion of creditors, but the protection, discharge, and relief of the unfortunate and honest debtor, "'(a) § 2. The precise nature or extent of a discharge in bankruptcy or insolvency is very various under different systems, as will more fully appear by reference to the English and American statutes contained in the Appendix. The most complete discharge is of course that which releases both the person and property of the debtor from all his debts.(6) Or the release may be confined to 1 CuUen's Bank. L. 871-2. {a) According to the same authority, St. 5 Geo. 2 seems to be the first bankrupt law providing for a discharge. Oullen, 372. (6) The mere right of discharge cannot properly be said to be the only relief resulting to the debtor. Exemption from arrest upon mesne or final process, as well as from costs and expenses of litigation, is a portion of the relief. Cohen v. Barrett, 5 Cal. 195. By St. 6 Geo. 4, c. 16, s. 121, providing that a bankrupt shall be discharged from all debts due by him when he became bankrupt, and from all claims CHAP. IX.] DISCHARGE. 229 debts contracted after the enactment of the law, as is the case in this country with State insolvent laws, which would otherwise be unconstitutional by impairing the obligation of contracts. (See chap, i.) Again, an insolvent law may merely discharge the person of the debtor from arrest, leaving his property still liable. And this designation is sometimes applied even to the poor debtor process, by which a party arrested for a debt, upon taking a certain oath, is released from imprisonment for that debt alone. And finally it may be remarked, that, by the existing bankrupt law in England, the nature of the discharge in each particular case is made to depend upon its own peculiar circumstances, the certificates being more or less absolute, and taking immediate effect, or being postponed to a future time, with reference, generally, |;o the conduct and char- acter of the bankrupt, as habitually fair or dishonest, prudent or reckless. (a) Judge Story remarks: "One State may adopt a and demands thereby made provable under the commission, in case he shall obtain his certificate ; the goods as well as the person are protected : there- fore, goods of a certificated bankrupt, acquired after the bankruptcy, being seized under &fi.fa., issued upon a judgment in respect of a debt due before the bankruptcy, the Court on motion set aside th&fl.fa. Davis v. Shapley, 1 B. & Ad. 54. A discharge under the act of 1803, for the relief of insolvent debtors, in the District of Columbia, being only a bar to any future remedy against the person of the debtor ; a creditor might prosecute his demand to judgment, in order to charge after-acquired property. Wright v. Paton, 10 Johns. 300. It is held that a discharge of an insolvent debtor, void as to its effect in relieving the defendant from the payment of his debts, is equally inoperative to protect him from imprisonment. Witt v. Follett, 4 Wend. 501. But see page 235. In Maryland, property acquired by an insolvent debtor, after he had been legally discharged, under the insolvent law of 1774, c. 28, otherwise than "by descent, gift, devise, bequest, or in a course of distribution," was not liable for debts contracted prior to his discharge ; and if liable, could not be affected by a fi. fa., withou,t a scire facias having previously issued, if a year and a day had elapsed. PoUitt v. Parsons, 2 Har. & J. 61. As to discharge from imprisonment, see Mason v. Haile, 12 Wheat. 378 ; People V. Abel, 3 Hill, 109 ; Waken, 4 ibid. 606 ; Hayden v. Palmer, 24 Wend. 364. (a) In addition to the specific and positive objections to the original granting of a discharge, or to its validity when granted, which are expressly provided by various statutes, there are others of a more undefined and dis- cretionary character, more especially in the later English acts, which require a brief notice. < Upon the general subject of granting a discharge, it is held that the com- 230 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. general system of insolvency, another a limited or temporary system ; one may relieve from the obligation of contracts, another missioners, in the exercise of their discretion as to the certificate, ought to be governed entirely by the fairness or fraudulent conduct of the bankrupt. Williamson, 1 Atk. 82. With regard to the course of proceeding as to the certificate, which, how- ever, is subject to the modifications of later statutes; formerly, it seems, first the commissioners certified ; then the creditors signed their consent ; and then the commissioners, upon affidavits of such signature, certified this also at the foot of it. 7 Vin. 132. A certificate must be finally allowed and confirmed by the lord chancel- lor ; but it is held that his power, though nominally discretionary, is to be exercised, not arbitrarily but discreetly, according to the conduct of the bankrupt. Allen, 7 Vin. 134. Where a statute gives to all the creditors the right of opposing the cer- tificate before the chancellor, any creditor may do it, though his claim was not large enough to authorize his signing it. Allen, 7 Vin. 134 ; CuUen's Bank. L. 376. A creditor may object to the allowance of a certificate by the chancellor, though he has himself signed it. Lord Mansfield says : "The allowance has been sometimes refused and. sometimes adjourned, even where there has been no opposition. Many years may intervene between the signing and the allowance of the certificate ; and large effects may, in the mean time, come to the bankrupt ; and the future allowance ought not to overreach them." Accordingly, a legacy left to the bankrupt, by the will of a testatrix who died between the signing and allowance of the certificate, was held to vest in his assignee and not in his executor. Tudway v. Bourn, Burr. 716-8. A certificate has been delayed, where the principal creditors lived abroad, in order to give them reasonable time to inquire into the bankrupt's conduct and prove their claims. Sansmerez, 1 Atk. 84. Or where only three months had elapsed since the issuing of the commission, and the bankrupt had been a trader in Ireland, and most of his books were there. Williamson, 1 Atk. 82. See, also, 1 Atk. 84. Or to give creditors who are proceeding at law an opportunity to come in. OuUen's Bank. L. 379. But where four-fifths of the proving creditors have signed, the allowance will not be delayed on the application of new creditors, upon the ground, that when they are included four-fifths have not signed, unless upon proof of fraud. Pydell, 1 Atk. 78. Nor upon the application of one having a mere unliquidated claim ; more especially if he is unable to swear positively to a balance, aud the bankrupt swears to a balance due him. Johnson, 1 Atk. 81. Nor unless the creditor accounts for the delay in proving his claim. Adams, 2 Bro. 48. In construction of statutes relating to the effect of gaming upon a bank- rupt's certificate, it is held that a loss by gaming invalidates a certificate, CHAP. IX.] DISCHARGE. 231 only from imprisonment ; one may adopt a still more restrictive course of occasional relief, and another may refuse to act in any although the bankrupt on the same day wins more than the sum lost. Newman, 2 Glyn & J. 329. Upon application at chambers, under St. 5 & 6 Vict. c. 122, s. 42, to discharge a certificated bankrupt from execution, the judge may receive affidavits to prove the discharge void on account of gaming, under s. 38. Clark V. Smith, 3 Man. Gr. & Sc. 982. The 201st section of the act enacts, that no bankrupt shall be entitled to his certificate, if he shall within one year before his bankruptcy have lost £200 by any contract for the sale or purchase of "any government or other stock." Held, on appeal, affirming the decision of the commissioner, that railway stock is within the meaning of this section. Matheson, 13 Eng. Law & Eq. 482. The following decisions illustrate the application of the English statute to cases of miscellaneous misconduct on the part of the bankrupt. A bankrupt, who had twice before compounded with his creditors, made false and fraudulent entries in his books, consisting of fictitious accounts in particular names. He stopped payment, being at the time able to pay 12s. in the pound, and soon after offered lis. in the pound. The commissioner refused him his certificate and all protection, excepting for the twenty-one days ; and on appeal, the lords justices, acting under the discretion given by the 198th section of the act — "a discretion to be exercised on judicial grounds with reference to the nature of the case in general, and on its pecu- liar circumstances" — dismissed the petition of appeal, with costs, affirming the decision of the commissioner, and refusing any protection whatever, the conduct of the bankrupt being unfair, untradesmanlike, and disreputable. Curties, 13 Eng. Law & Eq. 571. So a trader carried on business as a baker, and, before the statute 12 & 13 Vict. c. 106 came into operation, obtained money from two different parties, on pretence 'that it should be invested on mortgage, which was not done, The trader became bankrupt, and the commissioner refused him any certifi- cate. On appeal, held, dismissing the appeal, that the money was obtained by fraud and falsehood; and on these grounds he was not entitled to his certificate ; that, before a bankrupt can ask for his certificate, he should have conformed to the bankrupt law since his bankruptcy; that if a trader so obtains money, though not in the course of his trade, or in matters con- nected with his business, it is, on a question of certificate, conduct as a trader, within the meaning of the act ; and that, if a case comes otherwise within the act, it is not the less so because the conduct complained of took place before the passing of the act. Stance, 13 Eng. Law & Eq. 576. So bankers, who, upon the evidence before the Court, must be taken to have been, and to have known that they were deeply insolvent, continued to receive deposits, and to issue notes for a period of eighteen months, during which time their assets would not pay more than 5s. in the pound. On an adjudication of bankruptcy, the commissioner for this, among other 232 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. manner upon the subject. The laws of one State may give undue preferences to one class of creditors, as, for instance, to creditors reasons, refused them any certificate or protection. On appeal, the Court affirmed the refusal of certificate on the above stated ground, but, upon the consent of the assignees and of the opposing creditors, granted protection to their persons. Eufford, 13 Eng. Law & Bq. 542. So a trader owing £6000 removed from a provincial city to London, where he recommenced business, and incurred new debts, and did not inform his new creditors of the state of his pecuniary circumstances. In less than nine months he became bankrupt; and the commissioner adjourned the grant of certificate for eighteen months, without protection for six months ; but, on appeal, by arrangement, the order was varied by granting the certificate from a day certain, eighteen months from the adjudication, and giving pro- tection at the end of nine months therefrom. Wooldridge, 39 Eng. Law & Eq. 130. So the certificate of a bankrupt was suspended by the commissioner for a stated time, and then to be of the third class, and without protection in the mean time, on account of ofifences enumerated in the 2d, 7th, and 9th cases of s. 256 of 12 & 13 Vict. c. 106. The bankrupt appealed ; but, it appearing that he had committed the ofiences mentioned in the 5th case of that sec- tion, and his counsel declining to accept the offer of the Court of a discharge of the commissioner's order and a general refusal of certificate, their lord- ships dismissed the appeal, on the ground of that offence, although they were of opinion, upon hearing only the bankrupt's counsel, that the evidence did not support the judgment as to the 2d, 7th, and 9th cases. Warwick, 35 Eng. Law & Bq. 330. But where a trader had purchased Turkish scrip, to be paid for on the account day, and lost by the speculation upwards of £400, in consideration of which one of the commissioners had, relying on s. 201 of the consolidation act, refused him his certificate ; upon appeal, the lords justices granted a certificate after a suspension of more than twelve months from the commis- sioner's decision, although it was doubtful how far the certificate would be valid at law, and might, as to its validity, be disputed. Wade, 35 Eng. Law & Eq. 405. So, where the evidence appeared to establish that a bankrupt's conduct was not open to censure, complaint, or imputation in his dealing with some members of his family; and where he had for a considerable time continued to trade when the assets were less than the debts; yet the evidence satisfac- torily proved that the trade had not been carried on dishonestly or desperately, but with a reasonable hope of paying the creditors in full ; and where an action, although probably erroneously, had been defended, yet not frivolously and vexatiously, but on behalf of the creditors ; and where the trader's conduct was open, manly, and straightforward ; held, a reasonable interpretation of the statute to grant him a certificate. Dornford, 5 Eng. Law & Bq. 242. So a trader, who was not engaged in any business, except as the owner CHAP. IX.] DISCHARGE. 233 by bond or judgment ; another may provide for an equality of debts, and a distribution pro ratd, without distinction, among all. of two small sailing vessels, kept no regular accounts. He contracted with a shipbuilder for the repair of one of the vessels, and the amount claimed for the repair was far beyond the contract price, by reason of some altera- tions alleged to be beyond the contract. Cross-actions were brought, and settled by arbitration. The trader left England in a feeling of irritation at the result of the proceedings, and was declared bankrupt on the petition of the shipbuilder. He had on a former occasion compounded with his cred- itors, paying them less than 15s. in the pound, but had been forced into this proceeding by misfortune. Held, that the bankrupt's conduct in quitting England was highly censurable, but would be sufBciently punished by sus- pending his certificate for twelve months, and allowing it as one of the second class ; and that, under the present act, the Court will not universally refuse a certificate protecting the bankrupt's property, merely because he has on a former occasion compounded with his creditors, and paid less than 15s. in the pound. Hodgson, 27 Eng. Law & Bq. 405. So a bankrupt, in the course of a trading of two years' duration, became liable upon accommodation bills to the sum of £59,000. On applying for his certificate, the commissioner (chiefly upon this ground) suspended the same for two years, without protection in respect of such bills, and then to be of the third class, and to have a condition annexed that neither the bank- rupt nor his future property should be protected from liability in respect of the bills. Held, upon appeal, that, if a bankrupt has dealt in accommoda- tion bills, that is a circumstance requiring a full and satisfactory explana- tion, but is not necessarily one affecting his title to a certificate ; and although every such transaction must be judged of according to its peculiar circumstances, the main point for consideration is, how far the bankrupt had reason to believe that he could discharge his liability upon such bills, on their becoming due. Accordingly, in this case, there being no evidence of fraud or misrepresentation, that the bankrupt was entitled to a certificate of the second class ; and that the condition above named was improper. Hammond, 31 Eng. Law & Eq. 260. So A., a tallow-broker, in business with B., became bankrupt, and his cer- tificate was suspended for two years, and then to be of the third class, on two grounds : first, that he had fraudulently induced a creditor to forbear enforcing payment of a certain sum, by withholding information known to him and not known to the creditor ; second, for receiving money for goods alleged by the bankrupt to have been purchased, and then re-transferring the goods to the person of whom he bought them, so that the creditor did not receive the goods, and lost his money. The lords justices were of opin- ion, that the withholding of information, or the silence of the bankrupt regarding that information, was not dishonestly intended in the one case, and the act by which the goods were re-transferred and the money lost in 234 BANKRUPTCY AND INSOLVENCY. [CHAP, IX, One may prefer creditors living within the State to all living without, securing to the former an entire priority of payment out the second case was, upon the evidence before the Court, not fraudulent, so far as the petitioner was concerned, and therefore they granted an immediate certificate of the first class. Gull, 13 Bng. Law & Eq. 557. So A. and B. purchased a business of their brothers, but it was not paid for. A. attended to the accounts, so far as they were attended to, and B. peformed the duties of traveler. A. and B., on various occasions, raised money by deposits of goods, and paid £60 per cent, for discount. B. ordered goods one day, and pledged them on the next. The brothers, the vendors of the business, sued for the purchase-money, and issued execution on a judg- ment in the action. Both A. and B. were adjudicated bankrupts, and the commissioner refused them their certificates or protection, on the ground of not keeping proper books of account, (as to A., destruction of books,) ob- taining goods for the purpose of pledging, and pledging them, and fraudulent preference to the brothers who sold the business. B. appealed, and swore that he pledged the goods to meet a sudden demand for payment of bills falling due ; that he believed he was solvent when the goods were bought, and that he had nothing to do with the keeping of the books ; and he pro- duced a witness, who swore that the goods were ordered because they were wanted in the stock. The lords justices were of opinion, that there was no wrong intention as to the books or the pawning, and that there was pressure by the vendors, and, acquitting the appellant of fraud, granted him a second class certificate, to be dated eight months after the adjudication. Martyn, 13 Eng. Law & Eq. 562. So, where the certificate of a bankrupt was suspended for two years without protection, then to be of the third class, and not to apply to certain debts, in part upon the ground of the quantity of wine in his possession,valued at £1500, Knight Bruce, L. J., in reversing the commissioner's judgment, remarked : " With respect to the wine, it did not appear to have been bought injudiciously, nor was its purchase open to serious objections, either as exhibiting im- proper or careless expenditure or as evidence of extravagant habits in private life. The wine had been selected with judgment." In regard to another objection, arising from the purchase of pictures valued at £15,000, the same judge remarked : "They were bought because, in the first place, the bankrupt was fond of art, and believed he was a judge of it; and, although he had gone to a very considerable expense in them, they were not collected for a merely personal gratification, but in the hope and with the view of selling them again at a profit." Hammond, 31 Eng. Law & Eq. 263. So a bankrupt, having had his certificate refused, was taken in execu- tion, and lodged in jail. The ground of the refusal of the commissioner was a fraudulent preference within the 256th section of the 12 & 13 Vict, c. 106 ; but the court of appeal, being of opinion that such a charge was not sustained, granted a certificate of the third class, and directed the re- CHAP. IX,] DISCHARGE. 235 • of the assets ; another may, with a more liberal justice, provide for the equal payment of all, at home and abroad, without favor or preference. In short, diversities of almost infinite variety and objects may be introduced into the local system, which may work gross injustice and inequality, and nourish feuds and discontents in neighboring States. What is here stated is not purely specu- lative. It has occurred among the American States in the most offensive forms, without any apparent reluctance or compunction on the part of the offending State. "^ § 3. With regard to these various forms and degrees of dis- charge, it may be remarked, that the constitutional objections which apply to some of them do not apply to others. Thus it is held, that a foreign creditor may be bound by the provision of a statute exempting the debtor from imprisonment, and not bound by another provision of the same statute, discharging the debt itself. It is said : " The plaintiff sued in the State court, and thereby consented to avail himself of the remedies provided by the laws of the State in reference to the collection of his demand. 1 Story, Constn. (Abr.) 386-7. lease of the bankrupt from prison on a given day. Hunt, 13 Bng. Law & Eq. 538. So the Court considers it inexpedient, as a general rule, to grant certifi- cates with a declaration, either wholly or to a limited extent, that they shall not protect the future property of the bankrupt. Culhane, 39 Eng. Law & Eq. 125. A trader, in insolvent circumstances, being pressed for the payment of debts, applied to a banking firm for assistance, which firm agreed to ad- vance money upon the security of a judgment covering the advance and a debt already due. The trader, acting under the advice of his solicitor, who was also solicitor of the bankers, gave the judgment. In three months the trader was again pressed by other creditors, and, not being able to satisfy them, his solicitor refused to act any longer for him ; and, under the advice of that solicitor, the bankers obtained an order from a court of common law under the judgment, and attached certain debts, owing to the trader, and out of the proceeds satisfied the judgment. Soon afterwards, the trader was adjudicated bankrupt, and one of the commissioners granted him a second class certificate, with a condition that the same should not be available to protect his future-acquired estate until he should have paid 5s. in the pound to all his creditors. But upon appeal it was held, that the order of the com- missioner must be discharged, the certificate be suspended, and the bankrupt have liberty to apply to the appeal court. Ibid. 236 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. One of these was imprisonment of the debtor. Of course, any* law existing at the time, or enacted subsequently to the making of the contract, affecting that remedy, was obligatory upon the plaintiff, and all other suitors in the same forum. The subject was one pertaining to State legislation exclusively. The law in question went beyond this, and not only relieved the defendant from imprisonment, but assumed to discharge him from all obli- gation to comply with his agreement. The contract, and the remedies to enforce it, are distinct subjects, and cannot be made identical, because treated of in the same statute."^ (But see page 229, n.) § 4. We have already (chapter i.) considered the subject of the constitutionality of bankrupt and insolvent laws, as to debts prior or subsequent to their enactment. Analogous questions have arisen, respecting the application of particular statutes of insol- vency, by way of discharge, to existing rights or obligations. Thus the original insolvent law of Massachusetts — St. 1838, c. 163, s. 7 — was held to discharge a debt contracted between the time of the enactment and that of the taking effect of the law.^ And St. 1841, c. 124, s. 3, which extended the provi- sions of St. 1838, c. 163, so that no discharge should be granted to a debtor, who within six months prior to the petition had preferred a creditor, was held to apply to one who had filed his petition for the benefit of the latter statute before the former took effect, and not thereby to affect any vested right.^ So the provisions of statute 1844, c. 178, concerning future proceedings, though inconsistent with previous acts, were held to apply to cases commenced under those statutes. Thus where the second meeting had not been held when the statute of 1844 was passed, the debtor could not be discharged at such meeting, occurring not more than three months from the date of the warrant; though he might have been under the pre-existing law.* § 5. Questions have also arisen, as to the relative and mutual bearing of discharges under a general bankrupt law and a State insolvent law. Thus, while the United States bankrupt act of 1841 was in force, and the insolvent laws of Massachusetts suspended, A., iper Gardiner, J., Donelly v. Cor- ^ Washburn jj. Bump, 10 Met. 392. bett, 8 Seld. 607. See 4 Wend. ' Lane, 3 Met. 213. 501- •• Eastman v. Hillard, 7 Met. 420. CHAP. IX.J DISCHARGE. 237 an insolvent debtor, made a deed of assignment of his property in trust for all his creditors who should execute the deed and there- by release their demands. By the terms of this deed, $200 were reserved for A.'s benefit; and he paid money to one of his cred- itors, to induce him to execute the deed. After the deed was executed by most of his creditors, a creditor who had not exe- cuted it sued A., who paid his demand in full. After the repeal of the bankrupt act, A. took the benefit of the insolvent laws of Massachusetts, and was discharged, under their provisions, in due form. He did not include, in his schedule of property and list of creditors, the property conveyed by the deed, nor the names of those who executed it. After A. was discharged under the insol- vent laws, an action was brought against him, on a demand d^e when he made the deed, by a creditor who did not execute it; and A. relied, in defence, on his last discharge. Held, that A.'s proceedings aforesaid, before he took the benefit of the insolvent laws, did not invalidate his discharge under those laws, and that the action was barred by that discharge.^ § 6. In the case of Fisher v. Currier,^ upon the question whether one who had petitioned under the bankrupt law, but failed to obtain a discharge, could afterwards avail himself of the insolvent law; upon the one side, the Court adverted to the broad terms of the insolvent law, and the consideration, that, if the bankruptcy proceedings were held an impediment, the time for which such impediment would last was wholly unlimited ; and on the other, that to allow one deprived of all property and refused a discharge for fraud to avail himself of the State law, was a vio- lation of its spirit, if not of its letter. Judge Shaw remarks: " The courts of the United States have exclusive jurisdiction to decide judicially whether they shall be discharged or not; and having jurisdiction of the whole subject, their adjudication is equally conclusive, when it denies or withholds a discharge, as when it grants one. Such judgment protects the creditor against any dis- charge of the same debts by operation of the law of the State."' § 7. Where an insolvent debtor, whose property had been assigned, and who had been discharged, under the statute of 1838, c. 163, before the passing of the United States bankrupt act, peti- tioned to be declared bankrupt under that act, and was so 'Atkins V. Spear, 8 Met. 490. "Per Slaaw, C. J., Fisher v. Currier, 7 a 7 Met. 424. See page 2.39, n. Met. 428. 238 BANKKUPTCT AND INSOLVENCY. [CHAP. IX. declared, and received a certificate of discharge; it was held, that these proceedings under the bankrupt act did not take away the right of his creditors to prove their claims against his estate afterwards, under the statute of 1838.^ § 8. A person arrested upon State process gave bonds to apply for the benefit of the State insolvent law, and was released. He applied for the benefit of the bankrupt law, and was declared a bankrupt. Before discharge he applied for an injunction to stay proceedings in the State courts, which was refused. Held, that his release was no satisfaction of the execution.^ § 9. Questions have also arisen in construction of statutory provisions as to a discharge, where the party has previously been an insolvent debtor; in which case terms are usually imposed more rigid than upon the first petition. Upon this subject it is held in Massachusetts, that a discharge, obtained upon second proceedings in insolvency, is no bar to an action upon a debt which might have been proved under the first proceedings, and was not proved under the second, unless it was discharged under the first proceedings and renewed by a subsequent promise.^ So after a discharge has been refused on appeal to the supreme judi- cial court, the insolvent is not entitled to the benefit of the statute on a new petition, unless he owes debts to the amount of $200, which were not provable under the former proceedings. And if, on proof of his owing such debts to that amount, proceed- ings are had against him on a new petition, and he obtains a cer- tificate of discharge, such certificate will not discharge him from any debts that were provable under the former proceedings, unless the creditors elect to prove them under the new proceed- ings, which, it seems, they may do.* So a statute, providing that no discharge of a debtor a second time insolvent, and whose assets fail to pay fifty per cent., shall be granted or valid, unless three-fourths in value of his creditors, whose claims are proved, shall assent thereto in writing, is not repealed by a subsequent act, providing that no insolvent whose assets do not pay fifty per cent, shall receive a discharge, unless a majority in number and value of his creditors, who have proved their claims, shall assent thereto in writing, within six months after the date of the assign- 1 Minot V. Thacher, 7 Met. 348. s Gardner v. Way, 8 Gray, 189. 2 Rank, Crabbe, 493. * Gilbert v. Hebard, 8 Met. 129. CHAP. IX.] DISCHARGE. 239 ment.^ So a discharge of an insolvent, whose estate does not pay fifty per cent., and three-fourths in value of whose creditors do not assent thereto, is of no effect, provided the debtor has previously been insolvent, although no discharge was ever granted him.^(a) § 10. With regard to the nature of a discharge, as being the result of an implied contract or an act of State sovereignty, a judicial or ministerial act on the part of the court, and a legal right or beneficiary privilege in the party, it is said: "An abso- lute discharge from an honest debt, without the creditor's assent, is an act of high sovereignty, which overrides all contract, and proceeds against the creditor purely in invitum. The idea that it rests in any manner upon contract, in the language of Judge Gardiner, 'scarcely deserves the credit of plausibility.' (Donnelly V. Corbett, 3 Seld. 500.)"' It is further remarked in a late Eng- lish case: "A certificate under the bankrupt law is not a matter 1 Gates ti. Campbell, 8 Cush. 104. 'Per Pierrepont, J., (dissen.), Oly- ^Tebbetts v. Pickering, 5 Cush. 83. phant u. Atwood, 4 Bosw. (N. Y.) 470. (a) In England, creditors whose claims are proved, the assent of three- fourths of whom is required by St. 1844, c. 178, s. 5, to the discharge of a debtor a second time insolvent, include only those creditors whose claims are proved within six months after the date of the assignment, and do not include a creditor whose claim has been presented for proof, and disallowed by the commissioner, although an appeal has been taken from the disallow- ance of the claim, which is afterwards sustained, and the claim allowed. Heslop V. Baker, 20 Eng. Law & Eq. 536. A plea, that a party has been a second time bankrupt, should show that the assignees under the first bankruptcy have become divested of their title, so that the property may vest in the second assignees. Wagner v. Imbrie, 5 ibid. 503. If a debt which is barred under one commission be revived prior to a second, it is provable under the latter. Eoberts v. Morgan, 2 Esp. 736. A bankrupt, who has been made a bankrupt before, and paid on that occasion less than 15s. in the pound, will not, in the matter of his certificate, be placed in a more favorable position than he would have been in under the 6th Geo. 4, c. 16. Hollingworth, 7 Eng. Law & Bq. 303. In Massachusetts, since the insolvent law revived by repeal of the bank- rupt law, the creditors of a bankrupt, not discharged, may prove their claims under the insolvent law ; in which case it seems they will be barred by a dis- charge. But such discharge will not bar those creditors whose claims arose before he was decreed a bankrupt, unless they are proved in insolvency. Fisher v. Currier, 7 Met. 424. See page 237. 240 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. of right, but a matter of discretion; a discretion, I agree, to be exercised on judicial principles; but the case of a certificate is one in which those judicial principles involve the duty of attend- ing to the public interests, and the claims of society, at least, as much as any other class of cases coming under the consider- ation of the Court."' § 11. The precise mode of obtaining the certificate in England is thus described: "The certificate is an instrument, whereby the commissioners certify to the lord chancellor their adjudication, the advertisement in the Gazette, the several meetings in pursu- ance of it, the bankrupt's surrender and conformity, and his hav- ing passed his last examination, and made a true discovery of his estate and effects, and that the certificate has been duly signed by the creditors, both in respect of number and value. It is signed and sealed by the commissioners; and the creditors sign a consent at the foot of it — to the commissioners signing and seal- ing it, to the bankrupt's having such allowance and benefit as are given him by statute, and to his being discharged from his debts. "2 § 12. It is the general rule, that no proceedings under a com- mission discharge the bankrupt from the demands of his cred- itors, if he have not a certificate of discharge duly obtained, even though the assignee waste and embezzle the whole of the bank- rupt's effects, and though the creditor, who afterwards sues the bankrupt, concurred in the appointment of that assignee, and constituted him his attorney to collect the demand.' Or even though the creditor has proved his demand under the commission, and received a dividend. Although, as will be seen, — s. 62, — if a creditor sue in such case, while the commission is open, so that the bankrupt may obtain a certificate, the Court, in its discre- tion, may grant continuances to operate as a temporary bar.* § 13. With regard to the legal eifect of a decree of discharge, (and the certificate accompanying it,)(a) they are so far judicial •Per Knight Bruce, L. J., Selby, 35 'Whitney v. Crafts, 10 Mass. 23. Eng. Law & Eq. 416. * Lummus i>. Fairfield, 5 Mass. 248. ■' Archb. Banlc. L. 198. (a) A statute provided for a discharge from any contract made after the statute should go into operation. The form of discharge was from any con- tract made since the passing of the act. Held, the terms of the act must control. Washburn v. Bump, 10 Met. 392. CHAP. IX.] DISCHAKQB. 241 acts as to be conclusive, unless, under the late United States bankrupt act, impeached for fraud or concealment, contrary to the provisions of that act.' To a plea of bankruptcy, therefore, it is held no replication, that the defendant did not become a bankrupt, nor comply with the requisites of the law, nor obtain a discharge.^ So creditors, in proceedings in insolvency, who have notice of the proceedings, and to come in and show cause, but fail to appear and object, are held concluded by the discharge, if the commis- sioner has jurisdiction, except as to -matters which, under the statute, avoid the discharge.* And notice is presumed from a certificate in bankruptcy, till the contrary appears.* § 14. An entire and full record of the proceedings of the court, containing the order for the discharge, which proceedings are certified by the clerk under the seal of the court, is* in gen- eral sufiicient evidence of a discharge.* But a certificate alone is also sufficient evidence, under section 4 of the bankrupt law of 1841, (and most other similar acts.) The entire record need not be produced by the defendant, but, if it contain anything favor- able to the plaintifi', there is nothing to prevent him from giving it in evidence.^ And it has been held that the certificate of final discharge is conclusive, notwithstanding a certified copy of what purported to be the full and entire proceedings in bankruptcy is proved, by which it did not appear that the bankrupt had obtained his final discharge.'(a) > Blake ». Bigelow, 5 Geo. 437 ; Peter- « People v. Stryker, 24 Barb. §49. son V, Speer, 29 Penn. 4.38. * Norris v. Goes, 2 Speers, 80. 2 Price V. Bray, U. S. Sup. Ct. Apr. — » Tompkins v. Bennett, 3 Texas, 36. 47; Law Kep. Sept.— 47, p. 223; sBoaso. Hetzel, 3 Penn. 298. Bowie V. Jones, 1 Gill, 208. ' King v. Dietz, 12 Penn. 156. (a) See s. 16. The grant of the certificate by the commissioner, under section 225 of the English act, is a judicial act, and he may look at the nature of the (creditors') deed, to see whether it is of the nature contem- plated by section 224, and, if it appears not to be so, he may refuse his certificate, although the deed be executed by the required number and value of the creditors. Wilkes, 31 Bng. Law & Bq. 265. See Bank of Utica v. Card, 8 Ham. 519; Eespublica v. Clarkson, 1 Yeates, 46. It is held in New York, that a certificate of discharge under an insolvent act is conclusive as to all facts stated in it, except acts of fraud specified, and other causes of avoidance specified in the statute. Lester v. Thompson, 1 Johns. 300. The validity of a certificate will not be tried by affidavit, on motion for 16 242 BANKRUPTCY AND INSOLVENCY. [CHAP, IX. § 15. When a bankrupt's discharge, granted by a district court of the United States, is ofiFered in evidence, it will be pre- sumed that the court had jurisdiction, till the contrary appears.' And it has even been held, that the certificate is of itself conclu- sive in his favor, unless impeached for fraud; and cannot be impeached by pleading facts showing the non-jurisdiction of the court granting it.^ But it is the prevailing rule, that a certificate in bankruptcy may be attacked and opened in a State court, pre- cisely as it might have been in the court which granted it, when and so far as it impedes or conflicts with the rights of a party 1 Morse ». Cloyes, 11 Barb. 100. ^ Eeed v. Vaughn, 15 Mis. 137. the insolvent's discharge from custody, but the plaintiff must resort to his action. "Noble v. Johnson, 9 Johns. 259. The notice, subjoined to the general issue of a discharge under the New York insolvent act of 1811, need not state the proceedings previous to the discharge, that the defendant was imprisoned or impleaded, and a resident, etc., but those facts may be proved by the proceedings on file. Hines v. Ballard, II Johns. 491. It is sufficient if the notice states that the defendant had been discharged, the commissioner's name, and the date of the discharge. Noble v. Johnson, 9 Johns. 259. A discharge by a commissioner recited, among other things, that the debtor was an inhabitant of J. county, for three months at least immediately preceding his petition, or in which said county he was then imprisoned, " and that he delivered a true account of all the suits in which he was imprisoned or impleaded," etc. Held, in an action against the debtor, in which the dis- charge was pleaded, that the discharge was sufficient evidence, in itself, either of the imprisonment of the insolvent, or of his inhabitancy, (one of which facts must be deemed true,) and his being prosecuted on civil process agreeably to the act, so as to give the commissioner jurisdiction, without any proof aliunde of these facts. Jenks v. Stebbins, II Johns. 224. In New York, the validity of a discharge under the two-thirds act cannot be questioned, on an application to discharge the defendant on common bail, either on the ground of fraud or irregularity. Eeed v. Gordon, I Cow. 50. In Maryland, where a defendantmpleads a discharge under the insolvent laws, the judgment of discharge comes incidentally in question, and cannot be questioned, if granted by a court of competent jurisdiction. Bowie v. Jones, I Gill, 208. The certificate of the justices of the peace, under the Maryland act of 1774, c. 28, relating to insolvent debtors, is of itself evidence of the facts it contains ; and the party claiming under such proceedings is not compelled to prove-such facts by evidence, aliunde the certificate. Winingder v. Dif- fenderffer, 5 Har. & J. 181. CHAP. IX.] DISCHAKQE. 243 there litigating.^ And though, in an action against the bankrupt, the certificate is primd facie evidence of bankruptcy, and, if not rebutted, conclusive;^ yet a certificate is not conclusive evidence of the facts stated in it ; but the Court may examine the record, to determine whether it was rightly granted.' So, while the cer- tificate of a bankrupt's conformity is conclusive evidence of the issuing of the commission, and of the trading and bankruptcy, in an action by the assignees against a debtor of the bankrupt; it is only primd facie evidence of such facts, in an action by a creditor against the bankrupt ; and under the replication, that the certificate was unfairly obtained, it is competent for the plaintiff to prove that the defendant was not a trader.* So a discharge granted by the court of a district, other than that in which the bankrupt resided or had his business at the time of filing his petition, is void for want of jurisdiction.' But one living with his family and carrying on business in one State is a resident there, though in the previous spring and for some years before he had a commercial establishment in another, acted as a citizen, and intended to remove his family there the next season.^ So, in Massachusetts, if a claim against the estate of an insolvent debtor be contested by the assignee, on the ground of a discharge therefrom, by previous proceedings in insolvency against such debtor, the validity of the certificate may be impeached by the creditor, and tried and decided by the commissioner.' So, in Maryland, the fact that the defendant had been discharged under the insolvent law does not necessarily present a case of want of jurisdiction by the magistrate, before whom a suit was brought to recover of the defendant a debt due before his application for the benefit of the insolvent law.'(a) 1 Bond V. Baldwin, 9 Geo. 9. ^ gtiieg v. Lay, 9 Ala. 795. a Waller v. Edwards, 6 Litt. 348.' « Ibid, s Gardner v. Nute, 2 Cash. 333. ' Gates v. Mack, 4 Cush. 48. * Blythe v. Johns, 5 Binn. 247. « Deal v. Harris, 8 Md. 40. (a) See Dorr v. McClintock, 2 Miles, 1 90. In New York, when petitioning creditors have collateral security for their claims or some of them, and do not relinquish such security to the assignees for the benefit of all the cred- itors, and the amount of the security being deducted from their claims, less than two-thirds of the whole amount of credits remains ; the judge has no authority to grant a discharge. Morewood v. HoUister, 2 Seld. 309. Where an insolvent, under the New York act of 18H, presented his peti- 244 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. § 16. In general, as we have seen, (s. 14,) a discharge may be proved by the original certificate, or by a certified copy of the record, containing the order for the discharge, -vvhich is usually required to be attested by the clerk under the seal of the court.' And, if the discharge were granted in another State, the clerk's certificate must also be authenticated by the judge.2(a) § 17. A discharge can also sometimes be proved by parol evi- I Greene v. Durfee, 6 Cush. 362 ; Tomp- ' Dorsey v. Maury, 10 S. & M. 298. kins V. Bennett, 8 Tex. 86. tion to the first judge of the comity, who appointed a day for the creditors to appear and show cause, etc., and before the day a commissioner was appointed for the county, and the insolvent on the day presented his peti- tion, etc., to the commissioner, who completed the proceedings so begun by the first judge, and granted a discharge to the insolvent; held, that the dis- charge was void for want of jurisdiction in the commissioner, the act having made no provision in such case, and he had no authority unless the proceed- ings were commenced de novo. Muzzy v. Whitney, 10 Johns. 226. In California, an application for a discharge in insolvency is a special proceeding in the nature of an action. The petition, schedule, and affidavit are the pleadings on the part of the petitioner, who is the plaintifi' ; and if they are sufficient to entitle him to his discharge, any irregularity or defect in form must be taken advantage of before judgment, by his creditors, who are defendants in the proceeding. Kohlman v. Wright, 6 Cal. 230. In the same State, an insolvent's discharge under the statute must be by the judgment of the court, and in the same county in which the proceeding was instituted. Turner v. Mcllhany, 6 Cal. 287. A discharge made in chambers, by the district judge, in the same district, but in another county from that in which the proceedings were instituted, is no defence to an action against the insolvent. And objections which go to the jurisdiction may be properly taken on the trial. Ibid. (a) Under the act of 1800, the certificate of discharge could not be obtained, unless the commissioners certified that the bankrupt had made a full discovery of his estate and efiects, and in all things conformed to the act, or the judge of the district should be of opinion that the certificate was unreasonably denied by the commissioners, and unless two-thirds of the creditors in value, coming in under the commission, should consent to the allowance of the certificate, and such consent were proved, by the oath of the bankrupt, to have been fairly obtained ; and any of the creditors were entitled to be heard, against the allowance of the certificate. Kane v. In- graham, 2 John. Gas. 403. CHAP. IX.] DISCHARGE. 245 dence ; but only to supply a loss ; and the existence of the record must be first shown.'(a) So a defect in the form and manner of authentication of a certificate of discharge in bankruptcy, ofiered in evidence on the trial of a cause at the circuit, may be obviated by producing, upon the argument at bar, a certificate duly exem- plified and authenticated.^ So, if a commission issue against a person by a wrong name, under which he obtains his certificate, while the commission remains unsuperseded; a plea of bankruptcy to an action brought against him by his right name will be sup- ported by the certificate, and proof of identity.' So a certifi- cate of discharge, obtained by an insolvent debtor under the name of Edward P. Smith, is a bar to an action against him on a contract executed by him under the name of Edward Smith before the commencement of the proceedings in insolvency, if he used both names in his business, although the plaintiff knew him only by the name of Edward Smith, and did not know of the proceedings in insolvency.* § 18. A discharge, being matter of record, should be pleaded as such.° And it may be given in evidence under a plea of mil tiel record, without proving the regularity of the preliminary proceedings.* So a plea of discharge must expressly set out the court which granted it.' § 19. In regard to the precise form of the plea, it is said: "A brief plea of a discharge in bankruptcy is given in England, by statute, in certain cases. 9 East. 82, Harris v. James. In those cases to which the statute does not apply, it is said to be best to set out the proceedings at large, and there are precedents of that character. But this seems to be unneces- sary, and is very onerous."* And in this country it is only necessary to set forth such facts and so much of the proceed- ' Loughry v. M'Cullough, 1 Penn. 503. ' Thompaoa v. Wiley, 34 Maine, 195. 2 Dresser v. Brooks, 3 Barb. 429. ' Morrison v. Woolson, 9 Fost 510. ' Stevens v. Elizee, 3 Camp. 256. But see Preston u. Simons, 1 Bicb, * Hubbard v. Smith, 4 Gray, 72. 262. 5 Murphy «. Richards, 5 Watts & Serg. ^Per Parker, C. J., Johnson v. Ball, 279. 15 N. H. 407. (a) It is not essential to the validity of a discharge, under the insolvent law of Connecticut, that the certificate should be recorded; but it takes effect from its delivery. Witter v.. Latham, 12 Conn. 392. 246 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. ings in the District Court as will show that the court had juris- diction of the cause and the party, and granted the discharge. If there is any matter which renders the discharge invalid, or takes the case out of its operation, the plaintiff may set it forth in his replication.^ So, although in pleading a discharge the facts on which jurisdiction depends must be averred, yet, when the discharge is offered in evidence, jurisdiction will he presumed until the contrary appears, the Circuit and District Courts of the United States, though of limited jurisdiction, not being inferior courts, in the technical sense of the term.^ It is necessary to state, that the bankrupt resided within the district where the dis- charge was granted ; that he owed debts not created in conse- quence of a defalcation as a public officer, etc.;(a) and that he presented his petition to the proper court, containing the matters required by the act. But where the necessary facts are stated to give the District Court jurisdiction, the regularity of the subse- quent proceedings will be presumed, and need not be averred. And it is not necessary to state that notice to the creditors was published, or that objections were or were not made to the decree, or that the requisite time had elapsed before the decree was granted. And an averment, that the petition for a discharge was filed, is good, without stating in terms that it was presented to the Court. Nor need the plea contain a special averment, that the debt which is the subject of the suit against the bank- rupt, was included in the schedule annexed to his petition.* So a plea of bankruptcy to debt on bond was held good, although it only hypothetically admitted the execution of the bond.^ And 1 Johnson v. Ball, 15 N. H. 417 ; Wig- ' Kuckman v. Cowell, 1 Comst. 505. gins V. Shapleigh, 20 N. H. 444 ; ' McCormick v. Pickering, 4 Comst. 276. Stow V. Parks, 1 Chand. (Wis.) 60. *Ibid. (a) It has been held that a plea of discharge must show, that the plain- tiff's debt is not of the class mentioned in the 1st section of the act, as hav- ing been created " in consequence of a defalcation as a public officer, or as executor," etc. Maples v. Burnside, 1 Denio, 332. (See Fiduciary, etc.) . In New York, in pleading an insolvent discharge from all debts, in bar of an action on a judgment for a tort, the plea must allege that the plaintiff satis- fied the requirements of the statute in obtaining his discharge, and also that the petition was signed by the insolvent and the creditors who united with him I though the omission cannot be taken advantage of after verdict. Smith V. Bennett, 17 Wend. 479. CHAP. IX.] DISCHARGE. 247 the proceedings not being, in any just sense of the term, ex parte in their character, the plea (more especially in a suit in the United States Circuit Court) need not aver, that all the steps required by the statute have been strictly complied with, and that the Court had jurisdiction to enter the final decree, as the Circuit Court -will take judicial notice of the fact, that the District Courts of the Union had exclusive jurisdiction in all original proceedings under the act, and make the usual intendments in favor of the regularity of the proceedings.^ But a plea of discharge, under the insolvent act, must distinctly aver every fact which was necessary to give the officer granting the discharge jurisdiction in the first instance ; and mere recitals in the discharge will not suffice.^ § 20. A party answering a plea in bankruptcy is not confined to a technical replication, but under the statute (of 1841) may give the defendant written notice of fraud and concealment. But if he does reply specially, the replication must be single, or the defect will be reached by demurrer.' § 21. A replication, that a discharge pleaded in bar was obtained perfraudem, admits the jurisdiction of the officer who granted it, and estops the plaintiff from showing that the requisite number of creditors did not unite in the petition for the discharge.* So this replication cures the defect in a plea of the defendant, that he became a bankrupt within the true intent of the statute, and obtained a certificate of discharge from the commissioners, though such plea would have been bad on demurrer." § 22. Where a creditor's bill is brought against a debtor, who afterwards obtains a discharge in bankruptcy, the complainant, if he wishes to contest the validity of the discharge, should file a supplemental bill, setting out the commencement of the original suit, the subsequent decree in bankruptcy, the discharge, and the facts relied upon to avoid the discharge; and should make the assignee and the bankrupt parties to such bill. But if he merely wishes to proceed against the property, he must revive the suit against the assignee alone, stating the discharge as a reason for proceeding no further against the bankrupt; and if the assignee has sold his interest in the property, that fact should be shown, 1 Lathrop v. Stuart, 5 McLean, 167; 9 ' Downer v. Rowell, 26 Vt. 397. Fost. 510. « Ayre3 v. Seribner, 17 Wend. 407. 2 Sailers v. Tobias, 3 Paige, C. R. 38. s Jenkins v. Stanley, 10 Mass. 226. 248 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. and the purchaser made a party to the suit, instead of the as- signee.' So where, after a decree for the complainant in an equity- suit, the defendant obtains a discharge in bankruptcy, and the complainant wishes to contest the validity of the discharge, and to obtain satisfaction of the decree out of the defendant's subse- quently-acquired property, his proper remedy is to file a supple- mental bill, stating the obtaining of the decree, the discharge, and the fraud which renders it invalid, and praying that the decree may be carried into full effect against the defendant, notwith- standing his alleged discharge. And perhaps, in a.proper case, the Court would allow the complainant to proceed by petition for leave to take out 'an execution upon his decree, notwithstanding the discharge ; but the defendant must be served with a copy of such petition, and with notice of the time and place of presenting the same. In such case the complainant, if he wishes to protect and preserve his liei) upon the defendant's subsequently-acquired real estate, as against those who may become bond fide purchasers thereof without notice of the alleged invalidity of the discharge, should file a notice, in the county clerk's oflBce, of the pendency of such supplemental suit.^ § 23. As we have seen, a discharge and certificate, granted by a court having jurisdiction of the case, is conclusive evidence in favor of the bankrupt or insolvent, unless impeached for fraud or artful concealment of property, (or other cause, which by ex- press statute renders it void.)^ Its regularity cannot be inquired into collaterally, and evidence to impeach such discharge for fraud in its procurement must be offered in chief, and not merely by way of rebuttal.* But the important point remains to be considered, that a discharge may be thus impeached by any cred- itor against whom it may be pleaded; and this, generally, whether such creditor contested the discharge in the court by which it was granted or not.°(a) ' Penuiman o. Norton, 1 Barb. 246. * Richards v. Nixon, 20 Penn. 19. 2 Aloott V. Avery, 1 Barb. 347. 'Gupton v. Connor, 11 Humph. 287. ' Morrison v. Woolson, 9 Fost. 510. {a) In England, it is said: "The guards (against abuse of the certificate) respect, 1. The persons whose concurrence and authority are required to the signing of it originally. 2. The superintendence and control of the great seal, in the subsequent allowance and confirmation of it. And lastly, the CHAP. IX.] DISCHARGE. 249 § 24. As already suggested, tte grounds for impeaching a dis- charge (under the act of 1841) must he distinctly and properly specified and alleged,' hy prior reasonahle notice in writing. (See p. 252.) This is required by the act of Congress ; and a cred- itor cannot contest such certificate upon any ground not stated in the notice.^ Though the notice may be amended at any time before the final trial, provided a sufiicient time elapse to enable the bank- rupt to prepare for meeting it.* Thus, in order that a plaintiff may o£Fer evidence to impeach a discharge on the ground of "some fraud or wilful concealment by him of his property," the "prior reasonable notice, specifying in writing such fraud or conceal- ment," required hf the bankrupt act, should be by replication to the defendant's plea, seasonably filed, or by written notice, season- ably given, setting forth, in each case, the fraud and concealment, and wherein it consisted, as specifically as if it were a special dec- laration in an action of the case.'' So, an execution having issued against a bankrupt after his discharge, and a motion having been made to quash it, a plea was put in, that the discharge was obtained fraudulently, without further specification. Held, that the plea was bad, because it did not specify in what the fraud consisted, nor allege that notice had been given of the fraud intended to be relied upon.' And where a plaintifi" has levied an execution on the property of the defendant, who has been dis- charged in insolvency, and there appear in the aflBdavits of the plaintifiT sufficient grounds for setting aside the discharge for fraud ; the Court will not try the validity of the discharge on the affidavits, but will allow the plaintifi" to retain his lien, and direct an issue to try the validity of the discharge.* § 25. The fraud, which is held a sufficient answer to a plea of iBotts V. Patton, 10 B. Mon. 452. ' Flournoy v. Newton, 8 Geo. 306. 2 Ashley v. Kobinson, 29 Ala. 112; 8 ^Chadwickj). Starrett, 27 Maine, 138. Geo. 306; Tompkins v. Bennett, 3 6 chambers v. Neal, 13 B. Mon. 256. Texas, 36. « Cramer v. — , 3 Sandf. 700. particular cases of exception, by which, even after it has been allowed, it may be avoided, and its operation defeated." Cullen's Bank. L. 373. It was held a good answer to a plea of bankruptcy, that the certificate was obtained by fraud, though the enactment to that effect in 5 Geo. 2, c. 30, s. 7, was not repeated in 6 Geo. 4, c. 16. Horn v. Ion, 4 B. & Add. 78 ; 1 Nev. & M. 627. 250 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. discharge in bankruptcy or insolvency, is of various kinds. With regard to the general meaning of the term, when used in statutes ; in a case in Massachusetts, a broad construction was given to it, as against the debtor setting up his discharge in bankruptcy. The 2d section of the act of 1841 provides, in very comprehen- sive and detailed terms, that all preferences shall be void, that the assignee may recover property thus disposed of, and that the debtor shall not be discharged. By the 4th section, in one clause, "fraud or wilful concealment of property" shall prevent a dis- charge; and, by a further clause, a discharge is made a bar to any suit, unless "impeached for some fraud or wilful conceal- ment." In construction of these clauses it is remarked by the Court: "We are of opinion that the word 'fraud' is used in the same sense in both clauses of the 4th section, and that it means something more than the acts which are mentioned in connection with it. In the latter clause, 'fraud or wilful concealment of property' are the only terms used, yet concealment of property is a fraud. In the former clause, 'fraud' is united with all the enumerated causes for withholding a discharge, most of which, if not all, are frauds. The word 'fraud' must therefore have a meaning which reaches and operates beyond all those enumerated causes. Otherwise, it is superfluous, and our opinion is, that the word, in both clauses, means, at least, all conduct of the bank- rupt which is a fraud upon the bankrupt act, whether declared by the act to be such, or not. The purpose of the act was to dis- charge debtors, upon their honestly giving up their property to be equally divided among their creditors. All concealment of property, all preferences of one creditor over another, and all other acts inconsistent with good faith, are to be regarded as fraudulent, and as sufiicient causes for barring the debtor's claim to a discharge, and to avoid a discharge after it is granted."^ § 26.* It is held, in construction of a State insolvent law, that creditors who wish a debtor remanded must themselves express dissatisfaction with the truth and fairness of his proceedings, and enter into the stipulation required by law. An attorney cannot act for them in these particulars, except by virtue of a special authority given to him for that purpose.^ So a petitioner under iPer Metcalf, J., Coates u. Blush, 1 ^Hojrani). Hutton. 1 Speno. 82. Cush. 571. CHAP. IX.] DISCHARGE. 251 an act for the relief of insolvent debtors is entitled to insist that the suggestions of fraud, made hy a creditor, shall be verified by the oath of the creditor, and tried by a jury ; and it is error in a judge to decide on such suggestions without submitting them on an issue to a jury.' So it is held that a creditor, who has unsuc- cessfully opposed the discharge of his debtor as a bankrupt, is thereby estopped, in a suit afterwards brought by him against the debtor to recover his debt, to which the debtor pleads his dis- charge, from showing that the discharge was fraudulently ob- tained.^ But the distinction is made upon this subject, that although the statute of bankruptcy, in terms, gives the right to impeach the certificate of the bankrupt, yet, where the precise question of fraud has been passed upon by the District Court, it is consistent with the statute to give the adjudication the opera- tion of an estoppel, as against any attempt to impeach the certifi- cate for identically the same fraud that was gone into before the District Court to prevent a discharge. But where the at- tempt is to impeach the certificate for further and other instances of fraud, beyond what were passed upon by the District Court, the adjudication will not conclude the plaintiff; for the estoppel must be confined to such as the case shows were passed upon by the District Court.^ And, contrary to a case already cited, it is held that a certificate of discharge, though primd facie conclusive, may be impeached for fraud in obtaining it, by any creditor against whom it may be pleaded, whether such cred- itor contested the debtor's discharge in the District Court of the United States, upon his application therefor, or not.* And, more especially, where certain creditors of a bankrupt, who had proved their claims against him, opposed his discharge; and an issue was framed and tried in the District Court of the United States, involving the question whether the bankrupt had been guilty of any fraud or wilful concealment of his property, or had preferred any of his creditors, contrary to the provisions of the bankrupt act; and the jury returned a verdict in hi§ favor, and the Court granted a discharge and certificate; and afterwards a creditor, who did not prove his claim under the proceedings in bankruptcy, nor appear before the Court to oppose the discharge, 1 Purvis V, Robinson, 4 Jones, Law, 96. ' Downer v. Rowell, 25 Vt. 386. 2 Wales V. Lyon, 2 Mich. 276. * Gupton v. Connor, 11 Humph. 287. 252 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. brought an action against the bankrupt, who set up the discharge as a bar: held, that the verdict was not conclusive against the plaintiff, and that he might impeach and avoid the discharge, by evidence that the defendant had preferred one creditor to another, contrary to the provisions of the bankrupt act.-' § 27. When the plaintiff relies upon the defendant's fraud in obtaining a discharge in bankruptcy, in order to avoid a plea of the discharge, conformably to the general rule above stated (p. 249) he must in his replication specify the particular acts of the defendant, which he will give in evidence as fraudulent.^ So one, who has taken the benefit of the insolvent debtors' act of South Carolina, cannot be again held to bail for the same debt, unless the affidavit contains a specific charge of fraud in making his assignment.^ More especially a general plea of fraud is not sufficient in the case of a bankrupt engaged in extensive business. He has right to notice of the specific acts charged.* Thus a replication which set forth that the party had made pay- ments or transfers of property to creditors, sureties, or indorsers, was held insufficient. Such replication must also contain a de- scription of the property alleged to have been transferred, as to kind and quantity, and to whom it was conveyed, and, in case of unlawful preferences, what creditors were preferred, in order that the defendant may be fairly apprised of the proof he is to meet on the trial. Though, if the property was sold at auction or in small quantities, the names of all the purchasers need not be stated ; the reason for the omission being given in the plead- ing. Nor, where the allegation is wilful concealment of the debtor's property, and some articles are sufficiently described, will the replication be bad for adding, "and other property of considerable value." The replication must also state how and in what manner the concealment was effected, and in what stage of proceedings it occurred ; as, that he omitted it in his inventory, or withheld the knowledge of it from the court or a commissioner, when examined under the act, or secreted it from the assignee." But specifications, contesting a bankrupt's discharge on the ground of fraud, are within the statute allowing amendments on terms, after a demurrer is sustained.^ And when the form of the plead- iBeekman v. Wilson, 9 Met. 434. *Lathrop v. Stewart, 6 McLean, 630. ' DresBcr«. Brooks, S Barb. 429; Kemp 6 Brereton v. Hull, 1 Denio, 75. V. Neville, 6 Moo. 21. e Stewart v. Hargroove, 23 Ala. 429. ' Man V. Lowden, 4 M'Cord, 485. CHAP. IX.] BISCHARGB. 253 ings is such, that a party has had no opportunity of setting up fraud in avoidance of a bankrupt's discharge, he may give the fraud in evidence on the trial without having pleaded it. Ac- cordingly, where a party who was sued in trespass for taking goods pleaded not guilty, and gave notice of justification under a judgment and execution against the plaintiff, and on the trial the defendant proved his discharge as a-bankrupt, obtained after the judgment was rendered; it was held that the defendant might give fraud in evidence, so as to avoid the discharge.' § 28. Where the fraud which consists in concealment of prop- erty by the bankrupt is positively established, the great seal will refuse the certificate ; though it is otherwise where the petition alleges merely information and belief as to that fact.^ And the certificate of a bankrupt who has concealed any part of his prop- erty with intent to defraud his creditors is void by the 38th sec- tion of the 5 & 6 Vict. c. 122, even though he voluntarily gives it up before the granting of the certificate.'(a) § 29. Under a replication to a plea of a bankrupt's discharge, which averred a fraudulent concealment of his property by the bankrupt at the time of presenting his petition, and specified the concealment of his interest in the business, profit, etc. of the late firm of A. & Co. ; it was held, that a note given by that firm to the bankrupt, soon after the date of the petition, for his secret interest as a partner during the preceding year, was properly re- ceived in evidence, although the amount was only about one-sixth of the sum mentioned, under a videlicet, in the replication.* § 30. The fact that a bankrupt has made a. fraudulent convey- ance, which does not come within the provisions of s. 2 of the bankrupt law (of 1841), does not of itself affect the validity of his discharge, nor does his omission to surrender the property thus 1 Ruckman v. Cowell, 1 Comst. 505. ' CourtiTron v. Meunier, 2 Eng. Law & 2 Joseph, 1 Rose, 184; 18 Ves. 340. Eq. 393. * Cutler V. Taylor, 1 Sandf. 593. (a) A certificate of conformity to the bankrupt laws, issued by commis- sioners under the 6 Geo. 4, c. 16, ought to state that there does not appear to them any reason to doubt the "truth or fulness" of the discovery made by the bankrupt of his estate and effects. The merely saying that there does not appear any reason to doubt its "fulness" is insufBcient. Wagner v. Imbrie, 5 Eng. Law & Bq. 503. 254 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. situated necessarily prove a fraud or wilful concealment, under s. 4 of the bankrupt law; but these facts are admissible as evidence, afifecting the question of a fraudulent or wilful concealment of the bankrupt's property.' § 31. A. conveyed to bis father, apparently for a valuable con- sideration, certain real and personal property, but retained pos- session of it in 1838. In 1840 the real property was sold by execution against A., but no deed was given to the purchaser. In 1842 A. was discharged in bankruptcy. He pleaded his dis- charge to a writ of scire facias to revive a judgment obtained in 1838, and it was held, that, while his discharge could be pleaded in all courts, it could be impeached for fraud or wilful conceal- ment in obtaining it ; and his retaining possession of the property, which he pretended to have sold his father and did not include in his inventory, raised a presumption of fraud, on which a verdict of the jury, that it was a fr^ud, was sustained.^ § 32. For the purpose of avoiding a plea of discharge in bank- ruptcy, the plaintiff specified a fraudulent concealment of prop- erty, as follows: "The defendant wilfully and fraudulently kept back and concealed certain property, money, eflFects, or rights of property, in the hands of one Mary Fogg, of Elliott, in the County of York, and State of Maine, of a large amount, to wit, $1000." Held insufficient.* § 33. A. and his wife before their marriage made a marriage settlement, the deed of which was incorrectly proven, and so did not pass the wife's property to the trustee. A. became bankrupt and was discharged, but in his inventory his wife's property was not included. A creditor sued A., charging him with a wilful and fraudulent concealment of his property, and a case was stated, which set forth the foregoing facts, but did not state a wilful and fraudulent concealment. Held, that A.'s plea of a discharge was good, as the discharge could only be impeached by such a con- cealment, which was not expressly stated in the case.^ § 34. The possession of property by a bankrupt, six years after he had filed his petition, creates no presumption of fraud in the procurement of his discharge, and evidence of such possession, 1 Ashley v. Eobinson, 29 Ala. 112. * Sanders v. Smallwood, 8 Ired. 125; 2 The Slate v. Bethune, 8 Ired. 139. The State v. Bethune, 8 Ired. 139. » Rand v. Upham, 2 Fost. 39. CHAP. IX.] DISCHARGE, 255 unaccompanied with other proof, is properly excluded from the jury.' § 35. Where a defendant relies on a discharge under the United States bankrupt act of 1841, and the plaintiff attempts to avoid the discharge, by showing that the defendant concealed a part of his property, the defendant may give in evidence the statements which he made to his counsel, who assisted him in making an inventory of his property, rights, and credits, respecting the prop- erty alleged to have been concealed, and the advice of his counsel that such property ought not to be inserted in such inventory.^ § 36. When a bankrupt's certificate is attacked on an allega- tion of fraud in withholding moneys in his hands, and after the defendant has introduced evidence, to show that the business in which he was engaged, for several years prior to the filing of his petition in bankruptcy, was generally disastrous to those engaged in it at the same time ; evidence of the amount of losses sustained by another individual, wholly disconnected from him, is not ad- missible evidence for the defendant. But after the plaintifis have proved that the defendant had received considerable sums of money before filing his petition, that he was engaged in merchandising, and had purchased cotton, etc., the defendant may repel any infer- ence which might be drawn from this evidence prejudicial to him, by showing that all those, who were engaged in the purchase of cotton at the same time and place with himself, had failed ; and this, notwithstanding it is shown that he sold his goods for cash, while the others had sold on a credit. So, also, evidence that the defendant was a reckless cotton buyer is admissible for him. But, when the plaintiffs have proved that the defendant purchased cot- ton to a very large amount during the three years immediately preceding the trial, which was several years after obtaining his discharge in bankruptcy ; the defendant cannot rebut this evidence by showing that nine-tenths of those engaged in that business during the same time were insolvent. Nor can he be allowed to prove, that merchants in a neighboring place were in the habit of employing persons in the city where he lived to buy cotton for them on commission.^ § 37. A mere omission to include in his schedule an interest in trust property, bequeathed to the bankrupt by his father, is not 1 Powell V. Knox, 16 Ala. 364. » Edgar v. McArn, 22 Ala. 796. 2 Kobinson v. Wadaworth, 8 Met. 67. 256 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. such "a fraud or •wilful concealment" as will necessarily vacate a discharge; nor is a charge in a bill by his creditors, to subject the bankrupt's property to a discharge of their debt, that the failure of the debtor to render in such interest, in his schedule, "amounted in law" to a fraud which would vacate his discharge, equivalent to a charge of "fraud or wilful concealment" of his property.^ So the mere fact that a bankrupt, at some time prior to the filing of his petition, was owner of certain property, which is not returned in his schedule, raises no such presumption of fraud as will cast upon him the burden of explanation.^ But where, upon the trial of an issue vel non in obtaining a discharge in bankruptcy, it is shown, that five years before the filing of his petition the bankrupt was the owner of a certain slave, which was not rendered in his schedule, and that four years after his discharge the same slave was in his possession ; the law raises the presumption that he was the owner of the slave during the interim, and devolves upon him the necessity of showing, by competent proof, that such was not the fact.*(a) § 33. With reference, more particularly, to any concealment or misrepresentation in regard to debts; in England, a bankrupt knowingly permitting a fictitious debt to be proved, is not entitled to his certificate.* Upon the ground that in such case he cannot 1 Hugely V. Robinson, 19 Ala. 404. » Powell v. Knox, 16 Ala. 364. 2 Powell V. Knox, 16 Ala. 864. * Freydeburgh's case, 3 Ves. & B. 142. (a) An insolvent who returns real estate must produce the deeds. Brown's case, 1 Browne, 375. Where a debtor had conveyed to his son-in-law a number of houses and lots, and a number of slaves, for which he was said to have received a large sum of money, and at the date of the conveyance was very much in debt ; held, on the trial of the validity of his schedule, that the burden lay on him to account for the proceeds. And where he alleges that the proceeds have been gambled away, the question of his gaming may be submitted to the jury, and their finding will not be disturbed. Sherman v. Barrett, 1 McMul- lan, 147. The withdrawal of a debtor's schedule from the clerk's office by his at- torney, after it had been filed, and its retention by him, until the sitting of the court to which it was returnable, where no application was made for it, either at the clerk's office or to the counsel, is good ground for continuing the cause, if it operates as a surprise when produced; but it is insufficient to authorize the imprisonment of the debtor, no fraudulent intent being imputed to the parties. Lindsey v. Hunter, 18 Geo. 50. CHAP. IX.] DISCHARGE. 257 have made a^full discovery} So a certificate granted to a petition- ing trader by the commissioner of bankruptcy, under section 221 of the bankrupt law consolidation act, 12 & 13 Vict. c. 106, will not prevent a creditor from suing the trader for a debt, if the creditor has not had notice of both sittings of the court to con- sider the trader's proposal of compromise: even if the creditor be the indorsee of a bill of exchange drawn by a third party and accepted by the trader, and the latter at the time of giving the first notice was ignorant that the bill had been parted with by the drawer, and had given the drawer due notice of the first sit- ting, and after the first sitting, learning to whom the bill had been indorsed, had given the indorsee due notice of the second sitting.^ So, under the act of 1841, it was held that a petitioner could not be decreed a bankrupt, when in his petition and schedule he did not include all his creditors and the debts due them.' So it was held that a discharge under that law would not bar a suit for an account not included in the schedule.^ So it has been held in New York, that the omission, by an insolvent, to state the cause of his indebtedness to his creditors, vitiates his discharge.* So in England, where an insolvent, who had accepted and given to the payee a bill drawn on him by J. S., described the bill in his schedule as drawn by J. S., but did not name the payee, or allege that the holder was unknown ; held, the insolvent was not dis- charged as to the payee under the 75th section of the 1 & 2 Vict. c. 110.® So to an action by the plaintiffs as the drawers, against the defendant as the acceptor, of a bill of exchange, dated the 19th of October, 1853, at three months, indorsed to the plaintiffs, the defendant pleaded, that a petition for protection from process was duly presented by the defendant to the insolvent court; that before action a final order for protection and distribution was made by an insolvent commissioner, and that the debt in the declaration was contracted before the filing of the petition. Replications: first, that the debt was due at the time of filing the petition, and that the plaintiffs were not named in the defendant's schedule as creditors, or as claiming to be creditors, for the debt, nor was the bill of ex- 1 Laffert, 1 Rose, 330. * Steele v. Towne, 2 Wms. 771. 2 Wesson v. Alcard, 16 Eng. Law & ^ McNair v. Gilbert, 3 Wend. 344. Eq. 481. 6 Lambert v. Smith, 6 Eng. Law & Eq. ' Hardison, Law Kep. Oct. — 42, p. 255 894; aco. Pugh v. Hookham, 2 Car. —Virginia. & P. 376. 17 258 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. change set forth in the schedule; secondly, that the debt was due, and the plaintiffs were then and thenceforth, etc. indorsees and holders of the bill, and were known to him as such indorsees and holders, and were not named in the schedule as creditors, or as claiming to be creditors. The defendant had, before his insol- vency, given a renewal bill for £26, 7s. 6d. to Messrs. W., varnish merchants, who, without the knowledge of the defendant, indorsed it to the plaintiffs. One of the Messrs. W. afterwards died. In his schedule, the defendant described the debt and bill in the declaration in these terms: "The representatives of Messrs. W. & Co., varnish merchants, late of 134 High Holborn, are Messrs. Wallis, varnish manufacturers. Long Acre : £30 admitted for varnish. These creditors hold a bill of exchange for £30 and upwards, drawn by self and partner, and afterwards renewed by self." Held, first, that the plea was bad, and that the two repli- cations constituted but one answer to the plea; secondly, that the description in the schedule was defective, and that the debt was not barred.* But where a party who petitions for his pro- tection under the insolvent acts 5 & 6 Vict. c. 116, and 7 & 8 Vict. c. 96, omits a debt from his schedule with the knowledge and consent, and through the contrivance and procurement, of the party to whom it is owing, the debt is barred.^ And the general prevailing rule seems to be less rigid against the debtor than would be inferred from the above-cited cases. Thus it is held, that, where a defendant relies on his discharge under the United States bankrupt law of 1841, the plaintiff cannot avoid the discharge by merely showing that the defendant, in his petitioii, omitted to insert the plaintiff's name, etc. in the sworn list of creditors, and that, by reason of such omission, the plaintiff had no notice of the proceedings in bankruptcy, and could neither prove his claims against the defendant, nor oppose the granting of his discharge ; without further proof that the omis- sion was wilful and fraudulent.^ So a discharge under the bank- rupt act will release the debtor from all liability to a creditor by note, though the debt for which the note was executed was not placed on the schedule of the bankrupt, and the holder did not 1 Kemp V. Hurry, 80 Eng. Law & Eq. 2 Wilkin v. Manning, 25 Eng. Law & 583. Eq. 514. ' Buruside v. Brigham, 8 Met. 75. CHAP. IX.] DISCH4EGB. 259 make himself a party to the proceedings in bankruptcy by taking a dividend, or otherwise; where there is no allegation of fraud or other matter which could impeach, as to the creditor, the validity of the discharge.^ So an omission, by a petitioner for the benefit of the bankrupt law, to give notice to a creditor, is not of itself, without proof that the omission was fraudulent or intentional, sufficient to invalidate the petitioner's certificate of bankruptcy, as against such creditor.'' So the defendant, being indebted to the plaintiflfs, became insolvent, and obtained his discharge, under 1 & 2 Vict. c. 110. In the list of creditors in his schedule, he described the plaintiffs as bankers, 32 Clement's Lane, City, their right address being 32 Abchurch Lane, City, and notice of the hearing of the petition was directed to Clement's Lane, but was served at Abchurch Lane, but the plaintiffs denied having received it. Held, that the description was sufficient, and that the defend- ant was discharged from the debt.^ So in February, 1846, the defendant executed a warrant of attorney to secure to the plaintiff £100, upon which judgment was entered up, and execution levied to the amount of <£50. In August, 1847, the defendant obtained an order for protection under Stat. 5 & 6 Vict. c. 116, and Stat. 7 & 8 Vict. c. 96, and in his schedule the consideration for the war- rant of attorney was stated to be about £70, and the balance due upon it about £20. In October, 1854, the plaintiff caused another writ of fieri facias to be issued to levy the sum of £70 14s. lid., which he alleged to be the balance remaining due upon the judg- ment. Upon application to set aside this writ, it was held, that the order for protection must be considered as valid until set aside by the insolvent debtors' court; and that the issuing of execution upon the judgment on the warrant of attorney was a violation of sect. 21 of Stat. 7 & 8 Vict. c. 96, unless the amount of the debt was inaccurately stated in the schedule, by " culpable negligence, fraud, or evil intention" on the part of the defend- ant.* So in Connecticut, where an insolvent debtor, in his peti- tion, described A. as a creditor of a firm of which the insolvent was a member, and not as an individual creditor, and A. had legal notice ; it was held, in an action, after the debtor's discharge, by • Rogers v. Western, etc. 1 La. Ann. ' Brown v. Thompson, 33 Eng. Law & R. 161. Eq. 227. 2 Brown v. Rebb, 1 Richardson, 374. * Brook v. Chaplin, 30 Eng. Law & Eq. 276. 260 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. A., against the debtor, for a debt due from him individually, that execution should not issue against the body of the defendant.' So even an omission by an insolvent debtor of a large proportion of his creditors from the schedule, and a failure to state the resi- dence of those creditors actually on the schedule, as also the nature and amount of their debts, or the consideration or security for the same, if not done wilfully and fraudulently, will not of itself avoid a discharge.^ So in New York, by the later decisions, where one who buys a debt, three or four years before the insol- vency of the debtor, and holds it at its full amount against the debtor, becomes a petitioner for his discharge for the full amount; the discharge will not be void, unless the insolvent procure the creditor to petition for a larger amount than is due him, in order to obtain the discharge.^ And the omission of a creditor, or the statement, of a debt at less than its true amount, in the schedule of debts, if not wilful or intentional, and thus fraudulent, will not vitiate a discharge.* So, although a compliance with statutory provisions is a condition precedent to the discharge of an insol- vent; yet, where the true cause and consideration of his indebted- ness to a principal creditor were not set forth in the petition, as required by statute, but the creditors had regular notice to appear and object ; it was held, that this objection was a matter exclu- sively for the judge who heard the petition, he having jurisdiction of the case, and could not be taken advantage of on certiorari, to invalidate the discharge. And the same rule was applied to an omission, in the affidavit, of a creditor, and of a certificate that the assignment had been duly recorded ; upon the general ground, that the statute, in providing expressly that certain acts or omis- sions shall vitiate the discharge, strongly implies tliat the decision of the judge who hears the application shall as to other matters be conclusive.'* § 39. In an action where the defendant relies upon his discharge, and the plaintiffs attempt to avoid the discharge, on the ground of concealment, omissions in the petition and schedules, and irregukrities in the proceedings; the defendant may show, that the plaintiffs knew of all these matters when proceedings were 1 Trumbull v. Smith, 2 Conn. 241 . * Small «. Graves, 7 Barb. 576 ; Ayrea 2 Williams v. Coggesliall, 11 Cush. 442. v. Scribner, 17 Wend. 407 ; 11 Barb. » Small V. Graves, 7 Barb. 676. 241, ' The People v. Stryker, 24 Barb. 649. CHAP. IX.] DISCHARGE. 261 pending; that they then raised the same objections, and they were not considered available in opposition to the granting of the decree of bankruptcy.' § 40. A judge, in his charge to the jury, stated that the alleged omissions in the defendant's petition and schedules, in order to impeach the discharge, must be wilful and fraudulent, instead of saying that they must be wilful; but afterwards, that it must appear that the defendant had committed a fraud, or wilfully con- cealed his property. Upon an exception to the charge in general, and not to any particular part, held, that even exceptions to each particular part of the charge could not be sustained; that the word fraudulent was evidently not intended to mean anything more than wilful; and that, taking the whole charge together, the jury must have so understood it.^ § 41. It has been already stated — p. 231, n. — that by the ex- isting English bankrupt law the general character of a bankrupt may be inquired into, for the purpose of determining the ques- tion, and also the nature and extent, of his discharge. It is said : "When a bankrupt, applying for a certificate, is shown to have been negligent or careless, rash or improvident in the conduct of his business, or in the management of his affairs, or has been shown to have been unduly lavish in his expenditure, these cir- cumstances are, of course, important and weighty on the question whether he shall have any certificate, and, if any, of what class and on what conditions."' So it is held, that, where a bankrupt is proved to have been guilty of falsehood or dishonesty with reference to his creditors or his affairs, he is not entitled to his certificate ; that the Court, in the case of certificate, has regard not only to the bankrupt and his affairs, but to the interests of society.* § 42. When a bankrupt's certificate of discharge is impeached for fraud, evidence of his general good character is not admissible for him.* § 43. The "fair character" which a petitioner must sustain, under the Connecticut insolvent act, statutes 282-3, tit. 52, s. 1, in order to entitle him to a discharge, is his general character, 1 Lyon V. Marshall, 11 Barb. 241. * Dobaon, 36 Eng. Law & Eq. 419. 2 Ibid. 6 Pearsall v. McCartney, 28 Ala. 110. 8 Per Knight Bruoe, L. J., Dobson, 35 Eng. Law & Eq. 420. 262 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. depending upon his babits of life, or a course of conduct; and the expression, " not being justly chargeable with mismanage- ment in his business," refers to his habits, or a course of con- duct, in his business, and imports something more than a single in- stance of immoral conduct, though it may lead to a pecuniary loss. Therefore a judgment against the petitioner, in an action for se- duction, is not sufficient to preclude him from the benefit of the aet.^ § 44. In this connection we may consider another answer to the plea of discharge in bankruptcy or insolvency, to wit, a sub- sequent promise to pay the debt upon which the action is brought. § 45. The question as to the effect of a subsequent promise has sometimes arisen from a promise made after the commence- ment of bankruptcy or insolvency proceedings, but before the granting of the certificate. § 46. In England, such promise has been held binding. But a later case decides, that a promise to pay, after the fiat but before the certificate, does not revive the debt, because at that time the party might have been sued on the original debt.^ § 47. In this country it is held, that a new promise, to over- come the effect of a bankrupt discharge, must appear to have been made after the party was decreed to be a bankrupt; and a replication to plea of the discharge in bankruptcy, setting forth a promise made after the presentation of the petition and before the commencement of the suit, is bad.' But a new promise by a bankrupt, after he has been decreed such, and before Ms discharge, that he will pay a debt existing before the decree, is held to be valid and not affected by the discharge. It revives the debt and prevents the effect of the discharge, and it is not necessary to declare upon the new promise. Such a promise means that the bankrupt will pay the debt and not set up his expected dis- charge.* § 48. It is the prevailing rule of law, that if a debtor, after discharge under a bankrupt or insolvent act, absolutely and un- conditionally promises to pay a pre-existing debt ; he waives the exemption from arrest conferred by such act, and the promise 1 Botts V. iiockwood, 8 Conn. 487. ' Stebbins v. Sherman, 1 Sandf. 510. '^Kirkpatriok v. Tattersall, 1 Car. & ^Otis v. Gazlin, 31 Maine, 567. See Kir. 577 ; Rrix v. Braham, 1 Bing. Porter v. Porter, ibid. 169. 509. CHAP. IX.J DISCHARGE. 263 creates a new contract on which a suit may be brought.' The debt barred by the discharge is a good consideration for the new promise.^ And the form or nature of the debt or the remedy to enforce it is immaterial.^ § 49. The precise nature and effect of such promise are thus expressed by the Court in Massachusetts: "We do not hold that a note, promise, or debt, is ' destroyed ' by a discharge in bank- ruptcy. If it were, it not only could not be renewed or revived, but it could not be a consideration for a new promise. * * * The new promise operates as a waiver, by the promisor, of a defence with which the law has furnished him against an action on the old promise or demand. A new promise removes the statute bar, but does not create a new and substantive cause of action which is the basis of a judgment. The judgment must be considered as rendered on the old contract."* § 50. It has been held, however, contrary to the prevailing rule on the subject, that a new promise does not revive the liabil- ity upon a note evidencing the debt, but makes the party liable only on the new promise.® So, that a promise to pay a specialty debt which has been discharged does not revive it as a debt by specialty ; but the debt is merely a consideration that gives valid- ity to the new promise.' § 51. As illustrative of the nature of the claims which may be thus revived ; where one who has been discharged under an insolvent law is afterwards sued, and gives a bond for an un- conditional appearance, he waives his discharge.^ So, where one thus discharged is afterwards arrested on ca. sa., and, in- stead of applying for a discharge from arrest, gives bond to take the benefit of the law, but fails to do so.* So where judgment had been recovered in New York, and the defendant afterwards obtained a certificate of bankrupt in Pennsylvania, and, being arrested on a ea. sa., voluntarily paid part of the money, and gave his bond for the residue ; he was held liable on that bond.' 1 Earnest v. Parke, 4 Rawle, 452 ; Ken- 5 Carson v. Osborn, 10 B. Mon. 155. you V. Worsley, 2 K. I. 341 ; Will- 6 Field's case, 2 Rawle, 351; ace. Gra- iama I). Bobbins, 32 Maine, 181. See ham v. Hunt, 8 B. Mon. 7. Patten v. Ellingwood, 32 Maine, 163. ' M'Alpin v. Newell, 2 Miles, 339. 2 Fletcher v. Neally, 20 N. H. 464. 8 Kensington Bank v. Wilkinson, 2 3 Otis V. (Jazlin, 31 Maine, 567. Miles, 166; Shore v. Edgell, ibid. *Per Metcalf, J., Way v. Sperry, 6 174; Cohen «. Patton, ibid. 437. Cush. 241-2. 9 Nixon v. Young, 2 Yeates, 156. 264 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. So where the maker of a note, payable to two persons jointly, after being discharged, made a note to each of them for one half of the amount of the joint note, as a substitute therefor, and bearing the same date, and received the latter in exchange ; it was held, that, if the joint note was a subsisting and valid note at the time of the substitution, an action might be maintained on each of the substituted notes against the maker, notwithstanding his discharge.^ § 52. Independently of express statutory provision to the con- trary, the new promise may be verbal, as well as written.^(a) Thus the maker of a note, who had been discharged therefrom, being asked by an agent of the holder to give a new note, declined to do so, but added: "I have always said, and still say, that she shall have her pay." Held, a jury might properly construe these words as a distinct and unequivocal promise to pay the note.^ So where a defendant, after being discharged, on receiving a letter from the plaintiffs, said: "It is an honest debt; I will pay it;" I will "pay part, if not the whole, before you leave;" and there was no evidence of any other debt due to the plaintiffs than this, which was contracted before the defendant's discharge ; and he did not produce the letter : held, the evidence was primd facie sufficient to support the replication of a new promise.* So a count against a bankrupt on a pre-existing liability, as the in- dorser of a note, upon which he had been charged by regular proceedings against the maker, which, after stating that the makers, on bill filed, etc. obtained an order enjoining the parties, that on the final hearing said injunction was, by decree of the chancellor, made perpetual, and that from this decree an appeal was taken to the Supreme Court, avers, "that after the discharge of said defendant in bankruptcy, and while the said appeal was 1 Williams «. Bugbee, 6 Cush. 418. * Fitzgerald v. Alexander, 19 Wend. 2 Williams v. Bobbins, 82 Maine, 181. 402. s Pratt V. Russell, 7 Cush. 462. (a) St. 6 Geo. 4, c. 16, s. 131, requires a written promise. The written promise of a certificated bankrupt to ipay a debt is held to stand on the same ground, in regard to signing, as a promise under the statute of limita- tions or of frauds. It is sufficient if the party's name appear in any part of the paper. Lobb v. Stanley, 5 Ad. & El. N. 574. CHAP. IX.J DISCHARGE. 265 pending in the Supreme Court, the said defendant undertook and faithfully promised the plaintilF, that, if plaintiff should lose said case in the Supreme Court, he would make it good to him, and plaintiff should lose nothing by said indorsement of the note; and that the said decree of the chancellor was subsequently by said Supreme Court in all things affirmed;" sets out a sufficient consideration to support a subsequent promise.^ § 53. But it is said: "Different principles apply to cases of defences of the statute of limitations and a discharge under the bankrupt act. In the former, a new promise may be implied; in the latter it must be express, clear, and unequivocal;"^ such as to show that the promisor intended deliberately to waive the pro- tection of his discharge, and to rebind himself legally to pay the old debt.* Thus partial payments are not a new promise, nor the equivalent of a new promise.^ Nor will a payment of interest by the maker, on a note from which he has been discharged, revive his liability to pay the note.° Nor is the mere expression of an intention to pay the debt of itself sufficient ; but whether there was a promise is a question for the jury.' So a devise, in order that "all the contracts" of the devisor, "whether bonds, notes, letters, agreements, or otherwise, may be honorably fulfilled and per- formed," will not apply to debts discharged by certificate of bank- ruptcy.'' So where a party, after he had been decreed a bank- rupt, but before he obtained his discharge, promised to give a new note for the principal and interest due on an old one, in- cluded in his subsequent discharge, but never gave such new note ; this was held insufficient to sustain an action on the old note after the discharge.* So a debt, barred by a discharge, is not revived by a new promise of the debtor, to allow the amount of it in payment of a sum of money, to become due to him on the 1 Herndon v. Givens, 16 Ala. 261. 12 S. & M. 491 ; Brown v. Collier, 2 Per Dewey, J., Cambridge, etc. v. 8 Humph. 510. Littlefield, 6 Cush. 213. < Stark v. Stinson, 3 Fost. 259; Viele 3 Horner v. Speed, 2 P. & H. (Va.) 616 ; v. -Ogilvie, 2 Greene, 826. Evans v. Carey, 29 Ala. 99; 81 ^ Cambridge, etc. s). Littlefield, 6 Cush. Maine, 169 ; Lynbury v. Wright- 210. man, 5Esp. 198 ; Flemingi). Hayne, * United, etc. v. Winkley, 7 Gray, 1 Stark. 370; Muoklow v. St. John, 460; Stewart v. Reckless, 4 Zabr. 4 Taun. 613; Brook u. Wood, 18 427. Price, 667 ; Dupuy v. Swart, 3 ' Roosevelt v. Mark, 6 John. Ch. 266. Wend. 139. See Alsop «. Brown, 1 ^porter «. Porter, 31 Maine, 169. Doug. 192; Prewett v. Caruthers, 266 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. subsequent performance by him of a special contract.^ Nor by an agreement of the maker of a note, from which he is dis- charged, to let the amount of it remain unpaid on a judgment in his favor against the holder, and abide the result of a suit by the latter on the note.^ § 54. In an action on a debt from which the debtor has been discharged in insolvency, evidence is inadmissible of promises made before the commencement of proceedings to pay the debt notwithstanding the discharge; although there was also evidence of a subsequent promise, and the former evidence was admitted " only for the purpose of showing that the defendant would be likely to make the promise after he went into insolvency, and as showing that he considered it an honorary debt," and although ihe jury were instructed that, "to entitle the plaintiff to recover, they must be satisfied that the defendant, after the commencement of the insolvency proceedings, unconditionally promised the plain- tiff his debt."^ § 55. As has been suggested, the new promise must be abso- lute ; or, if conditional — as, provided the party is afterwards of sufiicient ability — it must be alleged and proved that the condition has been complied with.*(a) Thus, when the debt was demanded, the defendant said he would pay it, adding, that it was his inten- tion "to pay this and all other just debts against him when he got able." Upon an averment of the promise in this form, and of the defendant's ability to pay when the suit was brought ; held, the new promise was sufficient to sustain the action.® But where a certificated bankrupt promised a creditor, whose debt was barred, to pay him the amount of it when he should be able, but refused to give his note; and the creditor immediately commenced suit for the debt : held, the suit was not conclusive of the creditor's acceptance of the promise, and that proof of his then ability to 1 Kelley «. Pike, 5 Cush. 484. * Yate v. Hollingsworth, 5 Har. & J. 216 ; ' Ibid. Maxim v. Morse, 8 Mass. 127 ; Sher- 3 Reed v. Frederick, 8 Gray, 230. man v. Hobart, 26 Vt. 60. 6 Taylor v. Nixon, 4 Sneed, 352. (a) If a debtor, previous to bankruptcy, promise a particular creditor to pay the debt when he shall be able, his certificate is no bar to an action on the new promise^ although the original debt might have been proved under the commission. The new promise creates a contingent debt not provable under the commission. Kingston v. Wharton, 2 S. & R. 208. CHAP. IX.] DISCHARGE. 267 • pay would not entitle the plaintiflF to recover, as the promise clearly related to a future ability.^ So it is held that a creditor of a bankrupt, who has been discharged, cannot maintain an ac- tion on a subsequent promise of the bankrupt, " to pay when he is able," until all the assets of the bankrupt have been distributed.^ § 56. A promise to pay a discharged debt will avoid the effect of the discharge, though made to a third person. But this fact may be taken into consideration, with the other facts, to explain the sense of the words.^ So a distinct and unequivocal verbal promise by the maker of a discharged note, td pay the same to the payee, is a promise to pay him or his order, or bearer, accord- ing to the tenor of the note, and binding on the promisor, although not founded on any new consideration.* But, on the other hand, it is held that a parol promise by the maker of a discharged note, made to the payee after his discharge, that he will pay it, does not pass to a subsequent indorsee, and cannot be used to defeat the discharge in a suit against the bankrupt in the indorsee's name.^ And, in general, that while, to renew a debt barred by a dis- charge, there must be an express promise to pay it; which need not be made to the holder, but must refer to the debt without ques- tion; that no form of words is necessary, and perhaps signs or acts, signifying a present willingness, and an undertaking, to pay the debt, and intended to convey that idea to the hearer, are suf- ficient : still it is a question for the jury, whether the language used imported such a promise under the circumstances.^ § 57. It has been held that a bankrupt may be held to bail in an action against him, grounded on the demand revived by a sub- sequent promise; because, as it becomes a good debt recoverable at law, it must have all the incidents of a legal debt, and all the ordinary modes of proceeding to recover it are open to the cred- itor.' But, by St. 5 Geo. 2, c. 30, s. 7, any bankrupt arrested, etc. for a debt prior to his bankruptcy, shall be discharged on common bail. And, a bankrupt having been arrested upon the alleged ground of a new promise, it was held that he should be dis- charged. Abbott, C. J., said : " It must be a question for the jury, 1 Samuel v. Cravens, 5 Eng. 380. 5 Wardwell v. Foster, 31 Maine, 558. 2 Mason v. Kughart, 9 B. Mon. 480. « U. S. v. Winkley, 7 Gray, 460 ; Ben- 3 Evans v. Carey, 29 Ala. 99 ; McKin- nett v. Everett, 8 R. I. 152. ley V. O'Keson, 5 Barr, 369. ' Blaokbourn v. Ogle, 8 Price, 526 ; * Way V. Sperry, 6 Cush. 288. Drew v. Jefiferies, ibid., 531, n. 268 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. whether or no the bankrupt has made himself liable by a new promise, and, until they have decided that question against him, he is entitled to be discharged."' § 58. We now proceed to consider what debts or claims are barred by a certificate of discharge. A preliminary inquiry, however, arises, as to the effect of a discharge, and the mode of taking advantage of it, where a creditor recovers judgment against the bankrupt or insolvent before the certificate issues, though after the commencement of proceedings ; thus preventing him from setting* up the defence in the regular course of the pleadings. Upon this subject the authorities are not recon- cilable. (Sees. 101.) § 59. It is said, on the one hand : "In ordinary cases, although a judgment technically changes the nature of the debt, it is still in fact the same debt; and if contracted previous to the institution of the proceedings in bankruptcy, it will be barred by the discharge, where such discharge is obtained subsequent to the entry of the judgment."^ A discharge in bankruptcy, valid as regards the debt on which a judgment is founded, is operative against the judg- ment.' So it is held that a judgment may always be vacated, especially in equity, if the debt on which it rests might have been, when there exists sufiicient excuse for the defendant that he did not make the defence at law; that the judgment rests on the original consideration of the debt, and is no new contract, and is only higher than the debt as regards the evidence necessary to impeach it. And where a petition in bankruptcy was filed before suit on a debt, but final discharge was granted after judgment, it was held that the discharge vacated the judgment, and was a good defence to a bill in equity to enforce it.* So it is held, that a dis- charge may be pleaded in bar to an action, upon a judgment founded on a debt which existed when the bankrupt filed his petition, but recovered before the discharge was granted, so that the defend- ant had no opportunity of pleading such discharge in the suit. 1 Peers v. Gadderer, 1 B. & C. 50-1. Rogers v. Western, etc. 1 La. Ann. 2 Per Walworth, Chano., Johnson v. 111. See Cohoon v. Morris, 1 Jones, Fitzhugh, 3 Barb. Ch. 373 ; Dresser Law, 218. V. Brooks, 3 Barb. 429 ; aco. Mo- ' 30 Miss. 389. Donald v. Ingraham, 30 Miss. 889 ; * Fox ». Woodruff, 9 Barb. 498.* * In this case, Gridley, J., goes into an elaborate examination of the American and English cases upon this subject. The Court, however, were CHAP. IX.] DISCHARGE. 269 So, if the discharge be granted after judgment upon the contract, as the debtor in such case has had no opportunity to plead the dis- charge, he Tyill sometimes be relieved on motion, and a perpetual stay of proceedings on the judgment against him will be granted.' So ■where a decree in chancery is entered against a defendant, sub- sequent to the institution of proceedings in bankruptcy by him, and he afterwards obtains his discharge, and is then sued in an action at law upon the decree ; his proper course is to plead the discharge, averring that the debt was contracted prior to the presenting of his petition in bankruptcy, so as to be provable, and there- fore affected by the discharge.^ So in an action in Massachu- setts, on a judgment rendered in Massachusetts, the defendant pleaded his discharge in insolvency granted in New York in 1828, that the original cause of action arose in that State, and that both parties were citizens of New York. Held, a good defence.* So where, in an action of debt upon a judg- ment, it was stated in the declaration, that the judgment was recovered by the plaintiff "for a certain debt then due by the defendant to the plaintiff," and the defendant pleaded in bar his discharge as a bankrupt, alleging that he was decreed a bank- rupt prior to the rendition of the judgment declared upon, and that subsequent to the rendition of the judgment he obtained his certificate of discharge, and that "the debt in the declaration mentioned was due and owing from the defendant to the plaintiff at the time the defendant was declared a bankrupt;" it was held, that it sufiBciently appeared, that the debt for which the judgment was recovered was provable under the commission, and so was barred by the certificate.* § 60. These American cases are decided in part upon the au- thority of certain leading English decisions. Thus where a bail bond was forfeited before the commission, then a judgment recov- ered upon it, and subsequently a certificate of discharge, relief 1 Parkinson v. Scoville, 19 Wend. 150. s Betts v. Bagly, 12 Pick. 572. 2 Johnson v. Fitzhugh, 3 Barb. Ch. * Harrington v. MoNaughton, 20 Vt. 360. 293. divided in opinion. By a sort of reversed application of the rule in the text, in Wyman v. Mitchell, (1 Cowen, 316,) a judgment recovered after an insol- vent act was held not to be barred, because the debt was contracted before. But see, contra, Pierce v. Eaton, 12 Gray; Cutl. Ins. L. 66. 270 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. was granted.^ So the defendant was indebted to the plaintiflF's testator on a bond, when he committed an act of bankruptcy. Judgment was afterwards recovered on the bond, and, the testator dying before execution, the plaintiff sued upon the judgment and recovered a new judgment, upon which execution issued, and the defendant had been arrested and was in custody. The party had not obtained his certificate so as to plead it in the last suit, nor had he obtained it at the time of the motion ; but he applied for relief as an uncertificated bankrupt, under the provisions of the act. Lord Mansfield said: "The only doubt that can arise is with respect to the interest and costs(a) accrued since the bank- ruptcy;, but I think they stand on the same foundation as the original debt, which was clearly due before the bankruptcy, and therefore equally within the benefit of the statute."^ § 61. But on the other hand it is held, that a discharge in bankruptcy, obtained by the debtor after the rendition of a judg- ment against him, in an action commenced previous to his petition, though upon a provable debt, is no defence to an action on the judgment.^(6) So, when an action is referred by rule of court to arbitrators, who award costs to the defendant, but, before the award is accepted by the court, the plaintiff takes the benefit of the insolvent law, and obtains his discharge; the discharge does not bar the defendant's claim for the costs awarded.* So an action upon a judgment recovered after petition, but before the decree of bankruptcy, is not barred by the discharge.' So where a defendant, after the institution of suit against him and others, iBouteflouri). Coats, Cowp. 25. Pike v. McDonald, 32 Maine, 418; 2 Blandford «. Foote, Cowp.lSS. This Bank v. Franeisous, 15 Mis. 303; case is said never to have been ques- Jameson v. Campbell, 6 B. & Aid. tioned. Per Gridley, J., Dresser v. 250. Brooks, 8 Barb. 446. * Mann v. Houghton, 7 Gush. 592. 'Woodbury v, Perkins, 5 Cush. 86; 6 Fjgiier p_ poss, 30 Maine, 459. (a) In these cases, the costs are said to be accessorial. Per Burrough, J., Dinsdale v. Eames, 2 Brod. & B. 6. (6) Judge Devrey remarks— Woodbury v. Perkins, 5 Cush. 88— that there is no hardship in this view. Not to the creditor, because he may discon- tinue his suit, and prove his claim ; nor the debtor, because he may suggest the pendency of bankruptcy proceedings, and thus obtain continuances till the discharge is granted. He, however, recognizes the conflict of authorities on the subject. CHAP. IX.] DISCHAKGB. 271 obtains his discharge, but neglects to obtain leave to plead it, and suffers judgment to be entered against him; it seems that he cannot set up his certificate afterwards, in opposition to the appointment of a receiver in a creditor's suit, founded on such judgment.* So a defendant, while a suit was pending against him on a promissory note, petitioned to be discharged under the bankrupt law, and then compromised by giving a cognovit for part, agreeing, at the same time, that any discharge he might obtain should not affect the plaintiff's claim. Held, that the de- fendant's discharge, after judgment on the cognovit, did not entitle him to a perpetual stay of proceedings.^ So where a person, during the pendency of a suit against him upon a promis- sory note, became a bankrupt, and, subsequently to the decree of bankruptcy, judgment was recovered against him in the suit ; it was held, that such judgment was not provable against the bank- rupt's estate under the proceedings in bankruptcy, and was not barred by bis discharge.^ And to a sci. fa. to revive a judgment of revival of a judgment, a plea of discharge under the bankrupt law after the original judgment, but before the judgment of revival, is bad on demufrer.* § 62. Cases on the same subject occur in the courts of equity, and with somewhat similar conflict.(a) Thus, where a defendant, after filing his answer, obtained his discharge, under the act to abolish imprisonment for debt, he was allowed to set up the discharge by a supplemental answer.' So, where a decree is made by the court of chancery, before the discharge of the defendant in bankruptcy, for the payment of a debt contracted before the bankruptcy, the discharge is a bar to any suit or other proceeding upon the de- cree, to charge the defendant personally with the debt, unless such discharge can be successfully impeached for some of the causes specified in the bankrupt act.* So, where a defendant in a creditor's bill, who was a proper party at the commencement of the suit, has been subsequently discharged under the act, the 1 Steward v. Green, 11 Paige, 535. * Stewart v. Colwell, 24 Penn. 67. 2 Thompson v. Hewitt, 6 Hill, 254. 6 Hopk. 27. SHolbrook v. Foss, 27 Maine, 441. « Johnson ». Fitzhugh, 3 Barb. Ch. 360. (a) "Whether a person, who has neglected at law to plead his discharge under an insolvent act, can avail himself of it in equity, see Eeily v. LurnSr, 2 Oranch, 344. 272 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. plaintiiF will be permitted to dismiss the bill, as to him, without costs.^ So, where a defendant is discharged under the act, after answer, it is a matter of course to permit him to put in an answer setting up the discharge, unless the plaintiff will stipulate to exempt the person and after-acquired property of the bankrupt, or to dismiss his bill without costs, or will swear to fraud in the discharge. But where the plaintiff swears that the discharge was obtained by fraud, the proper course is to authorize the defendant to set up the discharge by a cross bill.^ So, where creditors seize on execution property acquired by one after he has been decreed a bankrupt under the law of the United States, and before it is decided whether his certificate of discharge shall be granted ; a court of equity will interfere by injunction, to protect his rights, and will restrain proceedings until the question of his discharge is decided. And the State, and not the Federal Court, is the proper tribunal to afford relief in such case.' And where a judgment cred- itor of a bankrupt, who has commenced a creditor's suit, comes in and proves his debt against the estate in bankruptcy, he thereby precludes himself from proceeding further in the creditor's suit, even as against subsequently acquired property, and although the bankrupt does not eventually obtain his discharge.* But, on the other hand, where a defendant has had an opportunity to set up his discharge under the bankrupt act, as a technical defence to a suit in equity, and has neglected to do so, the Court will not open a regular default for the purpose of enabling him to set up such a discharge.' And equity will not restrain by injunction further proceedings at law, upon a verdict obtained through the defend- ant's neglect to produce his certificate in evidence. ^(a) Where a 1 Pratt V. Babcook, 10 Paige, 295. 5 Freeman v. Warren, 3 Barb. Cli. 634. 2 Scott V. Grant, 10 Paige, 485. But see Ringlands v. Spaulding, 3 8 Mosby V. Steele, 7 Ala. 299. Barb. Ch. 341. * Haxtan v. Corse, 2 Barb. Ch. 506. 6Li„guar,j ^ Hibbertson, 1 Rose, 459. (a) Where a suit was pending before the passage of the act of 1841, it was held, that the discharge of one of the defendants under that act exonerated him from a decree -in personam, but did not discharge the complainant's lien on the defendant's property. Fetter v. Oirode, 4 B. Monr. 482. A judgment creditor does not obtain a specific lien, such as will be within the exceptions of the bankrupt act, upon the equitable estate of his debtor, by the return of an execution unsatisfied, but by the commencement of a suit in equity, after the execution has been so returned. Blake v. Bigelow, 5 Geo. 3, 437. CHAP. IX.] DISCHARGE. 273 bankrupt files his petition for a discharge, and a short time after- wards, and before his discharge, a creditor files a creditor's bill, and thereby acquires a lien upon a quarter's salary then due and payable to the bankrupt, it seems that such lien will be upheld. But the assignee, and not the debtor, was held, in such a case, to be the proper party to plead the petition and subsequent dis- charge.* § 63. A certificate obtained by a bankrupt, under the act, being a bar to an action upon a judgment, recovered pending the pro- ceedings in bankruptcy, and before the granting of the certificate, upon a debt due at the time of the decree of bankruptcy ; the costs accruing upon the debt after the decree, and before the granting of the certificate, are held in this respect to follow the debt.^ So, if an action be commenced against the bankrupt after the com- mission, for work done before the bankruptcy, and he afterwards obtain his certificate, he is discharged from the costs as well as the debt.' So where a defendant became bankrupt between plea and verdict, in an action on a bail bond, and obtained his certifi- cate after final judgment ; held, the debt should have been proved, and the certificate was a discharge from both debt and costs.* And the (interest and) costs, upon a writ of error, accruing after bankruptcy, are discharged, as well as the debt.*(a) But, on the other hand, it is held, that, if a plaintifi" become bankrupt after verdict for the defendant, but before judgment signed, the costs are not a debt provable under the commission ; and execution for them may issue against him, notwithstanding his certificate.* So, where a cause and all matters in difiierence were referred at nisi prius to an arbitrator, and he found that a sum of money was due from the plaintiff to the defendant, and ordered that sum to be 1 Smith V. , 4 Ed. Ch. 653. 5 1 chit. 16 (a) ; Blandford ». Foote, 2 Harrington v. McNaughton, 20 Vt. Cowp. 138. 293. 6 Walker v. BarneB, 1 Marsh. 346; 5 3 Willett V. Pringle, 2 N. R. 190. Taunt. 778; 2 Rose, 279. * Dimsdale v. Eames, 4 Moore, 350 ; 2 B. & B. 8; Lewis v. Piercy, 1 H. Black. 29. (a) The costs arising on a judgment, obtained against an insolvent before Ms discharge, being a debt capable of liquidation, are barred by the dis- charge. Thomas v. Striker, 5 Johns. 136, n. Although the costs were not taxed, nor the roll signed. Warne v. Constant, 5 Johns. 135. 18 274 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. paid to the latter ; and between the times of making the order of reference and taxing costs, and signing judgment, the plaintiff be- came bankrupt: it was held, that the amount of the taxed costs did not constitute a debt provable under the commission, and that the bankrupt was not discharged as to that debt by his certificate.* So where a person commenced an action, and during its pendency became bankrupt, and afterwards failed to maintain his action, and judgment was rendered against him for the costs of suit, his bankruptcy not being then interposed by him as an objection; in an action of debt upon that judgment, it was held that his bank- ruptcy furnished no defence.^ So where a party, having com- menced a suit, afterwards obtains a discharge as an insolvent, and then judgment, as in case of nonsuit, is rendered against him, for not going to trial; his discharge is not a bar to an action to recover the costs on that judgment.^ § 64. If a suit against the bankrupt or insolvent is pending simultaneously with the bankruptcy or insolvency proceedings, provision is universally made, either by statute, or rule or prac- tice of court, to allow such continuances, as will enable the party to plead his discharge in bar, whenever it shall be obtained.(a) The defence of a discharge should be pleaded in bar to the fur- ther maintenance of a suit commenced.* A certificate pending a suit operates in the nature of a release.® In pursuance of this system, a defendant will be allowed to plead a discharge in insol- vency obtained since the last continuance, in a case brought to a 1 Haswell v. Thorogood, 7 B. & C. 705. * Kunzler v. Cohaus, 5 Hill, 317 ; 2 Wilkins v. Warren, 27 Maine, 438. Sackett v. Andress, 5 Hill, 327. ' Stebbins v. Willson, 14 Johns. 403. ^ Anon. Lofft. 437. (a) In such case the snit will not be dismissed, because the party may aban- don his petition, or never be declared a bankrupt. " The petition is merely an effort by the petitioner, an expression of his intention that the management of his assets shall be transferred to an assignee." But if the suit were dis- missed, the plaintiff might not only lose his attachment, but also his chance of coming in with other creditors. "The defendant seeks to deprive the plaintiff of the remedy given him by law, by an act to which the plaintiff is not a party." And these considerations, independent of the provisions of the bankrupt law, are fortified by the provision of that law, that an assignee may be admitted to defend a suit against the bankrupt. Hobart v. Haskell, 14 N. H. 127, per Gilchrist, J. CHAP. IX.] DISCHARGE. 275 higher court on exceptions, such exceptions being waived.' So, where a defendant has neglected to plead a bankruptcy discharge obtained pending the action, and judgment is given by default, he may be admitted to plead on payment of costs.^ So the Supreme Court will, on motion, in their discretion, reverse pro forma a judgment of the court below, in order that the defendant may plead a discharge in bankruptcy obtained after final trial, on pay- ment of costs of the court above.' So the defendant has been allowed to add the plea of bankruptcy, after the cause has been several times on the trial list on the issue of a plea of payment, at any time before or on the actual trial.* § 65. In general, a plaintiff may discontinue without costs, if the defendant obtain a discharge after suit commenced.' Even in an action of trespass.' And where a defendant specifies, among other grounds of defence, a discharge in bankruptcy ; the court is bound, under a statute, which provides that, when an action is dis- continued or the plaintiff nonsuited solely in consequence of a plea of bankruptcy, the defendant shall recover no costs against the plaintiff, either to allow the plaintiff to discontinue solely on the ground of the discharge in bankruptcy, or to require the de- fendant, if he insists on going to trial, to waive his discharge and proceed on his other grounds of defence.^ § 66. But whether a defendant who, during the pendency of a suit against him, institutes proceedings in insolvency, shall have a delay of the trial of the action on that ground, and for how long a time, are matters resting entirely in the discretion of the judge before whom the action is pending ; and to the exercise of such discretion no exception lies.* So where, in a bill in equity to re- scind a contract for fraud, one of the respondents was discharged as a bankrupt in November, 1843, but showed no effort to plead the discharge till April, 1845, and in July, 1846, after the case had been published and an opinion given on the merits, moved to be allowed to make the defence by a cross bill; held, the motion ' Lewis V. Shattuck, 4 Gray, 572. 5 Merritt v. Arden, 1 Wend. 91 ; Case 2 Lee V. Phillips, 6 Hill, 246 ; Sanford v. Belknap, 5 Cow. 422 ; Labron v. V. Sinclair, ibid. 248; Cutler w. Day, Woram, 6 Hill, 373. 1 Harr. 439. «] Wend. 91. 'Bank, etc. v. Onion, 16 Verm. 470. 'Goward v. Dunbar, 4 Cush. 500. * Richards v. Nixon, 20 Penn. 19. « Barker v. Haskell, 9 Cush. 218. 276 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. could not be allowed.' And it has been held that a certificate granted after plea, but before the trial, will not avail at law.^ So it was said by Lord Ellenborough, that "if, upon looking at the memorandum of the record at nisi prius, and the certificate given in evidence, it should appear that the defence did not arise till after the action brought, it seems that the defendant cannot avail himself of the plea, (of bankruptcy,) because in such case the judge would say that the certificate did not apply to the plea so pleaded."' So where the defendant, after verdict, obtained leave to plead his discharge puis darrein continuance, on payment of costs, but neglected to comply with the condition of the rule, and judgment was perfected against him ; it was held, that he could not afterwards avail himself of his discharge ; and the Supreme Court would not, on motion of his bail, order an exoneretur on the bail-piece.* And, in general, it is laid down, that if a bank- rupt is sued upon a cause of action arising before his bankruptcy, and obtains his certificate pending the suit, he must plead it puis darrein continuance ; and, if he does not, and judgment is ob- tained, and an action upon that judgment be brought against him, he cannot plead his certificate to that action. ° And it is held that a creditor may prosecute an action against his debtor to final judgment, notwithstanding, after the action is commenced, the defendant institutes proceedings in insolvency, and the creditor offers the claim in suit for proof against the estate.* (See chap- ter V.) § 67. Where a debt is due before the bankruptcy, and conse- quently provable under the commission, the Court will in general discharge the bankrupt out of custody.' Unless it appear that the certificate was obtained by fraud.' Or collusion.' Or that it is seriously meant to be disputed."" Or unless the commission appears to be grossly fraudulent." And the Court will not dis- charge a certificated bankrupt out of custody, without giving the 1 Doggett V. Emerson, 1 Woodb. & M. 'Barker v. Haskell, 9 Cush. 218. 195. 'Holding v. Impey, 7 Moore, 614; 1 sLangmead v. Beard, 9 E. 85, n. Bing. 187 ; Robinson v. Vale, 4 D. Slower V. Cameron, 6 E. 416. See &E. 340; 2 B. & C. 769. See Nun- Pearson V. Fletcher, 5 Esp. 90. ny v. Hall, 8 Moo. 423. * Mechanics' Bank v. Hazard, 9 Johns. 'Vincent v. Brady, 2 H. Black. 1. 392. . » Baker v. Ridgway, 2 Bing. 3U. 'Todd V. Maxfield, 9 D. & K. 171; 6 »» Stacey ti. Frederioi, 2 B. & P. 390. B. & C. 105. " Sowley v. Jones, 2 W. Black. 725. CHAP. IX.] DISCHARGE. 277 creditor time, to show ttat the certificate was fraudulently ob- tained.^ So where an execution was levied on the goods of a bankrupt the same day that he obtained his certificate, the Court refused relief on motion.^ And the protection granted to a bank- rupt by commissioners, in order to be available, must be for a time limited?{a) § 68. Conformably to the general rule on this subject, a bank- rupt, who obtained his certificate after issue and before judgment, having after judgment been rendered in discharge of his bail, was held entitled to be liberated on a summary application, although he had not pleaded his certificate puis darrein continuance^. § 69. And, in pursuance of the same principle, if a judgment creditor — more especially one whose judgment is recovered before the certificate — after the debtor is discharged issue an execution, the Court rendering the judgment will on motion release the debtor, or set aside, or order a perpetual stay, or quash the levy, of such execution.^(6) So if, between the argument of a cause in 1 Nowers v. Colman, Buck, 5. 6 Graham v, Pierson, 6 Hill, 247 ; Mo- 2 Hanson v. Blakey, 4 Bing. 493. Dougald v. Reid, 5 Ala. 810 ; Field ' Claughton v. Leigh, 1 B. & C. 650. v. Howland, 17 Johns. 85 ; Graham * Humphreys v. Knight, 6 Bing. 569 ; v. Benton, 1 Wils. 41 ; Brown v. The 4 M. & P. 375. Branch Bank at Montgomery, 20 Ala. 420. (a) On the 5th of May, 1854, an order was made in bankruptcy, that the bankrupt's certificate should be suspended for three years, and that protec- tion should be granted to him for six months, to be renewed from time to time. The bankrupt was arrested on the 5th of November, 1855, just before the expiration of his protection, and whilst he was on his way to the bank- ruptcy court, to solicit its renewal. The debt for which he was arrested was not a -debt provable under the commission. Held, that the coinmissioners had no jurisdiction to grant such protection, and that he was not entitled to be discharged out of custody. Grave v. Bishop, 33 Bug. Law & Eq. 461. See Whitaker, 13 Eng. Law & Eq. 522 ; Eackhara v. Blowers, 5 Eng. Law & Eq. 347. A bankrupt, whose certificate of conformity is suspended for a given time, cannot be taken in execution after the expiration of that time, on a writ of execution issued during its continuance, under the provisions of the 257th section of the 12 & 13 Vict. c. 106. Everhard, 2 Eng. Law & Eq. 382. (&) This is more especially the practice, where the execution creditor sig- nifies his election to proceed under the commission. Thus, in the case of Burchall, (1 Atk. 141,) the lord chancellor ordered, that the commissioners should proceed in the execution of the commission ; and the other petitioner, 278 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. error, and the decision of the Court affirming the judgment, the debtor has been discharged in bankruptcy, the Court will, on motion, grant a perpetual stay of execution.^ So where, after a judgment was recovered in the Circuit Court, and the cause was removed into the Supreme Court by writ of error, the defendant obtained his discharge in bankruptcy, but, supposing that the judgment had been ipso facto discharged, neglected to instruct his counsel, and the judgment was affirmed; the Court, on motion, ordered the execution to be stayed, on payment of the costs in the Supreme Court.'' So where a judgment in an action of tort was recovered, against one who afterwards applied for the benefit of the bankrupt act ; the claim being provable, and barred by the discharge. And where such discharge was obtained while the de- fendant was in confinement under the execution, and the plaintiff refused to release him ; held, an audita querela would lie, and the bankrupt was discharged. Nor was it necessary to allege that the jailer had refused to permit him to depart from the jail. Nor did it aifect the complainant's right to bring audita querela, that he might, by possibility, have had a remedy by habeas corpus.^ So where a debtor, after a judgment, was discharged, it was held irregular to issue execution on the judgment without an order of the Court, made on notice to the defendant, of the justice's rule for such order.* And in an action against the sheriff for not serving an execution issued on a judgment recovered against a bankrupt, on a debt due before his bankruptcy, the plaintiff is entitled to nominal damages only.' So the rule has been applied, where the discharge was granted on the same day that a judg- ment was rendered.^ So in August, 1841, A. brought an action in Connecticut against B. and C. on a contract made by them in New York. Process was served personally upon B. but not upon C. 1 Parks J). Goodwin, 1 Mamr. (Mioh.) ' Comstook jj. Grout, 17 Verm. 512. 35 ; Curtis v. Slosson, 6 Barr, 265. * Francis v. Ogden, 2 New Jer. 210. ^Bostwiok V. Dodge, 2 Doug. 331. See ^Selfridge v. Lithgow, 2 Mass. 374. Parks V. Goodwin, 2 Doug. 831, n. ^ Baker v. Judges, etc. 4 Johns. 191. Thomas Tribe, being present in court, that had Burchall in execution at his suit, and acquainting his lordship that he now elected to seek relief for his debt under the commission against Burchall, and being also the petitioning creditor, his lordship ordered Tribe forthwith to discharge Burchall out of the Marshalsea. CHAP. IX.] DISCHAKGB. 279 Neither B. nor C. appeared in the suit. A. appeared, and con- tinued the case over one term, till August, 1842, when judgment was rendered by default. February 4, 1842, B. filed a petition in bankruptcy in New York ; and on July 1, 1842, was discharged. October, 1843, A. took out execution upon his judgment, and levied it upon property of B. acquired since the discharge. B. ap- plies to the State court for a new trial and an injunction upon the execution. Held, judgment should by law have been rendered either at the first or next following term ; that the proceedings in bankruptcy constituted a meritorious defence, being neither inequitable nor immoral, which B. should be allowed to make, having lost it without his fault ; and the application was granted.'^ § 70. Upon this point the general rule is laid down, that the right of a bankrupt to protect himself against the payment of all debts from which he has been discharged is perfect and unquali- fied; and he may therefore supersede and quash an execution issued in a suit, to which he had not the legal right to plead his discharge before the judgment was rendered against him.^ And the State courts may enjoin a creditor, while proceedings in bankruptcy are pending, from levying upon property acquired after the proceedings in bankruptcy were commenced.^ So where a party was brought into court by attachment, to enforce an order directing the payment of money, and he there produced a certificate of his personal discharge under the insolvent laws of the State; he was ordered to be discharged from custody.* So an arrest of a person who has received his discharge as an insol- vent debtor, by virtue of an execution issued upon a judgment recovered against him while he is applying for the benefit of the acts, and previous to his discharge, is held unlawful.^ And a valid discharge in bankruptcy extinguishes a judgment, so that the creditor who seizes the bankrupt's goods by virtue of the judg- ment and execution thereon may be charged as a trespasser, eveh if he have no knowledge of the discharge ; though it is otherwise as to the officer making the levy.^ § 71. But, on the other hand, it has been held, that the pro- ceeds of a sale under execution, upon a judgment subsequent to 1 Carrington v. Holabird, 17 Conn. 530. < Andrews v. Scotton, 2 Bland, 620. ^Ewing V. Peck, 17 Ala. 339. ' s gtate v. Ward, 3 Halst. 120. 3 Turner v. Gatewood, 8 B. Mon. 613. 6 Ruckman v. Cowell, 1 Comst. 505. 280 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. the insolvent's discharge, go to the execution creditor, not to the assignee.' And it is not a sufficient return on a ea. sa., that after it was delivered to the officer the party filed a petition in bank- ruptcy.^ So a ca. sa. may be served on a bankrupt, after the commissioners have signed his certificate of discharge, and before it is allowed by the district judge.^ So an application by a debtor, for his discharge as an insolvent, and an order to the creditors to show cause, do not affect the right of a judgment creditor to take the property of such debtor on execution, prior to an assignment.^ And it is held that a debtor cannot move to have his discharge entered of record, for the purpose of preventing the issuance of execution, before the plaintiff has sued out an execution.* So where A., having conveyed lands to a trustee, to indemnify his securities on a debt due to a bank, availed himself of the bankrupt act; and, before his discharge, B., having recovered a judgment, and sued out execution against him, paid the debt due to the bank, and procured a sale of the lands under the deed, at which sale she became the purchaser: held, that the execution was void- able merely, and was sufficient, until avoided, to entitle her under the statute^ to discharge the debt secured by the deed, and have the lands sold under it for her use and benefit; and that such sale vested in the purchaser both the legal and equitable title to the lands.'(a) 1 Sheeffer v. Child, 7 Watts, 84. 5 Brown v. The Branch, etc. 20 Ala. 420. 2Robb V. Powers, 7 Ala. 658. « Clay's Dig. 256, 36. ' Pesoa V. Passmore, 4 Teates, 139. ' Roden v. Jaco, 17 Ala. 344. * Bailey v. Burtu, 8 Wend. 339. (a) A discharge by the insolvent court, after judgment for a debt recov- ered against the insolvent in the county court, does not satisfy the debt ; and the debtor, having been after such discharge imprisoned for forty days, under a warrant on a judgment summons, by virtue of the 98th and 99th sec- tions of the 9 & 10 Vict. c. 95, is not entitled to be discharged under the 1 & 2 Vict. c. 110, s. 90. The application for the discharge should be made to the judge of the county court ; and his decision, refusing to allow the dis- charge, is final, and the superior courts will not grant a habeas corpus. Somers, 32 Eng. Law & Eq. 420. A defendant, against whom a judgment was given in the county court, afterwards obtained his discharge, on petition to the insolvent court in respect of the debt. Having been afterwards committed by the county court judge upon a judgment summons, for nonpayment of the same debt; it was held, that he was not entitled to be discharged. George v. Summers, 33 Eng. Law & Eq. 341. CHAP. IX.] DISCHARGE. 281 § 72. An execution, for the damages directed to be paid by a decree in' equity, cannot issue against a party who has obtained a discharge in bankruptcy, under proceedings instituted subsequent to the decree, although the amount of such damages had not been liquidated by the master at the time of the discharge ; the dam- ages being provable against the estate of the bankrupt.^ And where a defendant in equity has been discharged in bankruptcy subsequently to a decree against him, and the complainant after- wards issues an execution against his property, without having taken any steps to test the validity of such discharge, the court of chancery will grant relief by setting aside the execution, upon motion.^ § 73. As has been suggested, an allegation of fraud will pre- vent the summary interposition of the Court in favor of a dis- charged debtor, and opportunity will generally be given for the trial of this question. Thus a defendant, after judgment recov- ered against him, instituted proceedings in bankruptcy, and ob- tained his discharge, after which the plaintiff issued execution, which was levied on the personal property of the defendant, who moved to set it aside, on the ground of his discharge, and the plaintiff, in opposing, showed facts tending to show that it had been fraudulently obtained. The Court ordered the execution to be set aside, unless the plaintiff, in a given time, would bring an action on the judgment, to enable the defendant to set up the discharge ; and, on his doing so, the execution and levy to stand as security, but proceedings on them, in the mean time, to be stayed.^ So, where a creditor applies for leave to issue execution against 'a discharged bankrupt on a judgment obtained before his discharge, alleging fraudulent preferences among his creditors, the Court can and will, in proper cases, order an issue to try the facts.* § 74. In regard to the nature of the claims which are barred or extinguished by a discharge, the proposition usually laid down, and indeed the express language of the statutes, is, that provable debts are discharged, but those not provable are not discharged. (See chap, viii.) And this is the case, even as against subsequently- acquired property, and though a suit has been commenced before iBoyda. Vanderkemp, 1 Barb. Ch. 273. ^ Bangs v. Strong, 1 Denio, 619. 2 Alcott V. Avery, 1 Barb. Ch. 347. *Ogden v. Harris, 2 New Jer. 540. 282 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. the act of bankruptcy.^ The proposition, however, is not univer- sally true ; as in case of debts due to creditors out of the State, which may in their election be proved under a State insolvent law, but, although provable, are not barred, unless actually proved. So also in case of some torts or wrongs, where the party may at his election treat the claim as a provable debt, and, if he so elect, will be barred.'' With reference to debts of this description, it may be said: "The question is not whether or not the plaintiff might have proved his debt under the defendant's commission, but whe- ther he was hound to do so, and if he were not, the certificate is no bar to the action."^ § 75. The question, whether debts due at the time of bank- ruptcy are discharged, is said to be one purely of law, and for the decision of the Court, on production and examination of the papers before the court of insolvency, and the certificate.* § 76. One of the most frequent controversies on the subject of discharge has arisen in connection with foreign debts ; that is, debts due to persons residing out of the country or State in which the bankruptcy or insolvency proceedings are instituted, whether the debt be a domestic one and the proceedings foreign, or vice versd. As will be seen by the following observations and deci- sions of various courts, the laws upon this question cannot be con- sidered as by any means uniform or well settled. They partake of the same uncertainty, and to some extent turn upon the same general considerations, as those more particularly appertaining to the operation of the assignment upon foreign property. (See chap, vi.) § 77. The general proposition is laid down, that in England, France, and Holland, and perhaps throughout Europe, a discharge in bankruptcy in one country is valid in all others ; while a con- trary rule prevails in the United States, that a discharge obtained abroad is no bar to a suit here, although the assignee's authority to sue is recognized. (a) But to any suit here, even by a foreign 1 Bamford v. Burrell, 2 B. & P. 1 ; Har- = Williamson v. Dickens, 5 Ired. 259. rington !). MoNaughton, 20 Vt. 293 ; 'Per Grose, J., Goodtitle v. North, Bank of Missouri v. Franoisous, 10 Doug. 583. Mis. 27. * Dresser v. Brooks, 3 Barb. 429. (o) "The rule, which must give effect here to a bankrupt law of a foreign country, is a mere rule of amity, and not of international law." Per Eichard- Bon, 0. J., Saunders v. "Williams, 5 N. H. 215. In a late case in New York, CHAP. IX.J DISCHARGE. 283 creditor, a discharge under our law is a bar, however ineffectual it might be in foreign courts. '(a) § 78. This general statement, however, is to be taken with the qualification, that in England a discharge, under a commission of bankruptcy in a foreign country, is no bar to an action against the bankrupt, by an English subject, for a debt arising in England.^ This point arose in reference to an alleged discharge under an 1 Zarega, Law Kep. Apr. — 42, p. 480 — N. Y. " Smith v. Buchanan, 1 East, 6. it is held that the Court will not recognize rights acquired under a foreign bankrupt law. Marmelman v. Caen, Law Bep. Nov. — 61, p. 63. (a) Where a Scotch bankrupt has obtained a warrant of protection under the 2 & 3 Vict. c. 41, s. 18, and is afterwards arrested in England for a prior debt, the Court is bound to discharge him out of custody, although it be alleged, on affidavit, that the bankruptcy was fraudulent and collusive, and that there was no trading. O'Brien v. Don, 38 Eng. Law & Eq. 227. A leading case upon the recognition of foreign bankrupt laws is Sill v. Worswick, 1 H. Bl. 665. See also Story, Confl. of L. s. 417. Contrary to the rule laid down in the text, it has been expressly decided in New York, that debts contracted and payable abroad are not barred, unless expressly so provided, or unless the creditors prove their claims. Murray v. De Eottenham, 6 John. Ch. 52 ; McMenomy v. Murray, 3 John. Ch. 435. Thus A. and B., partners, largely indebted in this country and in Europe, conveyed lands to C. in trust, for the security of certain German creditors, whose debts were contracted and payable in Germany, until they should be paid, or B. should be absolutely exonerated and discharged there- from by said creditors, and their demands transferred to A. alone, or B. be otherwise exonerated, acquitted, or discharged therefrom ; and after said debts should be satisfied, or B. so discharged and released, then in trust for A. A. and B. having committed an act of bankruptcy in July, 1800, were dis- charged under the act passed April 4, 1800. Held, on a bill in equity to set aside the deed of trust, that the deed was valid, and the discharge of B. as a bankrupt was not a fulfilment of the condition on which the trust for the German creditors was created. But even if this discharge were a bar to any suit in the United States, it would not satisfy the trust, unless it also operated as a discharge in Germany. McMenomy v. Murray, 3 JT)hn. Ch. 435. In this case, however. Chancellor Kent made the question to depend in part upon the consideration, whether it would haye that effect under the local laws of the country in which thejdebt was contracted and to be paid. And in another case in the same State, a discharge under the insolvent act of New York was held a good plea in bar, in the courts of that State, to a suit by a foreign creditor. Hamersly v. Lambert, 2 John. Ch. 508. In Maryland, it is held that a debt created in London, and due to a Lon- don creditor, is not extinguished by a discharge of the debtor under the bankrupt act of the United States. Lizardi v. Cohen, 3 Gill, 430. 284 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. insolvent law of Maryland. Lord Kenyon says: "It is impos- sible to say that a contract made in one country is to be governed by the laws of another. It might as well be contended that if the State of Maryland had enacted that no debts due from its own subjects to the subjects of England should be paid, the plaintiff would be bound by it. This is the case of a contract lawfully made by a subject in this country, which he resorts to a court of justice to enforce ; and the only answer given is that a law has been made in a foreign country to discharge these defendants from their debts on condition of their having relinquished all their property to their creditors. But how is that an answer to a subject of this country suing on a lawful contract made here? How can it be pretended that he is bound by a condition to which he has given no assent, either express or implied ? It is true that we so far give effect to foreign laws of bankruptcy as that assignees of bankrupts deriving titles under foreign ordinances are permit- ted to sue here for debts due to the bankrupt's estates : but that is, because the right to personal property must be governed by the laws of that country where the owner is domiciled. "^(a) And Justice Lawrence remarked, that such discharge was no more effectual than a voluntary assignment of all their property for their creditors.^(6) • Smith V. Buchanan, 1 East, 11. ^j^id. 12. (a) "If a subject of this country, by means of legal process abroad, get into his hands, after the bankruptcy, money belonging to the bankrupt, he is liable to refund it to the assignees." Per Bayley, J., Oazenove v. Prevost, 5 B. & Aid. 70. (6) In another case, however, under a different state of facts, the Court remark as follows: "If the bankruptcy and certificate would have been a discharge of the debt in America, which it clearly would, it must, by the comity of the law of nations, be the same here. We always import together with their persons the existing relations of foreigners as between themselves, according to the laws of their respective countries ; except, indeed, where those laws clash with the rights of our own subjects here, and one or other of the laws must necessarily give way, in which case our own is entitled to the preference. This having been long settled in principle, and laid up among our acknowledged rules of jurisprudence, it is needless to discuss it any further." Per Lord BUenborough, 0. J., Potter v. Brown, 5 E. 131. In this case both parties resided in Baltimore. The defendant gave the plaintiff a bill upon a party in England, which was never accepted. The CHAP. IX.] DISCHAR9B. 285 § 79. The general bearing of the lex loci upon the question of discharge is thus stated by the Court in Massachusetts: "The law of the place of the contract, which may be called the law of the contract, gives it its character, makes it what it is, fixes its limits and obligation, fixing the time when it shall commence, how it shall be executed or satisfied, and how it shall be terminated and discharged. When, therefore, such a contract is discharged by force of the same law which gave it its origin and effect, it is extinguished, and no longer exists as a contract. The law under which such discharge is obtained can hardly be said — when in- voked as a defence in a suit upon the contract in another country — to have an extra-territorial operation ; it operates within the country where the contract was made in fixing its character and legal eflFect, which, upon the happening of the contemplated con- tingency, put an end alike to its obligation and to its execution."' And the same Court remark as follows in regard to the prevailing tendency of the decisions upon the general subject: "It cannot escape the attention of the reader of the later decisions of the Supreme Court of the United States, that, so far from manifest- ing any purpose to extend their decisions declaring discharges under State insolvent laws no bar as respects citizens of other States, several of the judges of that court seem to question the soundness of the decisions already made, and manifest no disposi- tion to extend the principle beyond the cases already decided."* § 80. In an early case in New York, Chancellor Kent remarked as follows: "I am aware that the opinion has respectable sanc- tion, that a eessio bonorum, under the laws of a State where the debtor has his personal domicile, ought to operate as a discharge from his creditors in every part of the world. But such a gen- eral rule as this is not the law of the land, nor do I believe it to be any part of the jus gentium."^ And in the same State, in a late case,* Pierrepont, J., dissenting, remarks upon the apparent iPer Shaw, C. J., May v. Breed, 7 'Per Kent, Chr., MoMenomy v. Mur- Cush. 36. ray, 3 John. Ch. 440. *Per Dewey, J., Scrihner v. Fisher, 2 *01yphant v. Atwood, 4 Bosw. 469. Gray, 46. defendant afterwards obtained a discharge under the United States bankrupt law. It was held, in an action for non-acceptance, that the cause of action arose in the United States, and the discharge was a bar. Ibid. 124. 286 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. inconsistency of allowing full eflfect to a foreign discharge, and of denying all effect to such discharge when granted in another of the United States: "The learned lord chancellors — in alluding to the rights of assignees — speak like Englishmen full of rever- ence for English laws ; hut whenever a debtor in England invokes the foreign law to relieve him from his debt, these same judges invariably discriminate, and respect or disregard the foreign law according as they deem such law equitable or unjust."^ The case, however, in which these remarks were made, was as follows: The drawee of a bill, at the time it was drawn and accepted, though a citizen of the United States, resided in England, and there remained till after its maturity; after which maturity he became bankrupt in England, and was discharged, the bill, when accepted, and till after the discharge, belonging to an American citizen. Held, the debt was discharged.^ So in Massachusetts it is held, that a discharge, under the English bankrupt law, of a merchant residing in England, from a debt to a citizen of Massachusetts, contracted and payable in England, is a bar to a subsequent action on the debt in this State ; whether the creditor proved his debt under the English commission of bankruptcy or not.^ And in Pennsyl- vania it was held that a British subject, who had been discharged under the bankrupt law of England, was protected thereby in Pennsylvania.* § 81. The view most favorable to the rights of foreign cred- itors is always accompanied by the qualification, that the certifi- cate does not discharge the bankrupt from debts contracted and made payable in a foreign country, unless the foreign creditors come in and prove their debts under the commission. ° So an attorney, for the prosecution of a claim of a foreign creditor against an insolvent debtor, has authority to unite with the domestic creditors, in recommending the appointment of a par- ticular person as a trustee for the insolvent, in the absence of any restrictions to the contrary, and thus bring his client within the operation of the insolvent laws of the State where the debtor resides.^ And if a foreign creditor, either by himself or his •Olyphantj). Atwood, 4 Bosw. 471. ^ McMenomy v. Murray, 3 John. Ch. 2 Ibid. p. 459. 435. ' May V. Bleed, 7 Cush. 16. e jones v. Horsey, 4 Md. 306. * Harris v. Mandev ille, 2 Yeates, 99 ; 2 Ball. 266. CHAP. IX.] DISCHARGE. 287 attorney, voluntarily unites in the recommendation of a person as a trustee for the insolvent, it is such an acquiescence in the insolvent laws of a State as will place him on the same footing with the domestic creditors, and compel him to take the dividend of the assets as they do.* But the fact, that a foreign creditor brings suit in the courts of Maryland, upon a contract made in that State, does not subject the contract, or a judgment obtained thereon, to the operation of the insolvent laws of that State.'(a) § 82. As suggested, it has been repeatedly held, in the United States courts, that a discharge under a foreign bankrupt law is no bar to an action in the courts of this country, on a contract made here.^ Thus a judgment was recovered in New York, in 1796, against A. and B., on a contract alleged to have been made at Madeira. In 1801, A. was discharged by the bankrupt law in force at Teneriffe. He was afterwards sued on the judgment, in the Circuit Court of the United States in Pennsylvania, and pleaded his discharge in bar, without alleging that the original contract was made in this country. The plea was held insuffi- cient.^ And if the validity of a foreign discharge be recognized, yet, where the defendant introduces such discharge, it must appear when he became a bankrupt, when the fiat was issued, and that the demands in suit were provable under the fiat.° § 83. As we have already seen, (see chap, i.) the general propo- sition seems fully established, that a State bankrupt or insolvent law, discharging the person and future acquisitions of a debtor upon a co;i tract between citizens of the State, made subsequent to the passage of the law, is valid. ° With respect to the opera- tion of a discharge under a State insolvent law upon debts con- tracted, or made payable,(J) or due to parties residing, out of the 1 Jones V. Horsey, 4 Md. 306. * Green v. Sarmiento, 3 Wash. C. C. 17. '^ Poe V. Duck, 5 Md. 1. 6 Mansfield v. Andrews, 41 Maine, 591. s McMillan v. McNeill, 4 Wheat. 213 ; « Penniman v. Meigs, 9 John. 825 ; Green v. Sarmiento, Peters C. C. Sebring v. Mersereau, 9 Cow. 844 ; 75 ; Le Roy «. Crowninshield, 2 Poe v. Uuck, 5 Md. 1 ; St. Clair v. Mason, 162. Bank, etc. 7 Ham. (part 2) 169. (a) "It has never yet been decided, that a foreign creditor, by suing for a debt in a State court, adopted its insolvent laws, and thereby waived his constitutional immunity." Per Gardiner, J., Donelly v. Corbett, 3 Seld. 507. (6) "The proposition that a State insolvent law may operate a discharge of a debt contracted by one of its own citizens with the citizens of another 288 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. State, it is the general rule, that no State insolvent laws can dis- charge the obligations of any other contracts made in the State, than those which are made between the citizens of that State,* unless expressly made payable therein, or unless, as is sometimes intimated, the creditor becomes a citizen of the State after the contract is made.^ More especially if he never has been a citizen of that State.'(a) Chief Justice Marshall says, in an early leading case : "Any bankrupt or insolvent system professes to summon the creditors before some tribunal, to show cause against granting a discharge to the bankrupt. But on what principle can a citizen of another State be forced into the courts of a State for this inves- tigation ? The judgment to be passed is to prostrate his rights ; and on the subject of those rights, the Constitution exempts from the jurisdiction of the State tribunals, without regard to the place where the contract may originate."* Hence, where bills were drawn in Pennsylvania, on a citizen of Massachusetts, and were accepted by him in Massachusetts ; held, the Legislature of Mas- sachusetts could not, by the insolvent act of 1838, discharge these contracts; and that attachments made by process issued from the courts of the United States were not dissolved in consequence of the defendant's taking advantage of the law, although such attach- ments on process from the State courts would be dissolved.(6) 'Springer «. Foster, 2 Story, 388; 5 ^Tebbettst). Pickering, 5 Cush. 83. Tex. 349; Palmer v. Goodwin, 32 » Banchor u. Fisk, 38 Maine, 316; May Maine, 535 ; Ballantine v. Haight, v. Breed, 7 Cush. 15 ; Scribner v. 1 Harr. 196 ; Banks v. Greenleaf, 6 Fisher, 2 Gray, 43. But see Poe », Call, 271 ; Dinsmore v. Bradley, 5 Duck, 5 Md. 1 ; Donelly v. Corbett, Gray, 487 ; Glenn v. Boston, etc. 7 3 Seld. 500. Md. 287 ; Sherrill v. Hopkins, 1 * Sturges v. Crowninshield, 4 Wheat. Cow. 103. See McNeilly v. Rich- 122. ardson, 4 Cow. 607. State, when the contract is on its face to be performed within the State granting the discharge, is one which stands by no means without dispute at this day. We think, however, that the weight of authority sustains the proposition." 2 Pars, on Oontr. 593, n. "The history of this judicial doctrine is somewhat remarkable." Per Metcalf, J., Brigham v. Henderson, 1 Cush. 432. (a) It is intimated that the residence of a factor is equivalent in this respect to that of his principal. Blackman v. Green, 24 Vt. 17. (6) By the insolvent law of Maryland, of January 3, 1800, the chancellor of Maryland could not discharge a citizeg of Maryland who resided in the District of Columbia, at the time of its separation from Maryland, unless he CHAP. IX.] DISCHARGE. 289 And such discharge is no har to an action, hy a citizen of another State, on a negotiable promissory note made in Massachusetts, specifying no place of payment, and indorsed in blank ; although the plaintiff produces no evidence except the note.* The Court remark : " This note was not made payable at any particular place, and, therefore, upon its negotiation, was payable to the indorsee, wherever he might reside. In the absence of evidence, the in- dorsement is to be taken to have been made at the date of the note, and to the person in whose possession the note is."^ So a discharge under a State bankrupt or insolvent law cannot be pleaded in bar to an action on a contract made or to be per- formed in another State or country.^ More especially if the creditor resided out of the State at the time of the contract.* §'84. The general rule, as to contracts made with parties resid- ing out of the State, is held to apply, notwithstanding a. Judgment recovered in the State where the discharge was granted. Thus the plaintiffs, citizens of the District of Columbia, sold goods in that district to the defendant, a citizen of Maryland, for which the latter gave his note executed in Maryland. A judgment was recovered on this note in Prince George's County Court in Mary-' land, and on this judgment an attachment was issued before, and was levied after, an application for the benefit of the insolvent laws of Maryland. Held, the discharge of the defendant did not impair the right of the plaintiffs, as non-resident creditors, to obtain a preference over domestic judgment creditor8.^(a) 1 Houghton V. Maynard, 5 Gray, 552. * Hicks v. Hotchkiss, 7 John. Ch. 297. 'Per Dewey, J., ibid. 553. ^ Evans v. Sprigg, 2 Md. 457. * Beers v. Rhea, 5 Texas, 349 ; Keims- dyk V. Kane, 1 Galli. 871 ; Cook v. Moffat, 5 How. (U. S.) 295; Poe v. Duck, 5 Md. 1. had complied with all the requisites of the insolvent law, so as to entitle himself to a discharge before that separation. Beily v. Lamar, 2 Cranch, 344. (a) But where residents of the District of Columbia entered into a con- tract there, to be performed there, it was held, that one of the parties was released from a judgment on the contract, obtained in Pennsylvania ; he being afterwards discharged under the insolvent law of the district. Mount V. Bradford, 2 Miles, 17. And that the bail in the Pennsylvania judgment were also discharged. Ibid. Carey v. Conrad, 2 Miles, 92 ; Warner v. Ban- croft, 2 Miles, 95. 19 290 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. § 85. Where one citizen of Massachusetts sells goods there to another, but at the same time informs him that the goods belong to a citizen of another State, without however disclosing the name of the owner ; a subsequent discharge of the purchaser under the insolvent laws of Massachusetts is no bar to an action by the owner for the price.-' So a citizen of Massachusetts gave a note to the Treasurer of the State of Connecticut, for rent of land situate in Massachusetts, owned by Connecticut, and leased to him by an agent of Connecticut. Held, in an action on the note, that the discharge of the maker, under the insolvent laws of Massachusetts, was not a bar to the action; the claim not having been proved under those laws.^ § 86. But, as suggested, a discharge is valid as against a citi- zen of the State where it is granted, though the contract was made and to be performed in another State. This construction of the law does not conflict with the Constitution of the United States. '(a) So an insolvent discharge is held a bar to a recov- ery upon a contract made and to be executed, or merely pay- able,(J) within the State, although the creditor be a non-resident, and neither united in the petition for the discharge, nor accepted a dividend.* So a discharge under an insolvent law of Massa- chusetts, which would there have been a good defence against a note, the maker and payee of which were both resident citi- zens of that State, (where it was made, and held, until, when overdue, it was transferred and put in suit in New Hampshire,) is also a good defence to such suit in New Hampshire.* So a discharge under the insolvent laws of New York was held to pre- vent the arrest of the insolvent's person, in Delaware, on a debt 1 Ilsley V. Merriam, 7 Cush. 242. * Parkinson v. Sooville, 19 Wend. 150 ; 2 Clark V. Hatch, 7 Cush. 455. Burrall v. Rice, 5 Gray, 539. 3 Marsh v. Putnam, 3 Gray, 551. 5 jjall v. Boardman, 4 N. H. 36. (a) On the other hand, a note dated and given in Massachusetts to a per- son residing there, by a person domiciled in another State at the date and at the maturity of the note, is barred by a discharge under the Massachu- setts insolvent law, St. 1838, c. 163, duly obtained by the promisor, who removed here between the maturity of the note and the commencement of the suit. Beal v. Burchstead, 10 Cush. 623. (6) But see the opinion of Mr. Justice Metcalf in Scribner v. Fisher, 2 Gray, 43. CHAP. IX.] DISCHARGE. 291 which arose in New York.* So a discharge, under the insolvent law of Massachusetts, is an effectual bar to a suit in New Hamp- shire upon a note, made and payable in Massachusetts, between parties resident there at the time of making it, notwithstanding the payee and holder of the npte removed from Massachusetts to New Hampshire before any proceedings were commenced under the insolvent law.^ § 87. The questions of residence, and of the place of making and performance of the contract, as bearing upon the point of discharge, are of course peculiarly likely to arise in reference to negotiable instruments ; which may either be originally executed between parties who are both subject to the provisions of the insolvent law in question, and subsequently transferred to parties in another State or country; or vice versd. § 88. Upon this subject the general rule is, that a negotiable note is payable wherever the indorsee may live ; and, therefore, if indorsed to one out of the State, is not discharged, unless col- lusively assigned, or still remaining the actual property of the payee. (a) Thus A. and B., of Massachusetts, gave to 0. and D., also of Massachusetts, in payment of a debt, a negotiable note ; and C. and D. carried the note to New York, and there sold it, for ' Bailey v. Seal, 1 Harring. 367. See Braynard v. Marshall, 8 Pick. 194 ; Baker v. Wheaton, 5 Mass. 509 ; Belts v. Bagley, 12 Pick. 572 ; Ag- Watson V. Bourne, 10 Mass. 337; new «. Plait, 15 Pick. 417. Walsh V. Ferrand, 13 Mass. 19 ; 2 Stevens v. Norris, 10 Fosl. 466. [a) Even though indorsed after maturity. Fessenden v. Willey, (Mass.) Law Eep. Nov. — 61, p. 56. A different doctrine from that in the text was held in the case of Braynard v. Marshall, 8 Pick. 194. It was there decided that a note made in New York and indorsed to a citizen of Massachusetts is barred by a discharge under the insolvent law of New York. Judge Story forcibly combats this doctrine, and remarks: "Such a doctrine has never been propounded in any common law authority, nor ever been sup- ported by the opinion of any foreign jurist." Story, Conf. of L. 3d ed. s. 344. The converse of this question recently arose in Pennsylvania. After the passage of the insolvency act of Massachusetts, a citizen of that State made a note payable to the order of a citizen of New York, who indorsed it, with- out recourse, to a citizen of Massachusetts, before the maker applied for a discharge as a bankrupt in the latter State. Held, in an action by the in- dorsee against the maker in Pennsylvania, that the discharge of the latter, obtained in Massachusetts, was a good defence. Wheelock v. Leonard, 20 Penn. 440. 292 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. value, to E., of New York; E. brought a suit against A. and B. in the United States Court for Massachusetts, attaching their prop- erty ; and A. and B. became insolvent debtors, the plaintiifs were appointed their assignees, and they were discharged. The plain- tiffs then bring a bill in equity in the United States Court for an injunction upon the suit. The bill was dismissed.^ So a note, made in the State of New York, by A. to the order of B., both being citizens of that State, and payable at a bank in the City of New York, was indorsed and delivered, before due, to C, a citi- zen of Connecticut, who had since remained the owner of the note. After it fell due, A. was discharged in New York as an insolvent debtor. In an action brought on the note in Connecticut ; held, the contract stood on the same ground as if the note had been originally made to C, and was not therefore discharged, though payable in New York.^ So a resident of Massachusetts made a note payable to his own order, and delivered it to a resident of the same State, and it afterwards, before maturity, came into the hands of a citizen of New Hampshire, who brought an action upon it in New York. The defendant relied upon a discharge under the insolvent law of Massachusetts. Held, no bar to the action.* So a firm in Massachusetts made a note payable to their own order, and indorsed it to a firm in New York. Held, that a discharge of the makers and indorsers, under the insolvent laws of Massachusetts, was not a bar to an action against them on the note, by the indorsees, who had not proved their claim thereon under those laws.^ So a bill of exchange was drawn, in the State of Maine, by a citizen of that State, in favor of another citizen of that State, upon a citizen of Massachusetts, who accepted it. Held, that a discharge of the acceptor, under the insol- vent laws of Massachusetts, was not a bar to an action against him, on the bill, (though, by operation of law, payable in Massachusetts,) by the payee, who had not proved his claim." So the plaintiffs, bankers in Maryland, and the defendants, bankers in Massachusetts, were in the habit of sending to each other for collection notes, drafts, and uncurrent bank-bills, and drawing upon each other, from time to time, for the funds 1 Towne v. Smith, 1 Woodb. & M. 115. * Savoyo v. Marsh, 10 Met. 594. ^Aiideiaon v. Wheeler, 25 Conn. 603. 5 piglje v. Foster, 10 Met. 597. 8 Smith V. Gardiner, 4 Boaw. 54. CHAP. IX.] DISCHARGE. 293 collected. There was no agreement as to the place of payment of such funds. No place of payment was expressed in the mutual drafts, or in the acceptances of them; but it was the usage to pay or accept them when presented at the office of the drawees. The plaintiffs having a claim for a general balance of account ; held, the case fell within the general rule, that a con- tract to pay money follows the person of the creditor ; that no agreement could be inferred to pay the balance only in Massa- chusetts ; and that the claim was not barred by a discharge under the Massachusetts insolvent law.' So a discharge, under the insol- vent laws of Massachusetts, is no bar to a suit upon a judgment rendered in Massachusetts, against citizens of that State, in favor of those who have ever been citizens of Maine, upon drafts or bills of exchange, drawn by the plaintifiFs in Boston upon the de- fendants in Boston, and by the defendants there accepted, payable generally to the order of the plaintiffs, but not paid; although the discharge was obtained after the rendition of that judgment. The rights and liabilities of the parties are in no way changed by the conversion of the original indebtedness upon drafts or bills of exchange into a judgment.^ § 89. A discharge under a bankrupt or insolvent law does not, in general, discharge a debt due to the people, the United States, or the Commonwealth, unless they are expressly named in the law.^ In a late case in Pennsylvania it is said: "The point was first ruled in the English statutes of bankruptcy, in an anon- ymous case reported in 1 Atk. 262. A bankrupt, as is there held, though he has conformed in every respect to the acts relat- ing to bankruptcy, cannot be discharged from a commitment under an extent of the Crown. The lord chancellor observed, the cause is not within the statute, and therefore he cannot be discharged from a commitment on behalf of the Crown. The same point is ruled under the bankrupt act of the 4th of April, 1800, in the United States v. King, Walla. E. 12. It is there decided, that debts due to the United States are not barred by a bankrupt certificate. The reason is, that the King is not bound because he is not named — a reason equally applicable to the United iMcKimu. Willis, 1 Allen, 512; Reims- 'People v. Herkimer, 4 Cow. 345; dyk V. Kane, 1 Gallis. 371. Glenn v. Humphreys, 4 Wash. C. C. 2 Whitney v. Whiting, 35 N. H. 457. 424 ; 10 Penn. 466. 294 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. States, and to the commonwealth, which is, within its sphere, a sovereign State. Whether the United States or the commonwealth would be at liberty, under the general terms 'all creditors,' in the 5th section, to come in and prove their debts, so as to entitle them to a dividend, and whether, in that event, they would be barred by the certificate, it is needless to determine."^ But a discharge under the insolvent law of Maryland was held to release the debtor from a judgment previously rendered against him on be- half of the State, and to protect him from a ca. sa. on such judgment; and, if arrested, the Court would discharge him on motion.^ § 90. In general, a defendant who relies upon a discharge must show that the debt is not within the exceptions of the statute.* One of the exceptions usually found in bankrupt and insolvent laws is, that fiduciary debts shall not be discharged. And the certificate usually contains this express exception. But this is held unnecessary, more especially if no such debts existed.* And it is also held that a plea of discharge need not allege that the indebtedness of the defendant did not arise in a fiduciary matter.* (See s. 18 and sequ.) So the petition of a bankrupt for a writ of supersedeas, to stay the collection of a debt from which he has been discharged, need not aver that the debt was not incurred in "a fiduciary capacity." In such a petition, the averments must be certain only to a "common intent."^ And even an express averment, that the debt sought to be recovered is fiduciary, is held bad. It should state the facts.' § 91. With regard to the nature of a fiduciary debt, a fac- tor who has sold the goods of his principal, and received the money therefor, does not owe him a debt while acting in a fidu- ciary capacity, within the meaning of the first section of the act of 1841.' Nor does the exception of fiduciary debts from a dis- charge apply to any mere implied trust.' So when A. received money of B. to carry to a distant place, and thus pay the latter's I Per Rogers, J., Com. v. HutoMnson, «Dick v. Powell, 2 Swan, 632. 10 Penns. 406, 467-8. ' Mabry v. Herndon, Law Rep. Oct.— estate V. Walsh, 2 Gill & Johns. 406. 46, p. 254— Alabama. ■' Sarden v. Gatewood, 1 Cart. 107. « Haymau v. Pond, 7 Met. 328 ; Anstill * Williams v. Coggeshall, 11 Cush. 442. «. Crawford, 7 Ala. 335 ; Chapman ° Stow V. Parkes, 1 Chandl. 60. Contra, v. Forsyth, 2 How. 202. Bivens v. Newoomb, 2 Cart. 98. s-winiamson v. Dickens, 6 Ired. 259. CHAP. IX.] DISCHAKGE. 295 note, and appropriated it to his own use ; it was held, that A. stood in the position of an express agent, or common carrier, and could not be regarded as acting in a fiduciary capacity.^ But a certifi- cate is no bar to the recovery of specific property held by the bankrupt as executor. Though it is otherwise with a claim by distributees, for money received by him in his fiduciary character, and for which he was liable before bankruptcy.^ So the debt of an auctioneer is fiduciary.' So the liability of a collector of taxes, for a defalcation as such collector, is a fiduciary debt.*(a) So where money and property are received by A. for the use of B., under and by virtue of a judgment given, and an assignment of property made to him, by C, in trust to pay a debt due from C. to B. ; such money and property constitute, in equity, a trust fund, in the hands of A., for the payment of the debt provided for; and the judgment recovered against A. by B., for the amount thus received by A. for his use, is a fiduciary debt, which will not be discharged by A.'s certificate in bankruptcy.* § 92. The question has arisen, whether the existence of fidu- ciary debts would prevent a discharge from other debts also. Thus the bankrupt law of 1841, s. 1, provided, that persons owing debts not created while acting in any fiduciary capacity should on compliance with the law be discharged; The 4th section pro- vided, that no person should be discharged, who after the passage of the act should apply trust funds to his own use.' Held, the existence of a fiduciary debt did not debar the bankrupt from a discharge from other debts. M'Lean, J., says: "An indebt- ment by an individual, not created as above stated, is within the provisions of the act, although he may be under fiduciary obliga- tion. To have refused a discharge because the individual owed a fiduciary debt, would, by withholding a general privilege, have superadded a penalty to a past transaction without notice. A 1 Phillips V. Russell, 42 Maine, 360. * Morse v. Lowell, 7 Met. 152. 2 Waller v. Edwards, 6 Litt. 348. ^ Kingsland v. Spalding, 3 Barb. Ch. 3 See Hardison, Law Kep. Oct. 1842, 341. vol. 5, No. 6, p. 255 ; Lord, ibid. 268; Brown, ibid.; Tebbetts, >bid. 259. (a) A surety of a postmaster may be discharged. But not a public defaulter. United States v. Davis, 3 M'L. 483. 296 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. misapplication of trust-funds, as declared, covers the enumerated cases in the 1st section. But, while the 1st section only with- holds from the jurisdiction of the bankruptcy court fiduciary debts, the 4th declares that if such debts have been contracted subsequent to the law, the individuals shall not be discharged. From this provision the strongest implication arises, that if the fiduciary debts were contracted before the passing of the act, the petitioner would, for other obligations, be entitled to a dis- charge."' § 93. In general, fiduciary creditors may prove their claims and receive dividends ; and will then be barred. But where a fidu- ciary creditor proved his claim for the purpose of preventing a discharge from other debts; and, the Circuit Court soon after- wards declaring, that other debts would be discharged notwith- standing a fiduciary indebtedness, and also a fiduciary debt itself, if proved, the District Court upon petition allowed a withdrawal of the claim, and granted a discharge : held, the claim was not barred.^ § 94. Another exception is that of claims for necessaries. Thus, in Massachusetts, St. 1848, c. 304, s. 10, provided, that a discharge should not bar any claim for necessaries furnished to the debtor or his family, unless proved. Held, the rent of a boarding-house kept by a single woman without a family was not a claim for necessaries against her. The Court remarked, that the above exception in the statute, being directly repugnant to the policy of the insolvent system, in reference to the equal dis- tribution of the property and the discharge of the debtor, must be construed strictly, and with reference to its purpose, — that of enabling poor persons to obtain articles sufficient to save them- selves and those dependent upon them from sufiiering. It would be otherwise if the phrase were used, "things necessary to the carrying on of his business."^ But rent of a dwelling-house occu- pied by the debtor and his family falls under the head of necessa- ries, and a claim therefor is not barred by a discharge under the insolvent law. And this notwithstanding a subsequent statute, providing that debts for rent shall be held to be claims for neces- 1 Chapman v. Forsyth, 2 How. 202-7. ' Prentice v. Richards, 8 Gray, 226. 2 Morse v. Lowell, 7 Met. 152. CHAP. IX.] DISCHARGE. 297 saries; such statute being an explanatory and declaratory act merely.* § 95. Where one is taken on execution upon a judgment for necessaries, and a recognizance given to deliver himself up for examination ; a discharge in insolvency is no bar to a suit upon the recognizance; and, if the case finds the claim to be for cloth- ing, it -will be presumed to be necessary, personal clothing.^ § 96. A negotiable promissory note, the consideration of which was an account for necessaries, is barred by a discharge, although the account would not have been, unless proved.* So a judgment upon an account for necessaries is barred by the discharge.^ § 97. We have already (chapter viii.) considered the general rule in bankruptcy and insolvency, that a claim for damages on account of a tort or wrong is not a provable debt. It is a con- sequence, or more properly, perhaps, a part, of the same rule, that, in general, a claim of this nature is not barred by the dis- charge. In reference to that class of wrongs — such as fraud — which may be provable at the election of the party ; he is not bound to prove his claim under the commission, but may waive his contract, and sue for the tort.°(a) § 98. The reasons of this rule are forcibly expressed by Grose, J., who remarked, that "he would not consent that the whole sys- tem of the bankrupt laws should be converted into a system of ..fraud by the bankrupt himself."^ § 99. Upon the question whether a claim is upon a contract or for a wrong, and therefore whether the discharge is a good bar or not, the form of action is held decisive.^ And on petition for dis- charge as an insolvent debtor, by a party arrested on execution in iBell V. Tuttle, 1 Allen, 219. 6parker v. Crole, 2 M. & P. 150; 5 2 Smith V. Randall, 1 Allen, 456. Ring. 63 ; 5 Tred. 259. See Valpy 'Rindge v. Breck, 10 Cush. 43. v. Sanders, 5 Man. Gr. & So. 886. * Bangs V. Watson, 9 Gray ; Cutl. Ins. ^ Goodtjtle v. North, Doug. 583. L. 74. ' Williamson v. Dickens, 5 Ired. 259. (a) The instaiices of waiver in case of tort are thus enumerated : "Selling goods under an execution, which is afterwards set aside ; of not delivering goods according to agreement, which had been paid for ; of discounting a bill at a loss before it was due, and embezzling the money ; or of pledging a debenture for a debt of his own, by one with whom it had been deposited by another person only as a collateral security." Oullen's Bank. L. 113. 298 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. an action for breach of promise of marriage, parol evidence of the fact, that the seduction of the plaintiff in that action was allowed to be given in evidence, in aggravation of damages, is not admis- sible, for the purpose of showing that "damages were recovered for seduction." It would contradict the record. The "damages for seduction," intended in the insolvent laws, are damages for the cause of seduction. That which aggravates damages for a particular cause of action is not necessarily a constituent part of such cause.-' But, on the other hand, where one, before bank- ruptcy, received money on a promise to put it on bond and mort- gage, and neglected to do so, the demand was held to be provable under the commission, and he discharged by his certificate; and therefore he was held not liable in an action ex delicto for his default; it not being the plaintiff's right, by varying his form of action, to impair the effect of the defendant's certificate.^ § 100. In illustration of the general rule above stated, bank- ruptcy is no defence to a bill in equity brought to rescind a con- tract for fraud.^ So a discharge is no bar to a suit in Massachu- setts (Rev. Sts. c. 104, s. 4,) to recover possession of lands or tenements wrongfully withheld from the owner, "its operation being (as the Court remark) to bar actions for the recovery of debts only. But this is a summary process, in nature of a pos- sessory action, and is founded on an alleged unlawful and tortious holding of the possession of lands or tenements, against the right of the plaintiffs."* Nor to a proceeding upon a mechanics^ lien? So a discharge, under the New York insolvent act of 1811, was held no bar to an action of trover.* So bankruptcy is no bar to an action of trover, though the conversion happened before the bankruptcy ; and where a plaintiff has an election to bring trover or assumpsit, he may bring the former, though the bankruptcy would be a bar to the latter.' So an action on the case for deceit is not barred by a certificate of discharge as a bankrupt, though the measure of damages be ascertainable by reference to a con- tract. Thus where a party, being indebted on a note, undertook . to confess judgment thereon, and falsely represented that he had 1 Wallace v. Coil, 4 Zabr. 600. * Crosby v. Wentworth, 7 Met. 10-13, 2 Hatten «. Speyer, 1 Johns. 87. s M'CuUough «. Caldwell, 5 Pike, 237. 3 Smith v. Babcook, 2 Woodb. & M. ejiennedya. Strong, 10 Johns. 289. 246. 1 Parker v. Norton, 6 T. K. 696. CHAP. IX.J DISCHARaE. 299 done so, and that it was a lien on land, and his creditor, relying on the representations, was thereby induced not to proceed for re- covery of the debt, and the debtor afterwards obtained a discharge in bankruptcy ; it was held, that an action by the creditor against the debtor for deceit was not barred by the certificate.' So an order of the Mayor's Court, after a conviction of a husband for desertion of his wife, etc., that the defendant pay a certain sum per week to the guardians of the poor for the use of the wife, give security, etc., and stand committed until the judgment be complied with, is not affected by the subsequent discharge of the defendant's person under the insolvent law, except as to the pay- ments then due ; and where, after such sentence and discharge, the former desertion continuing, the Mayor's Court made a sec- ond order upon the defendant to pay a weekly sum to the guard- ians of the poor, to give security, and to stand committed, etc., the Supreme Court affirmed the first order, and revised the sec- ond.^ So where a party is committed for non-payment of a fine, imposed as a punishment for a wilful contempt, as for violating an injunction, or other criminal act of like nature, he cannot be discharged under an insolvent act.^ So an insolvent discharge, after a verdict, and before judgment, in an action of trespass, does not protect a defendant from imprisonment.* But the judg- ment, even in an action of tort, is "a debt {hand fide) contracted," within the meaning of a statute, making such debts provable, if contracted between the act of bankruptcy and the commission. Hence the judgment debtor, after obtaining his certificate, shall be discharged from arrest.' So the discharge, under the Connec- ticut insolvent act, was held to extend to a judgment debt founded on a tort.' So where a verdict of trover was obtained in vacation against a person, who, after the first day of next term, but before final judgment was signed, became a bankrupt; held, that final judgment, signed afterwards, but during the same term, related to the first day of the term, and that therefore the damages were provable under the commission ; and also that the certificate was a 1 Hughes V. Oliver, 8 Barr, 426. * Hodges v. Chaoe, 2 Wend. 248. 2 Newhouse ». The Commonwealth, 5 ^ Robinson v. Vale, 2 B. & C. 762. Whart. 82. See Texas, Ashm. 174. « Betts v. Lockwood, 8 Conn. 487. 3 People V. Spalding, 10 Paige, 284 ; 4 How. 21. See Luther v. Deyo, 19 Wend. 629. 300 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. bar to a scire facias} So a judgment for costs in an action of tort is barred.''(a) § 101. The question sometimes arises, how far the institution of legal proceedings, upon a claim for a tort, previous to the dis- charge, and their progress towards final judgment, will bring such claim within the operation of the certificate. (See s. 58.) Thus after verdict in an action for seduction of a daughter, the defendant com- mitted an act of bankruptcy and was discharged. The plaintifi" then signed final judgment, and arrested the defendant on a ca. sa. The Court held that the judgment was not affected by the defend- ant's certificate, and refused to discharge him from custody.^ So an action on the case for seduction was submitted to referees. After they had agreed upon a report in favor of the plaintiff", but before it was finally signed and delivered, the defendant was dis- charged in bankruptcy. Upon a motion for stay of proceedings ; held, the nature of the claim had not been changed by the pro- ceedings of reference, and it was not barred by the discharge. Bronson, J., remarked: "I see no ground on which the defendant can be relieved short of an application to Congress."* § 102. For one of the same reasons, which except torts from the operation of a discharge, it is held that any damages, which are in their nature contingent and uncertain, cannot be proved; and consequently are not discharged. Thus where A. brought an action against B. for not redelivering certain mining shares lent by A. to B., which were to be redelivered on a certain day, and B. pleaded his discharge under the insolvent act; it was held, that the claim was not "a debt or sum of money due or claimed to be due" from B., with respect to which he was discharged by the adjudication.' So where the continuing partners of a firm contract to pay all the debts and acquit the retiring partner, who subsequently is obliged to pay debts which were not due and pay- able until after such contract, and also after the application of 1 Greenway v. Fisher, 7 B. & C. 436 ; * Crouch v. Gridley, 6 Hill. 250. 1 M. & K. 330. 6 Oweiit).Routh,25Eng. Law&Eq. 306. ' Holding «. Impey, 1 Bing. 465. See Utterson v. Vernon, 3 T. R. » Buss V. Gilbert, 2 M. & S. 70. 539. (a) A judgment for costs in favor of a sheriff, sued for not returning an execution, is a provable debt, and barred by a discharge. Graham v. Pier- son, 6 Hill, 247. CHAP. IX.] DISCHAKGB. 301 one of the partners for the benefit of the insolvency laws; such payments are recoverable in assumpsit against the insolvent partner even after a discharge in insolvency, they not having been provable against his estate.^ So a covenant, not secured by a penalty, and where the damages to be recovered are uncertain, is not discharged.^ As, for example, a covenant against incum- brances in a deed conveying land, the claim being for damages sustained by the grantee subsequently to the discharge.* Nor a covenant of warranty in a deed of conveyance.* More especially ■where the breach is subsequent to the discharge.' So where the proceeds of goods, transferred by an absolute bill of sale as col- lateral security for a debt, and sold by the creditor, are recovered of the creditor in a suit brought by a prior mortgagee of the goods; a discharge in bankruptcy of the debtor, pending that suit, is no bar to the creditor's right of action against the debtor on the implied warranty of title.' So where A. sold a ship to B., with a covenant that he had a good title, though in fact he had none, and afterwards became a bankrupt, and B. sustained damage by paying the value of the ship to the true owner; held, in an action on the covenant by B. against A., stating the special damage, that A.'s certificate was no bar.''(a) And the same rule 1 Berry v. McLean, 11 Md. 92 ; Morton * Barnes v. Wilkinson, 31 Miss. 537. V. Richards, 13 Gray, 15. 5 Bush v. Cooper, 18 How. 82. 2 Banister v. Scott, 6 T. K. ■189. See 6 Bennetts. Bartlett, 6 Gush. 225. Parker v. Norton, ibid. 695. ' Hammond v. Toulmin, 7 T. R. 612. * French ». Morse, 2 Gray, 111. (a) The defendant, by deed, assigned to the plaintiff a policy of insurance, and covenanted to keep the policy alive, and that, if he did not do so, it should be lawful for the plaintiff to pay the premiums, and the defendant in such case would repay the plaintiff. The defendant afterwards became bank- rupt, and obtained his certificate of conformity under the 12 & 13 Vict, c. 106. Held, that the certificate did not discharge him from liability to pay the premiums ; but that it did discharge him from liability to repay the plaintiff. Young v. Winter, 32 Eng. Law & Bq. 437. Contra, Warburg v. Tucker, ibid. 189, that neither claim is discharged. A discharge, under the New York insolvent act of April 12, 1813, ob- tained May 6th, 1819, is a good bar to an action of covenant, brought by the loan officers of Albany, on a covenant contained in a mortgage, to recover the balance remaining due on the mortgage, after a sale of the mortgaged premises, pursuant to the act relating to the same, the proceeds of which were insufficient to satisfy the principal and interest due on the mortgage, 302 BANKRUPTCY AND INSOLVENCY. [CHAP. IX, applies to a hond by a principal and surety, which has not been and which, by the terms of the mortgage, were payable, when demanded, at any time after the first Tuesday of May, 1815, it being a debt due at the time of the application for relief under the act, on the 19th of February, 1817. Loan, etc. v. Oapron, 17 Johns. 14. A joint-stock company, completely registered, became bankrupt. One of the members had previously been declared bankrupt, and had obtained his certificate. The master placed the bankrupt's name on the list of contrib- utories, and calls were made by the master on him for contributions to dis- charge the liabilities of the company incurred before his bankniptcy. Held, on his appeal, that his certificate was a bar, and his name ought to be removed from the list. Chappie's case, 17 Bug. Law & Eq. 516. Debt for railway calls. Pleas, secondly, that the defendant was not a holder of the shares; and thirdly, bankruptcy of the defendant. The de- fendant, being the holder of shares in a railway company, became bankrupt. No transfer of the shares to the assignees had taken place in the mode pointed out by the Companies Clauses Act, 8 Vict. c. 16 ; but before the flat a correspondence took place between the official and the trade assignee, in which the latter sent to the former a statement of the bankrupt's property, comprising in it the value of the shares in question, and estimating the amount that would be necessary to work the fiat and pay dividends, and he subsequently wrote, suggesting the propriety of selling the shares. After- wards, and after the fiat, three calls were made. Held, first, that there was no evidence of the assignees' having accepted the shares. Secondly, that the debt was not barred by the certificate, as it was not provable under the fiat as a debt due infuturo, within section 51 of the 6 Geo. 4, c. 16, or as a debt due on contingency within section 56. South Stafibrdshire Railway Co. V. Burnside, 2 Bug. Law & Eq. 418. A., B., and C, bankers and copartners, were appointed treasurers of a corporate body, and executed a joint and several official bond with a pen- alty, more especially that they would, " when thereunto required by the said company," etc., pay all balances in their hands, etc. A commission issued against them, they having a large balance in their hands as treasurers, but no demand under the bond having been made by the company. Held, there was not a sufficient breach of the condition, to constitute a debt provable against the separate estates of the bankrupts. Lancaster, etc. 1 Mont. 27. The question has arisen as to the discharge of a claim incomplete at the commencement of proceedings, but afterwards perfected. In July, 1846, the defendant, having been arrested under a ca. sa., in order to obtain his discharge, gave to the attorney of the execution creditor JE5 and a blank promissory note stamp, with his name written on it. In May, 1851, the de- fendant obtained a certificate in bankruptcy; and in October, 1852, the attorney filled up the blank stamped paper, by making it a promissory note for £2A, 18s. 6d., at one month's date, and indorsed it to the plaintiff for value. Held, that it was properly left to the jury to say whether the stamped CHAP. IX.J DISCHARGE. 303 forfeited before the bankruptcy of the surety.'(a) So a discharge, after commencement of suit but before judgment, is no defence to an action upon a bond with surety for surrender ; such bond not being a provable debt.^J) It was said by Tindal, C. J.: "In the construction of this section (of a statute relating to contingent debts) a distinction has been taken between contingent liabilities which may never become debts, and debts payable on a contingency. The present case, although in form a case of debt on bond, yet the bond being defeasible on performance of the condition, it is, in substance, not the case of a contingent debt, but a contingent liability. At the time when the fiat issued, it was quite uncertain whether any debt would ever arise upon the bond ; it was at that time a liability which would not become a debt, unless the condition were broken."^ So the defendant exe- cuted a bond, as a surety, to pay to the plaintiff such costs as the plaintiff should be liable to pay, in case a verdict should pass for certain defendants in an action of scire facias, wherein the now plaintiff sued as a nominal party. The action was tried, at the ' Alsop V. Price, 1 Dougl. 160. ' Hinton v. Aoraman, 2 Man. Gr. & So. 2 Hinton v. Aoraman, 2 Man. Gr. & Sc. 410. 367. paper was filled up within a reasonable time, considering the circumstances of the defendant, and his liability to pay the note. Held, also, that there was no claim provable under the fiat, and, consequently, the certificate was no bar to an action on the note. Temple v. Pullen, 20 Bng. Law & Bq. 306. (a) The discharge of an indorser of a note, under the insolvent act of New York, was held not to discharge him from his liability as indorser, where the note fell due after such discharge ; though the note was given by the indorser as collateral security for the payment of a debt due the holder, which was barred by the discharge. Mechanics' Bank v. Oapron, 15 Johns. 467. (6) It is held that a discharge releases the party from a bond to take ad- vantage of the State insolvent law. Nesbit v. Greaves, 6 W. & S. 120. A bond, taken as collateral security for actual advances and responsibili- ties, was held a legal debt, provable in bankruptcy. The discharge was therefore a bar to any of the claims which it was meant to secure. So also with a judgment given by the debtor as such security to a third person in trust for the creditor. Otherwise if the security is given by way of indem- nity, and such is the express condition. In this case the creditor or trustee cannot prove a claim, till he has been damnified by actual payment. Roose- velt V. Mark, 6 John. Oh. 266. 304 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. spring assizes in 1848, and a verdict found for the then defend- ants; after which, in Easter terra, a rule nisi for a new trial was obtained. In November following, the defendant in the present action became a bankrupt. In Hilary term, 1849, the rule for a new trial was discharged. In May the defendant obtained his certificate, and in August the costs in the action on the scire facias were taxed, and final judgment signed against the now plaintifi". Held, that the plaintiif 's claim was not barred by the defendant's certificate, the debt not being a contingent debt within the 6 Geo. 4, c. 16, s. 56, but only a contingent liability.' So, in Massa- chusetts, where the first publication of notice occurred on the last day of the time limited in a recognizance for a debtor's deliv- ering himself for examination, under St. 1857, c. 141, s. 10; held, as the recognizance was not forfeited until the expiration of that day, a discharge in insolvency was no bar to an action upon the recognizance.^ § 103. The rule, that, even in case of an express provision for proof of contingent claims, there are certain debts partaking of that character, which are not discharged, has been applied to offi- cial bonds. Thus a surety for an administrator is held liable for a breach of the bond, notwithstanding the surety's discharge in bank- ruptcy. The Court in Massachusetts make the following remarks, illustrative of the general subject: "It was therefore, in legal effect, a bond conditioned for the fidelity of an oiBcer appointed by law, to discharge plain and well-defined duties. Such an existing obligation, we think, can in no just sense be considered a debt, either in presenti or in future. It may, in case of any future breach, be the foundation of a debt; but any claim arising from it, in the nature of a debt, will arise from the breach, and not from the mere existence of the obligation. Nor can this come under the head of contingent claims, as expressed in the fifth section of the bankrupt act. This applies to the case of debts in presenti, and which will become payable by lapse of time only; and if it applies to contingent debts, such as those of indorsers, sureties, bail, etc., it means that when their debts become abso- lute, such creditors shall have a right to prove, and have them allowed. This manifestly applies to all that class of contingent 1 Hankin v. Bennett, 14 Eng. Law & ' Smith v. Randall, 1 Allen, 456. Eq. 408. CHAP. IX.] DISCHARGE. 305 liabilities, where a possible or contingent liability exists at the time of the filing of the petition, and where such contingency happens, and the contingent liability becomes an absolute debt, as where an indorser or surety pays the debt of his principal, and thereby becomes his creditor." And the decision is fortified by the considerations, that only provable claims are discharged, and that a probate bond is strictly a statutory security, filed in the probate office for the benefit of all parties interested, sued, in general, by leave of the judge, and in a peculiar tribunal.' So a decree in bankruptcy will not protect the surety of a guardian of a minor on his official bond, against a statute judgment obtained against him as such surety, by the return of no property to an execution against his principal, though made after he obtained his decree in bankruptcy.'' § 104. A similar rule seems to be applied to the contingent liability of sureties, generally. (See s. 107.) Thus a debtor was arrested on mesne process, and gave a bond, in common form, to procure his release from arrest. The surety in the bond then filed his petition, and was decreed a bankrupt. Judgment was then rendered, and the bond forfeited. The bankrupt afterwards received his discharge. Held, no defence to a suit upon the bond.' So, when the condition of a replevin bond is broken, by a failure of the plaintiff in replevin to deliver up the property on demand of the defendant, after judgment for a return; a discharge in insolvency of a surety on the bond, from all debts due at a time previous to such demand, though subsequent to the commence- ment of the action of replevin, is no bar to an action against him on the bond.* § 105. There are other cases, however, which take a difierent view of this question. Thus it is held in Illinois, that a discharge is a good bar to an action upon a covenant of warranty, though the covenant was not broken till after the granting of the certifi- cate." So in the Supreme Court of the United States, it appeared that a person mortgaged land which was subject to the lien of a judgment, the deed containing an implied covenant of warranty, arising from the words "bargain and sell;" and afterwards be- >Per Shaw, C. J., Loring v. Kendall, » Woodard v. Herbert, 11 Shep. 358. 1 Gray, 314-6. * Sleeper v. Miller, 7 Cush. 594, n. « Turner v. Esselman, 15 Ala. 690. » Bates v. West, 19 111. 134. 20 306 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. came a bankrupt, and purchased the property, at a sale under the lien. Held, he was estopped to set up the lien against the mortgage, the covenant not being annulled by the discharge in bankruptcy so far as it affected the land ; though discharged as a personal contract, being a provable claim. ^ § 106. Rent constitutes a claim, in relation to which, for pecu- liar reasons, the question of discharge has often arisen. In England, before an express statute on the subject, it was held that a certificate discharges a bankrupt from an action of debt on the reddendum in a lease, whether the rent fell due before or after the bankruptcy.^ But that the bankruptcy of the defendant could not be pleaded in bar of an action of covenant for rent.^ So, that a collateral, independent and express covenant, by the assignee of a lease to indemnify the lessor, is not discharged by the assignee's becoming bankrupt.* In Massachusetts, a discharge in bankruptcy, taking effect on the 28th of June, 1842, was held no bar to an action of debt for a quarter's rent falling due on the 9th of July following, the bankrupt- having occupied the premises to the end of the quarter. Judge Fletcher remarks, that the claim is not " a debt due at the time of the discharge, nor a con- tingent debt within the meaning of the bankrupt law, because the claim is in part for the occupancy of the premises by the bank- rupt after the discharge, and though that part be but a small part, it does not affect the principle. The assets of the bankrupt cannot be charged for the occupancy of the bankrupt after the time of the discharge."^ So in Pennsylvania, a certificate of discharge in bankruptcy is no defence to an action for rent, accruing under a demise for years, after the decree in bankruptcy and before the discharge.^ Nor for a ground rent coming due after the discharge ; more especially if there be an express covenant.'^ The Court say : "A rent service is not a debt; and a covenant to pay it is not a covenant to pay a debt; it is a security for the performance of a collateral act. The annual payments spring into existence, and for the first time become debts when they are demandable ; for 1 Bush V. Cooper, 18 How. 82. i* Mayor v. Steward, 4 Burr. 2439. 2 Wadham v. Marlowe, 2 Chit. 600 ; 4 » Savory v. Stocking, 4 Cush. 607-8. Dougl. 54; 1 H. Black. 437, n.; 1 « Prentiss v. Kingsley, 10 Barr, 120. T. R. 91 ; 8 East. 314, n. And see ' Bosler v. Kuhn, 8 Watts & Serg. 183 ; Gill V. Scrirens, 7 T. K. 27. Hamilton v. Atherton, 1 Ashm. 67. » Mills V. Auriol, 1 H. Black. 483 ; 4 T. R. 94. CHAP. IX.] DISCHARGE. 307 ' while they are growing due, the landlord had no property in any- thing distinct from the corpus of the rent, or the realty of which they are the produce."^ So in New York, if a house be taken for a year before an act of bankruptcy, and the bankrupt con- tinue in possession afterwards, he is not discharged from the sub- sequent rent by his certificate.^ So a discharge under the bank- rupt act is not a bar to the recovery of rent which accrued after presenting the petition in bankruptcy, upon a lease executed by the bankrupt, as lessee, before that time.' § 107. It is in general expressly provided, and, independently of statute, seems to be a well settled rule, that the discharge of a debtor shall not affect the liability of any party bound with him as joint promisor[a) or surety.* (See s. 104.) Thus a covenant by C, that A. shall pay what B. recovers against him in a suit brought, and for which payment 0. binds himself, his heirs, etc., is not discharged by the bankruptcy and certificate of A.° And a surety for a bankrupt is not discharged by the creditor's signing the bankrupt's certificate, even after notice from the surety not to do so.* So, in Massachusetts, a certificate granted to an in- solvent, whose assets do not pay fifty per cent., with the assent in writing of a majority of his creditors, pursuant to the statute of 1848, c. 304, s. 9, is subject to the reservation of the statute of 1838, c. 163, s. 7, that no discharge shall release any other person liable for the same debt. The Court remark: "It does not follow that this discharge derives its whole force and effect from the assent, and operates like a technical release of Wood, under seal. It was an assent that Wood should receive a dis- charge under the insolvent law, having the force and effect given to such a discharge by the law, which is a discharge of the indi- vidual debtor, expressly reserving the liability of any partner or surety."' So, when a principal debtor has taken the benefit of the i Hosier v. Kuhn, 8 W. & S. 183; over- 64; 1 Pars, on Con. 29; Ward v. ruling West v. Sink, 2 Yea. 274. Johnson, 13 Mass. 152. 'i Hendricks v. Judah, 2 Caines, 25. ^Bgnd v. Gardiner, 4 Binn. 269. ' Stinemets v. Ainslie, 4 Denio, 573. « Browne v. Carr, 7 Bing. 508 ; 5 M. & * See Soutten v. Soutten, 5 B. & Aid. P. 497 ; 1 Buss. 600. 852 ; Moore v. Waller, 1 A. K. Mar. ' Sigourney v. Williams, 1 Gray, 623-4. 488; Pitkin v. Thompson, 13 Pick. (a) The heirs of a deceased co-obligor are compellable in chancery to pay the debt, where the surviving obligor is bankrupt. Winslow v. Parkhurst, 1 Boot, 268. 308 BANKRUPTCY AND INSOLVENCT. [CHAP. IX bankrupt law, a person holding a note against him, having re- ceived and credited a dividend from the assignee in bankruptcy, may recover the balance of his claim from one who had guaran- teed the debt, notwithstanding evidence of there being yet some small unsettled matters of the estate, the extent of which was unknown.^ So, on a motion to set aside an inquest, by default, against two defendants, one having previously been discharged as an insolvent, the Court refused the rule, upon the plaintiff's stipulating to enter a verdict for the defendant who was dis- charged.^ § 108. In regard to the familiar form of suretyship assumed by bail; the discharge of the principal under a bankrupt or in- solvent law, before the bail are fixed, entitles them to an exone- retur, without a surrender.' Proceedings will be stayed after declaration, plea and demurrer in the suit against bail.* The bail may avail themselves of such discharge at any time at which they could avail themselves of a surrender. "(a) And bail are discharged, when the principal has been discharged in insolvency in another State.^ But, by the English law, the bail cannot surrender their principal, being a certificated bankrupt, after they are fixed; that is, after a return of non est? And the Circuit Court of the United States require such discharge to be pleaded, and do not treat the certificate as conclusive.* And if 1 Cake V. Lewis, 8 Barr, 493. 5 oicott v. Lilly, 4 John. 407 ; Thorne 2 Oakley v. Steddiford, 3 Jolins. 253. v. Brown, 9 Watts, 288. 3 Saunders v. Bobo, 2 Bai. 492 ; Kane « Richmond v. De Young, 3 Gill. & J. V. Ingraham, 2 John. Cas. 403 ; 64. M'Causeland v. Waller, 1 H. & J. ' WooUey ». Cobbe, 1 Burr. 244, 436 ; 156; M'Glesney v. M-Lear, 1 Har- Cookerill v. Oeston, 1 T. R. 624. ring. 466 ; Ricliardaon v. M'Intyre, ^ Hayton v. Wilkinson, 1 Hall's Am. L. 4 Wash. C. C. 412. Jour. 260. See Bobyshall ». Op- * Riddles v. Mitchell, 1 Caines, 11, n. penheimer, 4 Wash. C. 317. (a) In Pennsylvania, a defendant arrested on capias ad satisfaciendum gave bond for his appearance at the next term, to take the benefit of the insolvent law. During that term the Court set aside the capias, and the defendant did not apply. Held, that the bond was not forfeited, but became inoperative when the process was set aside. Mason v. Benson, 9 Watts, 287. Under the 10th section of the insolvent act of June, 1836, an insolvent may present his petition to surrender, in discharge of his bond, at any time while the court is in session before the succeeding term, where the term is not limited in duration. And, if he die during that time, his bail is exoner- ated. Bailie v. Wallace, 10 Watts, 228. CHAP. IX.] DISCHARGE. 309 the principal neglects to avail himself of a discharge in insol- vency, and allows a judgment against him, the Court will not order an exoneretur of the bail on motion.^ In denying relief to bail after a return of non est, in case of the death of the principal, Kent, Oh. J., says: "A number of cases, in this court, have gone so far as to relieve the bail, if the principal had been discharged under the insolvent act, any time before the period allowed to the bail, ex gratia, had expired; but these decisions went upon the principle, that the discharge was equivalent to a surrender, and that it would be an unnecessary circuity to have a formal surrender made, since the principal would immediately be entitled to a discharge ; and the latest decisions in England seem to have gone the same length."^ § 109. A bond with sureties, to take the poor debtor's oath or that the debtor will surrender himself within one year, is not avoided as against the sureties, by his discharge in bankruptcy.* So where an insolvent debtor, in Ohio, is released from custody by his giving a bond with surety, conditioned that he shall deliver up and assign all his property for the benefit of his creditors, and a breach of the bond occurs; the surety is liable for the creditor's whole debt, even though the debtor had no property to assign, or was not entitled to the benefit of the law, for the want of suffi- cient residence. And neither that fact, nor the insolvency of the debtor, can be givien in mitigation of damages.* So in Pennsyl- vania, where one has been arrested for debt, prior to the passage of the act of July 12, 1842, and given bond, and filed his peti- tion for the benefit of the insolvent laws ; he is not relieved from his obligation to appear and prosecute his application at the time appointed by the Court, by the passage of that act before that time arrived; but, upon his failure to appear, he and his surety are liable upon their insolvent bond.^ § 110. Another form of suretyship grows of the attachment of propertt/. In Massachusetts it has been held, that an insolvent debtor's discharge is a good defence to an action, which was com- menced, and in which the defendant's property was attached, and the attachment dissolved by giving a bond pursuant to the act of 'Mechanics', etc. v. Hazard, 9 John. 'Goodwin v. Stark, 15 N. H. 218. 392. * Loines w. Phillips, 4 Ham. 1 72 ; 2, 3 1 3. 2 Olcott V. Lilly, 4 John. 409. 5 LiUey v. Torbet, 8 W. & S. 89. 310 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. 1838, c. 163, s. 20, before the institution of the proceedings in insolvency ; and, in sucli case, the plaintiff cannot have judgment, with an order for a stay of execution, so as to render the sureties in the bond liable for a breach of the condition.' But it is said to have been since decided, that where a defendant gives bond to dis- solve an attachment, and within thirty days after judgment peti- tions in insolvency, and obtains a discharge, the sureties in the bond are still liable.^(a) And in New Hampshire it is held no defence to an action by a deputy sheriff, founded upon a re- ceipt taken by him for property attached, that, after judgment against the debtor, and a demand of the property, the debtor was declared a bankrupt; even if the petition in bankruptcy was filed before judgment was rendered.^ The Court remark : " If the attachment was dissolved when the receipt of the defendants was executed, the property may have passed to the assignee, dis- charged from the lien. But it will by no means follow that the contract of the defendants, upon which this action is founded, is discharged also. It was founded upon a sufficient consideration, viz., the delivery of the property to the defendants. That con- sideration has not failed. That contract is not discharged or affected by the bankruptcy. The plaintiff's right of action was perfect before Folsom was declared a bankrupt. The security was perfected, therefore, and the case raises no question whether an attachment is dissolved by a petition and decree of bank- ruptcy."* § 111. To an action against a surety in a replevin bond it is no sufficient answer, that the principal has since become bankrupt, and obtained a discharge; and that, the property having vested in the commissioners, it has become by act of law impossible to 1 Loring v. Eager, 3 Gush. 188. » Towle v. Robison, 15 N. H. 408. 2N. England, etc. «. Parker, Cutl. Ins. *Per Parker, C. J., ibid. 409-10. L. 74^5. (a) The same rule does not apply to a receipt given by the debtor himself. Thus an officer attached goods, and suffered them to go immediately back into the possession of the debtor, taking the receipt of the latter therefor, he therein engaging to redeliver them to the officer on demand. The officer demanded the goods, and, failing to obtain them, brought an action on the receipt. The defendant afterwards obtained his discharge under the bank- rupt act, and pleaded it in bar to the action. Held, a sufficient bar. Eowles V. Treadwell, 11 Shep. 377. CHAP. IX.] DISCHARGE. 311 perform the condition. It was however intimated, the plaintiff claiming the goods under an attachment, which was perhaps avoided by the bankruptcy proceedings, that this fact might materially affect the amount of damages upon a hearing in chan- cery.^ § 112. Declaration against principal and surety upon an appeal bond, executed in May, 1842, and upon which judgment was re- covered against the principal in the following October. Plea, that the principal was discharged under the bankrupt act in April, 1843, pursuant to a petition presented on the 11th of December, 1842. Judgment for the plaintiff.^(a) § 113. The question has sometimes arisen, as to the rights of a surety who pays a preferred claim against the bankrupt. Under the bankrupt act of 1800, a surety in a custom-house bond, who paid the debt before bankruptcy of the principal, was merely entitled to preference from the estate, but could not maintain an action against the principal after his discharge.^ And where a surety on a custom-house bond paid the bond, and the prin- cipal, becoming insolvent, assigned his effects in trust, first to pay 1 Flagg V. Tyler, 6 Mass. 32. See ^ Hall v. Fowler, 6 Hill, 630. Wheeler v. Train, 3 Pick. 255, ' Reed v. Emory, 1 S. & E. 839. (as) In connection with suretyship may be considered the liability of a husband for his wife. In an action against a husband and wife, for a debt contracted by the wife when sole, the defendants may plead a discharge in bankruptcy obtained by her, in the course of proceedings instituted by her by petition subsequently to the contracting of the debt, and before the mar- riage, although the decree of discharge was not issued until after the mar- riage, and was issued to her in her maiden name. Ohadwick v. Starrett, 27 Maine, 138. A feme sole, having contracted a debt, and owning some shares of bank stock, married. After marriage, the stock, with the consent of the husband, was transferred to a third person, for the purpose of having it transferred back to her for her sole and separate use, which was accordingly done. She also held other shares of bank stock, which had been transferred to her separate use by the executor of her father's estate. The creditor sued the husband and wife at law, and, the bankruptcy of the husband being pleaded in defence, he discontinued. He then filed a bill in equity for the purpose of reaching the bank stock. No fraud in the transfer to the wife's separate use being alleged, nor any act of the wife after marriage indicating an inten- tion to charge this fund ; it was held that the bill could not be sustained. Vanderheyden ■;;. Mallory, 1 Oomst. 452. 312 BANKKUPTCY AND INSOLVENCY. [CHAP. IX. his custom-house bonds, then to indemnify his sureties, then for his general creditors ; and the trustee received money from the bankrupt's estate, which he mixed with his own, and himself be- came bankrupt, but no part of the principal's estate came specific- ally into the hands of the assignees of the trustee : it was held that the surety could not claim a preference over the principal's general creditors, though the United States would have been preferred.^ § 114. Upon the general subject of the claim of a surety for money paid on account of a bankrupt or insolvent principal; inasmuch as a joint debtor or surety has no fixed or definite demand against the bankrupt or insolvent for his mere collat- eral liability, and prior to any actual paiyment thereupon ; the question has arisen, whether such liability so far constitutes or involves a provable claim, that the certificate of discharge be- comes a bar to any action brought against the principal debtor, to recover the amount actually paid on his account. Upon this point, the decisions are not reconcilable. Thus sect. 4 of the bankrupt act of 1841 provides, that the discharge shall apply to all debts "provable under this act." By sect. 5, "all creditors whose debts are not due and payable until a future day — sure- ties, indorsers, bail, or other persons, having uncertain or con- tingent demands — shall be permitted to come in and prove such debts or claims — and shall have a right, when their debts and claims become absolute, to have the same allowed them; and such annuitants and holders of debts payable in future, may have the present value thereof ascertained — and allowed them — as debts in presenti." In construction of this act it is held by the Supreme Court of the United States, that a surety cannot recover from his principal, a discharged bankrupt, the amount paid by him as such surety after the discharge.^ And the same rule is applied to an accommodation or other indorser.^(a) More 1 Pollock V. Pratt, 2 Wash . C. 490. s Handy v. Carter, 8 Humph. 153; Morse 2 Mace V. Wells, 7 How. 272. v. Hovey, 1 Sandf. Ch. 187 ; aco. Westcott V. Hodges, 5 B. & Aid. 12. (a) "Where A. draws a bill on B., payable to his own order, which B. accepts, and B. draws a bill on A., payable to the order of B., which A. accepts, for their mutual accommodation ; and both bills are payable at the same time, CHAP. IX.] DISCHARGE. 313 especially where the indorsee has received his dividend from the assignee of the maker hy the indorser's direction.^ So the plaintiff and defendant gave their hond upon a joint purchase of real estate. The plaintiff afterwards conveyed his share of the land to the defendant, who thereupon agreed to pay the bond, and indemnify the plaintiff. Subsequently, the defendant was discharged as a bankrupt; and, after that, instalments fell due on the bond, which the plaintiff was obliged to pay. Held, the plaintiff stood in the relation of surety for the defendant, and his right to recover for the instalment so paid was barred by the discharge. A surety was held not to be &. future creditor, and it was doubted whether he is one having an uncertain or contingent demand. But his claim was held provable, because sureties are expressly named.^ So if the acceptor of a bill, not due, become bankrupt, and the indorser be afterwards obliged to take up the bill on account of non-payment by the acceptor, he may prove the amount under the commission ; and if the acceptor afterwards obtain his certificate, he will be discharged from the debt, and the Court will enter an exoneretur on the bail piece, in an action against him at the suit of the indorser.^ § 115. The contrary doctrine, however, is sustained by numer- ous authorities, that, independently of express statute, the pay- ment of a debt by a surety constitutes his substantial claim and cause of action, which, unless it arise before the discharge, even if not before other stages in the bankruptcy or insolvency pro- ceedings, is not barred. Thus a discharge in bankruptcy Is held no bar to an action by one co-surety against another for contri- bution, when the entire debt was paid by the plaintiff subsequently to the discharge. And this although, in the suit upon the bond, lAustini). Slough, 2Teates, 15; 1 ibid. » Joseph d. Orme, 2 N. E. 180. And 524. see Stedman v. Martinnant, 13 East, 2 Crafts V. Mott, 4 Comst. 603-5. ace. 427 ; Cowley v. Dunlop, 7 T. R. 565. Furtress v. Markle, 2 Greene, 553 ; Clarke v. Porter, 25 Penn. 141. have the same dates, and contain the same sums : one is a good consideration for the other, and neither is an indemnity; so that, if either party become a bankrupt, the bill accepted by him may be proved under his commission, and consequently, to an action brought on it, his bankruptcy may be pleaded. Rolfe V. Caslon, 2 H. Black. 570. And see Storey v. Barns, 7 East, 435 ; 3 Smith, 441. 314 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. the obligee struck out the name of one surety, upon a suggestion being made of his bankruptcy, and recovered judgment against the principal and the other surety.-' So A. and B. were co-sure- ties on C.'s bond, and B. received a discharge in bankruptcy. Afterwards, upon suit, A. paid the amount of the bond, and brought suit against B. for contribution. Held, that B.'s dis- charge was no defence.^ So where a principal in a delivery bond is discharged in bankruptcy, and judgment is afterwards recov- ered against the surety, and is paid by him, the discharge is no bar to an action by the surety against the principal.' So a judg- ment was obtained against bail, before the discharge of their principal, under the insolvent act of New York, and after his discharge a ca. sa. was issued against them, and they paid the debt, and afterwards brought an action against the principal. Held, the debt not being certain until after the discharge, it was not a bar.* So the plaintiff had a judgment against him on a bail bond, as bail for the defendant, and afterwards the defendant was declared a bankrupt, and after that time, and before he obtained his certificate of discharge, the plaintiff paid the judgment debt. The certificate was held no bar to a special action on the case for not indemnifying the plaintiff according to promise, because the plaintiff could not swear to a debt due and owing to him before he actually paid the money.* So A. draws a bill on B. in favor of C, who indorses it to D., who discounts it. Before the bill is due, A. becomes a bankrupt and obtains his certificate. When the bill is due, payment is refused ; upon which C. refunds the money to D., which was advanced in discount, and takes back the bill. To an action brought by B. against A. on the bill, A. can- not plead his bankruptcy.* So under the Maryland act of 1787, a bankrupt's surety, who had paid the debt after the principal was discharged, was not barred by the chapcellor's certificate, but was entitled to his action, for reimbursement, against the prin- 1 Dunn V. Sparks, 1 Cart. 397 ; Goss v. Roosevelt v. Mark, 6 John. Ch. 286 Gibson, 8 Humph. 197. — a leading case, and a, great au- '^ Dole w. Warren, 82 Maine, 94; Swain thority on this point;) aco. Young V. Barber, 3 Wms. 292. v. Hockley, 3 Wils. 346; Taylor v. 'Pogue u. Joiner, 1 Eng. 241. Mills, Cowp. 625 ; Smith v. Gale, 7 * Buel V. Gordon, 6 Johns. 126. T. 11. 364 ; Lansing v. Prendegast, 5 Goddard v. Vanderheyden, 3 Wils. 9 John. 127. 262; 2 Bl; R. 794; 2 B. & P. n., 6 Brooks v. Rogers, 1 H. Black. 640. (called by Chancellor Kent — in CHAP. IX.] DISCHARGE. 315 cipal.* So an indorser of a note, fixed before, but who paid money after, the discharge of the maker under the New York insolvent act of 1813, was not affected by the discharge.^ So where a surety executed, with his principal, a note payable in one year after its date, and, after the note became due, the principal obtained his discharge under the bankrupt law, and the surety did not prove his contingent claim against the principal, and, after such discharge, the surety paid the note ; held, that such dis- charge was no bar to an action in favor of the surety against the principal ; that the moral obligation of the defendant to indemnify his surety was suflScient foundation for implying, in law, the re- quest alleged.' So, where A. lent his acceptances to the defend- ant before his bankruptcy, but which were not paid till afterwards, A. may maintain an action against the defendant, for money paid to his use, notwithstanding his bankruptcy and certificate, and notwithstanding the defendant, before his bankruptcy, gave his receipt to A., acknowledging the receipt of so much money as the acceptances amounted to.^ Lord Kenyon says: "This differs from all the former cases ; for here was no debt due at law from the defendant to Parke at the time of the defendant's bankruptcy, but the debt altogether arose afterwards by the payment of the acceptances by Parke. No action could have been maintained at law on this acknowledgment : in the other cases legal securities were taken, upon which the party might have been sued."° § 116. It is generally provided by bankrupt and insolvent laws, that the positive dissent, or the absence of an express assent, of a certain number or proportion of the creditors, shall prevent a dis- charge. Upon the general subject of the assent of creditors it is said : "Although the creditors might legally have refused their assent, yet this would have been an unjustifiable exercise of their power, if they were satisfied that the debtor had in all respects conformed to the law, made a full disclosure of his property, and done no improper act."^ So also that there is a moral obligation 1 Haddon v. Chambers, 1 Yeates, 529 ; * Snaith v. Gale, 7 T. E. 364-6 ; Hes- 2 Dall. 236. kuyson v. Woodbridge, 1 Doug. 166, 2 Ainslie v. Wilson, 7 Cow. 662 ; Frost n. ; Young v. Hooklly, 3 Wils. 346 ; V. Carter, 1 Johns. Gas. 73. aoo. 2 W. Bl. 839. Paxson V. Haster, 6 Halst. 410. See ^ Per Ld. Kenyon, Ch. J., Snaith v. Gale, Howis V. Wiggins, 4 T. R. 714; 7 T. R. 366. Frost t). Carter, 2 Gaines' Gas. 311. 'Per Shaw, C. J., Sigourney «. Wil- 3 Wells V. Mace, 17 Verm. 503. llams, 1 Gray, 624. 316 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. on a creditor to sign the certificate, when he is satisfied that the bankrupt has conformed to the provisions of the statute.^ But still creditors have an absolute discretion to refuse to sign.^(a) § 117. Under a statute of Massachusetts, by which the debtor was entitled to a discharge, unless one half in number or value of the creditors dissented, who had proved their claims at one of two prescribed meetings, the second meeting having been adjourned, and one half of the creditors, including those who proved at the adjournment, not having dissented ; the discharge was held rightly granted. Shaw, 0. J., says: "The several adjournments consti- tute but one meeting, and affect the proceedings in no other way than would a necessary postponement of business from night to morning, or from forenoon to afternoon."' § 118. The assignment of an insolvent debtor was made May 16, and the assets paid less than 50 per cent, of the claims proved. On the 14th of November a meeting was held, at which, it not appearing that a majority in value had expressed their dissent, it was ordered by the judge that the debtor be discharged, and a certificate issue, (and one was so issued,) bearing date November 17th. On the 16th of November, a creditor filed his dissent, which, with the previous dissents, amounted to more than a ma- jority in value of the creditors, who had proved their claims; but the judge refused to receive it, on the ground, that it should have been filed at the meeting on the 14th. Held, the certificate of discharge was granted within six months after the assignment ; that it was not necessary that the dissent should be filed at a meeting ; that the dissent filed on the 16th of November, though rejected by the judge, was properly and sufficiently filed on that 1 Browne v. Carr, 7 Bing. 508 ; 2 Kuss. ^ Cridland, 3 Ves. & B. 103 ; 2 Eose, 600; 5M. & P. 497. 164. 3 Rice V. Wallace, 7 Met. 431-4. (a) The following singular case occurred in England : The father of the bankrupt was the principal creditor, and sole assignee, under his son's com- mission I but dying intestate, leaving the bankrupt his only child, who thereby became his sole personal representative, and in that capacity the principal creditor under his own commission ; he as such chose himself sole assignee, and signed his own certificate, which was afterwards allowed. CuUen's Bank. L. 374, n. ; Cooper's Ca. Green, 260. CHAP. IX.] BISCHARGE. , 317 day; and, consequently, that the certificate of discharge, issued as above, was void.^ § 119. The provision in the statute of 1844, c. 178, s. 4, that an insolvent debtor, whose assets shall pay less than 50 per cent, on all the claims proved against him, shall not be discharged, if a majority in value of his creditors shall dissent therefrom, does not apply to a case in which the debtor was entitled to a discharge before the passing of that statute, under statute of 1838, c. 163, and who had appealed to the supreme judicial court, under s. 7 of the latter statute, from a withholding of his discharge on the objection of his creditors, but whose creditors could not, under the former statute, dissent to his discharge, within six months after the assignment of his property, because that statute was passed more than six months after the assignment.^(a) § 120. It is held, that an assent once given, cannot, as matter of right, be withdrawn. It is said: "The law presumes the act 1 Gardner v. Nute, 2 Cash. 333. ^ Bartlett, 8 Met. 72. (a) The following cases further show the construction given to the Massa- chusetts acts, in reference to this and other analogous points : A discharge at a third meeting, called after the expiration of six months from the appointment of assignees, was formerly held void. Williams v. Eobinson, 4 Gush. 529. But it is otherwise under St. 1848, c. 304, s. 9. Journeay v. Gardner, 11 Cush. 355 ; Williams v. Ooggeshall, 11 Gush. 442. The provisions of the statute of 1844, c. 178, s. 1, apply to proceedings in insolvency which were pending when it went into operation. And since this statute went into operation, a discharge of an insolvent debtor is void, if granted by a judge of probate or master in chancery, at a court not held on the second Monday of a month, or by adjournment from day to day of a court held on snch Monday. Eddy v. Ames, 9 Met. 585. The provision of the statute of 1844, c. 178, s. 4, that, to prevent the dis- charge of an insolvent debtor, whose assets pay less than fifty per cent, of the claims proved against his estate, the dissent of a majority in value of his creditors, who shall have proved their claims, shall be signified within six months after the date of the assignment, is a condition precedent, to be strictly construed in favor of the debtor ; and where a creditor proved his claim and filed his dissent, after the expiration of the six months, but at an adjournment of a meeting called and held within the six months, it was held, that the condition was not complied with, notwithstanding the provision of the statute of 1838, c. 163, s. 16, that all things lawfully done at any ad- journed meeting shall be of the like force and effect as if done at the original meeting. Eevere v. Newell, 4 Gush. 584. And see Williams v. Robinson, 4 Cush. 529. 318 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. to be done deliberately. It attaches to it important consequences to the debtor, and to the other creditors. To allow creditors to file and withdraw their dissent when they pleased, and as often as they pleased, would lead to great confusion and embarrassment in proceedings in insolvency, and that by conferring a power upon the creditors, which neither the language of the statute, nor any reasonable construction of it confers."* But if a bankrupt fails to receive a discharge, a creditor may maintain an action against him for the balance of his debt, though he has received a dividend under the assignment.^ So a creditor who proves his claim, and also the costs in a suit commenced before proceedings in insol- vency were instituted, and receives a dividend on the claim, and also such costs in full; is not thereby estopped to contest the debtor's discharge on any legal ground.^ It is said : " The cred- itors of an insolvent may well prove their claims and receive their dividends, upon the assumption that the insolvent has, in all re- spects, truly conformed to the requisites of the laws. ... It is no part of the duty of the creditor to assume, in advance, that the debtor has been guilty of fraudulent acts." And a distinction is made between this case, and those in which creditors, who would not otherwise have been barred, have become parties to proceedings in insolvency by proving debts and receiving dividends, and the debtor has received his discharge upon full compliance with the iPev Thomas, J., Bererly, etc. v. Wil- ^ Hamlin v. Hamlin, 3 Jones, Eq. 191. kinson, 2 Gray, 520; Merriam v. s Morse «. Reed, 13 Met. 62. Eichards, 3 ibid. 252. iPer Dewey, J., ibid. 63. (a) A., a merchant in Baltimore, in 1818, consigned a ship to B. in New Orleans, who procured a freight for her ; but, the ship being there attached for the debt of A., B. became bound for the debt, in order to release her, and was afterwards obliged to pay it. A. approved of the act of B., and prom- ised to indemnify him for any loss he might sustain. In 1819, B. instituted suit against A. to recover the amount so paid by him, and, immediately after- wards, A. applied for the benefit of the insolvent laws of Maryland, and ob- tained his discharge thereunder. In 1821, judgment was entered in the action of B. against A., "subject to the legal operation of the defendant's dis- charge." Held, that such condition, attached to the judgment, did not admit the validity of such laws, nor vary any rights which B. had before ; that the act of B., in procuring the release of the ship from the attachment, was within his authority as consignee, and that the promise of A. to indemnify B. was CHAP. IX.] DISCHARGE. 319 § 121. There may be an implied assent to a discharge; as where a foreign creditor proves his claim against an insolvent debtor, and receives his dividend, in which case the claim is barred. So a creditor who becomes a party to an assignment, under an insol- vent act passed subsequent to the time when his claim accrued, by taking his dividend, waives all objection to the constitutionality of the assignment.' § 122. In Massachusetts, a discharge of an insolvent debtor under St. 1838, c. 163, is invalid, if the debtor does not, at the second meeting of his creditors, take and subscribe the oath re- quired by s. 7 of that statute. And the recital in the certificate of discharge, that the debtor has "in all things conformed himself to the directions" of the insolvent law, is not primd facie evidence that he made and subscribed the oath.^ But, in Pennsylvania, it not appearing that the oath to the petition of an applicant for the benefit of the insolvent laws was sworn to in open court, the peti- tioner was again sworn, as the law prescribed, the case was con- tinued, another notice directed, and the applicant discharged. Held, that the discharge was conclusive.^ § 123. Questions have often arisen, depending upon the precise time of enactment or repeal of the law under which the discharge is claimed. § 124. The bankrupt law of 1800 did not affect acts declared by it to be acts of bankruptcy, but done before June 1, 1800.* § 125. The members of a partnership became, in 1847, unable to meet their engagements. A deed of arrangement was drawn up between themselves and most of their creditors, (to which deed the plaintiffs were not parties, nor was it executed by them,) by which provisions were made for paying the debts of the partner- 1 Van Hook v. Whitlock, 7 Paige, 373. * McMenomy v. Murray, 3 John. Ch. 2 Cox V. Austin, 11 Cush. 32. 435. s Fritts V. Doe, 22 Penn. 335. not made in contemplation of the laws of Maryland, but of those of Louisiana, and was not barred by A.'s discharge. Boyle v. Turner, 6 Pet. 635. A certificate granted by a commissioner in bankruptcy to a petitioning trader, under the St. 12 & 13 Vict. c. 106, s. 221, discharges all claims ex- isting at the date of the petition of persons who had notice of the sittings of the Court ; although one creditor refused to receive the composition agreed on by three-fifths. Tindall v. Hibberd, 2 C. B. 198. 320 BANKRUPTCY AND INSOLVENCY. [CHAP. IX. ship, and the members of the partnership were in virtue thereof released from further liability. Held, that this deed, having been completely executed before the passing of the 12 & 13 Vict. c. 106, (the bankrupt law consolidation act,) did not fall within the provisions of \;he 224th section of that statute, and consequently could not bind strangers to it, and therefore could not be pleaded in bar to an action brought against the partners by the plaintiffs, who were creditors at the time of the execution of the deed, but had never executed it.' § 126. A discharge granted after the repeal of an insolvent law, without a saving clause, on an application made before the repeal, is void.^ § 127. An insolvent's petition, preferred under one act, was granted after the passage of an act repealing the former one, which second act was afterwards repealed. Held, that the peti- tioner took the benefit of the second act, and was not affected by its subsequent repeal or modification.^ § 128. A petition under the bankrupt law was filed March 3, 1843, about noon, and the act repealing it, but by its terms not affecting any case commenced before its passage, was approved by the President late in the evening of that day. Held, the pro- ceedings were valid, and should be carried on to their regular termination.^ § 129. And if a petition is seasonable, being filed on the day the law was repealed ; the application for a discharge is but an extension of the original proceedings.* § 130. The general act 6 Geo. 4, c. 16, repealing all former acts, took effect September 1, 1855. September 8, a commission was sued out upon an act of bankruptcy committed in July. Held, it could not be supported.*(a) § 131. In Massachusetts, a debt founded on a contract made while the insolvent act of 1838 was suspended by Stat. 1842, c. 1 Larssent v. Bibby, 34 Eng. Law & ♦ Joseph Riohardson, 2 Story, 571. Eq. 7. 6 Ankrim, 3 McLean, 285. 2 State V. Shinn, 2 South. 553. ' Maggs v. Hunt, 4 Bing. 212. ' Cranston Bank v. Baker, 2 R. I. 13. (a) As to the time of taking effect of statutes, see Tattle v. Grimwood, 3 Bing, 493, 11 Moore, 432 ; Wilson v. Whittaker, M. & M. 8 ; Bryar v. Will- cooks, 3 Cow. 159. CHAP. IX.] DISCHARGE. 321 71, might be discharged under the provisions of that act, after it came into renewed operation.' § 132. It is held that a discharge of an insolvent's person, under a State law, does not prevent the statute of limitations from running against the claim of a creditor.^ But it is also held, that a defendant, who has taken the benefit of an insolvent act, cannot afterwards plead the statute of limitations to any de- mand which existed at the time of his discharge, although the creditor may not have proved such demand, as required by the act. Such proof is only required to perpetuate the evidence of the debt.^ » Austin V. Caverly, 10 Met. 332. 3 King „. Westendorf, Dudl. S. C. 244. 2 Sletor V. Oram, 1 Whart. 106. 21 CHAPTER X PEEFERBNOE. 1. General right of preferring. 8. Statutory provisions against it. 6. Construction of statutes. 7. Amount of property conveyed; the whole or a part. 10. Whether the conveyance must be in contemplation of bankruptcy, etc. ; meaning of the term. 16. Pre-existing indebtedness; agree- ment for future security; sale in the regular course of business. 20. Whether the conveyance must be voluntary; effect of pressure or com- pulsion. 24. Questions of time in regard to preference. 26. Voluntary assignment for the benefit of creditors. 27. A preference is in general only voidable by proceedings in bankruptcy, etc. 29. Evidence — presumption — bur- den of proof. 31. Preference by legal process. 34. Notice. 38. Preference by promise to pay a debt. 40, By payment. § 1. It is the prevailing rule, that an insolvent debtor may give a preference to one creditor or one set of creditors by paying his or their debt in full, to the exclusion of all the rest of the cred- itors, provided it be done in good faith.^ So, that a debtor may convey his property in trust for the benefit of one set in exclu- sion of the rest.^ It is said to be the inherent right of a debtor to prefer creditors, in the entire absence of legal or actual fraud.* § 2. As might be supposed, however, regret is often expressed at the well-settled rule, that a debtor in failing circumstances and even avowedly insolvent may thus give a preference.* And • Buffum V. Green, 5 N. Hamp. 71 ; 8 Mis. 84; 1 John. 378. 2 Ball V. Thompson, 3 Mis. 84. ' Garretson v. Brown, 2 Dutch. (N. J.) 425. See Owen v. Arvis, ibid. 23 ; Nix. Dig. 27. *Per Kent, Chr., M'Menomyv. Eoose- velt, 3 J ohn. Ch . 453. And see Biggs (322) V. Murray, 2 John. Ch. 565; Small «. Dudley, 2 P. Wms. 427 ; Cook v. Goodfellow, 10 Mod. 489 ; Burd v. Smith, 4 Dall. 76 ; Pingree v. Corn- stock, 18 Pick. 46 ; Cunningham v. Freeborn, 11 Wend. 240; Atkinson V. Jordan, 5 Ohio, 293. CHAP. X.] PBBFEEENCB. 323 assignments with preferences are said to have been held valid, only on the ground that there was no bankrupt or insolvent law in existence at the time.' § 3. This leads us to consider, as one of the most important topics of the present work, the subject of preference. § 4. Equal distribution being a chief object of bankrupt and insolvent laws, they would of course be very defective, without the most explicit provisions to prevent any preference of some creditors over others. Accordingly, the various English and American statutes of bankruptcy and insolvency very distinctly address themselves to this purpose, enacting in general, and of course with many variations of detail, that conveyances or pay- ments made in contemplation of bankruptcy or insolvency shall themselves constitute acts of bankruptcy or insolvency ;(«) that they shall be void as against the subsequently-appointed assignee, who is authorized to recover the property or money thus unlaw- fully sequestrated ; and shall either prevent the discharge of the debtor, or avoid the effect of such discharge, when set up as a defence to the suit of a creditor.(5) ' Breneman, Crabbe, 456. (a) A fraudulent deed is an act of bankruptcy, though void ia other re- spects on account of the fraud. Hassels v. Simpson, Dong. 92. TJpon the point, whether an unlawful preference is confined to cases where a personal benefit to the preferred creditor is intended, LordDenman says: "We cannot relieve ourselves from a sense of the great difiSculty that sur- rounds this question." It was, however, decided in the negative. Marshall V. Lamb, .5 Ad. & Ell. N. 126. St. 6 Geo. 4, c. 16, s. 3, provided, that a fraudulent conveyance "within this realm or elsewhere" should constitute an act of bankruptcy. This lan- guage was used to meet a decision under previous statutes, (Ingliss v. Grant, 5 T. R. 530,) that a conveyance made in India, by one residing there, though trading with England, could not constitute an act of bankruptcy. (&) It is held in New York, that preferences in contemplation of bankruptcy cannot be set up to impeach and avoid the discharge after it has been granted. Caryl v. Eussell, 18 Barb. 429. So giving preferences to creditors, previous to an assignment under the insolvent act, is not an answer to a plea of discharge, although it appear on the face of the plea. Hayden v. Palmer, 24 Wend. 364. But on the other hand it has been held, that, where a bill of sale has been executed by a petitioner for the benefit of the insolvent laws, to secure a debt actually due at the time it was made, the creditors are referred to other 324 BANKRUPTCY AND INSOLVENCY. [CHAP. X. § 5. In reference to provisions of this nature in the old United States bankrupt act, it was remarked : " Courts of law consider the property of the bankrupt completely at his disposal before an act of bankruptcy committed, so far as to protect a creditor in the receipt of money or the acquisition of goods, if done in the usual course of business; indeed, if money be obtained or security given when a bankruptcy is inevitable, and even con- templated by the bankrupt, such acts are valid if the effect of measures taken by the creditor. It will not, however, be permit- ted that a person, insolvent at the time, and contemplating an act of bankruptcy, should parcel "out his estate to such creditors as he may see fit to prefer ; this is opposed to the very genius of the bankrupt laws, which proceed upon a principle of equality and a just distribution. It cannot be expected in general, that any other evidence should be offered of the intention of the bank- rupt in parting with his property, than circumstances clearly indi- cating an approaching bankruptcy, and that the transaction is out of the usual course of trade."' And similar remarks are made respecting the law of 1841 : " The acts thus enumerated are usually termed acts of bankruptcy, and may be considered as tests of insolvency, showing conclusively the inability of the trader to pay his debts, or carry on his trade. The policy and aim of bankrupt laws are to compel an equal distribution of the assets of the bankrupt among all his creditors. Hence, when a merchant or- trader, by any of these tests of insolvency, has shown his inability to meet his engagements, one creditor cannot, by collusion with him, or by a race of diligence, obtain a prefer- ence to the injury of others. Such conduct is considered a fraud on the act, whose aim is to divide the assets equally, and there- fore equitably. To prevent these frauds, the English bankrupt laws give the title of the assignee a relation back to the act of bankruptcy, so as to avoid all payments, sales, or contracts made after it. The second section of our bankrupt act effects the same I Per Spencer, J., Ogden v. Jackson, 1 Smith v. Hodson, 4 T. B. 212 ; Har- John. 873 ; aoc. Barnes v. Preeland, man v. Fisher, Cow. 122, 632. 6 T. R. 84; Neate v. Ball, 2 E. 117; • proceedings to establish any legal objections they may have to it; and the insolvent court will confine its inquiries to the bond fide character of the consideration alone. Hassinger, 2 Ashm. 287. CHAP. X.] PREFBRBNCB. 325 object, not by establishing the doctrine of relation in direct terms, but by declaring all such payments, transfers, etc. void, and a fraud on the act, and enabling the assignee to recover the money paid."^ So it is remarked by the Court in Massachusetts, with more particular reference to the insolvent law of that State: " The law annexes the penalty to the act done, whether it be done with an express intent to cheat his creditors or not. But, in another sense, it is fraudulent ; it is a fraud on the insolvent laws. This very act, by annexing penalties to such partial payments, in effect makes them fraudulent."^(a) § 6. Where a transfer of property is alleged to be void on the ground of preference, the statutory provisions on the subject are construed liberally in furtherance of the general object, both with reference to the act itself and the remedy. Thus the bankrupt act of 1841 was held to avoid preferences given before the act took effect, by analogy to the provision that no discharge should be granted in case of such preference given in contemplation of the passage of the law.^ So, in Massachusetts, the purpose of Stat. 1846, c. 168, s. 1, authorizing proceedings against any person sus- pected of having fraudulently received, etc. any of the estate of an insolvent debtor, is intended not only to provide for the investiga- tion of cases of actual fraud, in which the property of an insol- vent is obtained without consideration, but also to enable creditors, or those interested, to discover and pursue property, which is so 1 Per Grier, J., Shawhan v. Wherritt, ^ Per Shaw, 0. J., Fernald v. Gray, 12 7 How. 644. Cush. 596. ' Cornwell's, etc. 7 W. & S. 305. (a) The undue preference, forbidden by the prison bounds act of South Carolina, includes the idea of a fraudulent preference. And where a debtor, knowing his insolvency, assigns his estate to some creditors in preference to others within the time specified in the act, it amounts to an undue prefer- ence. McKenzie v. Garrison, 10 Eich. 234. But see Mires v. Smith, Har- per, 128. In Louisiana, the presumption established by the act of 1817, re-enacted in 1855, (Rev. Sts. p. 257, s. 28,) applies to cases alone in which proceedings are instituted against the insolvent to deprive him of the benefit of the in- solvent laws, on the ground of his having given an unjust preference to one or more of his creditors over others. Martin v. Drumm, 12 La. An. 494. In New Jersey, the primary object of " the act to prevent frauds by incor- porated companies," is to secure to creditors an equal distribution of assets. An act done with a view to defeat this object is illegal, as in fraud of the law. People's Bank v. Paterson, etc. 2 Stockt. 13. 326 BANKRUPTCY AND INSOLVENCY. [CHAP. X. withdrawn from the assets of the insolvent that it cannot be. applied in satisfaction of his general creditors. And the provi- sions of the statute extend to fraudulent conveyances of real estate.* So, in South Carolina, A. obtained judgment against B., his partner, in a limited partnership, whom he had caused to be arrested. B. filed a schedule of his property for the purpose of obtaining his discharge as an insolvent debtor, and against this schedule A. filed several suggestions of fraud. B. had made an assignment, in which certain creditors were preferred, and which was accepted by all but A. Some of the partnership property had been sold at auction, with the concurrence of A. and B., which turned out to be fraudulent upon the creditors. Held, a fraudulent sale of goods at auction, or in any other way, where the creditors were not to receive the benefit of the sale, was a fraud within the act for discharging insolvent debtors ; that, as A. was included among the creditors, if the sale was fraudulent as to the creditors, A. was included ; that, as the other creditors had accepted the assignment, A. was the only one who could com- plain ; and that a general verdict of guilty, where the frauds sug- gested were of the same character, was sufficient.^ And although, as has been stated, independently of a bankrupt or insolvent law, a mere preference without fraud is not invalid; yet, in the appli- cation of such law, a sale may be held void upon the ground of fraud, generally, as well as of a technical preference. Thus a trustee of an insolvent may recover against a vendee of goods, whether the sale was void by the insolvent laws or by the statute of Elizabeth.^ So in Massachusetts a "fraudulent conveyance," which by the Stat. 1844, c. 178, s. 9, is made a cause for pro- ceeding against an insolvent debtor, under the statute of 1838, c. 163, includes not only a conveyance, which, by the common law and the statutes of Elizabeth, is fraudulent and void as to cred- itors, but also a conveyance made with intent to give a preference to a pre-existing creditor, which is made void, as to the other creditors, by the statute of 1841, c. 124, s. 3.* § 7. The amount of property conveyed has an important bear- ing upon the question of preference. • It is held that an assign- ment of all a man's property, made for the benefit of certain 1 Harlow ». Tufts, 4 Cush. 448. » Dietus v. Fuss, 8 Md. 148. 2 Hyams v. Valentine, 4 Strobh. 408. < Jordan, 9 Met. 292. CHAP. X.] PREFERENCE. 327 creditors, is an act of bankruptcy, though made without moral fraud.^ And it is said, in a leading case : " There is a great dif- erence between the conveyance of all and of a part. A convey- ance of a part may be public, fair, and honest ; as a trader may sell, so he may openly transfer many kinds of property by way of security; but a conveyance of all must either be fraudulently •kept secret, or produce an immediate absolute bankruptcy."^ § 8. But, under special circumstances, the contrary doctrine has been adopted in a late English case, that a bill of sale, made by a trader, to secure future advances only, and executed hond fide, is not, in point of law, an act of bankruptcy, although it transfers all the stock in trade; and no intention to defeat or delay creditors can be inferred from it, although it operated by way of mortgage, and the property assigned was disproportioned in value to the amount advanced.* While, on the other hand, the fact of the amount of property conveyed may be viewed as one of several circumstances, indicating an unlawfu 1 preference. Thus an issue of fraud under an insolvent debtor's act, where a debtor has conveyed all his visible property under circumstances strongly tending to show that the conveyance was intended to defraud creditors, presents the double question for the jury, whether the property was purchased for the use of the debtor, and whether the transfer was hond fide, and for value paid.* And where a trader assigns part of his property, by way of mortgage, the further question under the bankrupt law is, not whether putting the deed in force will put an end to his business, but whether it will make him insolvent. Thus a manufacturer mortgaged all his machinery, to secure certain bills drawn by him, and accepted by the consignees of his goods, which had been discounted by the mortgagee, and also of such other bills as should, from time to time, be discounted in like manner. The mortgagee was em- powered, after three day's notice, to enter and take possession of all the machinery, and, after a sale, to pay the amount of the expenses and the bills then due or running, and to pay the ' Breneman, Crabbe, 456. v. Davison, 1 Brod. & B. 408 ; 2 Per Lord Mansfield, Worsley v. De Wedge v. Newlyn, 4 B. & Aid. 881 ; Mattos, 1 Burr. 467, 478; aoo. Wil- Gibson v. Boutls, 3 Scott, 229. son V. Day, 2 Burr. 827. See Has- ' Bittleston v. Cooke, 36 Eng. Law & sells V. Simpson, Dougl. 89. n.; Eq. 97. Compton V. Bedford, 1 W. Bl. 362; 'Adams v. Beaman, 3 Jones, 140. Wilson V. Day, 2 Burr. 827 ; Berney 328 BANKRUPTCY AND INSOLVENCY. [CHAP. X. surplus to the mortgagors. At the time of the execution of this deed, the machinery was worth £1600, and the mortgagor's prop- erty consisted of goods, £1100, and good debts, £900, while his whole liabilities were £2900. Held, that this deed was no evi- dence of an act of bankruptcy, although, had it been acted upon, the mortgagor could not have carried on the particular business in which he was engaged.'(a) § 9. Preference may consist in a conveyance of partnership property to secure a private debt. Thus A. and B. entered into ■ Young V. Waud, 14 Bng. Law & Eq. 462. (a) B., a victualler, being indebted to A. in £570 upon a balance of ac- count for goods supplied and advances made, and being pressed for payment, as an inducement for forbearance, executed a deed, by -which he mortgaged to A. the public-house in which he carried on business, and assigned to him the trade and other fixtures, and movable property in the house other than the stock in trade ; with a proviso that A. should enter and sell in case of B. making default in paying off A.'s debt by certain instalments, which ex- tended over several months ; otherwise the deed to be void. The value of the property mortgaged was between £300 and £400, B.'s whole assets being at the time about £1200, and his debts £4000. B. became bankrupt between three and four months after the execution of the deed, having in the mean time continued his business, and received further supplies of goods and advances from A., and made various payments to him and other cred- itors. Held, that B.'s execution of the deed was not an act of bankruptcy, not being an assignment of the whole, or of the whole with a colorable ex- ception, of a trader's property, so as necessarily to defeat or delay creditors, by producing absolute present insolvency and incapacity to carry on trade, and withdrawing the whole of the property from the reach of the creditors. Hale V. AUnutt, 36 Eng. Law & Eq. 383. G., a farmer, who became liable to the bankrupt laws, as a trader, by pos- sessing two shares in a joint stock bank, worth less than £20 each, conveyed all his other property, worth about £3000, to a creditor, to secure his debt of £900. Held, that the conveyance. might be an act of bankruptcy, as a fraudulent grant with intent to defeat or delay creditors, although the two shares, which were G.'s only trading property, were not conveyed, and although the conveyance did not stop G.'s trade as a banker. Also, that the conveyance, being of property worth three times the amount of the debt which it wa^ given to secure, did not prevent the deed being an act of bank- ruptcy; for, though the grantee would be a trustee for G., as to the amount beyond his own debt, the property could not be taken in execution ; and, as the common law remedies of the other creditors against their debtor's prop- erty would thus be barred, they might consequently be defeated or delayed. Smith V. Cannan, 18 Eng. Law & Eq. 390. See Sparrow, 21 ibid. 646. CHAP. X.] PREFEKENCB. 829 partnership in 1841. A., before his marriage, had joined his wife in a settlement of her property, by a bond and mortgage. A part of her property, which the trustees for her had loaned to A., he put into the firm. B. was appointed trustee under the settle- ment, and A., just before the failure, transferred to him other property of the firm to secure the loan. Held, on a bill by B. to enforce this security, it was void under the United States bank- rupt law.' § 10. It is the prevailing rule, conformably to the usual phraseology of bankrupt and insolvent laws, that a conveyance, in order to constitute preference, must be in actual contemplation of legal bankruptcy or insolvency. Thus, in England, it is said, that the law does not avoid a conveyance, made under circum- stances in which the party may "hope that his affairs would rally and come round again."^ So, also, that "the delivery in the ex- pectation of insolvency only, would not be an illegal act, because it is only from the bankrupt laws, the policy of which is that all the creditors should be paid alike, that the illegality arises. It must be an act then not only that in effect contravenes the bankrupt laws, but it must be done with the intent to contravene them, and in contemplation of bankruptcy."^(a) So, under section 2 of the late United States bankrupt law, the execution by a voluntary bank- rupt, after January 1, 1841, of a deed of trust, giving a trust to some of his creditors, was held not to invalidate his discharge, unless the act was "done in contemplation of the passage of a bankrupt law."* And, to bar a discharge, payments, if appropriating only a part of the debtor's property, must be made in contemplation of bankruptcy, and also be voluntary. They must contemplate not only insolvency, but also bankruptcy as its consequence, and must originate with the debtor, the first step being taken by him.' 1 Ancker v. Leevy, 3 Strobh. Eq. 197. *PearsaU v. M'Cartney, 28 Ala. 110. 2 Per Tindal, C. J., Green v. Bradfield, suowell, Law Rep. Nov.— 43, p. 298— 1 Car. & Kir. 454. Vermont ; Cole v. Alters, 1 Gill, 3 Per Gibbs, C. J., Fidgeon v. Sharpe, 412. 1 Marsh. 198 ; aoc. Phoenix v. In- graham, 5 John. 412. (ffl) It has been sometimes held, that a security, given by an insolvent debtor v/pon application, by his creditor, for a pre-existing debt, is valid, though the debtor contemplates bankruptcy; if no act of bankruptcy has been committed. Phoenix v. Ingraham, 5 Johns. 412. But see Atkinson v. The Farmers', etc. Crabbe, 529. See also s. 20. 330 BANKRUPTCY AND INSOLVENCY. [CHAP, X. (See s. 20.) And if a party who fears or believes himself insol- vent, but does not contemplate stoppage or failure, and intends to keep on, and make his payments, and transact his business, hoping that his aflfairs may be thereafter retrieved, in that state of mind makes a sale or payment, without intending to give a preference, and as a measure connected with going on in his business, and not as a measure preparatory to, or connected with, a stoppage in business ; such sale or payment is not void, as made in " contem- plation of bankruptcy," though he immediately afterwards becomes bankrupt.-^ §'11. The reasons of this general doctrine are thus given in reference to the act of 1800: "That an insolvency is no objec- tion to giving a preference, unless it be shown that a bankruptcy was contemplated at the time, will be found admitted and acted upon, in a great variety of cases. It is founded upon the right which every man has to dispose of his property to whom he pleases, for an adequate consideration, and in satisfaction of his debts, until he commits an act of bankruptcy, or contemplates so to do ; and where a part only of the insolvent's estate is trans- ferred for the. payment of a just debt, though the act be volun- tary on the part of the insolvent, the transaction is not, on that ground, impeachable."^ So it is remarked, in reference to the bankrupt law of 1841: "This assignment, upon its face, shows that it was made in contemplation of bankruptcy. And, as against an assignee duly appointed under the bankrupt act, or those who should claim under him, it would unquestionably be void; as a fraud upon the rights of creditors who should come in and prove their debts under the decree in bankruptcy. . And as Congress has the power to establish a uniform system of bank- ruptcy throughout the United States, I am not prepared to say it has no authority, by the Constitution, to prohibit any person, who has become a bankrupt, from assigning his property for the purpose of giving a preference to one class of creditors over another, where he has not the means of paying the whole, so as to leave all his creditors to a fair race of diligence, in obtaining a priority of payment, by due course of law. Such, however, does not seem to have been the intention of the framers of the recent 1 Jones V. Howland, 8 Met. 377. = Per Spencer, J., Phoenix v. Ingraham, 5 John. 426. CHAP. X.J PREFERENCE. 331 bankrupt law. Although the act declares all payments, assign- ments, etc. made or given in contemplation of bankruptcy, for the purpose of giving preferences, utterly void, the residue of the sentence shows that they are only void in reference to proceed- ings under the bankrupt law. For it declares such assignments a fraud upon the act ; and authorizes the assignee in bankruptcy to claim, sue for, and recover the property, as a part of the assets of the bankrupt. And it prohibits the discharge of the bankrupt who has been guilty of such a fraud in reference to the contemplated proceedings under the act."' (See s. 27.) And the whole subject is still more fully gone into, in the Supreme Court of the United States: "Under the common law, conveyances by a debtor, to hond fide creditors, are valid, though the debtor has become insolvent and failed, and makes the conveyance for the sole purpose of giving a preference over his other creditors. This common law right, it was the object of the 2d section of the act to restrain; but, at the same time, in so guarded a way as not to interfere with transactions consistent with the reasonable accom- plishment of the objects of the act. To give to these words, 'contemplation of bankruptcy,' a broad scope, and somewhat loose meaning, would not be in furtherance of the general pur- pose with which they were introduced. The word 'bankruptcy' occurs many times in this act. It is entitled 'An act to establish a uniform system of bankruptcy;' and the word is manifestly used in other parts of the law to describe a particular legal status, to be ascertained and declared by a judicial decree. It cannot be easily admitted that this very precise and definite term is used in this clause to signify something quite different. It is certainly true in point of fact, that even a merchant may contemplate insolvency and the breaking up of his business, and yet not con- template bankruptcy. He may confidently believe that his per- sonal character, and the state of his affairs, and the disposition of his creditors, are such, that when they shall have examined into his condition they will extend the times of payment of their debts, and enable him to resume his business. A person, not a merchant, banker, etc., and consequently not liable to be pro- ceeded against and made a bankrupt, though insolvent, may have come to a determination that he will not petition. The contem- 1 Per Walworth, Chr., Seaman v. Stoughton, 3 Barb. Ch. 348. 332 BANKBUPTCY AND INSOLVENCY. [CHAP. X. plation of one of these states, not being in fact the contemplation of the other, to say that both were included in a term which describes only one of them, would be a departure from sound principles of interpretation. Moreover, the provisos in this sec- tion tend to show what was the real meaning of this first enacting clause. The object of these provisos was, to protect bond fide dealings with the bankrupt, more than two months before the filing of the petition by or against him, provided the other party was ignorant of such an intent, on the part of the bankrupt, as made the security invalid under the first enacting clause. And the language is ' provided that the other party to any such dealings or transactions had no notice of a prior act of bankruptcy, or of the intention of the bankrupt to take the benefit of this act.' These facts, of one of which a bond fide creditor must have no- tice, to render his security void, if taken more than two months before the filing of the petition, can hardly be supposed to be difierent from the facts which must exist to render the security void under the first clause; or, in other words, if it be enough for the debtor to contemplate a state of insolvency, it could hardly be required that the creditor should have notice of an act of bankruptcy, or an intention to take the benefit of the act."' So where a debtor, prior to the passing of the insolvent law of New York, of 1811, had fraudulently disposed of, and conveyed away, his property ; this was held not to be a fraud against that statute, so as to invalidate the discharge, there being no evidence that the conveyance was made by him in expectation of the passage of the act, and with the intent of taking advantage of it. And it was doubted, whether, if that fact had been shown, it would have affected his discharge.^ So in Connecticut, where an insolvent debtor, who was ignorant of his insolvency, made a bond fide mortgage of real and personal property, not with the intention of closing his business, but rather with a view to continue and extend it, it was held that this was not a conveyance made " with a view to insolvency," within the meaning of the insolvent statute of 1853.* So where a mortgage was executed on the 2l8t day iPer Curtis, J., Buokingham v. Mo- 529; Belcher v. Prittie, 10 Bing. Lean, 13 How. 168-9; aoo. Poland 408; Morgan v. Brundrett, 5 B. & V. Glyn, 2 Dow. & R. 310. Contra, Ad. 297. Fidgeon v. Sharpe, 5 Taun. 545 ; « Davis v. Eeynolda, 10 Johns. 442. Hartshorn v. Slodden, 2 B. & P. » Utley v. Smith, 24 Conn. 290. 582 ; Gibbins v. Phillips, 7 B. & C. CHAP. X.J PREFERENCE. 333 of July, to secure an indorsement made on the 13th day of July, and in compliance with a promise of the mortgagor at the time of the indorsement, but was not acknowledged and delivered until the 31st day of July, nor left for record until the 8th day of August; and within sixty days after the 21st day of July the mortgagor went into insolvency; it having been found by the Court that, although he was embarrassed and insolvent at the time, yet, in procuring the note to be discounted, and in executing the mortgage, he did not act in view of insolvency, and that the execution was not delayed, nor the mortgage withheld from record for the purpose of concealment, or for any other fraudulent pur- pose; held, such mortgage was not invalid under the insolvent act.* So under the insolvent laws of Maryland, a transfer, more especially if made at the request of a creditor, will stand, unless made not only for the purpose of preference, but with a view to, and under an expectation of, taking the benefit of the insolvent acts. It is not enough to avoid such transfer, that the grantor was insolvent when the deed was executed and the grantee knew of such insolvency. And a bill brought to vacate the deed should aver that undue preference was made with such view and expecta- tion. If such intent be denied by the answer, the plaintiff must prove it.^ So a conveyance made by a debtor, in contemplation of taking the benefit of the insolvent law of Missouri, is in fraud of the law, and debars such debtor from the benefit of the act.* § 12. Conformably with this rule as to conveyances, to make a judgment void under the bankrupt law, it must have been given not only to effect a preference, but also in contemplation of bank- ruptcy.^ So, in Massachusetts, an agreement made by a debtor, whose property was attached by several creditors, that judgment should be rendered against him in favor of the first attaching cred- itor, on the first day of the term to which the several writs of attach- ment were returnable, was held not void by the statute of 1888, c. 163, the insolvent law, as against his other creditors, though the first attaching creditor's demand was greater than the value of all the property attached ; unless such agreement were made by the debtor in contemplation of becoming insolvent, and obtaining a discharge under the provisions of that statute.' 'Croswell v. AUis, 25 Conn. 301. ' Atkinsonu.TheFarniers', etc. Crabbe, 2 Falconer v. Griffith, 3 Md. Ch. 151. 629. » Talbot V. Jones, 5 Mis. 217. ^ Eastman v. Eveleth, 4 Met. 187. 334 BANKRUPTCY AND INSOLVENCY. [CHAP. X. § 13. It is to be remarked, however, that a different view is favored by highly respectable authorities, (a) It is sometimes held in England, that mere contemplation of insolvency is suffi- cient to invalidate a conveyance.' So it has been said: "Con- templation of bankruptcy means a contemplation of becoming a broken up and ruined trader, according to the original significa- tion of the term ; a person whose table or counter of business is broken up — hancus ruptua."^ And that the words " in contempla- tion of bankruptcy" in section 2 of the bankrupt act of 1841 mean in contemplation of a state of bankruptcy, or a known insolvency and inability to carry on business, and a stoppage in business.* They do not necessarily mean being declared a bankrupt under the act.* So it was held in Pennsylvania, that a transfer by an insolvent person of all his property to a creditor, ten days before applying for the benefit of the bankrupt law, was void under that law, although, at the time of making the transfer, he did not in- tend to take the benefit of the law. ° So in the court of the United States it was held an act of bankruptcy, for a trader to give a mortgage to a creditor for the purpose of preference, and in contemplation of stopping his business, because of insolvency and incapacity to carry it on. Hence where a retailer, indebted to the amount of $5000, and having a stock of the nominal value 1 Pulling V. Tucker, 4 B. & Aid. 382. s Hutchins v. Taylor, Law Rep. Nov.— 'Per Story, J., Everett v. Stone, 3 42, p. 289. Story, 453 ; Hutchins v. Taylor, 5 * Arnold v. Maynard, ibid. 296. Law Rep. 288 ; Arnold v. Maynard, ^ McAllister v. Richards, 6 Barr, 133. 2 Story, 349; Gibson ». Muskett, 4 Man. & Gr. 160. (a) A distinction is sometimes made between contemplation of bankruptcy and a, fiat of bankruptcy. Gibbins v. Phillips, 7 B. & 0. 529. " With respect to this doctrine of contemplation in cases of bankruptcy, we have nothing, either in the common or statute law, to show what it is." Per Gibbs, 0. J., Pidgeon v. Sharpe, 5 Taun. 541. In Jones v. Howland, 8 Met. 383, the distinction is pointed out between the provisions of the English statute 1 Jac. 1, c. 15, that any fraudulent conveyance shall be an act of bankruptcy, and those of the United States act, avoiding conveyances made in contemplation of bankruptcy. In Jones v. Howland, 8 Met. 377, Mr. Justice Hubbard reviews the Eng- lish oases relating to transfers which are alleged to be fraudulent under the bankrupt laws, and shows that the earlier decisions are overruled by the later ones, which establish a rule more lenient to the debtor and parties claiming under him. CHAP. X.] PEBFBRENCB. 335 of $4000 or $5000, and which sold at auction for less than I being his whole visible property, mortgaged it to a creditor, hav- ing a claim of about $500, for about $1700; held, the law pre- sumed a knowledge on his part that he was insolvent, and must stop and break up his business, and therefore the mortgage was made " in contemplation of bankruptcy," and subjected the party to a petition in invitum, though he did not intend to file a volun- tary petition, or subject himself to a petition on behalf of cred- itors ; and whether the mortgage was spontaneous, or given on the demand of the creditor, or in pursuance of a general prom- ise at the time of contracting the debt, to give security when requested.' And under the insolvent law of Massachusetts, as originally framed, it having been found that the necessity of proving actual contemplation of insolvency afforded great oppor- tunity for evading the spirit and object of the law; a differ- ent phraseology and more favorable to the rights of creditors was adopted in amendatory acts. And it is held, that to author- ize the issuing of a warrant, under the statute of 1844, c. 178, to seize the estate of a debtor, on the ground of his having made a fraudulent conveyance by way of preference, it must be shown, 1st, that the debtor was insolvent, or contemplated proceedings in insolvency, at the time of making the conveyance, and that he made it with a view of giving a preference to a pre-existing cred- itor ; 2d, that he then had no reasonable cause to believe himself solvent; and 3d, that the creditor, at the time of receiving the conveyance, had reasonable cause to believe the debtor was insol- vent. And the burden of proving the first and third of these propositions is on the creditor who petitions for the issuing of the warrant.^(a) 1 Arnold v. Maynard, 2 Story, 350. 2 Jordan, 9 Met. 292. (a) A debtor, being in fact insolvent, and the whole of his stock in trade being attached by several creditors, assigned to another creditor choses in action, as security for his debt and for liabilities incurred on the debtor's behalf; but not intending to take the benefit of the insolvent law, nor having knowledge of its existence. The next day he filed a petition in insolvency. Held, the transfer was valid as against other creditors and the assignee. Gorham v. Stearns, 1 Met. 366. Statements publicly made by a debtor, of his intention to dispose of property, are evidence of the bond fides of a subsequent sale. Otherwise 336 BANKRUPTCY AND INSOLVENCY. [CHAP. X. § 14. But whichever of the foregoing doctrines may ultimately prevail, the general principle upon which the latter one rests is undoubtedly sound, that a party is held to contemplate the natu- ral result of his acts, and what the acts purport to produce, an actual insolvency and inability to pay all his creditors.^ The intent to prefer may be inferred from the fact of preference.^ And the question of contemplation of bankruptcy must always be put to the jury in express terms.' It is said: "By fraudulent, I mean a security contrary to the policy of the bankrupt laws, which are intended to secure to the general creditors an equal division of a bankrupt's estate. Whether it was or was not so given, is a question for the jury."* So it is remarked: "This doctrine of contemplation, in cases of bankruptcy, ought not to be pressed with too much force, seeing we have nothing either in the common or statute law, to show what it is. (a) This was ad- mitted by the judges, in Fidgeon v. Sharpe, (5 Taunton, 539.) The cases make it to depend upon the quo animo. It is a ques- tion of fact. A man may be in difficulties, and not stop pay- ment ; he may stop payment, and not be insolvent ; and he may be insolvent, and not be a bankrupt. There is a distinction be- tween bankruptcy and insolvency; and the Court of C. B., in the case I have last referred to, forbear to decide whether the con- templation of insolvency only, will prevent a trader from giving a preference to one creditor over another."' § 15. Upon the ground that the question is one of evidence 'Per Story, J., Everett u. Stone, 3 *Per Alexander, C. B., Balme v. Hut- Story, 451 ; Gibson u. Boutts, 8 ton, 2 Y. & J. 101. Scott, 236. ^ Per Kent, Chr., MoMenomy v. Boose- "Beals V. Clark, 13 Gray, 18. velt, 3 John. Ch. 458. ' Pulling V. Tucker, 4 B. & A. 382. See Morgan v. Horsman, 3 Taun. 241. with statements, made at any time, as to the value of this or other property, or statements as to an agreement by which certain machinery was placed in the building of another person. Or the general reputation of the debtor for honesty and integrity. Heywood v. Reed, 4 Gray, 574. As to the legal construction of the statutory language, " reasonable ground to believe himself insolvent," see Holbrook v. Jackson, 7 Gush. 136 ; Denny V. Dana, 2 Gush. 160 ; Butler v. Breck, 7 Met. 164; Lane v. Haynes, 8 Law Eep. 499. (a) Gontemplation, in England, is said to mean the act of bankruptcy ; in the United States, insolvency. Ashby v. Steere, 2 Woodb. & M. 347. CHAP. X.] PREFBRENOB. 337 and of fact, the words contained in an instrument of conveyance, "this is intended to secure them, let our business take what turn it may;" were held proof of a contemplated bankruptcy.' So where a debtor in a state of actual and total insolvency closed his business, and on the same day voluntarily transferred the whole of his property for the purpose of securing a portion of his creditors and indorsers, selected by himself, on notes not then due, to the exclusion of other creditors, on whose claims he was at any moment liable to be sued, and, in seventeen days after- wards, took the benefit of the insolvent laws, without any attempt to prevent his being sued, or to compromise, or in any way to adjust, the claims of any of the other creditors ; held, in the absence of all evidence to the contrary, he must be considered as having acted "under an expectation of becoming an insolvent debtor," that is, with an expectation and intention of taking the benefit of the insolvent laws, and with an intent "to give an undue and improper preference;" and that the party to whom his property was so transferred must account with his permanent trustee ap- pointed under the insolvent laws.^(a) But it is said: "The recent cases have gone too great a length ; they seem to have proceeded on the principle that if a party be insolvent at the time he makes a payment or a delivery, and afterwards becomes a bankrupt, he must be deemed to have contemplated bankruptcy at the time when he made such payment ; but I think that is not correct, for a man may be insolvent, and yet not contemplate bankruptcy."' And, though the vitiating intent may be established by circum- 1 Ogden «. Jackson, 1 John. 374. 'Per Patteson, J., Morgan t. Brun- 2 Dulaney v. Hoffman, 7 Gill & J. 170. drett, 5 B. & Ad. 297 ; aco. Tindal, C. J., in Atkinson v. Brindle, 2 Bing. N. C. 227. {a) In New York, a debtor imprisoned on execution is required, on peti- tioning to be discharged as insolvent, to make oath that he has not, at any time or in any manner, made over any part of his property with view to his or his family's future benefit, nor with intent to defraud or injure his cred- itors. Watson, 2 E. D. Smith, 429. And a debtor, who Is largely insol- vent, and, knowing the fact, converts his property into money, and deceit- fully departs, taking his property with him, beyond jurisdiction, and there loses it, is not entitled to discharge as an insolvent, when the discharge is resisted on these grounds, although he testifies that his intent was to benefit his condition and satisfy his creditors. Ibid. 338 BANKRUPTCY AND INSOLVENCY. [CHAP. X. stantial proof, such proof is entitled to less influence when it is manifest that direct evidence upon the question was in the reach of the party offering it.' Thus A. and B., partners, being in- debted to a bank in the sum of $5000, on the 21st of Feb- ruary, 1832, gave the partnership note at sixty days, secured by sixty-four shares of the stock of the bank, standing in the name of C. This not being paid at maturity, and the partnership in the mean time being dissolved, on the 24th of April they gave a new note in their individual names, payable to the cashier at twenty-eight days, which, on the 25th of June, was paid by C, with money which he admitted, in his answer, he received from A. and B. two days before, but, as he averred, with no knowledge of their business or indebtedness. A. and B. petitioned for the benefit of the insolvent laws in September and October, 1832. The complainant sought the repayment of this $5000 on the ground that it was paid to the bank in fraud of those laws. A., the only witness in the case, proved, that about the 21st of May, 1832, when they had not available means to pay their debts, an arrangement was made by him, B., and clerk, and C, to pay the bank the note in question, out of bills due the firm ; and that the witness objected to this arrangement, because they expected to compound with their creditors, and he did not wish to give a pref- erence to one over another, but to make an equal distribution of assets among their creditors. Held, that this proof was not suffi- cient to establish that this preference was given with a view, and under any expectation on the part of A. and B., of taking the benefit of the insolvent laws, and was therefore void under the insolvent system of Maryland. ''(a) § 16. Unlawful preference implies pre-existing indebtedness ; and a transfer of property or payment of money cannot in gen- eral be avoided, if made for a consideration which first exists or is created at the time of such transfer or payment. I 2 Md. Ch. Deo. 58. ^ Stewart v. Union, etc. 2 Md. Ch. Dec. 58. (a) An absolute sale in contemplation of insolvency, with a design to pre- fer a portion of one's creditors to the exclusion of others, is not an assign- ment of property within the meaning of the Ohio act of 1853, declaring "the effect of assignments to trustees in contemplation of insolvency." Bagaley V. Waters, 7 Ohio, (N. S.) 359. CHAP. X.] PREFERENCE. 339 § 17. The question sometimes arises, whether this rule applies to a transfer founded upon a past consideration, but also upon an agreement, made at the time when the consideration was paid, for such future transfer. And upon this point it has been held, that, where an agreement was made by a party in prosperous circum- stances to transfer specific property as collateral security for ad- vances made, but the transfer was not completed till after he became involved, the transfer was not an act of bankruptcy.' So A., a trader, having a large order from the E. I. Company, and no funds to execute it, borrowed money from B., upon an agree- ment that B. should repay the loan from this source. At the time of the loan B. knew A. to be insolvent, and before the money became due from the company A. was several times arrested, and bailed by B., and thus avoided committing an act of bankruptcy till after the money fell due, when B. received it. Held, not a fraudulent preference.^ But, under the insolvent laws of Massa- chusetts, the giving of a security for a pre-existing debt may invalidate the discharge, although the debtor agreed to give such security when the debt was contracted, it having been in fact given not until afterwards.^ And it seems that an assignment, though made bond fide, of the whole of a trader's stock for the price of a part, not because a trader is obliged under pressure to sell his stock for less than its value, but because an old debt is taken as part of the price, though the moving cause of the trans- fer may be a new advance, is a fraudulent transfer, constituting an act of bankruptcy within the 12 & 13 Vict. c. 106, s. 67. At all events, such assignment is an act of bankruptcy, even without fraud in fact, if it conveys all the trader's property, including the sum advanced, and professes to give the assignee a right to take the trader's future acquired property upon non-payment of his debt within a certain time.^ § 18. The distinction between past and present considerations, as affecting the question of preference, of course has an important bearing upon sales made by a trader in the regular course of busi- ness. In part at least upon the ground that such sales are not made as payment of or security for existing debts, they are usually held valid, although in apparent purpose and actual eflFect 1 Potts, Crabbe, 469. * Graham v. Chapman, 11 Eng. Law & 2 Hunt V. Mortimer, 10 B. & C. 44. Eq. 498. 8Blodgett». Hildreth, 11 Cush. 311. 340 BANKRUPTCY AND INSOLVENCY. [CHAP. X. operating fraudulently and injuriously upon the rights of cred- itors. It is said: "A sale cannot in reason be held to be a fraudulent transfer, unless it takes place under such circum- stances, that the buyer, as a man of business and understanding, ought to suspect and believe that the seller means to get money by it for himself, in fraud of his creditors, and that the sale is made for that purpose ; as for instance, where the buyer, as a man of business, must know that he is purchasing the goods much below their real value."* Thus a retail draper bought on credit, at different times, large quantities of goods. About three months after commencing such purchases, he sold the goods to the defend- ant for money, part at one time and part at another, during the six following months, at about half the cost price of the articles. The sales were real sales, the trader and the defendant each trying to make the best bargain that he could for himself. The trader's object appeared to be to raise money to pay his creditors, and there was no evidence of an intent to decamp with the money. He afterwards became bankrupt, in consequence of this reckless course of dealing. Held, that such sales were not fraudulent transfers, and, consequently, not acts of bankruptcy, within the meaning of the statute 12 k 13 Vict. c. 106, s. 67.^ So B., a trader, being indebted to A., agreed with the defendant, upon his paying £200 to A. in liquidation of the debt, to assign all her goods and effects to him as security for the repayment of the ^£200. The deed contained a power for the defendant to take all the goods of B. which then were, or at any time during the continuance of the security might be, upon the premises, and to sell the same, and repay himself the £200 and interest. There were covenants to pay the £200 by instalments, and that B. should remain in pos- session until default in payment. B., who had remained in posses- sion, sold the goods, and paid £207 to the defendant for principal and interest. Afterwards B. became bankrupt. In an action by her assignees against the defendant to recover the £207, the jury having found that the deed was not fraudulent, nor executed in contemplation of bankruptcy; held, the deed was not an act of bankruptcy, inasmuch as the payment of the £207 by the defend- ant to A. was an advance to B., to enable her to carry on her busi- 1 Smith's Merc. L. 483. a Lee v. Hart, 84 Eng. Law & Eq. 569 ; 28 ibid. 531. See People's, etc. v. Paterson, 2 Stookt. 113. CHAP. X.] PREFEREKCB. .341 ness, and that she derived the full benefit of the whole sum ad- vanced.^ So a transfer of collateral security made in good faith, to secure a present loan, to be used in due course of business, does not come within the act of New York, s. 9, forbidding transfers by insolvent corporations, with intent to give preference. Thus an insurance company is not insolvent, nor does it act in contem- plation of insolvency, merely because it has insured greatly be- yond its capital ; nor when its assets exdeed the amount of all losses of which it has any information or suspicion. Nor under these circumstances does a loan made by the company, and secured by collaterals, for the purpose of meeting its liabilities as they arise, with the belief that it is solvent and will meet all its engage- ments, and in order to sustain it and enable it to do so — the money raised being so applied — an unlawful preference.^ So in Massachusetts, a mortgage given to secure borrowed money, made at the time of the loan, will not avoid a discharge in insolvency under St. 1844, c. 178, s. 8.' So a person intending to take the benefit of the insolvent law may, in the absence of any fraudulent intent, transfer a negotiable note to one who proposes to become surety for the fees ; and the latter may recover it from the maker.* § 19. It is well remarked upon this subject: "If the language of the clause is construed with strictness, it is not the transfer and delivery of the goods, that can be called fraudulent in any sense. The trader is bound to deliver the goods he has sold for valuable consideration, receiving in return for them a fund of equal value, which might be made available for the benefit of his creditors. ... If the transfer and delivery of any part of the property may be by the statute an act of bankruptcy, a trader carrying on business in the ordinary way may be made a bank- rupt by a regular sale in his shop, by proof subsequently obtained that he had a scheme for cheating his creditors of the money, and in that case the unfortunate purchaser must both yield up to the assignees the articles bought, and take his right of proving under the commission."* •Hutton V. Crittwell, 16 Eng. Law & 'Williams v. Coggeshall, 11 Cush. 442. Eq. 121. *Fogg V. Willcutt, Law Rep., May— ^Holbrookj). Basset, 5 Bosw. 147; Nel- 48, p. 31— Mass. Sup. C. son V. Wellington, ibid. 178. See ^pgr Dennian, C. J., Baxter v. Pritch- Curtis V. LeaTitt, 15 N. Y. 9. ard, 1 Ad. & Ell. 456. 342, BANKRUPTCY AND INSOLVENCY, [CHAP. X. § 20. It is the general rule, that a transfer is not void as a fraudulent preference in contemplation of bankruptcy, where it is not voluntary, but procured by the pressure of the creditor, or by measures taken by him for the enforcement of his debt.^ It is said, the distinction "between a voluntary transfer in contempla- tion of bankruptcy, and a transfer either voluntary but not in contemplation of bankruptcy, or in contemplation of bankruptcy but involuntary and under the pressure of threat or compulsion, is the distinction upon which all the modern cases turn."^ So it is said: "There is not a case to be met with, which denies this position, that if even an act of bankruptcy be contemplated by the debtor, yet if, at the instance, and on the application of the creditor he makes payment, or assigns property, such payment or assignment is valid, as against the assignees of the bankrupt."* So it is held that the preference of a creditor is not the payment of one in the ordinary course of business, or under threats or suits, but selecting one, as a relation or friend, or settling with him be- fore the debt is due, or on the eve of bankruptcy, when not pushed by him.^ And pressure does not require legal proceedings.' It is sometimes expressed by the terms, "urgency and importunity — diligence in fact, or diligence in law."* § 21. Upon this ground, a bank, even in contemplation of in- solvency, may meet all demands upon it until the day it suspends payment ; but, if a creditor is not diligent in making a demand, he cannot be preferred.'^ So on the 19th of November, 1846, A. and B., traders and partners, sold out their entire stock in trade to C, their brother, and took his promissory notes therefor. On the 27th, the property was attached by creditors of A. and B., resident in other States, on suits commenced in the Circuit Court 1 Hale V. Allnutt, 36 Eng. Law & Eq. R. 680 ; Belcher v. Prittie, 10 Bing. 383 ; People's, etc. v. Paterson, etc. 408 ; Reynard v. Robinson, 8 M. & 2 Stookt. 113. See Caines v. Bris- So. 127; Gibson v. Boutts, 3 Scott, ban, 13 John. 9; Hartshorn ». Sled- 237 ; Cook v. Rogers, 7 Bing. 438; den, 3 B. & P. 583; Crosby v. Fidgeon d. Sharpe, 5 Taun. 539. Crouch, HE. 262, (leading cases ;) ^ Smith's Merc. L. 481-2. Haldeman v. Michael, 6 W. & S. 'Per Spencer, J., Phoenix u. Ingra- 128; Morgan v. Brundrett, 5 B. & ham, 5 John. 428. Ad. 289; Atkinson -o. Brindall, 2 * Aahby v. Steere, 2 Woodb. & M. 347. Bing. N. 226 ; Hunt v. Mortimer, 10 ^ Green v. Bradfield, 1 Car. & Kir. 350. B. &C. 44; Ridley t). Gyde, 9 Bing. oper Burrough, J., Arbouin v. Han- 349; Scott V. Thomas, 6 C. & P. bury, Holt, N. P. 575. ml; Thompson «. Freeman, 1 T. '2Stockt. 113. E. 165 ; Doe v. Gillett, 2 Cr. M. & CHAP. X.] PEEFBRBNCB. 343 of the United States. On the 3d of December, an arrangement was made, in pursuance of which, the attaching creditors dis- charged their attachments, and the notes of 0. were placed in the hands of the defendant, as a trustee, to receive the amount thereof, and, out of the proceeds, to pay such attaching creditors seventy-five per cent, of their demands, and, if there should be any surplus remaining, to divide the same among certain other creditors of A. "and B., who had consented to such arrangement, in proportion to their respective demands. On the 23d of De- cember, A. and B. took the benefit of the insolvent law, and on the 4th of January, 1847, a conveyance of all the estate was made to the plaintiff, as assignee. In an action of trover by the plaintiff, as such assignee, to recover the value of the notes, it was held that the transfer of the same, by the insolvents, to the de- fendant, was not void, as an intended preference of a pre-existing creditor, in contravention of the act of 1841, c. 124, s. 3.' It was remarked by the Court : " Before the right of the plaintiff, as assignee, accrued, the insolvents had disposed of their notes to a holder for value, as a trustee for those who were proceeding by compulsory measures to enforce payment of their debts, with a reasonable chance of success. Such transfer was made as a com- position, by which satisfaction of the whole was obtained by means of a payment of part, and to relieve themselves from the pressure of a claim, which, if it could be successfully enforced, would have deprived them of all control and benefit both from the goods and notes. "^ So where a debtor intends, voluntarily, and in contem- plation of bankruptcy, to make a conveyance to a creditor, and does the first act towards such conveyance, but before its con- summation the creditor takes measures to enforce payment, the transfer is good. As where a debtor put checks into the hands of his clerk, to be delivered at the creditor's counting-house, which was done, but they did not reach the creditor till after he had de- manded payment. So where a creditor, knowing the debtor to be embarrassed and insolvent, demanded security about two months before his bankruptcy, and received a conveyance of part of his stock ip trade, although the creditor did not threaten a suit; the conveyance was held good; more especially as the bankrupt made » Perkins v. Webster, 2 Gush. 480. ^Ver Shaw, C. J., Perkins v. Webster, 2 Gush. 485. 344 BANKRUPTCY AND INSOLVENCY. [CHAP. X. oath to the fairness of the transaction, and that he did not at the time contemplate bankruptcy.^ § 22. There is a class of cases, however, which deny the doc- trine, that mere pressure or compulsion, or the absence of it, will determine the validity of a transfer or payment. The importunity must not be colorable.^ And it is said : " The motives and inten- tions of the bankrupt may be material or immaterial, or, to speak accurately, may be more or less material, according to his situa^ tion, to the nature of the threat, and the degree and period of urgency by the creditor."^ So it is said, to constitute a convey- ance^an act of bankruptcy, "there should be two ingredients — fraud, and the delay of creditors. The bill of sale was given by the bankrupt of his own will, and not on pressure or demand ; but it was not, therefore, necessarily fraudulent ; it was incumbent on the plaintiff to show fraud aliunde. If the party so securing the debt had been solvent, the transaction could not have been deemed fraudulent, although it might have the effect of delaying other creditors."* And on the other hand, showing compulsion in some cases to be rather a ground for regarding the conveyance as an act of bankruptcy, than as giving it legal validity, it is said: " This question arises upon the validity of a deed of sale of all his goods and stock in trade, made by a trader under arrest at the suit of the vendee, there being then another writ out against him. The trader was in insolvent circumstances, and known to himself to be so at the time. Now the execution of such a bill of sale, under these circumstances, has in all the cases been consid- ered, primd facie at least, as fraudulent."® So the Court in Massachusetts remark : "The effect of such a doctrine would be, that if a creditor should adopt the old expedient of an attach- ment on mesne process, and should thereby acquire a lien on the debtor's whole property, and an inchoate right to appropriate it entirely to himself, he might do so, provided the debtor would confirm it by a more permanent lien, if bis motive was thereby to acquire a future advantage to himself, by being assured of the hope of further advances; whereas the insolvent law provides, iBayleyu.Ballard,! Camp. 416; Smith * Per Bayley, J., Gibbons «. Wiillips, 7 0. Payne, 6 T. E. 152. B. & C. 534. ^Arbouin «. Haiibury, Holt, N. P. 576; 'Per Lord EUenborough, Newton v. Crosby v. Crouch, 11 E. 262. Chantler, 7 E. 143; ace. Butcher i>. 'Per AlJerson, J., Cook v. Rogers, 7 Easto, Doug. 294. Bing. 438. CHAP. X.] PRBFERBNOE. 345 that such attachment itself, if made in collusion with the debtor, shall be void; and, whether collusive or not, shall be void in favor of the general creditors, as soon as a proceeding in insol- vency commences."' § 23. For these reasons, where a trader, whose goods had been seized under a,fi.fa., executed a bill of sale of them to the defendant, who paid out the sheriff, and the jury found that the object of the transaction was not merely to relieve the trader from a forced sale, but to protect the goods from other creditors ; held, the sale was void under the 18 Eliz. c. 5, and an act of bank- ruptcy.^ So, where creditors expressed to a debtor their determ- ination to obtain either payment or security, and he thereupon conveyed to them his whole stock, and immediately quit his house and business ; it was held that the law would not intend that such conveyance was induced by the urgency of creditors ; because, if they had taken out immediate process against him, he could have been placed in no worse situation than that in which he placed himself by the transfer.' § 24. Upon the grounds that a party is not supposed to contem- plate remotely future events, and that the law cannot practically pronounce a transfer to be fraudulent or otherwise, except with reference to a state of affairs nearly coincident in time with such transfer ; an express exception is usually made, in bankruptcy and insolvency statutes, in relation to preferences, of all payments and conveyances which may occur more than a specified period prior to the enactment of the law, or the act or proceeding by which a party becomes subject to its operation. Thus the act passed April 4, 1800, s. 1, provided, that "from and after the 1st day of June, then next, if any merchant should, with intent un- lawfully to delay or defraud his creditors, make any fraudulent conveyance, etc., such person shall be deemed and adjudged a bankrupt." By s. 17, where property was conveyed with intent to defraud creditors prior to the party's becoming a bankrupt, the commissioners were to assign such property. But in the absence of any express retrospective provision as to conveyances merely in contemplation of bankruptcy, a conveyance to secure ' Per Shaw, C. J., Denny v. Dana, 2 ^ Graham v. Furber, 25 Eng. Law & Cush. 170. Eq. 273. 8 Thornton v. Hargreaves, 7 E. 544. 346 BANKKUPTCT AND INSOLVENCY. [CHAP. X. a particular creditor, in pursuance of a previous contract to do so, made prior to June 1, was held valid.^ So the words "future conveyances" in the late bankrupt act were held to mean those subsequent to its taking effect. Hence a valid assignment for the benefit of creditors, prior to that time, was not affected by the act.^ So, under this act, a sale to a creditor made more than thirteen months before filing a petition, if lond fide, and without knowledge that the seller contemplated going into bankruptcy, was held valid. Though such sale, if made as a preference, and in contemplation of bankruptcy, might prevent a discharge, and be an act of bankruptcy.^ But, on the other hand, a voluntary assignment for the benefit of creditors, made after the passage of the bankrupt law of 1841, although before it went into operation, and preferring some creditors to others, was held a fraud upon the law, and an assignee appointed under it entitled to recover the property assigned.* So the discharge may be impeached, by prov- ing unlawful preferences and payments, made in fraud of the act, between the day when it was passed, and the day when it took effect.^ So the section of the act, providing that all bond fide dealings and transactions with' the bankrupt more than two months before the petition shall be valid, provided the other party had no notice of a prior act of bankruptcy, or of the bankrupt's intention to take the benefit of the act, is held to apply only to the ordinary dealings, in the common course of business, where payments, securities, conveyances, and transfers are made between the parties. It does not apply to a conveyance notoriously made for preference, voluntarily, and more especially without the knowledge or co-operation of the grantee, and without considera- tion. ° § 25. The question of time arises, in connection with a transfer of property to be subsequently acquired by the debtor, and the taking possession of the property, or registration of the instru- ment of conveyance. Thus the bankrupts, resident in Boston, 1 M'Menomy v. Roosevelt, 3 John. Ch. ' Ashby v. Steere, 2 Woodb. & M. 347. 446. See Taylor, 35 Eng. Law & * Cornwell's Appeal, 7 Watts & Serg. Eq. 166 ; Bevan v. Nunn, 9 Bing. 805, But see n. 2. 107. 6 Swan v. Littlefield, 4 Cush. 574. » Weiuert). Farnum, 2 Barr, 14G, (over- e jjverett «. Stone, 3 Story, 451-2. See ruling Oornwell, 7 W. & S. 305;) Gray v. Schroeder, 2 Strob. 126; Hutohins v. Taylor, 6 Law Rep. Branden v. Qowing, 7 Rich 459. 289. CHAP. X.J PEEFBRBNCE. 347 some months previous to their bankruptcy, conveyed, by bill of sale, not recorded, as collateral security, for a debt of $2000, one- half of a vessel, at sea, of which the other half was owned by the master, who was of Bath, and agreed to assign all future policies of insurance thereon, as further security, which was done, it being agreed that the mortgagors might use the vessel for their own benefit till default of payment. Prior to the commencement of bankruptcy proceedings, the vessel came once to Boston, and twice to Bath, but the mortgagees did not take possession. Five days before the filing of the petition, they sent notice of the bill of sale to the master. After the bill of sale, one of the mort- gagors made oath at the custom-house, that the vessel belonged to them. The mortgaged moiety of the vessel having been sold by the assignee ; held, the proceeds should be paid to the mort- gagees. Under the circumstances, one part-owner having posses- sion of the vessel at sea, no delivery was practicable, even as against creditors or subsequent purchasers ; and in reference to the assignee in bankruptcy, who succeeds, in general, only to the rights of the bankrupt himself, none was necessary. And, it seems, as against the assignee, it was not necessary that the mort- gage should be recorded, nor did the transfer take effect only when the mortgagees took possession, so as to raise the question whether the transaction was not in contemplation of bankruptcy; but it took effect at the making, and the taking possession was a mere assertion of title.' So the assignee of a bankrupt cannot claim personal, property acquired by him after the execution of a mortgage, which included property afterwards to be acquired, of the same description with other property then in existence ; more especially the mortgagee having taken possession before the com- mencement of bankruptcy proceedings.^ So a mortgage of per- sonal property, executed and delivered before the issuing of the warrant, and not recorded till after the property is taken posses- sion of by the messenger, but before the first publication of the notice of the issuing of the warrant, is valid against the assignee.* But where a debtor, without the knowledge of his creditor, exe- cuted, and caused to be recorded, a mortgage of personal prop- erty to secure the debt, and appointed a third person to act in the 1 Winsor v. M'Lellan, 2 Story, 492. ' Briggs v. Parkman, 2 Met. 258. 2 Mitchell V. Winslow, 2 Story, 630. 348 BANKEUPTCT AND INSOLVENCY. [CHAP. X. mortgagee's behalf; and after a subsequent assignment of the debtor's property, under the statute, he delivered the mortgage to his creditor, who accepted it ; held, the mortgaged property passed to the assignees.' § 26. The general principle of unlawful preference is some- times applied even to voluntary assignments in favor of creditors generally. Thus, in Massachusetts, an assignment made by part- ners of all their joint property, to a trustee, to be distributed among the creditors of the firm who shall become parties, in the same manner as it would be by the insolvent law, and which pro- vides for a discharge, and authorizes the assignee to pay off all liens, is void, as against a creditor not a party. The grounds of this decision were, 1. That only partnership property was assigned, while partnership debts were to be discharged; thus exempting individual property from its liability for such debts. 2. Liens were preserved, while by insolvency proceedings they are dis- charged. 3. No provision was made against unlawful preferences. 4. The assignees were not to be appointed by the creditors, and the right of creditors to control insolvency proceedings was in various ways superseded. 5. The administration of an insolvent estate was thereby taken from magistrates appointed by law for that purpose. And, in general, " its whole character is opposed to the policy, spirit, and principles of the insolvent laws, which repeal all laws inconsistent with their provisions."^ So a convey- ance by a trader to trustees, though for the benefit of all his creditors, and though the property has never passed out of his hands, is an act of bankruptcy.^ Even though a proviso is in- serted, that it shall be void if the trustee think fit, or if all cred- itors above ^20 should not execute, or a commission of bank- ruptcy should issue within a certain time.'* So though the trustee does not execute it.° More especially a voluntary assignment for the benefit of creditors, made after the passage of a bankrupt law, which gives a preference to one creditor over another, has been held a fraud upon that law ; and assignees in bankruptcy entitled 1 Dole ». Bodman, 3 Met. 189. * Tappenden v. Burgess, 4 E. 230 ; Dut- 2 Wyles V. Seals, 1 Gray, 283. ton v. Morrison, 17 Ves. 190. s Botoherby v. Lancaster, 1 Ad. & El. 5 Simpson ». Sikes, 6 M. & S. 312. But 77 ; Kettle v. Hammond, Co. B. L. see Greenwood v. Churchill, 1 My. 100; Eohardt v. Wilson, 8 T. B. & K. 546. 140; Stewart v. Moody, 1 Cr. M. & E. 777. CHAP. X.J PEBFERBNCB. 349 to the property so transferred.* And a fraudulent deed of assign- ment, if the express assent of the preferred creditors is not shown, is a mere power, subject, like other powers, to revocation, and is revoked by bankruptcy of the grantor. The property vests in the assignee in bankruptcy, and it is the duty of the bankrupt, if he retains the property, to surrender it.^(a) Biit where proceedings in bankruptcy were commenced by a creditor against his debtor, but, before any decree of bankruptcy, they were withdrawn, upon the debtor's making an assignment of his 'Cornwell's Appeal, 7 Watts & Serg. ^^ Ashley v. Robinson, 29 Ala. 112. 305. But see p. 346. (a) "Where an insolvent in New York, in contemplation of obtaining a dis- charge, confessed a judgment, on which his property was sold, his discharge was set aside as fraudulent in law, though the judgment was confessed to a trustee, for the benefit of all his creditors, without preference. Hurst, 7 Wend. 239. A. being embarrassed, it was agreed, at a meeting of his creditors, to accept a composition of 12s. in the pound, 10s. to be secured by bills ac- cepted by B., and the remaining 2s. to be secured by A.'s note. A. agreed to secure B., by assignment of his property. On the 10th October, 1854, a composition deed accordingly was made between A., B., and the creditors of A. who should sign within a certain time, to be void unless executed by six-sevenths of the creditors, with a covenant not to sue A. until default in payment of the bills and note, or any of them. The bill for the first instal- ment having been dishonored, 0., one of the creditors and one of the present defendants, sued A. on the original debt, and B. on the bill. A. withdrew his pleas, and gave 0. judgment for the amount of his claim, less the first instalment, which B. paid. By deed of the 3d March, 1855, A. assigned the whole of his stock and property to B., as security for the sums which he had paid, or might pay, to the creditors of A. upon the bills. In trover by A. against his assignees; held, that there was a good petitioning creditor's debt, (being the judgment debt, it seems ;) for, first, though the composi- tion deed was not void by reason of any concealment from the creditors of the fact that the whole of A.'s property was to be assigned to B., and therefore the debt was suspended, it remained, and, upon default in payment of the instalment, the right of suing for it revived; and, secondly, the judg- ment obtained by 0. was conclusive, and was an acknowledgment by A. that he still owed the debt. Also, that the assignment to B. was an act of bank- ruptcy ; for a transaction, whereby the property of a trader is conveyed to secure a surety to a composition deed against liabilities which he has in- curred to the particular creditors who may come in, and which surety can stop the trade at any moment, is not a case where the trader receives an equivalent. Leake v. Young, 36 Eng. Law & Eq. 188. 350 BANKBTJPTCT AND INSOLVENCY. [CHAP. X. property for the benefit of all his creditors, some of the creditors not concurring in the arrangement; held, the assignment was nevertheless valid.'(a) And if a debtor in failing circumstances call a meeting of his creditors, and propose to give up all his property, to be equally divided, not asking a discharge, but prom- ising to pay the balance when able; it is held that a creditor out of the State, who was not present at the meeting, cannot avoid this agreement, and charge one who has received money under it as trustee of the debtor for his whole debt. Such a transaction is not a fraud upon the insolvent law.^ § 27. An assignment of property, which is declared by a bank- rupt act to be void, and a fraud upon that act, is void as against those persons only who claim by virtue of proceedings under the act.^(J) Thus an assignment made in contemplation of bank- ruptcy, and for the purpose of giving preferences, is only void as against an assignee under the bankrupt act, but valid for the pur- pose of enforcing performance of the trust, or as against a cred- itor seizing the goods by process of law.* It is said: "It would be contrary to every principle of equity to permit a trustee, who has received the property of a debtor in trust to apply it to the payment of creditors, to set up the defence of fraud, in making and receiving the transfer, as a defence to a suit brought by them to compel a performance of the trust, without showing that the fund had been recovered from him by the parties intended to be defrauded, or even that they had ever made any claim to it."' This was a case where the bankrupts made a conveyance, fraud- ulent under the bankrupt law, and itself an act of bankruptcy, 1 Hastings v. Belknap, 1 Denio, 190. •* Seaman v. Stoughton, 3 Barb. Oh. 2 Adams v. Blodgett, C. C. Mass. Law 344 ; Dodge v. Sheldon, 6 Hill, 9. Rep. June — 47, p. 69. ^ Per Walworth,Chr., Seaman o.Stough- •> Atkins V. Spear, 8 Met. 490 ; Dodge ton, 3 Barb. Ch. 348. V. Sheldon, 6 Hill, 9. See Penniman V. Cole, 8 Met. 496; Burt v. Perkins, 9 Gray; Cutl. Ins. L. (3d ed.) 87. (a) See Case of "Woodward, 1 Ashmead, 107 ; Case of Oliver, ibid. 112 ; Lyall V. Miller, 6 M'L. 482. (&) The converse of this rule, however, does not seem equally true. Thus the mortgage of a homestead, exempted from execution by statute, is invalid as against the assignee in insolvency, if at the time it is made the insolvent owes debts contracted before the insolvent law was passed. Beals v. Clark, 13 Gray, 18. CHAP. X.] PREFERENCE. 351 to sureties and indorsers, and judgments were afterwards recov- ered upon the debts thus secured. The assignee claims the prop- erty as against both the levies and the conveyances. Judgment was rendered for the plaintiff; in part upon the ground, that the transfers were valid against the bankrupt himself, and also against creditors generally, unless fraudulent at common law, and not merely in view of the bankrupt law. It is said : " If they are to be treated as fraudulent at all, they are so only under the bankrupt act; and the judgment creditors cannot protect themselves, by attempting to avail themselves of such a fraud, under the bankrupt act, to defeat the very policy of the act it- self." Moreover, " these very conveyances were not only a fraud upon the bankrupt act, but they were actually acts of bankruptcy, for which proceedings might be had under the bankrupt act in in- vitum; and as acts of bankruptcy, the title of the bankrupts became thereby subject to the operation of the bankrupt act, and was divested eo instanti, by relation, when and as soon as the debtors were declared bankrupts, and an assignee was appointed. His title would overreach that of any subsequent attaching cred- itors."* So, in Massachusetts, the provision in the insolvent laws, that a debtor's conveyance of his property, in contemplation of insolvency, with intent to give a preference to any creditor, shall be void as to his other creditors, and that his assignees my recover the property so conveyed, or the value thereof, from the creditor so preferred, for the benefit of the other creditors, has not so altered the common law respecting fraudulent conveyances as to render such conveyance void as to an attaching creditor.^ So a transfer of property by a debtor to a creditor, with view, or under the expectation, of becoming an insolvent, is made void by the Maryland act of 1812, c. 77, s. 1, only for the purpose of vesting the property in the trustee of such debtor, for the benefit of his general creditors.* And the act of 1854, c. 193, makes void judgments, decrees, conveyances, and assignments for fraud, or for giving undue preferences, in such cases only of insolvency where there has been a petition for the benefit of the act.^ § 28. A mortgage void in part, as contravening the insolvent •Per story, J., Everett v. Stone, 3 ^Penniman ». Cole, 8 Met. 496. Story, 464-5; ace. Doe v. Britain, 'Harding v. Stevenson, 6 Har. & J., 2 B. & Aid. 93. See Doe v. Ball, 264. 11 Mees. & W. 531. * Treibert v. Burgess, 11 Md. 452. 352 BANKKTJPTCT AND INSOLVENCY. [CHAP. X. law, is wholly void.^ And if a creditor, who has received a con- veyance of property from an insolvent by way of preference, brings an action for it against the assignee, he cannot recover the sum paid by him to the debtor as the difference between the debt and the value of the property.^ But if a mortgage of personal property is foreclosed, and the assignee of the mortgagor avoids the mortgage, and recovers the property or its value from the mortgagee; the foreclosure is no satisfaction of the mortgage debt.^ So an insolvent made a valid mortgage by deed and de- feasance, recorded, to A., and gave the defeasance to B., another creditor, who, by arrangement with all parties in interest, paid A.'s debt, and took a deed to himself, giving the insolvent a new defeasance for both debts. The assignee of the insolvent brings a writ of entry against B. Held, B.'s title was valid, so far as to secure the sum paid to A., and that the assignee's remedy was a bill to redeem.*(a) 1 Denny ». Dana, 2 Cush. 160. ' Whitney v. Willard, 13 Gray, 203. 2 Bartlett v. Decreet, 4 Gray, 111. * Judd v. Flint, 4 Gray, 557. (a) The following miscellaneous cases further illustrate the nature and degree of the invalidity which attaches to a conveyance made by way of preference : — In Connecticut, a fraudulent conveyance of property will not preclude the debtor from obtaining his discharge, under ti Connecticut act, tit. 52, p. 282, where such property has been reconveyed to him before the service of his petition, and applied by him to the payment of some of his creditors. Middlebrook v. French, 4 Conn. 1. In a suit by the creditors of a bankrupt, against his fraudulent grantee, for an account of property conveyed in fraud of creditors, they are entitled to an account of the rents and profits only from the time when the act of bankruptcy was committed. Sands v. Codwise, 4 John. 536. A debtor having been declared a bankrupt, a conveyance previously exe- cuted by him was declared fraudulent and void as to creditors. Held, an inter- vening judgment was a lien upon the land. Codwise v. Gelston, 10 John. 507. An assignee of an insolvent debtor may afiBrm a sale of goods made by such debtor for the purpose of delaying or defrauding his creditors, and receive the price from the vendee ; and if such assignee, knowing all the facts of the case, brings an action against the vendee on a note given by him for the price, and secures the demand by an attachment, he thereby so far affirms the sale, and waives his right to disaffirm it, that he cannot, by discontinuing such action and demanding the goods, entitle himself to main- tain an action of trover against the vendee on his refusal to return .them. Butler V. Hildreth, 5 Met. 49. CHAP. X.] PRBPEKENCB. 353 § 29. Since, at common law, a debtor in failing circumstances has an unquestionable right to secure one creditor to the exclu- sion of others, either by payment or a bond fide transfer of his property, the onus probandi is upon the party who seeks to dis- turb such preference, to show that it is prohibited by the bank- rupt or insolvent system of the State.^ Direct evidence is not necessary, but facts and circumstances may be relied on to show the intent with which the transfer was made. But when, by answer or evidence, the debtor denies the intent attributed, very strong evidence is necessary to countervail such answer or evi- dence.* The inference must be a fair and justifiable one from all the facts.* Thus in New York, under 1 Rev. Sts. 591, s. 9, for- bidding any corporation, when insolvent, or in contemplation of insolvency, to make any transfer or payment with the intent to prefer any particular creditor, the intent to prefer must be alleged and proved, and cannot be inferred from the mere fact that, at the time of such transfer, the corporation was insolvent.* § 30. When a discharge is pleaded, and a particular act of preference replied by way of avoidance, evidence of previous con- veyances to other persons, not specified in the replication, is admissible, to show the state of the defendant's property at the time of the alleged preference.* So the declarations of the par- ties to an assignment, made at the time, are admissible as part of the res gestae, to explain the motives and circumstances.® So where a plaintiff, for the purpose of avoiding a discharge of the defendant under an insolvent law, relied on by him as a bar to the plaintiff's action, introduces a witness, who testifies that the defendant, on the evening before he applied for the benefit of that law, transferred property to the witness in payment of a pre- existing debt; the defendant is entitled to prove, on cross-exam- ination, the declarations made by him to the witness, at the time of such transfer, for the purpose of showing that it was not made by him in contemplation of becoming insolvent and obtaining a discharge.'^ § 31. Preference may be effected under the form of legal pro- 1 Stewart v. Union, etc. 2 Md. Ch. Dec. * Curtis v. Leavitt, 15 N.Y. (1 Smith,) 9 68. 6 Pettee v. Coggeshall, 5 Gray, 61. 2 Brooks V. Thomas, 4 Md. Ch. Dec. 15. « Powlea v. Dilley, 9 Gill, 222. > Powles V. Dilley, 9 Gill, 222. » Goodhue v. Hitchcock, 8 Met. 62. 23 354 BANKKUPTCY AND INSOLVENCY. [CHAP. X. cess, as well as transfer or payment in pais. Upon this subject it is held, that procuring a friendly suit, in order to be turned over from one prison to another, or a voluntary or feigned action, or an arrest on a sham debt, is an act of bankruptcy.* So pro- curing property to be taken by attachment or execution was held to come within a provision against preferences by "assignment, sale, transfer, or conveyance."^ But not payment of money.' So where a bankrupt was insolvent on the first day of February, 1842, the day the bankrupt law went into operation, and made a voluntary confession of judgment on that day in favor of one of his creditors, for a sum in damages exceeding the value of all his attachable property, and all his property was taken the same evening, by virtue of an execution upon such judgment, and after- wards was sold thereon, and this was done by the bankrupt for the mere purpose of compelling another of his creditors to make a deduction in the rent of a certain farm, which the bankrupt then occupied as his tenant, and which rent was to become due March 1st, 1842, and, if that could not be effected, then to defeat Entirely the debt of that creditor, the debtor contemplating bankruptcy as the ultimate resort; and the petition in bankruptcy was filed March 30, 1842 : the district court refused to grant to the bankrupt his discharge, notwithstanding the debt, upon which the judgment was confessed, was actually due at that time to the creditor in whose favor the confession was made.* § 32. A power of attorney to confess a judgment, in a State where such judgment constitutes a lien, followed by such confes- sion, and a notification thereof, is a security made void by the second section of the act of 1841.° It is said by the Court : "By the law of Ohio, a judgment creates a lien on the real estate of the judgment debtor, and the levy of an execution creates one on his personal estate levied on. A power of attorney to confess a judg- ment, whenever a judgment is taken under it, does in fact operate to create a security upon the_ debtor's real estate ; and when an execution issues on that judgment, to create a lien on the personal estate levied on. It is true these liens arise by operation of law, from the judgment and execution, and its levy, which are the acts 1 Green, 43 ; Esp. Dig. 556 ; ClaTey v. » Wall ». Lakin, 13 Met. 167. Haley, Cowp. 429. * Chase, 22 Vt. 649. a Lane v. Haynes, 8 Law Rep. 499. 6 Buckingham v. McLean, IB How. 151 CHAP. X.] PREFERENCE. 355 of officers of the law, and not of the debtor. But the power of attorney is designed to, and does, produce those acts, which de- pend upon it for their validity, and therefore through those acts does create the security. The operation of law is always neces- sary to give effect to any form- of security, which indeed is but the legal consequence of the act of the party."* § 33. But independently of statute, a fraudulent judgment and execution, though void against creditors, are not per se an act of bankruptcy.* So where a debtor, in contemplation of taking the benefit of the bankrupt act of 1841, confessed judgment to his creditor, to give him a preference, the creditor being in no way a party to the fraudulent transaction ; such judgment is not suffi- cient to avoid the title of the creditor to the real estate of the debtor, purchased at a sale under execution on such judgment.' And the confession of a judgment to a creditor, with a view to prefer him, is not invalid under the bankrupt law of 1841, if it be not voluntary, but the effect of measures taken by the cred- itor, or in his power to take ; and the burden is upon the party seeking to avoid the transaction, to show that it was voluntary.* So a judgment by confession is not void because confessed only ten days before the filing a petition, by the defendant, to be de- clared a bankrupt. It must have been confessed in contempla- tion of bankruptcy, voluntarily, and with a view of giving a par- ticular creditor a preference over the general creditors. And where a defendant confessed judgment after suit instituted, and stipulated for delay, the confession, under such circumstances, repels the conclusion that the confession was voluntary, or made with a view to prefer such creditor." So a power of attorney to confess a judgment is not in itself an act of bankruptcy, as a procuring the party's goods to be taken in execution; unless made willingly — as where it was made under strong pressure of creditors, and the threat of a suit if he did not comply.' So the permanent trustee of an insolvent debtor filed a bill to set aside a judgment confessed by the insolvent before applying for a release under the insolvent laws, alleging that it was intended to give the 1 Per Curtis, J., Buckingham v. Mc- * Haldeman u. Michael, 6 Watts & Lean, 18 How. 166. Serg. 128. 2 Clavey v. Haley, Cowp. 427. 6 Taylor v. Whitthorn, 5 Humph. 340. ' Fenelon v. Lonergan, 29 Penn. 471. * Buckingham v. McLean, 13 How. 171, 356 BANKRUPTCY AND INSOLVENCY. [CHAP. X. plaintiff an undue and improper preference, and that the debtor then contemplated applying for the benefit of the insolvent laws. The trustee made the debtor a witness, who swore that he did not confess the judgment with a view of taking the benefit of the insolvent laws; and, there being no opposing evidence on the record, it was held, that the transaction was not avoided by the insolvent laws, and being bond fide, and for a valuable considera- tion, was good at common law, and must be sustained.'' So it is held that a judgment or preference in fraud of the act can be set aside only in the court where the bankrupt proceedings are had. The bankrupt act declaring preferences void prescribes how bank- rupts' estates shall be administered in such court, but not the rights of parties elsewhere.^ § 34. It is generally provided, that, whatever eflFect a preference may have upon the rights of the bankrupt or insolvent himself, the preferred creditor shall not lose the benefit of the conveyance, unless he had express or implied notice of the debtor's condition. § 35. Information that another person was generally consid- ered insolvent, that this was the general opinion in the neighbor- hood, with the knowledge that he was selling his goods by consent of the creditors, is, in contemplation of law, notice of insolvency;* § 36. Bill in equity in the United States Court, alleging that one Brandon had been decreed to be a merchant and trader, and to have committed acts of bankruptcy by a -fraudulent conveyaace in trust and by secreting himself, and was therefore decreed a bankrupt, November 22, 1842 ; that the plaintifi" was appointed his assignee; that the defendants, having notice of the acts of bankruptcy, April 6, 1842, filed a bill in the State coi;irt, charg- ing that the conveyance was void, and it was accordingly decreed to be void, and the property ordered to be sold for the benefit of the defendants, and since the decree in bankruptcy they had sold it ; and praying relief. The answer admitted the execution of the conveyance, but denied any act of bankruptcy, and that Brandon was a bankrupt before the decree against him. Held, the decree in the United States Court was sufficient evidence, as against the present defendants, of the bankruptcy ; that the conveyance was > Hickley v. Farmers', etc. 5 Gill & J. 'Brooks v. Thonifts, 8 Md! 367. See 377. Devas v. Vtnables, 8 Bing. N..400. : fenelon v. Lonergan, 29 Fenn. 471. CHAP. X.] PREFERENCE. 357 an act of bankruptcy, of which by their own showing the defend- ants had notice; and therefore they did not thereby acquire a lien which was saved by the proviso in the second section of the bankrupt law ; such lien in the present case being inconsistent with the second and fifth sections.* And in New York, con- trary to the general rule, under the act to prevent insolvency of moneyed corporations, 1 Rev. Sts. 591, s. 9, a payment or transfer by such corporation, actually insolvent, or in contem- plation of insolvency, with intent to give a preference, is void, though the party receiving the payment had no knowledge of the condition of the corporation, and no intent to secure a prefer- ence.* But sect. 1 of c. 293 of the act of Maryland, 1834, rela- tive to conveyances by insolvents, does not apply to cases where the grantee had not notice of the insolvency of the grantor. And the notice which will vitiate the deed must be an actual notice, derived from a knowledge of the condition of the grantor.* So personal property legally assigned as security may be validly taken possession of by the creditor after he knows the debtor has become insolvent.* So where a mortgage of personal property was made by A. to B., fraudulent and void as to A.'s creditors, to secure payment, in six months, of a debt of A., then due and payable to C, who had no knowledge of the mortgage when it was made, and B., before the six months elapsed, sold the prop- erty at auction, and applied the proceeds of the sale to the pay- ment of A.'s debt to C, and A. afterwards applied for the benefit of the insolvent act of 1838, c. 163, and his property was assigned under that act ; it was held, that his assignee could not recover of B. the proceeds of the mortgage property.* § 37. In order to show that a creditor had no reasonable cause to believe the debtor insolvent, it is competent to prove his good reputation for property in the town where he did business ; or his pecuniary standing among his neighbors and those dealing with him.' So, to show that a mortgagee had reasonable cause to be- lieve the debtor insolvent, a witness may be asked whether, at the 1 Sha-whan v. Whepritt, 7 How. 627. * Mitchell v. Black, 6 Gray, 100. 2 (Gardiner, C. J., and Edwards, J , ' Crowninshield v. Kittridge, 7 Met. disseniing,) Brouwer v. Harbeck, 520. 5 Seld. 589. ^Bartlett v. Decreet, 4 Gray, 111 ; ' Falconer v. Griffith, 3 Md. Ch. Dee. Hey wood v. Keed, 4 Gray, 574. 151. 358 BANKRUPTCY AND INSOLVENCY. [CHAP. X. date of the mortgage, it was not known in the cotnmunity that his business was a ruinous one to those who followed it. But not whether, from his knowledge of the debtor, his business was profitable.^ And for the same purpose it may be shown that the debtor was reputed to be insolvent in the town where he resided.^ § 38. It is the general rule, that a bankrupt or insolvent can- not legally secure to a particular creditor any sum of money in consideration of such creditor's assent to his discharge. The payment of money or giving security to a creditor, to induce him to sign a bankrupt's certificate, vitiates the discharge.^ So a bond given to a creditor, to induce him to withdraw a petition which he had preferred to the chancellor against the allowance of the certificate, is void.^ So where, between the second and third meetings, a bankrupt gave his note to a creditor, who was also acting as a commissioner, and afterwards signed the certificate, but did not prove the debt which the note was made to secure ; in an ac- tion upon the note, held it was void.° In justification of this rule it is said : "All the creditors ought to be upon a par, and if some are induced to sign the certificate, because others have, whom they suppose to be on a par with themselves, but who in fact have been paid, this is a gross fraud on them. If the fact had come to the knowledge of any of the creditors, and had been stated by them to the chancellor, before the allowance of the certificate, he could not have allowed it."' So (in reference to the withdrawal of a petition,) "the plaintiff' presented a petition, which he ought to have pursued. Instead of that, he is induced to suppress his petition, in order to gain his own debt, while all others are barred by the certificate which is secured by his suppression, and this under a law made to prevent fraud, and to secure an equal ad- vantage to all creditors. A distinction is attempted to be made between the act of giving money for the consent of the creditor to sign the certificate, and that of giving him money to withdraw his opposition to it ; as if the former act were only to be con- demned. But see how the act of withdrawing an opposition stands, 1 Denny v. Dana, 2 Cush. 160 ; Bart- * Sumner v. Brady, 1 H. Bl. 647. lett V. Decreet, 4 Gray, 111. 6 Haywood v. Chambers, 5 B. & Aid. 2 Lee V. Kilburn, 3 Gray, 594. 753. 3 Eobson V. Calze, 1 Doug. 228 ; Hoi- « Per Lord Mansfield, Eobson v. Calze, land V. Palmer, 1 B. & P. 95. 1 Doug. 228. CHAP. X.] PBEFERENCE. 859 compared with the actual signing the certificate. The argument urged is, that it is a voluntary act ; the creditor may do as he pleases. But the law feels it a mischief and a subversion of the bankrupt laws to traffic with them and the power given by those laws."* So (in regard to a promise in consideration of not op- posing a discharge) such promise is held void, because it tempts the debtor to set apart and withhold part of his assets ; prevents a proper scrutiny on the part of creditors, and leads other cred- itors to abstain from any investigation, because the preferred creditor is satisfied. Moreover it is a promise to pay for what the creditor was morally bound to do, if the debtor had complied with the law; and if he had not, then the agreement is against the policy of the law .'(a) § 39. It has been held that a certificate is void if obtained by money, though without the bankrupt's privity.* But where a petition in behalf of an assignee alleged, that prior to the bank- ruptcy A,, as agent of the bankrupt, paid to the defendant, a creditor of the bankrupt, a certain due-bill, as inducement to be- come party to a general assignment for the benefit of the bank- rupt's creditors, which never took effect; and prayed, that the defendant might be ordered to pay the plaintiff the sum thus received by him: the evidence showing, that A. did not act as the agent of the bankrupt, or, if he did, not with the knowledge of the defendant; the petition was dismissed.^ And it is some- >Per Lord Loughborough, Sumner v. 'Butt, 10 Tea. 359; Hall, 17 Ves. 62. Brady, 1 H. Bl. 467. * Winsor v. Kendall, 3 Story, 607. * Dexter v. Snow, 12 Cush. 594. (a) An agreement by a foreign creditor, in consideration of the insolvent's procuring a third person to pay one claim in full, that he would prove another, and never sue for the balance over his dividend, is void, and no defence te an action for such balance. Downs v. Lewis, 11 Oush. 76. A declaration, in an action by the representative of A., alleged, that, before the making of the promise, etc., the defendant was indebted to A. for money had and received ; that a commission had issued against the de- fendant, and, in consideration of the premises, and that A. would prove his claim, the defendant promised to pay him the sum due in a few months ; that A. proved, but the defendant did not pay. A verdict being found for the plaintiff, judgment was arrested, the promise not being founded on any legal consideration, and the case not warranting any presumption of the waiver of a tort. Brealey v. Andrew, 7 Ad. & Ell. 10'8. 360 BANKRUPXCT AND INSOLVENCY. [CHAP. X. times held, that the mere fact, that another creditor has been induced to withdraw his opposition, is not by itself a fraud on the act.' So, the creditors of a bankrupt having assented to a com- position of 38. 6d. in the pound, to which the plaintiff, who was a creditor, was not a party, the same creditors afterwards signed a petition for annulling the adjudication of bankruptcy, which the plaintiff refused to sign unless the defendant would give him his guaranty for £167, in part payment of his debt ; and the defend- ant, accordingly, without the knowledge of the other creditors, gave the plaintiff the guaranty, whereupon the latter signed the petition. Held, in an action on the guaranty, that it was not in contravention of the bankrupt law amendment act, 12 & 13 Vict. c. 106, s. 268, and was not fraudulent.^ § 40. "By the principles of the common law, a, payment made by an insolvent debtor to his creditor might legally be received and retained, although, at the time of receiving such payment, the creditor had reason to believe the debtor insolvent, "^(a) Hence, independently of express enactments relative to payments, bank- rupt and insolvent laws are held not to render them void. Thus in Massachusetts, where the holder of a promissory note, signed by one who afterwards became insolvent, and indorsed by persons of undoubted credit, received of the debtor, in part payment of, and as a substitute for, such note, when it became due, other good notes and money ; it was held, that such payment and substitution were not an unlawful preference within the statute of 1888, c. 163, s. 10, 1 Fox V. Paine, 10 Ala. 523. »Per Dewey, J., Wall v. Lakin, 13 9 Smith V. Saltzman, 25 Eng. Law & Met. 169. Eq. 476. (a) A. and B., partners, made a voluntary assignment of all their prop- erty, for the benefit of their creditors, without preference ; and a few days after each presented a petition for the benefit of the bankrupt law. Six months before, one of them, in the name of the firm, wrote to their consignee, in Rio : "The object of this letter is to request you to ship $10,000, under cover, to E. D. G., as he is our indorser, and, under the bankrupt law, this is the only way we can secure him.'' The request was not complied with. The Court held that this "transfer" was made in contemplation of bank- ruptcy, and for the purpose of giving a preference to an indorser over other creditors, and refused to grant a discharge. The petitioners demanded a jury, and they, by their verdict, found the bankrupts were entitled to their discharges. Crabbe, 516. CHAP. X.] PREFBRBNOB. 361 80 as to render the creditor liable therefor, in an action by the as- signee of his debtor.* So, in order to render a payment made by an insolvent, aware of his insolvency, an act of bankruptcy, it must be with the intention to give a preference to the particular cred- itor.^ And the distinction as to voluntary or compulsory convey- ances (see s. 20) is also applied to payments. Thus the payment or satisfaction of a bond fide judgment, on which execution may be immediately issued, is held not a voluntary payment in fraud of the bankrupt law, if the debtor is thereby enabled to continue his business.^ So payment by a trader, who contemplates bank- ruptcy, of a debt not then due, upon a bond fide request of the creditor, is not in law a voluntary payment ; the fact of the debt not being due is merely a circumstance for the jury in considering the question of fraudulent preference.^ But payment by weekly instalments in discharge of a debt for goods sold is not a payment "in the usual and ordinary course of trade and dealing," under St. 19 Geo. 2, c. 32, s. 1." 1 Stevens v. Blauohard, 3 Gush. 169. » Ibid. See St. 1844, c. 178, a. 8; Thompson ■'Straohan v. Barton, 34 Eng. Law & V. Stone, 8 Gush. 103. Eq. 492. z Garwood ; Potts, Crabbe, 516. » Botton v. Jager, Eyan & M. 265. CHAPTER XL JUEISDICTION. 1. General — presumed, etc. 3. Interest — limited jurisdiction — in rem. 6. Change of jurisdiction. 7. Equity. 11. United States Courts ; Local In- solvency Courts; State Courts — re- spective and relative jurisdiction. 17. Commissioners. 24. Appeal, etc. § 1. Jurisdiction in bankruptcy and insolvency is of course mostly determined by express statute.(a) The proceedings being to a great extent different from those in other courts, the special func- tion of which, in reference to debts, is to enforce and not discharge them, and, in reference to property, to sequestrate it for the use of one creditor, instead of distributing it among all ; it necessa- rily follows, that the methods of administering bankrupt and insolvent laws, including the tribunals to which this office is entrusted, are sui generis, and matters of precise and positive statutory regulation. Still, however, questions of jurisdiction have often arisen, more especially, as will be seen, between the courts of the United States and those of the States ; which involve the grave point, so constantly and variously agitated in our his- tory, of the exclusive or concurrent authority of the national government. § 2. It is held unnecessary to aver in terms the jurisdiction of the court to which application is made. Thus an averment, in a plea of an insolvent discharge, that the defendant was "of the (a) It is said that a regular court of bankruptcy has existed in England since the time of William IV., consisting of judges and commissioners, each of whom may sit alone to receive applications and issue processes, and upon questions of fact may order a jury. The lord chancellor and finally the House of Lords have appellate jurisdiction. 2 Pars, on Oontr. 609. (362) CHAP. XI.] JURISDICTION. 863 county," to a judge of which he presented his petition, is suflScient to give the judge jurisdiction.* And when a bankrupt's discharge, granted by a District Court of the United States, is offered in evidence, it will be presumed that the court had jurisdiction, till the contrary appears, without proof of the preliminary proceed- ings. This presumption is made by reason of the character of the court.^ § 3. But, as in other cases, want of jurisdiction may be proved, for the purpose of invalidating the proceedings. Thus interest disqualifies a judge to act in this class of cases. Hence a commis- sioner of insolvency, who, as assignee of A., an insolvent debtor, has a claim against B., is so interested in B.'s estate, that he has not jurisdiction to act as commissioner thereon.' And it is held in general that a creditor ought not to act as a commissioner.* § 4. And insolvent courts are courts of limited jurisdiction. Thus they cannot proceed against the executors or administra- tors of the trustees of insolvents, for the purpose of compelling them to account in those courts for the trust estate.^(«) § 5. Proceedings in bankruptcy and insolvency are in rem, and as such binding upon other persons than the immediate parties. Thus a decree of the Supreme Court in equity, affirming proceed- ings in insolvency upon a petition of the debtor to annul them, is a bar to a similar application by a creditor on the same and other grounds; though such creditor had no notice of the former peti- tion.* § 6. In reference to a change of jurisdiction ; where a statute 1 Porter v. Miller, 3 Wend. 329. ■• Prosser, 2 Rose, 370. 2 Morse v. Cloyes, 11 Barb. 100. spurviance v. Glenn, 8 Md. 202. 'Blanchard v. Young, 11 Cush. 341. ^Merrlam v. Sewall, 8 Gray, 316. (a) Clerical errors, of such a character as could not mislead or prejudice the creditor, in the copies of papers and notice served on him under section 14 of the act of 1831, to abolish imprisonment for debt, cannot affect the jurisdiction of the magistrate. People v. Beheman, Hill & Denio, 81. Though the magistrate cannot adjourn the case for more than thirty days without consent of parties, yet with consent of parties he may do so, without losing jurisdiction. Ibid. In California, the fact that the court was adjourned, though not for the term, at the time set for the hearing of objections of creditors, and that the hearing took place before the judge, is no objection to the proceedings. Clarke v. Eay, 6 Cal. 600. 364 BANKRUPTCY AND INSOLVENCY. [CHAP. XI. established courts of insolvency, and vested in them the jurisdic- tion previously exercised by commissioners, except in cases com- menced before the act took eflFect; but made no provision for the death of a commissioner, in reference to the excepted cases ; and the statute also repealed all acts giving jurisdiction to such com- missioners : held, on the death of a commissioner, his jurisdiction vested in such court.^(a) But a statute, providing that, if any judge of insolvency "shall from sickness, absence, or other cause, be unable to perform the duties required of him in any case aris- ing within his jurisdiction," such duties should be performed by the judge of the adjoining county, therein specified, does not apply to the case of a vacancy in the office of judge of insol- vency in the county where the case is pending.^ § 7. "In bankruptcy, the administration of the estate is both legal and equitable.'"^ So' insolvency courts proceed, in the exer- cise of a special authority, on principles of equity; without being courts of equity.* The proceedings are not stricti juris either proceedings in law or equity, but a new remedy or proceeding, created by statute, the administration of which has been vested 1 Osgood V. Fernald, Cutl. Ins. L. 116. s per Ld. Eldon, Younge, 3 Ves. & B. 2 Grafton, etc. v. Biokford, 13 Gray, 31. 564. 4 Purviance v. Glenn, 8 Md. 202. (a) A debtor in prison, to whom a commissioner has refused to administer the poor debtor's oath, may afterwards take it before another one, having in the mean time gone into insolvency. Snow, Law Eep. Dec. — 47, p. 344. In Maryland, a judge may appoint a trustee, take a bond, and give a dis- charge, during the recess of the court ; and it is no objection to the regu- larity of the proceedings, that these acts were done previous to the filing of the insolvent's petition in the clerk's office of the court. Bowie v. Jones, 1 Gill, 208. After a discharge is obtained, the objection, that a prior ' petition by the same insolvent was pending at the time the present petition was filed, is unavailing. Ibid. In England, when the court of bankruptcy has refused to grant a certifi- cate of conformity on the ground that the bankrupt has committed any of the ofi'eiices enumerated in section 256 of Stat. 12 & 13 Vict. c. 106, the grant- ing of a certificate to the assignees, or a creditor, upon which a writ of exe- cution may be issued against the body of the bankrupt, in pursuance of section 257, is a ministerial act, and, being for the purpose of enforcing pay- ment of the bankrupt's debts, it may be granted from time to time upon the application of the assignees or creditors. Oowgill, 4 Eng. Law & Eq. 270. CHAP. XI.] JURISDICTION. 365 in particular courts, independent of their common law or chan- cery powers as courts of general jurisdiction.' § 8. In England, it is held that the jurisdiction of the chancel- lor in bankruptcy differs from that of the Court of Chancery ;* and that, since St. 1 & 2 Wm. 4, c. 56, the lord chancellor has no jurisdiction of an original petition in bankruptcy.^ It is also held that the court has no jurisdiction to hear petitions addressed to the lord chancellor.* Nor a petition of appeal to the lord chancellor from an order of the vice-chancellor ; nor a petition for rehearing of a petition of appeal already heard by the lord chancellor; nor a cross petition of appeal to the , lord chancellor, complaining of a particular part of the order of the vice-chancellor.' But it has jurisdiction of a -petition to the lord chancellor for confirming a master's report, where the lord chancellor had made an order on a previous petition, referring the matters therein to the master ; or a supplemental petition of appeal to the chancellor from an order of the vice-chancellor, founded upon grounds not suggested by the original petition or petition of appeal ; or a petition to the chancellor for only consequential directions on one part of an order of the vice-chancellor, against which there had been no petition of appeal.' § 9. The English chancellor's authority in bankruptcy is with- out any precise boundaries, and is exercised for the purpose of justice and the protection of parties.^ Thus the assignees of a bankrupt seized, as his property, the farm of A., kept it a long time, and. mismanaged it. The chancellor, sitting in bankruptcy, referred the matter to a master, and, upon his report, but after the commission had been superseded, ordered that a certain sum, exceeding the sum in their hands, be paid by the assignees to A. Upon a motion for prohibition in the King's Bench, held, the chancellor had not exceeded his jurisdiction, though the commis- sion had come to an end; and that the court had no authority to revise an order made by the chancellor where he had general jurisdiction, nor to grant a prohibition after his final order, unless there was an original want of jurisdiction apparent on the face 1 Cohen v. Barrett, 5 Cal. 195. 'Benson, 1 Dea. & Ch. 324. »Lund, 6 Ves. 782. 'Ibid. See Reid, 1 Dea. & Ch. 250. » Lowe, 1 Dea. & Ch. 30. ' Morris's Estate, Crabbe, 70. 'Appling, 1 Dea. & Ch. 1. (But see orders of l6 & 17 Jan. 1832.) 366 BANKRUPTCY AND INSOLVENCY. [CHAP. XI. of the proceedings.' So, in Maryland, a violation of the insol- vent laws by a transfer of property, under an expectation of being or becoming an insolvent debtor, and with intent to give preference, is a fraud upon the insolvent system, and, as such, within the jurisdiction of the Court of Chancery, so that the permanent trustee of an insolvent debtor, appointed under the insolvent laws, may maintain a bill against his assignee, to account for and pay over the proceeds of the property assigned,^ So a claim against the assignees of a bankrupt under the laws of the United States, on the ground of a trust in the assignees, and not on the ground of a debt due from the bankrupt, is within the jurisdiction of the Chancery Court.^ And where the assignee of a bankrupt, after the bankrupt act was repealed, filed his bill in equity, in the District Court, against fraudulent assignees of the bankrupt, and others, which was dismissed as a bill, but re- tained as a petition, and a decree subsequently had thereon ; the decree was held valid.* So, in Massachusetts, proceedings in in- solvency, commenced before a judge who has no jurisdiction, will be set aside on a bill in equity filed under St. 1838, c. 163, s. 18, more than a year after.* § 10. But chancery powers in reference to bankruptcy and in- solvency will not be exercised iyicidentally or collaterally. Thus, in Massachusetts, an application to the court for the exercise of the chancery powers conferred by statute of 1838, c. 163, s. 18, in cases arising under that statute, must be by bill, petition, or other proceeding in chancery. In a writ of entry brought by an assignee of an insolvent debtor, to try the title to land set off on an execution against the debtor, the rights of the parties are to be determined upon strict principles of law.' Nor can a court of equity interfere with courts of insolvency in the exercise of their peculiar jurisdiction, unless expressly empowered by statute. Thus, in Maryland, the county courts have exclusive jurisdiction over cases of insolvency, and the insolvent's assets cannot be dis- tributed in a court of equity.' So the several acts of assembly erecting the system which exists in Baltimore, in relation to in- 1 Cowan, 8 B. & A. 123. 5 Grafton, etc. v. Bickford, 13 Gray, 2 Dulaney v. Hoffman, 7 Gill & J. 170. 564. 8 DenBton v. Morris, 2 Edw. Ch. 37. ' Gushing v. Arnold, 9 Met. 23. * The Chemung, etc. v. Judson, 4 Seld. ' Manahan v. Sammon, 3 Md. 463. 264. CHAP. XI.] JURISDICTION. 367 solvent debtors, have, in the first instance, invested the commis- sioners with the sole and exclusive jurisdiction upon the subject of appointing a permanent trustee. Over the exercise of that power the Court of Chancery can exercise no control to' supervise or reverse their appointment for any pretended error of judg- ment.^ So the defendant sued A., and summoned trustees, and A. was defaulted, there being no defence. The cause was con- tinued for two terms, to ascertain whether there were any funds in the trustees' hands, and at the April term, on May 26, final judgment was obtained. In the mean time A. became a bankrupt, and his assignee applied, on April 7, for an injunction, that the suit should be prosecuted no further, which was granted, but was dissolved April 28. Held, that there was no ground to sus- tain a bill to set aside this judgment, and to restore the property levied upon to the assignee, and that, although the suit in the District Court was not a bar to this, not being identical in mat- ter, yet the decision of that court addressed itself strongly to the discretion of the Circuit Court.^ § 11. In this country, jurisdiction in bankruptcy, has always by statute been vested in the District Courts of the United States. With the qualifications hereafter to be stated, or in ref- erence to the bankruptcy proceedings themselves, and not to their legal results, which may be brought in question in other tribunals, the jurisdiction of the District Court is entire and absolute ;(a) and when the jurisdiction once attaches, it extends not only to the general merits of the bankrupt's case, but to the regularity and sufficiency of all the interlocutory proceedings.^ And this class of cases so far constitutes an exception to the ordinary rule, which requires for a suit in the United States Court a residence of the parties in different States, that an assignee in bankruptcy may institute a suit against a citizen of the same State, in the courts of the United States, though such citizen 1 Glenn v. Fowler, 8 Gill & J. 340. ^ Morrison v. Woolson, 9 Fost. 510. 2 Fiske 0. Hunt, 2 Story, 582. (a) Proceedings in bankruptcy, having been commenced in the district where the party then resided or transacted business, the United States Court for that district has exclusive jurisdiction of the case. Hull, Law Rep. 1842, Oct.— p. 269— Mass. C. 0. 368 BANKRUPTCY AND INSOLVENCY. [CHAP. XI. should not be a party to the proceedings in bankruptcy.' The jurisdiction is said to depend upon the subject, and not upon the parties.\a) So a suit by an assignee, to recover a debt due to the bankrupt, is a suit against one claiming an adverse interest touching a right of property of the bankrupt, within the meaning of the 8th section, and therefore the United States Court has jurisdiction.* So under s. 6 of the bankrupt act of 1841, a Dis- trict Court has jurisdiction of an action by an assignee in bank- ruptcy, of a voluntary bankrupt, to recover a balance due from a principal to the bankrupt, as factor, at the time of the presenta- tion of his petition; such a suit being essential to the winding up of the proceedings in bankruptcy.* So, in regard to equity powers, it is said: "The District Court is possessed of the full jurisdiction of a court of equity, over the whole subject-matters which may arise in bankruptcy, and is authorized by summary proceedings to administer all the relief which a court of equity would administer under the like circumstances, upon a regu- lar bill and regular proceedings, instituted by competent par- ties. In this respect the act of Congress, for wise purposes, has conferred a more wide and liberal jurisdiction upon the courts of the United States than the lord chancellor, sitting in bankruptcy, was authorized to exercise. In short, whatever he might properly do, sifting in bankruptcy, or sitting in the Court of Chancery, under his general equity jurisdiction, the courts of the United States are by the act of 1841 competent to do."* Thus the District Court, pending bankruptcy proceedings therein, may enjoin the enforcement of debts due from the bank- 1 Atkinson v. Purdy, Crabbe, 551. < Kelly v. Smith, 1 Blatch. 290. s 1 Blatch. 290. 5 Per Story, J., Foster, 2 Story, 140. » Pritchard v. Chandler, 2 Curt. 488. Mitchell ». Great Works, etc. 2 Story, 648— affirmed. (a) The District Court had not, like the chancellor in England, exclasive jurisdiction over the execution of the bankrupt law of 1800, and could not remove the assignee, nor compel him to account. Lucas v. Morris, Paine, 396. The District Court of the United States had no jurisdiction of a petition for the benefit of the bankrupt act of 1841, filed after the repeal of that act, although signed and sworn to before the repeal ; and a discharge of the petitioner, afterwards granted by that court, is void. Wells v. Braokett, 30 Maine, 61. CHAP. XI.] JURISDICTION. 369 rupt in a State court. And an officer -will be liable for selling property after such injunction.^ So certain persons associated themselves together as "the Wilson Mill Privilege," and appointed the bankrupts as their agents and attorneys, -who took charge of their property, erected buildings, made improvements, and ad- vanced money. The association was afterwards incorporated under another name, that of the defendants in this suit, and voted to settle all the accounts of the agents, ratified their doings, and continued one of them as their agent. The assignee brings a bill in equity in the Circuit Court for settlement. Held, the court had jurisdiction of the bill. It was ruled in this case, in answer to constitutional objections raised at the bar, that Con- gress can constitutionally confer such jurisdiction upon the United States Court. The judicial is to be taken as coextensive with the legislative power, and Congress would have no right to im- pose the duty on the State courts; but a State legislature might prohibit its courts from taking cognizance of bankruptcy cases.* Judge Story remarks: "There is one consideration which cannot but be deemed of paramount importance in the administration of a system of bankruptcy. It is uniformity, promptitude, regular- ity, and efficiency in carrying into effect all its provisions. The courts which are to administer such a system must possess not only jurisdiction at law, but in equity; not only a right to pro- ceed in a formal way, but to act summarily; not only to hold regular terms, but to be always open; not only to be bound to act, but to be governed by uniform rules and principles of inter- pretation and action."^ So the District Court has jurisdiction over liens and mortgages upon the bankrupt's estate ; may in- quire into their validity and extent, and grant the same relief which could be had in a State court; and the language in section 6, "any creditors, etc. who shall claim any debt or demand under the bankruptcy," applies not only to proving creditors, but to all who have a present subsisting claim, whether it be secured or not. If secured by mortgage, the mortgagee may apply for a sale of the property, and the assignee may contest his claim; in which case the court has jurisdiction, whether resort be had to a formal 1 Stinsou V. M'Murray, 6 Humph. 339. ^ Mitchell v. Great Works, etc. 2 Story, 648. 8 Ibid. 656-7. 370 BANKRUPTCY AND INSOLVENCY. [CHAP. XI. bill in equity or other plenary proceedings, or whether the pro- ceedings be summary.-' Hence the District Court has power to order a sale of mortgaged property of the bankrupt ; and, if there are more mortgages than one, and the proceeds are insufiScient to discharge the first, the purchaser holds the estate free and dis- charged from the others.^ § 12. As has been suggested, the comprehensive jurisdiction given to the courts of the United States involves to a certain extent a control over those of the States. In answer to objections made against this construction of the bankrupt law, it is said: "It is further objected that, if the jurisdiction of the District Court is as broad and comprehensive as the terms of the act justify according to the interpretation here insisted on, it oper- ates or may operate to control all proceedings in the State courts either then pending or thereafter to be brought by any creditor or person having any adverse interest to enforce his rights, or obtain remedial redress against the bankrupt or his assets after the bankruptcy. We entertain no doubt that, under the pro- visions of the sixth section of the act, the District Court does posses? full jurisdiction to suspend or control such proceedings in the State courts, not by acting on the courts, over which it pos- sesses no authority, but by acting on the parties through the instrumentality of an injunction or other remedial proceedings in equity upon due application made by the assignee, and a proper case' being laid before the court requiring such interference. Such a course is very familiar in courts of chancery, in cases where a creditor's bill is filed for the administration of the estate of a de- ceased person, and it becomes necessary or proper to take the whole assets into the hands of the courts, for the purpose of collecting and marshalling the assets, ascertaining and adjusting conflicting priorities and claims, and accomplishing a due and equitable distribution among all the parties in interest in the estate. Similar proceedings have been instituted in England in cases of bankruptcy, and they were, without doubt, in the con- templation of Congress, as indispensable to the practical working of the bankrupt system."^ 1 Christy, 3 How. 293. a Per Story, J., Christy, 3 How. 318. 2 Houston V. The City Bank, etc. 6 How. 486. CHAP. XI.] JURISDICTION. 371 § 13. The sale of property mortgaged furnishes an illustration of the control exercised by the District, over a State Court. (See s. 11.) Thus a mortgagee of a bankrupt's estate,, by virtue of pro- ceedings in a State Court, caused the property to be sold by the sheriflF; yrhereupon the assignee filed a petition in the District Court, that the sale might be declared null and void, being illegal, a fraud upon the bankrupt law, a preference, and in various par- ticulars irregular ; or else, that the proceeds should be paid over to the assignee for distribution according to law. Held, the Dis- trict Court had jurisdiction of the case, and a motion for a writ of prohibition was refused.^ But where a mortgagee procured a sale of the property by application to the State Court, but thereby obtained no advantage over other creditors which the District Court would not have awarded him ; and there was no dispute as to the validity of the mortgage ; a bill brought in the District Court by the assignee, to set aside such sale, was dismissed. It was held, that, although upon the ground of expediency the juris- diction of the District Court over the bankrupt's property, whether mortgaged or not, perhaps ought to be exclusive; yet the bank- rupt law had not made it so ; and the District Court would not interfere, except to protect other creditors from wrong, or where the mortgage is contested.^a) 1 Christy, 3 How. 292. ^ Norton v. Boyd, 3 How. 426. (The case of Christy affirmed.) (a) Similar cases have arisen, involving the exdusive jurisdiction of local insolvency courts. Thus it is held in Maryland, that the county courts have exclusive jurisdiction over cases of insolvency, and the insolvent's assets cannot be distributed in a court of equity. Manahan v. Sammon, 3 Md. 463. The proper and only tribunal to adjust the claims of creditors of an insolvent's estate, inter sese, is the county court of the county where the insolvent petitions ; which court might reject any particular claim. There- fore, while proceedings in insolvency are pending before the county court, for the purpose of ascertaining and adjusting the claims of different creditors to dividends from the insolvent's estate, one of those creditors, whose claim is there disputed by the others, cannot maintain an action on the trustee's bond for alleged misconduct, neglect, or fraud, in the administration of the estate. The State v. Williams, 3 Md. 163. So, it being enacted by the 20th section of the 17 & 18 Vict. c. 119, that a trader petitioning for an adjudication of bankruptcy shall forthwith, after filing his petition, and before adjudication, make it appear to the satisfaction of the Court that his available estate is sufiBcient to produce £150 at the 372 BANKRUPTCY AND INSOLVENCY. [CHAP. XI. § 14. Under the act of 1800, the doctrine of exclusive juris- diction was sometimes carried to a great extent. Thus it was held that the State courts could not inquire whether the allowance of a discharge was in strict conformity to the act.^ But, in con- struction of the act of 1841, it is said to have been early suggested, that the third article of the Constitution, relating to the judicial power, would exclude the jurisdiction of the State courts. But the Federalist controverted this view; and Congress by its stat- utes expressly conferred jurisdiction upon those courts in many matters arising under the laws of the United States, both civil and criminal. And it has generally been held, that such juris- diction impliedly attaches, unless expressly negatived by the Con- stitution or the statute. " The State courts are to give force and effect to a law of Congress, as the supreme law of the land. It is the law of Massachusetts ; as much so as a statute enacted by her own legislature ; deriving its vitality from another source, but of equal and it may be of paramount authority."^ And in accord- ance with these views it is uniformly held, that a certificate in bankruptcy may be attacked and opened in a State court, when it impedes or conflicts with the rights of a party litigating there, so far as that party's rights are concerned.' And as to all judg- ments and contracts which might have been proved under the commission.* Thus objection may be made in a State court to a discharge in bankruptcy, upon the ground of concealment of prop- ' Sinclair v. Smyth, 1 BreT. 402. ' Bond v. Baldwin, 9 Geo. 9 ; Comstock 2 Per Dewey, J., Ward v. Jenkins, 10 v. Grout, 17 Verm. 512. Met. 683. * Comstock v. Grout, 17 Verm. 512. least; the decision of the court of bankruptcy as to value is conclusive. Pennell v. Butler, 37 Eng. Law & Eq. 224. So the duty imposed on the insolvent court, by the 1 & 2 Vict. c. 110, s. 92, which enacts that any surplus property in the hands of the assignee, after the debts of a prisoner have been satisfied, may be ordered by the insol- vent court to be vested in such insolvent, or his heirs, etc. is a judicial, and not a merely ministerial duty; and, therefore, where the insolvent court had refused to make an order for vesting the surplus property in a person claim- ing under a deed of assignment, made to him by the insolvent, (there being rival claimants,) on the ground that the deed was not valid, this Court refused to compel the insolvent court by mandamus to make the order. Kegina v. Law, 40 Eng. Law & Eq. 64. CHAP, XI.] JURISDICTION. 373 erty.^ Upon this point it is held, that there is no inliibition in the bankrupt act, or in the mutual relation of the Federal and State Governments, or in the grants or restraints of power con- ferred upon them respectively, which precludes the State courts from inquiring into the validity of a discharge and certificate, upon an allegation duly interposed, that the bankrupt did not render a full and complete inventory of his "property, rights of property, and rights and credits," but fraudulently concealed the same.^ So a decree of the United States District Court, admit- ting the proof of a debt, though conclusive as to the matter before it, does not settle the rights of parties acquired under that decree, when drawn in question in a State court.' So, although a statute provides that "the original discharge, (of an insolvent debtor,) the record thereof, and a transcript of such record duly authen- ticated, shall be conclusive evidence of the facts and proceedings therein contained;" yet, in any collateral matter, where the dis- charge is questioned, there may be an inquiry into the existence of the facts necessary to give jurisdiction to the court granting the discharge. And a discharge granted on the petition of two- thirds in value of the creditors, according to the statute, is void for want of jurisdiction, when the schedule shows that the amount of one creditor's claim was not stated.* So the State courts have jurisdiction in suits brought by assignees.' And, in England, the Court cannot on motion stay proceedings in an action brought by the assignees of a bankrupt without leave of the court of bank- ruptcy, (according to St. 12 & 13 Vict. c. 106, s. 163.) Nor is this a defence to the action. Nor can the defendant object, that the name of the official assignee has been used without his con- sent.* So upon a bill by a creditor to condemn property of a debtor to the satisfaction of a judgment, where the defendant relied on his discharge in bankruptcy, it was held, that the State court had jurisdiction, as established by the bill, answers, and evidence, though the rules of interpretation of the Federal courts, as to the construction of the bankrupt act. Would be applied by the State courts.'^ So, in reference to a State insolvent law, 1 Mabry v. Herndon, Sup. Ct. Alabama, * Stanton v. Ellis, 2 Kern. 575. 1846— Law Rep. Oct.— 46, p. 254. 6 Hastings v. Fowler, 2 Cart. 216. 2 Mabry v. Herndon, 8 Ala, 848. SLee v. Sangster, 2 C. B. (N. S.) 1. 3 Buckner v. Calcott, 28 Miss. 482. ' Rugely v. Robinson, 19 Ala. 404. 374 BANKRUPTCY AND INSOLVENCY. [CHAP, XI. under which publication of notice prevents a subsequent attach- ment or trustee process ; in regard to these points, the United States Court is governed by the local laws, where neither the Constitution nor act of Congress conflicts. And a distinction is made between cases of this nature, and the rule that an insolvency discharge does not affect contracts out of the State.^(a) § 15. But, as we have suggested, (s. 11 and sequ.) if suit be brought in a State court, of which such court has, in gen- eral, jurisdiction, but the effect of which in the particular case will be to interfere with the proper settlement of the bank- rupt estate, the United States Court will summarily inter- fere, by process in equity. Thus if the bankrupt, after the de- cree of bankruptcy, have brought an action in his own name in the State court, and obtained a judgment, his bankruptcy not being pleaded in bar, the District Court have power, upon peti- tion of the assignee, while the judgment remains unpaid, to order the amount paid to the assignee. And this power may be exer- cised by the court within one district, though the decree and the proceedings under _jt were had in the District Court within another district. But the assignee must take the judgment, subject not only to taxable costs, but also all other reasonable charges and expenses incurred in obtaining the judgment. Though not to charges for services rendered by the attorney of the bankrupt, in the suit at law, in opposing a motion there preferred by the assignee to be allowed to enter and prosecute the claim. And if the attorney be made a defendant in the proceedings in the court of the United States, as it is proper he should be, and the fund, by interlocutory decree of the court, be allowed to be paid to him, subject to the future order of the court, and the ultimate decree of the court be that he pay the money to the assignee, he will be allowed to retain, in addition to the amount allowed for the charges and expenses incurred in prosecuting the suit at law, 1 Perry, etc. v. Brown, 2 Woodb. & M. 449. (a) The decision of the Court of Appeals of the State of Maryland, that the interest of an insolvent debtor in the claim of the Mexican Company against Mexico, did not pass to his trustees by the assignment, is conclusive and binding upon all other courts as to the precise point decided. [Taney, 0. J., McLean, and Daniel, J. J., dissenting.] Williams v. Gibbes, 17 How. 239 ; Gooding v. Oliver, ibid. 274. CHAP, XI.] JUBISDICTION, 375 all his necessary actual charges and expenses in this proceeding, but not fees for his services as counsel in defending it ; but, if he have himself acted as his own counsel in this proceeding, he will be allowed costs, as between party and party.* So, although a State insolvent law may be adopted by a rule of a Federal court under the process act of 1828 ; unless so adopted, such law does not affect the proceedings in such court.^ § 16. The question of the respective jurisdictions of the United States and State courts has arisen in connection with the claim of exemption from imprisonment by virtue of a discharge under a State insolvent law. It is held, that a debtor, committed on mesne process issuing from the United States Court, cannot bd discharged by the order of a State court, passed under a State insolvent law. Thus the plaintiffs, recovered a judgment against A., and before execution he was surrendered by his bail. Being in jail, the defendants executed a bond for the jail limits ; con- ditioned that he should remain a true prisoner till lawfully dis- charged. Afterwards A. petitioned in the Supreme Court of the State for the benefit of the insolvent law, and the Court ordered his release, on giving bond to return to jail conformably to that law; which was done, and he was discharged. It was held that these proceedings were ineffectual as against the process from the United States Court, and this action, being upon the original bond for the prison limits, was held to be maintainable ; although it was suggested that the United States Court itself, if directly applied to, might have discharged the debtor.* So a person com- mitted on execution applied to a State judge, and gave bond, pursuant to a law of the State, to appear at the next Court of Common Pleas, and there take the benefit of the State insolvent law, and to surrender himself to jail if he failed to comply with all things necessary for his discharge. Held, though the dis- charge from jail would have been lawful, if the debtor had been imprisoned under State process ; it was not a lawful discharge from imprisonment under process of the United States Court; that Congress had not adopted, either by the process act of 1792, (1 Sts. at Large, 275,) or of 1828, (4 Sts. at Large, 278,) any State laws regulating process, which can be executed only by the State 1 Moore v. Jones, 23 Verm. 739. 3 Sadlier v. Fallen, 2 Curt. (U. S.) 190. 2 Beers v. Haughton, 1 McLean, 226. 376 BANKRUPTCY AND INSOLVENCY. [CHAP. XI. courts; and that, so far as a State law is adopted, and does regu- late or affect the process of the United States courts, it must take effect upon that process, through the action of the United States courts, modifying their own process, or controlling its operation, so as to render it conformable to the laws of the State, and not by the action of State courts or judges upon that process, or upon its operation.^ So, although the provision of the Rhode Island insolvent law, which relieves from imprisonment on execution a debtor who has without fraud or perjury obtained a discharge, exempts such party from imprisonment under process of the United States Court ; yet the provision, empowering the Supreme Court of the State, in its discretion, to grant a stay of all pro- ceedings against the debtor, cannot be executed by the United States Court. Nor can the United States Court stay an execu- tion, for the reason that the Supreme Court has' granted a stay of proceedings.'' § 17. It is in general expressly provided by statute, or inferred by judicial decisions from the nature of the office, that the action of a commissioner in cases of bankruptcy or insolvency is subject to the control and revision of a higher officer or tribunal. In some cases, however, this rule does not apply. Thus it is said: " The manner of selling the bankrupt's estate, and the price proper to be paid for it, are matters peculiarly within the discretion of the commissioner, whose duty it is to superintend the conduct of the assignees in administering the bankrupt's assets."* So in Massachusetts the Supreme Court will not interfere, under their general equity jurisdiction of insolvency, to revise a compromise made by the assignee of an insolvent with his debtors, under the direction of the commissioner.* § 18. Under the late English statute of bankruptcy, there may be a change of jurisdiction from one commissioner to another. Though the petition be allotted to commissioner A., yet any other commissioner may sit and act for him ; consequently, the notice to surrender, though signed by commissioner B., is good, and it is the bankrupt's duty to surrender before commissioner C, who 1 Duncan v. Darst, 1 How. 301. See = gamuel Hopkins, 2 Curt. (U.S.) 567. Beers v. Haughton, 9 Pet. 329; U. sPer Knight Bruce, L. J., Flood, 31 S. «. Knight, 14 ibid. 301 ; 5 Sts. at Eng. Law & Eq. 260. Large, 321. i Richards v. Merriam, 11 Cush. 582. CHAP. XI.] JURISDICTION. 377 is sitting for commissioner A., on the day appointed.^(a) So where the petition of adjudication had heen filed in the country district in which the bankrupt resided and had his property, but the great majority of the creditors resided in London and else- where, out of that district ; the court, upon the application of one, made with the consent of the others, directed the removal of the petition, and of proceedings thereunder, from the country district to the court of bankruptcy in London.^ § 19. Where, upon an application being made to the court of bankruptcy in London, the senior commissioner, having trans- acted the business before him, had left the court for the day, this was held to be an unavoidable absence within the meaning of the 20th section of the bankrupt law consolidation act, so as to enable a junior commissioner, then present in court, to act for him.' § 20. In a late case,* the question as to the precise nature of the authority of commissioners arose in a very interesting and important form. This was an action of trespass against commis- sioners for the commitment of the plaintiff, for not answering to the satisfaction of the defendant, when examined before them con- cerning the estate and effects of a bankrupt. The ground was taken on behalf of the plaintiff, that commissioners are not judicial officers, and that a commitment for not answering to their satis- faction was not an act within the limit of their authority. But Abbott, 0. J., in a learned and elaborate judgment, and substan- tially overruling the leading case of Miller v. Seare, (2 W. Bl. 1141,) decided that the action could not be maintained. The opin- ion is predicated upon a review of the successive statutes upon the subject, each apparently designed to confer new powers in the mat- ter of examination, and upon the peculiar language used, to their satisfaction, evidently implying judicial or discretionary authority. § 21. Under the bankrupt law of 1800, the proceedings by the 1 Keg. V. Gordon, 33 Eng. Law & Eq. s gewell, 17 Eng. Law & Eq. 301. 656. * Doswell v. Impey, 1 B. & 0. 70. 2 Sewell, 17 Eng. Law & Eq. 301. (a) In Pennsylvania, under the statute of 1836, a debtor must apply for the benefit of the statute to the judge or prothonotary of common pleas of the county in which he is detained on execution, although the execution issued from the court of another county, and the condition of the bond required in such case must be conditioned accordingly. Avery t;. Seely, 3 W. & S. 494. 378 BANKRUPTCY AND INSOLVENCY. [CHAP. XI. commissioners of bankrupt were finished within the 51st section, when the commissioners had proceeded on the commission, exam- ined the bankrupt and other witnesses, admitted the creditors to prove their debts, and assigned the bankrupt's estate. And when such proceedings were filed in the District Court, certified copies thereof were primd facie evidence against all persons, of the commission, trading, and acts of bankruptcy.^ § 22. Four partners were adjudicated bankrupts, two of whom resided abroad. The adjudication was made on the 8th of Novem- ber. On the 13th, notice was given of an application, on behalf of the partners abroad, to suspend the advertisement. On the 17th, the meeting was held to show cause against the issue of the advertisement, and the application was then made. The commis- sioner refused to suspend the issue of the advertisement, on the ground that, as the application was not made within seven days from the adjudication, he had no authority, under the 104th sec- tion of the 12 & 13 Vict. c. 106, to do so. Held, upon appeal, that "such extended time," mentioned in the section, meant "fur- ther or longer time," not exceeding fourteen days; and that, the notice having been given within the seven days, everything was in fieri, and the commissioner had authority to grant the applica- tion. The matter was, therefore, sent back to the commissioner.^ § 23. Under the bankrupt law consolidation act, 1849, (12 & 13 Vict. c. 106,) the commissioners have a discretionary power to refuse protection to a bankrupt, or to refuse or suspend the cer- tificate of conformity, in any cases not within the penal enactment of section 256 ; and the judgment certificate, mentioned in section 257, is to issue as well upon such discretionary refusal, or suspen- sion, as upon the compulsory refusal, or suspension, in consequence of the commission of any of the ofiences enumerated in section 256.* § 24. It is said there is no appeal from the chancellor in bank- ruptcy.* But, on the other hand, that there is no settled rule of the court against his rehearing an appeal in bankruptcy." § 25. It is held that the court of review has no jurisdiction to hear or rehear petitions which have been heard, or to make orders altering or affecting orders of the chancellor or vice-chancellor iRugan V. West, 1 Binn. 263. * Bryant, 1 Ves. & B. 211. « Castelli; 8 Eng. Law & Eq. 280. 5 Baket, 1 Mont. & Mac. 279. 'Stanton, 8 Eng. Law & Eq. 283. CHAP. XI.] JUKISDICTION. 379 prior to the act 122 Wm. 4, c. 56; but it has exclusive jurisdic- tion of cases pending at the date of the act, and matters arising out of the petitions and orders of the chancellor and vice-chan- cellor.^ § 26. A commissioner of bankrupts has no jurisdiction to annul his adjudication of bankruptcy, on the application of the bankrupt, except -where the Bankrupt shows cause against the adjudication under the 104th section of the act 12 & 13 Vict. c. 106. After the advertisement of the adjudication, the bankrupt must appeal to the superior court.* § 27. The primary jurisdiction in bankruptcy being, by the 12th section of the statute 12 & 13 Vict. c. 106, transferred to the commissioners, and the jurisdiction of the vice-chancellor under that act having been exclusively appellate and transferred to the court of appeal by the statute 14 & 15 Vict. c. 83, the court of appeal cannot order the payment of money out of the bankruptcy court, unless the application be made by way of ap- peal from a commissioner.^ § 28. Where a creditor petitions against an adjudication within the proper time, and the petition is not heard within the twenty^ one days from the adjudication, and when heard it is dismissed, and the creditor appeals within twenty-one days after the com- missioner's decision on his petition, his appeal is in time under the 12th section of the statute.* A petition to the commissioner to annul the adjudication is not an appeal'within the meaning of that section.^ § 29. Where the court, differing from the commissioner, and holding the petitioning creditor's debt to be sufficient, referred back to him the question of the validity of the adjudication, an application, for leave to appeal to the House of Lords from the decision as to the sufficiency of the debt, was held premature, and was ordered to stand over till the commissioner should have given his decision.* § 30. Upon the petition to the United States District Court of an assignee in bankruptcy appointed by that court, certain transfers and settlements of property made between the bank^ iLangston, 1 Mont. & Bl. 142. *Bean, 13 Eng. Law & Eq. 523. 2 Carter, 20 Eng. Law & Eq. 19. * 11,;^.. 8 Cheetham, 8 ibid. 279. « Griffiths, 21 ibid. 227. 380 BANKRUPTCY AND INSOLVENCY. [CHAP. XI rupt and the appellant were declared fraudulent and set aside. Held, no appeal lay to the Supreme Court, which can exercise no appellate jurisdiction unless (expressly) conferred by law. Also for the reason, that the decrefe was not final, but interlocutory, in directing an account, and in other respects.^ So a decree of the Circuit Court, setting aside a deed made before bankruptcy, directing the trustees under the deed to deliver to the assignee all the property remaining undisposed of in their hands, but making no orders as to the proceeds of property sold, except for an ac- count preparatory to a final decree, is not so far final as to be the subject of an appeal to the Supreme Court.^ § 31. In an inferior State court the defendant pleaded a dis- charge in bankruptcy, and offered the record of the proceedings in evidence. Objections were taken to the regularity and valid- ity of the discharge, but they were overruled, and judgment ren- dered for the defendant. The plaintiffs appealed to the Supreme Court of the State, which affirmed the judgment. Held, a writ of error did not lie to the Supreme Court of the United States, under the act of Congress, 1789, c. 20, s. 25, which provides such writ, where one claims in a State court a right or exemption under a law of Congress, and the decision is against the right claimed. Also, that the court could not examine the question of the validity of the proceedings ; nor the efi"ect of promises alleged to have been made subsequent to the discharge.* § 32. The Supreme 'Court has no revising power over a Dis- trict Court in bankruptcy cases. It cannot issue a writ of prohi- bition to the latter court.* § 33. In Massachusetts, when the demand of a creditor of an insolvent is allowed, but his claim to a preference as an operative is disallowed, the remedy is not by an appeal ; but he should first file a petition to have his demand paid in full, and, upon the dis- allowance of such petition, bring his case before the court." § 34. The appeal, authorized by the Stat, of 1838, c. 163, s. 4, from the decree of the commissioner of insolvency, rejecting or allowing the claim of a supposed creditor, must be entered "in the proper court which shall be first held within and for the 1 Crawford t). Points, 13 How. 11. * Christy, 3 How. 292. 2 Pulliam V. Christian, 6 How. 209. 6 Thayer v. Mann, 2 Gush. 371. s Linton v. Stanton, 12 How. 423. CHAP. XI.] JURISDICTION. 381 county in which the proceedings are had, next after the expira- tion of fourteen days from the time of claiming the appeal;" and if not so entered, through forgetfulness or mistake, cannot be entered at a succeeding term, even with the consent of parties.' § 35. Under the statute of 1838, c. 163, s. 4, an appeal from a decision of a judge of probate or master in chancery, rejecting a claim against the estate of an insolvent debtor, cannot be taken to the supreme judicial court, unless the debt demanded exceeds the sum of f 800 on the day of the first publication of notice.^ § 36. The Supreme Court has jurisdiction, under the general supervisory power conferred upon it in matters of insolvency by Stat. 1838, c. 163, s. 18, to revise the proceedings of a judge of probate, master in chancery, or commissioner in insolvency, under the Stat. 1846, c. 168, s. 1, against persons charged with fraud- ulently embezzling or disposing of the estate of an insolvent debtor.^ § 37. One whose claim has been formally allowed, from which allowance an appeal has been taken and prosecuted according to law, is not a creditor, entitled to vote as a creditor, after such appeal has been taken and perfected, and before any judgment upon it has been rendered by the appellate court.* § 38. In reference to the question of costs, upon appeal by the assignee from the allowance of a claim, it was held that the cred- itor should recover costs, though his claim was reduced from the sum allowed by the magistrate. The Court remarked: "The appellee has prevailed in her suit, although the appellant has pre- vailed on his appeal. "°(a) 1 Palmer v. Dayton, 4 Cush. 270 ; Ed- * Betton v. Allen, 9 Cush. 382. dy'B Case, 6 ibid. 28. '" Per Wilde, J., Stevens v. Hale, 7 Met. 2 Whiting V. Gray, 9 Met. 291. 86. 3 Harlow v. Tufts, 4 Cush. 448. (a) As to official fees, see Millar, 1 De Gex, 144 ; Diamond, ibid. 143 ; NichoUs, 10 Jur. 482 ; Davis, 1 De Gex, 267. CHAPTER XII. SUITS EBtATING TO BANKRUPTCY, ETC. 1. General remarks. 27. Evidence in suit by assignee 2. Concurrent proceedings. 82. Suit by bankrupt. 4. Suit by and against assignees. 85. Pleading. 19. Limitation. 46. Proceedings in equity. 21. Form of declaration. 47. Set-off. 23. Bond of assignee. 50. Costs. 24. Costs. 52. Evidence. § 1. We have already, in various connections, had occasion to refer to the subject of actions which grow out of bankruptcy or insolvency proceedings; and to which the bankrupt or insolvent himself, his assignees, or third persons, may under different cir- cumstances be parties. Some points, however, more exclusively falling under this particular head, remain to be considered. § 2. In a preceding chapter (chapter v.) we spoke of the rela- tive and mutual bearing, upon the rights of a creditor, of pro- ceedings for the recovery of his debt by becoming party to the commission and by prosecution of a suit at law. Upon this sub- ject it may be here added, that the act of 6 Geo. 4 provided, that no creditor who had brought an action should prove his debt, without relinquishing such action. But the act of 5 & 6 Vict, contains no such provision. And it is held, under the latter stat- ute, that a creditor may proceed with his action notwithstanding the pendency of bankruptcy proceedings; and, though the debt be paid under pressure of the latter, that the action will be stayed only on payment of costs.^ § 3. With regard to the remedies of one having a claim upon the respective parties to a negotiable instrument, it is held that the drawer of a bill, who has paid it to an indorsee after a fiat in bankruptcy against the acceptor, may sue the acceptor upon the (382) 1 Covington v. Hogarth, 7 Man. & Gr. 1013. CHAP. XII.] SUITS RELATING TO BANKRUPTCY, ETC. 883 bill before he has obtained his certificate, although the indorsee has proved under the fiat. By such payment, he does not so far take the place of the indorsee and become bound to receive the dividend of the latter, as to disable him from bringing this action. He does not claim under the indorsee, but has a right to recover against the bankrupt before his discharge, and thus avoid the effect of it.^(a) § 4. Assignees must sue in their own name. The bankrupt or insolvent cannot sue;^(6) more especially after his discharge.^ 1 Walker v. Pilbeam, 4 Man. Gr. & Sc. ^ EMerkin v. Elderkin, 1 Root, 139. 229 ; Mead v. Braham, 3 M. & S. » Young v. Willing, 2 Dall. 276. 91. {a) Where a plaintiff was liable to the defendant for costs of a non-suit, and issued a flat of bankruptcy against the defendant, the court refused to stay the defendant's proceedings in the action. Eicke v. Nokes, 1 Bing. N. 69. A defendant, after becoming bankrupt, was discharged from custody on a ea. sa., upon executing a warrant of attorney with two sureties, who con- sented that the plaintiff, in order to diminish their liability, should prove his debt under the commission. The plaintiff haying thus proved, but no divi- dend being paid, the court refused to discharge the sureties on summary application. Duncan v. Sutton, ibid. 431. (6) Nor can the agent of the bankrupt maintain a suit. Thus goods were shipped from Liverpool to San Francisco by A., who indorsed the bills of lading to his agent, the plaintiff, and before the arrival of the goods became a bankrupt. Held, that the plaintiff, as it appeared on the face of the com- plaint, being the mere naked agent of the shipper, could not recover the goods in his own name of the master of the vessel, who claimed to hold them for A.'s assignee in bankruptcy. Lineker v. Ayeshford, 1 Gal. 75. It has been held that a case should be remanded from a court above to a magistrate, in order to substitute the assignee for the bankrupt as plaintiff in the suit. Merrill v. Tamany, 3 Fenn. 433. Where a statute provided, that, in a certain case of preference, the party receiving it should be liable to an action by such persons as the commis- sioners should appoint ; it was held, in the absence of such appointment, that by virtue of their general authority the assignees might maintain the action." Ellis v. Eussell, 10 Ad. & Ell. N. 952. With regard to claims against assignees, an assignee receiving stock in a manufacturing corporation is not liable either at law or in equity to a cred- itor of the company, who is also a stockholder, under any statute making members of a corporation liable for its debts. Gray v. Coffin, 9 Cush. 192. While proceedings in insolvency are pending before the county court, for the purpose of ascertaimng and adjusting the claims of different creditors 384 BANKRUPTCY AND INSOLVENCY. [CHAP. XII. Thus a court of chancery will not lend its aid to enforce, for the benefit of a certificated bankrupt, a judgment recovered by him before his bankruptcy, and not included in his list of assets. If a suit can be maintained at all, it must be in the name of the assignee.^ So an application by an insolvent who has received his discharge, to vacate an order of the court, relating to prop- erty of which he was seized prior to his discharge, will not be sustained ; his assignees are the proper parties.^ So the assignees of a discharged insolvent must be parties to a bill brought by him to enforce an agreement or trust, in relation to his estate, existing prior to his assignment, though the assignees had re-as- signed, but without the consent of the creditors.' So where the complainant in a bill in equity is discharged in bankruptcy, the suit is not abated but becomes defective, and the assignee of the bankrupt complainant may come in and file a supplemental bill. If the assignee should refuse to do this, it seems that the com- plainant may proceed by making the assignee a defendant.* So an assignee in bankruptcy, although party to a suit in chan- cery, between creditors and the bankrupt, may prosecute a suit in his own name, where he filed no cross bill.' So, whenever a judgment is recovered for a debt or claim due to a bankrupt and belonging to his assignee, whether by the bankrupt himself or by a third person in his right, the assignee is entitled to the money recovered by such judgment; and if the judgment have not been paid, a court of equity may arrest the payment of it to the bank- rupt, or the one who sues in his right, and order the money paid to the assignee.* So, if a sherifl" take goods of a bankrupt in execution, after the act of bankruptcy and before the commission issued, and sell them after the commission, the assignee may maintain trover against him.' And trover, not trespass, is the 1 Planters' Bank v. Conger, 12 S. & M. ^ Botts v. Patton, 10 B. Mon. 452. 527. 6 Moore v. Jones, 23 Vt. 739. 2 Sells V. Hubbell, 2 John. Ch. 394. ' Cooper v. Chltty, 1 W. Black. 65 : 1 ' Moran v. Hays, 1 ibid. 339. Burr. 20. i Springer v. Vanderpool, 4 Ed. Ch. 362. to dividends from the insolvent's estate, one of those creditors, whose claim is there disputed by the others, cannot maintain an action on the trustee's bond, for alleged misconduct, neglect, or fraud, in the administration of the estate. State v. Williams, 3 Md. 163. CHAP. XII.] SUITS RELATING TO BANKRUPTCY, ETC. 385 proper form, notwithstanding the sheriff sells the goods after the issuing of the commission, and after a provisional assignment, and notice from the provisional assignee not to sell.^ So if a creditor accompany the sheriff's officer in levying an execution, ■which is afterwards avoided by a commission of bankruptcy, trover* may be maintained against him by the assignees, though he has never received the goods or their value from the sheriff.^ So an assignee may sue in his own name, on a bond given to the debtor for the prison limits, after commencement of insolvency proceed- ings, in case of an arrest made upon an execution on a judgment recovered after the insolvency, but before appointment of the assignee ; the action being founded upon ' a debt prior to the insolvency.* § 5. Where a bond was given to partners, and one of them became a bankrupt, it was held, that a suit upon the bond was properly brought in the name of the solvent partner and the assignee of the bankrupt.*(a) , § 6. Stat. 12 & 13 Vict. c. 106, s. 153, enacts, that the as- signees of a bankrupt, with the leave of the court of hankrwptey first obtained, but npt otherwise, may commence or defend any action which the bankrupt might have commenced or defended. Such an action having been commenced by a bankrupt's assignees without such leave; held, that the court in which the action was brought had no power to stay the proceedings." The Court re- mark: "The statute intended to make the obtaining of the requisite leave a matter only between the assignees and the court of bankruptcy, and not at all between the assignees and the other party to the suit." Also that the act applies to defences; "and if the assignees were to defend such an action without having 1 Smith V. Milles, 1 T. R. 475. * Peel v. Ringgold, 1 Eng. 546. See 2 Mewham v. Edmonson, 1 B. & P. 369. chap. iv. 3 Wetherbee v. Martin, 10 Gray; Cutl. ^hee v. Sangster, 38 Eng. Law & Eq. Ins. L. (3d ed.) 52. 274. (a) See chap. iv. "Where, on a petition to the vice-chancellor for a change of assignees, an order was obtained under St. 5 Geo. 2, c. 30, s. 61, direct- ing a new assignment to the plaintiff from the two former assignees, one of whom absconded, and only the other and the plaintiff executed the assign- ment ; held, without a previous application to the vice-chancellor, explain- ing the non-joinder of the other assignee, the plaintiff could not maintain an action for goods sold and delivered. Aldritt v. Kittridge, 6 Moo. 569. 386 BANKKUPTCY AND INSOLVENCY. [CHAP. XII. obtained the leave of the court of bankruptcy, it is diflBcult, if not impossible, to suggest how the court of common law, in which the action was pending, could interfere with the defendant's pro- ceedings." The penalty is, that costs shall not be allowed out of the estate.' § 7. An assignment under a bankrupt or insolvent law neither abates, nor can it be pleaded in bar to, an action commenced by the debtor before the assignment. The assignee may prosecute the action, but will in general be required to suggest the as- signment on the record, and sometimes to enter into a written consent to pay the costs if the action should fail.^ The act of 1841, in virtue of the decree of bankruptcy, divests the bank- rupt of all property and rights of property, except as therein provided, and declares that all suits pending, to which he is a party, shall be prosecuted or defended by the assignee to their final conclusion, in the same way, and with the same effect, as they might have been by the bankrupt himself; consequently the assignee must be made a party to the litigation which may be pending in favor of or against the bankrupt, or it can- not progress to a trial. This may be done by motion, or per- haps by soi. fa. And perhaps, where the assignee, in a proper case, fails to come in as a plaintiff, the defendant may suggest the plaintiff's bankruptcy, and, upon production of the decree, the court may order the assignee to make himself a party within a limited time, and in default thereof the suit to abate for want of prosecution ; but, however this may be where the fact of bank- ruptcy is not controverted, it is competent for the defendant to plead in bar to an action by the bankrupt himself the decree declaring the plaintiff to be a bankrupt. The effect of this plea may be avoided by the assignee's making himself a party; but if he replies, and the issue is found against him, or he demurs, and his demurrer is overruled, and he does not plead further, judg- ment will be rendered for the defendant.^ Thus a chose in action was assigned by way of collateral security and indemnity to sure- ties of the assignor. After a suit commenced by the sureties in the assignor's name, he became bankrupt, and his assignee in bankruptcy entered and prosecuted the suit. Held, the suit was 1 Per Williams, J., ibid. 276. sLaoy v. Eookett, 11 Ala. 1002. 2 Cleverly, v. MoCuUough, 6 Bioh. 517; 6 Pike, 492, 619. CHAP. XII.] SUITS RELATING TO BANKRUPTCY, ETC. 387 not hereby discontinued, since, if the liability of the sureties were discharged by the bankrupt, the assignee would have an interest in the claim, and might rightfully prosecute it.* So a mo- tion against a sheriif, for failing to make money on an execution which had issued in favor of a plaintiff, who after the rendition of the judgment had been declared a bankrupt, must be made in the name of the assignee in bankruptcy.* So where the defend- ant, in a suit to foreclose a mortgage, is declared a bankrupt pending the suit, the assignee must be made a party before any further proceedings.* § 8. When a defendant obtains a discharge under the United States bankrupt act, after action brought, the plaintiff cannot, on summoning in the assignee, recover judgment against the defend- ant, for the purpose of fixing the amount of the demand, and filing the judgment as the basis of a claim to a dividend.* § 9. Where a sole plaintiff becomes bankrupt, the defendant may move that the assignees may elect within a certain time to file their supplemental bill, or, in default, that all further pro- ceedings should be stayed ; and is not compelled to file his bill of revivor and proceed with the cause." § 10. A declaration stated, that the plaintiff was a printer, that the sheriff had seized his goods under &fi.fa., issued by the defendants, and that, in consideration of the defendants' with- drawing the execution, the plaintiff agreed to deliver to them, as security, a printing machine, which they were to be at liberty to remove, with a power to the plaintiff to redeem it on payment of £150 within fourteen days; and alleged as a breach, that, although within fourteen days the plaintiff offered to pay the de- fendants £150, the defendants refused to redeliver to him the printing machine, whereby he lost great profits, which he would have made by its use, and also thereby his whole trade and busi- ness were ruined and stopped, and he became insolvent. The defendants pleaded, that, after the accruing of the causes of action declared upon, the plaintiff became insolvent, and his estate and effects were vested in the provisional assignee. Held, that this plea was good, without averring that the assignee had 1 Hammond v. Kice, 18 Verm. 353. * Minot v. Brickett, 8 Met. 560. 2 Gary o. Bates, 12 Ala. 544. 5 ciark v. Tipping, 10 Bng. Law & Eq. 3 10 Paige, 20. 292. 888 BANKRUPTCY AND INSOLVENCY. [CHAP. XII. interfered. Also, that the declaration stated an entire cause of action which touched the personal estate of the insolvent, and therefore passed to the assignee.' § 11. A decree in proceedings to which an assignee in bank- ruptcy is not a party does not bind him.^ Thus a decree of fore- closure, recovered after the decree of the District Court, declar- ing the mortgagor a bankrupt, but in a foreclosure suit commenced before such decree, cannot affect the right of the assignee in bankruptcy to redeem, unless the assignee is made a party, which may be done by a supplemental bill, in the nature of a bill of revivor.' § 12. Where the owner and holder of a bill of exchange is declared a bankrupt, and it is a matter of doubt whether such bill was not within the jurisdiction, so as to pass to the assignee, except as to bond fide holders thereof without notice ; the drawer, who is liable to the holder, may file a bill of interpleader against the different claimants, to compel them to settle the right as between themselves.^ § 13. Where a plaintiff sues as assignee of a bankrupt, a plea denying him to be such is a plea in bar, and not in abatement.' § 14. In an action by the assignees of a bankrupt, a general confession of judgment admits the assignment and right of ac- tion to be in the plaintiff, agreeably to the declaration.* § 15. To an action by assignees for goods sold by the bank- rupt, alleging promises made to him before bankruptcy, and an account stated with the plaintiffs ; it is not a valid plea, that the bankrupt brought a previous action upon the same promises, which is still pending; because the former action could not be brought upon the account stated, and the assignees had no power to con- tinue the former suit.' § 16. Under the act of 1800, the assignee was not liable to be summoned as trustee of the bankrupt, by one who, as a surety of the bankrupt, in a bond given to the United States, had paid the money due on the bond. The action should have been directly against the assignee, as such, who held the effects, not as a trustee 1 Stanton v. Collier, 22 Eng. Law & *Bellu. Hunt, ibid. 391. Eq. 373. 6 Peel ». Ringgold, 1 Eng. 546. s Atkinson u. the Farmers', etc. Crabbe, 'Kelly v. Holdsbip, 1 Browne, 36. 629. ' Biggs V. Cox, 4 B. & C. 920. » Johnson v. Fitzhugh, 8 Barb. Ch. 860. CHAP. XII.] SUITS RELATING TO BANKRUPTCY, ETC. of, but adversely to, the bankrupt.^ But he was liable as trustee of the payee of i note given by the bankrupt, where the payee had proved the note under the commission, though the note were afterwards assigned to another ; the assignment being question- able as to its fairness.* (See chap, vi.) § 17. If a defendant become bankrupt before answer and be- fore decree, under the 52d section of Stat. 15 & 16 Vict. c. 86, the plaintiff may obtain an order to prosecute the suit against the assignees, without filing a bill of revivor or supplemental bill.* § 18. It is no objection to a title to a real property acquired under judicial sale, that a party defendant, claiming an interest in the land, became bankrupt or insolvent pending the suit, and his assignee was not made party. The act of 1841 makes no such requisition.* § 19. In general, an assignee in bankruptcy, under the act of 1841, cannot sue to recover the property of the bankrupt after the lapse of two years from the declaration and decree, if the cause of action had then accrued.^ And if the defect in not bringing the action within that time appears by the declaration, it may be reached by demurrer.* § 20. There are various exceptions, however, to the general rule of limitation. Thus in case of a secret fraud, the provision of the 8th section, that no action shall be brought by the assignee more than two years after the declaration and decree of .bank- ruptcy, or after the cause of action accrues, does not bar a suit brought within that period after discovery of a fraud, upon which such suit is founded. And it is enough to state a case of secret fraud, without alleging in terms that the cause of action was fraudulently concealed.'' The distinction is made, that, if the bankrupt, and the promisor of a note made to him, fraudulently conceal the cause of action from the assignee, from the exact time when the assignee's title accrued, the two fears' limitation in the act does not begin to run. But a fraudulent concealment after the assignee's title accrued is not sufficient.* So an action brought by the assignee of a bankrupt upon a witnessed note is not barred, 1 Oliver v. Smith, 5 Mass. 183. 5 Comegys v. McCord, 11 Ala. 932 ; 13 ^Decoster v. Livermore, 4 Mass. 101. ibid. 888. s Lash V. Miller, 31 Bng. Law & Eq. « Harris v. Collins, 13 Ala. 388. See 387. Paulding v. Lee, 20 Ala. 753. « Cleveland v. Boerum, 27 Barb. 252. ' Carr v. Hilton, 1 Curt. 230. 8 Pritchard v. Chandler, 2 Curt. 488. 390 BANKRUPTCY AND INSOLVENCY, [CHAP. XII. by the law of Massachusetts, till the expiration of twenty years from the time when the note became payable.^ So a limitation does not apply to applications to the chancellor, for rules to refund moneys paid under a decree which has been reversed.^ So where A., being entitled, in right of his deceased wife, to a distributive share of the estate of one of her children, deceased, in the hands of a guardian, obtained his discharge in bankruptcy without having surrendered this interest ; it was held, that when he was declared a bankrupt, his entire estate vested by act of law in his assignee, in as full and ample a manner as if he had made a deed of assign- ment, and that, if the assignee failed to recover it within two years, as provided in the bankrupt act, such abandonment con- ferred no right on the bankrupt to the estate.^ § 21. In regard to the form of declaring in a suit by assignees, it has been held, that, in an action by the assignees to recover back money, paid by the bankrupt after he had committed an act of bankruptcy, and before the commission was opened, it is not necessary for them to declare as assignees.^ And assignees, in assumpsit against the_vendee of goods sold by the bankrupt after the commission, need not name themselves assignees in the decla- ration ; though it is otherwise in a suit on a contract made by the bankrupt before the commission.® So trustees of an insolvent debtor may bring ejectment without stating their characters in the record.* § 22. One pleading the insolvent laws need not set them forth at large.' So a declaration was held sufficient, which alleged that "A., assignee of the estate and effects of B., a bankrupt, com- plains, etc.," without referring to the bankrupt act, this being a public law.* So a declaration, in which the plaintiffs described themselves as "assignees of B., an insolvent debtor," not refer- ring to any statute of insolvency, was held good after verdict.* § 23. In Marylandjjto sustain a bill in chancery, by the perma- nent trustee of an insolvent debtor, he must show that he gave bond with surety in that character before filing the bill.^" So, in iPritchard v. Chandler, 2 Curt. 488. 'Mason, etc. v. Montgomery, Wright, 2 Kane v. Pilcber, 7 B. Mon. 651. 723. 3 Deadriok v. Armour, 10 Humph. 588. * Hastings v. Fowler, 2 Cart. 216. 'Thomas v. Rideing, Wightw. 65; 1 sBrigham v. Coburn, 10 Gray; Cutl. Rose, 121. Ins. L. (3d ed.) 52. 6 Evans v. Manse, Cowp. 569. lo Stewart v. Stone, 8 Gill & J. 510. * Cooper V. Henderson, 6 Binn. 189. CHAP. XII.] SUITS RELATING TO BANKRUPTCY, ETC. 391 Pennsylvania, the trustees of an insolvent cannot bring an action before they have given bonds.^ And notice to the original de- fendant is sufiBcient, in a scire facias brought upon a judgment after his discharge in insolvency, without notice to his assignees in insolvency, if they have never qualified by giving bonds.^ § 24. It is held that when the assignee of a bankrupt comes in and prosecutes or defends a suit, commenced by or against the bankrupt, if it is intended by the adverse party to charge him for costs, a motion for security must be made at the time when he is permitted to come in.* § 25. Upon a petition to stay the bankrupt's certificate coming on to be heard, it appeared that the petitioners had not been able to serve the petition upon the bankrupt, he having gone out of the jurisdiction. The Court dismissed the petition, with costs as against the assignees ; but, upon the petitioner's undertaking not to file another petition, without costs as against the bankrupt.* § 26. Where one became bankrupt, who was interested to the amount of one-tenth in land in dispute, and assisted to defend the suit; it was held that the assignee might continue to defend, if the creditors, knowing the fact, did not object. It might be otherwise in commencing disputed suits, unless the creditors as- sent. The amount of the expense in the defence would be in proportion to his interest, if he had made no contract to pay more ; but if he had agreed to pay more, for instance, one half, and the defence would not be continued without his paying it, his efiects are liable for that half till an assignee is appointed ; afterwards the assignee, as such, is liable for the half, if the cred- itors did not object to a continuance of the defence, and respect- able counsel advised it, and the assignee directed it.* § 27. It is the prevailing rule in bankruptcy and insolvency, founded in part upon express statutes,(a) and in part upon gen- 1 Power V. HoUman, 2 Watts, 218 ; Im- ' Holland v. Seaver, 1 Fost. 386. mel V. Stoerer, 1 Penn. 262. * Belton, 17 Eng. Law & Eq. 50. 2 The Commonwealth I). Lelar, 13 Penn. SBaboook, 1 Woodb. & M. 26. 22. (a) The 5th sect, of Mass. St. 1838, c. 163, provides, that "in all suits prosecuted by the assignees for any debt, etc. — the assignment — shall be conclusive evidence of their authority.'' By St. 6 Geo. 4, c. 16, s. 90, in any action by or against an assignee, no 392 BANKRUPTCY AND INSOLVENCY, [CHAP. XII. eral considerations of policy and convenience, that the assignment itself is conclusive evidence of the assignee's authority to sue, though the previous proceedings were defective and erroneous ; as ■where objection was made to the magistrate's jurisdiction for want of necessary allegations in the petition ; and also that the warrant was not under seal.^ So the assignee need not prove trading and other requisites of bankruptcy .^a) So under the act of 6 Geo. 4, which provides, that, unless the bankrupt within two months from the adjudication give notice that he will dispute the commission, the depositions as to the debt, the trading and the act of bank- ruptcy sha;ll be conclusive in all suits of the assignee for any debt, etc. ; the defendant in such suit cannot set up a fraudulent contriv- ance between the petitioning creditor and the bankrupt, although it might be ground for an application to supersede the commis- sion.^ So in Massachusetts proof is unnecessary of the com- mencement of the proceedings, or of the lawful appointment of the commissioner.* § 28. As has been suggested, the remedy of a party whose rights are affected by an assignment under the insolvent laws, when the preliminary proceedings are irregular, is by application in equity to arrest the proceedings, and set aside the assign- 1 Partridge v. Hannum, 2 Met. 569 ; Hayw. 243 ; Bissell v. Post, 4 Day, Key V. Cook, 2 Moo. & P. 720 ; Doe 79 ; Barstow v. Adams, 2 ibid. 70. V. Edgar, 2 Bing. N. C. 391. ' Young v. Timmins, 1 Cr. & Jerv. 148. ' Per Aahhurst, J.> Evans v. Mann, * Doane v. Russell, 3 Gray, 882. Cowp. 570; Barclay ». Carson, 2 proof shall be required of the petitioning creditor's debt, the trading, or the act of bankruptcy, unless the other party, if defendant, shall in writing demand it. See Porter v. Walker, 1 M. & G. 686 ; Skaife v. Howard, 2 B. & 0. 560. (a) Under the act of 1800, the judgment of the district judge, on a ver- dict flndipg that an act of bankruptcy had been committed, wa,s conclusive evidence, between the assignees and one claiming under the bankrupt after such act, that the commission duly issued. Livermore v. Swasey, 7 Mass. 213. It is held that where debts belonging to the estate of a bankrupt are sold by the assignee, in an action by an assignee of the purchaser, to recover the debts, it is sufficient evidence of the authority of the assignee in bankruptcy that he acted as such, without record evidence thereof. Arnold v. Leonard, 12 S. & M. 258. CHAP. XII.] SUITS RELATING TO BANKRUPTCY, ETC. 393 ment.* This may be done, on petition, by any person aggrieved, and the assignment will thereupon be adjudged, once for all, to be valid or invalid.* § 29. In assumpsit by assignees for money had and received to their use after the bankruptcy, the defendant pleaded the general issue, and that the plaintiffs were not assignees, and gave notice to dispute the act of bankruptcy upon which the proceedings were founded. The plaintiffs proved an act of bankruptcy, and receipt of money belonging to the estate between such act and the fiat, no other act being proved. Held, it was not open to the defend- ant to deny the trading and the petitioning creditor's debt.* So a notice that "A. was not duly declared a bankrupt" does not authorize the defendant to dispute the petitioner's debt, the act of bankruptcy, etc.* § 30. It is said, in explanation of this rule : "Ample provision is made by the insolvent laws, for correcting errors and irregu- larities in proceedings in insolvency, by a petition to this Court by any person whose interests may be injured by them. But so long as they stand unreversed, it is essential to the safety of all persons concerned, that the status, the representative capacity and authority of the assignee, should not be drawn in question in collateral suits, and between parties not responsible for, nor even connusant of such proceedings, but who are obliged to deal with such assignees as officers established by law, with powers conferred and defined by law, so long as they stand in that capacity."' And in another case the Court remark, that, unless the assignment were conclusive, "in one suit, and before one tribunal, an assignee might be prepared with the proofs of all the preliminary proceed- ings, and establish his representative capacity to the satisfaction of the Court. In another suit, for various causes, he might fail so to establish his character. The statute contemplates one entire settlement of the estate of the insolvent. So far as the, statute fails of accomplishing this office completely, it fails of accomplish- ing its intended purpose. Then, if the proceedings are irregular, it behooves all parties, once for all, to have that matter inquired into and settled; or if they are regular, that it may be estab- iHawson v. Paige, 3 Gray, 239; 2 *Moon«. Raphael, 7 C. & P. 115. Met. 569. 5 Per Shaw, C. J., Whithead u. Mal- sWheelook v. Hastings, 4 Met. 504 lory, 4 Gray, 185. s Porter v. Walker, 1 Man. & Gr. 686. 394 BANKRUPTCY AND INSOLVENCY, [cHAP. XII. lished, once for all, and irrevocably, for the security of all per- sons." The case is regarded as analogous to that of an adminis- trator. An assignee "is'in effect the administrator of the estate of a living person.'" So in another case it is said: "The inten- tion of the legislature doubtless was, to furnish the greatest facili- ties, that could be allowed consistently with the legal rights of other parties, to prevent all unnecessary delay and protracted litigation in the adjustment of the estate of insolvent debtors. If it be objected, that by giving such construction to the statute, the debts and demands of the insolvent may be enforced by one who has really no legal authority to act in the matter — it may be answered, that so far as the defendant, in any such suit, is con- cerned — a recovery by such assignee, or payment to him, must necessarily be a legal protection for the debtor against a subse- quent claim for the same demand by another person as assignee. As to other parties in interest, and particularly as to the protec- tion of the insolvent debtor, the 18th section of the statute confers on the Court full jurisdiction and power of superintendence, as a court of chancery, of all cases arising under the statute. In a proper case with proper parties, this Court would have full power to arrest the proceedings, if there were an illegal and unauthor- ized appointment of one as assignee."^ § 31. In general, the rule above stated is restricted to actions brought by the assignee against debtors to the estate, or for debts, duties, or demands.^(a) Thus it is held not applicable to an iPer Shaw, 0. J., Wheelock v. Hast- ^Deu v. Wright, Pet. C. C. 64; 1 Binn. ings, 4 Met. 509. 263 ; 1 Mass. 67. 'Per Dewey, J., Partridge v. Hannum, 2 Met. 571-2. (a) In an action by a trustee of an insolvent debtor, in New Jersey, the plaintiff, under the general issue, must prove his authority, by producing all the proceedings ; the production of the commissioner's certificate, and the final discharge of the insolvent, not being of themselves suflBcient. "Win- chester V. Union Bank, 2 Gill & Johns, 73. Upon an indictment under the bankrupt law consolidation act, 12 & 13 Vict. c. 106, s. 253, it is not enough to prove the petition to, and adjudica- tion of, the court of bankruptcy, but the preliminary matters, namely, the petitioning creditor's debt, the trading, and act of bankruptcy, must also be proved. Where, therefore, upon such an indictment, the act of bankruptcy relied on was the filing a petition in the insolvent court, and the only evi- CHAP. XII.] SUITS RELATING TO BANKEUPTCT, ETC. 395 action of trover by the assignees.* So the production of the commission and assignment does not prove the trading, bank- ruptcy, etc., and the appointment of the assignees, in suits by third persons, where the bankruptcy and the proceedings under it are in question.^ Hence in an action of replevin, turning upon the question whether a third person had become a bank- rupt, and the regular steps been taken, and in which the as- signees are not plaintiffs, nor the defendant a debtor of the bankrupt; the plaintiff must produce the regular evidence of an act of bankruptcy, and of the debt of the petitioning creditor.' lEugan V. West, 1 Binn. 263; Lovett 10 B. & C. 153; Norman «/. Booth, V. Cutler, 1 Mass. 67. Contra, Rob- 10 B. & C. 703. son V. Alexander, 1 Moo. & P. 448. 2 Wood v. Grundy, 3 Har. & J. 13 ; And see, as to the limitation of the Barney v. Patterson, 6 Har. & J. general rule, Muskett V. Drummond, 182. ' Waterman v. Robinson, 5 Mass. 303. dence offered was a copy of the petition, duly signed and certified by the proper officer, in accordance with the 239th section of the act, but the time of filing such petition was only shown by an indorsement on the back of the copy, such indorsement not being certified in any way, or referred to by the petition, it was held, that although the petition to, and adjudication of, the court of bankruptcy were proved, yet that it was also necessary to prove the act of bankruptcy, and that the evidence was not sufficient for that purpose. Eegina v. Sands, 33 Bng. Law & Eq. 536. Under the act of 1800, the record of the proceedings against the bankrupt, attested by the clerk of the District Court, was good evidence, without any certificate of the judge. Murray v. Marsh, 2 Hayw. 290. A copy of the assignment to the commissioners of a bankrupt, certified by their clerk, after the expiration of the bankrupt law, was admitted in evidence. Scott v. Leather, 3 Yeates, 184. In an action between assignees and a stranger, a general declaration of bankruptcy by the commissioners was admissible in evidence, in which they found "that A. became a bankrupt, within the true intent and meaning of the statute, before the date and issuing of the commission," and though it did not state that he became a bankrupt within six months before the date of the petition on which the commission issued, nor mention any specified acts of bankruptcy on which a commission could issue. Belden v. Edwards, 2 Day, 246. In such action, parol evidence was sufficient to prove a specific act of bankruptcy, and the time when it was committed. Ibid. Under the act of 1841, a certified copy of the docket of entries made in a bankrupt proceeding was competent evidence. Berghans v. Alter, 5 Barr, 507. 396 BANKRUPTCY AND INSOLVENCY. [CHAP. XII. So it has been held, that, in an action by one who has purchased under the assignees, proof is necessary of the trading, the act of bankruptcy, and the petitioning creditor's debt.^ So it is held, that, in an action of ejectment brought by an assignee, he must prove his title, like any other party, by producing the title deeds f though it has been doubted whether a purchaser under the assignee must, in ejectment, have proved the petitioning cred- itor's debt;\a) and decided that this was not necessary, in eject- ment against one who claimed by title adverse to the bankrupt.* So in an action of trespass against assignees ; defence, that A. had been declared bankrupt and the defendants appointed his assignees, and justifying the taking of the property as such; replication, that it belonged to the plaintiff and not to the de- fendants: held, the defendants must give formal proof of the bankruptcy, and of their own appointment.^ So, in Maryland, where the plaintiff, to show his right to institute the action as assignee of a bankrupt, and his appointment as such, presented the proceedings in the Circuit Court of the District of Columbia, on the application of the bankrupt; it was held that the Court had a right to decide on the correctness of these proceedings, and the validity of the appointment. And it appearing that the plain- tiff was appointed general assignee in bankruptcy for the County of Washington, and gave bond in that capacity; and was also appointed assignee of the bankrupt, but gave no bond as such : the Court held that neither appointment authorized this action.*(6) iHart V. strode, 2 Marsh. 116. * Scott v. Leather, 3 Yeates, 184. « Talcott V. Goodwin, 3 Day, 264. ^ jones v. Brown, 1 Bing. N. C. 484. s Deu V. Wright, Pet. C. C. 64. e Hall ». Sewell, 9 Gill, 146. (ci) If one of the counts were upon the demise of the assignees, and the other on the demise of the bankrupt himself, and the plaintiff failed to prove the petitioning creditor's debt, so as to support the first count, he might rely on the other, although the deed of the assignees recited the bankrupt'^ assignment, etc. Den v. Wright, Peters 0. 0. 64. (6) Where an action of covenant was brought by the assignee of A., a bankrupt, founded on an agreement between the latter and the defendant, a plea that A. of his own motion filed in the District Court of the United States his petition, applied for a discharge under the bankrupt law, and was declared a bankrupt, and that the plaintiff was appointed assignee, solely at his own instance, was held bad on demurrer. Hastings v. Fowler, 2 Cart. 216. An officer who delivers property, held by him under attachment, to an CHAP. XII.] SUITS KBLATING TO BANKRUPTCY, ETC. 397 § 32. Although, in general, an assignee is the proper party to all suits in which the hankrupt and his estate are inter- ested; yet it is held that the bankrupt can maintain a suit in his own name, unless the assignee interpose an objection. '(a) So where his creditors have never accepted an assignment, or an assignment has not been made.^ And, as we have seen, in some cases where a suit has been commenced by an insolvent before assignment of his estate, the suit will not abate by his discharge, but will continue in the insolvent's name for the benefit of his assignees.' So an uncertificated bankrupt may recover the price of goods sold by Irim, if the assignees do not interfere.* So it is sometimes held that a chose in action not assignable by notice, and claims to property to be enforced by trespass or trover, must be sued in the name of the insolvent. So a cause of action which accrues under the proceedings of the commissioner of insolvency .° So if there has been an equitable • Sawtelle v. Rollins, 10 Shep. 196. See ' Raymond «. Johnson, 11 Johns. 488. Herbert v. Sager, 5 Ad. & Ell. n. < Hayllar v. Sherwood, 2 Nev. & M. 401. 966. 6 state ». Sherman, 3 Ham. 507. sTunno v. Edwards, 3 Brev. 510; Kir- wan V. Latour, 5 Har. & J. 289. assignee in insolvency of the debtor, upon demand made, while the assign<- ment is in force, is not liable therefor to the attaching creditor, in case the proceedings in insolvency are subsequently annulled, for want of notice to the debtor of the petition by which they were instituted. Fenniman v. Freeman, 3 Gray, 245. (a) And more especially, it is said : " The bankrupt is still capable of maintaining actions, and no one can take advantage against him by plea of his bankruptcy, before the commission and assignment tmder it; the legal property remaining, till actual assignment, in the bankrupt himself." Cnl- len's Bank. L. 412. In an action by the bankrupt against a third person, he cannot offer evi- dence of declarations made by the assignees, that they had no interest in the property in question, merely upon the ground of an eaypectation that the defendant would claim under a sale from them. Doe v. Black, 8 0. & P. 464. The plaintiff's assigaee in bankruptcy had sold all his interest in a bond for the conveyance of real estate to the defendant, who had received a deed from the obligor. The plaintiff' claimed to have previously assigned the bond to one under whom he claimed, and by his bill sought to compel a conveyance. Held, that no case was presented, as it did not appear by the bill that the assignment was prior to the petition in bankruptcy. Perley v. Dole, 38 Maine, 558. 398 BANKRUPTCY AND INSOLVENCY, [CHAP. XII. assignment of the cause of action before the bankruptcy, the suit may be prosecuted afterwards, in the name of the bankrupt, for the benefit of the party in interest.^ And where, pending a suit, the plaintiff becomes bankrupt, and is discharged in bankruptcy, and his assignee sells the demand to a third person ; the Court will not substitute the latter as plaintiff on the record, nor, on his motion, substitute the assignee in bankruptcy as plaintiff.^ So an insolvent debtor who has made a general assignment, on proof of his paying all debts due at the time of his discharge, may bring ejectment in his own name, for lands assigned by him, without a formal reassignment.^ So the devisee of an insolvent debtor, who had taken the benefit of St. 5 & 6 Vict. c. 116, and obtained a release in full from all his creditors, was held entitled to sus- tain a bill in equity in respect of surplus real property, which had been conveyed by the oflScial assignee, without applying to the insolvent court for an order, revesting the property in the assignee of the insolvent.* But it is held, on the other hand, that an insol- vent who has assigned his property cannot sue in his own name for a claim existing at the time of his assignment, though he is authorized by his creditors, and his assignees have not acted.® So where an action was brought by A., the payee of a note, for the use of B., a bankrupt, it was held, that if B. received the note previous to the decree the action was defeated, as his as- signee, by that decree, succeeded to all his rights and interest, and, if he had any equitable interest in the note, he must show it, as the presumption of law is, that the equitable interest is united with and follows the legal title.* § 33. In reference to actions between the bankrupt on the one hand, and his assignees or third persons on the other, growing out of the bankruptcy itself, it is said : "Although he has been declared a bankrupt by the commissioners, yet;^ neither he, nor any other, is bound by their determination ; but he may contest his bankruptcy in an action. He may have trespass against the assignees, or other persons acting under the commission- ers, if he was not liable to a commission. He may even sub- mit to his commission in the first instance ; yet still protesting 1 Sa-wtelle v. Rollins, 10 Shep. 196. * Wearing v. Ellis, 39 Eng. Law & Eq. 2 Gale V. Vernon, 1 Sandf. 679. 541. » Power V. Holman, 2 Watts, 218. » Stoever v. Stoever, 9 S. & R. 434. «Griswold v. McMillan, 11 111. 590. CHAP. XII.] SUITS BELATING TO BANKRUPTCY, ETC. 399 that he is no bankrupt, he may notwithstanding, within a proper time, bring an action against his assignees. But the Court may enjoin him from proceeding or not, according to the length of time and manner of his acquiescence, and other circumstances of the case. And if the petitioning creditor's debt shall not be really due, or it cannot be proved that the party was a bankrupt, but on the contrary it shall appear that the commission was taken out fraudulently or maliciously, the lord chancellor shall, upon peti- tion of the party grieved, examine into the same, and order satis- faction to be made to him for the damages sustained by him, and for the better recovery thereof, may, if there be occasion, assign the bond given by the petitioning creditor, on which the party may sue in his own name."* § 34. Upon these grounds, where a party, against whom a com- mission had issued wrongfully, was required by the assignees to give up his books and did so ; it was held that he might maintain trover without a demand ; the delivery being under the Circum- stances compulsory.^ So one against whom a commission has issued is not estopped from bringing trover against the assignees for his goods, either by having aided them and given directions as to the sale of the goods, or by having surrendered a lease for the assigned reason of his bankruptcy; the former act merely indicating a purpose to make the most of the property, and the latter being one to which the assignees were not parties or privies; although it seems, as against the lessor it would have been an estoppel.^(a) So, a commission having issued against the plaintiff, which was invalid for want of a petitioning creditor's debt, he applied to a commissioner to appoint an official assignee, to inves- tigate the sufficiency of the debt and take care of the property. The defendant was accordingly appointed, without notice that the 1 CuUen's Bank. L. 412-13. » Heane v. Rogers, 9 B. & C. 577. 2 Summerset v. Jarvia, 8 Br. & B. 2, (a) The validity of the petitioning creditor's debt, on which a commission issued in England, cannot be disputed in Pennsylvania by the bankrupt, more especially after great lapse of time, on the ground that the creditor was an alien enemy ; where the debt was settled by an award without taking that objection, and the bankrupt unsuccessfully brought an action of tres- pass against the commissioners, and the chancellor refused, on his application, to supersede the commission. Merrick's, etc. 5 W. & S. 1. 400 BANKRUPTCY AND INSOLVENCY. [CHAP. XII. commission was disputed. Held, notwithstanding his application, the plaintiff might maintain an action against the defendant for money received under the commission.^ § 35. We have already (chapter ix.) at some length considered the defence of bankruptcy, when set up in a suit against the bankrupt, and the answers which may be made to that defence. But little remains to be added in the present connection ; and it will be seen that some of the decisions are not wholly recon- cilable. § 36. In pleeiding a discharge under the bankrupt act, all the facts necessary to confer jurisdiction should be alleged, and, if that is done, the discharge will be held valid unless impeached for fraud.'' (See s. 40.) § 37. It is held that a plea, setting up a right acquired under proceedings in bankruptcy, must aver not only a petition, a decree of bankruptcy and assignment, but also that the petition set forth a list of creditors, and an inventory of property, and was duly verified. It should also appear that the debts were not fiduciary.' § 38. A plea to a writ of error, of the bankruptcy of the plaintiff in error, must show when he was declared a bankrupt, that the court may judge of its effect on the writ of error. Such plea should also show the place where the decree was rendered, and the court rendering it.*(a) § 39. An answer to a creditor's bill, setting up the defence of bankruptcy, stated that the defendant made his application, showing its terms; that he then resided in the district where it was made; that he was a bankrupt within the act of Congress, and was owing debts not contracted as executor, etc.; that, upon regular proceedings had in the District Court, he was decreed 1 Munk B. Clark, 2 Bing. N. 299. Stow v. Parks, 1 Chand. 60; 2 2 Stow V. Parks, 1 Chand. 60. Sandf. Ch. 814. ' Seaman v. Stoughton, 3 Barb. Ch. * Vairin v. Edmonson, 4 Gilm. 120. 844. Contra, (as to the last point,) (a) A plea of arrangement under the bankrupt law consolidation act must show that the deed is for a distribution of the whole estate and for all the creditors. Bloomer v. Darke, 2 C. B. (N. S.) 165. It seems, it is not sufficient to allege in general terms, that all was done to make the deed as effectual as if the creditors had signed it. Ibid. CHAP. XII.] SUITS RELATING TO BANKRUPTCY, ETC. 401 a bankrupt, and the decree was still in force; and that, upon further regular proceedings, he was discharged from his debts by a decree of that court, and received a certificate. The certificate of discharge was then set out at length. Held sufficient, without alleging that the complainant's debt was not within the class of debts excluded from the operation of the bankrupt law ; that if the complainant wishes to insist on such matter to avoid the defence, he must show it.^ § 40. It is held that a plea by the defendant, that the plaintiff was declared a bankrupt pendente lite, need not allege anything . in respect to the jurisdiction of the court in which the proceed- ings in bankruptcy were had; for it will be inferred that these were in the proper tribunal.* (See s. 36.) § 41. In New York, an insolvent discharge under the act of 1813 cannot be given in evidence in bar of an action commenced since the Rev. Sts., unless pleaded specially, or unless notice of it is given with the general issue.^ § 42. A discharge in bankruptcy may be given in evidence under a plea of nul tiel record, without proving the regularity of the preliminary proceedings in bankruptcy.* § 43. As we have seen in a preceding chapter — chap. ix. — in pleading a discharge, it is only necessary to set forth so much of the proceedings, as will show that the court had jurisdiction of the petition, and granted the discharge. If there is any matter which renders the discharge invalid, or takes the case out of its operation, the plaintiff may set it forth in his replication.^ § 44. And, with reference to the replication, a plaintiff will not be permitted to add new and other specifications to his sugges- tions of fraud, etc. against a debtor's schedule, after the issue has been made up, and the parties are ready for trial.* And where a discharge under the insolvent laws is pleaded, and the plaintiff files a specification of the grounds on which he shall seek to avoid the discharge, he cannot be permitted at the trial to take objec- ions to the validity of the discharge not mentioned in his speci- fication.^ § 45. Plea, that, after the recovery of a judgment, the de- 1 McCabe v. Cooney, 2 Sandf. Ch. 314. » Johnson v. Ball, 15 N. H. 407. a Lacy v. Rockett, 11 Ala. 1002. e Bentley v. Page, 2 MoMuUan, 52. 8 Spencer v. Beebe, 17 Wend. 557. ' Heslop ». Baker, 20 Eng. Law & Eq, « Thompson v. Wiley, 34 Maine, 195. 536. 402 BANKRUPTCY AND INSOLVENCY. [CHAP. XII. fendant was a prisoner, and, according to the provisions of the 3 & 4 Vict. c. 107, petitioned the insolvent court for his dis- charge; that the court made an order, vesting his estate and effects in the provisional assignee; and that afterwards the defend- ant delivered to the court a schedule, containing a full and true description of all dehts due from him, and of all persons to whom he was indebted, together with the nature and amount of such debts. The plea then stated that the defendant was brought before the court and examined ; and that, by an order of adjudi- cation, it was ordered that the defendant be discharged from cus- tody as to the several debts due to the persons named in the schedule; and that the defendant was, by such order of adjudi- cation, discharged from the said judgment debt. Replication, that the defendant was not, by the order of adjudication, adjudged or ordered to be discharged from the said debt. Held, that upon these pleadings, the objection was not open, that the schedule did not contain a full and true description of the plaintiffs as judg- ment creditors, nor of the nature and amount of their debt.'^ §46. We have often had occasion to refer to the exercise oi equity jurisdiction in cases of bankruptcy and insolvency. (See chap, xi.) With regard to the authority of a court of chancery thus to inter- fere ; where an assignee filed a bill in equity, praying that the de- fendant who had received a mortgage from the insolvent, which was an unlawful preference, might be ordered to surrender the mort- gage or convey the land to the plaintiff, but waiving any discovery or answer on oath, and relying wholly on the plaintiff's own proofs : it was held, that there was a plain, adequate, and com- plete remedy at law, and the bill could not be sustained.'' And in another case the same rule was applied, notwithstanding a prayer for a discovery.* But a bill for discovery lies in aid of an action at law.* And where a debtor sold goods, and took a note for the price payable to a pre-existing creditor, and deliv- ered it to him in fraud of the insolvent law ; it was held, that the assignee of such debtor might maintain a bill in equity for the note against the maker and payee.° § 47. By the English law, if, after bankruptcy and before a 1 JaokBOu V. Chichester, 16 Eng. Law » Woodman u. Saltonstall, 7 Gush. 181. & Eq. 581. « Adams v. Porter, 1 Cusb. 170. 2 Thayer v. Smith, 9 Met. 469. 6 Holmes v. Woodworth, 6 Gray, 324. CHAP. XII.] SUITS RELATING TO BANKRUPTCY, ETC. 403 certificate, a creditor purchase goods from the bankrupt, in an action for the price, brought after a certificate, the old debt cannot be set off, being barred by the certificate.' § 48. In trover by assignees against an auctioneer who sold the bankrupt's property ; it was held that the defendant should be allowed for rent paid the landlord, and the expenses of the sale, but not for those of remoyal, that being "part of the aggres- sion complained of."^ § 49. Under the act of 1800, in an action brought by the as- signees, the defendant could not set ofi" a check issued by the bankrupt, payable to bearer, bearing date before the bankruptcy, unless he proved, further, that the check came to his hands prior to the bankruptcy.* Where there were mutual dealings between A. and B., and, A. having the property of B. in his hands, B. became bankrupt, A. was entitled to set off his debts or demands against the funds in his hands, and would be compelled to account to the assignees of the bankrupt for the balance only, even though the subject of the set-off would not be admissible at law.* A joint debt might be set off against the separate claim of the assignee of one of the partners; but such set-off could not have been made at law, independently of the statute.* In an action by assignees for the bankrupt's services as supercargo of a ship, the defendant could not set off a demand against the bankrupt for not keeping the ship fully insured.^ § 60. If a plaintiff takes issue on a defendant's plea of an insol- vent's discharge, and the issue is found for the defendant, the plaintiff is subject to costs of the trial.^ § 51. If creditors object to a discharge, and prevail in the Dis- trict Court, and the bankrupt prevails on appeal, upon new evi- dence, filed in a new examination and disclosure allowed to him on leave; neither party recovers costs.* § 62. In regard to evidence in bankruptcy and insolvency cases,(a) it is held that an applicant for the benefit of the insol- 1 Hayllar v. Sherwood, 2 Ner. & M. 6 Tuckers v. Oxley, 5 Cranoh, 34. 401. " Brown ». Cuming, 2 Gaines, 33. 2 Grimshaw v. Atterwell, 8 C. & P. 6. ' Conklin if. Luptou, 1 Wend. 30. s Ogden v. Cowley, 2 Johns. 274. » Guild, 1 Woodb. & M. 29. * Murray v. Riggs, 15 Johns. 571. (a) In Eeed's case— Mar. T. Suffolk, (Mass.) 1849— it was ruled by Wilde, J., that upon a question of fraud the burden of proof is on the debtor, who 404 BANKRUPTCY AND INSOLVENCY. [CHAP. XII. vent law may prove, by his own oath, that he has been arrested and given the bond required by the statute in such case.' § 63. Under the act of 1800, in an action against the acceptor of a bill, the plaintiff, who had become a certificated bankrupt, was admitted as a witness to prove a parol acceptance, he having released his interest at the bar, and the suit being prosecuted by his assignees who had given security for costs.* So the bank- rupt, on obtaining his certificate, etc., might have been a witness in a suit brought by himself before bankruptcy, though the names of the assignees were not substituted immediately.^ But it is held that a voluntary bankrupt is not a competent witness for the assignee, to prove a debt due him.*. So in an action by the United States against one who had received property belonging to a certificated bankrupt, the bankrupt is not a competent wit- ness to prove the time of his insolvency; debts to the United States not being barred by a certificate.^ So the testimony of a bankrupt in England, which was offered to prove a debt due in this country, was rejected on the ground, that he might have an interest in the surplus.^ So a bankrupt, who has been discharged in Great Britain, and against whose property in New York an attachment has issued, under the absent and absconding debtor act, cannot be a witness in favor of his trustee under that act, although he has released his interest in the surplus of his estate to his assignees in Great Britain, and to his trustees here.'' § 54. A petitioning creditor is a competent witness to prove his debt, in an action where the validity of an assignee's sale of the bankrupt's land is in question, if he have no interest in the event of the suit.* So in an action by an assignee to recover a debt due to his separate estate, a creditor of a firm, of which the bankrupt was a member, is a competent witness for the plaintiff.^ 1 Hamilton v. CheTalier, 3 Harr. 433. 6 United States v. King, Wallace, 13. 2 MoEwen v. Gibbs, 4 Ball. 137. See « Coit v. Owen, 3 Desaus. 175. McClenachan v. Scott, 2 Dall. 172, n. ' Graves v. Delaplaine, 14 Johns. 146. • Browne v. lua. Co. etc. 4 Yeates. 119. 8 Farringtonw. Farrington, 4 Mass. 237. * Cromwell v. Comegys, 7 Ala. 498. » Barclay v. Carson, 2 Hayw. 243. is the party applying for a certificate, to show that he has in all respects complied with the law ; inter alia made a full disclosure of his property ; and that the same rule grows out of the fact, that the insolvent law is a favor to the debtor. CHAP. XII.] SUITS RELATING TO BANKRUPTCY, ETC. 405 So, where one offered as a ■witness for the plaintiff was objected to, on the ground of his being interested as a creditor of the bank- rupt ; and the only proof of such fact was, that his name appeared as a creditor in the bankrupt's schedule of debts; and, being sworn, he testified, that, although he had been a creditor, he had since assigned the debt, and was not one then : held, that such schedule did not furnish conclusive evidence of his interest, and that this evidence was more than counterbalanced by his testi- mony.* But, in an action by an assignee, a creditor under the fiat is not a competent witness for the plaintiff, under St. 6 & 7 Vict. c. 85, being "a person on whose immediate and individual behalf" the action is brought.^ § 65. The indorser of a note who has become bankrupt was held to be a competent witness for the indorsee.^ § 56. In an action by assignees, the declarations of the bank- rupt, made before bankruptcy, are admissible in evidence for the defendant.* So, in an action by an assignee, evidence for the plaintiff is admissible, of statements of the bankrupt as to his affairs.*(a) 1 Steene «. Aylesworth, 18 Conn. 244. * Marks «. Barker, 1 Wash. C. C. 178. 8 Belcher v. Drake, 2 Car. & Kir. 658. » Belcher v. Drake, 2 Car. & Kir. 658. ' Murray v. Marsh, 2 Hayw. 290. {a) The examination of a debtor, proceeded against by warrant, under the New York act "to abolish imprisonment, and to punish fraudulent debtors," cannot be used in evidence against the debtor in a prosecution against him for a misdemeanor, in disposing of his property with intent to defraud his creditors. People v. Underwood, 16 Wend. 546. CHAPTER XIII. SUPERSEDEAS. 1. General grounds for, and mode of superseding. 4. Effect. 6. By whom. 7. For what. 14. On whose application. 16. Miscellaneous points. § 1. We have already — chap. i. — referred to the general point of void and voidable commissions of bankruptcy and insolvency. In the present chapter we shall briefly consider under what circumstances and for what causes such commissions may be superseded. § 2. It is said: "The only case in which any express provision by statute has been made, for superseding a commission, is that of the petitioning creditor compounding his debt with the bank- rupt: but the lord chancellor has always exercised a discretionary power of this kind, whenever the ends of justice required, either for the sake of creditors or of the bankrupt himself, that a commission should not be suffered to proceed. "(a) § 3. In the United States, it is not necessary to issue a formal writ to supersede a commission of bankruptcy.^ And a district 1 Morris's Estate, Crabbe, 70. (o) Cullen's Bank. L. 440. See Anderton, 1 Mont. & Mac. 177 ; Bugle- hole, 1 Eose, 271, 10 Ves. 525 ; Maltby v. Christie, 1 Bsp. 342 ; Perring v. Tucker, 3 M. & P. 557 ; Bold, 1 Cox, 423 ; Hodson, 10 Jur. 930 ; Garnett, 1 De Gex, 95. As to the necessity of a surrender in order to supersede, see Bean, 1 Eose, 211 ; Jones, 11 Ves. 409 ; Drake, 1 Mont. & Bl. 486 ; Nichols, 2 Glyn & J. 101 J Glyn, 1 Mont. 124 ; Peaker, 2 Glyn & J. 337 ; Jones, 8 Ves. 328 ; Hopkins, 1 Eose, 228 ; Whittington, Buck, 235 ; Gardiner, Buck, 458 ; Crowther, Buck, 480 ; Lavender, 1 Eose, 55 ; Norcott, 1 Mont. 281 ; Casling, 2 Glyn & J. 35. As to the efiFect of obtaining a discharge from custody by the bankrupt, in preventing a supersedeas, see Goldie v. Gunston, 4 Camp. 381 ; Watson v. Wace, 7 D. & E. 633 j Mott v. Mills, 3 C. & P. 197. (406) CHAP. XIII.] SUPERSEDEAS. 407 judge derives the power to supersede a commission of bankruptcy from the bankrupt law, by construction and implication.' But after a decree of bankruptcy, proceedings cannot be suspended without general consent. Perhaps the consent of the assignee is not absolutely necessary.^ § 4. A supersedeas, lawfully ordered, places the bankrupt and his estate in the same situation they would have been in, if the commission had never existed.^ § 5. The defendant, having in his possession a lease belonging to A., deposited with him as security for moneys advanced by him to A., and upon which he claimed a lien for costs as against A., and also as against B., who had been appointed assignee under a commission issued against A.; concurred with B. in a sale of the lease, and received from him in satisfaction of his claim the amount of the purchase-money, and also, with B.'s assent, certain sums due for rent of the premises, etc. Previous to the sale, the de- fendant, as B.'s solicitor, had notice of a petition to supersede the commission for want of a petitioning creditor's debt. The commission being superseded, and a new one issued, the plaintiffs, assignees under the latter, bring this action to recover the sums thus received. It was held, that the defendant, though having a valid Hen upon the lease till payment of his debt, had no right to • sell it, and by the sale became guilty of a conversion, and that the plaintiffs might waive the tort and bring an action for money had and received. Also, that this was the precise remedy for the other sums received, and that the concurrence of B. did not change the rights of the parties, he having no legal authority to consent.* § 6. Whether a commissioner of bankruptcy can himself super- sede the proceedings, depends upon express statutory provisions, and often upon the precise time when the application is made. Thus A. was adjudged a bankrupt in February, 1851, and on the 19th of the same month, a duplicate of the adjudication was served on him. He did not, within the time limited by the 104th section of the 12 & 13 Vict. c. 106, show cause to the court against the validity of the adjudication, and on the 28th February, the adjudi- 1 Morris's Estate, Crabbe, 70. ' Morris's Estate, Crabbe, 70. 2 Gile, Law Rep. Sept.— 42, p. 224— * Clark v. Gilbert, 2 Scott, 520. Vermont. 408 BANKRUPTCY AND INSOLVENCY. [CHAP. XIII. cation was advertised in the gazette. On the 19th March, A. pre- sented a petition to the commissioner, praying that the petition for adjudication of bankruptcy, or the adjudication thereunder,, might be annulled. Held, (reversing the decision in 15 Jur. 984 ; s. c. 7 Eng. Rep. 312,) that the commissioner had no jurisdiction to annul the adjudication, after the time, allowed by the 104th section for showing cause against the validity of the adjudica- tion, had expired, and the petition so presented to the commis- sioner was not' a proper proceeding to dispute the adjudication, within the meaning of the 233d section of the act ; and that, although a petition of appeal to the vice-chancellor from the order on that petition was presented within twenty-one days from the date of such order, according to- the 12th section, but more than twenty-one days after the advertisement of adjudication, the bankrupt was not entitled to have the adjudication an- nulled.^ § 7. A commission will be superseded for fraud.\a) Thus a separate commission was superseded for fraud, after the bankrupt had received his certificate and recommenced trading, and the separate effects had been delivered up to the assignees under a subsequent joint commission.^ So a bankrupt's certificate, ob- , tained by imposition practised upon the great seal, may be revoked, if no injury accrue to persons subsequently dealing with the bankrupt on the faith of it.* And in case of conspiracy for a fraudulent commission, the lord chancellor will order the neces- sary documents to be laid before the attorney-general, in order to an indictment." But a commission will not be superseded for 1 Carter, 8 Eng. La-w & Eq. 112. * Tallis, 1 Rose, 371; Cawtliorn, 2 2 Bather, Buck, 426; Conway, 13 Ves. Rose, 186; 19 Ves. 260. 62. 6 Emery, Buck, 422. » Poole, 2 Cox, 227. (a) Where the counsel for the opposing creditors, while going to the office of the recorder of New York, to oppose the insolvent's discharge, was met by one of the attorneys for the petitioning creditor and the insolvent, and detained by him in conversation, and in the perusal of papers relating to the opposition, and in the mean time the other attorney had appeared with the petitioning creditors before the recorder, and obtained an order for the assignment of the insolvent's estate ; it was held, that the? recorder ought to vacate the order. Bradstreet, 13 Johns. 385. CHAP. XIII.] SUPERSEDEAS. 409 fraud, where purchases have been made under it.^ Nor if the object can be attained otherwise.^ § 8. Though a commission is matter of right, yet, where it has been taken out oppressively, the court will strictly examine it, and, unless founded on a sufficient act, will not inquire as to other acts.' § 9. A commission against an uncertificated bankrupt is void and a nullity; all his property being vested in his assignee.^ Or against several persons, one of whom is such bankrupt." But it is otherwise if the prior joint commission has never been acted on or superseded.* And where a commission was issued against A. and B., partners, and a subsequent one against A., C, D., and E., which was superseded as to A., without prejudice to the others ; and the assignees under the second commission sold an estate belonging to one of the three partners : held, a purchaser, upon a bill for specific performance, could not object to the sale on the ground that the second commission was void.'^(a) 1 Edwards, 10 Ves. 104. 5 Wray, 1 Mont. & Mao. 195. See 2 Bourne, 3 Glyn & J. 137. Butts v. Bilke, 4 Prioe, 240; Crid- 8 Smith, 1 Rose, 147. land, 8 Vea. & B. 94 ; Nelson o. * Nelson v. Chernell, 1 M. & Sc. 452; Chernell, 7 Bing. 663. Martin v. O'Hara, Cowp. 823; e -Warner », Barker, 2 Moore, 71 ; Bui- Brown, 1 Ves. & B. 60; Till v. len, 1 Rose, 134. Wilson, 7 B. & C. 684. ' Burlton v. Wall, 1 Tarn. 113. (a) If one a second time bankrupt do not pay 15s., he is liable to an action by a creditor who has signed his certificate. Phillpott v. Corden, 5 T. R. 287. Though the first commission be superseded by consent. Thornton v. Dallas, 1 Dougl. 46. To make a former commission a good defence against an action by the assignee under a later one, there must have been an assignment under the former one. Phillips v. Hopwood, 1 B. & Ad. 619. The bankrupt's property is liable only to a judgment at law ; but is not to be taken by the second assignee under the commission. Hodgkinson, 19 Ves. 291. See Austin v. Denniford, 9 D. & E. 600. See, as to the effect of a former commission, Eicke v. Nokes, M. & M. 303 ; Priest V. Milnes, 2 Chit. 114 ; Jelfs v. Ballard, 1 B. & P. 467 ; Edmonson v. Parker, 3 ibid. 185 ; Graham v. Grill, 4 Camp. 282. The certificate is not a bar, unless it affirmatively appear that the estate has produced 15s. ; not merely that it probably will produce it. Coverly v. Morley, 16 E. 225 ; Haviland v. Cook, 5 T. E. 655 ; Gregory v. Merton, 3 Esp. 195. The plaintiff need only prove the former proceedings, and that the party submitted to them. He need not prove the trading, act of bankruptcy, etc., 410 BANKKUPTCT AND INSOLVENCY. [CHAP. XIII, § 10. By St. 6 Geo. 4, c. 16, s. 26, no commission abates by the death of the bankrupt after adjudication. But if he die before adjudication, the commission cannot proceed.^ And no writ of supersedeas is necessary.'' § 11. The commission may proceed, though he dies before sur- render.' Or before an assignment of commissioners.* So a sepa- rate commission was established, though the other partner died before assignment." § 12. If the bankrupt die after a petition to supersede, it shall lie over, for the purpose of notice to his personal repre- sentatives.°(a) § 13. A certified bankrupt died pending the commission, having devised all his property, and all he might afterwards acquire, to his wife. She devised all her property to her daughter, and ap- pointed her son executor. Real property of the bankrupt being afterwards discovered, it was held that the son had sufficient interest therein to entitle him to apply for a supersedeas.'' § 14. It has been said: "If the weight of evidence had been against the commission, yet the court will not supersede it, because a commission of bankruptcy is as much ex debito jwstitiae as a writ, and I know no instance where this court have superseded a commission, without directing an issue, unless it appears very 1 Beale, 2 Ves. & B. 29. 5 Smith, 5 Tes. 295. 2 Green, 1 Dea. & Chit. 230. 6 Leworthy, 1 Mont. 54. 'Dewdney, 15 Ves. 494. ' Morris's, etc. Cra,bbe, 70. * Troughton v. Giltey, Amb. 630. as would be necessary in reference to third persons. Haviland v. Cook, 5 T. R. 655 ; Gregory v. Merton, 3 Bsp. 195. Where a docket has been struck, a second commission, obtained upon a subsequent one, cannot be sustained without a supersedeas for the first. Hall, 1 Smith, 120. It is in the discretion of the great seal to supersede a second commission against an uncertificated bankrupt, even on his own petition. Lees, etc. 16 Ves. 473. See Brown, 2 Ves. 67 ; Knight, 2 Eose, 319 ; Freeman, 1 Ves. & B. 34. As to a third commission, see Todd v. Maxfield, 5 D. & R. 258 ; Lane, 1 Mont. 12; Hodgkinson, 2 Rose, 172; Fowler v. Coster, 10 B. & C. 427; Morley, 2 Dea. & Chit. 45. (a) As to the effect of the death of a petitioning creditor, see Tanner, 1 Mont. & Mac. 292 ; Winwood, 1 Glyn & J. 252 ; Wakefield, 1 Mont. & Mac. 291. CHAP. XIII.] SUPERSEDEAS. 411 plainly to be taken out fraudulently or vexatiously."^ So it is held that a certificate will not be recalled, but upon a clear case against the bankrupt.'' So, where a bankrupt has been long in possession of his certificate, the court will not recall it.*(a) § 15. A certificated bankrupt may petition for a supersedeas, upon the ground that he was not a trader.* So a voluntary peti- tion may be withdrawn upon application of the petitioner, before any decree of bankruptcy, upon proper cause shown and payment of costs ; more especially if all known creditors are understood to concur, and the debts have been compromised. It is doubted whether this could be done after a decree.' But a bankrupt can- not set up a former act of bankruptcy to invalidate his commis- sion.* So a party was adjudicated bankrupt, and the assignees sold chattels (alleged to have been mortgaged to A. B.) as being in the order and disposition of the bankrupt. The time had ex- I Wilson, 1 Atk. 218. B. 506; Northam, 2 Rose, 140; 2Hood, 1 Glyn& J. 219. Shaw, 2 Ves. 40. 'Reed, Buck, 430. 5 Randall, Law Rep. July— 42, p. 115 * Lewis, 2 Glyu & J. 208. See Dono- — U. S. Ct. Mass. van, 15 Ves. 6; Bryant, 1 Ves. & sRex v. Bullock, 1 Taun. 71. (a) Where the petitioner omits to return a debt due to him, from plain mistake or misapprehension, or an honest conviction that the worthlessness of the claim rendered its return useless, the mere fact of omission, under such circumstances, will not defeat the petition. Oliver, 1 Ashm. 112. An applicant under the insolvent law filed his petition, and returned but one creditor, to whom he gave private notice, and on his examination admit- ted that he had other creditors for small sums, and one for a considerable amount, the latter of whom he swore that he lost sight of on preparing his petition, and the others of whom he considered it immaterial to return, from the smallness of their amounts. The Court, being of the opinion that the omissions were not fraudulently made, postponed the hearing, with liberty to the petitioner, in the mean time, to make return of all his omitted cred- itors, and to notify them according to law. Johnson, 1 Ashm. 157. The situation of parties and nature of the demand are to be considered in determining what is convenient certainty. Bowers, 13 Eng. Law & Bq. 582. A doubt on the legal validity of an adjudication is not sufficient ground for annulling it. Ibid. A creditor, a wholesale dealer, issued a summons under the 78th section of the act, demanding a payment of money due from a retail dealer in the same line of business, and described the items in the particulars of demand as "goods." Held, that this described, with sufficient certainty, the wares supplied, so as to prevent the annulling of the adjudication on the ground of uncertainty. Ibid. 412 BANKRUPTCY AND INSOLVENCY. [CHAP. XIII. pired within -whicli, by the 233d section of the consolidation act, 12 & 13 Vict. c. 106, the bankrupt could have petitioned to annul, but A. B. presented such petition, and the commissioner, on the ground of want of trading, annulled the adjudication. Held, upon appeal of the petitioning creditor, that as, upon the evidence, it appeared that the application to annul was made at the instiga- tion of the bankrupt, the adjudication must be restored, the Court declining to decide the question of trading.*(a) § 16. In Massachusetts, before the issuing of a warrant in in- solvency against a partnership, on the petition of one partner, notice to the other partners, though not prescribed by law, may be required by the commissioner, in his discretion; and any partner not so notified might apply to the Supreme Court, under Stat. 1838, c. 163, s. 18, to suspend and vacate the proceedings, on showing that the partnership is not insolvent, and that there was no foundation for the allegation of insolvency, on which the proceedings were instituted. And where proceedings in insol- vency, instituted against a partnership, on the petition of one partner, without previous notice to his copartners, are suspended by this court, on the application of a partner not so notified, the case will be referred to a master to inquire and report as to the truth of the statements upon which the proceedings were com- menced before making a final decision. ^(6) 1 Emery, 28 Eng. Law & Eq. 828. 2 Thompson v. Thompson, 4 Cush. 127. (a) Whether a bankrupt committed can petition to supersede, see Eex v. Bullock, 1 Taun. 82; Bean, 17 Ves. 47; McGennis, 18 ibid. 289 ; Brown, 2 Swans. 290. As to acquiescence by the bankrupt in the commission. Hall, 1 Mont. 354; Hill, ibid. 9; Like v. Home, 6 Esp. 20; Kirk, 15 Yes. 464; Abell, 1 Glyn & J. 199 ; Leigh, 2 ibid. 332 ; Giles, 1 Dea. & Chit. 548 ; Mercer v. Wise, 3 Esp. 219 ; Gutten, 1 Glyn & J. 317 ; Clarke v. Clarke, 6 Esp. 61; Hearne v. Eogers, 4 M. & E. 486 ; Bass, 4 Madd. 270 ; Hornby, 1 Mont. & Bl. 1 ; Hooper, 1 Dea. & Chit. 117. (6) In all cases of proceedings in insolvency instituted in invitum, Stat. 1844, c. 178, s. 9, requires that notice should be given to the debtor before the warrant is issued, and without such notice the proceedings are void. Thompson v. Snow, 4 Cush. 121. Where a warrant in insolvency is issued against partners, on the petition of a creditor, without previous notice to them, a formal waiver of notice, filed by one of the partners with the commissioner, does not make the pro- ceedings good as against his copartner. Thompson v. Snow, 4 Cush. 121. CHAP. XIII.] SUPERSEDEAS. 413 § 17. A commission is an execution for all creditors ; the peti- tioning creditor, therefore, cannot receive his debt and have the commission superseded while the others are unsati8fied.^(a) And where certain creditors petitioned for a decree of bankruptcy against a debtor, and, on the return day of the notice to show cause, having compromised with him, they moved to withdraw the petition and suspend proceedings, but other creditors ob- jected ; held, the case must proceed.^ § 18. When a petitioner prays to have a supersedeas revoked, in order to prove debts of long standing, he must satisfy the court that he has a reasonable expectation of rebutting the pre- sumption of payment. The fact that a trifling benefit will be attained, is not sufficient ground for revoking a decree. The preponderance of equity will be considered.^ § 19. On demurrer to a bill to vacate proceedings, a former decree of the Supreme Court, sustaining them, cannot be availed of — it must be pleaded.* § 20. It is held that a voluntary petition will be received, though a compulsory one has been filed, and an order of notice issued thereon.(&) The act does not forbid it. The debtor may intend to dispute the allegations in the former petition, or may fear it will be abandoned. By this means also the debtor's schedules are furnished without expense.^ § 21. Though a commission may be rendered void, by reason of the petitioning creditor taking money or goods from the bank- 1 Stokes, 7 Ves. 408. * Merriam v. Sewell, 8 Gray ; Cutl. " Culver V. Calender, Law Rep. July — (3d ed.) 20. 42, p. 125— U. S. Ct. Conn. 6 Canfield, Law Kep. Jan.— 48, p. 415 ' Morris, Crabbe, 70. — N. Y. (a) As to superseding on petition of creditors, see Cutten, Buck, 68 ; Harmer v. Davis, 1 Moo. 300; Prowse, 1 Glyn & J. 92; ibid. 23; Forth, 1 Mont. & Mac. 10; Palmer, ibid. 211; Heming, Buck, 350; Milmhurst, 1 Glyn & J. 4 ; Trigmell, 1 Ves. & B. 348 ; Sylvester, 1 Mont. 125 ; Stewart v. Eichman, 1 Esp. 108 ; Walker v. Burnell, 1 Doug. 305 ; OoUins v. Forbes, 3 T. R. 322 ; Bonsor, 2 Eose, 61 ; Plight, 1 Dea. & Chit. 78. As to applications to supersede by an assignee, see Graves, 1 Glyn & J. 86; Jeeks, 1 Eose, 393. > (6) In a case within the author's immediate knowledge, a voluntary peti- tion before one commissioner, after the petition of a creditor before another, was stayed by injunction. 414 BANKRUPTCY AND INSOLVENCY. [OHAP. XTII. rupt, it cannot be considered as void in an action at law, but can only be superseded by the chancellor under the statute.'(a) § 22. Where a party had acquiesced in the proceedings for a year and a half, surrendered herself as a bankrupt to the com- missioners, been examined before them, and thereupon strong circumstances of bankruptcy had appeared ; held, an issue would not be directed ; though it was suggested that the bankrupt might try the question by bringing trover against the assignee.^ And one who has obtained a certificate under a joint commission against himself and others may, in an action of trover against a stranger, controvert the validity of the commission or take advantage of its illegality.' § 23. A bankrupt bringing an action to try the validity of the commission cannot at the same time and on the same ground peti- tion to supersede it.* He must elect.° And where the petition of a creditor to supersede shows that an action is commenced to try its validity, the court will not supersede till the action is determined.^ § 24. If in an action against the assignee the bankrupt dis- prove an act of bankruptcy; the Court will not, except under very special circumstances, delay superseding, in order to have another trial.^ 1 Garratt v. Biddulph, 4 Esp. 104. ^ Drake, 2 Dea. & Chit. 91 ; WilUam- 2 Niitt, 1 Atk. 102. son, 1 ibid. 549. s Butt3 V. Bilke, 4 Price, 240. « Price, Buck, 230. * Burgess, Jacob, 559. ' Dick, 1 Rose, 51. See Billiald, Buck, 220. (a) In Massachusetts, the Supreme Court has jurisdiction under s. 16 of St. 1851, c. 327, of a bill in equity to vacate proceedings against an insolvent corporation under that statute. Cheshire, etc. Gay, 3 Gray, 531. It is no objection to the maintenance of a bill in equity by an insolvent corporation against their assignee in insolvency and purchasers of their real estate from such assignee, to vacate the proceedings in insolvency, that one of their creditors joins as a plaintiff, who also claims the land under a later deed from the corporation. Ibid. To a bill in equity to set aside proceedings in insolvency, there need not be annexed a copy of the record of the proceedings. Ibid. A commissioner of insolvency has no jurisdiction to stay proceedings in the case of an insolvent corporation. Ibid. APPENDIX. AN ACT TO ESTABLISH AN UNIFORM SYSTEM OF BANKRUPTCY THROUGHOUT THE UNITED STATES, PASSED APRIL 4, 1800. Sect. 1. Be it enacted by the Senate and House of Hepre- sentatives of the United States of America, in Congress assem- bled, That from and after the first day of June next, if any merchant, or other person, residing within the United States, actually using the trade of merchandise, by buying and selling in gross, or by retail, or dealing in exchange, or as a banker, broker, factor, underwriter, or marine insurer, shall, with intent unlaw- fully to delay or defraud his or her creditors, depart from the State in which such person usually resides ; or remain absent therefrom ; or conceal him or herself therein ; or keep his or her house, so that he or she cannot be taken or served with process ; or willingly or fraudulently procure him or herself to be arrested ; or his or her lands, goods, moneys, or chattels to be attached, sequestered, or taken in execution ; or shall secretly convey his or her goods out of his or her house ; or conceal them to prevent their being taken in execution; or make, or cause to be made, any fraudulent conveyance of his or her lands or chattels; or make or admit any false or fraudulent security or evidence of debt ; or being arrested for debt, or having surrendered him or herself in discharge of bail, shall remain in prison two months or more, or escape therefrom ; or whose lands or effects being attached by process issuing out of, or returnable to any court of common law, shall not, within two months after written notice thereof, enter special bail and dissolve the same ; or in districts in which attachments are not dissolved by the entry of special bail, being arrested for debt after his or her lands and effects, or any part thereof, have been attached for a debt or debts amount- ing to one thousand dollars or upwards, shall not, upon notice of such attachment, give sufiScient security for the payment of what may be recovered in the suit in which he or she shall be arrested, (415) 416 APPENDIX. at or before the return day of the same, to be approved by the judge of the district, or some judge of the court out of which the process issued, upon which he is arrested, or to which the same shall be returnable, every such person shall be deemed and ad- judged a bankrupt : Provided, That no person shall be liable to a commission of bankruptcy, if the petition be not preferred, in manner hereinafter directed, within six months after the act of bankruptcy committed. Skct. 2. And he it further enacted, That the judge of the Dis- trict Court of the United States, for the district where the debtor resides, or usually resided at the time of committing the act of bankruptcy, upon petition, in writing, against such person or per- sons being bankrupt, to him to be exhibited by any one creditor, or by a greater number, being partners, whose single debt shall amount to one thousand dollars, or by two creditors, whose debts shall amount to one thousand five hundred dollars, or by more than two creditors, whose debts shall amount to two thousand dollars, shall have power, by commission under his hand and seal, to appoint such good and substantial persons, being citizens of the United States, and resident in such district, as such judge shall deem proper, not exceeding three, to be commissioners of the said bankrupt, and in case of vacancy or refusal to act, to appoint others, from time to time, as occasion may require : Pro- vided always, That before any commission shall issue, the creditor or creditors petitioning, shall make afiidavit or solemn affirmation before the said judge, of the truth of his, her, or their debts, and give bond, to be taken by the said judge, in the name and for the benefit of the said party, so charged as a bankrupt, and in such penalty, and with such surety as he shall require, to be condi- tioned for the proving of his, her, or their debts, as well before the commissioners as upon a trial at law, in case the due issuing forth of the said commission shall be contested, and also for prov- ing the party a bankrupt, and to proceed on such commission, in the manner herein prescribed. And if such debt shall not be really due, or after such commission taken out, it cannot be proved that the party was a bankrupt, then the said judge shall, upon the petition of the party aggrieved, in case there be occa- sion, deliver such bond to the said party, who may sue thereon and recover such damages, under the penalty of the same, as, upon trial at law, he shall make appear he has sustained, by reason of any breach of the condition thereof. Sect. 3. And he it further enacted, That before the commis- sioners shall be capable of acting, they shall, respectively, take and subscribe the following oath or affirmation, which shall be administered by the judge issuing the commission, or by any of the judges of the Supreme Court of the United States, or any UNITED STATES BANKRUPT LAWS. 417 judge, justice, or chancellor of any State court, and filed in the office of the clerk of the district court: "I, A. B., do swear, or affirm, that I will faithfully, impartially, and honestly, according to the best of my skill and knowledge, execute the several powers and trusts reposed in me, as 'a commissioner in a commission of bankruptcy against and that without favor or affection, prejudice or .malice." And the commissioners who shall be sworn as aforesaid, shall proceed, as soon as may be, to exe- cute the same, and upon due examination, and sufficient cause appearing against the party charged, shall and may declare him or her to be a bankrupt: Provided, That before such examina- tion be had, reasonable notice thereof, in writing, shall be deliv- ered to the person charged as a bankrupt, or if he or she be not found at his or her usual place of abode, to some person of the family above the age of twelve years, or if no such person appear, shall be fixed at the front or other public door of the house in which he or she usually resides, and thereupon it shall be in the power of such person, so charged as aforesaid, to demand, before or at the time appointed for such examination, that a jury be im- pannelled to inquire into the fact or facts alleged as the causes for issuing the commission, and on such demand being made the inquiry shall be had before the judge granting the commission, at such time as he may direct, and in that case, such person shall not be declared bankrupt, unless by the verdict of the jury, he or she shall be found to be within the description of this act, and shall be convicted of some one of the acts described in the first section of this act : Provided also, That any commission which shall be taken out as aforesaid, and which shall not be proceeded in as aforesaid, within thirty days thereafter, may be super- seded by the said judge, who shall have granted the same, upon the application of the party thereby charged as a bankrupt, or of any creditor of such person, unless the delay shall have been unavoidable, or upon a just occasion. Sect. 4. And be it further enacted. That the commissioners so to be appointed, shall have power, forthwith, after they have declared such person a bankrupt, to cause to be apprehended, by warrant under their hands and seals, the body of such bankrupt, wheresoever to be found, within the United States : Provided, They shall think, that there is reason to apprehend that the said bankrupt intends to abscond or conceal him or herself, and in case it be necessary, in order to take the body of the said bank- rupt, shall have power to cause the doors of the dwelling-house of such bankrupt to be broken, or the doors of any other house in which he or she shall be found. Sect. 5. And he it further enacted, That it shall be the duty of the commissioners so to be appointed, forthwith, after they 27 418 APPENDIX. have declared such person a bankrupt, and they shall have power, to take into their possession, all the estate, real and personal, of every nature and description, to which the said bankrupt may be entitled, either in law or equity, in any manner whatsoever, and cause the same to be inventoried and appraised to the best value, (his or her necessary wearing apparel, and the necessary wearing apparel of the wife and children, and necessary beds and bedding of such bankrupt only excepted,) and also to take into their pos- session, and secure, all deeds and books of account, papers, and writings belonging to such bankrupt ; and shall cause the same to be safely kept, until assignees shall be chosen or appointed, in manner hereafter provided. Sect. 6. And he it further enacted, That the said commis- sioners shall forthwith, after they have declared such person a bankrupt, cause due and sufficient public notice thereof to be given, and in such notice shall appoint some convenient time and place for the creditors to meet, in order to choose an assignee or assignees of the said bankrupt's estate and effects; at which meeting the said commissioners shall admit the creditors of such bankrupt, to prove their debts ; and where any creditor shall reside at a distance from the place of such meeting, shall allow the debt of such creditor to be proved by oath, or affirmation, made before some competent authority, and duly certified, and shall permit any person duly authorized by letter of attorney from such creditor (due proof of the execution of such letter of attorney being first made) to vote in the choice of an assignee or assignees of such bankrupt's estate and efiects, in the place and stead of such creditor : and the said commissioners shall assign, transfer, or deliver over, all and singular the said bankrupt's estate and efiects aforesaid, with all muniments and evidences thereof, to such person or persons as the major part, in value, of such creditors, according to the several debts then proved, shall choose as aforesaid : Provided always. That in such choice, no vote shall be given by, or in behalf of any creditor whose debt shall not amount to two hundred dollars. Sect. 7. Provided always, and be it further enacted, That it shall be lawful for the said commissioners, as often as they shall see cause, for the better preserving and securing the bankrupt's estate, before assignees shall be chosen as aforesaid, immediately to appoint one or more assignee or assignees of the estate and effects aforesaid, or any part thereof; which assignee or assignees aforesaid, or any of them, may be removed at the meeting of the creditors, so to be appointed, as aforesaid, for the choice of as- signees, if such creditors, entitled to vote as aforesaid, or the major part, in value, of them, shall think fit, and such assignee or assignees as shall be so removed, shall deliver up all the estate UNITED STATES BANKRUPT LAWS. 419 and effects of such bankrupt, whicli shall have come to his or their hands or possession, unto such other assignee or assignees as shall be chosen by the creditors as aforesaid ; and all such estate and effects shall be, to all intents and purposes, as effectually and legally vested in such new assignee or assignees, as if the first assignment had been made to him or them, by the said commis- sioners, and if such first assignee or assignees shall refuse or neglect, for the space of ten days next after notice, in writing, from such new assignee or assignees, of their appointment, as aforesaid, to deliver over as aforesaid, all the estate and effects as aforesaid, every such assignee or assignees, shall, respectively, forfeit a sum not exceeding five thousand dollars, for the use of the creditors, and shall moreover be liable for the property so detained. Sect. 8. And be it further enacted, That at any, time, previous to the closing of the accounts of the said assignee or assignees, so chosen as aforesaid, it shall be lawful for, such creditors of the bankrupt, as are hereby authorized, to vote in the choice of as- signees, or the major part of them, in value, at a regular meeting of the said creditors, to be called for that purpose, by the said commissioners, or by one-fourth, in value, of such creditors, to remove all or any of the assignees chosen as aforesaid, and to choose one or more in his or their place and stead, and such assignee or assignees as shall be so removed, shall deliver up all the estate and effects of such bankrupt, which shall have come into his or their hands or possession, unto such new assignee or assignees as shall be chosen by the creditors, at such meeting, and all such estate and effects shall be, to all intents and pur- poses, as effectually and legally vested in such new assignee or assignees, as if the first assignment had been made to him or them, by the said commissioners : and if such former assignee or assignees shall refuse or neglect, for the space of ten days next after notice, in writing, from such new assignee or assignees, of their appointment, as aforesaid, to deliver over, as aforesaid, all the estate and effects aforesaid, every such former assignee or assignees shall, respectively, forfeit a sum not exceeding five thousand dollars for the use of the creditors, and shall moreover be liable for the property so detained. Sect. 9. And be it further enacted, That whenever a new assignee or assignees shall be chosen as aforesaid, no suit at law or in equity shall be thereby abated, but it shall and may be law- ful for the court in which any suit may depend, upon the sugges- tion of a removal of a former assignee or assignees, and of the appointment of a new assignee or assignees, to allow the name of such new assignee or assignees, to be substituted in place of the name or names of the former assignee or assignees, and thereupon 420 APPENDIX. the suit shall be prosecuted in the name or names of the new assignee or assignees, in the same manner as if he or they had originally commenced the suit in his or their own names. Sect. 10. And be it further enacted, That the assignment or assignments of the commissioners of the bankrupt's estate and effects as aforesaid, made as aforesaid, shall be good at law or in equity, against the bankrupt, and all persons claiming by, from, or under such bankrupt, by any act done at the time, or after he shall have committed the act of bankruptcy, upon which the com- mission issued. Provided always, That in case of a bond fide purchase made before the issuing of the commission from or under such bankrupt, for valuable consideration, by any person having no knowledge, information, or notice of any act of bankruptcy committed, such purchase shall not be invalidated or impeached. Sect. 11. And be it further enacted. That the said commis- sioners shall have power by deed or deeds, under their hands and seals, to assign and convey to the assignee or assignees, to be appointed or chosen as aforesaid, any lands, tenements, or here- ditaments, which such bankrupt shall be seized of, or entitled to, in fee tail, at law or in equity, in possession, remainder, or rever- sion, for the benefit of the creditors, and all such deeds being duly executed and recorded according to the laws of the State within which such lands, tenements, or hereditaments may be situate, shall be good and effectual against all persons whom the said bankrupt, by common recovery, or other means, might or could bar of any estate, right, title, or possibility of or in the said lands, tenements, or hereditaments. Sect. 12. And be it further enacted, That if any bankrupt shall have conveyed or assured any lands, goods, or estate, unto any person, upon condition or power of redemption, by payment of money or otherwise, it shall be lawful for the commissioners, or for any person by them duly authorized for that purpose, by writing, under their hands and seals, to make tender of money or other performance according to the nature of such condition, as fully as the bankrupt might have done, and the commissioners, after such performance or tender, shall have power to assign such lands, goods, and estate, for the benefit of the creditors, as fully and effectually as any other part of the estate of such bankrupt. Sect. 13. And be it further enacted. That the commissioners aforesaid, shall have power to assign, for the use aforesaid, all the debts due to such bankrupt, or to any other person for his or her use or benefit, which assignment shall vest the property and right thereof in the assignee or assignees of such bankrupt, as fully as if the bond, judgment, contract, or claim had originally belonged or been made to the said assignees, and after the said assignment, neither the said bankrupt, nor any person acting as trustee for UNITED STATES BANKRUPT LAWS. 421 him or her, shall have power to recover or discharge the same, nor shall the same be attached as the debt of the said bankrupt, but the assignee or assignees aforesaid, shall have such remedy to recover the same, in his or their own name or names, as such bankrupt might or could have had, if no commission of bank- ruptcy had issued ; and when any action in the name of such bankrupt shall have been commenced and shall be pending for the recovery of any debt or effect of such bankrupt, which shall be assigned or shall or might become vested in the assignee or assignees of such bankrupt as aforesaid, then such assignee or assignees may claim to be, and shall be, thereupon admitted to prosecute such action in his or their name, for the use and benefit of the creditors of such bankrupt : and the same judgment shall be rendered in such action, and all attachments or other security taken therein, shall be in like manner holden and liable, as if the said action had been originally commenced in the name of such assignee or assignees after the original plaintiff therein had be- come a bankrupt as aforesaid : Provided, That where a debtor shall have, bond fide, paid his debt to any bankrupt, without notice that such person was bankrupt, he or she shall not be liable to pay the same to the assignee or assignees. Sect. 14. And be it further enacted, That if complaint shall be made or information given to the commissioners, or if they shall have good reason to believe or suspect, that any of the prop- erty, goods, chattels, or debts of the bankrupt, are in the posses- sion of any other person, or that any person is indebted to, or for the use of the bankrupt, then the said commissioners shall have power to summon, or cause to be summoned, by their attorney or other person duly authorized by them, all such persons before them, or the judge of the district where such person shall reside, by such process, or other means, as they shall think convenient, and upon their appearance to examine them by parol or by inter- rogatories, in writing, on oath, or affirmation, which oath or affirm- ation they are hereby empowered to administer, respecting the knowledge of all such property, goods, chattels, and debts; and if such person shall refuse to be sworn or affirmed, and to make answer to such questions, or interrogatories, as shall be admin- istered, and to subscribe the said answers, or upon examination, shall not declare the whole truth, touching the subject matter of such examination, then it shall be lawful for the commissioners, or judge, to commit such person to prison, there to be detained until they shall submit themselves to be examined in manner aforesaid, and they shall, moreover, forfeit double the value of all the property, goods, chattels, and debts, by them concealed. Sect. 15. And be it further enacted, That if any of the afore- said persons shall, after legal summons to appear before the com- 422 APPENDIX. missioners or judge, to be examined, refuse to attend, or shall not attend at the time appointed, having no such impediment as shall be allowed of by the commissioners or judge, it shall be lawful for the said commissioners or judge to direct their warrants to such person or persons, as by them shall be thought proper, to appre- hend such persons as shall refuse to appear, and to bring them before the commissioners or judge, to be examined, and upon their refusal to come, to commit them to prison, until they shall submit themselves to be examined according to the directions of this act: Provided, That such witnesses, as shall be so sent for, shall be allowed such compensations as the commissioners or judge, shall think fit, to be rateably borne by the creditors, and if any person, other than the bankrupt, either by subornation of others, or by his or her own act, shall wilfully or corruptly com- mit perjury, on such examination, to be taken before the commis- sioners as aforesaid, the party so offending, and all persons who shall procure any person to commit such perjury, shall, on con- viction thereof, be fined not exceeding four thousand dollars, and imprisoned not exceeding two years, and moreover shall, in either case, be rendered incapable of being a witness in any court of record. Sect. 16. And be it further enacted, That if any person or persons shall fraudulently or collusively claim any debts, or claim or detain any real or personal estate of the bankrupt, every such person shall forfeit double the value thereof, to and for the use of the creditors. Sect. 17. And he it further enacted. That if any person, prior to his or her becoming a bankrupt, shall convey to any of his or her children, or other persons, any lands or goods, or transfer his or her debts or demands, into other persons' names, with intent to defraud his or her creditors, the commissioners shall have power to assign the same, in as effectual a manner, as if the bankrupt had been actually seized or possessed thereof. Sect. 18. And he it further enacted. That if any person or persons, who shall become bankrupt, within the intent and mean- ing of this act, and against whom a commission of bankruptcy shall be duly issued, upon which commission, such person or per- sons shall be declared bankrupt, shall not, within forty-two days after notice thereof, in writing, to be left at the usual place of abode, of such person or persons ; or personal notice, in case such person or persons be then in prison, and notice given in some gazette, that such commission hath been issued, and of the time and place of meeting of the commissioners, surrender him or her- self to the said commissioners, and sign or subscribe such sur- render, and submit to be examined, from time to time, upon oath or solemn affirmation, by and before such commissioners, and in UNITED STATES BANKRUPT LAWS. 423 all things conform to the provisions of this act, and also upon such his or her examination, fully and truly disclose or discover, all his or her effects and estate, real and personal, and how and in what manner, to whom and upon what consideration, and at what time or times he or she hath disposed of, assigned or trans- ferred, any of his or her goods, wares or merchandise, moneys or other effects and estates, and of all books, papers, and writings relating thereunto, of which he or she was possessed or in or to which he or she was any ways interested or entitled, or which any person or persons shall then have, or shall have had in trust for him or her, or for his or her use, at any time before or after the issuing of the said commission, or whereby such bankrupt, or his or her family then hath, or may have or expect any profit, possi- bility of profit, benefit or advantage whatsoever, except only such part of his or her estate and effects, as shall have been really and bond fide before sold and disposed of, in the way of his or her trade and dealings, and except such sums of money as shall have been laid out in the ordinary expenses of his or her family, and also upon such examination, execute in due form of law, such conveyance, assurance, and assignment of his or her estate, what- soever and wheresoever, as shall be devised and directed by the commissioners, to vest the same in the assignees, their heirs, executors, administrators, and assigns forever, in trust for the use of all and every the creditors of such bankrupt, who shall come in and prove their debts under the commission; and deliver up unto the commissioners, all such part of his or her the said bankrupt's goods, wares, merchandises, money, effects and estate, and. all books, papers and writings, relating thereunto, as at the time of such examination, shall be in his or her possession, cus- tody or power (his or her necessary wearing apparel, and the necessary wearing apparel of the wife and children, and necessary beds and bedding of such bankrupt only excepted,) then he or she, the said bankrupt, upon the conviction of any wilful default, or omission in any of the matters or things aforesaid, shall be adjudged a fraudulent bankrupt, and shall suffer imprisonment for a term not less than twelve months, nor exceeding ten years, and shall not, at any time after, be entitled to the benefits of this act: Provided always, That in case any bankrupt shall be in prison or custody at the time of issuing such commission, and is willing to surrender and submit to be examined, according to the directions of this act, and can be brought before the said com- missioners and creditors for that purpose, the expense thereof shall be paid out of the said bankrupt's effects, and in case such bankrupt is in execution, or cannot be brought before the com- missioners, that then the said commissioners, or some one of them, shall, from time to time, attend the said bankrupt in prison or 424 APPENDIX. custody, and take his or her discovery as in other eases ; and the assignees, or one of them, or some person appointed by them, shall attend such bankrupt in prison or custody, and produce his or her books, papers and writings, in order to enable him or her to prepare his or her discovery, a copy whereof the said assignees shall apply for, and the said bankrupt shall deliver to them or their order, within a reasonable time, after the same shall have been required. Sect. 19. And be it further enacted, That the said commis- sioners shall appoint, within the said forty-two days, so limited as aforesaid, for the bankrupt to surrender and conform as afore- said, not less than three several meetings for the purposes afore- said, the third of which meetings shall be on the last of the said forty-two days : Provided always, That the judge of the district within which such commission issues, shall have power to enlarge the time so limited as aforesaid, for the purposes aforesaid, as he shall think fit ; not exceeding fifty days, to be computed from the end of the said forty-two days, so as such order for enlarging the time be made at least six days before the expiration of said term. Sect. 20. And be it further enacted, That it shall be lawful for the commissioners, or any other person or officers, by them to be appointed, by their warrant, under their hands and seals, to break open in the day time the houses, chambers, shops, ware- houses, doors, trunks, or chests of the bankrupt; where any of his or her goods or estate, deeds, books of accounts or writings, shall be, and to take possession of the goods, money, and other estate, deeds, books of account or writings of such bankrupt. Sect. 21. And be it further enacted, That if the bankrupt shall refuse to be examined or to answer fully, or to subscribe his or her examination as aforesaid, it shall be lawful for the commissioners to commit the ofiiender to close imprisonment, until he or she shall conform him or herself; and if the said bankrupt shall submit to be examined, and upon his or her examination, it shall appear that he or she hath committed wilful or corrupt per- jury, he or she may be indicted therefor, and being thereof con- victed, shall suffer imprisonment for a term not less than two years, nor exceeding ten years. Sect. 22. And be it further enacted, That every bankrupt, having surrendered, shall, at all seasonable times before the ex- piration of the said forty-two days, as aforesaid, or of such further time as shall bo allowed to finish his or her examination, be at liberty to inspect his or her books and writings, in the presence of some person to be appointed by the commissioners, and to bring with him or her for his or her assistance, such persons as he or she shall think fit, not exceeding two at one time, and to make extracts and copies to enable him or her to make a full discovery UNITED STATES BANKRUPT LAWS. 425 of his or her eifects ; and the said bankrupt shall be free from arrests in coming to surrender, and after having surrendered, to the said commissioners, for the said forty-two days, or such fur- ther time as shall be allowed for the finishing his or her examina- tion, and in case such bankrupt shall be arrested for debt, or taken on any escape warrant or execution, coming to surrender, or after his surrender within the time before mentioned, then on producing such summons or notice under the hand of the commis- sioners, and giving the officer a copy thereof, he or she shall be discharged ; and in case any officer shall afterwards detain such bankrupt, such officer shall forfeit to such bankrupt for his or her own use, ten dollars for every day he shall detain the bankrupt. Sect. 23. And be it further enacted, That every person who shall knowingly or wilfully receive or keep concealed any bank- rupt, so as aforesaid summoned to appear, or who shall assist such bankrupt in concealing him or herself, or in absconding, shall suifer such imprisonment, not exceeding twelve months ; or pay such fine to the United States, not. exceeding one thousand dollars, as upon conviction thereof shall be adjudged. Sect. 24. And be it further enacted, That the said commis- sioners shall have power to examine, upon oath or affirmation, the wife of any person lawfully declared a bankrupt, for the discovery of such part of his estate as may be concealed or disposed of by such wife, or by any other person, and the said wife shall incur such penalties for not appearing before the said commissioners, or refusing to be sworn or affirmed, or examined, and to subscrij)e her examination, or for not disclosing the truth, as by this act is provided against any other person in like cases. Sect. 25, And be it further enacted, That in case any person shall be committed by the commissioners for refusing to answer, or for not fully answering any question, or for any other cause, the commissioners shall, in their warrant, specify such question or other cause of commitment. Sect. 26. And be it further enacted. That if after the bank- rupt shall have finished his or her final examination, any other person or persons shall voluntarily make discovery of any part of such bankrupt's estate, before unknown to the commissioners, such person or persons shall be entitled to five per cent, out of the effects so discovered, and such farther reward as the commis- sioners shall think proper, and any trustee having notice of the bankruptcy, wilfully concealing the estate of any bankrupt, for the space of ten days after the bankrupt shall have finished his final examination, as aforesaid, shall forfeit double the value of the estate so concealed, for the benefit of the creditors. ' Sect. 27. And be it further enacted, That if any person shall become bankrupt, and at such time, by consent of the owner, have 426 APPENDIX. in his or her possession and disposition, any goods, whereof he or she shall be reputed owner, and take upon him or herself, the sale, alteration, or disposition thereof, as owner, the commission- ers shall have power to assign the same, for the benefit of the creditors, as fully as any other part of the estate of the bankrupt. Sect. 28. And be it further enacted, That if any bankrupt, after the issuing any commission against him or her, pay to the person who sued out the same, or give or deliver to such person goods or any other satisfaction or security, for his or her debt, whereby such person shall privately have and receiye a greater proportion of his or her debt than the other creditors, such pref- erence shall be a new act of bankruptcy, and on good proof thereof, such commission shall, and may be superseded, and it shall and may be lawful for either of the judges, having authority to grant the commission as aforesaid, to award any creditor peti- tioning, another commission ; and such person so taking such undue satisfaction as aforesaid, shall forfeit and lose, as well his or her whole debts, as the whole he or she shall have taken and received, and shall pay back, or deliver up the same, or the full value thereof, to the assignee or assignees, who shall be appointed or chosen under such commission in manner aforesaid, in trust for, and to be divided amongst the other creditors of the said bankrupt, in proportion to their respective debts. Sect. 29. And be it further enacted, That every person who shall be chosen assignee of the estate and effects of a bankrupt, shall, at some time after the expiration of four months, and within twelve months from the time of issuing the commission, cause at least thirty days public notice to be given, of the time and place the commissioners and assignees intend to meet, to make a divi- dend or distribution of the bankrupt's estate and effects: at which time the creditors who have not before proved their debts, shall be at liberty to prove the same, and upon every such meeting, the assignee or assignees, shall produce to the commissioners and creditors then present, fair and just accounts of all his or their receipts and payments, touching the bankrupt's estate and effects, and of what shall remain outstanding, and the particulars thereof; and shall, if the creditors then present, or major part of them, require the same, be examined upon oath or solemn affirmation, before the same commissioners, touching the truth of such ac- counts ; and in such accounts, the said assignee or assignees, shall be allowed and retain all such sum and sums of money as they shall have paid or expended in suing out and prosecuting the commission, and all other just allowances on account of, or by reason or means of their being assignee or assignees, and the said commissioners shall order such part of the nett produce of the said bankrupt's estate, as by such accounts, or otherwise, UNITED STATES BANKRUPT LAWS. '427 shall appear to be in the hands of the said assignees, as they shall think fit, to be forthwith divided among such of the bankrupt's creditors, as have duly proved their debts, under such commis- sion, in proportion to their several and respective debts, and the commissioners shall make such their order for a dividend, in writ- ing, under their hands, and shall cause one part of such order to be filed amongst the proceedings under the said commission, and shall deliver unto each of the assignees, under such commission, a duplicate of such their order, which order of distribution shall contain an account of the time and place of making such order, and the sum total or quantum of all the debts proved under the commission, and the sum total of the money remaining in the hands of the assignee or assignees to be divided, and how many per cent, in particular, is there ordered to be paid to every cred- itor of his debt ; and the said assignee or assignees, in pursuance of such order, and without any deed or deeds of distribution to be made for the purpose, shall forthwith make such dividend and distribution accordingly, and shall take receipts in a book to be kept for the purpose, from each creditor, for the part or share of such dividend or distribution which he or they shall make, and pay to each creditor respectively; and such order and receipt shall be a full and effectual discharge to such assignee, for so much as he shall fairly pay, pursuant to such order as aforesaid. Sect. 30. And he it further enacted^ That within eighteen months, next after issuing of the commission, the assignee or assignees shall make a second dividend of the bankrupt's estate and effects, in case the same were not wholly divided upon the first dividend, and shall cause due public notice to be given of the time and place the said commissioners intend to meet, to make a second distribution of the bankrupt's estate and effects, and for the creditors, who shall not before have proved their debts, to come in and prove the same ; and at such meeting, the said assignees shall produce, on oath or solemn affirmation as aforesaid, their accounts of the bankrupt's estate and effects, and what upon the balance thereof, shall appear to be in their hands, shall, by like order of the commissioners, be forthwith divided amongst such of the bankrupt's creditors as shall have made due proof of their debts, in proportion to their several and respective debts, which second dividend shall be final, Wless any suit at law, or equity, be depending, or any part of the estate standing out, that could not have been disposed of, or that the major part of the creditors shall not have agreed to be sold or disposed of, or unless some other or future estate or efiects of the bankrupt shall afterwards come to, or vest in the said assignees, in which cases the said assignees shall, as soon as may be, convert such future or other estate and effects into money, and shall within 428. APPENDIX. two montha after the same be converted into money, by like order of the commissioners, divide the same among such bankrupt's creditors, as shall have made due proof of their debts under such commission. Sect. 31. And be it further enacted, That in the distribution of the bankrupt's effects there shall be paid to every of the cred- itors a portion-rate, according to the amount of their respective debtSj so that every creditor having security for his debt, by judg- ment, statute, recognizance, or specialty, or having attachment under any of the laws of the individual States, or of the United States, on the estate of such bankrupt, {provided, there be no execution executed upon any of the real or personal estate of such bankrupt, before the time he or she became bankrupts,) shall not be relieved upon any such judgment, statute, recogni- zance, specialty, or attachment for more than a rateable part of his debt, with the other creditors of the bankrupt. Sect. 32. And be it further enacted, That the assignees shall keep one or more distinct book or books of account, wherein he or they shall duly enter all sums of money, or effects, which he or they shall have received or got into his or their possession of the said bankrupt's estate, to which books of account every cred- itor who shall have proved his or her debt, shall at all reasonable times, have free resort and inspect the same as often as he or she shall think fit. Sect. 33. And be it further enacted. That every bankrupt, not being in prison or custody, shall at all times after his surrender, be bound to attend the assignees, upon every reasonable notice, in writing, for that purpose, given pr left at the usual place of his or her abode, in order to assist in making out the accounts of the said bankrupt's estate and effects, and to attend any court of record, to be examined touching the same, or such other busi- ness as the said assignees shall judge necessary; for which he shall receive three dollars per day. Sect. 34. And be it further enacted, That all and every person and persons, who shall become bankrupt as aforesaid, and who shall, within the time limited by this act, surrender him or her- self to the commissioners, and in all things conform as in and by this act is directed, shall be allowed five per cent, upon the nett produce of all the estate that shall be recovered in and received, which shall be paid unto him or her by the assignee or assignees, in case the nett produce of such estate, after such allowance made, shall be sufficient to pay the creditors of said bankrupt, who shall have proved their debts under such commission, the amount of fifty per cent, on their said debts, respectively, and so as the said five per cent, shall not exceed, in the whole, the siim of five hun- dred dollars ; and in case the nett produce of the said estate shall, UNITED STATES BANKRUPT LAWS. 429 over and above the allowance hereafter mentioned, be suflBcient to pay the said creditors seventy-five per cent, on the amount of their said debts respectively, that then the said bankrupt shall be allowed ten per cent, on the amount of such nett produce, to be paid as aforesaid, so as such ten per cent, shall not in the whole, exceed the sum of eight hundred dollars, and every such bankrupt shall be discharged from all debts by him or her due or Owing, at the time he or she became bankrupt, and all which were or might have been proved under the said commission, and in case any such bankrupt shall afterwards be arrested, prosecuted, or impleaded, for or on account of any of the said debts, such bankrupt may ap- pear without bail, and may plead the general issue, and give this act and the special matter in evidence ; And the certificate of such bankrupt's conforming, and the allowance thereof, according to the directions of this act, shall be, and shall be allowed to be suf- ficient evidence primd facie of the party's being a bankrupt within the meaning of this act, and of the commission and other proceed- ings precedent to the obtaining such certificate and a verdict shall thereupon pass for the defendant, unless the plaintiiF in such action can prove the said certificate was obtained unfairly and by fraud, or unless he can make appear any concealment of estate or eflfects, by such bankrupt, to the value of one hundred dollars : Provided, That no such discharge of a bankrupt, shall release or discharge any person who was a partner with such bankrupt, at the time he or she became bankrupt, or who was then jointly held or bound with such bankrupt for the same debt or debts from which such bankrupt was discharged as aforesaid. Sect. 35. Provided always, and he it further enacted, That if the nett proceeds of the bankrupt's estate, so to be discovered, recovered and received, shall not amount to so much as will pay all and every of the creditors of the said bankrupt, who shall have proved their debts under the said commission, the amount of fifty per cent, on their debts, respectively, after all charges first de- ducted, that then, and in such case, the bankrupt shall not be allowed five per centum on such estate as shall be recovered in, but shall have and be paid by the assignees so much money as the commissioners shall think fit to allow, not more than three hun- dred dollars, nor exceeding three per centum on the nett proceeds of the said bankrupt's estate. Sect. 36. Provided also, and he it further enacted, That no person becoming a bankrupt, according to the intent and pro- visions of this act, shall be entitled to a certificate of discharge, or to any of the benefits of the act, unless the commissioners shall certify under their hands, to the judge of the district within which such commission issues, that such bankrupt bath made a full dis- covery of his or her estate and efiects, and in all things conformed 430 APPENDIX. himi or herself to the directions of this act, and that there doth not appear to them any reason to doubt of the truth of such dis- covery, or that the same was not a full discovery of the said bankrupt's estate and effects ; or unless the said judge should be of opinion that the said certificate was unreasonably denied by the commissioners, and unless two-thirds in number and in value of the creditors of the bankrupt, who shall be creditors for not less than fifty dollars, respectively, and shall have duly proved their debts under the said commission, shall sign such certificate to the judge, and testify their consent to the allowance of a certificate of discharge in pursuance of this act; which signing and consent shall also be certified by the commissioners ; but the said com- missioners shall not certify the same till they have proof by affi- davit or affirmation, in writing, of such creditors, or of the per- sons respectively authorized for that purpose, signing the said certificate: which affidavit or affirmation, together with the letter or power of attorney to sign, shall be laid before the judge of the district within which such commission issues, in order for the allowing the certificate of discharge ; and the said certificate shall not be allowed unless the bankrupt make oath or affirmation, in writing, that the certificate of the commissioners, and consent of the creditors thereunto, were obtained fairly and without fraud ; and any of the creditors of the said bankrupt are allowed to be heard, if they shall think fit, before the respective persons afore- said, against the making or allowing of such certificates by the commissioners or judge. Sect. 37. And\he it further enacted, That if any creditor, or pretended creditor of any bankrupt, shall exhibit to the commis- sioners any fictitious or false debt or demand, with intent to de- fraud the real creditors of such bankrupt, and the bankrupt shall refuse to make discovery thereof, and suffer the fair creditors to be imposed upon, he shall lose all title to the allowance upon the amount of his effects, and to a certificate of discharge as afore- said ; nor shall he be entitled to the said allowance or certificate, if he has lost at any one time fifty dollars, or in the whole three hundred dollars, after the passing of this act, and within twelve months before he became a bankrupt, by any manner of gaming or wagering whatever. Sect. 38. And he it further enacted. That if any bankrupt, who shall have obtained his certificate, shall be taken in execu- tion or detained in prison, on account of any debts owing before he became a bankrupt, by reason that judgment was obtained before such certificate was allowed, it shall be lawful for any of the judges of the court wherein judgment was so obtained, or for any cour^, judge, or justice within the district in which such bank- rupt shall be detained, having powers to award or allow the writ of habeas corpus, on such bankrupt producing his certificate so UNITED STATES BANKRUPT LAWS. 431 as aforesaid allowed, to order any sheriff or jailor who shall have such bankrupt in his custody, to discharge such bankrupt without fee or charge, first giving reasonable notice to the plaintiff, or his attorney, of the motion for such discharge. Sect. 39. And he it further enacted. That every person who shall have bond fide given credit to, or taken securities, payable at future days, from persons who are or shall become bankrupts, not due at the time of such persons becoming bankrupts, shall be admitted to prove their debts and contracts, as if they were pay- able presently, and shall have a dividend in proportion to the other creditors, discounting, where no interest is payable, at the rate of so much per centum per annum, as is equal to the lawful interest of the State where the debt was payable ; and the obligee of any bottomry or respondentia bond, and the assured in any policy of insurance, shall be admitted to claim, and after the con- tingency or loss, to prove the debt thereon, in like manner as if the same had happened before issuing the commission ; and the bankrupt shall be discharged from such securities, as if such money had been due and payable before the time of his or her becoming bankrupt : and such creditors may petition for a com- mission, or join in petitioning. Sect. 40. And he it further enacted, That in case any person committed by the commissioner's warrant, shall obtain a habeas corpus, in order to be discharged, and there shall appear • any insufficiency in the form of the warrant, it shall be lawful for the court or judge before whom such party shall be brought by habeas corpus, by rule or warrant, to commit such person to the same prison, there to remain until he shall conform as aforesaid, unless it shall be made to appear that he had fully answered all lawful questions put to him by the commissioners ; or in case such per- son was committed for not signing his examination, unless it shall appear that the party had good reason for refusing to sign the same, or that the commissioners had exceeded their authority in making such commitment, and in case the jailor to whom such person shall be committed, shall wilfully or negligently suffer such person to escape, or to go without the doors or walls of the prison, such jailor shall, for such offence, being convicted thereof forfeit a sum not exceeding three thousand dollars, for the use of the creditors. Sect. 41. And he it further enacted, That the jailor shall, upon the request of any creditor, having proved his debt, and showing a certificate thereof, under the hands of the commissioners (which the commissioners shall give without fee or reward) produce the person so committed, and in case such jailor shall refuse to show such person to such creditor, requesting the same, such person shall be considered as having escaped, and the jailor or sheriff so refusing, shall be liable as for. a wilful escape. 432 APPENDIX. Sect. 42. And be it further enacted, That where it shall ap- pear to the said commissioners that there hath been mutual credit given by the bankrupt, and any other person, or mutual debts between them at any time before such person became bankrupt, the, assignee or assignees of the estate, shall state the account between them, and one debt may be set-off against the other, and what shall appear to be due on either side, on the balance of such account, after such set-off, and no more, shall be claimed or paid on either side respectively. Sect. 43. And be it further enacted, That it shall and may be lawful to and for the assignee or assignees of any bankrupt's estate and effects, under the direction of the commissioners, and by and with the consent of the major part in value of such of the said bankrupt's creditors as shall have duly proved their debts under the commission, and shall be present at any meeting of the said creditors, to be held in pursuance of due and public notice for that purpose given, to submit any difference or dispute, for, on account of, or by reason or means of, any matter, cause or thing whatsoever, relating to such bankrupt, or to his or her estate or effects, to the final end and determination of arbitrators, to be chosen by the said commissioners, and the major part in value of such creditors, as shall be present at such meeting as aforesaid, and the party or parties with whom they shall have such difference or dispute, and to perform the award of such arbi- trators, or otherwise to compound and agree the matter in differ- ence and dispute as aforesaid, in such manner as the said assignee or assignees, under the direction, and with the consent aforesaid, shall think fit and can agree, and the same shall be binding on the several creditors of the said bankrupt, and the said assignee or assignees are hereby indemnified for what they shall fairly do according to the directions aforesaid. Sect. 44. And be it further enacted, That the assignees shall be, and hereby are vested with full power to dispose of all the bankrupt's estate real and personal at public auction or vendue, without being subject to any tax, duty, imposition or restriction, any law to the contrary notwithstanding. Sect. 45. And be it further enacted. That if after any com- mission of bankruptcy sued forth, the bankrupt happen to die before the commissioners shall have distributed the effects, or any part thereof, the commissioners shall, nevertheless, proceed to execute the commission, as fully as they might have done if the party were living. Sect. 46. And be it further enacted. That where any commis- sion of bankruptcy shall be delivered to the commissioners therein named to be executed, it shall and may be lawful for them before they take the oath or aflBrmation of qualification, to demand and take from the creditor or creditors, prosecuting such njommission. UNITED STATES BANKRUPT LAWS. 433 a bond, with one good security, if required, in the penalty of one thousand dollars, conditioned for the payment of the costs, charges and expenses, -which shall arise and accrue upon the prosecution of the said commission : Provided always. That the expenses, so as aforesaid to be secured and paid by the petitioning creditor or creditors, shall be repaid to him or them by the commissioners or assignees, out of the first moneys arising from the bankrupt's estate or effects, if so much be received therefrom. • Sect. 47. And he it further enacted, That the district judges, in each district respectively, shall fix a rate of allowance, to be made to the commissioners of bankruptcy, as compensation of services to be rendered under the commission, and it shall be law- ful for any creditor, by petition to the district judge, to except to any charge contained in the account of the commissioners : and the said judge, after hearing the commissioners, may in a summary way decide upon the validity of such exception. Sect. 48. And be it further enacted, That all penalties given by this act, for the benefit of the creditors, shall be recovered by the assignee or assignees by action of debt, and the money so recovered, the charges of suit being deducted, shall be distributed towards payment of the creditors. Sect. 49. And be it further enacted. That if any action, shall be brought against any commissioner, or assignee, or other person, having authority under the commission for anything done or per- foriaed by force of this act, the defendant may plead the general issue, and give this act and the special matter in evidence, and in case of, a non-suit, discontinuance, or verdict, or judgment for him, he shall recover double costs. Sect. 50. And be it further enacted, That if any estate real or personal shall descend, revert to or become vested in any person, after he or she shall be declared a bankrupt, and before he or she shall obtain a certificate, signed by the judge as aforesaid, all such estate shall, by virtue of this act, be vested in the said commis- sioners, and shall be by them assigned and conveyed to the as- signee or assignees, in fee simple, or otherwise, in like manner as above directed with the estate of the said bankrupt, at the time of the bankruptcy, and the proceeds thereof shall be divided among the creditors. Sect. 51. And be it further enacted, That the said commis- sioners shall, once in every year, carefully file, in the clerk's ofiice of the district court, all the proceedings had in every case before them, and which shall have been finished, including the commis- sions, examinations, dividends, entries and other determinations of the said commissioners, in which ofiice the final certificate of the said bankrupt may also be recorded ; all which proceedings shall remain of record in the said office, and certified copies 28 434 APPENDIX. thereof shall be admitted as evidence in all courts, in like manner as the copies of the proceedings of the said district court are admitted in other cases. Sect. 52. And be it further enacted. That it shall and may be lawful for any creditor of such bankrupt, to attend all or any of the examinations of said bankrupt, and the allowance of the final certificate, if he shall think proper, and then and there to propose interrogatories, to be put by the judge or commissioners to the said bankrupt and others, and also to produce and examine wit* nesses and documents before such judge or commissioners, relative to the subject matter before them. And in case either the bank- rupt or creditor shall think him or herself aggrieved by the de- termination of the said judge or commissioners, relative to any material fact in the commencement or progress of the said pro- ceedings, or in the allowance of the certificate aforesaid, it shall and may be lawful for either party to petition the said judge, setting forth such facts and the determination thereon, with the complaint of the party and a prayer for trial by a jury to de- termine the same ; and the said judge shall in his discretion make order thereon, and award a venire facias to the marshal of the district, returnable within fifteen days before him, for the trial of the facts mentioned in the said petition, notice whereof shall be given to the commissioners and creditors concerned in the same ; at which time the said trial shall be had, unless on good cause shown, the judge shall give farther time, and judgment being entered on the verdict of the jury, shall be final on the said facts, and the judge or commissioners shall proceed agreeably thereto. Sect. 53. And he it further enacted, That the commissioners before the appointment of assignees, and the assignees after such appointment, may from time to time, make such allowance out of the bankrupt's estate, until he shall have obtained his final dis- charge, as in their opinion may be requisite, for the necessary support of the said bankrupt and his family. Sect. 54. And be it further enacted, That it shall be lawful for the major part in value of the creditors, before they proceed to the choice of assignees, to direct in what manner, with whom, and where the moneys arising by, and to be received from time to time out of the bankrupt's estate, shall be lodged, until the same shall be divided among the creditors as herein provided, to which direc- tion every such assignee and assignees shall conform as often as three hundred dollars shall be received. Sect. 55. And be it further enacted. That every matter and thing by this act required to be done by the commissioners of any bankrupt, shall be valid to all intents and purposes if performed by a majority of them. Sect. 56. And be it further enacted. That in all cases where the assignees shall prosecute any debtor of the bankrupt for any UNITED STATES BANKEUPT LAWS. 435 debt, duty or demand, the commission, or a certified copy thereof, and the assignment of the commissioners of the bankrupt's estate, shall be conclusive evidence of the issuing the commission, and of the person named therein being a trader and bankrupt, at the time mentioned therein. Sect. 57. And be it further enacted, That every person obtain- ing a discharge from his debts, by certificate as aforesaid, granted under a commission of bankruptcy, shall not, on any future com- mission, be entitled to any other certificate than a discharge of his person only; unless the nett proceeds of the estate and effects of such person so becoming bankrupt a second time, shall be suf- ficient to pay seventy-five per cent, to his or her creditors on the amount of their debts respectively. Sect. 58. And be it further enacted, That any creditor of a person, against whom a commission of bankruptcy shall have been sued forth, and who shall lay his claim before the commis- sioners appointed in pursuance of this act, may, at the same time, declare his unwillingness to submit the same to the judgment of the said commissioners, and his wish that a jury may be impan- nelled to 'decide thereon ; and in like manner the assignee or assignees of such bankrupt may object to the consideration of any particular claim by the commissioners, and require that the same should be referred to a jury. In either case, such objection and request shall be entered on the books of the commissioners, and thereupon an issue shall be made up between the parties, and a jury shall be impannelled, as in other cases, to try the same in the circuit court for the district in which such bankrupt has usually resided. The verdict of such jury shall be subject to the control of the court, as in suits originally instituted in the said court, and when rendered, if not set aside by the court shall be certified to the commissioners, and shall ascertain the amount of any such claim, and such creditor or creditors shall be considered, in all respects, as having proved their debts under the com- mission. Sect. 59. And be it further enacted. That the lands and effects of any person becoming bankrupt, may be sold on such credit, and on such security, as a major part in value of the creditors may direct : Provided, nothing herein contained shall be allowed so to operate, as to retard the granting the bankrupt's certificate. Sect. 60. And be it further enacted. That if any person be- coming bankrupt, shall be in prison, it shall be lawful for any creditor or creditors, at whose suit he or she shall be in execution, to discharge him or her from custody, or if such creditor or cred- itors shall refuse to do so, the prisoner may petition the commis- sioners to liberate him or her ; and thereupon, if, in the opinion of the commissioners, the conduct of such bankrupt shall have been fair, so as to entitle him or her, in their opinion, to a certifi- 436 APPENDIX. cate when by law such certificate might be given, it shall be lawful for them to direct the discharge of such prisoner, and to enter the same in their books ; which being notified to the keeper of the jail in which such prisoner may be confined, shall be a suflScient authority for his or her discharge : Provided, That in either case, such discharge shall be no bar to another execution, if a certifi- cate shall be refused to such bankrupt : And provided also, That it shall be no bar to a subsequent imprisonment of such bankrupt, by order of the commissioners, in conformity with the provisions of this act. Sect. 61. And be it further enacted, That this act shall not repeal or annul, or be construed to repeal or annul, the laws of any State, now in force, or which may be hereafter enacted, for the relief of insolvent debtors, except so far as the same may respect persons, who are, or may be clearly within the purview of this act, and whose debts shall amount, in the cases specified in the second section thereof, to the sums therein mentioned ; and if any person, within the purview of this act, shall be imprisoned for the space of three months for any debt, or upon any contract, unless the creditors of such prisoner shall proceed to prosecute a commission of bankruptcy against him or her, agreeably to the provisions of this act, such debtor may and shall be entitled to relief, under any such law for the relief of insolvent debtors, this act notwithstanding. Sect. 62. And he it further enacted. That nothing contained in this law shall, in any manner, aifect the right of preference to prior satisfaction of debts due to the United States, as secured or provided by any law heretofore passed, nor shall be construed to lessen or impair any right to, or security for money due to the United States, or to any of them. Sect. 63. And he it further enacted. That nothing contained in this act shall be taken, or construed, to invalidate or impair, any lien existing at the date of this act, upon the lands or chat- tels of any person who may become a bankrupt. Sect. 64. And he it further enacted. That this act shall con- tinue in force during the term of five years, and from thence to the end of the next session of Congress thereafter, and no longer : Provided, That the expiration of this act shall not prevent the complete execution of any commission which may have been previously thereto issued. Theodore Sedgwick, Speaker of the House of Representatives. Thomas Jefferson, Vice-President of the United States a id President of the Senate. Approved, April 4, 1800. John Adams, President of the United States. GENERAL BANKRUPT LAW OF 1841. AN ACT TO ESTABLISH A UNIFORM SYSTEM OF BANKRUPTCy THROUGHOUT THE UNITED STATES. Sect. 1. Be it enacted hy the Senate and House of Repre- sentatives of the United States of America, in Congress assem- bled. That there be, and hereby is, established throughout the United States, a uniform system of bankruptcy, as follows : All persons whatsoever residing in any State, district, or territory of the United States, owing debts, which shall not have been created in consequence of a defalcation as a public officer, or as executor, administrator, guardian, or trustee, or while acting in any other fiduciary capacity, who shall, by petition, setting forth to the best of his knowledge and belief, a list of his or their creditors, their respective places of residence, and the amount due to each, to- gether with an accurate inventory of his or their property, rights and credits, of every name, kind, and description, and the loca- tion and situation of each and every parcel and portion thereof, verified by oath, or if conscientiously scrupulous of taking an oath, by solemn affirmation, apply to the proper court, as herein- after mentioned for the benefit of this act, and therein declare themselves to be unable to meet their debts and engagements, shall be deemed bankrupts within the purview of this act, and may be so declared accordingly by a decree of such court. All persons being merchants, or using the trade of merchandise, all retailers of merchandise, and all bankers, factors, brokers, under- writers, or marine insurers, owing debts to the amount of not less than two thousand dollars, shall be liable to become bankrupts, within the true intent and meaning of this act, and may, upon the petition of one or more of their creditors, to whom they owe debts amounting in the whole to not less than five hundred dollars, to the appropriate court, be so declared accordingly, in the following cases, to wit: whenever such person, being a merchant, or actually using the trade of merchandise, or being a retailer of merchandise, or being a banker, factor, broker, underwriter, or marine insurer, shall depart from the State, district or territory of which he is an (437) 438 APPENDIX. inhabitant, with intent to defraud his creditors; or shall conceal himself to avoid being arrested; or shall willingly or fraudulently procure himself to be arrested or his goods and chattels, lands, or tenements, to be attached, distrained, sequestered or taken in execution ; or shall remove his goods, chattels and effects, or con- ceal them to prevent their being levied upon, or taken in execu- tion or by other process ; or make any fraudulent conveyance, assignment, sale, gift, or other transfer of his lands, tenements, goods or chattels, credits, or evidences of debt : Provided, how- ever. That any person so declared a bankrupt at the instance of a creditor, may, at his election, by petition to such court within ten days after its decree, be entitled to trial by jury before such court, to ascertain the fact of such bankruptcy; or if such person shall reside at a great distance from the place of holding such court, the said judge in his discretion may direct such trial by jury to be had in the county of such person's residence, in such manner and under such directions as the said court may prescribe and give ; and all such decrees passed by such court, and not so re-examined, shall be deemed final and conclusive as to the subject matter thereof. Sect. 2. And be it further enacted, That all future payments, securities, conveyances, or transfers of property, or agreements made or given by any bankrupt in contemplation of bankruptcy, and for the purpose of giving any creditor, indorser, surety, or other persoii any preference or priority over the general creditors of such bankrupt; and all other payments, securities, conveyances or transfers of property or agreements made or given by such bank- rupt in contemplation of bankruptcy, to any person or persons whatever not being a hand fide creditor or purchaser for a valuable consideration, without notice, shall be deemed utterly void, and a fraud upon this act ; and the assignee under the bankruptcy shall be entitled to claim, sue for, recover, and receive the same as part of the assets of the bankruptcy ; and the person making such unlaw- ful preferences and payments shall receive no discharge under the provisions of this act : Provided, That all dealings and transac- tions by and with any bankrupt, hond fide made and entered into more than two months before the petition made and filed against him, or by him, shall not be invalidated or affected by this act : Provided, That the other party to any such dealings or transac- tions had no notice of a prior act of bankruptcy, or of the inten- tion of the bankrupt to take the benefit of this act. And in case it shall be made to appear to the court, in the course of the pro- ceedings in bankruptcy, that the bankrupt, his application being voluntary, has, subsequent to the first day of January last, or at any other time, in contemplation of the passage of a bankrupt law, by assignments or otherwise, given or secured any preference UNITED STATES BANKRUPT LAWS. 439 to one creditor over another, he shall not receive a discharge unless the same be assented to by a majority in interest of those of his creditors who have not been so preferred : And provided, also, That nothing in this act contained shall be construed to annul, destroy, or impair any lawful rights of married women or minors, or any liens, mortgages, or other securities on property, real or personal, which may be valid by the laws of the States respectively, and which are not inconsistent with the provisions of the second and fifth sections of this act. Sect. 3. And be it further enacted. That all the property and rights of property, of every name and nature, and whether real, personal or mixed, of every bankrupt, except as is hereinafter provided, who shall by a decree of the proper court be declared to be a bankrupt within this act, shall, by mere operation of law, ipso facto, from the time of such decree, be deemed to be divested out of such bankrupt without any other act, assignment or other conveyance whatsoever ; and the same shall be vested, by force of the same decree, in such assignee as from time to time shall be appointed by the proper court for this purpose ; which power of appointment and removal such court may exercise at its discre- tion, toties quoties; and the assignee so appointed shall be vested with all the rights, titles, powers, and authorities to sell, manage and dispose of the same, and to sue for and defend the same, sub- ject to the orders and directions of such court, as fully, to all intents and purposes, as if the same were vested in, or might be exercised by, such bankrupt before or at the time of his bank- ruptcy declared as aforesaid ; and all suits in law or in equity, then pending, in which such bankrupt is a party, may be prose- cuted and defended by such assignee to their final conclusion in the same way, and with the same effect, as they might have been by such bankrupt ; and no suit commenced hj or against any assignee shall be abated by his death or removal from office, but the same may be prosecuted or defended by his successor in the same office : Provided, however, That there shall be excepted from the operation of the provisions of this section the necessary household and kitchen furniture, and such other articles and necessaries of such bankrupt as the said assignee shall designate and set apart, having reference in the amount to the family, con- dition and circumstances of the bankrupt, but altogether not to exceed in value, in any case, the sum of three hundred dollars ; and also, the wearing apparel of such bankrupt, and that of his wife and children ; and the determination of the assignee in the matter shall, on exception taken, be subject to the final decision of the said court. Sect. 4. And he it further enacted, That every bankrupt who shall bond fide surrender all his property and rights of property, 440 APPENDIX. with the exception before mentioned for the benefit of his cred- itors, and shall fully comply with and obey all the orders and directions which may from time to time be passed by the proper court, and shall otherwise conform to all the other requisitions of this act, shall (unless a majority in number and value of his cred- itors, who have proved their debts, shall file their written dissent thereto,) be entitled to a full discharge from all his debts, to be decreed and allowed by the court which has declared him a bank- rupt, and a certificate thereof granted to him by such court accordingly, upon his petition filed for such purpose ; such dis- charge and certificate not, however, to be granted until after ninety days from the decree of bankruptcy, nor until after seventy days' notice in some public newspaper, designated by such court, to all creditors who have proved their debts, and other persons in interest, to appear at a particular time and place, to show cause why such discharge and certificate shall not be granted; at which time and place any such creditors, or other persons in interest, may appear and contest the right of the bankrupt thereto : Pro- vided, That in all cases where the residence of the creditor is known, a service on him personally or by letter addressed to him at his known usual place of residence, shall be prescribed by the court, as in their discretion shall seem proper, having regard to the distance at which the creditor resides from such court. And if any such bankrupt shall be guilty of any fraud or wilful con- cealment of his property or rights of property, or shall have preferred any of his creditors contrary to the provisions of this act, or shall wilfully omit or refuse to comply with any orders or directions of such court, or to conform to any other requisites of this act, or shall in the proceedings under this act, admit a false or fictitious debt against his estate, he shall not be entitled to any such discharge or certificate ; nor shall any person, being a mer- chant, banker, factor, broker, underwriter, or marine insurer, be entitled to any such discharge or certificate, who shall become bankrupt, and who shall not have kept proper books of account, after the passing of this act ; nor any person who, after the pass- ing of this act, shall apply trust funds to his own use: Provided, That no discharge of any bankrupt under this act shall release or discharge any person who may be liable for the same debt as a partner, joint contractor, indorser, surety or otherwise, for or with the bankrupt. And such bankrupt shall at all times be subject to examination, orally, or upon written interrogatories, in and before such court, or any commission appointed by the court therefor, on oath, or, if conscientiously scrupulous of taking an oath, upon his solemn affirmation, in all matters relating to such bankruptcy, and his acts and doings, and his property and rights of property, which, in the judgment of such court, are necessary UNITED STATES BANKRUPT LAWS. 441 and proper for the purposes of justice ; and if in any such exam- ination he shall wilfully and corruptly answer or swear or affirm falsely, he shall be deemed guilty of perjury, and shall be punish- able therefor in like manner as the crime of perjury is now pun- ishable by the laws of the Umted States ; and such discharge and certificate, when duly granted, shall, in all courts of justice, be deemed a full and complete discharge of all debts, contracts, and other engagements of such bankrupt, which are provable under this act, and shall be and may be pleaded as a full and complete bar to all suits brought in any court of judicature whatever, and the same shall be conclusive evidence of itself in favor of such bankrupt, unless the same shall be impeached for some fraud or wilful concealment by him of his property, or rights of property, as aforesaid, contrary to the provisions of this act, on prior rea- sonable notice specifying in writing such fraud or concealment ; and if, in any case of bankruptcy, a majority, in number and value, of the creditors, who shall have proved their debts at the time of hearing of the petition of the bankrupt for a discharge as hereinbefore provided, shall at such hearing file their written dis- sent to the allowance of a discharge and certificate to such bank- rupt, or if, upon such hearing, a discharge shall not be decreed to him, the bankrupt may demand a trial by jury upon a proper issue to be directed by the court, at such time and place and in such manner as the court may order; or he may appeal from that decision, at any time within ten days thereafter, to the circuit court next to be held for the same district, by simply entering in the district court, or with the clerk thereof, upon record, his prayer for an appeal. The appeal shall be tried at the first term of the circuit court after it be taken, unless, for sufficient reason a continuance be granted ; and it may be heard and determined by said court summarily, or by a jury, at the option of the bank- rupt ; and the creditors may appear and object against a decree of discharge and the allowance of the certificate, as hereinbefore provided. And if upon a full hearing of the parties it shall appear to the satisfaction of the court, or the jury shall find, that the bankrupt has made a full disclosure and surrender of all his estate, as by this act required, and has in all things conformed to the directions thereof, the court shall make a decree of discharge, and grant a certificate, as provided in this act. Sect. 5. And he it further enacted, That all creditors coming in and proving their debts under such bankruptcy, in the manner hereinafter prescribed, the same being bond fide debts, shall be entitled to share in the bankrupt's property and effects, pro rata, without any priority or preference whatsoever, except only for debts due by such bankrupt to the United States, and for all debts due by him to persons who, by the laws of the United States, 442 APPENDIX. have a preference, in consequence of having paid moneys as his sureties, which shall be first paid out of the assets ; and any per- son who shall have performed any labor as an operative in the service of any bankrupt shall be entitled to receive the full amount of the wages due to him for such labor, not exceeding twenty-five dollars : Provided, That such labor shall have been performed within six months next before the bankruptcy of his employer ; and all creditors whose debts are not due and payable until a future day, all annuitants, holders of bottomry and respondentia bonds, holders of policies of insurances, sureties, indorsers, bail, or other persons, having uncertain or contingent demands against such bankrupt, shall be permitted to come in and prove such debts or claims under this act, and shall have a right, when their debts and claims become absolute, to have the same allowed them ; and such annuitants and holders of debts payable in future may have the present value thereof ascertained under the direction of such court, and allowed them accordingly, as debts in presenti; and no creditor or other person, coming in and proving his debt or other claim, shall be allowed to maintain any suit at law or in equity therefor, but shall be deemed thereby to have waived all right of action and suit against such bankrupt ; and all proceed- ings already commenced, and all unsatisfied judgments already obtained thereon, shall be deemed to be surrendered thereby ; and in all cases where there are mutual debts or mutual credits be- tween the parties, the balance only shall be deemed to be the true debt or claim between them, and the residue shall be deemed ad- justed by the set-ofi"; all such proof of debts shall be made before the court decreeing the bankruptcy, or before some commissioner appointed by the court for that purpose ; but such court shall have full power to set aside and disallow any debt, upon proof that such debt is founded in fraud, imposition, illegality or mis- take ; and corporations to whom any debts are due may make proof thereof by their president, cashier, treasurer, or other officer, who maybe specially appointed for that purpose; and in appoint- ing commissioners to receive proof of debts, and perform other duties, under the provisions of this act, the said court shall appoint such persons as have their residence in the county in which the bankrupt lives. Sect. 6. And he it further enacted, That the district court in every district shall have jurisdiction in all matters and proceed- ings in bankruptcy arising under this act and any other act which may hereafter be passed on the subject of bankruptcy; the said jurisdiction to be exercised summarily, in the nature of summary proceedings in equity ; and for this purpose the said district court shall be deemed always open. And the district judge may ad- journ any point or question arising in any case in bankruptcy UNITED STATES BANKRUPT LAWS. 443 into the circuit court for the district, in his discretion, to be there heard and determined ; and for this purpose the circuit court of such district shall also be deemed always open. And the juris- diction hereby conferred on the district court shall extend to all cases and controversies in bankruptcy arising between the bank- rupt and any creditor or creditors who shall claim any debt or demand under the bankruptcy; to all cases and controversies between such creditor or creditor^ and the assignee of the estate, whether in office or removed ; to all cases and controversies be- tween such assignee and the bankrupt, 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. And the said courts shall have full authority and jurisdiction to compel obe- dience to all orders and decrees passed by them in bankruptcy, by process of contempt and other remedial process, to the same extent the circuit courts may now do in any suit pending therein in equity. And it shall be the duty of the district court in each district, from time to time, to prescribe suitable rules, regulations and forms of proceedings in all matters of bankruptcy; which rules, regulations and forms shall be subject to be altered, added to, revised, or annulled, by the circuit court of the same district, and other rules and regulations, and forms substituted therefor ; and in all such rules, regulations and forms, it shall be the duty of the said courts to make them as simple and brief as practicable, to the end to avoid all unnecessary expenses, and to facilitate the use thereof by the public at large. And the said courts shall, from time to time, prescribe a tariff or table of fees and charges, to be taxed by the officers of the court, or other persons, for services under this act, or any other on the subject of bank- ruptcy ; which fees shall be low as practicable, with reference to the nature and character of such services. Sect. 7. And be it further enacted, That all petitions by any bankrupt for the benefit of this act, and all petitions by a creditor against any bankrupt under this act, and all proceedings in the case to the close thereof, shall be had in the district court within and for the district in which the person supposed to be a bank- rupt shall reside, or have his place of business at the time when such petition is filed, except where otherwise provided in this act. And upon every such petition, notice thereof shall be published in one or more public newspapers, printed in such district, to be designated by such court, at least twenty days before the hearing thereof; and all persons interested may appear at the time and place where the hearing is thus to be had, and show cause, if any they have, why the prayer of the said petitioner should not be granted; all evidence by witnesses to be used in all hearings 444 APPENDIX. before such court, shall be under oath, or solemn affirmation, ■when the party is conscientiously scrupulous of taking an oath, and may be oral or by deposition, taken before such court, or before any commissioner appointed by such court, or before any disinterested State judge of the State in which the deposition is taken; and all proof of debts or other claims, by creditors entitled to prove the same by this act, shall be under oath, or solemn affirmation as aforesaid, before such court or commissioner ap- pointed thereby, or before some disinterested State judge of the State where the creditors live, in such form as may be prescribed by the rules and regulations hereinbefore authorized to be made and established by the courts having jurisdiction in bankruptcy. But all such proofs of debts and other claims shall be open to contestation in the proper court, having jurisdiction over the pro- ceedings in the particular case in bankruptcy, and as well the assignee as the creditor shall have a right to a trial by a jury, upon an issue to be directed by such court, to ascertain the valid- ity and amount of such debts or other claims ; and the result therein, unless a new trial shall be granted, if in favor of the claims, shall be evidence of the validity and amount of such debts or other claims. And if any person or persons shall falsely and corruptly answer, swear, or affirm, in any hearing or on trial of any matter, or in any proceeding in such court in bankruptcy, or before any commissioner, he or they shall be deemed guilty of perjury, and punishable therefor in the manner and to the extent provided by law for other cases. Sect. 8. And be it further enacted. That the circuit court within and for the district where the decree of bankruptcy is passed, shall have concurrent jurisdiction with the district court of the same district of all suits at law and in equity which may and shall be brought by any assignee of the bankrupt against any person or persons claiming an adverse interest, or by such person against such assignee, touching any property or rights of property of said bankrupt transferable to, or vested in, such assignee ; and 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 after the declaration and decree of bankruptcy, or after the cause of suit shall first have accrued. Sect. 9. And he it further enacted, That all sales, transfers and other conveyances of the assignee, of the bankrupt's property and rights of property, shall be made at such times and in such manner as shall be ordered and appointed by the court in bank- ruptcy ; and all assets received by the assignee in money shall. UNITED STATES BANKKUPT LAWS. 445 within sixty days afterwards, be paid into the court, subject to its order respecting its future safe keeping and disposition ; and the court may require of such assignee a bond, with at least two sure- ties, in such sum as it may deem proper, conditioned for the due and faithful discharge of all his duties, and his compliance with the orders and directions of the court; which bond shall be taken in the name of the United States, and shall, if there be any breach thereof, be sued and sueable, under the order of such court, for the benefit of the creditors and other persons in interest. Sect. 10. And he it further enacted, That, in order to insure a speedy settlement and close of the proceedings in each case in bankruptcy, it shall be the duty of the court to order and direct a collection of the assets and a reduction of the same to money, and a distribution thereof, at as early periods as practicable con- sistently with a due regard to the interests of the creditors: and a dividend and distribution of such assets as shall be collected and reduced to money, or so much thereof as can be safely so disposed of, consistently with the rights and interests of third persons having adverse claims thereto, shall be made among the creditors who have proved their debts, as often as once in six months from the time of the decree declaring the bankruptcy; notice of such dividends and distribution to be given in some news- paper or newspapers, in the district, designated by the court, ten days at least before the order therefor is passed ; and the pend- ency of any suit at law or in equity, by or against such third per- sons, shall not postpone such division and distribution, except so far as the assets may be necessary to satisfy the same ; and all the proceedings in bankruptcy in each case shall, if practicable, be finally adjusted, settled, and brought to a close, by the court, within two years after the decree declaring the bankruptcy. And where any creditor shall not have proved his debt until a dividend or distribution shall have been made and declared, he shall be entitled to be paid the same amount fro rata, out of the remain- ing dividends or distributions thereafter made, as the other cred- itors have already received, before the latter shall be entitled to any portion thereof. Sect. 11. And he it further enacted. That the assignee shall have full authority, by and under the order and direction of the proper court in bankruptcy, to redeem and discharge any mort- gage or other pledge, or deposit, or lien upon any property, real or personal, whether payable in presenti, or at a future day, and to tender a due performance of the conditions thereof. And such assignee shall also have authority, by and under the order and direction of the proper court in bankruptcy, to compound any debts, or other claims or securities, due or belonging to the estate of the bankrupt ; but no such order or direction shall be made 446 APPENDIX. until notice of the application is given in some public newspapers in the district, to be designated by the court ten days at least before the hearing, so that all creditors and other persons in inter- est may appear and show cause, if any they have, at the hearing, why the order or direction should not be passed. Sect. 12. And be it further enacted, That if any person who shall have been discharged under this act shall afterward become bankrupt, he shall not again be entitled to a discharge under this act, unless his estate shall produce (after all charges) sufficient to pay every creditor seventy-five per cent, on the amount of the debt which shall have been allowed to each creditor. Sect. 13. And be it further enacted, That the proceedings in all cases in bankruptcy shall be deemed matters of record ; but the same shall not be required to be recorded at large, but shall be carefully filed, kept and numbered in the office of the court, and a docket only, or short memorandum thereof, with the num- bers, kept in a book by the clerk of the court ; and the clerk of the court, for affixing his name and the seal of the court to any form, or certifying a copy thereof, when required thereto, shall be entitled to receive, as compensation, the sum of twenty-five cents, and no more. And no officer of the court, or commissioner, shall be allowed by the court more than one dollar for taking the proof of any debt or other claim of any creditor or other person against the estate of the bankrupt; but he may be allowed, in addition, his actual travel expenses for that purpose. Sect. 14. And be it further enacted, That where two or more persons, who are partners in trade, become insolvent, an order may be made in the manner provided in this act, either on the petition of such partners, or any one of them, or on the petition of any creditor of the partners; upon which order all the joint stock and property of the company, and also all the separate estate of each of the partners shall be taken, excepting such parts thereof as are herein excepted ; and all the creditors of the com- pany, and the separate creditors of each partner, shall be allowed to prove their respective debts ; and the assignees shall also keep separate accounts of the joint stock or property of the company, and of the separate estate of each member thereof; and after deducting out of the whole amount received by such assignees the whole of the expenses and disbursements paid by them, the nett proceeds of the joint stock shall be appropriated to pay the cred- itors of the company, and the nett proceeds of the separate estate of each partner shall be appropriated to pay his separate cred- itors ; and if there shall be any balance of the separate estate of any partner, after the payment of his separate debts, such balance shall be added to the joint stock, for the payment of the joint creditors ; and if there shall be any balance of the joint stock, UNITED STATES BANKRUPT LAWS. 447 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 rights and interests therein, and as it would hav^e been if the partnership had been dissolved •without any bankruptcy; and the sum so appropriated to the separate estate of each partner shall be applied to the payment of his separate debts ; and the certificate of discharge shall be granted or refused to each partner as the same would or ought to be if the proceedings 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. Sect. 15. And be it further enacted, That a copy of any de- cree of bankruptcy, and the appointment of assignees, as directed by the third section of this act, shall be recited in every deed of lands, belonging to the bankrupt, sold and conveyed by any assignees under and by virtue of this act ; and that such recital, together with a certified copy of such order, shall be a full and complete evidence both of the bankruptcy and assignment therein recited, and supersede the necessity of any other proof of such bankruptcy a,nd assignment to validate the said deed ; and all deeds containing such recital, and supported by such proof, shall be as effectual to pass the title of the bankrupt of, in, and to the lands therein mentioned and described to the purchaser, as fully to all intents and purposes, as if made by such bankrupt himself immediately before such order. Sect. 16. And be it further enacted, That all jurisdiction, 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 Circuit Court of the United States for the District of Columbia, and in and upon the supreme or superior courts of any of the territories of the U nited States, in cases of bankruptcy, where the bankrupt resides in the said District of Columbia, or in either of the said territories. Sect. 17. And be it further enacted, That this act shall take efi"ect from and after the first day of February next. John White, Speaker of the House of Representatives. Sam'l L. Southard, President of the Senate pro tempore. Approved August 19, 1841. John Tyler. INSOLVENT LAW OF MASSACHUSETTS, BEING CHAPTER 118 OF THE GENERAL STATUTES. Sect. 1. The courts of insolvency in the several counties shall continue courts of record, and the judges and registers of probate and insolvency in their respective counties shall be judges and registers thereof. Sts. 1856, c. 284, § 1; 1858, c. 32, § 1; 1858, c. 93. Sect. 2. The courts shall have original jurisdiction in their respective counties of all cases of insolvency arising under the provisions of this chapter. St. 1858, c. 93, § 10. Sect. 3. Each court shall be held at the shire towns of the county at such times as the judge appoints, and may be held at such other places as will best promote the convenience of the public. The judge may adjourn any court or meeting from time to time as occasion requires, and all things lawfully done at an adjourned meeting shall have like force and effect as if done at the original meeting. Sts. 18b8, c. 163, § 15 ; 1866, c. 284, § 3; 1858, c. 93, § 11. Sect. 4. The judge may in vacation as well as in court approve compositions and assignees' bonds, approve or order sales, receive petitions, issue orders of notice and warrants, and do such other official acts as are done as matters of course and do not require notice to an adverse party. St. 1856, c. 284, § 4. Sbct. 5. The judge may keep order in his court, and punish any contempt of his authority; administer oaths, issue commis- sions, take testimony, and compel the attendance of witnesses and the giving of testimony in the same manner and to the same extent as the superior court ; and may appoint such officers to attend upon the court as are necessary for the transaction of its business and keeping order therein. Sts. 1838, c. 163, § 16; 1866, c. 284, §§7, 9; 1859, c. 196. Sect. 6. The proceedings in courts of insolvency shall be deemed matters of record, and the assignment and certificate of discharge shall be recorded in full. The other proceedings need not be recorded at large, but shall be carefully filed, kept, and (448; INSOLVENT LAW OF MASSACHUSETTS. 449 numbered, in the office of the register. Copies of all parts of the records, and of records of prior proceedings in insolvency depos- ited in his office, duly certified by the register, shall in all caseg be admissible as evidence, primd facie, of the facts therein stated. Sts. 1838, c. 163, § 14; 1858, c. 32, §§ 1, 2. Sect. 7. The register shall keep a docket with an alphabetical index of all cases in court, in which he shall enter short memo- randums, with the numbers, of all proceedings and papers filed. He [shall] make all computations of dividends and orders of dis- tribution, and shall furnish to the assignee a certified copy of such orders, and of the schedules of creditors and assets filed in each case. Sts. 1854, c. 329, § 3 ; 1856, c. 284, § 13 ; 1868, c. 32, §§ 1' 2- Sect. 8. He may administer all oaths required in the course of proceedings before the court, except the oath described by section seventy-two ; and in the absence of the judge or a vacancy in that office, he may adjourn a court or meeting. Sts. 1838, c. 163, § 14; 1856, c. 284, § 13; 1858, c. 141, § 5. Sect. 9. For copies of orders for distribution and of schedules, in addition to those required by law, and for copies of other papers, he shall be paid by the person demanding the same, at the rate of fourteen cents a page, and no more. St. 1856, c. 284, §22. Sect. 10. The docket, and all books, records, documents, and papers, in his office, relating to insolvency, shall at all reasonable times be open to the inspection of the public. St. 1856, c. 284, §13. Sect. 11. All assignments, warrants, orders of notice, and pro- cesses, issuing from the court, shall be under the seal thereof, and shall be executed and obey-ed throughout the commonwealth; and any officer or person to whom they are legally directed may serve the same in any county. All warrants shall b.e returnable not less than ten nor more than sixty days from the issuing of the same. Sts. 1848, c. 304, § 6 ; 1866, c. 284, § 6. Sect. 12. Persons having business in court may designate the newspapers in which notices under their applications shall be published; but if the newspapers thus selected are deemed by the judge insufficient to give publicity to the notice, he may order publication in one other newspaper. St. 1851, c. 138. Sect. 13. Each county shall provide suitable court rooms in the shire towns ; and a suitable fire-proof room, in which shall be kept all the records, books, documents, and papers, appertaining to the business of the court, and the records in all cases in insol- vency. St. 1856, c. 284, § 3. Sect. 14. All expenses attending the sessions of the courts, and the transaction of business therein, for blank books for rec- 29 450 APPENDIX. ords, and for blank forms and stationery necessary for the busi- ness of the courts, shall be paid out of the treasury of the commonwealth. St. 1856, c. 284, § 23. Sect. 15. The judges or a majority of them shall from time to time make rules in writing for regulating the practice and con- ducting the business of the courts in all cases not provided for by law. They shall, as soon as conveniently may be after making and adopting such rules, submit a copy thereof to the supreme judicial court for approval, and amendment or alteration. St. 1856, c. 284, § 10. Sect, 16. The supreme judicial court shall have a general superintendence and jurisdiction of all cases arising under this chapter ; and, except when special provision is otherwise made, may, upon the bill, petition, or other proper process, of any party aggrieved, hear and determine the case as a court of equity. It may from time to time make such general rules and forms as it deems necessary to establish and maintain a regular and uniform course of proceedings in all the counties. The powers thus granted may be exercised either by said court or by any justice thereof in term time or vacation, except that general rules and forms shall be made only at a law term. Sts. 1838, c. 163, § 18 ; 1851, c. 327, § 16. Sect. 17. Any inhabitant of this State owing debts contracted while such inhabitant, may apply by petition to the judge for the county within which he resides, setting forth his inability to pay all his debts, and his willingness to assign all his estate and effects for the benefit of his creditors, and praying that such proceedings may be had in the premises as are provided in this chapter. Sts. 18a8, c. 163, § 1; 1841, c. 124, § 1; 1855, c. 363, § 1; 1858, c. 93, §10. Sect. 18. If it appears to the satisfaction of the judge that the debts due from the applicant amount to not less than two hundred dollars, he shall forthwith issue a warrant under his hand to the sheriff of the county or either of his deputies, directing him forth- with as messenger to take possession of all the estate, real and personal, of the debtor, except such as may be by law exempt from attachment, and of all his deeds, books of account, and papers, and keep the same safely until the appointment of an assignee ; to publish notice in such newspapers as the warrant specifies, send written notice by mail or otherwise to all creditors upon the schedule furnished him by the debtor, and to give such personal or other notice to any persons concerned as the warrant prescribes ; which notice shall state : — First. That a warrant has issued against the estate of the debtor : Second. That the payment of any debts, and the delivery of INSOLVENT LAW OF MASSACHUSETTS. 4&1 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 to prove their debts and choose one or more assignees of his estate, will be held at a court of insolvency to be holden at a time and place designated in the warrant, not less than ten nor more than sixty days after the issuing of the same. Sts. 1838, c. 163, §§ 1, 2 ; 1841, c. 124, § 1; 1844, c. 178, § 10; 1846, c. 168, § 4; 1848, c.804, §§6, 8; 1850, c. 319; 1851, c. 138, § 1; 1854, c. 329, § 4. Sect. 19. The messenger shall as soon as may be demand and receive from the debtor and other persons all the estate in his or their possession respectively, which is herein ordered to be as- signed, with all the deeds, books of account, and papers, of the debtor, relating thereto. St. 1838, c. 163, § 6. Sect. 20. Upon demand made by the messenger under the pre- ceding section, the debtor shall forthwith deliver to him such part of the estate and other things demanded as is within his posses- sion or power, and shall disclose the situation of such parts thereof as are in the possession of any other person, so as to enable the messenger to demand and receive the same. The debtor shall also, within three days after the date of the warrant, make and deliver to the messenger a schedule, containing a full and true account of all his creditors, with the place of residence of each creditor, if known to the debtor, and the sum due to each of them. The schedule shall also set forth the nature of each debt, whether founded on written security, account, or otherwise, and also the true cause and consideration thereof, and a statement of any ex- isting mortgage, pledge, or other collateral security, given for the payment of the same. Sts. 1838, c. 163, § 6 ; 1848, c. 304, § 8 ; 1834, c. 329, § 3. Sect. 21. When it appears to the satisfaction of the judge that the estate of the debtor or any part thereof is of a perishable nature, or likely to deteriorate in value before an assignee can be appointed, he may order the same to be sold in such manner as he deems expedient, under the direction of the messenger, who shall hold the funds received, in place of the estate disposed of. St. 1848, c. 304, § 15. Sect. 22. At the meeting held in pursuance of the notice, the messenger shall make return of the warrant and of his doings thereon, and deliver to the register the schedule of creditors re- ceived from the debtor ; and at the same meeting, or within such further time as the court may, for cause shown, allow therefor, the debtor shall deliver to the register a schedule of all his real and personal estate, giving a description of the same and stating where it is situated. Sts. 1838, c. 163, § 2; 1841, c. 124, § 'I; 1854, c. 329, § 3. 452 APPENDIX. Sect. 23. If it appears to the judge that the notice to the cred- itors required by section eighteen has not been given, he shall forthwith adjourn the meeting and order such notice. St. 1848, c. 304, § 8. Sect. 24. If the debtor dies after the issuing of the warrant, the proceedings shall be continued and concluded in like manner and with like validity and effect as if he had lived. St. 1838, c. 163, § 5. Sect. 25. Debts due and payable from the debtor at the time of the first publication of the notice of issuing the warrant, may be proved and allowed against his estate at any meeting; and all debts at that time absolutely due, although not payable, may be proved and allowed as if payable, with a discount or rebate of interest when no interest is payable by the contract. Moneys due on any bottomry or respondentia bond or policy of insurance may be proved and allowed, if the contingency or loss happens before the making of the first dividend, in like manner as if the same had happened before the first publication of the notice. If the debtor is liable for any debt in consequence of having made or indorsed a bill of exchange or promissory note before said first publication, or in consequence of the payment by any party to a bill or note of any part of the money secured thereby, or of the payment of any sum by a surety of the debtor in any contract, if the payment is made before the making of the first dividend, such debt may be proved and allowed as if it had been due and pay- able by the debtor before the first publication. All demands against the debtor for or on account of goods or chattels wrong- fully obtained, taken, or withheld, by him, may be proved and allowed as debts, to the amount of the value thereof. No debt other than those above mentioned shall be proved or allowed against the estate. St. 1838, c. 163, §§ 2, 3, 7, 12, 13. Sect. 26. If it appears that there has been mutual credit given by the debtor and any other person, or mutual debts between them, the account between them shall be stated, and one debt set off against the other, and the balance shall be allowed or paid on either side. St. 1838, c. 163, § 3. Sect. 27. When a creditor has a mortgage or pledge of real or personal estate of the debtor, or a lien thereon, for securing the payment of a debt claimed by him, the property so held as security shall, if he requires it, be sold, and the proceeds applied towards the payment of his debt, and he shall be admitted as a creditor for the residue. The sale shall be made in such manner as the judge orders, and the creditor and assignee respectively shall execute all deeds and papers necessary or proper for effect- ing the conveyance. If the creditor does not require such sale and join in effecting the conveyance, he may release and deliver INSOLVENT LAW OF MASSACHUSETTS. 453 up to the assignee the premises held as security and be admitted as a creditor for the whole of his debt. 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. St. 1838, c. 163, § 3. Sect. 28. No debt shall be proved or allowed unless the cred- itor, or if he resides in a foreign country and the debt is founded on a contract made by the debtor with the consignee or agent of the creditor residing in the United States, such consignee or agent makes oath in substance as follows : — I, , do swear that , of , by (or against) whom pro- ceedings in insolvency have been instituted, at and before the date of such proceedings, was, and still is, justly and truly indebted to me in the sum of , for which sum or any part thereof I have not, nor has any other person to my use, to my knowledge or belief, received any security or satis- faction whatever, beyond what has been disposed of agreeably to law. And I do further swear, that said claim was not procured by me for the purpose of influencing the proceedings in this case. And I do further swear, that I have not, directly or indirectly, made or entered into any bargain, arrange- ment, or agreement, express or implied, to sell, transfer, or dispose of, my claim,- or any part of my claim, against said debtor, nor have, directly or indirectly, received or taken, or made or entered into any bargain, arrange- ment, or agreement, express or implied, to take or receive, directly or indi- rectly, any money, property, or consideration, whatsoever, to myself, or to any person or persons to my use or benefit, under or with any understand- ing or agreement, express or implied, whereby my vote for assignee, or my assent to the debtor's discharge, is or shall be in any way affected, influenced, or controlled, or whereby the proceedings in this case are or shall be affected, influenced, or controlled. No claim shall be allowed unless all the statements set forth in the oath are true. Sts. 1838, c. 163, §§ 4, 15; 1848, c. 304, § 14; 1851, c. 189, § 1; 1851, c. 349, § 1; 1852, c. 189, §§ 1, 2; 1856, c. 284, § 35 ; 1858, c. 93, § 9. Sect. 29. If the creditor is disabled by absence from the State, sickness, or other cause, from proving his claim, the above oath may be made by his agent or attorney testifying to the best of his knowledge and belief; in which case the judge may require such further proof of the truth of the statements therein as he deems expedient. St. 1852, c. 189, §§ 1, 2. Sect. 30. The oath may be made before a justice of the peace; but the judge may at any time require the personal appearance in court of the party making such aflSdavit, to be further interro- gated on oath. The debtor and any party proving a debt may be examined on oath in presence of the judge on all matters relating thereto. Sts. 1838, c. 163, § 4; 1858, c. 93, § 9. Sect. 31. When a claim is presented for proof before the elec- tion of the assignee, and the judge entertains doubts of its valid- ity 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, 454 APPENDIX. he may postpone the proof of the claim till after the assignee is chosen. St. 1856, c. 284, § 33. _ Sect. 32. A person who has since the sixth day of July, eighteen hundred and fifty-six, accepted any preference, having reasonable cause to believe that the same was made or given by the debtor contrary to any provision of this chapter, shall not prove the debt or claim on account of which the preference was made or given, nor receive any dividend thereon. Sts. 1838, c. 163, § 10; 1856, c. 284, § 32. Sect. 33. The judge shall allow all debts duly proved, and shall cause a list thereof to be made and certified by the register; and any creditor may act at all meetings by his duly constituted attorney the same as though personally present. St. 1838, c. 163, §§2,15. ■ _ Sect. 34. A supp'osed 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 to the superior court ; but no appeal shall be allowed unless it is claimed and notice thereof given to the register, to be entered with the record of the pro- ceedings, and also to the assignee or creditor, as the case may be, within ten days after the decision appealed from. The appeal shall be entered at the term of the superior court which shall be first held within or for the county next after the expiration of fourteen days from the time of claiming the same. But if the appellant in writing waives his appeal before the entry thereof, proceedings may be had in the court of insolvency as if no appeal had been taken. Sts. 1838, c. 163, § 4; 1859, c. 196. Sect. 35. Upon entering the appeal the creditor shall file in court a statement in writing of his claim, setting forth the same substantially as in a declaration for the same cause of action at law, and the assignee shall plead or answer thereto in like manner; and like proceedings shall be thereupon had in the pleadings, trial, and determination of the cause, as in an action at law com- menced and prosecuted in the usual manner ; except that no execution shall be awarded against the assignee for the amount of a debt found due to the creditor. St. 1838, c. 163, § 4. Sect. 36. The final judgment of the court shall be conclusive ; and the lists 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. St. 1838, c. 163, § 4. Sect. 37. A bill of exchange, promissory note, or other instru- ment, used as evidence upon the proof of a claim, and left in court or deposited in the ofiice, may be delivered by the register to the person who used it, upon his filing a copy thereof attested by the INSOLVENT LAW OP MASSAOHUSETTS. 455 register; the register also indorsing upon it the name of the party against whose estate it has been proved, and the date and amount of any dividend declared thereon. St. 1852, c. 189, § 8. Sect. 38. The creditors shall at the first meeting in the pres- ence of the judge choose one or more assignees of the estate of the debtor ; the choice to be made by the greater part in value of the creditors who have proved their debts : Provided, That when the number of creditors present amounts to five and less than ten", the votes of two at least, and when the number of cred- itors amounts to ten or more, the votes of three at least, shall be necessary for a choice. If no choice is made by the creditors at said meeting, the judge shall appoint one or more assignees. If an assignee so chosen or appointed fails, within four days, to express in writing his acceptance of the trust, the judge may fill the vacancy. St. 1838, c. 163, § 2. Sect. 39. All elections of assignee shall be subject to the ap- proval 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. St. 1858, c. 141, § 1. Sect. 40. The judge at any time may, and upon the request filed in writing of any creditor who has proved his claim shall, require the assignee to give good and sufiEcient bond to the judge and his successors in office, with a condition for the faithful per- formance and discharge of his duties. The bond shall be approved by the judge 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 manner provided for the prosecution of administration bonds. Sts. 1844, c. 178, § 11 ; 1848, c. 304, § 12. Sect. 41. 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. St. 1853, c. 116. Sect. 42. The judge shall, by an instrument under his hand, assign and convey to the assignee all the estate real and personal of the debtor, except such as is by law exempt from attachment, with all his deeds, books, and papers relating thereto. St. 1838, c. 163, § 5. Sect. 43. The assignee shall forthwith cause the assignment to be recorded in the registry of deeds in each district or county in which there may be real estate of the debtor on which it may operate; and shall give such public notice of his appointment as the judge shall order. St. 1838, c. 163, § 11. Sect. 44. The assignment shall vest in the assignee all the property of the debtor real and personal which he could have lawfully sold, assigned, or conveyed, or which might have been 456 APPENDIX. taken on execution upon a judgment against him, at the time of the first publication of the notice of issuing the warrant, although the same is then attached on mesne process as the property of the debtor; and shall be effectual to pass all said estate, and, subject to the provisions of the following section, to dissolve any- such attachment. The assignment shall vest in the assignee all debts due to the debtor or any person for his use, and all liens and securities therefor, and all his rights of action for goods or estate real or personal, and all his rights of redeeming such goods or estate. The assignee may redeem all mortgages, conditional contracts, pledges, and liens, of or upon any goods or estate of the debtor, or sell the same subject to such mortgage or other incumbrance. St. 1838, c. 163, § 5. Sect. 45. If a debtor whose property is attached, conveys be- fore judgment and execution in the suit any part of such property, and subsequently thereto, and before execution issues, proceedings are commenced by or against him as an insolvent debtor, or if a dissolution of an attachment under the preceding section might prevent the property attached from passing to the assignee, the judge before whom proceedings in insolvency are pending, or the court to which the process of attachment is returnable, may upon application made on or before the day of the third meeting of creditors by any person interested, and cause shown thereon, order the lien created by the attachment to continue. The action may be continued or execution stayed until the assignee is chosen and takes charge of the action. The assignee may proceed with the action and levy the execution at the cost and expense of the estate ; and the amount recovered exclusive of costs due to the original plaintiif shall vest in the assignee. Sts. 1841, c. 124, §6;- 1855, c. 66; 1857, c. 247. Sect. 46. The assignee shall demand and receive from the messenger and all other persons, all the estate in his or their possession assigned or intended to be assigned under the pro- visions of this chapter ; and he shall sell all such 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, or manner of sale, as will in its opinion promote the interests of the creditors ; and the assignee shall keep a regular account of all money received by him as assignee, to which every creditor shall at reasonable times have free resort. St. 1838, c. 163, § 11. Sect. 47. He shall have the like remedy to recover all said estate, debts, and effects, in his own nam§, as the debtor might have had if no assignment had been made. If at the time of the assignment an action is pending in the name of the debtor for the INSOLVENT LAW OF MASSACHUSETTS. 467 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 sur- viving, remaining, or new assignee, as the case may be, he shall be admitted to prosecute the suit in like manner and with like eifect as if it had been originally commenced by him. In suits prosecuted by the assignee, the assignment made by the judge shall be conclusive evidence of his authority to sue. St. 1838, C. 163, § 5. Sect. 48. Drafts, bills of exchange, promissory notes, claims, demands, and causes of action, which subsequently to the sixth day of July in the year eighteen hundred and fifty-six, and within six months before the filing of the petition by or against a debtor, are assigned, transferred, conveyed, or delivered, to any person indebted or liable to the debtor, shall not be oifset or pleadable in defence in any suit by the assignee to recover such debt or liability; but the assignee may recover the same notwithstanding such draft, bill of exchange, promissory note, claim, demand, or cause of action: Provided, That the person to whom the same are so assigned, transferred, conveyed, or delivered, had at the time of such assignment, transfer, conveyance, or delivery, rea- sonable cause to believe the debtor insolvent. St. 1856, c. 284, §28. Sect. 49. 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 assignee, 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 designated 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. St. 1838, c. 163, § 11. See Gen. Sts. c. 57, § 63. Sect. 50. 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 may authorize the same to be deposited in any bank in this State upon such interest, not exceeding the legal rate, as the bank may contract with the assignee to pay thereon. St. 1859, c. 119, § 1. Sect. 51. He shall, give written notice to all known creditors by mail or otherwise of all dividends ; and such notice of meet- ings after the first as the judge shall order. Sts. 1846, c. 168, § 4; 1850, c. 319. 458 APPENDIX. Sect. 52. 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 compensation for his services, in the discretion of the judge. St. 1838, c. 163, Sect. 53. He may, under the direction of the judge, submit any controversy arising in the settlement of demands against the estate, 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 contro- versy by agreement with the other party as he thinks proper and most for the interest of the creditors. St. 1838, c. 163, § 11. Sect. 64. When it appears to the satisfaction of the judge that the title to any portibn of an estate which has come into posses- sion of the assignee is in dispute, and that the property is of a perishable nature, or liable to deteriorate in value, he may on the petition of the assignee, and after such notice to the claimant, his agent, or attorney, as the judge deems reasonable, order it to be sold under the direction of the assignee, who shall hold the funds received, in place of the estate disposed of; and the proceeds of the sale shall be considered the measure of the value of the prop- erty in any suit or controversy between the parties. But this provision shall not prevent the recovery of the property from the possession of the assignee by action of replevin commenced at any time before the judge orders the sale. St. 1858, c. 73, §§ 1, 2. Sect. 55. When an assignee has received from the estate assets sufficient to pay fifty per cent, of the debts and claims proved against it, he shall certify the fact and render his accounts there- for to the judge ; and when he has received twenty-five per cent, more from the assets, he shall in like manner certify and render his accounts therefor. He shall also certify and render his ac- counts at any time when required by the judge. St. 1844, c. 178, § 7. Sect. 56. At a meeting called by order of the judge in his dis- cretion for the purpose, and which shall be called upon the appli- cation of a majority of the creditors either in number or value, the creditors may with the consent of the judge remove any assignee by such a vote as is provided in section thirty-eight for the choice of assignees. Sts. 1838, c. 163, § 11-; 1859, c. 69. Sect. 57. The judge after due notice and hearing may remove an assignee if it appears to him upon the complaint of any person interested in the estate that the assignee has fraudulently re- ceived, concealed, embezzled, or conveyed away, any of the money, goods, effects, or other estate of the debtor, ^r has been interested in any suit at law in relation to said estate for the purpose of securing to himself a preference or priority over the other cred- INSOLVENT LAW OF MASSACHUSETTS. 459 itors, or has in his possession or control any portion of the estate with intent to appropriate the same unlawfully to his own use, or has been guilty of any fraudulent act in relation to the same. St. 1848, c. 304, § 12. Sect. 58. He may also remove an assignee who having removed from the State unreasonably refuses or neglects to obey any law- ful order for calling meetings of the creditors, to settle his accounts, or otherwise unreasonably refuses or neglects to discharge his duties ; and for any other cause which in his judgment renders such removal necessary or expedient. Sts. 1851, c. 349, § 2; 1858, c. 141, § 1. Sect. 59. An assignee may with the consent of the judge resign his trust and be discharged therefrom. St. 1858, c. 141, § 3. Sect. 60. Vacancies caused by death or otherwise in the office of assignee may be filled by appointment of the judge, or at his discretion by an election of the creditors in the manner prescribed in section thirty-eight at a regular meeting, or at a meeting called for the purpose, with such notice thereof in writing to all known creditors, and by such person, as the judge shall direct. Sts. 1838, c. 163, §§ 2, 11 ; 1858, c. 141, §§ 2, 3. Sect. 61. The resignation or removal of an assignee shall in no way release him from performing all things requisite on his part for the proper closing up of his trust and the transmission thereof to his successors ; nor afiiect the liability of the principal or surety on the bond given by the assignee. St. 1858, c. 141, § 3. Sect. 62. When by death or otherwise the number of assignees is reduced, the estate of the debtor not lawfully disposed of shall vest in the remaining assignee or assignees, and the persons selected to fill vacancies, with the same powers and duties relative thereto as if they were originally chosen. Sts. 1838, c. 163, § 11 ; 1848, c. 304, § 12 ; 1851, c. 349, § 2. Sect. 63. Any former assignee, his executors, or administra- tors, upon request, and at the expense of the estate, shall make and execute to the new assignee all deeds, conveyances, and assur- ances, and do all other lawful acts, requisite to enable him to recover and receive all the estate; and the judge may pass all orders which he deems expedient to secure the proper fulfilment of the duties of any former assignee, and the rights and interests of all persons interested in the estate. Sts. 1838, c. 163, § 11 ; 1851, c. 349, § 2; 1858, c. 141, § 4. Sect. 64. No person who has received any preference contrary to the provisions of the laws relating to insolvency, shall vote for or be eligible as assignee, but no title to property, real or per- sonal, sold, transfer»ed, or conveyed, by an assignee, shall be affected or impaired by reason of his ineligibility. St. 1856, c. 284, § 34. 460 APPENDIX. Sect. 65. An assignee refusing or unreasonably neglecting to execute an instrument when lawfully required by the judge, or disobeying a lawful order or decree of the judge in the premises, may be committed to and detained in the jail of the county where he is found, or in which he dwelt when he was appointed, until he obeys such order or decree, or is released by the supreme judi- cial court or some justice thereof on a writ of habeas corpus, St. 1838, c. 163, § 23. Sect. &Q. The debtor shall at all times before the granting of his certificate, upon reasonable notice, attend and submit to an examination on oath before the judge and the assignee upon all matters relating to the disposal of his estate ; to his trade and dealings with others, and his accounts concerning the same ; to all debts due or claimed from him ; and to all other matters concern- ing his estate, and the due settlement thereof according to law; which examination shall be in writing when so required by the judge, shall be signed by the debtor and filed with the other proceedings. St. 1838, c. 163, § 6. Sect. 67. If the debtor is in jail in any suit or proceeding for or on account of any debt or demand that is provable against his estate, at any time before the granting of his certificate and when his attendance is required before the court or the assignee, or at any meeting of his creditors, the judge may, in his discretion, by warrant under his hand require the jailer to produce the debtor for the purposes aforesaid, at a time and place to be specified in the warrant. St. 1838, c. 163, § 9. Sect. 68. If the debtor, by reason of imprisonment, sickness, or any other cause deemed sufiicient by the judge, is unable to attend before the judge, or the assignee, or at any meeting of his creditors, the judge, or some person deputed by him for that pur- pose, and the assignee, or some person appointed by him, shall attend the debtor, in jail or elsewhere, if he is within this State, in order to take his examination; s^nd the examination thus taken shall be of the same force and effect as if the debtor had attended in person before the judge or assignee, or at the meetings afore- said, and had there undergone the same examination. St. 1838, c. 163, § 9. Sect. 69. If the debtor is without this State and unable to return and give his personal attendance at any of the times and for the purposes specified in this chapter, and if it appears that such absence was not caused by his wilful default, and as soon as may be after the removal of such impediment he offers to attend and submit to an examination on oath before the judge and the assignee as herein provided, and to do and perform all things required by this chapter for the purpose of obtaining his certifi- cate, he shall be entitled thereto in like manner as if he had done INSOLVENT LAW OP MASSACHUSETTS. 461 the same things at the times respectively herein prescribed. St. 1838, c. 163, § 9. Sect. 70. The debtor shall, at the expense of the estate, make and execute such deeds and -writings, and indorse such bills, notes, and other negotiable papers, draw such checks and orders for moneys deposited in banks or elsewhere, and do all such other lawful acts and things, as the assignee at any time reasonably requires, and which may be necessary or useful for confirming the assignment, and enabling the assignee to demand, recover, and receive all the estate and effects so assigned, especially any part thereof which is without this State. St. 1838, c. 163, § 5. Sect. 71. If the debtor refuses or unreasonably neglects to execute an instrument when lawfully required pursuant to an order of the judge, or disobeys any lawful order or decree, the judge shall issue his warrant to any civil officer, commanding him to arrest and commit the debtor to the jail in the county where he may be found, or where he dwelt at the time of his insolvency; and he shall remain in close custody until he obeys such order or decree, unless he is released by the supreme judicial court or some justice thereof on a writ of habeas corpus. St. 1838, c. 163, § 28. Sect. 72. The judge shall appoint a second meeting of the cred- itors, to be held at a court not more than three months after the date of the warrant, regard being had to the distance at which the creditors reside. The debtor shall then be allowed to amend and correct his schedule of creditors, and shall take and subscribe an oath before the judge, which shall be certified by him and filed in the case, in substance as follows: — do swear that the account of my creditors contained in the schedule made and signed by me, and now on file in court, is in all respects just and true, according to my best knowledge and belief. And I do further swear, that I have delivered to , the messenger, all my estate, (except- ing such parts thereof as are by law exempted by attachment, and such as have been necessarily expended for the support of myself and my family,) and all my books of account and papers relating to my said estate, that were within my possession or power when the same were demanded of me by the messenger; that I have delivered to my assignee all such of my said estate, books, and papers, as have since come to ijiy possession ; and that if any other estate, effects, or other things, which shall or ought to be assigned and delivered to the assignee, shall hereafter come to my knowledge or posses- sion, I will forthwith disclose or deliver the same to him. And I do further swear, that there is not any part of my estate or effects made over or dis- posed of in any manner for the future benefit of myself or my family, or in order to defraud my creditors." Sts. 1838, c. 163, § 7; 1854, c. 329, § 3. Sect. 73. When a failure to call or hold a second or third meet- ing within the time -prescribed occurs, the court may, upon the petition of an interested party, order such meeting with like effect 462 APPENDIX. as to the validity of the proceedings as if the meeting had been duly held. St. 1854, c. 329, § 1. Sect. 74. Upon the death, resignation, or neglect of the as- signee, or his absence from the county, whereby a meeting to be notified by him is liable to be defeated, such meeting may be noti- fied by the register on the order of the judge, on petition of any interested party, with notice at the discretion of the judge to the assignee if living, and with the like effect as if the meeting had been called and notified by the assignee. St. 1854, c. 329, § 2. Sect. 75. The judge shall appoint a third meeting of the cred- itors to be held within six months from the time of the appoint- ment of the- assignee; at which meeting or some meeting there- after, if it appears to the satisfaction of the judge that the debtor has made a full disclosure and delivery of all his estate as herein required, and that he has in all things conformed himself to the directions and requirements of the laws relating to insolvent debtors, the judge shall grant him a certificate, which shall state all fiduciary debts specially exempt from discharge, and be in substance as follows : — Commonwealth of Massachusetts. ss. Court of Insolvency. To all people to whom these presents shall come, I, A. B., judge of the court of insolvency for said county of , send greeting. Whereas, it has been made to appear to me, that 0. D., of B., in the said county of , merchant, whose estate has been assigned for the benefit of his creditors, according to law, has made a full disclosure and delivery of all his estate, and that he has in all things conformed himself to the require- ments of law in that behalf made and provided : I do accordingly certify that said C. D. is absolutely and wholly discharged from all his debts which have been or shall be proved against his estate assigned as aforesaid, and from all debts which are provable against his estate, and which are founded on any contract made by him within this State or to be performed within the same, and made since the last day of July in the year eighteen hundred and thirty-eight, and from all debts which are provable as aforesaid, and which are founded on anycontract made by him since that date, and due to any persons who were resident within this commonwealth on the day of last, being the day of 'the first publication of the notice of the war- rant issued for the seizure of the estate of said 0. D. ; and from all demands against him for or on account of any goods or chattels wrongfully obtained, taken, or withheld, by him, according to the provisions of chapter one hun- dred and eighteen of the General Statutes. And I do further certify that said 0. D. is by force of said chapter forever discharged and exempted from arrest or imprisonment in any suit, or upon any proceeding, for or on account of any debt or demand whatever which might have been proved against his estate assigned as aforesaid. Given under my hand and the seal of said court this day of , in the year Sts. 1838, c. 168, §§ 7, 12 ; 1844, c. 178, § 3; 1848, c. 304, § 9. Sect. 76. The debtor shall thereupon, except as provided in INSOLVENT LAW OP MASSACHUSETTS. 463 section seventy-nine, be absolutely and wholly discharged from debts proved against his estate ; and. from all debts provable under this chapter, and founded on any contract made by him subsequently to the last day of July in the year eighteen hundred and thirty-eight, and while an inhabitant of this State, if made within this State, to be performed within the same, or due to any person resident therein at the time of the first publication of the notice of the issuing of the warrant ; and from all demands for or on account of any goods or chattels wrongfully obtained, taken, or withheld by him, as mentioned in section twenty-five, while such inhabitant. Sts. 1838, c. 163, § 7; 1844, c. 178, § 3; 1855, c. 363, § 1. Sect. 77. If the debtor at the time of obtaining his certificate is in jail on any suit or proceeding, for or on account of any claim provable against his estate, he shall be discharged from such imprisonment upon producing to the jailer his certificate granted pursuant to the provisions of this chapter. St. 1838, c. 163, § 9. ' Sect. 78. The debtor shall also be forever thereafter discharged and exempt from arrest or imprisonment in any suit or upon any proceeding for or on account of any debt or demand which might have been proved against his estate. And the property and estate of the debtor by him acquired subsequently to the time of the first publication of the notice of the issuing of the warrant, shall not be subject to attachment, by trustee process or otherwise, in any suit to recover a debt which may have been so provable and due to any person or persons not resident in this State at the time of such first publication, or founded on any contract existing at the time of said first publication and made or to be performed out of the limits of this State. Sts. 1838, c. 163, § 7; 1850, c. 97. Sect. 79. A debt created subsequently to the fifteenth day of April, in the year eighteen hundred and forty-four, by the debtor's defalcation as a public oflBcer, executor, administrator,, guardian, receiver, trustee, or assignee, of an insolvent estate, shall not be discharged under this chapter, but the dividend declared thereon shall be payment of so much of said debt. A claim for neces- saries furnished to the debtor or his family shall not be so dis- charged unless the claim is proved against his estate. Sts. 1838, c. 163, § 7 ; 1844, c. 178, § 3 ; 1848, c. 304, § 10 ; Gen. Sts., c. 90, § 29. _ Sect. 80. A discharge shall not release or discharge any person liable for the same debt as a partner, joint contractor, indorser, surety, or otherwise, for or with the debtor. St. 1888, c. 163, § 7. Sect. 81. A discharge shall not be granted to a debtor whose assets do not pay fifty per cent, of the claims proved against his estate, unless the assent in writing of a majority in number and value of his creditors who have proved their claims is filed in the 464 APPENDIX. case within six months after the date of the assignment. St. 1848, c. 304, § 9. Sect. 82. A discharge shall not be granted to a debtor a sec- ond time insolvent, whose assets do not pay fifty per cent, of the claims proved against his estate, unless the assent in writing of three-fourths in value of his creditors who have proved their claims is filed in the case within six months after the date of the assignment. No discharge shall be granted to a debtor a third time insolvent. But a debtor who has paid all the debts owing by him at the time of his previous insolvency, 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 been previously insolvent. Sts. 1844, c. 178, §§ 5, 6; 1856, c. 257. Sect. 83. A creditor may assent to the debtor's discharge under the two preceding sections, notwithstanding an appeal from the allowance of his claim is pending, and such assent shall be valid if the claim is finally allowed. St. 1852, c. 293. ' Sect. 84. When a discharge is refused a debtor for the sole reason that the assent of the requisite majority of his creditors has not been seasonably obtained or filed, or for the reason that he has not taken the oath required by section seventy-two, the judge, upon the application of the debtor made within twelve months after the date of the assignment and with the written assent of three-fourths in number and value of the creditors who have proved their claims, may grant his discharge if he satisfies the judge on a hearing had after public notice of said application that the failure to obtain or file the assent was occasioned by acci- dent or mistake, and by no fault of his own ; or that the omission to take the oath was owing to his inability by reason of sickness to attend and take the same; and if he is present and takes the oath and abides and performs all lawful orders of the court. St. 1858, c. 121. Sect. 85. Either the debtor or the assignee may within ten days after the decision of the judge upon the question of granting the certificate of discharge, and not after, upon giving notice to the register to be entered with the record of proceedings, appeal from such decision to the term of the superior court which shall be first held within and for the county next after the expiration of fourteen days from the time of claiming the appeal. But if the appellant in writing waives his appeal before the entry thereof in the superior court, proceedings may be had in the court of in- solvency, as if no appeal had been taken. Sts. 1838, c. 163 § 8- 1848, c. 304, §11; 1859, c. 196. Sect. 86. The appeal may be heard and determined by the superior court or any justice thereof; and the assignee or any INSOLVENT LAW OF MASSAOHDSBTTS. 465 creditor may appear and object to the allowance of the certificate. If after a full hearing of the parties it appears to the satisfaction of the court that the debtor has made a full disclosure and de- livery of all his estate as herein required, and that he has in all things conformed himself to the directions of this chapter, the court shall cause a certificate thereof in substance like that pre- scribed in section seventy-five, to be made under the seal of the court, signed by the clerk, and delivered to the debtor. Sts. 1838, c. 163, § 8 ; 1859, c. 196. Sect. 87. A discharge shall not be granted, or valid, if the debtor has wilfully sworn falsely as to any material fact in the course of the proceedings, or if he has fraudulently concealed any part of his estate, or efiiects, or any books or writings relating thereto; or if, being insolvent and having reasonable and sufficient cause to believe himself so, he has, within one year next before the filing of a petition by or against him, paid or secured, either directly or indirectly, in whole or in part, any borrowed money, or pre-existing debt, or any liability of his or for him ; or if, within six months before the filing the petition by or against him, he has procured his lands, goods, money, or chattels to be attached, sequestered, or seized on execution ; or if, subsequently to the sixth day of July, eighteen hundred and fifty-six, he has destroyed, altered, mutilated, 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 creditors ; or has removed himself, or removed or caused to be removed any part of his prop- erty, from the State, with intent to defraud his creditors ; or has made any fraudulent payment, gift, transfer, conveyance, or as- signment of any part of his property, or spent any part thereof iu gaming; or if, having knowledge that any person has proved a false debt against his estate, 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 to said- date kept proper books of account. And the discharge shall be null and void, if the debtor, or any person in his behalf, shall have procured the assent of any creditor thereto by. any pecuniary con- sideration. Sts. 1838, c. 163, § 10; 1841, c. 124, § 3; 1844, c. 178, § 8; 1848, c. 304, § 9; 1856, c. 284, § 31; 1858, c. 64. See §90. Sect. 88. If any person, in contemplation of becoming insol- vent and of obtaining a discharge in insolvency, makes any pay- ment, pledge, assignment, transfer, or conveyance of any part of his property, directly or indirectly, absolutely or conditionally, for the purpose of preferring any creditor or person having a claim against him, or who is or may be under any liability for 30 466 APPBNnix. him, or for the purpose of preventing the property from coming to the hands of his assignee in insolvency, or of being distributed under the laws relating to insolvency in satisfaction of his debts, except as provided in section ninety, he shall not be entitled to a discharge, and any discharge received by him shall be void and of no effect. Sts. 1838, c. 163, § 10; 1841, c. 124, § 3; 1856, c. 284, § 25. See § 90. _ _ Sect. 89. If any person, being insolvent or in contemplation of insolvency, -within six months before the filing of the petition by or against him, with a view to give a preference to any cred- itor or person having a claim against him, or who is under any liability 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 conditionally, the per- son receiving such payment, pledge, assignment, transfer, or con- veyance, or to be benefited thereby, having reasonable cause to believe such person is insolvent or in contemplation of insolvency, and that such payment, pledge, assignment, or conveyance is made in fraud of the laws relating to insolvency, the same shall be void; and the assignees may recover the property, or the value of it, from the person so receiving it or so to be benefited. Sts. 1838, c. 163, § 10; 1841, c. 124, § 3; 1856, c. 284, §§ 25, 26. See § 90. Sect. 90. The provisions of the three preceding sections shall not apply to any payment of money, or transfer of property in payment, not exceeding twenty-five dollars in amount, upon a debt contracted for necessaries furnished to the debtor or his family. St. 1856, c. 284, § 25. Sect. 91. If any person, being insolven't or in contemplation of insolvency, within six months before the filing of the petition by or against him, makes any sale, assignment, transfer, or other conveyance of any description, of any part of his property, to any person who then has reasonable cause to believe such person insol- vent or in contemplation of insolvency, and that such sale, assign- ment, transfer, or other conveyance is made with a view to pre- vent the property from coming to his assignee in insolvency, or to prevent the same from being distributed under the laws relating to insolvency, 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 said provisions, the sale, assignment, transfer, or convey- ance shall be void, and the assignee may recover the property or the value thereof as assets of the insolvency. And if such sale, assignment, transfer, or conveyance is not made in the usual and ordinary course of business of the debtor, that fact shall be primd facie evidence of such cause of belief. St. 1856, c. 284, § 27. INSOLVENT LAW OF MASSACUC SETTS. 467 Sect. 92. The debtor shall receive from the assignee one dollar a day for his attendance on the judge or the assignee when re- quired under section sixty-six. He shall also be allowed out of his estate, for the necessary support of himself and his family, such sum, not exceeding the rate of three dollars per week for each member of his family, and for such time, not exceeding two months, as the judge may order. And every debtor who is dis- charged shall be allowed five per cent, on the net produce of all his estate received by the assignee, if such net produce, after such allowance, is sufficient to pay the creditors entitled to a dividend the amount of fifty per cent, on their debts ; but the allowance shall not exceed in the whole the sum of five hundred dollars. St. 1838, c. 163, §§ 6, 8. Sect. 03. If an allowance to the debtor on the net produce of his estate becomes due and is not paid to him in his lifetime, it shall be paid to his executors or administrators, and disposed of and distributed in like manner as any other property of which he may be possessed at the time of his decease. St. 1838, c. 168, § 5. Sect. 94. If after the payment of all debts proved any surplus remains in the hands of the assignee, it shall be paid or recon- veyed to, or revest in, the debtor or his legal representative. St. 1838, c. 163, § 13. Sect. 95. At the third meeting the assignee shall exhibit to the judge and creditors present, fair and just accounts of all his receipts and payments touching the estate, and shall, if required by the judge, be examined on oath as to the truth of such ac- counts The judge shall thereupon order a dividend of the estate and efiects, or of such part thereof as he deems fit, among such of the creditors as have proved their claims, in proportion to their respective debts. St. 1838, c. 163, § 12. Sect. 96. In the order for a dividend under the preceding sec- tion, the following claims shall be entitled to priority or prefer- ence, and to be first paid in full in their order : — First. All debts due to the United States, and all debts due to and taxes assessed by this State : Second. Wages due to any operative to an amount not exceed- ing fifty dollars for labor performed within one year next pre- ceding the first publication of the notice of insolvency, or for labor for the recovery of payment for which a suit commenced within one year after the performance thereof is pending, or has termin- ated within one year from said first publication : Third. All debts due to physicians for medical attendance on the debtor or his family, rendered within six months prior to the institution of proceedings in insolvency, to an amount not exceed- ing fifty dollars : 468 APPENDIX. Fourth. All debts due to any persons who by the laws of the United States, or of this State, are or may be entitled to a prior- ity or preference in like manner as if this chapter had not been enacted : Fifth. Legal fees, costs, and expenses, of suit, and for the cus- ,tody of the property proved as preferred under section one hun- dred and twenty-seven. Sts. 1838, c. 163, §§ 12, 24 ; 1841, c. 124. § 6; 1850, c. 218; 1858, c. 1 19, §§ 1, 2. Sect. 97. If at the time of ordering the dividend it appears probable that there are just claims against the estate which by reason of the distant residence of the creditor or for other suffi- cient reason have not been proved, the judge shall in ordering the dividend leave in the hands of the assignee a sum sufficient to pay every such absent creditor a proportion equal to what shall be then paid to the other creditors, which sum shall remain thus unappropriated in the hands of the assignee until the final divi- dend is declared, or until the judge orders its distribution. St. 1838, c. 163, § 12. Sect. 98. The assignee shall, at such time as the judge directs within eighteen months after the appointment of the assignee, make a second dividend of the estate, if the same was not wholly distributed upon the first dividend, and shall give notice of a meeting of all the creditors of the debtor for that purpose. At such meeting the accounts of the assignee shall be produced and examined as provided in section ninety-five, and settled by the judge ; and any balance appearing to be in the hands of the assignee, shall, by order of the judge, be divided among all the creditors who have proved their debts, in proportion thereto. St. 1838, c. 163, § 13. Sect. 99. If at any time before the final dividend there remain in the hands of the assignee any outstanding debts or other prop- erty due or belonging to the estate which cannot in the opinion of the judge be collected and received by the assignee without unreasonable or inconvenient delay, the assignee may, under the direction of the judge, sell and assign such debts or other prop- erty in such manner as the court shall order. St. 1838, c. 163, §13. Sect. 100. Suits upon claims sold by assignees shall be brought in the name of the purchasers. The fact of sale and of purchase by the plaintifi' shall be set forth in the writ, and the defendant may avail himself of any matter of defence of which he could have availed himself in a suit upon the claim by the assignee. Costs in such suits shall be recovered by or against the plaintiff, and the assignee shall not be liable therefor. St. 1859, c. 194. See §47. Sect. 101. Such second dividend shall be final, unless a suit INSOLVENT LAW OF MASSACHUSETTS. 469 relating to the estate is then depending, or part of the estate is outstanding, or unless some other estate or effects of the debtor afterwards come to the hands of the assignee ; in which cases another dividend shall be made by order of the judge. Further dividends shall be made in like manner as often as occasion requires. St. 1838, c. 163, § 13. Sect. 102. No creditor whose debt is proved at the time of the second or any subsequent dividend shall disturb any prior divi- dend, but he shall be paid so far only as the funds remaining un- appropriated in the hands of the assignee are sufficient therefor. St. 1838, c. 163, § 13. Sect. 103. If any person arrested on mesne process in a civil action for the sum of one hundred dollars or upwards, founded upon a demand in its nature provable against the estate of an insolvent debtor, has not given bail therein on or before the return day of such process ; or has been actually imprisoned for more than thirty days, in any civil action founded on such contract, for the sum of one hundred dollars or upwards ; or if any person whose goods or estate are attached on mesne process in any civil action founded on such contract, for the sum of one hundred dol- lars or upwards, has not within seven days from the return day of such process dissolved the attachment in the manner provided in chapter one hundred and twenty-three ; or if any person has removed himself or any part of his property from the State, with intent to defraud his creditors ; or has concealed himself to avoid arrest, or any part of his property to prevent its being attached, or taken on a legal process ; or procured himself or his property to be arrested, attached, or taken, on any legal process ; or made any fraudulent payment, conveyance, or transfer, of any part of his property; any of his creditors whose claims provable against his estate amount to the sum of one hundred dollars, may, within ninety days thereafter, apply by petition to the judge for the county in which the debtor resides, or, in case the debtor has ceased to reside in this State within one year next before the commencement of proceedings against him, in the county in which he last had his residence, setting forth the facts and the nature of such claims, verified by oath, and praying that his estate may be seized and distributed according to the provisions of this chapter. Sts. 1838, c. 163, § 19; 1844, c. 178, §§ 9, 12, 13; 1851, c. 189, §2; 1856, c. 284, §§25, 29. Sect. 104. The judge, after notice of the petition given to the debtor by a copy thereof served upon him personally or left at his last and usual place of abode, and a hearing before him of the petitioner and debtor, or a default by the debtor to appear in pur- suance of said notice, if the facts set forth in the petition appear to be true, shall forthwith issue his warrant to take possession of 470 APPENDIX. the estate of the debtor. The warrant shall be directed, and the property of the debtor shall be thereon taken and distributed, in the same manner and with similar proceedings to those herein provided for the taking possession and distribution of the prop- erty of a debtor upon his own petition. Sts. 1838, c. 163, § 19; 1844, c. 178, § 9. Sect. 105. When a person by accident or mistake has failed to dissolve an attachment within the time required by section one hundred and three, he may forthwith apply by petition to the judge before whom proceedings against him are pending, for a stay of the proceedings, and after such notice to the petitioning creditor as the judge orders, or without notice if the urgency of the case does not allow notice to be given, the proceedings may be stayed by an order of the judge until a hearing; and if upon the hearing he proves to the satisfaction of the judge that he is in fact solvent, or that for any other cause the proceedings ought to be stayed, the judge shall order the proceedings to be stayed and finally suppressed. St. 1851, c. 189, § 3. Sect. 106. If a debtor after notice of the filing of a petition by or against him secretes or conceals any property belonging to his estate, or any books, deeds, documents, or writings, relating thereto, or removes or causes to be removed the same or any part thereof out of the State, or otherwise disposes of any part thereof, with a view to prevent it from coming to the possession of the messenger or assignee, or to hinder, impede, or delay either of them in recovering or receiving the same ; or makes any payment, gift, sale, assignment, or conveyance of any property belonging to his estate ; or spends any part .thereof in gaming or otherwise, except such parts as may reasonably be expended for the support of himself and his family, not exceeding the amount allowable by law; he shall be punished by imprisonment in the State prison not exceeding five years, or in the jail not exceeding two years. St. 1856, c. 284, § 30. Sect. 107. A judge before whom proceedings are pending in relation to the estate of a debtor may, upon the complaint under oath of any person interested therein, against any one suspected of having fraudulently received, concealed, embezzled, or con- veyed away, any money, goods, efi"ects, or other estate, of the debtor, cite the suspected person to appear before him and be examined on oath upon the matter of the complaint. If the per- son cited refuses to appear and submit to such examination or to answer such interrogatories as are lawfully propounded to him, the judge may commit him to the jail of the county, there to remain in close custody until he submits to the order of the court. All such interrogatories and answers shall be in writing, signed by the party examined, and filed in court. St. 1846, c. 168, § 1. INSOLVENT LAW OF MASSACHUSETTS. 471 Sect. 108. When two or more persons who are parChers become .insolvent, a warrant may be issued, as provided in this chapter, by the judge in whose county either of the partners resides, upon the petition of one or more of the partners, (reasonable notice being first given by the judge to the other partners, if within the State, to show cause why its prayer should not be granted,) or upon the petition of any creditor of the partners ; upon which warrant all the joint stock and property of the company and the separate estate of each of the partners shall be taken, except such parts as may be by law exempt from attachment; and all the creditors of the company, and the separate creditors of each part- ner, may prove their respective debts. St. 1838, c. 163, § 21 ; 1856, c. 284, § 37; 1858, c. 93, § 10. Sect. 109. The assignee shall be chosen by the creditors of the company ; and shall keep separate accounts of the joint stock, or property of the company, and of the separate estate of each member thereof; and after deducting out of the whole amount received by him the total expenses and disbursements paid, the net proceeds of the joint stock shall be appropriated to pay the creditors of the company, and the net proceeds of the separate estate of each partner shall be appropriated to pay his separate creditors. If there is any balance of the separate estate of a partner after the payment of his separate debts, it shall be added to the joint stock for the payment of the joint creditors. If there is a balance of the joint stock after the payment of the joint debts, it shall be divided and appropriated to and among the separate estates of the several partners according to their respective rights and interests therein, and as it would have been if the partnership had been dissolved without insolvency; and the sum so appropriated to the separate estate of each partner shall be applied to the payment of his separate debts. St. 1888, c. 163, § 21. Sect. 110. The provisions of the two preceding sections shall apply to limited partnerships formed under chapter fifty-five, or under chapter thirty four of the Revised Statutes, when such partnerships become insolvent ; but the separate estates and sep- arate debts of the special partners shall not be subject to the proceedings against the partnership. St. 1838, c. 163, § 22. Sect. 111. In all proceedings against partners each shall be entitled to allowance as herein before provided for the mainte- nance of himself and his family; and the allowance on the net produce of the estates as provided in section ninety-two, shall be computed on the joint estate, and also on each of the separate estates, as if there had been a separate warrant against each ; but neither of the partners shall receive in the whole more than five hundred dollars. St. 1838, c. 168, § 21. 472 APPENDIX. ' Sect. 112. The certificate of discharge shall be granted or re- fused to each partner as it would or ought to be if the proceedings had been against him alone. In all other respects the proceed- ings against partners shall be conducted in the same manner as against a single person. St. 1838, c. 163, § 21. Sect. 113. Any corporation created by authority of this State, except railroad and banking corporations, may apply by petition signed by an officer duly authorized by a vote of a majority of the corporators present and voting at a legal meeting called for the purpose, to the judge for the county where the corporation has its principal place of business, setting forth its inability to pay its debts and its willingness to assign all its estate and effects for the benefit of its creditors, and praying that such proceedings may be had in the premises as are hereinafter provided. The judge shall thereupon forthwith issue a warrant, as in the case of an application by a debtor under section seventeen, but requiring the notice given by the messenger to state further that the making of any contract by the corporation is forbidden by law. St. 1851, c. 327, §§1,2. Sect. 114. Thereupon like proceedings shall be had, with like powers, duties, and privileges, of the judge, register, messenger, assignee, and creditors, as are hereinbefore provided upon the petition of a debtor, except as hereinafter mentioned. St. 1851, c. 327. Sect. 115. Claims on account of bills of exchange, indorse- ments, money due on bottomry or respondentia bonds, paid upon indorsements, or as surety, may be proved against an insolvent corporation before the making of the last dividend, in like manner as against the estate of an insolvent debtor before the making of the first dividend. St. 1851, c. 327, § 3. Sect. 116. The schedules to be furnished shall be prepared and furnished by the treasurer or other financial officer of the corporation, with such assistance as he requires from the other officers ; and all the provisions of this chapter which apply to the debtor or set forth his duties in regard to executing papers, sub- mitting to examinations, disclosing, making over, secreting, con- cealing, conveying, assigning, or paying away, his money or prop- erty, shall in like manner, and with like force, effect, and penalties, apply to each and every officer of the corporation, in relation to the same matters concerning the corporation, and the money and property thereof. And said officers shall at the second meeting severally make and subscribe an oath in substance as follows: — I, , (president, etc., or treasurer, etc.,) do swear that I verily believe the account of the creditors of the corporation, contained in the schedule signed by A. B., and now on file in court, is in all respects just and true ; that I do verily believe that all the property and estate of said corporation. INSOLVENT LiW OF MASSACHUSETTS. 473 and all its books of account and papers, have been delivered to the messenger or the assignee; and that if any goods or estate not so delivered, hereafter come to my knowledge, I will faithfully and diligently apprise the assignee thereof. And I do further swear that, to the best and utmost of my knowl- edge, information, and belief, there is no part of the estate or effects of said corporation made over or disposed of in any manner in fraud of the laws relating to insolvency or of the creditors of said corporation. St. 1851, c. 327, §§ 6, 7, 8. Sect. 117. In the case of a turnpike, canal, bridge, or other corporation authorized by law to take toll, the assignment to the assignee shall empower him to sell and convey the franchise of the corporation, and any and all property and rights connected with the exercise thereof, to such persons as become the pur- chasers of the same ; and by virtue of such sale and conveyance such purchasers and their associates shall be deemed to be so far the owners of all such franchises, that they may have such cor- poration organized anew by themselves as its sole members, in the manner provided in section three of chapter sixty-eight, and the provisions of law applicable to such corporation. When the corporation has been thus organized anew, it shall be deemed to be lawfully possessed, as of its own property, of all the franchises to such corporation previously granted, and of all the property and rights so sold and conveyed with such franchises ; and such purchasers, their associates, successors, and assigns, shall be the only members of the corporation. When such corporation is so organized anew, it shall not be liable to any suit at law or in equity, founded on any contract (performable within this State or made with any citizen thereof) which existed prior to such organization, nor for any claim provable under this chapter. St. 1851, c. 327, § 6. Sect. 118. When an assignee proceeds to sell the franchises of a corporation under the preceding section, he shall, if the judge has so ordered, expose the property, estate, or assets, of the cor- poration, for sale in shares, in number equal to the whole number of shares of the capital stock of the corporation, and such shares may thereupon be sold separately, and the purchasers thereof may organize anew in the manner in said section provided. St. 1851, c. 327, § 27. Sect. 119. All claims against any turnpike, canal, or other corpofation authorized to take land or materials, for damages for taking land or materials, or laying out such road, canal, or turn- pike, shall be preferred debts, next after debts due to the United States and to the commonwealth. St. 1851, c. 327, § 19. Sect. 120. All payments, conveyances, and assignments, made fraudulent and void by sections eighty-nine and ninety-one, when made by a debtor, shall in like manner, to the like extent, and with like remedies, be fraudulent and void when made by a cor- 31 474 APPENDIX. poratioa which is subject to the provisions of this chapter. St. 1851, c. 327, § 9. . Sect. 121. An allowance or discharge shall not be granted to any corporation, or to any person as officer or member thereof. Sect. 122. If a corporation whose goods or estate are attached on mesne process in a civil action founded on a contract for the sum of one hundred dollars or upwards, which is in its nature provable under this chapter, does not within fourteen days from the return day of the writ, if the term of the court to which the process is returnable so long continues, or on or before the last day of the term if the same sooner ends, dissolve the attachment in the manner provided in chapter one hundred and twenty-three ; or if a corporation makes any fraudulent payment, conveyance, or transfer of its property or any part thereof; any of its cred- itors whose claims provable against its estate under this chapter amount to the sum of one hundred dollars, may apply by petition, stating the facts and the nature of said claim or claims, verified by oath, to the judge in the county in which the corporation is established, praying that its estate may be seized and distributed according to law ; and thereupon, after notice of the presentment of the petition given to the corporation by a copy thereof served on its president, treasurer, or clerk, thirty days at least before the return day of the notice, and a hearing of the petitioners and corporation, or after default of the corporation to appear at the time and place in the notice appointed, if the facts set forth in the petition appear to be true, the judge shall forthwith issue his warrant to take possession of the estate of the corporation ; and such further proceedings shall be had thereon as upon a warrant issuing upon the petition of a corporation under section one hun- dred and thirteen. Sts. 1651, c. 327, § 17 ; 1856, c. 284, § 25. Sect. 123. If a mortgage is foreclosed pending proceedings under the ten preceding sections and before the appointment of an assignee, the assignee when appointed may redeem the same at any time within sixty days after his appointment, with similar remedies to those provided by law for the redemption of mort- gages before foreclosure. St. 1851, c. 327, § 20. Sect. 124. Nothing in the preceding sections shall give valid- ity to or affect any mortgage made by a corporation for any purpose whatever. St. 1851, c. 327, § 26. Sect. 125. In each case there shall be allowed and paid the following fees, and none other, viz.: — For issuing the warrant, five dollars : For each day on which a meeting is held, seven dollars : For each order for a dividend, five dollars. Such fees shall have priority of payment over all other claims out of the estate, and before a warrant issues the petitioner shall INSOLVENT LAW OF MASSACHUSETTS. 475 deposit with the register, or with the judge to be delivered to the register, forty 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 payment 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 the warrant, two dollars : Second. For all necessary travel, at the rate of four cents a mile : Third. For each written notice to creditors named in the schedule, ten cents : Fourth. For custody of property, publication of notices, and other services, his actual 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 : For cause shown and upon hearing thereon, such further allow- ance may be made as the court in its discretion may determine. St. 1856, c. 284, § 24. Sect. 126. The register shall receive all fees, and account for and pay over the same to the treasurer of the coinmonwealth quarter-yearly, on the first Mondays of January, April, July, and October. St. 1856, c. 284, § 24. Sect. 127. When an attachment on mesne process has been made and is not dissolved before commencement of proceedings in insolvency, if the claim upon which the suit was commenced is proved against the estate of the debtor, the plaintiff may also prove the legal fees, costs, and expenses, of the suit and of the custody of the property, and the amount thereof shall be a privi- leged debt. St. 1841, c. 124, § 6. Sect. 128. In all matters of insolvency contested before a court of iiisolvency, the superior court, or in the supreme judicial court, said courts may in their discretion award costs to either party to be paid by the other, or to either or both parties to be paid out of the estate which is the subject in controversy, as justice and equity may require. Sts. 1866, c. 284, § 38 ; 1859, c. 196. Sect. 129. When costs are awarded to be paid by one party to the other, said courts respectively may issue execution therefor. St. 1856, c. 284, § 39. Sect. 180. When a creditor who has proved his debt petitions the judge to vacate the proceedings in a case, the judge may order the proceedings to be stayed, and after due notice to all persons interested in the estate and a hearing of the matter, if no objection is made by the debtor or any such creditor, pass an order vacating all proceedings therein. St. 1848, c. 304, § 13. 476 APPENDIX. Sect. 131. Each judge shall on or before the tenth day of each month make a return to the secretary of the commonwealth of the name, residence, and occupation, of each person, by or against whom as an insolvent debtor, and of the name of each corpora- tion, the kind of business for which it was created, the place or places where its business was principally done, by or against which, as an insolvent corporation, a petition has been filed in his court during the next preceding month, with the dates of such petitions. The secretary shall enter such returns, conveniently for reference, in a book which shall be open to the inspection of the public. Sts. 1846, c. 168, § 3; 1851, c. 327, § 24. Sect. 132. Nothing in this chapter shall affect the jurisdiction of a commissioner of insolvency or master in chancery in any case pending before him at the time of its enactment ; but such juris- diction shall continue in full with the same fees of such commis- sioners, masters, and their clerks, as heretofore established. St. 1844, c. 178, § 15. Sect. 133. If a commissioner of insolvency or master in chan- cery before whom proceedings upon any case in insolvency men- tioned in the preceding section are pending, dies, is removed from the charge of the case, or for any cause is unable to perform the duties required of him, the case and all papers connected there- with shall be transferred to the court of insolvency for the county in which the case is pending. The court shall thereupon have jurisdiction of the case and proceed therein as if it had been orig- inally commenced in said court. Sts. 1844, c. 178, § 15; 1850, c. 207; 1855, c. 226; 1856, c. 284, § 2. Sect. 134. Upon the closing of proceedings in a case pending before a commissioner of insolvency or master in chancery, all papers and records relating thereto shall be returned to and de- posited in the office of the register of probate and insolvency for the county. Sts. 1838, c. 163, § 14; 1856, c. 284, § 40. BANKRUPT ACT OF 1867. AN ACT TO ESTABLISH A UNIFORM SYSTEM OF BANKRUPTCY THROUGHOUT THE UNITED STATES. Be it enacted hy the Senate and Mouse of Representatives of the United States of America in Congress assembled, That the several district courts of the United States be, and they hereby are, consti- tuted courts of bankruptcy, and they shall have original jurisdiction in their respective districts in all matters and proceedings in bank- ruptcy, and they are hereby authorized to hear and adjudicate upon the same according to the provisions of this act. The said courts shall be always open for the transaction of business under this act, and the powers and jurisdiction hereby granted and con- ferred shall be exercised as well in vacation as in term time, and a Judge sitting at chambers shall have the same powers and juris- diction, 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 contro- versies 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 adjustment of the various priorities and conflicting interests of all parties ; and to the marshaling and disposition of the different 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 bank- ruptcy, 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 hold- ing court, they shall ha,ve given notice, as well as at the places designated by law for holding such courts. 32 (477) 478 APPENDIX. Sect. 2. — And he it further enacted. That the several circuit courts of the United States, within and for the districts where the proceedings in bankruptcy shall 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 bill, petition, or other proper process, of any party aggrieved, hear and determine the case as 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 vaca- tion. Said Circuit Courts shall also have concurrent jurisdiction with the District Courts of the same district, of all suits at law or in equity, which may or shall be brought by the assignee in bankruptcy against any person claiming an adverse interest, or by such person against such assignee, touching any property or rights of property of said bankrupt 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 contained shall revive a right of action barred at the time such assignee is appointed. OF THE ADMINISTRATION OF THE LAW IN COUBTS OF BANKRUPTCY. Sect. 3. — And he 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 recommenda- tion 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 counselor of said Court, or of some one of the Courts of Record of the State in which he resides. 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 faithfully discharge the duties of his office, in a sum not less than $1000, to be fixed by said Court, with sureties sat- isfactory to said Court, or to either of the said Justices thereof; and he shall, in open Court, take and subscribe the oath pre- scribed in the act entitled "An act to prescribe an oath of office, and for other purposes," approved July 2, 1862, and also that he will not during his continuance in office be, directly or indirectly, BANKRUPT ACT OF 1867. 479 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. Sect. 4'. — And he 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 uf any bankrupt, to administer oaths in all pro- ceedings before him, to hold and preside at meetings of creditors, take proof of debts, to make all computations of dividends, and all orders of distribution, and to furnish the assignee with a cer- tified 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 chambers and dispatch there such part of the adminis- trative business 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 memo- randa, 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, however. That nothing in this section contained' shall empower a Register to commit for contempt, or to hear a disputed adjudication, 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 question or issue to be stated by the oppos- ing parties in writing, and he 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 dis- trict, or in any appeal therefrom; nor shall he be executor, administrator, guardian, commissioner, appraiser, divider, or as- signee, of or upon any estate within the jurisdiction of either of said Courts of bankruptcy, nor be interested in the fees or emol- uments arising from either of said trusts. The fees of said Regis- ters, 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. Sect. 6. — And be it further enacted. That the Judge of the District Court may direct a Register to attend at any place within 480 APPENDIX. the district, for the purpose of hearing guch voluntary applications under this act as may not be opposed, of attending any meetings of creditors, or receiving any proofs of debts, and, generally, for the prosecution of any bankruptcy or other proceedings under this act, and the traveling and incidental expenses of such Regis- ter, and of any clerk or other officer attending him, incurred in so acting, shall be settled 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, then such expenses shall form a part of the costs in the case or cases in which the Register shall have acted in such journey, 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 summoning and examination of persons or witnesses, and for requiring the pro- duction of books, papers and documents : Provided always. That all depositions of persons and witnesses taken before said Regis- ter, and all acts done by him, shall be reduced to writing and be signed by him, and shall be filed in the Clerk's office 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 resignation, 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 unneces- sary. Sect. 6. — And he it further 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 aris- ing 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 certificate, 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 jurisdiction 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 Court, or in such manner as the Court may BANKRUPT ACT OP 1867. 481 direct, or any property, or .the amount of any disputed debt or claim, shall be paid, delivered or transferred by one of such par- ties to the other of them either with or without costs. Sect. 7. — And be it further enacted, That parties and witnesses summoned before a Register shall be bound to attend in pursuance of such summons, at the place and time designated therein, and shall be entitled to protection, and be liable to process of con- tempt in like manner as parties and witnesses are now liable thereto in case of default in attendance under any writ of sub- poena; and all persons willfully and corruptly swearing or affirm- ing falsely before a Register shall be liable to all the penalties, punishments and consequences of perjury. If any person exam- ined 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 person so acting to pay the costs thereby occasioned, if such per- son be compellable by law to answer such question or to sign such examination, and such person shall also be liable to be punished for contempt. OF APPEALS AND PRACTICE. Sect. 8. — And be it further enacted, That appeals may be taken from the District to the Cii'cuit Courts in all cases in equity, and writs of error may be allowed to said Circuit Courts from said Dis- trict Courts in cases at law under the jurisdiction created by this act when the debt or damages claimed amount to more than $500 ; 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 for 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 proceedings, 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 manner now required by law in cases of such appeals. No writ of error shall be allowed unless the party claiming it shall comply with the statutes regulating the granting of such writs. 33 482 APPENDIX. Sect. 9. — And be it further enacted, That in cases arising un- der 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 $2000. Sect. 10. — And be it further enacted, That the Justicesof the Supreme Court of the United States, subject to the provisions of this act, shall frame general orders for the following 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; For regulating the practice and procedure upon appeals; For regulating the filing, custody, and inspection of records; 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 general 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. VOLUNTARY BANKRUPTCY — COMMENCEMENT OF PROCEEDINGS. Sect. 11. — And be it further enacted, That if any person residing within the jurisdiction of the United States, owing debts provable under this act, exceeding the amount of $300, shall apply by petition, addressed to the Judge of the Judicial District in which such debtor has resided or carried on business for the six months next immediately preceding the time of filing such peti- tion, or for the longest period during such six months, setting forth his place of residence, his inability to pay all his debts in full, his willingness to surrender all his estate and effects for the benefit of his creditors, and his desire to obtain the benefits of this act, and shall annex to his petition a schedule, verified by oath before the Court, or before a Register in bankruptcy, or be- fore one of the Commissioners of the Circuit Court of the United States, containing a full and true statement 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 BANKRUPT ACT OF 1867. 483 to be so stated, and the sura due to each creditor; also the nature of each debt or demand, whether founded on written security, obligation, contract, 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 mortgage, pledge, lien, judgment or collateral, or other security given for the payment of the same; and shall also annex to his petition an accurate inventory, verified in like manner, of all 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 incumbrances thereon, the filing of such petition shall be an act of bankruptcy, and such petitioner shall be adjudged a bankrupt: Provided, That all citizens of the United States peti- tioning to be declared bankrupt shall, on filing such petition, and before 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 opposing 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 $300, 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 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 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 use, and the transfer of any property by him, are forbidden by law. Third — That a meeting of the creditors of the debtor, giving the names, residences and amounts, so far as known, to prove their debts and choose one or niore 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. Sect. 12. — And he it further enacted, That at the meeting, held in pursuance of the notice, one of the Registers of the Court 484 APPENDIX. 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 heen 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. Sect. 13. — And be it further enacted, That the creditors shall, at the first meeting held after due notice from the messenger, 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 appointed, fails within five days to express in writing his acceptance of the trust, the Judge or Register may fill the vacancy. All elections or appointments of assignees shall be sub- ject 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 per- formance 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 the 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. Sect. 14. — And be it further 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 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 dissolve any such attachment made within four months next preceding the commencement of said proceedings: Provided, however. That there shall be excepted from the operation of the provisions of this section the necessary household and kitchen BANKRUPT ACT OF 1867. 485 furniture, and such other articles and necessaries of such bank- rupt as the said assignee shall 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 $500; and also the wearing apparel of such bankrupt, and that of his wife and children, q,nd 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 pro- cess or order of 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 1864: Provided, That the foregoing exception shall operate as a limita- tion 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 determ- ination of the assignee in the matter shall, on exception taken, be subject to the final decision of the said Court: And provided further, That no mortgage of any vessel or of any other goods or chattels, made as security for any debt or debts, in good faith and for present considerations and otherwise valid, and duly recorded, pursuant to any statute of the United States, or of any State, shall be invalidated or aflFected hereby ; and all the property con- veyed by the bankrupt in fraud of his creditors; all rights in equity, choses in action, patents and patent rights and copyrights; all debts due him, or any person for his use, and all liens and se- curities 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 unlaw- ful taking or detention of or injury to the property of the bank- rupt; 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 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, pend- ing 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 486 APPENDIX. 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 may be, 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 hereinbefore mentioned; but no property held by the bankrupt in trust shall pass by such assignment. No 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 days' 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. No 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; and no suit in which the assignee is a party shall be abated by his death or removal from office, but the same may be prosecuted 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 contract, or pledge or deposit, or lien upon any property, real or personal, whenever payable, and to tender due performance of the condition thereof, or to sell the same subject to such mortgage, lien, or other incumbrances. The debtor shall 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 himself fully of all the assets of the bankrupt. The assignee shall im- mediately give notice 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 general 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. Sect. 15. — And be it further enacted, That the assignee shall demand and receive from any and all persons holding the same all the estate assigned, or intended to be assigned, under the provisions of this act; and he shall sell all such unincumbered 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 BANKRUPT ACT OF 1867. 487 its opinion, prove to the interest of the creditors; and the assignee shall keep a regular account of all money received by him as assignee, to which every creditor shall, at reasonable times, have free resort. Sect. 16. — And he it further enacted. 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 bank- ruptcy had not been rendered and no assignment had been made. If, at the time of the commencement 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 pros- ecute 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. Sect. 17. — And be it further enacted, 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 assignee, or otherwise keep it distinct and apart from all other money in his possession; and ^hall, 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 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 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. He shall be allowed, and may retain, out of 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 discretion of the Court. He may, under the direction of the Court, submit any controversy arising in the settlement of demands against the estate, or of debts due to it, to the determination of arbitrators, to be chosen by him and the other 488 APPENDIX. party to the controversy, and may, under such direction, com- pound and settle any such controversy, by agreement with the other party, as he thinks proper and most for the interest of the creditors. Sect. IS.— And be 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 removal neces- sary 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 hereinbefore provided for the choice of assignee. An assignee may, with the consent of the Judge, resign his trust and be discharged therefrom. Vacancies caused by death or other- wise in the office of assignee, may be filled by appointment 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 all 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 requisite on his part for the proper closing up of his trust, and the transmission thereof to his suc- cessors; nor shall it aifect the liability of the principal or surety on the bond given by the assignee. When, by death or otherwise, the number of assignees is reduced, the estate of the debtor not lawfully disposed of shall vest in the remaining assignee or as- signees, and the persons selected to fill vacancies, if any, with the same powers and duties relative thereto as if they were originally chosen. Any former assignee, his executors or administrators, upon request, and at the expense of the estate, shall make and execute to the new assignee all deeds, conveyances and assurances, and do all other lawful acts requisite 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 fulfilment of the duties of any former assignee, and the rights and interests of all persons interested in the estate. No person who has received any prefer- ence 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 im- paired by reason of his ineligibility. An assignee refusing 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. BANKRUPT ACT OP 1867. 489 OF DEBTS AND PROOI' OF CLAIMS. Sect. 19. — And be it further enacted, That all debts due and payable from the bankrupt at the time of the adjudication of bank- ruptcy, 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 contract, may be proved against the estate of the bankrupt. All demands against the bankrupt for or on account of any goods or chattels 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 guar- antor, upon any bill, bond, note, or any other specialty, or con- tract, 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 dividend shall have been de- clared. 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, with the right to share in the dividends, if the contin- gency 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. 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 payments 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 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 may be established 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 pro- portionate 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 dam- ages 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 490 APPENDIX. 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. Sect. 20. — And be it further enacted, That, in all cases of mutual debts or mutual credits between the parties, the account between them shall be stated, and one debt set off against the other, and the balance only shall be allowed or 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 mort- gage 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 bal- ance of the debt after deducting the value of such property, 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 convey his claim to the assignee upon such property, and be admitted to prove his whole debt. If the value of the property 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 consummate 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. Sect. 21. — And he it further 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 unsatisfied judgments al- )5ready obtained thereon, shall be deemed to be discharged and surrendered thereby ; and no creditor whose debt is provable under this act shall be allowed to prosecute to final judgment any suit at law or in equity therefor against the bankrupt, until the question r^ of the debtor's discharge shall have been determined ; and any such ''»Buit 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 unreason- able delay on the part of the bankrupt in endeavoring to obtain his discharge, and provided also, that if the amount due the cred- itor 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 BANKRUPT ACT OF 1867. 491 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 obligation in respect of distinct contracts as a member of two or more firms, carrying on separate and dis- tinct trades, and having distinct estates to be wound up in bank- ruptcy, or as a sole trader and also as a member of a firm, the circumstance 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 respect- ively liable upon such contracts. Sect. 22. — And be it further enacted. That all proofs of debts against the estate of the bankrupt, by or in behalf of creditors residing within the judicial district where the proceedings in bank- ruptcy 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 in the judicial district where such creditors, or either of them, reside, or before any Com- missioner of the Circuit Court, authorized 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 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 sura claimed is justly due from the bankrupt 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 proceedings under this act, and that no bargain or agreement, express 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 consider- ation whatever, whereby the vote of such creditor for assignee, 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 afl"ected, in- fluenced, 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 knowledge, unless he is absent from the United States or prevented by some other good cause from testi- fying, in which eases the demand may be verified in like manner by the attorney or authorized agent of the complainant 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 492 APPENDIX. 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 afiirmation of their President, Cash- ier, 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 open to the inspection of all the creditors. The Court may, on the application of the assignee, or of any creditor, or of the bank- rupt, 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, and where the proof shows the claim to be founded in fraud, illegality, or mistake. Sect. 23. — And he it further 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 njade or given, nor shall he receive any dividend therefrom, until he shall first have surrendered to the assignee all property, money, benefit, or advantage, received by him under such pref- erence. 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 con- stituted attorney the same as though personally present. Sect. 24. — And he it further enacted. That a supposed cred- itor who takes an appeal to the Circuit Court from the decision 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 declaration for the same cause of action at law, and the assignee shall plead or answer thereto in like manner, and like proceedings shall thereupon be had in the BANKRUPT ACT OF 1867. 493 pleadings, trial and determination of the cause, as in an 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 conclusive, 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 evidence upon the proof of a claim, and left in Court, or deposited in the Clerk's office, may be deliv- ered, 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 PROPERTY PERISHABLE AND IN DISPUTE. Sect. 25. — And be it 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 deteriorate 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 in place of the estate disposed of; and whenever it appears to the satisfaction of the Court that the title to any portion of an estate, real or personal, which has come into pos- session 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 may deem reasonable, order it to be sold under the direction of the assignee, who shall hold the funds received in place of the estate disposed of; and the proceeds of the sale shall be considered the measure of the value of the property in any suit or controversy between the parties in any Courts. But this provision shall not prevent the recovery of the property from the possession of the assignee by any proper action commenced at any time before the Court orders the sale. EXAMINATION OF BANKRUPTS. Sect. 26. — And be it further enacted, That the Court may, on the application of the assignee in bankruptcy, or any creditor, or 494 APPENDIX. ■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 disposal or condition of his property, to his trade and dealings with others, and his accounts concerning the same, to all 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, and 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 shall fail to attend on being summoned thereto, the Court may compel his attendance by warrant directed to the Marshal, com- manding him to arrest such person 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 attendance, the Court may order him to be produced by the jailer, 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 bank- rupt 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 committed 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 wilful 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 all respects, he shall be permitted to do so, with like effect as if he had not been in de- fault. 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 re- quired to attend before the Court, to the end that she may be ex- amined 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. No bankrupt shall be liable to arrest during the pendency of the proceedings in bankruptcy in any civil action, unless the same is BANKRUPT ACT, OF 1867. 495 founded on some debt or claim from which his discharge in bank- ruptcy would not release him. OF THE DISTRIBUTION OF THE BANKRUPT'S ESTATE. Sbct.'27. — And he it 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 oper- ative or clerk, or house servant, to an amount not exceeding $50, for labor performed within six months next preceding the adjudi- cation of bankruptcy, shall be entitled to priority, and shall be first paid in full: Provided, 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 satisfac- tory 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 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 gen- eral 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 accounts of all his receipts and payments, verified by his oath, and he also shall 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 outstand- ing, 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 sufiicient to provide for all undetermined claims which, by reason of the distant residence of the creditor, or for other sufficient reason, have not been proved, and for other ex- penses 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 determine. In case a dividend is ordered, the Register shall, within ten days after such meeting, prepare a list of creditors entitled to dividend, and shall calculate and set oppo- 496 APPENDIX. site 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 shall forward hy 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. Sect. US. — And be it further 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 creditors 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 eifects of the debtor afterward come to the bands 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. 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 by the. assignee without unreasonable or inconvenient delay or ex- pense, the assignee may, under the direction of the Court, sell and assign such debts or other property in such manner as the Court shall order. No dividend already declared shall be disturbed by reason of debts being subsequently proved, but the creditor proving such debt shall be entitled to a dividend equal to those already received by the other creditors before any further pay- ment 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 shall 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 re- quired 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 in- curred by him in the execution of his trust, in any case, the as- signee 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 ; BANKRUPT ACT OF 1867. 497 for any larger sum not exceeding five thousand dollars, two and a half 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 satisfactorily 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 interested party, order such meetings, with like eflfect as to the validity of the proceedings, as if the meeting had been duly held. In the order for a dividend under this sec- tion, the following claims shall be entitled to priority or prefer- ence, and to be first paid in full in the following order. First. — The fees, costs and expenses of suits, and the several 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 servant, to an amount not exceeding $50, for labor performed within six months next preceding the first publication of the notice of pro- ceedings 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 pro- vided. 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 bankrupt's DISCHARGE AND ITS EFFECT. Sect. 29. — And he it further enacted. 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, and the Court shall thereupon order notice to be given by mail to all creditors who have proved their debts, and by publications at least once a week in such newspapers as the Court shall designate, due regard 34 498 APPENDIX. being had to the general circulation of the same in the district, or in that portion of the district in which the bankrupt and his creditors shall reside, to appear on a day appointed for that pur- pose, 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 ex- amination in the course of the proceedings in bankruptcy, in relation to any material facts 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 property belonging to him at the time of the presentation of his petition and inventory, excepting such property as he is permitted 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,^oney, or chattels to be attached, sequestered, or seized on execution ; or if, since the passage of this act, he has destroyed, mutilated, altered, or falsified any of his books, docu- ments, 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 creditors ; or has removed or caused to be removed any part of his prop- erty from the district, with intent to defraud his creditors ; or if he has given any fraudulent preference contrary to the pro- visions of this act, or made any fraudulent payment, gift, trans- fer, conveyance, or assignment of any part of his property, or has lost any part thereof in gaming, or has admitted a false or ficti- tious debt against his estate ; or if, having knowledge 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 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 cred- itor 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, directly or indirectly, absolutely or conditionally, for the purpose 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 convicted of BANKRUPT ACT OF 1867. 499 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 invalidating such discharge, if granted. Sect. 30. — And be it further enacted, That no person who shall have been discharged under this act, and shall afterward become bankrupt, on his own application shall again be entitled to a dis- charge, whose estate is insuflScient 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 amplication 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 bank- ruptcy, 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. Sect. 31. — And be 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 may, in its discretion, order any question of fact so presented to be tried at a stated session of the District Court. Sect. 32. — And be it further enacted. That if it shall appear to the Court that the bankrupt has in all 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 dis- charge from all his debts, except as hereinafter provided, and shall give him a certificate thereof under the seal of the Court, in substance as follows : District Court oi' 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 behalf, it is therefore, ordered by the Court that the 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, which 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. . (Seal.) , Judge. 500 APPENDIX. Sect. 33. — And be it further enacted, That no debt created by the fraud or embezzlement of the bankrupt, or by his defalcation 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, dis- charge, or affect any person liable for the same debt for or with the bankrupt, either as partner, 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 per centum of the claims against his estate, unless the as- sent in writing of a majority in number and value of his creditors who have proved their claims is filed in the case at or before the time of application for discharge. Sect. 34. — And be it further 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 averment that on the day of its date such discharge was granted to him, setting the same forth, in hsee verba, as a full and complete bar to all suits brought on any such debts, claims, liabilities, or demands, and the certificate shall be conclusive 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 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 sec- tion 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 ap- plication shall be subject to amendment at the discretion of the Court. The Court shall cause reasonable notice of said applica- tion 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 afore- said 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 bankrupt shall be set aside and annulled. But if said Court BANKRUPT ACT OF 1867. 501 111 find that said fraudulent acts, and all of them, set forth as foresaid, are not proved, or that they were known to said cred- for or creditors before the granting of said discharge, then judg- lent shall be rendered in favor of the bankrupt, and the validity of his discharge shall not be affected by said proceedings. PREFERENCES AND FRAUDULENT CONVEYANCES DECLARED VOID. Sect. 35. — And be 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 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, sequestered, or seized on execution, or makes any payment, pledge, assignment, transfer, or conveyance of any part of his property, either directly or in- directly, absolutely or conditionally, 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 attach- ment, payment, pledge, assignment, or conveyance is made in fraud of the provisions of this act, the same shall be void, and the assignee 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 bank- ruptcy, within six months before the filing of the petition by or against him, makes any payment, sale, assignment, transfer, con- veyance, or other disposition of any part of, his property to any person who then has reasonable cause to believe him to be insol- vent, 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 as- signee in bankruptcy, or to prevent the same from being distrib- uted 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 re- cover the property, or the value thereof, as the 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 shall be prima facie 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 dis- 502 APPENDIX. charge 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 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. BANKKTJPTCY OF PARTNERSHIPS AND OF COEPOEATIONS. Sect. 36. — And he 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 shall issue in the manner provided by this act, upon which all the joint stock and property of the copartnership, and also all the separate estate of each of the partners, shall be taken, excepting such parts thereof as are hereinbefore excepted; and all 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 and property of the copartnership and of the separate estate of each member thereof; and after deducting out of the whole amount received by such assignee the whole of the expenses and disbursements, the net proceeds of the joint stock shall be appropriated to pay the creditors of the copartnership, and the net proceeds of the separate estate of each partner shall 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 be added to the joint stock for the 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, as it would have been if the partnership had been dissolved without any bankruptcy ; and the sum so appropriated to the separate estate of each partner shall be applied to the payment of his separate debts; and the certificate of discharge shall be granted or refused to each partner as the same would or ought to be if the proceedings 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 siich copartners reside in difierent districts, that Court BANKRUPT ACT OF 1867. 503 in which the petition is first filed shall retain exclusive jurisdiction over the case. Sect. 37. — And be it further enacted, That the provisions of this act shall apply to all moneyed, business or commercial corpora- tions and joint-stock companies, and that upon the pAition of any officer of any such corporation or company, duly authorized by a vote of a majority of the corporators present at any legal meet- ing called for the purpose, or upon the petition 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 examinations* disclosing, making over, secreting, concealing, conveying, assign- ing, or paying away his money or property, shall in like manner, and with like force, efi'ect, and penalties, apply to each and every officer of such corporation or company in relation to the same mat- ters concerning the corporation or company, and the money and property thereof. All payments, conveyances, and assignments declared fradulent 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 company. No allowance or discharge shall be granted to any corporation or joint-stock company, or to any person or officer or member thereof: Provided, That whenever any corporation, by proceedings under this act, shall be declared bankrupt, all its property and assets shall be distributed to the creditors of such corporation in the manner provided in this act in respect to natural persons. OP DATES AND DEPOSITIONS. Sect. 88. — And be it further enacted, That the filing of a petition 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 bankruptcy under this act; the proceedings in all cases of bankruptcy shall be deemed matters of record, but the same shall not be required to be recorded at large, but shall be carefully filed, kept, and numbered in the office of the Clerk of the Court, and a docket only, or short memoran- dum 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 t 504 APPENDIX. facie evidence of the fact therein stated. Evidence or examina- tions 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 Register in bankruptcy, or other suitable person, to take and certify such ex- amination, and may compel the attendance of witnesses, the pro- duction of books and papers, and the giving of testimony in the same manner as in suits in equity in the Circuit Court. INVOLUNTARY BANKRUPTCY. ' Sect. 39. — And he it further 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 defraud 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, gift, 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 exe- cution, issued out of any Court of any State, District or Terri- tory, 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 remaining in force and not discharged by payment, or in any other manner provided by the law of such State, Dis- trict 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 hundred dollars or upward; or who, being bankrupt or insolvent, or in contemplation of bankruptcy or insolvency, shall make any pay- ment, 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 to him as indorsers, bail, sureties, or otherwise, or with the intent, by such disposition of his property, to defeat or delay the opera- tion of this act ; or who, being a banker, merchant or trader, has fraudulently stopped or suspended and not resumed payment of BANKKUPT ACT OF 1867. 505 his commercial paper, within a period of fourteen days, shall he deemed to have committed an act of bankruptcy, and, subject to the conditions hereinafter described, 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 hun- dred 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 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 reasonable 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. Sect. 40. — And be it further enacted, That upon the filing of the petition authorized by tte next preceding section, if it shall appear that sufficient grounds exist therefor, the Court shall di- rect 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 injunction, restrain the debtor, and any other person, in the mean time, 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; 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 ar- rest 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 petition or the further order of the Court, and forthwith to take possession provisionally of all the property and efiiects 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, in such manner as the judge may direct. No further proceedings, 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 suoli or.ler, the proceedings shall be adjourned and 506 APPENDIX. an order made that the notice be forthwith so served or pub- lished. Sect. 41. — And be it further enacted, That on such return day or adjourned day, if the notice has been duly served or published, 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 writing, 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 a hearing or trial, 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 his costs. Sect. 42. — And be it further 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 adjudge the debtor to be a bankrupt, and, as such, subject to the provisions 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 as- signed and distributed in the same manner and with similar pro- ceedings 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 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 trans- mit by mail, postpaid, to the messenger, a schedule of the cred- itors and an inventory of his estate in the form, and verified in the manner required of a petitioning debtor by section thirteen, If the debtor has failed to appear in person or by attorney, a certified copy of the adjudication shall 'be forthwith served on him jby 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 in- formation they can obtain. If the petitioning creditor shall not appear and proceed on the return day, or adjourned 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. BANKRUPT ACT OF 1867. 507 OF SUPERSEDING THE BANKRUPT PROCEEDINGS BY ARRANGE- MENT. Sect. 43. — And he it further enacted, That if at the first meeting 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 creditors whose claims have been proved shall determine and resolve 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 committee of the creditors, it shall be lawful for the creditors to certify and report such resolution to the Court, and to nominate 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 all the creditors whose claims have been proved, of a consent that the estate of the bank- rupt be wound up and settled by said trustees according to the terms of such resolution, the bankrupt, or his assignee in bank- ruptcy, if appointed, as the case may be, shall, under the direc- tion of the Court, and under oath, convey, transfer and deliver all the property and estate of the bankrupt to the said trustee br 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 thb 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 there- under, 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 efi'ect sudh resolution of the creditors, and the said trustees shall 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 cred- itors, 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 shall have all the rights and powers of assignees in bankruptcy. The Court, 508 APPENDIX. on the application of such trustees, shall have power to summon and examine, on oath or otherwise, the bankrupt, and any cred- itor, and any person indebted to the estate, or known or suspected of having any of the estate in his possession, or any other per- son whose examination may be material or necessary to aid the trustees in the execution of their trust, and to compel the attend- ance 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 all the proceedings had continued in the manner provided in the preceding sections of this act. If the resolution shall not be duly reported, or the consent of the cred- itors 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 resuming the proceedings. And the period of time which shall have elaps^ between the date of the resolution and the date of the order^for assuming proceedings shall not be reckoned in calculating periods of time prescribed by this act. PENALTIES AGAINST BANKRUPTS. Sect. 44. — And be 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 conceal any property belonging to his estate, or part with, conceal, or destroy, alter, mutilate, or falsify, or cause to be concealed, de- stroyed, 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 or assignment, transfer or conveyance of any property belonging to his estate with the like intent, or spend any part thereof in gaming ; or shall, with the intent to defraud, wilfully and fraudulently conceal from his assignee or omit from his schedule any property or effects what- soever ; 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 ; BANKRUPT ACT OF 1867. " 509 or shall, within three months before the commencement of pro- ceedings in bankruptcy, under the false color and pretence of carrying on business and dealing in the ordinary course of trade, obtain on credit from any person any goods or chattels with in- tent to defraud ; or shall, with intent to defraud his creditors, within three months next before the commencement of proceed- ings in bankruptcy, pawn, pledge, or dispose of otherwise than by bona fide transactions in the ordinary way of his trade, any of his goods or chattels, which have been obtained on credit and remain unpaid for, he shall 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 OFFICERS. Sect. 45. — And he it further enacted, That if any judge, register, clerk, marshal, messenger, assignee, or any other oflScer of the several Courts of Bankruptcy shall, for anything done or pretended to be done under this act, or under color of doing any- thing thereunder, wilfully demand or take, or appoint or allow 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 shall 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 dol- lars, and be imprisoned not exceeding three years. Sect. 46. — And be 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 Court, or know- ingly concur in using any such forged or counterfeit signature or seal, for the purpose of authenticating any proceeding or docu- ment, or shall tender in evidence any such proceeding or docu- ment with a false or counterfeit signature of any such judge, register, or other officer, or a false or counterfeit seal of the Court, subscribed or attached thereto, knowing such signature or seal to be false or counterfeit, any such person shall 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 imprisoned not exceeding five years at the dis- cretion of the Court. 510 APPENDIX. FEES AND COSTS. Sect. 47. — 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 established by general order, under the provisions of this act, for fees in bank- ruptcy, the following fees, which shall be applied 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 ever bond with sureties, two dollars. For every application for any meeting in any matter under this act, one dollar. For 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 of the estate, and, before a warrant issues, the petitioner 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 execu- tion against him to compel payment 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 e&ch 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 be 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 de- termine. BANKRUPT ACT OF 1867. 511 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 oflScers 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. OF MEANING OF TEEMS AND COMPUTATION OF TIME. Sect. 48. — And be it further enacted, That the word " assignee" and the word "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 officer. The word "marshal" shall include the marshal's deputies; 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 prescribed by the act, or shall be mentioned in any rule or order of Court or general order which shall at any time be made under 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 fall 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. Sect. 49. — And be it further enacted, That all the jurisdiction, 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 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 within any organized circuit of the United States, the power and juris- diction of a Circuit Court in bankruptcy may be exercised by the district judge. Sect. 50. — And be it further enacted. That this act shall commence 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 peti- tion 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. INDEX. A. Abboad, conveyance made, whether an act of bankruptcy, 323, n. Absenting, an act of bankruptcy, 27. Abuses of bankrupt, etc. laws, 5. Acceptance, of lease by assignees, 142. Account, in case of bankruptcy of a partner, 60. Act of bankruptcy, claim arising after, whether provable, 197. by fraudulent deed, 323, ri., 351. Acts of bankruptcy and insolvency, 18. bankruptcy consists in, 18. of bankruptcy, what are, in general, 19. relation of, 19. notice of, 20. whether criminal, 21. constitute, not merely furnish evidence of, bank- ruptcy, 22. whether by agent, 24. prior, effect of, 24. cannot be purged, 24. concerted, 24. joint commission for, 25. require intent to defraud, 25. time of, 25. place of, 26. absenting or keeping house, 27. denial, 31. departing, 34. concealment of goods, 35. imprisonment, 36. failure to dissolve attachment, 37. Action. (See Suits.) and execution, bankruptcy compared to, 9, 67, n., 95, 187. form of, in case of bankruptcy of a partner, 61. against assignee, 175. Adjournment, 88, 316-, 317, n., 363. Adjudication, formal, of insolvency, whether necessary, 88. Administrator, set-off in case of, 224. A (i) 11 INDEX. Affidavit, to commission, 82, and n. Affirmance, by assignee, 224. Agent, act of, whether an act of bankruptcy, 24. whether a bankrupt, 47. Agriculturist, whether a bankrupt, 42. Alien, bankruptcy in case of, 53. Allowance, 164. in case of partnership, 78. to assignees, 174. Amendment, in case of bankruptcy, etc. proceedings, 84. of schedule, 86. notice to impeach discharge, 249, 252. Amount of debt of petitioning creditor, 188. provable, 201. property conveyed, effect on question of preference, 326, 337, 345. Annulling of decree of bankruptcy, 379. Appeal, 119, n., 378, 380. effect of, upon claim, 226. -bond, surety in case of, whether discharged, 311. Appraisal of property mortgaged, in case of bankruptcy, etc., 117, 118, 120. Appropriation of property, in case of partnership, 68. Army officer, whether a bankrupt, 42. Arrest, of bankrupt, 102. whether bankruptcy, etc. relieves from, 228, n., 229, and n., 235. upon promise to pay a discharged debt, 267. Assent to discharge, 315. construction of statutes concerning, 238. form of, 240. effect on surety, 307. unlawfully procured, 358. Assignee, and solvent partner, in case of bankruptcy, etc., 60, 63. choice of, in case of partnership, 78. provisional, 103, n. bankrupt, etc. cannot be his own, 104. whether interest disqualifies, 104, 121. he may purchase the estate, 171. bankruptcy of, 178. whether a petitioning creditor, 187. of note, proof by, 209. liability of, for dividend, 216. affirmance of contract by, 224. only, can avoid a preference, 350. must bring suit, 383. Assignment, provisional, 103, n. to whom, 104. the party himself, 104. one interested, 104. solicitor or partner, 104, and n. election of assignees, 104. removal of assignees, 106. what property passes to the assignee, 107. whether subject to equities, incomplete contracts, etc., 108. trusts, 110. negotiable instruments, 110, n. in case of husband and wife, 111, n. resulting trust, 112. possibilities, inheritance, devise, 112. INDEX. Ill Assignment, miscellaneous interests— policies of- insurance, patents, offices, etc., 113. in case of partnership, 114. liens and incumbrances, 114. equitable, 114. statutory, 115, n. vendor's lien, 117. sale, appraisal, etc. for liens — statutory provisions, 117. bills, etc. held as security. 120. unliquidated damages, 121. sale for part of a debt, 121. lien, whose property it must affect, to prevent proof of the debt, 121. lien by legal proceedings, 123. attachment, 123. cases in the U. S. and State courts relating to— doctrine of Judge Story, 123. under the insolvent law of Massachusetts, 129. surviving of attachments under this law, 131. judgment, 132. execution, 133. rights of assignee, in reference to property fraudulently con- veyed, 134. , rights of assignee, as to property in the order, etc. of the bank- rupt, 136. leases, 141. choses in action, 146. claims for torts, 150. foreign property, 153. real estate, lex loci, 158. suit by foreign assignees, 159. rights of the bankrupt, etc. in his own property, 161. maintenance of the bankrupt, etc., allowance, 163. reservation of necessary articles, 164 homestead, 165. time, in connection with the assignment, the title of the assignee, etc.; source of title; doctrine of reZaiibn/ limitation, 165. sale by assignees, 170. general responsibility of assignees, 174. conflicting assignments ; voluntary and oJBcial assignees, 175. joint assignees, 177. successive assignees, 178. assignees and receivers, 179. assignment by special order, 181. for creditors, evidence of insolvency, 2. and insolvency, laws concerning, 12. of lease, covenant against, in case of bankruptcy, 141. chose in action, previous to bankruptcy, 148. proof of debts, and discharge, coincidence of, 195. for benefit of creditors, preference by, 348. whether conclusive in action by assignee, 391. Attachment, in case of bankruptcy, 123. failure to dissolve, 184, n. (See Acts of bankruptcy.) surety in case of, whether discharged, 309. IV INDEX. Attainder, bankruptcy in case of, 50, n. Attendance, of petitioning creditor, 185. Attorney, whether a bankrupt, 42. petition by, 81. proof by, 199, n. whether creditors may act by, 250. Auctioneer, claim against, whether fiduciary, 295. Audita querela, brought by bankrupt, 278. Award of petitioning creditor, 191. proof in case of, 214, 215. whether discharged by certificate, 270, 27.^, Bail, justifying as, evidetce of solvency, 2, n. for bankrupt, whether discharged, 308. claim of, whether discharged, 312. Banker, whether a bankrupt, 44, 46, 48. Bankrupt and insolvent, definition, 1. whether a petitioning creditor, 187. etc., suit by, 397. Bankruptcy, and insolvency, distinction, 1, 10, 18, 141, 334, 336, n., 337. meaning of the term, 331, 334. lexicographical definitions of, 1, n. derivation of the word, 1, n. applies, in general, only to traders, 2, 6, 11. purposes of laws of, 3. construction of laws of, 3, n., 8. necessity and inefficacy of laws of, 4. origin of laws of, 4, 6, n. abuses of laws of, 5, and n. surplus in, 5, u. interest in, 5, n. -process, supersedeas of, 5. English statutes of, 6. voluntary and involuntary, 6, 9, 10, 11. course of proceedings in, 7, and n. commissioners of, 7, n. in United States, 7. proceedings in, whether discretionary or dejure, 8. in equity, 8. the nature of an execution or action, 9. effect of, on entailment, 9, n. as affected by the United States Constitution, 10. conflict of United States and States as to, 12. acts of. (See Acts.) and insolvency, who subject to. (See Parties, Trading.) in case of partnership. (See Partnership.) of corporations. (See Corporation.) forms of proceeding in. (See Forms.) proceedings, whether at law, 95. change of, into a system of relief, 228. and insolvency discharges, connection of, 236, 239, n. contemplation of, distinction, 334, 336, n., 337. INDEX. Bills, drawing of, whether trading, 44. held as security, disposal of in bankruptcy, 120. proof of, 209, 210, 219. and notes, application of State laws to, 289, 290, 291. Blanchard v. Russell, case of, 15, n. Bond, of assignee, 175,,390. petitioning creditor, 185. whether provable, 209. discharged, 302, and n., 304. Books, production of, 94. Brickmaker, whether a bankrupt, 44, 45. Burden of proof, as to preference, 353. Business, necessary for bankruptcy, 40. (See Parties.) Butler, whether a bankrupt, 42, 46. C. Certificate. (See Discharge.) course of proceeding as to, 230, n. form of, 240. necessity of, 240. discharge proved by, 241, 244. Chancery. (See Equity.) proceedings in bankruptcy, etc., 364, 368, 370, 374, 381, 392, 402, 414, n. Change of jurisdiction, 363, 376. Character, as affecting discharge, 229, 231, n., 261. Charges of assignee, 174. Choice of assignees, 104, 121. Choses in action, whether assignees take, 146. transfer of by assignee, 149, n. Circumstantial evidence of insolvency, 3. bankruptcy, 23, 29. Claims, proof of, 194. (See Proof, etc.) Clergyman, whether a bankrupt, 42, 47. Clerk ip insolvency, time of appointment of, 87. of court, assignment to, 181. Coal, ownership of, bankruptcy in case of, 44, 45. Collusion, act of bankruptcy by, 24. Commencement of proceedings, what, 81, n. Commission of bankruptcy, proceedings, 7, and n., 8. form of, in case of partnership, 67. whether an action or execution, 9, 67, n., 187. prior, effect of, 409. Commissioner, jurisdiction of, 376. action of trespass against, 377. power of, to supersede, 407. Commitment, for refusing to answer, 93, 94. non-attendance, 94. Commonwealth, debt due to, whether discharged, 293. Compensation of messenger, 103, and n. Complete, petitioning creditor's claim must be, 188. Concealing, an act of bankruptcy, 27, n. 71 INDEX. Concealing, impeachment of discharge for, 248, 249, 253. Concurrent proceedings in bankruptcy, etc., 382. Conditional debt, whether sufficient for petition, 184. promise, to pay discharged debt, 266. Conduct, as affecting discharge, 229, 231, n. Confession of judgment, preference by, 349, n., 354. Conflict of bankrupt and insolvent laws, 12. Conflicting assignments, 175. Consideration of petitioning creditor's claim, 189. provable debt, 198. Constitution, bearing of, upon Ijankrupt laws, 10. insolvent laws, 12, 228, 235. as to search-warrants, 95. discharge under State insolvent law, 287. Construction of bankrupt, etc. laws, 3, n., 8, 135, 236, 238. statutes as to preference, 325. Contemplation of bankruptcy, judgment in, 133, n. conveyance in, 323. whether necessary to preference, 329. and insolvency, distinction, 334, 336, n., 337. Contingent debt, what, 78. proof of, 203. and liability, distinction, 204, and n., 205, n., 303. set-off of, 223. whether provable, 266, n. discharged, 300. Continuance of suit, in case of bankruptcy, etc., 274. Contract, obligation of, as affected by bankrupt, etc. laws, 12, 15, 17, 236. whether a bankrupt, etc. law makes part of, 17. assignees take, 146. discharge is matter of, 239. Conveyance to assignees, whether necessary, 165. Corporation, bankruptcy or insolvency of, 80, n. petition by, 186, n. set-off in case of, 224. Costs, 403. in case of partnership, 79. of petitioning creditor, 191, and n. liability of petitioning creditor for, 192, and n. of protest, whether provable, 210. in general, whether provable, 214, 220. whether bankruptcy relieves from, 228, n., 270, 273, and n., 275, 300, and u. upon discontinuance of suit against bankrupt, etc., 275. on appeal, 381. against assignee, 391. Counsel, whether debtor may have, 91. assignee may have, 174. Courts of bankruptcy and insolvency, 362. (See Jurisdiction.) Covenant, whether discharged, 301, and n., 305. Credit, whether necessary to bankruptcy, 42, 46. Creditor, whether petitioner in bankruptcy must be, 183. Creditors, fraud upon, assignee may avoid, 134. when parties, 194, and n., 200. Crime, whether bankruptcy is a, 21, 228. does not prevent a petition in bankruptcy, 90. INDEX. Vll Criminate himself, whether bankrupt is bound to, 91. Crown debt, whether discharged, 293. Curtesy, estate by, in case of bankruptcy, 113. Custom-house bond, surety in, 311. D. Damages, unliquidated, proof of, 121. Damnosa hereditas — lease, 141. Death, effect of, on commission, 410. Debt, what sufficient for petition,' 183, n. (See Petitioning creditor.) Debts. (See Proof, etc.) secured, proof of, 118. concealment of, as affecting discharge, 256. provable, are discharged, 281. Declaration, in suit by assignee, 390. Declarations of bankrupt, whether evidence, 353, 405. Decree, binds q,ll having notice, 100. Deeds, production of by insolvent, etc., 256, n. Defaulter, claim against, whether fiduciary, 295, n. Definition of bankruptcy and insolvency, 1. Delay of creditors, as necessary to bankruptcy, 25, 31. certificate,-grounds of, 230, n. Denial, as an act of bankruptcy, 31. Departing the realm, as an act of bankruptcy, 19. one's own house, as an act of bankruptcy, 19. Derivation of the word bankrupt, 1, n. Diploma, whether it passes to assignee, 113. Discharge, in case of partnership, 79. and proof, coincidence of, 195, and n. whether conclusive upon State court, 372. nature, history, and various kinds of, 227. statutes concerning, application of, to pending cases, 236. under bankrupt and insolvent laws, 236. in case of previous bankruptcy, etc., assent of creditors, 238. whether judicial or ministerial, matterof right or discretion — form of proceeding, 239. necessity of a cer^M,te, 240. conclusiveness of^H|^cate; jurisdiction; notice; whether the record is to b^Mduced, 240, 372. how pleaded ; forrn'^rplea and replication ; notice of objections to the discharge, 245, 400. avoided by fraud, 249. construction of the term fraud, 250. ^ duty of creditors objecting to, estoppel, 250, 260. specification of acts of fraud, 252. insufficiency of schedule, etc., concealment of property, 253. concealment, etc. as to debts, 256. general character of the bankrupt, 261. subsequent promise to pay, 262. at what time, 262, 266. ym INDEX. Discharge, subsequent promise to pay, legal nature of, 263. to what claims applicable, 263. verbal, 264. whether implied, 265. conditional, 266. to whom, 267. arrest upon, 267. effect of, upon a judgment, 268. in equity, 271. costs, 273. continuances of suit in case of bankruptcy; plea puis darrein continuance, 125, 274. release from arrest, etc. ; stay, etc. of execution, 276. allegation of fraud by the creditor, 281. to what debts applicable, 281. provable debts, 281. foreign debts, 282. proof of, binds the cred- itor, 286. ' under State insolvent law, whether it binds citizens of other States, 287. in case of negotiable instruments, 291. whether applicable to debts of the government, 293. fiduciary debts, 294. claims for necessaries, 296. torts, 297. in case of suits for, 300. contingent claims, covenants, bonds, sure- ties, etc., 300. rent, 306. whether it releases parties jointly liable, sureties, etc., 307. bail, 308. in case of poor debtors, 309. attachment, 309. replevin, 310. appeal, 311. preferred claim, 311. the claim of a surety, 312. as depending on assent of creditors, 315. time of assent, 316. withdrawal of assent, 317. implied assent, 319. the oath, 319. \i'' statutes relating to, time of enactment and repeal, 319. statute of limitations, in connection with, 321. ^^Discontinuance of suit, in case of bankruptcy, etc., 275. Discretion, whether discharge is matter of, 240. Dissent of creditors to discharge, 315. Dissolution of partnership by bankruptcy, etc., 58. Distress in case of bankruptcy, 130, n. Distribution and discharge, the objects of bankruptcy, etc., 3, 4 7 of property, in case of. partnership, 63. ' ' Distributive share, passes to assignee, 112. District Courts of United States, jurisdiction of, 367 Dividend, 216. ' INDEX. IX Docket, in bankruptcy, 79. Double proof, 120, 209, 219. in case of partnership, 70. Drover, whether a bankrupt, 44. E. Ecclesiastical benefice, disposition of, in bankruptcy, 114, n. Election of proof, in case of partnership, 70. assignees, 78, 104, 121. between proceedings in bankruptcy, and at law, 95 by assignee, in case of fraud, 136. lease, 142. in case of petitioning creditor, 191. to prove for a tort, 297, and n. English and American statutes respecting bankruptcy, etc.^— distinction, 10. Entailment, effect of insolvency upon, 9, n. Equal distribution, bankruptcy, etc. contemplates, 4, 323. Equitable liens, in case of bankruptcy, 115. mortgage, proof of, 119. claim of petitioning creditor, 189. proof of, 205, 208. Equity, as connected with bankruptcv, 8, 73, 364, 368, 370, 374, 381, 392, 402, 414, n. control of attachment, in case of bankruptcy, 124. proceedings against bankrupt, pleadings in, 247. effect of a discharge in, upon a judgment, 271. execution in, effect of discharge upon, 281. Equities, assignee takes, subject to, 108. Error, writ of, 380. Escape, an act of bankruptcy, 19. Estate tail, effect of insolvency upon, 9, n. Estoppel, to deny bankruptcy, 22. trading, 41. of petitioning creditor, 193. to allege fraud, by prior proceedings, 251. of creditors by notice, 260. foreign creditor by proof of claim, 286. creditor, depends on discharge, 318. Evidence of insolvency, what is, 2, and n. absenting, 30. in bankruptcy, etc. proceedings, 83, 89, and n., 403. of notice of insolvency, 335, and n., 337, 357. as to preference, 353. Examination, private, in bankruptcy, etc., 90. mode of, in bankruptcy, 91. questions allowable in, 91. Exceptions from discharge, 294. Exciseman, whether a bankrupt, 42. Execution, 228, n., 229, n. against a partnership in case of bankruptcy, etc», 59, n, whether a commission is an, 67, n., 413. -lien in case of bankruptcy, 133. of petitioning creditor, 191. X INDEX. Execution, proof of claim in case of, 214. effect of discharge upon, 229, n., 277. Executor, whether a bankrupt, 47. petitioning creditor, 187. proof of claim in case of, 200. claim against, whether fiduciary, 295. Executory agreement, assignment paramount to, 111. Explanation of acts of bankruptcy, 23-29. Expunging of proof, 225. Factor, whether a bankrupt, 47. petitioning creditor, 187. Farmer, whether a bankrupt, 42, 44. Fees, whether an insolvent is entitled to, as a witness, 91. of messenger, 103, and n. Feme sole trader, whether a bankrupt, 49. Fiat, in bankruptcy, 7, n. Fiduciary debts, effect of, upon discharge, 246, and n. whether discharged, 294. First publication of notice, 130, 132, n., 168. Foreign act, whether an act of bankruptcy, 27, 323, n. property, whether assignees take, 153. residence, petition in case of, 186. creditors, privilege of, as to time, 230, n. debt, discharge of, 235, 282. Foreigner, whether a bankrupt, 52. assent by, to discharge, 319. Form of proceeding in case of partnership, 56, 58, n., 63, 67. judgment in case of bankruptcy, 129. plea of discharge, 245. Forms of proceeding in bankruptcy, etc., 7, and n., 81. are regulated by statute, 81. the petition, signature, oath, etc., 81. notice to the debtor, 82. proof of the petition, 83. misnomer, etc., 83. statements as to place, 83. amendment, 84. schedules, 84. warrant, form of, seal, 87. clerk, 87. meetings, 87. decree or judgment, 88. trial by jury, 89. evidence, 89. admissions, etc. of bankrupt, 89, n. testimony and declarations of creditors, 89, n. attendance of witnesses, 89, n. of party in interest, 89, n. conflicting, 90, n. crime does not disqualify a bankrupt, 90. whether the petition is, 90. INDEX. XI Forms of evidence, schedules, 90. mode of examination, 90. attendance of party, 91. privilege as to answers, 91. commitment for not answering, etc. — form of warrant, etc., 93. production of books, etc., 94. search-warrant, 95. mutual bearing of proceedings in bankruptcy, etc. and actions at law — election, 95. parties, 99. Franchise, disposition of,- in bankruptcy, 114. Fraud, as requiring bankrupt, etc. laws, 4. upon creditors, assignee may avoid, 134. expunging in case of, 225. impeachment of discharge for, 248. construction of the word, in reference to discharge, 250, 261. in case of judgment or execution against a bankrupt, 276, 281. limitation of suit in case of, 389. superseding for, 408. Fraudulent conveyance, an act of bankruptcy, 19, 23. effect of, on discharge, 253. (See Preference.) what is, 326. Furniture, exemption of, 164, n. Future debt, what is, IS. whether sufficient for a petition, 184, and n. provable, 198. proof of, 204, and n. advances, security for, whether a preference, 327, 339. property, conveyance of, by bankrupt, 347. G. Gaming,, effect of, on discharge, 230, n. Good will, sale of by assignees, 161. Government claims, whether preferred, 220. Grazier, whether a bankrupt, 44. Guaranty, proof of, as a debt, 206. set-off of, 223. History of bankrupt, etc. laws, 6, and n. Homestead, in case of bankruptcy, etc., 165. Household furniture, exemption of, 164, n. Husband and wife, bankruptcy, etc. in case of, 49, 164. petition by, 186. proof of debts in case of, 198, 209. effect of discharge in case of, 311, n. XU INDEX. I. Implied promise to pay a discharged debt, 265. assent to discharge, 31&. i Imprisonment, as evidence of insolvency, 3. an act of bankruptcy, 19. whether banlsruptcy, etc. relieves from, 223, n., 229, and n., 235, 276. by U. S. court, whether a State court can discharge from, 375. Incumbrance in case of bankruptcy, 114. (See Lien.) Indemnity bond, proof of, 209. Indictment for bankruptcy, 22, n. Indorser, whether discharged, 302, n., 315. (See Surety.) Infamy, does not prevent a petition in bankruptcy, 90. Infant, bankruptcy, etc. in case of, 48. petition by, 186. In invitum. (See "Voluntary, etc.) discharge is, 239. Injunction, by bankruptcy court, in case of attachment, 124. Inn-keeper, whether a bankrupt, 43. In pari materia statutes, construction of, 3, n. Insolvency. (See Bankruptcy.) and bankruptcy, distinction, 1, and n., 9, 10, ISv definition O'f, 2. proof of, 2, and n. laws of, construction of, 3, n. purposes of, 3. necessity and inefficiency of, 4. abuses of, 5, and n. proceedings, supersedeas of, 5. are voluntary, 9, 11. systems of the States, 11. as conflicting with bankrupt laws, 12. dissolution of attachment by, 129. and bankruptcy discharges, connection of, 236, 239, d. discharge, whether it affects debts out of the State, 28X. Insolvent laws, diversity of, 228. Intent, as necessary to bankruptcy, 25, 32, 336. preference, 353. Interes-t, of assignee, 104, 106, 121. in case of petitioning creditor's debt, 188, n. on claims proved, 202. dividends, 217, 218, n. disqualifies a magistrate in bankruptcy, etc., 36i3. Jewelry of bankrupt, 111, n. Joint commission, when, 25. and separate commissions, 67, n. -tenancy in case of bankruptcy, etc., 113. assignees, 177. INDEX. Xlll Joint claim, form of proving, 199. proof against parties to bills, etc., 210, 219. promisor, whether discharged, 307. Judgment of insolvency, whether necessary, 88. effect of upon attachment in case of bankruptcy, 127, 128. -lien, in case of bankruptcy, 132. preference by, 133, n., 354. of petitioning creditor, 191. proof in case of, 211, 213, 214. only prima facie evidence of claim, 213. recovered after discharge; 229, n. whether discharged by certificate, 268. upon foreign claim, 189. for necessaries, whether discharged, 297. in contemplation of bankruptcy, 333. confession of, preference by, 349, n. Judicial, whether discharge is, 240, 241, n. Juris positivi, bankrupt acts are, 21, 22. Jurisdiction, (See Courts, Constitution, State,) 362. general, in bankruptcy, etc.; presumption of; whether it must be expressly alleged, 362, 401. (See Discharge.) effect of interest upon ; limited jurisdiction ; in rem, 363. change of, 363, 376. in equity, 364. United States courts, local insolvency courts ; respective and relative jurisdictions, 367. commissioners, 376. appellate, 378. ia case of partnership, 62. mortgage, 119, n. conflicting, in case of bankruptcy, etc., 124, 129, 132, n. Jury, trial in bankruptcy, etc. proceedings, 89. whether a claim requiring a, is provable, 196. trial of fraud, 251. contemplation of bankruptcy is a question for the, 336. K. Keeping house, an act of bankruptcy, 19, 27, 32. Labor, produce of, bankruptcy whether applicable to, 42, Land, bankruptcy in case of, 42, 44, 48. Lease, whether assignee takes, 141. effect of discharge upon, 306. Legacy, in case of bankruptcy, 113. claim of assignee to, 23.0, n. Legal proceedings, preference by, 353. Lex rei sitae, effect in bankruptcy, etc., 158. loci, as to discharge, 285. Lien, in case of bankruptcy, etc., 114. preference in case of, 219. XIV INDEX. Lien, whether affected by discharge, 272, n. jurisdiction of, 369, 371. Limitation of right of sale by assignee, 172. suit by assignee, 389. Limitations, statute of, as to petitioning creditor's debt, 188. discharge, 321. Liquidated, whether petitioning creditor's claim must be, 189. Lunatic, whether a bankrupt, 50, n. M. Maintenance of bankrupt, etc., 163. Majority of creditors, rights of, 105, n. Married woman. (See Husband, etc.) whether a bankrupt, 49. Marshalling of assets, in case of partnership, 63. Massachusetts, insolvent law of, 11. May V. Breed, ease of, 15. Mechanic, whether a bankrupt, 42. Meetings, necessity and legality of, 87. adjournment of, 316, 317, n. Messenger, 101. fees of, 177. liability of petitioning creditor to, 192. Mine, bankruptcy in case of, 45. Misnomer of bankrupt, etc., 83, 245. Mortgage, lien of, in case of bankruptcy, 117. (See Lien.) sale under, 369, 371. Mortgagee, whether a petitioning creditor, 187. W. Necessaries, claim for, whether discharged, 296. Negotiable paper. (See BiUs, Promissory notes, etc.) title of assignee to, 110, n. proof in case of, 120, 122, 209. application of insolvent laws to, 289, 290, 291. for necessaries, whether discharged, 297. New promise, effect of, 262. New York, insolvent laws of, 12, and n., 13, n. Notice, of proceedings in insolvency, 82, 412. presumption of, from certificate, 241. i» what creditors entitled to, 194, n. of act of bankruptcy, 20, 26, n. accompanying plea of discharge, 242, n., 247, 249. of insolvency, nature and effect of, 335, and n., 356. to creditors, want of, 257, 259. whether necessary to unlawful preference, 356. to creditors, estoppel by, 260. in case of partnership, 412. ■ (See Partnership.) Nul tiel record, plea of, 245, 401. INDEX. XV O. Oath, whether necessary to petition, 81. of creditor, 89, n. to allegation of fraud, 2.51. whether necessary to discharge, 319. Obligation of contract, laws impairing the, 236. (See Constitution, State.) Occupation necessary to bankruptcy, 40. (See Parties.) Office, in case of bankruptcy, etc., 113. Officers of a corporation, petitioning in bankruptcy, 186, n., 187. Official bond, proof of, 209. whether discharged, 304. Once a bankrupt always, etc., 24. Operative, claim of, 218. Oral promise to pay discharged debt, 264. Order and disposition of bankrupt, property in, 64, 136, 167, 171, n. Parol evidence of discharge, 244. promise to pay discharged debt, 264. Parties, to bankruptcy and insolvency, 40. trading, questions concerning, 40. how decided, 41. estoppel as to, 41. miscellaneous occupations, 41. selling the produce of labor, 42. inn-keepers, 43. ship-owners, 43. drawing of bills, etc., 44. banking, 44. selling the produce of land, 44. single acts of trading, 46. allegation as to the mode of trading, 46. unlawful trading, 47. trading in one's own right, 47. time of trading, 48. infants, 48. married women, 49. foreigners, 51. form of objecting that the party is not subject to bankruptcy, 54. partners. (See Partnership.) only can be heard in bankruptcy, etc. proceedings, 99. what creditors are, 194, and n., 200. Partner, may be a receiver, 104. petition by, 186. proof by, 199. Partnership, bankruptcy, etc., in case of, 56, 114. forms of proceeding, petition, etc., 56. bankruptcy, etc. of one partner, 58. dissolves ; effect on the right to dispose of prop- , erty, etc., 58. XVI INDEX. Partnership, mutual and relative rights of the assignee and solvent part- ner, 60. questions of residence and jurisdiction, 61. joint and separate property ; change of title before bankruptcy; transfer by one partner to the other, 63. joint_ and several commissions ; joint and several debts ; form of petition ; appropriation of assets ; double proofs ; elec- tion of proofs, etc., 67. whether the firm may prove against a partner, 73. different firms consisting of the same members, 74. choice of assignees, by whose vote, 78. allowance, 78. set-off, 79. costs, 79. discharge, 79. insolvency of, what constitutes, 2. act of bankruptcy in case of, 25. form of petition in case of, 81. attachment and bankruptcy in case of, 131. .interest in case of, 203. preference in case of, 328. suit in case of, 385. void proceedings in case of, 412. Patent, in case of bankruptcy, etc., 113. Pawnbroker, whether a bankrupt, 44. Payment, of petitioning creditor's claim, 192. in contemplation of bankruptcy, etc., 329. preference by, 360. Peer, whether a bankrupt, 42. People, debt due to the, whether discharged, 293. Personal contracts, whether assignee takes, 148. Petition, form of, 81. in case of partnership, 50, 58, n., 63. allegations in, whether evidence, 90. Petitioning creditor, 182. necessity of, 182, 183. time of contracting the debt, 183. future debt, 184, and n. nature of the debt, 183, n. effect of payment of the debt, 183, n., 192. conditional debt, 184. proof of debt, 185, 200. duties of the creditor, 185. case of a former commission, 185, 187. bond of, 185. attendance, 185, n. testimony, 404. parties, husband and wife, 186. infant, 186. partners, 186. foreign creditor, 186. bankrupt and assignee, 187. holder of bill, 187. executors, 187. mortgagees, 187. INDBX. XVU Petitioning parties, holder of warrant of attorney, 187. agent, 187. the only creditor, 188. creditor, amount of debt, interest, etc., 188. limitation, 188. claim must be complete, 188. consideration, 189. equitable claim, 189. liquidated claim, 189. claim secured by mortgage, 190. judgment, verdict, award, costs, etc., 191. liability ior costs, 192. estoppel, 193. » in case of partnership, 67. Physician, whether a bankrupt, 42. Place, of act of bankruptcy, 26. trading, 51. proceedings, in case of partnership, 62. description of, in bankruptcy, etc. proceedings, 87. effect of, upon discharge, 243. Pleading, in reference to bankruptcy, etc., 390. Policy of insurance, in case of bankruptcy, etc., 113, 115, n. Poor debtor laws, 229. surety for, whether discharged, 309. Positivi juris, bankrupt, etc. laws are, 3, n. Possession, in case of bankruptcy of partner, 60. as affecting preference, 346. Possibility, whether an assignee takes, 112. Postmaster, claim against, whether fiduciary, 295, n. Pre-existing indebtedness, preference requires, 338. Preference, 322. generally allowed, 322, 330, 331. statutes against, 323. whether depending on intention, 323, n., 336. by conveyance made abroad, 323, n. various penalties for, 323. construction of statutes relating to, 325, and n. as depending upon the amount of property conveyed, 326. in case of partnership, 328. whether it requires contemplation of bankruptcy, etc. ; meanina; of the word, 329. by a judgment or other legal process, 333, 353. whether actual, implies an intent to prefer, 336. a question of evidence, 336. requires pre-existing indebtedness, 338. whether it applies to an agreement for future security, 339. a sale in regular course of business, 339. the conveyance must be voluntary; effect of pressure or compulsion, 329, n., 342. questions of time in regard to, 345. by assignment for the benefit of creditors, 348. voidable only by proceedings in bankruptcy, etc., 350. presumption, evidence, and burden of proof as to, 353. question of notice as to, 356. evidence of notice, 356, 357. by promise to pay a debt, 358. XVUl INDEX. Preference, by payment, 360. of United States, 72, n. petitioning creditor, 183, n. debts, 218. Preferred claim. (See Proof, etc.) .surety for, 311. Presumption of jurisdiction, 363. Private examination in bankruptcy, etc., 90. . Privilege of bankrupt as to examination, 91. Production of books, etc., 94. Prohibition, writ of, 380. Proof of claims, rights of proving creditors, 194. ^ connection between, and discharge, 195. assignment, 195. what claims are provable ; special contract ; claim requiring a jury, 195. time of the debt, future debt, 197. consideration of the debt, 198. illegal claims, 199. by whom the proof is to be made, 199. mode of proof, must be absolute, 200. by creditor holding security, 200. amount of debt, 201. interest, 202. contingent claims, 203. distinction between, and coTttingeni lia- bilities, 204. claim of a surety, 207. equitable claims, 205, 208. bonds, 209. notes, 209. judgment, verdict, etc., 211. award, 212. costs, 210, 214. torts, 215. secured claim, 118. dividends, 216. liability of the assignee for, 216. interest of a surety in, 217. interest on, 217. successive, 217. preferred claims, 218. wages, 218. secured debt, 219. costs, 220. of the government, 220. set-off, 221. withdrawing and expunging of claims, 225. appeal, 226. of petitioning creditor's debt, 185. withdrawal of, 225. Property, distribution of, in case of partnership, 63. what passes to assignee, 107. Protest of bill, whether necessary to proof, 210. cost of, whether provable, 210. Provisional assignee, 103, n., 178. INDEX. XIX Puis darrein, etc. plea, in case of bankruptcy, etc., 125, 274. Purchaser and assignee, distinction, 109. Purposes, of bankrupt, etc. laws, 3. R. Eeal action, whether assignees succeed to, 150, 151. estate of partners in case of banltruptcy, etc., 66. Beasonable notice of insolvency, 335, ^.nd n., 336, n. Eeceiptor, whether discharged by bankruptcy, 130, 309. Receiver, partner may be, 104. and assignee, 179. Eecognizance, whether discharged by bankruptcy, 304. Record, proof of discharge by, 241. may be examined in reference to discharge, 243, 244. whether discharge is matter of, 245, n. Registration, as affecting preference, 346. Relation, of insolvency, 3. bankrupt law to previous cases, 16. in bankruptcy, 19. of assignee's title, 166. Release of bankrupt, etc. from imprisonment, 276. Removal of assignee, 105, 106, n. Renewal of debt by subsequent promise, 262. Rent, whether a lien in bankruptcy, 130 n. claim for necessaries, 296. effect of discharge upon, 306. Repeal of State, by United States laws, 13. statute, effect on bankruptcy, 26, 368. discharge, 320. Replevin, surety in, discharge of, 305, 310. Replication to plea of discharge, 246, 247, 249, 252, 401. Rescinding of sale by assignee, 174. Residence, as affecting bankruptcy, 51. in case of partnership, 62. description of, in bankruptcy proceedings, 83. necessary to a discharge, 243. Resulting trust in case of bankruptcy, 112. Return on execution, evidence of insolvency, 3. Review, 378. Sale between partners, effect of in bankruptcy, etc., 65. by messenger, 101. of property mortgaged, 117, 369, 371. by assignee, 136, 170. in course of trade, whether a preference, 339. Schedule, in case of partnership, 58, n. necessity and sufficiency of, 84. (See Discharge.) amendment of, 86. falsifying of, 86, 90. XX INDEX. Schoolmaster, whether a bankrupt, 41 . Seal necessary to warrant, 87. Search-warrant, in case of insolvency, 95. Second mortgage, in case of bankruptcy, etc., 118, n., 119. insolvency, discharge under, 238, 239, and n.' Security. (See Lien, Mortgage, Attachment.) what prevents proof of debt, 121. Security, proof in case 'of, 200. relinquishment of, 243, n. Seeking his living, 41. Servant, claim of, 218. Set-off, 403. in case of partnership, 79, and n. proof of claim, 221. Ship-owner, whether a bankrupt, 43. Signing of petition, 81. promise to pay discharged debt, 264, n. Slander, in reference to bankraptcy, 55. Smuggling, bankruptcy in case of, 47. Sole creditor may petition, 188. Solicitor, whether assignee, 104, and n. Solvent partner, acts of, 59. Special judgment in case of bankruptcy, etc., 129. contract, whether provable, 196. Specification of fraudulent acts, 252. State insolvent laws, 11, 228. claim of, whether preferred, 220, n. discharge in one, whether effectual against citizen of another, 287. claim of, whether discharged, 293. Statutes of bankruptcy, etc., construction of, 3, n., 8. successive, 19, n. repeal of, effect on bankruptcy, etc., 26, 368. as to petitioning creditor, construction of, 183, n. of limitations, as to petitioning creditor's debt. 188. insolvency, whether applicable to existing rights, 236, 238. application of, to pending cases, 317, n. repeal of, effect on discharge, 320. of limitations, in case of discharge, 331. as to preference, construction of, 325. Statutory lien, in case of bankruptcy, etc., 115, n. Stocks, dealing in, effect on discharge, 231, n. Sub-partnership, in case of bankruptcy, etc., 74. Subsequent promise to pay discharged debt, 262. Successive statutes of bankruptcy, 19, n. assignees, 178. statutes, relative construction of, 236, 238. Suits relating to bankruptcy, etc., 382. concurrent with proceedings in bankruptcy, etc., 95, 382. (See Forms, etc.) by assignees, 383. must in gjeneral be in their own name, 383. in case of partnership, 385. by leave of court, 385. continuance of suit commenced before bankruptcy, 386, 389. ^ ' assignees not bound, unless parties, 383. INDEX. XXI Suits by assignees, interpleader in case of bankruptcy, 388. pleading in suits by assignees, 388, 390. trustee process against assignee, 388. suit against assignees, 383, n., 889. limitation of suit by assignee, 389. bond of assignee, 390. costs, 391, 403. evidence in suit by assignee; whether his right to sue requires to be strictly proved, 391. suit by bankrupt, 397. plea of bankruptcy, 400. proceedings in equity, 402. set-off, 402. evidence, 403. Supersedeas, 5, 54, 406. general grounds of, and mode of proceeding, 406. effect, 407. by whom, 407. for what, 408. on whose application, 411. miscellaneous points, 412. Surety, proof by, 77, 207, 209. bankruptcy, etc. of, 135, n. claim of, for dividend, 217. whether discharged, 302, 305, 307. for preferred claim, rights of, 311. claim of, whether discharged, 312. Surgeon, whether a bankrupt, 42. Surplus, in bankruptcy, etc., 5, n. Surrender of property mortgaged, etc., 117, 118. Surviving of attachment in bankruptcy, etc., 131. Suspension of State, by United States law, 13, and n., 16. law, effect on discharge, 320. Swearing to petition, 81. Taking sanctuary, an act of bankruptcy, 27, n. Taxes, proof of, 199. Time, in reference to act of bankruptcy, 25. trading, 48. title of assignees, 165. of sale by assignee, 172. petitioning creditor's debt, 183. as to proof of debts and discharge, 195, and n., 197, 240, n. to which the certificate applies, 240, n. of assent, etc. to discharge, 316. enactment, as affecting discharge, 319. as affecting preference, 345. in reference to authority of commissioner, 378. of suit by assignee, 389. Title of assignees, nature and foundation of, 165. to property sold by assignee, 172. Tort, claim for, whether assignees take, 150. xxii INDEX. Tort, elaim for, by petitioning creditor, 192. proof of, 197, 212, 215, 224. whether discharged, 282, 297. Trading, 56. whether necessary to bankruptcy, 2, 6, 10, 11, 18, 40. what is, 41. description of, in commission, 41. whether in one's own right, 47. time of, 48. after bankruptcy, 161. Trust for wife, bankruptcy, etc., in case of, 49. -property, assignee's title to, 110, 112. proof of claim in case of, 199. whether a fiduciary claim, 295. Trustee, whether a bankrupt, 47. -process against assignee, 175. U. United States, preference of, 72, n., 220, and n., 221, n. courts, jurisdiction of, 367. proof of, 246. claim of, whether discharged, 293. and State courts, conflicting jurisdiction of, 370. Unlawful trading, bankruptcy in case of, 47. Unliquidated damages, proof of, 121. claim, whether provable, 196, 212. set-off of, 223. Usage, in reference to questions of trading, 41. Use and occupation, liability of assignees for, 144. Usury, claim for, whether assignees take, 150, 151, n. effect of, on proof of claim, 199. Vacating of choice of assignees, 105, 106, n. Valuation of property mortgaged^ et<3., 117, 118, 120. Vendor, lien of, in bankruptcy, etc., 117. Verbal promise, to pay discharged debt, 264. Verdict of petitioning creditor, 192. proof in case of, 211, 213, 214, 215. Verdict, whether discharged, 299, 300. Victoria, statute of,_6. Victualler of the navy, whether a bankrupt, 42. Voluntary and involuntary bankruptcy and insolvency, 5, 6, 9, 10, 11, 18, 40, 141, 182, 413. assignment for creditors, 175. debt, whether provable, 198. whether preference must be, 329, n., 333, 335, 342, 355, 361. assignment, preference by, 348. INDEX. w. Wages, preference of, 218. Waiver of tort in bankruptcy, etc., 197, 297, and n. Warrant, sealing of, 87. of commitment, form, 93. arrest, 102. Warranty, whether discharged, 305. Wearing apparel, exemption of, 164. Wife of bankrupt. {See Husband, etc.) Withdrawal of claim proved, 225. assent to discharge, 317. Witness who may be, as to bankruptcy, etc., 404. Work, debt payable in, proof of, 196. GENERAL ORDERS, TOGETHER WITH THE FORMS OF PROCEEDOG m BANKRUPTCY, AS PROMULGATED BY THE SUPREME COURT OF THE UNITED STATES. ORDER OF COURT In relation to Rules, 8^c., in Bankruptcy. Ordered, That certain Kules and Forms of Proceeding in Bankruptcy having been framed and adopted by the Court in pursuance of the Act of Congress, approved March 2, 1867, the same are now promulgated as such. And it is further Ordered, That the said Eules and Forms be recorded by the Clerk, and that they be allowed to be printed. Test : D. W. MIDDLETON, Clerk, Supreme Court United States. May 16, 1867. GENERAI ORDERS H BAMRUPTCT. In pursuance of the Tenth Section of the Act entitled "An act to establish a Uniform System of Bankruptcy throughout the United States," approved March 2, 1867, the Justices of the Supremo Court of the United States have framed the following General Orders, which shall constitute the Kules of Practice and Procedure in Bankruptcy in the District Courts of the United States : — Duties of Clerks of District Courts. ' The Clerks of the several District Courts shall enter upon each Petition in Bankruptcy the day, and the hour of the day, upon which the same shall be filed ; and shall also make a similar note upon every subsequent paper filed with them ; and the papers in each case shall be kept in a file by themselves. No paper shall be taken from the files for any purpose except by order of the Court. Every paper shall have endorsed upon it a brief statement of its char- acter. The Clerks shall keep a Docket, in which the cases shall be entered and numbered in the order in which they are commenced ; and the number of each case shall be endorsed on every paper. The docket shall be so arranged that a brief memorandum of every proceeding in each case shall be entered therein, in a manner convenient for reference, and shall at all times be open for public inspection. The Clerks shall also keep separate minute books for the record of proceedings in bankruptcy ; in which shall be entered a minute of all the proceedings in each case, either of the Court or of a Register of the Court, under their respective dates. II. 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 signature of the Clerk and seal of the Court may, upon application, be furnished to the Registers. III. Appearance, Proceedings in bankruptcy may be conducted by the bankrupt in person 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. Either party may appear and conduct the proceedings by attorney, who shall be 4 GENERAL ORDERS IN BANKRUPTCY. an attorney or counsellor authorized to practice in the Circuit or District Court. The name of the attorney or counsellor, with his place of residence and busi- ness, shall be entered upon the docket, with the date of the entry. All papers or proceedings offered by an attorney to be filed shall be endorsed as above required ; and orders granted on motion shall contain the name of the party or attorney making the motion. Notices and orders which are not, by the Act, or by these Kules required to be served on the party personally, may be served upon his attorney. IV. Commencement of Proceedings Upon the filing of a petition in case of Voluntary Bankruptcy, or as soon as any adjudication of bankruptcy is made upon a petition filed in case of In- voluntary Bankruptcy, the petition shall be referred to one of the Eegisters in such manner as the District Court shall direct ; and the petitioner shall furnish the Eegister with a copy of the papers in the case, and thereafter all the proceedings required by the Act shall be had before him, except such as are re- quired by the Act to be had in the District Court, or by special order of the Dis- trict Judge, unless some other Eegister is directed to act in the case. The order designating the Register to act upon any Petition shall name a day upon which the Bankrupt shall attend before the Eegister, from which date he shall be subject to the orders of the Court in all matters relating to his bankruptcy, and may receive from the Eegister a protection against arrest, to continue until the final adjudication on his application 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 Register, or be delivered to him personally by the Clerk or other officer of the Court. V. Registers. The time when, and the place where, the Eegisters shall act upon the matters arising under the several cases referred to them, shall be fixed by special order of the District Court, or, by the Eegister acting under the authority of a general order, in each case, made by the District Court; and at such times and places the Eegisters may perform the acts which they are empowered to do by the Act. and conduct proceedings in relation to the following matters, when uncontested, viz : making adjudication of bankruptcy on petition of the Debtor; directing, unless otherwise ordered by the Court, the newspapers in which the Notices shall be published by the Messenger; administering oaths; receiving the sur- render of a Bankrupt ; granting protection thereon ; giving requisite direction for notices, advertisements, and other ministerial proceedings ; taking proofs of claims; ordering payment of rates and taxes, and salary, or wages of persons in the employment of the assignee ; ordering amendments, or inspection, or copies, or extracts of any proceedinga? takino- nnnnnnts of nrnp.p.ed.s of aep.iirit.ip.a held GENERAL ORDERS IN BANKRUPTCY. 5 ^y any Creditor ; taking evidence concerning expenses and charges against the bankrupt's estate ; auditing and passing accounts of assignees; proceedings for the declaration and payment of dividends, and taxing costs in any of the proceed- ings, all of which shall be subject to the control of the Court. VI. Despatch of Business. Every Kegister, in performing the duties required of him, under the Act, and by these orders, or by orders of the District Court, shall use all reasonable despatch, and shall not adjourn the business but for good cause shown. Six hours' session shall constitute a day's sitting if the business requires ; and when there is time to complete the proceedings in progress within the day, the party obtaining any adjournment or postponement thereof may be charged, if the court think proper, with all the costs incurred in consequence of the delay. VII. Examination and Filing of Papers. It shall be the duty of the Eegister to examine the bankrupt's petition and schedules filed therewith, and to certify whether the same are correct in form ; or, if deficient, in what respect they are so ; and the court may allow amend- ments to be made in the petition and schedules upon the application of the petitioner, upon proper cause shown, at any time prior to the discharge of the bankrupt. At the close of the last examination of the bankrupt, the Register having charge of the case, shall file all the papers relating thereto in the office of the clerk of the District Court, and these papers, together with those on file in the Clerk's oifice, and the Entries in the minute-book, shall constitute the record in each case ; and the Clerk shall cause the papers in each case to be bound together. VIII. Orders by the Register. Whenever an order is made by a Eegister in any proceeding in which notice is required to be given to either party before the order can be made, the fact that the notice was given, and the substance of the evidence of the manner in which it was given, shall be recited in the preamble to the order, and the fact also stated that no adverse interest was represented at the time and place ap- pointed for the hearing of the matter upon such notice; and whenever an order is made where adverse interests are represented before the Register, the fact shall be stated that the opposing parties consented thereto, or, that the ad- verse interest represented made no opposition to the granting of such order. IX. Notification to Assignee of his Appointment. It shall be the duty of the Register, immediately upon the appointment of an Assignee, as prescribed in Sections 12 and 13 of the Act; (should he not be 6 GENERAL OEDEES IN BANKEtJPTCT. present at such meeting,) to notify him by personal or mail service of his ap- pointment ; and in such notification the assignee so appointed shall be required to give notice forthwith to the Court or Eegister of his acceptance or rejection of the trust. Testimony — How Taken. The examination of witnesses before a Eegister in Bankruptcy may be con- ducted 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. The depositions upon such examination shall be taken down in writing by the Register in the form of narra- tive, unless he determines that the examination shall be by question and answer in special instances, and when completed shall be read over to the witness and signed by him in the presence of the Eegister. Any question or questions which may be objected to shall be noted by the Eegister upon the deposition, but he shall not have power to decide on the competency, materiality, or relevancy of the question ; 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. In case of refusal of a witness to attend, or to testify before a Eegister, the same proceedings may be had as are now authorized with respect to witnesses to be produced on examination before an examiner of any of the Courts of the United States on written interrogatories. XI. Minutes Before Register — Filing, etc. A memorandum made of each act performed by a Eegister shall be in suit- able form, to be entered upon the minute-book of the Court, and shall be for- warded to the clerk of the Court not later than by mail the next day after the act has been performed. Whenever an issue is raised before the Eegister in any proceedings, either of fact or law, he shall cause the same to be stated in writing in the maimer required by the Fourth and Sixth Sections of the Act, and certify the same forthwith to the District Judge for his decision. The pendency of the issue undecided, before a Judge shall not necessarily sus- pend or delay other proceedings before the Eegister or Court in the case. XII. Accounts for Services of Register and Marshal. Every Eegister shall keep an accurate account of his travelling and incidental expenses, and those of any clerk or other officer attending him in the per- formance of his duties in any case or number of cases which may be referred to him ; and shall make return of the same under oath, with proper vouchers (when vouchers can be procured) on the first Tuesday in each month; and the Marshal shall make his return, under oath, of his actual and necessary expenses in the service of every wa.i-ra.nt adrlrPHapfl tn Tiim. mni\ fnr pnatni1i7 n f T^vAr»Qi-tir GENERAL ORDERS IN BANKRUPTCY. 7 publication of notices, and other services, and other actual and necessary ex- penses paid by him, with vouchers therefor whenever practicable, and also with a statement that the amounts charged by him are just and reasonable. XIII. Marshal as Messenger. It shall be the duty of the Marshal as Messenger to take possession of the property of the Bankrupt, and to prepare, within three days from the time of taking such possession, a complete inventory of all the property, and to return it as soon as completed. The time for making the inventory and return may be enlarged, under proper circumstances, by special order of the District Court. He shall also, in case the bankrupt is absent, or cannot be found, prepare a schedule of the names and residences of his creditors, and the amount due to each, from the books or other papers of the bankrupt that may be seized by him under his warrant, and from any other sources of information ; but all state- ments upon which his return shall be made, shall be in writing, and sworn to by the parties making them, before one of the Registers in Bankruptcy of the Court, or a Commissioner of the Courts of the United States. In cases of volun- tary bankruptcy, the Marshal may appoint special deputies to act, as he may designate, in one or more cases, as Messengers, for the purpose of causing the notices to be published and served as required in the Eleventh Section of the Act, and for no other purpose. In giving the notices required by the third sub- division of the Eleventh Section of the Act, it shall be sufficient to give the names, residences, and the amount of the debts (in figures) due the several creditors, so far as known, and no more. XIV. Petitions and Amendments. All petitions, and the Schedules filed therewith, shall be printed, or written out plainly, and without abbreviation, or interlineation, except where such abbrevia- tion and interlineation may be for the purpose of reference, and whenever any amendments are allowed, they shall be written and signed by the petitioner on a separate paper, in the same manner as the original schedules were signed and verified ; and if the amendments are made to difierent schedules, the amend- ments to each schedule shall be made separately, with proper reference to the schedule proposed to be amended, and each amendment shall be verified by the oath of the petitioner in the same manner as the original schedules. XV. Priority of Actions — (Involuntary Bankruptcy^ Whenever two or more petitions shall be filed by creditors against a common debtor alleging separate acts of bankruptcy committed by said debtor on differ- ent days within six 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 8 GENEEAL ORDERS IN BANKRUPTCY. commission of the earliest 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 adjudica- tion 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 unless proceedings be taken by the debtor for the pur- pose of causing such adjudication to be annulled or vacated. XVI. Filing Petitions in Different Districts. In case two or more petitions shall be filed against the same individual in' different districts, the first hearing shall be had in the district in which the debtor has his domicil ; and such petition may be amended by 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 firm 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 bank- ruptcy than that first alleged, if such earlier act is charged in either of the other petitions ; 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 for adjudication of bankruptcy shall be filed in different districts by different members of the same copartnership for an adjudication of the bank- ruptcy of said copartnership, the Court, in which the petition is first filed, hav- ing 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. XVII. Concerning Redemptions of Property and Compounding Claims. Whenever it may be deemed for the benefit of the estate of a bankrupt to redeem and discharge any mortgage, or other pledge, or deposit, or lien upon any property, real or personal, or to relieve said property from any conditional contract, and to tender performance of the conditions thereof, or to compound any debts, or other claims, or securities due or belonging to the estate of the bankrupt, the assignee, or the bankrupt, or any creditor who has proved his debt, may file his petition therefor in the office of the Clerk of the District Court ; and thereupon, the Court shall appoint a suitable time and place for the hearing thereof, notice of which shall be given in some newspaper, to be designated by the Court, at least ten days before the hearing, so that all creditors and other persons interested may appear 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 assignee. GENERAL ORDERS IN BANKRUPTCY. 9 XVIII. Proceedings in Case of Copartnerships. In case one or more members of a copartnership refuse to join in a petition to have the firm declared bankrupt, the parties refusing shall be entitled to resist the prayer of the petition in the same manner as if the petition had been filed by a creditor of the partnership, and notice of the filing of the petition 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 copartnership is not insolvent, or has not committed an act of bankruptcy, and to take all other defences which any debtor pro- ceeded against is entitled to take by the provisions of the Act; and in case an adjudication of bankruptcy is made upon the petition, such copartner shall be required to furnish to the Marshal, as Messenger, 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 made. XIX. Duties of Assignees. The assignee, shall, immediately on entering upon his duties, prepare a com- plete inventory of all the property of the bankrupt that comes into his posses- sion; and all sales of the same shall be by public auction, unless otherwise ordered by the Court. Every assignee shall keep full, exact, and regular books of account of all receipts, payments, and expenditures of money by him, and shall make report to the Court, within twenty days after receiving the deed of assignment, of the articles set off to the bankrupt by him, according to the pro- visions of the Fourteenth Section of the Act, with the estimated value of each article, and any creditor may take exceptions to the determination of the assignee within twenty days after the filing of the report. XX. Composition with Creditors — (Arbitration.) Whenever an assignee shall make application to the Court for authority to submit a controversy arising in the settlement of demands against the bank- rupt's estate, or of debts due to it, to the determination of arbitrators, or for authority to compound and. settle such controversy by agreement with the other party, the subject-matter of the controversy and the reasons why the assignee thinks it proper and most for the interest of the creditors that it should be settled by arbitration or otherwise, shall be set forth clearly and distinctly in the application; and the Court, upon examination of the same, may im- mediately proceed to take testimony and make an order thereon, or may direct the assignee to give notice of the application, either by publication or by mail, or both, to the creditors who have proved their claims to appear and show cause, on a day to be named in the order and notice, why the application should not be granted, and may make such order thereon as may be ju&t and proper. 10 GENERAL OEDEES IN BANKEUPTCT. XXI. Disposal of Property hy Assignee. In making sales of personal property the assignee shall give at least ten days' notice of the time and place of the sale, and of the articles to be sold, by ad- vertisement in one or more newspapers, to be designated by the Court or by a Register, and by posted handbills, or otherwise, as he may think best for the interest of the estate, or as the Court may order ; and he shall give like notice of the sale of any real estate at least twenty days before such sale. Upon his application ' to the court, and for good cause shown, the assignee may be authorized to sell any speciiied portion of the bankrupt's estate at private sale. The Court, by order in special cases, may dispense with newspaper and handbill advertisements. In making sale of the franchise of a corporation, it may be offered in fractional parts, or in certain numbers of shares, corresponding to the number of shares in the bankrupt corporation. And in making sale of the real estate of a bankrupt, the assignee shall, unless otherwise ordered by the Courts offer the same in lots or parcels, if it exists in separate parcels, in such manner as may be for the in- terest of the creditors of the estate. XXII. Perishable Property. In all cases where goods or other articles come into possession of the messenger, or assignee, which are perishable, or liable to deterioration in value, the Court may upon application, in its discretion, order the same to be sold, and the proceeds deposited in Court. XXIII. Service of Notice. The notice provided by the 18th section of the j^ct, shall be served by the Marshal or his deputy, and notices to the creditors of the time and place of meeting provided by the section, shall be given through the mail by letter, signed by the Clerk of the Court. Every envelope containing a notice sent by the Clerk or Messenger shall have printed on it a direction to the Postmaster at the place to which it is sent, to return the same within ten days unless called for. XXIV. Opposition to Discharge. A creditor opposing the application of a bankrupt for discharge, shall enter his appearance in opposition thereto on the day when the creditors are required to show cause, and shall file his specification of the grounds of his opposi- tion, in writing, within ten days thereafter, unless the time shall be enlarged by order of the District Court in the case, and the court shall thereupon make an order as to the entry of said case for trial on the docket of the District Court, and the time within which the same shall be heard and decided. GENERAL ORDERS IN BANKRUPTCY. 11 XXV. Second and Third Meeting of Creditors. Whenever any Bankrupt shall apply for his discharge, within three months from the date of his being adjudged a Bankrupt, under the provisions of the 29th section of the Act, the Court may direct that the second and third meet- ings of Creditors of said Bankrupt required by the 27th and 28th sections of said Act shall be had on the day which may be fixed in the order of notice for the Creditors to appear and show cause why a discharge should not be granted such Bankrupt ; and the notices of such meeting shall be sufficient if it be added to the notice to show cause, that the second and third meetings of said Creditors shall be had before the Eegister upon the same day that cause may be shown against the discharge, or upon some previous days, or day. XXVI. Appeals. Appeals in equity from the District to the Circuit Court, and from the Cir- cuit to the Supreme Court of the United States, shall be regulated by the rules governing appeals in equity in the Courts of the United States. Any supposed creditor who takes an appeal to the Circuit Court from the decision of the District Court rejecting his claim, in whole or in part, according to the provisions of the 8th Section of 'the Act, shall give notice of his intention to enter the appeal within ten days from the entry of the final decision of the District Court upon his claim; and he shall file his appeal in the Clerk's Office of the Circuit Court within ten days thereafter, setting forth a statement in writing of his claim in the manner prescribed by said section ; and the assignee shall plead or answer thereto in like manner within ten days after the statement shall be filed. Every issue thereon shall be made up in the Court, and the cause placed upon the docket thereof, and shall be heard and decided in the same manner as other actions at law. xxvir. Imprisoned Debtor. If at the time of preferring his petition the debtor shall be imprisoned, the Court, upon his application, may order him to be produced upon habeas corpus by the jailor or any officer in whose custody he may be, before the Eegister, for the purpose of testifying in any matter relating to his bankruptcy, and if committed after the filing of his petition upon process in any civil action founded upon a claim provable in bankruptcy, the Court may, upon like application, dis- charge him from such imprisonment. If the petitioner, during the pendency of the proceedings in bankruptcy, be arrested or imprisoned upon process in any civil action, the District Court, upon his application may issue a writ of habeas corpus 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 12 GENERAL OEDEES IN BANKEUPTCY. 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. XXVIII. Deposit and Payment of Moneys. The District Court in each District shall designate certain National Banks, if there are any within the judicial district, or if there be none, then some other safe depository, in which all moneys received by assignees or paid into Court in the course of any proceedings in bankruptcy, shall be deposited ; and every Assignee, and the Clerk of said Court shall deposit all sums received by them severally, on account of any bankrupt's estate, in one designated depository, and every Clerk and Assignee shall make a report to the Court of the funds received by him, and of deposits made by him, on the first Monday of every month. No moneys so deposited shall be drawn from such depository unless upon a check, or warrant, signed by the Clerk of the Court, or by an Assignee, and countersigned by the Judge of the Court, or one of the Registers designated for that purpose, 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 foccount for which it is drawn, shall be forthwith made in a book kept for that purpose by the assignee or the clerk ; and all checks and drafts shall be entered in the order of time in which they are drawn, and shall be numbered in the case of each estate. A copy of this rule shall be furnished to the depository 80 designated, and also the name of any Register authorized to countersign said checks. XXIX. Prepayment or Security of Fees. The fees of the Register, Marshal, and Clerk, shall be paid or secured in all cases before they shall be compelled to perform the duties required of them by the parties requiring such service ; and in the case of witnesses, their fees shall be tendered or paid at the time of the service of the summons or sub- poena, and shall include their travelling expenses to and from the place at which they may be summoned to attend. The Court may order the whole, or such portion of the fees and costs in each case to be paid out of the fund in Court in such case, as shall seem just. XXX. As to Fees and Costs. To the Cl.erh of tJie Court : — For each notice required to be sent by mail when signed by the Clerk, ten cents ; the postage to be prepaid by the party required to give such notice. GENERAL OKDEES IN BANKRUPTCY. 13 To the Clerk and Register : — For every copy of any paper in proceedings in Bankruptcy, twenty-five cents for certifying the same, and in addition thereto, ten cents for each folio of 100 words. To the Register : — For every order made where notice is required to he given, and for certifying copy of the same to the Clerk, one dollar. For every certificate of question to he certified to the District Judge, under the 4th and 6th Sections of the Act, one dollar. For every proof of deht, twenty-five cents ; and where testimony is taken, the fees prescribed by law may be added. In cases where the debtor has no means, and makes proof to the satisfaction of the Court, that he is unable to pay the costs prescribed by the Act, and these Orders, the Judge in his discretion may direct that the fees and costs therein shall not exceed the sum required by the Act to be deposited with the Clerk. XXXI. Costs in Contested Adjudications. In cases of Involuntary Bankruptcy, where the Debtor resists an adjudica- tion, and the Court after hearing, shall adjudge the debtor a bankrupt, the peti- tioning creditor shall recover, to be paid out of the fund, the same costs that are allowed by law to a party recovering in a suit in Equity; and in case the peti- tion shall be dismissed, the debtor may recover like costs from the petitioner. XXXII. As to Forms and Schedules. The several Forms specified in the Schedules annexed to these Orders for the several purposes therein stated, shall be observed and used with such altera- tions as may be necessary to suit the circumstances of any particular case. In all cases where, by the provisions of the Act, a special order is required to be made in any proceeding, or in any case instituted under the Act in a District Court of the United States, such order shall be framed by the Court to suit the circumstances of the particular case ; and the forms, hereby prescribed, shall be followed, as nearly as may be, and so far as the same are applicable to the cir- cumstances requiring such special order. In proceedings in Equity instituted for the purpose of carrying into effect the provisions of the Act, or for enforc- ing the rights and remedies given by it, the Eules 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 Rules of the Circuit Court regulating the practice and procedure in cases at Law, shall be followed as nearly as may be. XXXIII. Omissions and Amendments. Whenever a debtor shall omit to state in the schedules annexed to his petition, any of the facts required to be stated concerning his debts or his property, he shall state, either in its appropriate place in the schedules, or in a separate t 14 GENERAL ORDEES IN BANKRUPTCY. affidavit to be filed with the petition, the reason for the omission, with such particularity as will enable the Court to determine whether to admit the schedules as suflScient, or to require the debtor to make further efforts to com- plete the same according to the requirements of the law ; and in making any application for amendment to the schedules the debtor shall state under oath the substance of the matters proposed to be included in the amendment, and the reasons why the same had not been incorporated in his schedules as origin- ally filed, or as previously amended. In like manner, he may correct any statement made during the course of his examination. FORMS PROCEEDING UNDER THE UNITED STATES BANKRUPT ACT OF MARCH 2, 1867. I'ORMiS Form No. 1. PETITION BY DEBTOR To the Honorable , Judge of the District Court of the United States, for the District of : — The Petition of , of the of , in the County of , and State of , and District aforesaid, Kespectfully Represents : — That he has for months next immediately preceding the filing of this petition, at , within said Judicial District ; that he owes debts exceeding the amount of three hundred dollars, and is unable to pay all of the same in full; that he is willing to surrender all his estate and effects for the benefit of his Creditors, and desires to obtain the benefit of the Act entitled "An Act to Estab- lish a Uniform System of Bankruptcy throughout the United States," approved March 2, 1867 : That the Schedule hereto annexed. Marked A, and verified by Tour Peti- tioner'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 provi- sions of said Act : That the Schedule hereto annexed. Marked B, and verified by Your Peti- tioner's oath, contains an accurate inventory of all his estate, both real and personal, assignable under the provisions of said Act : Wherefore, your Petitionee prays, that he may be adjudged by the Court to be a Bankrupt, within the purview of said Act; and that he may be Decreed to have a Certificate of Discharge from all his Debts provable under the same. — , Solicitor, [or, Attornci/,] Sfc. Oath to foregoing Petition. fN. B. — ^If Petitioner is not a citizen, tlie last clause of this oath should be omitted.] United States op America. District of , ss : — I, , the Petitioning Debtor mentioned and described in the foregoing Petition, do hereby make solemn oath \or, affirmation] that the statements con- tained therein are true according to the best of my knowledge, information and belief ; and I do further make oath [or, affirmation] that I am a citizen of the United States of America, and that I will bear true faith and allegiance to the same. , Petitioner. Subscribed and sworn [w, affirmed] to, before me, this day of , A. D. 18 U. S. District Jvdge, [Register in Bankruptcy, or, U. S. Commissioner.] 38 FORMS UNDER THE U S BANKRUPT ACT, 1867. Vi 00 ^ ^ ■^ 5Q Si g S» ■^3 ■^ B ^ Nature and Consideration of the Debt, and whether contracted as copartner or joint contractor; and, if so, with whom. 1 c3 Hi 11 go o g « f^ i 1 11 i o •si « Is r • ^ i ft) g i o ^ o Debts due the United States, and taxes and assessments under the laws thereof. 2. Debts due to the State of , and taxes and as- sessments under the laws of said State. 3. Wages due clerk, servant, &c., to an amount not exceeding |50, for Labor performed, within Six Months. 4. Other debts Preferred by said Act. FORMS UNDER THE U. S. BANKRUPT ACT, 1861. 19 p u a s B n s rn 3 li n ■n B fl o ■it C-t 2 "K IS p r *3~ CO s t; Aim VI 1 o u 11 in « «»■ O .a . *■§ -M n §5 ^ 13 * to 2S a I- s" 11 a 11 ■§1° M • is si ? i 1 1 ft &.4 P.J 1 1° •sii " >, "S^ 1 1° "C his a"si "SSb 02^43 * 1 a 1 all® •SmsI ■|-3§ 1 1« ■SB s.9aas - - -o ^.9 P p-sl S «5 ■sis ^ s s 'ia . .- - - o •Pil 2 a" " III! III ^Bfllil- B-s-s-ss £ 5 o o5 o «hI «a «a Miz;;z!i2ifl pjio "O o p ' S U rA 1 fe ^ 1 s { ■3 i 1-s 5 1 g 1 o 12, a? fe ll i 1 1 1 1 1 3l ,_, ^^ ^^ 1—1 1 < ■ 3 i e s E . 20 FOEMS UNDER THE U. S. BANKRUPT ACT, 1867. «°fl _ n £ o fl III m "g &t? g 3Jg !:§ < S ■So" e » ?1S e ^^ g O |5t 9 1 I!- S'Ss »? ■^ »'S .§ gg^ TS 1 sill ■s|s| 5°^^ im £.| I 3 P^ S-c S ^»'=S S'S-g^ 1 S a M's't^i ■1^ idg|5 =? -sg.^ ■—3 O d d - 52 to Oi o o c3 J-" .2 a ° s o 1^2 §£ S Q c3 oT o ■- p; fl 53 g So-a =8^ g^ g.- -g PW F o ai a I o i (^ o « ^ k1 2 §^ FOKMS UNDER THE U. S. BANKRUPT ACf, 1807. 21 00 a d o o2 ■is 5=M I IB a 2 §5.3 •§ ■§ •a fl"« s5g © £ ft S =3 © gws «« d .c o a-" JO ■9 =^ fe ion 111 t.eH ■*' OP m ■» . [» O " § «|l o © ft ■S«M S Q o a ►-• OJ M 0) O W. St.® dJ Nature of Liability, whether same was contracted as copartner or joint-con- tractor, or with any other Person ; and, if so, with whom. 1 u 4& 1- s * s . Is 'do d K g 22 FOEMS UNDER THE U. S. BANKEUPT ACT, 1867. a. « << f^ H )^ tS » A ■^ s 5 1 -8 O " 2* & ti'S ill -.^ u plt-( Petitioner. FORMS TTNDEB THE U. S. BANKRUPT ACT, 1867. 25 [PetiUon by Debtor.] SCHEBlTIiE B. (3.) Choses in Action. Dolls. CtB. a. — Debts due Petitioner on open Account i.— Stocks in Incorporated Companies, and Interest in Joint Stock Com panies e. — Policies of Insurance d. — Unliquidated Claims of every nature, with their Estimated Value -, Petitioner. 26 FORMS UNDER THE U. S. BANKRUPT ACT, 1867. [Petition of Debtor.] SGIIKOVTIiX: B. (4.) Property in Reversion^ Remainder, or Expectancy, including Property held in Trust for the Petitioner, or subject to any Power or Right to Dispose of, or to Charge. [N. B. — A Particular Deseription of Bach Interest must be Entered. If all or any of the debtor's Property has been Conveyed by Deed of Aseignment, or otherwise, for the benefit of Creditors, tbe date of such Deed should be stated, the Name and addreaa of the Person to whom the Property was Conveyfd, the Amount realized from the Proceeds thereof, and the Disposal of the Same, as far as known to the Petitioner.] General Interest. Particular Description. Supposed val'e of my interest. Interest in Land. Personal Property., Property in Money, Stock, Shares, Bonds, Annuities, etc., etc. Rights and Powers. . Property heretofore conveyed for benefit of Creditors. What portion of Debtors Property has been Con- veyed by Deed of Assign- ment, or otherwise, for Ben- efit of Creditors ; Date of such Deed, Name and Ad- dress of Party to whom Conveyed; Amount real- ized therefrom and Dispo- sal of same, so far as known to Petitioner. Real Estate and Leasehold Property, with Locality, Names, and Descriptions of Parties now Enjoying the Same, and the Value thereof; also the Nature of my Interest therein,, and from Whom, and in what Manner it is derived Dolls. CtB. Personal Property with Locality, Names, and Descriptions of Persons now Enjoying the Same; also the Nature of my Interest therein, and from Whom, and in what Man- ner it is derived Annuities, Money in Public or other Funds, Shares in Rail- road and other Companies, showing in whose names the same are standing, with Names and Descriptions of per- sons now Enjoying the Same ; also the Nature of my In- terest therein, and from Whom, and in what Manner it is derived Rights and Powers, wherein I or any other Person or Per- sons in Trust for me or for my benefit have any power to Dispose of, Charge, or Exercise Am'nt realized from proceeds of property conveyed. DoUb. Cts. Description of property of Debtor heretofore conveyed for benefit of Creditor by deed of assignment, or otherwise ; date of such deed or iuHtrument of conveyance, with name and address of party towhom made; amount realized from same, and the disposal of such property, so far as known to ji?etitioner t^A /l /» ^Wt yVH FORMS CUDEE THE U. S. BANKRITPT ACT, 18fi7. 27 [Petition by 'i)6btor.] SCHEnVfiX! B. (5.) A Particular Statement of the property claimed as Excepted from tJie Opcra- tion of said Act, by the provisions of the I4tth Section thereof, gioing Each Item of Property and its Valuation; and, if any portion of it is Real Estate, its Location, Description, and Present Use. [N. B. — The property claimed to ba Exempt uncier the LawB of any State iB to be described separately from the rest, and reference given to the Statute of said State eroating the Exception.] Property claimed to be Ex- cepted from the opera- tionB of said Act, and •which may be set apart by . the assignee under the 14th Section Property claimed to be Ex- empt by State laws ; its Valuation ; whether Eeal or Personal Estate ; its Description and Pre sent Use; and under what State Law Exemp- tion is claimed Valuation. Dolls. Cts. Petitioner. 28 FORMS UNDER THE V. S. BANKRUPT ACT, ISf?. [Petitiou of Debtor.] SCWWBTJIjE b. («.) The following is a True List of all Boohs, Papers, Deeds, and Writings relating to my Trade, Business, Dealings, Estate, and Effects, or ant/ Part thereof, which, at the date of this Petition, are in my Possession or under my Cus- tody and Control, or which are in the Possession or Custody of any Person in Trust for me, or for my Use, Benefit or Advantage ; and also of All othtrs which have been heretofore, at any time in my Possession, or under my Cus- tody or Control, and which are now held by the Parlies whose names are hereinafter set forth, with the reason for their Custody of the same : — Books Deeds Papers, etc. Petitioner, fN. B.— Here follows oath to Schedule B, as hereinafter prescribed.] FORMS UNDER THE U. S. BANKRUPT ACT, 18C7. 29 OATHS TO SCHEDULES A AND B. fN. B.— The following forms of oaths to Schedules A and B of the Petition by Debtor are prescribed and they are to be* annexed to the same, respectively.] Oath to Schedule A. United States of Ambkioa. District of , ss : — On this day of ,A. D. 18 , before me personally came , the person mentioned in and who subscribed to the foregoing Petition and Schedule, Marked A, respectively, and who being by me first duly sworn [or, aifirmed] did declare the said Schedule to be a statement of all his debts,- &c., in accord- ance with the Act of Congress entitled " An Act'to Establish a Uniform System of Bankruptcy throughout the United States," approved March 2, 1867. District Judge, [or, Register; or, U. S. Commissioner.'] Oath to Schedule B. UiviTED 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 Petition and Schedule, Marked IS, respectively, and who being by me first duly sworn [or, affirmed] did declare the said Schedule to be a statement of all his estate, both real and personal, in accordance with the Act of Congress entitled "An Act to Establish a Uniform System of Bankruptcy throughout the United States," approved March 2, 1867. - District Judge, [or, Register, or, U. S. Commissioner.] Form No. 2. COPARTNERSHIP PETITION. [In case of a copartnership, the form will be as follows :] To the Honorable Judge of the District Court of the United Stales for the District of The Petition of , and , of , in the County of , and State of , and District afore- said, respectfully represents : That the said , and , copartners transacting business at , in the County of , and State of , and in said District, have for the months. [Or, That the said and members of a copartnership composed of themselves, and one of , in the County of , and State of , have for the months : — next immediately preceding the filing of this Petition at , within said Judicial District ; that the members of said copartnership owe debts ex- 30 FORMS UNDER THE U S. BANKRUPT ACT, 1867 ceeding the amount of three hundred dollars, and are unable to pay all their debts in full ; that they are willing to surrender all their estate and eflfects for the benefit of their creditors, and desire to obtain the benefit of the Act entitled "An Act to Establish a Uniform System of Balikrnptcy throughout the United States," approved March 2, 1867. That the Schedule hereto annexed, Marked A, and verified by their oaths, contains a Full and True Statement of all the debts of said Copartnership, and, as far as possible, the Names and Places of Residence of their Creditors, and the further statements concerning such debts required by the provisions of said Act. That the Schedule hereto annexed, Marked B, verified by their oaths, con- tains an accurate In . entory of all the estate of said Copartnership as required by the provisions of said Act. And said' further states, that the Schedule hereto annexed, Marked Ci verified by his oath, contains a Full and True Statement of all his In- dividual debts ; and, as far as possible, the Names and Places of Residence of his Creditors ; and the further Statements concerning such debts required by the provisions of said Act ; and that the Schedule hereto annexed. Marked D, veri- fied by his oath, contains an accurate Inventory of all bis Individual Estate as required by the provisions of said Act. And said further states, that the Schedule hereto annexed, Marked E, verified by his oath, contains a Full and True Statement of all his In- dividual debts, and, as far as possible, the Names and Places of Residence of his Creditors, and the further Statements concerning such debts required by the provisions of said Act ; and th^t the Schedule hereto annexed. Marked F, veri- fied by his oath, contains an accurate Inventory of all his Individual Estate as required by the provisions of said Act. [N. B. — Similar clauses to be added for Individual ScJiedules of each Copartner joining in the Petition.] Wherefore, yohr Petitio.\brs pray, that after due proceedings had, they may be adjudged by a Decree of the Court to be Bankrupts within the purview of said Act ; and upon their compliance with all the requirements of the said Act, and all the orders and directions of the Court made in pursuance thereof, they may be severally decreed to have a Certificate of Discharge from all THEIR Debts provable under said Act, and otherwise entitled to aU the benefits thereof; Petitioners. [N. B.— The Form of the Oath to the Petition is to be modified by employing the plural for the singular numher, and by the addition of clauses to cover the Schedules of Each Copart- ner.] Form No. 3. CORPORATION PETITION. [N. B.— If a Petition in Bankruptcy is filed by a Corporation, an authenticated copy of a Vote or other action of the Stockholders, (or, party or parties entitled to act in behalf of such Corporation,) authorizing such proceedings should be filed with the Petition, and which, in substance, should be as follows : ] Statement to accompany/ Petition of Corporation, (In Bankruptcy.) At a meeting of the Stockholders, [or, of the Board of Directors, or Trustees, as the Case may be,J of the Company, [or. Association, or. FORMS DNDER THE U S. BANKRUPT ACT, 1867. 31 Bank, or, Society,] a Corporation created by , of the State of , held at in the county of , and State of on this day of , A. D. 18 , the Condition of the Affairs of aaid Cor- poration having been inquired into, and it being ascertained to the Satisfaction of said meeting that the said Corporation was Insolvent, and that its Affairs ought to be wound up, it was Voted [or, Eesolvedjby a Majority of the Corpora- ators [or, Stockholders, or, Directors, or. Trustees] present at such Meeting, (which was duly called and notified for the purpose of taking action upon the subject aforesaid;) that be, and thereby — Authorized, Empowered, aod Eequired to file a Petition in the District Court of the United States for the District of , withii) which said Corporation has carried on its business, for the purpose of having the same adjudged Bankrupt; and that such proceedings be had thereon as are provided by tlie Act of Congress entitled " An Act to Establish a Uniform System of Bankruptcy throughout the United States," approved March 2, 1867. In witness whereof, 1 have hereunto subscribed my name as President [or, other officer or agent] of said Corporation, and affixed the Seal { of cofpo'Jation. } of ^^^ ^ame this day of , A. D. President [or, other officer] of said Corporation. [N. B. — In case of a Corporation, the following changes are to he made in the form of Peti- tion already prescribed, viz : The substitution of the Name of the Corporation for that of the Individual Petitioner, and the omission of the Prayer for a Discharge and the following passage substituted : "And that like proceedings may be had in the premises as in said act are provided in respect to natural persons." The language of the Oath to the Corporation Petition may be changed to correspond with the form of the Petition.] Form No. 4. OEDEE OP EEFEEENCE TO EEGISTEE. In the District Court of the United States, For the District of In the Matter of i In Bankkuptcy. A Petitioner for Adjudication in Bank- ruptcy of himself. District of , ss : Whereas , of the County of , State of , and District aforesaid, has, on this day of , A. D. 18 , at o'clock m., filed in the office of the Clerk of said Court a Petition for Ad- judication in Bankruptcy against himself, according to the provisions of the Act of Congress entitled " An Act to Establish a Uniform System of Bank- ruptcy throughout the United States," approved March 2, 1867, It is thereupon Ordered, That said Petition be referred to , one of the Registers in Bankruptcy of this Court, to make Adjudication thereon, and take such other proceedings therein as are required by said Act ; and Jur- 32 FORMS UNDER THE U. S. BANKRUPT ACT, 1867. ther, That the said , shall on or before the day of , at o'clock m., file with said Kegister a duplicate copy of said Petition and the Schedules thereto annexed, and that he attend before said Register on said day, and thenceforth as said Register may direct, to submit to such orders as may be made by said Register, or by this Court relating to his said Bank- ruptcy. And further, that until otherwise ordered by the Court, the said Register shall act upon the matters arising in this case at his office, at , at such times as he shall fix for that purpose. Witness the Honorable , Judge of the said Court, and seal thereof, at , in said District, on the day of , A. D. 18 . ( Seal of > . ^ Clerh of District Court, for said District. Form No. 5. ADJUDICATION OF BANKRUPTCY UPON DEBTOR'S PETITION. In the District Court of the United States For the District of In the Matter of By Whom a Petition for Adjudication of Bankruptcy was Piled on the day of , A. D. 18 , in said Court. At , in said District, on the day of , A. D. 18 . Before , one of the Registers, of said Court in Bankruptcy. I, THE Undeksignbd, a Register of said Court in Bankruptcy, upon good proof before me , taken, do find, that the said , has become a Banki'upt within the true intent and Meaning of the Act of Congress Entitled "An Act to Establish a Uniform System of Bankruptcy throughout the United States," approved March 2, 1867 ; and I do hereby declare and adjudge him a Bankrupt accordingly. Register in Bankruptcy. [N. B.— When a Debtor is declared a Bankrupt upon a Creditor's Petition, the Order should be made by the Court and Entered as an Order of the Court in substantially the form above prescribed. ] FORMS UNDER THE U. S. BANKRUPT ACT, 1867. 33 Form No. 6. WARRANT TO MESSENGER. ( Voluntary Bankruptcy.) In the District Court of the United States, For the District of In the Matter of By Whom a Petition for Adjudication of / ^^ Bankruptcy, Bankruptcy was Filed on the day of , A. D. 18 , in said Court. District of , ss .•— To the Marshal of the District of : — Greeting : — Whereas, a Petition for Adjudication of Bankruptcy and for Relief, under the Act of Congress, entitled " An Act to Establish a Uniform System of Bankruptcy throughout the United States," approved March 2, 1867, was, on the day of , 18 , filed by , of , in said District, upon which he hath been found and adjudged a Bankrupt, there being no opposing party thereto : — You are, therefore, HEREBY DIRECTED, AS MESSENGER, to publish times in the — [Here Tbame the newspapers in which the notice is to he published,] (the first publica- tion to be made forthwith,) the following notice, to wit : — Tms IS 10 GIVE Notice: That on the day of , A. D. 18 , a Warrant in Bankruptcy was issued against the Estate of , of , in the county of , and State of , who has been adjudged a Bankrupt, on his own Petition; that the Payment of any Debts and Delivery of any Property belonging to such Bankrupt, to him, or for his use, and the Transfer of any Property by him are for bidden by Law ; that a Meeting of the Creditors of the said Bankrupt, to Prove their Debts, and to Choose one or more assignees of his Estate, will be held at a Court of Bank ruptcy, to be holden [/fere designate the Place, and Building, Room, or Office where the Court is to beheld^ before , Register, on the day of , A. D. 38 , at o'clock M. And you are further directed to Serve Written or Printed Notice, forthwith. Either by Mail or Personally, [ Those upon whom personal Service is to be made, sliould be designated by the Court, or Register, ] on ail Creditors upon the Schedule filed with said Bankrupt's Petition, lor, where names may be given yon in addition thereto by the Debtor,] a least ten days before the appointed meeting of said Court, in the following form, to wit : — To Mr. , of ' , County of , and State of , Creditor of , Bankrupt. You are hereby notified, that a Warrant in Bankruptcy has been issued out of the District Court of the United States, for the District of , against the estate of , adjudged a Bankrupt, upon his own Petition: — That the payment of any Debts, and, the Delivery of any Property belonging to said Bankrapt, to him, or for his use, and the transfer of any Property by him are Forbidden by Law: — That a Meeting of the Creditors of said Bankrupt, to wit: [Here insert names of the Several Creditors of Bank- rupt, with their places of residence and amount of their debts, respectively, in the following form, e.g. : — A. B. , |Boston,Mass .r | |500] to Prove their Debts and Choose one or more Assignees of his Estate, will be held at a Court of Bankruptcy, to be holden on the day of , A. D. ] 8 , at o'clock, — M., at IHere insert the Place, Building, Room, or Office, where the Court loill be hctit^ before , Register. And have you then there this Warrant, with your doings thereon. Witness the Honorable , Judge of the said Court, and the seal thereof, at , in said District, on tie UXr.\ day Of ,A.D.18 . Clerk of District Court, JSr said District 34 FOBMS UNDER THE U. S. BANKRUPT ACT, 1867. Form No. 7. RETURN OF MESSENGER TO ACCOMPANY WARRANT. [N. B. — Thifl Return may be Endorsed on the Warrant, or follow the signature of the Clerk.l District of : ss. At , on the day of , A. D. 18 . — By virtue of the within Warrant, I have caused the notice therein ordered, to be published, by advertise- ment, times, in the Newspapers within mentioned ; the first publication of which was on the day of , A. D. 18 , in [Here mention Newspaper in which first publication was had,] And I also on the day of , A. D. 18 , sent by mail or served personally upon the creditors and others named in said Warrant, a copy of the notice required thereby to be sent to, or served on them : — And all of the said notices were according to the directions set out in said Warrant. ^ Fmes. 1. For service of warrant 2. For necessary travel miles, at 5 cents per ■ mile, each way 3. For each written note to Creditor named in the Schedule, 10 cents 4. For actual and necessary expenses in publication of notices [N. B. — If there are any other necessary expenses, the same may ie inserted in specific terms, numbering the same consecutively.] f U. S. Marshal, as Messenger, District of , District of , ss : — , A. D. 18 . Then personally appeared the , and made oath, that the above Expenses returned by him, in addition to his fees, were actually and necessarily incurred and paid by him, and that the same are just and reasonable. Before me, District Judge, [or. Register in Bankruptcy.] Form No. 8. '^ REGISTER'S OATH OF OFFICE. -United States op America,. District of , ss: !*'_ > havin^been duly nominated and recommended by the Chief Justice of the Supreme Court of the United States, and appointed by the Dis- trict Judge of the United States for the district of , as a Register in Bankruptcy under the act entitled "An Act to Establish a Uniform " System of Bankruptcy throughout the United States," approved March 2, 1867, do solemnly swear that I have never voluntarily borne arms against the United States since I have been a citizen thereof; that I have voluntarily given no aid, countenance, counsel, or encouragement to persons engaged in armed hostility thereto; that I have neither sought nor accepted, nor attempted to exercise the functions of any office whatever under any authority or pretended authority in hostility to the United States; that I have not yielded a voluntary support to any pretended "■"'""•"»v.q»,+ o„<-v,^„'t„ r,„-a,ar. nv nr,r,atUntinr. wit.Viin FOEMS UNDER THE U. S. BANKRUPT ACT, 1867. 35 the United States hostile or inimical thereto. And I do further swear, that to the best of my knowledge and ability, I will support and defend the Constitu- tion of the United States against all enemies, foreign and domestic ; that I will bear true faith and allegiance to the same ; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter ; and also, that I will not, during my 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 this District. So help me God. Subscribed and to, before me this day of , A. D, 18 . District Judge. Form No. 9. OFFICIAL BOND OF EEGISTEE. In the District Court of the United States, For the District of In Bankruptcy. Know all men by these Presents : That we [Insert names and resi- dences in full of Bondsmen] are held and firmly bound to the United States of America in the sum of dollars, lawful money of the United States, to be paid to the said United States, for the payment of which, well and truly to be madej we bind ourselves and each of us, our and each of our heirs, exec- utors, and administrators, jointly and severally, firmly by these presents. Sealed with our seals, and dated this day of , Anno Domini one thousand eight hundred and Whereas the said , having been on the day of , A. D. 18 , appointed by the Honorable , Judge of the Dis- trict Court of the United States for the District of , a Register in Bankruptcy, in and for said District, this Bond is executed pur- suant to the Third Section of the Act of Congress entitled " An Act to Estab- lish a Uniform System of Bankruptcy throughout the United States," ap- proved March 2, 1867, and is conditioned for the faithful discharge of the du- ties pertaining to said office of Register in Bankruptcy. In witness whereof we have hereunto set our hands and seals this day of , A. D. one thousand eight hundred and , [l. s.] [L. S.J Signed, sealed, and filed in office of the Clerk of said District Court. Attest : , Clerk District of FN. B. — The above Bond to be endorsed with the approval of the Judge of the District Court thus: "I herecv approve the within Bond, and declare the sureties THEREON TO BE SATISFACTORY;" and the usual certificate of the Clerk of the District Court, as to the exact time and date of filinfir. 1 36 FOEMS UNDEE THE U S. BANKEUPT ACT, 1837. Form No. 10. COMMON OEDEE. In the District Court of the United States, For the District of • In the Matter of > In Bankruptcy Bankrupt #• At > in said District, on the day of , A. D. 18 . Before Mr. , one of the Registers of said District Cotirt, in Bankruptcy. District of , sa: Upon the application of , of , in the County of , and State of , there being no opposing interest, [or, the party, or parties, appearing assenting thereto, ] It is Ordered : [Here insert the order.] Witness the Honorable , Judge of the said Court, and the seal thereof, at , in said District, on the f Se^aof ? day of ,A.D. 18 . 1 the Court. J •' Clerk of District Court, for said District. Form No. 11. CEETIFIED MEMOEANDUM OF FIEST MEETING OF CEEDITOES. In the District Court of the United States, For the District of In the Matter of i In Bankruptcy. Bankrupt At , in said District, on the day of , A. D. 18 Before Mr. , Register in Bankruptcy. District of , ss : — Memorandum. — This being the day appointed by the Court for the First Meeting of Creditors under the said Bankruptcy, whereof the notice required in that behalf has been duly given, I, the undersigned. Register of the said Court in Bankruptcy, sat at the time and place above mentioned, pursuant to such no- tice, to take the proof of debts and for the choice of assignee under the said Bankruptcy ; and I do hereby certify that the greater part in number and in value of the creditors who have proved their debts were present, or duly repre- sented, and made choice of , of , in the County of > and State of , as the Assignee of the said Bankrupt's estate. [Or, . Failed to make choice of an Assignee of said Bankrupt's estate, and there being no opposing interest, I anoointed . of ___ .jnthe County \«f , and State of POEMS UNDER THE U. S. BANKRUPT ACT, 1867. 37 Failed to make choice of an Assignee of said Bankrupt's estate, and there bemg no opposing interest, I further certify to the Court the failure to make such choice of Assignee, in order that the Court may take action in the premi- Register in Bankruptcy. fN. B.— When the matter of appointment is referred to the Court, the Register may, if requested, certify the names of the persons proposed at the Creditor's meeting and the votes given for each.] Form No. 12. ABSTRACTS OF PROCEEDINGS UNDER SECTION FOUR— FORM OF MEM- ORANDUM TO BE RETURND TO CLERK BY REGISTER, OP HIS ACTION IN EACH CASE. , v./ 1 In the District Court of the United States, For the District of In the Matter of ' In Bankruptcy. Bankrupt . At , in said District, on the day of , A. D. 18 . Before Mr. , Register in Bankruptcy. District of , s-i : Memoranpum. — This day attended the first meeting of Creditors of , the Bankrupt aforesaid, at said , where choice was made of as- signee as appears by the papers herewith returned. [Here insert particular statement of all that was done before the Register.] Register in Bankruptcy. [N. B — A memorandum of what is done in each case respectively must be returned on separate sheets of paper. ] Form No. 13, CREDITORS "WHO HAVE PROVED THEIR DEBTS AT FIRST MEETING. In the District Court of the United States, For the District of In the Matter of In Bankruptcy. Bankrupt . At , in said District on the day of , A. D. 18 . Before Mr. , Register in Bankruptcy. 38 FORMS UNDEE THE U. S. BANKRUPT ACT, 1867. District of , ss : The following is a list of Creditors who have this day proved their debts : — Names of Creditors. Resideuce. Debts Proved. Dolls. Cts. Register in. Bankruptcy. Form No. 14. FORM OF SPECIAl, LETTER OF ATTORNEY. In the Matter of ' In Bankruptcy. Bankrupt To Sir : \or, Messrs., or. Gentlemen,] I, \or, we,] 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 on the day advertised in the [Name the Newspapers] or any adjournment thereof, and then and there for , and in name to vote for or against any proposal or resolution that may be lawfully made or passed at such meeting or adjourned meeting; and in the choice of Assignee, or Assignees of the Estate of the said Bankrupt, and for . , or , to accept such appointment of Assignee. Dated this day of , A. D. 18 . Witness to the signature of , Exhibited to me this day of , A. D. 18 Eegister in Bankruptcy. FOEMS UNDER THE U. S. BANKRUPT ACT, 1867. 39 Form No. 15. CHOICE OF ASSIGNEES. (First Meeting of Creditors.) In the District Court of the United States, For the District of . In the Matter of In Bankruptcy. Bankrupt , in said District day of , A. D. 18 . At on the Before Mr. Register in Bankruptcy. District of ss : Memorandum. — 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 fuhlished^ and by special notice served personally, or through the mail. We, whose names are hereunder written, being the greater part in number and in value, of the Creditors of the said , Bankrupt aforesaid, pres- ent at this Meeting, and who have proved our Debts, have chosen, and do hereby nominate and choose [Here insert the name, or names of assignees, with their places of residence, respectively] to be the assignee of the said Bankrupt's Estate and Effects, and we do desire that he [or, they] may be appointed such assignee , accordingly : Names of Creditors above men- tioned. Residences of the Same. Am'nt of Debt. Dolls. Cts. I [or, we] do hereby accept the said Trust, [or. Appointment.] I, , a Register of the said Court in Bankruptcy, do hereby approve of, and confirm the said choice of Assignee . , Register in Bankruptcy. * hereby appoint Mr. , of , to act as Solicitor, and Attorney in the above Bankruptcy. , Register [or, Assignee.] District Judge. *N. B. — If no attorney be appointed, strike tha latter form out, and when the appoint- ment is made file an appointment as above, signed Fy the Assignee. The District Judge win endorse hereon, in case of approval of the above, thus: "Ap- proved." _ 40 FORMS UNDER THE U. S. BANKRUPT ACT, 3867. Form No. 16. NOTIFICATION OF APPOINTMENT OF ASSIGNEE. In the District Court of the United States, Tor the District of In the Matter of In Bankruptcy. Bankrupt District of , ss : — To , of , in the County of , and State of : — I DO HEREBY CERTIFY to you, that you were duly chosen [or, appointed] assignee [or, one of the assignees] of the Estate and Effects of the above named Bankrupt, at the first meeting of Creditors, on the day of , A. D. 18 , and I do hereby approve and confirm said election, [or, appoint- ment ;] and I do further certify, that the greater part in value and in number of the Creditors of said Bankrupt who had proved their claims were present, or were duly represented at said meeting. Dated at , the day of , A. D. 18 Judge of said District, [or. Register in Bankruptcy.] [N. B. — If the appointment is made by the Judge, the last clause should be omitted. ] Acceptance of Assignee. [N. B. — To be endorsed on notification, or to foUow it.] To WHOM IT MAY CONCERN : Be it known, that I hereby signify my accept- ance of the Trust of Assignee of the Estate of the above [or, within] named Bankrupt this day of , A. D, 18 Form No. 17. BOND OF ASSIGNEE. In the District Court of the United States, For the District of In the Matter of In Bankruptcy. Bankrupt . District of , ss .. Know all liiinN by THESb; presents: That we, , of ; of ; and of , are held and firmly bound unto the United States of America in the iust and POEMS UNDER THE U. S, BANKRUPT ACT, 1867. 41 fall sum of ^ dollars, to the payment whereof, well and truly to be made, we do bind ourselves, our and each of our heirs, executors, and admin- istrators. Signed, Sealed, and Delivered at , this day of A.D. 18 . ^ The said , having been, on the day of , A. D. 18 , by order of the District Court of the United States for the District of ; In Bankruptcy, appointed assignee of the estate of , a Bankrupt, this Bond is executed pursuant to the thirteenth Section of the Act of Congress entitled "An Act to Establish a Uniform System of Bankruptcy throughout the United States," approved March 2, 1867; and is conditioned for the due and faithful discharge of all duties by the said , as such assignee, and in compliance with the Orders and Directions of the Court in the matter of Bankruptcy of the said Signed, Sealed, and Delivered in presence of — , [l. L. s. L. [N. B.— To be Endorsed on the above "On the day of , A. D. 18 ."] Approved: , District Judge, [or, Register in Bankruptcy.] Form No. 18. ASSIGNMENT OF BANKRUPT'S EFFECTS. In the District Court of the United States, Tor the District of In the Matter of In Bankruptcy Bankrupt District of , ss : — Know all men by these presents, that , of the of , in the County of , and State of , in said District ha been duly appointed assignee [If more than one assignee is appointed, insert accord- ingly] in said matter. Now, therefore, I , Judge of said Dis- trict Court, [or, Register in Bankruptcy of said District,] by virtue of th*} f authority vested in me by the 14th Section of an Act of Congress entitled "An Act to Establish a Uniform System of Bankruptcy throughout the United States," approved March 2, 1867, do hereby convey and assign to the said , assignee, as aforesaid, all the Estate, Keal and Personal, of the said , Bankrupt, aforesaid, including all the property, of what- ever kind, of which he is possessed, or in which he was interested, or entitled to have on the day of , A. D. 18 , with all his Deeds, Books, and Papers relating thereto, excepting such property as is Exempted from the operation of this Assignment by the provisions of said Fourteenth Section of said Act. To HAVE AND TO HOLD all the foregoing premises to the said , and his heirs forever, In trust, nevertheless, for the use and purposes, with the powers, and subject to the conditions and limitations set forth in said Act. 42 FORMS UNDER THE U. S. BANKRUPT ACT, 1867 In witness whereof, I, the said Judge [or, the said Register] have here- c T^ s I ^^^° 8^* ™y hand, and caused the seal of said Court to be affixed, lofthe'court. 1 this day of ,A, D. 18 . District Judge, [or, Register in Bankruptcy^ Form No. 19. NOTICE OF ASSIGNEE OF HIS APPOINTMENT. (In Bankruptcy.) » District of , ss : At , the day of , A. D. 18 . The undersigned hereby gives notice of his appointment as assignee of , of , in the County of , and State of , within said District, who has been adjudged a Bankrupt upon his own Petition [or, on Creditor's Petition ; or, as the case may be] by the District Court of said District. , Assignee, Sfc. To , Form No. 20. EXEMPTED PROPERTY. In the District Court of the United States, For the District of In the Matter of In Bankruptcy. Bankrupt At , on the day of , 18 District of ss: The following is a Schedule of property designated and set apart to be re- tained by the Bankrupt aforesaid, as his own property, under the provisions of the 14th Section of the Act of Congress entitled " An Act to establish a Uniform System of Bankruptcy throughout the United States," approved March2, 1867 : General Head. Particular Description. Value. Necessary household and kitchen furniture. Other articles and necessaries Wearinpf apparel of Bankrupt and his family. Equipments, if any, as a Soldier. Other Property Exempted by the laws of the United States. Property Exempted by State ■■ — r- Dolls. Cts. District Judee. for. Ti.i>jrisf.pr.^ FORMS UNDER THE U. S. BANKRUPT ACT, 1867. 43 Form No. 21. PROOF OF DEBT, WITH SECURITY. In the District Court of the United States, For the District of In the Matter of 1 In Bankruptcy. Bankrupt District of , ss : On this day of , A. D. 18 , before me , a Re- gister in Bankruptcy [or, United States Commissioner, or other proper officer] of said District, personally appeared , of , in the County of , and State of , and who, after being duly sworn [or, affirmed] and examined, at the time and place aforesaid, upon h oath, says that , the person by [or, against] whom a Petition for Adjudication of Bankruptcy is filed, w at and before the filing of the said Petition and still , justly and truly indebted to this Deponent, [or, the firm of , composed of this deponent and , transacting business at ,] in the sum of dollars and cents, for which said sum of dollars and cents, or any part thereof, this Deponent has not nor any person by order, or to this Deponent's knowledge or belief, for use, received any security or satisfaction whatsoever, save and except the , hereinafter mentioned; that the claim was not procured for the purpose of influen- cing the proceedings under the Act of Congress entitled " An Act to Establish a Uniform System of Bankruptcy throughout the United States," approved March 2, 1867 ; that no bargain or agreement, expressed or implied, has been made or entered into by or on behalf of this Deponent to sell, transfer, or dis- pose of said claim, or any part thereof, against said Bankrupt, or to take or re- ceive, directly or indirectly, any money, property, or consideration whatever, whereby the vote of this Deponent [or, the firm of which this Deponent is a member] for Assignee, or any action on the part of this Deponent, or any other person, in the proceedings under said act, has been, is, or shall be in any way affected, influenced, or controlled ; [Here insert a particular description of the debt, and also of the property held as security, and the estimated value of siich •property \ Deponent. Subscribed and sworn [or, affirmed] to, at , on the day of , A D. 18 . Before me — -. District Judge, [or, Register in Bankruptcy. [Or, U. 8. Commissioner. \ Eeceived by me, at this day of , A. D. 18 . » Assignee, 44 FOKMS UNDER THE U. S. BANKRUPT ACT, 1867. Form No. 22. DEPOSITION FOR PROOF OF DEBT WITHOUT SECURITY. In the District Court of the United States, For the District of In the Matter of •In Bankruptcy. Bankrupt District of , ss . At , in the County of , and State of > on the day of , A. D. 18 , before me came , of , in the County of , and State of , and made oath, \or, affirmation,] and says, that the said , the per- son whom a Petition for adjudication of Bankruptcy has been filed, at and before the filing of the said Petition, and still justly and truly indebted to this Deponent in the sum of, [Here state the amount, and describe the consideration of the Debt, and whether any, and what, pay- ments have been m,ade thereon,\ for which said sum of dollars and cents, or any part thereof, this Deponent says that he has not nor has any person by h order, or to this Deponent's knowl- edge or belief, for use, had, or received any manner of satisfac- tion or security whatsoever. And this Deponent further says that the said claim was not procured for the purpose of influencing the proceedings under the Act of Congress entitled "An Act to Establish a Uniform System of Bankruptcy throughout the United States," approved March 2, 1867 ; that no bargain or agreement, express or implied, has been made or entered into by or on behalf of this Deponent to sell, transfer, or dispose of said claim, or any part thereof, against said Bankrupt, or to take or receive, directly or indirectly, any money, property, or consideration what- ever, whereby the vote of this Deponent for Assignee, or any action on the part of this Deponent, or any other person in the proceedings under said Act, has been, is, or shall be in any way affected, influenced, or controlled. Deposing Creditor, Subscribed and sworn [or affirmed] to, before me. Register in Bankruptcy. FOrCMS UNDEK THE U. S BAKKEUPT ACT, 1867. 45 Form No. 23. DECLARATION FOE PEOOF OF DEBT BY OFFICER OF CORPORATION, In the District Court of the United States, For the District of In the Matter of »In Bankruptcy. Bankrupt District of , ss: — I, , of , in the County of , and State of , President [or, Cashier, or, Treasurer, or, as the case may be] of , , being a Corporation incorporated by and under the laws of the State of , and carrying on business at , in the State of , being duly sworn, do solemnly declare that I am such officer, and duly authorized to make this proof, and that the statement of the , between the said Corporation and the said Bankrupt, hereunto annexed, is a full, true, and complete statement of account between the said Corporation and the said Bankrupt; and that it is within my own knowledge, that the debt thereby appearing to be due from the estate of said Bankrupt to the said Cor- poration was incurred, on, or before the day of , and for the consideration therein stated ; and that to the best of my knowledge and beliei the said debt still remains unpaid and unsatisfied. And I do further declare that said claim was not procured for the purpose of influencing the proceedings under said Act, and that no bargain or assignment, express or implied, has been made or entered into by or on behalf of said Corporation to sell, transfer, oi dispose of the said claim or any part thereof, against such Bankrupt, or to take or receive, directly or indirectly, any money, property, or consideration what- ever, whereby the vote of such Corpor3,tion, or of any person in the proceedings under said Act was, is, or shall be, in any way, affected, influenced, or controlled. President [or, as the case may Je] of the Company, [or. Association^ Declared under oath at , this day of , A. D. 18 Before me, Register in Bankruptcy. 46 FORMS UNDER THE U. S. BANKRUPT ACT, 1867. Form No. 24. AFFIDAVIT FOR PROOF OF DEBT BY AGENT OR ATTORNEY. In the District Court of the United States, For the District of In the Matter of I In Bankruptcy. Bankrupt District of , ss: — On this day of , A. D. 18 , before me, , Eegister in Bankruptcy, [or, U. S. Commissioner, or other proper officer] of said District, personally appeared , of , in the County of , and State of , Attorney, \or, Authorized Agent,] of , in the County of , and State of , and after being by me duly sworn, [or; affirmed,] says that the said , the person by [or, against] whom a Petition for Adjudication of Bankruptcy has been filed, , at and be- fore the filing of the said Petition, and still justly and truly indebted to the said , in the sum of dollars and cents, [Here particu- larly describe ike consideration of the debt, and whether any, Sfc.,^ for which said sum of dollars and cents , or any part thereof, this De- ponent says that he has not, nor has any person by h Order, or to this Deponent's knowledge, or belief, for use had or received any, manner of satisfaction or security whatsoever. And this Deponent further says, that the claim was not procured for the purpose of influencing the proceedings under the Act of Congress entitled "An Act to Establish a Uniform System of Bankruptcy throughout the United States," approv'ed March 2, 1867; that no bargain or agreement, express or implied, has been made, or entered into, by, or on behalf of such creditor to sell, transfer, or dispose of said claim, or any part thereof, against said Bankrupt, or to take or receive, directly or indirectly, any money, property, or consideration whatever, whereby the vote of such Creditor for assignee, or any action on the part of such Creditor, or any other person in the proceedings under said Act, has been, is, or shall be, in any way affected, inflflenced, or controlled. And this Deponent further says, 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 still remains unpaid and unsatisfied. Subscribed and sworn \or, affirmed] to, this day of , A. D. 18 before me — District Judge, [or Register in Bankruptcy ; Or, U. S. Commissioner J\ Received by me, this day of , A. D. 18 , FORMS UNDER THE U. S. BANKRUPT ACT, 1867. 47 Form No. 25. PROOF OF DEBT WITH SECURITY BY AGENT. In the District Court of the United States, For the District of In the Matter of . In Bankruptcy. Bankrupt . At , in said District, on the day of , A. D. 18 . Before Mr. , Register in Bankruptcy . District of , ss : — On the day above mentioned, personally came , attorney [or, au- thorized agent] of , who being duly and examined at the time and place aforesaid, upon h oath, says that , the per- son whom a Petition for Adjudication of Bankruptcy is filed w at and before the filing of the said Petition, and still justly and truly in- debted to the said , in the sum of dollars and cents, for which said sum of dollars and cents, or any part thereof, this Deponent has not, nor any person by order, to this Depo- nent's knowledge or belief, for the use, of said , received any security or satisfaction whatsoever, save and except the herein- after mentioned. And this Deponent further says 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, and that such debt to the best of his knowledge and belief still remains unpaid and unsatisfied ; that the claim was not procured for the purpose of influencing the proceedings under the Act of Congress entitled '' An Act to Establish a Uniform Ssystem of Bankruptcy throughout the United States," approved March 2, 1867; that no bargain or agreement, expressed or implied, has been made, or entered into, by or on behalf of such Creditor to sell, trans- fer, or dispose of said claim, or any part thereof, against said Bankrupt, or to take or receive, directly or indirectly, any money, property, or consideration whatever, whereby the vote of such Creditor for Assignee, or any action on the part of such Creditor, or any other person in the proceedings under said Act, has been, is, or shall be in any way affected, influenced, or controlled. [Here insert a description of the debt, and also of the properly held as secu- rity and the estimated value of such property.^ Subscribed and to, this day of , A. D. 18 . Before me, > Register in Bankruptcy. Received by me, this day of , A. D. 18 -, Assignee. 48 FORMS UNDEE THE U. S. BANKRUPT ACT, 1867 Form No. 26. LETTER OF ATTORNEY TO REPRESENT CREDITOR. In the District Court of the United States, For the District of In the Matter of In Bankruptcy. Bankrupt To Sir, [Messrs., or Gentlemen :] — I, , of the of , in the County of , and State of , do hereby authorize you [or, either of you] to attend the Meeting, or Meetings of Creditors of the Bankrupt aforesaid, advertised, or directed to be held at a Court of Bankruptcy at , on the day of , A. D. 18 , the day notified in the Warrant issued to the Messenger 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 adjournments thereof, may be held, and then and there, from time to time, and as often as there may be occasion, for , and in name to vote for or against any proposal or resolution that may be then submitted under the 12th, 13th, 14th, 18th, 19th, 21st, 22d, 23d, 27th, 28th, 33d, 36th, 37th, 43d, and 43d Sections of the Act entitled " An act to Establish a Uniform System of Bankruptcy throughout the United States," approved March 2, 1867 ; and in the choice of assignee, or assignees, of the Estate of the said Bankrupt, and for , \or. either of us] to accept such appointment of assignee ; and with like powers to attend and vote at any other meeting, or meetings, of Credi- tors, or sitting, or sittings, of the Court, which may be held therein for any of the purposes aforesaid, or the Declaration of Dividend, or for E^ny other pur- pose in interest whatsoever. In witness whereof, have hereunto signed name , and affixed seal the day of , A. D. 18 Signed, Sealed, and Delivered in , [l. s.] presence of — , [l. s.] , [l. s.] FNOTE.— The party executing the above letter of attorney may acknowledge the same before a Judge, Register, Clerk, or Commissioner of the Court, or any officer authorized to take the acknowledgment of Deeds or other Instruments in Writing.] [N. B. Upon the above letter of attorney should be endorsed the following Certificate of the Register, to wit: "Exhibited to me, this day of , A. D. 18 , at .] , Register in Bankruptcy." FORMS UNDEK THE U S. BANKRUPT ACT. 1867. 49 Form No. 27. AFFIDAVIT OF LOST BILL OR NOTE. In the District Court of the United States, For the District of In the Matter of > In Bankruptcy. Bankrupt District of ss : — On this day of , A. D. 18 , at , comes before me , of , in the County of , and State of , and makes and says that he has made a careful search for the Bill of Exchange, [or, note,] the particulars whereof are under written, and which ha been proved under this estate by , but that he, this Deponent, has not been able to find the same, and verily believes that the same has been lost or mislaid ; and this Deponent further 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 same, and entitled to receive for his own use all dividends in respect thereof Bill or note above referred to. Date. Drawer or Maker. Acceptor. Sum. Subscribed and A. D. 18 . to, before me on this day of Register, or U. S. Commissioner [or, other proper officer.] Upon the above named Deponent signing the annexed letter of indemnity, and giving security to the satisfaction of the official assignee, I direct the divi- dend to be paid to him. Register in Bankruptcy. 50 FORMS UNDER THE U. S. BANKRUPT ACT, 1867. Form of notice of Indemnification to Register. In the matter of , of , Bankrupt . Sir : The Bill \or, Note] mentioned below, proved by , tinder thia estate, having been lost or mislaid, and the following dividend having been de- clared thereon, but not yet paid, viz : — , in consideration of yoar paying to or to order the dividend above men- tioned hereby undertake to indemnify you against all claims of any other person to the said dividend, or any part thereof ; and from all loss; dam- age, and expense, which you or your Executors or Administrators may sustain by reason of your making such payment to me; and if it should hereafter ap- pear that the said sum of $ , or any part thereof, with the dividend already received or declared up to this day, exceed the amount of the Bill [or, Note] hereby engage to repay the same to you, or to tHe assignee, or assignees, of the above estate, with interest at the rate of per cent, per annum from this day. Dated at , this , A. D. 18 . Bill or Note ahove referred to. Date. Drawer or Maker. Acceptor. Sum. To Mr. Sureties of Creditor receiving Dividend. Register in Bankruptcy. Form No. 28. NOTICE AND REQUEST OP ASSIGNEE. (2d meeting of Creditors.) 'In the District Court of the United States, iFor the District of In the Matter of i In Bankruptcy. Bankrupt To the Hon. , Judge of the District Court [or, BegiUer in Bankruptcy] in the above District. Sir: I, [or, we,] the Assignee of the estate of said Bankrupt , respectfully represent, that have accepted the appointment of Assignee of said estate; that FORMS UNDER THK U. S. BANKRUPT ACT, 1867 51 the period of three months has elapsed since the date of the Adjudication of Bankruptcy in said case, and request that the Court will order a General Meet- ing of the Creditors of said Bankrupt , to which may make report of proceedings in trust, according to the provisions of the Twenty-Seventh Section of the Bankrupt Act of March 2, 1867. . , Assignee . Order Thereon — 'By the Court, or Register. Upon the foregoing application of , Assignee of the estate of Bankrupt , it is Ordered that a second General Meeting of the Creditors of said Bankrupt be held at , in said District, on the day of , A. D. 18 , at o'clock m., at the office of , one of the Registers in Bankruptcy in said District, for the purposes named in the Twenty-seventh Section of the Bankrupt Act of March 2, 1867. And it is further Ordered, That the Assignee givenotice of saidmeeting by sending written or printed notices by mail, post-paid, of the time and place of said meeting to all known Creditors of said Bankrupt ; and that also notify the Bankrupt to be present thereat; and- shall also publish notice of the time and place of said meeting on two different days in the newspaper called the , printed at , at least days prior to said meeting. Witness the Honorable , Judge of the said Court, and the seal thereof, at , in said District, on the \^:%:L\ 'i^yof ,a.d.i8 . » Clerh of District Court, for said District. Foim No. 29. FORM OF RETURN OF ASSIGNEE TO BE SUBMITTED TO THE REGISTER IN BANKRUPTCY PRESIDING AT SAID MEETING. In the Matter of >In Bankruptcy. Bankrupt . District of , ss: — I, [or, we,] Assignee of the estate of , a Bankrupt, do certify, that have caused the notices required by the foregoing order to be published in the newspaper called the , printed at , on the day of , A. D. 18 ; and that have caused written or printed notices of the time and place of said meeting to be sent by mail, post paid, to all known Creditors of said Bankrupt. Said notices were mailed at the post office in , oh the day of , A. D. 18 , at days prior to the date appointed for the said meeting. , Assignee. Subscribed and to, at , this day of , A. D. 18 . Before me, ■ ' Register in Bankruptcy. m. B.—Like forms may be used for the third meeting of Creditors, and for auhseguent meetings, if mch are ordered bu the ComtA 52 FORMS UNDER THE TT S, BANKRUPT ACT, 1867. Form No. 30. DIVIDEND MEETING. In the District Court of the United States, For the District of In the Matter of I In Bankruptcy. Bankrupt At , in said District, J on day of , A. D. 18 . District of , ss : — Mkmoranddm. — That at a meeting of the Bankrupt's Creditors duly called and held this day for the purposes set forth in the 27th Section of the Act en- titled " An Act to Establish a Uniform System of Bankruptcy throughout the United States," approved March 2, 1867, we, the undersigned, being the ma- jority in value of the Creditors of the said Bankrupt present, or represented at this Meeting, seeing that it appears by the accounts of the Assignee , now filed, that there is a balance of dollars, standing to the credit of this estate, in the Bank of , and a balance of dollars in the hands of the , do Resolve that after payment of all proper costs, charges, and expenses, and after deducting and retaining a sum sufficient for all undetermined claims, which, by reason of the distant residence of the Creditors, or for other reason satisfac- tory to us, have not been proved, and for other expenses and contingencies, the sum of dollars remains for distribution among the Creditors of the above named Bankrupt, who have proved their debts against the said Bank- rupt's estate. And, it was further Resolved, by the undersigned Creditors that the said sum be divided among the Creditors who have proved their claims against said estate, and that such proceedings be had for declaring and paying said dividend as are required by the 27th Section of said Act. Creditors. I hereby certify to the above. ■ , Register in Bankruptcy. [N. B. — In case one half in value of the Creditors shall not be represented at such meet- ing;, the fact shall be so stated in the Memorandum, and the amount to be divided, and the order for a dividend shall be made and signed by the Assignee in accordance with the pro- visions of the 27th Section of said Act. ] [N. B.— Like forms may be used for the further proceedings provided for in the 28th Sec- tion of said Act.] FORMS UNDER THE U. 8. BANKRUPT ACT, 1887. 53 Form No. 31. NOTICE OF DIVIDEND. In the District Court of the United States, For the District of In the Matter of Bankrupt >Iiv Bankruptcy. At , on the day of , A. D. 18 . Sir : I hereby inform you that you may, on application, at my office, , on the day of , or any day thereafter, between the hours of , receive a Warrant for the Divi- dend due to you out of the above estate. If you cannot personally attend, the Warrant will be delivered to your order on your filling up and signing the sub- joined letter. The bills and securities, if any, exhibited at the time of the proof of your debt must be produced to me before the Warrant of Dividend can be received. I am, sir, your obedient servant, To Assignee. Subjoined letter authorizing Assignee to give Warrant to party other than Creditor. , 18 . To Mr. , Assignee in Bankruptcy of the estate of , Bankrupt. Sir : \or, Messrs.] Please to deliver to , the Dividend Warrant payable to me out of the above estate. Yours, &c., ., Creditor. Form No. 32. LIST OF PROOFS AND CLAIMS FOR DIVIDEND. In the District Court of the United States, For the District of In the Matter of Bankrupt >In Bankruptcy. At , in said District, on the day of , A. D. 18 . 54 FORMS UNDER THE U. S. BANKRUPT ACT, J 867. A hst. of debts proved and claimed said, with Di declared thereon by Mr. of said District Court. the Bankruptcy of , qfore- at the late of per cent this day , one of the Registers in Bankruptcy Creditors. To bo placed nlphabetically, and the names of all the par- tiOH to the proof to be carefully Bet forth. Sum proved. The claims to be set forth in the same man- ner at the end of the ^rhole of the profits. Dollars. Cents. Dolls. CtB. Register in Bankruptcy FORMS UNDER THE U. S. BANKRUPT ACT, 18li7 55 Q o a B is ts CO -J CO § >. a! S 1 fe( a S5 • 3. J In Bankkdptcy. Bankrupt To , Assignee of the estate of said Banknipt, respectfully rep- resents that a certain portion of said Bankrupt's estate, to wit : [Here describe the estate or property and its estimated value,'] is subject to a mortgage, [De- scribe the mortgage,] or to a conditional contract, [Describing it,] or to a lien, [Describe the origin and nature of the lien,] or, (if the property be personal property,) has been pledged or deposited and is subject to a lien for, [Describe the nature of the lien,] and that according to the best judgment of your Peti- tioner it would be for the interest of the Creditors of said estate that said prop- erty should be redeemed and discharged from the lien thereon. Wherefore pray that may be empowered to pay out of the assets of said estate in hands the sum of , being the amount of said lien in order to redeem said property therefrom. Dated this day of , A. D. 18 . , Assignee. [N. B. — If the prayer is for a sale of the property, strike out all after the words "judg- " ment of your Petitioner," and insert "it would be for the interest of the creditors of said " estate that said property should be sold subject to said mortgage, lien, or other incum- "brance. Wherefore, he prays, that he. maybe authorized to make sale of said property " subject to the incumbrance thereon in the manner prescribed by the general order for the "sale of property not encumbered." Form No. 35. ASSIGNEE'S RETURN WHERE THERE AEE NO ASSETS. In the District Court of the United States, For the District of In the Matter of In Bankruptcy. Bankrupt At , in said District, on the day of , A. D. 18 . District of , ss : On the day aforesaid, before me, comrs , of , in the County of , and State of , and makes , and says, that he, this FOEMS UNDER THE U. S. BANKRUPT ACT, 18C7. 57 Deponent, as Assignee [or, one of the Assignees] of the estate and effects of the above named Bankrupt , neither received nor paid any moneys on account of the estate. Subscribed and to, at this day of , A. D. 18 . Before me, , Register in, Bankruptcy. Form No. 36. ASSIGNEE'S NOTICE FOR SETTLEMENT OF HIS ACCOUNTS PREPARATORY TO FINAL DIVIDEND. In the District Court of the United States, For the District of In the Matter of >L\ Bankruptcy. Bankrupt . At , on the day of , A. D. 18 . To , Sir: This is to give you notice that I have filed my final accounts as assignee of the estate of , Bankrupt , in said Court, and that on the day of , next, I shall appl^ to said Court for the settlement of my said accounts, and for a discharge from all liability as Assignee of said estate in accordance with the provisions of the twenty-eighth section of the Bankrupt Act of March 2, 1867. Yom-8, &c., , Assignee. Form No. 37. AFFIDAVIT TO BE MADE BY ASSIGNEE. In the District Court of the United States, For the District of In the Matter of ' In Bankruptcy. Bankrupt District of On this day of , A. D. 18 , before me comes , of , in the county of , and State of , and makes , and says that he, this Deponent, was, on the day of , A. D. 18 , appointed Assignee of the estate and effects of the above-named 58 FORMS UNDER THE U. S. BANKRUPT ACT, 1867. Bankrupt, and that as such 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 7iere also he made to any prior account JilecL by Deponent] is true, and such account contains entries of every sum of money received by Deponent, on account of the estate and effects of the above-named Bankrupt , and that the payments purporting in such account to have been made by Deponent have been so made by him. And he asks to be allowed for said payments and for charges of settlement as set forth in said accounts. — — , Assignee. Sworn to and subscribed at , in said District of , this day of , A. D. 18 . Before me, — Register in Bankruptcy. FORMS UNDER THE U. S. BANKRUPT ACT, 18C7. 59 03 u OB ^ s ~« oo In Bankruptcy. Bankrupt District of , ss : — On this day of , A. D. 18 , before me came , of , in the county of , and State of , and makes , and says that he, this Deponent, did on , the day of , one thousand eight hundred and , personally serve , of , in the County of , and State of , with a true copy of the Summons hereto annexed, by delivering the same to ; and he, this Deponent, further makes , and says, that he is not interested in the* proceedings in Bankruptcy named in said Summons. Subscribed and to, this day of , A. D. 18 Before me, Register in Bankruptcy. [N. B. In case the -witness is to be summoned before adjudication, the form may be altered by substituting for the recital, the following words: — "By virtue of the Petition for Adjudication in Bankruptcy filed in said Court by , against , in the District Court of the United States for the District of ."] 66 FORMS UNDER THE U. S. BANKRUPT ACT, 1867. Form No. 50, FORM OF CERTIFICATE UNDER SECTION SIX. In the District Court of the United States, For the District of In the Matter of ■ In Bankruptcy. Bankrupt . District of , ss : I, , one of the Eegisters of said Court in Bankruptcy, do hereby certify that in the course of the proceedings in said cause before me the following question arose pertinent to the said proceedings, and was stated and agreed to by the counsel for the opposing parties, to wit : Mr. , who appeared for the Bankrupt, and Mr. , who appeared for , one of the Creditors of said Bankrupt, [Add othernames if others are interested,^ and [Here follows a summary of the evidence upon the point or matter to be submitted to the Court, and the question of law arising thereon as agreed to by the counsel.^ And the said parties requested that the same should be certified to the Judge for his opinion thereon. Dated at , the , day of , A. D. 18 . » Register in Bankruptcy. Form No. 51. PETITION OF BANKRUPT FOR HIS DISCHARGE. In the Matter of >In Bankruptcy Bankrupt To the Hon. , Judge of the District Court of the United States, forr tlie District of A. B., of , in the County of , and State of , in said District, respectfully represents that on the day of , last past, he was duly declared a Bankrupt under the Act of Congress in that case made and provided; that he hath duly surrendered all his property and rights of property, and fully complied with and obeyed all the orders and directions of the Court touching his Bankruptcy, and is ready to submit himself to any other and further examinations, orders, and directions which the Court may require. fN. B. — If this Petition is filed within less than six months after the filing of the original Petition it should state that no debts have been proved against the Bankrupt, or that no ■ussets have come to the hands of the Assignee.] FORMS UNDEE THE U. 8. BANKEUPT ACT, 1867. 67 Wherefore he Prays, that he may be decreed by the Court to have a full discharge from all his debts provable under said Bankrupt Act, and a certificate thereof granted according to the said Act of Congress. Dated this day of , A. D. 18 . Bankrupt. Order of Court thereon. District of ' ss : — On this day of , A. D. 18 , on reading the foregoing Petition, it is Ordered by the Court, That a hearing be had upon the same on the day of , A. D. 18 , before said Court at , in said District at o'clock m.; and that notice thereof be published in newspapers printed in said District for times once a week; and that all Credi- tors who have proved their debts, 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 Petition should not be granted. And it is further ordered by the Court, That all such Creditors whose places of residence are known shall be entitled to a service of notice of the said Peti- tion and order, either personally or by letter addressed to them at their known usual place of residence, attested by the Clerk of the Court, or served at their usual place of abode by the Marshal or his deputy, or sent by mail whereof due proof shall be given. Witness the Honorable , Judge of the said Court, and the seal thereof, at , in said District, on the W:t:L\ day of .A.D.18 . , Glerh of District Court, for said District. Form No. 52. NOTICE BY LETTEE TO CEEDITOR THAT BANKEUPT HAS PETITIONED FOE DISCHARGE. In the District Court of the United States, For the District of In the Matter of In Bankruptcy. Bankrupt At , in said District, on the day of , A. D. 18 . District of , ss: Sir : Take notice that a Petition has been filed in said court by , of , in said District, duly declared a Bankrupt under the act of Congress of March 2, 1867, for a discharge, and certificate thereof, from all his debts, and other claims provable under said act, and that the day of next, at o'clock m., is assigned for the hearing of the same, when and where you may attend and show cause, if any you have, why the prayer of the said Petition should not be granted. y Clerk of the District Court. To 68 FORMS UNDER THE U S. BANKRUPT ACT, 1867. [N. B.— The certificate of the Clerk that these letters were duly mailed to each Creditor and that the proper postage stamps were placed thereon will be evidence of the fact of no- tice. If any are delivered to the Creditors or left at their usual place of residence, the per- sons so delivering or leaving them should make affidavit as follows : Affidavit of service of notice. District of ss : I, Marshal, [or Deputy Marshal, as the case may he,] make oath, that I de- livered letters of which a copy is hereto annexed to the following named per- sons at the times and places stated in connexion with the name of each, and that I left at the last and usual place of abode in said District copies of the same letter, with the following named persons, on the day and hour mentioned in con- nexion with the name of each. [Here insert names and other required particu- lars.] Served personally , day of , A. D. 18 . Marshal, [or, Deputy.] {Or, left at last usual place of abode day of , A. D. 18 . Marshal, [or. Deputy.] This day of , A. D. 18 , subscribed and to, before me. One of the Registers in Bankruptcy of said Court. Form No. 53. CREDITOR'S SPECIFICATION OF THE GROUNDS OF HIS OPPOSITION TO THE BANKRUPT'S DISCHARGE. In the District Court of the United States, For the District of In the Matter of In Bankruptcy. Bankrupt , of , in the County of , and State of , Creditor, having proved debt against the estate of said , Bankrupt, and having received notice of his Petition for a dis- chaige from his debts, do hereby oppose the granting of said discharge, and for the grounds of such opposition do file the following specification : [Here insert one or more of the causes which should prevent the granting of the Bankrupt's discharge according to the provisions of Section Twenty -nine of said Act.] • ■ , Creditor, S^c. To , District Judge, [or, Register in Bankruptcy] of said District. FORMS UNDER THE U. S. BANKRUPT ACT, 1867 69 Form No. 54. CREDITOR'S PETITION. To the .Honorable , Judge of the District Court of the United States for the District of The Petition of , of the ' , of , in the County of , and State of , Respectfully shows : — That he is a Creditor of , who for a period of months next preceding the date of the filing of thig Petition, has resi- ded at , in the County of , and State of , and District aforesaid ; — -That Your Petitioner's demand is provable against the said , in accordance with the provisions of the Act of Con- gress, entitled " An Act to Establish a Uniform System of Bankruptcy through- " out the United States," approved March 2, 1867; That he believes that said , owes debts to an amount exceeding the sum of Three Hundred Dollars ; That Your Petitioner's demand exceeds the amount of Two Hundred and Fifty Dollars ; and that the nature of Yoar Petitioner's de- mand against the said , is as follows : — A certain promissory note signed by said , payable to the order of Your Petitioner, [or, naming tbe pavty to whose order the said note is made payable, ] of which the following is a Copy, to wit : [or, set lorth evidence of indebtedness in any other form to a liquidated amount, exceeding Two Hundred and Fifty Dollars, to meet the case.] And Your Petitioner further represents, that within the Six calendar Months next preceding the date of this Petition, the said , did com- mit an act of Bankruptcy within the meaning of said Act, to wit : In that the said , did heretofore, to wit : on the day of , A. D. 18 , depart out of, and from the State of , of which he is »n inhabitant as aforesaid, with intent to defraud his creditors, [or, being absent during said period, he has, with intent to defraud his creditors remained absent from said State : — [Or, That the said , within the period aforesaid, to wit : On the day of , A. D. 18 , within said District, did conceal himself, [or did disguise himself,] to avoid the service of Legal Process in an action for the recovery of a debt or demand, provable under said Act, to wit : To avoid the service of Legal Process in a suit brought by in the Co»rt, of the State of , I or, any other Court] in which such process had been issued, to be served upon the said , by , Marshal for said District, [or, Sheriff, Constable, or other Officer, or party, as the case may be,] at which time the said , did conceal himself, and remain secreted, to avoid the service of said Process, so that the said officer or party having the same to serve upon said Debtor was unable to find him, in order to make proper service of the same : — [Or, That the said , within the period aforesaid, to wit : At , in said District, on the day of , A. D. 18 , being possessed of certain Property, to wit : [Here describe the Prop- erty,] and he, being aware that Legal Process had been issued, [or, was about to be issued,] to be levied thereon at the Suit of some one or more of his Cred- tors, did conceal [or, remove; or, destroy the identity] of said Property to avoid its being Attached, Taken, or Sequestered on such Process : — 70 FOEMS UNDER THE U. S. BANKRUPT ACT, 1867. [Or, That the said , within the period aforesaid, to wit : — At , in said District, on the day of , A. D. 18 , being possessed of certain Estate, Property, Eights or Credits, to wit: \Here describe the Property and where situated^ did make an Assii^ment \or, Gift, Sale, Conveyance, or Transfer, as the case may bej of the same [or, of any part thereof — mentioning the part] to , of , in the County of , and State of , with intent to delay [or, hinder; or, defraud] the Creditors of him, the said : — '[Or, • That the said , within the period aforesaid, and within said Dis- trict, to wit : At , has been arrested and held in custody under and by virtue of mesne process, \or Execution ; or, as the case may be,] issued out of the Court of the United States for the District of , \or, of any Court of any State, District, or Territory,] within which such debtor resides or has property, founded upon a demand, in its nature, provable against the Bankrupt's Estate under said Act, and for a sum exceeding One Hundred Dollars ; and that such Process is remaining in force, and not discharged by payment, or in any other manner provided by the Laws of such State applicable thereto, for a period of Seven days : — \0r. That the said , within the period aforesaid, and within said Dis- trict, to wit : — On the day of , A. D. 18 , being Bank- rupt, \or, insolvent; or, in Contemplation of Bankruptcy, or Insolvency,] did make to , of , in the County of , and State of , a payment \or. Grift, Grant, Sale, Conveyance, or Transfer] of money \or, of any other Property, Estate, Rights or Credits,] \ro, did give to , of , in the County of , and State of , a Warrant to Confess Judgment, or, did procure, or Suffer his Property to be taken on Legal Process,] in favor of , of , in the County of , and State of ; the said judgment to be confessed, issuing out of the Court of ; with the intent to give a preference to , of , in the County of , and State of ; \or, to one or more of his Creditors; or, with the intent, thereby, to give preference to , of , in the County of , and State of , being a person, \or, persons,] who were liable for him as Endorser, Bail, Sureties, or other- wise, [describing the particular relaiion,\ or, with the intent by such disposition of his Property to Defeat, or Delay-the operation of said Act.] [Or, That the said , within the period aforesaid, and within said Dis- trict, to wit : On the day of , A. D. 18 , being a Banker, [or. Merchant; or, Trader; or, as the case may be,] has fraudulently stopped; or, suspended (and has not resumed) payment of his Commercial Paper within a period of fourteen days. [N. 'R.— Whichmcr of the aa$ is relied upon as the act of Bankruptcy of Debtor, the same must be partic- ularly described.] "Wherefore, your Petitioner prays, that he, the said , may be declared a Bankrupt, and that a Warrant may be issued to take possession of his Estate ; that the same may be distributed according to law ; and that such further proceedings may be had thereon, as the law in such case prescribes. Solicitor [or, Attorney ] Petitioner. FORMS UNDER THE U. S. BANKRUPT ACT, 1867. 71 Oath to Foregoing Petition. United States op America, District of ss : — I. , the Petitioner above named, do hereby make solemn oath that the statements contained in the foregoing Petition subscribed by me are tiue, so far as the same are stated of my own knowledge, and that those matters which are stated therein on information and belief, are true according to the best of my knowledge, information, and belief. Petitioner. Subscribed and sworn [or, affirmed] to before me, this day of A. D. 18 . District Judge, [or. Register in Bankruptcy ; or, Z7. S. Commissioner. \ [N. B. — In case the parties proceeded against are a Copartnership, or a Corporation, the above forms may be varied accordingly.] Form No. 55. DEPOSITION AS TO PETITIONING CREDITOR'S CLAIM. [To be filed with Creditor's Petition.] In the District Court of the United States, For the District of In the Matter of . . , ^ . . „ ,-,.-,. /In Bankruptcy. Against whom a Petition tor Adiudica- tion of Bankruptcy was Filed on the day of , A. D. 18 At , in said District, on the day of ,A. D. 18 . Before , one of the Registers of said Court, in Bankruptcy. District of , ss : — , of , in the County of , and State of being duly Sworn, [or, Affirmed] and Examined, at the Time and Place above mentioned, upon his Oath, [or, affirmation,] says that the said was, [or, were,] on and before the day of , A. D. 18 , and still justly and truly indebted unto this Deponent, — [Here give a par- ticular description of the Debt.\ , Petitioning Creditor. On the day of , before me personally appeared, , the above named Petitioning Creditor, and was duly sworn to the truth of the fore- going statement. ^ . , Register in Bankruptcy. 72 FORMS UNDER THE U. S. BANKRUPT ACT, 1867. Form No. 56. DEPOSITION OF WITNESS TO ACT OF BANKRUPTCY. [To be filed with Creditor's Petition.] In the District Ootirt of the United States, . For the District of In the Matter of Against whom a Petition for Adjudica- tion in Bankruptcy was Filed on the day of , A. D. 18 • In Bankruptcy. At , in said Districts on the day of , A. D. 18 , Before , one of the Register, of said Court in Bankruptcy : — , District of , ss : — being duly Sworn, [or, Affirmed,] and Examined, upon his Oath, [or, Affirma- tion,] says, that, [Here set forth particularly the Witnesses knowledge of the Act of Bankruptcy alleged to have been committed by the party proceeded against.] On the day of , appeared personally , the above named Witness, and was duly sworn to the truth of the foregoing state- ment. , Register in Bankruptcy. Form No. 57. ORDER TO SHOW CAUSE, UPON CREDITOR'S PETITION. In the District Court of the United States, For the District of " In the matter of ) In Bankruptcy Against whom a Petition for Adjudica- tion of Bankruptcy was Filed on the day of , A. D. 18 . District of , ss : — Upon Filing proofs sustaining the allegations of the Petition aforesaid, it is — Ordered, That the said , do appear at this Court, as a Court of Bankruptcy, to be holden at , in the County of , and State of , and District aforesaid, on the day of , at _ o'clock M., and show Cause, if any there be, why the Prayer of said Petition should not bo granted ; and — It is furthei- Ordered, That a copy of said Petition, together with a copy of this order, be served on said , by delivering the same to him FORMS UNDER THE U. S. BANKRUPT ACT, 1867. 73 personally, or by leaving the same at hia last usual place of abode, in said dis- trict, at least five days previous to the day herein required for his appearance. Witness the Honorable , Judge of the said Court, and , c , . . *^® ^^^ thereof, at , in said District, on the day {thfto°urtJ of .A.D.18 . ^ ■ . ^ Clerk of District Court, for said District, Form No. 58. ADJUDICATION OF BANKRTTPTCY— CREDITOR'S PETITION. In the District Court of the United States, For the District of In the Matter of In Bankruptcy. Bankrupt At , in said District day of , A. D. 18 . District of , ss: This cause came on to be heard at , in said Court, and , [Here state the proceedings, whether there was no opposition, or, if opposition, what proceedings were had, and when and where, and what counsel appeared for the several parties, \ 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 true, and it is therefore adjudged, that became Bankrupt within the true intent and meaning of the Act entitled "An Act to Establish a Uniform System of Bankruptcy throughout the United States," approved March 2, 1867, before the filing of the said Petition, and he is there- fore declared and adjudged a Bankrupt accordingly. And it is further ordered that the said Bankrupt shall, within five days after the date of this order, make and deliver or transmit by mail, post paid, to the Marshal, as Messenger, a Schedule of his Creditors, and Inventory of his estate in the form, and verified in the manner required of the Petitioning debtor by the said Act. Witness the Honorable , Judge of the said Court, and the seal thereof, at , in said District, on the day ( Seal of ? of ,A. D. 18 . i the Court. 3 Clerk of District Court, fur said District.. 74 POEMS UNDER THE U. S. BANKRUPT ACT, 1867. Form No. 59. WARRANT OF SEIZURE UPON ADJUDICATION OF BANKRUPTCY ON CEED- ITOE'S PETITION. In the District Court of the United States, For the District of In the Matter of In Bankruptcy. Bankrupt District of ss : To the Marshal of said District, [or, to either of his Deputies,'] Cheeting : Whereas a Petition for Adjudication of Bankruptcy was on the day of , A. D. 18 , filed against , of the County of , and State of , in said District, under which he has been duly declared and adjudicated Bankrupt ; you are therefore by virtue of the said Petition and the adjudication thereon, according to the provisions of the Act entitled " An Act to Establish a Uniform System of Bankruptcy throughout the United States," approved March 2, 1867, required, authorized, and em- powered, as Messenger, to take possession of all the estate, real and personal, of said , the said Bankrupt, except such as may be by law exempt from the operation of said Act, and of all his deeds, books of account, and pa- pers, and to keep the same safely until the appointment of an assignee. And you are also directed to publish notice twice in the newspapers called , and , printed at , in the County of , the first publication to be made forthwith as follows : District Court of the XTnited States, For the District of In the Matter of In Bankruptct. Bankrupt . A warrant in Bankruptcy has been issued hy said Court against the estate of , of the County of t of the State of , in said District, adjudged a Bankrupt upon the Petition of his Creditors, and the payment of any debts and the delivery of any property hiton^ing to said Bankrupt, to him or to his use, and the transfer of any property by him, are forbidden by law. A meeting of the Creditors of said Bankrupt to prove their debts and choose one or more Assignees of his estate will be held at a Court of Bankruptcy to be Iwlden at , in said District, on the day of ' , A. D. 18 , at o'clock m., at the office of , [giving the street and number,] one of the Registers in Bank- ruptcy of said Court, ■Marshal, [or. Deputy Marshal^ Messenger. FORMS UNDER THE U. S. BANKEDPT ACT, 1867. 75 And yon will also serve written or printed notice by mail or personally on all Creditors whose names may be given to you by said Bankrupt within five days from the date of such adjudication, within days after the date hereof, and also to said , the Bankrupt, which notice shall be as follows • In the District Court of the United States, For the District of la the Matter of In Bankruptcy. Bankrupt , District of , 8s: — To , one of the Creditors of said , Bankrupt. This is to give you notice : let. That a Warrant in Bankruptcy has been issued against the estate of , Bankrupt aforesaid. 2d. That the payment of any debts, and the delivery of any property belonging to said Bankrupt, to him or to his use, and the transfer of any property by him are forbidden by law. 3d. That a meeting of the Creditors of the debt^i' to prove their debts and choose one or more Assignees of the estate will be held at a Court of Bankruptcy to be holden at , in said District, on the day of , at o'clock m., at the of&ce of , [jS^iving the street and number,] one of the Eegiaters in Bankruptcy of said Com-t. And the following are the names of the creditors of said Bankrupt and the amount of their debts as given to me by him. [£. g.—A. B., (of Boston,) dollars.] , Messenger. And have you there this warrant with your doings thereon. In TESTIMONY WHEREOF, I have hereunto set my hand and caused the seal of this Court to be affixed at > this day of , in the year of our Lord 18 . [l. s.] District Judge. Clerk of the Court. Return by Marshal thereon. District of ss : By virtue of the within warrant, I have taken possession of the estate of the within named , Bankrupt, except such as is by law excepted from the operation of said warrant by the act of Congress, and of all his deeds, books of account, and papers which have come to my knowledge, and I have published notice by advertisement on two different days in the newspapers within mentioned, the first publication of which was on the day of , A. D. 18 . I also within days after the date of the within warrant sent written or printed notice, as within directed, to the within named , Bankrupt, and to the creditors named on the schedule delivered to me by him, and herewith returned. The notices sent by mail, were deposited in the post office at , on the day of , A. D. 18 , with the proper postage stamp affixed thereto, and those delivered personally by me to said creditors were delivered at the times and the places set opposite to the name of each, and all of said notices were according to the directions set out in this war- rant. Marshal, [or, Deputy Marshal,] Messenger. 76 FORMS UNDER THE U. S. BANKRUPT ACT, 1867. Fees and Expenses. 1. Service of warrant 2. Necessary travel at the rate of 5 cents a mile each way 3. Notice to creditors, 10 cents each 4. Actual expenses in publishing notices as follows 5. Actual expenses in custody of property and other services as follows. .. 00 [Here render the particulars^ Marshal, [or, Deputy Marshal^ Messenger. Affidavit as to Expenses. District of , A. D. 18 . Personally appeared the said , Messenger, and made oath that the above expenses returned by him under numbers four and five have been actually incurred and paid by him, and are just and reasonable. Before me, , One of the Registers in Bankruptcy in said District. Form No. 60. ADJUDICATION WHERE DEBTOR IS FOUND NOT BANKRUPT. In the District Court of the United States, For the District of lu the Matter of \In Bankruptcy. Before Honorable ■ District of Bankrupt , ss : At , in said District on the day of , A. D. 18 . , Judge of the District of This cause came on to be heard at , in said Court, and [Here state the proceedings, whether there was no opposition, or, if opposed; state what proceedings were had, and when and where, and what counsel appeared for the several parties^ FORMS UNDER THE U, S BANKRUPT ACT, 1867. 77 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, Ordered, That said Petition be dismissed, and that all proceedings under the same be vacated and annulled. Witness the Honorable , Judge of the said Court, and the seal thereof, at , in said District, on the day f Seal of ? of A T) IS \ the Court. \ °^ ' ■^' ^- ^^ • Clerh of District Court, for said District. [N. B. 1. If default be made by the Debtor to appear pursuant to the order, upon a Creditor's Petition, the subsequent order may be made by a Register in Bankruptcy/] [N. B. 2. If no Schedule of Creditors shall be delivered to the Messenger by the Bank- rupt, the Messenger shall prepare such Schedule from the best information he can obtain, and send notices accordingly. ] Form No. 61, DENIAIi OF BANKRUPTCY, Km) DEMAND FOE JURY BY DEBTOR. In the District Court of the United States, For the District of In the Matter of the Petition of , Creditor, Debtor. District of >In Bankruptcy. At , in said District, on the day of , A. D. 18 . And now on this return day [or, adjourned return dayj for the hearing of said Petition, the said appears and denies that he has committed the act of Bankruptcy set forth in said Petition, 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.] Witness the Honorable , Judge of the said Ccurt, and the seal thereof, at , in said District, on the day f s^^iof \ of , A. D. 18 . i the Court, i Clerk of District Court, for said District. 78 FORMS UNDER THE U. 8. BANKRUPT ACT, 1867. Form No. 63. ORDER OF COURT UPON DENIAL OF BANKRUPTCY AND DEMAND FOE JURY TRIAL. (Involuntary Bankruptcy.) In the Diatrict Court of the United States, For District of In the Matter of the Petition of , Creditor, , Debtor. > I:v Bankruptcy. At , in the said District, on the day of , 18 . District of ss : Upon the demand in writing filed by the Eespondent to said Petition, that the fact of the commission of an act of Bankruptcy may be inquired of by a Jury, it is Ordered, That said issue be submitted to a Jury at the present term of this Court, (if a Jury be in attendance,) or, if in vacation, at the next term of this Court. Witness the Honorable , Judge of the said Court, and the seal thereof, at , in said District, on the day Clerk of District Court, for said District. Form, No. 63. APPOINTMENT OF TRUSTEES UNDER SECTION 43 In the District Court of the United States, Tor the District of In the Matter of >In Bankruptcy. Bankrupt At this meeting of the Creditors of said Bankrupt, called specially by order of said Court for the purpose of determining in what manner the estate of said Bankrupt shall be settled, it was resolved by three-fourths in value of the Creditors whose claims have been proved, as follows : 1st. That it is for the interest of the general body of the Creditors of said that the estate of said Bankrupt, should be wound up and settled, FORMS UNDER THE U. S BANKRUPT ACT, 1867. 79 and distribution made among the Creditors by trustees under the inspection and direction of a Committee of Creditors. 2d That this resolution be certified and reported to the Court. 3d. That be nominated as trustee to take, hold, and distribute said estate. 4th. That , of , of \ be the Committee of the Creditors under whose direction the said Trustees shall act. Creditors. Amount of Debts. Dolls. Cts, Affidavit of Bankrupt. A. B., the said Bankrupt, being duly sworn, \or affirmed,] says that the names of the persons affixed to the foregoing resolution represent three-fourths in value of all his creditors whose claims have been proven against his estate. Subscribed and to, before me this day of , A. D. 18 Register, [or TJ. S. Commissionei .\ Certificate of Register thereon. In the District Court of the United States, For the District of (In Bankruptcy.) At , the day of , A. D. 18 ,1 hereby certify that at a meeting of the Creditors of said , held this day in pursuance of a notice regularly given according to the provisions of the Act of Con- gress entitled, &c., approved March 2, 1867, [or, according to the order of the Court, as the case may be,J the above resolutions were adopted and signed by three-fourths in value of the Creditors of said Bankrupt, who were present or were represented at said meeting. Register in Bankruptcy. 80 FORMS UNDER THE U. S. BANKRUPT ACT, 1807. Order of the Court on above Proceedings. In the District Court of the United States, For the District of In the Matter of )In Bankruptcy. Bankrupt The foregoing certificate having been filed and read, it is Ordered, That the said , shall convey, transfer, and deliver all his property or estate to , as trustee by deed in the following form : District of ss : In the District Court of the United States for said District. This indenture made this day of , A. D. 18 , be- tween , {the Debtor,) of , in the County of and State of , and ' on behalf and with the consent of , Creditors of the said , wit- ' NESSETH, that the said , {the Debtor,) hereby conveys, transfers, and delivers all his estate and eflects to , absolutely, to have and to hold the same in the same manner and with the same rights in all respects as the said would have had or held the same if no proceed- ipgs in bankruptcy had been taken against him, to be applied and administered for the benefit of the Creditors of said , in like manner as if said had been at the date hereof duly adjudged Bankrupt, and the said {trustees) had been appointed assignee in bankruptcy under said act. In testimony whereof, the said , {debtor,) and the said , 'trustees,) in acceptance of said trust, have hereunto set their hands and seals this day of , A. D. 18 . Executed in presence of — , [l. s.] , [l. s.] . [L.S.] This day appeared before me, a Register in Bankruptcy, the above named {Bankrupt,) and acknowledged the foregoing instrument by him signed to be his free act and deed. Register in Bankruptcy. P0BM8 UNDER THE U, S, BANKRUPT ACT, 186». 81 We hereby give our assent to the execution of the above deed ; Names of Creditors. Residence. Amount. Dolls. Ct8, Oath of Bankrupt. Iv the District Court of the United States, For the District of In the Matter of )In Bankb«ptcv. Bankrupt . , the said Bankrupt, being duly sworn, doth' depose and say that he has conveyed, transferred, and delivered all his prop- erty to the trustees in the above indenture named, and that the persons signing their consent to the above conveyance represent three-fourths in value of all hia Creditors whose claims have been proved against his estate. Bankrupt. Subscribed and sworn ' or, affirmed] this Before me, — day of A. D. 18 Register in Bankruptcy. Witness the Honorable , Judge of the said Court, and the Seal thereof, at , in said District on the day of , A. D. 18 . ) thf ^conrt. ] Clerk of the District Court, for said District. Advertisement of Trustee. In the District Court of the United States, For the District of (In Bankruptcy.) This is to give notice that by an indenture bearing date the of ,A. D. IS , , „ , '°^ has conveyed aud assigned all his estate and eflPects whatsoever to , as trustee, upon trust for the benefit of all the Creditors of _ . and that said conveyance was duly executed according to the provisions ot the 43d Section of the Bankrupt Act of March 2, \%&1 . Dated this day of , A. D. 18 . day Trustees. 82 FORMS UNDER THE U. S. BANKRUPT ACT, 1867. Older of Court. The foregoing proceedings under the 43d Section of the Bankrupt Act of Majch 2, 1867, having been placed on file and read, it is Ordered, That itll proceedings upon said Petition in Bankruptcy be stayed until the further order of the Court. Witness the Honorable , Judge of said Court, and the Seal thereof, lit , in said District, on the day of A. D 18 . ( Seal of ) \ the Court. > -^- , /'t-.- • i-* /» -ti-'- Clerk of District Court, jor said Dislrwt. Form No. 64. ORDER CONCERNING SALE OF PROPERTY BY ASSIGNEE. In the District Court of the United Sates, For the District of In the Matter of >In Bankruptcy. Bankrupt At , in said D istrict on the day of , A. D. 18 . District of , ss : — Upon the representation of , a Creditor of said , and upon the proofs filed therewith, it is Ordered, That the real estate of said Bank- rupt when offered for sale by his Assignee shall be sold in lots or parcels as follows, [Here follow the direction by reference to plat or any other specific description or order in which the property shall he sold. \ Witness the Honorable , Judge of said Court, and the Seal thereof, at , in said District, on the day of , A. D. 18 . ' Seal of ? t the. Court. Clerk of District Court, for said District. Form No. 65. ORDER CONCERNING SALE OF PROPERTY OF CORPORATION. In the District Court of the United States, For the District of In the Matter of the Bankruptcy of A corporation formed under the laws of the State of )In Bankruptcy. At , in said District on tlir dav of A. D. 18 FOEMS UNDER THE U, S. BANKRUPT ACT, 18ft7 83 District of , ss : — Upon the representation of , a Creditor, [or, the party in interest,! and upon the pioof-^ filed therewith, it is Ordered, That the frafchise of said corporation be sold in fractional parts according to the number of shares therein, as follows, [If there be me thousand shares of the corporation, the order may require that the franchise be sold in fractions of, or iil any other pro- portion?^ ! Witneas the Honorablb , Judge of said Court, an(|the Seal thereof, at , m said District, on the day of , A D 18 J Seal of ) "' J the Court. J ' ; , C/.crk of District Court, fir' said District. Form No. 66. ORDER OF DIMINUTION OF CLAM. In the District Court of the United States, For the District of In the Matter of )In Bankruptcy. Bankrupt . At , in said District on the day of , A. D. 18 . District of , ss : — Upon the evidence submitted to this Court upon the claim of , against said estate, {and, if the fact be 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 entered upon the books of the Assignee as the true sum upon which a dividend shall be computed, [if, with interest, insert : — " with interest thereon from the day of , A. D. 18 ."] Witness the Honorable , Judge of the said United States District Court Clerk of District Court, for said District. 84 P0BM8 UNDER THE U. 8. BANKRUPT ACT, 1867. Form No. 67. , EXPUNGING OB ALLOWANCE OF CLAIM. In the DistrictiCourt of the United States, For the ; District of In the Matter of >In Bankruptcy. Bankrupt At . in said District, on the day of , A. D. 18 . District of , ss : Upon the evidence submitted to the Court upon the claim of against said estate, (and, if the fact be so, upon hearing counsel thereon,) it is Ordered, That said claim be disallowed and expunged from the "list of claims upon the Assignee's record in said case. Witness the Honorable , Judge of said United States District Court. Clerk of District Court for said District. [N. B. — If the claim is found to be good, say " Jt i« Ordered, That said claim be established to the full amount thereof."'] Form No. 68. IN CASE OF DISALLOWANCE THE CREDlf OR MAY FILE THE FOLLOWING NOTICE OF APPEAL. In the District Court of the United States, Tor the District of In the Matter of >In Bankruptcy, Bankrupt At on the day of , A. D. 18 To ■ . Assignee of said estate : You are hereby notified that I claim an appeal from the decision of the judge of said Court made on the day of , A. D. 18 , refusing w allow my claim when presented against the estate of , Bankrupt, to the Circuit Court of the United States next to be holden at , in said District, on the day of , A. D. 18 . [If the appeal is from a disallowance of part of the claim, instead of " r