"I think the better practice, however, would be to conform to the provisions of section 9b as respects all the matters and objects covered by it. But under the broad powers at law and in equity conferred upon the District Courts in bankruptcy proceedings by section 2 and subdivision 15 of that section, it is competent, I think, for the court to issue an order in the nature of a writ of ne excat as broad as that provided by section 717 of the Revised Statutes, whenever such process is necessary for the enforcement of the provisions' of the Bankrupt Act. By section 2 the District Courts are expressly invested 'with such jurisdiction at law and in equity as will enable them to exercise original jurisdiction in bankruptcy proceedings, . . . (15) to make such orders and issue such process . . . in addition to those specifically provided for, as may be necessary for the enforcement of the provisions of this act.'

The writ of ne exeat is one of the orders or writs in familiar use in equity against one who designing to avoid the justice and equity of the court, is about to go beyond the sea, so that the duty will be endangered if he goes.' Wyatt, Prac. Reg. 289; 2 Story, Eq. Jur. p. 800, sec. 1470, note; 3 Daniell, Ch. Prac. (2d Am. ed.) p. 1925.

The necessity of the occasional exercise of this power for the efficient administration of the Bankrupt Law is evident. Without it the bankrupt might easily defy, and largely nullify, all adverse proceedings against him, by absconding with his assets.

Under the fortieth section of the Act of 1867 (Rev. St. sec. 5024) it was held by Gray, C. J., in Usher v. Pease, 116 Mass. 440; 12 N. B. R. 305, that the warrant of arrest did not extend beyond the hearing and adjudication upon the petition, and was for the purpose of securing the bankrupt's attendance thereon, and to prevent his absconding meanwhile or putting his property out of reach. The scope of section 9b of the present act is somewhat broader; but it seems still to be limited to a detention of the bankrupt for the purpose of examination after adjudication, and for his appearance from time to time for that purpose, not exceeding in all ten days, and for his obedience to all lawful orders made in reference to his examination. The issue of the warrant is further limited to a period of one month after the qualification of the trustee. In the present act there is no express authority to issue a warrant in order to prevent the bankrupt from absconding with assets, except incidentally and under the above limitations of section 9b; and considering the manifest insufficiency of that section to secure an effective administration of the act, I cannot doubt that it was intended by the compact and broad language of section 2 subd. 15, to authorize the court to make all orders and to issue any other process, agreeable to the recognized principles of law, that might be found necessary for that purpose. The Act of 1867 contains no such general grant of power as is found in section 2 above quoted. See Rev. St. secs. 4972, 4976, 5024 The limitations of that act, therefore, are not applicable to the present

act.

The writ of ne exeat under section 717 is not to be issued 'unless a suit in

Seizing Bankrupt's Property - Extradition of Bankrupts. [Ch. III.

equity is commenced.' This was the existing rule of law as to the issuance of writs of ne exeat. Beames, Ne Exeat, 26; 3 P. Wms. 312; Mattocks v. Tremain, 3 Johns. Ch. 75. Section 2 of the Act of 1898, in giving the District Courts equitable jurisdiction 'in bankruptcy proceedings.' would seem to make the commencement of such proceedings the equivalent of a suit in equity for the purpose of the issuance of such a writ. Mackintosh v. Ogilvie,

I Dickens, 119. In view of the broad provisions of section 2, subd. 15, however, it seems quite unnecessary to resort to section 717 for authority to prevent bankrupts from absconding, either with or without their assets, when their detention is necessary for the proper enforcement of the act."

Seizing Possession of Property of Bankrupt.-Compare section 69; also section 2 (3).

SEC. 10. Extradition of Bankrupts.-a Whenever a warrant for the apprehension of a bankrupt shall have been issued, and he shall have been found within the jurisdiction of a court other than the one issuing the warrant, he may be extradited in the same manner in which persons under indictment are now extradited from one district within which a district court has jurisdiction to an

other.

No Analogous Provisions in Former Acts.

The power of removal referred to is contained in section 1,014 U. S. R. S., which is as follows:

For any crime or offense against the United States the offender may, by any justice or judge of the United States, or by any commissioner of a circuit court to take bail, or by any chancellor, judge of a supreme or superior court, chief or first judge of common pleas. mayor of a city, justice of the peace, or other magistrate, of any State where he may be found, and agreeably to the usual mode of process against offenders in such State, and at the expense of the United States, be arrested and imprisoned, or bailed, as the case may be for trial before such court of the United States as by law has cognizance of the offence. Copies of the process shall be returned as speedily as may be into the clerk's office of such court. together with the recognizances of the witnesses for their appearance to testify in the case. And where any offender or witness is committed in any district other than that where the offense is to be tried, it shall be the duty of the judge of the district where such offender or witness is imprisoned, seasonably to issue. and of the marshal to execute, a warrant for his removal to the district where the trial is to be had."

11.]

Suits by and Against Bankrupts.

SEC. 11. Suits By and Against Bankrupts.-a A suit which is founded upon a claim from which a discharge would be a release, and which is pending against a person at the time of the filing of a petition against him, shall be stayed until after an adjudication or the dismissal of the petition; if such person is adjudged a bankrupt, such action may be further stayed until twelve months after the date of such adjudication, or, if within that time such person applies for a discharge, then until the question of such discharge is determined.

b The court may order the trustee to enter his appearance and defend any pending suit against the bankrupt.

c A trustee may, with the approval of the court, be permitted to prosecute as trustee any suit commenced by the bankrupt prior to the adjudication, with like force and effect as though it had been commenced by him.

d Suits shall not be brought by or against a trustee of a bankrupt estate subsequent to two years after the estate has been closed.

Analogous Provisions of Former Acts.

As to right to maintain an action against a bankrupt: R. S. section 5105; act of 1867, section 21; act of 1841, section 5. As to stay of suits against a bankrupt: R. S. section 5106; act of 1867, section 21. As to trustees' continuance of pending suits against a bankrupt: R. S. section 5047; act of 1867, sections 14 and 16; act of 1841, section 3; act of 1800, section 13. As to limitations of actions against the trustee: R. S. section 5057; act of 1867, section 2; act of 1841, section 8. Also R. S. section 5056; act of 1867 section 14.

Statutory Provisions, Old and New.-There are marked differences between the provisions of the former and the present act with regard both to the maintenance and continuance of actions against a bankrupt. The former act as it appeared in the Revised Statutes contained two provisions. Section 5105 in substance enacted that the proving of a debt was a waiver of all right of action, and that thereafter the creditor should not be allowed to maintain any suit at law or in equity. This, it will be seen, prevented the institution of new actions as well as the continuance of pending actions, provided the debt was proved. Section 5106 of the Revised Statutes declared that no creditor whose

Suits By and Against Bankrupts.

[Ch. III. debt was provable should be allowed to prosecute to final judgment any suit at law or in equity therefor, against the bankrupt until the question of his discharge should have been determined, and that all such suits must be stayed until the question of discharge was considered by the court, provided there was no unreasonable delay on the part of the bankrupt in attempting to obtain his discharge, and provided also that, if there was a dispute as to the amount of the debt, a court of bankruptcy might allow the action to proceed to judgment for the purpose of ascertaining the amount due, which amount might be proved in bankruptcy, but execution was to be stayed. Comparing those provisions (which appear more fully in the copy of the act printed as an appendix to this book) with the provisions of the section under consideration, it will be seen that the present act expressly provides only for the stay of pending actions; that it makes no reference to the institution of new actions; that a suit will not be stayed simply because it is founded upon a debt which is provable, but the debt must be one which would be released by a discharge. It will be further seen that the present statute makes a stay from the time of filing the petition until an adjudication or the dismissal of the petition, compulsory; but that after that time it is discretionary. Moreover there are no express grounds required. for the court to give as its reason for permitting the continuance of the action. It will be further seen that the old act, in cases where creditors did not prove their claims and thereby waive all right of action, only required that the action should not be allowed to be prosecuted to final judgment, and that even to this there were some express exceptions; but under the present act, if a stay is granted no further proceedings whatever can be taken.

The general purpose and object of these laws authorizing the stay of actions against a bankrupt are to prevent his being harassed with suits, while he is proceeding in good faith to obtain his discharge, and until the question of his discharge is determined and it is either granted or refused. Another purpose is to prevent a race of diligence between creditors.

The law intends that creditors having provable claims shall

secure their remedy in bankruptcy proceedings, and that if the claim is dischargeable the bankrupt shall not be annoyed by proceedings in any other court pending the application for a discharge. If he receives the discharge he may of course plead it as a defense. If he is refused a discharge, the right of a creditor to sue for his debt or the balance of it over and above any dividend received, remains unimpaired. But still the question remains: Has a creditor, between the time of the filing of the petition and the granting of the discharge, a right to institute a new suit upon his claim against the bankrupt, simply because the act does not in terms provide that new suits shall not be instituted, nor that a new suit if instituted shall be stayed? When will the courts allow such suits? If such a suit were instituted and prosecuted to judgment, it would in no way give the creditor any right or lien upon the property with which the trustee becomes vested by law. If prosecuted to judgment, and a discharge is thereafter granted, the discharge may be pleaded as a defense to any further action on the judgment or any proceedings to enforce it. (McDonald v. Davis, 105 N. Y. 508.) If a discharge is granted, there is then no advantage accruing to the creditor by reason of the institution of his action, unless it be to liquidate his claim so that the amount may be proven under section 63 (5). He will have incurred the expense of his litigation to reap only this advantage, because under the provision of section 63, his costs incurred in the suit will not be a provable debt. But if the discharge is refused, then any judgment which he recovers will be a prior lien upon the subsequently acquired property of the bankrupt.

Under the act of 1867, which provided in the case of creditors. who did not prove their claims, only, that the courts should not allow the prosecuting of suits to judgment, it was held that the act did not in terms prohibit the commencement of a suit to enforce provable debts, and that therefore a court of bankruptcy might in its discretion refuse to enjoin the commencement or the prosecution of such action. (In re Ghiradelli, Fed. Cas. 5,376; 4 N. B. R. 164; s. c. I Saw. 343; and see Eyster v. Gaff, 91 U. S. 521.)