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Exempting Encumbered Articles.

2 Minn. 89; in re Wright, Fed. Cas. 18,067; 8 N. B. R. 430; to the contrary, O'Donnell v. Segar, 25 Mich. 367; in re Henkel, 2 N. B. R. 546; Fed. Cas. 6,361; s. c. 2 Saw. 305; Randall v. Buffington, 10 Cal. 491, and see Comstock v. Bechtel, supra.)

Exemption of Property Subject to a Lien Dissolved by Adjudication of Bankruptcy. It has been held that where property of a bankrupt has been made subject to a lien obtained pursuant to an action, which lien is dissolved by the adjudication of bankruptcy, and such property has been sold before the dissolution of the lien, the bankrupt is entitled to the same exemption out of the proceeds as he would have had in the property. (In re Ellis, Fed. Cas. 4,400; I N. B. R. 154.) But the adjudication of bankruptcy ought in no way to affect the lien if it was on exempt property only.

Rights Fixed by Petition.-Under the Act of 1867 the rights of a bankrupt as to exemptions are fixed by the laws existing at the time of the filing of the petition. Any change in the laws, or even a change of residence, will in no way affect his rights. (Compare in re Kerr, 9 N. B. R. 566; Fed. Cas. 7,729; in re Dillard, 9 N. B. R. 8; Fed. Cas. 3,912.) The exemptions must thus be allowed by the laws of the State of his residence (if he has been a resident the greater part of six months), not by the laws of the State where the property is located. (In re Stevens, 5 N. B. R. 298; Fed. Cas. 13,392; s. c. 2 Biss. 373.) But as the title to a bankrupt's property does not now vest in the trustee till adjudication, it would seem as if, in case the bankrupt had in good faith acquired exempt property between the filing of the petition and the adjudication, he might claim it as exempt. The filing of the petition determines merely what law shall apply; it does not affect the title. (Compare section 70a.)

Exempting Encumbered Articles.-As it is universally admitted that exemption laws should be liberally construed so as to make generous provision for the unfortunate debtor, if a bankrupt owns

Right of Exemption is Personal to Bankrupts—The State Laws. [Ch. III. property which is unencumbered and which may be exempt by the laws of his State, then such property should be set apart to him. Encumbered property may be set apart, but only when there is no other, and the exemption of the latter class of property does not destroy liens; the bankrupt merely receives the articles so set apart, subject to the liens. (In re Rupp, Fed. Cas. 12,141; 4 N. B. R. 95.)

Right of Exemption is Personal to Bankrupts.-The bankrupt or his family alone can claim the right of exemption. If they do not claim it, a mortgagee of exempt property cannot assert it, unless the exemption is waived in or by the mortgage. (Edmondson v. Hyde. Fed. Cas. 4,285; 7 N. B. R. 1; s. c. 2 Saw. 205.) The wife and children of a bankrupt may claim the exemption, the law being intended as much to protect them as the husband; thus the husband cannot deprive the family of the right to an exempt homestead merely by absconding, so long as he leaves his family in it. (In re Pratt, 7 Pac. L. R. 202.) The bankrupt may claim his exemption through his attorney or agent. (Wilson v. McElroy, 32 Pa. St. 82; Regan v. Zeeb, 28 Ohio St. 483.)

The State Laws.-As has been said the bankruptcy act does not enact that any new exemption shall be allowed a bankrupt. It merely provides that the allowance of those prescribed by State laws shall not be affected, hence the statutes of the State of residence of a bankrupt must be studied in each case and followed; and not only is the statutory law of the State to be recognized and followed, by the courts of bankruptcy and the trustee in bankruptcy in setting apart such exemptions, but the decisions of the courts of those States as to the meaning and construction. of their respective laws are also to be followed. (Goodall . Tuttle, Fed. Cas. 5,533: 7 N. B. R. 193.) It is an established and well-recognized principle that when a legislature adopts a statute of another State, it is presumed to have adopted the judicial construction given thereto. (Sedgwick on Stat. and Con. Law. 428-431; Goodall v. Tuttle, supra.)

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SEC. 7. Duties of Bankrupts.—a The bankrupt shall (1) attend the first meeting of his creditors, if directed by the court or a judge thereof to do so, and the hearing upon his application for a discharge, if filed; (2) comply with all lawful orders of the court; (3) examine the correctness of all proofs of claims filed against his estate; (4) execute and deliver such papers as shall be ordered by the court; (5) execute to his trustee transfers of all his property in foreign countries; (6) immediately inform his trustee of any attempt, by his creditors or other persons, to evade the provisions of this act, coming to his knowledge; (7) in case of any person having to his knowledge proved a false claim against his estate, disclose that fact immediately to his trustee; (8) prepare, make oath to, and file in court within ten days, unless further time is granted, after the adjudication, if an involuntary bankrupt, and with the petition if a voluntary bankrupt, a schedule of his property, showing the amount and kind of property, the location thereof, its money value in detail, and a list of his creditors, showing their residences, if known, if unknown, that fact to be stated, the amounts due each of them, the consideration thereof, the security held by them, if any, and a claim for such exemptions as he may be entitled to, all in triplicate, one copy of each for the clerk, one for the referee, and one for the trustee; and (9) when present at the first meeting of his creditors, and at such other times as the court shall order, submit to an examination concerning the conducting of his business, the cause of his bankruptcy, his dealings with his creditors and other persons, the amount, kind, and whereabouts of his property, and, in addition, all matters which may affect the administration and settlement of his estate; but no testimony given by him shall be offered in evidence against him in any criminal proceeding.

Provided, however, That he shall not be required to attend a meeting of his creditors, or at or for an examination at a place more than one hundred and fifty miles distant from his home or principal place of business, or to examine claims except when presented to him, unless ordered by the court, or a judge thereof, for cause shown, and the bankrupt shall be paid his actual expenses from the estate when examined or required to attend at any place other than the city, town, or village of his residence.

Analogous Provisions of Former Acts,-As to duty to obey orders and execute necessary papers: R. S. section 5104; act of 1867, section 26; act of 1800,

Duty to Attend Meetings, etc.— Executing Necessary Papers.

[Ch. III. sections 21, 33. As to executing transfers: R. S. section 5051; act of 1867, section 14. As to voluntary bankrupt's duty to file schedule: R. S section 5014; act of 1867, section II. As to involuntary bankrupt's duty to file schedule: R. S. section 5030; act of 1867, section 42; amended, act of July 27, 1868, ch. 258; section 2. As to contents of schedule: R. S. section 5015; act of 1867, section 11; act of 1841, section 1; also, R. S. section 5016; act of 1867, section II. As to verification: R. S. section 5017; act of 1867; section II. As to amendment of schedules: R. S. section 5020; act of 1867, section 26. As to examination of bankrupt: R. S. section 5086; act of 1867, section 26; act of 1841, section 4; act of 1800, sections 18, 23, 52. As to provisions analogous to the matters mentioned in the other subdivisions, consult "Analogous Provisions," under the sections cross-referenced to those subdivisions.

Duty to Attend Meetings. Section 7a (1)—Compare section 55 as to Meetings of Creditors.

Duty to Obey Orders of the Court. Section 7a (2)—The moment a person voluntarily files a petition in bankruptcy he submits himself personally to the jurisdiction of the court and becomes bound to obey its orders and directions, even before adjudication. (In re Harris, 3 N. Y. Leg. Obs. 152.) By section I (4) the term "bankrupt" includes a person against whom an involuntary petition has been filed, and a bankrupt, even before adjudication, is subject to the orders of the court. (In re Bromley, 3 N. B. R. 686.) Disobedience to the order of the court is punishable as a contempt. For the practice in punishing contempts before referees, see section 41, and see as to general power to punish for contempt, section 2 ante, and note on that subject.

Duty to Examine Claims. Section 7a (3)-Compare section 57 on Proof and Allowance of Claims and G. O. 21.

Executing Necessary Papers. Section 7a (4)-Although the trustee becomes vested by law, without any formal assignment, with title to the bankrupt's property including his rights of action, frequently it is necessary or advisable that there should be a record for filing. Any paper which the court thus deems necessary or advisable, it may order the bankrupt to execute; for instance, he may be required to execute such papers as will enable the trustee to be admitted to prosecute in his own name a suit pend

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ing in a State court, under the power conferred on him by section II; and the court may enjoin the bankrupt from prosecuting such action or taking any steps therein. (Samson v. Burton, 5 Ben. 325; Fed. Cas. 12,285; s. c. 4 N. B. R. 1; in re Clark, 4 Ben. 88; Fed. Cas. 2,798; s. c. 3 N. B. R. 491.)

So the court may order the bankrupt to execute an assignment of a license (In re Fisher, 3 Am. B. R. 406; 98 Fed. 89), or to assign his interest in an insurance policy. (In re Diack, 3 Am. B. R. 723; 100 Fed. 770.)

Executing Transfers. Section 7a (5)-Compare "Foreign Bankruptcies," section 17, as to title of the trustee to property in foreign countries.

Duty to Inform Trustee of Evasion of Act or Proof of False Claim. Section 7a (6) (7)-Compare section 29 post as to Crimes Against the Act.

Schedule to be Filed. Section 7a (8).—The filing of a schedule, if neglected, may be ordered by the court; and disobedience to the order will be punished as a contempt. The provisions of section 39 (6), that the referee shall prepare and file the schedules when the bankrupt neglects to do so, imposes upon that officer that duty, only in those cases where the bankrupt cannot be compelled personally to do it. The Supreme Court of the United States, pursuant to section 30, has prepared a form for schedules which is very complete and which renders it unnecessary to dwell upon the details, (see Form No. 1). G. O. 5 provides that all petitions and schedules shall be written or printed plainly without interlineation or abreviation, except for purpose of reference. G. O. 9 provides that in case of involuntary bankruptcy in which the bankrupt is absent or cannot be found, it shall be the duty of the petitioning creditor to file within five days of the date of adjudication a schedule giving names and places of residence of all creditors of the bankrupt according to the best information of such creditor. If the debtor is found and is served with notice to furnish a schedule of creditors and fails to do so, the petition

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