668

Inconsistent laws repealed.

Effective after three months from approval.

SIXTY-NINTH CONGRESS. SESS. I. CHS. 406, 409, 410. 1926.

tory Act are not applicable, such proceedings shall be disposed of conformably to the provisions of said Act approved July 1, 1898, and the Acts amendatory thereof and supplementary thereto.

SEC. 19. All Acts or parts of Acts inconsistent with any provisions of this Act are hereby repealed.

SEC. 20. This Act shall take effect and be in force on and after three months from the date of its approval. Approved, May 27, 1926.

Mr. WALSH. from the Committee on the Judiciary, submitted the

following

REPORT

[To accompany S. 1039]

The Committee on the Judiciary, to whom was referred the bill (S. 1039) to amend an act entitled "An act to establish a uniform system of bankruptcy throughout the United States," approved July 1, 1893, and acts amendatory thereof and supplementary thereto, having considered the same, report favorably thereon with the recommendation that the bill do pass with certain minor amendments, correcting errors in the bill as printed and specified, as follows: On page 1, line 3, after the word "section," strike out "15" and insert in lieu thereof "14," and in the same line after "24," insert "c." On page 3, in line 6, after the word "ascertained," insert the word "or," and on the same page, line 9, after the word "person," insert the word "or"; in line 22, page 3, insert. preceding the letter "c," the words "Sec. 24."

The changes in the existing law as provided for in S. 1039 are set forth in Report No. 774. on Senate bill 1649, Sixty-eighth Congress, first session, which is herewith submitted and made a part of this report, as follows:

Senate Report No. 744, Sixty-eighth Congress, first session

AMENDMENT OF THE NATIONAL BANKRUPTCY ACT

JUNE 3 (calendar day, JUNE 5), 1924.-Ordered to be printed

Mr. WALSH of Montana, from the Committee on the Judiciary, submitted the following

REPORT

To accompany S. 1649]

The Committee on the Judiciary, to which was referred the bill (S. 1649) to amend an act entitled "An act to establish a uniform system of bankruptcy throughout the United States." approved July 1, 1898, and acts amendatory thereof and supplementary thereto, having considered the same, report favorably thereon with the recommendation that the bill do pass with certain amendments, correcting errors in the bill as introduced and as hereinafter specified.

That said bill as reported, with said errors corrected, is as follows:

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 3 (a), section 14 (b), section 24, section 25 (a), section 29 (a), (b), and (d), section 57 (n), section 60 (a), and section 64 (a) and (b) of an act entitied "An act to establish a uniform system of bankruptcy throughout the United States," approved July 1, 1898, and acts amendatory thereof and supplementary thereto, be, and the same are hereby, amended and supplemented as follows:

"SEC. 3. (a) Acts of bankruptcy by a person shall consist of his having (1) conveyed, transferred, concealed, or removed, or permitted to be concealed or removed, any part of his property, with intent to hinder, delay, or defraud his creditors, or any of them: or (2) transferred, while insolvent, any portion of his property to one or more of his creditors with intent to prefer such creditors over his other creditors; or (3) suffered or permitted, while insolvent, any creditor to obtain a preference through legal proceedings, and not having at least five days before a sale or final disposition of any property affected by such preference vacated or discharged such preference; or (4) suffered or permitted, while insolvent any creditor to obtain through legal proceedings any levy, attachment, judgment, or other lien, and not having vacated or discharged the same at least five days before the expiration of four inonths from the date of obtaining such levy, attachment, judgment, or other lien; or (5) made a general assignment for the benefit of his creditors; or, bei: z insolvent, applied for a receiver or trustee for his property or because of insolvency, a receiver or trustee has been put in charge of his property under the laws of a State, of a Territory, or of the United States; or (6) admittel in writing his inability to pay his debts and his willingness to be adjudged a bankrupt on that ground.

AMENDMENT OF NATIONAL BANKRUPTCY ACT

"SEC. 14 (b) The judge shall hear the application for a discharge and such proof and pleas as may be made in opposition thereto by the trustee or other parties in interest, at such time as will give the trustee or parties in interest a reasonable opportunity to be fully heard, and investigate the merits of the application and discharge the applicant unless he has (1) committed an offense punishable by imprisonment as herein provided; or (2) with intent to conceal his financial condition, destroyed, concealed, or failed to keep books of account or records from which such condition might be ascertained; or (3) obtained money or property on credit upon a materially false statement in writing, made by him to any person or his representative for the purpose of obtaining credit from such person; or (4) at any time subsequent to the first day of the twelve months immediately preceding the filing of the petition transferred, removed, destroyed, or concealed, or permitted to be removed, destroyed, or concealed any of his property with intent to hinder, delay, or defraud his creditors; or (5) has been granted a discharge in bankruptcy within six years; or (6) in the course of the proceedings in bankruptcy refused to obey any lawful order of or to answer any material question approved by the court: Provided, That a trustee shall not interpose objections to a bankrupt's discharge until he shall be authorized so to do at a meeting of creditors called for that purpose.

"SEC. 24. (c) Appeals and reviews under this section shall be taken within thirty days after the judgment or order or other matter complained of has been rendered or entered.

"SEC. 25. (a) Appeals, as in equity cases, may be taken in bankruptcy proceedings from the courts of bankruptcy to the Circuit Court of Appeals of the United States and to the supreme courts of the Territories in the following cases, to wit: (1) From a judgment adjudging or refusing to adjudge the defendant a bankrupt; (2) from a judgment granting or denying a discharge; and (3) from a judgment allowing or rejecting a debt or claim of $500 or over. Such appeal shall be taken within thirty days after the judgment appealed from has been rendered, and may be heard and determined by the appellate court in term or vacation, as the case may be.

"SEC. 29. (a) A person shall be punished, by imprisonment for a period not to exceed five years, upon conviction of the offense of having knowingly and fraudu lently appropriated to his own use, embezzled, spent, or unlawfully transferred any property or secreted or destroyed any document belonging to a bankrupt estate which came into his charge as trustee, receiver, custodian, or other officer

of the court.

"(b) A person shall be punished, by imprisonment for a period not to exceed two years, upon conviction of the offense of having knowingly and fraudulently (1) concealed any property belonging to the estate of a bankrupt; or (2) made a false oath or account in, or in relation to, any proceeding in bankruptcy; (3) presented under oath any false claim for proof against the estate of a bankrupt, or used any such claim in composition personally, or by agent, proxy, or attorney, or as agent, proxy, or attorney, or (4) received any inaterial amount of property from a bankrupt after the filing of the petition, with intent to defeat this act; or (5) extorted or attempted to extort any money or property from any person as a consideration for acting or forbearing to act in bankruptcy proceedings.

“(d) A person shall not be prosecuted for any offense arising under this act unless the indictment is found or the information is filed in court within three years after the commission of the offense, except where he has been absent from the jurisdiction of the court, in which case the time during which such person has been so absent shall not be a part of the period of limitation prescribed herein. "SEC. 57. (n) Claims shall not be proved against a bankrupt estate subse quent to six months after the adjudication; or if they are liquidated by litigation and the final judgment therein is rendered within thirty days before or after the expiration of such time, then within sixty days after the rendition of such judg ment: Provided, That the right of infants and insane persons without guardians, without notice of the proceedings, may continue six months longer.

“Sec. 60. (a) A person shall be deemed to have given a preference if, being insolvent, he has, within four months before the filing of the petition, or after the filing of the petition and before the adjudication, procured or suffered a judgment to be entered against himself in favor of any person, or made a transfer of any of his property, and the effect of the enforcement of such judgment or transfer will be to enable any one of his creditors to obtain a greater percentage of debt than any other of such creditors of the same class. Where the preference consists in a transfer, such periods of four months shail not expire until four mouths after

the date of recording or registering of the transfer, if by law such recording or registering is required or permitted.

"SEC. 61. (a) The court shall order the trustee to pay all taxes legally due and owing by the bankrupt to the United States, State, county, district, or municipality, in the order of priority as set forth in paragraph (b) hereof: Provided, That no order shall be made for the payment of a tax assessed against real estate of a bankrupt in excess of the value of the interest of the bankrupt estate therein as determined by the court.

"Upon filing the receipts of the proper public officers for such payments, the trustee shall be credited with the amounts thereof, and in case any question arises as to the amount or legality of such tax the same shall be heard and determined by the court.

"(b) The debts to have priority, in advance of the payment of dividends to creditors, and to be paid in full out of bankrupt estates, and the order of payment shall be (1) the actual and necessary cost of preserving the estate subsequent to filing the petition; (2) the filing fees paid by creditors in involuntary cases, and, where property of the bankrupt, transferred or concealed by him either before or after the filing of the petition, shall have been recovered for the benefit of the estate of the bankrupt by the efforts and at the expense of one or more creditors, the reasonable expenses of such recovery; (3) the cost of administration, including the fee and mileage payable to witnesses as now or hereafter provided by the laws f the United States, and one reasonable attorney's fee, for the professional serves actually rendered, irrespective of the number of attorneys employed, to the petitioning creditors in involuntary cases while performing the duties herein prescribed, and to the bankrupt in voluntary and involuntary cases, as the court may allow; (4) where the confirmation of composition terms has been refused or set aside upon the objection and through the efforts and at the expense of one or more creditors, in the discretion of the court, the reasonable expenses of such creditor or creditors; (5) taxes payable under paragraph (a) hereof; (6) wages due to workmen, clerks, traveling or city salesnien, or servants which have been earned within three months before the date of the commencement of proceedings, not to exceed $300 to each claimant; and (7) debts owing to any person who by the laws of the States or the United States is entitled to priority.

SEC. 2. Nothing herein shall have the effect to release or extinguish any penalty, forfeiture, or liability incurred under any act or acts of which this act is amendatory.

SEC. 3. That all parts of acts inconsistent herewith be, and the same are hereby, repealed.

SEC. 4. This act shall take effect and be in force on and after the expiration of three months from the date of its passage and approval.

STATEMENT

The changes in the national bankruptcy act (act of July 1, 1898, 30 Stat. 544), as amended and proposed by this bill are as follows: The bill amends the following sections and subsections, to wit, section 3 (a), section 14 (b), section 24, section 25 (a), section 29 (a), (b), and (d), section 57 (n), section 60 (a), and section 64 (a) and (b). Errors in bill as introduced corrected in this report: In the bill as introduced section 24 (a) and 24 (b) on pages 3 and 4 are reenactments of the original act, but as their reenactment in this amendatory bill might by implication repeal the acts of January 28, 1915 138 Stat. 804), and September 6, 1916 (39 Stat. 727), which acts are amendments to the Judicial Code, the error in reenacting these two sections has been corrected in the bill as reported. On page 3, line 9, of the bill as introduced the word "or" at the commencement of the sentence should be "to," while in section 64 (b), page 8, line 13, the words "and involuntary" have been added immediately after the word "voluntary," having been unintentionally omitted from the original draft of the bill as introduced.