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AMEND THE BANKRUPTCY ACT

Thus, in Hendrir v. United States (219 U. S. 79), a statute giving special jurisdiction to a certain court was affected by the enactment of a subsequent statute giving such jurisdiction to another court. Trial was had, and the petitioner was convicted after the passage of the second statute, the proceeding having been pending at the time this statute was passed. He contended that his case should have been tried by the court designated in the second statute and the contention is cited that:

It is argued that when the jurisdiction of a cause depends upon a statute the repeal of the statute takes away the jurisdiction and causes pending at the time fall, unless saved by provision of the statute. Many cases are cited to support the proposition and other cases to sustain the view that, "if an act conferring jurisdiction is repealed, without reservation as to pending cases, they fall with it." The effect would have to be admitted if the imputed cause existed. Tho act of June 28, 1898, under which the change of venue was ordered, was not repealed. The conditions of its future application, of course, disappeared with the admission of the State into the Union, but what had been done before that time was not abrogated, nor was the statute repealed.

It was held that the second statute was prospective in operation and that the case was properly tried under the original statute.

In Fullerton v. Northern Pacific Ry. (266 U. S. 435, 1924), an action. was brought against the carrier for excess charges, the action being harred by the State statute of limitations but within the time limited by subsequent Federal statute which provided that periods of Federal control of railways should not be counted in computing time limits. It was held that such subsequent act cannot revive causes of action barred under State statute since it is not retroactive. Statutes must be considered prospective in operation unless the language is express or unless there is a necessary implication that they are to affect existing causes of action.

In Ellis v. United States (2 Fed. Supp. 224, 1932), it appeared that plaintiff brought action on a war-risk insurance policy alleging & "disagreement" (as to payment) entitling him to maintain an action. The type of disagreement alleged had been held sufficient as a matter of law before July 3, 1930, when the statute was enacted specifically defining a sufficient disagreement but was insufficient under the statute. It was held (this being dicta, of course) that had the action been brought before July 3, 1930, the court would have had jurisdiction of plaintiff's cause of action. However, the statute applied to all suits commenced after such a date, the court saying:

Where a change in a statute is made, such change applies to all suits thereafter commenced, unless an exception is made in any regard.

In re Schneider (203 Fed. 589, 1913), concerned the 1910 amendment to the Bankruptcy Act vesting the trustee with all powers of a judgment creditor. It was held that this amendment had no effect on rights vested under contracts made before its passage, citing Arctic Co. v. Armstrong (192 Fed. 114, 1911), in which it was held that this amendment would not be given retroactive effect (in the absence of specific intention shown) to divest rights fixed under the prior law. See also In re New Amsterdam Motor Co. (180 Fed. 943, 1910), where it was held that the amendments of 1910, in the absence of specific provision, have no retroactive effect.

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AMEND THE BANKRUPTCY ACT

7

In United States v. St. Louis, etc. Ry. Co. (270 U. S. 1 (1925)), it appeared that the plaintiff had rendered services to the Government for which payment was disallowed. By act of 1920 a 3-year limitation on such actions had been laid down. It was held that this provision did not apply to causes of action existing at the date of the act and that a subsequent statute of 1924, which specifically made the limitation application to causes of action, whenever accrued, did not apply to or control pending cases. This case undoubtedly involves matters of jurisdiction and procedure rather than substantive rights (being a question of limitation of actions).

Section 77B, as originally enacted, makes express provision that it shall apply to pending proceedings in bankruptcy. Subdivision (p) of section 77B provides that "proceedings under this section may be taken in proceedings in bankruptcy which are pending on the effective date of this amendatory act." Subdivision (i) expressly provides that it shall apply in case a receiver or trustee shall have been ap pointed "whether before or after this amendatory act takes effect."

APRIL 24 (calendar day, MAY 4), 1936.-Ordered to be printed

Mr. VAN NUYS, from the Committee on the Judiciary, submitted the

following

REPORT

[To accompany S. 4297]

The Committee on the Judiciary, to whom was referred the bill (S. 4297) which amends section 80 of the act of July 1, 1898, as amended, entitled "An act to establish a uniform system of bankruptcy throughout the United States", report the same back favorably to the Senate with amendments with the recommendation that, as so amended, it do pass.

The committee amendments are as follows:

Strike out the word "filing" in line 2 on page 2 and insert in lieu thereof the words "which file".

Strike out the comma after the word "section" in line 3 on page 2 and also the words "or to prevent the approval of a plan under this section for any such district in any case" and insert in lieu thereof the words "within one year after the date this paragraph takes effect and which prior to such date has filed a petition in bankruptcy".

This bill proposes to exempt for a period of 1 year drainage, levee, irrigation, and reclamation districts from the limitations of the general bankruptcy law which prohibits the filing of a second proceeding in bankruptcy within 6 years, provided such district has filed a petition in bankruptcy prior to the enactment hereof.

Shortly after the enactment of the Municipal Bankruptcy Act, approved May 24, 1934, several such districts filed petitions for refunding of their respective debts, without making applications for loans to the Reconstruction Finance Corporation for that purpose. The result in these instances was an adjustment as to maturity dates of their bonded or other obligations and a consequent reduction in interest rates.

Subsequently, the landowners in some of these districts through the directors of the districts and with the consent of a majority of the bondholders through their representatives have applied for loans

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AMEND THE BANKRUPTCY ACT

from the Reconstruction Finance Corporation with which to refinance their indebtedness, some of which applications have been approved. Without the benefit of the effect of proceedings under the amend ment of May 24, 1934, referred to, such districts cannot secure approval of the maximum required by the Reconstruction Finance Corporation for closing and disbursing these loans.

As amended the exemption proposed by this bill will not open the door to any abuses inasmuch as it is restricted to those districts which find themselves in the situation outlined above.

74TH CONGRESS 2d Session

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HOUSE OF REPRESENTATIVES

{

REPORT No. 3012

AMEND THE BANKRUPTCY ACT OF JULY 1, 1898, TO PREVENT LOSS OF ASSETS AND EXCESSIVE CHARGES IN CONNECTION WITH CERTAIN REORGANIZATIONS, COMPOSITIONS, AND EXTENSIONS, AND TO AID THE DISTRICT COURTS IN THE ADMINISTRATION THEREOF, AND FOR OTHER PURPOSES

JUNE 17, 1936.—Committed to the Committee of the Whole House on the state of the Union and ordered to be printed

Mr. CHANDLER, from the Committee on the Judiciary, submitted the following

REPORT

[To accompany H. R. 12064]

The Committee on the Judiciary, to whom was referred the bill (H. R. 12064) to amend the Bankruptcy Act by adding a section to be known as section 77c for the purpose of providing an administrative agency to aid the Federal courts in the administration of sections 74 and 77b of said Bankruptcy Act and thereby prevent losses of assets. and excessive charges in connection with corporate reorganizations, compositions, and extensions, having considered the same, report favorably to the House with the recommendation that the bill pass.

GENERAL STATEMENT

H. R. 12064 was prepared under the direction of the select committee appointed pursuant to House Resolution 412 of the Seventythird Congress, second session

to investigate the methods of organization, the activities and practices of realestate reorganization or bondholders' committees, or similar or other groups, by use of the mails or otherwise, to determine whether misrepresentation or unfairness has been practiced in acquiring or representing such securities, in assessing expenses against the bondholders and disposing of or managing the properties by such committees, trustees, receivers, or other persons against which the securities were issued as liens, and in the employment of attorneys or other persons, or in failing adequately to report to said security owners, and in what manner the rights and equities of bondholders and owners can be protected against undue and unjustified loss upon their investment.

In the performance of its work, the select committee held hearings in Washington, Chicago, Detroit, Boston, New York, Philadelphia, St. Louis, Milwaukee, San Francisco, and Los Angeles, examined a