31 to be benefited thereby had reasonable cause to believe the defendant was insolvent and in contemplation of bankruptcy, or (3) that such lien was sought and per- Through frand mitted in fraud of the provisions of this Act; or if the dissolution of such lien would militate against the best interests of the estate of such person the same shall not be dissolved, but the trustee of the estate of such person, Trustee subrefor the benefit of the estate, shall be subrogated to the rights of the holder of such lien and empowered to perfect and enforce the same in his name as trustee with like force and effect as such holder might have done had not bankruptcy proceedings intervened. gated. Liena not at fected by this d Liens given or accepted in good faith and not in contemplation of or in fraud upon this Act, and for a pres- act ent consideration, which have been recorded according to law, if record thereof was necessary in order to impart notice, shall not be affected by this Act. four months eto, vold. Property mains part of as e That all conveyances, transfers, assignments, or in- Conveyances, etc., subsequent cumbrances of his property, or any part thereof, made or to act and withgiven by a person adjudged a bankrupt under the provi-ion sions of this Act subsequent to the passage of this Act and within four months prior to the filing of the petition, with the intent and purpose on his part to hinder, delay, or defraud his creditors, or any of them, shall be To defraud, null and void as against the creditors of such debtor, except as to purchasers in good faith and for a present fair consideration; and all property of the debtor conveyed, transferred, assigned, or encumbered as aforesaid t shall, if he be adjudged a bankrupt, and the same is not exempt from execution and liability for debts by the law of his domicile, be and remain a part of the assets and estate of the bankrupt and shall pass to his said trustee, whose duty it shall be to recover and reclaim the same by legal proceedings or otherwise for the benefit of the creditors. And all conveyances, transfers, or incum-Conveyances brances of his property made by a debtor at any time months of petiwithin four months prior to the filing of the petition state law. against him, and while insolvent, which are held null and void as against the creditors of such debtor by the laws of the State, Territory, or District in which such property is situate, shall be deemed null and void under Vold under this this Act against the creditors of such debtor if he be adjudged a bankrupt, and such property shall pass to the assignee and be by him reclaimed and recovered for the benefit of the creditors of the bankrupt. within tion, vold under act. created through f That all levies, judgments, attachments, or other liens, obtained through legal proceedings against a per- legal proceed. son who is insolvent, at any time within four months inga prior to the filing of a petition in bankruptcy against him, shall be deemed null and void in case he is adjudged Vold, ta a bankrupt, and the property affected by the levy, judg ment, attachment, or other lien shall be deemed wholly 32 to trustee. Property pames discharged and released from the same, and shall pass to the trustee as a part of the estate of the bankrupt, unless the court shall, on due notice, order that the right under such levy, judgment, attachment, or other lien shall be preserved for the benefit of the estate; and thereupon the same may pass to and shall be preserved by the Court may or trustee for the benefit of the estate as aforesaid. And the der conveyance. Proviso. court may order such conveyance as shall be necessary to carry the purposes of this section into effect: Provided, That nothing herein contained shall have the effect to destroy or impair the title obtained by such levy, judgPurchaser for ment, attachment, or other lien, of a bona fide purchaser for value who shall have acquired the same without notice or reasonable cause for inquiry. value. counterclaims. Set-offs and SEC. 68. SET-OFFS AND COUNTERCLAIMS.—a In all cases of mutual debts or mutual credits between the estate of a bankrupt and a creditor the account shall be stated and one debt shall be set off against the other, and the balance only shall be allowed or paid. Not allowed. property. b A set-off or counterclaim shall not be allowed in favor of any debtor of the bankrupt which (1) is not provable against the estate; or (2) was purchased by or transferred to him after the filing of the petition, or within four months before such filing, with a view to such use and with knowledge or notice that such bankrupt was insolvent, or had committed an act of bankruptcy. Possession of SEC. 69. POSSESSION OF PROPERTY.-a A judge may, Seizure of bank upon satisfactory proof, by affidavit, that a bankrupt rupt's property. against whom an involuntary petition has been filed and give bond. is pending has committed an act of bankruptcy, or has neglected or is neglecting, or is about to so neglect his property that it has thereby deteriorated or is thereby deteriorating or is about thereby to deteriorate in value, issue a warrant to the marshal to seize and hold it subject to further orders. Before such warrant is issued the petireboners to tioners applying therefor shall enter into a bond in such an amount as the judge shall fix, with such sureties as he shall approve, conditioned to indemnify such bankrupt for such damages as he shall sustain in the event such seizure shall prove to have been wrongfully obtained. Release of prop- Such property shall be released, if such bankrupt shall give bond in a sum which shall be fixed by the judge, with such sureties as he shall approve, conditioned to turn over such property, or pay the value thereof in money to the trustee, in the event he is adjudged a bankrupt pursuant to such petition. erty. Title of prop erty to be in trustee SEC. 70. TITLE TO PROPERTY.- a The trustee of the estate of a bankrupt, upon his appointment and qualification, and his successor or successors, if he shall have one or more, upon his or their appointment and qualification, shall in turn be vested by operation of law with the title 33 Provise. Insurance poll of the bankrupt, as of the date he was adjudged a bankrupt, except in so far as it is to property which is exempt, Except, eta. to all (1) documents relating to his property; (2) interests in patents, patent rights, copyrights, and trademarks; (3) powers which he might have exercised for his own benefit, but not those which he might have exercised for some other person; (4) property transferred by him in fraud of his creditors; (5) property which prior to the filing of the petition he could by any means have transferred or which might have been levied upon and sold under judicial process against him: Provided, That when any bankrupt shall have any insurance policy which has a cash surrender value payable to himself, his estate, or personal representatives, he may, within thirty days after the cash surrender value has been ascertained and stated to the trustee by the company issuing the same, pay or secure to the trustee the sum so ascertained and stated, and continue to hold, own, and carry such policy free from the claims of the creditors participating in the distribution of his estate under the bankruptcy proceedings, otherwise the policy shall pass to the trustee as assets; and (6) rights of action arising upon contracts or from the unlawful taking or detention of, or injury to, his property. cies, etc. bankrupt estates. Sale. b All real and personal property belonging to bank- Appraisal of rupt estates shall be appraised by three disinterested appraisers; they shall be appointed by, and report to, the court. Real and personal property shall, when prac ticable, be sold subject to the approval of the court; it shall not be sold otherwise than subject to the approval of the court for less than seventy-five per centum of its appraised value. title. c The title to property of a bankrupt estate which has Conveyance of been sold, as herein provided, shall be conveyed to the purchaser by the trustee. discharge, etc., d Whenever a composition shall be set aside, or dis- Revocation of charge revoked, the trustee shall, upon his appointment title of estate in and qualification, be vested as herein provided with the trustee. title to all of the property of the bankrupt as of the date Date. of the final decree setting aside the composition or revoking the discharge. Avoidance of transfer by bank etry. e The trustee may avoid any transfer by the bankrupt of his property which any creditor of such bankrupt rupt of his propmight have avoided, and may recover the property so transferred, or its value, from the person to whom it was transferred, unless he was a bona fide holder for value prior to the date of the adjudication. Such property may Recovery of be recovered or its value collected from whoever may have received it, except a bona fide holder for value. f Upon the confirmation of a composition offered by a bankrupt, the title to his property shall thereupon revest or composition in him. property. Title revested on confirmation 34 Act to take ef fect on passage. Proviso. THE TIME WHEN THIS ACT SHALL GO INTO EFFECT. a This Act shall go into full force and effect upon its passage: Provided, however, That no petition for volunFiling of petitary bankruptcy shall be filed within one month of the tary bankruptcy. passage thereof, and no petition for involuntary bankInvoluntary. ruptcy shall be filed within four months of the passage tion for Pending Quaffected. thereof. deb Proceedings commenced under State insolvency laws before the passage of this Act shall not be affected by it. Approved, July 1, 1898. Bet, amendments, [PUBLIC-NO. 62.] AN ACT To amend an Act entitled "An Act to establish a uniform system of bankruptcy throughout the United States," approved July first, eighteen hundred and ninety-eight. Bankruptey Be it enacted by the Senate and House of RepresentaVOL 30, p. 544. tives of the United States of America in Congress assembled, That clause five of section two of said Act be, and the same is hereby, amended so as to read as follows: Bankruptcy "(5) Authorize the business of bankrupts to be conlow receivers, ducted for limited periods by receivers, the marshals, or for continuing trustees, if necessary in the best interests of the estates, Vol. 80, p. 546, and allow such officers additional compensation for such services, but not at a greater rate than in this Act allowed trustees for similar services;" courts may al etc., extra pay -business. Acts constitut ing bankruptcy. SEC. 2. That clause four, subdivision a, of section three Vol. 30, p. 546. of said Act, be, and the same is hereby, amended so as to read as follows: Applying for receiver, or prop "or (4) made a general assignment for the benefit of erty being in re his creditors, or, being insolvent, applied for a receiver ceiver's hands, 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." Involuntary bankrupts. SEC. 3. That subdivision b of section four of said Act Vol. 30, p. 547. be, and the same is hereby, amended so as to read as fol Mining pur. alta added. lows: "b Any natural person, except a wage-earner, or a person engaged chiefly in farming or the tillage of the soil, any unincorporated company, and any corporation engaged principally in manufacturing, trading, printing, publishing, mining, or mercantile pursuits, owing debts to the amount of one thousand dollars or over, may be adjudged an involuntary bankrupt upon default or an impartial trial, and shall be subject to the provisions and entitled to the benefits of this Act. Private bankers, but not national banks or banks incorporated under State or Territorial laws, may be adjudged involuntary bankrupts. 55TH CONGRESS, HOUSE OF REPRESENTATIVES. 2d Session. { UNIFORM SYSTEM OF BANKRUPTCY. REPORT DECEMBER 16, 1897.-Referred to the House Calendar and ordered to be printed. Mr. HENDERSON, from the Committee on the Judiciary, submitted the following REPORT. [To accompany S. 1035.] The Committee on the Judiciary, to which was referred Senate bill 1035, has had the same under consideration,, and respectfully recom mends that all after the enacting clause of said bill be stricken out and in lieu thereof recommends the following: CHAPTER I.-Bankrupts. SECTION 1. Meaning of words and phrases.-a The words and phrases used in this act and in proceedings pursuant hereto shall, unless the same be inconsistent with the context, be construed as follows: (1) "A person against whom a petition has been filed" shall include a person who has filed a voluntary petition; (2) "adjudication" shall mean the date of the entry of a decree that the defendant, in a bankruptcy proceeding, is a bankrupt, or if such decree is appealed from, then the date when such decree is finally confirmed; (3) "appellate courts" shall include the circuit courts of appeals of the United States, the supreme courts of the Territories, and the Supreme Court of the United States; (4) "bankrupt" shall include a person against whom an involuntary petition or an application to set a composition aside or to revoke a discharge has been filed, or who has filed a voluntary petition, or who has been adjudged a bankrupt; (5) "clerk" shall mean the clerk of a court of bankruptcy; (6) "corporations" shall mean all bodies having any of the powers and privileges of private corporations not possessed by individuals or partnerships; (7) "court" shall mean the court of bank ruptcy in which the proceedings are pending and may include the referee; (8) "courts of bankruptcy" shall include the district courts of the United States and of the Territories, the supreme court of the District of Columbia, and the United States court of the Indian Territory and of Alaska; (9) "creditor" shall include anyone who owns a demand or claim provable in bankruptcy and his duly authorized agent, attor ney, or proxy; (10) "date of bankruptcy," or "time of bankruptcy," or |