Petitions for involuntary bankruptcy may be filed against any natural person except a wage-earner or a person engaged chiefly in farming or the tillage of the soil, any unincorporated company, private bankers, but not national banks nor banks incorporated under the State or Territorial laws, and any corporation engaged principally in manufacturing, trading, printing, publishing, or mercantile pursuits, owing debts to the amount of $1,000 or over." "A partnership, during the continuation of the partnership business, or after its dissolution and before the final settlement thereof, may be adjudged a bankrupt," in either voluntary or involuntary proceedings. tic, and the acts of bankruptcy had been committed before the insanity, the court held that it would be premature to determine, before the appointment of a guardian ad litem, whether the lunatic could be adjudged an involuntary bankrupt. A guardian ad litem was appointed accordingly. 530 St. at L. 544, 547, § 4 A person engaged in raising hogs or cattle for sale is engaged in farming within the meaning of the statute. In re Thompson, 102 Fed. R. 287. See In re Taylor (C. C. A.), 102 Fed. R. 728. The statute does not protect a man who engages in farming after the abandonment of a business in which he had committed an act of bankruptcy. In re Luckhardt, 101 Fed. R. 807. An association claiming to act as a corporation, but which has not been legally incorporated, can be forced into involuntary bankruptcy. Davis v. Stevens, 104 Fed. R. 235. It has been held: that a corporation which maintains a private hospital where patients are treated with an antiseptic vapor prepared on the premises can be declared a bankrupt. In re San Gabriel Sanitarium, 95 Fed. R. 271. That involuntary bankruptcy cannot be adjudicated against a corporation engaged solely in giving theatrical performances, In re Oriental Society, 104 Fed. R. 975; a water company supplying 996 water for municipal and domestic use in return for fixed rentals, In re N. Y. & W. Water Co., 98 Fed. R. 711; and an incorporated mutual fire insurance company which pays losses out of the proceeds of assessments on its members. In re Cameron Town M. Fire, L. & Windstorm Ins. Co., 96 Fed. R. 756. As to a corporation which issues policies of insurance for the profit of its stockholders, see In re Merchants' Ins. Co., 3 Biss. 162. Nor a mining company, although it sells the products of its mines. In re Elk Park Min. & Mill Co., 101 Fed. R. 422; In re Rollins Gold & S. Min. Co., 102 Fed. R. 982; In re Chicago-Joplin Lead & Zinc Co., 104 Fed. R. 67; In re Woodside Coal Co., 105 Fed. R. 56. 630 St. at L. 544, 547, § 5; In re Levy, 95 Fed. R. 812. 7 In re Hirsch, 97 Fed. R. 571. 8 In re Meyer (C. C. A.), 98 Fed. R. 976; Bank v. Meyer, 92 Fed. R. 896; Mather v. Coe, 92 Fed. R. 333. "We are of the opinion that it is the scheme of these provisions to treat the partnership as an entity which may be adjudged a bankrupt by voluntary or involuntary proceedings irrespective of any adjudication of the individual partners as bankrupt, and upon an adjudication to draw to the administration the individual estates of the partners as well as the partnership estate, and marshal and distribute them according to equity. "Three or more creditors who have provable claims against any person which amount in the aggregate, in excess of the value of securities held by them, if any, to five hundred dollars or over; or if all of the creditors of such person are less than twelve in number, then one of such creditors whose claim equals such amount, may file a petition to have him adjudged a bankrupt." It has been held that a man's wife may join in the petition if she is otherwise qualified.10 A creditor of a partnership can join in a petition for involuntary bankruptcy against one of the partners individually." It has been held that by assenting to an insolvent assignment," and by accepting dividends from The assets of the individual estates and the debts provable against them can be ascertained without adjudicating the individual partners bankrupt. The language does not require such an adjudication. The section is silent respecting a discharge of the partners individually. It does not, by terms or by implication, preclude an adjudication of the individual partners as bankrupt in the part nership proceeding; and, if there is such an adjudication, there is nothing to prevent the partners from receiving a discharge individually, if they are otherwise entitled to it under the act. But, as the commission of an act of bankruptcy is in dispensable to jurisdiction in an involuntary proceeding, the individual members cannot be adjudged bank rupts in such a proceeding who have not committed, or been participants in committing, one of the enumerated acts." Wallace, J., In re Meyer (C. C. A.), 98 Fed. R. 976, 979. The death of one of the partners will not prevent the adjudication of the bankruptcy of the firm, provided, at least, that possession of assets can be obtained from his administrator without force. In re Pierce, 102 Fed. R. 977. "The court may permit the proof of the claim of the partnership estate against the individual estates, and vice versa, and may marshal the assets of the partnership estate and individual estates so as to prevent preferences and secure the equitable distribution of the property of the several estates." 30 St. at L. 544, 548, § 5g. Where judgments against a firm, in favor of certain of its creditors, were bought up by one of the partners, who took assignments of the judgments to himself, it was held that he thereby became a creditor of each of his copartners for their respective shares of the money advanced by him in purchasing the judgments, and was entitled to prove a claim for such share against the individual estate of one of the copartners in bankruptcy. In re Carmichael, 96 Fed. R. 594. A solvent partner upon the bankruptcy of his associate is a creditor to the extent of any balance that would be due him upon an accounting, and may prove such a claim. In re Stevens, 104 Fed. R. 323. 930 St. at L. 544, 561, § 59. It has been held that a creditor whose claim is unliquidated and has not been reduced to judgment, In re Brinckman, 103 Fed. R. 965; and a creditor who has received a preference, which he does not surrender, cannot institute the proceedings. In re Gillette, 104 Fed. R. 769. But see In re Miller, 104 Fed. R. 764. 10 In re Novak, 101 Fed. R. 800. 11 In re Mercur, 95 Fed. R. 634. 12 In re Romanow, 92 Fed. R. 510. 13 the assignee, a creditor is estopped from filing a petition for an involuntary bankruptcy because of such an assignment. 14 After a petition in involuntary bankruptcy has been filed, other creditors may intervene and join in the petition, even if the original petitioners have done nothing after the return of the subpoena indorsed "not found" and the period of four months since the commission of the acts of bankruptcy therein alleged has expired.15 It has been held that when the petition alleges that a creditor has obtained an unlawful preference, he may be allowed to intervene and defend.16 An intervention may be allowed to a person such as the trustee of another bankrupt who claims an interest in the assets; " but it has been held that unless he intervenes, a claimant to property held by the trustee cannot upon a motion, accompanied by a special appearance, have it returned to him; 18 and that the court can 13 Simonson v. Sinsheimer (C. C. A.), 95 Fed. R. 948. It has been held that creditors are not estopped by filing their claims with the assignee while in ignorance of facts tending to show that the assignment was fraudulent. In re Curtis (C. C. A.), 94 Fed. R. 630. Nor by their submission to the assignee, at his request, of an unverified statement of their claims. Simonson v. Sinsheimer, 100 Fed. R. 426. Nor by delaying the institution of proceedings in bankruptcy for about two months at the request of the defendant who represented that he was about to offer a composition to his creditors. Ibid. Nor by the endorsement of their attorneys under peculiar circumstances of the word "seen " upon an order of the State court for the sale of the property assigned. Ibid. Nor by selling goods to the assignee. Ibid., 96 Fed. R. 579. Nor appearing in the State court for the purpose of preventing a distribution of the insolvent estate until the time arrived at which proceedings in bankruptcy could be instituted. Leidigh Carriage Co. v. Stengel (C. C. A.), 95 Fed. R. 637. Nor by attacking in a State court certain preferences in the as signment. Ibid. Nor by joining with the insolvent and his assignee in a petition to the State court for a decree authorizing the conveyance of land to the creditor in part payment of his claim on the promise that he should receive a bond to indemnify him in case he should be required to pay back for the benefit of other creditors part of the proceeds of the land, which bond was never given. In re Curtis (C. C. A.), 94 Fed. R. 630. Nor by prosecuting an action in the State court for the recovery of a debt. In re Henderson, 10 Fed. R. Under the Act of 1867, it was held that a secured creditor by joining in a petition for involuntary bankruptcy represented himself to be insecured and waived or abandoned his security. In re Bear, 5 Fed. R. 53. 385. 14 In re John A. Etheridge Furniture Co., 92 Fed. R. 329. Cf. Neustadter v. Chicago Dry Goods Co., 96 Fed. R. 830. 15 In re Stein (C. C. A.), 105 Fed. R. 749. 16 Goldman v. Smith, 93 Fed. R. 182. 17 Fisher v. Cushman (C. C. A.), 103 Fed. R. 860. 18 In re Bender, 106 Fed. R. 873. not compel creditors to join in a petition," and is not required to notify those who have not joined of a dismissal of the petition for an insufficiency of petitioners." "The death or insanity of the bankrupt shall not abate the proceedings, but the same shall be conducted and concluded in the same manner, so far as possible, as though he had not died or become insane: Provided, that in case of death the widow and children shall be entitled to all rights of dower and allowance fixed by the laws of the State of the bankrupt's residence." 21 § 476. Acts of bankruptcy.-" (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) made a general assignment for the benefit of his creditors; or (5) admitted in writing his inability to pay his debts and his willingness to be adjudged a bankrupt on that ground. "(b) A petition may be filed against a person who is insolvent and who has committed an act of bankruptcy within four months after the commission of such act. Such time shall not expire until four months after (1) the date of the recording or registering of the transfer or assignment when the act consists in having made a transfer of any of his property with intent to hinder, delay, or defraud his creditors or for the purpose of giving a preference as herein before provided, or a general assignment for the benefit of his creditors, if by law such recording or registering is required or permitted, or, if it is not, from the date when the beneficiary takes notorious, exclusive, or continuous possession of the property, unless the petitioning creditors have received actual notice of such transfer or assignment. "(e) It shall be a complete defense to any proceedings in bank19 In re Gillette, 104 Fed. R. 769. 21 30 St. at L 544, 549, § & 20 Ibid. ruptcy instituted under the first subdivision of this section to allege and prove that the party proceeded against was not insolvent as defined in this act at the time of the filing of the petition against him, and if solvency at such date is proved by the alleged bankrupt the proceedings shall be dismissed, and under said subdivision 1 the burden of proving solvency shall be on the alleged bankrupt." (1) A fraudulent transfer, conveyance, concealment or removal of property is an act of bankruptcy, irrespective of the insolvency of its maker. It was held under the bankruptcy act of 1867, that the intent specified in the statute means an actual design in the mind which must be proved as a question of fact;3 that the intent must be determined by looking at what the debtor says and does, and the effect of the same; that the fraud or innocence of the person to whom the transfer is made is immaterial; that where the debtor gave a fictitious note and procured an attachment on the same for the purpose of preventing an attachment by an actual creditor, a fraud was committed although his real object was to use the money to pay other creditors; that where an insolvent firm was dissolved and the assets transferred to one of the partners, who executed a mortgage upon the same to secure a separate debt, there was a conveyance to hinder and delay creditors; but that a conveyance by a debtor whose property exceeded in value all that he owed, in consideration of an agreement that the grantee should pay his debts and support him during the residue of his days, was not per se fraudulent. The present statute says that "concealed' shall include secrete, falsify § 476. 130 St. at L. 544, 546, 547, § 3. 2 In re Randall & Sunderland, Deady, 557; In re Nickodemus, 3 N. B. R. 230; West Co. v. Lea, 174 U. S. 590. It has been held that concealment of property differs from a transfer of property, in that the latter is final and complete when once accomplished, while the former is continuous. So if an insolvent conceals his property with intent to hinder, delay or defraud his creditors, more than six months thereafter, while the concealment exists, his creditors may file a petition against the debtor. Citizens' Bank of Salem v. De Pauw 3 In re Drummond, 1 N. B. R. 596; Perry v. Langley, 2 N. B. R. 231; In re Goldsmith, 3 N. B. R. 165. 4 Ecfort v. Greeley, 6 N. B. R. 433. 5 In re Drummond, 1 N. B. R. 596. So held under the present law. In re Rome Planing Mill, 96 Fed. R. 812. 6 In re Williams & Co., 1 Lowell, 406. 7 In re Waite, 1 Lowell, 207. 8 In re Cornwall, 9 Blatchf. 114; s. C., 6 N. B. R. 305. |