But such creditors, if they have assented to the arrangement, cannot complain, and the separate creditors, being benefited, have no equity.1

It is not so universally admitted that the partners may not assign their separate property to pay the debts of the firm.2 The reason for the decisions in favor of such an assignment is that the several partners are bound for the debts of the firm, and in the absence of a bankrupt law, or of bankruptcy proceedings, the partners may pay their debts in such order as they please.

In the absence of express stipulations to the contrary, the courts will construe the assignment as intended to marshal the assets according to the usual rule.3

1 Read v. Baylies, 18 Pick. 497; Haynes v. Brooks, 116 N. Y. 487.

2 Validity of such disposition. New. man v. Bagley, 16 Pick. 570.

3 Moody v. Downs, 63 N. H. 50.

CHAPTER VII.

EXAMINATION OF THE BANKRUPT AND OTHERS IN RESPECT TO THE AFFAIRS OF THE BANKRUPT.

§ 142. Examinations in Bankruptcy. All systems of bankruptcy, in England and this country, have contained provisions for a summary inquisition into all the affairs and estate of the bankrupt, not only by examining him, but his wife, and others who have information upon the subject, or who are supposed to be indebted to him, or to be concealing his assets. The main purpose of the proceedings often is to obtain evidence against the party examined, or to ascertain that there is no such evidence. In some of the statutes it is confined to persons suspected of concealing assets. It is important to bear in mind, throughout this discussion, that the power of examination is wholly different from the power to summon witnesses upon an issue pending, and that a general discovery is intended. The use of the word "witness" is unfortunate, and has sometimes led to mistakes.

The statutes in England

§ 143. Public or Last Examination. have usually provided for two kinds of examination of the bankrupt, one public and the other private, the former peremptory, the other optional with the assignees or others interested. It is a condition precedent to the bankrupt's discharge under these statutes that he should be publicly examined at a fixed time by the commissioner, or other proper officer of the court, or under his direction. This was called his "last examination," because the optional private éxaminations, if made, were to be before this final purgation. It was at this examination that the bankrupt was to furnish his accounts and surrender

1 1 Christian, Bankruptcy, 2d ed., p. 375. See Robson, 7th ed., p. 582; Ex parte Alexander, 1 De G. J. & S. 311.

28.

2 Act of 1800, § 24; 2 Stat.

8 Eden, Bankruptcy, 2d ed., p. 382.

all property not before given up, and he could be in no criminal default until he had failed to account at this time. The origin of the practice was that the proceedings were always in invitum and ex parte, and he was afforded this time to conform. In this country a very large proportion of the proceedings are by the debtor himself, and those which are not, are taken with ample notice to him, and after hearing his defence; and, consequently, our practice requires the bankrupt to file his schedule and inventory, and in them to make a full statement of his debts and assets when he files his petition, or when the adjudication is made against him.1 There is, therefore, in this country nothing which corresponds exactly with the "last examination" of the English books, none, that is, which must be had in all cases, before the discharge or before the bankrupt can be held to be in default. But any creditor may have an order for the examination of the debtor at any time before his discharge; and the examinations themselves are for a like purpose in both countries, the discovery of assets and other matters of interest to the creditors.2

§ 144. Whether Debtor can be examined before Adjudication. Under our late law it was once held that one against whom a petition for adjudication has been filed is already a bankrupt, and must submit to examination, if required by the court, though such an order would not often be made. This construction appears to me opposed to the meaning and intent of the statutes, which are to discover the dealings of one whose estate is under the charge of the court for distribution. Until he is judicially found to be a bankrupt, he is no more bound to "submit to examination" than the other party to the action; both stand on their legal and usual rights, and are

1 Act of 1867, §§ 11, 43; 14 Stat. 1841, Re Heusted, 5 Law Rep. 510, 521, 538; R. S. §§ 5014, 5030.

2 Act of 1867, § 26; 14 Stat. 529; R. S. § 5086; Act of 1898, § 21 a; infra, § 484.

3 Re Bromley, 3 N. B. R. 686; Re Salkey, 5 Biss. 486, Fed. Cas. No. 12,252; Re Mendenhall, 9 N. B. R. 285, Fed. Cas. No. 9423. See, under Stat.

Fed. Cas. No. 6440, where interrogatories were permitted to be filed, and thus indirectly the bankrupt was made to disclose, as in any case in equity. This order might be defended on general grounds of equity practice, but is put upon what I venture to call too broad a construction of the statute.

governed by precisely the same law, and may testify for themselves, or be required to testify for their opponents, when the issue is tried, and not before. The law of Massachusetts and of Canada agrees with what I consider to be the true rule ; 1 and so does the practice, as far as I am acquainted with it. In voluntary bankruptcy the adjudication is a matter of course after the petition is filed, and though the court will usually postpone the examination until an assignee is chosen, there is no legal objection to the order at any time after adjudication.2

§ 145. Examination of Bankrupt. The bankrupt, after adjudication, is bound to surrender all the assigned estate, and to do all acts which may be required of him, and to be ready at all times until his discharge to aid the assignees in this respect. The late statute provided that these things were to be done at the expense of the estate; 3 but it was held that he was not entitled to fees and expenses as a witness, which seems a harsh rule.1 After his discharge he stands like any other witness, and cannot be required to submit, as a bankrupt, to examination.5 When a composition is effected before the appointment of an assignee, it is not the practice to order an examination of the bankrupt before the time of meeting, because the statute says he shall attend the meeting and answer all inquiries then and

1 Re Jordan, 9 Met. 292; Clarke, Insolvent Acts, 126. See infra, § 470. 2 Re Lee, 4 Law Rep. 486, Fed. Cas. No. 8178; Re Parker et al., 1 Penn. L. J. 370, Fed. Cas. No. 10,722.

is no limit of time in the examination of witnesses, excepting the final settlement of the estate; and there is no reason for exempting the discharged bankrupt from an obligation which remains upon all

8 Act of 1867, § 28; 14 Stat. 530; other persons. Therefore, while he is R. S. § 5101.

4 Re Okell, 2 Ben. 144, Fed. Cas. No. 10,474; Re McNair, 2 N. B. R. 219, Fed. Cas. No. 8907. The rule is different under the act of 1898. See infra, § 470.

5 Re Dole, 11 Blatch. 499, Fed. Cas. No. 3964; Re Dean, 3 N. B. R. 768, Fed. Cas. No. 3701; Re Jones, 6 N. B. R. 386, Fed. Cas. No. 7449; Re Witkowski, 10 N. B. R. 209, Fed. Cas. No. 17,920. These cases mean that the bankrupt is not bound to keep himself in readiness, nor to attend without fees, etc. There

not bound to remain within the jurisdiction, and is entitled to fees of attendance, etc., and therefore is not in the attitude of a bankrupt, after his discharge he is bound to answer as a witness not merely in cases, but as to matters newly discovered or newly arising concerning his estate. Our law is therefore substantially like that of England, under 6 Geo. IV., c. 16, § 116, that the bankrupt might be examined after he had received his certificate, but should be entitled to a per diem allowance there. for.

there. The officers of a bankrupt corporation are like an individual bankrupt in respect to examinations concerning the company's affairs.

§ 146. Bankrupt in Prison or out of Jurisdiction. -If the bankrupt is imprisoned within the district, the judge may cause him to be brought up for examination by habeas corpus.2 The same can be done for any other witness, through the general power of the court. If the deponent is out of the district, the court where the proceedings are pending may order the examination by interrogatories, or may appoint a commissioner or examiner to take the deposition orally; and the courts of the United States where the witness is found have jurisdiction to enforce such orders.

§ 147. Examination at Meetings without Special Order. The bankrupt, and perhaps other persons attending a meeting, may be examined there viva voce, or as the register may direct, without a previous order. In case of the bankrupt's wife, the statute, and in that of other witnesses, the practice, requires that cause be shown for the first as well as for subsequent examinations. All but the bankrupt must have their fees and expenses paid or tendered. Witnesses should attend at the time and place appointed, and not depart without leave of the court or register.7

6

§ 148. Examination of Assignees and Creditors. Every assignee may be examined touching his management of the

1 Ex parte Levy, L. R. 11 Eq. 619; Re Bennett, 3 Ch. D. 315; Ex parte Jewett, 2 Lowell, 393, Fed. Cas. No. 7303. [Under the act of 1898 a composition cannot be offered by a bankrupt till after he has been examined. See infra, § 475.]

2 Act of 1867, § 26; 14 Stat. 529; R. S. § 5089. [This is provided for by Rule XXX. See infra, § 472.]

Ev., 6th ed., § 1174, but the practice is probably the same. See Re Bromley, 3 N. B. R. 686.

5 See the remarks of a judge of great ability and experience upon the danger of permitting witnesses to be harassed or examined except upon good cause. Ex parte Alexander, 1 De G. J. & S. 311. 6 Mercer's Case, 2 Sm. & G. 87, 5 De G. M. & G. 26; but not counsel fees,

8 [Act of 1898, § 21 b, c, provide for unless in special cases: Re Leighton, depositions.] L. R. 1 Ch. 331; Ex parte Waddell, 6 Ch. D. 328.

4 This was expressly provided by several of the English statutes, but has been omitted from that of 1869. 2 Taylor

527.

7 Wright v. Maude, 10 M. & W.