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writing and is not required to be filed in court but must contain a statement that he is willing to be declared a bankrupt on account of his inability to pay his debts. A corporation may commit this act of bankruptcy, but it has been held that the directors of a Massachusetts corporation cannot pass a valid vote to that effect.2

Formerly a petition might be brought at any time within six months of the act of bankruptcy, but now it must be brought within four months. Time is computed by excluding the first day and including the last unless that be a Sunday or holiday, and in that case the next business day is included (§ 31). Such was the rule under the act of 1867. The rule as to the time within which the petition was to be brought when an attachment relied on as an act of bankruptcy was to be recorded was the same as at present. The decisions were to the opposite effect on the question whether the assignee could avoid a preference given more than four months before the petition was filed but not recorded until less than four months.5 As to whether such a preference can now be upset, see post, $522.

If a petition is filed within four months of an act of bankruptcy the court will have jurisdiction though the subpœna is not served on the debtor till more than four months have elapsed.

When a bankrupt against whom a petition has been filed alleging a conveyance of property to defeat his creditors proves that he was solvent at the time the petition was filed, the petition must be dismissed; the burden of proving this is on him. Under the definition of insolvency given in this act (§ 1, (15)) it may be difficult for creditors to prove that he was insolvent. Under the old received definition of insolvency it would be comparatively easy for a creditor to tell whether a man could meet his debts as they matured, because it would be

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known to his associates in trade whether his debts were paid or not. Now, however, especially in the case of a man owning real estate, this fact may be difficult of proof. Under paragraph e the creditors will be in a better position than in proceedings under the second and third subdivisions of § 3a, where the burden of proving insolvency is on them, unless the debtor neglects to appear with his books and papers and submit to an examination.

The last two acts of bankruptcy mentioned in § 3a are regarded as conclusive evidence of the debtor's insolvency, and a person who has done either of these may be proceeded against without the necessity of proving insolvency at the time of their commission.

As to the form of the petition, see infra, § 521.

The provision of clause e was inserted to prevent a debtor's property being unnecessarily taken from him. After the adjudication under the Act of 1867,1 a warrant was given to the marshal to take possession of the property as a part of the usual course of proceedings, and the court had the power to issue a provisional warrant after the petition was filed directing the marshal to take charge of the property and person of the debtor.2 In neither of these cases was a creditor applying for the warrant required to give a bond. Under the present act the ordinary course will be for the trustee, after his appointment, to take charge of the effects of the bankrupt (§ 47, (2)) though the court would probably have power to issue an injunction against the debtor to prevent his disposal of the property before the adjudication (§ 2, (15)), as was done under the Act of 1867.3 In cases of urgent necessity they can, under the present act, appoint the marshal to take charge of the estate in order to preserve it.*

If the petition is dismissed, the creditor will be liable on his bond for all costs, damages, and counsel fees. The damages in such a case would be large, and the fear of incurring such a

1 § 42, 14 Stats. 537, R. S. § 5028. 2 § 40, 14 Stats. 536, R. S. § 5024.

8 Ib.

4 See supra, § 465.

liability will undoubtedly prevent the creditors from often applying to the court under this clause of the act.1

The form of bond is prescribed by Form 9. The Act and the Form contemplate a bond with two sureties. Whether a corporation could be accepted as a surety on this bond may be a question. Section 50 g authorizes corporations to become sureties on the bonds of referees and trustees. This does not authorize them to be sureties in any other cases, and the terms of clause e do not seem to allow them to act as such in this instance.

§ 467. Act of 1898. SEC. 4. WHO MAY BECOME BANKRUPTS.—a. Any person who owes debts, except a corporation, shall be entitled to the benefits of this Act as a voluntary bankrupt.

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, 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.

All persons except corporations may become voluntary bankrupts, irrespective of the amount of their debts. "Person" includes officers, partnerships, and women (§ 1, (19)). Under the act of 1867 corporations also were included, but subject to this qualification, and the further one that, under that act, the person must have owed debts to the amount of $300,2 the decisions are in point.3

1 See also infra, § 532. See Re Smith, 92 Fed. Rep. 135, 1 N. B. N. 61.

2 § 11, 14 Stats. 521, R. S. § 5014. 3 See supra, §§ 15 et seq.

A corporation cannot evade this provision of the act by arranging with certain creditors that a petition shall be filed against it.1

Farmers, or persons who work for wages, salary, or hire, at a rate not exceeding $1,500 a year (§ 1, (27)) cannot be made bankrupt. With this exception, all natural persons and most corporations engaged in business, and owing debts of $1,000, are subject to this act. State or national banks are excluded.

The Act of 1867 applied to all natural persons,2 partnerships,3 and moneyed, business, and commercial corporations and jointstock companies.*

Married women will come within this section whenever they are made subject to the rights and liabilities of single women.5 Infants may also be bankrupts in certain cases, and lunatics who have committed an act of bankruptcy before becoming insane, or in a lucid interval.7

An undischarged bankrupt may be proceeded against.8

Aliens may be made bankrupts if they have a principal place of business or reside within the United States, and also if they have committed an act of bankruptcy here though they do not reside here.10

The Act of 1867 applied to "moneyed, business, and commercial corporations." 11 It was held that railroad companies were included in its provisions,12 and also insurance companies,13 and all other corporations except municipal corporations and corporations which are established for educational; ecclesiastical, or charitable purposes.14 The scope of the present act is much more limited. In place of the three comprehensive classes, we have five kinds of corporations specified, viz., manufacturing, trading, printing, publishing, or mercantile.

1 Re Bates Machine Co., 91 Fed. Rep. 625, 1 N. B. N. 135.

2 § 39, 14 Stats. 536, R. S. § 5021. 3 § 36, 14 Stats. 534, R. S. § 5121. 4 § 37, 14 Stats. 535, R. S. § 5122. 5 Supra, § 15.

10 Supra, § 465.

11 § 37, 14 Stats. 535, R. S. § 5122. 12 Supra, § 25.

13 Re Merchants' Ins. Co., 3 Biss. 162, Fed. Cas. No. 9441; Re Independent Ins. Co., 2 Lowell, 97, Fed. Cas.

6 Supra, § 16, Re Brice, 1 N. B. N. 310. No. 7018; Holmes, 103, Fed. Cas. No.

7 Supra, § 18.

8 Supra, § 19.

• Supra, § 20.

7017.

14 Adams v. B., H. & E. R. R., 4 N. B. R. 314, Fed. Cas. No. 47.

Railroad companies and other transportation agencies would not seem to be within the terms of the section. They are not comprehended in any of the classes unless it be last, and as to this it may be said that they rather assist mercantile pursuits than are themselves engaged in them. Insurance companies also are probably not subject to the act, since it has been said by the Supreme Court of the United States that the issuing of a policy of insurance is not a commercial transaction.1

The broadest one of the terms used in this section is “ mercantile." That is defined by Worcester as "relating to trade or commerce." It corresponds with the word "commercial" under the act of 1867. "Business" is a word of much greater scope, and extended the operation of the last act to almost all corporations.

It was held that a railroad company did not come within the terms of that part of the Act of 1867 which related to the suspension of commercial paper by a "banker, broker, merchant, trader, manufacturer or miner." 3 The phraseology is somewhat similar to that of the present section, so that these cases are authorities for the proposition that railroad companies will not come within its terms.

It would seem that a corporation engaged in making lumber would be subject to the act, or a distillery, but a mining company would not, nor would a company engaged in boring for oil. It was held that a livery-stable keeper was not a “merchant" nor subject to the Act of 1841.7 Under the Act of 1867 a contractor who built a railroad was held not to be a trader. This case suggests the question whether a construction com

1 Paul v. Virginia, 8 Wall. 168. 2 Adams v. B., H. & E. R. R., 4 N. B. R. 314, Fed. Cas. No. 47.

3 Re Greenville R. R., Fed. Cas. No. 5787; Winter v. Iowa Ry. Co., 2 Dill. 487, Fed. Cas. No. 17,890; Alabama R. R. Co. v. Jones, 5 N. B. R. 97, Fed. Cas. No. 126.

Re Chandler, 1 Lowell, 478, Fed. Cas. No. 2591; Re Cowles, 1 N. B. R. 280, Fed. Cas. No. 3297

5 Re Eeles, 5 Law Rep. 273, Fed. Cas. No. 4302.

6 Re Woods, 7 N. B. R. 126, Fed. Cas. No. 17,990.

7 Hall v. Cooley, 3 N. Y. Leg. Obs. 282, Fed. Cas. No. 5928. The case of Re Odell, 17 N. B. R. 73, Fed. Cas. No. 10,426, seems in conflict with this, but it was disapproved in a later case. Re Duff, 4 Fed. Rep. 519.

8 Re Smith, 2 Lowell, 69, Fed. Cas. No. 12,981

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