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able demands, shall, when such debt does not exceed five hundred dollars, be collected in the courts of the State where such bankrupt re- 6. sides having jurisdiction of claims of such nature and amount."
R. S., § 711, par.
R. S., § 4979, 5047. 119 Mass., 435. 17 N. Y. Supreme, 277. 20 N. Y. Supreme, 263. 30 La., 75, 1210. 31 La., 215. 72 N. Y., 159. 73 N. Y., 226. 10 Hun., 277. 49 Md., 51. 11 Hun., 394. 12 Hun., 220. 13 Hun., 353. 19 Hun., 622. Circuit and dis
SEC. 3. That section two of said act (1) be, and it hereby is, amended by trict courts to have striking out, in line ten, the words "the same," and inserting the word diction of all ac"any"; and by adding next after the words "adverse interest," in line tion by assignees. twelve, the words "or owing any debt to such bankrupt."
R. S., § 4979. Sales by assignee to be at auction
R. S., $$ 5062
SEC. 4. That unless otherwise ordered by the court, the assignee shall sell the property of the bankrupt, whether real or personal, at public auction, in such parts or parcels and at such times and places as shall be best calculated to produce the greatest amount with the least expense. 5065. All notices of public sales under this act by any assignee or officer of notice of, how the court shall be published once a week for three consecutive weeks in given. the newspaper or newspapers, to be designated by the judge, which, in his opinion, shall be best calculated to give general notice of the sale. And the court, on the application of any party in interest, shall have supervisory complete supervisory power over such sales, including the power to set power over, to be aside the same and to order a re-sale, so that the property sold shall in the court. realize the largest sum.
And the court may, in its discretion, order any real estate of the bank of real estate rupt, or any part thereof, to be sold for one-fourth cash at the time of may be made for sale, and the residue within eighteen months in such instalments as the part cash and part credit, &c. court may direct, bearing interest at the rate of seven per centum per annum, and secured by proper mortgage or lien upon the property so sold. And it shall be the duty of every assignee to keep a regular account Assignees to of all moneys received or expended by him as such assignee, to which keep accounts. account every creditor shall, at reasonable times, have free access.
R. S., § 5039.
If any assignee shall tail or neglect to well and faithfully discharge his penalties on, for duties in the sale or disposition of property as above contemplated, it shall neglect, fraud by, be the duty of the court to remove such assignee, and he shall forfeit all and for conspiring. fees and emoluments to which he might be entitled in connection with such sale. And if any assignee shall, in any manner, in violation of his duty aforesaid, unfairly or wrongfully sell or dispose of, or in any manner fraudulently or corruptly combine, conspire, or agree with any person or persons, with intent to unfairly or wrongfully sell or dispose of the property committed to his charge, he shall, upon proof thereof, be removed, and forfeit all fees or other compensation for any and all services in connection with such bankrupt's estate, and, upon conviction thereof before any court of competent jurisdiction, shall be liable to a fine of not more than ten thousand dollars, or imprisonment in the penitentiary for a term of not exceeding two years, or both fine and imprisonment, at the discretion of the court. And any person so combining, conspiring, or agreeing with such assignee for the purpose aforesaid shall, upon conviction, be liable to a like punishment.
That the assignee shall report, under oath, to the court, at least as often - to report condias once in three months, the condition of the estate in his charge, and the tion of estate once state of his accounts in detail, and at all other times when the court, on in three months. motion or otherwise, shall so order.
And on any settlement of the accounts of any assignee, he shall be re-to account for quired to account for all interest, benefit, or advantage received, or in interest, &c. any manner agreed to be received, directly or indirectly, from the use, disposal, or proceeds of the bankrupt's estate.
And he shall be required, upon such settlement, to make and file in court an affidavit declaring, according to the truth, whether he has or has not, as the case may be, received, or is or is not, as the case may be, to receive, directly or indirectly, any interest, benefit, or advantage from the use or deposit of such funds; and such assignee may be examined NOTE.-(1) The provisions of the bankrupt law referred to in this act are incorporated into the Revised Statutes in the sections noted in the margin.
-on settlement of
account to file oath and may be examined, &c.
Notices of bank
ruptcy and of is suing warrant, R. S., § 5019.
Set-off not al
orally upon the same subject, and if he shall willfully swear falsely, either in such affidavit or examination, or to his report provided for in this section, he shall be deemed to be guilty of perjury, and, on conviction thereof, be punished by imprisonment in the penitentiary not less than one and not more than five years.
SEC. 5. That section eleven of said act (1) be amended by striking out the words "as the warrant specifies," where they first occur, and inserting the words "as the marshal shall select, not exceeding two"; and inserting after the word "specifies" where it last occurs the words "But whenever the creditors of the bankrupt are so numerous as to make any notice now required by law to them, by mail or otherwise, a great and disproportionate expense to the estate, the court may, in lieu thereof, in its discretion, order such notice to be given by publication in a newspaper or newspapers, to all such creditors whose claims, as reported, do not exceed the sums, respectively, of fifty dollars."
SEC. 6. That the first clause of section twenty of said act (1) be lowed of claims amended by adding, at the end thereof, the words "or in cases of compurchased after pulsory bankruptcy, after the act of bankruptcy upon or in respect of bankruptcy, &c. R. S., 5073, which the adjudication shall be made, and with a view of making such
Proof of claim SEC. 7. That section twenty-one of said act (1) be amended by insertnot waiver of right ing the following words in line six, immediately after "thereby": "But of action when dis- a creditor proving his debt or claim shall not be held to have waived charge not grant- his right of action or suit against the bankrupt where a discharge has been refused or the proceedings have been determined without a discharge".
R. S., § 5105. 13 Hun., 596. 123 Mass., 278. 124 Mass., 99.
Parties may be
SEC. 8. That the following words shall be added to section twentywitnesses in all six of said act (1): "That in all causes and trials arising or ordered cases under bank- under this act, the alleged bankrupt, and any party thereto, shall be a rupt law. R. S., §§ 858, competent witness".
5087, 5088, 5107. 3 Hughes, 285.
SEC. 9. That in cases of compulsory or involuntary bankruptcy, the granted to invol- provisions of said act,(1) and any amendment thereof, or of any suppleuntary bankrupt. ment thereto, requiring the payment of any proportion of the debts of R. S., § 5112. 6 Bissell, 185. the bankrupt, or the assent of any portion of his creditors, as a condi3 Dillon, 3, 145. tion of his discharge from his debts, shall not apply; but he may, if otherwise entitled thereto, be discharged by the court in the same manner and with the same effect as if he had paid such per centum of his debts, or as if the required proportion of his creditors had assented thereto.
-to voluntary bankrupt.
R. S., § 5112.
3 Hughes, 637.
And in cases of voluntary bankruptcy, no discharge shall be granted to a debtor whose assets shall not be equal to thirty per centum of the claims proved against his estate, upon which he shall be liable as principal debtor, without the assent of at least one-fourth of his creditors in number, and one-third in value; and the provision in section thirty-three of said act (1) of March second, eighteen hundred and sixty-seven, requiring fifty per centum of such assets, is hereby repealed.
In involuntary SEC. 10. That in cases of involuntary or compulsory bankruptcy, bankruptcy, pref the period of four months mentioned in section thirty-five of the act(1) two, and fraudu- to which this is an amendment is hereby changed to two months; but lent transfers this provision shall not take effect until two months after the passage of within three, this act. And in the cases aforesaid, the period of six months mentioned months before pe- in said section thirty-five is hereby changed to three months; but this tition, void. R. S., § 5128, provision shall not take effect until three months after the passage of 5129; 102 U. S., 620. this act.
SEC. 11. That section thirty-five of said act be, and the same is hereby, ances ade to per- amended as follows: sons knowing they are in fraud of bankrupt law, void.
R. S., § 5128, 5129.
First. After the word "and" in line eleven, insert the word "knowing". Secondly. After the word "attachment", in the same line, insert the words "sequestration, seizure".
NOTE. (1) The provisions of the bankrupt law referred to in this act are incorporated into the Revised Statutes in the sections noted in the margin.
Thirdly. After the word "and", in line twenty, insert the word "knowing". And nothing in said section thirty-five shall be construed to invalidate any loan of actual value, or the security therefor, made in good faith, upon a security taken in good faith on the occasion of the making of such loan.
6 Bissell, 167. 3 Dillon, 110. 10 Hun., 277.
Involuntary bankrupts may be adjudged such, for
SEC. 12. That section thirty-nine of said act of March second, eighteen hundred and sixty-seven, (1) be amended so as to read as follows: "SEC. 39. That any person residing, and owing debts, as aforesaid, who, after the passage of this act, shall depart from the State, District, R. S., §§ 5021or Territory of which he is an inhabitant, with intent to defraud his creditors;
1876, July 26, ch. 234. 13 Blatch., 401,
17 Blatch., 72.
Or, being absent, shall, with such intent, remain absent; Or shall conceal himself to avoid the service of legal process in any 455. action for the recovery of a debt or demand provable under this act; Or shall conceal or remove any of his property to avoid its being attached, taken, or sequestered on legal process;
Or shall make any assignment, gift, sale, conveyance, or transfer of his estate, property, rights, or credits, either within the United States or elsewhere, with intent to delay, defraud, or hinder his creditors;
Or who has been arrested and held in custody under or by virtue of mesne process or execution, issued out of any court of the United States or of any State, District, or Territory within which such debtor resides or has property, founded upon a demand in its nature provable against a bankrupt's estate under this act, and for a sum exceeding one hundred dollars, and such process is remaining in force and not discharged by payment, or in any other manner provided by the law of the United States or of such State, District, or Territory, applicable thereto, for a period of twenty days,
Or has been actually imprisoned for more than twenty days in a civil action founded on contract for the sum of one hundred dollars or upward; Or who, being bankrupt or insolvent, or in contemplation of bankruptcy or insolvency, shall make any payment, gift, grant, sale, conveyance, or transfer of money or other property, estate, rights, or credits, or confess judgment, or give any warrant to confess judgment, or procure his property to be taken on legal process, with intent to give a preference to one or more of his creditors, or to any person or persons who are or may be liable for him as indorsers, bail, sureties, or otherwise, or with the intent, by such disposition of his property, to defeat or delay the operation of this act;
Or who being a bank, banker, broker, merchant, trader, manufacturer, or miner, has fraudulently stopped payment,
Or who being a bank, banker, broker, merchant, trader, manufacturer, or miner, has stopped or suspended and not resumed payment, within a period of forty days, of his commercial paper, (made or passed in the course of his business as such),
Or who, being a bank or banker, shall fail for forty days to pay any depositor upon demand of payment lawfully made, shall be deemed to have committed an act of bankruptcy, and, subject to the conditions hereinafter prescribed,
Shall be adjudged a bankrupt on the petition of one or more of his creditors, who shall constitute one-fourth thereof, at least, in number, and the aggregate of whose debts provable under this act amounts to at least one-third of the debts so provable:
Provided: That such petition is brought within six months after such act of bankruptcy shall have been committed.
-on petition of six months. creditors within
R. S., § 5023; 5028.
1876, July 26, ch. 234.
6 Bissell, 150.
And the provisions of this section shall apply to all cases of compulsory or involuntary bankruptcy commenced since the first day of Decem- 515. ber, eighteen hundred and seventy-three, as well as to those commenced hereafter.
4 Dillon, 363.
3 Sawyer, 128, 614. 14 Blatch.,
NOTE.-(1) The provisions of the bankrupt law referred to in this act are incorporated in the 148,186. 3 Woods, Revised Statutos in the sections noted in the margin.
Proceedings on And in all cases commenced since the first day of December, eighteen petition when alle- hundred and seventy-three, and prior to the passage of this act, as well gation as to numas those commenced hereafter, the court shall, if such allegation as to ber of creditors is denied. the number or amount of petitioning creditors be denied by the debtor, by a statement in writing to that effect, require him to file in court forthwith a full list of his creditors, with their places of residence and the sums due them respectively, and shall ascertain, upon reasonable notice to the creditors, whether one-fourth in number and one-third in amount thereof, as aforesaid, have petitioned that the debtor be adjudged a bankrupt.
6 Bissell, 166.
Proceedings petition when allegation as to num
Der of creditors is
- when number,
But if such debtor shall, on the filing of the petition, admit in writing that the requisite number and amount of creditors have petitioned, the court (if satisfied that the admission was made in good faith,) shall so adjudge, which judgment shall be final, and the matter proceed without further steps on that subject.
And if it shall appear that such number and amount have not so &c., of creditors petitioned, the court shall grant reasonable time, not exceeding, in cases heretofore commenced, twenty days, and, in cases hereafter commenced, ten days, within which other creditors may join in such petition. And if, at the expiration of such time so limited, the number and amount shall comply with the requirements of this section, the matter of bankruptcy may proceed; but if, at the expiration of such limited time, such number and amount shall not answer the requirements of this section, the proceedings shall be dismissed, and, in cases hereafter commenced, with costs. Assignee may re- And if such person shall be adjudged a bankrupt, the assignee may property recover back the money or property so paid, conveyed, sold, assigned, fraudulently conveyed, &c. or transferred contrary to this act: Provided, That the person receivR. S., § 5129. ing such payment or conveyance had reasonable cause to believe that 6 Bissell, 167. the debtor was insolvent, and knew that a fraud on this act was intended; and such person, if a creditor, shall not, in cases of actual fraud on his part, be allowed to prove for more than a moiety of his debt; and this limitation on the proof of debts shall apply to cases of voluntary as well as involuntary bankruptcy.
17 Blatch., 348.
And the petition of creditors under this section may be sufficiently verified by the oaths of the first five signers thereof, if so many there be. And if any of said first five signers shall not reside in the district in which such petition is to be filed, the same may be signed and verified by the oath or oaths of the attorney or attorneys, agent or agents, -computation of of such signers. And in computing the number of creditors, as aforenumber of credit- said, who shall join in such petition, creditors whose respective debts ors to be joined in. do not exceed two hundred and fifty dollars shall not be reckoned.
tition for involun
But if there be no creditors whose debts exceed said sum of two hundred and fifty dollars, or it the requisite number of creditors holding debts exceeding two hundred and fifty dollars fail to sign the petition, the creditors having debts of a less amount shall be reckoned for the purposes aforesaid".
Proceedings on SEC. 13. That section forty of said act(1) be amended by adding at return of order to the end thereof the following words: "And if, on the return-day of show cause on pe- the order to show cause as aforesaid, the court shall be satisfied that tary adjudication the requirement of section thirty-nine of said act as to the number and of bankruptcy. amount of petitioning creditors has been complied with, or if, within R. S., § 5025, the time provided for in section thirty-nine of this act, creditors suffi
3 Dillon, 37.
3 Woods, 134.
cient in number and amount shall sign such petition so as to make a total of one-fourth in number of the creditors and one-third in the amount of the provable debts against the bankrupt, as provided in said section, the court shall so adjudge, which judgment shall be final; otherwise it shall dismiss the proceedings, and, in cases hereafter commenced, with costs."
SEC. 14. That section forty-one of said act(1) be amended as folhave jury to try lows: After the word "bankruptcy," in line eight, strike out all of said
NOTE.-(1) The provisions of the bankrupt law referred to in this act are incorporated in the
R. S., §§ 5026,
section, and insert the words, "Or, at the election of the debtor, the
SEC. 15. That section eleven of said act(1) be amended by inserting Bankrupt to subthe words "and valuation" after the word "inventory" in the twenty. mit valuation with first line; and that section forty-two of said act be amended by inserting inventory. R. S., § 5014the words "and valuation" after the word "inventory" in the fifteenth 5016, 5030.
SEC. 16. That section forty-nine of said act(1) be amended by striking In Territories, out after the word "the" in line five, the words "supreme courts", and district courts to inserting in lieu thereof "district courts," and in line six, after the word have jurisdiction instead of supreme "States", inserting the words "subject to the general superintendence courts. and jurisdiction conferred upon circuit courts by section two of said act."
COMPOSITION WITH CREDITORS.
R. S., § 4978.
Composition on resolution of creditors, how effected.
R. S., § 5103.
SEC. 17. That the following provisions be added to section fortythree of said act(1): That in all cases of bankruptcy now pending, or to be hereafter pending, by or against any person, whether an adjudication in bankruptcy shall have been had or not, the creditors of such alleged bankrupt may, at a meeting called under the direction of the court, and upon not less than ten days' notice to each known creditor of the time, place, and purpose of such meeting, such notice to be per- 300, 493, 497. sonal or otherwise, as the court may direct, resolve that a composition proposed by the debtor shall be accepted in satisfaction of the debts due to them from the debtor. And such resolution shall, to be operative, have been passed by a majority in number and three-fourths in value of the creditors of the debtor assembled at such meeting either in person or by proxy, and shall be confirmed by the signatures thereto of the debtor and two-thirds in number and one half in value of all the creditors of the debtor.
4 Dillon, 111.
17 Hun., 49.
And in calculating a majority for the purposes of a composition under-computation of this section, creditors whose debts amount to sums not exceeding fifty majority for purdollars shall be reckoned in the majority in value, but not in the ma- poses of. jority in number; and the value of the debts of secured creditors above the amount of such security, to be determined by the court, shall, as nearly as circumstances admit, be estimated in the same way. And creditors whose debts are fully secured shall not be entitled to vote upon or to sign such resolution without first relinquishing such security for the benefit of the estate.
The debtor, unless prevented by sickness or other cause satisfactory Debtor to be to such meeting, shall be present at the same, and shall answer any in- present at meetquiries made of him; and he, or, if he is so prevented from being at ings, answer quiries, &c.
NOTE (1) The provisions of the bankrupt law referred to in this act are incorporated into the