TITLE VIII The Insolvency Law Chapter I. General Provisions. V. Assignees. VI. Classification and Preference of Creditors. VIII. Proof of Debts. IX. Compositions. X. Discharge. XI. Fraudulent Preferences and Transfers. CHAPTER I § 1280. Insolvency law, defined. § 1281. Jurisdiction of Island Court. § 1280. Insolvency law, defined. The provisions of this Title and Titles II and III of Part IV of this Code shall be known and may be cited as "The Insolvency Law" and in accordance with its provisions every insolvent debtor may be permitted to suspend payments or be discharged from his debt and liabilities. [Enacted 1953.] § 1281. Jurisdiction of Island Court. The Island Court shall have original jurisdiction in hearing and determining all causes, actions, and proceedings under this Title. [Enacted 1953.] CHAPTER II Suspension of Payments § 1285. State of suspension of payments. Petition. Inventory to be filed. § 1286. Order for meeting of creditors. Injunction to be issued to debtor. § 1287. Fees deposited for filing petition; notice to creditors. § 1285. State of suspension of payments. Petition. Inventory to be filed. Any debtor who, possessing sufficient property to cover all his debts, be it an individual person, an association, or corporation, foresees the impossibility of meeting them when they respectively fall due, may petition that he be declared by the court in the state of suspension of payments. The debtor shall annex to his petition a schedule and inventory as set forth in §§ 1301, 1302, and 1303 of this Code, in addition to the statement of his assets and liabilities and the proposed agreement he requests of his creditors. [Enacted 1953.] § 1286. Order for meeting of creditors. Injunction to be issued to debtor. Upon receiving and filing the petition with the schedule and documents mentioned in the next preceding section, the court shall make an order calling a meeting of creditors to take place in not less than two (2) weeks nor more than three (3) months from the date of such order. This order shall designate the day, hour, and place of meeting of the creditors. The order shall be published by the means authorized for the publication of service and notices and for such periods as may be prescribed by the court. It shall contain an injunction forbidding the petitioning debtor from disposing of his property in any manner, except insofar as concerns the ordinary operations of commerce or of the industry in which the petitioner is engaged, and, further, from making any payments outside the necessary or legitimate expenses of his business or industry, so long as the proceedings relative to the suspension of payments are pending. For the purposes of this law said proceedings shall be considered to have been instituted from the date of the filing of the petition. [Enacted 1953.] § 1287. Fees deposited for filing petition; notice to creditors. A copy of said order shall immediately be published by the clerk of the court, in the manner designated therein, for the number of times and in the form prescribed by the court, and the clerk shall cause a copy of said order to be delivered personally or to be sent forthwith by registered mail, postage prepaid, to all creditors named in the schedule. There shall be deposited with the clerk of the court the sum of ten dollars ($10.00), which shall be paid to the Guam treasury for the filing and registration of the petition, including all proceedings until the legal process is completed, and, in addition, a sum sufficient to defray all expenses of publication ordered by the court, necessary postage and ten cents ($0.10) for each copy, to be delivered personally or mailed to the creditors. The last-named sum is hereby constituted the legal fee for the personal delivery or mailing required by this section. [Enacted 1953.] § 1288. Suspension of execution against debtor. If any execution be pending against the debtor it shall not be consolidated with this proceeding, but the course thereof shall be suspended before sale of property is made thereunder, provided the debtor makes a request therefor to the court before which the proceeding for suspension of payments is pending, unless the execution be against property especially mortgaged which is hereby exempted from the provisions of this section. The suspension ordered by virtue of this section shall lapse when three (3) months shall have passed without the proposed agreement being accepted by the creditor or as soon as it is denied. No creditor other than those mentioned in § 1291 of this Code shall sue or institute proceedings to collect his claim from the debtor from the moment that suspension of payments is applied for and while the proceedings are pending. [Enacted 1953.] § 1289. Creditors represented by lawyers. Creditors may be represented at the meeting by one or more lawyers, or by any person duly authorized by power of attorney, which document shall be presented and be attached to the record. Persons appearing for more than one creditor shall have only one personal vote, but the claims presented by them shall be taken into consideration for the purpose of arriving at the majority of the amount represented. [Enacted 1953.] § 1290. Meeting of creditors. Only creditors included in the schedule filed by the debtor shall be cited to appear and take part in the meeting mentioned in § 1286, and they shall be notified upon delivery or transmission to them of a copy of the order calling the meeting, to appear at the meeting with the written evidences of their respective claims, without which they shall not be admitted. The presence of the creditors representing at least threefifths (3/5) of the liabilities shall be necessary for holding a meeting. The meeting shall be held on the day and at the hour and place designated, the judge of the Island Court acting as presi dent, and the clerk of the court as secretary thereof, subject to the following rules: (a) The clerk shall prepare for insertion in the minutes of the meeting a statement of the persons present and their claims; the judge shall examine the written evidences of the claims and the powers of attorney, if any. If the persons present who have complied with the foregoing rules represent at least threefifths (35) of the liabilities, the judge shall declare the meeting open for business. (b) The petition of the debtor, the schedule of debts and of property, the statement of assets and liabilities, and the proposed agreement filed therewith shall be read forthwith by the clerk, and the discussion shall be opened. (c) The debtor may modify his proposition or propositions in view of the results of the debate, or insist upon the ones already made, and the judge without further discussion shall clearly and succinctly place these several propositions before the meeting for a vote thereupon. (d) The vote shall be taken by a call of names and shall be inserted in the minutes; a majority vote shall rule. (e) To form a majority it is necessary: (1) That two-thirds (23) of the creditors voting unite upon the same proposition; (2) That the claims represented by said majority vote amount to at least three-fifths (35) of the total liabilities of the debtor mentioned in the petition. (f) After the result of the voting has been announced, all protests made against the majority vote shall be admitted and stated in the record, and the meeting shall be closed. (g) The minutes of the meeting, containing a succinct statement of all proceedings had therein, shall be drawn up, and there shall be inserted therein, the proposition or propositions voted upon, which, after having been read and approved, shall be signed by the judge together with all persons taking part in the voting. If any such persons shall be unable to write, any person present shall sign, at their request, and the clerk shall certify to all of the above. [Enacted 1953.] § 1291. Claimants exempt. Persons having claims for personal labor, maintenance, expenses of last illness and funeral, of the wife or children of the debtor, incurred in the sixty (60) days immediately preceding the filing of the petition, and the persons having legal or contractual mortgages, may refrain from attending the meeting and from voting therein. Such persons shall not be bound by any agreement determined upon at such meeting, but if they should join in the voting they shall be bound in the same manner as are the other creditors. [Enacted 1953.] § 1292. Agreements rejected. The proposed agreement shall be deemed rejected if the number of creditors required for holding a meeting does not voluntarily attend thereat, or if the two majorities mentioned in subparagraph (e) of § 1290 are not in favor thereof, even if the negative vote itself does not receive such majority. [Enacted 1953.] § 1293. Agreements made effective. If the decision of the meeting be negative as regards the proposed agreement or if no decision is had in default of such number or of such majorities, the proceedings shall be terminated without recourse and the parties concerned shall be at liberty to enforce the rights which may correspond to them. If the decision is favorable to the debtor, it may be objected to within ten (10) days following the date of the meeting by any creditor who attended the meeting, and who dissented from and protested against the vote of the majority. The opposition or objection to the decision of the majority favorable to the debtor shall be proceeded with as in any other incidental motion, the debtor and the creditors who shall appear declaring their purpose to sustain the decision of the meeting being the defendants. The court shall hear and pass upon such objection as soon as possible and in a summary manner, and in its order, which shall be final, it shall declare whether or not the decision of the meeting is valid. In case that the decision of the meeting is held to be null, the court shall declare the proceeding terminated and the parties concerned at liberty to exercise the rights which may correspond to them; and in case the decision of the meeting is declared valid, or when no opposition or objection to said decision has been presented, the court shall order that the agreement be carried out and the persons concerned shall be bound by the decision of the meeting. The court may issue all orders which may be proper to enforce the agreement on motion of any of the parties litigant. The order directing the agreement to be made effective shall be binding upon all creditors included in the schedule of the debtor who may have been properly summoned, but not upon creditors mentioned in § 1291 who failed to attend the meeting or refrained from voting therein, and their rights shall not be af |