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14 Stat. 529.
Preference of wages.
Duties of as
2 March 1867. in bankruptcy, in any civil action, (a) unless the same is founded on some debt or Bankrupt not to claim from which his discharge in bankruptcy would not release him.(6) be liable to arrest pendente lite.
IX. DISTRIBUTION OF THE BANKRUPT'S ESTATE. 2 Mar. 1867 2 27. 63. All creditors whose debts are duly proved and allowed, shall be entitled to share
in the bankrupt’s property and estate pro rata, without any priority or preference
whatever ; except that wages due from him to any operative, or clerk or house servant, share pro rata.
to an amount not exceeding fifty dollars, for labor performed within six months next
preceding the adjudication of bankruptcy, shall be entitled to priority, and shall be first Sureties to make paid in full: Provided, That any debt proved by any person liable as bail, surety, proof of pay. guarantor or otherwise, for the bankrupt, shall not be paid to the person so proving
the same, until satisfactory evidence shall be produced of the payment of such debt by such person so liable, and the share to which such debt would be entitled may be paid into court, or otherwise held for the benefit of the party entitled thereto, as the
court may direct. General meetings 64. At the expiration of three months from the date of the adjudication of bank
ruptcy in any case, or as much earlier as the court may direct, the court, upon request of the assignee, shall call a general meeting of the creditors,(c) of which due notice
shall be given, and the assignee shall then report, and exhibit to the court and to the signee.
creditors just and true accounts of all his receipts and payments, verified by his oath, and he shall also produce and file vouchers for all payments for which vouchers shall be required by any rule of the court; he shall also submit the schedule of the bankrupt's creditors and property as amended, duly verified by the bankrupt, and a statement of the whole estate of the bankrupt as then ascertained, of the property recovered, and of the property outstanding, specifying the cause of its being outstanding, also what debts or claims are yet undetermined, and stating what sum remains
in his bands. Dividend to be
65. At such meeting, the majority in value of the creditors present shall determine whether any and what part of the net proceeds of the estate, after deducting and retaining a sum sufficient to provide for all undetermined claims, which, by reason of the distant residence of the creditor, or for other sufficient reason, have not been proved, and for other expenses and contingencies, shall be divided among the creditors ;(d) but unless at least one-half in value of the creditors shall attend such meeting,
either in person or by attorney, it shall be the duty of the assignee so to determine. List of creditors. In case a dividend is ordered, the register shall, within ten days after such meeting,
prepare a list of creditors entitled to dividend, and shall calculate and set opposite to the name of each creditor who has proved his claim, the dividend to which he is entitled out of the net proceeds of the estate set apart for dividend, and shall forward by mail to every creditor a statement of the dividend to which he is entitled; and such
creditor shall be paid by the assignee in such manner as the court may direct. Ibid. & 28. 66. The like proceedings shall be had at the expiration of the next three months, or Second and final earlier, if practicable ; (e) and a third meeting of creditors shall then be called by the
court, and a final dividend then declared, unless any action at law or suit in equity be pending, or unless some other estate or effects of the debtor afterwards come to the hands of the assignee, in which case the assignee shall, as soon as may be, convert such estate or effects into money, and within two months after the same shall be so converted, the same shall be divided in manner aforesaid. Further dividends shall be made in like manner as often as occasion requires; and after the third meeting of creditors no further meeting shall be called, unless ordered by the court.(9)
67. If, at any time, there shall be in the hands of the assignee any outstanding debts or other property, due or belonging to the estate, which cannot be collected and
received by the assignee without unreasonable or inconvenient delay or expense, the (a) The district court has power to release a bankrupt from 8. c. 6 Int. R. Rec. 215. And see Ex parte Jacoby, 6 Int. R. Rec. arrest, on state process, in an action upon a debt that may be 149; Ex parte Simpson, 2 Bank. Reg. 17. discharged in bankruptcy. Ex parte Glaser, 1 Bank. Reg. 73; (C) No second or further meeting of creditors ought to be called, 8. c. 15 Pitts. L. J. 265. Otherwise, if the arrest were prior to or requested by the assignee, unless there be moneys in his hands the institution of proceedings in bankruptcy. Ex parte Walker, for a dividend. Ex parte son, 1 Bank. Rog. 58; 8. c. 15 Pitts. L. 1 Bank. Reg. 60; Ex parte Hazleton, 2 Bank. Reg. 12.
J. 212. The bankrupt may be discharged, though the second and (5) A bankrupt is not liable to arrest, pending proceedlings in third meetings were not held at the expiration of three and six bankruptcy, for a claim that would be barred by the discharge. months respectively from the date of the adjudication. Ex parte Es parte Kinuball, 2 Bank. Reg. 74. Where the petitioner has Littlefield, 3 Bank, Reg. 13. been declared a bankrupt, the court will discharge him from (d) The distribution of the assets of a bankrupt cannot be interarrest on an execution for costs. Ex parte Borst, 2 Bank. Reg. fered with by state process. Ex parte Bridgman, 2 Bank. Reg. 62. But the bankrupt court has no power to discharge a bank- 84. rupt from arrest on state process, in an action of tort, in the (e) What business may be transacted at such adjourned meetnature of deceit; and evidence is not almissible to contradict the ings. Ex parte Sherwood, 25 Leg. Int. 76; 8. c. 1 Bank. Reg. 74. averments in the declaration. Ex parte Devue, 16 Am. L. R. 690; (g) The surplus funds in the hands of the assignee, after settie 8. c. 2 Bank. Reg. 11; Ex parte Patterson, 1 Bank. Reg. 58; Ex ment of the estate, where do debts have been proved, and there parte Pettis, 10 Ain. L. R. 695. Nor will a bankrupt be dis- is reasonable cause to believe that none will be proved, will be charged from arrest for a debt contracted in a fiduciary capacity, ordered to be paid to the bankrupt, on his petition, setting forth as a commission merchant. Ex parte Kimball, 2 Bauk. Reg. 111; the facts. Ex parte Hoyt, 3 Bank. Reg. 13.
Power to sell uncollectable claims.
2 March 1867.
assignee may, under the direction of the court, sell and assign such debts or other property in such manner as the court shall order.
68. No dividend already declared shall be disturbed by reason of debts being subse- Dividends not to quently proved, but the creditors proving such debts shall be entitled to a dividend be disturbed, ty
subsequent proof equal to those already received by the other creditors, before any further payment is of claims. made to the latter.
69. Preparatory to the final dividend, the assignee shall submit his account to the Accounts of ascourt and file the same, and give notice to the creditors of such filing, and shall also fival dividend. give notice that he will apply for a settlement of his account, and for a discharge from all liability as assignee, at a time to be specified in such notice ; and at such time, the court shall audit and pass the accounts of the assignee, and such assignee shall, if Examination of
assignee. required by the court, be examined as to the truth of such account, and if found correct he shall thereby be discharged from all liability as assigned to any creditor of the bankrupt. The court shall thereupon order a dividend of the estate and effects, or of such part thereof as it sees fit, among such of the creditors as have proved their claims, in proportion to the respective amount of their said debts.(a)
70. In addition to all expenses necessarily incurred by him in the execution of his Compensation of trust, in any case, the assignee shall be entitled to an allowance for his services in assignco. such case, on all moneys received and paid out by him therein, for any sum not exceeding one thousand dollars, five per centum thereon ; for any larger sum, not exceeding five thousand dollars, two and a half per centum on the excess over one thousand dollars; and for any larger sum, one per centum on the excess over five thousand dollars. And if, at any time, there shall not be in his hands a sufficient amount of money to defray the necessary expenses required for the further execution of his trust, he shall not be obliged to proceed therein, until the necessary funds are advanced or satisfactorily secured to him.
71. If by accident, mistake or other cause, without fault of the assignee, either or power to orier both of the said second and third meetings should not be held within the times limited, meetings of crethe court may, upon motion of an interested party, order such meetings with like effect as to the validity of the proceedings as if the meeting had been duly held.16)
72. In the order for a dividend, under this section, the following claims shall be Priority of debts entitled to priority or preference, and to be first paid in full in the following order:-
1. The fees, costs and expenses of suits, and the several proceedings in bankruptcy under this act, and for the custody of property, (c) as herein provided : (d)
II. All debts due to the United States, and all taxes and assessments under the laws thereof:(e)
III. All debts due to the state in which the proceedings in bankruptcy are pending, and all taxes and assessments made under the laws of such state:(9)
IV. Wages due to any operative,(h) clerk or house servant, to an amount not exceeding fifty dollars, for labor performed within six months next preceding the first publication of the notice of proceedings in bankruptcy :
V. All debts due to any persons who, by the laws of the United States, are or may be entitled to a priority or preference, in like manner as if this act had not been passed: Always provided, That nothing contained in this act shall interfere with the assessment and collection of taxes by the authority of the United States or any state.
X. OF THE DISCHARGE. 73. At any time after the expiration of six months from the adjudication of bank- 2 Mar. 1867 & 29. ruptcy, or if no debts have been proved against the bankrupt, or if no assets have come to the hands of the assignee, at any time after the expiration of sixty days,(i) Application for
discharge. and within one year from the adjudication of bankruptcy,(k) the bankrupt may apply (a) See Ex parte Brisco, 2 Bank. Reg. 78.
is to be regarded as one in which no assets have come into his (b) Anon., 1 Bank. Reg. 1.
hands. Ex parte Dodge, 16 Am. L. R. 438; 8. c. 1 Bank. Reg. 115. (C) See Ex parte Bogert, 2 Bank. Reg. 178.
The bankrupt may apply for a discharge at the expiration of (d) The claim of the bankrupt's attorney for services and dis- sixty days, without any certificate from the assignee. Ex parte bursements is not one to be paid in full. Ex parte Heirschberg, Bellamy, 1 Ben. 426. Where debts are proved and there are 1 Bauk. Reg. 195.
assets, application for a discharge cannot be filed before the ex(e) Where the members of a firm become individually bound to piration of six months from the adjudication. Ex parte Boden. the United States, as accommodation sureties, on the bankruptcy heim, 2 Bank. Reg. 133. of the firm, the government is not entitled to priority of payment (k) It is only where the bankrupt can apply for his dischargo out of the partnership assets. Ex parte Webb, 9 Int. R. Rec. 169; within less than six months from the adjudication, that he must 8. c. 2 Bank. Reg. 163; 2 Am. L. T. Bank. 87.
apply within a year, in order to obtain a discharge. Ex parte (9) A state has, in her sovereign capacity, a lien for taxes, Greenfield, 2 Bank. Reg. 98, 100; Ex parte Martin, Ibid. 169. which has precedence over that of a prior mortgage-creditor; but This is the construction of the act adopted by the committee on other liens held by a state are to be discharged in the order of the revision of the laws (Jenckes, Ch.) in a report to congress on their date. Ex parte Brand, 2 Am. L. T. Bank. 66.
the 10 February 1869.26 Leg. Int. 85. And the conflicting de(h) An apprentice is such operative. Ex parte Steiner, 1 Penn. cisions may be considered overruled. See Ex parte Willmott, 2 L. J. 368.
Bank. Reg. 76. Where the application for a discharge by a lank(1) The bankrupt may apply for a discharge, at the expiration rupt without assets, is made more than a year after the adjudicaof sixiy days, though debts have been proved, if there be no tion, the granting or withholding of it, is within the discretion assete. Ex parte Woolums, 1 Bank. Reg. 131. When at the of the court; the bankrupt may explain the causes of the delay. time of the application for a discharge, the assignee has neither Ex parte Canaday, 3 Bauk. Reg. 3. ' But see Ex parte Martin, 2 received uor paid any moneys on account of the estate, the case Bank. Reg. 169.
14 Stat. 531.
2 March 1867. to the court (a) for a discharge from his debts; and the court shall thereupon order Notice. notice to be given by mail to all creditors who have proved their debts, (b) and by pub
lication at least once a week in such newspapers as the court shall designate, (c) due regard being had to the general circulation of the same in the district, or in that portion of the district in which the bankrupt and his creditors shall reside, to appear on a day appointed for that purpose, and show cause why a discharge should not be granted
to the bankrupt.(d) Conditions of dis- 74. No discharge shall be granted, or, if granted, be valid, if the bankrupt has wil. obarge.
fully sworn falsely in his affidavit annexed to his petition, schedule or inventory,(e) or upon any examination in the course of the proceedings in bankruptcy, in relation to any material fact concerning his estate or his debts, or to any other material fact:
Or if he has concealed any part of his estate or effects,(g) or any books or writings relating thereto; (h) or if he has been guilty of any fraud or negligence in the care, custody or delivery to the assignee of the property belonging to him at the time of the presentation of his petition and inventory, excepting such property as he is permitted to retain under the provisions of this act; or if he has caused, permitted or suffered any loss, waste or destruction thereof:
Or if, within four months before the commencement of such proceedings, he has procured his lands, goods, money or chattels to be attached, sequestered or seized on execution :(i)
Or if, since the passage of this act,(k) he has destroyed, mutilated, altered or falsified any of his books, documents, papers, writings or securities, or has made or been privy to the making of any false or fraudulent entry in any book of account or other document, with intent to defraud his creditors :
Or has removed or caused to be removed any part of his property from the district, with intent to defraud his creditors :(?)
Or if he has given any fraudulent preference contrary to the provisions of this act; (m) or made any fraudulent payment, (n) gift, transfer, conveyance or assignment of any part of his property; or has lost any part thereof in gaming; or bas adınitted a false or fictitious debt against his estate; or if, having knowledge that any person has proved such false or fictitious debt, he has not disclosed the same to his assignee withiu one month after such knowledge:
Or if, being a merchant or tradesman, he has not, subsequently to the passage of this act, kept proper books of account:(0)
Or if he, or any other person in his behalf, bas procured the assent of any creditor to the discharge, or influenced the action of any creditor, at any stage of the proceedings, by any pecuniary consideration or obligation: (p)
Or if he has, in contemplation of becoming bankrupt,() made any pledge, payment, (a) Where there is no opposition, the order for a final discharge moval of property, or whoso claim was then barred by the statute may be made by the register. Ex parte Bellamy, 1 Ben. 428. of limitations, cannot oppose a discharge on such ground. Ex But if a creditor oppose the discharge, he must certify the pro parte Burk, 2 Am. L. T. Bank. 45. ceedings to the court. Ex parte Hughes, 1 Bank. Reg. 9; Ex (m) By this is meant only a preference in frand of the bank. parte Puffer, 2 Bank. Reg. 17.
rupt law, that is, contrary to its provisions. Ex parte Rosenfield, (6) Such notice need only be given to those creditors who have 1 Bank. Reg. 161. A fraudulent sale before the passage of the proved their debts. Ex parte McIntire, 1 Ben. 543.
act, is insufficient, in itself, to bar a discharge. Ex parte Huss(c) If no debts be proved notice of the application for final dis- man, 2 Bank. Reg. 140. What acts amount to a fraudulent precharge is to be given by publication. Anon., 6 Int. R. Rec. 149. ference which will bar a discharge. Ex parte Rosenfeld, 17 Am.
(a) If the bankrupt do not apply for his discharge within three L. R. 44; 8. c. 2 Bank. Reg. 49; Ex parte Gay, Ibid. 114; Ex parte months, the notice need not refer to the second and third meet- Lewis, Ibid. 145; 8. C. 2 Am. L. T. Bank. 75. inge of creditors. Anon., 1 Bank. Reg. 1.
(n) Where a trader knows, or in reason onght to know, that be (e) It must be shown that such act was intentional, to bar a is insolvent, and makes payment of an independent debt, not in discharge. Ex parte Wyatt, 2 Bank. Reg. 94. The omission of the course of trade, and without the creditor's knowledge of such the names of certain creditors from the schedule, with their insolvency, it is a fraudulent preference and bars a discharge. knowledge and consent, will not bar a discharge, on the objection Ex parte Gay, 2 Bank. Reg. 114; Ex parte Lewis, Ibid. 145; 8. C. of other creditors. Ex parte Needham, 2 Bank. Reg. 124; 8. c. 2 16 Pitts. L. J. 45; Wilson v. Brinkman, 2 Bank. Reg. 119. And Am. L. T. Bank. 39; see Ex parte Rathbone, 1 Bauk. Reg. 145; see Ex parte Randall, 2 Am. L. T. Bank. 69. 8. c. 3 Bank. Reg. 4. kx parte Hill, Ibid. 114; Ex parte Hussman, 2 Bank. Reg. 140. The intent is to be proved as a fact, either by direct evidence, or Nor can the creditor, so consenting, object. Ex parte Whetmore, as the necessary and certain consequence of other facts clearly 2 Am. L. T. 105. Where a husband's equitable interest in bis proved. Morgan v. Mastick, 2 Bank. Reg. 163, wife's property has been sold under execution, he has no longer (0) To bar a discharge, it is not required that the omission to any interest to be returned in his schedules. Ex parte Hum- keep proper books of account should have been wilful, or with a mitsh, 2 Bank. Reg. 3.
fraudulent intent. Ex parte Solomon, 25 Leg. Int. 364; 8. C 2 (9) Ex parte Goodridge, 2 Bank. Reg. 105. If the bankrupt has Bank. Reg. 94. Ex parte Newman, 2 Bank. Reg. 99. What are the possession and use of property, which he wilfully omits from proper books of account must be determined by the circumstances his schedules and retains from the assignee, it is no answer to a of the particular case. Ex parte Newman, 2 Bapk. Reg. 99. charge of concealment, that it belonged, of right, to assignees A cash book would scein to be indispensable. Ex parte Gay, 2 under an earlier assignment in insolvency, under the state law. Bank. Reg. 114. Ex parte Littlefield, 3 Bank. Reg. 13. So is an Ex parte Beal, 2 Bank. Reg. 178; 8. 0. 2 Am. L. T. Bank. 95. invoice book, or stock book, for a tradesmian. Ex parte White, 2
(h) If the bankrupt has possession of the joint ostate and books Bank. Reg. 179; 8. c. 2 Am. L. T. 105. Where a trade formerly of account of a firm of which he is a member, he must discloso carried on by the bankrupt has been finally closed, and there is thom to his separate assignee; if he wilfully fail to do so, a dis- nothing for the assignee to do, or inquiro into, concerning the charge will not be granted. Ex parte Beal, 2 Bank. Reg. 178; s. same, the failure to keep proper books of account for that busic. 2 Am. L. T. Bank. 95.
ness, will not bar a discharge. Ex parte Keach. 3 Bank. Reg. 3. (i) The property of a debtor having been attached by a hostile (p) See Ex parte Mawson, 1 Bank'
. Reg. 33, 153. creditor, without the knowledge of the debtor, his subsequent V To bar a discharge, a fraudulent payment by way of preomission to have himself adjudged a voluntary bankrupt, will ference, must have been made in contemplation of bankruptcy; not be deemed evidence of an intent to give a preference. Ex or the creditor must have been a party to the fraud. Ex parte parte Belden, 2 Bank. Reg. 14.
Locke, 2 Bank. Reg. 123. See Ex parte Rosenfield, 1 Bank. Reg. (k) See Ex parte Rosenfield, 1 Bank. Reg. 161.
161; Ex parte Lawson, 2 Bank. Reg. 125. (1) One who was not a creditor at the time of the alleged re
transfer, assignment or conveyance of any part of his property, directly or indirectly, 2 March 1867. absolutely or conditionally, for the purpose of preferring any creditor or person having a claim against him, or who is or may be under liability for him, or for the purpose of preventing the property from coming into the hands of the assignee, or of being distributed under this act in satisfaction of his debts : (a)
Or if he has been convicted of any misdemeanor under this act, or has been guilty of any fraud whatever contrary to the true intent of this act :(6)
And before any discharge is granted, the bankrupt shall take and subscribe an oath, Oath of bankto the effect that he has not done, suffered or been privy to any act, matter or thing
rupt. specified in this act as a ground for withholding such discharge, or as invalidating such discharge if granted.(c)
75. No person who shall have been discharged under this act, and shall afterwards Ibid. 2 30. become bankrupt, on his own application, shall be again entitled to a discharge, whose Discharge on estate is insufficient to pay seventy per centum of the debts proved against it, unless second back
, when the assent in writing of three-fourths in value of his creditors who have proved their granted. claims is filed, at or before the time of application for discharge; but a bankrupt who shall prove to the satisfaction of the court that he has paid all the debts owing by him at the time of any previous bankruptcy, or who has been voluntarily released therefrom by his creditors, shall be entitled to a discharge in the same manner and with the same effect as if he had not previously been bankrupt.
76. Any creditor (d) opposing the discharge of any bankrupt may file a specification in Ibid. 31. writing of the grounds of his opposition ; (e) and the court may, in its discretion, order Opposing creditany question of fact so presented to be tried at a stated session of the district court.(g) ors. 77. If it shall appear to the court that the bankrupt has in all things conformed to
Ibid. 2 32. his duty under this act,(h) and that he is entitled under the provisions thereof, to receive a discharge,(i) the court shall grant him a discharge from all his debts, except as hereinafter provided, and shall give him a certificate thereof under the seal of the court, in substance as follows :
District Court of the United States : District of Whereas has been duly Form of disadjudged a bankrupt under the act of congress establishing a uniform system of bank- charge. ruptcy throughout the United States, and appears to have conformed to all the requirements of law in that behalf, it is therefore ordered by the court, that said be for ever discharged from all debts and claims which by said act are made provable against his estate, and which existed on the day of -, on which day the petition for a ljudication was filed by (or against) him ; excepting such debts, if any, as are by said act excepted from the operation of a discharge in bankruptcy. Given under my hand and the seal of the court at in the said district, this day of
-, A. D. (Seal)
Judge. 78. No debt created by the fraud or embezzlement of the bankrupt,(k) or by his
Ibid. 233. defalcation as a public officer, or while acting in any fiduciary character, (?) shall be
(a) Where the bankrupt had made a general assignment, to ings upon an order to show cause may, if necessary, be adjourned. which the creditors had given their assent in writing, it was held, Ex parte Mawson, 1 Bank. Rög. 41 ; Ex parte Thompson, Ibid. that they were estopped from alleging that it was made for the 65; Ex parte Seckendorf, 15 Pitts. L. J.450; 8. c. 1 Bank. Reg. purpose of preventing a distribution under the bankrupt law. 185. And the creditor may file his specifications on the day to Ex parte Schuyler, 2 Bank. Reg. 169; 8. c. 2 Am. L. T. Bank. 85. which it stands adjourned. Ex parte Tallman, 1 Bank. Rug. 145. (6) Sed Ex parte Beatty, 2 Bank. Reg. 177.
But he must file his specifications within the time prescribed by (c) Where the bankrupt has taken the oath required by this rule of court. Ex parte Meley, 2 Bank. Reg. 85. He may, howclause, and a creditor opposes the discharge, with specifications, ever, have leare to file them, nunc pro tune. Ex parte Girefe, 2 which he subeequently withdraws, the bankrupt should again Bank. Reg. 106. On the henring, the burden of proof is on the take and subscribe the oath, after such withdrawal. Ex parte creditor. Ex parte Okell, 2 Bauk. Reg. 35. Machal, 2 Bank. Reg. 113.
(9) This means a trial by jury, Gordon v. Stoft, 16 Am. L. R. (d) In Ex parte Shepard, 16 Am. L. R. 481, 8. c. 1 Bank. Reg. 749. A trial by jury may be awarded, thonghi wt specially 116, it was ruled by Hall, J., that any creditor may oppose the prayed for. Ex parte Lawson, 2 Bank. Reg 125. 01. the trial, discharge, whether he have proved the debt or not: Judge the burden of proof is on the creditor. Ex parte lill, 1 Bank. Blatchford arrived at a different conclusion, in Ex parte Levy, 1 Reg. 42. Bank. Reg. 66, where it was held, that creditors who had not (h) Where specifications in opposition to the discharge are proved their claims, were not competent to oppose the discharge: filed, the register may certify conformity, except in the par. and Clerke, J., has decided that any person who shows an inte ticulars covered by the specifications. Ex parte Pulver, 2 Bank. rest may oppose, whether technically a creditor or not; Ex parte Rog. 101. If the requirements of the act have been conplied Boutelle, 2 Bank. Reg. 51; and accordingly, it has been held, by with, a discharge can only be refused on some groun set forth Deady, J., that one not a creditor at the time of an alleged in the 29th section of the act. Ex parte Elliott, 2 Bank. Ray the fraudulent removal of property, or whose claim was then barred (i) It is incumbent on the bankrupt, to see that all the neby the statute of limitations, has no standing in court as an cessary steps are regularly taken; otherwise he cannot receive opposing creditor. Ex parte Burk, 2 Am. L. T. Bank. 45. And a discharge. Ex parte Bellamy, 1 Ben. 426. see, to this point. the following cases decided under the act of (k) Inasmuch as the discharge does not bar a debt created by 1941: Ex parte King. I N. Y. Leg. Obs. 22; Ex parte Traphagen, fraud, the existence of such debt is no ground for a refusul of it. Ibid. 98; Ex parte Tebbetts, 5 Law Rep. 259; Ex parte Book, 3 Ex parte Rosenfield, 16 Am. L. R. 618; 8. c. 1 Bank. Reg. 161; McL. 317.
Ex parte Patterson, 1 Bank. Reg. 58; Ex parte Wright, 2 Bank. (e) A creditor may file his specifications at any time after Reg. 14, 57; 8. c. 15 Pitts. I.. J. 553; Ex parte Bashforil. 2 Bank. making proof of his claim. Ex parte Baum, 1 Ben. 274. The Reg. 26; Ex parte Pettis, Ibid. 17; Ex parto Clark, Ibid. 14; Ex specifications must set forth the grounds of opposition, with rea parte Doody. Ibid. 74; Ex parte Stokes, Ibid. 76. But the debt sonable definiteness. Ex parto Waggoner, 1 Ben. 532; Ex parte may be proved. Ex parte Wright, 2 Bank. Reg. 14; 8. c. 15 Rathbone, 1 Bank. Reg. 50 ; s. c. 25 Leg. Int. 60. Otherwise, Pitts. L. J. 553; Ex parte Rundle, 2 Bank. Reg. 19. See Ex they will be disregarded. Ex parte lill. 1 Bauk. Reg. 42; Ex parte Robinson, lid 108. parte Beardsley, Ibid. 52; Ex parte Son, Hid. 58; Ex parte Rath- (1) That the creditor's debt is a fiduciary one is no ground for bone, Ibid. 65; Ex parte Mawson, Ibid. 115; Ex parte Tyrrel. 2 withholding the discharge; it is not affed by it.
Ex parte Bank. Reg. 73; Ex parte Hansen. Ibid. 75; Ex parte Dreyer, Ibid. Tracy, 2 Bank. Reg. 98. A balance due liv a factor to his prin76. But incomplete specifications are amendable. Ex parte Mc- cipal is not a fiduciary debt, within the meaning of the act. EX Intire, 1 Bauk. Reg. 115; Ex parte Hill, Ibid. 12. The proceed. parte Seymour, 1 Ben. 348; Chapman v. Forsyth, 2 How. 202.
Effect of the dis
may be con
2 March 1867. discharged under this act; (a) but the debt may be proved, and the dividend thereon What debts not
shall be a payment on account of said debt; and no discharge granted under this act to be affected by shall release, discharge or affect any person liable for the same debt for or with the the discharge.
bankrupt, either as partner, joint contractor, endorser, surety or otherwise. In all proceedings in bankruptcy commenced after the first day of January 1869, no discharge shall be granted to a debtor whose assets shall not be equal to fifty per centum of the claims proved against his estate upon which he shall be liable as the principal debtor, unless the assent in writing of a majority in number and value of his creditors to whom he shall have become liable as principal debtor, and who shall have proved their claims, be filed in the case, at or before the time of the hearing of the application
for discharge.(6) Ibid. & 34. 79. A discharge duly granted under this act shall, with the exceptions aforesaid,
release the bankrubt from all debts, claims, liabilities and demands which were or charge might have been proved against his estate in bankruptcy: (c) and may be pleaded, by
a simple averment that on the day of its date such discharge was granted to him, setting the same forth in hæc verba,(d) as a full and complete bar to all suits ought on any such debts, claims, liabilities or demands; and the certificate shall be conclusive
evidence in favor of such bankrupt of the fact and the regularity of such discharge: When the valid. 80. Always provided, That any creditor or creditors of said bankrupt, whose debt ity of discharge
was proved or provable against the estate in baukruptcy, who shall see fit to contest tested.
the validity of said discharge, on the ground that it was fraudulently obtained, may,
at any time within two years after the date thereof, apply to the court which granted Application. it, to set aside and annul the same. Said application shall be in writing, shall specify
which, in particular, of the several acts mentioned in section twenty-nine it is intended to give evidence of against the bankrupt, setting forth the grounds of avoidance, and no evidence shall be admitted as to any other of the said acts; (e) but said application shall be subject to amendment at the discretion of the court. The court shall cause reasonable notice of said application to be given to said bankrupt, and order him to appear and answer the same, within such time as to the court shall seem fit and proper. If, upon the hearing of said parties, the court shall find that the fraudulent acts, or any of them, set forth as aforesaid by said creditor or creditors against the bankrupt, are proved, and that said creditor or creditors had no knowledge of the same until after the granting of said discharge, judgment shall be given in favor of said creditor or creditors, and the discharge of said bankrupt shall be set aside and annulled. But if said court shall find that said fraudulent acts and all of them, set forth as aforesaid, are not proved, or that they were known to said creditor or creditors before the granting of said discharge, then judgment shall be rendered in favor of the bankrupt, and the validity of his discharge shall not be affected by said proceedings.
XI. FRAUDULENT PREFERENCES AND CONVEYANCES. 2 Mar. 1867 2 35. 81. If any person, being insolvent, or in contemplation of insolvency, within four
months before the filing of the petition by or against him, with a view to give a pre
ference to any creditor or person having a claim against him,(g) or who is under any given within four months to be liability for him, procures any part of his property to be attached, sequestered or
seized on execution, or makes any payment, pledge, assignment, transfer or conveyance of any part of his property, either directly or indirectly, absolutely or conditionally, the person receiving such payment, pledge, assignment, transfer or conveyance, or to be benefited thereby, or by such attachment, having reasonable cause to believe such
14 Stat. 531.
person is insolvent, (h) and that such attachment, payment, pledge, assignment or conBut where the bankrupt sold goods on commission, and refused (d) A discharge in bankruptcy must be specially ploaded. to account, it was held to be a fiduciary debt, and unatfected by Fellows v. Hall, 3 McL. 281 ; 8. c. ibid. 487. It is not necessary the discharge. Ex parte Kimball, 2 Bank. Reg. 74; 8. c. Ibid. to set forth in a plea of bankruptcy, more than the certificato 114. See Ex parte Lord, 5 Law Rep. 258; Ex parte Wright, 1 and discharge. White r. How, 3 MCL. 291. If a discharge be West. L. J. 143. Under the act of 1841, it was held that a debt pleaded, the plaintiff may show its invalidity through the fraud resulting from the neglect of an attorney to pay over moneys of the defendant. Fellows v. Hall, 3 McL. 187. collected for his client, was not a fiduciary one. Wolcott v. Hodge, averred in a replication to the plea of bankruptcy. Hood r. 15 Gray 547.
Spencer, 4 McL. 168. Where the discharge is granted, when too (a) Å fiduciary debt is merged in a judgment obtained for it, late to be pleaded, the remedy is by motion for a perpetual stay before the institution of proceedings in bankruptcy. Wolcott v. of execution. Cornell v. Dakin, 38 N. Y. 253. llonge, 15 Gray 547 ; 8. P. Bangs v. Watson, 9 Gray 21; Hundra- (e) A discharge will not be vacated on general averments. han v. Cheshire Iron Works, 4 Allen 396.
Ex parte McIntire, 1 Bank. Reg. 115. (b) So amended by act 27 July 1868. 15 Stat. 227. This act (9) An endorser though not specially named is included within applies to cases commenced between the 1 June 1868, and the the terms of this clause. Ahl 0. Thorner, 1 Chicago Leg. News date of its passage. Ex parte Billing. 2 Bank. Reg. 161.
337; 8. c. 16 Pitts. L. J. 78; 2 Am. L. T. 104. (c) A judgment obtained on breach of promise to marry, is (h) If a creditor, having reasonable cause to believe his debtor provable in bankruptcy, and barred by the discharge. Ex parte insolvent, purchase goods of him, and the debtor make the sale Side 2 Bank. Reg: 77. So is a judgment in trespass for mali. with a view of giving a preference, the transaction is void as cious imprisonment. Ex parte Simpson, 2 Bank. Reg. 17. The against the assignee in bankruptcy. Reasonable cause, means a discharge does not affect lien-creditors, Ex parte Campbell, 16 state of facts which would put a prudent man upon inquiry. Ex Am. L. R. 100; 8. c. 1 Am. L. T. Bank. 30; Ex parte Schnepf, 16 parte MeDonough, 1 Chicago Log. News 361; s. c. 16 Pitts. L. J. Am. L. R. 204; 3. c. 6 Int. R. Rec. 214; Ex parte Bernstein, Ibid. 110. But a mortgage taken as security, though out of the usual 222. The discharge will not bar an attachment, at the suit of a course of business, is ralid, if the creditor had no rensonablo creditor omitted from the schedule, which has been levied on cause to believe his debtor to be insolvent. Lee v. Franklin Are property fraudulently concealed from the assignee. Barnes v. nue German Savings Institution, 1 Chicago Leg. News 370. See Moore, 2 Bank. Reg. 174.
Ex parte Palmer, 2 Am. L. T. 107.
What must be