Sivut kuvina

2 March 1867.

Ibid. 9. Appeals and

writs of error to

the supreme court.

Ibid. 10.

General orders.

Duties of officers.


Appeals. Records.

2 Mar. 1867 11. 14 Stat. 521.

Who may be adjudged bankrupt.

Of the petition.


the party claiming it shall comply with the statutes regulating the granting of such writs.

17. In cases arising under this act, no appeal or writ of error shall be allowed in any case from the circuit courts to the supreme court of the United States, unless the matter in dispute in such case shall exceed two thousand dollars.

18. The justices of the supreme court of the United States, subject to the provisions of this act, shall frame general orders; (a) for the following purposes :-

For regulating the practice and procedure of the district courts in bankruptcy, and the several forms of petitions, orders and other proceedings to be used in said courts in all matters under this act:

For regulating the duties of the various officers of said courts:

For regulating the fees payable and the charges and costs to be allowed, except such as are established by this act or by law, with respect to all proceedings in bankruptcy before said courts, not exceeding the rate of fees now allowed by law for similar services in other proceedings:

For regulating the practice and procedure upon appeals:
For regulating the filing, custody and inspection of records:

And generally for carrying the provisions of this act into effect.

After such general orders shall have been so framed, they or any of them may be rescinded or varied, and other general orders may be framed in manner aforesaid; and all such general orders so framed shall from time to time be reported to congress, with such suggestions as said justices may think proper.


19. If any person (b) residing within the jurisdiction of the United States, owing debts provable under this act, exceeding the amount of three hundred dollars, shall apply, by petition (c) addressed to the judge of the judicial district in which such debtor has resided or carried on business for the six months next immediately preceding the time of filing such petition, or for the longest period during such six months,(d) setting forth his place of residence, his inability to pay all his debts in full, his willingness to surrender all his estate and effects for the benefit of his creditors and his desire to obtain the benefit of this act; and shall annex to his petition a schedule, verified by oath, before the court or before a register in bankruptcy, or before one of the commissioners of the circuit court of the United States, containing a full and true statement of all his debts, (e) and, as far as possible, to whom due, with the place of residence of each creditor, (g) if known to the debtor, and if not known, the fact to be so stated, and the sum due to each creditor ; (h) also, the nature of each debt or demand, whether founded on written security, obligation, contract or otherwise, (i) and also the true cause and consideration of such indebtedness in each case, and the place where such indebtedness accrued, and a statement of any existing mortgage, pledge, lien, judgment or collateral or other security given for the payment of the same; and shall also annex to his petition an accurate inventory, verified in like manner, of all his estate, both real and personal, assignable under this act, (k) describing the same, and stating where it is situated, (7) and whether there are any, and if so, what encum(a) As to what is a special order in bankruptcy, see Ex parte Bellamy, 1 Ben. 474. (b) Any person may take advantage of the act; its provisions are not confined to traders. Morgan v. Mastick, 2 Bank. Reg. 163.


(c) If the petition be illegible, it will be ordered to be taken off the file. Anon. 3 Bank. Reg. 15.

(d) Where a petitioner in bankruptcy had carried on business and resided in New York, for twenty years prior to June 1866, and removed to New Jersey in that year, it was held, that his petition was properly filed in the district court for the southern district of New York. Ex parte Belcher, 1 Bank. Reg. 202. So, where the petitioner was engaged as agent and attorney for his brother, in buying and selling merchandise in New York city, at an office having a sign with his brother's name on it, and was well known by those who had dealings with him, to be doing business at that office, it was held to be a carrying on of business within the meaning of this section. Ex parte Bailly, 1 Bank. Reg. 177. But where a bankrupt had been a member of a manufacturing firm in New Jersey, which failed and stopped business, and while continuing to reside in New Jersey, had an office in New York, where he received and wrote letters, and was settling up the business of the firm, it was held, that he was not carrying on business in New York, within the meaning of the statute. Ex parte Little, 2 Bank. Reg. 97. So, where the petitioner, formerly in business for himself in Chicago, had been employed for upwards of a year, as a bookkeeper, in New York city, but lived with his father at Elizabeth, New Jersey, it was held, that the district court for the southern district of New York had no jurisdiction. Ex parte Magie, 1 Bank. Reg. 138, 153. Where a bankrupt, born in Boston, became domiciled in California, but left that state with no intention of returning, and after a residence of several months in Europe, returned to Boston, and in less than two months thereafter, filed his petition in bankruptcy, it was held, that the act of leaving California, with no intention of returning, at once

revived the domicil of origin, and that the court had jurisdiction. Ex parte Wiggin, 1 Bank. Reg. 90. A district court has no power, on the petition of copartners, one of whom resides in another district, and has no place of business within the jurisdiction. to decree such copartner a bankrupt. Ex parte Prankard, 1 Bank. Reg. 51; and see Ex parte Kinsman, 1 N. Y. Leg. Obs. 309.

(e) Debts barred by the statute of limitations of the domicil, should be embraced in the schedule. Ex parte Perry, 1 Bank. Reg. 2.

(g) The act requires such a statement of the creditor's residence as will insure notice, either personally, or by mail; the creditor's place of abode must be stated, so far as it is possible to ascertain it; and if he have another place of business, his post-office address also. Ex parte Pulver, 1 Ben. 381.

(h) It is sufficient to state the original amount and date of the debt; the interest is a matter of computation. Ex parte Hill, 1 Ben. 321.

(i) It is necessary to state whether any note has been given, or judgment rendered for the debt; and whether any other person is jointly liable therefor. Ex parte Orne, 1 Ben. 420. It is suflicient to schedule a judgment, as owing to a partnership by the firm name. Anon. 6 Int. R. Rec. 150.

(k) Where a bankrupt has charge of, and conducts, in his own name, the business of another, taking half of the net profits, as a compensation for his services, his right to a share of such net profits need not be reported as assets. Ex parte Beardsley, 1 Bank. Reg. 121. And where a husband's equitable interest in his wife's property has been sold under execution, he has no longer any interest to be returned in his schedules. Ex parte Hummitsh, 15 Pitts. L. J. 494; s. c. 2 Bank. Reg. 3; Ex parte Pomeroy, Ibid. 3.

(1) The bankrupt's household furniture and wearing apparel must be set forth in separate items. Ex parte Hill, 1 Ben. 321. As to where a judgment in favor of the bankrupt is to be scheduled, see Ex parte Sallee, 2 Bank. Reg. 78.


brances thereon; the filing of such petition shall be an act of bankruptcy, and such 2 March 1867. petitioner shall be adjudged a bankrupt: (a) Provided, That all citizens of the United States petitioning to be declared bankrupt shall, on filing such petition, and before any proceedings thereon, take and subscribe an oath of allegiance and fidelity Oath. to the United States, which oath shall be filed and recorded with the proceedings in



20. The judge of the district court, or, if there be no opposing party, any register Reference to re of said court, to be designated by the judge, shall forthwith, if he be satisfied that the debts due from the petitioner exceed three hundred dollars, issue a warrant, to be Warrant. signed by such judge or register, directed to the marshal of said district, authorizing him forthwith, as messenger, to publish notices in such newspapers as the warrant specifies; (b) to serve written or printed notice, by mail or personally, on all creditors upon the schedule filed with the debtor's petition, (c) or whose names may be given to him in addition by the debtor; and to give such personal or other notice to any persons concerned as the warrant specifies, which notice shall state:

I. That a warrant in bankruptcy has been issued against the estate of the debtor: Notice. II. That the payment of any debts, and the delivery of any property belonging to such debtor, to him or for his use, and the transfer of any property by him, are forbidden by law :

III. That a meeting of the creditors of the debtor, giving the names, residences and amounts, so far as known, to prove their debts and choose one or more assignees of his estate, will be held at a court of bankruptcy, to be holden at a time and place designated in the warrant, not less than ten nor more than ninety days after the issuing of the same. e.(d)

Ibid. 12.

21. At the meeting held in pursuance of the notice, one of the registers of the court shall preside, and the messenger shall make return of the warrant and of his doings Return of warthereon; (e) and if it appears that the notice to the creditors has not been given as rant. required in the warrant, the meeting shall forthwith be adjourned, and a new notice given as required.(g) If the debtor dies after the issuing of the warrant, the proceed- Proceedings not to abate by ings may be continued and concluded in like manner as if he had lived.(h) death.


14 Stat. 522.

22. The creditors shall, at the first meeting held after due notice from the messen- 2 Mar. 1867 ? 13. ger, in presence of a register designated by the court, choose one or more assignees of the estate of the debtor; (i) the choice to be made by the greater part in value and Choice of assignee. in number of the creditors who have proved their debts.(k) If no choice is made by the creditors at said meeting, (1) the judge, or if there be no opposing interest, the register, shall appoint one or more assignees.(m) If an assignee so chosen or appointed fails, within five days, to express in writing his acceptance of the trust, the judge or register may fill the vacancy. All elections or appointments of assignees shall be sub- Approval of the ject to the approval of the judge; (n) and when in his judgment it is for any cause judge. needful or expedient, he may appoint additional assignees, or order a new election.(o)

(a) Where the petitioner fails to attend before the register, on the day fixed in the order of reference, he may, nevertheless, be adjudged a bankrupt within a reasonable time thereafter. Ex parte Hatcher, 1 Bank. Reg. 91.

(b) The register may direct publication in newspapers of other states, in addition to those designated by rule of court. Ex parte Robinson, 1 Ben. 270. The publication must be completed before the commencement of the period of ten days immediately pre ceding the return day of the warrant. Ex parte Devlin, 1 Ben. 335. An omission to publish the notice in one of the papers designated for that purpose, is a sufficient irregularity to set aside the proceedings. Ex parte Hall, 2 Bank. Reg. 68.

(c) Creditors residing without the United States are to be notified by publication only. Ex parte Heys, 1 Ben. 333; see Ex parte Townsend, 1 Bank. Reg. 1. The messenger ought to copy into the notices the exact language contained in the warrant; but an immaterial variance will be disregarded. Ex parte Pulver, 1 Ben. 381.

(d) Where the creditors reside abroad, the register has a discretion in giving the time for the first meeting of creditors, not exceeding ninety days from the issuing of the warrant. Ex parte Heys, 1 Ben. 333.

(e) The return of the messenger is not conclusive in all cases; but if prima facie good, it is sufficient authority to proceed. Ex parte Pulver, 1 Ben. 381. What is a sufficient return, where the residence of the creditor is unknown. Ibid.

(g) If a creditor be misnamed in the notice, a new notice must be given, unless waived by appearance. Anon., 6 Int. R. Rec. 149. Where an amendment has been allowed, a new warrant should issue. Ex parte Perry, 1 Bank. Reg. 2; see Ex parte Ratcliffe, Ibid. 98; s. c. 25 Leg. Int. 92; Ex parte Devlin, 1 Ben. 335.

(h) A discharge cannot be granted after the death of the debtor: inasmuch as it is then impossible to comply with the requirements of the 29th section. Ex parte O'Farrell, 2 Bank. Reg. 154. s. c. 2 Am. L. T. Bank. 106.

(i) Any attempt of a register to influence the choice of an

assignee, is unauthorized and improper. Ex parte Smith, 1 Bank. Reg. 25. The court will not sanction the solicitation of votes of creditors by persons seeking thereby to be chosen assignees. Anon., 2 Bank. Reg. 100.

(k) A creditor who has made probate of his debt, but retains the deposition in his own possession, is not competent to vote for an assignee. Ex parte Sheppard, 1 Bank. Reg. 115. A creditor holding security cannot vote in the election of an assignee. Ex parte Davis, 16 Am. L. R. 30; 8. c. 6 Int. R. Rec. 149; and see Ex parte Altenheim, 1 Ben. 431. The attorney of a creditor duly empowered to prove the claim, cannot vote for an assignee, unless specially authorized to do so. Ex parte Lowerre, 1 Ben. 406. A firm can only vote as one creditor. Ex parte Purvis, 6 Int. R. Rec. 173. An unliquidated claim on the part of the bankrupt against a creditor, is to be disregarded in proceedings for the choice of an assignee. Ex parte Orne, 1 Ben. 361.

(1) After the meeting, the register has no power to permit a creditor to alter his vote, and thereby cause a failure to elect. Ex parte Scheiffer, 2 Bank. Reg. 179.

(m) If no creditor attend at the meeting, it is the duty of the register to appoint an assignee. Ex parte Cogswell, 1 Ben. 388. So also, if no person receive a majority of the votes in value and number of the creditors who have proved their claims. Ex parte Purvis, 6 Int. R. Rec. 173; Ex parte Scheiffer, 2 Bank. Reg. 179. There can be no informal vote by the creditors; if they do not elect, it is the province of the judge, or if there be no opposing interest, of the register, to appoint. Ex parte Pearson, 2 Bank. Reg. 151.

(n) It is the duty of the register to state to the judge any reasons which he may know to exist, why the election or appointment of an assignee should not be approved. Ex parte Bliss, 1 Ben. 407.

(0) If an assignee be chosen by the greater part in value and number of the creditors who have proved their claims, and there be no imputation either upon his capacity or integrity, the judge cannot interfere. Ex parte Grant, 2 Bank. Reg. 35. If a mistake occur, the court can correct it before approval. Ex parte

2 March 1867.

Assignee may be required to give bond. Approval.

23. The judge at any time may, and upon the request in writing of any creditor who has proved his claim, shall require the assignee to give good and sufficient bond to the United States, with a condition for the faithful performance and discharge of his duties; (a) the bond shall be approved by the judge or register by his endorsement thereon, shall be filed with the record of the case, and enure to the benefit of all creditors proving their claims; and may be prosecuted in the name and for the benefit of In default, to be any injured party. If the assignee fails to give the bond within such time as the judge orders, not exceeding ten days after notice to him of such order, the judge shall remove him and appoint another in his place.


Ibid. 14.

Assignment to be executed.

Effect thereof.

Exempt property.

24. As soon as said assignee is appointed and qualified,(b) the judge, or, where there is no opposing interest, (c) the register shall, by an instrument under his hand, assign and convey to the assignee, all the estate, real and personal, of the bankrupt, with all his deeds, books and papers relating thereto; and such assignment shall relate back to the commencement of said proceedings in bankruptcy; (d) and thereupon, by operation of law, the title to all such property and estate, both real and personal, shall vest in said assignee, (e) although the same is then attached on mesne process as the property of the debtor, and shall dissolve any such attachment made within four months next preceding the commencement of said proceedings: (g)

25. Provided, however, that there shall be excepted from the operation of the provisions of this section, the necessary household and kitchen furniture, and such other articles and necessaries of such bankrupt as the said assignee shall designate and set apart, having reference in the amount to the family, condition and circumstances of the bankrupt, but altogether not to exceed in value, in any case, the sum of five hundred dollars; (h) and also the wearing apparel of such bankrupt, and that of his wife and children; and the uniform, arms and equipments of any person who is or has been a soldier in the militia, or in the service of the United States; and such other property as now is, or hereafter shall be, exempted from attachment, or seizure or levy on execution by the laws of the United States; and such other property not included in the foregoing exceptions as is exempted from levy and sale upon execution, or other process or order of any court, by the laws of the state in which the bankrupt has his domicil at the time of the commencement of the proceedings in bankruptcy, to an amount not exceeding that allowed by such state exemption laws in force in the year 1864: (i) Provided, that the foregoing exception shall operate as a limitation upon the conveyance of the property of the bankrupt to his assignees; and in no case shall the property hereby excepted pass to the assignees, or the title of the bankrupt thereto Scheiffer, 2 Bank. Reg. 179. A motion to set aside the appointment of the assignee must be made to the district judge, on notice, not to the register. Ex parte Stokes, 1 Bank. Reg. 130. If it should appear, that the bankrupt had brought in one or more of his friends, though bona fide creditors, and had by them chosen an assignee, who was also his friend and in his interest, the court would withhold its approval. Ex parte Bliss, 6 Int. R. Rec. 116. See Ex parte Scheiffer, 2 Bank. Reg. 179.

Not to pass by assignment.

(a) An assignee chosen by the creditors may be required to give security. Ex parte Fernberg, 2 Bank. Reg. 114.

(b) Until the appointment or election of the assignee is approved, the register has no authority to execute an assignment. Ex parte Scheiffer, 2 Bank. Reg. 179.

(c) The register has the right to convey the estate to the assignee, when there is no opposing interest, though the title to the property be in dispute. Ex parte Wylie, 2 Bank. Reg. 53. (d) The assignee's right of possession cannot be interfered with by a replevin, issued cut of a state court after the filing of the petition. Ex parte Vogel, 2 Bank. Reg. 138. Property acquired by the bankrupt between the time of filing his petition, and the final discharge, does not vest in the assignee. Ex parte Patterson, 1 Ben. 508; Ex parte Levy, Ibid. 496; Ex parte Rosenfield, 15 Pitts. L. J. 245; s. c. 1 Bank. Reg. 60. And a prior bona fide lien gives a prior claim which the district court may ascertain and liquidate. Ex parte Winn, 1 Bank. Reg. 131; Ex parte Schnepf, 16 Am. L. R. 204; Ex parte Hambright, 2 Bank. Reg. 157; Armstrong . Rickey, Ibid. 150. A general assignment for the benefit of creditors, untainted by fraud, is valid as against the assignee. Sedgwick v. Place, 1 Bank. Reg. 204; 8. P. Sedgwick v. Minck, Ibid. 204. With the exception of property fraudulently conveyed by the bankrupt, the assignee takes nothing but what was vested in the former. Ex parte Hambright, 2 Bank. Reg. 157. He takes the same rights as the bankrupt had in the property, and no more; subject to all liens, encumbrances and equities, except attachments and conveyances in frand of creditors. Rockford, Rock Island and St. Louis Railroad Co. v. McKay, 3 Bank. Reg. 12. See Wallace v. Conrad, 26 Leg. Int. 252. s. c. 3 Bank. Reg. 10.

(e) See Nash v. Nash, 12 Allen 345. The bankrupt's wife cannot claim dower in his lands, during his lifetime. Kelly v. Strange. 3 Bank. Reg. 2.

(g) Attachments in state courts brought within four months, before a commencement of proceedings in bankruptcy, are dissolved. Ex parte Ellis, 1 Bank. Reg. 154; Pennington e. Lowenstein, Ibid. 157; Ex parte Brand, 2 Am. L. T. Bank. 66.

(1) Every bankrupt, who is a householder, is absolutely entitled, in addition to the amount exempted by the state laws, to

retain his household furniture, not exceeding $500 in value. Ex
parte Cobb, 1 Bank. Reg. 106. But the exemption of $500 ought
not to be allowed in all cases, without discrimination. Ex parte
Ruth, 16 Am. L. R. 157; 8. c. 6 Int. R. Rec. 166. A sum of money
may be set apart for the use of the bankrupt, under this clause.
Ex parte Thornton, 17 Am. L. R. 42; 8. c. 2 Bank. Reg. 68. But
an allowance in money cannot be made to a bankrupt, who has
no personal chattels, out of the assets collected by his assignee.
Ex parte Lawson, 2 Bank. Reg. 19. Partnership property cannot
be set apart for the use of the individual members of a bankrupt
firm. Ex parte Hafer, 25 Leg. Int. 148; s. c. 1 Bank. Reg. 147.
Real estate may, in some cases, be set apart for the bankrupt,
but only where it will not injure the sale of other real estate, or
work adversely to the interests of the creditors. Ex parte Ed-
wards, 2 Bank. Reg. 109; contrà, Ex parte Thornton, 17 Am. L.
R. 42; 8. c. 2 Bank. Reg. 68; Ex parte Jackson, Ibid. 158; Ex
parte Gainey, Ibid. 163. But real estate cannot be so set apart,
in contravention of the vendor's lien for unpaid purchase-money.
Ex parte Perdue, 2 West. Jur. 279; 8. c. 2 Bank. Reg. 67; and
see Ex parte Whitehead, 2 Bank. Reg. 180. As to the title of the
bankrupt to real estate set apart to him by the assignee, see Ex
parte Watson, 2 Bank. Reg. 174; 8. c. 2 Am. L. T. Bank. 93.
(2) The amount of property exempted by the state laws is
exclusive of the $500 which may be set apart for the bankrupt,
under the act of congress. Ex parte Ruth, 16 Am. L. R. 157; s.
c. 6 Int. R. Rec. 166; Ex parte Cobb, 1 Bank. Reg. 106; Ex parte
Feely, 3 Bank. Reg. 15. The assignee cannot set apart for the
use of the bankrupt, under the state laws, property specifically
mentioned in the act of congress; the allowance, under the state
law, must be of a different kind of property. Ex parte Feely, 3
Bank. Reg. 15. If the bankrupt select, under the state law, pro-
perty which is also exempted by the bankrupt act, there can be
no second allowance, in lieu thereof. under the latter laws. Ex
parte Noakes, 1 Bank. Reg. 164. In Pennsylvania, a vested ex-
pectant interest of a bankrupt in a sum of money, payable at his
own death, or at the death of another, not exceeding three hun-
dred dollars in value, may be set apart for the use of the bank-
rupt. Ex parte Bennett, 17 Am. L. R. 34; s. c. 2 Bank. Reg. 66,
Where, by the state laws, real property to a certain amount is
exempted from levy and sale, provided the debtor comply with
the requirements of the law; and the bankrupt fails to comply,
such property is not exempt from the operation of the bankrupt
act. Ex parte Farish, 2 Bank. Reg. 62; Ex parte Jackson, Ibid.
158. The approval by congress of the new constitution of North
Carolina did not extend the exemption under the bankrupt act.
Ex parte McLean, 2 Bank. Reg. 173.

2 March 1867.


to vest in the

be impaired or affected by any of the provisions of this act; (a) and the determination of the assignee in the matter shall, on exception taken, be subject to the final decision of the said court: And provided further, that no mortgage of any vessel, or of any Chattel mortother goods or chattels, made as security for any debt or debts, in good faith and for gages not to be present considerations, and otherwise valid, and duly recorded, pursuant to any statute of the United States, or of any state, shall be invalidated or affected hereby.(b) 26. And all the property conveyed by the bankrupt in fraud of his creditors; (c) Choses in action all rights in equity, (d) choses in action, patents and patent rights, and copyrights; assignee. all debts due him, or any person for his use, and all liens and securities therefor; and all his rights of action for property or estate, real or personal, and for any cause of action which the bankrupt had against any person, arising from contract, or from the unlawful taking or detention, or of injury to the property of the bankrupt, and all his rights of redeeming such property or estate, with the like right, title, power and authority to sell, manage, dispose of, sue for, and recover or defend the same, as the bankrupt might or could have had, if no assignment had been made, shall, in virtue of the adjudication of bankruptcy and the appointment of his assignee, be at once vested in such assignee; (e) and he may sue for and recover the said estate, debts and Power to prose effects, and may prosecute and defend all suits at law or in equity, pending at the time of the adjudication of bankruptcy, in which such bankrupt is a party, in his own name, in the same manner and with the like effect as they might have been prosecuted (g) or defended by such bankrupt. And a copy, duly certified by the clerk of Certified copy of the court, under the seal thereof, of the assignment made by the judge or register, as the case may be, to him as assignee, shall be conclusive evidence of his title as such assignee, to take, hold, sue for and recover the property of the bankrupt, as hereinbefore mentioned; but no property held by the bankrupt in trust shall pass by such Trust property assignment.

cute and derend suits.

assignment to be evidence.

not to pass.

or removal of

27. No person shall be entitled to maintain an action against an assignee in bank- Notice to he ruptcy, for anything done by him as such assignee, without previously giving him given of intended action against twenty days' notice of such action, specifying the cause thereof, to the end that such assignee. assignee may have an opportunity of tendering amends, should he see fit to do so. No Possession of person shall be entitled, as against the assignee, to withhold from him possession of books. any books of account of the bankrupt, or claim any lien thereon; and no suit in which suits not to the assignee is a party shall be abated by his death or removal from office, but the abate by death same may be prosecuted and defended by his successor, or by the surviving or remain- assignee. ing assignee, as the case may be. The assignee shall have authority, under the order Power to redeem and direction of the court, to redeem or discharge any mortgage or conditional contract, mortgages, &c. or pledge or deposit, or lien upon any property, real or personal, whenever payable, and to tender due performance of the condition thereof, or to sell the same, subject to such mortgage, lien or other encumbrances. (h) The debtor shall also, at the request Further assurof the assignee, and at the expense of the estate, make and execute any instruments, deeds and writings which may be proper to enable the assignee to possess himself fully of all the assets of the bankrupt.


28. The assignee shall immediately give notice of his appointment, (i) by publica- Notice of aption, at least once a week for three successive weeks, in such newspapers as shall for pointment. that purpose be designated by the court, due regard being had to their general circulation in the district or in that portion of the district in which the bankrupt and his creditors shall reside; and shall, within six months, cause the assignment to him to Assignment to be be recorded in every registry of deeds, or other office within the United States, where recorded.

(a) Property of the bankrupt exempt, both by the state law and the bankrupt law, from levy and sale, cannot be sold after he has filed his petition in bankruptcy, though previously levied on by the marshal. Ex parte Griffin, 2 Bank Reg. 85. Exempt property does not pass by the assignment. Ex parte Lambert, 2 Bank. Reg. 1:8.

(b) A chattel mortgage, though bona fide, is not valid, unless duly recorded under the state law. Ex parte Soldiers' Business Messenger and Dispatch Co., 2 Bank. Reg. 172. Nor unless the mortgagee enter into possession, as required by the state law. Ex parte Manly, 2 Am. L. T. Bank. 89. The assignee cannot make up out of the general funds, any difference between the net proceeds of the sale of the mortgaged property, and the amount due the mortgage-creditors. Ex parte Purcell. 2 Bank. Reg. 10. If the property be not worth the sum due the creditor, the assignee has no duties in respect to it. Ex parte Lambert, 2 Bank. Reg. 138.

(c) The assignee may recover property conveyed by the bankrupt in fraud of creditors, before the passage of the act. Bradshaw r. Klein, 16 Am. L. R. 505; s. c. 1 Bank. Reg. 146. So, he may receive the proceeds of property sold by the sheriff, under a judgment confessed in fraud of the bankrupt law. Wilson v. Brinkinan, 2 Bank. Reg. 149.

(d) The resulting trust for a bankrupt in real estate purchased with his funds, and conveyed to his wife in fraud of creditors,

vests in the assignee. Ex parte Meyers, 1 Bank. Reg. 162.

(e) The assignee represents the whole body of creditors, and it is his right and duty to contest the validity of any mortgage by which one creditor has obtained a preference over another. Ex parte Metzger, 2 Bank. Reg. 114; see Merchants' Bank of Hastings v. Truax, 1 Bank. Reg. 146; Ex parte Kerr, 2 Bank. Reg. 124.

(g) So amended by act 27 July 1868. 15 Stat. 228.

(h) The assignee may have an order for the sale of real estate mortgaged to the bankrupt. Ex parte Stewart, 15 Pitts. L. J. 222; 8. c. 1 Bank. Reg. 42; Ex parte Salmons, 15 Pitts. L. J. 541; s. c. 2 Bank. Reg. 19; Dwight v. Ames, Ibid. 147. He takes, subject to prior bona fide liens. Ex parte Smith, 1 Bank. Reg. 169. Such as a vendor's equitable lien for unpaid purchase-money. Ex parte Perdue, 2 Bank. Reg. 67; 8. c. 2 West. Jur. 279. And the sheriff's lien for his costs, which have accrued under an attachment, dissolved by the proceedings in bankruptcy. Ex parte Housberger, 2 Bank. Reg. 33.

(i) No discharge can be granted, unless it appear that notice of the appointment of the assignee was duly published. Ex parte Bellamy, 1 Ben. 390. But if the notice be published three times in the course of two weeks, instead of once a week for three successive weeks, as required by the act, this will not prevent the granting of a discharge. Ex parte Littlefield, 3 Bank. Reg. 13.

2 March 1867.

Record to be evidence.

Ibid. 15.

Powers of the assignee. Sales.


Ibid. 16.


May prosecute

pending actions.

a conveyance of any lands owned by the bankrupt ought by law to be recorded; and the record of such assignment, or a duly certified copy thereof, shall be evidence thereof in all courts.

29. The assignee shall demand and receive from any and all persons holding the same, all the estate assigned or intended to be assigned under the provisions of this act; and he shall sell all such unencumbered estate, real and personal, which comes to his hands, on such terms as he thinks most for the interest of the creditors; (a) but upon petition of any person interested, and for cause shown, the court may make such order concerning the time, place and manner of sale, as will, in its opinion, prove to the interest of the creditors. And the assignee shall keep a regular account of all money received by him as assignee, to which every creditor shall, at reasonable times, have free resort. (b)

30. The assignee shall have the like remedy to recover all said estate, debts and Remedies of the effects, in his own name, as the debtor might have had, if the decree in bankruptcy had not been rendered and no assignment had been made. (c) If, at the time of the commencement of proceedings in bankruptcy, an action is pending in the name of the debtor, for the recovery of a debt or other thing, which might or ought to pass to the assignee by the assignment, the assignee shall, if he requires it, be admitted to prosecute the action in his own name, in like manner and with like effect as if it had been Suits not to be originally commenced by him. No suit pending in the name of the assignee shall be abated by his death or removal; but upon the motion of the surviving, or remaining or new assignee, as the case may be, he shall be admitted to prosecute the suit in like manner and with like effect as if it had been originally commenced by him. In suits prosecuted by the assignee, a certified copy of the assignment made to him by the judge or register shall be conclusive evidence of his authority to sue.

abated by death or removal.

Ibid. 17. Deposit of funds.


Notice of meetings, &c.



Ibid. 18. Removal of assignee.

Vacancies, how filled.

31. The assignee shall, as soon as may be after receiving any money belonging to the estate, deposit the same in some bank, in his name as assignee, or otherwise keep it distinct and apart from all other money in his possession; and shall, as far as practicable, keep all goods and effects belonging to the estate separate and apart from all other goods in his possession, or designated by appropriate marks, so that they may be easily and clearly distinguished, and may not be exposed or liable to be taken as his property or for the payment of his debts. When it appears that the distribution of the estate may be delayed by litigation or other cause, the court may direct the temporary investment of the money belonging to such estate, in securities to be approved by the judge or a register of said court; or may authorize the same to be deposited in any convenient bank, upon such interest, not exceeding the legal rate, as the bank may contract with the assignee to pay thereon.

32. He shall give written notice to all known creditors, by mail or otherwise, of all dividends; and such notice of meetings, after the first, as may be ordered by the court. He shall be allowed, and may retain out of money in his hands, all the necessary disbursements made by him in the discharge of his duty,(d) and a reasonable compensation for his services, in the discretion of the court. He may, under the direction of the court, (e) submit any controversy arising in the settlement of demands against the estate, or of debts due to it, to the determination of arbitrators, to be chosen by him and the other party to the controversy; and may, under such direction, compound and settle any such controversy, by agreement with the other party, as he thinks proper and most for the interest of the creditors.

33. The court, after due notice and hearing, may remove an assignee for any cause which, in the judgment of the court, renders such removal necessary or expedient. At a meeting called by order of the court, in its discretion, for the purpose, or which shall be called upon the application of a majority of the creditors in number and value, the creditors may, with consent of the court, remove any assignee by such a vote as is herein before provided for the choice of assignee. An assignee may, with the consent of the judge, resign his trust and be discharged therefrom. Vacancies caused by death or otherwise in the office of assignee may be filled by appointment

(a) He may sell the unencumbered assets, without any order of court. Ex parte White, 1 Bank. Reg. 1. Where a sheriff makes a levy after the filing of the petition in bankruptcy, the assignee must sell, and deposit the proceeds, subject to the order of the court. Pennington v. Sale, 1 Bank. Reg. 157. He must surrender to the proper owners, property found in the possession of the bankrupt, but not belonging to him. Ex parte Noakes, 1 Bank. Reg. 164; see Ex parte Vogel, 2 Bank. Reg. 138.

(b) The bankrupt's landlord is entitled to be paid the amount of his accruing rent for the use of the demised premises, for the time the same was necessarily occupied by the assignee, for the storage of the bankrupt's effects. Ex parte Appold, 16 Am. L. R. 624; Ex parte Walton, 1 Bank. Reg. 154; and see Ex parte Rose, 2 Balt. L. Tr. 625.

(c) The assignee may recover property fraudulently disposed of by the bankrupt, by summary proceedings in the district court. Bill v. Beckwith, 2 Bank. Reg. 82; Ex parte Meyer, Ibid. 137. And see Bradshaw v. Klein. 16 Am. L. R. 505.

(d) See Ex parte Appold, 16 Am. L. R. 624; Ex parte Sherwood, 25 Leg. Int. 76; 8. c. 1 Bank. Reg. 74; Ex parte Walton, Ibid. 154; supra, note b. And as to counsel fees, see Ex parte New York Mail Steamship Co., 2 Bank. Reg. 137. The court may authorize him to expend money in finishing chattels which he finds in an incomplete and unsaleable condition. Dwight v. Ames, 2 Bank. Reg. 147.

(e) The register has no jurisdiction in the premises. Ex parte Graves, 1 Bank. Reg. 19.

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