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Sec. 4. Courts and procedure therein-Continued. Rules, forms, and orders (830)...

9614 Computation of time ($ 31).

9615 Transfer of cases (8 32)..

9616 5. Officers, their duties and compensation....

9617 Creation of two officos (8 33)..

9617 Appointment, removal, and districts of referees (8 34)

9618 Qualifications of referees (8 35)

9619 Oaths of office of referees (8 36).

9620 Number of referees ($ 37)

9621 Jurisdiction of referees (8 38)..

9622 Duties of referees ($ 39)..

9623 Compensation of referees ($ 40, as amd, Act Feb. 5, 1903, $ 9). 9624 Contempts before referees (8 41).

9625 Records of referees (S 42)...

9626 Referee's absence or disability (§ 43).

9627 Appointment of trustees (8 44)..

9628 Qualifications of trustees ($ 45).

9629 Death or removal of trustees (8 46).

9630 Duties of trustees (8 47, as amd. Act Feb. 5, 1903, § 10, and Act June 25, 1910, $ 8)......

9631 Compensation of trustees, receivers, and marshals ($ 48, as amd. Act Feb. 5, 1903, & 11, and Act June 25, 1910, $ 9)...

9632 Accounts and papers of trustees (8 49)...

9633 Bonds of referees and trustees (8 50).

9634 Duties of clerks (8 51)....

9635 Compensation of clerks and marshals ($ 52).

9636 Duties of Attorney-General (8 53)...

9637 Statistics of bankruptcy proceedings (8 54).

9638 6. Creditors

9639 Meetings of creditors ($ 55).

9639 Voters at meetings of creditors (8 56).

9640 Proof and allowance of claims ($ 57, as amd. Act Feb. 5, 1903, § 12) 9641 Notices to creditors (8 58, as amd. Act June 25, 1910, § 91/2)...... 9642 Who may file and dismiss petitions (8 59, as amd. Act June 25, 1910, $ 10)

9643 Preferred creditors ($ 60, as amd. Act Feb. 5, 1903, § 13, and Act June 25, 1910, § 11).

9644 7. Estates

9645 Depositories for money ($ 61)....

9645 Expenses of administering estates. (8 62).

9646 Debts which may be proved (§ 63)..

9647 Debts which have priority (8 64, as amd. Act Feb. 5, 1903, § 14, and Act June 15, 1906)...

9648 Declaration and payment of dividends (8 65, as amd. Act Feb. 5, 1903, § 15)

9649 Unclaimed dividends ($ 66).

9650 Liens ($ 67, as amd. Act Feb. 5, 1903, § 16, and Act June 25, 1910, $ 12)

9651 Set-offs and counterclaims (8 68)

9652 Possession of property (§ 69)..

9653 Title to property ($ 70, as amd. Act Feb. 5, 1903, § 16).

9654 Bankruptcy records; duty of clerks to keep; inspection ($ 71, as amd. Act Feb. 5, 1903, $ 17)...

9655 Restriction of compensation of referees, receivers, marshals, and

trustees ($ 72, as amd. Act Feb. 5, 1903, & 18, and June 25, 1910,
§ 13)



Definitions § 9585. (Act July 1, 1898, c. 541, § 1.) Meaning of words and

phrases. Meaning of Words and Phrases.-a The words and phrases used in this act and in proceedings pursuant hereto shall, unless the

same be inconsistent with the context, be construed as follows: (1) “A person against whom a petition has been filed” shall include a person who has filed a voluntary petition; (2) "adjudication” shall mean the date of the entry of a decree that the defendant, in a bankruptcy proceeding, is a bankrupt, or if such decree is appealed from, then the date when such decree is finally confirmed; (3) “appellate courts" shall include the circuit courts of appeals of the United States, the supreme courts of the Territories, and the Supreme Court of the United States; (4) "bankrupt" shall include a person against whom an involuntary petition or an application to set a composition aside or to revoke a discharge has been filed, or who has filed a voluntary petition, or who has been adjudged a bankrupt; (5) "clerk” shall mean the clerk of a court of bankruptcy; (6) "corporations” shall mean all bodies having any of the powers and privileges of private corporations not possessed by individuals or partnerships, and shall include limited or other partnership associations organized under laws making the capital subscribed alone responsible for the debts of the association; (7) "court" shall mean the court of bankruptcy in which the proceedings are pending, and may include the referee; (8) "courts of bankruptcy” shall include the district courts of the United States and of the Territories, the supreme court of the District of Columbia, and the United States court of the Indian Territory, and of Alaska; (9) “creditor" shall include anyone who owns a demand or claim provable in bankruptcy, and may include his duly authorized agent, attorney, or proxy; (10) "date of bankruptcy," or "time of bankruptcy," or "commencement of proceedings," or "bankruptcy," with reference to time, shall mean the date when the petition was filed; (11) "debt" shall include any debt, demand, or claim provable in bankruptcy; (12) "discharge" shall mean the release of a bankrupt from all of his debts which are provable in bankruptcy, except such as are excepted by this act; (13) “document” shall include any book, deed, or instrument in writing; (14) "holiday" shall include Christmas, the Fourth of July, the Twenty-second of February, and any day. appointed by the President of the United States or the Congress of the United States as a holiday or as a day of public fasting or thanksgiving; (15) a person shall be deemed insolvent within the provisions of this act whenever the aggregate of his property, exclusive of any property which he may have conveyed, transferred, concealed, or removed, or permitted to be concealed or removed, with intent to defraud, hinder, or delay his creditors, shall not, at a fair valuation, be sufficient in amount to pay his debts; (16) “judge” shall mean a judge of a court of bankruptcy, not including the referee; (17) "oath" shall include affirmation"; (18) "officer" shall include clerk, marshal, receiver, referee, and trustee, and the imposing of a duty upon or the forbidding of an act by any officer shall include his successor and any person authorized by law to perform the duties of such officer; (19) "persons” shall include corporations, except where otherwise specified, and officers, partnerships, and women, and when used with reference to the commission of acts which are herein forbidden shall include persons who are participants in the forbidden acts, and the agents, officers, and members of the board of directors or trustees, or other similar controlling bodies of corporations; (20) "petition shall mean a paper filed in a court of bankruptcy or with a clerk or deputy clerk by a debtor praying for the benefits of this act, or by creditors alleging the commission of an act of bankruptcy by a debtor therein named; (21) “referee” shall mean the referee who has jurisdiction of the case or to whom the case has been referred, or anyone acting in his stead; (22) "conceal” shall include secrete, falsify, and mutilate; (23) "secured creditor" shall include a creditor who has security for his debt upon the property of the bankrupt of a nature to be assignable under this act, or who owns such a debt for which some indorser, surety, or other persons secondarily liable for the bankrupt has such security upon the bankrupt's assets; (24) "States” shall include the Territories, the Indian Territory, Alaska, and the District of Columbia; (25) "transfer” shall include the sale and every other and different mode of disposing of or parting with property, or the possession of property, absolutely or conditionally, as a payment, pledge, mortgage, gift, or security; (26) “trustee” shall include all of the trustees of an estate; (27) “wage-earner” shall mean an individual who works for wages, salary, or hire, at a rate of compensation not exceeding one thousand five hundred dollars per year; (28) words importing the masculine gender may be applied to and include corporations, partnerships, and women; (29) words importing the plural number may be applied to and mean only a single person or thing; (30) words importing the singular number may be applied to and mean several persons or things. (30 Stat. 544, 545.)

This was the first section of the Bankruptcy Act of July 1, 1898, c. 511, entitled "An act to establish a uniform system of bankruptcy throughout the United States."

The act was divided into 7 chapters, of which chapter 1 contained this section only, and chapters 2–7 contained the remaining sections 2–70 of the act as originally enacted. Said sections are set forth, as amended by subsequent acts, post, 88 9586–9654. Two additional sections, added to the act as sections 71 and 72 thereof, are set forth at the end of chapter 7, post, 88 9655, 9656.

Notes of Decisions 1. Constitutionality of national bank- of bankruptcy on the voluntary petiruptcy law.-Under the clause of the tion of the debtor. Hanover Nat. Bank federal constitution from which the v. Moyses (1902) 186 U. S. 181, 22 Sup. power of congress in this behalf is de- Ct. 857, 46 L. Ed. 1113, 8 Am. Bankr. rived, it is within the competence of Rep. 1; In re Klein (1843) 1 How. (U. the national legislature, untrammeled S.) 277, note;' Id. (C. C. 1843) Fed. by any state laws, to enact any and all Cas. No. 7,865; State Bank v. Wilborn forms of legislation tending to promote (1845) 6 Ark. 35; Lalor v. Wattles the distribution of an insolvent's estate (1846) 8 Ill. (3 Gilman) 225; Loud v. among his creditors and his discharge Pierce (1845) 25 Me. 233; Thompson from their demands, providing only V. Alger (1847) 12 Metc. (Mass.) 428; that its enactments are not wanting in Kunzler v. Kohaus (1843) 5 Hill (N. Y.) the character of uniformity. Hurley v. 317; Morse v. Hovey (1846) 1 Barb. Devlin (D. C. 1907) 151 Fed. 919, 18 Ch. (N. Y.) 404. Am. Bankr. Rep. 627; In re Silver- Those provisions of the act which man (D. C. 1870) 2 Abb. U. S. 243, 4 provide for compositions in bankruptcy N. B. R. 522, Fed. Cas. No. 12,855; are not unconstitutional; it is none the Keene v. Mould (1847) 16 Ohio, 12; less, for this reason, a "law on the subRowan v. Holcomb (1847) 16 Ohio, 463; ject of bankruptcies.” In re Reiman Pope v. Title Guaranty & Surety Co. (C. C. 1875) 13 N. B. R. 128, Fed. Cas. (1913) 152 Wis. 611, 140 N. W. 348. No. 11,675; Id. (D. C. 1874) 11 N. B.

The authority of congress over the R. 21, Fed. Cas. No. 11,673. subject of bankruptcy is not to be In enacting a law on the subject of gauged or limited by the British stat- bankruptcy, it was within the constituutes of bankruptcy which were in force tional power of congress to attach conat the time of the adoption of our con- ditions or limitations to the granting of stitution. Though those statutes, as a discharge in bankruptcy. In re Calithen in force, applied only to persons fornia Pac. R. Co. (D. C. 1874) 11 N. engaged in trade, congress is not oblig- B. R. 193, Fed. Cas. No. 2,315, ed to limit its laws on the subject to The authority of congress to enact merchants or traders. Hanover Nat. a uniform law on the subject of bankBank v. Moyses (1902) 186 U. S. 181, ruptcy includes the authority to pro22 Sup. Ct. 857, 46 L. Ed. 1113, 8 Am. vide for its administration, to select Bankr. Rep. 1; Kunzler v. Kohaus and designate the courts which are to (1843) 5 Hill (N. Y.) 317; In re Silver- have jurisdiction under it, and to regman (D. C. 1870) 2 Abb. U. S. 243, 4 ulate the modes of procedure. Goodall N. B. R. 522, Fed. Cas. No. 12,855. v. Tuttle (D. C. 1872) 7 N. B. R. 193,

The bankruptcy act is not unconstitu- Fed. Cas. No. 5,533; Mitchell v. Great tional because it applies to corporations Works Mill. & Mfg. Co. (C. C. 1843) as well as to natural persons. In re Fed. Cas. No. 9,662; McLean v. LafayCalifornia Pac. R. Co. (D, C. 1874) 11 ette Bank (C. C. 1843) Fed. Cas. No. N. B. R. 193, Fed. Cas. No. 2,315. 8,885.

The bankruptcy act is not unconstitu- The bankruptcy act does not deprive tional in providing for an adjudication creditors of their property without due

process of law because it does noc provide for notice to them of the filing of a voluntary petition nor require personal service of notice of the application for discharge in voluntary proceedings, nor on the theory that the notice provided for is unreasonably short or the right to oppose the discharge unreasonably restricted. Hanover Nat. Bank v. Moyses (1902) 186 U. S. 181, 22 Sup. Ct. 857, 46 L. Ed. 1113.

The penal and criminal provisions of the bankruptcy act do not render it unconstitutional, since it is competent for congress to enforce, by suitable penalties, all legislation necessary or proper to the execution of the powers with which it is intrusted, and any act committed with a view to evading such legislation, or fraudulently securing its benefits, may be made an offense against the United States. U. S. v. Fox (1877) 95 U. S. 670, 24 L. Ed. 538.

With reference to the constitutional requirement that bankruptcy laws shall be "uniform throughout the United States," it is held that the uniformity required is geographical and not personal, and that no limitation is imposed upon congress as to the classification of persons who are to be affected by such laws, provided only that the laws shall have uniform operation throughout the United States. For this reason, the present bankruptcy act is not lacking in the “uniformity" required by the constitution, although it discriminates, in respect to the right to file a voluntary petition, between natural and artificial persons, withholding that right from all corporations. Neither is it invalid because, in respect to amenability to involuntary proceedings, it distinguishes between different classes of corporations, being made applicable only to those of a certain character or engaged in certain pursuits, and also between different classes of natural persons, exempting wage-earners and farmers. Nor is the classification actually adopted by congress unreasonable or beyond the limits of its discretion. Hanover Nat. Bank v. Moyses (1902) 186 U. S. 181, 22 Sup. Ct. 857, 46 L. Ed. 1113, 8 Am. Bankr. Rep. 1; Leidigh Carriage Co. v. Stengel (1899) 95 Fed. 637, 37 C. C. A. 210, 2 Am. Bankr. Rep. 383.

The bankruptcy act is not deprived of the uniformity required by the constitution because it adopts the exemption laws of the several states, to the extent of according to the bankrupt the exemptions allowed him by the law of the state of his domicile. Hanover Nat. Bank v. Moyses (1902) 186 U. S. 181, 22 Sup. Ct. 857, 46 L. Ed. 1113, 8 Am. Bankr. Rep. 1;

(C. C. 1874) 10 N. B. R. 1, Fed. Cas. No. 3,728; Darling v. Berry (C. C. 1882) 13 Fed. 659; In re Beckerford (C. C. 1870) 4 N. B. R. 203, Fed. Cas. No. 1,209; In re Jordan (D. C. 1873) Fed. Cas. No. 7,514; In re Duerson (D. C. 1876) 13 N. B, R, 183, Fed. Cas. No. 4,117:

Dozier v. Wilson (1890) 84 Ga. 301, 10 S. E. 743.

The provisions of the bankruptcy act applying to an estate in bankruptcy the varying laws of the states with reference to the bankrupt's wife's right of dower and the priority of claims, do not deprive the act of the requisite uniformity, nor amount to an unlawful delegation of the legislative power of congress to the several states. Hanover Nat. Bank v. Moyses (1902) 186 U. S. 181, 22 Sup. Ct. 857, 46 L. Ed. 1113, 8 Am. Bankr. Rep. 1; Thomas v. Woods (1909) 173 Fed. 585, 97 C. C. A. 535, 23 Am. Bankr. Rep. 132.

Although the bankruptcy •act invades and annuls vested rights, and impairs or destroys the obligation of contracts, by releasing debtors from their obligations upon a partial payment or without any payment at all, even in respect to debts contracted before the enactment of the law, and making its provisions compulsory upon creditors, it is not for that reason unconstitutional.

In re Kean (D. C. 1873) 8 N. B. R. 367, Fed. Cas. No. 7,630; In re Smith (D. C. 1873) 8 N. B. R. 401, Fed. Cas. No. 12,986; Evans v. Eaton (C. C. 1816) Fed. Cas. No. 4,559; In re Owens (D. C. 1875) 12 N. B. R. 518, Fed. Cas. No. 10,632; Keene v. Mould (1847) 16 Ohio, 12; Morse v. Hovey (1846) 1 Barb. Ch. (N. Y.) 404; In re Klein (C. C. 1843) Fed. Cas. No. 7,865; Loud v. Pierce (1845) 25 Me. 233; Cutter v. Folsom (1845) 17 N. H. 139.

Congress is not prevented by anything contained in the constitution from destroying any lien upon the property of the bankrupt, if it shall be deemed necessary for the effective working of the law and for preserving the equal rights of creditors, whether such lien was created by contract, statute, or judgment. In re Jordan (D. C. 1873) 8 N. B. R. 180, Fed. Cas. No. 7,514, If the prohibition against laws impairing the obligation of contracts could be construed as applying to congress, the bankruptcy act would not be liable to this objection, in respect to that part of it which operates to dissolve liens acquired within four months prior to the proceedings, for such liens relate only to the remedy for the enforcement of the contract, and not to the obligation of the contract. In re Rhoads (D. C. 1899) 98 Fed. 399, 3 Am. Bankr. Rep. 380; Corner v. Miller (Md. Ct. Com. Pleas) 1 N. B. R. 403.

2. Policy and purpose of act.-In respect to the distribution of property, it is the intention of the bankruptcy act to divide the estate of the bankrupt between himself, his wife, and his children on the one hand, and his creditors on the other hand, as the laws of the state of his domicile authorize its division under like circumstances. In re McKenzie (1905) 142 Fed. 383, 73 C. C. A. 483, 15 Am. Bankr. Rep. 679; Hurley v. Devlin (D. C. 1907)


151 Fed. 919, 18 Am. Bankr. Rep. 627. It is the intention to save to the bankrupt and his family every right and exemption which would have been theirs as against creditors enforcing claims by ordinary judicial process.

In re Cohn (D. C. 1909) 171 Fed. 568, 22 An. Bankr. Rep. 761. It is the further purpose of the act to relieve an honest debtor, who shows himself entitled to its benefits, from any further legal prosecution for his debts, in order to enable him to start afresh in business life. In re Swofford Bros. Dry Goods Co. (D. C. 1910) 180 Fed, 549, 25 Am. Bankr. Rep. 282.

The primary and principal purpose of the law regards the rights of creditors, and it is its intent to secure an absolutely equal and impartial distribution of the assets among the creditors, as speedily as possible, preventing all preferences and favoritism, defeating all fraudulent attempts to secrete prop-. erty, and providing a remedy against every act by which a failing debtor seeks an unequal distribution. Pirie v. Chicago Title & Trust Co. (1901) 182 U. S. 438, 21 Sup. Ct. 906, 45 L. Ed. 1171, 5 Am. Bankr. Rep. 814; In re Blount (D. C. 1906) 142 Fed. 263, 16 Am. Bankr. Rep. 97; In re Swofford Bros. Dry Goods Co. (D. C. 1910) 180 Fed. 519, 25 Am. Bankr. Rep. 282; Webb's Trustee v. Lynchburg Shoe Co. (1908) 107 Va. 807, 60 S. E. 130; Whitwell v. Wright (Sup. 1909) 115 N. Y. Supp. 48; Hewitt v. Boston Straw Board Co. (1913) 214 Mass. 260, 101 N. E. 424; Pope v. Title Guaranty & Surety Co. (1913) 152 Wis. 611, 140 N. W. 348; Utah Ass'n of Creditmen v. Boyle Furniture Co. (Utah, 1913) 136 Pac. 572. It is the duty of the courts to carry this purpose into effect to the extent which the language of the statute justifies, and not to tolerate any scheme or artifice to evade the letter and spirit of the law. In re Blount (D. C. 1906) 142 Fed. 263, 16 Am. Bankr. Rep. 97. No state court has power to suspend the operation of the bankruptcy law, or to restrain a judgment debtor from availing himself of its provisions. In re Kepecs (Sup. 1910) 123 N. Y. Supp. 872.

A municipal ordinance which required members of the city's fire department to make prompt payment of all necessary personal and household expenses, and provided that the failure of a fireman to do so should be ground for discharging him, was held o be superseded and invalidated by the bankruptcy law, in so far as it affected debts of a fireman which would be dischargeable in a bankruptcy proceeding pending against him. In re Hicks (D. C. 1905) 133 Fed. 739, 13 Ain Bankr. Rep. 654.

The maker of a judgment note containing a waiver of "all rights under the bankruptcy laws of the United States" is not thereby estopped from setting up a subsequent discharge in bankrupt

cy as a defense to his liability, since the waiver is void as contrary to public policy. May 8. Mercbants' & Me. chanics' Bank (1885) 109. Pa. 145.

3. Interpretation and construction of bankruptcy act. The bankruptcy law is a remedial statute and should not be subjected to a narrow or illiberal interpretation; it should be construed reasonably and according to the fair import of its terms, with a view to effect its objects and to promote justice. Botts v. Hammond (1900) 99 Fed. 916, 40 C. C. A. 179, 3 Am. Bankr. Rep. 775; Blake, Moffitt & Towne v. Francis-Valentine Co. (D. C. 1898) 89 Fed. 691, 1 Am. Bankr. Rep. 372; Norcross v, Nathan (D. C. 1900) 99 Fed. 414, 3 Am. Bankr. Rep. 613; Southern Loan & Trust Co. v. Benbow (D. C. 1899) 96 Fed. 514, 3 Am. Bankr. Rep. 9; In re Muller (D. C. 1869) 3 N. B. R. 329, Fed. Cas. No. 9,912; In re Mallory (D. C. 1871) Fed. Cas, No. 8,991, 6 N. B. R. 22; Mims v. Lockett (1856) 20 Ga. 474; Campbell v. Perkins (1853) 8 N. Y. 430. Statutory provisions as to the conditions on which bankrupts may be discharged are remedial, and the strict rules of construction appropriate to retrospective laws are not applicable to them. In re Scott (D. C. 1901) 126 Fed. 981, 11 Am. Bankr. Rep. 327.

Where provisions of the bankruptcy act of 1867 were construed by the courts, a court is justified in giving the same construction to similar provisions in the present bankruptcy act. In re Levin (1910) 176 Fed. 177, 99 O. C. A. 531, 23 Am. Bankr. Rep. 815.

Those provisions of the act which confer jurisdiction and powers on the courts of bankruptcy are to be construed liberally, not narrowly, in order that the act may have the beneficial effect intended by congress and be capable of harmonious execution. Mur. ray v. Beal (D. C. 1899) 97 Fed. 567, 3 Am. Bankr. Rep. 284; Southern Loan & Trust Co. v. Benbow (D. C. 1899) 96 Fed. 514, 3 Am. Bankr. Rep. 9; In re California Pac. R. Co. (D. C. 1874) 11 N. B. R. 193, Fed. Cas. No. 2,315.

The provisions of the act prescribing the requisites of a composition with creditors are to be strictly construed as against those who seek by this means to deprive nonassenting creditors of their right to have the debtor's property administered upon and distributed in the ordinary course of bankruptcy proceedings. In re Rider (D. C. 1899) 96 Fed. 808, 3 Am. Bankr. Rep. 178.

A provision in the first section of the bankruptcy act that a given word shall" include a certain thing, does not necessarily exclude other meanings. In re Harper (D. C. 1910) 175 Fed. 412, 23 Am. Bankr. Rep. 918.

On questions of the construction of the bankruptcy act, opinions expressed by individual members of congress in the debates on the passage of the act, as to the object and effect of its particular

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