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§ 59-]

Who may File and Dismiss Petitions.

the discharge which the court is empowered to grant to a bankrupt.

And see decided under the present Act, Southern Loan and Trust Co. v. Benbow, 3 Am. B. R. 9; 96 Fed. 514; in re Ulfelder Clothing Co. 3 Am. B. R. 425; 98 Fed. 409.

The question as to the effect of want of notice has most frequently arisen in determining the effect of a discharge in bankruptcy upon the claims of creditors to whom no personal notice was given, and the rule enunciated in Rayl v. Lapham is in harmony with the decision of nearly all the courts under the former act. (Thurmond v. Andrews, 13 N. B. R. 157; s. c. 10 Bush [Ky.] 400; Platt v. Parker, 13 N. B. R. 14 [citing Payne v. Albe, 4 N. B. R. 220; s. c. 7 Bush (Ky.) 344]; Heard v. Arnold, 15 N. B. R. 543; s. c. 56 Ga. 570; Pattison v. Wilbur, 10 R. I. 448; s. c. 12 N. B. R. 193; Williams v. Butcher, 12 N. B. R. 143; in re Archenbrown, Fed. Cas. 504; 11 N. B. R. 149 [citing Hill v. Robbins, 22 Mich. 475]; Symonds v. Barnes, 6 N. B. R. 377; Corey v. Ripley, 4 N. B. R. 503.)

But under the present act creditors whose claims have not been scheduled in time for proof and allowance with the name of the creditor if known to the bankrupt, unless such creditor had notice or actual knowledge of the bankruptcy proceedings, will not be discharged. (Section 17 [3].)

SEC. 59. Who may File and Dismiss Petitions.-a Any qualified person may file a petition to be adjudged a voluntary bankrupt. b Three or more creditors who have provable claims against any person which amount in the aggregate, in excess of the value of securities held by them, if any, to five hundred dollars or over; or if all of the creditors of such person are less than twelve in number, then one of such creditors whose claim equals such amount may file a petition to have him adjudged a bankrupt.

c Petitions shall be filed in duplicate, one copy for the clerk and one for service on the bankrupt.

d If it be averred in the petition that the creditors of the bankrupt are less than twelve in number, and less than three creditors

Who May File and Dismiss Petitions - Voluntary Petitioners.

[Ch. VI. have joined as petitioners therein, and the answer avers the existence of a larger number of creditors, there shall be filed with the answer a list under oath of all the creditors, with their addresses, and thereupon the court shall cause all such creditors to be notified of the pendency of such petition and shall delay the hearing upon such petition for a reasonable time, to the end that parties in interest shail have an opportunity to be heard; if upon such hearing it shall appear that a sufficient number have joined in such petition, or if prior to or during such hearing a sufficient number shall join therein, the case may be proceeded with, but otherwise it shall be dismissed.

e In computing the number of creditors of a bankrupt for the purpose of determining how many creditors must join in the petition, such creditors as were employed by him at the time of the filing of the petition or are related to him by consanguinity or affinity within the third degree, as determined by the common law, and have not joined in the petition, shall not be counted.

f Creditors other than original petitioners may at any time enter their appearance and join in the petition, or file an answer and be heard in opposition to the prayer of the petition.

g A voluntary or involuntary petition shall not be dismissed by the petitioner or petitioners or for want of prosecution or by censent of parties until after notice to the creditors.

Analogous Provisions of Former Acts.

As to voluntary petition: R. S. section 5044; act of 1867. section 11; act of 1841, section 7. As to involuntary petitions, and the necessary amount of petitioners' claims: R. S. section 5021; act of 1867, section 39; act of 1841, section 7; act of 1800, sections 1 and 2.

Voluntary Petitioners. Section 59a.-There is some conflict of authority as to the right of a person to file a voluntary petition after an involuntary petition has been filed against him. It was held that this could be done, In re Canfield (1 N. Y. Leg. Obs. 234; S. c. 5 Law Rep. 415), a case decided under the act of 1841. The contrary was held in re R. Stewart (Fed. Cas. 13.419; 3 N. B. R. 108), decided under the act of 1867. In this case an adjudication was made upon the voluntary petition by the register, but the same was set aside by the court on motion. The court, in granting the motion, said: "It was never intended by the Bankrupt Act, and

59.] Who May Become Bankrupts - Petitioners in Involuntary Proceedings. no correct rule of practice can tolerate, that when a creditor has instituted proceedings to force his debtor into bankruptcy, such debtor should be allowed to become a bankrupt, and be adjudicated as such on his own petition before the determination of the creditor's petition. To permit such a practice might work a most flagrant wrong upon the rights of the petitioning creditor." In re C. A. Davidson (Fed. Cas. 3,599; 3 N. B. R. 418), a case arising in the southern district of New York, it appears from the facts stated in the opinion that creditors filed an involuntary petition; that the debtor denied the facts of the petition, and upon a trial was adjudged a bankrupt upon the petition of the creditors; but in the meantime the bankrupt filed in the same court his voluntary petition to be adjudged a bankrupt, and was so adjudged prior to the adjudication upon the involuntary petition, and the usual proceedings subsequent to an adjudication followed the adjudication on the voluntary petition, and none of these proceedings were assailed or were questioned by the court.

But under the present act it has been held that the pendency of an involuntary petition before adjudication will not necessarily invalidate a subsequent voluntary petition filed in the same or in another district. The question of jurisdiction must be determined upon each petition and neither is necessarily conclusive of the other. (In re Waxelbaum, 3 Am. B. R. 392; 98 Fed. 589, So. Dist. of N. Y.)

Who May Become Bankrupts.-Compare notes to section 4. A State court has no right to enjoin a party from applying to the court of bankruptcy to be adjudged a voluntary bankrupt. (Fillingin v. Thornton, 49 Ga. 384; s. c. 12 N. B. R. 92.)

Petitioners in Involuntary Proceedings. Section 59b, et seq.-It has been held that a State court has the power to restrain, by injunction, a creditor from prosecuting a fraudulent and oppressive petition in bankruptcy against a debtor, especially in cases where the petitioning creditor has, prior to filing the petition, sought the aid of the State court with reference to the claim held by him. (Pusey v. Bradley, 46 How. Pr. 255; s. c. I N. Y. Supr. [T.

Petitioners in Involuntary Proceedings.

[Ch. VI.

& C.] 661, citing 3 Edw. Ch. 203, 205; 17 How. Pr. 464; 6 Abb. Pr. 239.)

A person may request his creditors to institute proceedings in bankruptcy against him, and the adjudication will not be assailable as being fraudulently obtained. (In re Bouton. Fed. Cas. 1,706; 5 Saw. 427.)

A person may lawfully buy up claims so that he may enable himself to join in a petition in bankruptcy, and make up the necessary amount of claims. (In re Shouse, Crabbe, 482; in re Woodford & Chamberlain, Fed. Cas. 17,972; 13 N. B. R. 575-) It is not necessary that the debt of the petitioning creditor be one existing at the time of the act of bankruptcy which is alleged in the petition. (Phelps v. Clasen, 3 N. B. R. 87; Fed. Cas. 11,074; s. c. Wool. 204.) As to the right of a creditor holding a claim which is barred by the statute of limitations to file a petition based thereon compare section 63, paragraph on DEBTS BARRED BY THE STATUTE OF LIMITATIONS.

It seems to be the rule that where, upon the filing of an involuntary petition in bankruptcy there are not the proper number of petitioning creditors nor a sufficient amount of claims to support the petition but subsequently and before the adjudication other creditors enter their appearances and join in the petition, such creditors and the amounts of their claims will be reckoned in making up the number of the creditors and the amount of claims necessary to support an involuntary petition in bankruptcy. (In re Romanow, I Am. B. R. 461; 92 Fed. 510.) It was also held in this case that where there were not a proper number of petitioning creditors nor a sufficient amount of claims to support the petition but subsequently and before the adjudication but more than four months after the act of bankruptcy other creditors entered their appearances and joined in the petition, the petition is valid and an adjudication may be had upon it as it is immaterial when the other creditors join in the petition since it was filed within the four months after the commission of the act of bankruptcy by the insolvent debtor. But a later case, (In re Beddingfield, 2 Am. B. R. 355; 96 Fed. 190,) limits the practice to cases

§ 59.]

Petitioners in Involuntary Proceedings.

where apparently the original petition represented a sufficient number of creditors and claims and conferred jurisdiction. In the case of In re Mercur (2 Am. B. R. 626; 95 Fed. 634), the rule was clearly laid down that where but one creditor has made a petition to his debtor to be adjudicated a bankrupt alleging that the creditors are less than twelve in number when in fact there are more than twelve, other creditors may be allowed to join in the petition and the original petition may be amended, even though the amended petition sets up an act of bankruptcy other than that alleged in the original petition. Where a creditor has joined in an involuntary petition and has subsequently obtained a settlement of his claims he cannot withdraw from the proceedings. (See In re Beddingfield, supra and DISMISSAL OF PETITION, post, under this section.) Where the petition is filed by one creditor who alleges that all the creditors of the debtor are less than twelve in number and that with his own claim the amount of all equals or exceeds five hundred dollars, it is probable that such allegation may be made upon information or belief. (See In re Scammon, 10 N. B. R. 66; 6 Biss. 130; Fed. Cas. No. 12,427.)

Where a petition is filed against one who is a member of a partnership, his debts due as a member of the firm and those due individually are both to be taken into consideration in determining the number and amount. (In re Lloyd, Fed. Cas. 8,429; 15 N. B. R. 257.) In the same case it was held that a debt due by the partner to the firm could not be computed in ascertaining the number and amount of his debts, and that where he is a member of two firms, one of which owed the other, that debt could not be counted. In ascertaining whether the debt of the petitioning creditors equals the amount required by the statute, the interest as well as the principal of the indebtedness may be taken in consideration. (Sloan v. Lewis, 22 Wall. 150.) Debts not due, as well as those that are due, may be made the foundation of a petition in bankruptcy; they are provable claims, although not then payable. (In re W. Alexander, Fed. Cas. 161; 4 N. B. R. 178; s. c. I Low. 470; Linn v. Smith, Fed. Cas. 8,375; 4 N. B. R. 46.) If the

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