by estoppel or such as are partnerships as to creditors only. (In re Kenney, 3 Am. B. R. 353; 97 Fed. 554.)

Construction of the Section.-In the case of In re Henry L. Meyer, et al. also reported as Chemical Bank v. Meyer et al. (3 Am. B. R. 559; 39 C. C. A. 368; 98 Fed. 976) where the act of bankruptcy alleged was an assignment for the benefit of creditors purporting to transfer all the property of the partnership, and made by one partner, Wallace, C. J., gives the following general construction of this section:

"By the provisions of section 5 of the Bankrupt Act, ‘a partnership,' during the continuance of the business or after its dissolution and before the final settlement of its business may be adjudged a bankrupt, and jurisdiction of all the partners and the administration of the partnership and individual property is conferred upon any Court of Bankruptcy having jurisdiction of one of the partners. The section provides that the creditors of the partnership shall appoint the trustee; that the trustee shall keep separate accounts of the partnership property and of the individual property; that the expenses shall be paid from the partnership property and the individual property as the court may determine; and that the net proceeds of the partnership property shall be appropriated to the payment of the partnership debts, and any surplus added to the assets of the individual partners, and the net proceeds of the individual estate of each partner shall be appropriated to the payment of his individual debts, and any surplus to the payment of the partnership debts. It authorizes the partnership estate to prove against the individual estates, and vice versa and directs the assets of the partnership estate and the individual estates to be marshaled so as to prevent preferences, and secure the equitable distribution of the property of the several estates. It further provides that the property of a partnership shall not be administered in bankruptcy when less than all the members are adjudged bankrupt; and in that event the partner not adjudged bankrupt is to settle the partnership business expeditiously, and account for the interests of the adjudged bankrupt. The last provision applies to a proceeding by or against one partner, or any number less than all, and means that the bankruptcy of one partner shall not preclude the other from settling the partnership business, and, like those immediately preceding it, is merely declaratory of a recognized equitable principle of administration in bankruptcy. Amsinck v. Bean, 22 Wall. 403, 22 L. Ed. 801; Murray v. Murray, 5 Johns. Ch. 60; Colly. Partn. 854.

We are of the opinion that it is the scheme of these provisions to treat the partnership as an entity which may be adjudged a bankrupt by voluntary or involuntary proceeding, irrespective of any adjudication of the individual partners as bankrupt, and upon an adjudication to draw to the administration the individual estates of the partners as well as the partnership estate, and

When a Partnership is Insolvent.

[Ch. III. marshal and distribute them according to equity. The assets of the individual estates and the debts provable against them can be ascertained without adjudicating the individual partners bankrupt. The language does not require such an adjudication. The section is silent respecting a discharge of the partners individually. It does not, by terms or by implication, preclude an adjudication of the individual partners as bankrupt in the partnership proceeding; and, if there is such an adjudication, there is nothing to prevent the partners from receiving a discharge individually, if they are otherwise entitled to it under the act. But, as the commission of an act of bankruptcy is indispensable to jurisdiction in an involuntary proceeding, the individual members cannot be adjudged bankrupts in such a proceeding who have not committed, or been participants in committing, one of the enumerated acts.

Section 5 differs significantly in its phraseology from that of the former acts in regard to the bankruptcy of partners. It takes the place of section 14 of the Bankruptcy Act of 1841, and of section 36 of the Bankruptcy Act of 1867. These sections of the earlier acts authorized an adjudication of bankruptcy of 'persons who are partners in trade,' instead of 'a partnership;' and, while providing for the administration of the joint and separate estates substantially like section 5, provided, as section 5 does not, for granting or refusing a discharge to each partner. By the language of these acts, it was a prerequisite that all the persons comprising the partnership should be adjudged bankrupt before the warrant could issue entitling the assignee to administer the joint estate, and the provisions respecting a discharge show that such an adjudication was contemplated.

When a Partnership is Insolvent.-It has been held in a recent case in the Circuit Court of Appeals for the 6th Circuit (Vaccaro v. Security Bank, 4 Am. B. R. 474) that where the joint assets of a partnership are not sufficient to pay the liabilities of the firm, but the individual property of all the members of the firm, including the deceased partner, after deducting individual debts and exemptions and the dower of the widow of the deceased partner, are, added to the partnership assets, much more than sufficient to pay the debts of the firm, the partnership is not insolvent within the meaning of section 3 of the Bankruptcy Act. (In re Blair, 3 Am. B. R. 588; 96 Fed. 76.) This proceeds from the general principle of the liability of the partners' individual estates for the debts of the firm.

The differences indicate that Congress intended that a partnership should be, for the purpose of the Bankrupt Act, in all respects a person,' as defined by section 1, entitled to a discharge under section 14. and subject to be adjudged a bankrupt in involuntary proceedings if it has committed any of the

acts of bankruptcy specified in section 3. There are many provisions in the act which refer to the personal immunities and duties of bankrupts, and are not applicable to an entity like a partnership, but these are equally inapplicable to a corporation.

Under the former acts, there could not be an adjudication of all the partners unless a joint act of bankruptcy had been committed, and consequently there could be no administration of the joint effects (see Redmond v. Martin, 9. N. B. R 408, Fed. Cas. No. 11,632); and cases arose in which creditors were without an adequate remedy. It may have been the purpose of Congress in the present act to cure the defect."

Who Must Petition. The section contains no express provision as to who may become petitioners in proceedings to adjudge the parties bankrupt, but under G. O. 8 and under the cases decided, it is held in analogy to the Act of 1867 that co-partners may be adjudged bankrupt, 1st, where all unite in a voluntary petition; 2nd, where a creditor files an involuntary petition; 3rd, where one or more but not all the co-partners petition. The last case is provided for in G. O. 8, which is as follows:

Any member of a partnership, who refuses to join in a petition to have the partnership declared bankrupt, shall be entitled to resist the prayer of the petitioner in the same manner as if the petition had been filed by a creditor of the partnership, and notice of the filing of the petition shall be given to him in the same manner as provided by law and by these rules in the case of the debtor petitioned against; and he shall have the right to appear at the time fixed by the court for the hearing of the petition, and to make proof, if he can, that the partnership is not insolvent or has not committed an act of bankruptcy, and to make all defenses which any debtor proceded against is entitled to take by the provisions of the act; and in case an adjudication of bankruptcy is made upon the petition, such partner shall be required to file a schedule of his debts and an inventory of his property in the same manner as is required by the act in cases of debtors against whom adjudication of bankruptcy shall be made.

When a petition on behalf of part of the members of the firm is filed in the clerk's office it is to be classed as a voluntary proceeding, and in the absence of the judge from the district or division, the clerk must refer the case to the proper referee. If, however, the non-joining partner or partners upon notification should make defense to the petition then the proceeding would become as to them an involuntary one and the rules prescribed for

The Act of Bankruptcy.

[Ch. III. involuntary proceedings followed. (See In re Murray et al. 3 Am. B. R. 601; 96 Fed. 600; compare in re Russell, 3 Am. B. R. 91; 97 Fed. 32.) It is very clear where one of the members of the firm desires a discharge from the firm as well as from individual debts he must set up in his petition that he is a member of the firm and that he seeks such discharge. (In re Russell, supra.)

Where one of the partners is an infant an adjudication should be made against the partner who is of age and against the firm, but as to the minor partner the petition should be dismissed on the ground of minority. (In re Dunnigan Bros. 2 Am. B. R. 628; 95 Fed. 428; compare in re Duguid, 3 Am. B. R. 794; 100 Fed. 274.)

The Act of Bankruptcy.-To what extent an act of one partner which is an act of bankruptcy may be imputed to the whole firm has been somewhat questioned by the authorities. It would seem that for any act done by one member which is within any possible scope of delegated authority, the firm and all its members would be liable in all civil proceedings, including bankruptcy proceedings; but if an act of any one member of the firm, although it is an act of bankruptcy, is not within the scope of his authority, and has not been sanctioned or ratified by his co-partners, and was not done by their direction or authority, then it cannot be considered a firm act, and they cannot all be put into bankruptcy because of it. (In re Meyer, 3 Am. B. R. 559; 39 C. C. A. 368; 98 Fed. 976.)

Generally it will be found that the members of the firm can all be charged with knowledge, or at least with a tacit sanction of the act of the offending member. The circumstances attending the transaction may be such that the law will presume that it was authorized or ratified by all the members of the firm. But if there has been no firm act of bankruptcy and no individual act ratified by the other members of the firm, and no act of any one member which was within the scope of a partner's authority, still all the members of the firm may be adjudged bankrupt, if each

of them individually has committed an act of bankruptcy. Compare in re Penn, 5 N. B. R. 30; Fed. Cas. 10,927; 5 Ben. 89.)

Who May be Adjudged.—As has been pointed out (In re Meyer, 3 Am. B. R. 559; 39 C. C. A. 368; 98 Fed. 976) it has been held that the individual partners may be adjudged as bankrupt in the partnership proceeding.

In the Eastern District of North Carolina Judge Purnell has recently held (In re Barden, 4 Am. B. R. 51; 101 Fed. 553) that where a petition is filed by a partnership to have the firm adjudged bankrupt, and also petitions by the individual members of the firm, each petition and the accompanying schedules constitutes separate and distinct cases, and the referee and trustee are entitled to separate fees in each case-one on the partnership petition and one on the petition of each individual member.

But in the District of New Hampshire, Aldrich, J. held (In re Gay, 3 Am. B. R. 529; 98 Fed. 870) separate petitions unnecessary and further held that where a firm and the individual partners become petitioners and set out the various accounts of indebtedness and the assets and various interests, and ask to be adjudged bankrupts, the practice adopted in New Hampshire is to discharge from both partnership and individual indebtedness in one proceeding, upon one petition, and only one filing fee is

necessary.

The learned Judge says that this is the practice in Maine and Massachusetts and further says:

"Paragraph 'c' of section 5 of the Bankrupt Law contemplates that the Bankruptcy Court which has jurisdiction of one of the partners may have jurisdiction of all the partners, and of the administration of the partnership and individual property. Paragraph 'd' provides that the trustee shall keep separate accounts of partnership property and property belonging to the individual partners; and paragraph 'e' that the expenses shall be paid from the partnership property and the individual property in such proportion as the court shall determine. So it would seem that in a proper case (and I mean by that upon sufficiently comprehensive papers, and conditions warranting it) the court may wind up the affairs and relieve from the indebtedness of the partnership and the individual partners in one proceeding, and apportion the expenses as equity may require. Furthermore, it may be said that Congress. for the purpose of making the law a practical, working law, authorized and