Thirdly. After the word "and", in line twenty, insert the word "knowing". And nothing in said section thirty-five shall be construed to invalidate any loan of actual value, or the security therefor, made in good faith, upon a security taken in good faith on the occasion of the making of such loan.

6 Bissell, 167. 3 Dillon, 110. 10 Hun., 277.

Involuntary bankrupts may be adjudged such, for

SEC. 12. That section thirty-nine of said act of March second, eighteen hundred and sixty-seven,(1) be amended so as to read as follows: "SEC. 39. That any person residing, and owing debts, as aforesaid, who, after the passage of this act, shall depart from the State, District, R. S., § 5021or Territory of which he is an inhabitant, with intent to defraud his 5031. creditors;

Or, being absent, shall, with such intent, remain absent;

Or shall conceal himself to avoid the service of legal process in any action for the recovery of a debt or demand provable under this act; Or shall conceal or remove any of his property to avoid its being attached, taken, or sequestered on legal process;

Or shall make any assignment, gift, sale, conveyance, or transfer of his estate, property, rights, or credits, either within the United States or elsewhere, with intent to delay, defraud, or hinder his creditors;

Or who has been arrested and held in custody under or by virtue of mesne process or execution, issued out of any court of the United States or of any State, District, or Territory within which such debtor resides or has property, founded upon a demand in its nature provable against a bankrupt's estate under this act, and for a sum exceeding one hundred dollars, and such process is remaining in force and not discharged by payment, or in any other manner provided by the law of the United States or of such State, District, or Territory, applicable thereto, for a period of twenty days,

Or has been actually imprisoned for more than twenty days in a civil action founded on contract for the sum of one hundred dollars or upward; Or who, being bankrupt or insolvent, or in contemplation of bank ruptcy or insolvency, shall make any payment, gift, grant, sale, conveyance, or transfer of money or other property, estate, rights, or credits, or confess judgment, or give any warrant to confess judgment, or procure his property to be taken on legal process, with intent to give a preference to one or more of his creditors, or to any person or persons who are or may be liable for him as indorsers, bail, sureties, or otherwise, or with the intent, by such disposition of his property, to defeat or delay the operation of this act;

Or who being a bank, banker, broker, merchant, trader, manufacturer, or miner, has fraudulently, stopped payment,

Or who being a bank, banker, broker, merchant, trader, manufacturer, or miner, has stopped or suspended and not resumed payment, within a period of forty days, of his commercial paper, (made or passed in the course of his business as such),

Or who, being a bank or banker, shall fail for forty days to pay any depositor upon demand of payment lawfully made, shall be deemed to have committed an act of bankruptcy, and, subject to the conditions hereinafter prescribed,

Shall be adjudged a bankrupt on the petition of one or more of his creditors, who shall constitute one-fourth thereof, at least, in number, and the aggregate of whose debts provable under this act amounts to at least one-third of the debts so provable:

Provided: That such petition is brought within six months after such act of bankruptcy shall have been committed.

1876, July 26, ch. 234. 13 Blatch., 401, 455.

17 Blatch., 72.

-on petition of
creditors within
six months.
R. S., § 5023;
5028.

1876, July 26, ch. 234.

6 Bissell, 150.
3 Dillon, 37, 511,

And the provisions of this section shall apply to all cases of compulsory or involuntary bankruptcy commenced since the first day of Decem- 515. ber, eighteen hundred and seventy-three, as well as to those commenced hereafter.

4 Dillon, 363. 3 Sawyer, 128, 614. 14 Blatch.,

NOTE. (1) Tho provisions of the bankrupt law referred to in this act are incorporated in the 148, 186. 3 Woods, Revised Statutes in the sections noted in the margin.

134.

6 Bissell, 166.

Proceedings on And in all cases commenced since the first day of December, eighteen petition when alle- hundred and seventy-three, and prior to the passage of this act, as well gation as to num- as those commenced hereafter, the court shall, if such allegation as to ber of creditors is the number or amount of petitioning creditors be denied by the debtor, denied. by a statement in writing to that effect, require him to file in court forthwith a full list of his creditors, with their places of residence and the sums due them respectively, and shall ascertain, upon reasonable notice to the creditors, whether one-fourth in number and one-third in amount thereof, as aforesaid, have petitioned that the debtor be adjudged a bankrupt.

Proceedings on petition when allegation as to num

Der of creditors is

admitted.

- when number,

insufficient.

But if such debtor shall, on the filing of the petition, admit in writing that the requisite number and amount of creditors have petitioned, the court (if satisfied that the admission was made in good faith,) shall so adjudge, which judgment shall be final, and the matter proceed without further steps on that subject.

And if it shall appear that such number and amount have not so &c., of creditors petitioned, the court shall grant reasonable time, not exceeding, in cases heretofore commenced, twenty days, and, in cases hereafter commenced, ten days, within which other creditors may join in such petition. And if, at the expiration of such time so limited, the number and amount shall comply with the requirements of this section, the matter of bankruptcy may proceed; but if, at the expiration of such limited time, such number and amount shall not answer the requirements of this section, the proceedings shall be dismissed, and, in cases hereafter commenced, with costs. Assignee may re- And if such person shall be adjudged a bankrupt, the assignee may property recover back the money or property so paid, conveyed, sold, assigned, fraudulently conveyed, &c. or transferred contrary to this act: Provided, That the person receivR. S., § 5129. ing such payment or conveyance had reasonable cause to believe that the debtor was insolvent, and knew that a fraud on this act was intended; 17 Blatch., 348. and such person, if a creditor, shall not, in cases of actual fraud on his part, be allowed to prove for more than a moiety of his debt; and this limitation on the proof of debts shall apply to cases of voluntary as well as involuntary bankruptcy.

cover

6 Bissell, 167.

Petition, verified.

how

And the petition of creditors under this section may be sufficiently verified by the oaths of the first five signers thereof, if so many there be. And if any of said first five signers shall not reside in the district in which such petition is to be filed, the same may be signed and verified by the oath or oaths of the attorney or attorneys, agent or agents, -computation of of such signers. And in computing the number of creditors, as aforenumber of credit- said, who shall join in such petition, creditors whose respective debts ors to be joined in. do not exceed two hundred and fifty dollars shall not be reckoned. But if there be no creditors whose debts exceed said sum of two hundred and fifty dollars, or it the requisite number of creditors holding debts exceeding two hundred and fifty dollars fail to sign the petition, the creditors having debts of a less amount shall be reckoned for the purposes aforesaid".

Proceedings on

tition for involun

SEC. 13. That section forty of said act(1) be amended by adding at return of order to the end thereof the following words: "And if, on the return-day of show cause on pe- the order to show cause as aforesaid, the court shall be satisfied that tary adjudication the requirement of section thirty-nine of said act as to the number and of bankruptcy. amount of petitioning creditors has been complied with, or if, within R. S., §§ 5025, the time provided for in section thirty-nine of this act, creditors suffi

5026.

3 Dillon, 37.

3 Woods, 134.

-debtor may

cient in number and amount shall sign such petition so as to make a total of one-fourth in number of the creditors and one-third in the amount of the provable debts against the bankrupt, as provided in said section, the court shall so adjudge, which judgment shall be final; otherwise it shall dismiss the proceedings, and, in cases hereafter commenced, with costs."

SEC. 14. That section forty-one of said act(1) be amended as folhave jury to try lows: After the word "bankruptcy," in line eight, strike out all of said NOTE.-(1) The provisions of the bankrupt law referred to in this act are incorporated in the Revised Statutes in the sections noted in the margin.

certain issues

upon.

section, and insert the words, "Or, at the election of the debtor, the R. S., §§ 5026, court may, in its discretion, award a venire facias to the marshal of 5027. the district, returnable within ten days before him for the trial of the facts set forth in the petition, at which time the trial shall be had, unless adjourned for cause. And unless, upon such hearing or trial, it shall appear to the satisfaction of said court, or of the jury, as the case may be, that the facts set forth in said petition are true, or if it shall appear that the debtor has paid and satisfied all liens upon his property, in case the existence of such liens was the sole ground of the proceeding, the proceeding shall be dismissed, and the respondent shall recover costs; and all proceedings in bankruptcy may be discontinued on reasonable notice and hearing, with the approval of the court, and upon the assent, in writing, of such debtor, and not less than one-half of his creditors in number and amount; or, in case all the creditors and such debtor assent thereto, such discontinuance shall be ordered and entered; and all parties shall be remitted, in either case, to the same rights and duties existing at the date of the filing of the petition for bankruptcy, except so far as such estate shall have been already administered and disposed of. And the court shall have power to make all needful orders and decrees to carry the foregoing provision into effect.

SEC. 15. That section eleven of said act(1) be amended by inserting Bankrupt to subthe words "and valuation" after the word "inventory" in the twenty. mit valuation with first line; and that section forty-two of said act be amended by inserting R. S., $$ 5014inventory. the words "and valuation" after the word "inventory" in the fifteenth 5016, 5030.

line.

SEC. 16. That section forty-nine of said act(1) be amended by striking In Territories, out after the word "the" in line five, the words "supreme courts", and district courts to inserting in lieu thereof "district courts," and in line six, after the word have jurisdiction instead of supreme "States", inserting the words "subject to the general superintendence courts. and jurisdiction conferred upon circuit courts by section two of said R. S., § 4978. act."

COMPOSITION WITH CREDITORS.

SEC. 17. That the following provisions be added to section fortythree of said act(1): That in all cases of bankruptcy now pending, or to be hereafter pending, by or against any person, whether an adjudication in bankruptcy shall have been had or not, the creditors of such alleged bankrupt may, at a meeting called under the direction of the court, and upon not less than ten days' notice to each known creditor of the time, place, and purpose of such meeting, such notice to be personal or otherwise, as the court may direct, resolve that a composition proposed by the debtor shall be accepted in satisfaction of the debts due to them from the debtor. And such resolution shall, to be operative, have been passed by a majority in number and three-fourths in value of the creditors of the debtor assembled at such meeting either in person or by proxy, and shall be confirmed by the signatures thereto of the debtor and two-thirds in number and one half in value of all the creditors of the debtor.

Composition on resolution of creditors, how effected.

R. S., § 5103. 71 N. Y., 20. 12 Blatch., 562. 124 Mass., 213, 300, 493, 497. 4 Dillon, 111. 128 Mass., 228. 49 Md., 51. 13 Hun., 526.

17 Hun., 49.

poses of.

And in calculating a majority for the purposes of a composition under-computation of this section, creditors whose debts amount to sums not exceeding fifty majority for purdollars shall be reckoned in the majority in value, but not in the majority in number; and the value of the debts of secured creditors above the amount of such security, to be determined by the court, shall, as nearly as circumstances admit, be estimated in the same way. And creditors whose debts are fully secured shall not be entitled to vote upon or to sign such resolution without first relinquishing such security for the benefit of the estate.

The debtor, unless prevented by sickness or other cause satisfactory Debtor to be to such meeting, shall be present at the same, and shall answer any in- present at meetquiries made of him; and he, or, if he is so prevented from being at ings, answer quiries, &c.

NOTE-(1) The provisions of the bankrupt law referred to in this act are incorporated into the
Revised Statutes in the sections noted in the margin.

in

Resolution and

such meeting, some one in his behalf, shall produce to the meeting a statement showing the whole of his assets and debts, and the names and addresses of the creditors to whom such debts respectively are due. Such resolution, together with the statement of the debtor as to his debtor's statement assets and debts, shall be presented to the court; and the court shall, to be presented to court, and proceed-upon notice to all the creditors of the debtor of not less than five days, ings thereon. and upon hearing, inquire whether such resolution has been passed in the manner directed by this section; and if satisfied that it has been so passed, it shall, subject to the provisions hereinafter contained, and upon being satisfied that the same is for the best interest of all concerned, cause such resolution to be recorded and statement of assets and debts to be filed; and until such record and filing shall have taken place, such resolution shall be of no validity. And any creditor of the debtor may inspect such record and statement at all reasonable times. The creditors may, by resolution passed in the manner and under the circumstances aforesaid, add to, or vary the provisions of, any composition previously accepted by them, without prejudice to any persons taking interests under such provisions who do not assent to such addition or variation. And any such additional resolution shall be presented to the court in the same manner and proceeded with in the same way and with the same consequences as the resolution by which the composition was accepted in the first instance.

Creditors may change provisions of composition. 15 Blatch., 23.

Provisions of

The provisions of a composition accepted by such resolution in purcomposition, upon suance of this section shall be binding on all the creditors whose names whom binding. and addresses and the amounts of the debts due to whom are shown in the statement of the debtor produced at the meeting at which the resolution shall have been passed, but shall not affect or prejudice the rights of any other creditors.

Debtor or how to

unknown.

Where a debt arises on a bill of exchange or promissory note, if the describe debts debtor shall be ignorant of the holder of any such bill of exchange or where holders are promissory note, he shall be required to state the amount of such bill or note, the date on which it falls due, the name of the acceptor and of the person to whom it is payable, and any other particulars within his knowledge respecting the same; and the insertion of such particulars shall be deemed a sufficient description by the debtor in respect to such debt.

- how may correct Any mistake made inadvertently by a debtor in the statement of his mistakes in state- debts may be corrected upon reasonable notice, and with the consent of a general meeting of his creditors.

ment.

Composition to provide for prorata payment, &c.

-how enforced.

-rules in relation to, may be made by court.

may be set aside or not confirmed by court, &c.

Every such composition shall, subject to priorities declared in said act, provide for a pro-rata payment or satisfaction, in money, to the creditors of such debtor in proportion to the amount of their unsecured debts, or their debts in respect to which any such security shall have been duly surrendered and given up.

The provisions of any composition made in pursuance of this section may be enforced by the court, on motion made in a summary manner by any person interested, and on reasonable notice; and any disobedience of the order of the court made on such motion shall be deemed to be a contempt of court.

Rules and regulations of court may be made in relation to proceedings of composition herein provided for in the same manner and to the same extent as now provided by law in relation to proceedings in bankruptcy. If it shall at any time appear to the court, on notice, satisfactory evidence, and hearing, that a composition under this section cannot, in consequence of legal difficulties, or for any sufficient cause, proceed without injustice or undue delay to the creditors or to the debtor, the court may refuse to accept and confirm such composition, or may set the same aside; and, in either case, the debtor shall be proceeded with as a bankrupt in conformity with the provisions of law, and proceedings may be had accordingly; and the time during which such composition shall have been in force shall not, in such case, be computed in calculating periods of time prescribed by said act.

R. S., §§ 4990,

SEC. 18. That from and after the passage of this act the fees, com- Fees reduced missions, charges, and allowances, excepting actual and necessary dis- one-half until Subursements, of, and to be made by the officers, agents, marshals, mes new rules. preme Court makes sengers, assignees, and registers in cases of bankruptcy, shall be reduced to one-half of the fees, commissions, charges, and allowances 5124-5127. heretofore provided for or made in like cases: Provided, That the preceding provision shall be and remain in force until the justices of the Supreme Court of the United States shall make and promulgate new rules and regulations in respect to the matters aforesaid, under the pow ers conferred upon them by sections ten and forty-seven of said act, and no longer, which duties they shall perform as soon as may be.

consolidate duties

And said justices shall have power under said sections, by general Supreme Court regulations, to simplify and, so far as in their judgment will conduce to to simplify and the benefit of creditors, to consolidate the duties of the register, assignee, of officers. marshal, and clerk, and to reduce fees, costs, and charges, to the end that prolixity, delay, and unnecessary expense may be avoided. And no register or clerk of court, or any partner or clerk of such register or clerk of court, or any person having any interest with either in any fees or emoluments in bankrupcty, or with whom such register or clerk of court shall have any interest in respect to any matter in bankruptcy, shall be of counsel, solicitor, or attorney, either in or out of court, in any suit or matter pending in bankruptcy in either the circuit or district court of his district, or in an appeal therefrom.

Who are prohibited from being ruptcy cases, &c.

counsel in bank

R. S., § 4996.

Nor shall they, or either of them, be executor, administrator, guard--and from being ian, commissioner, appraiser, divider, or assignee of or upon any estate executors, guardians, &c. within the jurisdiction of either of said courts of bankruptcy; nor be interested, directly or indirectly, in the fees or emoluments arising from either of said trusts.

And the words (2) "except such as are established by this act or by law", in section ten of said act, are hereby repealed.

SEC. 19. That it shall be the duty of the marshal of each district, in the month of July of each year, to report to the clerk of the district court of such district, in a tabular form, to be prescribed by the justices of the Supreme Court of the United States, as well as such other or further information as may be required by said justices.

First, the number of cases in bankruptcy in which the warrant prescribed in section eleven of said act has come to his hands during the year ending June thirtieth, preceding;

Secondly, how many such warrants were returned, with the fees, costs, expenses, and emoluments thereof, respectively and separately;

Thirdly, the total amount of all other fees, costs, expenses, and emoluments, respectively and separately, earned or received by him during such year from or in respect of any matter in bankruptcy;

Fourthly, a summarized statement of such fees, costs, and emoluments, exclusive of actual disbursements in bankruptcy, received or earned for such year.

Fifthly, a summarized statement of all actual disbursements in such cases for such

year.

Power of Supreme Court to regulate fees. R. S., § 4990.

Marshal to re

port annually to clerk of district court.

R. S., §§ 776–792.

And in like manner, every register shall, in the same month and for Register's rethe same year, make a report to such clerk of,

First, the number of voluntary cases in bankruptcy coming before him during said year;

Secondly, the amount of assets and liabilities, as nearly as may be, of the bankrupts;
Thirdly, the amount and rate per centum of all dividends declared;
Fourthly, the disposition of all such cases;

Fifthly, the number of compulsory cases in bankruptcy coming before him, in the same way;

Sixthly, the amount of assets and liabilities, as nearly as may be, of such bankrupt;
Seventhly, the disposition of all such cases;

Eighthly, the amounts and rate per centum of all dividends declared in such cases; Ninthly, the total amount of fees, charges, costs, and emoluments of every sort, received or earned by such register during said year in each class of cases above stated. NOTE. (2) That part of the act of 1867, ch. 176, § 10 (14 Stat. L., 521), here repealed, is in Revised Statutos, § 4990.

port.

R. S., § 4998.