UNIFORM SYSTEM OF BANKRUPTCY. 25 which such property is situate, shall be deemed null and void under this act against the creditors of such debtor if he be adjudged a bankrupt, and such property shall pass to the assignee and be by him reclaimed and recovered for the benefit of the creditors of the bankrupt. ƒ That all levies, judgments, attachments, or other licns, obtained through legal proceedings against a person who is insolvent, at any time within four months prior to the filing of a petition in bankruptcy against him, shall be deemed null and void in case he is adjudged a bankrupt, and the property affected by the levy, judgment, attachment, or other lien shall be deemed wholly discharged and released from the same, and shall pass to the trustee as a part of the estate of the bankrupt, unless the court shall, on due notice, order that the right under such levy, judgment, attachment, or other lien shall be preserved for the benefit of the estate; and thereupon the same may pass to and shall be preserved by the trustee for the benefit of the estate as afore said. And the court may order such conveyance as shall be necessary to carry the purposes of this section into effect: Provided, That nothing herein contained shall have the effect to destroy or impair the title obtained by such levy, judgment, attachment, or other lien, of a bona fide purchaser for value who shall have acquired the same without notice or reasonable cause for inquiry. SEC. 68. SET-OFFS and COUNTERCLAIMS.- -a In all cases of mutual debts or mutual credits between the estate of a bankrupt and a creditor the account shall be stated and one debt shall be set off against the other, and the balance only shall be allowed or paid. b A set-off or counterclaim shall not be allowed in favor of any debtor of the bankrupt which (1) is not provable against the estate; or (2) was purchased by or transferred to him after the filing of the petition, or within four months before such filing, with a view to such use and with knowledge or notice that such bankrupt was insolvent, or had committed an act of bankruptcy. SEC. 69. POSSESSION OF PROPERTY.-a A judge may, upon satis factory proof, by affidavit, that a bankrupt against whom an involuntary petition has been filed and is pending has committed an act of bankruptcy, or has neglected or is neglecting, or is about to so neglect his property that it has thereby deteriorated or is thereby deteriorating or is about thereby to deteriorate in value, issue a warrant to the mar shal to seize and hold it subject to further orders. Before such war rant is issued the petitioners applying therefor shall enter into a bond in such an amount as the judge shall fix, with such sureties as he shall approve, conditioned to indemnify such bankrupt for such damages as he shall sustain in the event such seizure shall prove to have been wrongfully obtained. Such property shall be released, if such bankrupt shall give bond in a sum which shall be fixed by the judge, with such sureties as he shall approve, conditioned to turn over such property, or pay the value thereof in money to the trustee, in the event he is adjudged a bankrupt pursuant to such petition. SEO. 70. TITLE TO PROPERTY.-a The trustee of the estate of a bankrupt, upon his appointment and qualification, and his successor or successors, if he shall have one or more, upon his or their appointment and qualification, shall in turn be vested by operation of law with the title of the bankrupt, as of the date he was adjudged a bankrupt, excent in so far as it is to property which is exempt, to all (1) documents relating to his property; (2) interests in patents, patent rights, copyrights, and trade-marks; (3) powers which he might have exercised for his own benefit, but not those which he might have exercised for some other 26 UNIFORM SYSTEM OF BANKRUPTCY. person; (4) property transferred by him in fraud of his creditors; (5) property which prior to the filing of the petition he could by any means have transferred or which might have been levied upon and sold under judicial process against him: Provided, That when any bankrupt shalt have any insurance policy which has a cash surrender value payable to himself, his estate, or personal representatives, he may, within thirty days after the cash surrender value has been ascertained and stated to the trustee by the company issuing the same, pay or secure to the trus tee the sum so ascertained and stated, and continue to hold, own, and carry such policy free from the claims of the creditors participating in the distribution of his estate under the bankruptcy proceedings, otherwise the policy shall pass to the trustee as assets; and (6) rights of action arising upon contracts or from the unlawful taking or detention of, or injury to, his property. bAll real and personal property belonging to bankrupt estates shall be appraised by three disinterested appraisers; they shall be appointed by, and report to, the court. Real and personal property shall, when practicable, be sold subject to the approval of the court; it shall not be sold otherwise than subject to the approval of the court for less than seventy-five per centum of its appraised value. The title to property of a bankrupt estate which has been sold, as herein provided, shall be conveyed to the purchaser by the trustee. d Whenever a composition shall be set aside, or discharge revoked, the trustee shall, upon his appointment and qualification, be vested as herein provided with the title to all of the property of the bankrupt as of the date of the final decree setting aside the composition or revoking the discharge. The trustee may avoid any transfer by the bankrupt of his property which any creditor of such bankrupt might have avoided, and may recover the property so transferred, or its value, from the person to whom it was transferred, unless he was a bona fide holder for value prior to the date of the adjudication. Such property may be recovered or its value collected from whoever may have received it, except a bona fide holder for value. f Upon the confirmation of a composition offered by a bankrupt, the title to his property shall thereupon revest in him. THE TIME WHEN THIS ACT SHALL GO INTO EFFECT. a This act shall go into full force and effect upon its passage: Provided, however, That no petition for voluntary bankruptcy shall be filed within one month of the passage thereof, and no petition for involuntary bankruptcy shall be filed within four months of the passage thereof. b Proceedings commenced under State insolvency laws before the passage of this act shall not be affected by it. FIFTY-SEVENTH CONGRESS. SESS. II. Cнs. 486, 487. 1903. CHAP. 487.-An Act To amend an Act entitled "An Act to establish a uniform system of bankruptcy throughout the United States," approved July first, eighteen hundred and ninety-eight. 797 February 5, 1901, [Public, No. 62) Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That clause five of section Bankruptcy art, two of said Act be, and the same is hereby, amended so as to read as follows: amendments Vol. 30, p. 511. may allow revolves, "(5) Authorize the business of bankrupts to be conducted for lim-Bankrupter courts ited periods by receivers, the marshals, or trustees, if necessary in the ete extray for co best interests of the estates, and allow such oflicers additional compensation for such services, but not at a greater rate than in this Act allowed trustees for similar services;" SEC. 2. That clause four, subdivision a, of section three of said Act, be, and the same is hereby, amended so as to read as follows: timing business Vol. 30, p. 46. Arts constituting ceiver, or hands. or (4) made a general assignment for the benefit of his creditors, or, being insolvent, applied for a receiver or trustee for his property being in receiver's or because of insolvency a receiver or trustee has been put in charge of his property under the laws of a State, of a Territory, or of the United States." Involuntary bankrupts. Vol. 30, p. 547. added. SEC. 3. That subdivision b of section four of said Act be, and the same is hereby, amended so as to read as follows: "b Any natural person, except a wage-carner, or a person engaged in pu chiefly in farming or the tillage of the soil, any unincorporated company, and any corporation engaged principally in manufacturing, trading, printing, publishing, mining, or mercantile pursuits, owing debts to the amount of one thousand dollars or over, may be adjudged an involuntary bankrupt upon default or an impartial trial, and shall be subject to the provisions and entitled to the benefits of this Act. Private bankers, but not national banks or banks incorporated under State or Territorial laws, may be adjudged involuntary bankrupts. "The bankruptcy of a corporation shall not release its officers, directors, or stockholders, as such, from any liability under the laws of a State or Territory or of the United States." SEC. 4. That subdivision b of section fourteen of said Act be, and the same is hereby, amended so as to read as follows: Officers' liability not ruptcy of corporation. released by latk Discharge of bank rupts. "b The judge shall hear the application for a discharge, and such proofs and pleas as may be made in opposition thereto by parties in interest, at such time as will give parties in interest a reasonable opportunity to be fully heard, and investigate the merits of the application and discharge the applicant unless he has (1) committed an offense punishable by imprisonment as herein provided; or (2) with intent to dion, and desire conceal his financial condition, destroyed, concealed, or failed to keep tion, etc., of records books of account or records from which such condition might be ascertained; or (3) obtained property on credit from any person upon by false statements. a materially false statement in writing made to such person for the Concealment of con Obtaining property 798 Transfer, to defraud. FIFTY-SEVENTH CONGRESS. SESS. II. CH. 487. 1903. property with intent purpose of obtaining such property on credit; or (4) at any time subsequent to the first day of the four months immediately preceding the filing of the petition transferred, removed, destroyed, or concealed, or permitted to be removed, destroyed, or concealed any of his prop Refusal to answer erty with intent to hinder, delay, or defraud his creditors; or (5) in voluntary proceedings been granted a discharge in bankruptcy within six years; or (6) in the course of the proceedings in bankruptcy refused to obey any lawful order of or to answer any material question approved by the court." order of court, etc. Debts not affected by dcharge. Vel 30, p. 550. Criminal etc., liabilities modified. Process, etc. Service by publication modified, Time for pleadings reduced. Er. Jence. SEC. 5. That section seventeen of said Act be, and the same is hereby, amended so as to read as follows: “SEC. 17. DEBTS NOT AFFECTED BY A DISCHARGE.-a A discharge in bankruptcy shall release a bankrupt from all of his provable debts, except such as (1) are due as a tax levied by the United States, the State, county, district, or municipality in which he resides; (2) are liabilities for obtaining property by false pretenses or false representations, or for willful and malicious injuries to the person or property of another, or for alimony due or to become due, or for maintenance or support of wife or child, or for seduction of an unmarried female, or for criminal conversation; (3) have not been duly 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 proceedings in bankruptcy; or (4) were created by his fraud, embezzlement, misappropriation, or defalcation while acting as an officer or in any fiduciary capacity." Provision as to wife of bankrupt. SEC. 6. That subdivisions a and b of section eighteen of said Act be, and the same are hereby, amended so as to read as follows: "a Upon the filing of a petition for involuntary bankruptcy, service thereof, with a writ of subpoena, shall be made upon the person therein pamed as defendant in the same manner that service of such process is now had upon the commencement of a suit in equity in the courts of the United States, except that it shall be returnable within fifteen days, unless the judge shall for cause fix a longer time; but in case personal service can not be made, then notice shall be given by publication in the same manner and for the same time as provided by law for notice by publication in suits to enforce a legal or equitable lien in courts of the United States, except that, unless the judge shall otherwise direct, the order shall be published not more than once a week for two consecutive weeks, and the return day shall be ten days after the last publication unless the judge shall for cause tix a longer time." "b The bankrupt, or any creditor, may appear and plead to the petition within five days after the return day, or within such further time as the court may allow." SEC. 7. That subdivision a of section twenty-one of said Act be, and the same is hereby, amended so as to read as follows: “a A court of bankruptcy may, upon application of any officer, bankrupt, or creditor, by order require any designated person, including the bankrupt and his wife, to appear in court or before a referee or the judge of any State court, to be examined concerning the acts, conduct, or property of a bankrupt whose estate is in process of adminis tration under this Act: Provided, That the wife may be examined only elber business touching business transacted by her or to which she is a party, and to determine the fact whether she has transacted or been a party to any business of the bankrupt,' Examination lim transactions. Jurisdiction of United States and State courts. Vol. 30, p. 552. Linutation as to suits SEC. 8. That subdivision b of section twenty-three of said Act be, and the same is hereby, amended so as to read as follows: "b Suits by the trustee shall only be brought or prosecuted in the for every of certain courts where the bankrupt, whose estate is being administered by such Vol. 30, pp. 582, 564. trustee, might have brought or prosecuted them if proceedings in property. FIFTY-SEVENTH CONGRESS. SESS. II. CH. 487. 1903. bankruptcy had not been instituted, unless by consent of the proposed defendant, except suits for the recovery of property under section sixty, subdivision b, and section sixty-seven, subdivision e." 799 SEC. 9. That subdivision a of section forty of said Act be, and the Compensation of same is hereby, amended so as to read as follows: "a Referees shall receive as full compensation for their services, payable after they are rendered, a fee of fifteen dollars deposited with the clerk at the time the petition is filed in each case, except when a fee is not required from a voluntary bankrupt, and twenty-five cents for every proof of claim filed for allowance, to be paid from the estate, if any, as a part of the cost of administration, and from estates which have been administered before them one per centum commissions on all moneys disbursed to creditors by the trustee, or one-half of one per centum on the amount to be paid to creditors upon the confirmation of a composition.' relerces. Fees, etc., increased. Trustees. SEC. 10. That section forty-seven is hereby amended by adding vol. 30, p. 557. thereto the following subdivision: added. "c The trustee shall, within thirty days after the adjudication, fileFiling of decrees a certified copy of the decree of adjudication in the office where conveyances of real estate are recorded in every county where the bankrupt owns real estate not exempt from execution, and pay the fee for such filing, and he shall receive a compensation of fifty cents for each copy so filed, which, together with the filing fee, shall be paid out of the estate of the bankrupt as a part of the cost and disbursements of the proceedings." SEC. 11. That subdivision a of section forty-eight of said Act be, and the same is hereby, amended so as to read as follows: Too Vol. 30, p. 557. Fees and commis "a Trustees shall receive for their services, payable after they are sions modified. rendered, a fee of five dollars deposited with the clerk at the time the petition is filed in each case, except when a fee is not required from a voluntary bankrupt, and from estates which they have administered such commissions on all moneys disbursed by them as may be allowed by the courts, not to exceed six per centum on the first five hundred dollars or less, four per centum on moneys in excess of five hundred dollars and less than fifteen hundred dollars, two per centum on moneys in excess of fifteen hundred dollars and less than ten thousand dollars, and one per centum on moneys in excess of ten thousand dollars. And in case of the confirmation of a composition after the trustee has qualified the court may allow him, as compensation, not to exceed one-half of one per centum of the amount to be paid the creditors on such composition." SEC. 12. That subdivision g of section fifty-seven of said Act be, and the same is hereby, amended so as to read as follows: "The claims of creditors who have received preferences, voidable under section sixty, subdivision b, or to whom conveyances, transfers, assignments, or incumbrances, void or voidable under section sixtyseven, subdivision e, have been made or given, shall not be allowed unless such creditors shall surrender such preferences, conveyances, transfers, assignments, or incumbrances." SEC. 13. That subdivisions a and b of section sixty of said Act be, and the same are hereby, amended so as to read as follows: "a A person shall be deemed to have given a preference if, being insolvent, he has, within four months before the filing of the petition, or after the filing of the petition and before the adjudication, procured or suffered a judgment to be entered against himself in favor of any person, or made a transfer of any of his property, and the effect of the enforcement of such judgment or transfer will be to enable any one of his creditors to obtain a greater percentage of his debt than any other of such creditors of the same class. Where the preference consists in a transfer, such period of four months shall not expire until four Allowance of claims. Vol. 30, p. 560. can restricted creditors Preferred creditors. Description of pref erences modified. |