REVISION OF THE NATIONAL BANKRUPTCY ACT

59 ance with the laws of procedure of the United States now in force, or such as may be hereafter enacted, regulating trials for the alleged violation of laws of the United States;

(5) Authorize the business of bankrupts to be conducted for limited periods by receivers, the marshals, or trustees, if necessary in the best interests of the estates, and allow such officers_additional compensation for such services, as provided in section [forty-eight] 48 of this Act;

(6) Bring in and substitute additional persons or parties in proceedings under this Act when necessary for the complete determination of a matter in controversy;

(7) Cause the estates of bankrupts to be collected, reduced to money and distributed, and determine controversies in relation thereto, except as herein otherwise provided, and determine and liquidate all inchoate or vested interests of the bankrupt's spouse in the property of any estate, whenever under the applicable laws of the State creditors are empowered to compel such spouse to accept a money satisfaction for such interest;

(8) Close estates, [whenever it appears that they have been fully administered, by approving the final accounts and discharging the trustees, whenever it appears that the estates have been fully administered or, if not fully administered, that the parties in interest will not furnish the indemnity neces sary for the expenses of the proceeding_or_take the steps necessary for the administration of the estate; and reopen [them] estates for cause shown; [whenever it appears they were closed before being fully administered;]

(9) Confirm or reject arrangements or plans proposed [compositions between debtors and their creditors] under this Act, set aside confirmations of arrange ments or wage-carner plans [compositions] and reinstate the proceedings and

cases;

(10) Consider records, findings and orders certified to the judges by referees, and confirm, modify or reverse such findings and orders, [overrule] or return such records with instructions for further proceedings; [records and findings certified to them by referees ;]

(11) Determine all claims of bankrupts to their exemptions;

(12) Discharge or refuse to discharge bankrupts and set aside discharges and reinstate the cases;

(13) Enforce obedience by [bankrupts, officers, and other] persons to all lawful orders, by fine or imprisonment or fine and imprisonment;

(14) Extradite bankrupts from their respective districts to other districts; (15) Make such orders, issue such process and enter such judgments, in addition to those specifically provided for, as may be necessary for the enforce ment of the provisions of this Act: Provided, however, That an injunction to restrain a court may be issued by the judge only;

(16) Punish persons for contempts committed before referees; (17) Approve the appointment of trustees by creditors or appoint trustees when creditors fail so to do; and, upon complaints of ercditors or upon their own motion, remove for cause receivers or trustees upon hearing after notice; [pursuant to the recommendation of creditors, or when they neglect to recom mend the appointment of trustees, appoint trustees, and upon complaints of creditors, remove trustees for cause upon hearings and after notices to them:] (18) Tax costs [whenever they are allowed by law, and render Judgments therefor against the unsuccessful party, against the successful party for cause, [or] in part against each of the parties, and against estates, in proceedings [in bankruptcy:] under this Act;

(19) Transfer cases to other courts of bankruptcy;

(20) Exercise ancillary jurisdiction over persons or property within their respective territorial limits in aid of a receiver or trustee appointed in any linkruptcy proceedings pending in any other court of bankruptcy: Provided, hotever, That the jurisdiction of the ancillary court over a bankrupt's properta which it takes into its custody shall not extend beyond preserving such prog erty and, where necessary, conducting the business of the bankrupt, and reducing the property to money, paying therefrom such liens as the court shall find valid and the expenses of ancillary administration, and transmitting the property or its proceeds to the court of primary jurisdiction; and

(21) Require receivers or trustees appointed in proceedings not under that Act, assignees for the benefit of creditors and agents authorized to take posses sion of or to liquidate a person's property to deliver the property in their pos session or under their control to the receiver or trustee appointed under this act or, where an arrangement under Chapter XI or Chapter XII or a wais carner plan under Chapter XIII of this Act has been confirmed and such prop

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erty has not prior thereto been delivered to a receiver or trustee appointed under this Act, to deliver such property to the debtor or other person entitled to such property according to the provisions of the arrangement or plan, and in all such cases to account to the court for the disposition by them of the property of such bankrupt or debtor: Provided, however, That such delivery and accounting shall not be required, except in proceedings under Chapters X and XII of this Act, if the receiver or trustee was appointed, the assignment rus made or the agent was authorized more than four months prior to the date of bankruptcy. Upon such accounting, the court shall reczamine and determine the propriety and reasonableness of all disbursements made out of such property by such receiver, trustee, assignce, or agent, either to himself or to others, for services and expenses under such receivership, trusteeship, assignment, or agency, and shall, unless such disbursements have been approved, upon notice to creditors and other parties in interest, by a court of competent jurisdiction prior to the proceeding under this Act, surcharge such reecivor, trustee, assignee, or agent the amount of any disbursement determined by the court to have been improper or excessive.

b. Nothing in this section contained shall be construed to deprive a court of bankruptcy of any power it would possess were certain specific powers not herein enumerated.

CHAPTER III—BANKRUPTS

SC. 3. ACTS OF BANKRUPTCY.—a. Acts of bankruptcy by a person shall consist of his having (1) conveyed, transferred, concealed, [or] removed, or permitted to be concealed or removed any part of his property, with intent to hinder, delay, or defraud his creditors or any of them; or (2) transferred, while insolvent, any portion of his property to one or more of his creditors with intent to prefer such creditors over his other creditors; or (3) suffered or permitted, while insolvent, any creditor to obtain a [preference] lien upon any of his property through legal proceedings and not having [at least five days before a sale or other disposition of any property affected by such preference vacated or discharged such preference] racated or discharged such lien within thirty days from the date thereof or at least five days before the date set for any sale or other disposition of such property; [or, (4) suffered or permitted, while insolvent, any creditor to obtain through legal proceedings any levy, attachment, judgment, or other lien, and not having vacated or discharged the same within thirty days from the date such levy, attachment, judgment, or other lien was obtained;] or [5] (4) made a general assignment for the benefit of his creditors; or (5) while insolvent or unable to pay his debts as they mature, procured, permitted, or suffered voluntarily or involuntarily the appointment of & receiver or [a] trustee [has been appointed] to take [or put in charge of his property; or (6) admitted in writing his inability to pay his debts and his willingness to be adjudged a bankrupt [ou that_ground].

b. A petition may be filed against a person [who is insolvent and who has committed an act of bankruptcy] within four months after the commission of [such act] an act of bankruptcy. Such time with respect to the first, second, or fourth act of bankruptcy shall not expire until four months after [(1)] thedate when the transfer or assignment became so far perfected that no bona fide purchaser from the debtor and no creditor could thereafter hare acquired any rights in the property so transferred or assigned superior to the rights of the tauxferee or assignee therein. For the purposes of this section, it is sufficient if intent under the first act of bankruptcy or if intent or insolvency under the second net of bankruptcy crists either at the time when the transfer ras made or at the time when it became perfected, as hereinabore provided. [of the recording or registering of the transfer, or assignment, when the act consists in having made a transfer of any of his property with intent to hinder, delay, or defraud his creditors or for the purpose of giving a preference as hereinbefore provided, or a general assignment for the benefit of his creditors, if by law such recording or registering is required or permitted, or, if it is not. from the date when the beneficiary takes notorious, exclusive, or continuous possession of the property unless the petitioning creditors have received actual notice of such transfer or assignment.]

c. It shall be a complete defense to any proceedings under the first act of bankruptcy in bankruptcy instituted under the first subdivision of this section] to allege and prove that the party proceeded against was not insolvent as defined in this Act at the time of the filing of the petition against him. [and] If solvency at such date is proved by the alleged bankrupt, the proceedings shall

REVISION OF THE NATIONAL BANKRUPTCY ACT

61 be dismissed. [and] In such proccedings [under said subdivision one] the burden of proving solvency shall be on the alleged bankrupt.

d. Whenever a person against whom a petition has been filed [as herein fore provided] alleging the commission of the second, third, or fifth act of bankruptcy under the second and third subdivisions of this section] takes issue with and denies the allegation of his insolvency or his inability to pay his debts as they mature, he [it] shall be his duty to appear in court on the hearing, and prior thereto if ordered by the court, with his books, papers, and accounts, and submit to an examination and give testimony as to all matters fending to establish solvency or insolvency or ability or inability to pay his debts as they mature and, in case of his failure so to do, [to so attend and submit to exami nation] the burden of proving [his] solvency or ability to pay his debts as they mature shall rest upon him.

[e. Whenever a petition is filed by any person for the purpose of having another adjudged a bankrupt, and an application is made to take charge of and hold the property of the alleged bankrupt or any part of the same, prior to the adjudication and pending a hearing on the petition, the petitioner or applicant shall file in the same court a bond with at least two good and sufficient sureties who shall reside within the jurisdiction of said court, to be approved by the court or a judge thereof, in such sum as the court shall direct, conditioned for the payment, in case such petition is dismissed, to the respondent, his or her personal representatives, all costs, expenses, and damages occasioned by such seizure, taking, and detention of the property of the alleged bankrupt. If such petition be dismissed by the court or withdrawn by the petitioner, the respondent or respondents shall be allowed all costs, counsel fees, expenses, and damages occasioned by such seizure, taking, or detention of such property. Counsel fees, costs, expenses, and damages shall be fixed and allowed by the court and paid by the obligors in such bond.]

SEC. 4. WHO MAY BECOME BANKRUPTS.-a. Any person, except a municipal, railroad, insurance, or banking corporation or a building and loan association, shall be entitled to the benefits of this Act as a voluntary bankrupt.

b. Any natural person, except a wage carner or farmer, and any moneyed, business or commercial corporation, except a building and loan association, a municipal, railroad, insurance, or banking corporation, owing debts to the amount of $1,000 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. The bankruptcy of a corporation shall not release its officers, the members of its board of directors or trustees or of other similar controlling bodies, or its stockholders or members, as such, from any liability under the laws of a state or of the United States. The status of an alleged bankrupt as a wagc-earner or farmer shall be determined as of the time of the commission of the act of bankruptcy.

[b. Any natural person, except a wage earner or a farmer, any unincorporated company, and any moneyed, business, or commercial corporation (except a mu nicipal, railroad, insurance, or banking corporation or a building and loan association) 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. The bankruptcy of a corporation or association shall not release its officers, direc tors, or stockholders, as such, from any liability under the laws of a State or Territory or of the United States.]

SEC. 5. PARTNERS.-a. A partnership, including a limited partnership con taining one or more general partners, during the continuation of the partnership business or after its dissolution and before the final settlement thereof. may be adjudged a bankrupt either separately or jointly with one or more or all of its general partners.

b. A petition may be filed by one or more or all of the general partners in the separate behalf of a partnership or jointly in behalf of a partnership and of the general partner or partners filing the same: Provided, however, That where a petition is filed in behalf of a partnership by less than all of the general partners, the petition shall allege that the partnership is insolvent. A petition may be filed separately against a partnership or jointly against a partnership and one or more or all of its general partners.

[b]c. The creditors of the bankrupt partnership shall appoint the trustee [ ] who shall be the trustee of the individual estate of a general partner being Aministered in the proceeding: Provided, however, That the creditors of a eral partner adjudged a bankrupt may, upon cause shown, be permitted to

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appoint their separate trustee for his estate. In other respects, so far as possible, the partnership estate shall be administered as herein provided for other estates.

[c]d. The court of bankruptcy which has jurisdiction of one of the general partners may have jurisdiction of all the general partners and of the administration of the partnership and individual property.

[d]e. The trustee or trustees shall keep separate accounts of the partnership property and of the property belonging to the individual general partners. [elf. The expenses shall be paid from the partnership property and the Individual property in such proportions as the court shall determine.

[f]g. The net proceeds of the partnership property shall be appropriated to the payment of the partnership debts and the net proceeds of the individual estate of each general partner to the payment of his individual debts. Should any surplus remain of the property of any general partner after paying his individual debts, such surplus shall be added to the partnership assets and be applied to the payment of the partnership debts. Should any surplus of the partnership property remain after paying the partnership debts, such surplus shall be distributed among the individual partners, general or limited, or added to the Lassets of the individual partners] estates of the general partners, as the cuse may be, in the proportion of their respective interests in the partnership and in the order of distribution provided by the laws of the state applicable thereto.

[]. The court may permit the proof of the claim of the partnership estate against the individual estates, and vice versa, and may marshal the assets of the partnership estate and individual estates so as to prevent preferences and secure the equitable distribution of the property of the several estates.

[b]. Where all the general partners are adjudged bankrupt, the partnership shall also be adjudged bankrupt. In the event of one or more but not all of the [members] general partners of a partnership being adjudged bankrupt, the partnership property shall not be administered in bankruptcy, unless by consent of the general partner or partners not adjudged bankrupt : but such general partner or partners not adjudged bankrupt shall settle the partnership business as expeditiously as its nature will permit and account for the interest of the general partner or partners adjudged bankrupt.

j. The discharge of a partnership shall not discharge the individual general partners thereof from the partnership debts. A general partner adjudged a bankrupt either in a joint or separate proceeding may, pursuant to the prorisions of this Act, obtain a discharge from both his partnership and individual debts.

k. If a limited partnership is adjudged bankrupt, any limited partner who is individually liable under the laws of the United States or of any state for any of the partnership debts shall be decmed a general partner as to such debts and, if he is insolvent, shall be subject to the provisions and entitled to the benefits of this Act, as in the case of a general partner.

SEC. 6. EXEMPTIONS OF BANKRUPTS.-a. This Act shall not affect the allowance to bankrupts of the exemptions which are prescribed by the laws of the United States or by the state laws in force at the time of the filing of the petition in the state wherein they have had their domicile for the six months for the greater portion thereof] immediately preceding the filing of the petition, or for a longer portion of such six months than in any other jurisdiction: Provided, however, That no such allowance shall be made out of the property which a bankrupt transferred or concealed and which is recovered or the transfer of which is avoided under this Act for the benefit of the estate, except that, where the voided transfer was made by way of security only and the property recovered is in excess of the amount secured thereby, such allowance may be made out of such crcc88.

SEC. 7. DUTIES OF BANKRUPTS.-a. The bankrupt shall (1) attend at the first meeting of his creditors, [if directed by the court or a judge thereof to do so, and at the hearing upon objections, if any, to his application for a discharge [if filed, and at such other times as the court shall order; (2) comply with all lawful orders of the court; (3) examine and report to his trustee conerning the correctness of all proofs of claim filed against his estate; (4) execute and deliver such papers as shall be ordered by the court; (5) execute and deliver to his trustee transfers of all his property in foreign countries; (6) immediately inform his trustee of any attempt by his creditors or other persons to evade the provisions of this Act coming to his knowledge; (7) in case of any person having to his knowledge proved a false claim against his estate,

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disclose that fact immediately to his trustee; (8) prepare, make oath to and file in court within [ten] five days after adjudication, if an involuntary bankrupt, and [within ten days after the filing of a petition] with his petition, if a voluntary bankrupt, [(unless in either case further time is granted),] a sched ule of his property, showing the amount and kind of property, the location thereof and its money value, in detail; and a list of all his creditors, including all persons asserting contingent, unliquidated or disputed claims, showing their residence, if known, or if unknown that fact to be stated, the amount[s] due to or claimed by each of them, the consideration thereof, the security held by them, if any, and what claims, if any, are contingent, unliquidated or disputed; and a claim for such exemptions as he may be entitled to; all in triplicate, one copy [of each] for the clerk, one for the referee and one for the trustee []: Provided, That the court may for cause shown grant further time for the filing of such schedules, if, with his petition in a voluntary proceeding or with his application to have such time extended in an involuntary proceeding, the bankrupt files a list of all such creditors and their addresses; [aud] (9) [when present】 file in triplicate with the court at least fire days prior to the first meeting of hi creditors a statement of his affairs in such form as may be prescribed by the Supreme Court; (10) at the first meeting of his creditors, at the hearing upon objections, if any, to his discharge and at such other times as the court shall order, submit to an examination concerning the conducting of his business, the cause of his bankruptcy, his dealings with his creditors and other persons, the amount, kind and whereabouts of his property and, in addition, all matters which may affect the administration and settlement of his estate or the granting of his discharge; but no testimony given by him shall be offered in evidence against him in any criminal proceeding, creept such testimony as may be given by him in the hearing upon objections to his discharge: Provided, however, That he shall not be required to attend a meeting of his creditors, or at or for an examination at a place more than one hundred and fifty miles distant from his home or principal place of business, or to examine claims except when presented to him, unless ordered by the court, or a judge thereof, for cause shown, and the bankrupt shall be paid his actual expenses from the estate when examined or required to attend at any place other than the city, town or village of his residence] when the bankrupt is required to attend for examination, creept at the first meeting and at the hearing upon objections, if any, to his discharge, he shall be paid actual and necessary traveling cæpenses for any distance in crcess of one hundred miles from his place of residence at the date of bankruptcy; and Provided further, That the court may for cause shown, and upon such terms and conditions as the court may impose, permit the bankrupt to be cxamined at such place as the court may direct whether within or without the district in which the proceedings are pending; and (11) when required by the court, prepare, verify and file with the court in duplicate a detailed inventory. showing the cost to him of his merchandise or of such other property as may de designated, as of the date of his bankruptcy.

b. Where the bankrupt is a corporation, its officers, the members of its board of directors or trustees or of other similar controlling bodies, its stockholders or members, or such of them as may be designated by the court, shall perform the duties imposed upon the bankrupt by this Act.

SEC. 8. DEATH OR INSANITY OF BANKRUPTS-a. The death or insanity of a bankrupt shall not abate the proceedings, but the same shall be conducted and concluded in the same manner, so far as possible, as though he had not died or become insane: Provided, That in case of death, the bankrupt's right to exemption, if any, shall be preserved, and if the exempt property has not already been set off or awarded to him, it shall upon application be ordered act off and awarded to the spouse or dependent children surviving at his death to the exclusion of his personal representatives. [widow and children shall be entitled to all rights of dower and allowance fixed by the laws of the State of bankrupt's residence.]

SEC. 9. PROTECTION AND DETENTION] OF BANKRUPTS.-a. A bankrupt shall be exempt from arrest upon civil process except in the following cases (1) When issued from a court of bankruptcy for contempt or disobedience of its lawful orders; (2) when issued from a State court having jurisdiction and when served within such state upon a debt or claim from which his dis charge in bankruptcy would not be a release, and in such case he shall be exempt from such arrest when in attendance upon a court of bankruptcy or ngaged in the performance of a duty imposed by this Act.

SEC. 10. APPREHENSION AND EXTRADITION OF BANERUPTS-a. The court Judge] ay, during the pendency of a proceeding in bankruptcy, [at any time after