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"Under this Act" was substituted for "herein" in 1938 to promote precise expression. "And women" might well be deleted as unnecessary, particu larly in view of section 1(33).

(24) "Petition" shall mean a document filed in a court of bankruptcy or with a clerk thereof initiating a proceeding under this Act;

As broadened by the amendment of July 7, 1952, P.L. 456, 82d Cong., 2d Sess., § 1(g). Former definitions related only to petitions in strict bankruptcy. Several other sections have been shortened by using this amended definition.

(25) "To record" shall include to register or to file for record or registration;

This definition was inserted in 1938 to avoid questions as to the meaning of "record," wherever used, especially in section 21f, g, and h.

(26) "Referee" shall mean the referee who has jurisdiction of the case or to whom the case has been referred or anyone acting in his stead;

(27) "Relatives" shall mean persons related by affinity or consanguinity within the third degree as determined by the common law and shall include the spouse;

This definition was introduced by the Chandler Act (1938) for use in connection with sections 35(3), 44a and 59e(2) (qualification of referees, qualification of creditors to vote for trustees, and computation of number of creditors who must join in petition).

(28) "Secured creditor" shall include a creditor who has security for his debt upon the property of the bankrupt of a nature to be assignable under this Act or who owns such a debt for which some indorser, surety, or other person secondarily liable for the bankrupt has such security upon the bankrupt's assets;

Note that "secured creditor" for purposes of bankruptcy is not any creditor with security but only a creditor with security directly or indirectly from the bankrupt.

(29) "States" shall include the Territories and possessions to which this Act is or may hereafter be applicable, Alaska, and the District of Columbia;

(30) "Transfer" shall include the sale and every other and different mode, direct or indirect, of disposing of or of parting with property or with an interest therein or with the possession thereof or of fixing a lien upon property or upon an interest therein, absolutely or conditionally, voluntarily or involuntarily, by or without judicial proceedings, as a conveyance, sale, assignment, payment, pledge, mortgage, lien, encumbrance, gift, se

curity, or otherwise; the retention of a security title to property delivered to a debtor shall be deemed a transfer suffered by such debtor;

The Chandler Act (1938) expanded this definition in connection with revision of sections 60, 67 and 70e relating to voidable transfers. It promotes uniformity and brevity through the use of a single term to cover the numerous ideas encompassed. The act of 1898 stated: "transfer" shall include the sale and every other and different mode of disposing of or parting with property, or the possession of property, absolutely or conditionally, as a payment, pledge, mortgage, gift, or security;

It would seem that in view of the inclusiveness of the first part of the definition that the phrase beginning with "as" in the sixth line is now unnecessary.

The last clause, about retention of security title, was added by the amendment of July 7, 1952, P.L. 456, 82d Cong., 2d Sess., § 1(h), to emphasize the abrogation of the rule of Bailey v. Baker Ice Machine Co., 239 U.S. 268, 36 S.Ct. 50, 60 L.Ed. 275 (1915), which held that the title of the conditional vendor was not a transfer by the debtor. The same result was probably effected by the Chandler Act, but less conclusively.

(31) "Trustee" shall include all of the trustees and "receiver" shall include all of the receivers of an estate;

The reference to receivers was introduced by the Chandler Act (1938). The statement concerning the trustee goes back to the original Act of 1898.

(32) "Wage earner" shall mean an individual who works for wages, salary, or hire, at a rate of compensation not exceeding $1,500 per year;

(33) Words importing the masculine gender may be applied to and include all persons;

The Chandler Act (1938) took advantage of the definition of persons in (23) to shorten this definition.

(34) Words importing the plural number may be applied to and mean only a single person or thing; and

(35) Words importing the singular number may be applied to and mean several persons or things.


The definitions of this section should not be overlooked in construing the remainder of the statute.

General reference is here made to Collier on Bankruptcy (14th Ed.). Collier's outline corresponds to the Bankruptcy sections.

Chapter II


Sec. 2. (11 U.S.C. § 11.) Creation of Courts of Bankruptcy

and Their Jurisdiction

a. The courts of the United States hereinbefore defined as courts of bankruptcy are hereby created courts of bankruptcy and are hereby invested, within their respective territorial limits. as now established or as they may be hereafter changed, with such jurisdiction at law and in equity as will enable them to exercise original jurisdiction in proceedings under this Act, in vacation, in chambers, and during their respective terms, as they are now or may be hereafter held, to

Cf. section 1(10). The Chandler Act (1938) broadened this clause to conform to the provisions for debtor relief proceedings under the Act which are not nominally "bankruptcy proceedings."

A proposal to give the bankruptcy court express authority to exercise admiralty jurisdiction incidentally in bankruptcy cases was embodied in H.R. 3111, 81st Cong., but met opposition from the admiralty bar. The proposed amendments in that bill, which achieved enactment in P.L. 456, 82d Cong., 2d Sess., approved July 7, 1952, were "non-controversial".

(1) Adjudge persons bankrupt who have had their principal place of business, resided or had their domicile within their respective territorial jurisdictions for the preceding six months, or for a longer portion of the preceding six months than in any other jurisdiction, or who do not have their principal place of business, reside, or have their domicile within the United States, but have property within their jurisdictions, or who have been adjudged bankrupts by courts of competent jurisdiction without the United States, and have property within their jurisdictions, or in any cases transferred to them pursuant to this Act;

The Chandler Act (1938) substituted "longer" for "greater" and "than in any other jurisdiction" was added. In the absence of the added language the "greater" portion of the six months was held to mean more than three months. For the sort of trouble this caused, see In re Plotke, 104 F. 964 (C.C.A.7th, 1900).

The express authority to exercise jurisdiction in transferred cases was added by the amendment of July 7, 1952, P.L. 456, 82d Cong., 2d Sess., § 2(a).

(2) Allow claims, disallow claims, reconsider allowed or disallowed claims, and allow or disallow them against bankrupt estates;

To impose limits upon the doctrine of Arkansas Corporation Commission v. Thompson, 313 U.S. 132, 61 S.Ct. 888, 85 L.Ed. 1244 (1941), H.R.3111, 81st Cong., would have inserted: "(22) Hear and determine, or cause to be heard and determined, any question arising as to the amount or legality of any tax, Bankruptcy Act Anno. 5th Ed.-2

§ 2-(2)

whether or not previously assessed, which has not prior to bankruptcy been contested before and adjudicated by a judicial or administrative tribunal of competent jurisdiction, or, if such question has been so contested and adjudicated and the time for appeal or review has not expired, to authorize the receiver or the trustee to prosecute such appeal or review." Cf. § 64a(4), proviso.

(3) Appoint, upon the application of parties in interest, receivers or the marshals to take charge of the property of bankrupts and to protect the interests of creditors after the filing of the petition and until it is dismissed or the trustee is qualified; and to authorize such receiver, upon his application, to prosecute or defend any pending suit or proceeding by or against a bankrupt or to commence or prosecute any suit or proceeding in behalf of the estate, before any judicial, legislative, or administrative tribunal in any jurisdiction, until the petition is dismissed or the trustee is qualified: Provided, however, That the court shall be satisfied that such appointment or authorization is necessary to preserve the estate or to prevent loss thereto;

As Amended by the Chandler Act (1938). The text originally read: "appoint receivers or the marshals, upon application of parties in interest, in case the courts shall find it absolutely necessary, for the preservation of estates, to take charge of the property of bankrupts after the filing of the petition and until it is dismissed or the trustee is qualified." "Absolutely" was deleted because it had prompted some courts to refuse appointment unless there was a present threat of destruction of property rather than a present necessity to preserve. See In re Oakland Lumber Co., 174 F. 634 (C.C.A.2d, 1909); In re Commercial S. and L. Co., 16 A.B.R. (N.S.) 244 (N.D. Ohio, 1930). "Or to prevent loss" and "and to protect the interests of creditors" were included for similar reasons. Creditors' interests were further promoted by express permission to a court, upon due showing, to authorize a receiver to bring a suit or proceeding or to maintain or defend one pending anywhere. Previously, doubt existed whether a receiver could take any of the steps enumerated above. See Bingaman v. Commonwealth Trust Co., 1 F.2d 505 (M.D.Pa., 1924); In re Marcuse and Co., 11 F.2d 513 (C.C.A. 7th, 1926).

(4) Arraign, try, and punish persons for violations of this Act, in accordance 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;

As Amended by the Chandler Act (1938) to take advantage of the definition of "person" in section 1(23) and to eliminate a list of numerous classes of persons. The original language was probably not broad enough to cover "debtors" under the debtor relief provisions embodied in Chapters VIII-XIII.

(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 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;

"In bankruptcy" was replaced in 1938 by "under this Act" to include proceedings under the debtor relief chapters.

(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; and where in a controversy arising in a proceeding under this Act an adverse party does not interpose objection to the summary jurisdiction of the court of bankruptcy, by answer or motion filed before the expiration of the time prescribed by law or rule of court or fixed or extended by order of court for the filing of an answer to the petition, motion or other pleading to which he is adverse, he shall be deemed to have consented to such jurisdiction;

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As Amended by the Chandler Act (1938) and the Act of July 7, 1952. The clause beginning "and determine was added by the Chandler Act as essential for an advantageous sale, since Isaacs v. Hobbs Tie & Timber Co., 282 U.S. 734, 51 S.Ct. 270 (1931), probably does not change the well settled rule preventing the sale of a bankrupt's estate free of dower. See Kelly v. Minor, 252 F. 115 (C.C.A.4th, 1918). "Spouse" covers any interest of the husband.

For an extraordinary extension of this clause to cover plenary suits by trustees under Chapter X, see Austrian v. Williams, 331 U.S. 642, 67 S.Ct. 1443, 91 L.Ed. 1718 (1947).

The final provision, about failure to interpose objection, commencing "and where", was added by the amendment of July 7, 1952, P.L. 456, 82d Cong., 2d Sess., § 2(b), to abrogate the rule of Cline v. Kaplan, 323 U.S. 97, 65 S.Ct. 155, 89 L.Ed. 97 (1944), I Hanna & MacLachlan, Cases on Creditors' Rights (4th ed., 1949) 303, (Consolidated 4th ed., 1951) 269. This conforms to F.R.C.P. 12(h).

(8) Close estates, 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 necessary for the expenses of the proceeding or take the steps necessary for the administration of the estate: and reopen estates for cause shown;

As Amended by the Chandler Act (1938). The original form read: "close estates, whenever it appears that they have been fully administered, by approving the final accounts and discharging the trustees, and reopen them whenever it appears they were closed before being fully administered." The amendment made provision for closing estates for want of prosecution.

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