pœna, and that the debtor be adjudged a bankrupt, and is sworn to. It would not seem, under the language of the act, to be necessary to file any schedule with an involuntary petition at the outset, but the ninth order in bankruptcy provides that, if the bankrupt is absent or cannot be found, the petitioning creditor must file, within five days after the adjudication, a schedule giving the names and places of residence of all the creditors of the bankrupt, according to the best information of the petitioning creditor. The eleventh order in bankruptcy 48 allows these petitions also to be amended. The amendment may add additional grounds, and it may also make the averments of the petition more certain. 4°

Not every creditor of the bankrupt can file such petitions. By the fifty-ninth section of the act, this can be done only by those who have provable claims. Those who have preferences cannot prove their claims, except to the excess of the debt over the security. This is regulated by the fifty-seventh and fifty-ninth sections of the act.

The act as first passed provided that the claims of creditors who had received preferences should not be allowed unless such creditors should surrender their preferences. This, however, has been amended by the act of February 5, 1903, so that the present form of this paragraph provides that the claims of creditors who have received preferences voidable under section 60, subd. "b," or to whom conveyances, transfers, assignments, or incumbrances void or voidable under section 67, subd. "e," have been made or given, shall not be allowed unless such creditors shall surrender such preferences, conveyances, transfers, assignments, or incumbrances.

47 172 U. S. 656, 18 Sup. Ct. v, 43 L. Ed. 1190. 48 172 U. S. 657, 18 Sup. Ct. v, 43 L. Ed. 1190.

49 In re Mercur (D. C.) 95 Fed. 634; In re Nelson (D. C.) 98 Fed. 76; Ryan v. Hendricks, 166 Fed. 94, 92 C. C. A. 78; Millan v. Exchange Bank, 183 Fed. 753, 106 C. C. A. 327. See "Bankruptcy," Dec. Dig. (Key-No.) § 84; Cent. Dig. §§ 126-129.

Under this amendment, those who have valid preferences can prove their claims without being held to waive their preferences. Under the act of 1867 it had been held that a secured creditor who came into the proceeding and proved his claim waived his preference.50

A creditor of a partnership may prove against an individual member of the partnership, as that individual is I still his debtor.51

If the petition shows the requisite number and amount of creditors and debts on its face, the court has jurisdiction, and the proceeding could not be attacked collaterally by showing that, as a matter of fact, these jurisdictional facts did not exist. Such a question would be for the bankrupt court itself, and could not be inquired into by another court where the proceedings on their face appear to be regular.52 Paragraph "f" of the fifty-ninth section of the act allows creditors other than the original petitioners to enter their appearance at any time and join in the petition, or to file an answer, and be heard in opposition to the petition. If it develops on the examination of the question of fact that there is a deficiency of creditors, in number or amount, others who join in the petition under this provision can be counted, and the jurisdiction of the court will be upheld.53

In estimating the amount, interest may be included as part thereof.54

50 In re Bear (D. C.) 5 Fed. 53. See “Bankruptcy," Dec. Dig. (KeyNo.) $$ 76, 364; Cent. Dig. § 504.

51 In re Mercur (D. C.) 95 Fed. 634. See "Bankruptcy," Dec. Dig. (Key-No.) § 309; Cent. Dig. §§ 555-564.

52 In re Duncan, Fed. Cas. No. 4,131; In re Hecox, 164 Fed. 823, 90 C. C. A. 627; In re Dempster, 172 Fed. 357, 97 C. C. A. 51. See “Bankruptcy,” Dec. Dig. (Kcy-No.) §§ 21, 100; Cent. Dig. §§ 24, 141–

144.

53 In re Romanow (D. C.) 92 Fed. 510; In re Bedingfield (D. C.) 96 Fed. 190; In re John A. Etheridge Furniture Co. (D. C.) 92 Fed. 329. See “Bankruptcy,” Dec. Dig. (Key-No.) §§ 76, 77; Cent. Dig. $$ 55, 99, 100.

54 Sloan v. Lewis, 22 Wall. 150, 22 L. Ed. 832. See "Bankruptcy," Dec. Dig. (Key-No.) § 77; Cent. Dig. §§ 55, 101–108.

A creditor who joins in the proceeding cannot defeat the proceeding by subsequently withdrawing.""

55

Under the provisions of the act, neither a voluntary nor involuntary petition can be dismissed, even by consent of parties, until after notice to the creditors.56

This provision, however, alludes only to dismissals of petitions before a hearing on the merits. No notice is required when the petition is dismissed by the court as the result of a trial,57

The only party defendant to the petition in the first instance is the alleged bankrupt. If there is a proceeding against him, and he is a member of a partnership, other members of the partnership cannot voluntarily come in and submit the partnership to the proceeding, as the act provides opportunity for them to avail of it by filing separate petitions.58

The petition must allege insolvency, except in cases where insolvency is not a material issue, and it must also charge an act of bankruptcy with reasonable certainty. This brings up for discussion the question, what constitutes acts of bankruptcy? Here it is important to remember that the acts of the bankrupt alone are being considered, and those simply for the purpose of deciding the question whether he should be adjudicated a bankrupt. There are many dealings by him which are acts of bankruptcy as far as he is concerned, and violations of the bankrupt law, and yet which are not voidable as to the grantees or beneficiaries under them. The bankrupt may intend to give a preference, for instance, and his act in

55 In re Bedingfield (D. C.) 96 Fed. 190. See "Bankruptcy," Dec. Dig. (Key-No.) §§ 77, 92.

56 Section 59g (U. S. Comp. St. 1901, p. 3445); In re Cronin (D. C.) 98 Fed. 584. See "Bankruptcy," Dec. Dig. (Key-No.) §§ 48, 92; Cent. Dig. §§ 47, 133–136.

57 Neustadter v. Dry Goods Co. (D. C.) 96 Fed. 830. See "Bankruptcy," Dec. Dig. (Key-No.) §§ 50, 99; Cent. Dig. §§ 136, 146.

58 Mahoney v. Ward (D. C.) 100 Fed. 278. See "Bankruptcy," Dec. Dig. (Key-No.) § 88; Cent. Dig. §§ 58, 98-112.

giving it will be an act of bankruptcy; and yet the grantee, if he has not the knowledge, or means of knowledge, required by the bankrupt law, may be enabled to sustain his preference. Hence at this stage of the proceeding, which involves simply the issue whether the defendant should be adjudicated a bankrupt, the question of the validity of his acts as to third parties is not involved. Those questions. come up after adjudication, when proceedings are taken to set them aside.

ACTS OF BANKRUPTCY-DEFINITION AND ENUMERATION

40. Acts of bankruptcy are such acts as, in accordance with the terms of the statute, render him who commits them a subject for involuntary bankruptcy proceedings.

These acts, as specified in the third section of the act, may be enumerated as follows:

(a) Transfers to hinder, delay, and defraud creditors. (b) Illegal preferences.

(c) Suffering preference by legal process.

(d) Assignments.

(e) Admission of insolvency in writing.

SAME-TRANSFERS TO HINDER, DELAY, AND DEFRAUD CREDITORS

41. It is an act of bankruptcy for a person to convey, transfer, conceal, or remove, or permit to be concealed or removed, any part of his property, with intent to hinder, delay, or defraud his creditors, or any of them. This is broader in meaning than the state statutes based on the statute of Elizabeth. Solvency is a good defense to a petition filed under this act of bankruptcy.

This subdivision makes an act of bankruptcy any attempt to defraud creditors which would constitute a violation of the state statutes based upon the statutes of Elizabeth. However, it goes further than this. At common law, independent of the bankrupt act, a preference of one creditor over another by a debtor was not a violation of such statutes, if the debt was an actual, bona fide debt; but, under the bankrupt act, even a preference of one bona fide creditor over another is held to be not only an act of bankruptcy, but void, as intended to hinder, delay, and defraud creditors; and not only a preference of one creditor over another, but a debt of general assignment, securing all creditors exactly alike, is held to be not only an act of bankruptcy, but void, as to the trustee in bankruptcy, as intended to hinder, delay, and defraud creditors; for its effect would be to withdraw the administration of the bankrupt's estate from the bankrupt court and place it in the hands of a trustee, and this would hinder the creditors from the collection of their debts through the court primarily designed for that purpose."

A sale of property, however, is not necessarily fraudulent, though the vendor is insolvent. If made in the ordinary course of business, without circumstances of suspicion, it would be valid as to the vendee, and could hardly be considered an act of bankruptcy. Any contrary doctrine would put a clog upon the free alienation of property, which would be injurious in its effects upon the business community." So, where a corporation issued bonds to

59 WEST CO. v. LEA, 174 U. S. 590, 19 Sup. Ct. 836, 43 L. Ed. 1098; Gutwillig, In re (D. C.) 90 Fed. 475. An assignment, if perfected, is an act of bankruptcy, though invalid. Canner v. Webster Tapper Co., 168 Fed. 519, 93 C. C. A. 941; In re Federal Lumber Co. (D. C.) 185 Fed. 926. See "Bankruptcy," Dec. Dig. (Key-No.) § 58; Cent. Dig. §§ 57, 72-79.

60 Tiffany v. Lucas, 15 Wall. 410, 21 L. Ed. 198; Richardson v. Shaw, 209 U. S. 365, 28 Sup. Ct. 512, 52 L. Ed. 835, 14 Ann. Cas. 981; In re McLoon (D. C.) 162 Fed. 575. See "Bankruptcy," Dec. Dig. (Key-No.) § 57; Cent. Dig. §§ 57, 66, 69-79.