CHAPTER VI THE DISTRICT COURT (Continued)-BANKRUPTCY (Continued) 47. The Process on an Involuntary Petition. 48. The Warrant of Seizure. 49. The Appointment of a Receiver. 50. The Defense. 51. The Right to a Jury. 52. The Adjudication. 53. The Creditors' Meeting. 54. The Examination of the Bankrupt. THE PROCESS ON AN INVOLUNTARY PETITION 47. The process in an involuntary proceeding consists of an order to show cause, as a preliminary, and service of a copy of the petition and a writ of subpœna upon the defendant. The subpoena is similar to the original equity subpœna, and its service is like that of the equity subpoena, except in certain respects specified by the statute. In case personal service cannot be made, an order of pub lication is provided for, which is modeled upon the order prescribed in suits to enforce equitable claims. Section 18a of the bankruptcy act of 1898 (30 Stat. 551, c. 541 [U. S. Comp. St. 1901, p. 3429]) provides that, upon the filing of a petition for involuntary bankruptcy, service thereof, with a writ of subpoena, shall be made upon the person therein named 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. The original act went on to provide that, in case personal service cannot be made, then notice shall be given by publication in the same manner and for the same time as provided by law for notice of publication in suits in equity in courts of the United States. The amendment of February 5, 1903 (32 Stat. 797, c. 487 [U. S. Comp. St. Supp. 1911, p. 1491]), changed this last clause by providing that this notice of publication shall be given 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, fix a longer time. Under this provision the first process on an involuntary petition is an order to show cause, providing also that a copy of the petition and a writ of subpoena be served upon the defendant. A form of such an order to show cause is given as form 41 of those prescribed by the Supreme Court of the United States, and the subpoena as No. 52 of the same forms. This subpoena is not in the exact form of the original equity subpoena, and the act does not require it to be, but merely requires that its service shall be like that of the equity subpoena, except in the particulars named.3 This subpoena must be issued, and cannot be waived by the bankrupt. He can accept service on it, but he cannot stop its issue. This is for the reason that creditors also can contest an involuntary petition, and the issuance of the 1 172 U. S. 682, 18 Sup. Ct. xx, 43 L. Ed. 1209. 2 172 U. S. 683, 18 Sup. Ct. xx, 43 L. Ed. 1209. 8 A service on an adult member of the bankrupt's family in case of his absence is a personal service in the sense of and under the provisions of equity rule 13 (29 Sup. Ct. xxvi). In re Norton (D. C.) 148 Fed. 301. See "Bankruptcy," Dec. Dig. (Key-No.) § 86. subpœna is necessary in order to fix a return day within which creditors can contest.1 In case the subpoena is not served, the court can order an alias." The Order of Publication In case personal service cannot be made, an order of publication can be had as prescribed by the act. This order of publication is modeled upon the order prescribed in suits to enforce equitable liens. Section 738 of the Revised Statutes first provided for service by publication in such cases, but its provisions were enlarged and practically superseded by the act of March 3, 1875. It provides, in substance, that, when personal service cannot be made, "it shall be lawful for the court to make an order directing such absent defendant, or defendants, to appear, plead, answer or demur, by a day certain to be designated." No form of an order of publication is given among those prescribed by the Supreme Court. Such an order would be a simple one, and need only follow the statute. The following is suggested as a form for the purpose: "It appearing that personal service cannot be made upon the defendant herein, it is ordered that said defendant do appear, plead, answer, or demur to the petition within ten days from the last publication hereof, at in District of ..... ...... ...; and it is fur the .... ... of .. 4 In re L. Humbert Co. (D. C.) 100 Fed. 439. But the failure to issue the subpoena on account of such waiver does not affect the validity of the adjudication as to any except creditors who did not acquiesce in it or who desire to make defense to the petition. In re Western Inv. Co. (D. C.) 170 Fed. 677. See "Bankruptcy," Dec. Dig. (Key-No.) § 87. 5 Gleason v. Smith, 145 Fed. 895, 76 C. C. A. 427. See “Bankruptcy," Dec. Dig. (Key-No.) § 86. U. S. Comp. St. 1901, p. 513, now section 57 of the Judicial Code. D THE WARRANT OF SEIZURE 48. If, through danger of dissipation of the property, a necessity appears therefor, it is provided that an order may issue for the seizure of the property on behalf of the court, on satisfactory affidavits having been given, with bond. The petitioning creditors may simply issue and serve the notice above, without any interference with the property of the defendant bankrupt. If, however, they believe that there is danger of its dissipation, they are permitted, by section 69a of the act, on satisfactory proof by affidavit that the bankrupt 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, to apply to the judge for a warrant to the marshal to seize and hold it subject to further orders, and the judge is authorized to issue such a warrant. In such case a bond must be given to indemnify the bankrupt for any damages inflicted. This provision evidently contemplates such a procedure after the filing of the petition, and requires at least a prima facie case to be made by affidavit. The bond prescribed by it and by section 3e of the act is only in case it is desired before adjudication to protect the property, as is evident from the language of these two sections.. After adjudication the court has constructive custody of the property, and in such case it can proceed by summary process to take charge of the property, without requiring a bond." This warrant to the marshal authorizes the seizure not only of property in the hands of the bankrupt himself, but 7 BRYAN v. BERNHEIMER, 181 U. S. 188, 195, 21 Sup. Ct. 557, 45 L. Ed. 814. See "Bankruptcy," Dec. Dig. (Key-No.) §§ 109, 288. also of property claimed to be his that may be found in other hands. 8 This fact, however, should not be allowed to confuse the procedure under the involuntary petition with the summary procedure to gain possession of the property. The only proper issue in the involuntary petition itself is whether the bankrupt has committed an act of bankruptcy. That is the only issue which the law contemplates as being tried upon that petition, and it would be bad practice to combine in the same petition a proceeding against third parties. That should be raised by an additional petition to the court, or rule to show cause, so as to keep the two issues entirely separate." Under such a warrant the marshal may be directed to take charge of property in the hands of an assignee under a general assignment, as the bankruptcy act supersedes proceedings of this sort in state courts under state insolvent laws.10 The Supreme Court has held that where there has been an adjudication in bankruptcy, but a trustee has not been appointed, the bankrupt court could retake the property by summary process, on petition, out of the hands of parties who had replevied the property in the bankrupt's possession after the adjudication. The court, however, bases this right rather upon subdivision 15 of section 2, allowing the courts to make such orders, issue such process, and enter such judgments in addition to those specifically provided for as may be necessary for the enforcement of the provisions of this act, and upon clause 3 of bankruptcy order 8 BRYAN v. BERNHEIMER, 181 U. S. 188, 195, 21 Sup. Ct. 557, 45 L. Ed. 814. See "Bankruptcy," Dec. Dig. (Key-No.) § 116. In re Kelly (D. C.) 91 Fed. 504. See "Bankruptcy," Dec. Dig (Key-No.) § 116. 10 In re Sievers (D. C.) 91 Fed. 366; Davis v. Bohle, 92 Fed. 325, 34 C. C. A. 372; Bryan v. Bernheimer, 181 U. S. 188, 21 Sup. Ct. 557, 45 L. Ed. 814. See "Bankruptcy," Dec. Dig. (Key-No.) § 116. |