given majority of his creditors, is unconstitutional." In re Klein, 2 N. Y. Leg. Obs. 185; 14 Fed. Cas. 719. On appeal to the circuit court, Justice Catron, reversing the district court, pointed out the difference between the English and the American systems of bankruptcy; showed that voluntary bankruptcy was recognized by the laws of the states before the adoption of the Constitution; that this practice was meant to be recognized by the constitutional provision on the subject, and thereupon decided that the voluntary features of the Act of 1841 were not unconstitutional. Ibid. 1 How. 277, n.; 14 Fed. Cas. 716.

The question of jurisdiction can be raised at any stage of an action, and the defendant is not barred by appearing and answering. Jobbins v. Montague et al., 6 N. B. R. 509; 13 Fed. Cas. 648.

When a petition discloses a want of jurisdiction, the consent of the parties cannot cure the defect, and the court should take notice of the point of its own motion. Hopkins v. Carpenter, 18 N. B. R. 339; 12 Fed. Cas. 492.

A person not interested in the bankruptcy proceedings may by petition have his rights in property in custody of the bankrupt court determined by that court. The proper parties being made, such proceeding is plenary, and binds all parties. In re Anderson, 23 Fed. Rep. 482.

In the case cited the supreme court considered without deciding whether the jurisdiction of the district court as a court of bankruptcy over all the property of the bankrupt is exclusive. Norton v. Boyd, 3 How. 426. When all parties appear and seek the determination, the court of bankruptcy has power to determine the title of property in dispute between the assignee and others. So held under section 5063, R. S. Adams v. Collier, 122 U. S. 382.

Held, under the Act of 1867 (§ 4970, R. S.), that the district court has jurisdiction of a suit by creditors against the assignee of a bankrupt member of a partnership to procure an adjudication of their debts and their right of priority as against individual creditors.

"The moment U. filed his voluntary petition to be declared a bankrupt, all the property, in possession or in action, which he included on his inventory and schedules came, by the effect of the bankruptcy law, into the prehensory power of the court as fully as if it was in the actual and visible presence of the court; consequently it is under its protection and within its exclusive control." Byrd v. Harrold et al., 18 N. B. R. 433; 4 Fed. Cas. 949.

The district court, sitting as a court of bankruptcy, is always open, and may vacate orders and decrees at any time upon a proper showing. Boutwell v. Allerdice, 2 Hughes, 121; 3 Fed. Cas. 1020.

It was held that section 1 of the Act of 1867 did not authorize the foreclosure of a mortgage on the bankrupt's estate by the summary jurisdiction of the district court. In re Casey, 10 Blatchf. 376; 5 Fed. Cas. 279.

Under the Act of 1841 the court of bankruptcy had jurisdiction of an action by an assigree to recover a balance due from a consignor to the

bankrupt as broker at the time of the filing of the petition in bankruptcy. Kelly v. Smith et al., 1 Blatchf. 290; 14 Fed. Cas. 271 (1848).

The trustees named in a deed of trust given to secure the payment of promissory notes cannot sell the property after an adjudication in bankruptcy against the mortgagor, except by leave of the court of bankruptcy. Dooley v. Virginia M. & F. I. Co., 2 Hughes, 847; 7 Fed. Cas. 912.

A court of bankruptcy may proceed summarily against the sureties on a forthcoming bond, notwithstanding the assignee had previously brought an action on the bond resulting in a verdict for the defendant, which was set aside and a new trial granted. In re Mayo, 4 Hughes, 384; 16 Fed. Cas. 1262.

A decedent, by a codicil to his will, named two persons as executors for the purpose only of carrying on his business as a banker. They qualified as executors and conducted the business until they were obliged to suspend. A petition in bankruptcy was filed against them. It was held that this was not a trust that could be administered under the Bankrupt Act of 1867. Graves et al. v. Winter et al., 9 N. B. R. 357; 10 Fed. Cas. 999.

The United States district court for the southern district of New York decided that an assignee in bankruptcy under the laws of Great Britain could maintain an action in that court to collect assets of the bankrupt to the same extent that the bankrupt himself could have sued if no bankruptcy had taken place. Hunt et al. v. Jackson, 5 Blatchf. 349; 12 Fed. Cas. 924.

Justice Story held that where a petition had been filed on the day that the Act of 1841 was repealed the court could take jurisdiction, and maintain it to the close of the proceedings. In re Richardson et al., 2 Story, 571; 20 Fed. Cas. 699.

A court of bankruptcy cannot compel a bankrupt after discharge to execute papers necessary to the conveyance of his property. In re Nichols, 1 Fed. Rep. 842.

In deciding a case that arose in 1837, under the Bankrupt Act of 1800, the United States district court for Pennsylvania held that the district judge had power to supersede a commission of bankruptcy under the act mentioned without the express grant of such power; that the effect of such a supersedeas was to place the bankrupt and his estate in the same position they would have been in if no proceeding had been commenced, and that a supersedeas will not be revoked to allow a petitioner to prove debts many years after it was granted, except on a strong showing to rebut the presumption that the debts had been paid. In re Morris, Crabbe, 70; 17 Fed. Rep. 785 (1837).

By stipulation, certain mortgaged property of the bankrupt was sold by the marshal, and the proceeds paid into court. The court held that by this agreement, the assignee on one hand, and the mortgagee on the other, submitted their matters in dispute to the district court upon a petition to be filed and waived their respective rights to institute pro

ceedings in equity or at law, either in the district or circuit court. In re Masterson, 4 N. B. R. 553; 16 Fed. Cas. 1084.

Where a forthcoming bond was given in bankruptcy proceedings, it was held that the district court might order the goods or the value thereof to be delivered to the court by the obligors. Rosebaum v. Garnett, 3 Hughes, 662; 20 Fed. Cas. 1193.

An adjudication of bankruptcy under the Act of 1867 is conclusive as to the insolvency of the petitioner and that he owed more than $300, but not that he is within the jurisdiction of the court otherwise. In re Goodfellow, 1 Low. 510; 11 Fed. Cas. 594.

It is competent for a court of bankruptcy to order the seizure of the bankrupt's property while in the possession of another claiming to own the same. Feibelman v. Packard, 109 U. S. 421.

Held, under the Act of 1841, that there is no distinction in a court of bankruptcy between an order of the judge and an order of the court, the act of the judge being the act of the court. In re Mott, 6 Fed. Rep. €85.

In composition proceedings, before adjudication, a court of bankruptcy has no jurisdiction to determine questions of title between the alleged bankrupt and persons who were not parties to the proceedings. In re Waitzfelder et al., 18 N. B. R. 260; 28 Fed. Cas. 1343.

It appeared from the books of the bankrupts that they ought to have turned over $50,000 worth of property, and they did in fact turn over $18,000 worth. Upon an examination, the district court found that they had concealed $7,700, and ordered them to pay that sum to the assignee. On review, the circuit court affirmed the order. In re Peltasohn, 4 Dill. 107; 19 Fed. Cas. 126.

On the question of the authority of the district court as a court of bankruptcy to sell the bankrupt's real estate free from incumbrances, the court, construing the Act of 1867, used this language: "The power is given by the first section of the Bankrupt Act by which the jurisdiction of the court is extended to the ascertainment and liquidation of the liens and other specific claims' in the bankrupt's assets to the adjustment of the priorities and conflicting interest of all parties,' and 'to the marshaling and disposition of the different funds and assets so as to secure the rights of all parties to the due distribution of the assets among all the creditors.' Under the Bankrupt Act of 1841, less comprehensive and explicit provisions were held by the supreme court to confer this power." In re Rhodes, 20 Fed. Cas. 652.

The jurisdiction of a court of bankruptcy is subject to collateral attack in another court. Adams et al. v. Tarrell, 4 Fed. Rep. 796.

The court refused to set aside an adjudication on the ground that the petition showed a want of jurisdiction, and held that the point should be raised on the application for a discharge. In re Penn et al., 4 Ben. 99; 19 Fed. Cas. 151.

[See notes to §§ 9, 11, 18 and 23.]

CHAPTER III.

BANKRUPTS.

§ 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 through legal proceedings, and not having at least five days before a sale or final disposition of any property affected by such preference vacated or discharged such preference; or

(4.) Made a general assignment for the benefit of his creditors; or (5.) Admitted in writing his inability to pay his debts and his willingness to be adjudged a bankrupt on 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. Such time shall not expire until four months after: The date 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 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 the petition against him, and if solvency at such date is proved by the alleged bankrupt the proceedings shall be dismissed, and under said subdivision one the burden of proving solvency shall be on the alleged bankrupt.

*The word " insolvent" as used in this Act is defined in section 1, clause 15. This definition destroys the pertinence of a large number of decisions to the effect that insolvency consists of a present inability to pay one's debts as they mature in the ordinary course of business.

(d.) Whenever a person against whom a petition has been filed as hereinbefore provided under the second and third subdivisions of this section takes issue with and denies the allegation of his insolvency, it shall be his duty to appear in court on the hearing, with his books, papers, and accounts, and submit to an examination, and give testimony as to all matters tending to establish solvency or insolvency, and in case of his failure to so attend and submit to examination the burden of proving his solvency 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.

Fraudulent Payments and Transfers.

A payment which was otherwise an act of bankruptcy is none the less so because it was made upon a fiduciary debt. In re Dibblee et al., 3 Ben. 283; 7 Fed. Cas. 651.

The payment by an insurance company to insurees of unearned premiums is not such a preference as to support a petition for involuntary bankruptcy. Knickerbocker Ins. Co. v. Comstock, 9 N. B. R. 484; 14 Fed. Cas. 751.

A bank certified a check on the promise of the drawer that he would make his account good during the day. It was held that this created simply the relation of debtor and creditor, and that the payment of the debt after insolvency was an act of bankruptcy. Payne et al. v. Solomon, 14 N. B. R. 162; 19 Fed. Cas. 12.

An insolvent corporation made a payment of rent to preserve a lease of great value. The payment was held to be an act of bankruptcy under the Act of 1867, notwithstanding it was made in good faith, and was