estates; (6) bring in and substitute additional persons or parties in proceedings in bankruptcy 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; (8) 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; (9) confirm or reject compositions between debtors and their creditors, and set aside compositions and reinstate the cases; (10) consider and confirm, modify or overrule, or return, 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 enforcement of the provisions of this act; (16) punish persons for contempts committed before referees; (17) pursuant to the recommendation of creditors, or when they neglect to recommend 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, or the successful party for cause, or in part against each of the parties, and against estates, in proceedings in bankruptcy; and (19) transfer cases to other courts of bankruptcy.

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.

Analogous Provisions of Former Acts.—

As to courts of bankruptcy: R. S. §§ 563, 711, 4972, 4973, 4974, 4975, 4977, 4978, 4978A, 4978B; act of 1867, §§ 1, 49; act of 1841, §§ 6, 16.

As to specific powers: compare Analogous Provisions of Former Acts, given under the several sections of this act, cited in the cross-references given in the notes to this section.

Courts of Bankruptcy — Jurisdiction of Bankruptcy Courts. [Ch. II. Courts of Bankruptcy.-In providing for the administration of a system of bankruptcy Congress has invariably availed itself of an existing organization, namely, the district courts of the United States. These courts are denominated and constituted courts of Fankruptcy, but it has been held that although the same persons hold relatively the same offices, and the territorial jurisdiction of the courts as courts of bankruptcy is co-extensive with their jurisdiction as United States district courts, they are nevertheless, distinct and separate courts with powers and jurisdiction distinct and separate. As bankruptcy courts, they are statutory in their origin, and have no powers, authority or jurisdiction except that which is expressly conferred upon them by the statute, or that which is necessarily implied. (Clark v. Binninger, 1 Abb. N. C. 421; 38 How. Pr. 341; s. c. 3 N. B. R. 518; in re Norris, 18 Fed. Cas. 317; 4 N. B. R. 35; Jol bins v. Montague, 6 N. B. R. 509; Fed. Cas. 7330.)

But the courts of bankruptcy are not inferior courts in the sense that their jurisdiction must necessarily appear upon the face of the papers. An adjudication in bankruptcy is a proceeding in rem and the jurisdiction of the court over the person will be presumed if it does not appear upon the record. (Hayes v. Ford, 55 Ind. 52; 15 N. B. R. 509, citing Ruckman v. Cowell, 1 N. Y. 505. See also Chemung Bank v. Judson, 8 N. Y. 254; Reed v. Vaughn, 10 Mo. 447 and in re Columbia Real Estate Co. 4 Am. B. R. 411; 101 Fed. 965.)

Construction of the Section. Jurisdiction of Bankruptcy Courts.This section, first, confers upon courts of bankruptcy, jurisdiction at law and in equity, in chambers and at regular terms, of all proceedings in bankruptcy. This is a general vesting of jurisdiction. After that the section goes on and enumerates certain specific classes of cases to which the jurisdiction shall be deemed to extend, and which are generally explained in subsequent sections.

The question of the extent of the jurisdiction of the District Courts conferred by the terms of this section, especially by subd.

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7, giving jurisdiction to "cause the estates of bankrupts to be collected, reduced to money and distributed and determine controversies in relation thereto except as herein otherwise provided," has troubled the courts more than any other question arising in the administration of the Act of 1898. Finally, however, the question has been definitely settled (unless Congress amends the law) by the tribunal whose decrees are theoretically infallible in Bardes v. First Nat. Bank of Hawarden, 4 Am. B. R. 163; 178 U. S. 524; 44 L. Ed. 1001. No better statement of the limitation upon jurisdiction can be given than by quoting from Mr. Justice Gray's opinion in that case. After quoting section 2 of the Act of 1898, he proceeds to construe it by comparison with the Act of 1867 as follows:

"In the Act of 1867, the provisions as to the jurisdiction of proceedings in bankruptcy, and as to the original jurisdiction of actions at law and suits in equity, were as follows:

Sec. 1. That the several District Courts of the United States be, and they hereby are, constituted courts of bankruptcy, and they shall have original jurisdiction in their respective districts in all matters and proceedings in bankruptcy, and they are hereby authorized to hear and adjudicate upon the same according to the provisions of this act. The said courts shall be always open for the transaction of business under this act, and the powers and jurisdiction hereby granted and conferred shall be exercised as well in vacation as in term time, and a judge sitting at chambers shall have the same powers and jurisdiction, including the power of keeping order and of punishing any contempt of his authority, as when sitting in court. And the jurisdiction hereby conferred shall extend to all cases and controversies arising between the bankrupt and any creditor or creditors who shall claim any debt or demand under the bankruptcy; to the collection of all the assets of the bankrupt; to the ascertainment and liquidation of the liens and other specific claims thereon; to the adjustment of the various priorities and conflicting interests of all parties, and to the marshalling and disposition of the different funds and assets, so as to secure the rights of all parties and due distribution of the assets among all the creditors; and to all acts, matters and things to be done under and in virtue of the bankruptcy, until the final distribution and settlement of the estate of the bankrupt, and the close of the proceedings in bankruptcy.' 14 Stat. 517; Rev. Stat. §§ 563, 711, 4972, 4973.

Sec. 2. That the several Circuit Courts of the United States, within and for the districts where the proceedings in bankruptcy shall be pending, shall have a general superintendence and jurisdiction of all cases and questions arising under this act; and, except when special provision is otherwise made,

[Ch. II.

Jurisdiction of Bankruptcy Courts.

may, upon bill, petition or other proper process, of any party aggrieved, hear and determine the case in a court of equity. The powers and jurisdiction hereby granted may be exercised either by said court or by any justice thereof in term time or vacation. Said Circuit Courts shall also have concurrent jurisdiction with the District Courts of the same district of all suits at law or in equity, which may or shall be brought by the assignee in bankruptcy against any person claiming an adverse interest, or by such person against such assignee, touching any property or rights of property of said bankrupt transferable to or vested in such assignee.' 14 Stat. 518; Rev. Stat. §§ 4979, 4986.

In Lathrop v. Drake (1875), 91 U. S. 516, the jurisdiction conferred on the District Courts and the Circuit Courts of the United States by the Bankrupt Act of 1867 was defined by this court, speaking by Mr. Justice Bradley, as consisting of two distinct classes: first, jurisdiction, as a court of bankruptcy, over the proceedings in bankruptcy, initiated by the petition, and ending in the distribution of assets amongst the creditors, and the discharge or refusal of a discharge of the bankrupt; secondly, jurisdiction, as an ordinary court, of suits at law or in equity, brought by or against the assignee in reference to alleged property of the bankrupt, or to claims alleged to be due from or to him,' and the jurisdiction of the District and Circuit Courts over suits to recover assets of the bankrupt from a stranger to the proceedings in bankruptcy, brought by the assignee in a district other than that in which the decree in bankruptcy had been made, was upheld, not under the provisions of section of that act, giving to the District Court original jurisdiction of proceedings in bankruptcy, and of section 2, giving to the Circuit Court supervisory jurisdiction over such proceedings; but wholly under the distinct clause of section 2, which gave to those two courts concurrent jurisdiction of all suits, at law or in equity, brought by the assignee in bankruptcy against any person claiming an adverse interest, or by such person against such assignee, touching any property or rights of property of said bankrupt transferable to or vested in such assignee.'

The jurisdiction of the courts of the United States over all matters and proceedings in bankruptcy, as distinguished from independent suits at law or in equity, was of course exclusive. But it was well settled that the jurisdiction of such suits, conferred by the second section of the Act of 1867 upon the Circuit and District Courts of the United States for the benefit of an assignee in bankruptcy, was concurrent with that of the State courts. In Eyster v. Gaff (91 U. S. 521), this court, speaking by Mr. Justice Miller, said: The opinion seems to have been quite prevalent in many quarters at one time, that, the moment a man is declared bankrupt, the District Court which has so adjudged draws to itself by that act not only all control of the bankrupt's property and credits, but that no one can litigate with the assignee contested rights in any other court, except in so far as the Circuit Courts have concur

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rent jurisdiction, and that other courts can proceed no further in suits of which they had at that time full cognizance; and it was a prevalent practice to bring any person who contested with the assignee any matter growing out of disputed rights of property or of contracts, into the bankrupt court by the service of a rule to show cause, and to dispose of their rights in a summary way. This court has steadily set its face against this view. The debtor of a bankrupt, or the man who contests the right to real or personal property with him, loses none of those rights by the bankruptcy of his adversary. The same courts remain open to him in such contests, and the statute has not divested those courts of jurisdiction in such actions. If it has for certain classes of actions conferred a jurisdiction for the benefit of the assignee in the Circuit and District Courts of the United States, it is concurrent with and does not divest that of the State courts.'

Under the Act of 1867, then, the distinction between proceedings in bankruptcy, properly so called, and independent suits, at law or in equity, between the assignee in bankruptcy and an adverse claimant, was distinctly recognized and emphatically declared. Jurisdiction of such suits was conferred upon the District Courts and Circuit Courts of the United States by the express provision to that effect in section 2 of that act, and was not derived from the other provisions of sections 1 and 2, conferring jurisdiction of proceedings in bankruptcy. And the jurisdiction of suits between assignees and adverse claimants, so conferred on the Circuit and District Courts of the United States, did not divest or impair the jurisdiction of the State courts over like cases.

We now recur to the provisions of the Act of 1898. This act has the somewhat unusual feature of inserting at the head of each section a separate title indicating its subject-matter.

Section 2 of this act, entitled 'Creation of Courts of Bankruptcy and their Jurisdiction,' takes the place of section I of the Act of 1867, and hardly differs from that section, except in the following particulars:

First. It begins by describing the jurisdiction conferred on the courts of bankruptcy' as such jurisdiction, at law and in equity, as will enable them to exercise original jurisdiction in bankruptcy proceedings;' and it ends by declaring that 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.'

Second. It specifies in greater detail matters which are, in the strictest sense, proceedings in bankruptcy.

Third. It includes, among the powers specifically conferred on the courts of bankruptcy, those to (4) arraign, try and punish bankrupts, officers and other persons, and the agents, officers, members of the board of directors or trustees, or other similar controlling bodies of corporations, for violations of this act, in accordance with the laws of procedure of the United States now