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CHAPTER II.

PROCEEDINGS OF INSOLVENT TO DISCHARGE HIMSELF FROM DEBT.

SECTION 1601. Application to discharge from debt, how made.

1602. Order requiring creditors to show cause.

1603. Manner of serving same and hearing.

1604. If application be opposed how tried.

1605. If not opposed order to be made appointing receiver.

1606.

Upon final report of receiver discharge may be granted, except for certain debts.

§ 1601. Any insolvent, who, at the time of his application, has resided in this state five years, may present to the county court of the county where he resides, an application in writing, verified by his oath, setting forth the fact of his insolvency, the amount, kind, and particulars of his property, and the amount, nature and particulars of his debts, specifying the residence of his creditors, so far as they are known or can be ascertained by him, alleging that he has not given a preference as specified in section 1598, and asking a discharge from his debts.

§ 1602. Upon receiving the application, the court may make an order, requiring the creditors of the insolvent to show cause, if they have any, before the court, at a specified time and place, not less than three months thereafter, why the application should not be granted, and directing the publication once a week for ten weeks of the application, or a condensed statement thereof, and of the order, in the state paper and in two other newspapers which the court may designate as most likely to give notice to the creditors.

§ 1603. At a time and place specified, upon proof of the publication in conformity with the order, and also that a copy of one of the papers containing the application or statement, and order, was deposited in the post office, at least nine weeks previously, directed to each creditor within the United States, at his residence, when such residence is stated in the application, the court may proceed to hear the application.

§ 1604. If a creditor appear and deny any of the material allegations of the application, or allege that the applicant has fraudulently contracted the debt to such creditor, or that such debt arose from a fraudulent misapplication by the applicant of the property of another, or that since it was contracted, the applicant, if a merchant, has not kept proper books of account; the court may either try the question of fact, or may order it to be tried by a jury or by referees.

§ 1605. If such denial or allegation be not made, or if made, be found on the trial to be untrue, the court may make an order declaring that the applicant is an insolvent debtor, and appointing a receiver of his property not exempt from execution; the receiver must give the certificate, and has the power and is subject to the responsibilities mentioned in section 1600.

§ 1606. Upon the final report of the receiver, shewing the collection and conversion into available assets,

of all the property of the insolvent, not exempt from execution, and the proper application and payment thereof, if it appear that at least twenty-five per cent. of each of the insolvent's debts contracted before his application, has been paid, or a dividend to that extent offered and set apart thereon, the court may order that the insolvent be discharged from all such debts of the following kinds :

1. Debts due to persons who were residents of this state at the time of the application:

2. Debts contracted in this state:

3. Debts due to creditors who have received a dividend from the receiver.

But such order in no case discharges a debt arising out of a fraudulent misapplication of the property of another, nor does it affect the liability of another person who is liable jointly with the insolvent.

CHAPTER II.

PROCEEDINGS OF A CREDITOR TO CLOSE THE AFFAIRS OF AN INSOLVENT.

SECTION 1607. A creditor may apply to close insolvent's affairs in cases specified. 1608. Application to be in writing and verified.

1609. Order to show cause, injunction allowed.

1610. Time and manner of hearing.

1611. Upon trial, court may appoint receiver.
1612. Receiver's proceedings.

§ 1607. Any creditor residing in this state, having a claim arising on contract, and already due, to the amount of five hundred dollars, against a debtor

residing in this state, may apply to the county court, of the county where the debtor resides, to declare him insolvent, and close his affairs, in any of the following cases:

1. When he has fraudulently contracted the debt to such creditor:

2. When he has concealed, removed or disposed of of some part of his property, or is about to do so, with intent to defraud his creditors:

3. When an execution against his property has been returned unsatisfied in whole or in part: or,

4. When a promissory note made by him or a bill of exchange accepted by him, while engaged in the business of a merchant, broker, factor or banker, and owned by the creditor, has fallen due, and has remained unpaid and under protest for at least ten days before the application, without notice from the debtor, that he has a valid defence to such note or bill, accompanied by an offer of good security for the payment of any judgment that may be recovered thereon.

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§ 1608. The application must be in writing, verified by the affidavit of the creditor, or another person, and showing that the case is within the last section, and asking that a receiver of the property of the insolvent may be appointed and his affairs closed.

§ 1609. Upon receiving such application, the court may make an order, requiring the defendant to show [CIVIL CODE.]

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cause at a specified time and place, why the application should not be granted; and if, then or at any time afterwards, there appear to be danger of the defendant's disposing of property, to the prejudice of the application, the court may grant an injunction against any disposition thereof.

§ 1610. At the time and place specified, upon proof of the personal service of the order to show cause, the court may proceed to hear the application.

If the defendant appear and deny any of the material allegations of the application, the court must order the question of fact to be tried by a jury, or, if the defendant waive a trial by jury, may itself try the question, or may order a trial thereof by referees.

§ 1611. If such denial be not made, or, if made, be found on the trial to be untrue, the court may make an order, declaring that the defendant is an insolvent debtor, within one of the subdivisions of section 1607, specifying which, and appcinting a receiver of his property.

1612. The receiver must immediately publish notice of his appointment in the state paper, and in two other newspapers designated by the court, for such time as the court may direct; and, from the time of his appointment he is vested with all the property of the insolvent debtor not exempt from execution. The court may compel the transfer and delivery by the insolvent debtor of any of his property, in the manner mentioned in section And section 1600 is applicable to the receiver appointed under this chapter.

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