[Act July 26, 1876: That no voluntary assignment by a debtor or debtors of all his or their property, heretofore or hereafter made in good faith for the benefit of all his or their creditors, ratably and without creating any preference, and valid according to the law of the State where made, shall of itself, in the event of his or their being subsequently adjudicated bankrupts in a proceeding of involuntary bankruptcy, be a bar to the discharge of such debtor or debtors. At any time after the expiration of six months from the adjudication of bankruptcy, or if no debts have been proved against the bankrupt, or if no assets have come to the hands of the assignee, at any time after the expiration of sixty days, and before the final disposition of the cause, the bankrupt may apply to the court for a discharge from his debts.]

BANKRUPT laws are enacted for the purpose of regulating the acts and conduct of debtors, and taking the deposition of their property from them in certain specified cases. The important point is to ascertain in what way and for what acts a debtor may be put into bankruptcy, and mode of procedure.

The law now in f rce was adopted in 1867, but has been, from time to time, amended. The following are the principal and efficient points.

The District Courts of the United States are constituted Courts of Bankruptcy, and have general super ntendence and jurisdiction.

The general trial of issues may be by jury, or as the Court shall determine.

The District Courts shall always be open for the transaction of business in the exercise of their jurisdiction, and shall have full authority to compel obedience to all orders and decrees.

Appeals may be taken from the District to the Circuit Courts, in all cases in equity and writs of error.

The final judgment of the Circuit Court, rendered upon an appeal, shall be conclusive, and the list of debts shall, if necessary, be altered to conform thereto. The party prevailing in the suit shall be entitled to costs against the adverse party, to be taxed and recovered as in ordinary suits of law.

VOLUNTARY BANKRUPTCY.

Any person residing within the jurisdiction of the United States, and owing debts provable in bankruptcy exceeding the amount of three hundred dollars, applying by petition addressed to the judge of the judicial district in which such debtor has resided or carried on business for the six months next preceding the time of filing such petition, or for the longest period during such six months, setting forth his place of residence, his inability to pay all his debts in full, his willingness to surrender all his estate and effects for the benefit of his creditors, and his desire to obtain a discharge from his debts, and shall annex to his petition a schedule, and inventory and valuation, in compliance with the following provisions; the filing of such petition shall be an act of bankruptcy, and such petitioner shall be adjudged a bankrupt.

The said schedule, to be verified by the oath of the petitioner, must contain a full and true statement of all his debts, exhibit

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ing, as far as possible, to whom each debts due, the place of residence of each creditor, if known to the debtor, and if not known, the fact that it is not known; also the sum due to each creditor; the nature of each debt or demand, whether founded on written security, obligation, or contract, or otherwise; the true cause and consideration of the indebtedness in each case, and the place where such indebtedness accrued; and also a statement of any existing mortgage, pledge, lien, judgment, or collateral or other security given for the payment of the same.

The said inventory also to be verified by the oath of the petitioner, must contain an accurate statement of all the petitioner's estate, both real and personal, describing the same and stating where it is situated, and whether there are any, and, if so, what incumbrances thereon.

Immediately after the filing of the petition, schedule and inventory, the Judge or Register shall, if he is satisfied that the debts due from the petitioner exceed $300, issue a warrant, to be signed by such Judge or Register, directed to the Marshal for the district, authorizing him to publish notices in two news papers.

INVOLUNTARY BANKRUPTCY.

Any person residing and owing debts within the jurisdiction of the United States, who shall depart from the State, District, or Territory of which he is an inhabitant, with intent to defraud his creditors; or, being absent, shall, with such intent, remain absent; or shall conceal himself to avoid the service of legal process in any action for the recovery of a debt or demand provable under this act; or shall conceal or remove any of his property to avoid its being attached, taken, or sequestered on legal process; or shall make any assignment, gift, sale, conveyance, or transfer of his estate, property, rights, or credits, either within the United States or elsewhere, with intent to delay, defraud, or hinder his creditors; or who has been arrested and held in custody under or by virtue of mesne process, issued out of any court of the United States, or of any State, District, or Territory which within such debtor resides or has property, founded upon a demand in its nature provable against a bankrupt's estate under this act, and for a sum exceeding $100, and such process is remaining in force and not discharged by payment, or in any other manner provided by the laws of the United States, or of such State, District, or Territory, applicable thereto, for a period of twenty days; or has been actually imprisoned for more than twenty days in a civil action founded on contract for the sum of $100 or upward; or who, being bankrupt or insolvent, or in contemplation of bankruptcy or insolvency, shall make any pay. ment, gift, grant, sale, conveyance, or transfer of money or

other property estate, rights, or credits, or confess judgment, or give any warrant to confess judgment, or procure his property to be taken on legal process, with intent to give a preference to one or more of his creditors, or to any person or persons who are or may be liable for him as indorsers, bail, sureties, or otherwise, or with the intent, by such disposition of his property, to defeat or delay the operation of this act; or who, being a bank, banker, broker, merchant, trader, manufacturer, or miner, has fraudulently stopped payment, or who being a bank, banker, broker, merchant, trader, manufacturer, or miner, has stopped or suspended and not resumed payment, within a period of forty days, of his commercial paper (made or passed in the course of his business as such), or who, being a bank or banker, shall fail for forty days to pay any depositor upon demand of payment lawfully made, shall be deemed to have committed an act of bankruptcy, and, subject to the conditions hereinafter prescribed, shall be adjudged a bankrupt on the petition of one or more of his creditois, who shall constitute one-fourth thereof, at least, in number, and the aggregate of whose debts provable under this act amounts to at least one-third of the debts so provable: Provided That such petition is brought within six months after such act of bankruptcy shall have been committed. And the provisions of this section shall apply to all cases of compulsory or involuntary bankruptcy commenced since the first day of December, 1873, as well as to those commenced hereafter. And in all cases commenced since the first of December, 1873, and prior to the passage of this act, as well as those commenced hereafter, the court shall, if such allegation as to the number or amount of petitioning creditors be denied by the debtor, by a statement in writing to that effect, require him to file in court forthwith a full list of his creditors, with their places of residence and the sums due them respectively, and shall ascertain, upon reasonable notice to the creditors, whether one-fourth in number and one-third in amount thereof, as aforesaid, have petitioned that the debtor be adjudged a bankrupt. But if such debtor shall, on the filing of the petition, admit in writing that the requisite number and amount of creditors have petitioned, the court (if satisfied that the admission was made in good faith), shall so adjudge, which judgment shall be final, and the matter proceed without further steps on that subject. And if it shall appear that such number and amount have not so petitioned, the court shall grant reasonable time, not exceeding, in cases heretofore commenced, twenty days, and, in cases hereafter commenced, ten days, within which other creditors may join in such petition. And if at the expiration of such time so limited, the number and amount shall comply with the requirements of this section, the matter of bankruptcy may proceed;

but if, at the expiration of such limited time, such number and amount shall not answer the requirements of this section, the proceedings shall be dismissed, and, in cases hereafter commenced, with costs. And if such person shall be adjudged a bankrupt, the assignee may recover back the money or property so paid, conveyed, sold, assigned, or transferred contrary to this act: Provided, That the person receiving such payment or conveyance had reasonable cause to believe that the debtor was insolvent, and knew that a fraud on this act was intended; and such person, if a creditor, shall not, in cases of actual fraud on his part, be allowed to prove for more than a moiety of his debt; and this limitation on the proof of debts shall apply to cases of voluntary as well as involuntary bankruptcy. And the petition of creditors under this section may be sufficiently verified by the oaths of the first five signers thereof, if so many there be. And if any of said first five signers shall not reside in the district in which such petition is to be filed, the same may be signed and verified by the oath or oaths of the attorney or attorneys, agent or agents, of such signers. And in computing the number of creditors, as aforesaid, who shall join in such petition, creditors whose respective debts do not exceed $250 shall not be reckoned. But if there be no creditors whose debts exceed said sum of $250, or if the requisite number of creditors holding debts exceeding $250 fail to sign the petition, the creditors having debts of a less amount shall be reckoned for the purpose aforesaid.

Upon the filing of the petition authorized by the preceding section, if it appears that sufficient grounds exist therefor, the court shall direct the entry of an order requiring the debtor to appear and show cause, at a court of bankruptcy to be holden at a time to be specified in the order, not less than five days from the service thereof, why the prayer of the petition should not be granted.

SERVING OF ORDER TO SHOW CAUSE.

A copy of the petition and order to show cause shall be served on the debtor by delivering the same to him personally, or leaving the same at his last or usual place of abode, or if he cannot be found, and his place of residence cannot be ascertained, service shall be made by publication in such manner as the judge may direct.

On the return or adjourned day, if the notice has been served or published, or is waived by the appearance and consent of the debtor, the court shall proceed summarily to hear the allegations of the petitions and debtor.

Upon the hearing or trial of the facts set forth in the petition and found to be true, or upon default made by the debtor to ap

pear pursuant to the order, due proof of service thereof is made the court shall adjudge the debtor to be a bankrupt, and shal forthwith issue a warrant to take possession of his estate.

TO REALIZE FROM THE ESTATE FOR CREDITORS.

Notice to creditors shall state that a warrant in bankruptcy has been issued against the estate of the debtor. Proper returns shall be made at a meeting of the creditors. An assignee shall be appointed or chosen. No preference shall be given to any creditor. Assignee shall give bond for the faithful discharge of duties.

The debtor is entitled to exemption the necessary household and kitchen furniture, and such other articles and necessaries as the assignee may designate and set apart, having reference to the number of his family, condition, and circumstances of the debtor, not to exceed the sum of $500; wearing apparel of himself, wife, and children; all property as are exempted from attachment by the laws of the United States; also such property as is exempted by the laws of the State of which the debtor is a resident; the uniform, arms, and equipments of any person who has been a soldier in the service of the United States.

PROTECTION AND DISCHARGE OF BANKRUPTS.

The debtor shall at all times be subject to the order of the court until his discharge. No creditor shall be allowed to maintain any suit at law or in equity against the bankrupt. Pending the proceedings of bankruptcy the debtor cannot be arrested in any civil action, unless the debt is founded on some debt which his discharge in bankruptcy would not release him.

After the expiration of six months from the adjudication of bankruptcy, the debtor may apply for a discharge from his debts. But no discharge shall be granted if the bankrupt has wilfully sworn falsely; if he has concealed any part of his estate or effects, or any books or writings relating thereto; if he has within four months previous to the commencement of proceedings procured his lands, goods, etc., to be attached or seized on execution, or in any way destroyed, mutilated, altered, or falsified his books, etc.; or has given any fraudulent preference contrary to the provisions of this act; or if the bankrupt has been con victed of any misdemeanor.

BANKRUPTCY OF PARTNERSHIPS AND CORPORATIONS.

Where two or more are partners in trade shall be adjudged bankrupt, either on the petition of such partners or any one of them, or on the petition of any creditor of the partners, a warrant shall issue in the manner provided by this act, upon which