Acts of bankruptcy by a person shall con sist of his having (1) conveyed, transferred, concealed, or removed, or permitted to be concealed or removed, any part of his prop erty with intent to hinder, delay, or defraud his creditors, or any of them; or (2) trans ferred, 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 pref erence 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 assign ment for the benefit of his creditorgs; or (5) admitted in writing his inability to pay his debts and his willingness to be adjudged a bankrupt on that ground. See PREFERENCE.
A petition may be filed against a person who is insolvent and who has committed an act of bankruptcy within four months. Such time shall not expire until four months after (1) the date of the recording of the transfer, when the act consists in having made a transfer of any of his property with intent to hinder, delay, or defraud his cred itors, or for the purpose of giving a prefer ence as in the act provided, or a general as signment for the benefit of his creditors, if by law such recording is required or permit ted; (2) or, if it is not, from the date when the beneficiary takes notorious, exclusive, or continuous possession of the property, unless the petitioning creditor have received actual notice of such. transfer or assignment.
It would be a defence to prove that the party was not insolvent as defined in the act at the time the petition was filed against him, and upon such proof the proqeedings shall be dismissed. The burden of proof is on the alleged bankrupt. He must appear in court with books and accounts, and submit to an examination in respect to his insol vency.
The petitioner in involuntary proceedings is required to give bond with two good and sufficient sureties who shall reside in the jurisdiction to be approved by the court, In such sums as the court shall direct, condi tioned on the payment of damages and costs in case the petition is dismissed. If the pe tition is dismissed the respondent is allowed all costs, counsel fees, expenses, and dam ages, to be fixed by the court and covered by the bond. • "Any person who owes debts, except a cor poration, shall be entitled to the benefits of this act as a voluntary bankrupt."
"Any natural person, except a wage-earner or a person engaged chiefly in farming or the tillage of the soil, any unincorporated company and any corporation engaged prin cipally in manufacturing, trading, printing, publishing, or mercantile pursuits, owing debts to the amount of onettonx sand dollars or over, may be adjudged an involuntary bankrupt upon default or an impartial trial, and shall be subject to the provisions and entitled to the benefits of this act. Private bankers, but not national banks or banks incorporated under state or territorial laws, may be adjudged involuntary bankrupts." Mining corporations were added by the act of Feb. 5, 1903.
A partnership during its continuance or after its dissolution and before its final set tlement may be adjudged a bankrupt. The court which has jurisdiction of one of the partners may have jurisdiction of all the partnership assets, but separate accounts of the partnership and individual property should be kept and expenses divided between them as the court shall determine. The net proceeds of, partnership property goes to partnership debts, and those of the individ ual estates to individual debts. Any surplus in either case to the other class of debts. Proof of claims of partnership debts may be allowed against individual estates and vice versa, and the court may marshal the assets of both estates so as to prevent preferences and secure an equitable distribution.
If one or more but not all of the partners are adjudged bankrupt the partnership prop erty shall not be administered in bankruptcy unless by consent of the partners not ad judged bankrupts. The latter shall settle the partnership business as expeditiously as possible and account for the interest of the bankrupt partners. Any exemptions in force when the petition was filed in the state where the bankrupt had his domicil for six months or the greater portion thereof imme diately preceding the filing of the petition are preserved.
Provision is made for a composition with creditors, but not until the bankrupt has been examined in open court or at a meet ing of creditors and has filed his schedule of assets and list of creditors. If the ap plication therefor has been accepted in writ ing by a majority in number and amount of proved creditors, and the consideration there of and money to pay all prior debts and costs have been deposited subject to the order of the court, it may be presented to the court, which, after notice and a hearing, may con firm it.