Full text of Bankruptcy Act of 1841

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440

TWENTY-SEVENTH CONGRESS.

S e s s .I .

Ch.8,9. 1841.

Punishment United States, and all persons advising, or knowingly and willingly par­
lor said offence, ticipating in such embezzlement, upon being convicted thereof before
&c.
any court of the United States of competent jurisdiction, shall, for every
Act of June
23, 1836, ch.
115, excepting
13th and 14th
secs., repealed.
So much of act
of 14th April
1836, ch. 52, as
prohibits the
payment by the
U. S. of bank
notes under cer­
tain denomina­
tions, repealed.

S t a t u t e I.
'Aug. 16,1841.

such offence, forfeit and pay to the United States a fine equal to the
amount of the money embezzled, and shall suffer imprisonment for a
term not less than six months nor more than five years.
S e c . 3. And be it further enacted, That the act entitled “ An act to
regulate the deposits of the public money,” approved on the twentythird day of June, eighteen hundred and thirty-six, excepting the thir­
teenth and fourteenth sections thereof, be and the same hereby is re­
pealed.
S e c . 4. And be it further enacted, T hat so much of an act, passed
the fourteenth of April, eighteen hundred and thirty-six, entitled “ An
act making appropriations for the payment of the Revolutionary and
other pensioners of the United States, for the year eighteen hundred
and thirty-six,” as provides that no bank note of less denomination than
ten dollars, and after the third day of March, eighteen hundred and
thirty-seven, no bank note of less denomination than twenty dollars,
shall be offered in payment in any case whatsoever, in which money is
to be paid by the United States, or the Post Office Department, be, and
the same hereby is, repealed.
A p p r o v e d , August 13, 1841.
C h a p . V III.—Jin Act to provide fo r the paym ent of N avy Pensions.

Be it enacted by the Senate and House o f Representatives o f the
hundred and thirty-nine thousand six hundred and sixty-six dollars and
six cents is hereby appropriated, to be paid out of any money in the
Treasury not otherwise appropriated, for the payment of pensions and
half-pay chargeable on the navy pension fund: Provided, That all wi­
dows or children of all naval officers, seamen, or marines, now deceas­
ed, and entitled to receive or make proof of their pensions under the
act of the third of March, eighteen hundred and thirty-seven, shall re­
ceive the same until the close of the next session of Congress; but no
widows or children of any naval officer, seaman, or marine, who may
hereafter die, shall be entitled to any pension by virtue only of any pro­
vision in the said act.
S e c . 2. And be it further enacted, That no officer, seaman, or ma­
rine, entitled to a pension from the navy pension fund, who receives pay
from the public treasury, shall receive more from the said fund than is
sufficient to make the whole amount received from both the abovenamed sources equal to the pay fixed by law for the grade to which the
officer, seaman, or marine may belong as an officer in the services in
which he may be engaged, during the year, so that no officer shall re­
ceive pay at the same time both as a pensioner and an officer in service.
A p p r o v e d , August 16, 1841.

Appropriation. United States o f America in Congress assembled, That the sum of one

Proviso; pen­
sions under act
3d March 1837,
ch. 38, limited.
No widow, &c.
of any naval of­
ficer, &,c. who
may hereafter
die, entitled,
under the act of
1837, ch. 38.
No officer,&c.
shall receive
pay as a pen­
sioner and offi­
cer in service.

S t a t u t e I.
Aug. 19,1841. C h a p . IX .— An Act to establish a uniform system, of bankruptcy throughout the
United States, (a)
Repealed, 3d
March 1843, ch. Be it enacted by the Senate and House o f Representatives o f the United
82.

States o f America in Congress assembled, T hat there be, and hereby
is, established throughout the United States, a uniform system of bank­

voi° 2 S[e,® notes of t!le decisions of the courts of the United States on the bankrupt act of April 4,1800,
Case °(
a petitioner in bankruptcy, in the Kentucky district, and Carland, an opposing
aey.eral P011',13 were adjourned by the district to the circuit court. Upon the hearing of the case
m the circuit court, the district judge, as well as the justice of the Supreme Court, sat in the case ; and,

TWENTY-SEVENTH CONGRESS.

S e s s .I . C h . 9.

1841.

ruptcy, as follows: All persons whatsoever, residing in any State, Dis­
trict or Territory of the United States, owing debts, which shall not
hava been created in consequence of a defalcation as a public officer;
or as executor, administrator, guardian or trustee, or while acting in
any other fiduciary capacity, who shall, by petition, setting forth to the
t-.ist of his knowledge and belief, a list of his or their creditors, their
ii*spective places of residence, and the amount due to each, together
with an accurate inventory of his or their property, rights, and credits,
of every name, kind, and description, and the location and situation of
each and every parcel and portion thereof, verified by oath, or, if con­
scientiously scrupulous of taking an oath, by solemn affirmation, apply
to the proper court, as hereinafter mentioned, for the benefit of this act,
and therein declare themselves to be unable to meet their debts and
engagements, shall be deemed bankrupts within the purview of this act,
and may be so declared accordingly by a decree of such court; all per­
sons, being merchants, or using the trade of merchandise, all retailers
of merchandise, and all bankers, factors, brokers, underwriters, or ma­
rine insurers, owing debts to the amount of not less than two thousand

441
Uniform system of bank­
ruptcy establ’d.
All persons
owing debts not
created by de­
falcation, &c.
may be declared
bankrupts.

Merchants,
bankers, &c.,
on petition of
their creditors,
may be declared
bankrupts in
certain cases.

being opposed in opinion upon questions adjourned from the district court, they were certified to the
Supreme Court on the motion of the counsel of the petitioner. Held, that the district judge cannot sit as
a member of the circuit court, under the “ Act to establish a uniform system of bankruptcy throughout
the United States.” Consequently, the points adjourned could not be brought before the Supreme Court
on a certificate of division. Nelson v. Carland, 17 Peters’ Rep., 181; S. C., 1 Howard, 265.
An appeal or writ of error will not lie from the decision of the circuit court, in a case of bankruptcy,
adjourned from the district court. The decision of the circuit court is conclusive on the district judge.
Ibid,
Under the late bankrupt act of the United States, the existence of a fiduciary debt, contracted before
the passage of the act, constitutes no objection to the discharge of the debtor from other debts. Chapman
v. Forsyth, 2 Howard, 202.
A factor, who receives the money of his principal, is not a fiduciary, within the meaning of the act.
Ibid.
A bankrupt is bound to state, upon his schedule, the nature of a debt if it be a fiduciary one. Should
he omit to do so, he would be guilty of a fraud, and his discharge will not avail him ; but if a creditor, in
such case, proves his debt and receives a dividend from the estate, he is estopped from afterwards saying
that his debt was not within the law. Ibid.
But if the fiduciary creditor does not prove his debt, he may recover it afterwards from the discharged
bankrupt, by showing that it was within the exceptions of the act. Ibid.
In Kentucky, the creditor obtains a lien upon the property of his debtor by the delivery of afi.fa . to
the sheriff; and this lien is as absolute before the levy as it is afterwards. Savage’s Assignee v. Best,
3 Howard, 111.
Therefore, a creditor is not deprived of this lien by an act of bankruptcy on the part of the debtor
orriihitted before the levy is made, but after the execution is in the hands of the sheriff. Ibid.
This court has no revising power over the decrees of the district court sitting in bankruptcy; nor is it
authorized to issue a writ of prohibition to it in any case, except where the district is proceeding as a court
of admiralty and maritime jurisdiction. Ex parte Christy, 3 Howard, 292.
The district court, when sitting in bankruptcy, has jurisdiction over liens and mortgages existing u|>on
the property of a bankrupt, so as to inquire into their validity and extent, and grant the same relief which
the state courts might or ought to grant. Ibid.
The control of the district court over proceedings in the state courts upon such liens, is exercised, not
over the state courts themselves, but upon the parties, through an injunction or other appropriate pro­
ceeding in equity. Ibid.
The design of the bankrupt act was to secure a prompt and effectual administration of the estate of all
bankrupts, worked out by the courts of the United States, without the assistance of state tribunals.
Ibid.
The phrase in the 6th section, “ any creditor or creditors who shall claim any debt or demand under
the bankruptcy,” does not mean only such creditors who come in and prove their debts, but all creditors
who have a present subsisting claim upon the bankrupt’s estate, whether they have a security or mort­
gage therefor, or not. Ibid.
Such creditors have a right to ask that the property mortgaged shall be sold, and the proceeds applied
towards the payment of their debts; and the assignee, on the other hand, may contest their claims.
Ibid.
In the case of a contested claim, the district court has jurisdiction, if resort be had to a formal bill in
equity or other plenary proceeding; and also jurisdiction to proceed summarily. Ibid.
The principles established in the case of Ex parte the City Bank of New Orleans in the matter of
Christy, assignee of Walden, reviewed and confirmed. Ibid.
But this court docs not decide whether or not the jurisdiction of the district court over all the property
of a bankrupt, mortgaged or otherwise, is exclusive, so as to take it away from the state courts in such
cases. Norton’s Assignee v. Boyd, 3 Howard, 426.
Where the defendant below became a bankrupt, the Supreme Court will not award a supersedeas to
stay an execution, because the assignee of the bankrupt has his remedy in the circuit court. Blacks.
Zacharie, 3 Howard, 483.
Vol.. V .— 5(5

442

Proviso; per­
sons declared
bankrupts at the
instance of cre­
ditors, entitled
to trial by jury.
Where per­
sons reside at a
great distance.
Payments,&c.
made in con­
templation of
bankruptcy,
&c.

Assignee un­
der the bank­
ruptcy may re­
cover the some,
as part of the
assets.
Such prefer­
ences prevent a
discharge.
Proviso.
Proviso,

Preference to
any creditor to
prevent a dis­
charge, &,c.
Proviso.

TWENTY-SEVENTH CONGRESS.

S ess.

I. Ch. 9. 1841.

dollars, shall be liable to become bankrupts within the true intent and
meaning of this act, and may, upon the petition of one or more of their
creditors, to whom they owe debts amounting in the whole to not less
than five hundred dollars, to the appropriate court, be so declared ac­
cordingly, in the following cases, to w it: whenever such person, being
a merchant, or actually using the trade of merchandise, or being a re­
tailer of merchandise, or being a banker, factor, broker, underwriter,
or marine insurer, shall depart from the State, District, or Territory, of
which he is an inhabitant, with intent to defraud his creditors; or shall
conceal himself to avoid being arrested; or shall willingly or fraudu­
lently procure himself to be arrested, or his goods and chattels, lands,
or tenements, to be attached, distrained, sequestered, or taken in exe­
cution; or shall remove his goods, chattels, and effects, or conceal them
to prevent their being levied upon, or taken in execution, or by other
process; or make any fraudulent conveyance, assignment, sale, gift, or
other transfer of his lands, tenements, goods or chattels, credits, or evi­
dence of debt: Provided, however, That any person so declared a bank­
rupt, at the instance of a creditor, may, at his election, by petition to
such court within ten days after its decree, be entitled to a trial by jury
before such court, to ascertain the fact of such bankruptcy; or if such
person shall reside at a great distance from the place of holding such
court, the said judge, in his discretion, may direct such trial by jury to
be had in the county of sucn person’s residence, in such manner, and
under such directions, as the said court may prescribe and give; and
all such decrees passed by such court, and not so re-examined, shall be
deemed final and conclusive as to the subject-matter thereof.
S ec. 2. A n d be it further enacted, That all future payments, secu­
rities, conveyances, or transfers of property, or agreements made or
given by any bankrupt, in contemplation of bankruptcy, and for the
purpose of giving any creditor, endorser, surety, or other person, any
preference or priority over the general creditors of such bankrupts; and
all other payments, securities, conveyances, or transfers of property, or
agreements made or given by such bankrupt in contemplation of bank­
ruptcy, to any person or persons whatever, not being a bona fide cre­
ditor or purchaser, for a valuable consideration, without notice, shall
be deemed utterly void, and a fraud upon this act; and the assignee
under the bankruptcy shall be entitled to claim, sue for, recover, and
receive the same as part of the assets of the bankruptcy; and the per­
son making such unlawful preferences and payments shall receive no
discharge under the provisions of this act: Provided, That all dealings
and transactions by and with any bankrupt, bona fide made and entered
into more than two months before the petition filed against him, or by
him, shall not be invalidated or affected by this act: Provided, That
the other party to any such dealings or transactions had no notice of a
prior act of bankruptcy, or of the intention of the bankrupt to take the
benefit of this act. And in case it shall be made to appear to the court,
in the course of the proceedings in bankruptcy, that the bankrupt, his
application being voluntary, has, subsequent to the first day of January
last, or at any other time, in contemplation of the passage of a bankrupt
law, by assignments or otherwise, given or secured any preference to
one creditor over another, he shall not receive a discharge unless the
same be assented to by a majority in interest of those of his creditors
who have not been so preferred: A n d provided, also, That nothing in
this act contained shall be construed to annul, destroy, or impair any
lawful rights of married women, or minors, or any liens, mortgages, or
other securities on property, real or personal, which may be valid by
the laws of the States respectively, and which are not inconsistent with
the provisions of the second and fifth sections of this act.
S e c . 3. And he it further enacted, That all the property, and rights

TWENTY-SEVENTH CONGRESS. S m s . I. C h . 9. 1841.

443

of property, of every name and nature, and whether real, personal, or AH property,
mixed, of every bankrupt, except as is hereinafter provided who shall &c-except, &c.
by a decree of the proper court, be declared to be a bankrupt within vesled “ an as*
this act, shall, by mere operation of law, ipso facto, from the time of Slg"ee'
such decree, be deemed to be divested out of such bankrupt, without
any other act, assignment, or other conveyance whatsoever/and the
same shall be vested, by force of the same decree, in such assignee as
from time to time shall be appointed by the proper court for this purpose
which power of appointment and removal such court may exercise at its Court *?ay ap'
discretion, toties quoties; and the assignee so appointed shall be vested moVthe a t
with all the rights, titles, powers, and authorities to sell, manage and signee.
dispose of the same, and to sue for and defend the same subject to the ghts f t
orders and directions of such court as fully, to all intents and purposes, assignee
as if the same were vested in, or might be exercised by, such bankrupt
before or at the time of his bankruptcy declared as aforesaid; and all
suits in law or in equity, then pending, in which such bankrupt is a
party, may be prosecuted and defended by such assignee to its final
conclusion, m the same way, and with the same effect as they mio-ht
have been by such bankrupt; and no suit commenced by or against any
assignee shall be abated by his death or removal from office, but the
same may be prosecuted or defended by his successor in the same office;
Provided, however, That there shall be excepted from the operation of Proviso,
the provisions of this section the necessary household and kitchen furni­
ture, and such other articles and necessaries of such bankrupt as the
said assignee shall designate and set apart, having reference in the
amount to the family, condition, and circumstances of the bankrupt,
but altogether not to exceed in value, in any case, the sum of three
hundred dollars; and, also, the wearing apparel of such bankrupt, and
that of his wife and children; and the determination of the assignee in
the matter shall, on exception taken, be subject to the final decision of
said court.
Se
** f urt\>er enacted, That every bankrupt, who shall what bankbona fide surrender all his property, and rights of property, with the rupts entitled to
exception before mentioned, for the benefit of his creditors, and shall a full discharge,
fully comply with and obey all the orders and directions which may c’
from time to time be passed by the proper court, and shall otherwise
conform to all the other requisitions of this act, shall (unless a majority
in number and value of his creditors who have proved their debts, shall
file their written dissent thereto) be entitled to a full discharge from all
his debts, to be decreed and allowed by the court which has declared
him a bankrupt, and a certificate thereof granted to him by such court
accordingly, upon his petition filed for such purpose; such discharge q
t,
and certificate not, however, to be granted until after ninety days from and'certfficat?6
the decree of bankruptcy, nor until after seventy days’ notice in some not to be grantpublic newspaper, designated by such court, to all creditors who have ed until after a
proved their debts, and other persons in interest, to appear at a particu- fee.™ me’
lar time and place, to show cause why such discharge and certificate
shall not be granted; at which time and place any such creditors, or
other persons in interest, may appear and contest the right of the bank- pr0Vig0
rupt thereto: Provided, That in all cases where the residence of the
creditor is known, a service on him personally, or by letter addressed
to him at his known usual place of residence, shall be prescribed by the
court, as in their discretion shall seem proper, having regard to the dis­
tance at which the creditor resides from such court. And if any such What bank,
bankrupt shall be guilty of any fraud or wilful concealment of his property or rights of property, or shall have preferred any of his creditors charge or certicontrary to the provisions of this act, or shall wilfully omit or refuse to ficato.
comply with any orders or directions of such court, or to conform to
any other requisites of this act, or shall, in the proceedings under this

444

Proviso.
Bankrupts
subject to exa­
mination under
oath.

Perjury.
Such discharge
and certificate
to be deemed a
complete dis­
charge, unless,
&,c.

Bankrupts fail­
ing to obtain a
discharge, may
demand a trial
by jury, or ap­
peal to the cir­
cuit court.
Appeal to be
tried, when and
how.

Decree of dis­
charge may be
made, and a
certificate grant­
ed, upon a cer­
tain finding.
Creditors to
share the bank­
rupt’s property,
how.
Debts to U.
States, or for
money paid by
sureties, to be
first paid.

TWENTY-SEVENTH CONGRESS.

S ess.I .

Ch. 9 1841.

act, admit a false or fictitious debt against his estate, he shall not be
entitled to any such discharge or certificate; nor shall any person, being
a merchant, banker, factor, broker, underwriter, or marine insurer, be
entitled to any such discharge or certificate, who shall become bankrupt,
and who shall ftot have kept proper books of account, after the passing
of this act; nor any person who, after the passing of this act, shall
apply trust funds to his own u se: Provided, That no discharge of any
bankrupt under this act shall release or discharge any person who may
be liable for the same debt as a partner, joint contractor, endorser, surety,
or otherwise, for or with the bankrupt. And such bankrupt shall at all
times be subject to examination, orally, or upon written interrogatories,
in and before such court, or any commission appointed by the court
therefor, on oath, or, if conscientiously scrupulous of taking an oath,
upon his solemn affirmation, in all matters relating to such bankruptcy,
and his acts and doings, and his property and rights of property, which,
in the judgment of such court, are necessary and proper for the pur­
poses of justice; and if in any such examination, he shall wilfully and
corruptly answer, or swear, or affirm, falsely, he shall be deemed guilty
of perjury, and shall be punishable therefor, in like manner as the crime
of perjury is now punishable by the laws of the United States; and
such discharge and certificate, when duly granted, shall, in all courts
of justice, be deemed a full and complete discharge of all debts, con­
tracts, and other engagements of such bankrupt, which are proveable
under this act, and shall be and may be pleaded as a full and complete
bar to all suits brought in any court of judicature whatever, and the
same sliall be conclusive evidence of itself in favor of such bankrupt,
unless the same shall be impeached for some fraud or wilful conceal­
ment by him of his property or rights of property, as aforesaid, contrary
to the provisions of this act, on prior ffeasonable notice specifying in
writing such fraud or concealment; and if, in any case of bankruptcy,
a majority, in number and value, of the creditors who shall have proved
their debts at the time of hearing of the petition of the bankrupt for a
discharge as hereinbefore provided, shall at such hearing file their writ­
ten dissent to the allowance of a discharge and certificate to such
bankrupt, or if, upon such hearing, a discharge shall not be decreed to
him, the bankrupt may demand a trial by jury upon a proper issue to
be directed by the court, at such time and place, and in such manner,
as the court may order; or he may appeal from that decision, at any
time within ten days thereafter, to the circuit court next to be held for
the same district, by simply entering in the district court, or with the
clerk thereof, upon record, his prayer for an appeal. T he appeal shall
be tried at the first term of the circuit court after it be taken, unless,
for sufficient reason, a continuance be granted; and it may be heard
and determined by said court summarily, or by a jury, at the option of
the bankrupt; and the creditors may appear and object against a decree
of discharge and the allowance of the certificate, as hereinbefore pro­
vided. And if, upon a full hearing of the parties, it shall appear to the
satisfaction of the court, or the jury shall find that the bankrupt has
made a full disclosure and surrender of all his estate, as by this act
required, and has in all things conformed to the directions thereof, the
court shall make a decree of discharge, and grant a certificate, as pro­
vided in this act.
S ec . 5. And be it further enacted, T hat all creditors coming in and
proving their debts under such bankruptcy, in the manner hereinafter
prescribed, the same being bona fide debts, shall be entitled to share in
the bankrupt’s property and effects, pro rata, without any priority or
preference whatsoever, except only for debts due by such bankrupt to
the United States, and for all debts due by him to persons who, by the
laws of the United States, have a preference, in consequence of having

TWENTY-SEVENTH CONGRESS.

S e s s .I .

Ch. 9. 1841.

445

paid moneys as his sureties, which shall be first paid out of the assets;
and any person who shall have performed any labor as an operative in Operatives en­
titled to full
the service of any bankrupt shall be entitled to receive the full amount amount
of wa­
of the wages due to him for such labor, not exceeding twenty-five dol­ ges for labour,
lars ; Provided, That such labor shall have been performed within six not exceeding
months next before the bankruptcy of his employer; and all creditors $25,
whose debts are not due and payable until a future day, all annuitants, Proviso.
holders of bottomry and respondentia bonds, holders of policies of in­
surances, sureties, endorsers, bail, or other persons, having uncertain
or contingent demands against such bankrupt, shall be permitted to
come in and prove such debts or claims under this act, and shall have a
right, when their debts and claims become absolute, to have the same
allowed them ; and such annuitants and holders of debts payable in Value ofin debts
fu­
future may have the present value thereof ascertained, under the direc­ payable
ture may be as­
tion of such court, and allowed them accordingly, as debts in presenti; certained and
and no creditor or other person, coming in and proving his debt or other allowed.
Suits not main­
claim, shall be allowed to maintain any suit at law or in equity therefor, tainable
on
but shall be deemed thereby to have waived all right of action and suit debts or claims
against such bankrupt; and all proceedings already commenced, and proved under
all unsatisfied judgments already obtained thereon, shall be deemed to this act.
be surrendered thereby; and in all cases where there are mutual debts In mutual
or credits,
or mutual credits between the parties, the balance only shall be deemed debts
balance to
the true debt or claim between them, and the residue shall be deemed the
be the true debt.
adjusted by the set-off; all such proof of debts shall be made before the Proof of debts>
court decreeing the bankruptcy, or before some commissioner appointed
by the court for that purpose; but such court shall have full power to
set aside and disallow any debt, upon proof that such debt is founded in
fraud, imposition, illegality, or mistake; and corporations to whom any Corporations
debts
debts are due, may make proof thereof by their president, cashier, trea­ mayanprove
officer
surer, or other officer, who may be specially appointed for that purpose; by
thereof.
and in appointing commissioners to receive proof of debts, and perform Commission­
to bo resi­
other duties, under the provisions of this act, the said court shall ap­ ers
of the
point such persons as have their residence in the county in which the dents
county where
the bankrupt
bankrupt lives.
S f, c . 6. And be it further enacted, That the district court in every lives.
courts
district shall have jurisdiction in all matters and proceedings in bank­ toDistrict
have jurisdic­
ruptcy arising under this act, and any other act which may hereafter be tion in ail mat­
of bank­
passed on the subject of bankruptcy ; the said jurisdiction to be exer­ ters
cised summarily, in the nature of summary proceedings in equity; and ruptcy.
for this purpose the said district court shall be deemed always open. Judge may ad­
And the district judge may adjourn any point or question arising in any journ any point
case in bankruptcy into the circuit court for the district, in his discre­ to the circuit
tion, to be there heard and determined; and for this purpose the circuit court.
to which
court of such district shall also be deemed always open. And the juris­ theCases
jurisdiction
diction hereby conferred on the district court shall extend to all cases of the
district
and controversies in bankruptcy arising between the bankrupt and any courts shall ex*
tend.
creditor or creditors who shall claim any debt or demand under the
bankruptcy; to all cases and controversies between such creditor or
creditors and the assignee of the estate, whether in office or removed;
to all cases and controversies between such assignee and the bankrupt,
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. And Courts may
the said courts shall have full authority and jurisdiction to compel obe­ compel
obedi­
to their or­
dience to all orders and decrees passed by them in bankruptcy, by pro­ ence
and de­
cess of contempt and other remedial process, to the same extent the ders
circuit courts may now do in any suit pending therein in equity. And crees.
District courts
it shall be the duty of the district court in each district, from time to to prescribe
time, to prescribe suitable rules and regulations, and forms of proceed­ rules, &c.

446

Said courts to
prescribe a ta­
riff of fees and
charges for ser­
vices under this
act.
Proceedings,
where to be
had.

At least 20
days’ notice to
be given.

Evidence by
witnesses to be
under oath, &c.
Proof of debts,
&-c. to bo un­
der oath, &c.

Such proofs
open to contest­
ation. &c.

Circuit courts
to have concur­
rent jurisdiction
with district
courts, in cer­
tain cases.
Such suits to
be brought with*
in two years.

TWENTY-SEVENTH CONGRESS. Sess.I. C h . 9. 1841.
ings, in all matters of bankruptcy ; which rules, regulations, and forms,
shall be subject to be altered, added to, revised, or annulled, by the cir­
cuit court of the same district, and other rules and regulations, and
forms substituted therefor; and, in all such rules, regulations, and
forms, it shall be the duty of the said courts to make them as simple
and brief as practicable, to the end to avoid all unnecessary expenses,
and to facilitate the use thereof by the public at large. And the said
courts shall, from time to time, prescribe a tariff or table of fees and
charges to be taxed by the officers of the court or other persons, for
services under this act, or any other on the subject of bankruptcy;
which fees shall be as low as practicable, with reference to the nature
and character of such services.
S ec. 7. And be it further enacted, T hat all petitions by any bankrupt
for the benefit of this act, and all petitions by a creditor against any
bankrupt under this act, and all proceedings in the case to the close
thereof, shall be had in the district court within and for the district in
which the person supposed to be a bankrupt shall reside, or have his
place of business at the time when such petition is filed, except where
otherwise provided in this act. And upon every such petition, notice
thereof shall be published in one or more public newspapers printed in
such district, to be designated by such court at least twenty days before
the hearing thereof; and all persons interested may appear at the time
and place where the hearing is thus to be had, and show cause, if any
they have, why the prayer of the said petitioner should not be granted;
all evidence by witnesses to be used in all hearings before such court
shall be under oath, or solemn affirmation, when the party is conscien­
tiously scrupulous of taking an oath, and may be oral or by deposition,
taken before such court, or before any commissioner appointed by such
court, or before any disinterested State judge of the State in which the
deposition is taken ; and all proof of debts or other claims, by creditors
entitled to prove the same by this act, shall be under oath or solemn
affirmations as aforesaid, before such court or commissioner appointed
thereby, or before some disinterested St&te judge of the State where the
creditors live, in such form as may be prescribed by the rules and regu­
lations hereinbefore authorized to be made and established by the courts
having jurisdiction in bankruptcy. But all such proofs of debts and
other claims shall be open to contestation in the proper court having
jurisdiction over the proceedings in the particular case in bankruptcy;
and as well the assignee as the creditor shall have a right to a trial by
jury, upon an issue to be directed by such court, to ascertain the vali­
dity and amount of such debts or other claims; and the result therein,
unless a new trial shall be granted, if in favor of the claims, shall be
evidence of the validity and amount of such debts or other claims. And
if any person or persons shall falsely and corruptly answer, swear, or
affirm, in any hearing or on trial of any matter, or in any proceeding in
such court in bankruptcy, or before any commissioner, he and they shall
be deemed guilty of perjury, and punishable therefor in the manner and
to the extent provided by law for other cases.
S e c . 8 . And be it further enacted, That the circuit court within
and for the district where the decree of bankruptcy is passed, shall have
concurrent jurisdiction with the district court of the same district of all
suits at law and in equity which may and shall be brought by any as­
signee of the bankrupt against any person or persons claiming an ad­
verse 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; and no suit at law or in equity shall, in any case, be
maintainable by or against such assignee or by or against any person
claiming an adverse interest touching the property and rights of property
aforesaid, in any court whatsoever unless the same shall be brought

TWENTY-SEVENTH CONGRESS.

S e s s .I .

Ch. 9. 1841.

447

within two years after the declaration and decree of bankruptcy, or after
the cause of suit shall first have accrued.
S ec . 9. A nd be it further enacted, That all sales, transfers, and other Sales, &e. by
assignee,
conveyances of the assignee of the bankrupt’s property and rights of the
and how
property, shall be made at such times and in such manner as shall be when
to be made.
ordered and appointed by the court in bankruptcy; and all assets re­
ceived by the assignee in money, shall, within sixty days afterwards,
be paid into the court, subject to its order respecting its future safe­
keeping and disposition; and the court may require of such assignee a Assignee may
required to
bond, with at least two sureties, in such sum as it may deem proper, be
conditioned for the due and faithful discharge of all his duties, and his give bond.
compliance with the orders and directions of the court; which bond
shall be taken in the name of the United States, and shall, if there be
any breach thereof, be sued and sueable, under the order of such court,
for the benefit of the creditors and other persons in interest.
S e c . 10. And be it further enacted, That in order to ensure a speedy Collection of
distribu­
settlement and close of the proceedings in each case in bankruptcy, it assets,
shall be the duty of the court to order and direct a collection of the tion, &c.
assets, and a reduction of the same to money, and a distribution thereof
at as early periods as practicable, consistently with a due regard to the
interests of the creditors : and a dividend and distribution of such assets Dividend and
as shall be collected and reduced to money, qr so much thereof as can distribution.
be safely so disposed of, consistently with the rights and interests of
third persons having adverse claims thereto, shall be made among the
creditors who have proved their debts, as often as once in six months
thereof
from the time of the decree declaring the bankruptcy; notice of such toNotice
dividends and distribution to be given in some newspaper or newspapers be given.
in the district, designated by the court, ten days at least before the order
therefor is passed ; and the pendency of any suit at law or in equity, by
or against such third persons, shall not postpone such division and dis­
tribution, except so far as the assets may be necessary to satisfy the
same; and all the proceedings in bankruptcy in each case shall, if prac­ Proceedings,
if practicable, to
ticable, be finally adjusted, settled, and brought to a close, by the court, be
closed in two
within two years after the decree declaring the bankruptcy. And where years.
any creditor shall not have proved his debt until a dividend or distribu­ Debts not
until a
tion shall have been made and declared, he shall be entitled to be proved
dividend has
paid the same amount, pro rata, out of the remaining dividends or dis­ been
made,
tributions thereafter made, as the other creditors have already received, how to be paid.
before the latter shall be entitled to any portion thereof.
S ec . 11. A nd be it further enacted, That the assignee shall have full Assignee, by
order of the
authority, by and under the order and direction of the proper court in court,
may re­
bankruptcy, to redeem and discharge any mortgage or other pledge, or deem and
dis­
deposite, or lien upon any property, real or personal, whether payable charge any
in presenti or at a future day, and to tender a due performance of the mortgage, &c.
conditions thereof. And such assignee shall also have authority, by and And compound
under the order and direction of the proper court in bankruptcy, to debts, &e. due
compound any debts, or other claims, or securities due or belonging to the estate.
the estate of the bankrupt; but no such order or direction shall be made
until notice of the application is given in some public newspaper in the
district, to be designated by the court, ten days at least before the hear'ing, so that all creditors and other persons in interest may appear and
show cause, if any they have, at the hearing, why the order or direction
should not be passed.
S ec. 12. A nd be it further enacted, That if any person, who shall Persons once
be­
have been discharged under this act, shall afterward become bankrupt, discharged,
coming bank­
he shall not again be entitled to a discharge under this act, unless his rupts
again, not
estate shall produce (after all charges) sufficient to pay every creditor to be discharged
seventy-five per cent, on the amount of the debt which shall have been unless, &c.
allowed to each creditor.

448

TWENTY-SEVENTH CONGRESS.

S jess . I.

Ch. 9. 1841.

Proceedings to
S e c . 13. A nd be it further enacted, That the proceedings in all cases
be matters of in bankruptcy shall be deemed matters of record; but the same shall
record—how to
not be required to be recorded at large, but shall be carefully filed,
be kept.
Fees to clerk
of court.
Allowance to
court officers.

On partners in
trade becoming
insolvent.
Joint and se­
parate debts.
Creditors, &c.
may prove
debts.
Assignees to
keep separate
accounts.
Nett proceeds
of joint stock to
be paid to cre­
ditors of the
company.
And of sepa­
rate estates, to
separate credit­
ors. Balance,
of separate es­
tate, to be added
to joint slock.
And of joint
stock, to be di­
vided among
separate estates.
Certificate of
discharge to
each partner.

Decree of
bankruptcy,
&c. to be reci­
ted in deeds of
lands.

Such deeds to
effectually pass
the title of the
bankrupt.
Jurisdiction
conferred upon
the circuit court

kept, and numbered, in the office of the court, and a docket only, or
short memorandum thereof, with the numbers, kept in a book by the
clerk of the court; and the clerk of the court, for affixing his name and
the seal of the court to any form, or certifying a copy thereof, when
required thereto, shall be entitled to receive, as compensation, the sum
of twenty-five cents and no more. And no officer of the court, or com­
missioner, shall be allowed by the court more than one dollar for taking
the proof of any debt or other claim of any creditor or other person
against the estate of the bankrupt; but he may be allowed, in addition,
his actual travel expenses for that purpose.
S e c . 14. A nd be it further cnacted, That where two or more persons,
who are partners in trade, become insolvent, an order may be made in
the manner provided in this act, either on the petition of such partners,
or any one of them, or on the petition of any creditor of the partners;
upon which order all the joint stock and property of the company, and
also all the separate estate of each of the partners, shall be taken, ex­
cepting such parts thereof as are herein exempted; and all the creditors
of the company, and the separate creditors of each partner, shall be
allowed to prove their respective debts; and the assignees shall also
keep separate accounts of the joint stock or property of the company,
and of the separate estate of each member thereof; and after deducting
out of the whole amount received by such assignees the whole of the
expenses and disbursements paid by them, the nett proceeds of the joint
stock shall be appropriated to pay the creditors of the company, and the
nett proceeds of the separate estate of each partner shall be appropriated
to pay his separate creditors; and if there shall be any balance of the
separate estate of any partner, after the payment of his separate debts, such
balance shall be added to the joint stock, for the payment of the joint
creditors; and if there shall be any balance of the joint stock, after pay­
ment of the joint debts, such balance shall be divided and appropriated
to and among the separate estates of the several partners, according to
their respective rights and interests therein, and as it would have been
if the partnership had been dissolved without any bankruptcy ; and the
sum so appropriated to the separate estate of each partner shall be ap­
plied to the payment of his separate debts; and the certificate of dis­
charge shall be granted or refused to each partner, as the same would
or ought to be if the proceedings had been against him alone under this
act; and in all other respects the proceedings against partners shall be
conducted in the like manner as if they had been commenced and pro­
secuted against one person alone.
S e c . 15. And he it further enacted, That a copy of any decree of
bankruptcy, and the appointment of assignees, as directed by the third
section of this act, shall be recited in every deed of lands belonging to
the bankrupt, sold and conveyed by any assignees under and by virtue
of this act; and that such recital, together with a certified copy of such
order, shall be full and complete evidence both of the bankruptcy and
assignment therein recited, and supersede the necessity of any other
proof of such bankruptcy and assignment to validate the said deed ;
and all deeds containing such recital, and supported by such proof, shall
be as effectual to pass the title of the bankrupt, of, in, and to the lands
therein mentioned and described to the purchaser, as fully, to all in­
tents and purposes, as if made by such bankrupt himself, immediately
before such order.
S e c . 16. A nd be it f urther enacted, That all jurisdiction, power, and
authority, conferred upon and vested in the district court of the United
States by this act, in cases in bankruptcy, are hereby conferred upon

TWENTY-SEVENTH CONGRESS. Suss. I. Ch. 10,11,12. 1841

449

and vested in the circuit court of the United States for the District of
Columbia, and in and upon the supreme or superior Courts of any of
the Territories of the United States, in cases in bankruptcy, where the
bankrupt resides in the said District of Columbia, or in either of the
said Territories.
S e c . 17. And he it further enacted, T hat this act shall take effect
from and after the first day of February next.
A p p r o v e d , August 19, 1841.

for District of
Columbia, and
supreme courts
of territories.
This act to
take effect from
1st Feb. next.

S t a t u t e I.
C h ap . X .— An Act further to extend the time for heating Virginia military land Aug. 19,1841.
warrants, and returning surveys thereon to the General Land Office, (a)

B e it enacted by the Senate and House o f Representatives o f the
United States of America in Congress assembled, That the first section of
the act entitled “ An act to extend the tim efor locating Virginia mili­
tary land warrants, and returning surveys thereon to the General Land
Office,” approved July seventh, eighteen hundred and thirty-eight, as to
all warrants issued prior to the tenth day of August, eighteen hundred
and forty, and no others, be, and the same is hereby, revived, and to
continue in force until the first day of January, eighteen hundred and
forty-four.
A p p r o v e d , August 19, 1841.

1848, ch. 93.
1st sec. act of
7th July 1838,
ch. 166, revived
and continued
to 1st Jan. 1844

S t a t u t e I.

X I.— in Act to authorize the recovery of fines and forfeitures incurred Aug. 19,1841.
under the charter, laws, and ordinances of Georgetown, before justices of the

C hap.

peace.

Be it enacted by the Senate and House o f Representatives o f the
United States of America in Congress assembled, That to remove all
existing doubts as to the chartered powers of the Mayor, Recorder,
Aldermen and Common Council of Georgetown, the said Corporation
of Georgetown shall be, and they are hereby, authorized and empowered
to recover all fines, penalties, and forfeitures incurred, or that may be
incurred, under their charter, and the laws and ordinances passed in
pursuance thereof, by warrant before any justice of the peace of the
District of Columbia, and execution on his judgment, in like manner,
and subject to a like appeal to the Circuit Court of the District of
Columbia, as in other cases of small debts.
A p p r o v e d , August 19, 1841.

1846, ch. 67.
Corporation of
Georgetown to
recover fines,
&c. how.

S t a t u t e I.
C h a p . X II.— in Act to revive and extend the charters of certain banks in the Dis­ Aug. 25,1841.

trict of Columbia.

Be it enacted by the Senate and House of Representatives o f the
United States o f America in Congress assembled, That the charters
of the Bank of the Metropolis, of the Bank of Washington, and of the
Patriotic Bank of Washington, in the city of Washington ; the charter
of the Farmers and Mechanics’ Bank of Georgetown, in Georgetown ;
and the charters of the Farmers’ Bank of Alexandria, and of the Bank
of Potomac, in the town of Alexandria, be, and the same are, severally
and respectively hereby revived; and all the powers, rights, privileges,
immunities, limitations, prohibitions, and restrictions contained in said
charters are hereby renewed, extended, and made applicable in full
force to each of said banks, respectively, and to the presidents, direc­
tors, other officers, and stockholders of each of them, in the same
manner, and to the same extent, as was granted and provided by the
said several and respective charters, and the laws in force on the first
day of January, in the year eighteen hundred and thirty-eight, subject
to the limitations and provisions hereinafter contained : Provided, Said
(a) Notes of acts relating to Virginia warrants, vol. 1,182.

V ol. V.—57

2 n2

Act of May 31,
1838, ch. 91,
Act of July 3,
1840, ch. 39.

Charters of
Bank of Metro­
polis, Bank of
Washington,
&c. revived.
Powers, &c.
renewed to the
extent granted
by said charters,
&c.

Proviso.