, 1867-06-28


AN ACT to establish a uniform system Of bank
ruptcy throughout the United States
TcoSrIxUEB.
or DEBTS AND PROOF OF CLAIMS.
SEC. 10. And be it further enacted That all
debts due and payable fr ON the bankrupt at
the time of the adjudication of bankruptcy, and
all debts then existing but not payable until
future day, a rebate of interest being made when
no interest is payable by the terms OF contract,
NAV be proved against the estate of the bank
tupt. All demands against the bankrupt for or
on account Of any goods or chattels wrongtully
taken, converted, or withheld by him may be
proved and allowed as debts TO the amount OF
the value of the propertys so taken or withheld,
with interest II the bankrupt shall be bound as
drawer, endorser, surety, bail, or guarantor
upon any bill bond, note, or any other specially,
or contract, or for any debt Of another person,
and bis liability shall not have become absolute
until after the adjudication of bankruptcy, the
creditor may prove the same after such liability
shall have become fixed, and before the final
dividend shall have been declared. In all cases
of contingent debts and contingent liabilities
contracted by the bankrupt, and not herein
otherwise provided for, the creditor may make
claim therefor, and have his claim allowed, with
the right to share in the dividends, if the con-
tingency shall happen before the order for the
the court to have the present value of the debt
or liability ascertained and lquidated, which
shall then Oe done in such manner as the court
shall order, and he shall be allowed to prove for
the amount so ascertained. Any person liable
as bail, surety, guarantor, or otherwise for the
bankrupt, who shall have paid the debt or any
part thereof, in discharge of the whole, shall be
entitled to prove such debt or to stand in the
place of the creditor if be shall have proved the
same, although such payments shall have been
made after the proceedings in bankruptcy were
commenced. And any person so liable for the
bankrupt, and who has not paid the whole of
said debt, but is still liable for the same or any
part thereof, may, if the creditor shall fail or
omit to prove such debt, prove the same either
in the name Of the creditor or otherwise, as may
be provided by the rules, and subject to such
regulGtionsand limitations as may be established
by such rules. Where the bankrupt is liable to
pay rent other debt falling due at fixed or
stated periods, the creditor may prove for pro-
portionate part thereof up to the time of bank
ruptcy, as if the same grew due from day to day
and not at such fixed and stated periods If any
bankrupt shall be liable for unliqudated dam
ages arising out of any contract or promise, or
on account of any goods or chattels wrongfully
taken, converted, or withheld, the court may
cause such damages to be assessed in such mode
as it may deem best, and the sum so assessed
may be proved against the estate. No debts
other than those above specified shall be proved
or allowed against the estate.
Sec, 20. AHd be ii further enacted, That in all
cases of mutual debts or mutual credits between
the parties, the account between them shall be
stated, and one debt set off against the other,
and the balance only shall be allowed or paid
but no set-of shall be allowed of a claim in its
nature not provable against the estate: ProUided
That no set off shall be allowed in favor of any
debtorto the bankrupt of claim purchased by
or transferred to him after the filing of the petiS
ton. When creditor has a mortgage or pledge
OF real or personal property of the bankrupt, or
lien thereon for securing the payment of a
debt owing to him from the bankrupt, he shall
be admitted as a creditor only for the balance
Of the debt after deductIng the value of such
property, to be ascertained by agreement be-
tween him and the assignee, or by sale thereof,
to 0e made in such manner as the court shall
direct; or the creditor may release or convey
his claim to the assignee upon such property,
and be admitted to prove his whole debt. IF the
value of the property exceeds the sum for which
it is so held as security, the assignee may re.
lease to the creditor the bankr1pt's right of
redemption therein on receiving such excess; or
be may sell the property, subject to the claim of
the creditor thereon; and in either case the as
signee and creditor, respectively, shall execute
all deeds and writings necessary or proper to
consummate the transaction. If the property is
not so sold or released or delivered up, the
creditor shall not be allowed 10 prove any part
of his debt.
Sec. 81. And be 1t further enacted, That no cred.
itor proving bis debt or claim shall be allowed
to maintain any suit at law or in equity therefor
against the bankrupt, but shall be deemed to
have waived all right of action and suit against
the bankrupt, and all proceedings already COM
menced or unsatisfed judgments already OBJ.
tanned thereon, shall be deemed to be dis.
charged and surrendered thereby; And no credi.
tor, whose debt is provable under this act, shall
be allowed to prosecute to final judgment any
suit at law or in equity therefor against the
bankrupt, until the question of the debtors dis,
charge shall have been determined; and any such
suit or proceedings shall, upon the application
OF the bankrupt, be stayed to await the determi.
nation of the court in bankruptcy on the ques.
ton OF the discharge, provided there be no ln-
reasonable delay on the part of the bankrupt in
endeavoring to obtain his discharge, and pro.
Yided also that if the amount due the creditor
is in dispute, the suit, by leave of the court in
bankruptcy, may proceed TO judgment for the
purpose of ascertaining the amount due, which
amount may be proved in bankruptcy, but exc,
eution shall be stayed as aforesaid. If any
bankrupt SHALL at the time of adjudication, be
haole upon any bill of exchange, promissory
hotei or other obligation in respect of distinct
contracts as member of two or more firms
carrying on separate and distinct trades, and
having distinct estates to be wound up in bank,
Puptcy, or as a sole trader and also Tas1 a
member Of firm, the circumstances thai such
hrms are IN whole or in part composed of the
same individuals, or that the sole contractor is
also one Of the joint contractors, shall Dot pre-,
vent proof and receipt of dividend in respect of
such distinct contracts against the estates res
pectively liable upon such contracts
Sec. %. And be IL further enacted, That all
proofs Of debts against the estate of the bank
rupt, by or in behalf of creditors residing with
IN tue Judicial district where the proceedings in
bankruptcy are pending, shall be made before
one Of the registers Of the court in said district
aud by or in behalf of non. resident debtors be.
iore any register 10 bankruptcy in the judicial
olstrlet where such creditors or either of them
reside, or before any commissioner of the Circuit
Oourt authorized to administeS oaths in auy
olsIrlet. To entitle a|claimknt against the
estate Of bankruptto have his demand allow.
ed, 1t must be verified by R6epositiou in writing
on oath or solemn Affirmation before the propeP
register or commissioner setting forth the De,
mand, the consideration thereof, whether apV
and what securities are held therefor. and
Nne'her any and what payments have been
made thereoni that the sum claimed is Justly
uue from the bankrupt to the claimant; that the
SiAmant has not, nor has any other person. for
us use, received any securitv or sat;.f.a,;.-