Year: 1867

discharge of the whole, shall be entitled to prove
such debt or stand in the place of the creditor if
he shall have proved the same, although such pay
ments shall have been made after the proceedings
in bankruptcy were commenced. And any per-
son 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 other
wise, as may be provided by the rules, and sub
ject to such regulations and limitations as may be
established by such rules. Where the bankrupt
is liable to pay rem or other debt falling due at
fixed and stated periods, the creditor may prove
for prOportlonate part thereof up to the time OF
the bankruptcy, as if the same grew due from day
to day, and not at such fixed and stated periods.
Ifany bankrupt shall be liable for unliQudatcd
damages arising out of any contract or promise,
o. on account of any goods or chattels wrongful
ly taken, conveyed 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 al
lowed against the estate.


SEC. 20. And be it 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
setot shall lie allowed of claim in its nature not
provablc against the estate: fovdded That no
set off shall be allowed in favor of any debtor to
the bankrupt of claim purchased by or trans





When creditor has mortgage or Il pledge OF
real or personal property of the bankrupt, or a
lien thereon for securing the payment of debt
owing to him from the bankrupt, he shall be ad-
mitted as creditor only Tor the balance of the
debt after deducting the value OF such property,
to be ascertained by agreement between him and
the assignee, or by a sale thereof to be made in
such manner as the court shall direct; 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 proper
ty exceeds the sum for which it is held Sc
curity, the assignee may release to the creditor
the bankrupt's right OF redemption therein on
receiving such excess: or he may sell the pro-
perty, subject TO the claim of the creditor there
on and in either case the assignee and creditor,
respectively, shall execute all deeds and writings
necessary or proper to consummute the transac-
ton. If the property is not so sold or released
and delivered up, the creditor shall not be allow
ed to prove any part of his debt.


SEC. 81. And be ii further enacted, That no
creditor proving his debt claim shall be allow
ed to maintain any suit at law or in equity there
tor against the bankrupt, but shall be deemed to
have waived alright OF action and suit against
the bankrupt, and all proceedings already com
mcnccd, or unsa listed judgments already obtain
ed thereon shall be deemed to be discharged and
surrendered thereby; and no creditor whose debt
is provable under this act shall be allowed to
prosecute to final Judgment any suit at law in
equity therefor against the bankrupt, until the
question of the debtors discharge shall have been
determined; and any such suit or proceedings
shall, upon the application OF the bankrupt, be
stayed to await the determination of the court in
bankruptcy on the question of the discharge,
provided there be no unreasonable delay on
the part of the bankrupt in endeavoring to OBJ
tain his discharge, and provided, 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 aScertanng the
amount due, which amount may be proved in
bankruptcy, but execution shall be stayed as
aforesaid. If any bankrupt shall, at the time of
adjudication, be liable upon any bill Of exchange,
promiSSOry note, or other obligation in respect OF
distinct contracts as a member of two or more
firms carrying on separate and distinct trades,
and having distinct estates to be wound up in
bankruptcy, or as a sole trader and also as 4
member of firm, the circumstance that such
firms in whole or in part composed of the same
Individuals or that the sole contractor is also
OF the Joint contractors, shall not prevent proof
and receipt of dividend in respect of such distinct
contracts against the estates respectively liable
u pom such contracts.


SEC %. dnd be Il further enacted, That all proofs
of debt against the estate of the bankrupt, by or
in behalf of creditors residing within the judicial
district where the proceedings in bankruptcy are
pending, shall be made before one of the registers
OF the court in said district and by in behalf of
nonresident debtors before any register in bank
ruptcy in the judicial district where such creditors
or either of them reside, or before any commits
sioner of the Circuit Court authorized to admin
lister oatis in any district. To entitle claimant
against the estate of a bankrupt to have his de-
mlnd allowed, it must be verified by Il deposition
in writing on oath or solemn affirmation before
the proper register or commissioner setting forth
the demand the consideration thereof, whether
any and what securities arc held therefor, and
whether any and what payments have been made
thel con that the sum claimed is justly due from
the bankrupt TO the claimant; that the claimant
has not nor has any other person, for his use, re-
ccived any security or satisfaction whatever 9th
er than that by him set forth, that the claim
not procured for the purpose of influencing the
proceedings under this act, and that no bargain
or agreement, express or implied, has been made
or entered into, by or on behalf OF such creditor,
to sell, transfer, or dispose of the said claim or
any part thereof, against such bankrupt, or take
or receive, directly or indirectly, any money,
property, or consideration whatever, whereby
the vote of such creditor for assignee, or any ac
tion on the part of such creditor or any other per-
son in the proceedings under this act is or shall
be in any way affected, influenced, or controlled,
and no claim shall be allowed unless all the state
ments set forth in such deposition shall appear to
be true. Such oath or solemn affirmation shall
be made by the claimant, testltylng OF his own
knowledge, unless he is absent from the United
States or prevented by some other good cause
from testifyiug, in which cases the demand may
be verified in like manner by the attorney or au-
thorized agent of the claimant tcstfying to the
best of his knowledge, information, and belief,
and setting forth his means of knowledge; or if
in foreign country, the oath OF creditor may
be taken before any minister, consul, or vice con-
sui of the United States; and the court may, if





pent evidence, either for against the admission
of the claim Corporations may verify their
claims by the oath or solemn affirmation of their
president, cashier, or treasurer. Ii the proof is
satisfactory to the register or commissioner, it
shall be signed by the deponent, and delivered or
sent by mail to the assignee, who shall examine
the same and compare it with the books and ac-
counts of the bankrupt, and shall register, in
book to he kept by him for that purpose, the
names of creditors who have proved their claims,
in the order in which such proof is received, sta
ting the time of the receipt of such proof and the
amount and nature ofthe debts, which books shall
be open TO the inspection of all the creditors.
The court may, on the application of the assignee
or of any creditor, of the bankrupt, or without
any application, examine upon oath the bankrupt,
or any person rendering or who has made proof
of claims, and may summon any person capable
of giving evidence concerning such proof, or con-
cerning the debt sought to be proved, and shall
reject all claims not duly proved or where the
proof shows the claim to be founded in fraud,
illegality or mistake.


SEC. S3 And be itfurtser enacted, That when
claim is presented for proof before the election of
the assignee, and the judge entertains doubts of
its validity or of the right of the creditor to prove
IT, and is of opinion that such validity or right
ought to be investigated by the assignee, he may
postpone the proof of the claim until the assignee
is chosen. Any person who afterthe approval of
this act shall have accepted any preference, hav-
ing reason ,ble cause to believe that the same
made or given by the debtor, contrary to any pro-
vision of this act, shall not prove the debt claim
on account of which the preference was made or
from until he shall first have surrendered to the
,,ol1 Marty m n